Xylem (XYL) 10-K risk factor changes: FY2021 vs FY2020

*In evaluating our business and investment in our securities, investors should carefully consider the following discussion of material factors and [removed: events,* *along] [added: events, along] with all of the other information in this Report and in our other filings with the SEC.

The events and consequences discussed below could, in circumstances that we may not be able to accurately predict, recognize or control, have a material adverse effect on our business, financial condition, cash flows, results of operations [removed: or] [added: and/or] market price of our common stock.*

In addition, we operate in a continually changing business, economic and geopolitical environment and as a [removed: result] [added: result,] new risk factors may emerge from time to time.

The global economic and geopolitical climate, including the impacts of the [added: ongoing] COVID-19 pandemic, amplifies many of the risks [removed: below.*][added: below.]

With sales in [removed: over] [added: approximately] 150 countries, we compete in a wide range of geographic and product markets.

Material economic and industry factors impacting our businesses [removed: include] [added: include: (i)] the overall strength of, and our customers’ confidence in, local and global macroeconomic conditions; [removed: industrial] [added: (ii) overall strength of industrial, governmental] and [added: public and] private sector spending; [added: (iii) overall strength of the residential and commercial real estate markets; (iv)] federal, state, local and municipal governmental fiscal, trade and procurement [removed: policies; strength of the residential] [added: laws, regulations] and [removed: commercial real estate markets;] [added: policies, including with respect to domestic content; (v)] the availability of commercial financing for our customers and end-users; and [added: (vi)] the degree of funding for our public sector customers, including with respect to water infrastructure investments.

In [removed: 2020, 47%] [added: 2021, 44%] of our total revenue was from customers within the U.S. and [removed: 53%] [added: 56%] was from customers outside the U.S. We expect our sales from international operations and export sales to continue to be a significant portion of our revenue.

- changes in trade protection measures, including embargoes, tariffs and other trade barriers, [removed: and] import and export [removed: regulations and] [added: regulations,] licensing [removed: requirements;][added: requirements, and new and existing domestic content requirements for projects receiving governmental funding;]

- [removed: unanticipated] changes in other laws and regulations or how such provisions are interpreted or administered;

- shocks to the global financial system, including due to global health crises, the effects of climate change, or [removed: due to] idiosyncratic events, such as a terrorist attack;

- theft, compromise or misappropriation of [removed: technology or] [added: technology,] intellectual [removed: property;][added: property or data;]

- disruption of operations from [removed: labor or] [added: labor, civil,] political [added: or other] disturbances;

- threat, outbreak, uncertainty or escalation of political instability, insurrection, armed conflict, terrorism, [added: epidemics,] global health crises or pandemics, or war.

[removed: Additionally, we] [added: We] continue to monitor the impacts of the U.K.’s exit from the EU (“Brexit”) on our supply chain, operations and financial results.

As a result, we face continued uncertainty and risks of [removed: disruptions] [added: disruption] in our supply chain and increased costs.

In the year ended December 31, [removed: 2020, 19%] [added: 2021, 21%] of our total revenues were generated in emerging markets and we have placed a particular emphasis [added: in our strategy] on increasing our growth and presence in emerging markets.

Beyond the general risks that we face outside the U.S., our operations in emerging markets [removed: could involve] [added: are subject to] additional [removed: uncertainties, including] risks [removed: that] [added: and uncertainties, including: (i)] governments may impose withholding or other taxes on remittances and other payments to us, or the amount of any such taxes may increase; [added: (ii)] governments may seek to nationalize our assets; [removed: or] [added: (iii)] governments may impose or increase investment barriers or other restrictions affecting our [removed: business.][added: business; (iv) difficulty in enforcing agreements; (v) challenges collecting receivables, protecting our intellectual property and other assets; (vi) pressure on the pricing of our products and services; (vii) higher business conduct risks; and (viii) challenges in our ability to hire and retain qualified talent and labor.]

We cannot predict the impact [added: that] such [removed: events] [added: factors] might have on our business, financial condition, cash flows and results of operations.

The [added: ongoing] COVID-19 pandemic has had, and may continue to have, an adverse impact on our employees, customers, supply chain, operations and sales.

The [removed: global spread of the] COVID-19 pandemic has, and [removed: continues to,] [added: may in the future,] curtail the movement of people, goods and services worldwide, including in many of the regions where we sell our products and services and conduct operations.

Government-mandated precautions to mitigate the spread of COVID-19, including travel restrictions, quarantines, stay at home or similar measures in many of the areas in which we operate, resulted in temporary production impacts at several of our facilities in [removed: 2020,] [added: 2020 and 2021,] curtailed, and [removed: continues to] [added: may in the future] curtail, the business and operations of some of our customers and suppliers, [removed: and also impacted, and continues to impact,] [added: including] our ability to access our customers’ sites.

If the COVID-19 pandemic continues or worsens, including [added: additional] mutations of the virus, we may experience a [removed: continued] decline in sales and customer orders in certain of our businesses.

While we have taken [removed: reasonable] measures to mitigate these impacts, as the pandemic continues, or if it worsens, our manufacturing [removed: facilities and] [added: facilities,] supply chain [added: and logistics] may continue to be significantly impacted.

It is uncertain how materially the COVID-19 pandemic, including [removed: any] [added: additional] mutations of the virus, the corresponding rollout, efficacy or unanticipated consequences of [removed: such] vaccines, and the pace of recovery will affect our global operations and sales if these impacts persist, worsen or re-emerge throughout [removed: 2021] [added: 2022] and beyond.

[added: The extent and duration of these impacts on] us [added: are dependent in part on demand for our products and services and, our ability to meet customer demand; customers’ budgets, spending, willingness to allow us] access to their job sites and continuation of planned [removed: projects,] [added: projects;] continued funding for infrastructure investments, particularly water [removed: infrastructure,] [added: infrastructure;] our suppliers’ ability to continue to supply us with parts, components and raw materials, and logistics providers' ability to continue shipment of our products and [removed: supplies.][added: supplies in a timely manner.]

There are no assurances that the credit markets or the capital markets will be available to us in the future or that the lenders participating [added: in] our credit facilities will be able to provide financing in accordance with their contractual obligations.

The effects of the COVID-19 pandemic, including remote working arrangements for employees, has not to date [added: impacted] but could in the future impact our financial reporting systems and internal control over financial reporting.

We cannot reasonably estimate the length or severity of the [added: ongoing] COVID-19 pandemic or the associated [removed: economic downturn,] [added: macroeconomic impacts, including] impacts on our markets and other impacts to our business, financial position, results of operations and cash flows.

Our operating costs are subject to fluctuations, particularly due to changes in prices for commodities, parts, raw materials, energy and related utilities, freight, and cost of labor which [added: have been and] may [added: continue to] be driven by inflation, [added: tightening labor markets,] prevailing price levels, exchange rates, changes in trade agreements and trade protection measures including tariffs, and other economic factors.

[removed: Our] [added: Throughout 2021 our] operating costs have [removed: in the past and may continue to be] [added: been] impacted by price inflation, including [removed: in 2021] with respect to the cost of certain [added: raw materials, electronic components,] commodities, freight and [removed: logistics.][added: logistics, and we expect this to continue for the foreseeable future.]

The TCA between the U.K. and [removed: EU, which has been provisionally applied since January 1, 2021 pending ratification by the] EU [removed: Parliament,] imposes duties on goods traded between the U.K. and EU.

In order to remain competitive, we may not be able to recover all or a portion of these higher costs from our customers through [removed: product] price increases.

Actions we take to mitigate volatility in manufacturing and operating costs may not be successful and, as a result, our [added: business,] financial condition, cash flows and results of operations could be materially and adversely affected.

Sales outside of the U.S. for the year ended December 31, [removed: 2020] [added: 2021] accounted for approximately [removed: 53%] [added: 56%] of our net sales.

We also have significant operations in various locations outside of the U.S. We are [added: therefore] exposed to fluctuations in foreign currency [removed: transaction] exchange rates, particularly with respect to the Euro, Swedish Krona, [removed: Polish Zloty,] [added: British Pound,] Canadian Dollar, [removed: British Pound and] Australian [removed: Dollar.][added: Dollar, and Polish Zloty.]

Changes in the value of currencies of the countries in which we do business relative to the value of the U.S. Dollar or Euro could affect our ability to sell products competitively and control our cost structure, which [removed: could] [added: has had and may continue to] have a material adverse effect on our business, financial [removed: condition] [added: condition, cash flows] and results of operations.

[removed: The] translation risk is primarily concentrated in the exchange rate between the U.S. Dollar and the Euro, Chinese Yuan, British Pound, Canadian Dollar, Australian [removed: Dollar and] [added: Dollar,] Swedish [removed: Krona.][added: Krona, and Indian Rupee.]

As the U.S. Dollar fluctuates against other currencies in which we transact business, revenue and income [removed: can] [added: may] be impacted.

Strengthening of the U.S. Dollar relative to the Euro and the currencies of the other countries in which we do business, [added: has materially and adversely affected and] could [added: in the future] materially and adversely affect our sales growth [added: and profitability] in future periods.

Our pension and other defined benefit plans are subject to financial market risks that could adversely impact our [removed: earnings] [added: earnings, financial condition] and cash flows in future periods.

Risks in this section are grouped in the following categories: (1) Risks Related to Macroeconomic and Industry Factors; (2) Risks Related to Our Business and Operations; (3) Risks Related to Legal, Regulatory and Tax; and (4) Risks Related to Ownership of Our Common Stock.

Many risks affect more than one category, and as a result the risks are not in order of significance or probability of occurrence.*

The macroeconomic impacts of the ongoing COVID-19 pandemic and broader economic dynamics, including with respect to supply chain shortages, logistics challenges, tight labor markets and inflation, have had, and continue to have, a material adverse effect on our business and results of operations.

- disruptions in our global supply chain, including with respect to labor shortages, supply shortages, and freight and logistics challenges;

In 2021, 44% of our revenues were generated in the U.S, which included sales of products sold into federally funded projects.

We expect our U.S. sales in 2022 and beyond to be similar.

However, we may not be able to successfully compete for federally funded projects as some of our products may not comply with the domestic content requirements of the U.S. Buy American mandate applicable to the Infrastructure Investment and Jobs Act (“IIJA”) signed into law on November 15, 2021, as well as other federally funded projects.

We are assessing the risks associated with the Buy America mandate, as well as related mitigation options around sourcing and manufacturing, but there is no guarantee that we will be able to meet applicable domestic content requirements.

While governmental exemptions and waivers may in the future be issued that negate the application of the Buy America mandate to some or all of our potential sales into IIJA and other federally funded projects, it is uncertain whether and to what extent such exemptions or waivers may be issued.

An inability to meet applicable domestic content requirements for U.S. federally funded projects could have a material adverse impact on our business, financial condition or results of operations.

The U.K. and the EU's Trade and Cooperation Agreement (“TCA”) creates a number of risks and uncertainties for our businesses, including: 1) our services are subject to the World Trade Organization’s rules until the parties to the TCA agree on rules around trade in services, and 2) a delay in implementing final provisions on border checks, with some transitional arrangements for 2021 being continued into 2022.

The COVID-19 pandemic and broader global market supply and demand dynamics also have impacted, and continue to impact our supply chain with unpredictable disruptions, due to component shortages, including with respect to key electronic components such as semiconductors, capacity constraints, delays in shipment of materials necessary to the manufacture of our products, freight and logistics challenges, tight labor markets and inflation.

Different markets and parts of our business will recover from the COVID-19 pandemic at different rates depending on many factors,

including vaccination levels or new COVID-19 variants and related outbreaks.

The

We are exposed to the availability of these parts, components, materials and finished goods, which have been and may in the future be subject to delay, curtailment or change due to, among other things, macroeconomic factors including supply and demand dynamics, labor shortages, changes in the strategy or production planning of

We have also experienced, and continue to experience, increased freight and logistics costs, delivery delays related to port congestion and other logistics- related challenges.

Although we have insurance, we cannot be certain that this insurance coverage will continue to be available to us at a reasonable cost or will be adequate to cover any or all aspects of supply chain disruptions.

Some of our key components are available only from a sole or single source supplier or a limited group of suppliers and so we are subject to supply and pricing risk.

In addition, if a sole or single source supplier were to cease or interrupt production or otherwise fail to supply a key component to us, it could adversely affect our product sales and operating results.

In addition, as a result of the ongoing COVID-19 pandemic and broader global market supply and demand dynamics, we have experienced and may continue to experience shortages, capacity constraints and delays with respect to the supply of components, including electronic components (in particular, semiconductors), and other parts and raw materials.

We have and continue to take measures, including with respect to buffer stock, the use of alternative suppliers and re-design of certain products, to mitigate the impacts of the ongoing supply chain, freight and logistics issues.

However, if these shortages and disruptions continue, if additional disruptions occur, or if our efforts to mitigate these shortages and disruptions are insufficient or unsuccessful, we may be unable to, or delayed in our ability to execute on our backlog, fill new customer orders or timely deliver products to our customers and therefore could have a material adverse effect on our business, financial condition or results of operations.

A significant disruption to any of our facilities or operations, or that of third parties upon which we rely, could cause material adverse impacts to our financial performance, operations and business, including an inability to meet customer demand or contractual commitments, increased costs, and reduced sales, and could impact our business processes and activities, including our ability to timely report financial results.

The market for highly-skilled talent, leaders and labor in our industry is increasingly competitive.

critical to our long-term success.

Additionally, we rely on a complex global supply chain, which has been subject to dynamic conditions, unexpected changes and disruptions during 2021 and into 2022 due to macroeconomic factors associated with COVID-19.

These supply chain challenges have affected, and may continue to affect, our production and ability to timely fill customer orders.

We cannot predict when, or if, these conditions will ease or subside in the future.

Additionally, in 2020, in response to the business and economic conditions resulting from the COVID-19 pandemic, we initiated additional restructuring and realignment activity.

Globally, the frequency and severity of severe weather events due to the effects of climate change is increasing and our facilities, operations and business face related risks and opportunities.

Demand for water reuse applications, including those provided by our treatment business, may also increase as communities look to address water scarcity challenges due to the effects of climate change.

Severe weather events and other effects of climate change have caused, and may in the future cause, disruptions to our facilities and operations, and those of our customers and suppliers.

In 2021, a physical risk analysis using the Task Force on Climate Related Financial Disclosures (“TCFD”) framework indicated that certain of our facilities are at a moderate risk for exposure to water stress, coldwave and wildfire impacts due to the effects of climate change.

While we continue to assess these risks, implement mitigation plans and perform business continuity and disaster recovery planning, we cannot be sure that disruptions with material adverse effects will not occur.

Governments may implement emissions trading schemes, carbon taxes, fuel taxes and other policies to reduce the impacts of climate change that could impact our business and financial results.

The timing, scope and effect of governments’ implementation of carbon pricing and taxes are uncertain, but could significantly increase our expenses in the future and therefore have material adverse impacts on our business, financial condition, cash flows, results of operations and market price of our common stock.

Our commitments, goals, targets, objectives and initiatives related to sustainability, and our public statements and disclosures regarding them, expose us to numerous risks.

We have developed, and will continue to establish, goals, targets, and other objectives related to sustainability matters, including our sustainability goals as well as commitments to preliminary Science-Based Targets aligned to limiting global temperature increase to 1.5°C above pre-industrial level, in line with the Paris Agreement, by 2030 and net zero greenhouse gas (GHG) emissions (Scope 1, 2 and 3) before 2050.

Achieving these goals and commitments will require evolving our business, capital investment and the development of technology that might not currently exist.

The downturn in the global economy due to the impacts of COVID-19 has, and continues to have, a material adverse effect on our business and results of operations.

- disruptions in our global supply chain;

- the transition away from benchmark reference rates based on market participant judgments, such as LIBOR and EURIBOR, to rates based on observable transactions, such as the Secured Overnight Financing Rate;

The U.K. and the EU concluded a Trade and Cooperation Agreement (“TCA”) that has been provisionally applied since January 1, 2021, pending ratification by the EU Parliament.

The TCA creates a number of risks and uncertainties for our businesses.

It provides for duties on goods traded between the U.K. and EU, including a preferential treatment provision for no duties on goods that meet certain origin criteria.

Our businesses may not be able to benefit from the preferential treatment provision given the origin of certain components used in the manufacture of our products and related certification requirements.

The TCA does not specify rules for trade in services, and as such our services are subject to the World Trade Organization’s rules until the parties to the TCA resolve this trade issue.

There is also uncertainty as to whether the EU Parliament will ratify the TCA, amend or reject it in its entirety.

In addition, the new trading relationship between the U.K. and EU has increased, and will continue to increase, our costs, including for transportation and duties on products not otherwise eligible for preferential treatment under the TCA.

We have experienced, and may continue to experience, shipping delays given the need for customs inspections and other procedures at the border, including with respect to requirements to mitigate the risks of COVID-19.

Volatility in foreign currencies and other markets may also arise as the U.K. and EU work through the TCA or other new trade arrangements.

Additionally, once the TCA is formalized, there could be other near-or long-term negative impacts.

In addition, emerging markets pose other uncertainties, including the difficulty of enforcing agreements, challenges collecting receivables, protecting our intellectual property and other assets, pressure on the pricing of our products and services, higher business conduct risks, and the ability to hire and retain qualified talent.

The COVID-19 pandemic also has, and continues to, impact our supply chain with unpredictable disruptions, capacity constraints or delays in shipment of materials necessary to the manufacture of our products.

The extent and duration of these impacts on us are dependent in part on demand for our products and services, customers’ budgets, spending, willingness to allow

activities, including with regard to remote work.

In particular, we have in the past and continue to experience capacity constraints and delays with respect to supply of electronic components.

Any suspension or delay in our suppliers’ ability to provide us with necessary materials could impair our ability to timely deliver products to our customers and therefore could have a material adverse effect on our business, financial condition or results of operations.

Within the dewatering space, pumps provided through our Godwin and Flygt brands are used to remove and transfer excess or unwanted water.

more likely than not that a potential impairment could exist.

The recent change in the U.S. Presidential administration increases the uncertainty with regard to potential changes in the U.S. federal tax laws and the interpretation or enforcement of legislation or directives by tax authorities.

to pay substantial damages or license fees with respect to the use of third-party intellectual property rights, or be required to redesign our products at substantial cost, any of which could adversely impact our competitive position, financial condition and results of operations.

Climate change is receiving ever increasing attention globally as many governments, scientists and organizations, such as the United Nations, warn of the effects on our climate of increasing levels of greenhouse gases.

Additionally, President Biden's administration may increase the likelihood of potential changes in these laws and regulations and the enforcement of any existing or new legislation or directives by government authorities.

*This section of this Form 10-K generally discusses [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] items and year-to-year comparisons between [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

Discussions of [removed: 2018] [added: 2019] items and year-to-year comparisons between [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2019.*][added: 2020.*]

COVID-19 [removed: Pandemic][added: Pandemic Update]

[removed: As the COVID-19 pandemic began to unfold in the first quarter of 2020, Xylem deployed a COVID-19 Response Team, responsible for Xylem's] [added: The] Pandemic [removed: Plan, which] [added: Plan] is designed to aid in prevention, preparedness, response and recovery at our sites and across the Company.

[removed: Depending on] [added: Given] the [removed: severity,] magnitude and duration of the COVID-19 pandemic and its economic consequences, [removed: we anticipate that] it [removed: will] [added: has] become more difficult to distinguish specific aspects of our operational and financial performance that are most directly related to [removed: COVID-19] [added: the pandemic] from those [removed: that are] more broadly influenced by ongoing macroeconomic, market and industry dynamics that [removed: are,] [added: may be,] to varying degrees, related to the [removed: COVID-19] pandemic and its consequences.

Public health officials have recommended, or governments have mandated, precautions to mitigate the spread of COVID-19, including [removed: stay at home or similar measures, such as] travel restrictions, [removed: for periods of time] [added: quarantine guidelines, or similar measures] in many of the areas in which we operate.

[removed: Operationally,] [added: As] a [added: result, a] number of our production facilities across the globe experienced reduced production levels due to such measures to varying degrees during the year, however our current overall operating capacity approximates normal levels globally.

The COVID-19 [removed: pandemic is also] [added: pandemic, as well as broader global market supply and demand dynamics, have] adversely [removed: affecting,] [added: affected,] and [removed: is] [added: are] expected to continue to adversely affect, our [removed: operations,] supply [removed: chains and businesses.][added: chains.]

If these [added: shortages and] interruptions [removed: are sustained,] [added: continue,] or [added: if] additional interruptions occur, they could have a negative impact on our results of operations.

At the end of [removed: 2020,] [added: 2021,] total backlog increased [removed: 17.9%] [added: 52.6%] as compared to December 31, [removed: 2019.][added: 2020.]

[removed: However, because the] [added: The] severity, magnitude and duration of the COVID-19 pandemic and its economic consequences are uncertain, [added: and] the pandemic’s ongoing and future impacts on our business, financial condition, results of operations, and stock price remain uncertain and difficult to [removed: predict, and we expect that our results may continue to be adversely impacted beyond the year ending December 31, 2020.][added: predict.]

These initiatives [removed: are] [added: were] designed to support our long-term financial resilience and simplify our operations, strengthen our competitive positioning and better serve our customers.

Xylem Watermark, our corporate social responsibility program, [removed: is also supporting] [added: continues to support] our communities in addressing the challenges posed by this global pandemic [added: by strengthening access to Water, Sanitation and Hygiene (WASH) facilities in schools and health centers] through its partnership with Americares and UNICEF, as well as the [removed: expansion of the] Partner Community Grants program and matching donations program for employees and partners, and other philanthropic commitments.

Many of our offices globally [removed: have transitioned to] [added: remain in] a substantially remote work from home status, with no material disruption to operations, financial reporting systems, internal control over financial reporting or disclosure controls and procedures.

[removed: As public health officials and governments ease recommendations and regulations regarding stay at home measures, our] [added: Our] COVID-19 Response Team applies a set of [removed: Xylem "Return to Workplace"] health and safety guidelines for [removed: remote workers to return to our facilities.][added: employees working in Xylem offices.]

We [removed: also] continue to assess the evolving nature of the pandemic and its possible implications to our business, [added: employees,] supply [removed: chain] [added: chain, customers] and [removed: customers,] [added: communities,] and to take actions in an effort to mitigate adverse consequences.

Risks related to the [removed: impact] [added: impacts] of COVID-19 [added: as well as our supply chain] are described in further detail under "Item 1A.

Management reviews key performance indicators including revenue, gross margins, segment operating income and operating income margins, [removed: EBITDA and EBITDA margins,] [added: free cash flow,] orders growth, working capital and backlog, among others.

We consider the following [removed: items represent the] non-GAAP measures [removed: we consider] to be key performance indicators, as well as the related reconciling items to the most directly comparable measure calculated and presented in accordance with GAAP.

| (in millions, except per share data) | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | | | |

| Net income & Earnings per share | | | | | | $ | [removed: 254] [added: 427] | | $ | [removed: 1.40] [added: 2.35] | | | | | $ | [removed: 401] [added: 254] | | $ | [removed: 2.21] [added: 1.40] | | | | | | | | | | |

| Restructuring and realignment, net of tax of [removed: $17] [added: $5] and [removed: $19] [added: $17] | | | | | | [removed: 60] [added: 17] | | | [removed: 0.33] [added: 0.09] | | | | | | [removed: 63] [added: 60] | | | [removed: 0.35] [added: 0.33] | | | | | | | | | | | |

| Special charges, net of tax of [removed: $10] [added: $2] and [removed: $6] [added: $10] | | | | | | [removed: 76] [added: 10] | | | [removed: 0.42] [added: 0.06] | | | | | | [removed: 172] [added: 76] | | | [removed: 0.95] [added: 0.42] | | | | | | | | | | | |

| Tax-related special items | | | | | | [removed: (16)] [added: —] | | | [removed: (0.09)] [added: —] | | | | | | [removed: (88)] [added: (16)] | | | [removed: (0.48)] [added: (0.09)] | | | | | | | | | | | |

| (Gain) loss from sale of business, net of tax benefit of $0 | | | | | | [removed: —] [added: (2)] | | | [removed: —] [added: (0.01)] | | | | | | [removed: (1)] [added: —] | | | [removed: (0.01)] [added: —] | | | | | | | | | | | |

| Adjusted net income & Adjusted earnings per share | | | | | | $ | [removed: 374] [added: 452] | | $ | [removed: 2.06] [added: 2.49] | | | | | $ | [removed: 547] [added: 374] | | $ | [removed: 3.02] [added: 2.06] | | | | | | | | | | |

▪“EBITDA” defined as earnings before interest, taxes, depreciation and amortization expense, "EBITDA margin" defined as EBITDA divided by total revenue, "adjusted EBITDA" reflects the adjustment to EBITDA to exclude share-based compensation charges, restructuring and realignment costs, special charges and [removed: gain or loss from sale of businesses, and "adjusted EBITDA margin" defined as adjusted EBITDA divided by total revenue.]

| (in millions) | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | | | |

| [removed: Net Income] [added: Net income] | | | | | | $ | [removed: 254] [added: 427] | | | | | [removed: $401] [added: $] | [added: 254] | | | | | | | | [added: | | | 68.1 | | % | | | | | | |]

| Income tax expense | | | | | | [removed: 31] | | | | | | [removed: 15] | | | [removed: | | |] [added: 84] | | |

| Interest expense, net | | | | | | [removed: 70] | | | | | | [removed: 62] | | | [removed: | | |] [added: 69] | | |

| Depreciation | | | | | | [removed: 117] | | | | | | [removed: 117] | | | [removed: | | |] [added: 117] | | |

| Amortization | | | | | | [removed: 134] | | | | | | [removed: 140] | | | [removed: | | |] [added: 134] | | |

| Share-based compensation | | | [removed: | | | 26] [added: 2] | | | [added: 4] | | | [removed: 29] [added: 6] | | | [added: 21] | | | [added: 33] | | |

| Restructuring and realignment | | | [removed: | | | 77] [added: 12] | | | [added: 7] | | | [removed: 82] [added: 3] | | | [added: 0] | | | [added: 22] | | |

| Special charges | | | [added: 1] | | | [removed: 86] | | | [added: —] | | | [removed: 178] | | | [added: NM] | | | [added: %] | | |

| [removed: (Gain) loss] [added: Gain (loss)] from sale of business | | | | | | [removed: —] [added: 2] | | | | | | [removed: (1)] [added: —] | | | | | | | | | [added: | | | NM | | | | | | | | |]

| Adjusted EBITDA [removed: Margin | | |] [added: margin] | | | [removed: 16.3] [added: 19.0] | | % | [added: 16.7] | | [added: %] | [removed: 19.5] [added: 11.7] | | [removed: %] [added: %] | [added: NM] | | | [added: 16.3] | | [added: %] |

▪“special charges" defined as costs incurred by the Company, such as acquisition and integration related costs, non-cash impairment charges and both operating and non-operating adjustments for [added: costs related to the UK] pension [removed: costs.][added: plan buy-out.]

| Net cash provided by operating activities | | | | | | $ | [removed: 824] [added: 538] | | | | | [removed: $] [added: $] | [removed: 839] [added: 824] | | | | | | | |

Xylem’s COVID-19 Response Team is responsible for Xylem's Pandemic Plan.

We have experienced, and expect to continue experiencing shortages in the supply of components, including electronics, particularly semiconductors ("chips"), parts and raw materials.

We have also experienced, and continue to experience, increased inflation, freight and logistics costs, issues with port congestion, delivery delays and labor.

To help mitigate the effects of these challenges and increase the resilience of our supply chain, we continue to enhance and augment our risk management activities, including supplier pulsing and redundancy.

Additionally, we have and continue to take measures with respect to buffer stock, the use of alternative suppliers or redesign of certain products to mitigate the impacts of the ongoing supply chain, freight and logistics delays and bolster our access to electronics, parts and raw materials.

To some extent, we have been able to pass cost increases through to customers.

These supply chain issues have also impacted our delivery times to customers.

To some extent, mitigation strategies have alleviated these issues but our lead times continue to be impacted.

We have seen a recovery in demand for our products.

In the first quarter of 2020, we implemented a support pay program for employees impacted by COVID-19, which is in place through the second quarter of 2022 and will be evaluated for continuation, as necessary.

Risk Factors" in the Company's 2021 Annual Report.

gain or loss from sale of businesses, and "adjusted EBITDA margin" defined as adjusted EBITDA divided by total revenue.

Xylem reported revenue of $5,195 million for 2021, an increase of $319 million, or 6.5%, from $4,876 million reported in 2020.

On a constant currency basis, revenue increased by $197 million, or 4.0%, during the year.

The increase at constant currency was driven by an increase in organic revenue of $210 million reflecting strong organic growth in the industrial, commercial and residential end markets, partially offset by organic declines in utilities, largely as a result of component shortages in our Measurement & Controls Solutions segment.

These impacts were partially offset by cost inflation and increased spending on strategic investments.

- Orders of $6,300 million, up 25.2% from $5,033 million in 2020 (up 22.6% on an organic basis)

For 2022, we expect organic revenue growth in the low-single-digit range as utilities remain

focused on mission-critical applications.

We expect uneven growth from China and India as multi-year government funding programs are deployed.

The timing of large clean water utility project deployments has been impacted by the global shortage of electronic components.

We anticipate that these deployments will ramp up when supply constraints ease in the second half of 2022 based on our strong backlog position and orders momentum.

Additionally, we expect healthy momentum in the global test and treatment markets with rising demand and focus on pipeline assessment services and increased demand for our smart water solution and digital offerings.

For 2022, we expect organic revenue growth in the mid-single-digit range as activity rebounds globally.

We continue to see healthy growth in our dewatering business, especially in the emerging markets from mining demand as well as in the U.S. and Europe reflecting our strong orders and backlog.

- In the commercial markets, organic revenue in 2021 increased by approximately 7% driven across all major geographic regions.

For 2022, we expect organic revenue growth in the mid-single-digit range.

We expect continued solid replacement business in the U.S. and an acceleration of construction activity.

In Europe we expect modest share gains, with demand for eco-friendly products supported by increase in funding for green buildings.

- In residential markets, organic revenue increased by approximately 10% in 2021 driven by strength across all major geographic regions.

For 2022, we expect organic revenue growth in the low-single-digit to mid-single-digit range.

We anticipate demand and activity to moderate and remain healthy from increased residential users in the U.S. and western Europe.

We plan to continue to take actions and focus spending in 2022 on areas that allow us to make progress on our strategic priorities as well on our top priorities for 2022, which include converting our strong demand momentum into top-line growth by maximizing chip allocation and price realization, continuing our commitment to deliver margin expansion by mitigating supply chain and inflation headwinds and executing on strategic capital deployment opportunities.

| Revenue | | | | | | $ | 5,195 | | | | | $ | 4,876 | | | | | | | | | | | 6.5 | | % | | | | | | |

| Realignment costs | | | | | | 4 | | | | | | 6 | | | | | | | | | | | | (33.3) | | % | | | | | | |

| Special charges | | | | | | (4) | | | | | | (81) | | | | | | | | | | | | (95.1) | | % | | | | | | |

| Income tax expense | | | | | | 84 | | | | | | 31 | | | | | | | | | | | | 171.0 | | % | | | | | | |

Revenue generated for 2021 was $5,195 million, an increase of $319 million, or 6.5%, compared to $4,876 million in 2020.

The increase at constant currency was driven by an increase in organic revenue of $210 million reflecting strong organic growth in the industrial, commercial and residential end markets, partially offset by organic declines in utilities, largely as a result of component shortages in our Measurement & Controls Solutions segment.

| Organic Impact | | | 103 | | | 5.0 | | % | | | | 145 | | | 10.1 | | % | | | | (38) | | | (2.8) | | % | | | | 210 | | | 4.3 | | % |

Many of these impacts did not begin to be felt broadly across our businesses until the latter part of the first quarter of 2020 and have continued through the remainder of the year.

We expect to continue experiencing unpredictable interruptions with our external suppliers into 2021 that could lead to increased logistic costs.

We have enhanced our supplier pulsing and redundancy to help mitigate these challenges and do not expect these interruptions to result in a material impact to our business.

Additionally, we have in the past and may continue to take measures with respect to buffer stock to minimize freight and logistics delays.

To date, the most significant operational impacts we have experienced are volume reductions ranging across all segments and major geographic regions.

Although regions such as Europe and China have started to recover and experienced organic revenue growth during the fourth quarter of 2020, recovery in regions such as the U.S., the Middle East and India continues to lag.

Future demand for our products and services is uncertain as the COVID-19 pandemic has also had an adverse impact on many of the customers we serve.

As such, we have, and may continue to, experience decreased or delayed demand for our products and services.

In many cases, Xylem’s products and services are considered "essential services" under various governmental mandates, and as a result we did not experience significant issues in our ability to distribute products or services, aside from customer-driven project delays, inability to access or travel to customer sites and shipping delays due to stay at home measures.

In light of the uncertainty created by the COVID-19 pandemic, we also proactively took further cost reduction actions in 2020, which included a temporary 20% reduction in the base salary of the Company's Chief Executive Officer ("CEO") and all CEO direct reports, and a temporary 20% reduction in annual cash retainer fees payable to our Board of Directors effective from June 1, 2020 through December 31, 2020.

Additionally, in 2020 we committed to reduced capital expenditure and discretionary operating spending.

We anticipate that our capital expenditure spending will ramp up to more normal levels throughout 2021 as we see improvements in our markets.

In the first quarter of

2020, we implemented a support pay program for employees impacted by COVID-19, and an essential services premium pay program for the benefit of employees whose roles are classified as an “essential service” and, as such, are required to work either onsite at a Xylem facility or in the field supporting customers during periods of mandated stay at home or similar measures.

These programs will remain in place through the first quarter of 2021 and continue to be evaluated for continuation as necessary going forward.

During 2020, Xylem also re-purposed internal manufacturing capabilities and, working with our partners, leveraged our supply chain to donate 300,000 pieces of personal protective equipment ("PPE") to frontline workers.

These guidelines require government officials to first declare an easing of their restrictions, upon which we do a full review of our site to determine its readiness and follow a phased return to work approach, all in service to help ensure the safety of our people.

We will continue to work with our customers, employees, suppliers and communities to address the impacts of COVID-19.

Risk Factors".

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| EBITDA | | | | | | $ | 606 | | | | | $735 | | | | | | | | |

| EBITDA Margin | | | | | | 12.4 | | % | | | | 14.0 | | % | | | | | | |

| Adjusted EBITDA | | | | | | $ | 795 | | | | | $1,023 | | | | | | | | |

Xylem reported revenue of $4,876 million for 2020, a decrease of $373 million, or 7.1%, from $5,249 million reported in 2019.

On a constant currency basis, revenue decreased by $366 million, or 7.0%, driven by an organic decline across all end markets and across all segments during the year.

Organic revenue decline during the year was anticipated as our business was negatively impacted by the COVID-19 pandemic.

The decrease in adjusted operating margin was primarily due to unfavorable volume, impacted significantly by COVID-19; cost inflation; increased quality management costs; unfavorable mix and increased spending on strategic investments.

- Orders of $5,033 million, down 5.7% from $5,339 million in 2019 (down 5.3% on an organic basis), impacted by the COVID-19 pandemic; and

For 2021, we expect organic growth in the low-to-mid single-digit range with continued resilience on the wastewater side, as utilities remain focused on mission-critical applications and anticipate modest recovery on a global basis through the year.

Additionally, we expect that large clean water utility project deployments will be ramping up beginning in the second quarter and increasing throughout the end of the year.

We expect to gain momentum behind key multi-year wins setting up healthy longer term growth, however we believe the end market will continue to be impacted by the COVID-19 pandemic through the year.

For 2021, we expect organic revenue to be relatively flat to up low-single-digits as short-cycle orders and project activity continues to pick up during the year, however activity is still likely to be limited in the near-term by COVID-19 impacts.

We expect that continued softness in the segments served by our dewatering business in North America will stabilize and begin to accelerate through the year.

- In the commercial markets, organic revenue decline was approximately 6% for 2020 driven by weakness in the U.S. and the emerging markets, partially offset by strength in western Europe.

For 2021, we expect organic revenue to be relatively flat to down low-single-digits.

We expect replacement business in the U.S. to be modestly soft during the year, as the COVID-19 pandemic continues to impact market conditions.

While we anticipate healthy activity in Europe as the region continues to recover, we expect new construction activity in North America to be slow throughout the first half of the year.

[removed: We conduct approximately 53%] [added: Approximately 56%] of our [removed: business] [added: 2021 revenues were from customers] in various locations outside the U.S.

Our principal foreign currency transaction exposures primarily relate to the Euro, Swedish Krona, [removed: Polish Zloty,] [added: British Pound,] Canadian Dollar, [removed: British Pound and] Australian [removed: Dollar.][added: Dollar, and Polish Zloty.]

The translation risk is primarily concentrated in the exchange rate between the U.S. Dollar and the Euro, Chinese Yuan, British Pound, Canadian Dollar, Australian [removed: Dollar and] [added: Dollar,] Swedish [removed: Krona.][added: Krona, and Indian Rupee.]

As of December 31, [removed: 2020,] [added: 2021,] our long-term debt portfolio is primarily comprised of five series of fixed-rate senior notes that total approximately $2.5 billion.

Xylem is a leading global water technology company with [removed: 2020] [added: 2021] revenues of [removed: $4.9] [added: $5.2] billion and approximately [removed: 16,700] [added: 17,300] employees worldwide, of which approximately [removed: 1,100] [added: 1,200] were temporary or fixed-term employees or interns.

We design, manufacture and service highly engineered products and solutions across a wide variety of critical [removed: applications] [added: applications,] primarily in the water sector, but also in energy.

Our broad portfolio of products, services and solutions addresses customer needs [added: of scarcity, resilience, and affordability] across the water cycle, from the delivery, measurement and use of drinking water, to the collection, testing, analysis and treatment of wastewater, to the return of water to the environment.

We have differentiated market positions in core application areas including transport, treatment, dewatering, test, smart metering, infrastructure assessment services, digital [removed: solutions,] [added: software solutions for utilities,] commercial and residential building services and industrial processes.

- A substantial global installed base [added: across the water cycle] that provides for steady recurring revenue

- A dedicated, [added: experienced,] qualified and technologically advanced group of experienced employees focused on safely satisfying our customers' requirements in the water and energy spaces

Less than 1% of the total water available on earth is fresh water, and these supplies are [removed: under threat due to] [added: threatened by] factors such as the draining of aquifers, increased pollution and the effects of climate change.

We estimate the total addressable market [removed: size,] [added: size of the global water industry,] excluding operational expenditures related to labor, energy, and chemicals, to be approximately $600 billion.

Our customers often face all three of these challenges, ranging from inefficient and aging water distribution networks and energy-intensive or unreliable water and wastewater management systems [removed: (which require] [added: (requiring] improvements in water affordability); droughts and pollution which limit the amount of water readily available (causing water scarcity); or exposure to natural disasters such as floods or droughts [removed: (which require] [added: (requiring] improvements in resilience).

[removed: ][added: ]

Our [added: overarching] strategy is to help customers solve the world's greatest water challenges with innovative products, services and solutions to deliver sustainable economic, social and environmental benefits.

As part of this, we [removed: implement] [added: are implementing] a digital platform to discover, select, get price quotes, and purchase our offerings.

We will continue building innovation, product management and engineering teams in these regions, expanding our market coverage in key growth markets such as China, [removed: India] [added: India, Eastern Europe] and Africa.

We seek to address the base of the pyramid population by [removed: serving] [added: providing] water and sanitation needs with new solutions and business models.

We [removed: will focus] [added: are focused] on building and enabling infrastructure for digital growth by making our hardware, networks and software applications interoperable and creating a common software experience.

We will also align our incentives, including share-based [added: and performance-based] compensation, and organizational structure to our strategy, favoring approaches to drive 'one company' skills, [removed: behaviors] [added: mindset] and [added: behaviors, and] stakeholder value creation.

| | | | | | | Market Applications | | | | | | [removed: 2020] [added: 2021] Revenue (in millions) | | | | | | % Revenue | | | | | | Major Products | | | | | | Primary Brands | | |

| Water Infrastructure | | | | | | Transport | | | | | | $ | [removed: 1,679] [added: 1,816] | | | | | 81 | | % | | | | • Water and wastewater pumps • Filtration, disinfection and biological treatment equipment • Mobile dewatering equipment | | | | | | • Flygt • Godwin • Leopold • Sanitaire • Wedeco [added: • Xylem Vue] | | |

| Applied Water | | | | | | [added: Commercial] Building Services [removed: (a)] | | | | | | $ | [removed: 804] [added: 609] | | | | | [removed: 56] [added: 38] | | % | | | | • Pumps • Valves • Heat exchangers • Controls • Dispensing equipment systems | | | | | | • A-C Fire Pump • Bell & Gossett • Flojet • Goulds Water Technology • Jabsco • Lowara • Standard Xchange [added: • Xylem Vue] | | |

| | | | Industrial Water | | | | | | [removed: 630] [added: 736] | | | | | | [removed: 44] [added: 45] | | % | | | | | | | | | | | | | | | |

| Measurement & Control Solutions | | | | | | Water | | | | | | $ | [removed: 689] [added: 1,055] | | | | | [removed: 51] [added: 79] | | % | | | | • Smart meters • Networked communication devices • Data analytics • Test equipment • Controls • Sensor devices • Software & managed services • Critical infrastructure services | | | | | | • [removed: BLU-X •] Pure • Sensus • Smith Blair • WTW • YSI [added: • Xylem Vue] | | |

The industrial market includes customers [removed: who] [added: that] require similar water and wastewater infrastructure networks to support various industrial operations.

Both utility and industrial facility customers increasingly require our teams’ global but locally [added: proficient expertise to use our equipment in their specific applications.]

Our key competitors in the Water Infrastructure segment include KSB Inc., Sulzer Ltd., Evoqua Water Technologies, United Rentals, Trojan (Danaher Corporation) and [removed: Grundfos, among others.][added: Grundfos.]

Residential consumers represent the end users in the residential market, while owners and managers of properties such as apartment buildings, retail stores, institutional buildings, restaurants, [removed: schools,] [added: schools/universities,] hospitals and hotels are examples of end users in the commercial market.

Population growth, urbanization [removed: and] regulatory requirements [added: on energy efficiency and eco-friendly buildings] are macro growth drivers of these markets, driving the need for housing, food, community services and retail goods within growing city centers.

[removed: We also provide analytical instrumentation used to measure and analyze water] quality, flow and level in clean water, wastewater, surface water and coastal environments.

[added: Additionally, we offer] software and services including cloud-based analytics, remote monitoring and data management, leak detection, condition assessment, asset management and pressure monitoring solutions.

These technologies allow our customers to remotely and continuously monitor their [removed: water,] [added: water and] energy distribution infrastructure, prioritize and manage maintenance, and use data to optimize many aspects of their networks.

| (in millions) | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | [removed: 2018] [added: 2019] | | | | | | | | |

| United States | | | $ | [removed: 2,297] [added: 2,280] | | | | | [removed: 47] [added: 44] | | % | | | | $ | [removed: 2,554] [added: 2,297] | | | | | [removed: 49] [added: 47] | | % | | | | $ | [removed: 2,424] [added: 2,554] | | | | | [removed: 47] [added: 49] | | % |

| Total | | | $ | [removed: 4,876] [added: 5,195] | | | | | | | | | | | $ | [removed: 5,249] [added: 4,876] | | | | | | | | | | | $ | [removed: 5,207] [added: 5,249] | | | | | | | |

Parts and raw materials commonly used in our products include motors, fabricated parts, castings, bearings, seals, batteries, printed circuit boards ("PCBs") and electronic [added: components, including semiconductors, as well as commodities, including steel, brass, nickel, copper, aluminum and plastics.]

While we may recover some cost increases through operational improvements, we are still exposed to pricing risk, including [removed: due to duty and tariff assessments by the U.S. or other governments on foreign imports.]

This seasonality is dependent on factors such as customers' capital [removed: spending] [added: spending,] as well as the effects of climate change and weather conditions, including heavy flooding, prolonged droughts and fluctuations in temperatures or weather patterns, all of which can positively or negatively impact portions of our business.

No individual customer accounted for more than 10% of our consolidated revenues in [removed: 2020, 2019] [added: 2021, 2020] or [removed: 2018.][added: 2019.]

As such, beginning total backlog, plus orders, minus revenues, will not equal ending total backlog due to contract adjustments, foreign currency [removed: fluctuations] [added: fluctuations,] and other factors.

Typically, large projects require longer lead production cycles and deployment [removed: schedules] [added: schedules,] and delays [removed: can] occur from time to time.

Total backlog was [removed: $2,124] [added: $3,240] million at December 31, [removed: 2020] [added: 2021] and [removed: $1,801] [added: $2,124] million at December 31, [removed: 2019.][added: 2020.]

We anticipate that approximately [removed: 55%] [added: 60%] of the backlog at December 31, [removed: 2020] [added: 2021] will be recognized as revenue during [removed: 2021.][added: 2022.]

| | | | Treatment | | | | | | 431 | | | | | | 19 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 2,247 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | Residential Building Services | | | | | | 268 | | | | | | 17 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 1,613 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | Energy | | | | | | 280 | | | | | | 21 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | $ | 1,335 | | | | | 100 | | % | | | | | | | | | | | | | | | |

We also provide analytical instrumentation used to measure and analyze water

| Western Europe | | | 1,414 | | | | | | 27 | | % | | | | 1,259 | | | | | | 26 | | % | | | | 1,235 | | | | | | 24 | | % |

| Emerging Markets (a) | | | 1,066 | | | | | | 21 | | % | | | | 919 | | | | | | 19 | | % | | | | 1,049 | | | | | | 20 | | % |

| Other | | | 435 | | | | | | 8 | | % | | | | 401 | | | | | | 8 | | % | | | | 411 | | | | | | 7 | | % |

*(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")*

due to duty and tariff assessments by the U.S. or other governments on foreign imports.

Additionally, in 2021, Xylem announced our commitment to reach Net Zero greenhouse gas emissions before 2050 across our value chain, further aligning our long-term commitment to sustainability with sector-wide moves towards reduced carbon footprint.

In 2021, in partnership with Goldman Sachs, we continued our work towards further integrating our business and finance strategies with sustainability by creating a cash account tied to performance of select 2025 Sustainability goals.

This follows our 2019 execution of 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 includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment depending on Xylem's annual Sustainalytics Environmental, Social and Governance (“ESG”) score, an important barometer of Xylem’s continued commitment to sustainability.

Additionally, during the first quarter of 2021, we issued a special grant of less than 0.1 million ESG performance share units.

We continue to foster an empowering, mission-driven, people-centered, diverse and inclusive culture.

The market for highly-skilled talent and leaders in our industry is increasingly competitive, but we believe our culture is a differentiator and therefore important to our ability to attract and retain employees.

We have approximately 5,700 employees in the U.S., 8,100 in Europe, and 3,000 in Asia Pacific, with the remaining 1,000 in other geographies in which we operate.

These surveys cover a range of topics, including employee engagement, company culture, customer focus, organizational effectiveness, employee well-being, diversity, equity and inclusion, pay for performance and development opportunities.

86% of our employees globally participated in our 2021 engagement survey, and our engagement index showed increases from the 2019 survey.

*Our Vision and Values*

Our vision and values provide the foundation for how we want to grow as a company as well as the inspiration for how we want to behave as industry leaders and ethical corporate citizens.

Our vision is to create a world in which water issues are no longer a constraint to health, prosperity, and sustainable development.

We devote our technology, time and talent to advance the smarter use of water and our colleagues are guided by our core values:

- Respect for each other, for diversity of people and opinions, for the environment;

- Responsibility for our words and actions, for customer satisfaction, for giving back to our communities;

- Integrity for acting ethically, for doing what we say we’ll do, for having the courage to communicate with candor; and

- Creativity for thinking beyond boundaries, for anticipating tomorrow’s challenges, for unlocking growth potential.

*Diversity, Equity and Inclusion*

We are committed to a workplace that creates a sense of belonging for everyone: where all our colleagues feel involved, respected, valued, connected and able to bring their authentic selves to work.

At Xylem, we recognize the power of diversity and inclusion to drive innovation, make us more competitive, positively impact customer satisfaction and Company performance, and create value for our shareholders and other stakeholders.

Our commitment to building a global, diverse and inclusive culture starts at the top with our Board of Directors and senior leadership team members, who represent a broad spectrum of backgrounds and perspectives.

As of February 25, 2022, 50% of our directors have origins outside the U.S., and 50% of our directors also identify as diverse from a gender, ethnic or racial standpoint.

Approximately 17% of our senior leadership team members have origins outside the U.S., and approximately 42% of our senior leadership team also identify as diverse from a gender, ethnic or racial standpoint.

We believe that the diversity of our Board of Directors and senior leadership enhances our ability to evolve and execute our business strategy and to attract and retain diverse and highly qualified talent, and also fuels our commitment to building a culture of inclusion, and providing our colleagues with equitable access to opportunities.

As of December 31, 2021 globally, 25% of our colleagues identify as female; in the U.S., 25% of our colleagues identify as U.S. minorities.

Diversity and inclusion metrics are included in our regular business reviews to improve transparency and drive accountability by highlighting progress on goals and outlining steps to achieve them.

In addition, we publicly disclose various workforce metrics regarding gender, age and racial and ethnic diversity, including our U.S. EEO-1 report.

We estimate our total served market size to be approximately $60 billion.

| | | | Treatment | | | | | | 400 | | | | | | 19 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 2,079 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 1,434 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | Energy | | | | | | 276 | | | | | | 20 | | % | | | | | | | | | | | | | | | |

| | | | Test | | | | | | 306 | | | | | | 22 | | % | | | | | | | | | | | | | | | |

| | | | | | | Software as a Service | | | | | | 92 | | | | | | 7 | | % | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 1,363 | | | | | 100 | | % | | | | | | | | | | | | |

(a)Building Services application revenue is composed of approximately 70% of Commercial end market sales and approximately 30% of Residential end market sales.

proficient expertise to use our equipment in their specific applications.

We estimate our served market size in this sector to be approximately $20 billion.

Additionally, we offer

| Europe | | | 1,407 | | | | | | 29 | | % | | | | 1,380 | | | | | | 26 | | % | | | | 1,449 | | | | | | 28 | | % |

| Asia Pacific | | | 618 | | | | | | 13 | | % | | | | 659 | | | | | | 13 | | % | | | | 660 | | | | | | 13 | | % |

| Other | | | 554 | | | | | | 11 | | % | | | | 656 | | | | | | 12 | | % | | | | 674 | | | | | | 12 | | % |

In addition to the traditional markets of the U.S. and western Europe, opportunities in emerging markets within Asia Pacific, eastern Europe, Latin America and other countries are growing.

Revenue derived from emerging markets comprised approximately 19% of total revenue in 2020 and 20% of total revenue in both 2019 and 2018.

Our inventory management and distribution practices seek to minimize inventory holding periods by striving to take delivery of the inventory and manufacturing as close as possible to the sale or distribution of products to our customers.

components, as well as commodities, including steel, brass, nickel, copper, aluminum and plastics.

There have been no raw material shortages in the past several years that have had a significant adverse impact on our business as a whole.

transparent in our communication to stakeholders by providing details on our responsibility to build a sustainable future.

We foster a culture that permits all employees to thrive.

This means cultivating a diverse and inclusive workplace that brings together people from different perspectives, talents and experiences.

| | | | | | | For the fiscal year ended | | | December 31, [removed: 2020] [added: 2021] | | | | | | | | |

The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant as of June 30, [removed: 2020] [added: 2021] was approximately [removed: $11.6] [added: $22.6] billion.

As of February [removed: 19, 2021,] [added: 18, 2022,] there were [removed: 180,358,493] [added: 179,901,139] outstanding shares of the registrant’s common stock, par value $0.01 per share.

Portions of the registrant’s definitive proxy statement for its [removed: 2021] [added: 2022] Annual Meeting of Shareowners, to be held in May [removed: 2021,] [added: 2022,] are incorporated by reference into Part II and Part III of this Report.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

| 1A. | | | [Risk [removed: Factors](#i3a126c51d5544731b4157a83b3bf6191_16)] [added: Factors](#i6443bec7a7e647908001f0dc8cad9dcc_16)] | | | [removed: [13](#i3a126c51d5544731b4157a83b3bf6191_16)] [added: [15](#i6443bec7a7e647908001f0dc8cad9dcc_16)] | | |

| 1B. | | | [Unresolved Staff [removed: Comments](#i3a126c51d5544731b4157a83b3bf6191_19)] [added: Comments](#i6443bec7a7e647908001f0dc8cad9dcc_19)] | | | [removed: [24](#i3a126c51d5544731b4157a83b3bf6191_19)] [added: [27](#i6443bec7a7e647908001f0dc8cad9dcc_19)] | | |

| 3 | | | [Legal [removed: Proceedings](#i3a126c51d5544731b4157a83b3bf6191_25)] [added: Proceedings](#i6443bec7a7e647908001f0dc8cad9dcc_25)] | | | [removed: [25](#i3a126c51d5544731b4157a83b3bf6191_25)] [added: [28](#i6443bec7a7e647908001f0dc8cad9dcc_25)] | | |

| 4 | | | [Mine Safety [removed: Disclosures](#i3a126c51d5544731b4157a83b3bf6191_28)] [added: Disclosures](#i6443bec7a7e647908001f0dc8cad9dcc_28)] | | | [removed: [26](#i3a126c51d5544731b4157a83b3bf6191_28)] [added: [29](#i6443bec7a7e647908001f0dc8cad9dcc_28)] | | |

| * | | | [Information about our Executive [removed: Officers](#i3a126c51d5544731b4157a83b3bf6191_31)] [added: Officers](#i6443bec7a7e647908001f0dc8cad9dcc_31)] | | | [removed: [26](#i3a126c51d5544731b4157a83b3bf6191_31)] [added: [29](#i6443bec7a7e647908001f0dc8cad9dcc_31)] | | |

| | | | [Board of [removed: Directors](#i3a126c51d5544731b4157a83b3bf6191_34)] [added: Directors](#i6443bec7a7e647908001f0dc8cad9dcc_34)] | | | [removed: [27](#i3a126c51d5544731b4157a83b3bf6191_34)] [added: [30](#i6443bec7a7e647908001f0dc8cad9dcc_34)] | | |

| 5 | | | [Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i3a126c51d5544731b4157a83b3bf6191_40)] [added: Securities](#i6443bec7a7e647908001f0dc8cad9dcc_40)] | | | [removed: [28](#i3a126c51d5544731b4157a83b3bf6191_40)] [added: [31](#i6443bec7a7e647908001f0dc8cad9dcc_40)] | | |

| 7 | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i3a126c51d5544731b4157a83b3bf6191_46)] [added: Operations](#i6443bec7a7e647908001f0dc8cad9dcc_46)] | | | [removed: [31](#i3a126c51d5544731b4157a83b3bf6191_46)] [added: [34](#i6443bec7a7e647908001f0dc8cad9dcc_46)] | | |

| 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i3a126c51d5544731b4157a83b3bf6191_58)] [added: Risk](#i6443bec7a7e647908001f0dc8cad9dcc_58)] | | | [removed: [52](#i3a126c51d5544731b4157a83b3bf6191_58)] [added: [55](#i6443bec7a7e647908001f0dc8cad9dcc_58)] | | |

| 8 | | | [Financial Statements and Supplementary [removed: Data](#i3a126c51d5544731b4157a83b3bf6191_61)] [added: Data](#i6443bec7a7e647908001f0dc8cad9dcc_61)] | | | [removed: [53](#i3a126c51d5544731b4157a83b3bf6191_61)] [added: [56](#i6443bec7a7e647908001f0dc8cad9dcc_61)] | | |

| 9 | | | [Changes In and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i3a126c51d5544731b4157a83b3bf6191_181)] [added: Disclosure](#i6443bec7a7e647908001f0dc8cad9dcc_160)] | | | [removed: [105](#i3a126c51d5544731b4157a83b3bf6191_181)] [added: [108](#i6443bec7a7e647908001f0dc8cad9dcc_160)] | | |

| 9A. | | | [Controls and [removed: Procedures](#i3a126c51d5544731b4157a83b3bf6191_184)] [added: Procedures](#i6443bec7a7e647908001f0dc8cad9dcc_163)] | | | [removed: [106](#i3a126c51d5544731b4157a83b3bf6191_184)] [added: [109](#i6443bec7a7e647908001f0dc8cad9dcc_163)] | | |

| 10 | | | [Directors, Executive Officers and Corporate [removed: Governance](#i3a126c51d5544731b4157a83b3bf6191_196)] [added: Governance](#i6443bec7a7e647908001f0dc8cad9dcc_175)] | | | [removed: [108](#i3a126c51d5544731b4157a83b3bf6191_196)] [added: [112](#i6443bec7a7e647908001f0dc8cad9dcc_175)] | | |

| 12 | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i3a126c51d5544731b4157a83b3bf6191_202)] [added: Matters](#i6443bec7a7e647908001f0dc8cad9dcc_181)] | | | [removed: [108](#i3a126c51d5544731b4157a83b3bf6191_202)] [added: [112](#i6443bec7a7e647908001f0dc8cad9dcc_181)] | | |

| 13 | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i3a126c51d5544731b4157a83b3bf6191_205)] [added: Independence](#i6443bec7a7e647908001f0dc8cad9dcc_184)] | | | [removed: [108](#i3a126c51d5544731b4157a83b3bf6191_205)] [added: [112](#i6443bec7a7e647908001f0dc8cad9dcc_184)] | | |

| 14 | | | [Principal Accounting Fees and [removed: Services](#i3a126c51d5544731b4157a83b3bf6191_208)] [added: Services](#i6443bec7a7e647908001f0dc8cad9dcc_187)] | | | [removed: [108](#i3a126c51d5544731b4157a83b3bf6191_208)] [added: [112](#i6443bec7a7e647908001f0dc8cad9dcc_187)] | | |

| 15 | | | [Exhibits, Financial Statement [removed: Schedules](#i3a126c51d5544731b4157a83b3bf6191_214)] [added: Schedules](#i6443bec7a7e647908001f0dc8cad9dcc_193)] | | | [removed: [109](#i3a126c51d5544731b4157a83b3bf6191_214)] [added: [113](#i6443bec7a7e647908001f0dc8cad9dcc_193)] | | |

Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” "contemplate," "predict," [removed: “project,”] “forecast,” “likely,” “believe,” “target,” “will,” “could,” “would,” “should,” "potential," "may" and similar expressions or their negative, may, but are not necessary to, identify forward-looking statements.

By their nature, forward-looking statements address uncertain matters and include any statements that: are not historical, such as statements about our strategy, financial plans, outlook, objectives, plans, intentions or [removed: goals;] [added: goals (including those related to our social, environmental and other sustainability goals);] or address possible or future results of operations or financial performance, including statements relating to orders, revenues, operating margins and earnings per share growth.

Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the [added: ongoing] coronavirus (“COVID-19”) pandemic.

Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include, among others, the following: overall industry and economic conditions, including industrial, [removed: governmental] [added: governmental,] and [added: public and] private sector spending and the strength of the residential and commercial real estate markets; geopolitical, regulatory, economic and other risks associated with [removed: international operations;] [added: our sales and operations, including with respect to domestic content requirements applicable to projects with governmental funding;] continued uncertainty around the [added: ongoing] COVID-19 pandemic’s magnitude, duration and impacts on our business, operations, growth, and financial [removed: condition, as well as uncertainty around approved vaccines and the pace of recovery when the pandemic subsides;] [added: condition;] actual or potential other epidemics, pandemics or global health crises; [added: availability, shortage or delays in receiving electronics, parts and raw materials from our supply chain;] manufacturing and operating cost increases due to inflation, prevailing price changes, tariffs and other factors; [removed: fluctuations in foreign currency exchange rates;] [added: demand for our products,] disruption, competition [removed: and] [added: or] pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our products; disruptions in operations at our facilities or that of third parties upon which we rely; [removed: availability of products, parts] [added: ability to retain] and [removed: raw materials from] [added: attract senior management and other diverse and key talent, as well as increasing competition for overall talent and labor; difficulty predicting] our [removed: supply chain;] [added: financial results; defects, security, warranty and liability claims, and recalls with respect to products;] availability, regulation [removed: and] [added: or] interference with radio spectrum used by [removed: some] [added: certain] of our products; [removed: our ability to retain and attract senior management and other key talent;] uncertainty related to restructuring and realignment actions and related charges and savings; our ability to continue strategic investments for growth; our ability to successfully identify, execute and integrate acquisitions; [removed: difficulty predicting our financial results, including uncertainties due to the nature of our short- and long-cycle businesses;] volatility in [removed: our results] [added: served markets or impacts on business and operations] due to weather [removed: conditions; risks relating to products,] [added: conditions,] including [removed: defects, security, warranty and liability claims, and recalls;] [added: the effects of climate change; fluctuations in foreign currency exchange rates;] our ability to borrow or refinance our existing [removed: indebtedness] [added: indebtedness,] and [added: uncertainty around] the availability of liquidity sufficient to meet our needs; risk of future impairments to goodwill and other intangible assets; failure to comply [removed: with] [added: with, or changes in,] laws or regulations, including those pertaining to anti-corruption, data privacy and security, export and import, competition, and the [removed: environment;] [added: environment and climate change;] changes in our effective tax rates or tax expenses; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; and other factors set forth [removed: in “Part I Item] [added: under "Item] 1A.

| 1 | | | [Business](#i6443bec7a7e647908001f0dc8cad9dcc_13) | | | [3](#i6443bec7a7e647908001f0dc8cad9dcc_13) | | |

| 2 | | | [Properties](#i6443bec7a7e647908001f0dc8cad9dcc_22) | | | [28](#i6443bec7a7e647908001f0dc8cad9dcc_22) | | |

| 6 | | | [Reserved](#i6443bec7a7e647908001f0dc8cad9dcc_43) | | | [33](#i6443bec7a7e647908001f0dc8cad9dcc_43) | | |

| 9B. | | | [Other Information](#i6443bec7a7e647908001f0dc8cad9dcc_166) | | | [109](#i6443bec7a7e647908001f0dc8cad9dcc_166) | | |

| 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i6443bec7a7e647908001f0dc8cad9dcc_1661) | | | [110](#i6443bec7a7e647908001f0dc8cad9dcc_1661) | | |

| 11 | | | [Executive Compensation](#i6443bec7a7e647908001f0dc8cad9dcc_178) | | | [112](#i6443bec7a7e647908001f0dc8cad9dcc_178) | | |

| 16 | | | [Form 10-K Summary](#i6443bec7a7e647908001f0dc8cad9dcc_196) | | | [117](#i6443bec7a7e647908001f0dc8cad9dcc_199) | | |

| | | | [Signatures](#i6443bec7a7e647908001f0dc8cad9dcc_199) | | | [117](#i6443bec7a7e647908001f0dc8cad9dcc_199) | | |

Forward-looking and other statements in this Form 10-K regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or are required to be disclosed in our filings with the SEC.

In addition, historical, current, and forward-looking social, environmental and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.

| 1 | | | [Business](#i3a126c51d5544731b4157a83b3bf6191_13) | | | [3](#i3a126c51d5544731b4157a83b3bf6191_13) | | |

| 2 | | | [Properties](#i3a126c51d5544731b4157a83b3bf6191_22) | | | [25](#i3a126c51d5544731b4157a83b3bf6191_22) | | |

| 6 | | | [Selected Financial Data](#i3a126c51d5544731b4157a83b3bf6191_43) | | | [30](#i3a126c51d5544731b4157a83b3bf6191_43) | | |

| 9B. | | | [Other Information](#i3a126c51d5544731b4157a83b3bf6191_187) | | | [106](#i3a126c51d5544731b4157a83b3bf6191_187) | | |

| 11 | | | [Executive Compensation](#i3a126c51d5544731b4157a83b3bf6191_199) | | | [108](#i3a126c51d5544731b4157a83b3bf6191_199) | | |

| 16 | | | [Form 10-K Summary](#i3a126c51d5544731b4157a83b3bf6191_217) | | | [113](#i3a126c51d5544731b4157a83b3bf6191_220) | | |

| | | | [Signatures](#i3a126c51d5544731b4157a83b3bf6191_220) | | | [113](#i3a126c51d5544731b4157a83b3bf6191_220) | | |

We have approximately [removed: 375] [added: 345] locations in more than 50 countries.

These properties total approximately [removed: 12] [added: 13] million square feet, of which more than [removed: 330] [added: 300] locations, or approximately [removed: 6.5] [added: 7] million square feet, are leased.

| Stockerau | | | | | | Austria | | | | | | [removed: Administration] [added: Sales & Service Office] | | | | | | 234,000 | | | | | | Owned | | |

| Vadodara | | | | | | India | | | | | | Manufacturing and Research & Development | | | | | | [removed: 133,000] [added: 254,000] | | | | | | Leased | | |

| Durham | | | | | | NC | | | | | | Administration and Research & Development | | | | | | [removed: 170,000] [added: 172,000] | | | | | | Leased | | |

| Nottinghamshire | | | | | | United Kingdom | | | | | | [removed: Sales Office] [added: Administration] | | | | | | 139,000 | | | | | | Leased | | |

| Nanterre | | | | | | France | | | | | | Sales [added: & Service] Office | | | | | | 139,000 | | | | | | Leased | | |

| Langenhagen | | | | | | Germany | | | | | | Sales [added: & Service] Office | | | | | | 134,000 | | | | | | Owned | | |

| Abony | | | | | | Hungary | | | | | | Manufacturing | | | | | | 250,000 | | | | | | Leased | | |

| Weilheim | | | | | | Germany | | | | | | Manufacturing | | | | | | 160,000 | | | | | | Leased | | |

The following information is provided regarding the executive officers of Xylem as of February [removed: 4, 2021:][added: 7, 2022:]

| NAME | | | | | | AGE | | | | | | CURRENT TITLE | | | | | | OTHER BUSINESS EXPERIENCE DURING PAST 5 YEARS | | | [removed: | | |]

| Patrick K. Decker | | | | | | [removed: 56] [added: 57] | | | | | | President and Chief Executive Officer (2014) | | | | | | | | | [removed: | | |]

| Sandra E. Rowland | | | | | | [removed: 49] [added: 50] | | | | | | Senior VP and Chief Financial Officer (2020) | | | | | | • Executive Vice President and Chief Financial Officer, Harman International Industries Inc. (2015) | | | [removed: | | |]

| Franz Cerwinka | | | | | | [removed: 51] [added: 52] | | | | | | Senior VP and President, Emerging Markets (2020) | | | | | | • Chief Executive Officer, Johnson Controls-Hitachi Air Conditioning (2015) | | | [removed: | | |]

| David Flinton | | | | | | [removed: 50] [added: 51] | | | | | | Senior VP and Chief Innovation, Technology & Product Management Officer (2019) | | | | | | [removed: | | |] [added: • Senior VP and President, Dewatering (2015)] | | |

| Geri McShane | | | | | | [removed: 47] [added: 48] | | | | | | VP, Controller and Chief Accounting Officer (2019) | | | | | | • Controller, Accounting and Reporting (2016) | | | [removed: | | |]

| Matthew Pine | | | | | | [removed: 49] [added: 50] | | | | | | Senior VP and President, Applied Water Systems and Americas Commercial Team (2020) | | | | | | • President, Carrier Residential, United Technologies Corporation (2018) •VP and General Manager, Carrier Residential, United Technologies Corporation (2017) | | | [removed: | | |]

| Colin R. Sabol | | | | | | [removed: 53] [added: 54] | | | | | | Senior VP and President, Measurement & Control Solutions (2017) | | | | | | | | | [removed: | | |]

| Claudia S. Toussaint | | | | | | [removed: 57] [added: 58] | | | | | | Senior VP, [removed: General Counsel and] Chief [added: Human Resources and] Sustainability Officer [removed: (2014) | | |] [added: (2021)] | | | | | | [added: • Senior VP, General Counsel - (2014)] | | |

| Hayati Yarkadas | | | | | | [removed: 52] [added: 53] | | | | | | Senior VP and President, Water Infrastructure and Europe Commercial Team (2020) | | | | | | • Senior Vice President and President, Performance Materials, Trinseo S.A. (2015) | | | [removed: | | |]

The following information is provided regarding the Board of Directors of Xylem as of February [removed: 4, 2021:][added: 3, 2022:]

| Robert F. Friel | | | | | | Board Chair, Xylem Inc., Former Chairman, President and [removed: Chief Executive Officer,] [added: CEO,] PerkinElmer, Inc. | | |

| Jeanne Beliveau-Dunn | | | | | | [removed: CEO] [added: Chief Executive Officer] and President of Claridad, LLC | | |

| Lila Tretikov | | | | | | Corporate Vice President & Deputy Chief Technology Officer, Microsoft [added: Corporation] | | |

| Uday Yadav | | | | | | President and Chief Operating Officer, Electrical Sector, Eaton [added: Corporation PLC] | | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| | | | | | | | | | | | | | | | | | | | | |

| Dorothy Capers | | | | | | 60 | | | | | | Senior VP, General Counsel (2022) | | | | | | • Executive Vice President, Global General Counsel and Corporate Secretary, National Express Group (2015) | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

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| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| Mark D. Morelli | | | | | | President and Chief Executive Officer, Vontier Corporation | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Kairus Tarapore | | | | | | 59 | | | | | | Senior VP and Chief Human Resources Officer (2015) | | | | | | | | | | | |

| Sten E. Jakobsson | | | | | | Former President and Chief Executive Officer, ABB AB | | |

As of January 31, [removed: 2021,] [added: 2022,] there were [removed: 9,526] [added: 8,875] holders of record of our common stock.

In the first quarter of [removed: 2021,] [added: 2022,] we declared a dividend of [removed: $0.28] [added: $0.30] per share to be paid on March [removed: 18, 2021] [added: 17, 2022] for shareholders of record on February [removed: 18, 2021.][added: 17, 2022.]

There were no unregistered offerings of our common stock during [removed: 2020.][added: 2021.]

*Fourth Quarter [removed: 2020] [added: 2021] Share Repurchase Activity*

The following table summarizes our purchases of our common stock for the quarter ended December 31, [removed: 2020:][added: 2021:]

There were no shares repurchased under this program during the three months ended December 31, [removed: 2020.][added: 2021.]

There are up to [removed: $288] [added: $228] million in shares that may still be purchased under this plan as of December 31, [removed: 2020.][added: 2021.]

This graph covers the period from December 31, [removed: 2015] [added: 2016] through December 31, [removed: 2020] [added: 2021] and assumes that $100 was invested on December 31, [removed: 2015] [added: 2016] in our common stock, the S&P 500 and the S&P 500 Industrials with the reinvestment of any dividends.

[removed: ][added: ]

| December 31, [removed: 2015] [added: 2016] | | | 100 | | | | | | 100 | | | | | | 100 | | |

| 10/1/21 - 10/31/21 | | | | | | — | | | | | | — | | | | | | — | | | | | | $228 | | |

| 11/1/21 - 11/30/21 | | | | | | — | | | | | | — | | | | | | — | | | | | | $228 | | |

| 12/1/21 - 12/31/21 | | | | | | — | | | | | | — | | | | | | — | | | | | | $228 | | |

| December 31, 2017 | | | 140 | | | | | | 122 | | | | | | 121 | | |

| December 31, 2018 | | | 138 | | | | | | 116 | | | | | | 105 | | |

| December 31, 2019 | | | 165 | | | | | | 153 | | | | | | 136 | | |

| December 31, 2020 | | | 216 | | | | | | 181 | | | | | | 150 | | |

| December 31, 2021 | | | 257 | | | | | | 233 | | | | | | 182 | | |

| 10/1/20 - 10/31/20 | | | | | | — | | | | | | — | | | | | | — | | | | | | $288 | | |

| 11/1/20 - 11/30/20 | | | | | | — | | | | | | — | | | | | | — | | | | | | $288 | | |

| 12/1/20 - 12/31/20 | | | | | | — | | | | | | — | | | | | | — | | | | | | $288 | | |

| December 31, 2016 | | | 138 | | | | | | 112 | | | | | | 119 | | |

| December 31, 2017 | | | 192 | | | | | | 136 | | | | | | 143 | | |

| December 31, 2018 | | | 190 | | | | | | 130 | | | | | | 124 | | |

| December 31, 2019 | | | 227 | | | | | | 171 | | | | | | 160 | | |

| December 31, 2020 | | | 297 | | | | | | 203 | | | | | | 177 | | |

The following table sets forth selected consolidated financial data for the five years ended December 31, 2020.

This selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto included in this Report.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| (in millions, except per share data) | | | 2020 (a) (b) | | | | | | 2019 (a) (b) | | | | | | 2018 (b) | | | | | | 2017 | | | | | | 2016 (c) | | |

| Results of Operations Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue | | | $ | 4,876 | | | | | $ | 5,249 | | | | | $ | 5,207 | | | | | $ | 4,707 | | | | | $ | 3,771 | |

| Gross profit | | | 1,830 | | | | | | 2,046 | | | | | | 2,026 | | | | | | 1,847 | | | | | | 1,462 | | |

| *Gross margin* | | | 37.5 | | % | | | | *39.0* | | *%* | | | | *38.9* | | *%* | | | | *39.2* | | *%* | | | | *38.8* | | *%* |

| Operating income | | | 367 | | | | | | 486 | | | | | | 654 | | | | | | 552 | | | | | | 408 | | |

| *Operating margin* | | | 7.5 | | % | | | | *9.3* | | *%* | | | | *12.6* | | *%* | | | | *11.7* | | *%* | | | | *10.8* | | *%* |

| Net income attributable to Xylem | | | 254 | | | | | | 401 | | | | | | 549 | | | | | | 331 | | | | | | 260 | | |

| Per Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | $ | 1.41 | | | | | $ | 2.23 | | | | | $ | 3.05 | | | | | $ | 1.84 | | | | | $ | 1.45 | |

| Diluted | | | 1.40 | | | | | | 2.21 | | | | | | 3.03 | | | | | | 1.83 | | | | | | 1.45 | | |

| Basic shares outstanding | | | 180.1 | | | | | | 180.0 | | | | | | 179.8 | | | | | | 179.6 | | | | | | 179.1 | | |

| Diluted shares outstanding | | | 181.1 | | | | | | 181.2 | | | | | | 181.1 | | | | | | 180.9 | | | | | | 180.0 | | |

| Cash dividends per share | | | $ | 1.04 | | | | | $ | 0.96 | | | | | $ | 0.84 | | | | | $ | 0.72 | | | | | $ | 0.62 | |

| Balance Sheet Data (at period end): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | $ | 1,875 | | | | | $ | 724 | | | | | $ | 296 | | | | | $ | 414 | | | | | $ | 308 | |

| Working capital* | | | 857 | | | | | | 919 | | | | | | 988 | | | | | | 873 | | | | | | 878 | | |

| Total assets | | | 8,750 | | | | | | 7,710 | | | | | | 7,222 | | | | | | 6,860 | | | | | | 6,474 | | |

| Total debt | | | 3,084 | | | | | | 2,316 | | | | | | 2,308 | | | | | | 2,200 | | | | | | 2,368 | | |

* The Company calculates Working capital as follows: net accounts receivable + inventories - accounts payable - customer advances.

(a)The amounts shown for the years ended December 31, 2020 and December 31, 2019 include goodwill impairment charges of $58 million and $148 million, respectively, related to the Advanced Infrastructure Analytics ("AIA") goodwill reporting unit.

Refer to Note 12 to the consolidated financial statements for further information regarding goodwill.

(b)The amounts shown for the years ended December 31, 2020, December 31, 2019 and December 31, 2018 reflect the acquisition of Pure Technologies Ltd. Refer to Note 3 to the consolidated financial statements for further information regarding acquisitions.

(c)The amounts shown for the year ended December 31, 2016 don't reflect a full year of results for the acquisition of Sensus, which was acquired in October 2016.

| [Report of Independent Registered Public Accounting [removed: Firm](#i3a126c51d5544731b4157a83b3bf6191_64)] [added: Firm](#i6443bec7a7e647908001f0dc8cad9dcc_64) (PCAOB ID No. 34)] | | | [removed: [54](#i3a126c51d5544731b4157a83b3bf6191_64)] [added: [57](#i6443bec7a7e647908001f0dc8cad9dcc_64)] | | |

| [Consolidated Income Statements for the Years Ended December 31, [removed: 20](#i3a126c51d5544731b4157a83b3bf6191_67)[20](#i3a126c51d5544731b4157a83b3bf6191_67)[, 201](#i3a126c51d5544731b4157a83b3bf6191_67)[9](#i3a126c51d5544731b4157a83b3bf6191_67) [and 201](#i3a126c51d5544731b4157a83b3bf6191_67)[8](#i3a126c51d5544731b4157a83b3bf6191_67)] [added: 2021, 2020 and 2019](#i6443bec7a7e647908001f0dc8cad9dcc_67)] | | | [removed: [56](#i3a126c51d5544731b4157a83b3bf6191_67)] [added: [59](#i6443bec7a7e647908001f0dc8cad9dcc_67)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December 31, [removed: 20](#i3a126c51d5544731b4157a83b3bf6191_70)[20](#i3a126c51d5544731b4157a83b3bf6191_70)[, 201](#i3a126c51d5544731b4157a83b3bf6191_70)[9](#i3a126c51d5544731b4157a83b3bf6191_70) [and 201](#i3a126c51d5544731b4157a83b3bf6191_70)[8](#i3a126c51d5544731b4157a83b3bf6191_70)] [added: 2021, 2020 and 2019](#i6443bec7a7e647908001f0dc8cad9dcc_70)] | | | [removed: [57](#i3a126c51d5544731b4157a83b3bf6191_70)] [added: [60](#i6443bec7a7e647908001f0dc8cad9dcc_70)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 20](#i3a126c51d5544731b4157a83b3bf6191_73)[20](#i3a126c51d5544731b4157a83b3bf6191_73) [](#i3a126c51d5544731b4157a83b3bf6191_73)[and 201](#i3a126c51d5544731b4157a83b3bf6191_73)[9](#i3a126c51d5544731b4157a83b3bf6191_73)] [added: 2021 and 2020](#i6443bec7a7e647908001f0dc8cad9dcc_73)] | | | [removed: [58](#i3a126c51d5544731b4157a83b3bf6191_73)] [added: [61](#i6443bec7a7e647908001f0dc8cad9dcc_73)] | | |

| [Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 20](#i3a126c51d5544731b4157a83b3bf6191_79)[20](#i3a126c51d5544731b4157a83b3bf6191_79)[, 201](#i3a126c51d5544731b4157a83b3bf6191_79)[9](#i3a126c51d5544731b4157a83b3bf6191_79) [and 201](#i3a126c51d5544731b4157a83b3bf6191_79)[8](#i3a126c51d5544731b4157a83b3bf6191_79)] [added: 2021, 2020 and 2019](#i6443bec7a7e647908001f0dc8cad9dcc_76)] | | | [removed: [59](#i3a126c51d5544731b4157a83b3bf6191_79)] [added: [62](#i6443bec7a7e647908001f0dc8cad9dcc_76)] | | |

| [Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, [removed: 20](#i3a126c51d5544731b4157a83b3bf6191_82)[2](#i3a126c51d5544731b4157a83b3bf6191_82)[0](#i3a126c51d5544731b4157a83b3bf6191_82)[, 201](#i3a126c51d5544731b4157a83b3bf6191_82)[9](#i3a126c51d5544731b4157a83b3bf6191_82) [and 201](#i3a126c51d5544731b4157a83b3bf6191_82)[8](#i3a126c51d5544731b4157a83b3bf6191_82)] [added: 2021, 2020 and 2019](#i6443bec7a7e647908001f0dc8cad9dcc_79)] | | | [removed: [60](#i3a126c51d5544731b4157a83b3bf6191_82)] [added: [63](#i6443bec7a7e647908001f0dc8cad9dcc_79)] | | |

| [Note 1 Summary of Significant Accounting [removed: Policies](#i3a126c51d5544731b4157a83b3bf6191_91)] [added: Policies](#i6443bec7a7e647908001f0dc8cad9dcc_85)] | | | [removed: [61](#i3a126c51d5544731b4157a83b3bf6191_91)] [added: [64](#i6443bec7a7e647908001f0dc8cad9dcc_85)] | | |

| [Note 2 Recently Issued Accounting [removed: Pronouncements](#i3a126c51d5544731b4157a83b3bf6191_97)] [added: Pronouncements](#i6443bec7a7e647908001f0dc8cad9dcc_88)] | | | [removed: [68](#i3a126c51d5544731b4157a83b3bf6191_97)] [added: [71](#i6443bec7a7e647908001f0dc8cad9dcc_88)] | | |

| [Note 3 Acquisitions and [removed: Divestitures](#i3a126c51d5544731b4157a83b3bf6191_100)] [added: Divestitures](#i6443bec7a7e647908001f0dc8cad9dcc_91)] | | | [removed: [69](#i3a126c51d5544731b4157a83b3bf6191_100)] [added: [71](#i6443bec7a7e647908001f0dc8cad9dcc_91)] | | |

| [Note 4 [removed: Revenue](#i3a126c51d5544731b4157a83b3bf6191_106)] [added: Revenue](#i6443bec7a7e647908001f0dc8cad9dcc_94)] | | | [removed: [71](#i3a126c51d5544731b4157a83b3bf6191_106)] [added: [72](#i6443bec7a7e647908001f0dc8cad9dcc_94)] | | |

| [Note 5 Restructuring and Asset Impairment [removed: Charges](#i3a126c51d5544731b4157a83b3bf6191_109)] [added: Charges](#i6443bec7a7e647908001f0dc8cad9dcc_97)] | | | [removed: [73](#i3a126c51d5544731b4157a83b3bf6191_109)] [added: [74](#i6443bec7a7e647908001f0dc8cad9dcc_97)] | | |

| [Note 6 Other Non-Operating Income, [removed: Net](#i3a126c51d5544731b4157a83b3bf6191_112)] [added: Net](#i6443bec7a7e647908001f0dc8cad9dcc_100)] | | | [removed: [75](#i3a126c51d5544731b4157a83b3bf6191_112)] [added: [77](#i6443bec7a7e647908001f0dc8cad9dcc_100)] | | |

| [Note 7 Income [removed: Taxes](#i3a126c51d5544731b4157a83b3bf6191_115)] [added: Taxes](#i6443bec7a7e647908001f0dc8cad9dcc_103)] | | | [removed: [76](#i3a126c51d5544731b4157a83b3bf6191_115)] [added: [77](#i6443bec7a7e647908001f0dc8cad9dcc_103)] | | |

| [Note 8 Earnings Per [removed: Share](#i3a126c51d5544731b4157a83b3bf6191_118)] [added: Share](#i6443bec7a7e647908001f0dc8cad9dcc_106)] | | | [removed: [79](#i3a126c51d5544731b4157a83b3bf6191_118)] [added: [82](#i6443bec7a7e647908001f0dc8cad9dcc_106)] | | |

| [removed: [Note 10] Property, [removed: Plant] [added: plant] and [removed: Equipment](#i3a126c51d5544731b4157a83b3bf6191_124)] [added: equipment] | | | [removed: [80](#i3a126c51d5544731b4157a83b3bf6191_124)] [added: 77] | | | [added: | | | 77 | | |]

| [Note 12 Goodwill and Other Intangible [removed: Assets](#i3a126c51d5544731b4157a83b3bf6191_130)] [added: Assets](#i6443bec7a7e647908001f0dc8cad9dcc_121)] | | | [removed: [82](#i3a126c51d5544731b4157a83b3bf6191_130)] [added: [85](#i6443bec7a7e647908001f0dc8cad9dcc_121)] | | |

| [Note 13 Derivative Financial [removed: Instruments](#i3a126c51d5544731b4157a83b3bf6191_136)] [added: Instruments](#i6443bec7a7e647908001f0dc8cad9dcc_124)] | | | [removed: [84](#i3a126c51d5544731b4157a83b3bf6191_136)] [added: [87](#i6443bec7a7e647908001f0dc8cad9dcc_124)] | | |

| [Note 14 Accrued and Other Current [removed: Liabilities](#i3a126c51d5544731b4157a83b3bf6191_139)] [added: Liabilities](#i6443bec7a7e647908001f0dc8cad9dcc_127)] | | | [removed: [86](#i3a126c51d5544731b4157a83b3bf6191_139)] [added: [89](#i6443bec7a7e647908001f0dc8cad9dcc_127)] | | |

| [Note 15 Credit Facilities and [removed: Debt](#i3a126c51d5544731b4157a83b3bf6191_142)] [added: Debt](#i6443bec7a7e647908001f0dc8cad9dcc_130)] | | | [removed: [86](#i3a126c51d5544731b4157a83b3bf6191_142)] [added: [89](#i6443bec7a7e647908001f0dc8cad9dcc_130)] | | |

| [Note 16 [removed: Post](#i3a126c51d5544731b4157a83b3bf6191_148)[\-](#i3a126c51d5544731b4157a83b3bf6191_148)[retirement] [added: Post-retirement] Benefit [removed: Plans](#i3a126c51d5544731b4157a83b3bf6191_148)] [added: Plans](#i6443bec7a7e647908001f0dc8cad9dcc_133)] | | | [removed: [88](#i3a126c51d5544731b4157a83b3bf6191_148)] [added: [91](#i6443bec7a7e647908001f0dc8cad9dcc_133)] | | |

| [Note 17 [removed: S](#i3a126c51d5544731b4157a83b3bf6191_154)[hare](#i3a126c51d5544731b4157a83b3bf6191_154)[\-Based] [added: Share-Based] Compensation [removed: Plans](#i3a126c51d5544731b4157a83b3bf6191_154)] [added: Plans](#i6443bec7a7e647908001f0dc8cad9dcc_136)] | | | [removed: [95](#i3a126c51d5544731b4157a83b3bf6191_154)] [added: [98](#i6443bec7a7e647908001f0dc8cad9dcc_136)] | | |

| [Note 19 Accumulated Other Comprehensive Income [removed: (Loss)](#i3a126c51d5544731b4157a83b3bf6191_163)] [added: (Loss)](#i6443bec7a7e647908001f0dc8cad9dcc_142)] | | | [removed: [99](#i3a126c51d5544731b4157a83b3bf6191_163)] [added: [102](#i6443bec7a7e647908001f0dc8cad9dcc_142)] | | |

| [Note 20 Commitment and [removed: Contingencies](#i3a126c51d5544731b4157a83b3bf6191_166)] [added: Contingencies](#i6443bec7a7e647908001f0dc8cad9dcc_145)] | | | [removed: [100](#i3a126c51d5544731b4157a83b3bf6191_166)] [added: [103](#i6443bec7a7e647908001f0dc8cad9dcc_145)] | | |

| [Note 21 Related Party [removed: Transactions](#i3a126c51d5544731b4157a83b3bf6191_169)] [added: Transactions](#i6443bec7a7e647908001f0dc8cad9dcc_148)] | | | [removed: [101](#i3a126c51d5544731b4157a83b3bf6191_169)] [added: [104](#i6443bec7a7e647908001f0dc8cad9dcc_148)] | | |

| [Note 22 Segment and Geographic [removed: Data](#i3a126c51d5544731b4157a83b3bf6191_172)] [added: Data](#i6443bec7a7e647908001f0dc8cad9dcc_151)] | | | [removed: [102](#i3a126c51d5544731b4157a83b3bf6191_172)] [added: [105](#i6443bec7a7e647908001f0dc8cad9dcc_151)] | | |

| [Note 23 Valuation and Qualifying [removed: Accounts](#i3a126c51d5544731b4157a83b3bf6191_175)] [added: Accounts](#i6443bec7a7e647908001f0dc8cad9dcc_154)] | | | [removed: [105](#i3a126c51d5544731b4157a83b3bf6191_175)] [added: [108](#i6443bec7a7e647908001f0dc8cad9dcc_154)] | | |

We have audited the accompanying consolidated balance sheets of Xylem Inc. and subsidiaries (the "Company") as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: (PCAOB),] [added: ("PCAOB"),] the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 26, 2021,] [added: 25, 2022,] expressed an unqualified opinion on the Company's internal control over financial reporting.

During the third quarter of 2020, the Company recorded a goodwill impairment charge of $58 million related to the Advanced Infrastructure Analytics [removed: (“AIA”)] [added: ("AIA") goodwill] reporting [removed: unit.][added: unit within our Measurement & Control Solutions segment.]

The Company’s [removed: measurement] [added: evaluation] of [removed: the] goodwill [added: for] impairment [removed: resulted from] [added: involves] the comparison of the fair value of [removed: the AIA] [added: each] reporting unit to its carrying value.

Under the income approach, the fair value of the AIA reporting unit was based on the discounted value of the estimated cash flows that [removed: the reporting unit is expected to generate.]

- We tested the effectiveness of controls over management’s [removed: measurement of the] goodwill impairment evaluation, including those over the determination of the fair value of the AIA reporting [removed: unit and the measurement of the goodwill impairment,] [added: unit,] such as controls related to management’s forecasts of future revenue and the selection of the discount rate.

| Year Ended December 31, | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Revenue | | | $ | [removed: 4,876] [added: 5,195] | | | | | $ | [removed: 5,249] [added: 4,876] | | | | | $ | [removed: 5,207] [added: 5,249] | |

| Cost of revenue | | | [removed: 3,046] [added: 3,220] | | | | | | [removed: 3,203] [added: 3,046] | | | | | | [removed: 3,181] [added: 3,203] | | |

| Gross profit | | | [removed: 1,830] [added: 1,975] | | | | | | [removed: 2,046] [added: 1,830] | | | | | | [removed: 2,026] [added: 2,046] | | |

| Selling, general and administrative expenses | | | [removed: 1,143] [added: 1,179] | | | | | | [removed: 1,158] [added: 1,143] | | | | | | [removed: 1,161] [added: 1,158] | | |

| Research and development expenses | | | [removed: 187] [added: 204] | | | | | | [removed: 191] [added: 187] | | | | | | [removed: 189] [added: 191] | | |

| Restructuring and asset impairment charges | | | [removed: 75] [added: 7] | | | | | | [removed: 63] [added: 75] | | | | | | [removed: 22] [added: 63] | | |

| [Note 9 Inventories](#i6443bec7a7e647908001f0dc8cad9dcc_109) | | | [82](#i6443bec7a7e647908001f0dc8cad9dcc_109) | | |

| [Note 11 Leases](#i6443bec7a7e647908001f0dc8cad9dcc_115) | | | [83](#i6443bec7a7e647908001f0dc8cad9dcc_115) | | |

| [Note 18 Capital Stock](#i6443bec7a7e647908001f0dc8cad9dcc_139) | | | [101](#i6443bec7a7e647908001f0dc8cad9dcc_139) | | |

The goodwill balance was $2.8 billion as of December 31, 2021, of which $112 million is allocated to the AIA Reporting Unit (“AIA”).

The AIA reporting unit recorded goodwill impairment charges in each of the last two years, most recently including a $58 million charge during Q3 2020.

The fair value of AIA exceeded its carrying value as of the 2021 measurement date and, therefore, no further impairment was recognized.

the reporting unit is expected to generate.

| Other non-operating expense, net | | | — | | | | | | (5) | | | | | | (4) | | |

| December 31, | | | 2021 | | | | | | 2020 | | |

| Restructuring and asset impairment charges | | | 7 | | | | | | 75 | | | | | | 63 | | |

| Acquisition activity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2021 | | | $ | 2 | | | | | $ | 2,089 | | | | | $ | 2,154 | | | | | $ | (371) | | | | | $ | (656) | | | | | $ | 8 | | | | | $ | 3,226 | |

The determination of deferred taxes on this amount is not practicable.

These financial institutions are located

The table below also reflects updates to the aggregation of applications to simplify and focus presentation.

| Commercial Building Services | | | 609 | | | | | | 558 | | | | | | 600 | | | | | | | | |

| Residential Building Services | | | 268 | | | | | | 238 | | | | | | 247 | | | | | | | | |

| Industrial Water | | | 736 | | | | | | 638 | | | | | | 694 | | | | | | | | |

| Water | | | 1,055 | | | | | | 1,039 | | | | | | 1,134 | | | | | | | | |

| Energy | | | 280 | | | | | | 324 | | | | | | 397 | | | | | | | | |

*Items in the prior year footnote disclosures for Applied Water and Measurement and Control Solutions were reclassified to conform to the current classification.

The presentation of geographic regions below has been updated to better align to how management currently focuses on revenue and growth platforms by geographic region.

There has been no change to the Company's reportable segments.

| Western Europe | | | 753 | | | | | | 675 | | | | | | 658 | | |

| Emerging Markets (a) | | | 537 | | | | | | 468 | | | | | | 491 | | |

| Other | | | 204 | | | | | | 183 | | | | | | 187 | | |

| Western Europe | | | 370 | | | | | | 316 | | | | | | 323 | | |

| Emerging Markets (a) | | | 324 | | | | | | 260 | | | | | | 300 | | |

| Other | | | 115 | | | | | | 104 | | | | | | 103 | | |

| Western Europe | | | 256 | | | | | | 234 | | | | | | 222 | | |

| Emerging Markets (a) | | | 189 | | | | | | 177 | | | | | | 235 | | |

*(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")*

| Balance at 12/31/2021 | | | $ | 125 | | $ | 164 | | | | | | | | | | | | | |

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.

As a result of this action, during 2020, we recognized restructuring costs of $19 million, $4 million and $30 million in our Water Infrastructure, Applied Water and Measurement & Control Solutions segments, respectively.

| (in millions) | | | | | | 2021 | | | | | | 2020 | | |

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 2020 and 2021 restructuring actions:

| [Note 9 Inventories](#i3a126c51d5544731b4157a83b3bf6191_121) | | | [79](#i3a126c51d5544731b4157a83b3bf6191_121) | | |

| [Note 11 Leases](#i3a126c51d5544731b4157a83b3bf6191_127) | | | [80](#i3a126c51d5544731b4157a83b3bf6191_127) | | |

| [Note 18 Capital Stock](#i3a126c51d5544731b4157a83b3bf6191_160) | | | [98](#i3a126c51d5544731b4157a83b3bf6191_160) | | |

| [Note 24 Quarterly Financial Data](#i3a126c51d5544731b4157a83b3bf6191_178) | | | [105](#i3a126c51d5544731b4157a83b3bf6191_178) | | |

The impairment resulted from a downward revision of forecasted future cash flows.

- We evaluated developments in AIA’s business from the third quarter of 2020, the period in which the impairment charge was recorded, through December 31, 2020 to determine if events or circumstances have occurred that would more likely than not further reduce the fair value of the business.

February 26, 2021

| | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2017 | | | $ | 2 | | | | | $ | 1,912 | | | | | $ | 1,227 | | | | | $ | (210) | | | | | $ | (428) | | | | | $ | 16 | | | | | $ | 2,519 | |

| Cumulative effect of change in accounting principle | | | | | | | | | | | | | | | (2) | | | | | | | | | | | | | | | | | | | | | | | | (2) | | |

The valuation allowance is intended in part to provide for the uncertainty regarding the ultimate utilization of our U.S. capital loss carryforwards, U.S. foreign tax credit carryovers, and foreign net operating loss carryforwards.

the case of bankruptcy filings or deterioration in the customer’s operating results or financial position.

Xylem adopted ASC 842 - *Leases* as of January 1, 2019.

For annual periods prior to January 1, 2019, lease payments for these leases are recognized as a lease cost on a straight-line basis over the lease term.

During the fourth quarter of 2018, we adopted new accounting guidance that eliminates the concept of ineffectiveness for cash flow and net investment hedges.

Any ineffective portion of the change in fair value of the derivative was recognized directly in selling, general and administrative expenses.

Our policy was to de-designate cash flow hedges at the time forecasted transactions are recognized as assets or liabilities on a business unit’s balance sheet and report subsequent changes in fair value through selling, general and administrative expenses where the gain or loss due to movements in currency rates on the underlying asset or liability is revalued.

If it became probable that the originally forecasted transaction would not occur, the gain or loss related to the hedge recorded within accumulated other comprehensive income ("AOCI") was immediately recognized into net income.

Prior to the adoption of the new guidance, changes in the fair value of derivatives designated and that qualify as net investment hedges of foreign exchange risk were recorded in OCI.

Amounts in AOCI were reclassified into earnings at the time the hedged net investment is sold or substantially liquidated.

Subsequent to adopting the new hedge guidance, changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk are recorded in OCI and are subsequently reclassified into either revenue or cost of revenue (hedge of sales classified into revenue and hedge of purchases classified into cost of revenue) in the period that the hedged forecasted transaction affects earnings.

Subsequent to adopting the new hedge guidance, effectiveness of derivatives designated as net investment hedges is assessed using the spot method.

2018 Acquisitions and Divestitures

*Pure Technologies Ltd.*

On January 31, 2018, we acquired all the issued and outstanding shares of Pure, a leader in intelligent leak detection and condition assessment solutions for water distribution networks for approximately $420 million, net of cash received.

Acquisition costs of $4 million were reflected as a component of selling, general and administrative expenses in our Consolidated Income Statement for the year ended December 31, 2018.

Pure’s results of operations were consolidated with the Company effective February 1, 2018 and are reflected in the Measurement & Control Solutions segment.

The Pure purchase price allocation as of January 31, 2018 is shown in the following table:

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (in millions) | | | Amount | | | | | | | | | | | |

| Receivables | | | 23 | | | | | | | | | | | |

| Inventories | | | 4 | | | | | | | | | | | |

| Intangible assets | | | 149 | | | | | | | | | | | |

| Other long-term assets | | | 1 | | | | | | | | | | | |

| Accounts payable | | | (3) | | | | | | | | | | | |

| Total identifiable net assets | | | 173 | | | | | | | | | | | |

| Goodwill | | | 261 | | | | | | | | | | | |

| Total consideration | | | $ | 434 | | | | | | | | | | |

The fair values of Pure's assets and liabilities were determined based on estimates and assumptions which management believes are reasonable.

Our management, with the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of the Company, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the year ended December 31, [removed: 2020] [added: 2021] pursuant to Rule 13a-15(b) and 15d-15(e) of the Securities Exchange Act of 1934 (“the Exchange Act”).

Based upon that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures as of the year ended December 31, [removed: 2020] [added: 2021] were effective, in all material respects, and designed to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures.

The Company's management, including the CEO and CFO, conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organization of the Treadway Commission (2013).

Based on our assessment, the Company's management has concluded that our internal control over financial reporting was effective as of December 31, [removed: 2020.][added: 2021.]

The effectiveness of the Company's internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which appears following Item [removed: 9B] [added: 9C] of this Annual Report on Form 10-K.

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the 1934 Act) during the fiscal quarter ended December 31, [removed: 2020] [added: 2021] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Xylem Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Xylem Inc. and subsidiaries (the "Company") as of

December 31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 26, 2021, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying

Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

February 26, 2021

PART III

None.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Xylem Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Xylem Inc. and subsidiaries (the "Company") as of

December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2021, of the Company and our report dated February 25, 2022, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying

Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Stamford, Connecticut

February 25, 2022

PART III

The information required by this Item is incorporated herein by reference to the information in our Definitive Proxy Statement to be filed with the SEC in connection with our [removed: 2021] [added: 2022] Annual Meeting of Shareholders (the [removed: “2021] [added: “2022] Proxy Statement”) under the captions “Proposal 1 - Election of Directors,” "Board Composition and Refreshment," "Board Committees - Audit [removed: & Finance] Committee," and "Audit [removed: & Finance] Committee Report."

We have also adopted a written Code of Conduct which is applicable to all of our directors, officers and employees, including the Company’s [removed: Chief Executive Officer] [added: CEO] and [removed: Chief Financial Officer] [added: CFO] and other executive officers identified pursuant to this Item 10.

The information required by this Item is incorporated herein by reference to the information in our [removed: 2021] [added: 2022] Proxy Statement set forth under captions “Compensation Discussion and Analysis," "Director Compensation," "Board Committees - Leadership Development and Compensation Committee" and “Leadership Development and Compensation Committee Report.”

The information required by this Item is incorporated herein by reference to the information in our [removed: 2021] [added: 2022] Proxy Statement set forth under the captions “Stock Ownership - Certain Beneficial Owners," "Stock Ownership - Directors and Named Executive Officers" and "Equity Compensation Plan Information."

The information required by this Item is incorporated herein by reference to the information in our [removed: 2021] [added: 2022] Proxy Statement set forth under the captions "Corporate Governance - Director Independence" and “Corporate Governance Policies and Practices - Related Party Transactions.”

The information required by this Item is incorporated herein by reference to the information in our [removed: 2021] [added: 2022] Proxy Statement set forth under the captions “Proposal 2 - Fees of Audit and Other Services” and "Proposal 2 - Pre-Approval of Audit and Non-Audit Services."

| [3.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447217000027/a8-k32xbyxlaws.htm) | | | | | | Fourth Amended and Restated By-laws of Xylem Inc. | | | Incorporated by reference to Exhibit [removed: 3.1] [added: 3.2] of Xylem Inc.’s Form 8-K filed on May 15, 2017 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.1](http://www.sec.gov/Archives/edgar/data/216228/000095012311085776/y92722exv4w2.htm)] [added: [4.2](http://www.sec.gov/Archives/edgar/data/216228/000095012311085776/y92722exv4w2.htm)] | | | | | | Indenture, dated as of September 20, 2011, between Xylem Inc., ITT Corporation, as initial guarantor, and Union Bank, N.A., as trustee. | | | Incorporated by reference to Exhibit 4.2 of ITT Corporation’s Form 8-K [removed: Current Report] filed on September 21, 2011 (CIK No. 216228, File No. 1-5672). | | | | | |

| [removed: [4.2](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex41.htm)] [added: [4.3](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex41.htm)] | | | | | | Senior Indenture, dated March 11, 2016, by and between the Company and Deutsche Bank Trust Company Americas, as trustee. | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s Form 8-K filed on March 11, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.3](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex42.htm)] [added: [4.4](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex42.htm)] | | | | | | First Supplemental Indenture, dated March 11, 2016, by and between the Company and Deutsche Bank Trust Company Americas, as trustee. | | | Incorporated by reference to Exhibit 4.2 of Xylem Inc.’s Form 8-K filed on March 11, 2016 (CIK No. 1524472, File No. 1-35229) | | | | | |

| [removed: [4.4](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex43.htm)] [added: [4.5](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex43.htm)] | | | | | | Second Supplemental Indenture, dated March 11, 2016, by and between the Company and Deutsche Bank Trust Company Americas, as trustee. | | | Incorporated by reference to Exhibit 4.3 of Xylem Inc.’s Form 8-K filed on March 11, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.5](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] [added: [4.6](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] | | | | | | Third Supplemental Indenture, dated October 11, 2016, by and between the Company and Deutsche Bank Trust Company Americas, as trustee. | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s Form 8-K filed on October 11, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.6](http://www.sec.gov/Archives/edgar/data/1524472/000119312512246735/d349882ds4.htm)] [added: [4.9](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] | | | | | | Form of Xylem Inc. [removed: 4.875%] [added: 3.250%] Senior Notes due [removed: 2021.] [added: 2026.] | | | Incorporated by reference to Exhibit [removed: 4.6] [added: 4.1] of Xylem [removed: Inc.'s] [added: Inc.’s] Form [removed: S-4 Registration Statement] [added: 8-K] filed on [removed: May 24, 2012] [added: October 11, 2016] (CIK No. 1524472, File No. [removed: 333-181643).] [added: 1-35229).] | | | | | |

| [removed: [4.7](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex43.htm)] [added: [4.8](http://www.sec.gov/Archives/edgar/data/1524472/000119312516501188/d161514dex43.htm)] | | | | | | Form of Xylem Inc. 2.250% Senior Notes due 2023. | | | Incorporated by reference to Exhibit 4.3 of Xylem Inc.’s [removed: Current Report on] Form 8-K dated March 11, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.8](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] [added: [4.12](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] | | | | | | Form of Xylem Inc. [removed: 3.250%] [added: 4.375%] Senior Notes due [removed: 2026.] [added: 2046.] | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s Form 8-K filed on October 11, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.9](http://www.sec.gov/Archives/edgar/data/1524472/000119312516735781/d271767dex41.htm)] [added: [4.10](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] | | | | | | Form of [removed: Xylem Inc. 4.375%] [added: 1.950%] Senior Notes due [removed: 2046.] [added: 2028.] | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s Form 8-K filed on [removed: October 11, 2016] [added: June 26, 2020] (CIK [removed: No.] 1524472, File No. [removed: 1-35229).] [added: 1-35229)] | | | | | |

| [removed: [4.10](https://www.sec.gov/Archives/edgar/data/1524472/000152447220000006/xyl12312019ex410v1.htm)] [added: [4.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447220000006/xyl12312019ex410v1.htm)] | | | | | | Description of securities registered under Section 12 of the Exchange Act | | | Incorporated by reference to Exhibit 4.10 of Xylem Inc.’s Form 10-K Annual Report filed on February 28, 2020 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)[1](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] [added: [4.7](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] | | | | | | Fourth Supplemental Indenture, dated June 26, 2020, by and between the Company and Deutsche Bank Trust Company Americas, as trustee. | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s [removed: Current Report on] Form 8-K filed on June 26, 2020 (CIK No. 1524472, File No. 1-35229 | | | | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)[2](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] [added: [4.11](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] | | | | | | Form of [removed: 1.950%] [added: 2.250%] Senior Notes due [removed: 2028.] [added: 2031.] | | | Incorporated by reference to Exhibit 4.1 of Xylem Inc.’s [removed: Current Report on] Form 8-K filed on June 26, 2020 (CIK 1524472, File No. 1-35229) | | | | | |

| [removed: [4.1](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)[3](https://www.sec.gov/Archives/edgar/data/1524472/000119312520180917/d913118dex41.htm)] [added: [10.23](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1023.htm)] | | | [added: #] | | | [removed: Form of 2.250% Senior Notes due 2031.] [added: Letter Agreement between Xylem Inc. and Claudia S. Toussaint.] | | | Incorporated by reference to Exhibit [removed: 4.1] [added: 10.23] of Xylem Inc.’s [removed: Current Report on] Form [removed: 8-K] [added: 10-K Annual Report] filed on [removed: June] [added: February] 26, [removed: 2020] [added: 2021] (CIK [added: No.] 1524472, File No. [removed: 1-35229)] [added: 1-35229).] | | | | | |

| [removed: [10.1](http://www.sec.gov/Archives/edgar/data/1524472/000152447215000006/xyl12312014ex101.htm)] [added: [10.9](http://www.sec.gov/Archives/edgar/data/1524472/000152447215000006/xyl12312014ex101.htm)] | | | # | | | Form of Xylem 2011 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement (2015). | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.’s Form 10-K Annual Report filed on February 26, 2015 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.3](http://www.sec.gov/Archives/edgar/data/216228/000095012311093025/y92712exv10w3.htm)] [added: [10.1](http://www.sec.gov/Archives/edgar/data/216228/000095012311093025/y92712exv10w3.htm)] | | | | | | Tax Matters Agreement, dated as of October 25, 2011, among ITT Corporation, Exelis Inc. and Xylem Inc. | | | Incorporated by reference to Exhibit 10.3 of ITT Corporation’s Form 10-Q Quarterly Report filed on October 28, 2011 (CIK No. 216228, File No. 1-5672). | | | | | |

| [removed: [10.6](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex106.htm)] [added: [10.2](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex106.htm)] | | | # | | | Xylem 2011 Omnibus Incentive Plan (Amended as of February 24, 2016). | | | Incorporated by reference to Exhibit 10.6 of Xylem Inc.'s Form 10-K [added: Annual Report] filed on February 26, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.7](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex107.htm)] [added: [10.11](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex107.htm)] | | | # | | | Form of Xylem Non-Qualified Stock Option Award Agreement (Amended as of February 24, 2016). | | | Incorporated by reference to Exhibit 10.7 of Xylem Inc.'s Form 10-K [added: Annual Report] filed on February 26, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.10](http://www.sec.gov/Archives/edgar/data/1524472/000152447213000011/xyl06302013ex101.htm)] [added: [10.3](http://www.sec.gov/Archives/edgar/data/1524472/000152447213000011/xyl06302013ex101.htm)] | | | # | | | Xylem Retirement Savings Plan. | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.’s Form 10-Q [added: Quarterly Report] filed on July 30, 2013 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.11](http://www.sec.gov/Archives/edgar/data/1524472/000095012311099774/y93003exv10w11.htm)] [added: [10.4](http://www.sec.gov/Archives/edgar/data/1524472/000095012311099774/y93003exv10w11.htm)] | | | # | | | Xylem Supplemental Retirement Savings Plan. | | | Incorporated by reference to Exhibit 10.11 of Xylem Inc.’s Form 10-Q Quarterly Report filed on November 21, 2011 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.12](http://www.sec.gov/Archives/edgar/data/1524472/000152447217000008/xyl12312016ex1012.htm)] [added: [10.5](http://www.sec.gov/Archives/edgar/data/1524472/000152447217000008/xyl12312016ex1012.htm)] | | | # | | | Xylem Deferred Compensation Plan. | | | Incorporated by reference to Exhibit 10.12 of Xylem Inc.'s Form 10-K Annual Report filed on February 23, 2017 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.13](http://www.sec.gov/Archives/edgar/data/1524472/000095012311099774/y93003exv10w13.htm)] [added: [10.19](http://www.sec.gov/Archives/edgar/data/1524472/000095012311099774/y93003exv10w13.htm)] | | | # | | | Xylem Deferred Compensation Plan for Non-Employee Directors. | | | Incorporated by reference to Exhibit 10.13 of Xylem Inc.’s Form 10-Q Quarterly Report filed on November 21, 2011 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.14](http://www.sec.gov/Archives/edgar/data/1524472/000152447215000015/xyl06302015ex101.htm)] [added: [10.20](http://www.sec.gov/Archives/edgar/data/1524472/000152447215000015/xyl06302015ex101.htm)] | | | # | | | Form of Non-Employee Director Restricted Stock Unit Award Agreement. | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.’s Form 10-Q Quarterly Report filed on July 30, 2015 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.15](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex1015.htm)] [added: [10.7](http://www.sec.gov/Archives/edgar/data/1524472/000152447216000027/xyl12312015ex1015.htm)] | | | # | | | Xylem Special Senior Executive Severance Pay Plan (Amended as of February 24, 2016). | | | Incorporated by reference to Exhibit 10.15 of Xylem Inc.'s Form 10-K [added: Annual Report] filed on February 26, 2016 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.16](http://www.sec.gov/Archives/edgar/data/1524472/000152447217000039/xyl06302017ex101.htm)] [added: [10.8](http://www.sec.gov/Archives/edgar/data/1524472/000152447217000039/xyl06302017ex101.htm)] | | | # | | | Xylem Senior Executive Severance Pay Plan (Amended as of May 10, 2017). | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.'s Form 10-Q [added: Quarterly Report] filed on August 1, 2017 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.18](http://www.sec.gov/Archives/edgar/data/1524472/000095012311099774/y93003exv10w18.htm)] [added: [10.10](http://www.sec.gov/Archives/edgar/data/1524472/000152447213000006/xyl03312013ex101.htm)] | | | # | | | Form of Xylem 2011 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement [removed: — Futures Grant.] [added: (2013).] | | | Incorporated by reference to Exhibit [removed: 10.18] [added: 10.1] of Xylem [removed: Inc.’s] [added: Inc.'s] Form 10-Q Quarterly Report filed on [removed: November 21, 2011] [added: April 30, 2013] (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.19](http://www.sec.gov/Archives/edgar/data/1524472/000152447220000055/xyl09302020ex101.htm)] [added: [10.6](http://www.sec.gov/Archives/edgar/data/1524472/000152447220000055/xyl09302020ex101.htm)] | | | # | | | Xylem Annual Incentive Plan for the Senior Leadership Team (formally "Annual Incentive Plan for Executive Officers") restated, with administrative changes only, on August 11, 2020 | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.'s Form 10-Q [added: Quarterly Report] filed on October 29, 2020 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.20](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1020.htm)] [added: [10.21](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1020.htm)] | | | # | | | Form of Director’s Indemnification Agreement restated, with administrative changes only, on November 12, 2020. | | | [removed: Filed herewith.] [added: Incorporated by reference to Exhibit 10.20 of Xylem Inc.’s Form 10-K Annual Report filed on February 26, 2021 (CIK No. 1524472, File No. 1-35229).] | | | | | |

| [removed: [10.21](http://www.sec.gov/Archives/edgar/data/1524472/000152447213000006/xyl03312013ex101.htm)] [added: [10.14](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex103.htm)] | | | # | | | Form of Xylem 2011 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement [removed: (2013).] [added: (2021).] | | | Incorporated by reference to Exhibit [removed: 10.1] [added: 10.3] of Xylem [removed: Inc.'s] [added: Inc.’s] Form 10-Q Quarterly Report filed on [removed: April 30, 2013] [added: May 4, 2021] (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1023.htm)[3](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1023.htm)] [added: [10.24](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1024.htm)] | | | # | | | Letter Agreement between Xylem Inc. and [removed: Claudia S. Toussaint.] [added: Sandra E. Rowland.] | | | [removed: Filed herewith.] [added: Incorporated by reference to Exhibit 10.24 of Xylem Inc.’s Form 10-K Annual Report filed on February 26, 2021 (CIK No. 1524472, File No. 1-35229).] | | | | | |

| [removed: [10.31](http://www.sec.gov/Archives/edgar/data/1524472/000152447218000006/xyl12312017ex1031.htm)] [added: [10.12](http://www.sec.gov/Archives/edgar/data/1524472/000152447218000006/xyl12312017ex1031.htm)] | | | # | | | Form of Xylem Restricted Stock Unit Agreement (Amended as of February 21, 2018). | | | Incorporated by reference to Exhibit 10.31 of Xylem Inc.'s Form 10-K [added: Annual Report] filed on February 23, 2018 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.32](http://www.sec.gov/Archives/edgar/data/1524472/000152447218000006/xyl12312017ex1032.htm)] [added: [10.13](http://www.sec.gov/Archives/edgar/data/1524472/000152447218000006/xyl12312017ex1032.htm)] | | | # | | | Form of Xylem Performance Share Unit Agreement (Amended as of February 21, 2018). | | | Incorporated by reference to Exhibit 10.32 of Xylem Inc.'s Form 10-K [added: Annual Report] filed on February 23, 2018 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.34](http://www.sec.gov/Archives/edgar/data/1524472/000152447219000015/xyl03052019exhibit1034.htm)] [added: [10.27](http://www.sec.gov/Archives/edgar/data/1524472/000152447219000015/xyl03052019exhibit1034.htm)] | | | | | | Five-Year Revolving Credit Facility Agreement, dated as of March 5, 2019 among Xylem Inc. and the Lenders party thereto. | | | Incorporated by reference to Exhibit 10.34 of Xylem Inc.’s Form 8-K filed on March 5, 2019 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [10.34.1](https://www.sec.gov/Archives/edgar/data/1524472/000119312520176067/d949896dex10341.htm)] [added: [10.28](https://www.sec.gov/Archives/edgar/data/1524472/000119312520176067/d949896dex10341.htm)] | | | | | | Amendment No. 1, dated June 22, 2020, to the Five-Year Revolving Credit Facility Agreement, dated as of March 5, 2019, each among Xylem Inc. and Citibank, N.A., as administrative agent | | | Incorporated by reference to Exhibit 10.34.1 of Xylem Inc.’s [removed: Current Report on] Form 8-K filed on June 23, 2020 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [removed: [21.0](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex21.htm)] [added: [21.0](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex21.htm)] | | | | | | Subsidiaries of the Registrant. | | | Filed herewith. | | | | | |

| [removed: [23.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex231.htm)] [added: [23.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex231.htm)] | | | | | | Consent of Independent Registered Public Accounting Firm. | | | Filed herewith. | | | | | |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex311.htm)] [added: [31.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex311.htm)] | | | | | | Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | Filed herewith. | | | | | |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex312.htm)] [added: [31.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex312.htm)] | | | | | | Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | Filed herewith. | | | | | |

| [removed: [32.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex321.htm)] [added: [32.1](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex321.htm)] | | | | | | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | | | | | |

| [removed: [32.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex322.htm)] [added: [32.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447222000009/xyl12312021ex322.htm)] | | | | | | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | This Exhibit is intended to be furnished in accordance with Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference. | | | | | |

| [10.15](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex104.htm) | | | # | | | Form of 2011 Omnibus Incentive Plan Performance Share Unit Agreement (2021). | | | Incorporated by reference to Exhibit 10.4 of Xylem Inc.’s Form 10-Q Quarterly Report filed on May 4, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [10.16](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex105.htm) | | | # | | | Form of 2011 Omnibus Incentive Plan Restricted Stock Unit Agreement (2021). | | | Incorporated by reference to Exhibit 10.5 of Xylem Inc.’s Form 10-Q Quarterly Report filed on May 4, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [10.17](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex106.htm) | | | # | | | Form of 2011 Omnibus Incentive Plan ESG Performance Share Unit Agreement (2021). | | | Incorporated by reference to Exhibit 10.6 of Xylem Inc.’s Form 10-Q Quarterly Report filed on May 4, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [10.18](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000027/xyl06302021ex101.htm) | | | # | | | Form of Xylem 2011 Omnibus Incentive Plan Non-Qualified Stock Option Award Agreement for Certain Executives and Executive Officers as Approved by the Leadership Development & Compensation Committee | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.’s Form 10-Q Quarterly Report filed on August 3, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [10.25](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex101.htm) | | | # | | | Letter Agreement between Xylem Inc. and Matthew Pine. | | | Incorporated by reference to Exhibit 10.1 of Xylem Inc.’s Form 10-Q Quarterly Report filed on May 4, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

| [10.26](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000012/xyl03312021ex102.htm) | | | # | | | Individual Employment Contract between Xylem Europe GmbH and Hayati Yarkadas. | | | Incorporated by reference to Exhibit 10.2 of Xylem Inc.’s Form 10-Q Quarterly Report filed on May 4, 2021 (CIK No. 1524472, File No. 1-35229). | | | | | |

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| [10.2](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1024.htm)[4](https://www.sec.gov/Archives/edgar/data/1524472/000152447221000008/xyl12312020ex1024.htm) | | | # | | | Letter Agreement between Xylem Inc. and Sandra E. Rowland. | | | Filed herewith. | | | | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Patrick K. Decker | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Sandra E. Rowland | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Geri McShane | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Robert F. Friel | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Jeanne Beliveau-Dunn | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Jorge M. Gomez | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Victoria D. Harker | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Steven R. Loranger | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Surya N. Mohapatra | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Jerome A. Peribere | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Markos I. Tambakeras | | |

| February [removed: 26, 2021] [added: 25, 2022] | | | | | | /s/ Lila Tretikov | | |