Xylem (XYL) 10-K risk factor changes: FY2024 vs FY2023

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 and/or market price of our common [removed: stock.*][added: stock.]

Industry and economic conditions may adversely affect our markets and our customers’ operating [removed: conditions, which can in turn affect our business, results of operations] [added: conditions] and [removed: financial condition.][added: demand.]

Economic and industry factors that have had, or could in the future have, a material [removed: impacted] [added: impact] on our businesses and demand for our products and services include: (i) the overall strength of, and our customers’ confidence in, local and global macroeconomic conditions; (ii) inflation and related monetary policy actions by governments in [removed: response to inflation,] [added: response,] (iii) overall strength of industrial, governmental, public and private sector spending; (iv) overall strength of the industrial, residential and commercial real estate markets; (v) federal, state, local and municipal [removed: governmental] [added: governments’ environmental, energy efficiency,] fiscal, trade and procurement laws, regulations and policies, including as respects domestic content; (vi) the availability of commercial financing for our customers and end-users; and (vii) the degree of funding for our public sector customers, including for water infrastructure investments.

[removed: Macroeconomic] [added: The aforementioned factors and other macroeconomic] impacts, including actual or potential [removed: recession, and] [added: economic slowdowns, recession or other prolonged downturns in the global economy or our markets,] supply chain [removed: dynamics, including supply] [added: dynamics and] shortages, [removed: logistics challenges,] tight labor markets, inflation, and significant government debt and deficit levels, have [removed: had,] [added: had] and [removed: continue to] [added: may in the future] have, a material adverse effect on [added: demand for] our [removed: business] [added: products] and [added: solutions and therefore our business, financial condition, cash flows,] results of [removed: operations.][added: operations and stock price.]

[removed: Our business may be materially adversely affected by geopolitical,] [added: Geopolitical,] regulatory, economic, foreign exchange and other risks associated with our global sales, supply chain and [removed: operations.][added: operations may adversely affect our business.]

In [removed: 2023, 54%] [added: 2024, 57%] of our total revenue was from sales to U.S. customers and [removed: 46%] [added: 43%] was from sales to customers outside the U.S. We expect our [removed: sales from international operations and export sales to continue] [added: revenue profile] to be [removed: a significant portion of our revenue.][added: similar moving forward.]

- [removed: economic] nationalism, populism, protectionism, anti-global sentiment and changes in trade protection measures, including [added: the imposition of increased or new] embargoes, tariffs and other trade barriers, import and export [removed: regulations,] [added: regulations or restrictions,] licensing requirements, [removed: and new and existing] domestic content [removed: requirements for projects receiving governmental funding;][added: requirements, and governments’ countermeasures in response;]

- [removed: instability of] [added: uncertainty, volatility] and impacts from the evolving global geopolitical [removed: environment,] [added: environment involving the U.S. federal government and other countries’ governments,] including [removed: concerning] the relationships among the U.S., European Union, Middle East, Russia, China, Taiwan, or other foreign countries, and the international community at large;

- threat, outbreak, uncertainty or escalation of terrorism, political instability, insurrection, [removed: war or] [added: war,] other armed conflict, including between Russia and [removed: Ukraine] [added: Ukraine,] and [added: in] the Middle East, [removed: and] [added: with] the potential for regional [removed: escalation;][added: escalation, and other global safety and security concerns;]

- changes in tax laws and potential negative consequences from the interpretation, application and enforcement by governmental [removed: tax] authorities of tax laws and policies, as well as changes in other [removed: laws and] [added: laws,] regulations [added: and policies] or how [removed: such provisions] [added: they] are interpreted or administered;

- disruptions in global or regional supply chains, our operations, or those of third parties upon which we rely, including due to labor disruptions, supply shortages, [added: increased or new tariffs] and freight and logistics challenges;

- unanticipated regulatory changes or unfavorable circumstances arising from [added: U.S. or] host country [removed: laws] [added: laws, regulations] or [removed: regulations,] [added: policies,] including those related to [added: water quality, the environment and energy efficiency,] infrastructure and data transmission, [removed: security] [added: security, privacy,] and [removed: privacy;][added: artificial intelligence;]

- theft, [removed: compromise or] [added: compromise,] misappropriation [removed: of] [added: or challenges in protecting] our technology, intellectual property or data; [added: and]

- shocks to the global financial system, including due to the outbreak or threat of war, armed conflict, other geopolitical conflicts, terrorism or global health crises, the effects of climate change, or other idiosyncratic [removed: events;][added: events.]

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

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

We have significant [removed: sales,] operations and direct [removed: or] [added: and] indirect suppliers located in China, which have been in the past, or could in the future be, adversely affected by: i) China’s evolving laws, regulations and policies, including as respects public health crises, import and export tariffs and restrictions, and information security and privacy, and ii) changes in the political and geopolitical [removed: environment involving China,] [added: environment,] including [removed: U.S.-China or China-Taiwan relations.][added: China's relations with the U.S., European Union and Taiwan.]

The U.S.’s imposition of tariffs on goods imported from China or deemed to be of Chinese origin, as well as the potential for new [added: or increased] tariffs, other governmental actions, trade embargoes or sanctions by the U.S., or [added: similar measures or] countermeasures imposed by China in response, has in the past and could in the future have an adverse direct or indirect impact our global supply chain, manufacturing costs, business and operating results.

Geopolitical changes in China-Taiwan relations could disrupt the operations of several companies in Taiwan that are critical to [removed: our complex] [added: the] global supply chain for semiconductors (“chips”) and other electronic components.

[removed: An] [added: The lack of availability of radio spectrum or an] inability [added: or delay in modifying our products] to meet [removed: applicable domestic content requirements] [added: frequency requirements, or the cost of completing such modifications,] could have [removed: a] material adverse [removed: impact] [added: effects] on our business, financial [removed: condition or] [added: condition, and] results of operations.

Inflation, tariffs, customs duties and other increases [added: or fluctuations] in manufacturing and operating costs have, and could continue to, adversely affect our cash flows and results of operations.

Our [added: manufacturing and] operating costs are subject to fluctuations, particularly due to volatility or changes in prices for commodities, parts, raw materials, energy and related utilities, freight and logistics, and the cost of [removed: labor., Price volatility and changes have been and may continue to be driven by a variety of factors, such as inflation, tight labor markets,][added: labor.]

[added: Cost fluctuations have been and may continue to be driven by a variety of factors, such as inflation, tight labor markets,] prevailing price levels, exchange rates, changes in trade agreements, tariffs and other trade protection measures, and other economic [added: and geopolitical] factors.

Throughout [removed: 2023] [added: 2024,] our operating costs were adversely impacted by price inflation, [removed: including the cost of certain raw materials, components, energy, commodities, freight and logistics,] which could continue in [removed: 2024] [added: 2025] to varying degrees depending, in part, on broader [removed: macroeconomic] [added: macroeconomic, political] or geopolitical conditions.

[removed: Our] [added: For example, our] global supply chain includes shipping routes through the Red Sea, where vessels have been and may continue to be impacted by armed conflicts involving rebel groups; and continued conflicts or escalation of [removed: conflict] [added: ongoing conflicts] in [added: Ukraine or] the Middle East could adversely impact our logistics costs and [removed: could also] result in an increase in our costs for energy and supplies, and potentially delay shipments to customers.

[removed: Additionally, the] [added: The] U.S. has enacted [added: or threatened] various trade actions, including [removed: imposing] [added: new or additional] tariffs on certain goods we import from [removed: China] [added: China, Mexico, Canada] and other countries, which has [removed: resulted] [added: or may result] in retaliatory tariffs [removed: by China] and other [removed: countries.][added: trade actions.]

[removed: Failure] [added: We may be unable] to compete successfully in our [removed: markets, including our ability to] [added: markets or] develop and commercialize innovative and disruptive [removed: technologies, could adversely affect our business.][added: solutions and technologies.]

We believe the principal points of competition are [removed: product and service] performance, quality and reliability, [removed: innovation,] [added: price, life cycle cost, security,] speed [removed: to market with] [added: of development and commercialization of] new [removed: or disruptive technologies] [added: technologies, processes] and business models, [removed: application expertise,] brand reputation, [added: application expertise,] energy efficiency, [removed: product security, product life cycle cost,] timeliness of delivery, proximity of our service centers to customers, effectiveness of our distribution channels, [removed: price] and customers’ experience in doing business with [removed: us.][added: us directly or through our channel partners.]

Maintaining and improving our competitive position will require successful management of these factors in a [added: volatile] business environment with increasingly rapid rates of change and disruption.

Our competitive position and future growth depend upon a number of factors, including our ability to successfully: (i) [removed: innovate, develop, bring to market and maintain competitive, compelling, secure] [added: enhance] and [removed: efficient technologies, products] [added: differentiate our product] and [removed: services,] [added: service offerings,] business models and customer [removed: experience, to] [added: experience by increasing efficiency or security, or adding innovative features or disruptive or emerging technologies, such as artificial intelligence, that] address emerging regulations and [removed: trends and] [added: trends,] meet customers’ [removed: needs (including those related to digitization of water, social, environmental] [added: needs,] and [removed: sustainability matters),] [added: prevent commoditization,] (ii) defend our market share against an ever-expanding number of competitors, [removed: many of which are] [added: including] new [removed: and] [added: or] non-traditional [added: competitors] from outside our industry, such as large technology [removed: firms, or those in the emerging markets, (iii) enhance our product and service offerings by adding innovative features, increased efficiency or disruptive or emerging technologies, such as artificial intelligence, that differentiate them from those of our competitors and prevent commoditization, (iv)] [added: firms,(iii)] continue to invest [removed: in, cultivate, develop] [added: in] and maintain our distribution network of channel partners, [removed: (v)] [added: (iv)] attract, [removed: develop and] [added: develop,] retain [added: and train] individuals with the requisite innovation, digital and technical capabilities, expertise and understanding of customers’ needs to [removed: develop and] [added: develop,] commercialize [added: and sell] new technologies, [removed: products] [added: products, services] and [removed: services, (vi)] [added: solutions, (v)] continue to leverage and expand our external ecosystem of innovation partners with joint venture partners, universities, venture capital, the start-up [removed: of] community and other technology [removed: firms, (vii)] [added: innovators, (vi)] continue to invest in our manufacturing, research and development, engineering, sales and marketing, [added: modernization of our systems,] and digitization of customer [added: solutions,] service and support tools, [removed: (viii)] [added: (vii)] win [removed: large contracts] and execute [removed: them] [added: large contracts] on schedule and on budget, [removed: (ix)] [added: and (viii)] optimize our supply chain and manufacturing to enable predictable and efficient delivery to customers, and [removed: (x)] compete for business subject to [removed: applicable] governmental procurement laws, regulations and policies, including [removed: new and existing] sustainability and domestic content requirements in the U.S. and globally, as they may evolve over time.

[removed: We] [added: As a result of the foregoing, we] may not be successful in maintaining our competitive [removed: position,] [added: position and market share,] which could adversely affect our business, financial condition, cash flows or results of operations.

Cybersecurity incidents and related data breaches or other disruptions [removed: to] [added: involving] our enterprise information technology and operations, [removed: or to] our connected products and services, [removed: including those of third parties] [added: or information technology] on which we or our customers rely, could materially and adversely affect our business.

We rely on information technology, including operational technology, and communications networks to run our manufacturing processes and equipment, to enable business [removed: processes,] [added: processes] and [added: employee productivity, and] to process, transmit, store and manage our electronic information, including confidential business information and data relating to employees, customers or other business partners.

We also rely on key third parties, [removed: including: i)] [added: such as] direct and indirect suppliers, [removed: ii) strategic joint venture partners that provide certain aspects of our digital services and offerings, iii)] contract manufacturers, [removed: iv)] cloud-based service providers, and [removed: v)] outsourced business process providers, including in the areas of Information Technology, Finance, Human Resources, Procurement and Travel.

Regardless of [added: the] protection [removed: measures, all] [added: measures we, or the third parties we rely on, have implemented,] information technology and communications networks [removed: are inherently] [added: may be] susceptible to damage or disruption due to causes such as: equipment, system or application failure, including as a result of maintenance, obsolescence, unsupportability or age; human error or malfeasance; vandalism; natural disaster; fire; power, communication or other utility outage or failure; and cybersecurity incidents, including ransomware, denial-of-service, [added: vendor e-mail compromise, deepfake attacks,] malware, phishing, and computer [removed: viruses.][added: viruses resulting from a wide ranging threat landscape, including attacks by nation states and others.]

We provide certain [removed: digitally-enabled] [added: digitally enabled] or internet-connected products, such as pumps, controllers, meters and other equipment, [removed: and services, such as Water One®] [added: digital (or intelligent) solutions,] and other remote monitoring [removed: capabilities,] [added: and] condition [removed: assessment,] [added: assessment capabilities,] and an interoperability platform via [removed: a] [added: Idrica, our] strategic joint venture partner.

While we attempt to provide our customers with [added: reasonable] measures to safeguard our products and services from cybersecurity threats, the potential for a cybersecurity incident remains.

A cybersecurity [removed: Incident] [added: incident] or other damage or disruption to information technology and communications [removed: networks] [added: networks,] or involving our connected products and [removed: services] [added: services,] may have adverse effects on us, our customers or third parties on which we rely, including: interference with operations and services, potentially with public health and safety risks involving certain of our customers; disruption of production, supply chain, shipments, billing, collections and customer service; disruption to data analytics; disruption to remote monitoring and control of operational systems; unauthorized access, disclosure, misappropriation, misuse, destruction, compromise or theft of our financial, operational or other proprietary information, including intellectual property and trade secrets, or data pertaining to our employees, customers or suppliers; damage to employee, customer and business partner relationships; recall of our products; legal claims, proceedings or regulatory enforcement actions, and fines or penalties; increased costs to prevent, respond to or mitigate cybersecurity incidents; and damage [added: to] our brands and reputation.

To mitigate reliability and cybersecurity risks related to our enterprise and connected products and services, we maintain relevant policies, standards, procedures and technologies that are applicable to all Xylem employees and contractors, including: patching; passwords; network and data access, including requirements and rights; business continuity and disaster [removed: recovery;] [added: recovery plans;] monitoring for external and insider risks; obsolescence or end-of-life of operating technologies or applications’ operating systems; IT general computing controls; [added: and] secure software development.

As [removed: technology evolves,] [added: technology, including the use of artificial intelligence, and the threat landscape evolve,] we may continue to experience such events, likely with more frequency and involving a broader range of devices and more sophisticated modes of attack.

Some of the factors, events, and contingencies discussed below may have occurred in the past, and the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, but are provided because future occurrences of such factors, events, or contingencies could have a material adverse effect.*

- impacts from significant shifts in U.S. immigration policy, such as a tightened labor market and inflation;

We have a large and complex network of suppliers (and their suppliers) and contract manufacturers globally, including in China and Mexico.

As a result, these U.S. trade measures or countermeasures by China, Mexico or other countries could increase the cost of our products, which we may not be able to offset through price increases or productivity, and could also impede our ability to remain competitive.

Additional challenges we face include that customers may be slow to adopt our new and innovative solutions and technologies.

Pricing pressures, including as a result of new or additional tariffs on our products or goods used in the manufacture of our products, and/or the impact of disruptive or emerging technologies, such as artificial intelligence, and our efforts to optimize our productivity may require that we adjust the prices of certain products, services, solutions or projects or rationalize certain of our offerings to stay competitive or win large contracts.

Our connected products and services may be

susceptible to damage or disruption from a myriad of causes as described above.

As a result, the anticipated benefits of the acquisition may take

The cost of compliance with these laws and regulations may increase resulting in increased operating costs or required additional investment in facilities.

Risks arising from unsafe products or

Starting in 2024, we launched initiatives focused on improving margins and customer centricity through a range of business simplification, strategic pricing and operational productivity measures across our offerings, operations and customer base.

Such measures may include: differentiating our offerings and pricing among customers and channels; adjusting the prices of certain offerings; rationalizing certain of our offerings; modernizing our systems by standardizing key enterprise applications; rationalizing our footprint; write-offs on affected assets; and simplifying our supply chain.

As a result of these measures, there could be an adverse impact on our market share, competitiveness, profitability and growth, as well as the potential for unanticipated disruption in customer service.

or inefficiencies during transitional periods.

of products.

At the same time, certain governmental representatives and other

We may also experience operational disruption, increased costs, and other harms in our efforts to comply with or respond to reversals or changes in such requirements.

impairment of our goodwill and other indefinite-lived intangible assets.

Certain countries have enacted such legislation effective in 2024.

Furthermore, we expect the U.S. Congress to consider additional tax legislation in 2025, including extensions or other changes to the 2017 Tax Cuts and Jobs Act.

payments to government officials or other persons for the purpose of obtaining or retaining business.

For example, certain of our products supplied to the medical industry are subject to U.S. Food and Drug Administration 510(k).

These may encompass pollution and discharges, emissions trading schemes, carbon, fuel or other taxes.

Developments such as the adoption of new environmental or

Future economic slowdowns or recession, or other prolonged downturns in the global economy or our markets could have material adverse effects on our business, financial condition, cash flows, results of operations and stock price.

- foreign currency exchange rate fluctuations, restrictions on repatriation of earnings or payment of distributions, dividends, loans or advances to us by foreign subsidiaries;

- global or regional safety and security considerations; and

- increased costs and risks in developing, staffing and simultaneously managing our many global operations as a result of distance, remote work arrangements, language and cultural differences.

In the year ended December 31, 2023, 16% of our total revenues were generated in emerging markets and we have placed a particular emphasis in our strategy on increasing our growth and presence in emerging markets, including China, India, and key markets in Africa, Middle East and Southeast Asia.

In the year ended December 31, 2023, 54% of our revenues were from sales to U.S. customers, which included sales of some products for federally funded projects.

We expect our U.S. sales in 2024 and beyond to be similar.

However, on a case-by-case basis, we may not be able to successfully compete for a federally funded project as some of our products may not comply with the domestic content requirements of the U.S. Buy America mandate under the Infrastructure Investment and Jobs Act (“IIJA”) or other federally funded projects.

We continue to evaluate and implement mitigation measures around sourcing and localization of manufacturing for our most significantly impacted product lines, as well as consider alternative products that may meet both project specifications and domestic content requirements, but there is no guarantee that we will be able in all cases to meet applicable domestic content requirements of a project or across all our product lines.

While governmental exemptions and waivers may be issued that negate the application of the Buy America mandate for 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.

For example, we have significant manufacturing operations in Europe, which could be adversely impacted by increased energy costs related to an actual or potential escalation in the ongoing Russia-Ukraine conflict.

Additional tariffs imposed by the U.S., or further retaliatory trade measures taken by China or other countries, could increase the cost of our products.

We may not be able to offset increases in our manufacturing costs through price increases or productivity.

The failure of our technologies, products or services to maintain and gain market acceptance due to more attractive offerings, the failure of our products to comply with governmental regulations or policies, or customers’ slower-than-expected adoption of and investment in our new and innovative technologies could significantly reduce our revenues or market share and adversely affect our competitive position.

Pricing pressures could cause us to adjust the prices of certain products, services or projects to stay competitive, or we may not be able to continue to win large contracts, which could adversely affect our market share and competitive position.

Our enterprise consists of our businesses, functions, operations, manufacturing and employees.

Our connected products and services are inherently susceptible to damage or disruption from a myriad of causes as described above, including cybersecurity incidents.

We have implemented processes, procedures and technologies designed to detect and respond to cybersecurity incidents and mitigate potential risks associated with cybersecurity threats and incidents involving our information technology, products and services.

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 production, revenues and operating results.

As a result of global market supply and demand dynamics, we have in the past and could in the future experience shortages, capacity constraints and delays in the supply of raw materials, parts, and components, including chips and other electronic components.

In addition, we

Liabilities resulting from such events, damages and injuries could materially adversely affect our business, financial condition, results of operations or prospects.

laws and regulations.

The cost of compliance with these laws and regulations may become significant, result in increased operating costs or require additional investment in facilities, and therefore could have a material adverse effect on our business, financial condition, results of operations or prospects.

As such, these activities create a risk of significant legal and environmental liabilities and reputational damage.

critical to our long-term success.

ability to achieve our sustainability commitments; the assumption of new material risks associated with the acquired businesses; and the loss of key employees of the acquired businesses.

An inability or delay in modifying our products to meet such requirements, or the cost of completing such modifications, could have material adverse effects on our business, financial condition, and results of operations.

existing laws and regulations.

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

For example, in 2020 we recorded goodwill impairment charges of $58 million within our Measurement and Control Solutions segment primarily related to the performance of the business of the Pure Technologies Ltd. acquisition ("Pure") (as detailed in Note 12, “Goodwill and Other Intangible Assets”).

We did not record goodwill impairment charges within our Measurement and Control Solutions segment in 2021, 2022 or 2023.

Certain countries, including EU member states, have enacted or are expected to enact legislation to be effective as early as 2024, with widespread implementation of a global minimum tax expected by 2025.

Based on currently enacted legislation, we do not expect a material impact on our effective tax rate and cash tax liabilities in the near term.

However, additional guidance and details regarding implementation of these rules continue to be released.

Any implementation of these rules via domestic legislation of countries or via international treaties could have a material impact on our effective tax rate or result in higher cash tax liabilities.

can result in increased tax assessments, and settlement or litigation about the assessments and final resolution could be unfavorable to Xylem.

In addition, any violation could result in

For example, our Mar Cor product line provides US Food and Drug Administration 510(k) cleared water purification systems to the dialysis industry.

Any dispute or litigation regarding intellectual property could be costly and time-consuming to defend due to the complexity and uncertainty of intellectual property litigation.

*This section of this Form 10-K generally discusses [removed: 2023] [added: 2024] and [removed: 2022] [added: 2023] items and year-to-year comparisons between [removed: 2023] [added: 2024] and [removed: 2022.][added: 2023.]

Our broad portfolio of solutions addresses customer needs across the water cycle, from the delivery, measurement and use of drinking water to the collection, test, treatment and analysis of [removed: wastewater] [added: wastewater,] to the return of water to the environment.

Our product and service offerings are organized into four reportable segments that are aligned around the critical market applications they provide: Water Infrastructure, Applied Water, Measurement and Control Solutions and [removed: Integrated] [added: Water] Solutions and Services.

[removed: APT] [added: The Water Infrastructure segment also] provides a range of highly differentiated and scalable products and technologies with product offerings in the filtration and separation, disinfection, [added: and] wastewater solutions, [removed: anode and electrochlorination technology, and aquatics technologies] [added: for municipal] and [removed: solutions spaces.][added: industrial applications.]

- *Applied Water* serves the water usage applications sector with water pressure boosting systems for heating, ventilation and air conditioning, and for fire protection systems to the residential and commercial building [removed: services] [added: solutions] markets.

- *Measurement and Control Solutions* primarily serves the utility infrastructure solutions and services sector by delivering communications, smart metering, measurement and control [removed: technologies] [added: capabilities] and critical infrastructure technologies that allow customers to more effectively use their distribution networks for the delivery, monitoring and control of critical resources such as water, electricity and natural gas.

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

In the Measurement and Control Solutions segment, we generate our sales through a combination of long-standing relationships with leading distributors and dedicated channel [removed: partners] [added: partners,] as well as direct sales depending on the regional availability of distribution channels and the type of product.

[removed: *•Integrated] [added: *•Water] Solutions and Services* [removed: serves the industrial and municipal sectors with] [added: provides] tailored services and [removed: solutions] [added: solutions,] in collaboration with [removed: the customers backed by life‑cycle services] [added: customers,] including on‑demand water, outsourced water, [removed: recycle / reuse,] [added: recycle/reuse, pipeline assessment services, specialty dewatering] and emergency response service alternatives to improve operational reliability, [removed: performance,] [added: performance] and environmental compliance.

[added: Key offerings within this segment also include] equipment systems for industrial needs (influent water, boiler feed water, ultrahigh purity, process water, wastewater treatment, and [removed: recycle / reuse),] [added: recycle/reuse),] full-scale outsourcing of operations and maintenance, and municipal services, including odor and corrosion control [removed: services.][added: services, as well as leak detection, condition assessment and asset management and pressure monitoring solutions.]

[removed: See] [added: Refer to] Note 3, "Acquisitions and Divestitures," [removed: to the consolidated financial statements] for [removed: further] [added: additional] information.

The non-GAAP measures may not be comparable to [removed: similarly-titled] [added: similarly titled] measures reported by other companies.

- "adjusted net income" and "adjusted earnings per share" defined as net income and earnings per share, respectively, adjusted to exclude restructuring and realignment costs, amortization of acquired intangible assets, gain or loss from sale of businesses, [removed: special charges and tax-related special items, as applicable.][added: gain on remeasurement of previously held equity interest,]

| (in millions, except per share data) | | | | | | [removed: 2023] [added: 2024] | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | | | |

| Net income and Earnings per share | | | | | | $ | [removed: 609] [added: 890] | | | | | $ | [removed: 2.79] [added: 3.65] | | | | | $ | [removed: 355] [added: 609] | | | | | $ | [removed: 1.96] [added: 2.79] | |

| Restructuring and realignment | | | | | | [removed: 106] [added: 91] | | | | | | [removed: 0.49] [added: 0.37] | | | | | | [removed: 34] [added: 106] | | | | | | [removed: 0.19] [added: 0.49] | | |

| Acquired intangible amortization | | | | | | [removed: 176] [added: 216] | | | | | | [removed: 0.81] [added: 0.89] | | | | | | [removed: 72] [added: 176] | | | | | | [removed: 0.40] [added: 0.81] | | |

| Special charges [added: (a)] | | | | | | [removed: 138] [added: 57] | | | [removed: (a)] | | | [removed: 0.63] [added: 0.23] | | | | | | [removed: 160] [added: 138] | | | [removed: (b)] | | | [removed: 0.88] [added: 0.63] | | |

| Tax-related special items | | | | | | [removed: (115)] [added: (19)] | | | | | | [removed: (0.53)] [added: (0.08)] | | | | | | [removed: 1] [added: (115)] | | | [added: (c)] | | | [removed: 0.01] [added: (0.53)] | | |

| [removed: (Gain) loss] [added: Gain (loss)] from sale of business | | | [removed: | | |] 1 | | | | | | [removed: — | | |] [added: (1)] | | | [removed: (1)] | | | [added: (200)] | | | [removed: (0.01)] [added: %] | | |

| Tax effects of adjustments [removed: (c)] [added: (b)] | | | | | | [removed: (90)] [added: (88)] | | | | | | [removed: (0.41)] [added: (0.36)] | | | | | | [removed: (51)] [added: (90)] | | | | | | [removed: (0.28)] [added: (0.41)] | | |

| Adjusted net income and Adjusted earnings per share | | | | | | $ | [removed: 825] [added: 1,041] | | | | | $ | [removed: 3.78] [added: 4.27] | | | | | $ | [removed: 570] [added: 825] | | | | | $ | [removed: 3.15] [added: 3.78] | |

(a)The special charges in the [removed: year] [added: years end December 31, 2024 and 2023] primarily relate to [removed: $126] [added: $50] million [added: and $134 million] of acquisition and integration related [removed: costs.][added: costs, respectively.]

[removed: (c)The] [added: (b)The] tax effects of adjustments are calculated using the statutory tax rate, taking into consideration the nature of the item and the relevant taxing jurisdiction.

▪"adjusted operating expenses" defined as operating expenses adjusted to exclude amortization of acquired intangible assets, restructuring and realignment costs and special [removed: charges.][added: charges, as applicable.]

▪"adjusted operating income" defined as operating income, adjusted to exclude restructuring and realignment [removed: costs] [added: costs, amortization of acquired intangible assets, gain or loss from sale of businesses, gain on remeasurement of previously held equity interest, special charges] and [added: tax-related] special [removed: charges,] [added: items, as applicable,] and "adjusted operating margin" defined as adjusted operating income divided by total revenue.

▪“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, gain or loss from sale of [removed: businesses] [added: businesses, gain on remeasurement of previously held equity interest] and special charges, and "adjusted EBITDA margin" defined as adjusted EBITDA divided by total revenue.

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

| (in millions) | | | | | | [removed: 2023] [added: 2024] | | | | | | [added: 2023 | | | | | |] 2022 | | | | | | [added: 2024 v. 2023] | | | [added: | | | 2023 v. 2022 | | |]

| Net cash provided by operating activities | | | | | | $ | [removed: 837] [added: 1,263] | | | | | $ | [removed: 596] [added: 837] | | | | | | | |

| Capital expenditures | | | | | | [removed: (271)] [added: (321)] | | | | | | [removed: (208)] [added: (271)] | | | | | | | | |

| Free cash flow | | | | | | $ | [removed: 599] [added: 942] | | | | | $ | [removed: 388] [added: 566] | | | | | | | |

| Net cash used in investing activities | | | | | | $ | [removed: (628)] [added: (482)] | | | | | $ | [removed: (191)] [added: (628)] | | | | | | | |

| Net cash [removed: provided (used) by] [added: used in] financing activities | | | | | | $ | [removed: (157)] [added: (615)] | | | | | $ | [removed: (790)] [added: (157)] | | | | | | | |

Xylem reported revenue of [removed: $7,364] [added: $8,562] million for [removed: 2023,] [added: 2024,] an increase of [removed: $1,842] [added: $1,198] million, or [removed: 33.4%,] [added: 16.3%,] from [removed: $5,522] [added: $7,364] million reported in [removed: 2022.][added: 2023.]

On a constant currency basis, revenue increased by [removed: $1,867] [added: $1,210] million, or [removed: 33.8%,] [added: 16.4%,] during the year.

The increase at constant currency consists of revenue from acquisitions of [removed: $1,177] [added: $786] million and an increase in organic revenue of [removed: $690] [added: $424] million reflecting [removed: strong] organic growth [removed: in all segments as well as] across all major geographic [removed: regions.][added: regions, with organic growth in the Measurement and Control Solutions, Water Infrastructure, and Water Solutions and Services segments, more than offsetting organic declines in the Applied Water segment.]

Operating income [removed: for 2023] was $652 [removed: million, reflecting] [added: million (operating margin of 8.9%) during 2023,] an increase of $30 million, or 4.8%, [added: when] compared to [added: operating income of] $622 million [removed: in] [added: (operating margin of 11.3%) during] 2022.

The increase in operating income for [removed: 2023] [added: 2024] included [removed: an increase] [added: a decrease] in special charges of [removed: $122] [added: $81] million, an increase in purchased intangible amortization of [removed: $104] [added: $40] million, and [removed: an increase] [added: a decrease] in restructuring and realignment costs of [removed: $72] [added: $15] million as compared to [removed: 2022.][added: 2023.]

Excluding the impact of these items, adjusted operating income was [removed: $1,072] [added: $1,373] million, with an adjusted operating margin of [removed: 14.6%] [added: 16.0%] in [removed: 2023] [added: 2024] as compared to adjusted operating income of [removed: $744] [added: $1,072] million with an adjusted operating margin of [removed: 13.5%] [added: 14.6%] in [removed: 2022,] [added: 2023,] an increase of [removed: 110] [added: 140] basis points.

Due to the change in reportable segments effective January 1, 2024, we have provided an updated discussion covering 2023 and 2022 and year-to-year comparisons between 2023 and 2022, reflective of the current reportable segments.*

Additionally, we offer software and services which have been further enhanced by our Xylem Vue platform to enable a holistic view of the water cycle for our customers through cloud-based analytics, remote monitoring and data management with the purpose of optimizing their operating efficiency.

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

Commencing from the acquisition date, Xylem’s financial statements include the assets, liabilities, operating results and cash flows of Evoqua.

special charges and tax-related special items, as applicable.

| Gain on remeasurement of previously held equity interest | | | | | | (152) | | | | | | (0.62) | | | | | | — | | | | | | — | | |

| Loss from sale of business | | | | | | 46 | | | | | | 0.19 | | | | | | 1 | | | | | | — | | |

| Weighted average number of shares - diluted | | | | | | 243.5 | | | | | | | | | | | | 218.2 | | | | | | | | |

(c)The tax-related special items in 2023 primarily relate to $70 million of tax benefits from tax exam impacts and $27 million of tax benefits relating to tax law changes.

Operating income for 2024 was $1,009 million, reflecting an increase of $357 million, or 54.8%, compared to $652 million in 2023.

Operating margin was 11.8% in 2024, up 290 basis points from 8.9% in 2023.

- Net income of $890 million, or $3.65 per diluted share, up 30.8% ($1,041 million or $4.27 per diluted share on an adjusted basis, up 13.0% from 2023)

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| Gain on remeasurement of previously held equity interest | | | | | | 152 | | | | | | — | | | | | | — | | | | | | NM | | | | | | NM | | |

| Income tax expense | | | | | | 197 | | | | | | 26 | | | | | | 85 | | | | | | 657.7 | | % | | | | (69.4) | | % |

2024 versus 2023

Revenue generated for 2024 was $8,562 million, an increase of $1,198 million, or 16.3%, compared to $7,364 million in 2023.

The increase at constant currency consists of revenue from acquisitions of $786 million and an increase in organic revenue of $424 million, reflecting organic growth across all major geographic regions, with organic growth in the Measurement and Control Solutions, Water Infrastructure, and Water Solutions and Services segments, more than offsetting organic declines in the Applied Water segment.

| Organic Growth | | | 123 | | | 5.5 | | % | | | | (58) | | | (3.2) | | % | | | | 255 | | | 15.9 | | % | | | | 104 | | | 6.2 | | % | | | | 424 | | | 5.8 | | % |

| Acquisitions/(Divestitures) | | | 221 | | | 10.0 | | % | | | | — | | | — | | % | | | | 4 | | | 0.2 | | % | | | | 561 | | | 33.3 | | % | | | | 786 | | | 10.7 | | % |

| Constant Currency | | | 344 | | | 15.5 | | % | | | | (58) | | | (3.2) | | % | | | | 259 | | | 16.1 | | % | | | | 665 | | | 39.5 | | % | | | | 1,210 | | | 16.5 | | % |

| Foreign currency translation (a) | | | (4) | | | (0.2) | | % | | | | (2) | | | (0.1) | | % | | | | — | | | — | | % | | | | (6) | | | (0.3) | | % | | | | (12) | | | (0.2) | | % |

| Total change in revenue | | | 340 | | | 15.3 | | % | | | | (60) | | | (3.3) | | % | | | | 259 | | | 16.1 | | % | | | | 659 | | | 39.2 | | % | | | | 1,198 | | | 16.3 | | % |

| 2024 Revenue | | | $ | 2,555 | | | | | | | | $ | 1,793 | | | | | | | | $ | 1,871 | | | | | | | | $ | 2,343 | | | | | | | | $ | 8,562 | | | | |

(a)Foreign currency translation impact for the year primarily due to the weakening in value of various currencies against the U.S. Dollar, the largest being the Canadian Dollar, Chinese Yuan, Chilean Peso, Brazilian Real and the Hungarian Forint, offset by the strengthening in the British Pound.

Water Infrastructure revenue increased $340 million, or 15.3%, to $2,555 million in 2024 compared to 2023.

Organic revenue for the transport application also benefited from increased infrastructure projects in the emerging markets.

Organic revenue for the treatment applications grew by $44 million, led by infrastructure projects in the U.S. and emerging markets.

Applied Water revenue decreased $60 million, or 3.3%, to $1,793 million in 2024 compared to 2023.

Industrial organic revenue decreased by $32 million due to timing of projects and softness across all major geographic regions.

Organic revenue from building solutions declined $26 million driven by softness in the U.S.

Measurement and Control Solutions revenue increased $259 million, or 16.1%, to $1,871 million in 2024 compared to 2023.

Foreign currency translation was flat during the year, with the change at constant currency coming from organic growth of $255 million, and $4 million of acquisition activity.

Smart metering and other applications had $261 million of organic growth, driven by increased sales volume due to backlog execution in the U.S. Organic growth was partially offset by $6 million of organic decline in analytics, driven by lapping of project deliveries and backlog execution in the U.S. and emerging markets in the prior year.

Water Solutions and Services revenue increased $659 million, or 39.2% to $2,343 million in 2024 compared to 2023.

Revenue growth was partially made up of the revenue contributed by acquisitions of $561 million, with the remainder of the increase coming from organic revenue growth of $104 million, or 6.2%.

Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 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, 2022.*

We also provide sales and rental of specialty dewatering pumps and related equipment and services.

The Water Infrastructure segment also includes legacy-Evoqua's Applied Product Technologies ("APT") segment.

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.

Key offerings within this segment also include

On January 22, 2023, Xylem entered into a definitive agreement to acquire Evoqua, a leader in mission-critical water treatment solutions and services, in an all-stock transaction that reflected an implied enterprise value of approximately $7.5 billion.

The transaction closed on May 24, 2023.

Coinciding with the Evoqua acquisition, Xylem has updated our adjusted operating income and adjusted earnings per share to add back non-cash purchase accounting intangible amortization and recast 2022 amounts to reflect the change on a comparative basis

Evoqua, a leader in North America water treatment, complements Xylem’s distinctive portfolio of solutions with advanced water and wastewater treatment capabilities, a powerful and extensive network of service professionals and access to a number of attractive industrial markets with resilient, recurring revenue streams.

(b)The special charges in the year primarily relate to the U.K. pension settlement expense of $140 million and asset impairment charges of $14 million recorded in the period.

| Non-discretionary tax payments (R&D tax law adoption) | | | | | | 33 | | | | | | — | | | | | | | | |

Operating margin was 8.9% and 11.3% for 2023 and 2022, respectively.

- Net income of $609 million, or $2.79 per diluted share, up 42.3% ($825 million or $3.78 per diluted share on an adjusted basis, up 20.0% from 2022)

| Acquired intangible asset amortization | | | | | | (176) | | | | | | (72) | | | | | | | | | | | | 144.4 | | % | | | | | | |

| Adjusted operating expenses | | | | | | 1,681 | | | | | | 1,344 | | | | | | | | | | | | 25.1 | | % | | | | | | |

| *Adjusted operating expenses to revenue ratio* | | | | | | 22.8 | | % | | | | 24.3 | | % | | | | | | | | | | (150) | | bp | | | | | | |

| Organic Growth | | | 255 | | | 10.8 | | % | | | | 96 | | | 5.4 | | % | | | | 339 | | | 24.4 | | % | | | | — | | | NM | | | | | | 690 | | | 12.5 | | % |

| Constant Currency | | | 617 | | | 26.1 | | % | | | | 96 | | | 5.4 | | % | | | | 339 | | | 24.4 | | % | | | | 815 | | | NM | | | | | | 1,867 | | | 33.8 | | % |

| Total change in revenue | | | 603 | | | 25.5 | | % | | | | 86 | | | 4.9 | | % | | | | 338 | | | 24.3 | | % | | | | 815 | | | NM | | | | | | 1,842 | | | 33.4 | | % |

Organic growth for the year was driven by strength in both the utility and industrial end markets.

The utilities end market experienced organic growth of $150 million led by strength in the U.S. driven by strong price realization, increased sales volume bolstered by backlog execution, and higher rental revenue.

Western Europe also experienced strong organic growth due to demand from utility capital projects and strong price realization.

The emerging markets grew organically due to increased project revenue.

Measurement and Control Solutions revenue increased $338 million, or 24.3%, in 2023 (24.4% increase on a constant currency basis) compared to 2022.

We experienced organic revenue growth across all three major geographic regions and in both of the segment's end markets for the year, driven by $327 million of organic growth in the utility end market, primarily in the U.S., driven by increased sales volume and backlog execution, enabled by significant improvement of supply chain constraints, and $12 million in the industrial end market driven by strong backlog execution in our test business.

Integrated Solutions and Services revenue consists entirely of $815 million for the year ended December 31, 2023 contributed from the Evoqua acquisition.

Orders received during 2023 increased by $1,244 million, or 19.9%, to $7,501 million (20.5% increase on a constant currency basis).

Order intake increased due to $1,220 million of increased orders related to the Evoqua acquisition.

The increase in orders was partially offset by $41 million of unfavorable foreign currency translation.

Organic order growth for the year was $65 million, or 1.0%.

| Constant Currency | | | 476 | | | 18.3 | | % | | | | (6) | | | (0.3) | | % | | | | (53) | | | (2.9) | | % | | | | 868 | | | NM | | | | | | 1,285 | | | 20.5 | | % |

Water Infrastructure segment orders increased $453 million, or 17.4%, to $3,060 million, with $352 million in contributions from the acquisition of the APT business, and organic order growth of $124 million or 4.8%.

Organic orders increased during the year primarily in the transport applications, led by the dewatering business in the U.S., where we benefited from strong price realization and demand, the emerging markets, where we had increased capital project orders, and western Europe where we saw increased demand and capital project orders.

The treatment applications also saw organic growth primarily in the U.S. and in the emerging markets where we saw higher capital project orders in these regions.

Applied Water segment orders decreased $24 million, or 1.3%, to $1,770 million (flat on a constant currency basis).

Order intake during the year was negatively impacted by $18 million of foreign currency translation, with organic orders being essentially flat.

Weakness in the U.S. from lower demand and timing of orders was partially offset by strength in the emerging markets due to strong project orders and recovery from prior year COVID-19 impacts.

Measurement and Control Solutions segment orders decreased $53 million, or 2.9%, to $1,803 million, with no impact from foreign currency translation.

Organic order weakness for the year was driven by the energy applications, particularly in the U.S., where we saw lower demand in gas metrology.

Order declines were marginally offset by growth in the water applications, primarily in the U.S., and western Europe, driven by increased digital and service orders, as well as demand in our pipeline assessment services business.

Approximately [removed: 46%] [added: 43%] of our [removed: 2023] [added: 2024] revenues were from customers in various locations outside the U.S.

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

As of December 31, [removed: 2023,] [added: 2024,] our long-term debt portfolio is primarily comprised of four series of fixed-rate senior notes that total approximately $1.9 billion.

In addition to the senior notes, we also have [removed: $75] [added: $74] million in equipment financings with fixed interest rates.

Our long-term debt portfolio also includes [removed: $326] [added: $32] million of variable rate debt, [removed: primarily] comprised [added: entirely] of the [removed: $278] [added: $32] million for [removed: the Term Facility (as defined in Note 15, “Credit Facilities and Debt” to the consolidated financial statements) and $48 million of] equipment [removed: financings with variable interest rates .][added: financings.]

We estimate that a [removed: 1%] [added: 10%] movement in interest rates would not have a material economic impact on our financial position and results of operations.

Xylem is a leading global water technology company with [removed: 2023] [added: 2024] revenues of [removed: $7.4] [added: $8.6] billion and approximately 23,000 employees worldwide.

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

- A substantial global installed base [added: of products and solutions] across the water cycle that provides for steady [removed: recurring and] [added: parts,] replacement [added: and service] revenue

- A strong history of [removed: bringing] [added: providing] innovative products, solutions, [added: services] and business models to customers

- A dedicated, experienced, qualified and technologically advanced group of employees focused on safely satisfying our customers' requirements [removed: in the] [added: to transport, treat or measure clean] water [added: or wastewater] and [added: measure] energy [removed: spaces][added: usage]

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

In the U.S., deteriorating pipe systems, theft or inaccurate meters result in approximately one out of every six gallons of treated [added: and transported] water being lost prior to reaching the end customer.

This problem of "non-revenue" water is a major financial challenge of many utilities globally, especially in developing markets where non-revenue water can represent 10% to 60% or more of net water [removed: produced.][added: produced and the treatment and energy costs to transport water is substantial.]

We estimate the total addressable market size of the global water industry, excluding operational expenditures related to labor, energy, and chemicals, to be approximately [removed: $700] [added: $750] billion.

"Water scarcity" refers to the management of [added: the] limited [removed: supplies] [added: supply] of water due to climate change, overpopulation and pollution.

[removed: Our customers often face all four of these challenges, ranging from inefficient and aging water distribution networks and energy-intensive or unreliable water and wastewater management] systems (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 [removed: or droughts] (requiring improvements in resilience).

Additionally, we also provide solutions to enhance communications and efficiency, [added: improve safety and conserve resources to customers in the water sector.]

[removed: ][added: ]

We have four reportable business segments that are aligned around the critical market applications they provide: Water Infrastructure, Applied Water, Measurement and Control Solutions and [removed: Integrated] [added: Water] Solutions and Services.

| | | | | | | Market Applications | | | | | | [removed: 2023] [added: 2024] Revenue (in millions) | | | | | | % Revenue | | | | | | Major Products | | | | | | Primary Brands | | |

| Water Infrastructure | | | | | | Transport | | | | | | $ | [removed: 2,172] [added: 1,498] | | | | | [removed: 73] [added: 59] | | % | | | | [removed: • Water] [added: •Water] and wastewater pumps [removed: • Filtration,] [added: •Filtration,] disinfection and biological treatment equipment [removed: • Mobile dewatering equipment and rental services] | | | | | | [removed: •ADI] •Flygt [removed: •Godwin] •Ionpure [removed: •Leopold •Magneto •Neptune Benson •Sanitaire] [added: •Vortisand] •Wallace & Tiernan •Wedeco [removed: •Xylem Vue] | | |

| Applied Water | | | | | | Building Solutions | | | | | | $ | [removed: 1,025] [added: 997] | | | | | [removed: 55] [added: 56] | | % | | | | [removed: • Pumps • Valves • Heat] [added: •Pumps •Valves •Heat] exchangers [removed: • Controls • Dispensing] [added: •Controls •Dispensing] equipment systems | | | | | | [removed: • A-C Fire Pump • Bell] [added: •Rule •Bell] & Gossett [removed: • Flojet • Goulds] [added: •Flojet •Goulds] Water Technology [removed: • Jabsco • Lowara • Standard] [added: •Jabsco •Lowara •Standard] Xchange [removed: • Xylem Vue] | | |

| | | | Industrial Water | | | | | | [removed: 828] [added: 796] | | | | | | [removed: 45] [added: 44] | | % | | | | | | | | | | | | | | | |

| Measurement and Control Solutions | | | | | | [removed: Water] [added: Smart Metering and Other] | | | | | | $ | [removed: 1,354] [added: 1,519] | | | | | [removed: 78] [added: 81] | | % | | | | [removed: • Smart] [added: •Smart] meters [removed: • Networked] [added: •Network] communication devices [removed: • Data] [added: •Data] analytics [removed: • Test equipment • Controls • Sensor] [added: •Test instruments •Controls •Sensor] devices [removed: • Software] [added: •Software] & managed services [removed: • Critical] [added: •Critical] infrastructure services | | | | | | [removed: • Pure Technologies • Sensus • Smith] [added: •Sensus •Smith] Blair [removed: • WTW • YSI • Xylem] [added: •WTW •YSI •Xylem] Vue | | |

| [removed: Integrated] [added: Water] Solutions and Services | | | | | | [added: Capital and other] | | | | | | $ | [removed: 815] [added: 1,355] | | | | | [removed: 100] [added: 58] | | % | | | | •Preventative maintenance services •Rapid response mobile services •Digitally enabled/outsourced solutions •Process and wastewater [added: treatment] systems •Environmental remediation •Odor and corrosion control •Filtration •Reverse osmosis [removed: •Ion exchange] •Continuous deionization [added: •Mobile dewatering equipment and rental services] | | | | | | •AquaPro •WaterOne •Ion Pure [added: •Flygt •Pure Technologies •Godwin] | | |

[removed: Our] [added: Through two closely linked applications, transport and treatment, our] Water Infrastructure segment primarily supports the process that collects water from a source, treats it and distributes it to users, and then treats and returns the wastewater responsibly to the [removed: environment through two closely linked applications: Transport and Treatment.][added: environment.]

The [removed: Transport application] [added: Water Solutions and Services segment] also includes sales and rental of specialty dewatering pumps, scalable products, and related equipment, [removed: technology,] [added: technology] and services, which provide the safe removal or draining of groundwater and surface water from construction sites or other industrial [removed: sites] [added: sites,] and bypass pumping for the repair of aging utility infrastructure, as well as emergency water transport and removal during severe weather events.

Water Infrastructure sells [removed: primarily] through [added: a combination of] direct [removed: channels with remaining sales through] [added: channels,] indirect channels and service capabilities.

Several trends are increasing demand for this application expertise: (i) the [added: need for efficient transport and treatment solutions due to the] increase in [added: water scarcity, (ii) the increase in] both the type and amount of contaminants found in the water supply, [removed: (ii) increasing environmental regulations,] (iii) the need to increase system resilience and efficiencies [added: due] to [removed: optimize energy] [added: aged infrastructure] and [removed: other operational costs,] [added: affordability,] (iv) [removed: the retirement of an aging water industry workforce that has not been systematically renewed at utilities and other end-user customers,] [added: increasing environmental regulations,] and (v) the [removed: build-out of water infrastructure in the emerging markets.][added: need to reduce carbon emissions generated from transporting and treating water.]

We differentiate ourselves in the market by focusing on product and service performance, quality and reliability, innovation, speed to market with new or disruptive technologies and business models, application expertise, brand reputation, energy efficiency, product security, product life-cycle cost, timeliness of delivery, [removed: proximity of service centers,] effectiveness of our distribution channels, [removed: price and] customers' experience [removed: in doing business with us.][added: and our global installed base.]

Our key competitors in the Water Infrastructure segment include [added: De Nora, Grundfos,] KSB Inc., [added: ProMinent,] Sulzer Ltd., [removed: Grundfos, United Rentals,] Trojan (Veralto Corporation), [removed: Veolia, De Nora,] and [removed: ProMinent.][added: Veolia.]

Applied Water encompasses the uses of water to serve a diverse set of customers in the [removed: commercial, residential] [added: building solutions] and industrial [added: water] end markets.

The industrial market includes original equipment [removed: manufacturers ("OEMs"),] [added: manufacturers,] exploration and production firms, agricultural customers, and developers and managers of industrial facilities, such as [removed: electrical power generators,] chemical manufacturers, [removed: machine shops, clothing manufacturers,] marine, food and beverage [removed: companies] [added: companies, data centers] and car washes.

We compete by offering [removed: a wide variety of] innovative and high-quality products, coupled with world-class application expertise.

Our key competitors in the Applied Water segment include [removed: Grundfos, Wilo SE, Pentair plc and] Franklin Electric Co., [removed: Inc.][added: Inc, Grundfos, Pentair plc, and Wilo SE.]

Measurement and Control Solutions develops advanced technology solutions that enable intelligent [removed: use] [added: use, optimization] and conservation of critical water and energy resources.

The segment delivers communications, smart metering, measurement and control [removed: capabilities] [added: capabilities,] and critical infrastructure technologies that allow customers to more effectively use their distribution networks for the delivery, monitoring and control of critical resources such as water, electricity and natural gas.

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

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

[removed: Communications] [added: Our communications] networks enable customers to automate and optimize meter reading, bill customers, monitor flow rates and detect and enable rapid response to changing and unsafe conditions.

In short, [removed: they] [added: our communications offerings] provide insight into operations and enable our customers to manage the entire scope of their operations remotely through their networks and to optimize their operational costs.

Macro growth drivers include increasing regulation, aging infrastructure and worldwide movement towards smart grid implementation and [removed: automated meter] [added: advanced metering] infrastructure (“AMI").

We set ourselves apart in the industry by focusing on our communication network, innovation, new product development and service offerings that deliver tangible savings from efficiency of operating costs in meter reading and billing, [removed: as well as] [added: and] reduction of non-revenue water through improved meter accuracy, reduced theft and identification of leaks.

We provide a differentiated offering in the reliability and accuracy of our products often in rugged, [removed: remote,] [added: remote] and hazardous locations.

Our key competitors in the Measurement and Control Solutions segment include [removed: Itron,] Badger Meter, [removed: Landis+Gyr, Neptune (Roper), Kamstrup,] Echologics (Mueller Water Products), Hach (Veralto [removed: Corporation)] [added: Corporation), Itron, Kamstrup, Landis+Gyr, Neptune (Roper),] and Teledyne.

We have differentiated market positions in core applications including transport and dewatering, process water and wastewater treatment, analytics, smart metering, digital software solutions and comprehensive services.

Except as otherwise indicated or unless the context otherwise requires, “Xylem,” “we,” “us,” “our” and “the Company” refer to Xylem Inc. and its subsidiaries.

Our purpose is to empower our customers and communities to build a more water secure world.

Our customers often face all four of these challenges, ranging from inefficient and aging water distribution networks and energy-intensive or unreliable water and wastewater management

- Customer Centricity. We are putting the needs and experiences of our customers at the forefront of everything we do.

By listening to our customers and understanding their challenges, we aim to deliver innovative solutions that not only meet but exceed their expectations.

This approach helps us build strong, lasting relationships and helps align our products and services with customer needs.

We leverage the 80/20 principle to focus on the most impactful opportunities to drive value for our customers.

Additionally, we seek to create synergies across our businesses to enhance customer value and streamline operations.

We are committed to simplifying how we do business and equipping our sales teams with the tools, training, and insights needed to engage customers effectively.

We emphasize transactional excellence to aim for every customer interaction to be seamless, efficient, and value-driven.

We aspire for our customers to be enthusiastic advocates for our brand.

- Profitable Growth. We prioritize profitable growth to drive long-term success.

By applying the 80/20 principle, we focus on the most impactful opportunities to create significant value.

We aim to expand our market share, optimize our product portfolio, and drive revenue growth through strategic investments and partnerships.

By implementing strategic pricing, we maximize profitability and enhance our competitive position.

Additionally, we are dedicated to building high-margin, recurring revenue in growing markets, intelligent solutions, and services.

Our goal is to deliver consistent financial performance that benefits our shareholders and supports our long-term vision, building a stable and prosperous future for the company.

- Operational Excellence. We are committed to being a leading operator by continuously improving our processes, systems, and capabilities to enhance efficiency and effectiveness.

By applying the 80/20 principle to streamline our business, we aim to enhance throughput, reduce inventory, and improve product quality.

Implementing lean continuous improvement practices allows us to reduce waste and enhance the speed and ease of doing business, making our operations more efficient and effective.

We are dedicated to modernizing our systems to support productivity for growth and maintain operations that are agile and responsive.

Through our Xylem Management System and Goal Deployment Process, we align our efforts with strategic objectives, driving disciplined execution and operational excellence.

This commitment to excellence helps us remain competitive and enables us to respond quickly to changing market and customer demands.

Ultimately, we aim to run our company with discipline, maintaining operations that are streamlined and consistently aligned with our strategic goals.

- Sustainability Leadership. We strive to be a sustainability leader by integrating sustainability into our business strategy, with a strong emphasis on advancing favorable long-term financial and sustainability outcomes for our customers through our solutions.

We also aim to minimize our environmental impact, promote resource conservation, and support customers and the communities we serve together.

Our priorities are focused in three areas: decarbonizing the water sector, accelerating corporate water stewardship, and advancing WASH (Water, Sanitation, and Hygiene) access and capacity building.

Additionally, we are partnering with venture impact funds, philanthropic organizations, customers, and suppliers to develop long-term commercial opportunities in new markets.

Our sustainability leadership, including the skill-based volunteering by employees, provides Xylem with distinct advantages in competitive talent markets.

- High-Impact Culture. We continuously refine Xylem’s operating model to better serve our customers and create value for our shareholders.

Our organizational culture is fundamental to those objectives.

We have activated our high-impact culture through three high-impact behaviors: inspired to innovate, accountable to deliver, and empowered to lead.

These behaviors drive our employees to learn and innovate every day, to know their role in contributing to our purpose and strategy, and to deliver on our commitments to our customers and communities.

Within the framework of these behaviors, we encourage a collaborative and inclusive work environment and are keenly focused on simplifying our organization and processes to drive daily and break-through efficiency and innovation.

| | | | Treatment | | | | | | 1,057 | | | | | | 41 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 2,555 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 1,793 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | Analytics | | | | | | 352 | | | | | | 19 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | $ | 1,871 | | | | | 100 | | % | | | | | | | | | | | | | | | |

We have differentiated market positions in core application areas including transport, treatment, dewatering, analytic instrumentation and measurement, smart metering, infrastructure assessment services, digital software solutions for utilities, industrial processes, outsourced water services, filtration and separation, applied water systems for commercial and residential business services, disinfection, wastewater treatment, and anodes.

improve safety and conserve resources to customers in the water sector.

- Drive Customer Success. We seek to partner with customers to meet their stakeholders’ needs through our broad portfolio of products, services and solutions.

We are focused on several key areas, beginning with making it easier for customers to do business with Xylem and access the full range of our capabilities.

As part of this, we are implementing a digital platform to discover, select, get price quotes, and purchase our offerings.

Second, we seek to lead the way as digital technologies transform our sector by further integrating our digital solution portfolio and broadening our solution sales, digital literacy and marketing capabilities company-wide.

Third, we seek to help customers get the most out of their systems by providing world-class services that enable increased uptime, efficiency and resilience.

We partner with them by providing powerful, integrated lifecycle services and solutions.

- Grow in the Emerging Markets. We continue to invest in regionalizing our capabilities in the emerging markets.

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

We seek to address the base of the pyramid population by providing water and sanitation needs with new and fit-for-market product portfolios, solutions, and business models.

- Strengthen Innovation and Technology. We seek to create new customer offerings that help them solve water challenges more powerfully than ever before, while also providing our company with rapid, profitable, growth opportunities.

We 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.

This will further strengthen our core product offerings, and deliver strategic, sustainable innovations and insightful data analytics that help us tap into new markets through advanced technology and new business models.

- Build a High Impact Culture. We seek to continue embedding a continuous improvement mindset throughout the Company, to further improve our efficiency, simplify our business and manage costs to support continued growth.

We are committed to eliminating business complexity by streamlining internal bureaucracy and expanding standard business platforms and processes to help people do their jobs.

This will result in freeing up time to ensure that we focus on work that creates customer value.

Other focus areas include removing unnecessary costs from our end-to-end value chain to free up resources for growth; and building resilience and sustainability into our supply chain to protect our ability to serve customers.

- Cultivate Leadership and Talent Development. We continue to foster an empowering, mission-driven, diverse, equitable and inclusive culture.

We will continue to build leadership succession depth and breadth in keeping with our commitment to developing the next generation of leaders.

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

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

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

| | | | Treatment | | | | | | 795 | | | | | | 27 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 2,967 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | | | | | | | | | | $ | 1,853 | | | | | 100 | | % | | | | | | | | | | | | |

| | | | Energy | | | | | | 375 | | | | | | 22 | | % | | | | | | | | | | | | | | | |

| | | | | | | | | | $ | 1,729 | | | | | 100 | | % | | | | | | | | | | | | | | | |

Increasingly digital solutions and analytics are important competitive differentiators.

We are actively expanding our capabilities in these areas and integrating them together with our legacy technologies and service offerings as well as capabilities from other Xylem business units to present ever more compelling solutions to our customers.

In the sale or rental of products and provision of services, we benefit from our large installed base, which requires maintenance, repair and replacement parts due to the critical application and nature of the products and the conditions under which they operate.

Timeliness of delivery, quality and the proximity of service centers are important customer considerations when selecting a provider for after-market products and services as well as equipment rentals.

In geographic regions where we are locally positioned to provide a quick response, customers have historically relied on us, rather than our competitors, for after-market products relating to our highly engineered and customized solutions.

Our Pure Technologies equipment and services are also well positioned in the leak detection sector, which is attracting considerable attention as aging infrastructure and increased regulatory scrutiny exert pressure on operating budgets.

Our Integrated Solutions and Services segment provides application-specific solutions and full lifecycle services to treat process water, utility water, and wastewater for customers in a variety of end markets.

Integrated Solutions and Services also provides odor and corrosion control services and drinking water treatment systems for municipalities.

Integrated Solutions and Services offers customers outsourced water service contracts, capital

systems and related recurring aftermarket services, parts and consumables, and emergency services.

Our outsourced water service contracts include short-term service deionization contracts, averaging one to two years in duration, longer-term build-own-operate contracts, averaging eight to ten years in duration, and event driven mobile fleet deployments, including a growing portfolio of digitally connected technologies encompassed in our Water One® service platform.

Key capital and related aftermarket service and product offerings include filtration, reverse osmosis, ion exchange and continuous deionization.

From time to time, we are involved in legal and regulatory proceedings that are incidental to the operation of our businesses (or the business operations of [removed: previously-owned] [added: previously owned] entities).

Evoqua previously disclosed in its public filings that the United States Attorney’s Office for the District of Massachusetts was investigating whether financial misstatements were made in Evoqua’s public filings and earnings [removed: announcements.][added: announcements from 2016 to 2018 and prior to Xylem’s purchase of Evoqua.]

[removed: That] [added: Xylem previously disclosed in our 2023 Annual Report that the] investigation [removed: has been] [added: was] moved to the United States Attorney’s Office for the District of Rhode [removed: Island.][added: Island (the “USAO”).]

On May 13, 2024, Evoqua and the USAO entered into a non-prosecution agreement (the “Agreement”) to resolve the matter.

Under the Agreement, Evoqua paid a criminal monetary penalty of $8.5 million.

The Agreement does not include a compliance monitorship, and Evoqua agreed to certain ongoing monitoring, reporting and compliance obligations for a period of two years.

The Company is cooperating with the investigation.

We currently believe that it will not have a material adverse effect on our business, financial condition, results of operations, or prospects.

| | | | | | | For the fiscal year ended | | | December 31, [removed: 2023] [added: 2024] | | | | | | | | |

The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant as of June 30, [removed: 2023] [added: 2024] was approximately [removed: $26.9] [added: $32.8] billion.

As of February [removed: 23, 2024,] [added: 28, 2025,] there were [removed: 241,770,413] [added: 243,046,226] 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: 2024] [added: 2025] Annual Meeting of Shareowners, to be held in May [removed: 2024,] [added: 2025,] are incorporated by reference into Part II and Part III of this Report.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

| 1A. | | | [Risk [removed: Factors](#if7b557ec01b24fe2a7ff4307f8c51301_16)] [added: Factors](#i493bb054c7c54f1cb6cbad5626d55519_16)] | | | [removed: [16](#if7b557ec01b24fe2a7ff4307f8c51301_16)] [added: [16](#i493bb054c7c54f1cb6cbad5626d55519_16)] | | |

| 1B. | | | [Unresolved Staff [removed: Comments](#if7b557ec01b24fe2a7ff4307f8c51301_19)] [added: Comments](#i493bb054c7c54f1cb6cbad5626d55519_19)] | | | [removed: [29](#if7b557ec01b24fe2a7ff4307f8c51301_19)] [added: [28](#i493bb054c7c54f1cb6cbad5626d55519_19)] | | |

| 3 | | | [Legal [removed: Proceedings](#if7b557ec01b24fe2a7ff4307f8c51301_25)] [added: Proceedings](#i493bb054c7c54f1cb6cbad5626d55519_28)] | | | [removed: [33](#if7b557ec01b24fe2a7ff4307f8c51301_25)] [added: [32](#i493bb054c7c54f1cb6cbad5626d55519_28)] | | |

| 4 | | | [Mine Safety [removed: Disclosures](#if7b557ec01b24fe2a7ff4307f8c51301_28)] [added: Disclosures](#i493bb054c7c54f1cb6cbad5626d55519_31)] | | | [removed: [33](#if7b557ec01b24fe2a7ff4307f8c51301_28)] [added: [32](#i493bb054c7c54f1cb6cbad5626d55519_31)] | | |

| * | | | [Information about our Executive [removed: Officers](#if7b557ec01b24fe2a7ff4307f8c51301_31)] [added: Officers](#i493bb054c7c54f1cb6cbad5626d55519_34)] | | | [removed: [34](#if7b557ec01b24fe2a7ff4307f8c51301_31)] [added: [33](#i493bb054c7c54f1cb6cbad5626d55519_34)] | | |

| | | | [Board of [removed: Directors](#if7b557ec01b24fe2a7ff4307f8c51301_34)] [added: Directors](#i493bb054c7c54f1cb6cbad5626d55519_37)] | | | [removed: [35](#if7b557ec01b24fe2a7ff4307f8c51301_34)] [added: [34](#i493bb054c7c54f1cb6cbad5626d55519_37)] | | |

| 5 | | | [Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#if7b557ec01b24fe2a7ff4307f8c51301_40)] [added: Securities](#i493bb054c7c54f1cb6cbad5626d55519_43)] | | | [removed: [36](#if7b557ec01b24fe2a7ff4307f8c51301_40)] [added: [35](#i493bb054c7c54f1cb6cbad5626d55519_43)] | | |

| 7 | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#if7b557ec01b24fe2a7ff4307f8c51301_46)] [added: Operations](#i493bb054c7c54f1cb6cbad5626d55519_49)] | | | [removed: [39](#if7b557ec01b24fe2a7ff4307f8c51301_46)] [added: [38](#i493bb054c7c54f1cb6cbad5626d55519_49)] | | |

| 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#if7b557ec01b24fe2a7ff4307f8c51301_58)] [added: Risk](#i493bb054c7c54f1cb6cbad5626d55519_61)] | | | [removed: [60](#if7b557ec01b24fe2a7ff4307f8c51301_58)] [added: [66](#i493bb054c7c54f1cb6cbad5626d55519_61)] | | |

| 8 | | | [Financial Statements and Supplementary [removed: Data](#if7b557ec01b24fe2a7ff4307f8c51301_61)] [added: Data](#i493bb054c7c54f1cb6cbad5626d55519_64)] | | | [removed: [61](#if7b557ec01b24fe2a7ff4307f8c51301_61)] [added: [67](#i493bb054c7c54f1cb6cbad5626d55519_64)] | | |

| 9 | | | [Changes In and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#if7b557ec01b24fe2a7ff4307f8c51301_154)] [added: Disclosure](#i493bb054c7c54f1cb6cbad5626d55519_154)] | | | [removed: [120](#if7b557ec01b24fe2a7ff4307f8c51301_154)] [added: [130](#i493bb054c7c54f1cb6cbad5626d55519_154)] | | |

| 9A. | | | [Controls and [removed: Procedures](#if7b557ec01b24fe2a7ff4307f8c51301_157)] [added: Procedures](#i493bb054c7c54f1cb6cbad5626d55519_157)] | | | [removed: [120](#if7b557ec01b24fe2a7ff4307f8c51301_157)] [added: [130](#i493bb054c7c54f1cb6cbad5626d55519_157)] | | |

| 9B. | | | [Other [removed: Information](#if7b557ec01b24fe2a7ff4307f8c51301_160)] [added: Information](#i493bb054c7c54f1cb6cbad5626d55519_160)] | | | [removed: [121](#if7b557ec01b24fe2a7ff4307f8c51301_160)] [added: [130](#i493bb054c7c54f1cb6cbad5626d55519_160)] | | |

| 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#if7b557ec01b24fe2a7ff4307f8c51301_163)] [added: Inspections](#i493bb054c7c54f1cb6cbad5626d55519_163)] | | | [removed: [121](#if7b557ec01b24fe2a7ff4307f8c51301_163)] [added: [130](#i493bb054c7c54f1cb6cbad5626d55519_163)] | | |

| 10 | | | [Directors, Executive Officers and Corporate [removed: Governance](#if7b557ec01b24fe2a7ff4307f8c51301_172)] [added: Governance](#i493bb054c7c54f1cb6cbad5626d55519_172)] | | | [removed: [123](#if7b557ec01b24fe2a7ff4307f8c51301_172)] [added: [132](#i493bb054c7c54f1cb6cbad5626d55519_172)] | | |

| 11 | | | [Executive [removed: Compensation](#if7b557ec01b24fe2a7ff4307f8c51301_175)] [added: Compensation](#i493bb054c7c54f1cb6cbad5626d55519_175)] | | | [removed: [123](#if7b557ec01b24fe2a7ff4307f8c51301_175)] [added: [132](#i493bb054c7c54f1cb6cbad5626d55519_175)] | | |

| 12 | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#if7b557ec01b24fe2a7ff4307f8c51301_178)] [added: Matters](#i493bb054c7c54f1cb6cbad5626d55519_178)] | | | [removed: [123](#if7b557ec01b24fe2a7ff4307f8c51301_178)] [added: [132](#i493bb054c7c54f1cb6cbad5626d55519_178)] | | |

| 13 | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#if7b557ec01b24fe2a7ff4307f8c51301_181)] [added: Independence](#i493bb054c7c54f1cb6cbad5626d55519_181)] | | | [removed: [123](#if7b557ec01b24fe2a7ff4307f8c51301_181)] [added: [132](#i493bb054c7c54f1cb6cbad5626d55519_181)] | | |

| 14 | | | [Principal Accounting Fees and [removed: Services](#if7b557ec01b24fe2a7ff4307f8c51301_184)] [added: Services](#i493bb054c7c54f1cb6cbad5626d55519_184)] | | | [removed: [123](#if7b557ec01b24fe2a7ff4307f8c51301_184)] [added: [132](#i493bb054c7c54f1cb6cbad5626d55519_184)] | | |

| 15 | | | [Exhibits, Financial Statement [removed: Schedules](#if7b557ec01b24fe2a7ff4307f8c51301_190)] [added: Schedules](#i493bb054c7c54f1cb6cbad5626d55519_190)] | | | [removed: [124](#if7b557ec01b24fe2a7ff4307f8c51301_190)] [added: [133](#i493bb054c7c54f1cb6cbad5626d55519_190)] | | |

| 16 | | | [Form 10-K [removed: Summary](#if7b557ec01b24fe2a7ff4307f8c51301_193)] [added: Summary](#i493bb054c7c54f1cb6cbad5626d55519_193)] | | | [removed: [129](#if7b557ec01b24fe2a7ff4307f8c51301_196)] [added: [137](#i493bb054c7c54f1cb6cbad5626d55519_196)] | | |

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: the impact of overall industry and general economic [removed: conditions, including industrial, governmental, and public and private sector spending, interest rates, inflation and related monetary policy by governments in response to inflation, and the strength of the residential and commercial real estate markets,] [added: conditions] on [removed: economic activity and] our [removed: operations;] [added: markets, customers’ operating conditions and demand;] geopolitical events, [added: conditions and volatility,] including [removed: the ongoing] [added: protectionism] and [added: other anti-global sentiment,] possible escalation of the conflicts involving Russia and Ukraine, and the Middle East, [removed: as well as] [added: and] regulatory, economic and other risks associated with our global [removed: sales] [added: sales, supply chain] and [removed: operations, including those related to domestic content requirements applicable to projects receiving governmental funding;] [added: operations;] manufacturing and operating cost increases due to macroeconomic conditions, including inflation, energy supply, supply chain shortages, logistics challenges, tight labor markets, prevailing price changes, [added: new or additional] tariffs and other factors; demand for our products, disruption, competition or pricing pressures in the markets we serve; cybersecurity incidents or other disruptions of information technology systems on which we rely, or involving our connected products and services; lack of availability or delays in receiving parts and raw materials from our supply chain, including electronic components (in particular, semiconductors); disruptions in operations at our facilities or that of third parties upon which we rely; uncertainty related to the realization of [removed: the benefits and] [added: revenue] synergies [removed: from] [added: related to] our acquisition of Evoqua Water Technologies [removed: Corp.;] [added: Corp. ("Evoqua");] safe and compliant treatment and handling of water, wastewater and hazardous materials; failure to successfully execute large projects, including [removed: with respect to] meeting performance guarantees and customers’ budgets, timelines and safety requirements; our ability to retain and attract leadership and other [removed: diverse and] key talent, as well as competition for overall talent and labor; defects, security, warranty and liability claims, and recalls related to our products; uncertainty around [added: our simplification, productivity,] restructuring and realignment actions and related [removed: costs] [added: costs, savings] and [removed: savings;] [added: business impacts;] our ability to execute strategic investments for growth, including [removed: related to] acquisitions and divestitures; availability, regulation or interference with radio spectrum used by certain of our products; volatility in served markets or impacts on our business and operations due to weather conditions, including the effects of climate change; risks related to our sustainability commitments and related [added: voluntary or required] disclosures; fluctuations in foreign currency exchange rates; difficulty predicting our financial results; risk of future impairments to goodwill and other intangible assets; changes in our effective tax rates or tax expenses; [added: regulatory and] financial market risks related to our pension and other defined benefit plans; failure to comply with, or changes in, laws or regulations, including [removed: those pertaining] [added: related] to our business conduct, operations, products and services, including anti-corruption, data privacy and security, trade, competition, the environment, climate change and health and safety; legal, governmental or regulatory claims, investigations or proceedings and associated contingent liabilities; matters related to intellectual property infringement or expiration of rights; and other factors set forth under “Item 1A.

Forward-looking and other statements in this [removed: Form 10-K] [added: Report] regarding our environmental and other sustainability plans and goals are not an indication that these statements are necessarily material to [removed: investors] [added: investors, to our business, operating results, financial condition, outlook,] or [added: strategy, to our impacts on sustainability matters or other parties, 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 [removed: on] [added: on:] standards for measuring progress that are still [removed: developing,] [added: developing;] internal controls and processes that continue to [removed: evolve,] [added: evolve; third-party data, review, representations, or certifications; information from acquired entities, which may be subject to ongoing review, may not yet or ever be integrated into our reporting processes,] and [added: may not be reconcilable with our processes; and] assumptions that are subject to change in the future.

| 1 | | | [Business](#i493bb054c7c54f1cb6cbad5626d55519_13) | | | [4](#i493bb054c7c54f1cb6cbad5626d55519_13) | | |

| 1C. | | | [Cyber Security](#i493bb054c7c54f1cb6cbad5626d55519_22) | | | [29](#i493bb054c7c54f1cb6cbad5626d55519_22) | | |

| 2 | | | [Properties](#i493bb054c7c54f1cb6cbad5626d55519_25) | | | [31](#i493bb054c7c54f1cb6cbad5626d55519_25) | | |

| 6 | | | [Reserved](#i493bb054c7c54f1cb6cbad5626d55519_46) | | | [37](#i493bb054c7c54f1cb6cbad5626d55519_46) | | |

| | | | [Signatures](#i493bb054c7c54f1cb6cbad5626d55519_196) | | | [137](#i493bb054c7c54f1cb6cbad5626d55519_196) | | |

| 1 | | | [Business](#if7b557ec01b24fe2a7ff4307f8c51301_13) | | | [4](#if7b557ec01b24fe2a7ff4307f8c51301_13) | | |

| 1C. | | | [C](#if7b557ec01b24fe2a7ff4307f8c51301_1649)[yber Security](#if7b557ec01b24fe2a7ff4307f8c51301_1649) | | | [29](#if7b557ec01b24fe2a7ff4307f8c51301_1649) | | |

| 2 | | | [Properties](#if7b557ec01b24fe2a7ff4307f8c51301_22) | | | [32](#if7b557ec01b24fe2a7ff4307f8c51301_22) | | |

| 6 | | | [Reserved](#if7b557ec01b24fe2a7ff4307f8c51301_43) | | | [38](#if7b557ec01b24fe2a7ff4307f8c51301_43) | | |

| | | | [Signatures](#if7b557ec01b24fe2a7ff4307f8c51301_196) | | | [129](#if7b557ec01b24fe2a7ff4307f8c51301_196) | | |

[removed: Our] [added: We maintain a comprehensive] cybersecurity program [added: that] encompasses our enterprise information technology, including operational technology and technology of third parties on which we rely, and connected products and services.

[removed: *Management] [added: *Cybersecurity Risk Management] and [removed: Internal Cybersecurity Team*][added: Strategy*]

[removed: The CISO] [added: Our CISO, who has extensive cybersecurity knowledge and skills gained from over 25 years of relevant work experience, and] is [added: a Certified Information Systems Security Professional, is] responsible for assessing, monitoring and advising the Company’s [removed: businesses,] [added: various business units,] management and the Board [removed: of Directors (“Board”)] on [removed: the Company’s] risks from cybersecurity threats; implementing cybersecurity strategy, programs and processes across our enterprise and connected products and services; reviewing the risk management measures implemented by the Company to identify and mitigate cybersecurity risks; and overseeing the maintenance and deployment of the Cybersecurity Incident Response Plan.

The [added: CISO leads the] Company’s Cybersecurity Team (“Team”), comprised of individuals with a broad range of cybersecurity skills, experiences and [removed: certifications, is led by the CISO.][added: certifications.]

The Team is responsible for the implementation, monitoring and maintenance of the Company’s cybersecurity practices in coordination with its businesses, operations and functions, and oversees the Company’s cybersecurity [removed: program, including infrastructure, governance and incident response as detailed below.][added: program.]

[removed: The CISO and Team manage a program for] [added: Our] enterprise cybersecurity [removed: that] [added: program] is guided by the National Institute of Standards and Technology’s (“NIST”) Cybersecurity Framework.

Key areas of responsibility in the program include governance, risk and compliance, threat analysis and response, security architecture and engineering, security [removed: operations,] [added: operations] and secure manufacturing operations.

[removed: The CISO and Team also manage a program for] [added: Our] connected products and services cybersecurity [removed: risk management that] [added: program] is guided by the ISA/IEC 62443 [removed: standard to enable protection and resiliency across products and services.][added: standard.]

Both the enterprise and connected products and services programs are designed to assess, identify and manage risks from cybersecurity threats in order to protect and preserve the security, [added: resiliency,] integrity and continued availability of the Company’s information technology systems and connected products and services, and also to protect the confidentiality and integrity of information owned by, or in the custody and care of, the Company.

In addition, we also periodically engage third parties to assess our enterprise and product security programs and provide consultation and advice to assist with assessing, [removed: identifying,] [added: identifying] and managing cybersecurity risks.

Our [removed: Enterprise Risk Management (“ERM”)] [added: ERM] Program [removed: annually] assesses [removed: and,] [added: risks, including those related to cybersecurity, annually, and monitors such risks] on an ongoing [removed: basis, monitors the Company’s key risks, including cybersecurity risk.][added: basis.]

We maintain [removed: a suite of] [added: cybersecurity] policies [removed: – the Cybersecurity Policy, the Product Cybersecurity Policy and the Acceptable Use of Information Technology Resources Policy –] that apply [removed: globally] to all [removed: of our] employees, businesses and functions, as well as third-party vendors and contractors as required by our legal agreements with them.

These policies specify roles and responsibilities, fundamental principles and proper controls required for Xylem’s [removed: protection.][added: protection, and also require the use of certain cyber risk management processes to onboard new suppliers and other third parties.]

[removed: Our] [added: We periodically review our] policies [removed: are reviewed annually] to identify potential gaps or areas for improvement, considering changes in the Company, and its connected products and services, as appropriate.

Employees receive [removed: ongoing] annual [added: and ongoing] education and training regarding relevant cybersecurity risks and practices, including how to protect information and systems from cyber threats.

The [removed: Company’s] [added: Company maintains insurance as part of its] cybersecurity risk mitigation strategy [removed: includes the use of risk transfer via insurance that provides] [added: to provide] protection against certain potential losses arising from certain cybersecurity incidents.

To assist with oversight of cybersecurity, the Board has delegated to [removed: the] [added: its] Audit Committee responsibility to oversee certain aspects of cybersecurity, including controls and reporting.

At least semi-annually, the Audit Committee or full Board receive reports from the [removed: CIO] [added: Chief Information Officer (“CIO”)] and [removed: CISO.][added: Chief Information Security Officer (“CISO”).]

[removed: Such reports] [added: Reports] include [added: topics such as] updates on the Company’s cybersecurity risk profile, assessments of the Company’s enterprise and product security programs, management’s strategy for managing risks, measures implemented to identify and mitigate cybersecurity risks, the status of projects to strengthen the Company’s cybersecurity posture, the emerging cybersecurity threat [removed: landscape,] [added: landscape] and other relevant topics.

We have protocols and processes by which certain cybersecurity incidents, as specified by our [removed: Cybersecurity Incident Response Plan,] [added: IRP,] are escalated within the Company and, as appropriate, to the Audit [removed: Committee.][added: Committee of the Board of Directors.]

The Board [added: also] receives a report [added: from management] on the results of the Company’s annual ERM Program risk assessment, as well periodic updates on the ERM [removed: Program, including] [added: Program and] ongoing monitoring of the Company’s risks, [added: including cybersecurity risk,] as appropriate.

The [added: Company’s] Cyber Risk Committee (“CRC”), comprised of a cross-functional group of senior [removed: executives including the CIO, CISO, Chief Financial Officer and General Counsel,] [added: executives,] provides advice and governance regarding the Company’s strategic management of cybersecurity across the Company, including cybersecurity risk posture, projects, issues, threat intelligence and escalations.

[removed: The] [added: At its periodic meetings, the] CRC [removed: meets at least quarterly and] receives reports and presentations from the CISO or third parties on internal and external cybersecurity [removed: matters;] [added: matters,] and, as appropriate, briefings from the CISO on cybersecurity incidents, the Company’s incident response, recovery and [removed: remediation,] [added: remediation] and actual or potential impacts.

The [added: IRP undergoes at least annual tabletop exercises, the] results of [removed: these drills] [added: which] are used to identify areas for improvement in our processes and technologies.

[removed: Due] [added: However, due] to evolving cybersecurity threats, it has and will continue to be difficult to prevent, detect, mitigate, and remediate cybersecurity incidents.

For a more detailed discussion of [removed: these] [added: the] risks [added: we face] see the discussion set forth under “Item 1A.

Cybersecurity risk management is integrated into our Enterprise Risk Management (“ERM”) Program, which is our approach to identifying, assessing, prioritizing and mitigating risks to the Company, with mitigation efforts focused on the highest risks.

*Cybersecurity Governance*

Although we have experienced actual and attempted cybersecurity threats and incidents in the past, we do not believe that the risks from any of these events or incidents, individually or in the aggregate, have materially affected our business, operations or financial condition, or are reasonably likely to have such an effect.

We have implemented a comprehensive cybersecurity program guided by recognized industry practices and frameworks and we continue to evolve the program in order to be able to assess, identify and manage risks from the continually evolving cybersecurity threat landscape.

Although we maintain a cybersecurity program that we believe is reasonably designed to protect the Company, cybersecurity threats may result in adverse effects on the confidentiality, integrity, and availability of our information systems or those of third parties on which we rely, and our connected products and services.

Our Chief Information Officer (“CIO”), who has over 30 years of relevant work experience in information technology, including cybersecurity, is responsible for the Company’s information technology systems and cybersecurity and is an integral part of the Company’s management of cybersecurity and related risks.

The CIO reports to the Senior Vice President, Operations and Supply Chain, who reports directly to the Chief Executive Officer.

Our Chief Information Security Officer ("CISO"), who has extensive cybersecurity knowledge and skills gained from over 25 years of relevant work experience and holds the Certified Information Systems Security Professional certification, reports to the CIO.

On a regular basis, the CISO receives reports from the Team on these cybersecurity program matters.

In addition, the CISO also receives reports and updates on incident response and cybersecurity threats.

*Risk Management and Strategy*

Our risk management processes undergo at least quarterly review to identify potential gaps and areas for additional investment, resources and focus.

Our Code of Conduct, implemented by the Board, requires our employees’ adherence with our policies and practices, including with respect to cybersecurity risk management.

Through our internal social media channel, we provide cybersecurity alerts and education.

In addition, our policies require the use of a cyber risk management process to onboard new suppliers and other third parties.

*Board of Directors*

Our Board recognizes the importance of maintaining the trust and confidence of our customers, suppliers, employees and shareholders.

As part of its independent oversight of the key risks facing the Company, the Board and Audit Committee devote considerable time and attention to the oversight of management’s approach to cybersecurity and related risk mitigation, including strategy, controls.

resources, policies, standards, processes and practices.

These escalation protocols are periodically reviewed and updated, as needed.

The ERM Program has identified cybersecurity as one of the Company’s primary risks.

*Key Internal Governance Bodies*

Xylem has a number of committees to bolster business resilience, protect shareholder value and enable compliance with regulatory requirements.

The Enterprise Risk Committee (“ERC”), a key component of the Company’s ERM Program, is comprised of senior executives and is responsible for reviewing the Company’s key risks as identified by the ERM Program, including cybersecurity, and overseeing the Company’s identification, assessment, management, mitigation and ongoing monitoring of these risks.

As such, the ERC periodically receives reports from the CISO on cybersecurity risk.

*Incident Response*

The IRP undergoes at least annual tabletop exercises, where the Incident Response Team and relevant business and functions drill our response to a simulated cyber incident.

While we have not experienced any material cybersecurity threats or incidents as of the date of this Report, our cybersecurity program might not be able to prevent or mitigate future successful attacks, threats or incidents.

As detailed elsewhere in this Report, we also rely on information technology and other third-party vendors and strategic joint venture partners to support our business and operations, including our secure processing of personal, confidential, financial, sensitive, proprietary and other types of information, and to enable our connected product and service offerings.

Despite ongoing efforts to improve our and third parties’ ability to protect against cyber threats, we may not be able to protect all information systems or connected products and services.

Cybersecurity incidents may lead to reputational harm, revenue and client loss, legal actions, statutory penalties, among other consequences.

| | | | | | | | | | | | | [removed: Integrated] [added: Water] Solutions and Services | | | | | | | | | | | | | | | | | | | | |

The following information is provided regarding the executive officers of Xylem as of February [removed: 7, 2024:][added: 4, 2025:]

| Matthew F. Pine | | | | | | [removed: 52] [added: 53] | | | | | | President and Chief Executive Officer (2024) | | | | | | •Chief Operating Officer (2023) •Senior VP and President, Americas, Applied Water Systems and Measurement and Control Systems (2022) •Senior VP and President, Americas and Applied Water Systems (2020) •President, Carrier Residential, United Technologies Corporations (2018), a multinational industrial conglomerate | | |

| William K. Grogan | | | | | | [removed: 45] [added: 46] | | | | | | Senior [removed: VP and] [added: VP,] Chief Financial Officer (2023) | | | | | | • Senior VP and Chief Financial Officer, IDEX Corporation, a diversified manufacturer of highly engineered products (2017) | | |

| Rodney O. Aulick | | | | | | [removed: 56] [added: 57] | | | | | | Senior VP and President, Water Solutions and Services (2023) | | | | | | •Executive Vice President [removed: Integrated] [added: Water] Solutions and Services, Evoqua Water Technologies Corp. (2018) | | |

| Dorothy G. Capers | | | | | | [removed: 62] [added: 63] | | | | | | Senior VP, General Counsel (2022) | | | | | | • Executive Vice President, Global General Counsel and Corporate Secretary, National Express Group, a leading transport provider (2015) | | |

| Michael J. McGann | | | | | | [removed: 53] [added: 54] | | | | | | Senior VP and President, Americas and Measurement and Control Solutions (2023) | | | | | | •VP, North America Utilities Commercial Team (2022) •VP, Sensus Americas, Global Engineering and Assessment Services (2017) | | |

| Geri-Michelle McShane | | | | | | [removed: 50] [added: 51] | | | | | | VP, Controller and Chief Accounting Officer (2019) | | | | | | •Controller, Accounting and Reporting (2016) | | |

| Claudia S. Toussaint | | | | | | [removed: 60] [added: 61] | | | | | | Senior VP, Chief People and Sustainability Officer (2021) | | | | | | • Senior VP, General Counsel and Corporate Secretary (2014) | | |

| Hayati Yarkadas | | | | | | [removed: 55] [added: 56] | | | | | | Senior VP and President, Europe, Water Infrastructure [removed: and Global Services] (2020) | | | | | | • Senior VP and President, Performance Materials, Trinseo S.A., a specialty material solutions provider (2015) | | |

The following information is provided regarding the Board of Directors of Xylem as of February [removed: 7, 2024:][added: 4, 2025:]

| Victoria D. Harker | | | | | | [added: Former] Executive Vice President and Chief Financial Officer, TEGNA, Inc. | | |

| Albert Cho | | | | | | 44 | | | | | | Senior VP, Chief Strategy and External Affairs Officer (2022) | | | | | | • Senior VP, Chief Strategy and Digital Officer (2020) • VP and General Manager, Advanced Infrastructure Analytics (2018) | | |

| Meredith Emmerich | | | | | | 49 | | | | | | Senior VP and President, Applied Water Systems (2024) | | | | | | • VP and General Manager, Americas Commercial HVAC, Carrier Global Corporate, a climate and energy solutions provider (2020) | | |

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

| Lila Tretikov | | | | | | Partner, Head of Artificial Intelligence Strategy, New Enterprise Associates, Inc. | | |

| Franz W. Cerwinka | | | | | | 53 | | | | | | Senior VP and President, Applied Water Systems and Xylem Business Transformation (2023) | | | | | | •Senior VP and President, Emerging Markets (2020) •Chief Executive Officer, Johnson Controls Hitachi Air Conditioning, a multinational air conditioning manufacturing company (2015) | | |

| | | | | | | | | |

| | | | | | | | | |

| | | | | | | | | |

| Steven R. Loranger | | | | | | Former Chairman, President and Chief Executive Officer, ITT Corporation | | |

| Lynn C. Swann | | | | | | President, Swann Inc. | | |

| Lila Tretikov | | | | | | Corporate Vice President & Deputy Chief Technology Officer, Microsoft Corporation | | |

As of January 31, [removed: 2024,] [added: 2025,] there were [removed: 7,833] [added: 7,365] holders of record of our common stock.

Dividends are declared and paid on the common stock at the discretion of our Board [removed: of Directors] and depend on our profitability, financial condition, capital needs, future prospects and other factors deemed relevant by our Board.

In the first quarter of [removed: 2024,] [added: 2025,] we declared a dividend of [removed: $0.36] [added: $0.40] per share to be paid on March [removed: 20, 2024] [added: 19, 2025] to shareholders of record on February [removed: 21, 2024.][added: 18, 2025.]

There were no unregistered offerings of our common stock during [removed: 2023.][added: 2024.]

*Fourth Quarter [removed: 2023] [added: 2024] Share Repurchase Activity*

The following table summarizes our repurchases of our common stock for the quarter ended December 31, [removed: 2023:][added: 2024:]

| [removed: 10/1/23] [added: 10/1/24] - [removed: 10/31/23] [added: 10/31/24] | | | | | | — | | | | | | — | | | | | | — | | | | | | $182 | | |

| [removed: 11/1/23] [added: 11/1/24] - [removed: 11/30/23] [added: 11/30/24] | | | | | | — | | | | | | — | | | | | | — | | | | | | $182 | | |

| [removed: 12/1/23] [added: 12/1/24] - [removed: 12/31/23] [added: 12/31/24] | | | | | | — | | | | | | — | | | | | | — | | | | | | $182 | | |

(b)On August 24, 2015, our Board [removed: of Directors] authorized the repurchase of up to $500 million in shares with no expiration date.

There were no shares repurchased under this program during the three months ended December 31, [removed: 2023.][added: 2024.]

There are up to $182 million in shares that may still be purchased under this plan as of December 31, [removed: 2023.][added: 2024.]

This graph covers the period from December 31, [removed: 2018] [added: 2019] through December 31, [removed: 2023] [added: 2024] and assumes that $100 was invested on December 31, [removed: 2018] [added: 2019] in our common stock, the S&P 500 and the S&P 500 Industrials with the reinvestment of any dividends.

[removed: ][added: ]

| December 31, 2020 | | | 131 | | | | | | 118 | | | | | | 111 | | |

| December 31, 2021 | | | 156 | | | | | | 152 | | | | | | 134 | | |

| December 31, 2022 | | | 145 | | | | | | 125 | | | | | | 127 | | |

| December 31, 2023 | | | 152 | | | | | | 157 | | | | | | 150 | | |

| December 31, 2024 | | | 156 | | | | | | 197 | | | | | | 176 | | |

| December 31, 2019 | | | 120 | | | | | | 131 | | | | | | 129 | | |

| December 31, 2020 | | | 157 | | | | | | 156 | | | | | | 144 | | |

| December 31, 2021 | | | 186 | | | | | | 200 | | | | | | 174 | | |

| December 31, 2022 | | | 174 | | | | | | 164 | | | | | | 164 | | |

| December 31, 2023 | | | 182 | | | | | | 207 | | | | | | 194 | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#if7b557ec01b24fe2a7ff4307f8c51301_64)] [added: Firm](#i493bb054c7c54f1cb6cbad5626d55519_67)] (PCAOB ID No. 34) | | | [removed: [62](#if7b557ec01b24fe2a7ff4307f8c51301_64)] [added: [68](#i493bb054c7c54f1cb6cbad5626d55519_67)] | | |

| [Consolidated Income Statements for the Years Ended December 31, [removed: 2023, 2022 and 2021](#if7b557ec01b24fe2a7ff4307f8c51301_67)] [added: 202](#i493bb054c7c54f1cb6cbad5626d55519_70)[4](#i493bb054c7c54f1cb6cbad5626d55519_70)[, 202](#i493bb054c7c54f1cb6cbad5626d55519_70)[3](#i493bb054c7c54f1cb6cbad5626d55519_70) [and 20](#i493bb054c7c54f1cb6cbad5626d55519_70)[2](#i493bb054c7c54f1cb6cbad5626d55519_70)[2](#i493bb054c7c54f1cb6cbad5626d55519_70)] | | | [removed: [64](#if7b557ec01b24fe2a7ff4307f8c51301_67)] [added: [70](#i493bb054c7c54f1cb6cbad5626d55519_70)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December 31, [removed: 2023, 2022 and 2021](#if7b557ec01b24fe2a7ff4307f8c51301_70)] [added: 202](#i493bb054c7c54f1cb6cbad5626d55519_73)[4](#i493bb054c7c54f1cb6cbad5626d55519_73)[, 202](#i493bb054c7c54f1cb6cbad5626d55519_73)[3](#i493bb054c7c54f1cb6cbad5626d55519_73) [and 20](#i493bb054c7c54f1cb6cbad5626d55519_73)[2](#i493bb054c7c54f1cb6cbad5626d55519_73)[2](#i493bb054c7c54f1cb6cbad5626d55519_73)] | | | [removed: [65](#if7b557ec01b24fe2a7ff4307f8c51301_70)] [added: [71](#i493bb054c7c54f1cb6cbad5626d55519_73)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 2023 and 2022](#if7b557ec01b24fe2a7ff4307f8c51301_73)] [added: 202](#i493bb054c7c54f1cb6cbad5626d55519_76)[4](#i493bb054c7c54f1cb6cbad5626d55519_76) [and 202](#i493bb054c7c54f1cb6cbad5626d55519_76)[3](#i493bb054c7c54f1cb6cbad5626d55519_76)] | | | [removed: [66](#if7b557ec01b24fe2a7ff4307f8c51301_73)] [added: [72](#i493bb054c7c54f1cb6cbad5626d55519_76)] | | |

| [Consolidated Statements of Cash Flows for the Years Ended December 31, [removed: 2023, 2022 and 2021](#if7b557ec01b24fe2a7ff4307f8c51301_76)] [added: 202](#i493bb054c7c54f1cb6cbad5626d55519_79)[4](#i493bb054c7c54f1cb6cbad5626d55519_79)[, 202](#i493bb054c7c54f1cb6cbad5626d55519_79)[3](#i493bb054c7c54f1cb6cbad5626d55519_79) [and 20](#i493bb054c7c54f1cb6cbad5626d55519_79)[2](#i493bb054c7c54f1cb6cbad5626d55519_79)[2](#i493bb054c7c54f1cb6cbad5626d55519_79)] | | | [removed: [67](#if7b557ec01b24fe2a7ff4307f8c51301_76)] [added: [73](#i493bb054c7c54f1cb6cbad5626d55519_79)] | | |

| [Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, [removed: 2023, 2022 and 2021](#if7b557ec01b24fe2a7ff4307f8c51301_79)] [added: 202](#i493bb054c7c54f1cb6cbad5626d55519_82)[4](#i493bb054c7c54f1cb6cbad5626d55519_82)[, 202](#i493bb054c7c54f1cb6cbad5626d55519_82)[3](#i493bb054c7c54f1cb6cbad5626d55519_82) [and 202](#i493bb054c7c54f1cb6cbad5626d55519_82)[2](#i493bb054c7c54f1cb6cbad5626d55519_82)] | | | [removed: [68](#if7b557ec01b24fe2a7ff4307f8c51301_79)] [added: [74](#i493bb054c7c54f1cb6cbad5626d55519_82)] | | |

| [Note 1 Summary of Significant Accounting [removed: Policies](#if7b557ec01b24fe2a7ff4307f8c51301_85)] [added: Policies](#i493bb054c7c54f1cb6cbad5626d55519_88)] | | | [removed: [69](#if7b557ec01b24fe2a7ff4307f8c51301_85)] [added: [75](#i493bb054c7c54f1cb6cbad5626d55519_88)] | | |

| [Note 2 Recently Issued Accounting [removed: Pronouncements](#if7b557ec01b24fe2a7ff4307f8c51301_88)] [added: Pronouncements](#i493bb054c7c54f1cb6cbad5626d55519_91)] | | | [removed: [77](#if7b557ec01b24fe2a7ff4307f8c51301_88)] [added: [83](#i493bb054c7c54f1cb6cbad5626d55519_91)] | | |

| [Note 3 Acquisitions and [removed: Divestitures](#if7b557ec01b24fe2a7ff4307f8c51301_1618)] [added: Divestitures](#i493bb054c7c54f1cb6cbad5626d55519_94)] | | | [removed: [77](#if7b557ec01b24fe2a7ff4307f8c51301_1618)] [added: [83](#i493bb054c7c54f1cb6cbad5626d55519_94)] | | |

| [Note 4 [removed: Revenue](#if7b557ec01b24fe2a7ff4307f8c51301_91)] [added: Revenue](#i493bb054c7c54f1cb6cbad5626d55519_97)] | | | [removed: [81](#if7b557ec01b24fe2a7ff4307f8c51301_91)] [added: [89](#i493bb054c7c54f1cb6cbad5626d55519_97)] | | |

| [removed: [Note 5] Restructuring and [removed: Asset Impairment Charges](#if7b557ec01b24fe2a7ff4307f8c51301_94)] [added: asset impairment charges] | | | [removed: [83](#if7b557ec01b24fe2a7ff4307f8c51301_94)] [added: 62] | | | [added: | | | 76 | | | | | | 29 | | |]

| [removed: [Note 6] Other [removed: Non-Operating Income, Net](#if7b557ec01b24fe2a7ff4307f8c51301_97)] [added: non-operating income, net] | | | [removed: [86](#if7b557ec01b24fe2a7ff4307f8c51301_97)] [added: 16] | | | [added: | | | 33 | | | | | | 7 | | |]

| [Note 7 Income [removed: Taxes](#if7b557ec01b24fe2a7ff4307f8c51301_100)] [added: Taxes](#i493bb054c7c54f1cb6cbad5626d55519_106)] | | | [removed: [86](#if7b557ec01b24fe2a7ff4307f8c51301_100)] [added: [94](#i493bb054c7c54f1cb6cbad5626d55519_106)] | | |

| [Note 8 Earnings Per [removed: Share](#if7b557ec01b24fe2a7ff4307f8c51301_103)] [added: Share](#i493bb054c7c54f1cb6cbad5626d55519_109)] | | | [removed: [91](#if7b557ec01b24fe2a7ff4307f8c51301_103)] [added: [99](#i493bb054c7c54f1cb6cbad5626d55519_109)] | | |

| [Note 10 Property, Plant and [removed: Equipment](#if7b557ec01b24fe2a7ff4307f8c51301_109)] [added: Equipment](#i493bb054c7c54f1cb6cbad5626d55519_115)] | | | [removed: [92](#if7b557ec01b24fe2a7ff4307f8c51301_109)] [added: [100](#i493bb054c7c54f1cb6cbad5626d55519_115)] | | |

| [Note 12 Goodwill and Other Intangible [removed: Assets](#if7b557ec01b24fe2a7ff4307f8c51301_115)] [added: Assets](#i493bb054c7c54f1cb6cbad5626d55519_121)] | | | [removed: [95](#if7b557ec01b24fe2a7ff4307f8c51301_115)] [added: [102](#i493bb054c7c54f1cb6cbad5626d55519_121)] | | |

| [Note 13 Derivative Financial [removed: Instruments](#if7b557ec01b24fe2a7ff4307f8c51301_118)] [added: Instruments](#i493bb054c7c54f1cb6cbad5626d55519_124)] | | | [removed: [96](#if7b557ec01b24fe2a7ff4307f8c51301_118)] [added: [104](#i493bb054c7c54f1cb6cbad5626d55519_124)] | | |

| [removed: [Note 14] Accrued and [removed: Other Current Liabilities](#if7b557ec01b24fe2a7ff4307f8c51301_121)] [added: other current liabilities] | | | [removed: [99](#if7b557ec01b24fe2a7ff4307f8c51301_121)] [added: (4)] | | | [added: | | |]

| [Note 15 Credit Facilities and [removed: Debt](#if7b557ec01b24fe2a7ff4307f8c51301_124)] [added: Debt](#i493bb054c7c54f1cb6cbad5626d55519_130)] | | | [removed: [99](#if7b557ec01b24fe2a7ff4307f8c51301_124)] [added: [108](#i493bb054c7c54f1cb6cbad5626d55519_130)] | | |

| [Note 16 Post-retirement Benefit [removed: Plans](#if7b557ec01b24fe2a7ff4307f8c51301_127)] [added: Plans](#i493bb054c7c54f1cb6cbad5626d55519_133)] | | | [removed: [102](#if7b557ec01b24fe2a7ff4307f8c51301_127)] [added: [111](#i493bb054c7c54f1cb6cbad5626d55519_133)] | | |

| [Note 17 Share-Based Compensation [removed: Plans](#if7b557ec01b24fe2a7ff4307f8c51301_130)] [added: Plans](#i493bb054c7c54f1cb6cbad5626d55519_136)] | | | [removed: [109](#if7b557ec01b24fe2a7ff4307f8c51301_130)] [added: [118](#i493bb054c7c54f1cb6cbad5626d55519_136)] | | |

| [Note 19 Accumulated Other Comprehensive Income [removed: (Loss)](#if7b557ec01b24fe2a7ff4307f8c51301_136)] [added: (Loss)](#i493bb054c7c54f1cb6cbad5626d55519_142)] | | | [removed: [114](#if7b557ec01b24fe2a7ff4307f8c51301_136)] [added: [123](#i493bb054c7c54f1cb6cbad5626d55519_142)] | | |

| [removed: [Note 20] Commitment and [removed: Contingencies](#if7b557ec01b24fe2a7ff4307f8c51301_139)] [added: Contingencies (Note 20)] | | | [removed: [115](#if7b557ec01b24fe2a7ff4307f8c51301_139)] | | | [added: | | | | | |]

| [Note [removed: 2](#if7b557ec01b24fe2a7ff4307f8c51301_145)[1](#if7b557ec01b24fe2a7ff4307f8c51301_145) [Segment] [added: 21 Segment] and Geographic [removed: Data](#if7b557ec01b24fe2a7ff4307f8c51301_145)] [added: Data](#i493bb054c7c54f1cb6cbad5626d55519_148)] | | | [removed: [117](#if7b557ec01b24fe2a7ff4307f8c51301_145)] [added: [126](#i493bb054c7c54f1cb6cbad5626d55519_148)] | | |

| [Note [removed: 2](#if7b557ec01b24fe2a7ff4307f8c51301_151)[2](#if7b557ec01b24fe2a7ff4307f8c51301_151)] [added: 2](#i493bb054c7c54f1cb6cbad5626d55519_151)[3](#i493bb054c7c54f1cb6cbad5626d55519_151)] [Subsequent [removed: Events](#if7b557ec01b24fe2a7ff4307f8c51301_151)] [added: Events](#i493bb054c7c54f1cb6cbad5626d55519_151)] | | | [removed: [119](#if7b557ec01b24fe2a7ff4307f8c51301_151)] [added: [129](#i493bb054c7c54f1cb6cbad5626d55519_151)] | | |

We have audited the accompanying consolidated balance sheets of Xylem Inc. and subsidiaries (the "Company") as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] 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: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] 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) (PCAOB), the Company's internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] 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 [removed: February 28, 2024,] [added: March 3, 2025] expressed an unqualified opinion on the Company's internal control over financial reporting.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current-period audit of the financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

Goodwill — [removed: Measurement and Control Solutions] [added: Annual impairment test for one] Reporting [removed: Units] [added: Unit within Water Solutions and Services Segment] — Refer to Note 12 to the financial statements

The fair value of the [removed: Measurement and Control Solutions] [added: Company’s] reporting units exceeded their carrying value as of the [removed: 2023] [added: 2024] measurement date and, therefore, no impairment was recognized.

To determine the fair value of the [removed: Measurement and Control Solutions] [added: Company’s] reporting units, the Company used [added: an average of fair values derived from] the income [removed: approach.][added: and market approaches.]

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

The discount rate was based on the weighted average cost of capital appropriate for the [removed: Measurement and Control Solutions] reporting units.

[removed: Given] [added: We identified] the [added: Company’s goodwill impairment assessment for $2.5 billion of goodwill related to the one reporting unit within the Water Solutions and Services segment as a critical audit matter because of the] significant judgments made by management to estimate the fair value of the [removed: Measurement and Control Solutions] reporting [removed: units,] [added: unit,] performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the selection of the discount rate and forecasts of future [removed: revenue] [added: revenue, as well as multiples of earnings for the market approach] required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Our audit procedures related to forecasts of future [removed: revenue and] [added: revenue,] selection of the discount [removed: rate] [added: rate, and selection of the multiples in the market approach] for the [removed: Measurement and Control Solutions] [added: one] reporting [removed: units] [added: unit within the Water Solutions and Services segment] included the following, among others:

- We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the [removed: Measurement and Control Solutions] reporting [removed: units,] [added: unit,] such as controls related to management’s forecasts of future revenue and the selection of the discount [removed: rate.][added: rate for the income approach, and determination of multiples of earnings for the market approach.]

- With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) discount [removed: rate, and (3)] [added: rate,(3)] long-term revenue growth rate, including testing the source information underlying the determination of the discount rate and long-term revenue growth rate, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and comparing those to the discount rate selected by [removed: management.][added: management and (4) evaluated the multiples of earnings in the market approach, including testing the underlying source information and mathematical accuracy of the calculations.]

| Year Ended December 31, | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| [Note 6 Other Non-Operating Income, Net](#i493bb054c7c54f1cb6cbad5626d55519_103) | | | [94](#i493bb054c7c54f1cb6cbad5626d55519_103) | | |

| [Note 9 Inventories](#i493bb054c7c54f1cb6cbad5626d55519_112) | | | [99](#i493bb054c7c54f1cb6cbad5626d55519_112) | | |

| [Note 11 Leases](#i493bb054c7c54f1cb6cbad5626d55519_118) | | | [100](#i493bb054c7c54f1cb6cbad5626d55519_118) | | |

| [Note 14 Accrued and Other Current Liabilities](#i493bb054c7c54f1cb6cbad5626d55519_127) | | | [107](#i493bb054c7c54f1cb6cbad5626d55519_127) | | |

| [Note 18 Capital Stock](#i493bb054c7c54f1cb6cbad5626d55519_139) | | | [121](#i493bb054c7c54f1cb6cbad5626d55519_139) | | |

| [Note 22 Redeemable Non-controlling Interests](#i493bb054c7c54f1cb6cbad5626d55519_1616) | | | [128](#i493bb054c7c54f1cb6cbad5626d55519_1616) | | |

The goodwill balance was $7.9 billion as of December 31, 2024, of which $2.5 billion related to one reporting unit within the Water Solutions and Services segment.

The determination of the fair value using the market approach requires

management to make significant assumptions related to market multiples of earnings derived from comparable publicly traded companies with similar operating and investment characteristics as the reporting units.

| Gain on remeasurement of previously held equity interest | | | 152 | | | | | | — | | | | | | — | | |

| Assets held for sale | | | 77 | | | | | | — | | |

| Liabilities held for sale | | | 21 | | | | | | — | | |

| Redeemable non-controlling interest | | | 235 | | | | | | — | | |

| Gain on remeasurement of previously held equity interest | | | (152) | | | | | | — | | | | | | — | | |

| Short-term debt repaid | | | (268) | | | | | | — | | | | | | — | | |

| Cash classified within assets held for sale | | | (11) | | | | | | — | | | | | | — | | |

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

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

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

| Distributions to minority shareholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1) | | | | | | (1) | | |

| Acquisition activity | | | | | | | | | (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (2) | | |

| Balance at December 31, 2024 | | | $ | 3 | | | | | $ | 8,687 | | | | | $ | 3,140 | | | | | $ | (435) | | | | | $ | (753) | | | | | $ | 5 | | | | | $ | 10,647 | |

Xylem Inc. (“Xylem” or the “Company”) is a leading global water technology company.

We design, manufacture and service engineered products and solutions across a wide variety of critical applications primarily in the water sector.

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

As a result of the change, the Company has recast prior period segment amounts to align with the new segment reporting.

These changes have no impact on the Company’s historical consolidated financial position or results of operations.

operations.

consideration we expect to receive.

Weighting is equally attributed to both the market and income approaches in arriving at the fair value of the reporting units.

To determine the reasonableness of the calculated fair values, we review the assumptions to ensure that neither the income approach nor the market approach yielded significantly different valuations.

asset.

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.

Redeemable Non-Controlling Interest

Non-controlling interest that is redeemable upon the occurrence of an event that is not solely within the control of the issuer is classified as mezzanine equity in the Company’s consolidated balance sheets.

Initial measurement is at acquisition date fair value and subsequent measurement is at the greater of the carrying value or the redemption value.

Changes in the redemption value are recognized immediately as they occur and the carrying amount of the redeemable non-controlling interest is adjusted at the end of each reporting period.

This method views the end of the reporting period as if it were also the redemption date for the instrument.

Increases or decreases in the estimated redemption amount are recorded with corresponding adjustments against equity and are reflected in the computation of earnings per share.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, "*Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses*".

| [Note 9 Inventories](#if7b557ec01b24fe2a7ff4307f8c51301_106) | | | [91](#if7b557ec01b24fe2a7ff4307f8c51301_106) | | |

| [Note 11 Leases](#if7b557ec01b24fe2a7ff4307f8c51301_112) | | | [92](#if7b557ec01b24fe2a7ff4307f8c51301_112) | | |

| [Note 18 Capital Stock](#if7b557ec01b24fe2a7ff4307f8c51301_133) | | | [112](#if7b557ec01b24fe2a7ff4307f8c51301_133) | | |

*Critical Audit Matter Description*

The goodwill balance was $7.6 billion as of December 31, 2023, of which $1.7 billion is allocated to the Measurement and Control Solutions reporting units.

*How the Critical Audit Matter Was Addressed in the Audit*

- Our fair value specialists also assisted in evaluating the reasonableness of the Measurement and Control Solutions reporting units’ fair value by considering comparable EBITDA multiples of peer companies.