XYLEM INC.

INVESTOR RELATIONS OVERVIEW

AUGUST 2015

XYLEM PROPRIETARY / CONFIDENTIAL

FORWARD-LOOKING STATEMENTS

This presentation contains information that may constitute “forward-looking statements.” Forward-looking statements by their nature
address matters that are, to different degrees, uncertain. Generally, the words “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “forecast,” “believe,” “target,” “will,” “could,” “would,” “should” and similar expressions identify forward-looking statements,
which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement
is not forward-looking. These forward-looking statements include statements about the capitalization of Xylem Inc. (the “Company”), the
Company’s restructuring and realignment, future strategic plans and other statements that describe the Company’s business strategy,
outlook, objectives, plans, intentions or goals. All statements that address operating or financial performance, events or developments
that we expect or anticipate will occur in the future — including statements relating to orders, revenues, operating margins and earnings
per share growth, and statements expressing general views about future operating results — are forward-looking statements. Forward-
looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ
materially from those expressed or implied in, or reasonably inferred from, such forward-looking statements.

Factors that could cause results to differ materially from those anticipated include: economic, political and other risks associated with our
international operations, including military actions, economic sanctions or trade embargoes that could affect customer markets, and non-
compliance with laws, including foreign corrupt practice laws, export and import laws and competition laws; potential for unexpected
cancellations or delays of customer orders in our reported backlog; our exposure to fluctuations in foreign currency exchange
rates; competition and pricing pressures in the markets we serve; the strength of housing and related markets; ability to retain and
attract key members of management; our relationship with and the performance of our channel partners; our ability to borrow or to
refinance our existing indebtedness and availability of liquidity sufficient to meet our needs; changes in the value of goodwill or intangible
assets; risks relating to product defects, product liability and recalls; governmental investigations; security breaches or other disruptions
of our information technology systems; litigation and contingent liabilities; and other factors set forth in Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2013, and those described from time to time in subsequent reports filed with the Securities
and Exchange Commission.

All forward-looking statements made herein are based on information currently available to the Company. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise, except as required by law.

XYLEM PROPRIETARY / CONFIDENTIAL

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XYLEM OVERVIEW

XYLEM PROPRIETARY / CONFIDENTIAL

WHY SHOULD YOU INVEST IN XYLEM?

INVESTMENT HIGHLIGHTS
• Focused Water Play
• Leading Market Positions in
Highly Fragmented Industry
• Fortress Brands & World Class
Distribution
• Diverse Geographic & End
Market Exposure
• ~40% Recurring Revenue Driven
from Large Installed Base
• Strong Financial Position & Cash
Flow Generation

STRONG FOUNDATION & FUNDAMENTALS WITH OPPORTUNITY TO OUTPERFORM

XYLEM PROPRIETARY / CONFIDENTIAL

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OUR JOURNEY …
…WILL TAKE
US FROM A
PORTFOLIO
* OF
BUSINESSES
TO A
SOLUTION
MULTITRODE

PORTFOLIO
MULTITRODE

EVOLUTION TO A LEADING GLOBAL WATER TECHNOLOGY PROVIDER

XYLEM PROPRIETARY / CONFIDENTIAL

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SECULAR DRIVERS PROVIDE FOR
COMPELLING LONG-TERM GROWTH

WE ARE UNIQUELY POSITIONED

TO SOLVE THE WORLD’S GROWING WATER CHALLENGES

XYLEM PROPRIETARY / CONFIDENTIAL

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FOCUSED ON WATER CHALLENGES
PRODUCTIVITY QUALITY RESILIENCE

Problem: Problem: Problem:

Delivery and use of water as a Management of wastewater is Communities face rising economic
factor of production is highly energy-intensive, expensive, and risks from water variability
inefficient inefficient (flooding, scarcity)
Solutions: Solutions: Solutions:
• Energy efficient pumps • Smart pumps • Dewatering pumps
• Advanced water treatment • Advanced wastewater • Advanced water treatment
• Analytical instrumentation treatment • Analytical instrumentation
• Analytical instrumentation

BY ADDRESSING OUR CUSTOMERS BIGGEST WATER CHALLENGES

WE CREATE ECONOMIC VALUE FOR OUR CUSTOMERS

7 XYLEM PROPRIETARY / CONFIDENTIAL

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WE HAVE A DIVERSIFIED PORTFOLIO
2014 REVENUE 2014 REVENUE 2014 REVENUE
BY END MARKET BY GEOGRAPHY BY APPLICATION

 Industrial 44%  United States 38%  Transport 45%

 Public Utility 33%  Europe 35%  Treatment 9%
 Commercial 13%  Latin America 5%  Test 8%
 Residential 7%  ME/Africa 4%  Building Svcs 20%
 Agriculture 3%  Asia Pac 12%  Industrial Water 15%
 Rest of World 5%  Irrigation 3%
A Growing Emerging Market
Presence … Today ~21%
OUR BROAD PORTFOLIO ALLOWS US TO ADDRESS A DIVERSE SET OF
MARKETS AND PROVIDES FOR A UNIQUE INVESTMENT OPPORTUNITY

XYLEM PROPRIETARY / CONFIDENTIAL

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WE ARE WELL POSITIONED IN FRAGMENTED MARKETS

SIGNIFICANT GROWTH OPPORTUNITY IN HIGHLY FRAGMENTED INDUSTRY

XYLEM PROPRIETARY / CONFIDENTIAL

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HOW WILL XYLEM CREATE SHAREHOLDER
VALUE?
LONG-TERM STRATEGIC INITIATIVES

• Accelerate Profitable Growth

• Enable Commercial Leadership
• Focus & Accelerate Emerging Market Growth
• Focus & Invest in Industry Vertical Marketing
• Protect and Extend Innovation & Technology Leadership
• Build a Culture of Continuous Improvement
• Drive Business Simplification
• Expand Reach & Impact of Lean Six Sigma and Global Sourcing Capabilities
• Build a Culture of Execution & Accountability
• Create Superior Leadership & Talent Development
STRONG EXECUTION OF STRATEGIC INITIATIVES
AND FOCUS ON NEAR-TERM PRIORITIES TO CREATE SHAREHOLDER VALUE

XYLEM PROPRIETARY / CONFIDENTIAL

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FINANCIAL OVERVIEW

XYLEM PROPRIETARY / CONFIDENTIAL

FINANCIAL OVERVIEW
(Dollars, In Millions)

REVENUE TOP 2015 PRIORITIES

3,837 3,916 • Advance Focused Emerging Market Growth Strategy

3,791
• Develop Industry Vertical Marketing Capabilities
• Develop Business Simplification Roadmap
Organic* Organic*
-1% +3% • Improve Working Capital Performance
• Evaluate and Pursue M&A
2012 2013 2014

OPERATING MARGIN * EPS *

12.9% 11.8% 12.9% 1.77 1.97

1.67

-6% +18%

2012 2013 2014 2012 2013 2014

SIGNIFICANT OPPORTUNITY TO CREATE SHAREHOLDER VALUE BY

ACCELERATING REVENUE GROWTH & IMPROVING PROFITABILITY

* See appendix for non-GAAP reconciliations

XYLEM PROPRIETARY / CONFIDENTIAL
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 FINANCIAL OVERVIEW
(Dollars, In Millions / % of Revenue)

R&D SG&A

104 986 920

106 104 914

2012 2013 2014 2012 2013 2014

R&D% 2.8% 2.7% 2.7% SG&A% 24.1% 25.7% 23.5%
(Note: Includes Realignment Costs )

DEPRECIATION & AMORTIZATION EBITDA *

649 665
142 150 142 622

2012 2013 2014 2012 2013 2014

D&A% 3.7% 3.9% 3.6% EBITDA 17.1% 16.2% 17.0%
Margin%

* See appendix for non-GAAP reconciliations

XYLEM PROPRIETARY / CONFIDENTIAL
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 FINANCIAL OVERVIEW
(Dollars, In Millions)

FREE CASH FLOW * CAPITAL EXPENDITURES

312 297 126 119

198 112

2012 2013 2014 2012 2013 2014

FCF% 100% 87% 91% % of 3.0% 3.3% 3.0%
Revenue

RETURN OF SHAREHOLDER CAPITAL ROIC **

224
10.8% 10.0% 10.9%
154
84

2012 2013 2014 2012 2013 2014

Dividends & Share Repurchases Under Programs

* See appendix for non-GAAP reconciliations

XYLEM PROPRIETARY / CONFIDENTIAL
** Defined as Adj. Net Operating Profit After Tax / Average Invested Capital 14
FINANCIAL OVERVIEW
(Dollars, In Millions)

CAPITAL SUMMARY CAPITAL DEPLOYMENT STRATEGY

December 31, 2014
Committed to Maintain Investment Grade Rating
Cash 663
Organic Growth Initiatives Drive Highest ROIC
Debt 1,288
• Differentiated Product Development …
Net Debt 625
Targeted Investment into Most Attractive
Shareholders’ Equity 2,127 Growth Platforms
Net Capital 2,752
Inorganic Growth Investments
Net Debt to Net Capital 22.7%
• Highly Fragmented Industry
Liquidity and Cash Management • Strategic & Financial Filters Drive Disciplined
• Access to Revolver and Commercial Paper Approach
for Short-Term Liquidity Requirements • Proven Track Record
• No Debt Maturities Until 2016 & 2021 Return Capital to Shareholders
Pension Obligations • Dividend Growth Strategy
• Status: 101% (Funded Plans); 67% (Overall)
• Share Repurchase Programs

BALANCED CAPITAL DEPLOYMENT TO ENHANCE SHAREHOLDER RETURNS

XYLEM PROPRIETARY / CONFIDENTIAL

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  Completed  Not Achieved
ACQUISITION SCORECARD  On Track

IRR >
Gross Risk Adj. Mid- Cash EPS
Invested Year Strategic Margin Cost of Teens Return Accretive
Acquisition $M Completed Fit Accretive Capital ROIC 7-9 Years After Yr 1

Laing $30 2009      

Nova $384 2010      
Godwin $585 2010      
OI $25 2010      
YSI $310 2011      
Through Added Added
2012 ~200 Bps ~$0.45

MJK $13 2012      

Heartland $29 2012      
PIMS $57 2013      

MultiTrode $26 2013      

XYLEM PROPRIETARY / CONFIDENTIAL

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SEGMENT OVERVIEW

XYLEM PROPRIETARY / CONFIDENTIAL

 WATER INFRASTRUCTURE
(Dollars, In Millions)

OVERVIEW REVENUE

Served Market Size: $20B 2,442

2,349 2,384
2014 Revenues: $2.4B
2014 Op Margin*: 14.3%
• Leading Wastewater Pump & Dewatering Services Provider Organic* Organic*
-2% +4%
• Broad Portfolio of Filtration, Biological and Disinfection Technologies
• Industry-Leading Water & Environment Analytics Platform
2012 2013 2014
2014 Revenue Profile
By Application By End Market By Region OPERATING MARGIN*

15.2% 14.3%
13.2%

 Transport 73%  Public Utility 53%  Europe 40%

 Treatment 14%  Industrial 47%  United States 30%
 Test 13%  Asia Pac 14%
 Latin America 6% 2012 2013 2014
 ME/Africa 4%
 Rest of World 6%
* See appendix for non-GAAP reconciliations
XYLEM PROPRIETARY / CONFIDENTIAL
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 APPLIED WATER
(Dollars, In Millions)

OVERVIEW REVENUE

Served Market Size: $15B 1,474

1,442 1,453
2014 Revenues: $1.5B
2014 Op Margin*: 14.0%
• Leading Global Provider of a Broad Range of Energy-Efficient Organic* Organic*
Solutions with a Large & Diverse Customer Base Flat +2%
• U.S. Leader in Building Services Equipment & Solutions
• U.S. Leader in Industrial Water Technologies
2012 2013 2014
2014 Revenue Profile
By Application By End Market By Region

OPERATING MARGIN*

14.0%
13.1%
12.8%
 Building Svc 53%  Industrial 40%  United States 51%
 Ind’l Water 40%  Commercial 34%  Europe 27%
 Irrigation 7%  Residential 19%  Asia Pac 9%
 Agriculture 7%  Latin America 4%
 ME/Africa 5%
 Rest of World 4% 2012 2013 2014
* See appendix for non-GAAP reconciliations
XYLEM PROPRIETARY / CONFIDENTIAL
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APPENDIX

XYLEM PROPRIETARY / CONFIDENTIAL

 Xylem Inc. Non-GAAP Measures

Management views key performance indicators including revenue, gross margins, segment operating income and margins, orders growth, free cash flow,
working capital, and backlog, among others. In addition, we consider certain measures to be useful to management and investors evaluating our operating
performance for the periods presented, and provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can
assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives
and initiatives. These metrics, however, are not measures of financial performance under GAAP and should not be considered a substitute for revenue,
operating income, net income, earnings per share (basic and diluted) or net cash from operations as determined in accordance with GAAP. We consider the
following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

“Organic revenue" and "Organic orders” defined as revenue and orders, respectively, excluding the impact of foreign currency fluctuations and contributions
from acquisitions and divestitures. Divestitures include sales of portions of our business that did not meet the criteria for classification as a discontinued
operation or insignificant portions of our business that we did not classify as a discontinued operation. The period-over-period change resulting from foreign
currency fluctuations assumes no change in exchange rates from the prior period.

“Constant currency” defined as financial results adjusted for currency translation impacts by translating current period and prior period activity using the
same currency conversion rate. This approach is used for countries whose functional currency is not the U.S. dollar.

“EBITDA” defined as earnings before interest, taxes, depreciation, amortization expense, and share-based compensation. “Adjusted EBITDA” reflects the
adjustment to EBITDA to exclude non-recurring restructuring and realignment costs, gain on sale of business and special charges.

"Adjusted Operating Income", "Adjusted Segment Operating Income", and “Adjusted EPS” defined as operating income, segment operatng income and
earnings per share, adjusted to exclude non-recurring separation costs associated with the Xylem spin-off from ITT Corporation, non-recurring restructuring
and realignment costs, gain on sale of business, special charges and tax-related special items, as applicable.

“Free Cash Flow” defined as net cash from operating activities, as reported in the Statement of Cash Flow, less capital expenditures as well as adjustments
for other significant items that impact current results which management believes are not related to our ongoing operations and performance. Our
definition of free cash flows does not consider non-discretionary cash payments, such as debt.

“Realignment costs” defined as non-recurring costs not included in restructuring costs that are incurred as part of actions taken to reposition our business,
including items such as professional fees, relocation, travel and other costs.

“Special charges "defined as costs incurred by the Company associated with the settlement of legal proceedings with Xylem Group LLC and certain costs
incurred for the change in chief executive officer made during the third quarter of 2013, as well as costs incurred in the fourth quarter of 2013 for the
contractual indemnification of federal tax obligations to ITT and costs associated with a legal judgment arising from a historical acquisition matter.

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Reported vs. Organic & Constant Currency Revenue
($ Millions)

Constant
(As Reported - GAAP) (As Adjusted - Organic) Currency
(A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) / A

Change % Change Acquisitions / Change % Change

Revenue Revenue 2014 v. 2013 2014 v. 2013 Divestitures FX Contribution Adj. 2014 v. 2013 Adj. 2014 v. 2013
2014 2013
Year Ended December 31

Xylem Inc. 3,916 3,837 79 2% 6 49 134 3% 3%

Water Infrastructure 2,442 2,384 58 2% (6) 47 99 4% 4%

Applied Water 1,474 1,453 21 1% 12 2 35 2% 2%

Quarter Ended December 31

Xylem Inc. 1,042 1,033 9 1% 5 50 64 6% 6%

Water Infrastructure 672 673 (1) 0% - 39 38 6% 6%

Applied Water 370 360 10 3% 5 11 26 7% 6%

Quarter Ended September 30

Xylem Inc. 963 965 (2) 0% 7 2 7 1% 0%

Water Infrastructure 602 602 - 0% - 1 1 0% 0%

Applied Water 361 363 (2) -1% 7 - 5 1% -1%

Quarter Ended June 30

Xylem Inc. 1,005 960 45 5% (1) (7) 37 4% 4%

Water Infrastructure 616 577 39 7% (1) 2 40 7% 7%

Applied Water 389 383 6 2% - (7) (1) 0% 0%

Quarter Ended March 31

Xylem Inc. 906 879 27 3% (5) 4 26 3% 4%

Water Infrastructure 552 532 20 4% (5) 5 20 4% 5%

Applied Water 354 347 7 2% - (2) 5 1% 1%

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Reast - Reported vs. Organic & Constant Currency Revenue
($ Millions)

(As Reported - GAAP) (As Adjusted - Organic) Constant Currency

(A) (B) (C) (D) (E) = B+C+D (F) = E/A (G) = (E - C) / A

Change % Change Acquisitions / Change % Change

Revenue Revenue 2013 v. 2012 2013 v. 2012 Divestitures FX Contribution Adj. 2013 v. 2012 Adj. 2013 v. 2012
2013 2012
Year Ended December 31

Xylem Inc. 3,837 3,791 46 1% (82) (3) (39) -1% 1%

Water Infrastructure 2,384 2,349 35 1% (82) 4 (43) -2% 2%

Applied Water 1,453 1,442 11 1% - (7) 4 0% 0%

Quarter Ended December 31

Xylem Inc. 1,033 969 64 7% (15) (1) 48 5% 7%

Water Infrastructure 673 620 53 9% (15) 2 40 6% 9%

Applied Water 360 349 11 3% - (3) 8 2% 2%

Quarter Ended September 30

Xylem Inc. 965 931 34 4% (21) - 13 1% 4%

Water Infrastructure 602 576 26 5% (21) 3 8 1% 5%

Applied Water 363 355 8 2% - (3) 5 1% 1%

Quarter Ended June 30

Xylem Inc. 960 966 (6) -1% (23) (4) (33) -3% -1%

Water Infrastructure 577 587 (10) -2% (23) (3) (36) -6% -2%
Applied Water 383 379 4 1% - (1) 3 1% 1%

Quarter Ended March 31

Xylem Inc. 879 925 (46) -5% (23) 2 (67) -7% -5%

Water Infrastructure 532 566 (34) -6% (23) 2 (55) -10% -6%
Applied Water 347 359 (12) -3% - - (12) -3% -3%

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Adjusted Operating Income
($ Millions)

Full Year
2014 2013 2012
Total Revenue
• Total Xylem 3,916 3,837 3,791
• Water Infrastructure 2,442 2,384 2,349
• Applied Water 1,474 1,453 1,442
Operating Income
• Total Xylem 463 363 443
• Water Infrastructure 321 263 334
• Applied Water 193 175 178
• Total Segments 514 438 512
Operating Margin
• Total Xylem 11.8% 9.5% 11.7%
• Water Infrastructure 13.1% 11.0% 14.2%
• Applied Water 13.1% 12.0% 12.3%
• Total Segments 13.1% 11.4% 13.5%
Separation Costs
• Total Xylem - - 22
• Water Infrastructure - - 4
• Applied Water - - 2
Special Charges
• Total Xylem - 24 -
• Water Infrastructure - 4 -
• Applied Water - - -
• Total Segments - 4 -
Restructuring & Realignment Costs
• Total Xylem 43 64 24
• Water Infrastructure 29 48 19
• Applied Water 13 16 5
• Total Segments 42 64 24

Adjusted Operating Income*

• Total Xylem 506 451 489
• Water Infrastructure 350 315 357
• Applied Water 206 191 185
• Total Segments 556 506 542
Adjusted Operating Margin*
• Total Xylem 12.9% 11.8% 12.9%
• Water Infrastructure 14.3% 13.2% 15.2%
• Applied Water 14.0% 13.1% 12.8%
• Total Segments 14.2% 13.2% 14.3%

*Adjusted Operating Income excludes restructuring & realignment costs and special
charges in 2014 and 2013, and excludes restructuring & realignment costs and non-
recurring separation costs in 2012.

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Adjusted Diluted EPS
($ Millions, except per share amounts)

Q4 2013 Q4 2014
As Reported Adjustments Adjusted As Reported Adjustments Adjusted
Total Revenue 1,033 1,033 1,042 1,042
Operating Income 129 16 a 145 141 12 d 153
Operating Margin 12.5% 14.0% 13.5% 14.7%
Interest Expense (14) (14) (13) (13)
Other Non-Operating Income (Expense) (8) 8 b - - -
Gain on sale of business - - - - -
Income before Taxes 107 24 131 128 12 140
Provision for Income Taxes (39) 11 c (28) (32) 6 c (26)
Net Income 68 35 103 96 18 114
Diluted Shares 185.6 185.6 183.3 183.3
Diluted EPS $ 0.37 $ 0.19 $ 0.56 $ 0.52 $ 0.10 $ 0.62

Q4 YTD 2013 Q4 YTD 2014

As Reported Adjustments Adjusted As Reported Adjustments Adjusted
Total Revenue 3,837 3,837 3,916 3,916
Operating Income 363 88 a 451 463 43 d 506
Operating Margin 9.5% 11.8% 11.8% 12.9%
Interest Expense (55) (55) (54) (54)
Other Non-Operating Income (Expense) (10) 8 b (2) 1 1
Gain on sale of business - - 11 (11) -
Income before Taxes 298 96 394 421 32 453
Provision for Income Taxes (70) (13) c (83) (84) (7) c (91)
Net Income 228 83 311 337 25 362
Diluted Shares 186.0 186.0 184.2 184.2
Diluted EPS $ 1.22 $ 0.45 $ 1.67 $ 1.83 $ 0.14 $ 1.97

a Restructuring & realignment costs and special charges

b Special charges
c Net tax impact of restructuring & realignment costs, special charges and special tax items
d Restructuring & realignment costs

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Adjusted Diluted EPS
($ Millions, except per share amounts)

Q4 2012 Q4 2013
As Reported Adjustments Adjusted As Reported Adjustments Adjusted
Total Revenue 969 969 1,033 1,033
Operating Income 104 26 a 130 129 16 c 145
Operating Margin 10.7% 13.4% 12.5% 14.0%
Interest Expense (14) (14) (14) (14)
Other Non-Operating Income (Expense) (1) (1) (8) 8 d -
Income before Taxes 89 26 115 107 24 131
Provision for Income Taxes (16) (11) b (27) (39) 11 e (28)
Net Income 73 15 88 68 35 103
Diluted Shares 186.5 186.5 185.6 185.6
Diluted EPS $ 0.39 $ 0.08 $ 0.47 $ 0.37 $ 0.19 $ 0.56

Q4 YTD 2012 Q4 YTD 2013

As Reported Adjustments Adjusted As Reported Adjustments Adjusted
Total Revenue 3,791 3,791 3,837 3,837
Operating Income 443 46 a 489 363 88 c 451
Operating Margin 11.7% 12.9% 9.5% 11.8%
Interest Expense (55) (55) (55) (55)
Other Non-Operating Income (Expense) - - (10) 8 d (2)
Income before Taxes 388 46 434 298 96 394
Provision for Income Taxes (91) (13) b (104) (70) (13) e (83)
Net Income 297 33 330 228 83 311
Diluted Shares 186.2 186.2 186.0 186.0
Diluted EPS $ 1.59 $ 0.18 $ 1.77 $ 1.22 $ 0.45 $ 1.67

a One time separation costs and restructuring & realignment costs

b Net tax impact of separation costs, restructuring & realignment costs and special tax items
c Restructuring & realignment costs and special charges
d Special charges
e Net tax impact of restructuring & realignment costs, special charges and special tax items

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES

Xylem Inc. Non-GAAP Reconciliation

EBITDA and Adjusted EBITDA by Quarter
($ Millions)

2014
Q1 Q2 Q3 Q4 Total

Pre-Tax Income 61 104 128 128 421

Interest Expense (Income), net 13 14 12 13 52

Depreciation 23 24 23 25 95
Amortization 13 12 12 10 47
Stock Compensation 4 5 5 4 18

EBITDA 114 159 180 180 633

Restructuring & Realignment 18 9 4 12 43

Gain on Sale of Business - (11) - (11)

Adjusted EBITDA 132 168 173 192 665

Revenue 906 1,005 963 1,042 3,916

Adjusted EBITDA Margin 14.6% 16.7% 18.0% 18.4% 17.0%

2013
Q1 Q2 Q3 Q4 Total

Pre-Tax Income 51 57 83 107 298

Interest Expense (Income), net 12 13 14 13 52

Depreciation 25 24 23 27 99
Amortization 12 13 13 12 50
XYLEM PROPRIETARY
Stock Compensation / CONFIDENTIAL
6 6 9 6 27
27
EBITDA 106 113 142 165 526
NON-GAAP MEASURES

XYLEM PROPRIETARY / CONFIDENTIAL

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NON-GAAP MEASURES
Xylem Inc. Non-GAAP Reconciliation
Net Cash - Operating Activities vs. Free Cash Flow
($ Millions)

Year Ended
2014 2013 2012

Net Cash - Operating Activities $ 416 $ 324 $ 396

Capital Expenditures (119) (126) (112)

Cash Paid for Separation Costs (incl. Capex) - - 28

Free Cash Flow $ 297 $ 198 $ 312

Net Income 337 228 297

Separation Costs, net of tax (incl. tax friction) - - 16

Gain on Sale of Business 11 - -

Net Income, excluding gain on sale of business and separation costs* $ 326 $ 228 $ 313

Free Cash Flow Conversion 91% 87% 100%

* Separation costs are not excluded in 2013

XYLEM PROPRIETARY / CONFIDENTIAL

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NYSE: XYL

Phil De Sousa, Vice President, Investor Relations

(914) 323-5930

Dawn Powell, Investor Relations Coordinator

(914) 323-5931

http://investors.xyleminc.com

XYLEM PROPRIETARY / CONFIDENTIAL

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