← All companies ← XRX Manual XYZ → ← WTS Industrial Machinery ZBRA →

XYL, Xylem Inc. Common Stock New

Industrial Machinery capital-intensive Serial acquirer

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.

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.

Latest annual: FY2025 10-K

XYL · Xylem Inc. Common Stock New

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$9.0B

+5.5% YoY · 13% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $9.1B 5-yr avg $7.1B

Gross margin 39% 5-yr avg 38%

Operating margin 13.6% 5-yr avg 11.3%

ROIC 8% 5-yr avg 9%

Owner-earnings margin 11% 5-yr avg 8%

Free cash flow margin 11% 5-yr avg 8%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Products (83%) and Services (17%).
Situation: Serial acquirer. Goodwill and acquired intangibles are 60% of assets, with meaningful acquisition spending in 4 of the record's 10 years; much of what this business is was bought, at prices the record carries.
What moves the needle: Gross margin has run about 38% and operating margin about 11% through the cycle, a solid spread between what it charges and what the product costs to make. Read this kind of business on the capital-goods cycle and the aftermarket. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 9%). By owner earnings: roughly 10% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Products is 83% of revenue, with Services the other meaningful line at 17%.

Revenue by product line, FY2025

Products83%$7.5B
Services17%$1.6B

By geographyUnited States58%Europe20%Asia Pacific14%Other8%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$3.8B	$4.7B	$5.2B	$5.2B	$4.9B	$5.2B	$5.5B	$7.4B	$8.6B	$9.0B	$9.1B	RevenueRevenue
39%	39%	39%	39%	38%	38%	38%	37%	38%	38%	39%	Gross marginGross mgn
24%	23%	22%	22%	23%	23%	22%	24%	22%	21%	21%	SG&A / revenueSG&A/rev
3%	4%	4%	4%	4%	4%	4%	3%	3%	3%	2%	R&D / revenueR&D/rev
$408M	$552M	$654M	$486M	$367M	$585M	$622M	$652M	$1.0B	$1.2B	$1.2B	Operating incomeOp. inc.
10.8%	11.7%	12.6%	9.3%	7.5%	11.3%	11.3%	8.9%	11.8%	13.5%	13.6%	Operating marginOp. mgn
$260M	$331M	$549M	$401M	$254M	$427M	$355M	$609M	$890M	$957M	$981M	Net incomeNet inc.
24%	29%	6%	4%	11%	16%	19%	4%	18%	19%	19%	Effective tax rateTax rate
											Cash flow & returns
$497M	$686M	$586M	$839M	$824M	$538M	$596M	$837M	$1.3B	$1.2B	$1.3B	Operating cash flowOp. cash
$151M	$234M	$261M	$257M	$251M	$245M	$236M	$436M	$562M	$575M	$572M	DepreciationDeprec.
$68M	$100M	($254M)	$152M	$293M	($167M)	($32M)	($268M)	($245M)	($344M)	($291M)	Working capital & otherWC & other
$124M	$170M	$237M	$226M	$183M	$208M	$208M	$271M	$321M	$331M	$350M	CapexCapex
3.3%	3.6%	4.6%	4.3%	3.8%	4.0%	3.8%	3.7%	3.7%	3.7%	3.8%	Capex / revenueCapex/rev
$373M	$516M	$349M	$613M	$641M	$330M	$388M	$566M	$942M	$910M	$966M	Owner earningsOwner earn.
9.9%	11.0%	6.7%	11.7%	13.1%	6.4%	7.0%	7.7%	11.0%	10.1%	10.6%	Owner earnings marginOE mgn
$373M	$516M	$349M	$613M	$641M	$330M	$388M	$566M	$942M	$910M	$966M	Free cash flowFCF
9.9%	11.0%	6.7%	11.7%	13.1%	6.4%	7.0%	7.7%	11.0%	10.1%	10.6%	Free cash flow marginFCF mgn
$1.8B	$33M	$433M	$18M	$0	$0	$0	$476M	$193M	$163M	$156M	AcquisitionsAcquis.
$112M	$130M	$152M	$174M	$188M	$203M	$217M	$299M	$350M	$391M	$399M	Dividends paidDiv. paid
$4M	$25M	$59M	$40M	$61M	$68M	$52M	$25M	$20M	$15M	—	BuybacksBuybacks
7%	9%	13%	10%	8%	11%	11%	5%	7%	8%	8%	ROICROIC
12%	13%	20%	14%	9%	13%	10%	6%	8%	8%	9%	Return on equityROE
7%	8%	14%	8%	2%	7%	4%	3%	5%	5%	5%	Retained to equityRetained/eq
											Balance sheet
$308M	$414M	$296M	$724M	$1.9B	$1.3B	$944M	$1.0B	$1.1B	$1.5B	$1.0B	Cash & investmentsCash+inv
$843M	$956M	$1.0B	$1.0B	$923M	$953M	$1.1B	$1.6B	$1.7B	$1.8B	$1.8B	ReceivablesReceiv.
$522M	$524M	$595M	$539M	$558M	$700M	$799M	$1.0B	$996M	$983M	$991M	InventoryInvent.
$457M	$549M	$586M	$597M	$569M	$639M	$723M	$968M	$1.0B	$1.0B	$969M	Accounts payablePayables
$908M	$931M	$1.0B	$978M	$912M	$1.0B	$1.2B	$1.7B	$1.7B	$1.7B	$1.8B	Operating working capitalOper. WC
$1.8B	$2.1B	$2.1B	$2.5B	$3.5B	$3.2B	$3.0B	$3.9B	$4.1B	$4.6B	$4.0B	Current assetsCur. assets
$1.2B	$1.1B	$1.4B	$1.5B	$2.0B	$1.4B	$1.6B	$2.2B	$2.3B	$2.9B	$2.8B	Current liabilitiesCur. liab.
1.5×	1.9×	1.5×	1.6×	1.8×	2.3×	1.9×	1.8×	1.8×	1.6×	1.5×	Current ratioCurr. ratio
$2.6B	$2.8B	$3.0B	$2.8B	$2.9B	$2.8B	$2.7B	$7.6B	$8.0B	$8.3B	$8.3B	GoodwillGoodwill
$6.5B	$6.9B	$7.2B	$7.7B	$8.8B	$8.3B	$8.0B	$16.1B	$16.5B	$17.6B	$17.0B	Total assetsAssets
$2.4B	$2.2B	$2.3B	$2.3B	$3.1B	$2.4B	$1.9B	$2.3B	$2.0B	$1.9B	$1.9B	Total debtDebt
$2.1B	$1.8B	$2.0B	$1.6B	$1.2B	$1.1B	$936M	$1.3B	$895M	$463M	$930M	Net debt / (cash)Net debt
5.8×	6.7×	8.0×	7.3×	4.8×	7.7×	12.4×	13.3×	22.9×	42.2×	49.4×	Interest coverageInt. cov.
$2.2B	$2.5B	$2.8B	$3.0B	$3.0B	$3.2B	$3.5B	$10.2B	$10.6B	$11.5B	$11.0B	Shareholders’ equityEquity
0.5%	0.4%	0.6%	0.6%	0.5%	0.6%	0.7%	0.8%	0.7%	0.6%	0.6%	Stock comp / revenueSBC/rev
											Per share
180M	181M	181M	181M	181M	182M	181M	218M	244M	244M	243M	Shares out (diluted)Shares
$20.95	$26.03	$28.75	$28.97	$26.92	$28.62	$30.51	$33.75	$35.16	$37.03	$37.36	Revenue / shareRev/sh
$1.44	$1.83	$3.03	$2.21	$1.40	$2.35	$1.96	$2.79	$3.65	$3.92	$4.03	EPS (diluted)EPS
$2.07	$2.85	$1.93	$3.38	$3.54	$1.82	$2.14	$2.59	$3.87	$3.73	$3.97	Owner earnings / shareOE/sh
$2.07	$2.85	$1.93	$3.38	$3.54	$1.82	$2.14	$2.59	$3.87	$3.73	$3.97	Free cash flow / shareFCF/sh
$0.62	$0.72	$0.84	$0.96	$1.04	$1.12	$1.20	$1.37	$1.44	$1.60	$1.64	Dividends / shareDiv/sh
$0.69	$0.94	$1.31	$1.25	$1.01	$1.15	$1.15	$1.24	$1.32	$1.36	$1.44	Cap. spending / shareCapex/sh
$12.16	$13.84	$15.28	$16.32	$16.39	$17.73	$19.31	$46.59	$43.70	$47.05	$45.09	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+6.5%/yr	+6.6%/yr
Owner earnings / share	+6.8%/yr	+1.1%/yr
EPS	+11.7%/yr	+22.8%/yr
Dividends / share	+11.1%/yr	+9.1%/yr
Capital spending / share	+7.8%/yr	+6.1%/yr
Book value / share	+16.2%/yr	+23.5%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Operating income+21.2%
“Operating income for 2025 was $1,223 million, reflecting an increase of $214 million, or 21.2%, compared to $1,009 million in 2024.”
✓ figure matches the filed record
Net income+7.5%
“Net income attributable to Xylem was $957 (net income margin of 10.6%) during 2025, an increase of $67 million as compared to net income attributable to Xylem in the prior year of $890 million (net income margin of 10.4%).”
✓ figure matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

244Mpeak FY2025

ROIC

8%low FY2023

Gross margin

38%low FY2023

Net debt ÷ owner earnings

0.5×peak FY2018

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$910Mowner earningsvs.$957Mnet incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $957M of profit but $910M of owner earnings: $47M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$957M

Owner earnings$910M · 10% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$957M	$890M	$609M	$355M	$427M
Depreciation & amortizationnon-cash charge added back	+$575M	+$562M	+$436M	+$236M	+$245M
Stock-based compensationreal costnon-cash, but a real cost	+$53M	+$56M	+$60M	+$37M	+$33M
Working capital & othertiming of cash in and out, other non-cash items	−$344M	−$245M	−$268M	−$32M	−$167M
Cash from operations	$1.2B	$1.3B	$837M	$596M	$538M
Capital expenditurecash put back in to keep running and to grow	−$331M	−$321M	−$271M	−$208M	−$208M
Owner earnings	$910M	$942M	$566M	$388M	$330M
Owner-earnings marginowner earnings ÷ revenue	10%	11%	8%	7%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $53M), owner earnings is nearer $857M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 42.2×

Comfortable

Operating income $1.2B ÷ interest expense $29M

What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
How heavy is the debt, net of cash? $463M · 0.4× operating profit

Modest net debt

Cash $1.5B − debt $1.9B

What this means
Netting $1.5B of cash and short-term investments against $1.9B of debt leaves $463M owed, about 0.4× a year's operating profit (1.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 69d

Long (60+ days)

DSO 71 + DIO 65 − DPO 67 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 8%

Solid through the cycle

10-yr median, range 5%–13%; 8% latest = NOPAT $985M ÷ invested capital $11.9B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 8% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 10%

Solid through the cycle

10-yr median margin, range 6%–13%; latest $910M = operating cash $1.2B − maintenance capex $331M

Industry peers: median 15%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 10% of revenue this year, a 10% median across 10 years. Treating stock comp as the real expense it is (less $53M of SBC) leaves $857M.
Are earnings backed by cash? 1.30×

Cash-backed

Cash from ops $1.2B ÷ net income $957M

In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 45%

Returns about half

Dividends + buybacks $406M ÷ Owner Earnings $910M

What this means
Of $910M Owner Earnings, $406M (45%) went back to shareholders, $391M dividends, $15M buybacks. But the buybacks barely exceed stock issued to employees ($53M SBC), net of dilution, little was truly returned. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.58×

Harvesting

Capex $331M ÷ depreciation $575M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $9.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Near

Current ratio ≥ 2× · 1.63×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Near

Debt ≤ working capital · $1.9B vs $1.8B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +115%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.44/share (latest year $4.03), the averaged base the calculator's gate runs on, and book value is $48.30/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 12% → 11% (3-yr avg ends)

What this means
Through the cycle the operating margin held roughly steady — about 12% early, 11% lately, median 11%.
Reinvestment, incremental ROIC 5%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +8%/yr

What this means
Owner earnings grew about 8% a year over the record.
Worst year 2020 · 7.5% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +3.4%/yr

What this means
The share count is rising, dilution works against you on a per-share basis.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Competitors may develop and commercialize new technologies, such as AI, more effectively to drive internal efficiencies or create new or enhanced products or services that may adversely affect our competitiveness.”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$4.0B

Cash & short-term investments$1.0B
Receivables$1.8B
Inventory$991M
Other current assets$235M

Current liabilities$2.8B

Debt due within a year$531M
Accounts payable$969M
Other current liabilities$1.3B

Current ratio1.46×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.10×stricter: inventory excluded

Cash ratio0.37×strictest: cash alone against what's due

Working capital$1.3Bthe cushion left after near-term bills

Debt due this year vs. cash$531M due · $1.0B cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago+2.8%the freshest read on whether the business is still growing

Current ratio, recent quarters1.9× → 1.5×

Deeper floors

Tangible book value$467Mequity stripped of goodwill & intangibles

Net current asset value($1.7B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$2.4B$444M of it operating leases; with finance leases, “total fixed claims” below reaches $2.5B (annual-report basis)

From the company's latest filing.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$140M

'27$121M

'28$96M

'29$70M

'30$47M

later$138M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$140Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$612Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$533Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$1.9B

Lease obligations (present value)$533M

Total fixed claims on the business$2.5B

Counting the leases the way Buffett does, the fixed claims on this business come to $2.5B, of which the leases are 22%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $7.9B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$2.3B · 29%
Dividends$2.2B · 28%
Buybacks$369M · 5%
Retained (debt / cash)$3.0B · 38%

Returned to owners$2.6B
46% of the owner earnings the business produced over the span, $2.2B as dividends and $369M as buybacks.
Average price paid for buybacks$82.18
Across the years where the filing reports a share count, 4M shares were bought for $369M, about $82.18 each. Year to year the price paid ranged from $42.11 (2016) to $128.21 (2024); its heaviest year, 2021, paid $100.29 ($68M).
Net change in share count35.2%
The diluted count rose from 180M to 243M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record$1.60/sh
Paid in 10 of the years on record, the per-share dividend growing about 11% a year. It was never cut over the span.
Return on what it retained16%
Of the earnings it kept rather than paid out ($2.4B over the span), annual owner earnings (first three years vs last three) grew $393M, so each retained $1 added about 0.16 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$10.6B60% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity73%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$3.1Bover 10 years buying other businesses, against $2.3B of capital spent building

$206M written down across 2 years (2019, 2020): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Pine	$10.4M	$13.3M	$330M
2022	Mr. Pine	$10.1M	$7.2M	$388M
2023	Mr. Pine	$10.8M	$9.7M	$566M
2024	Mr. Pine	$10.6M	$9.5M	$942M
2025	Mr. Pine	$11.3M	$13.7M	$910M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$53M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Xylem Inc. Common Stock New is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereDid the share count rise anyway?35.2%
Diluted shares grew 35.2% over 2016–2025, even as the company spent $369M on buybacks. The repurchases were outrun by issuance — to staff, in a raise, or in a deal — and the filing says which; owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereAre "one-time" charges a yearly habit?9 of 10 years
Management took an impairment or write-down in 9 of the last 10 years, $278M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Does management own its misses?
1 plain admission in this year's filing
“Divestitures include sales or discontinuance of insignificant portions of our business that did not meet the criteria for classification as a discontinued operation.”verify →
Which reported numbers are a judgment call?
Management names Revenue recognition, Income taxes, Acquisitions, Contingencies as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Industrial Machinery

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ITWIllinois Tool Works Inc.	$16.0B	42%	24.2%	29%	17%
XYLXylem Inc. Common Stock New	$9.0B	38%	11.3%	9%	10%
IRIngersoll Rand Inc.	$7.7B	39%	12.4%	6%	15%
RRXRegal Rexnord Corporation	$5.9B	27%	9.9%	7%	9%
ZBRAZebra Technologies	$5.4B	47%	13.7%	13%	15%
FLSFlowserve	$4.7B	30%	7.7%	7%	6%
ITTITT Inc.	$3.9B	32%	15.1%	18%	10%
IEXIDEX Corp.	$3.5B	44%	22.3%	15%	18%
Group median	—	38%	13.1%	11%	12%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Xylem Inc. Common Stock New has delivered.

Today’s price $

Through the cycle, Xylem Inc. Common Stock New earns about $902M on its 10.0% median owner-earnings margin. This year’s 10.1% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($902M) Net of stock comp (−$54M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25+27%/yr

Owner-earnings growth · ’16→’25+8%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $966M on 238M shares outstanding, per the 10-Q cover, as of 2026-04-24; net debt $930M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh XYL against another business →

Cite: Owner Scorecard, "Xylem Inc. Common Stock New (XYL), the owner's record," https://ownerscorecard.com/c/XYL, data as of 2026-07-09.

Manual order: ← XRX its page in the Manual XYZ →

Industry order: ← WTS the Industrial Machinery chapter ZBRA →