Credit Facilities and Long-Term Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit Facilities and Long-Term Debt | Total debt outstanding is summarized as follows:
(a)The fair value of our Senior Notes was determined using quoted prices in active markets for identical securities, which are considered Level 1 inputs. The fair value of our Senior Notes due 2026 was $499 million and $497 million as of September 30, 2026 and December 31, 2025, respectively. The fair value of our Senior Notes due 2028 was $480 million and $480 million as of September 30, 2026 and December 31, 2025, respectively. The fair value of our Senior Notes due 2031 was $438 million and $454 million as of September 30, 2026 and December 31, 2025 respectively. The fair value of our Senior Notes due 2033 was $484 million as of September 30, 2026. The fair value of our Senior Notes due 2036 was $483 million as of September 30, 2026. The fair value of our Senior Notes due 2046 was $314 million and $340 million as of September 30, 2026 and December 31, 2025, respectively. (b)The debt issuance costs and unamortized discount are recognized as a reduction in the carrying value of the Senior Notes in the Condensed Consolidated Balance Sheets and is being amortized to interest expense in our Condensed Consolidated Income Statements over the expected remaining terms of the Senior Notes. Senior Notes In the fourth quarter of 2026, we issued $500 million aggregate principal amount of 5.250% Senior Notes due September 2029 (the “Senior Notes due 2029”), $500 million aggregate principal amount of 5.450% Senior Notes due January 2032 (the “Senior Notes due 2032”) and $500 million aggregate principal amount of 5.850% Senior Notes due January 2037 (the “Senior Notes due 2037” and, together with the Senior Notes due 2029 and the Senior Notes due 2032, the “September 2026 Notes”). The September 2026 Notes are unsecured and unsubordinated obligations of the Company and rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness. The September 2026 Notes are not guaranteed by any of our subsidiaries. The September 2026 Notes include covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the September 2026 Notes, as applicable, in whole or in part, at any time at a redemption price equal to the principal amount of the Notes to be redeemed, plus a make-whole premium. We may also redeem the September 2026 Notes in certain other circumstances, as set forth in the applicable September 2026 Notes indenture. If a change of control triggering event (as defined in the indenture) occurs, the Company is required to offer to repurchase the September 2026 Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest. The indenture also contains customary provisions regarding events of default, defeasance, and amendment, including the ability to modify certain terms with the consent of holders of a majority in principal amount of the outstanding September 2026 Notes. The September 2026 Notes are also subject to a special mandatory redemption. If (i) the Company does not complete the acquisition of the Cornell Pump and Roper Pump businesses described in Note 3, “Acquisitions and Divestitures,” on or before August 10, 2027 (or such later date to which the termination date under the definitive agreement for the acquisition may be extended in accordance with its terms), (ii) the definitive agreement is terminated on or before that date, or (iii) the Company notifies the trustee in writing that it will not pursue completion of the acquisition, the Company will be required to redeem all of the September 2026 Notes of each series at a redemption price equal to 101% of their principal amount, plus accrued and unpaid interest to the redemption date. Interest on the Senior 2029 Notes is payable on March 28 and September 28 of each year, commencing on March 28, 2027. Interest on the Senior 2032 Notes and the Senior 2037 Notes is payable on January 15 and July 15 of each year, commencing on January 15, 2027. On May 29, 2026, we issued $500 million aggregate principal amount of 5.200% Senior Notes due June 2033 (the “Senior Notes due 2033”) and $500 million aggregate principal amount of 5.450% Senior Notes due June 2036 (the “Blue Notes due 2036” and, together with the Senior Notes due 2033, the “May 2026 Notes”). The May 2026 Notes are unsecured and unsubordinated obligations of the Company and rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness. The May 2026 Notes are not guaranteed by any of our subsidiaries. The May 2026 Notes include covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the May 2026 Notes, as applicable, in whole or in part, at any time at a redemption price equal to the principal amount of the May 2026 Notes to be redeemed, plus a make-whole premium. We may also redeem the May 2026 Notes in certain other circumstances, as set forth in the applicable May 2026 Notes Indenture. If a change of control triggering event (as defined in the applicable Senior Notes indenture) occurs, the Company is required to repurchase the May 2026 Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest. The indenture also contains customary provisions regarding events of default, defeasance, and amendment, including the ability to modify certain terms with the consent of holders of a majority in principal amount of the outstanding May 2026 Notes. Interest on the May 2026 Notes is payable on June 1 and December 1 of each year. As of September 30, 2026, we are in compliance with all covenants for the May 2026 Notes. On June 26, 2020, we issued 1.950% Senior Notes of $500 million aggregate principal amount due January 2028 (the “Senior Notes due 2028”) and 2.250% Senior Notes of $500 million aggregate principal amount due January 2031 (the “Senior Notes due 2031” and, together with the Senior Notes due 2028, the “Green Bond”). The Green Bond includes covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the Green Bond at any time, at our option, subject to certain conditions, at specified redemption prices, plus accrued and unpaid interest to the redemption date. If a change of control triggering event (as defined in the applicable Green Bond indenture) occurs, we will be required to make an offer to purchase the Green Bond notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Interest on the Green Bond is payable on January 30 and July 30 of each year. As of September 30, 2026, we are in compliance with all covenants for the Green Bond. On October 11, 2016, we issued 3.250% Senior Notes of $500 million aggregate principal amount due November 2026 (the "Senior Notes due 2026") and 4.375% Senior Notes of $400 million aggregate principal amount due November 2046 (the "Senior Notes due 2046" and, together with the Senior Notes due 2026, the "October 2016 Notes"). The October 2016 Notes include covenants that restrict our ability, and the ability of our restricted subsidiaries, to incur debt secured by liens on certain property above a threshold, to engage in certain sale and leaseback transactions involving certain property above a threshold, and to consolidate or merge, or convey or transfer all or substantially all of our assets. We may redeem the October 2016 Notes, as applicable, in whole or in part, at any time at a redemption price equal to the principal amount of our October 2016 Notes to be redeemed, plus a make-whole premium. We may also redeem the October 2016 Notes in certain other circumstances, as set forth in the applicable October 2016 Notes indenture. If a change of control triggering event (as defined in the applicable Senior Notes indenture) occurs, we will be required to make an offer to purchase the October 2016 Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. Interest on the October 2016 Notes due 2026 and the Senior Notes due 2046 is payable on May 1 and November 1 of each year. As of September 30, 2026, we are in compliance with all covenants for the October 2016 Notes. Credit Facilities 2023 Five-Year Revolving Credit Facility On March 1, 2023, Xylem entered into a five-year revolving credit facility (the "2023 Credit Facility") with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2023 Credit Facility provided for an aggregate principal amount of up to $1 billion (available in U.S. Dollars and in Euros), with increases of up to $300 million for a maximum aggregate principal amount of $1.3 billion at the request of Xylem and with the consent of the institutions providing such increased commitments. On September 8, 2026, Xylem terminated the 2023 Credit Facility among the Company, certain lenders and Citibank, N.A. as Administrative Agent as a result of signing the 2026 Five-Year Revolving Credit Facility. 2026 Five-Year Revolving Credit Facility On September 8, 2026 Xylem entered into a five-year revolving credit facility (the "2026 Credit Facility") with Citibank, N.A., as Administrative Agent, and a syndicate of lenders. The 2026 Credit Facility provides for an aggregate principal amount of up to $1.5 billion (available in U.S. Dollars and in Euros), with increases of up to $500 million for a maximum aggregate principal amount of $2.0 billion at the request of Xylem and with the consent of the institutions providing such increased commitments. Interest on all loans under the 2026 Credit Facility is payable either quarterly or at the expiration of any Term SOFR or EURIBOR interest period applicable thereto. Borrowings accrue interest at a rate equal to, at Xylem's election, a base rate or an adjusted Term SOFR or EURIBOR rate plus an applicable margin. The 2026 Credit Facility includes customary provisions for implementation of replacement rates for Term SOFR-based and EURIBOR-based loans. The 2026 Credit Facility also includes a pricing grid that determines the applicable margin based on Xylem's credit rating, with a further adjustment based on Xylem's achievement of certain Environmental, Social and Governance ("ESG") key performance indicators. Xylem will also pay quarterly fees to each lender for such lender's commitment to lend accruing on such commitment at a rate based on Xylem's credit rating, whether such commitment is used or unused, as well as a quarterly letter of credit fee accruing on the letter of credit exposure of such lender during the preceding quarter at a rate based on the credit rating of Xylem with a further adjustment based on Xylem's achievement of certain ESG key performance indicators. The 2026 Credit Facility requires that Xylem maintain a consolidated total debt to consolidated EBITDA ratio (or maximum leverage ratio), which will be based on the last four fiscal quarters. In accordance with the terms of the agreement to the 2026 Credit Facility, Xylem may not exceed a maximum leverage ratio of 4.00 to 1.00 for a period of four consecutive fiscal quarters beginning with the fiscal quarter during which a material acquisition is consummated and a maximum leverage ratio of 3.50 to 1.00 thereafter for a minimum of four fiscal quarters before another material acquisition is consummated. In addition, the 2026 Credit Facility contains a number of customary covenants, including limitations on the incurrence of secured debt and debt of subsidiaries, liens, sale and lease-back transactions, mergers, consolidations, liquidations, dissolutions and sales of assets. The 2026 Credit Facility also contains customary events of default. Finally, Xylem has the ability to designate subsidiaries that can borrow under the 2026 Credit Facility, subject to certain requirements and conditions set forth in the 2026 Credit Facility. As of September 30, 2026, the 2026 Credit Facility was undrawn, and we are in compliance with all revolver covenants. The 2026 Credit Facility has availability of $1.5 billion, comprised of the $1.5 billion aggregate principal as of September 30, 2026. As of September 30, 2026, the future maturities of our debt were as follows:
(a)The debt issuance costs and unamortized discount is recognized as a reduction in the carrying value of the Senior Notes in the Consolidated Balance Sheets and is being amortized to interest expense in our Consolidated Income Statements over the expected remaining terms of the Senior Notes. Commercial Paper U.S. Dollar Commercial Paper Program Our U.S. Dollar commercial paper program generally serves as a means of short-term funding with a $600 million maximum issuing balance and a combined limit of $1.5 billion inclusive of the 2026 Credit Facility. As of September 30, 2026 and December 31, 2025, none of the Company's $600 million U.S. Dollar commercial paper program was outstanding, respectively. Euro Commercial Paper Program On June 3, 2019, Xylem entered into a Euro commercial paper program with ING Bank N.V., as administrative agent, and a syndicate of dealers. The Euro commercial paper program provides for a maximum issuing balance of up to €500 million (approximately $569 million) which may be denominated in a variety of currencies. The maximum issuing balance may be increased in accordance with the Dealer Agreement. As of September 30, 2026 and December 31, 2025, none of the Company's Euro commercial paper program was outstanding. We have the ability to continue borrowing under this program going forward in future periods.
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