Business Context and Reporting Period
This Form 8-K Current Report for Xylem Inc. covers events occurring on October 11, 2011. The filing details significant corporate governance changes and regulatory disclosures in preparation for the planned spin-off of Xylem from ITT Corporation. The report outlines the restructuring of the Board of Directors, the appointment of key officers, and amendments to the company's Articles of Incorporation and Bylaws.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses on corporate governance and structural changes rather than financial performance metrics.
Material Changes
- Board Expansion and Composition: The Board size increased from three to four directors effective October 12, 2011, with Curtis Crawford elected as a new director. Upon the effective time of the spin-off, the Board will expand to nine directors.
- Director Resignations and Elections: Aris Chicles and Frank Jimenez tendered resignations conditioned on the spin-off. Seven new directors were elected to serve immediately after the spin-off: John Hamre, Victoria Harker, Sten Jakobsson, Steven Loranger, Edward Ludwig, Surya Mohapatra, and Markos Tambakeras.
- Committee Appointments: New committee structures were established for the Audit, Leadership Development and Compensation, and Nominating and Governance committees, with specific members assigned to each.
- Executive Appointment: John Connolly was appointed as Vice President and Chief Accounting Officer, effective immediately after the spin-off.
- Corporate Governance Documents: The Amended and Restated Articles of Incorporation and Bylaws were approved and became effective on October 12, 2011.
Guidance, Outlook, and Risks
Outlook and Events: Xylem executives are scheduled to present an overview of the company and the separation from ITT Corporation at an investor day on October 13, 2011. Presentation slides are included as an exhibit.
Risks and Contingencies: The filing includes a Safe Harbor statement regarding forward-looking statements. Key risks identified include:
- Uncertainties related to the separation transaction, including potential tax liabilities and the ability to operate as an independent entity.
- Economic, political, and social conditions in operating countries.
- Changes in government budgets, consumer spending, and interest or foreign currency exchange rates.
- Availability of labor, commodities, and raw materials.
- Compliance with regulations, including Dodd-Frank legislation.
- Environmental contamination claims and personal injury liabilities.
Investor Verification Checklist
- Verify the final composition of the Board of Directors and committee assignments post-spin-off.
- Confirm the effective date of the spin-off and the distribution of shares to ITT Corporation holders.
- Review the attached investor day presentation (Exhibit 99.1) for specific strategic plans and financial projections.
- Examine the Amended and Restated Articles of Incorporation and Bylaws (Exhibits 3.1 and 3.2) for changes to capital stock and governance rules.
- Monitor the appointment of John Connolly as Chief Accounting Officer and his role in the transition.