The following discussion should be read in conjunction with the condensed consolidated financial statements, including the notes, included elsewhere in this report on Form 10-Q (this "Report").
COVID-19 Pandemic Update and Related Macroeconomic Impacts
Given the magnitude and duration of the COVID-19 pandemic and its prolonged economic consequences, it has become more difficult to distinguish specific aspects of our operational and financial performance that are most directly related to the pandemic from those more broadly influenced by ongoing macroeconomic, market and industry dynamics that may be, to varying degrees, related to the pandemic and its consequences.
We have also experienced, and continue to experience, increased inflation, freight and logistics costs, and are engaging in various mitigation strategies, including enhanced price realization efforts.
We continue to assess the evolving nature of the pandemic and related macroeconomic impacts on our business, employees, supply chain, customers and communities, and take appropriate actions in an effort to mitigate adverse consequences.
Additional financial highlights for the quarter ended June 30, 2022 include the following:
•Orders of $1,684 million, up 1.4% from $1,660 million in the prior year, and up 5.8% on an organic basis.
•Earnings per share of $0.62, flat compared to prior year ($0.66, flat versus prior year, on an adjusted basis).
Key Performance Indicators and Non-GAAP Measures
•"tax-related special items" defined as tax items, such as tax return versus tax provision adjustments, tax exam impacts, tax law change impacts, excess tax benefits/losses and other discrete tax adjustments.
Net cash provided by operating activities $ 32 $ 206 Capital expenditures
Net cash used in investing activities $ (84) $ (69) Net cash used in financing activities $ (158) $ (162)
The following table illustrates the impact from organic growth, recent divestitures, and foreign currency translation in relation to revenue during the three and six months ended June 30, 2022:
The following table illustrates the impact from organic growth, recent divestitures, and foreign currency translation in relation to orders during the three and six months ended June 30, 2022:
Selling, General and Administrative ("SG&A") Expenses
Research and Development ("R&D") Expenses
Restructuring and Asset Impairment Charges
The following is a roll-forward for the six months ended June 30, 2022 and 2021 of employee position eliminations associated with restructuring activities:
Planned reductions - January 1 60 319 Additional planned reductions 69 72 Actual reductions and reversals (48) (202) Planned reductions - June 30
The Water Infrastructure, Applied Water and Measurement & Control Solutions actions commenced in 2022 consist primarily of severance charges. The Water Infrastructure and Applied Water actions are complete and the Measurement & Control Solutions actions are expected to continue through the end of 2022.
We currently expect to incur between $10 million and $15 million in restructuring costs for the full year. These
restructuring charges are primarily related to efforts to optimize our cost structure, improve our operational efficiency and effectiveness, strengthen our competitive positioning and better serve our customers.
Operating Income and Adjusted EBITDA
The table below provides a reconciliation of the total and each segment's operating income to adjusted operating income, and a calculation of the corresponding adjusted operating margin:
NM - Not meaningful percentage change
The table below provides a reconciliation of total and each segment's adjusted EBITDA to consolidated EBITDA and net income:
* Other includes Regional selling locations, corporate and other items.
* Other includes Regional selling locations, corporate and other items.
* Other includes Regional selling locations, corporate and other items.
* Other includes Regional selling locations, corporate and other items.
* Other includes Regional selling locations, corporate and other items.
* Other includes Regional selling locations, corporate and other items.
The following table summarizes our sources and (uses) of cash:
(a)The impact is primarily due to weakening of the Euro and Chinese Yuan partially offset by strengthening of the Russian Ruble.
Sources and Uses of Liquidity
We monitor our global funding requirements and seek to meet our liquidity needs on a cost-effective basis.
Risks related to these items are described in our risk factor disclosures referenced under "Item 1A. Risk Factors" in our 2021 Annual Report.
Credit Facilities & Long-Term Contractual Commitments
See Note 10, "Credit Facilities and Debt", of our condensed consolidated financial statements for a description of our credit facilities and long-term debt.
© Edgar Online, source Glimpses