XYLXylem Inc.

Your computation of EBITDA on page 29 excludes share-based compensation in addition to taxes, depreciation and amortization. In future filings please revise the title of this non-GAAP measure to distinguish it from EBITDA. Refer to Question 103.01 of the updated Non-GAAP Compliance and Disclosure Interpretations.

to the Staff's comment, beginning with the 2017 Form 10-K filing, the Company will exclude share-based compensation from the computation of EBITDA rather than revising the title of the measure to distinguish it from EBITDA in future filings. Share-based compensation will instead be included as an adjustment in the reconciliation of EBITDA to the non-GAAP measure "Adjusted EBITDA" in future filings.

Rest of the answer

Please see the updated EBITDA and "Adjusted EBITDA" definitions and corresponding table below as a representation of how we plan on displaying this information within the Key Performance Indicators and Non-GAAP Measures section of our Form 10-K for the Fiscal Year Ended December 31, 2017:

▪

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

(in millions)

2017

2016

2015

Net Income

$

—

260

340

Income tax expense

Interest expense (Income), net

Depreciation

Amortization

EBITDA

559

589

Share-based compensation

Restructuring and realignment

Sensus acquisition related costs

Special charges

Gain from sale of business

(9

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In future filings, please revise your reconciliation of Operating expenses excluding restructuring and realignment costs, Sensus acquisition related costs and special charges to Total operating expenses to begin with the GAAP measure, rather than the non-GAAP measure. Refer to Question 102.10 of the updated Non-GAAP Compliance and Disclosure Interpretations.

to the Staff's comment, in future filings, the Company will revise the reconciliation of Operating expenses to begin with the GAAP measure, rather than the Non-GAAP measure. Please see the table below as a representation of how we plan on displaying this information within the Results of Operations table beginning with the filing of our Form 10-K for the Fiscal Year Ended December 31, 2017:

Results of Operations

2017 v. 2016

2016 v.

Rest of the answer

2015

Revenue

3,771

3,653

(100.0)%

3.2%

Gross profit

1,461

1,404

4.1%

Gross margin

%

38.7

38.4

(3,870)bp

30bp

Total operating expenses

1,055

955

10.5%

Expense to revenue ratio

28.0

26.1

(2,800)bp

190bp

Restructuring and realignment costs

(47

(20

135.0%

Sensus acquisition related charges

(53

(5

NM

Operating expenses excluding restructuring and realignment costs, Sensus acquisition related costs and special charges

950

930

2.2%

25.2

25.5

(2,520)bp

(30)bp

Operating income

406

449

(9.6)%

Operating margin

10.8

12.3

(1,080)bp

(150)bp

Interest and other non-operating expense (income), net

20.0%

#DIV/0!

27.0%

Tax rate

23.5

15.6

(2,350)bp

790bp

Net income

(23.5)%

NM Not Meaningful

In connection with the Company’s response to your comments, the Company acknowledges that:

• the Company is responsible for the adequacy and accuracy of the disclosure in its filings;

Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under federal securities law of the Untied States.

We would be pleased to discuss any of the foregoing responses to the extent you require further clarification or additional information. Please feel free to contact E. Mark Rajkowski at (914) 323-5950 or myself at (914) 323-5784.

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