You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: They will provide their perspective on Xylem's third-quarter results and their outlook.
I'll ask you please keep the one question and a follow up and then return to the queue.
A replay of today's call will be available until midnight on November 30.
Additionally, the call will be available for playback via the investors section of our website under the heading investor events.
All references will be on an organic or adjusted basis unless otherwise indicated.
These statements are subject to future risks and uncertainties such as those factors described in Xylem's most recent annual report on Form 10-K and in subsequent reports filed with the SEC including in our Form 10-Q to report results for the period ending September 30, 2020.
We have provided you with a summary of our key performance metrics including both GAAP and non-GAAP metrics.
For purposes of today's call, all references will be on an organic and adjusted basis, unless otherwise indicated.
I hope all of you and those close to you are keeping safe and well.
The team's operational execution was strong right around the world.
You'll recall that after the low point of April, we saw sequential improvements in May and June, and we continue to build on that positive trajectory through the summer.
Our team took advantage of the market regaining pace and exceeded our revenue and margin guidance for the quarter, while generating very strong cash flow.
This performance reflects the team's focus on serving our customers and managing what we can control, whatever the dynamics are of the macroenvironment.
Through the quarter, we saw solid foundations of recovery in a number of places, and we are well positioned to further capitalize on that momentum.
The pandemic's impact hasn't been uniform, of course.
Conditions varied significantly both by geography and by end market.
For example, China revenue returned a healthy growth of 17%.
Western Europe, overall, was back to relative stability at 2% growth.
The U.S. saw only slight recovery, still dealing with pandemic response and coming in at down 11%, although improving sequentially.
In our end markets, we've seen ongoing resilience in the wastewater side of utilities, and our wastewater solutions returned to solid growth in the quarter.
On the clean water side, we're delivering strong commercial momentum including winning large, long-term transformational metrology deals, leveraging our differentiated platform, particularly in advanced metering infrastructure.
In addition to big wins with England and in Winston-Salem which we mentioned last quarter, the team recently won another marquee project in Columbus, Ohio, worth $94 million.
This customer is a combined utility, meaning we will provide both water and electricity meters plus advanced software and services.
It's worth noting how compelling our value proposition is for combined utilities, addressing both water and energy applications with one portfolio and leveraging our unique Flexnet communication capability across both platforms to achieve economies of scale.
The Columbus, Winston-Salem and England deals have together added about $250 million to Xylem's backlog.
Our metrology and communications offerings are clearly differentiated in their own rights, but we also have the advantage of delivering unique value by combining infrastructure platforms with complementary digital solutions.
Each value proposition enhances the other.
As anticipated, COVID impacts are causing delays in some metrology projects where time lines have shifted to the right.
And in parts of the U.S., replacement meter installations have been pushed out in the short term.
Pipeline assessment services, a business that requires putting people on-site, has been affected by COVID-driven restrictions on travel and field work.
At the same time, the pace of interest in digital solutions for remote monitoring and automated operations has accelerated.
The pandemic has not only spot-led essential services, it has also eliminated utilities need for much greater operational and financial resilience which is now at the top of every utility operators' agenda.
Digital transformation has gone from being attractive to becoming an imperative, and that's reflected in strong quoting activity in our digital solutions business which has also increased by 50% its number of revenue-generating clients.
The revenues are still a small part of our top line, but the acceleration of interest further strengthens our view on digital adoption in this sector.
And as the number and size of those projects grow, we are seeing a broadening scope of opportunities across software, services and infrastructure products.
While we don't expect this to be a straight-line recovery, Xylem is well positioned irrespective of how the pandemic plays out.
We anticipate quarter sequential improvements.
Our financial health and liquidity are both strong.
We're successfully running in cost, executing the actions we announced earlier this year.
And we're shifting investment to adapt quickly to customers' evolving needs and new ways of working.
Our supply chain has been exceptionally resilient, with the team keeping customers supplied even through the pandemic's peaks.
So we are operating with discipline, strengthening our competitive position and helping our customers serve their communities with uninterrupted essential services despite whatever macro uncertainty may present.
But since Mark was in the Chair through the end of the reporting period, he'll carry the commentary on our third-quarter performance.
So Mark, over to you.
Revenue declined 7% which was better-than-anticipated as we entered the third quarter.
We had strong performance in our wastewater utility businesses and the residential end market, both of which grew mid-single digits in the quarter.
The return to growth in these markets was offset by the expected declines in our metrology project deployments and industrial and commercial businesses which continue to be impacted by project delays and site restrictions.
Geographically, as various countries have reopened and recovered, so has our business.
In China, for example, we saw a very strong performance with double-digit year-over-year growth.
Despite the China business returning to pre-pandemic growth rates, emerging markets overall declined 7%.
India was down only modestly, while the Middle East and Latin America declined double digits as they continue to be impacted by shutdowns throughout the quarter.
Across North America, recovery remains mixed.
While revenues improved quarter sequentially, they were down year over year.
While our wastewater business remained resilient, we continue to see timing effects on metrology deployments and softness in industrial markets.
Western Europe grew 2% in the quarter as countries reopened and activity resumed, with revenue growing in each of our end markets with the exception of industrial.
We also saw operating margins expand quarter sequentially to 13% which drove earnings per share of $0.62, both better than expected.
I'll cover the margin impacts by segment shortly.
Overall, our teams maintained very sharp focus and executed well operationally by driving strong productivity and cost reductions.
Water Infrastructure orders declined 5%.
Order trends in our wastewater utility businesses continued to be solid.
Treatment orders were up 20%.
Wastewater transport orders down 9% for the quarter would have been up mid-single digits but for lapping the large deal we won last year in India.
Orders in the industrial end market were soft due to double-digit declines in our dewatering business.
Long-term backlog continues to build as we're up over 30% for backlog shippable in 2021 and beyond.
Segment revenues declined 2% in the quarter compared to the prior year.
This was better-than-anticipated and reflects the resilience of utility spending to run and maintain their wastewater operations.
Our wastewater transport business grew 4% in the quarter.
And we saw continued strength in our treatment business which grew 3% in the quarter.
The growth in treatment reflects what has been, to date, the relatively uninterrupted deployment of wastewater capex projects.
The dewatering business experienced continued softness.
Revenues declined 14%, most of which was in the North American construction and industrial markets which have seen -- which have been significantly impacted by site closures and access restrictions.
Operating margin in the quarter was 18.5%, down modestly year over year from higher inflation, lower volumes and unfavorable mix.
However, the margin performance exceeded our expectations as the team's strong execution on cost reductions and productivity initiatives delivered 630 basis points in margin expansion.
Orders in the applied water segment declined 1% in the quarter, and revenues declined 4% as softness in the industrial and commercial markets continued, particularly in the United States and the Middle East.
The commercial end market declined 5% in the quarter.
As a reminder, this business is roughly two-thirds weighted toward repair and replacement work which held up relatively well in the quarter despite shutdowns in some regions.
Industrial was affected by similar regional dynamics including site access restrictions and declined 7%.
A bright spot in the quarter was residential which grew 4%.
We saw a particularly strong growth across Western Europe and from China.
Overall, emerging markets declined 8% in the quarter.
China had a very strong performance, growing 23% as the team executed well, delivering on pent-up demand.
This was more than offset by the declines in the Middle East and Latin American regions due to the ongoing lockdowns.
Revenue in the United States declined 6% but improved quarter sequentially, with some softness across end markets driven by continued virus impacts.
Operating margin in the segment was 15.9%.
Volume declines and inflation impacts reduced margins in the quarter but were largely offset by 530 basis points of cost reduction and productivity benefits.
Measurement and control solutions orders declined 19% in the quarter and revenue declined 15%.
We saw project timing significantly impact our metrology business and COVID-19 restrictions push out our project revenues in our pipeline assessment services business.
In metrology, we've seen relative stability in our opex replacement business from water metrology products.
As a reminder, our opex exposure accounts for about 70% of our revenues.
We've seen much more variability in the 30% of our metrology business that's tied to large project deployments or capex, particularly in our gas segment, where project revenues were down 60% in the quarter.
Here, we've been significantly impacted by project timing, particularly from lapping a large gas metrology project deployment which was largely completed at the end of last year and delays in another large gas project this year due to home access restrictions.
Despite these challenges, our underlying North American water metrology book and bill business has remained relatively stable and commercial momentum in winning new projects remains robust.
This is highlighted by the large contract wins we had in the first half of the year and continued into the third quarter with the Columbus, Ohio and Winston-Salem, North Carolina wins.
Patrick already covered Columbus, but I'll quickly highlight a couple of important points on the Winston-Salem win.
This is a $60 million contract to provide water metrology products under our network as a service offering, leveraging our Flexnet communications network.
Importantly, our teams differentiated the value of our offering by introducing several components from our digital solutions platform, enabling our customer to also seamlessly address critical needs around non-revenue water and the wastewater network.
Our pipeline assessment services business has also been subject to significant near-term delays in project revenues driven by COVID-19 travel restrictions and site closures.
As a reminder, there are two businesses within AIA, digital solutions and pipeline assessment services.
It's in the latter business where we've experienced deferrals of pipe inspection work.
And we expect those pushouts to continue into early 2021.
As a result, we booked an accounting charge to reflect the impacts of those delays.
We continue to strongly believe that the medium and long-term value proposition of this business is compelling, particularly as utilities move to address budget challenges by using pipeline assessment services to reduce future spend on pipe replacement.
We expect the project timing for deploying new metrology projects and the COVID-19-related delays in pipeline assessment services to continue to impact us through the fourth quarter.
This is reflected in our fourth quarter guidance which Sandy will cover later, as shippable backlog for the fourth quarter is down roughly 25%.
That said, it's significant that we've not had any project cancellations.
Rather, we're seeing an acceleration of growth in our project pipelines, and we continue to win large new contracts.
As a result, MCS shippable backlog in 2021 and beyond is up over 30% which is a pretty good indication of the power we're seeing with our digital platform.
So while these projects aren't currently reflected in the orders metric, they are the latest in a series of important wins that give us confidence in the medium and long-term growth profile of this segment.
EBITDA margin in the segment was 14.8%.
The year-over-year margin decline was driven by lower revenues of high-margin North American metrology and pipeline assessment services due to project timing and COVID-19.
This impact was partially offset by 630 basis points of cost reduction in the quarter.
We ended the quarter with approximately $1.6 billion of cash and short-term investments and $2.4 billion of liquidity driven by our very successful green bond issuance last quarter, combined with our strong cash flow performance throughout the year.
In the face of substantial challenges presented by the pandemic, I'm very proud of the work of our teams in managing all aspects of our working capital performance.
At quarter end, working capital was 20.3% of sales, representing an improvement of 30 basis points versus this time last year.
The team's focus on working capital, disciplined capex spending and cost control through the quarter have continued to pay off, enabling us to generate free cash flow of $234 million, a conversion rate of over 200% in the quarter which did see some benefit from favorable timing on payments primarily related to taxes and interest.
Having worked with Sandy previously, I wasn't at all surprised by how quickly she's come up to speed on our businesses and our markets and the pace with which she's developed relationships, all virtually, and taken on the leadership of the global finance team over the past month.
I couldn't be more confident about the future of Xylem or in Sandy's capability to help Patrick and the team accomplish our mission and take the company's performance to the next level.
So with that, I'll hand it back to Patrick for the last time.
Before turning to our outlook, I just want to take a moment to reiterate two overall trends we're seeing as we look forward.
The first is the influence of regional differences around the world.
in the third quarter.
So long as the impact of COVID-19 continues to influence demand, we believe those geographic effects will be considerable to at least the end of the year.
Xylem's global diversification puts us in a strong position as we serve the international markets that are furthest along in the recovery curve.
The second overall trend to highlight is a shift of attention from reactive operational imperatives to medium and longer-term resilience.
The pressured utility space at the beginning of the pandemic are well known.
You simply can't stop providing an essential service, even if you're struggling to put crews in the field, and more end users than usual are having trouble paying their bills.
Our customers have come through the most intense part of the crisis serving their communities heroically.
It's also been a wake-up call for the sector.
Utilities leaders and operators have become acutely aware of the pressing need to invest in greater operational and financial resilience.
Part of that investment will go to conventional infrastructure.
That will have to be combined with new approaches if utilities are to address their overarching challenges, making the cost of infrastructure more affordable, extending asset life and dramatically increasing labor efficiencies while maintaining safety.
So we've seen interest continue to ramp-up in digital transformation, remote monitoring, automated operations and smart infrastructure, more broadly.
Of course, the implications of digitizing utility network goes deeper than the software platforms in our digital solutions business.
Beyond software and end points, transformation also requires the digitally enabled pumps and drives that make up the backbone of a smarter network which is why we are implementing an integrated digital strategy across our entire portfolio.
We're very excited about the opportunity of working with our customers to build the digital water and energy networks that will carry their communities into the future.
Turning from those trends to outlook.
In general, we have a much clearer view on Q4 than we had on Q3.
We were seeing stabilization in a number of markets.
We have even greater supply chain confidence, and we're executing well on cost, all of which leads us to expect quarter sequential improvement in margins.
So by end market, I'll start with our outlook for utilities.
The wastewater side has been exceptionally resilient.
We expect opex to continue holding up well given the need to service mission-critical applications.
And capital projects with secured funding continue to move forward.
On the clean water side, as I mentioned, we have strong commercial momentum with multiyear projects like Anglin, Winston-Salem and Columbus, setting us up for healthy growth in 2021 and beyond.
In the short term, we expect performance to trail wastewater due to more pronounced COVID impacts, but we're not seeing structural changes in demand, and the growth profile of this segment is expected to remain highly attractive.
We simply anticipate some continuing COVID impacts on deployment timing.
And standard meter replacements are likely to remain soft until physical distancing eases.
Looking at industrial and commercial end markets, the accessibility of industrial sites varies widely by region.
Where COVID response has lagged, there have been site access restrictions, and work has been deferred.
So we're still anticipating softness to the fourth quarter, especially in North America construction and industrial markets, affecting our dewatering business.
And in commercial, it's a mixed picture that varies by end customer.
Demand in hospitals, data centers and apartment buildings, for example, is very different than for offices and hotels.
But less building use overall and soft North America construction suggest continued softness in the near term.
Now, I have the great pleasure of turning over to Sandy for the first time so she can provide some more specifics on our Q4 guidance.
I just want to kick off by expressing how excited I am to have joined the Xylem team.
I joined Xylem because of the unique combination of strong commercial opportunities for growth and the compelling mission of the company.
Xylem is also complementary to my previous experiences which has included bringing together cutting-edge technologies with industrial products.
I spent the last month getting up to speed with the team alongside Mark, and I look forward to all we have ahead of us, rounding out 2020 and beyond.
With that, let's get into a few more details on our fourth-quarter guidance.
On the top line, we expect organic revenues in the range of down 6% to down 8%.
This is a modest improvement in sequential performance versus the third quarter.
As we break it down by segment, we anticipate being down low-single digits in Water Infrastructure, down mid-single digits in applied water and down mid-teens in Measurement and control solutions reflecting the project deployment delays we have continued to see through October.
Operating margin in the quarter is expected to be in the range of 13 to 13 and a half percent.
Also, a modest quarter sequential improvement.
I also want to highlight a few full-year items.
We expect to end 2020 with free cash flow conversion of greater than 100% for the full year.
Restructuring and realignment costs are now expected to be between $75 million and $85 million, slightly lower than our previous guidance, while structural annual cost savings remain unchanged at approximately $70 million.
We are lowering our estimated tax rate this year to 18 and a half percent to reflect our updated mix of earnings.
Having worked with Mark before, I know he and I bring similar perspectives and share a common approach to operational excellence and driving investment in innovation to support sustainable growth.
Mark has built a great team, and I'm confident we have the organizational capability to focus to deliver.
It's great to have you on the team.
And we will execute from a position of competitive strength, even in the more challenging environments.
Our discipline on cost and cash will continue to pay off, both in the coming quarter and through 2021.
Looking ahead, that quality of operational execution will enable us to continue driving sustainable margin expansion.
Our robust financial health which gives our customers confidence that they can rely on us in uncertain times, is built on the foundations of a strong balance sheet and cash generation.
Our leading market positions are paired with a differentiated product portfolio and a durable business model at the heart of essential services.
And our strategy places Xylem in the lead as the water sector's digital adoption curve accelerates, providing a multiyear runway of attractive growth.
We will deploy capital to continue strengthening our portfolio, investing in the solutions and services that anticipate our customers' needs.
Both the economic and the social returns of those investments will be attractive over the medium and long terms.
And our commitment to create value for all our stakeholders will continue to underpin the sustainability and resilience of our company, our customers and our communities.
So let me take this opportunity to say once again, as I've said before, that all of Xylem stakeholders have benefit profoundly from Mark's leadership and tenure at Xylem, but none more than me, as I have benefited tremendously from his counsel.
So operator, pleased to listen to Q&A.

user
q3 adjusted earnings per share $0.62.

assistant