Welcome to Xylem's conference call to discuss the acquisition of Evoqua. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you'd like to ask a question at the time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. Others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Andrea van der Berg, Vice President of Investor Relations. Thank you, Gretchen. Good morning, everyone, thank you for joining us on short notice. We wanted to take this opportunity to discuss the announcement that Xylem has entered into a definitive agreement to acquire Evoqua. With me today are Xylem's Chief Executive Officer, Patrick Decker, and Chief Financial Officer, Sandy Rowland. Joining us today from Pittsburgh is Chief Executive Officer of Evoqua, Ron Keating. Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask that you please keep to one question and a follow-up and then return to the queue. As a reminder, this call and our webcasts are accompanied by a slide presentation available in the investors section of both companies' websites, www.xylem.com and www.evoqua.com. A replay of today's call will be available until midnight on January 30th, 2023. Please note the replay number is +1-800-839-6975 or +1-402-220-6061. Additionally, the call will be available for playback via the investors section of both companies' websites under the heading Investor Events. Please turn to slide two. We will make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the future. These statements are subject to future risks and uncertainties, such as those factors described in the slide presentation, as well as Xylem's most recent annual report on Form 10-K and in subsequent reports filed with the SEC, including the Form 8-K filed with the SEC earlier this morning. Please note that the company undertakes no obligation to update any forward-looking statements publicly to reflect subsequent events or circumstances, and actual events or results could differ materially from those anticipated. Additionally, on today's call, we will reference certain non-GAAP financial measures. We will include reconciliations of non-GAAP financial measures where appropriate to the comparable GAAP measure in the appendix to the slide presentation. Today's presentation is not an offer to buy or sell or the solicitation of an offer to buy or sell any securities or solicitation of any vote or approval. Any such solicitation or offering will be made by a prospectus meeting the requirements of applicable securities laws. Now please turn to slide four, and I'll turn the call over to Xylem's CEO, Patrick Decker. Thanks, Andrea. Good morning, everyone. Thanks for joining our call on what is an exciting day for Xylem, Evoqua, and our various stakeholders. It's a day that will have a profoundly positive impact on how we serve our customers and communities around the world and create value for investors in our companies. This morning, we announced that Xylem is acquiring Evoqua in an all-stock transaction with an implied value of approximately $7.5 billion. This transaction represents a transformational opportunity to solve water at the scale required to address water challenges around the world. By agreeing to combine, we're creating an unparalleled global platform, which will drive much-needed water innovations and solutions. We're bringing together two complementary companies whose joint capabilities address the sharpest customer pain points across the entire water cycle. Evoqua's best-in-class water treatment solutions and services across the industrial sector are a natural fit with Xylem's broad global portfolio and utilities offerings. It's underpinned by advanced digital solutions. Likewise, together, we will bring even more solutions to our utility and other commercial customers. Evoqua is a leader in treatment solutions and technology, including the remediation of emerging contaminants. They're also leaders in digitally enabled outsourced water services for high growth and attractive end markets. This is provided by the largest team of treatment service professionals in North America. Evoqua's customers count on them for reliability and mission-critical applications. With the combination of our two companies, the uniquely qualified team is gonna be able to serve even more customers. Together, we're creating a powerful platform positioned for very attractive growth. Together, our offering will be uniquely accessible for customers as they address greater risk and challenges. It will combine a technology solution, services, and digital offerings underpinned by a long-term reputation for quality and reliability. This transaction is expected to drive value for our shareholders, first by accelerating growth and scale, next, even more recurring and resilient revenues, and lastly, continued margin expansion and cost synergies. All of which will be supported by a strong financial profile and a flexible balance sheet for future optionality. Finally, we are uniting two purpose-driven companies with sustainability at their core and a passionate commitment to customers and communities. Together, we will accelerate the water sector's ability to create a more water secure, resilient, and sustainable world. We couldn't be more excited to get started on this next chapter together. Every strategic move that we've made is grounded in our vision of a world where water issues are no longer a constraint to human health, prosperity, and sustainable development. Intensifying water challenges put all of that at risk. At events recently, like the World Economic Forum that wrapped up last week, the global awareness of water as a systemic risk has never been more prominent. You've heard us speak about these underlying challenges for years. It's water scarcity, the resilience of water systems to climate change, and how these challenges are addressed affordably. Our purpose as a company is to help customers solve these intensifying challenges. Today, with this move, we are taking a decisive step forward. The combination of Xylem and Evoqua creates the world's most advanced platform of innovative solutions and services to address them. The need for large-scale impact is at the center of our decision to combine with Evoqua. It's our opportunity to meet the moment by building a platform at a scale that reflects the opportunity in front of us. Difficult problems become solvable when we bring together the right solutions, services, and experts. This combination does that, and it will also make accessing our solutions simpler for all of our customers. Together, we will do more and progress faster towards solving these challenges than we could ever do on our own, and create tremendous economic and social value in doing so. Water management has never been more essential. Fragmentation, until now, made it hard to address water challenges effectively. Our job, and what we call our opportunity of a lifetime, is to simplify life for our customers so they can solve water and they can do it at scale. At our Investor Day back in 2021, we laid out our strategic priorities for inorganic growth that would make that possible in the most attractive areas of the water sector. First, solutions for industrial end markets to address critical water needs. Second, systems intelligence, bolstering our already innovative digital solutions offering. Third, strengthening our core, building on our leading technologies and global channel presence. In 2021, we said we would acquire advanced treatment solutions and services for high-growth industrial water end markets with mission-critical water needs. Well, today, we are announcing that we are executing on that strategy, and the addition of Evoqua is another step forward. I know many of you are already very familiar with Evoqua, but I'm really keen for Ron Keating, the CEO of Evoqua, to join me and talk a bit about the business he and his team have built. Let me now turn it over to you, Ron. Thank you, Patrick. We are excited to join forces with Xylem. Our two organizations are incredibly complementary and equally committed to solving our customers' mission-critical water needs. I'm so proud of the Evoqua team and all that we've achieved on our journey to date. With a legacy that stretches back over 100 years, we've worked hard to build the industry's largest water treatment services team in North America while providing our critical technologies around the globe. We've created a strong leadership position in an attractive $16 billion served market. We've delivered growth of 7% annually over the last four years to $1.7 billion, with about 60% of that being recurring revenue at highly attractive margins. The crown jewel is our network of service professionals, our AquaPros who serve more than 38,000 industrial, utility, and commercial customers across more than 200,000 installations around the globe. As usual, I wanna thank each and every one of them for the work they do, keeping our customers operating around the clock. We built large positions in the most attractive end markets, including life sciences, microelectronics, power and renewables, and food and beverage. We are a leader in water and wastewater treatment solutions across North America, highlighted by our reuse and recycle capabilities, addressing customer needs in water-scarce and water-challenged regions. We have a core capability in providing outsourced water offerings, guaranteeing customer uptime with quality and quantity of water to support their operational needs. We also have a core capability in addressing emerging contaminants, as Patrick mentioned, particularly highlighted by our remediation capabilities of PFAS and selenium. All of that with a strong cash flow profile and a healthy balance sheet. Our customers' water requirements are incredibly complex. As Patrick said, their challenges are only intensified. Having reliable, uninterrupted access to clean water is mission-critical for customers, with disruptions and failures leading to exceptionally high operational and financial costs. In addition, public and government scrutiny of water discharge makes environmental performance an increasing imperative. That's driving outsourcing to trusted partners like us who have deep domain expertise and who are offering digitally enabled and connected service solutions. It's incredibly compelling to add these strengths to Xylem's leading platforms. The capabilities of the combined company will position us uniquely as a trusted partner that can meet customers' most essential needs and solve their toughest water challenges. We are absolutely energized as Evoqua by the prospect of solving water as a part of Xylem. I'll now turn the call back to Patrick. Thank you, Patrick. Thank you, Ron. As you and I have talked, I want to congratulate you and, you know, the entire Evoqua team on the outstanding business that you've built over the years. From our discussions, I know we both see great potential in the combination of our capabilities and our joint commitment to the customers and communities that we serve around the world. We are here today together on this call because of that shared belief in what we can achieve together. Xylem is building from a position of strength. We're bringing, you know, Evoqua with us as part of that with leading water solutions, a global distribution platform that Xylem brings, and an unmatched innovation engine together. We operate at a scale and scope that gives us a unique capability to commercialize new solutions for customers around the world. You as Evoqua add leading positions in mission-critical treatment applications and resilient and very attractive end markets, along with your trusted team of service professionals. Together, we're gonna offer a platform with significant scale and reach while maintaining a very robust financial foundation, creating additional optionality for the future. To talk more about that, I'm now gonna invite Sandy to join me to walk you all through the financial details of the transaction and the combined company. Thanks, Patrick. Before diving into the financials for the combined company, let's walk through the high-level structure of the transaction, which is compelling for shareholders. This is an all-stock transaction in which Xylem will acquire Evoqua at a 0.48 exchange ratio, implying an Evoqua enterprise value of $7.5 billion. Following the close, Evoqua shareholders are expected to own approximately 25% of the combined company, which is aligned with the relative financial contribution from each side. We'll maintain balance sheet flexibility and optionality to optimize our long-term capital structure. Let me now turn to the financials. On a combined trailing 12-month basis, we'll have approximately $7.1 billion in combined revenue, $1.2 billion of adjusted EBITDA and adjusted EBITDA margin of approximately 16.5%. Together, we will strengthen our recurring revenue profile and leverage the breadth of the largest North American water services network by a wide margin. In addition, the combination will enable Xylem to scale our offerings and capitalize on the strengths of both companies in the water sector across the world. Please turn to slide 10. The combination will strengthen our position with customers and expand the reach of our products and services, enabling further top-line growth. As Patrick said, expanding and scaling our industrial offerings and outsourced service capabilities will create an even more robust platform for long-term growth. We will also be able to extend Evoqua's geographic reach with Xylem's international presence and install base. We anticipate leveraging Evoqua's branch network to grow the combined company's service portfolio. Please turn to slide 11. In terms of costs, the combination is expected to deliver significant run rate cost synergies of approximately $140 million within three years. As you've heard, we expect the combined company to drive further scale efficiencies and optimize our overall cost structure. Synergies will primarily come in three areas: procurement, footprint and network optimization, and enabling back-office functions. Looking at the first area, scale efficiencies in procurement, we will look to leverage the purchasing power of the larger business. The second area of focus is our footprint and network. We plan to optimize our footprint, consolidating offices and branches where opportunities exist while keeping customer focus and continuity as a priority. We also anticipate increasing utilization of our manufacturing facilities. Finally, as one entity, we'll eliminate duplicative public company costs as well as realize functional support efficiencies. Please turn to slide 11. This slide provides an overview of the transaction structure that I touched on earlier. Just to briefly mention a few key points, this transaction has received unanimous support from both Xylem and Evoqua board of directors. At close, two current members of Evoqua's board of directors are expected to join Xylem's board. We'll offer more detail on this as we approach closing, which is expected to be mid-2023, subject to approval by Xylem and Evoqua shareholders, regulatory approvals, and other customary closing conditions. I'll now turn it back over to Patrick. Thanks, Sandy. You know, the combination of Xylem and Evoqua will further reinforce our investment thesis. When the transaction closes, we're gonna have, first, an even greater leadership position in key technologies, highly differentiated offerings to address rising demand on intensifying secular trends, a combined purpose-driven organization that creates economic and social value, opportunities for both companies' talent. Lastly, an even stronger positioning for above-market growth and margin expansion now and into the future. Most importantly, we'll be strengthening our capability to serve our customers and the communities that we serve. Before turning to Q&A, I'd like to take a moment to thank everyone who got us to this important milestone, both at Xylem, Evoqua, as well as our advisors. I look forward to working as one team together and achieving even greater impact. Now we look forward to taking questions. Operator, please take us into Q&A. The floor is now open for questions. At this time, if you have a question or comment, please press star one on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Again, we ask that you pick up your handset when posing your questions to provide optimal sound quality. Thank you. Our first question is coming from Deane Dray from RBC Capital Markets. Thank you. good morning, everyone. The fact is this combination has made strategic sense to us, really, Patrick, I know you cited 2021, but from our perspective, since 2018. congrats to both companies on getting to the finish line. Thank you, Deane. Thank you, Deane. I was hoping we could expand on the call here, and size some of the incremental growth opportunity because that's really where I think, the attractiveness of this combination is, you know, one plus one equaling much more than two here. For both of you, Patrick and for Ron. For Patrick first, increasing the share of wallet of utilities makes sense giving your presence globally in the municipal market. All these utilities, especially in wastewater, need to add advanced water treatment. I mean, there's an urgency around that. I want you to size that. For Ron, Evoqua has such a commanding presence in treatment in commercial, industrial, healthcare, but it's still like 82% North America. How do you see the opportunity to expand globally? How much will Xylem be a door opener for you? Lastly, for Sandy, this is hard, but I want you to kind of frame for us what this means for the growth trajectory, margins, and so forth. There you go. Patrick, you lead it off, please. Sure. Deane, thanks for the comments. Again, I mean, obviously very excited about the combination, and I'm gonna invite Ron in here very quickly to share his perspective on revenue synergies. You're right in that there are a few buckets that we're really focused on. I will say, and I wanna manage expectations that, you know, anytime that you're looking at revenue synergies, you know, it may take some time to realize those, and that's why the cost synergies that we've highlighted are important here. The, you know, the combination with Evoqua on the utility side is really a big deal here, especially because of the advanced treatment capabilities they've got. There's not a lot of overlap, so it really is complementary for the two of us. Our ability to help them expand internationally, I'm not gonna speak for Ron, I think he'll do that on his own, was a meaningful part of the attraction to them, given our strength in Europe and emerging markets. You're absolutely right. I mean, what Evoqua has built over the years, on not just industrial, you know, we've got to change the nomenclature a bit. You know, we as Xylem always talk industrial, I think, you know, Ron can do a better job than I here at really, it's not so much industrial, it really is like what specific elements of users of water around the world, have they built a terrific track record around? Ron, I'm gonna hand it over to you to speak a bit about that, and then I'll, you know, I'll have Sandy answer your last question. Yeah. Thank you, Patrick. Deane, thank you for the question. Look, this has made sense for a long time. You've known it and we've all been speaking for quite some time, and it really is around unleashing the growth opportunities for what Evoqua can do. I would just have to say it's not only globally, Deane, internationally. I mean, inside of North America, there's still a tremendous amount of opportunity for us to continue to penetrate. The access that Xylem has into a lot of the markets that we play in, albeit through, you know, different channels, gives us great opportunities for growth. We just had a investor group at one of our plants, and they were looking at a lot of the systems we were putting together, and they were pointing out the Xylem pumps on there 'cause a lot of them invest in both companies. What they didn't notice is all the competing lines that were there, that there's tremendous opportunity, you know, for us to make sure we're taking advantage of great alignment there. I have always said, and you've asked me numerous times, how do we grow something like an ISS internationally? I've said the only way to do it is to do it through acquisition so that we can get a beachhead in these international operations, and we can take advantage of that footprint to carry the capabilities that we have into those markets, being Europe, the emerging markets, Asia Pac as a whole. We sell technologies there, but to be able to take solutions, we needed a beachhead. This is an ideal partnership and alignment for us to be able to do that. You know, the strength and reach that Xylem has will open tremendous doors for Evoqua and it just makes us all very excited about the combination. Thank you for the question. Deane, did we answer your question? Absolutely. Then if we can frame, as best you can, with Sandy, just how does it add to the organic revenue growth outlook? How does it add to the margin trajectory, if we were to frame just these two biggest buckets, the largest share of wallet with utilities and then scaling Evoqua on all of these commercial, industrial, life sciences, healthcare opportunities internationally? You know, thanks, Deane. Great question. Certainly the opportunity for us to accelerate growth and accelerate margin expansion is one of our key deal principles. We believe that this transaction, you know, clearly checks that box. You know, I just wanna reinforce from an economic perspective, we feel very comfortable about the deal economics based on the, you know, the cost synergies alone, and that's the framework we looked at this the whole time. Clearly in the short term, Deane, what I do wanna reinforce is that both companies are very focused on delivering their organic plans. When you look at each of us individually, we both have very compelling organic plans. Right, right there, right behind that is, you know, we see short-term cost synergy opportunities. The cost synergies are not all in one bucket. There are procurement opportunities. There are opportunities to consolidate our footprint. Of course, there are SG&A opportunities just looking at functional overlap and do public company costs. You know, we are going to be focused on one-two punch of delivering those organic base plans and realizing the synergies. Deane, I would just offer up, obviously, as we, you know, as we get closer, you know, to close on this, along the way, we're gonna be communicating to each of you as to what we see around the key buckets of growth synergy. Obviously we've got a clear view on that. We just don't wanna commit to that here today. That really is the exciting part of the combination here. Yeah. I fully appreciate that. I think that counts as my one question, one follow-up, and best luck to everyone. Thank you. No, no, no, no worries at all. Thank you, Deane. Thanks, Deane. Our next question comes from Scott Davis from Melius Research. Hey, Scott. Good morning. Morning, Scott. Congrats to everybody. Thank you. The question I've been getting this morning from people is why now? You know, why didn't this deal happen two years ago or even longer? Perhaps maybe Ron could chime in on that. That was it a function of, just the bid ask on and valuation, or are there some other issues that kind of catalyzed perhaps why it made sense to do this now versus, the last several years? Yeah, Scott, it's a great question. Again, Ron, I'll hand it over to you. I mean, we both have views on this, and they're very aligned, so I think it's, I'll start, but it's, you know, it really is, in my view, it's the strength of the combination. It's the timing of where the companies are right now. You know, I think, you know, we found an agreement by working together that structurally suits our shareholders, and it's one that both parties, you know, share the upside, you know, in the combination. It takes two to tango. Ron, I'll hand it over to you. I mean, you've got, obviously you've got thoughts on this. Absolutely. Scott, thanks for the question. Patrick, thanks for the opening response 'cause you're exactly right. I mean, ultimately, Scott, you know, in our journey and where Evoqua was. What we've been able to continue to accomplish over the last couple of years has been absolutely tremendous. I mean, we've done some, you know, very strategic M&A on our own part. We have managed our product portfolio, you know, to such that we feel like it is where we need it to be to be able to go forward and absolutely just flourish. Ultimately, you know, it does turn into a bit ask. I think that the way that, you know, Patrick and Sandy came forward with a deal for us to be able to come in as shareholders and take advantage of the upside and enjoy, you know, the fruits of the benefit that we're going to see with tremendous synergies with both of these organizations going together. As Sandy said, the deal makes such great sense on cost synergies alone, but the sales synergies are going to be tremendous upside, you know, over the long term. You know, it's exciting. It's an exciting time for Evoqua employees, exciting time for our team. We feel like it's a great home for us and, you know, for our service network, our capabilities, the customer, expansion opportunities that we're gonna have, having a larger platform and a global platform, as well as being able to, you know, cross-fertilize a lot of their products into markets we serve and vice versa, I think is just a tremendous opportunity for all of us. Scott, I would just maybe round that out with a couple of comments here. As always, you know, we have been, and we are taking a long-term view. You know, anytime you bring together a complementary portfolio, like this into your platform, it takes time. I think that, you know, there clearly was a point where Ron and I and our boards agreed that, you know, we are best together. We're only gonna be stronger together based upon our options. We talked in our prepared remarks around what this does for us in terms of optionality going forward. Very excited. Just on the synergy issue, I just logistically would love to understand, you know, your go-to-market strategies. Can you kind of eliminate one salesperson, or do you need the separate, you know, skill sets? I mean, what? How do you really change, how do you go to market with, and perhaps create synergies and leverage, operating leverage perhaps in that sales model? Sure. I'll go first, then Ron can speak. I want to be clear that Scott, when we talk about synergies, cost versus revenue, on the cost side, looking at combining sales teams and services teams is not a big part of the model here because the services model that Evoqua brings versus what we bring are very different. We're really looking at leveraging their go-to-market on the services side, as a growth synergy for us rather than a cost synergy. The second piece, I think, you know, it really depends on which market you're looking at. In the utilities sector, we think that our channel, we believe that our channel and our platform around the world, not just U.S., but globally, is gonna be able to bring in some of Evoqua's advanced treatment solutions in a way where we've already got the credibility to be able to deliver, and that's gonna be a very nice fit. In North America, where Ron, you can speak more to it, they've got an even stronger presence in some of the subverticals of industrial. You know, we see their ability to bring us in, whether it be the digital side, or other solutions. Ron, do you wanna spend a couple minutes on that? Yeah, I would love to. Thank you, Patrick. You know, Scott, I think when it's customer-facing, that's really where we're touching the customer. We're creating value. We both have fantastic organizations that are gonna be able to build on each other. If you think about what Evoqua does, I mean, we treat water at point of source, then we've partnered with Xylem so well for so many years 'cause we have very little overlap. We treat it at point of source, and they take it to point of, you know, Xylem's always taken it to point of use and optimize that. Our opportunity to combine that and to carry that even into more of our vertical markets, as Patrick highlighted, that are very resilient, very strong markets, such as life sciences, microelectronics, power and renewables, food and beverage. I mean, the opportunity for us to go together with a larger solution set that we can pull each other in is great opportunities going forward. The synergies are much more on the cost side, really not customer touching, because customer touching, we wanna make sure that, you know, we're able to take advantage of the opportunity to become a bigger part of the customer's life, carry more for them. That's super helpful. Well, congrats, to all you guys and best of luck. Thank you. Thanks, Scott. Thank you, Scott. Appreciate it. Our next question comes from Joe Giordano from Cowen. Hey, good morning, everyone. Hey, good morning, Joe. Morning, Joe. Okay, Ron, I have a question. When you guys are doing, like, your larger solutions deployments, how much of that solution, you know, how much of that solution is Aquasource? Because obviously you're gonna have to bring in a lot of things that you do and a lot of things that maybe you don't do. Like, I'm just curious as to how, for an Evoqua solution, how does that map change post-deal? Like, are you now, like, how much pumps are in these solutions that now you'll be, like, sourcing as one company, essentially? Joe, that's a great question. As you know, with the solutions that we provide to the marketplace, we are design source and assemble. Our ISS business is design source and assemble for multiple suppliers. I've I told Patrick when we were early in the cycle, the amount of Godwin pumps that we deploy and we buy that go to our solution set around a lot of the renewables and power side, it's just pretty amazing. The opportunities, you know, that are there for us to really work more closely together and more deeply, I think is one of the big pieces that we're gonna see, you know, come out of this combination. You know, we put our own APT technologies on, but as you know, we've talked about this for quite some time. We don't make pumps. We don't make meters. We don't make valves. We source those, design source and assemble. The opportunity for us to make sure that we've got standardization going forward, it'll take a little time, but there certainly is big potential there. Yeah. One of the questions we're getting asked a lot, and I know it's hard to get into here, but like, the FTC has been harder on antitrust of late. You guys don't have clear overlap, so I think that's like the level 1 analysis of this is pretty easy. Like, are there situations we have to think about where, like, a competitor of Xylem's existing business is using Evoqua in solutions and now it's like essentially they're buying from their competitor? Like how pervasive is that? Is it at all? Is it something we have to think about? Just maybe if you can address that. Yeah. From. Sure. Go ahead, Patrick. Go ahead, Ron. No, go ahead. I was gonna say, we looked at this pretty intently, as you know, because one thing we wouldn't wanna do is come into this type of arrangement and feel like we had risk. We have very little overlap. I think, you know, the opportunities as we look forward are tremendous. We did a deep, you know, market analysis on overlap. It's very minor. In fact, I mean, I think we feel very good about it. Yeah. I'll just echo what Ron said. That is, you know, I think it's fair to say, Joe, that we wouldn't have entered this agreement if we felt differently. Look, we gotta get through the regulatory approvals, but we both feel that we're in a good spot. Okay, fair enough. I have two quick ones. Like, I know on the Xylem metering side, digital has always been like a real goal, and just curious how Evoqua's digital capabilities can accelerate projects that you already had going on there. Just last, like, I know you guys just elevated Matthew Pine to COO. How much of that was in anticipation of this deal, and like, is he gonna have primary responsibility towards, integrating? Thanks. Sure. Let me address the latter of the two. You know, obviously, decisions we make around structure, leadership are all done in concert with our broader strategic rationale. I think many of you in hindsight now can understand why we were doing things to also create capacity for me, for Ron, for others to be able to effectively integrate these two enterprises. There'll be more to come on what that structure looks like. You know, we've got a few key integration guiding principles that we've used before, including with Sensus, but now even more so with Evoqua. The first of those is to make sure that we keep our teams focused on delivering our base plans. You know, that each company has attractive organic opportunities, where Ron and teams have things they wanna do between now and close that really bolsters their growth and profitability. We have the same thing. Second is, you know, we're gonna focus on integrating around those things that drive real synergy, you know, and not distract people from the things that don't matter. Focus on the big synergy buckets. The third is to make sure that we, you know, we retain, motivate, and develop the best talent across both enterprises, so getting them into key leadership roles and the integration planning. Fourth, you know, bringing together the best of both cultures. In the context of that, everything else, Joe, will play out. Again, Ron, I'll give you the opportunity if you wanna say anything. That's, you know, that's where we are today. I mean, Joe, as you kind of back up, this just made so much sense. When you look at even both companies' purpose, Evoqua's always been transforming water, enriching life. You know, Xylem is solving water. I mean, it just the alignment made so much sense and Patrick articulating, you know, really the integration principles make us very comfortable and it's an exciting time for our team. Thank you. Thanks, Joe. Our next question comes from Steve Tusa from JP Morgan. Hi, good morning. Good morning, Steve. How you doing? Congratulations. Thank you. Thank you. Just wanted to make sure we understood specifically where there would be any overlap here. I don't cover Xylem. Is there any on the product side? I know it's relatively fragmented. Any specific areas of overlap for you guys? Yeah. Not much, Steve. Ron, you wanna comment on that? I mean. Yeah. Steve, we've looked at it. It's very minor. There are multiple, you know, offerings inside of even any areas where we have overlap. Okay, great. Thanks a lot. Appreciate the comments. Thank you. Thank you. Our next question comes from Mike Halloran from Baird. Hey, good morning, everyone. Congrats on the transaction. Hey, good morning, Mike. Good morning. Thank you. Yeah, it makes a lot of sense. I mean, as everyone said, I don't think this is a huge surprise. It's just a question of timing. Couple here. First, just, what are you guys able to do ahead of the transaction to hit the ground running, and how do you think about priorities when you first get the two pieces together? What are gonna be the first buckets you start working on? Yeah. I'll start and then I'll ask Ron to join here. You know, between now and actual close based upon regulatory approvals, we're gonna be knee-deep in Mike, in integration planning. We already have a structure laid out, represented by both teams. I kinda laid out earlier the kind of guiding principles for integration planning. To your point around what are the priorities, it really is making sure that each of our teams stay focused on delivering on the commitments we've already made, you know, to each of you, and to our customers. Secondly, it is, you know, we're very clear and, you know, whenever Ron got approval from his board and me with ours, it was around a shared set of numbers on synergies to go after. We're gonna organize and make sure that we deliver on those. It is making sure that we take care of top talent. That is a key priority, you know, in these transactions. We've got, you know, the right structures in place to make sure that we retain people, you know, motivate them, develop them. Lastly, you know, as you and I have talked about many times before, Mike, one of the most important things that Ron and I do every day is culture and climate. You know, what is gonna be the culture and the climate of this combined organization to go fulfill the promises that we're making here? I know that I can speak for Ron, but Ron, I'll let you jump in here. That's something that we're both, you know, very... We're very excited about and we're also very focused on. I will echo what Patrick said. I mean, first and foremost, Mike, we're both gonna continue to deliver on the commitments we made for 2023. While we're doing that, very deep planning so that at close, we can make sure that culture and that climate that Patrick's referring to, you know, really what the opportunity of this combination provides. It's, you know, again, I've said it a couple of times, but it is, you know, exciting time for the Evoqua team to be part of a larger organization. Mike, we've got, you know, another part of your question. Obviously we, you know, there's work we do between now and regulatory approval. There are boundaries that we can't cross, and we'll make sure that we stay clear of those. you know, we're not gonna trip any lines here, with the word, you know, gun jump. Obviously once day one after regulatory approval, we will be ready to go at full speed. Makes sense. I know, I think Joe asked a digital question earlier. This is, I guess, somewhat related. How much overlap is there in the digital offerings as we sit here today? You know, I was thinking through it this morning and it seems like they're relatively different end games, but can ultimately be pretty complementary. Maybe just like some thoughts. Sure. about how those overlap, how those can fit together and maybe what one can do for the other and vice versa. Yeah. Yeah. It's great. It's a great question, Mike. I mean, I'll start, Ron, and then you jump in. One of the things we were really impressed by with the Evoqua team is, you know, and this is where the first digital synergy exists is, they've done a great job at digitizing how their team delivers solutions to their customers. It's more from the inside out, and Ron can talk more about that. Where we've done a good job, and I think Ron's excited about what we can do, is how we digitize for the customer what's in the field, you know, the products, the solution, the, you know, the technology, the experience. We think those two together are gonna be really exciting for both our own people, but also for customers. Ron, I'll hand it over to you. Yeah, I would agree with that. I think there are multiple areas that we will find overlap, Mike, and overlap that is complementary in customers, not in what we do for customers, but for us to be able to carry a larger piece of a customer spend when they're thinking about their water challenges, their water needs. The connected solutions that we've deployed have really, as you know, have gained a lot of ground over the past few years. Even to the point I mentioned Godwin Pumps earlier, we have systems that are out where we are digitally connected, and we're watching quantity and quality of flow across the Godwin pumps that are operating within our system. Then what, you know, Patrick and team have been able to do is digitizing their products that are in the field, making sure that they're connected, has been an area that we've, you know, been exploring and going after on our product technology side, our APT side. I think the being able to, you know, learn and gain from each other is gonna be tremendous. I think the areas we're looking at on R&D, on just dealing with what the world's challenges are around emerging contaminants and continuing, you know, challenges in the water market and the water infrastructure as a whole is gonna give us great potential as we, as we align the two organizations. Appreciate Yeah. I would just add there that I think that's a great point that Ron's made here at the end, and that is, again, this is a longer-term, play, but just the strength of the platform together and our voice together to be able to talk about these emerging challenges that are out there on the waterfront, is one of the real synergies that will play out over time. Great. Appreciate all the color. Congrats again. Thank you. Thanks, Mike. Really appreciate it. Our last question comes from Nathan Jones from Stifel. Hey, good morning, Nate. Good morning, everyone. Morning ... the gestation period, I guess the gestation period for creating the world's leading water company is about four and a half years. congratulations on getting that done. I want to also congratulate Ron and the team at Evoqua for all of the shareholder value they've created over that four and a half years. Absolutely. I would also like. Thank you. I would like to echo Deane's comments here, and I think that a sort of real value in this combination is on the growth side, and less so on, you know, the headline cost synergies and things like that. I'd like to ask, I know that Ron mentioned this a little bit, but Patrick, your thoughts on Evoqua having really positively disrupted the business model with the outsource model that they've been deploying over the last few years, and how you look to go about expanding that geographically. I know Ron talked about, you know, needing a beachhead outside the US. There are a lot of complexities with transporting that business model outside of the US, I think that's something that could be very powerful for growth. I'd love to get your thoughts on the long-term plans for expanding that business. First of all, Nate, we totally agree. You know, that was part of the attraction both for us as well as for Evoqua, was the international expansion. You know, I think we together believe it's a really exciting opportunity given our footprint. You know, there are, you know, there is gonna be time required to do that, and that's why we're not putting a dollar amount on it right now. I can assure you strategically from an intense standpoint, that's a big part of what we're talking about. It's not just, you know, it's not just in the so-called emerging or developing markets. You know, it's across parts of Europe as well. You know, we think that there are opportunities to extend the distribution of their products, you know, just the treatment products themselves, via our channels. We think that there are opportunities to bring, you know, selected services from them to both our industrial and utility markets. That's in Europe. I mean, if you look at, you know, emerging markets, it's similar. I would say there that it's a little bit more greenfield. I think, you know, I mean, again, we're very excited about the opportunities. I think there, the opportunities are gonna come along faster than probably even in, even in Europe. You know, there are other elements of the growth synergies that I wanna highlight, and that again, it's scaling the industrial offering of both companies, deepening the utility penetration, expanding our service portfolio, across, you know, Evoqua's network and expertise, and combining our R&D capabilities. We've not put numbers around these, and we'll do that, and we'll have more to share with you all over time. These things are gonna take some time. It's, it's an exciting combination. Yeah. I would echo that. I've done that. Nathan. I would echo that. As you know, you've been highlighting this as an opportunity for us for quite some time. Four-and-a-half year gestation period, we finally came to the final point. To Patrick's point, the opportunities with that beachhead of what Xylem has, what Xylem can do, as well as just the capabilities of looking at the world's water challenges and putting a full package and portfolio into scope as you're going to solve those, will provide tremendous opportunities. Absolutely. My follow-up, Patrick, would be Evoqua obviously has, you know, an unparalleled service network within the U.S. Maybe you could just discuss the kinds of services that might enable you to expand in the U.S. for Xylem's existing portfolio? I think I mean, to me, the, the number one opportunity, and again, I would invite Ron to join in here. We've got a very different services offering between what we do, you know, on our mainly, you know, wastewater treatment side, the wastewater pumping side, what we do within commercial buildings. What Evoqua has is really unparalleled in terms of the way they think about the different elements of the so-called industrial users of water. We're really excited about their platform, the number of services professionals they have there. I think as Ron and I have talked about, just their ability once... you know, as their team understands what else we do, that combined capability is gonna be very exciting. Ron, I'll let you comment on kind of, you know, what you think excites your team on the front line, 'cause you've got that tremendous platform. Right. Absolutely. you know, Nathan, as you know, our team is very intimate, as I highlighted in the remarks, and 38,000 industrial customers with over 200,000 installations globally. We're there on site every day to be able to bring in the portfolio of what Xylem has that's also on site, the capabilities for us to be able to identify opportunities for growth and expansion, and for us as a combination, be that trusted partner for the entire water value chain is very big because, you know, as you know, we treat it sourced. Xylem deals with getting it to point of use and metering it and making sure it's optimized. you know, we love picking up on the back end for recycle and reuse, taking the wastewater and bringing it back around to the front end. I just think with our service network, our AQUA pros that I highlighted and the portfolio and the platform of Xylem, even inside of North America where we already have a high concentration, gives us tremendous opportunity to do more for our customers and become more and more critical to their everyday operation. Great. Thanks for taking my questions and congratulations. Thank you. Thank you, Nate. We have reached our allotted time for the question-and-answer session. I will now turn the call back over to Patrick Decker for additional closing remarks. Thanks. Again, thank you all for joining this morning on short notice. I just wanna close by reiterating how excited we are about our two teams, you know, coming together. You know, we are confident that we're gonna create an even more powerful platform for solving our customers' and communities' most urgent water issues. Together, we really believe that we can do much more together than we can alone. We are looking forward to keeping you well informed about our progress. I expect we'll be speaking with you in our upcoming earnings calls, just around the corner, as well as our follow-up. Thank you all for joining us today, have a great day. Thank you. Thank you. This concludes today's conference call of Xylem's discussion of the acquisition of Evoqua. Please disconnect your line at this time and have a wonderful day.