Investor Update Philip Mezey, President and Chief Executive Officer

Transcription

1 Investor Update Philip Mezey, President and Chief Executive Officer Barbara Doyle, Vice President, Investor Relations March 2018

2 FORWARD LOOKING STATEMENTS Certain matters in this presentation and being discussed today that are not statements of historical fact constitute forward-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans and performance, management's assessment of market factors, expectations of market growth, and statements regarding the strategy and plans of the Company. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of These statements are not guarantees of Itron's future performance. The Company does not intend and does not assume any obligation to update or revise any forward-looking statements in this presentation after the date they are made. Listeners are cautioned that all forward-looking statements are subject to a number of risks and uncertainties that could cause the Company's actual results in the future to differ materially from these forward-looking statements. These risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission, including its most recently filed 10-K, copies of which may be accessed through the SEC's website at Current data and other statistical information used throughout this presentation are based on independent industry publications, government publications, and reports by market research firms or other published independent sources. Some data are also based on our good faith estimates, which are derived from our review of internal surveys as well as the independent sources listed above. We believe that these sources are reliable. In an effort to provide additional information regarding the Company s financial results as determined by generally accepted accounting principles (GAAP), this presentation contains certain non-gaap financial measures such as constant currency, non-gaap operating income and margin, adjusted EBITDA and margin and free cash flow. The rationale for management s use of non-gaap information and a reconciliation of the non-gaap measures and the most directly comparable GAAP measures are included in the Appendix of this presentation. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. Itron Investor Presentation 2

3 HIGHLIGHTS» Transition to smart technologies for utilities and smart cities driving industry growth New demands on utilities increase the value of intelligent, secure, standards-based networks Global adoption of new generation of smart utility/iot platform is accelerating» Targeted M&A extends Itron s position as a technology leader for smart utilities and smart cities Advances strategy to provide outcomes-based solutions for utilities, smart cities and broader IoT Comverge acquisition closed June 1, 2017 and fully integrated Silver Spring Networks transaction closed on January 5, 2018; integration underway and progressing as planned» Itron operational transformation driving operational scale and efficiencies Supporting improved margins and profitability Next phase 2018 plan to drive an addition $45-50M annualized savings by YE 2020» Improving financial performance FY 17: adjusted EBITDA margin of 11%; Free cash flow of $142 million Guidance for 15-20% revenue growth in 2018 (excluding potential PPA and ASC606 adjustments) Temporal dilution in 2018 during SSNI integration; 2018 exit run-rate potential for mid-teen s EBITDA ~$3 billion backlog including estimate for Silver Spring Networks Itron Investor Presentation 3

4 INDUSTRY OVERVIEW

5 Internet of Things Integrating Distributed Energy Resources Evolving Utility Business Models Greater Customer Expectations Itron Investor Presentation 5

6 FROM AMI TO ACTIVE GRID APPS BASIC AMI» Streetlight management» EV charging» Traffic/parking monitoring» Air/water quality monitoring» Waste/recycling management» Public safety Smart City Services Revenue Cycle Services» Advanced monthly billing» Diversion detection» Theft detection and non-technical loss reduction» Outage notification» Enhanced customer satisfaction SMART GRID TO ACTIVE GRID» Consumer engagement 2.0» Active demand response» Local power pool transaction management» Load disaggregation Customer Services Distribution Automation Services» Outage detection location and analysis» High impedance detection» Primary phase detection/location» Asset monitoring & control» Active transformer load management» Pipeline safety» Leak detection Itron Investor Presentation 6

7 SMART PLATFORM ADOPTION CONTINUES NORTH AMERICA ~ 60% of 356M meters automated GLOBAL ~20% of 3.0B meters automated Electricity - 64% of 163M Electric meters automated Gas - 52% of 80M Gas meters automated Water - 52% of 111M Water meters automated Total Meters Electricity - 31% of 1.4B Electric meters automated Gas - 11% of 500M Gas meters automated Water - 9% of 1.1B Water meters automated Total Automated Source: IHS Research - Global Electricity, Gas and Water Metering Reports, 2017 Editions (includes China) Itron Investor Presentation 7

8 GLOBAL INDUSTRY OPPORTUNITY Average Metering and Communications Revenue Growth of 4% CAGR $13,381 $12,762 $12,201 $3,468 $3,622 $3,803 $2,593 $2,698 $2,768 $14,796 $15,043 $15,413 $14,212 $4,070 $4,375 $4,833 $5,396 $2,913 $3,058 $3,067 $2,922 Water CAGR 8% Gas CAGR 2% $6,140 $6,442 $6,811 $7,229 $7,363 $7,143 $7,095 Electric CAGR 2% Electricity Gas Water Source: IHS Research - Global Electricity, Gas and Water Metering Reports, 2017 Editions (includes China) Itron Investor Presentation 8

9 SELECTED INDUSTRY DYNAMICS North America Europe / Middle East / Africa Asia / Pacific Latin America Electricity Solution Oriented Large Mature AMI Base - Looking Toward Value Add Disaggregated Buying Pattern Rapid Growth in Smart Metering Wide Ranging Needs (Basic to Full Solution) Interest in Smart City Initiatives Increase in Comms and Networking Interest in Smart City Initiatives Gas Solution Oriented Increased Combo Utility Disaggregated Buying Pattern Rapid Growth in Smart Metering Basic Metering Oriented Basic Metering Oriented Water Increase in Comms and Networking Rapid Increase in Smart City Initiatives Strong Growth in Non-Revenue Water Heat and Allocation Growth Basic Metering Oriented Basic Metering Centered Strong Growth in Non-Revenue Water Heat and Allocation Growth Itron Investor Presentation 9

10 ACTIVE GRID BUSINESS OPPORTUNITY * Growth Strategy Includes Expansion into Value-Added Activities Above the Network CAGR % ( ) North America ($4.2 Billion in 2016) Europe / Middle East / Africa ($4.8 Billion in 2016) Asia / Pacific ($5.7 Billion in 2016) Latin America ($0.9 Billion in 2016) Outcomes + Analytics + Orchestration ($2.5 Billion Globally in 2016) Networking + Communications ($1 Billion Globally in 2016) Devices, Metering, Sensing ($12.1 Billion Globally in 2016) 15% 19% 27% 30% 3% 10% 9% 24% (1%) 1% 0% 2% Historical Serviceable Segments Expanded Serviceable Segments Source: Navigant Meter Data Management, Smart Grid as a Service, Smart Grid IT Systems, Communications Breakout, Networking and Communications for Smart Grids, DER Management technologies, and Demand Response Management Systems (2016), IHS Markit Electric, Water and Gas Meter Reports (2017). All figures in U.S. dollars Itron Investor Presentation 10

11 ITRON OVERVIEW Helping customers create a more resourceful world.

12 ITRON S GLOBAL SCALE AND REACH Latin America 4% EMEA 34% Asia Pacific 6% North America 56% TOTAL FY 17 REVENUES = $2.0B» Deployments at scale around the world» 90m smart endpoints globally» Adding Networks segment in 2018» Approx. $3 billion backlog entering 2018 Water 23% Gas 26% Electricity 51%» Opportunities for growth in all geographies and segments Itron Investor Presentation 12

13 How Itron is innovating to support utility business transformation A focus on more compelling outcomes» First to implement machine learning, peer-to-peer device interaction, edge processing» Converging Itron + Silver Spring Networks industrial grade, multi-purpose networks Accelerating Innovation» Itron Riva Developers Community and Partner Ecosystem» Internal R&D and targeted acquisitions New business models and revenue streams» Focus on outcome-based services» Smart utility and smart city services (DA, Streetlight Automation, DEM) Itron Investor Presentation 13

14 ENABLING FLEXIBLE DELIVERY MODELS On-Premise/Install Software as a Service Network Managed IT Services Complete Outsource Outcomes/Analytics as a Service Itron Investor Presentation 14

15 ITRON ACQUIRES SILVER SPRING NETWORKS» Converged platform drives efficiencies for critical infrastructure» Accelerates velocity of innovation» Expands product and services offerings Openstandards networking Metering & sensing devices Robust partner ecosystem Distribution automation Industrial IoT applications» Enables customer IoT adoption» Customer choice multi-vendor end-to-end offering» Vertical integration benefits single point of accountability» Large partner ecosystems Combined utility & smart city deployments Distributed energy management Itron Investor Presentation 15

16 BETTER POSITIONED FOR ATTRACTIVE OPPORTUNITIES COMBINED COMPANY WELL-POSITIONED SIGNIFICANT INDUSTRY OPPORTUNITY» >90 million combined global smart endpoints» Combined industry use-case expertise» Accelerate delivery of solutions and services» Broad ecosystem of partners for smart utilities and smart cities increase value to customers» Well-positioned for broader IoT opportunities Smart Utility Stage: Developed U.S. Penetration: 43% 1 Market Size : ~$10B 2020: ~$20B Smart City Stage: Begun/early accelerating adoption Penetration: Low Market Size : ~$37B 2025: ~$89B IoT Stage: Early adoptions with substantial opportunity Penetration: Very low Market Size : ~$ : ~$470B 1 U.S. Energy Information Administration, Annual Electric Power Industry Report. 2 Markets and Markets research. 3 Navigant Research, July Itron Management Analysis, Itron Investor Presentation 16

17 SUPPORTS ITRON S OBJECTIVES STATED OBJECTIVES: HOW SILVER SPRING NETWORKS FITS: Improve business and financial predictability Increases diversification and adds ~$1.2 billion in backlog Increase mix of higher-value business Increases business in networking and outcomes Achieve greater operational efficiencies Estimate ~$50 million in cost savings Mid-teens EBITDA margin target Drive profitable top-line growth Increase the percentage of revenue from outcome-based solutions Accretive to Itron s adjusted EBITDA margin by 2019; added lever for continued EBITDA margin improvement Silver Spring managed services and SaaS billings at 17% CAGR from 2014 through million and growing endpoints to drive more recurring revenue Itron Investor Presentation 17

18 SSNI ACQUISITION SYNERGIES UPDATE Completed acquisition on Jan 5, 2018» Confirming original $50M cost synergy estimate - Public company costs, personnel and facility overlap - ~$60M of up-front cash costs primarily in Q1/Q2 (non-gaap) - ~$10M of Year 1 Synergies ramp up in 2H 18» Temporal dilutive impacts in 2018; peak in Q Added interest expense and stock-based compensation costs - Full impact of people & facility costs during integration - Impacts for converting to GAAP revenues under PPA and ASC606» Acquired backlog adds over $1.2B - Subject to purchase accounting and ASC 605/606 adjustments - Will provide updated estimate on Q1 18 call Confirming $50M of Run-Rate Cost Synergies by End of 2020 $20m 1 $50m $10 million of total expense savings estimated in FY 18 Itron Investor Presentation 18

19 BUSINESS PROCESS TRANSFORMATION 2.2m 2.2m E & G ENDPOINTS E & G ENDPOINTS DEPLOYED 17m 17m TRUCK ROLLS ELIMINATED REDUCED TRUCK 15.6mROLLS 15.6 METRIC TONS OF CO2 SAVED 1.7m GALLONS OF GAS SAVED METRIC TONS OF CO2 SAVED 1.7m GALLONS OF GAS SAVED Improved electric service reliability by 25% 250,000 PEOPLE LOST POWER AFTER HURRICANE HARVEY 45m OUTAGE MINUTES AVOIDED Itron Investor Presentation 19

20 SMART CITY 19% REDUCTION IN ENERGY USEAGE $26M SAVINGS 19% REDUCTION IN CO2 11,000 CARS EQUIVALENT Itron Investor Presentation 20

21 CUSTOMER PROJECT EXAMPLES Itron Investor Presentation 21

22 MORE CUSTOMER PROJECT EXAMPLES Street Light City of Paris Street Light Itron Investor Presentation 22

23 BUSINESS AND OPERATIONS PERSPECTIVES Business transformation becoming evident.

24 TRENDED FINANCIAL METRICS Backlog ($M) $1,516 $1,575 $1,652 $1,750» Sizeable backlog of multi-year projects $1,035 $1,079 - Excludes >$325M of project awards, not yet booked - SSNI adds ~$1.2B of backlog (estimated) YE 2012 YE 2013 YE 2014 YE 2015 YE 2016 YE 2017 Revenues ($M) & Gross Margin $2,156 $1,938 $1,948 $1,884 $2,013 $2, % 32.8% 33.5% 31.7% 31.5% 29.6% * Adjusted EBITDA ($M) $252 $209 $ % $166 $155 $ % 7.9% 5.8% 10.4% 11.3% * » Higher-value smart solutions growth, exit from lower-margin business, benefits from restructurings and operational initiatives driving higher gross margin» Opportunity to exit 2018 at mid-teen s EBITDA % of revenue via growth in strategic businesses, acquisition synergies, higher-margin business and operational restructuring programs *2015 Notes: *FY 2015 impacted by $29m warranty charge Excluding the Warranty charge, 2015 GM=31.1%, EBITDA = $139M or 7.4% Itron Investor Presentation 24

25 Q4 17 BACKLOG ~$325 million of customer awards, not yet booked Total book to bill of 1.5:1; Book to bill >1:1 in all segments Additional +$1.2 billion of backlog from Silver Spring Networks acquisition in Q Q3 17 Q4 17 Sequential Change 5 Year Backlog Trend $1,488 $1,750 $1,516 $1,575 $1,652 $1, % CAGR $1,079 $847 $931 $737 $836 $761 $931 $ % CAGR Q3'17 Q4'17 12 Month Backlog Total Backlog Chart in Millions, actual currency rates 1. Backlog amount to be finalized upon completion of purchase accounting and impact of new revenue accounting standard. YE'13 YE'14 YE'15 YE'16 YE'17 12 Month Backlog Total Backlog Itron Investor Presentation 25 Q Earnings Presentation 25

26 BALANCE SHEET METRICS Leverage Ratios Are Sound, Debt Capacity Is Expanding, Cash Flow Is Growing HIGHLIGHTS Q4 16 Q1 17 Q2 17 Q3 17 Q TOTAL DEBT* $305m $304m $325m $323m $613m NET DEBT $134m $116m $197m $185m $137m NET DEBT / LTM ADJ EBITDA 0.8x 0.6x 1.0x 0.9x 0.6x 1 FREE CASH FLOW (LTM) $72m $101m $113m $102m $142m 1 Q4 17 total debt included $300 million of financing proceeds held in escrow used for the Silver Spring Networks transaction. 0.6X leverage, excluding the $300M held in escrow. Itron Investor Presentation 26

27 2018 FINANCIAL GUIDANCE FY 2018 Q Revenue $ $2.43 billion $575 - $600 million Non-GAAP EPS $ $3.35 $ $0.15 Assumptions & commentary:» Average euro to U.S. dollar foreign currency exchange rate of $1.21» Average shares outstanding of ~40 million for the year» Non-GAAP effective tax rate for the year of ~28%» Total interest expense of ~$50 million, excluding amortization of debt issuance costs» EBITDA and EPS weighted to 2H 18 driven by supply chain benefits and acquisition synergies ramp in the second half These assumptions and commentary are forward-looking and reflect the estimated impacts of purchase accounting for the acquisition of Silver Spring Networks, adoption of the new revenue accounting standard and the U.S. Tax Cut and Jobs Act on our financial results and are subject to change. A reconciliation of forward-looking non-gaap diluted EPS to the GAAP diluted EPS has not been provided because we are unable to predict with reasonable certainty the potential amount or timing of restructuring and acquisition and integration-related expenses and their related tax effects without unreasonable effort. These items are uncertain, depend on various factors, and could have a material impact on GAAP results for the guidance period. Itron Investor Presentation 27

28 2018 RESTRUCTURING PLAN» New restructuring plan approved by Board of Directors to begin in 2018» Next phase of transformation to optimize supply chain, manufacturing, R&D, Sales and Marketing» $45 - $50 million of annualized savings anticipated by the end of 2020 (run rate)» Pre-tax restructuring charges expected to be between $100 - $110 million; recorded in Q1 18» Supports Itron s longer-term goals for EBITDA margin above mid-teen s Itron Investor Presentation 28

29 LOOKING FORWARD: OPPORTUNITY SETS Early Stages on our Journey in an Opportunity-Rich Environment FY 2017 Revenue = $2.0 Billion OPERATING MARGIN Progress Remaining Value-added services Increased technology content Top-line growth Favorable mix Progress Remaining PURCHASED MATERIAL Value engineering Plant/product realignment Strategic outsourcing MFG OPERATIONS & SERVICE DELIVERY Progress Remaining Manufacturing rationalization Strategic outsourcing Consolidations & rebalancing OPEX Progress Remaining Opportunity selection Centers of Excellence Single ERP Shared services Itron Investor Presentation 29

30 APPENDIX - Summary of consolidated Q4 17 results - FY 2017 Segment Performance Financial Guidance - Revenue FX impact summary - GAAP to Non-GAAP Reconciliations

31 NON-GAAP FINANCIAL MEASURES» To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-gaap financial measures, including non-gaap operating expense, non-gaap operating income, non-gaap net income, non-gaap diluted EPS, adjusted EBITDA, constant currency and free cash flow. We provide these non-gaap financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-gaap financial measures as we believe the net result is a measure of our core business. The company believes these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. Our non-gaap financial measures may be different from those reported by other companies. A more detailed discussion of why we use non-gaap financial measures, the limitations of using such measures, and reconciliations between non-gaap and the nearest GAAP financial measures are included in the quarterly earnings press release. Itron Q3 Investor 2016 Earnings Presentation Presentation 31 31

32 Q4 17 HIGHLIGHTS Business growth and profitability improvements driven by strength in Smart Solutions» Q4 Revenue up 11% YoY and non-gaap EPS up 49% - Strong performance in Electricity segment Consistent growth in smart solution business» Strong Q4 and Annual Free Cash Flow - Annual free cash flow of $142M doubled vs. FY 2016 Standard Technology» Strong backlog of $1.75B at year-end - Q4 17 book to bill of 1.5:1» Completed acquisition of Silver Spring Networks 1/5/18 - Integration is underway and progressing as planned - Positive customer, partner and employee support 62% 53% 47% Q4'15 Q4'16 Q4'17 % of total deliveries Smart Solutions Itron Investor Presentation 32

33 CONSOLIDATED GAAP RESULTS Q4 17 $ in millions (except per share amounts) Q Q Change Revenue $550.8 $ % Change in constant currency +8% Gross margin 31.7% 31.6% +10 bps Operating income $47.2 $ % Operating income margin 8.6% 6.2% +240 bps Net income attributable to Itron, Inc. $1.8 $ % Earnings per share - diluted $0.05 $ % Cash provided by operating activities $76.9 $ %» Revenue growth from strong smart solution deliveries and managed services» Strong Electricity gross margin offset lower Gas and Water margins» Higher operating income and margin reflect increased gross profit and lower restructuring expense» GAAP net income includes a charge of $30M, or $0.77 per share, associated with the U.S. Tax Cut and Jobs Act» Increased cash provided by operations due to improved profitability and changes in working capital Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website Itron Investor Presentation 33 Q Earnings Presentation 33

34 CONSOLIDATED NON-GAAP RESULTS Q4 17 $ in millions (except per share amounts) Q Q Change Non-GAAP operating income $54.9 $ % Non-GAAP operating margin 10.0% 9.0% +100 bps Non-GAAP net income attributable to Itron, Inc. $ $ % Adjusted EBITDA $65.6 $ % Adjusted EBITDA margin 11.9% 10.9% +100 bps Non-GAAP earnings per share - diluted $ $ % Free cash flow $60.9 $ %» Higher volumes and mix of smart solutions drove increased non-gaap operating income and adjusted EBITDA» Non-GAAP net income reflects lower non-gaap effective tax rate from discrete tax benefits and timing and mix of income» Increase in free cash flow due to improved profitability and changes in working capital Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website. 1. Non-GAAP net income excludes $30 million, or $0.77 per share, charge related to the U.S. Tax Act. Itron Investor Presentation 34 Q Earnings Presentation 34

35 CONSOLIDATED GAAP RESULTS FY 17 $ in millions (except per share amounts) FY 2017 FY 2016 Change Revenue $2,018.2 $2, % Growth in constant currency --% Gross margin 33.5% 32.8% +70 bps Operating income $151.4 $ % Net income attributable to Itron, Inc. $ $ % Earnings per share - diluted $ $ % Cash provided by operating activities $191.4 $ %» Gross margin increased 70 bps due to higher volumes and mix of smart solutions and insurance recovery» Higher operating income driven by improved gross profit, lower restructuring and G&A expenses» GAAP net income and diluted EPS reflect higher operating income» Increased cash from operating activities improved profitability and changes in working capital Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website. 1. GAP net income includes $30 million, or $0.77 per share, charge related to the U.S. Tax Act. Itron Investor Presentation 35 Q Earnings Presentation 35

36 CONSOLIDATED NON-GAAP RESULTS FY 17 $ in millions (except per share amounts) FY 2017 FY 2016 Change Non-GAAP operating income $195.8 $ % Non-GAAP operating margin 9.7% 8.5% +120 bps Adjusted EBITDA $227.9 $ % Adjusted EBITDA margin 11.3% 10.4% +90 bps Non-GAAP net income attributable to Itron, Inc. $ $ % Non-GAAP earnings per share - diluted $ $ % Free cash flow $141.9 $ %» Higher gross profit and reduced external services drove non-gaap operating income and adjusted EBITDA increase» Non-GAAP net income reflects higher operating income and a lower non-gaap effective tax rate» Increased free cash flow driven by improved profitability and changes in working capital Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website. 1. Non-GAAP net income excludes $30 million, $0.77 per share, charge related to the U.S. Tax Act. Itron Investor Presentation 36 Q Earnings Presentation 36

37 ELECTRICITY SEGMENT - FY 17 REVENUE, GROSS MARGIN AND NON-GAAP OPERATING MARGIN $ in millions, actual currency $1,023 $ % 31.2% 9.5% 11.3%» Revenue +9% as reported and in constant currency Strong smart volumes in North America and EMEA Riva deployments ramping in North America Linky shipments continue to accelerate in EMEA» Gross margin +110 bps Higher smart volumes and mix» Non-GAAP operating margin +180 bps Increased revenue at higher gross margin Improved operating leverage FY 2016 FY 2017 Revenue Gross Margin Non-GAAP Op Inc Margin Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website Itron Investor Presentation 37 Q Earnings Presentation 37

38 GAS SEGMENT FY 17 REVENUE, GROSS MARGIN AND NON-GAAP OPERATING MARGIN $ in millions, actual currency $569 $534» Revenue down 6% and 7% in constant currency Lower revenue in North America and EMEA Decrease due to timing of large projects Riva deployments ramping in North America 36.0% 35.8% 17.4% 15.9%» Gross margin down 20 bps Higher costs with manufacturing transitions Product mix with higher proportion of standard meters» Non-GAAP operating margin down 150 bps Fall through of lower revenue and gross margin Increased sales and marketing expenses FY 2016 FY 2017 Revenue Gross Margin Non-GAAP Op Inc Margin Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website Itron Investor Presentation 38 Q Earnings Presentation 38

39 WATER SEGMENT FY 17 REVENUE, GROSS MARGIN AND NON-GAAP MARGIN OPERATING $ in millions, actual currency $505 $ % 35.7% 11.0% 10.6%» Revenue down 9% as reported and in constant currency Industry-related project delays in EMEA and North America Continued recovery of project funding in Latin America» Gross margin +150 bps Lower warranty costs and insurance recovery in Q2 17» Non-GAAP operating margin down 40 bps Decreased revenue partially offset by higher gross margin Increased sales and marketing expense FY 2016 FY 2017 Revenue Gross Margin Non-GAAP Op Inc Margin Reconciliation of GAAP to Non-GAAP results in Appendix and also available on our website Itron Investor Presentation 39 Q Earnings Presentation 39

40 GAAP TO NON-GAAP RECONCILIATION Adjusted EBITDA Itron Investor Presentation 40

41 GAAP TO NON-GAAP RECONCILIATION Non-GAAP Operating Income Itron Investor Presentation 41

42 THANK YOU INVESTOR RELATIONS CONTACTS Barbara Doyle Vice President, Investor Relations Rebecca Hussey Manager, Investor Relations