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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Itron Inc | NASDAQ:ITRI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
8.18 | 8.19% | 108.00 | 106.25 | 113.51 | 107.105 | 100.17 | 102.55 | 1,235,838 | 01:00:00 |
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Washington
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91-1011792
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(State of Incorporation)
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(I.R.S. Employer Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common stock, no par value
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NASDAQ Global Select Market
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I
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ITEM 1:
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ITEM 1A:
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ITEM 1B:
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ITEM 2:
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ITEM 3:
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ITEM 4:
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PART II
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ITEM 5:
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ITEM 6:
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ITEM 7:
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ITEM 7A:
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ITEM 8:
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ITEM 9:
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ITEM 9A:
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ITEM 9B:
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PART III
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ITEM 10:
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ITEM 11:
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ITEM 12:
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ITEM 13:
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ITEM 14:
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PART IV
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ITEM 15:
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SCHEDULE II:
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Year Ended
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Annual Bookings
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Total Backlog
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12-Month Backlog
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||||||
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(in millions)
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||||||||||
December 31, 2016
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$
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2,066
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$
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1,652
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|
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$
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761
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December 31, 2015
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1,981
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1,575
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836
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|||
December 31, 2014
|
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2,385
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1,516
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737
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Year Ended
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Total Bookings
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Electricity
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Gas
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Water
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||||||||
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(in millions)
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||||||||||||||
December 31, 2016
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$
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2,066
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$
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1,013
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$
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567
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$
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486
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|
December 31, 2015
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1,981
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958
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577
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|
446
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||||
December 31, 2014
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2,385
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1,074
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753
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558
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Name
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Age
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Position
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Philip C. Mezey
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57
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President and Chief Executive Officer
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W. Mark Schmitz
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65
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Executive Vice President and Chief Financial Officer
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Thomas L. Deitrich
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50
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Executive Vice President and Chief Operating Officer
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Michel C. Cadieux
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59
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Senior Vice President, Human Resources
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Shannon M. Votava
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56
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Senior Vice President, General Counsel and Corporate Secretary
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•
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a higher proportion of products sold with fewer features and functionality, resulting in lower revenues and gross margins;
|
•
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a shift in sales channel mix, which could impact the revenue received and commissions paid;
|
•
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a decrease in sales volumes, which could result in lower gross margins as driven by lower absorption of manufacturing costs;
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•
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a change in accounting standards or practices that may impact us to a greater degree than other companies;
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•
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a change in existing taxation rules or practices due to our specific operating structure that may not be comparable to other companies; and
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•
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a shortfall in sales without a proportional decrease in expenses.
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•
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underperformance relative to projected future operating results;
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•
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changes in the manner or use of the acquired assets or the strategy for our overall business;
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•
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negative industry or economic trends;
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•
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decline in our stock price for a sustained period or decline in our market capitalization below net book value; and
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•
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changes in our organization or management reporting structure, which could result in additional reporting units, requiring greater aggregation or disaggregation in our analysis by reporting unit and potentially alternative methods/assumptions of estimating fair values.
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Product Line
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|||
Region
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Electricity
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Gas
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Water
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Multiple Product Lines
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North America
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Oconee, SC (O)
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Owenton, KY (O)
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None
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Waseca, MN - G,W (L)
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EMEA
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Chasseneuil, France (O)
Godollo, Hungary (O)
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Argenteuil, France (L)
Reims, France (O)
Karlsruhe, Germany (O)
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Massy, France (L)
Macon, France (O)
Haguenau, France (O)
Oldenburg, Germany (O)
Asti, Italy (O)
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None
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Asia/Pacific
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None
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Wujiang, China (L)
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Suzhou, China (L)
Dehradun, India (L)
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Bekasi, Indonesia - E,W (O)
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Latin America
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None
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Buenos Aires, Argentina (O)
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Americana, Brazil (O)
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None
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ITEM 5:
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
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2016
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|
2015
|
||||||||||||
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High
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Low
|
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High
|
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Low
|
||||||||
First Quarter
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$
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43.00
|
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$
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30.31
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$
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41.86
|
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$
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35.05
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Second Quarter
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$
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45.51
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$
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39.78
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$
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37.81
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$
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34.44
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Third Quarter
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$
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56.23
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$
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42.34
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$
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33.91
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$
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28.30
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Fourth Quarter
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$
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65.75
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$
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51.90
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$
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37.53
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$
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31.75
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Year Ended December 31,
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||||||||||||||||||
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2016
(5)
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2015
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2014
(4)
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2013
(3)
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2012
(2)
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||||||||||
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(in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data
|
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||||||||||
Revenues
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$
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2,013,186
|
|
|
$
|
1,883,533
|
|
|
$
|
1,947,616
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|
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$
|
1,938,025
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$
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2,156,365
|
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Cost of revenues
|
1,352,866
|
|
|
1,326,848
|
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1,333,566
|
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1,323,257
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1,448,753
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|||||
Gross profit
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660,320
|
|
|
556,685
|
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|
614,050
|
|
|
614,768
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|
|
707,612
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|||||
Operating income (loss)
|
96,211
|
|
|
52,846
|
|
|
480
|
|
|
(139,863
|
)
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|
139,153
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|
|||||
Net income (loss) attributable to Itron, Inc.
|
31,770
|
|
|
12,678
|
|
|
(23,670
|
)
|
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(153,153
|
)
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|
99,839
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|
|||||
Earnings (loss) per common share - Basic
|
$
|
0.83
|
|
|
$
|
0.33
|
|
|
$
|
(0.60
|
)
|
|
$
|
(3.90
|
)
|
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$
|
2.52
|
|
Earnings (loss) per common share - Diluted
|
$
|
0.82
|
|
|
$
|
0.33
|
|
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$
|
(0.60
|
)
|
|
$
|
(3.90
|
)
|
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$
|
2.50
|
|
Weighted average common shares outstanding - Basic
|
38,207
|
|
|
38,224
|
|
|
39,184
|
|
|
39,281
|
|
|
39,625
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|
|||||
Weighted average common shares outstanding - Diluted
|
38,643
|
|
|
38,506
|
|
|
39,184
|
|
|
39,281
|
|
|
39,934
|
|
|||||
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|
||||||||||
Consolidated Balance Sheets Data
|
|
|
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|
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|
||||||||||
Working capital
(1)
|
$
|
319,420
|
|
|
$
|
281,166
|
|
|
$
|
262,393
|
|
|
$
|
338,476
|
|
|
$
|
338,985
|
|
Total assets
(6)
|
1,577,811
|
|
|
1,680,316
|
|
|
1,751,085
|
|
|
1,906,025
|
|
|
2,109,134
|
|
|||||
Total debt
(6)
|
304,523
|
|
|
370,165
|
|
|
323,307
|
|
|
377,596
|
|
|
415,809
|
|
|||||
Total Itron, Inc. shareholders' equity
|
631,604
|
|
|
604,758
|
|
|
681,001
|
|
|
839,011
|
|
|
982,253
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by operating activities
|
$
|
115,842
|
|
|
$
|
73,350
|
|
|
$
|
132,973
|
|
|
$
|
105,421
|
|
|
$
|
205,090
|
|
Cash used in investing activities
|
(47,528
|
)
|
|
(48,951
|
)
|
|
(41,496
|
)
|
|
(56,771
|
)
|
|
(125,445
|
)
|
|||||
Cash provided by (used in) financing activities
|
(63,023
|
)
|
|
7,740
|
|
|
(91,877
|
)
|
|
(57,438
|
)
|
|
(77,528
|
)
|
|||||
Capital expenditures
|
(43,543
|
)
|
|
(43,918
|
)
|
|
(44,495
|
)
|
|
(60,020
|
)
|
|
(50,543
|
)
|
(1)
|
Working capital represents current assets less current liabilities.
|
(2)
|
On May 1, 2012, we completed our acquisition of SmartSynch, Inc. for $77.7 million in cash (net of $6.7 million of cash and cash equivalents acquired).
|
(3)
|
During 2013, we incurred a goodwill impairment charge of $174.2 million. In addition, we incurred costs of $36.3 million in 2013 related to restructuring projects to increase efficiency.
|
(4)
|
During 2014, we incurred costs of $49.5 million related to restructuring projects to improve operational efficiencies and reduce expenses. Refer to Item 8: “Financial Statements and Supplementary Data, Note 13: Restructuring” included in this Annual Report on Form 10-K for further disclosures regarding the restructuring charges.
|
(5)
|
During 2016, we incurred costs of
$49.1 million
related to restructuring projects to restructure various company activities in order to improve operational efficiencies, reduce expenses and improve competiveness. Refer to Item 8: “Financial Statements and Supplementary Data, Note 13: Restructuring” included in this Annual Report on Form 10-K for further disclosures regarding the restructuring charges.
|
(6)
|
Total assets and total debt for all periods presented were adjusted for the adoption of Accounting Standards Update 2015-03,
Interest - Imputation of Interest
. Refer to Item 8: “Financial Statements and Supplementary Data, Note 1: Summary of Significant Accounting Policies” included in this Annual Report on Form 10-K for further disclosures regarding accounting pronouncements.
|
ITEM 7:
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Revenues were
$2.0 billion
compared with
$1.9 billion
in the same period last year, an increase of
$129.7 million
, or
7%
.
|
•
|
Gross margin was
32.8%
compared with
29.6%
in the same period last year. The increase of
320
basis points included improvements in all segments.
|
•
|
Operating expenses were
$60.3 million
higher compared with the same period last year, primarily due to increased restructuring expense.
|
•
|
Net income attributable to Itron, Inc. was
$31.8 million
compared with
$12.7 million
for the same period in 2015.
|
•
|
Adjusted EBITDA increased
$99.1 million
, or
91%
compared with the same period in 2015.
|
•
|
GAAP diluted EPS
was
$0.82
, a
$0.49
improvement compared with the same period in 2015.
|
•
|
Non-GAAP diluted EPS improved
$1.81
to
$2.54
compared with the same period last year.
|
•
|
Total backlog was
$1.7 billion
and twelve-month backlog was
$761 million
at
December 31, 2016
.
|
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
||||||||
|
(in thousands, except margin and per share data)
|
||||||||||||||||
GAAP
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
2,013,186
|
|
|
7
|
%
|
|
$
|
1,883,533
|
|
|
(3
|
)%
|
|
$
|
1,947,616
|
|
Gross profit
|
660,320
|
|
|
19
|
%
|
|
556,685
|
|
|
(9
|
)%
|
|
614,050
|
|
|||
Operating expenses
|
564,109
|
|
|
12
|
%
|
|
503,839
|
|
|
(18
|
)%
|
|
613,570
|
|
|||
Operating income
|
96,211
|
|
|
82
|
%
|
|
52,846
|
|
|
10,910
|
%
|
|
480
|
|
|||
Other income (expense)
|
(11,584
|
)
|
|
(26
|
)%
|
|
(15,744
|
)
|
|
(16
|
)%
|
|
(18,745
|
)
|
|||
Income tax provision
|
(49,574
|
)
|
|
124
|
%
|
|
(22,099
|
)
|
|
448
|
%
|
|
(4,035
|
)
|
|||
Net income (loss) attributable to Itron, Inc.
|
31,770
|
|
|
151
|
%
|
|
12,678
|
|
|
N/A
|
|
|
(23,670
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-GAAP
(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-GAAP operating expenses
|
$
|
490,104
|
|
|
1
|
%
|
|
$
|
484,967
|
|
|
(4
|
)%
|
|
$
|
504,931
|
|
Non-GAAP operating income
|
170,216
|
|
|
137
|
%
|
|
71,718
|
|
|
(34
|
)%
|
|
109,119
|
|
|||
Non-GAAP net income attributable to Itron, Inc.
|
98,284
|
|
|
251
|
%
|
|
27,981
|
|
|
(54
|
)%
|
|
60,621
|
|
|||
Adjusted EBITDA
|
208,638
|
|
|
91
|
%
|
|
109,497
|
|
|
(29
|
)%
|
|
154,632
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Margins and Earnings Per Share
|
|
|
|
|
|
|
|
|
|
||||||||
Gross margin
|
32.8
|
%
|
|
|
|
29.6
|
%
|
|
|
|
31.5
|
%
|
|||||
Operating margin
|
4.8
|
%
|
|
|
|
2.8
|
%
|
|
|
|
—
|
%
|
|||||
Basic EPS
|
$
|
0.83
|
|
|
|
|
$
|
0.33
|
|
|
|
|
$
|
(0.60
|
)
|
||
Diluted EPS
|
$
|
0.82
|
|
|
|
|
$
|
0.33
|
|
|
|
|
$
|
(0.60
|
)
|
||
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Earnings Per Share
(1)
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP diluted EPS
|
$
|
2.54
|
|
|
|
|
$
|
0.73
|
|
|
|
|
$
|
1.54
|
|
(1)
|
These measures exclude certain expenses that we do not believe are indicative of our core operating results. See pages
38-40
for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.
|
•
|
Standard metering – no built-in remote reading communication technology
|
•
|
Smart metering – one-way communication of meter data or two-way communication including remote meter configuration and upgrade (consisting primarily of our OpenWay technology)
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
(units in thousands)
|
|||||||
Meters
|
|
|
|
|||||
Standard
|
15,540
|
|
|
17,560
|
|
|
18,740
|
|
Smart
|
9,340
|
|
|
7,290
|
|
|
6,090
|
|
Total meters
|
24,880
|
|
|
24,850
|
|
|
24,830
|
|
|
|
|
|
|
|
|||
Stand-alone communication modules
|
|
|
|
|
|
|||
Smart
|
5,980
|
|
|
5,840
|
|
|
5,770
|
|
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Total Company
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
2,013,186
|
|
|
$
|
1,883,533
|
|
|
$
|
(34,781
|
)
|
|
$
|
164,434
|
|
|
$
|
129,653
|
|
|
Gross Profit
|
660,320
|
|
|
556,685
|
|
|
(9,381
|
)
|
|
113,016
|
|
|
103,635
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Total Company
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
1,883,533
|
|
|
$
|
1,947,616
|
|
|
$
|
(178,250
|
)
|
|
$
|
114,167
|
|
|
$
|
(64,083
|
)
|
|
Gross Profit
|
556,685
|
|
|
614,050
|
|
|
(51,264
|
)
|
|
(6,101
|
)
|
|
(57,365
|
)
|
(1)
|
Constant currency change is a non-GAAP financial measure and represents the total change between periods excluding the effect of changes in foreign currency exchange rates.
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Total Company
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Sales and marketing
|
$
|
158,883
|
|
|
$
|
161,380
|
|
|
$
|
(2,883
|
)
|
|
$
|
386
|
|
|
$
|
(2,497
|
)
|
|
Product development
|
168,209
|
|
|
162,334
|
|
|
(1,273
|
)
|
|
7,148
|
|
|
5,875
|
|
|||||
|
General and administrative
|
162,815
|
|
|
155,715
|
|
|
(2,047
|
)
|
|
9,147
|
|
|
7,100
|
|
|||||
|
Amortization of intangible assets
|
25,112
|
|
|
31,673
|
|
|
(705
|
)
|
|
(5,856
|
)
|
|
(6,561
|
)
|
|||||
|
Restructuring
|
49,090
|
|
|
(7,263
|
)
|
|
(412
|
)
|
|
56,765
|
|
|
56,353
|
|
|||||
|
Total Operating expenses
|
$
|
564,109
|
|
|
$
|
503,839
|
|
|
$
|
(7,320
|
)
|
|
$
|
67,590
|
|
|
$
|
60,270
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Total Company
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Sales and marketing
|
$
|
161,380
|
|
|
$
|
182,503
|
|
|
$
|
(18,985
|
)
|
|
$
|
(2,138
|
)
|
|
$
|
(21,123
|
)
|
|
Product development
|
162,334
|
|
|
175,500
|
|
|
(10,267
|
)
|
|
(2,899
|
)
|
|
(13,166
|
)
|
|||||
|
General and administrative
|
155,715
|
|
|
162,466
|
|
|
(14,356
|
)
|
|
7,605
|
|
|
(6,751
|
)
|
|||||
|
Amortization of intangible assets
|
31,673
|
|
|
43,619
|
|
|
(4,121
|
)
|
|
(7,825
|
)
|
|
(11,946
|
)
|
|||||
|
Restructuring
|
(7,263
|
)
|
|
49,482
|
|
|
(6,164
|
)
|
|
(50,581
|
)
|
|
(56,745
|
)
|
|||||
|
Total Operating expenses
|
$
|
503,839
|
|
|
$
|
613,570
|
|
|
$
|
(53,893
|
)
|
|
$
|
(55,838
|
)
|
|
$
|
(109,731
|
)
|
(1)
|
Constant currency change is a non-GAAP financial measure and represents the total change between periods excluding the effect of changes in foreign currency exchange rates.
|
|
Year Ended December 31,
|
||||||||||||||
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
||||||
Interest income
|
$
|
865
|
|
|
14%
|
|
$
|
761
|
|
|
54%
|
|
$
|
494
|
|
Interest expense
|
(9,872
|
)
|
|
(3)%
|
|
(10,161
|
)
|
|
2%
|
|
(9,990
|
)
|
|||
Amortization of prepaid debt fees
|
(1,076
|
)
|
|
(49)%
|
|
(2,128
|
)
|
|
32%
|
|
(1,612
|
)
|
|||
Other income (expense), net
|
(1,501
|
)
|
|
(64)%
|
|
(4,216
|
)
|
|
(45)%
|
|
(7,637
|
)
|
|||
Total other income (expense)
|
$
|
(11,584
|
)
|
|
(26)%
|
|
$
|
(15,744
|
)
|
|
(16)%
|
|
$
|
(18,745
|
)
|
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
|
||||||
Segment Revenues
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Electricity
|
$
|
938,374
|
|
|
14%
|
|
$
|
820,306
|
|
|
6%
|
|
$
|
771,857
|
|
|
|
Gas
|
569,476
|
|
|
5%
|
|
543,805
|
|
|
(9)%
|
|
599,091
|
|
|
|
|||
Water
|
505,336
|
|
|
(3)%
|
|
519,422
|
|
|
(10)%
|
|
576,668
|
|
|
|
|||
Total revenues
|
$
|
2,013,186
|
|
|
7%
|
|
$
|
1,883,533
|
|
|
(3)%
|
|
$
|
1,947,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
Gross
Profit
|
|
Gross
Margin
|
|
Gross
Profit |
|
Gross
Margin |
|
Gross
Profit |
|
Gross
Margin |
||||||
Segment Gross Profit and Margin
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Electricity
|
$
|
282,677
|
|
|
30.1%
|
|
$
|
225,446
|
|
|
27.5%
|
|
$
|
200,249
|
|
|
25.9%
|
Gas
|
205,063
|
|
|
36.0%
|
|
185,559
|
|
|
34.1%
|
|
211,623
|
|
|
35.3%
|
|||
Water
|
172,580
|
|
|
34.2%
|
|
145,680
|
|
|
28.0%
|
|
202,178
|
|
|
35.1%
|
|||
Total gross profit and margin
|
$
|
660,320
|
|
|
32.8%
|
|
$
|
556,685
|
|
|
29.6%
|
|
$
|
614,050
|
|
|
31.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
|
|
||||||||||||||
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
|
|
||||||
Segment Operating Expenses
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Electricity
|
$
|
214,390
|
|
|
10%
|
|
$
|
194,342
|
|
|
(30)%
|
|
$
|
278,000
|
|
|
|
Gas
|
138,250
|
|
|
17%
|
|
118,088
|
|
|
(13)%
|
|
135,522
|
|
|
|
|||
Water
|
135,314
|
|
|
8%
|
|
125,816
|
|
|
(4)%
|
|
130,822
|
|
|
|
|||
Corporate unallocated
|
76,155
|
|
|
16%
|
|
65,593
|
|
|
(5)%
|
|
69,226
|
|
|
|
|||
Total operating expenses
|
$
|
564,109
|
|
|
12%
|
|
$
|
503,839
|
|
|
(18)%
|
|
$
|
613,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Year Ended December 31,
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||||||||
|
Operating
Income
(Loss)
|
|
Operating
Margin
|
|
Operating
Income (Loss) |
|
Operating
Margin |
|
Operating
Income (Loss) |
|
Operating
Margin |
||||||
Segment Operating Income (Loss) and Operating Margin
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||
Electricity
|
$
|
68,287
|
|
|
7.3%
|
|
$
|
31,104
|
|
|
3.8%
|
|
$
|
(77,751
|
)
|
|
(10.1)%
|
Gas
|
66,813
|
|
|
11.7%
|
|
67,471
|
|
|
12.4%
|
|
76,101
|
|
|
12.7%
|
|||
Water
|
37,266
|
|
|
7.4%
|
|
19,864
|
|
|
3.8%
|
|
71,356
|
|
|
12.4%
|
|||
Corporate unallocated
|
(76,155
|
)
|
|
|
|
(65,593
|
)
|
|
|
|
(69,226
|
)
|
|
|
|||
Total operating income
|
$
|
96,211
|
|
|
4.8%
|
|
$
|
52,846
|
|
|
2.8%
|
|
$
|
480
|
|
|
—%
|
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Electricity Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
938,374
|
|
|
$
|
820,306
|
|
|
$
|
(17,643
|
)
|
|
$
|
135,711
|
|
|
$
|
118,068
|
|
|
Gross Profit
|
282,677
|
|
|
225,446
|
|
|
(5,606
|
)
|
|
62,837
|
|
|
57,231
|
|
|||||
|
Operating Expenses
|
214,390
|
|
|
194,342
|
|
|
(3,368
|
)
|
|
23,416
|
|
|
20,048
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Electricity Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
820,306
|
|
|
$
|
771,857
|
|
|
$
|
(55,440
|
)
|
|
$
|
103,889
|
|
|
$
|
48,449
|
|
|
Gross Profit
|
225,446
|
|
|
200,249
|
|
|
(14,322
|
)
|
|
39,519
|
|
|
25,197
|
|
|||||
|
Operating Expenses
|
194,342
|
|
|
278,000
|
|
|
(20,234
|
)
|
|
(63,424
|
)
|
|
(83,658
|
)
|
(1)
|
Constant currency change is a non-GAAP financial measure and represents the total change between periods excluding the effect of changes in foreign currency exchange rates.
|
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Gas Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
569,476
|
|
|
$
|
543,805
|
|
|
$
|
(6,990
|
)
|
|
$
|
32,661
|
|
|
$
|
25,671
|
|
|
Gross Profit
|
205,063
|
|
|
185,559
|
|
|
(982
|
)
|
|
20,486
|
|
|
19,504
|
|
|||||
|
Operating Expenses
|
138,250
|
|
|
118,088
|
|
|
(1,336
|
)
|
|
21,498
|
|
|
20,162
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Gas Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
543,805
|
|
|
$
|
599,091
|
|
|
$
|
(49,908
|
)
|
|
$
|
(5,378
|
)
|
|
$
|
(55,286
|
)
|
|
Gross Profit
|
185,559
|
|
|
211,623
|
|
|
(11,786
|
)
|
|
(14,278
|
)
|
|
(26,064
|
)
|
|||||
|
Operating Expenses
|
118,088
|
|
|
135,522
|
|
|
(14,054
|
)
|
|
(3,380
|
)
|
|
(17,434
|
)
|
(1)
|
Constant currency change is a non-GAAP financial measure and represents the total change between periods excluding the effect of changes in foreign currency exchange rates.
|
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2016
|
|
2015
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Water Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
505,336
|
|
|
$
|
519,422
|
|
|
$
|
(10,148
|
)
|
|
$
|
(3,938
|
)
|
|
$
|
(14,086
|
)
|
|
Gross Profit
|
172,580
|
|
|
145,680
|
|
|
(2,793
|
)
|
|
29,693
|
|
|
26,900
|
|
|||||
|
Operating Expenses
|
135,314
|
|
|
125,816
|
|
|
(1,003
|
)
|
|
10,501
|
|
|
9,498
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
Effect of Changes in Foreign Currency Exchange Rates
|
|
Constant Currency Change
(1)
|
|
Total Change
|
||||||||||
|
|
Year Ended December 31,
|
|
|
|
|||||||||||||||
|
|
2015
|
|
2014
|
|
|
|
|||||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Water Segment
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Revenues
|
$
|
519,422
|
|
|
$
|
576,668
|
|
|
$
|
(72,902
|
)
|
|
$
|
15,656
|
|
|
$
|
(57,246
|
)
|
|
Gross Profit
|
145,680
|
|
|
202,178
|
|
|
(25,156
|
)
|
|
(31,342
|
)
|
|
(56,498
|
)
|
|||||
|
Operating Expenses
|
125,816
|
|
|
130,822
|
|
|
(16,723
|
)
|
|
11,717
|
|
|
(5,006
|
)
|
(1)
|
Constant currency change is a non-GAAP financial measure and represents the total change between periods excluding the effect of changes in foreign currency exchange rates.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Operating activities
|
$
|
115,842
|
|
|
$
|
73,350
|
|
|
$
|
132,973
|
|
Investing activities
|
(47,528
|
)
|
|
(48,951
|
)
|
|
(41,496
|
)
|
|||
Financing activities
|
(63,023
|
)
|
|
7,740
|
|
|
(91,877
|
)
|
|||
Effect of exchange rates on cash and cash equivalents
|
(2,744
|
)
|
|
(13,492
|
)
|
|
(12,034
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
2,547
|
|
|
$
|
18,647
|
|
|
$
|
(12,434
|
)
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
(in thousands)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
115,842
|
|
|
$
|
73,350
|
|
|
$
|
132,973
|
|
Acquisitions of property, plant, and equipment
|
|
(43,543
|
)
|
|
(43,918
|
)
|
|
(44,495
|
)
|
|||
Free cash flow
|
|
$
|
72,299
|
|
|
$
|
29,432
|
|
|
$
|
88,478
|
|
|
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
Beyond
5 years
|
||||||||||
|
|
(in thousands)
|
||||||||||||||||||
Credit Facilities
(1)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
USD denominated term loan
|
|
$
|
225,877
|
|
|
$
|
18,625
|
|
|
$
|
52,923
|
|
|
$
|
154,329
|
|
|
$
|
—
|
|
Multicurrency revolving line of credit
|
|
103,790
|
|
|
1,653
|
|
|
3,951
|
|
|
98,186
|
|
|
—
|
|
|||||
Operating lease obligations
(2)
|
|
54,417
|
|
|
13,128
|
|
|
21,390
|
|
|
11,389
|
|
|
8,510
|
|
|||||
Purchase and service commitments
(3)
|
|
171,793
|
|
|
171,251
|
|
|
526
|
|
|
16
|
|
|
—
|
|
|||||
Other long-term liabilities reflected on the balance sheet under generally accepted accounting principles
(4)
|
|
94,060
|
|
|
—
|
|
|
55,653
|
|
|
13,003
|
|
|
25,404
|
|
|||||
Total
|
|
$
|
649,937
|
|
|
$
|
204,657
|
|
|
$
|
134,443
|
|
|
$
|
276,923
|
|
|
$
|
33,914
|
|
(1)
|
Borrowings are disclosed within Item 8: “Financial Statements and Supplementary Data, Note 6: Debt” included in this Annual Report on Form 10-K, with the addition of estimated interest expense but not including the amortization of prepaid debt fees.
|
(2)
|
Operating lease obligations are disclosed in Item 8: “Financial Statements and Supplementary Data, Note 12: Commitments and Contingencies” included in this Annual Report on Form 10-K and do not include common area maintenance charges, real estate taxes, and insurance charges for which we are obligated.
|
(3)
|
We enter into standard purchase orders in the ordinary course of business that typically obligate us to purchase materials and other items. Purchase orders can include open-ended agreements that provide for estimated quantities over an extended shipment period, typically up to one year at an established unit cost. Our long-term executory purchase agreements that contain termination clauses have been classified as less than one year, as the commitments are the estimated amounts we would be required to pay at
December 31, 2016
if the commitments were canceled.
|
(4)
|
Other long-term liabilities consist of warranty obligations, estimated pension benefit payments, and other obligations. Estimated pension benefit payments include amounts from 2018-2026. Long-term unrecognized tax benefits totaling $28.5 million (net of pre-payments), which include accrued interest and penalties, are not included in the above contractual obligations and commitments table as we cannot reliably estimate the period of cash settlement with the respective taxing authorities. Additionally, because the amount and timing of the future cash outflows are uncertain, deferred revenue totaling $49.3 million, which includes deferred revenue related to extended warranty guarantees, is not included in the table. For further information on defined benefit pension plans, income taxes, and warranty obligations and deferred revenue for extended warranties, see Item 8:
“
Financial Statements and Supplementary Data, Notes 8, 11, and 12,
”
respectively, included in this Annual Report on Form 10-K.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
U.S. federal taxes paid
|
$
|
9,000
|
|
|
$
|
15,700
|
|
|
$
|
3,300
|
|
State income taxes paid
|
4,526
|
|
|
1,543
|
|
|
438
|
|
|||
Foreign and local income taxes paid
|
10,761
|
|
|
11,946
|
|
|
14,484
|
|
|||
Total income taxes paid
|
$
|
24,287
|
|
|
$
|
29,189
|
|
|
$
|
18,222
|
|
(Unaudited; in thousands, except per share data)
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
||||||
TOTAL COMPANY RECONCILIATIONS
|
Year Ended December 31,
|
|||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
NON-GAAP OPERATING EXPENSES
|
|
|
|
|
|
||||||||
|
|
GAAP operating expenses
|
$
|
564,109
|
|
|
$
|
503,839
|
|
|
$
|
613,570
|
|
|
|
|
|
Amortization of intangible assets
|
(25,112
|
)
|
|
(31,673
|
)
|
|
(43,619
|
)
|
|||
|
|
|
Restructuring
|
(49,090
|
)
|
|
7,263
|
|
|
(49,482
|
)
|
|||
|
|
|
Acquisition related recovery (expense)
|
197
|
|
|
5,538
|
|
|
(15,538
|
)
|
|||
|
|
Non-GAAP operating expenses
|
$
|
490,104
|
|
|
$
|
484,967
|
|
|
$
|
504,931
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
NON-GAAP OPERATING INCOME
|
|
|
|
|
|
||||||||
|
|
GAAP operating income
|
$
|
96,211
|
|
|
$
|
52,846
|
|
|
$
|
480
|
|
|
|
|
|
Amortization of intangible assets
|
25,112
|
|
|
31,673
|
|
|
43,619
|
|
|||
|
|
|
Restructuring
|
49,090
|
|
|
(7,263
|
)
|
|
49,482
|
|
|||
|
|
|
Acquisition related (recovery) expense
|
(197
|
)
|
|
(5,538
|
)
|
|
15,538
|
|
|||
|
|
Non-GAAP operating income
|
$
|
170,216
|
|
|
$
|
71,718
|
|
|
$
|
109,119
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
NON-GAAP NET INCOME & DILUTED EPS
|
|
|
|
|
|
||||||||
|
|
GAAP net income (loss) attributable to Itron, Inc.
|
$
|
31,770
|
|
|
$
|
12,678
|
|
|
$
|
(23,670
|
)
|
|
|
|
|
Amortization of intangible assets
|
25,112
|
|
|
31,673
|
|
|
43,619
|
|
|||
|
|
|
Amortization of debt placement fees
|
987
|
|
|
2,021
|
|
|
1,512
|
|
|||
|
|
|
Restructuring
|
49,090
|
|
|
(7,263
|
)
|
|
49,482
|
|
|||
|
|
|
Acquisition related (recovery) expense
|
(197
|
)
|
|
(5,538
|
)
|
|
15,538
|
|
|||
|
|
|
Income tax effect of non-GAAP adjustments
(1)
|
(8,478
|
)
|
|
(5,590
|
)
|
|
(25,860
|
)
|
|||
|
|
Non-GAAP net income
|
$
|
98,284
|
|
|
$
|
27,981
|
|
|
$
|
60,621
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Non-GAAP diluted EPS
|
$
|
2.54
|
|
|
$
|
0.73
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Weighted average common shares outstanding - Diluted
|
38,643
|
|
|
38,506
|
|
|
39,461
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
|
ADJUSTED EBITDA
|
|
|
|
|
|
||||||||
|
|
GAAP net income (loss) attributable to Itron, Inc.
|
$
|
31,770
|
|
|
$
|
12,678
|
|
|
$
|
(23,670
|
)
|
|
|
|
|
Interest income
|
(865
|
)
|
|
(761
|
)
|
|
(494
|
)
|
|||
|
|
|
Interest expense
|
10,948
|
|
|
12,289
|
|
|
11,602
|
|
|||
|
|
|
Income tax provision
|
49,574
|
|
|
22,099
|
|
|
4,035
|
|
|||
|
|
|
Depreciation and amortization
|
68,318
|
|
|
75,993
|
|
|
98,139
|
|
|||
|
|
|
Restructuring
|
49,090
|
|
|
(7,263
|
)
|
|
49,482
|
|
|||
|
|
|
Acquisition related (recovery) expense
|
(197
|
)
|
|
(5,538
|
)
|
|
15,538
|
|
|||
|
|
Adjusted EBITDA
|
$
|
208,638
|
|
|
$
|
109,497
|
|
|
$
|
154,632
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
FREE CASH FLOW
|
|
|
|
|
|
||||||||
|
|
|
Net cash provided by operating activities
|
$
|
115,842
|
|
|
$
|
73,350
|
|
|
$
|
132,973
|
|
|
|
|
Acquisitions of property, plant, and equipment
|
(43,543
|
)
|
|
(43,918
|
)
|
|
(44,495
|
)
|
|||
|
|
Free Cash Flow
|
$
|
72,299
|
|
|
$
|
29,432
|
|
|
$
|
88,478
|
|
(1)
|
The income tax effect of non-GAAP adjustments is calculated using the statutory tax rates for the relevant jurisdictions if no valuation allowance exists. If a valuation allowance exists, there is no tax impact to the non-GAAP adjustment.
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Total
|
|
Fair Value
|
||||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||||||
Variable Rate Debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal: U.S. dollar term loan
|
$
|
14,063
|
|
|
$
|
19,688
|
|
|
$
|
22,500
|
|
|
$
|
151,874
|
|
|
$
|
—
|
|
|
$
|
208,125
|
|
|
$
|
205,676
|
|
Average interest rate
|
2.21
|
%
|
|
2.80
|
%
|
|
3.23
|
%
|
|
3.39
|
%
|
|
—
|
%
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal: Multicurrency revolving line of credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97,167
|
|
|
$
|
—
|
|
|
$
|
97,167
|
|
|
$
|
95,906
|
|
Average interest rate
|
1.65
|
%
|
|
1.89
|
%
|
|
2.06
|
%
|
|
2.13
|
%
|
|
—
|
%
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest rate swap on LIBOR based debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average interest rate (pay)
|
1.42
|
%
|
|
1.42
|
%
|
|
1.42
|
%
|
|
1.42
|
%
|
|
—
|
%
|
|
|
|
|
|||||||||
Average interest rate (receive)
|
0.96
|
%
|
|
1.55
|
%
|
|
1.98
|
%
|
|
2.14
|
%
|
|
—
|
%
|
|
|
|
|
|||||||||
Net/spread
|
(0.46
|
)%
|
|
0.13
|
%
|
|
0.56
|
%
|
|
0.72
|
%
|
|
—
|
%
|
|
|
|
|
|
|
Philip C. Mezey
|
W. Mark Schmitz
|
President and Chief Executive Officer
|
Executive Vice President and Chief Financial Officer
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Revenues
|
$
|
2,013,186
|
|
|
$
|
1,883,533
|
|
|
$
|
1,947,616
|
|
Cost of revenues
|
1,352,866
|
|
|
1,326,848
|
|
|
1,333,566
|
|
|||
Gross profit
|
660,320
|
|
|
556,685
|
|
|
614,050
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
||||||
Sales and marketing
|
158,883
|
|
|
161,380
|
|
|
182,503
|
|
|||
Product development
|
168,209
|
|
|
162,334
|
|
|
175,500
|
|
|||
General and administrative
|
162,815
|
|
|
155,715
|
|
|
162,466
|
|
|||
Amortization of intangible assets
|
25,112
|
|
|
31,673
|
|
|
43,619
|
|
|||
Restructuring
|
49,090
|
|
|
(7,263
|
)
|
|
49,482
|
|
|||
Total operating expenses
|
564,109
|
|
|
503,839
|
|
|
613,570
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
96,211
|
|
|
52,846
|
|
|
480
|
|
|||
Other income (expense)
|
|
|
|
|
|
||||||
Interest income
|
865
|
|
|
761
|
|
|
494
|
|
|||
Interest expense
|
(10,948
|
)
|
|
(12,289
|
)
|
|
(11,602
|
)
|
|||
Other income (expense), net
|
(1,501
|
)
|
|
(4,216
|
)
|
|
(7,637
|
)
|
|||
Total other income (expense)
|
(11,584
|
)
|
|
(15,744
|
)
|
|
(18,745
|
)
|
|||
|
|
|
|
|
|
||||||
Income (loss) before income taxes
|
84,627
|
|
|
37,102
|
|
|
(18,265
|
)
|
|||
Income tax provision
|
(49,574
|
)
|
|
(22,099
|
)
|
|
(4,035
|
)
|
|||
Net income (loss)
|
35,053
|
|
|
15,003
|
|
|
(22,300
|
)
|
|||
Net income attributable to noncontrolling interests
|
3,283
|
|
|
2,325
|
|
|
1,370
|
|
|||
Net income (loss) attributable to Itron, Inc.
|
$
|
31,770
|
|
|
$
|
12,678
|
|
|
$
|
(23,670
|
)
|
|
|
|
|
|
|
||||||
Earnings (loss) per common share - Basic
|
$
|
0.83
|
|
|
$
|
0.33
|
|
|
$
|
(0.60
|
)
|
Earnings (loss) per common share - Diluted
|
$
|
0.82
|
|
|
$
|
0.33
|
|
|
$
|
(0.60
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - Basic
|
38,207
|
|
|
38,224
|
|
|
39,184
|
|
|||
Weighted average common shares outstanding - Diluted
|
38,643
|
|
|
38,506
|
|
|
39,184
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net income (loss)
|
$
|
35,053
|
|
|
$
|
15,003
|
|
|
$
|
(22,300
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(24,977
|
)
|
|
(72,929
|
)
|
|
(89,297
|
)
|
|||
Net unrealized gain (loss) on derivative instruments, designated as cash flow hedges
|
(275
|
)
|
|
1,086
|
|
|
488
|
|
|||
Pension benefit obligation adjustment
|
(3,468
|
)
|
|
6,296
|
|
|
(24,947
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
(28,720
|
)
|
|
(65,547
|
)
|
|
(113,756
|
)
|
|||
|
|
|
|
|
|
||||||
Total comprehensive income (loss), net of tax
|
6,333
|
|
|
(50,544
|
)
|
|
(136,056
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to noncontrolling interest, net of tax:
|
3,283
|
|
|
2,325
|
|
|
1,370
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss) attributable to Itron, Inc.
|
$
|
3,050
|
|
|
$
|
(52,869
|
)
|
|
$
|
(137,426
|
)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
133,565
|
|
|
$
|
131,018
|
|
Accounts receivable, net
|
351,506
|
|
|
330,895
|
|
||
Inventories
|
163,049
|
|
|
190,465
|
|
||
Other current assets
|
84,346
|
|
|
106,562
|
|
||
Total current assets
|
732,466
|
|
|
758,940
|
|
||
|
|
|
|
||||
Property, plant, and equipment, net
|
176,458
|
|
|
190,256
|
|
||
Deferred tax assets, net
|
94,113
|
|
|
109,387
|
|
||
Other long-term assets
|
50,129
|
|
|
51,679
|
|
||
Intangible assets, net
|
72,151
|
|
|
101,932
|
|
||
Goodwill
|
452,494
|
|
|
468,122
|
|
||
Total assets
|
$
|
1,577,811
|
|
|
$
|
1,680,316
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
172,711
|
|
|
$
|
185,827
|
|
Other current liabilities
|
43,625
|
|
|
78,630
|
|
||
Wages and benefits payable
|
82,346
|
|
|
76,980
|
|
||
Taxes payable
|
10,451
|
|
|
14,859
|
|
||
Current portion of debt
|
14,063
|
|
|
11,250
|
|
||
Current portion of warranty
|
24,874
|
|
|
36,927
|
|
||
Unearned revenue
|
64,976
|
|
|
73,301
|
|
||
Total current liabilities
|
413,046
|
|
|
477,774
|
|
||
|
|
|
|
||||
Long-term debt
|
290,460
|
|
|
358,915
|
|
||
Long-term warranty
|
18,428
|
|
|
17,585
|
|
||
Pension benefit obligation
|
84,498
|
|
|
85,971
|
|
||
Deferred tax liabilities, net
|
3,073
|
|
|
1,723
|
|
||
Other long-term obligations
|
117,953
|
|
|
115,645
|
|
||
Total liabilities
|
927,458
|
|
|
1,057,613
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
||||
|
|
|
|
||||
Equity
|
|
|
|
||||
Preferred stock, no par value, 10 million shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, no par value, 75 million shares authorized, 38,317 and 37,906 shares issued and outstanding
|
1,270,467
|
|
|
1,246,671
|
|
||
Accumulated other comprehensive loss, net
|
(229,327
|
)
|
|
(200,607
|
)
|
||
Accumulated deficit
|
(409,536
|
)
|
|
(441,306
|
)
|
||
Total Itron, Inc. shareholders' equity
|
631,604
|
|
|
604,758
|
|
||
Noncontrolling interests
|
18,749
|
|
|
17,945
|
|
||
Total equity
|
650,353
|
|
|
622,703
|
|
||
Total liabilities and equity
|
$
|
1,577,811
|
|
|
$
|
1,680,316
|
|
|
Common Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Accumulated Deficit
|
|
Total Itron, Inc. Shareholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balances at January 1, 2014
|
39,149
|
|
|
$
|
1,290,629
|
|
|
$
|
(21,304
|
)
|
|
$
|
(430,314
|
)
|
|
$
|
839,011
|
|
|
$
|
17,735
|
|
|
$
|
856,746
|
|
Net income (loss)
|
|
|
|
|
|
|
(23,670
|
)
|
|
(23,670
|
)
|
|
1,370
|
|
|
(22,300
|
)
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
(113,756
|
)
|
|
|
|
(113,756
|
)
|
|
—
|
|
|
(113,756
|
)
|
|||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(1,564
|
)
|
|
(1,564
|
)
|
|||||||||||
Stock issues and repurchases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Options exercised
|
65
|
|
|
1,621
|
|
|
|
|
|
|
1,621
|
|
|
|
|
1,621
|
|
|||||||||
Restricted stock awards released
|
281
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||
Issuance of stock-based compensation awards
|
21
|
|
|
936
|
|
|
|
|
|
|
936
|
|
|
|
|
936
|
|
|||||||||
Employee stock purchase plan
|
61
|
|
|
2,247
|
|
|
|
|
|
|
2,247
|
|
|
|
|
2,247
|
|
|||||||||
Stock-based compensation expense
|
|
|
16,924
|
|
|
|
|
|
|
16,924
|
|
|
|
|
16,924
|
|
||||||||||
Employee stock plans income tax deficiencies
|
|
|
(2,647
|
)
|
|
|
|
|
|
(2,647
|
)
|
|
|
|
(2,647
|
)
|
||||||||||
Repurchase of common stock
|
(986
|
)
|
|
(39,665
|
)
|
|
|
|
|
|
(39,665
|
)
|
|
|
|
(39,665
|
)
|
|||||||||
Balances at December 31, 2014
|
38,591
|
|
|
$
|
1,270,045
|
|
|
$
|
(135,060
|
)
|
|
$
|
(453,984
|
)
|
|
$
|
681,001
|
|
|
$
|
17,541
|
|
|
$
|
698,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
12,678
|
|
|
12,678
|
|
|
2,325
|
|
|
15,003
|
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
(65,547
|
)
|
|
|
|
(65,547
|
)
|
|
—
|
|
|
(65,547
|
)
|
|||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(1,921
|
)
|
|
(1,921
|
)
|
|||||||||||
Stock issues and repurchases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Options exercised
|
24
|
|
|
853
|
|
|
|
|
|
|
853
|
|
|
|
|
853
|
|
|||||||||
Restricted stock awards released
|
296
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||
Issuance of stock-based compensation awards
|
20
|
|
|
706
|
|
|
|
|
|
|
706
|
|
|
|
|
706
|
|
|||||||||
Employee stock purchase plan
|
54
|
|
|
1,819
|
|
|
|
|
|
|
1,819
|
|
|
|
|
1,819
|
|
|||||||||
Stock-based compensation expense
|
|
|
13,384
|
|
|
|
|
|
|
13,384
|
|
|
|
|
13,384
|
|
||||||||||
Employee stock plans income tax deficiencies
|
|
|
(1,853
|
)
|
|
|
|
|
|
(1,853
|
)
|
|
|
|
(1,853
|
)
|
||||||||||
Repurchase of common stock
|
(1,079
|
)
|
|
(38,283
|
)
|
|
|
|
|
|
(38,283
|
)
|
|
|
|
(38,283
|
)
|
|||||||||
Balances at December 31, 2015
|
37,906
|
|
|
$
|
1,246,671
|
|
|
$
|
(200,607
|
)
|
|
$
|
(441,306
|
)
|
|
$
|
604,758
|
|
|
$
|
17,945
|
|
|
$
|
622,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
31,770
|
|
|
31,770
|
|
|
3,283
|
|
|
35,053
|
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
(28,720
|
)
|
|
|
|
(28,720
|
)
|
|
—
|
|
|
(28,720
|
)
|
|||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(2,479
|
)
|
|
(2,479
|
)
|
|||||||||||
Stock issues and repurchases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Options exercised
|
58
|
|
|
2,144
|
|
|
|
|
|
|
2,144
|
|
|
|
|
2,144
|
|
|||||||||
Restricted stock awards released
|
312
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||
Issuance of stock-based compensation awards
|
21
|
|
|
955
|
|
|
|
|
|
|
955
|
|
|
|
|
955
|
|
|||||||||
Employee stock purchase plan
|
20
|
|
|
747
|
|
|
|
|
|
|
747
|
|
|
|
|
747
|
|
|||||||||
Stock-based compensation expense
|
|
|
17,080
|
|
|
|
|
|
|
17,080
|
|
|
|
|
17,080
|
|
||||||||||
Excess tax benefits from employee stock plans
|
|
|
2,870
|
|
|
|
|
|
|
2,870
|
|
|
|
|
2,870
|
|
||||||||||
Balances at December 31, 2016
|
38,317
|
|
|
$
|
1,270,467
|
|
|
$
|
(229,327
|
)
|
|
$
|
(409,536
|
)
|
|
$
|
631,604
|
|
|
$
|
18,749
|
|
|
$
|
650,353
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
35,053
|
|
|
$
|
15,003
|
|
|
$
|
(22,300
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
68,318
|
|
|
75,993
|
|
|
98,139
|
|
|||
Stock-based compensation
|
18,035
|
|
|
14,089
|
|
|
17,860
|
|
|||
Amortization of prepaid debt fees
|
1,076
|
|
|
2,128
|
|
|
1,612
|
|
|||
Deferred taxes, net
|
13,790
|
|
|
1,488
|
|
|
(34,757
|
)
|
|||
Restructuring, non-cash
|
7,188
|
|
|
976
|
|
|
5,172
|
|
|||
Other adjustments, net
|
4,309
|
|
|
2,003
|
|
|
914
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(27,162
|
)
|
|
(9,009
|
)
|
|
(15,119
|
)
|
|||
Inventories
|
22,343
|
|
|
(52,737
|
)
|
|
7,208
|
|
|||
Other current assets
|
20,705
|
|
|
12,512
|
|
|
(10,947
|
)
|
|||
Other long-term assets
|
(339
|
)
|
|
(3,721
|
)
|
|
(12,540
|
)
|
|||
Accounts payables, other current liabilities, and taxes payable
|
(37,312
|
)
|
|
(7,060
|
)
|
|
56,158
|
|
|||
Wages and benefits payable
|
7,808
|
|
|
(10,866
|
)
|
|
7,502
|
|
|||
Unearned revenue
|
(25,810
|
)
|
|
11,943
|
|
|
30,584
|
|
|||
Warranty
|
(10,246
|
)
|
|
20,161
|
|
|
(7,297
|
)
|
|||
Other operating, net
|
18,086
|
|
|
447
|
|
|
10,784
|
|
|||
Net cash provided by operating activities
|
115,842
|
|
|
73,350
|
|
|
132,973
|
|
|||
|
|
|
|
|
|
||||||
Investing activities
|
|
|
|
|
|
||||||
Acquisitions of property, plant, and equipment
|
(43,543
|
)
|
|
(43,918
|
)
|
|
(44,495
|
)
|
|||
Business acquisitions, net of cash equivalents acquired
|
(951
|
)
|
|
(5,754
|
)
|
|
—
|
|
|||
Other investing, net
|
(3,034
|
)
|
|
721
|
|
|
2,999
|
|
|||
Net cash used in investing activities
|
(47,528
|
)
|
|
(48,951
|
)
|
|
(41,496
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities
|
|
|
|
|
|
||||||
Proceeds from borrowings
|
15,877
|
|
|
113,467
|
|
|
47,657
|
|
|||
Payments on debt
|
(79,119
|
)
|
|
(62,998
|
)
|
|
(102,438
|
)
|
|||
Issuance of common stock
|
2,891
|
|
|
2,663
|
|
|
3,647
|
|
|||
Repurchase of common stock
|
—
|
|
|
(38,283
|
)
|
|
(39,665
|
)
|
|||
Other financing, net
|
(2,672
|
)
|
|
(7,109
|
)
|
|
(1,078
|
)
|
|||
Net cash provided by (used in) financing activities
|
(63,023
|
)
|
|
7,740
|
|
|
(91,877
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of foreign exchange rate changes on cash and cash equivalents
|
(2,744
|
)
|
|
(13,492
|
)
|
|
(12,034
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
2,547
|
|
|
18,647
|
|
|
(12,434
|
)
|
|||
Cash and cash equivalents at beginning of period
|
131,018
|
|
|
112,371
|
|
|
124,805
|
|
|||
Cash and cash equivalents at end of period
|
$
|
133,565
|
|
|
$
|
131,018
|
|
|
$
|
112,371
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Income taxes, net
|
$
|
24,287
|
|
|
$
|
29,189
|
|
|
$
|
18,222
|
|
Interest
|
9,921
|
|
|
10,198
|
|
|
9,912
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Net income (loss) available to common shareholders
|
$
|
31,770
|
|
|
$
|
12,678
|
|
|
$
|
(23,670
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding - Basic
|
38,207
|
|
|
38,224
|
|
|
39,184
|
|
|||
Dilutive effect of stock-based awards
|
436
|
|
|
282
|
|
|
—
|
|
|||
Weighted average common shares outstanding - Diluted
|
38,643
|
|
|
38,506
|
|
|
39,184
|
|
|||
Earnings (loss) per common share - Basic
|
$
|
0.83
|
|
|
$
|
0.33
|
|
|
$
|
(0.60
|
)
|
Earnings (loss) per common share - Diluted
|
$
|
0.82
|
|
|
$
|
0.33
|
|
|
$
|
(0.60
|
)
|
Accounts receivable, net
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Trade receivables (net of allowance of $3,320
and $5,949)
|
$
|
299,870
|
|
|
$
|
298,550
|
|
Unbilled receivables
|
51,636
|
|
|
32,345
|
|
||
Total accounts receivable, net
|
$
|
351,506
|
|
|
$
|
330,895
|
|
Allowance for doubtful account activity
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Beginning balance
|
$
|
5,949
|
|
|
$
|
6,195
|
|
Provision for doubtful accounts, net
|
60
|
|
|
1,025
|
|
||
Accounts written-off
|
(2,422
|
)
|
|
(549
|
)
|
||
Effects of change in exchange rates
|
(267
|
)
|
|
(722
|
)
|
||
Ending balance
|
$
|
3,320
|
|
|
$
|
5,949
|
|
Inventories
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Materials
|
$
|
103,274
|
|
|
$
|
111,191
|
|
Work in process
|
7,925
|
|
|
9,400
|
|
||
Finished goods
|
51,850
|
|
|
69,874
|
|
||
Total inventories
|
$
|
163,049
|
|
|
$
|
190,465
|
|
Property, plant, and equipment, net
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Machinery and equipment
|
$
|
279,746
|
|
|
$
|
289,015
|
|
Computers and software
|
98,125
|
|
|
104,310
|
|
||
Buildings, furniture, and improvements
|
122,680
|
|
|
127,531
|
|
||
Land
|
17,179
|
|
|
19,882
|
|
||
Construction in progress, including purchased equipment
|
29,358
|
|
|
32,639
|
|
||
Total cost
|
547,088
|
|
|
573,377
|
|
||
Accumulated depreciation
|
(370,630
|
)
|
|
(383,121
|
)
|
||
Property, plant, and equipment, net
|
$
|
176,458
|
|
|
$
|
190,256
|
|
Depreciation expense
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Depreciation expense
|
$
|
43,206
|
|
|
$
|
44,320
|
|
|
$
|
54,435
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Core-developed technology
|
$
|
372,568
|
|
|
$
|
(354,878
|
)
|
|
$
|
17,690
|
|
|
$
|
388,981
|
|
|
$
|
(358,092
|
)
|
|
$
|
30,889
|
|
Customer contracts and relationships
|
224,467
|
|
|
(170,056
|
)
|
|
54,411
|
|
|
238,379
|
|
|
(168,885
|
)
|
|
69,494
|
|
||||||
Trademarks and trade names
|
61,785
|
|
|
(61,766
|
)
|
|
19
|
|
|
64,069
|
|
|
(62,571
|
)
|
|
1,498
|
|
||||||
Other
|
11,076
|
|
|
(11,045
|
)
|
|
31
|
|
|
11,078
|
|
|
(11,027
|
)
|
|
51
|
|
||||||
Total intangible assets
|
$
|
669,896
|
|
|
$
|
(597,745
|
)
|
|
$
|
72,151
|
|
|
$
|
702,507
|
|
|
$
|
(600,575
|
)
|
|
$
|
101,932
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Beginning balance, intangible assets, gross
|
$
|
702,507
|
|
|
$
|
748,148
|
|
Intangible assets acquired
|
—
|
|
|
4,827
|
|
||
Intangible assets impaired
|
—
|
|
|
(497
|
)
|
||
Effect of change in exchange rates
|
(32,611
|
)
|
|
(49,971
|
)
|
||
Ending balance, intangible assets, gross
|
$
|
669,896
|
|
|
$
|
702,507
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Amortization expense
|
$
|
25,112
|
|
|
$
|
31,673
|
|
|
$
|
43,619
|
|
Year Ending December 31,
|
|
Estimated Annual Amortization
|
||
|
|
(in thousands)
|
||
2017
|
|
$
|
17,914
|
|
2018
|
|
12,383
|
|
|
2019
|
|
9,695
|
|
|
2020
|
|
7,866
|
|
|
2021
|
|
6,845
|
|
|
Beyond 2021
|
|
17,448
|
|
|
Total intangible assets subject to amortization
|
|
$
|
72,151
|
|
|
Electricity
|
|
Gas
|
|
Water
|
|
Total Company
|
||||||||
|
(in thousands)
|
||||||||||||||
Goodwill balance at January 1, 2015
|
|
|
|
|
|
|
|
||||||||
Goodwill before impairment
|
$
|
449,668
|
|
|
$
|
359,485
|
|
|
$
|
382,655
|
|
|
$
|
1,191,808
|
|
Accumulated impairment losses
|
(393,981
|
)
|
|
—
|
|
|
(297,007
|
)
|
|
(690,988
|
)
|
||||
Goodwill, net
|
55,687
|
|
|
359,485
|
|
|
85,648
|
|
|
500,820
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Goodwill acquired
|
—
|
|
|
—
|
|
|
4,684
|
|
|
4,684
|
|
||||
Effect of change in exchange rates
|
(2,954
|
)
|
|
(28,049
|
)
|
|
(6,379
|
)
|
|
(37,382
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Goodwill balance at December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Goodwill before impairment
|
414,910
|
|
|
331,436
|
|
|
350,314
|
|
|
1,096,660
|
|
||||
Accumulated impairment losses
|
(362,177
|
)
|
|
—
|
|
|
(266,361
|
)
|
|
(628,538
|
)
|
||||
Goodwill, net
|
52,733
|
|
|
331,436
|
|
|
83,953
|
|
|
468,122
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Effect of change in exchange rates
|
(1,360
|
)
|
|
(11,523
|
)
|
|
(2,745
|
)
|
|
(15,628
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Goodwill balance at December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill before impairment
|
400,299
|
|
|
319,913
|
|
|
334,505
|
|
|
1,054,717
|
|
||||
Accumulated impairment losses
|
(348,926
|
)
|
|
—
|
|
|
(253,297
|
)
|
|
(602,223
|
)
|
||||
Goodwill, net
|
$
|
51,373
|
|
|
$
|
319,913
|
|
|
$
|
81,208
|
|
|
$
|
452,494
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Credit Facilities
|
|
|
|
||||
USD denominated term loan
|
$
|
208,125
|
|
|
$
|
219,375
|
|
Multicurrency revolving line of credit
|
97,167
|
|
|
151,837
|
|
||
Total debt
|
305,292
|
|
|
371,212
|
|
||
Less: current portion of debt
|
14,063
|
|
|
11,250
|
|
||
Less: unamortized prepaid debt fees - term loan
|
769
|
|
|
1,047
|
|
||
Long-term debt
|
$
|
290,460
|
|
|
$
|
358,915
|
|
Year Ending December 31,
|
|
Minimum Payments
|
||
|
|
(in thousands)
|
||
2017
|
|
$
|
14,063
|
|
2018
|
|
19,687
|
|
|
2019
|
|
22,500
|
|
|
2020
|
|
249,042
|
|
|
2021
|
|
—
|
|
|
Total minimum payments on debt
|
|
$
|
305,292
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Term loan
|
$
|
11,250
|
|
|
$
|
13,125
|
|
|
$
|
26,250
|
|
Multicurrency revolving line of credit
|
67,869
|
|
|
49,873
|
|
|
76,188
|
|
|||
Total credit facility repayments
|
$
|
79,119
|
|
|
$
|
62,998
|
|
|
$
|
102,438
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net unrealized gain (loss) on hedging instruments at January 1,
|
$
|
(14,062
|
)
|
|
$
|
(15,148
|
)
|
|
$
|
(15,636
|
)
|
Unrealized gain (loss) on derivative instruments
|
(1,087
|
)
|
|
76
|
|
|
(566
|
)
|
|||
Realized (gains) losses reclassified into net income (loss)
|
812
|
|
|
1,010
|
|
|
1,054
|
|
|||
Net unrealized gain (loss) on hedging instruments at December 31,
|
$
|
(14,337
|
)
|
|
$
|
(14,062
|
)
|
|
$
|
(15,148
|
)
|
Offsetting of Derivative Assets
|
|
|
|
|
|
||||||||||
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets
|
|
|
||||||||||
|
Gross Amounts of Recognized Assets Presented in the Consolidated Balance Sheets
|
|
Derivative Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||
|
(in thousands)
|
||||||||||||||
December 31, 2016
|
$
|
2,945
|
|
|
$
|
(1,322
|
)
|
|
$
|
—
|
|
|
$
|
1,623
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
$
|
3,082
|
|
|
$
|
(565
|
)
|
|
$
|
—
|
|
|
$
|
2,517
|
|
Offsetting of Derivative Liabilities
|
|
|
|
|
|
||||||||||
|
|
|
Gross Amounts Not Offset in the Consolidated Balance Sheets
|
|
|
||||||||||
|
Gross Amounts of Recognized Liabilities Presented in the Consolidated Balance Sheets
|
|
Derivative Financial Instruments
|
|
Cash Collateral Pledged
|
|
Net Amount
|
||||||||
|
(in thousands)
|
||||||||||||||
December 31, 2016
|
$
|
1,383
|
|
|
$
|
(1,322
|
)
|
|
$
|
—
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2015
|
$
|
967
|
|
|
$
|
(565
|
)
|
|
$
|
—
|
|
|
$
|
402
|
|
Derivatives in ASC 815 Cash Flow Hedging Relationships
|
|
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
|
|
Loss Reclassified from AOCI into Income (Effective Portion)
|
|
Loss Recognized in Income on Derivative (Ineffective Portion)
|
||||||||||||||||||||||||||||||||||
Location
|
|
Amount
|
|
Location
|
|
Amount
|
||||||||||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||||||||
|
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
|
(in thousands)
|
||||||||||||||||||||||||||||||
Interest rate swap contracts
|
|
$
|
(1,163
|
)
|
|
$
|
367
|
|
|
$
|
(915
|
)
|
|
Interest expense
|
|
$
|
(1,296
|
)
|
|
$
|
(1,639
|
)
|
|
$
|
(1,704
|
)
|
|
Interest expense
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate cap contracts
|
|
$
|
(605
|
)
|
|
$
|
(244
|
)
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
(27
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivatives Not Designated as Hedging Instrument under ASC 815
|
|
Location
|
|
Gain (Loss) Recognized in Income on Derivative
|
||||||||||
|
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
(in thousands)
|
||||||||||
Foreign exchange forward contracts
|
|
Other income (expense), net
|
|
$
|
537
|
|
|
$
|
(3,145
|
)
|
|
$
|
(5,248
|
)
|
Interest rate cap contracts
|
|
Interest expense
|
|
$
|
129
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at January 1,
|
$
|
98,767
|
|
|
$
|
116,178
|
|
Service cost
|
3,472
|
|
|
4,572
|
|
||
Interest cost
|
2,573
|
|
|
2,380
|
|
||
Actuarial (gain) loss
|
7,733
|
|
|
(5,211
|
)
|
||
Benefits paid
|
(9,481
|
)
|
|
(4,382
|
)
|
||
Foreign currency exchange rate changes
|
(4,386
|
)
|
|
(12,190
|
)
|
||
Curtailment
|
14
|
|
|
(1,683
|
)
|
||
Settlement
|
(1,431
|
)
|
|
—
|
|
||
Other
|
—
|
|
|
(897
|
)
|
||
Benefit obligation at December 31,
|
$
|
97,261
|
|
|
$
|
98,767
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at January 1,
|
$
|
9,662
|
|
|
$
|
10,761
|
|
Actual return on plan assets
|
604
|
|
|
159
|
|
||
Company contributions
|
348
|
|
|
671
|
|
||
Benefits paid
|
(370
|
)
|
|
(308
|
)
|
||
Foreign currency exchange rate changes
|
(29
|
)
|
|
(1,621
|
)
|
||
Fair value of plan assets at December 31,
|
10,215
|
|
|
9,662
|
|
||
Net pension benefit obligation at fair value
|
$
|
87,046
|
|
|
$
|
89,105
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Plan assets in other long-term assets
|
$
|
654
|
|
|
$
|
359
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Current portion of pension benefit obligation in wages and benefits payable
|
3,202
|
|
|
3,493
|
|
||
Long-term portion of pension benefit obligation
|
84,498
|
|
|
85,971
|
|
||
|
|
|
|
||||
Pension benefit obligation, net
|
$
|
87,046
|
|
|
$
|
89,105
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Net actuarial loss
|
$
|
26,767
|
|
|
$
|
24,687
|
|
Net prior service cost
|
619
|
|
|
706
|
|
||
Amount included in AOCI
|
$
|
27,386
|
|
|
$
|
25,393
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net actuarial (gain) loss
|
$
|
6,316
|
|
|
$
|
(6,894
|
)
|
|
$
|
25,838
|
|
Settlement/curtailment loss
|
(1,343
|
)
|
|
(336
|
)
|
|
(55
|
)
|
|||
Plan asset (gain) loss
|
(64
|
)
|
|
343
|
|
|
129
|
|
|||
Amortization of net actuarial loss
|
(1,351
|
)
|
|
(1,979
|
)
|
|
(572
|
)
|
|||
Amortization of prior service cost
|
(58
|
)
|
|
(59
|
)
|
|
(138
|
)
|
|||
Other
|
4
|
|
|
(46
|
)
|
|
68
|
|
|||
Other comprehensive (income) loss
|
$
|
3,504
|
|
|
$
|
(8,971
|
)
|
|
$
|
25,270
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Service cost
|
$
|
3,472
|
|
|
$
|
4,572
|
|
|
$
|
3,559
|
|
Interest cost
|
2,573
|
|
|
2,380
|
|
|
3,476
|
|
|||
Expected return on plan assets
|
(540
|
)
|
|
(502
|
)
|
|
(619
|
)
|
|||
Amortization of prior service costs
|
58
|
|
|
59
|
|
|
138
|
|
|||
Amortization of actuarial net loss
|
1,351
|
|
|
1,979
|
|
|
572
|
|
|||
Settlements and other
|
1,340
|
|
|
420
|
|
|
55
|
|
|||
Net periodic pension benefit costs
|
$
|
8,254
|
|
|
$
|
8,908
|
|
|
$
|
7,181
|
|
|
At and For The Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Actuarial assumptions used to determine benefit obligations at end of period:
|
|
|
|
|
|
|||
Discount rate
|
2.18
|
%
|
|
2.59
|
%
|
|
2.36
|
%
|
Expected annual rate of compensation increase
|
3.65
|
%
|
|
3.60
|
%
|
|
3.37
|
%
|
Actuarial assumptions used to determine net periodic benefit cost for the period:
|
|
|
|
|
|
|||
Discount rate
|
2.59
|
%
|
|
2.36
|
%
|
|
3.76
|
%
|
Expected rate of return on plan assets
|
5.29
|
%
|
|
5.45
|
%
|
|
5.40
|
%
|
Expected annual rate of compensation increase
|
3.60
|
%
|
|
3.37
|
%
|
|
3.33
|
%
|
|
At December 31,
|
||||||
2016
|
|
2015
|
|||||
|
(in thousands)
|
||||||
Projected benefit obligation
|
$
|
94,110
|
|
|
$
|
95,814
|
|
Accumulated benefit obligation
|
84,448
|
|
|
86,534
|
|
||
Fair value of plan assets
|
6,410
|
|
|
6,502
|
|
|
Total
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||
|
(in thousands)
|
||||||||||
|
December 31, 2016
|
||||||||||
Cash
|
$
|
783
|
|
|
$
|
783
|
|
|
$
|
—
|
|
Insurance funds
|
7,011
|
|
|
—
|
|
|
7,011
|
|
|||
Other securities
|
2,421
|
|
|
—
|
|
|
2,421
|
|
|||
Total fair value of plan assets
|
$
|
10,215
|
|
|
$
|
783
|
|
|
$
|
9,432
|
|
|
|
|
|
|
|
||||||
|
December 31, 2015
|
||||||||||
Cash
|
$
|
795
|
|
|
$
|
795
|
|
|
$
|
—
|
|
Insurance funds
|
7,089
|
|
|
—
|
|
|
7,089
|
|
|||
Other securities
|
1,778
|
|
|
—
|
|
|
1,778
|
|
|||
Total fair value of plan assets
|
$
|
9,662
|
|
|
$
|
795
|
|
|
$
|
8,867
|
|
|
Balance at January 1, 2016
|
|
Net Realized and Unrealized Gains
|
|
Net Purchases, Issuances, Settlements, and Other
|
|
Net Transfers Into Level 3
|
|
Effect of Foreign Currency
|
|
Balance at December 31, 2016
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Insurance funds
|
$
|
7,089
|
|
|
$
|
235
|
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
(367
|
)
|
|
$
|
7,011
|
|
Other securities
|
1,778
|
|
|
405
|
|
|
(84
|
)
|
|
—
|
|
|
322
|
|
|
2,421
|
|
||||||
Total
|
$
|
8,867
|
|
|
$
|
640
|
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
(45
|
)
|
|
$
|
9,432
|
|
|
Balance at January 1, 2015
|
|
Net Realized and Unrealized Gains
|
|
Net Purchases, Issuances, Settlements, and Other
|
|
Net Transfers Into Level 3
|
|
Effect of Foreign Currency
|
|
Balance at December 31, 2015
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Insurance funds
|
$
|
7,440
|
|
|
$
|
49
|
|
|
$
|
372
|
|
|
$
|
—
|
|
|
$
|
(772
|
)
|
|
$
|
7,089
|
|
Other securities
|
2,595
|
|
|
44
|
|
|
(82
|
)
|
|
—
|
|
|
(779
|
)
|
|
1,778
|
|
||||||
Total
|
$
|
10,035
|
|
|
$
|
93
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
(1,551
|
)
|
|
$
|
8,867
|
|
Year Ending December 31,
|
|
Estimated Annual Benefit Payments
|
|||
|
|
(in thousands)
|
|||
2017
|
|
$
|
3,655
|
|
|
2018
|
|
2,662
|
|
||
2019
|
|
2,737
|
|
||
2020
|
|
3,285
|
|
||
2021
|
|
3,918
|
|
||
2022-2026
|
|
22,929
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Stock options
|
$
|
2,357
|
|
|
$
|
2,648
|
|
|
$
|
2,333
|
|
Restricted stock units
|
14,723
|
|
|
10,735
|
|
|
14,591
|
|
|||
Unrestricted stock awards
|
955
|
|
|
706
|
|
|
936
|
|
|||
Phantom stock units
|
1,077
|
|
|
—
|
|
|
—
|
|
|||
Total stock-based compensation
|
$
|
19,112
|
|
|
$
|
14,089
|
|
|
$
|
17,860
|
|
|
|
|
|
|
|
||||||
Related tax benefit
|
$
|
4,927
|
|
|
$
|
4,228
|
|
|
$
|
4,994
|
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Expected volatility
|
33.5
|
%
|
|
34.3
|
%
|
|
39.3
|
%
|
Risk-free interest rate
|
1.3
|
%
|
|
1.7
|
%
|
|
1.7
|
%
|
Expected term (years)
|
5.5
|
|
|
5.5
|
|
|
5.5
|
|
|
Shares
|
|
Weighted Average Exercise Price per Share
|
|
Weighted Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value
(1)
|
|
Weighted Average Grant Date Fair Value
|
|||||||
|
(in thousands)
|
|
|
|
(years)
|
|
(in thousands)
|
|
|
|||||||
Outstanding, January 1, 2014
|
1,180
|
|
|
$
|
54.79
|
|
|
4.6
|
|
$
|
1,300
|
|
|
|
||
Granted
|
160
|
|
|
35.65
|
|
|
|
|
|
|
$
|
13.65
|
|
|||
Exercised
|
(67
|
)
|
|
28.03
|
|
|
|
|
826
|
|
|
|
||||
Forfeited
|
(7
|
)
|
|
44.06
|
|
|
|
|
|
|
|
|||||
Expired
|
(143
|
)
|
|
68.97
|
|
|
|
|
|
|
|
|||||
Outstanding, December 31, 2014
|
1,123
|
|
|
$
|
51.90
|
|
|
4.4
|
|
$
|
1,676
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Granted
|
291
|
|
|
$
|
35.25
|
|
|
|
|
|
|
$
|
12.09
|
|
||
Exercised
|
(24
|
)
|
|
36.05
|
|
|
|
|
$
|
26
|
|
|
|
|||
Forfeited
|
(17
|
)
|
|
37.47
|
|
|
|
|
|
|
|
|||||
Expired
|
(193
|
)
|
|
52.17
|
|
|
|
|
|
|
|
|||||
Outstanding, December 31, 2015
|
1,180
|
|
|
$
|
48.31
|
|
|
5.7
|
|
$
|
405
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Granted
|
191
|
|
|
$
|
40.40
|
|
|
|
|
|
|
$
|
13.27
|
|
||
Exercised
|
(58
|
)
|
|
37.00
|
|
|
|
|
$
|
742
|
|
|
|
|||
Forfeited
|
(36
|
)
|
|
35.29
|
|
|
|
|
|
|
|
|||||
Expired
|
(318
|
)
|
|
55.13
|
|
|
|
|
|
|
|
|||||
Outstanding, December 31, 2016
|
959
|
|
|
$
|
45.64
|
|
|
6.6
|
|
$
|
19,125
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Exercisable, December 31, 2016
|
562
|
|
|
$
|
51.18
|
|
|
5.1
|
|
$
|
9,181
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Expected to vest, December 31, 2016
|
385
|
|
|
$
|
37.76
|
|
|
8.7
|
|
$
|
9,658
|
|
|
|
(1)
|
The aggregate intrinsic value of outstanding stock options represents amounts that would have been received by the optionees had all in- the-money options been exercised on that date. Specifically, it is the amount by which the market value of Itron’s stock exceeded the exercise price of the outstanding in-the-money options before applicable income taxes, based on our closing stock price on the last business day of the period. The aggregate intrinsic value of stock options exercised during the period is calculated based on our stock price at the date of exercise.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
|||
Expected volatility
|
30.0
|
%
|
|
30.1
|
%
|
|
32.3
|
%
|
|||
Risk-free interest rate
|
0.7
|
%
|
|
0.7
|
%
|
|
0.4
|
%
|
|||
Expected term (years)
|
1.8
|
|
|
2.1
|
|
|
2.0
|
|
|||
|
|
|
|
|
|
||||||
Weighted-average grant date fair value
|
$
|
44.92
|
|
|
$
|
33.48
|
|
|
$
|
35.15
|
|
|
Number of Restricted Stock Units
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value
(1)
|
|||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|||||
Outstanding, January 1, 2014
|
658
|
|
|
|
|
|
||||
Granted
(2)
|
350
|
|
|
$
|
35.74
|
|
|
|
||
Released
|
(291
|
)
|
|
|
|
$
|
14,402
|
|
||
Forfeited
|
(35
|
)
|
|
|
|
|
||||
Outstanding, December 31, 2014
|
682
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Granted
(3)
|
434
|
|
|
$
|
35.09
|
|
|
|
||
Released
|
(296
|
)
|
|
|
|
$
|
12,204
|
|
||
Forfeited
|
(64
|
)
|
|
|
|
|
||||
Outstanding, December 31, 2015
|
756
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Granted
(4)
|
306
|
|
|
$
|
41.58
|
|
|
|
||
Released
|
(312
|
)
|
|
|
|
$
|
11,944
|
|
||
Forfeited
|
(82
|
)
|
|
|
|
|
||||
Outstanding, December 31, 2016
|
668
|
|
|
|
|
|
||||
|
|
|
|
|
|
|||||
Vested but not released, December 31, 2016
|
115
|
|
|
|
|
$
|
7,242
|
|
||
|
|
|
|
|
|
|||||
Expected to vest, December 31, 2016
|
477
|
|
|
|
|
$
|
30,006
|
|
(1)
|
The aggregate intrinsic value is the market value of the stock, before applicable income taxes, based on the closing price on the stock release dates or at the end of the period for restricted stock units expected to vest.
|
(2)
|
Restricted stock units include
14,433
shares for the 2-year award under the 2013 Performance Award Agreement, which are eligible for distribution at December 31, 2014.
|
(3)
|
Restricted stock units include
15,648
shares for the 3-year award under the 2013 Performance Award Agreement, which are eligible for distribution at December 31, 2015.
|
(4)
|
Restricted stock units include
110,259
shares for the 3-year award under the 2014 Performance Award Agreement, which are eligible for distribution at December 31, 2016.
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Shares of unrestricted stock granted
|
21
|
|
|
20
|
|
|
24
|
|
|||
|
|
|
|
|
|
||||||
Weighted average grant date fair value per share
|
$
|
44.94
|
|
|
$
|
35.01
|
|
|
$
|
39.06
|
|
|
Number of Phantom Stock Units
|
|
Weighted
Average Grant
Date Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Outstanding, January 1, 2016
|
—
|
|
|
|
||
Granted
|
63
|
|
|
$
|
40.11
|
|
Forfeited
|
(1
|
)
|
|
|
||
Outstanding, December 31, 2016
|
62
|
|
|
|
||
|
|
|
|
|||
Expected to vest, December 31, 2016
|
57
|
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
|
(in thousands)
|
|||||||
Shares of stock sold to employees
(1)
|
20
|
|
|
54
|
|
|
61
|
|
(1)
|
Stock sold to employees during each fiscal quarter under the ESPP is associated with the offering period ending on the last day of the previous fiscal quarter.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Defined contribution plans expense
|
$
|
7,941
|
|
|
$
|
6,579
|
|
|
$
|
7,097
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Bonus and profit sharing plans and award expense
|
$
|
43,377
|
|
|
$
|
14,192
|
|
|
$
|
34,989
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
20,490
|
|
|
$
|
5,033
|
|
|
$
|
17,749
|
|
State and local
|
2,708
|
|
|
1,633
|
|
|
775
|
|
|||
Foreign
|
12,586
|
|
|
13,945
|
|
|
20,269
|
|
|||
Total current
|
35,784
|
|
|
20,611
|
|
|
38,793
|
|
|||
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
10,805
|
|
|
3,951
|
|
|
(82,186
|
)
|
|||
State and local
|
1,160
|
|
|
(972
|
)
|
|
(979
|
)
|
|||
Foreign
|
(24,815
|
)
|
|
(41,893
|
)
|
|
(51,646
|
)
|
|||
Total deferred
|
(12,850
|
)
|
|
(38,914
|
)
|
|
(134,811
|
)
|
|||
|
|
|
|
|
|
||||||
Change in valuation allowance
|
26,640
|
|
|
40,402
|
|
|
100,053
|
|
|||
Total provision for income taxes
|
$
|
49,574
|
|
|
$
|
22,099
|
|
|
$
|
4,035
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Income (loss) before income taxes
|
|
|
|
|
|
||||||
Domestic
|
$
|
196,750
|
|
|
$
|
115,526
|
|
|
$
|
86,605
|
|
Foreign
|
(112,123
|
)
|
|
(78,424
|
)
|
|
(104,870
|
)
|
|||
Total income (loss) before income taxes
|
$
|
84,627
|
|
|
$
|
37,102
|
|
|
$
|
(18,265
|
)
|
|
|
|
|
|
|
||||||
Expected federal income tax provision (benefit)
|
$
|
29,619
|
|
|
$
|
12,986
|
|
|
$
|
(6,393
|
)
|
Goodwill impairment
|
—
|
|
|
—
|
|
|
119
|
|
|||
Change in valuation allowance
|
26,640
|
|
|
40,402
|
|
|
100,053
|
|
|||
Stock-based compensation
|
2,762
|
|
|
939
|
|
|
1,255
|
|
|||
Foreign earnings
|
(12,584
|
)
|
|
(33,364
|
)
|
|
(31,544
|
)
|
|||
Tax credits
|
(7,471
|
)
|
|
(5,257
|
)
|
|
(91,148
|
)
|
|||
Uncertain tax positions, including interest and penalties
|
3,817
|
|
|
4,274
|
|
|
1,519
|
|
|||
Change in tax rates
|
67
|
|
|
312
|
|
|
(20
|
)
|
|||
State income tax provision (benefit), net of federal effect
|
2,806
|
|
|
(14
|
)
|
|
(1,235
|
)
|
|||
U.S. tax provision on foreign earnings
|
997
|
|
|
203
|
|
|
31,309
|
|
|||
Domestic production activities deduction
|
(2,424
|
)
|
|
(1,100
|
)
|
|
(2,312
|
)
|
|||
Local foreign taxes
|
2,914
|
|
|
1,450
|
|
|
2,295
|
|
|||
Other, net
|
2,431
|
|
|
1,268
|
|
|
137
|
|
|||
Total provision for income taxes
|
$
|
49,574
|
|
|
$
|
22,099
|
|
|
$
|
4,035
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Deferred tax assets
|
|
|
|
||||
Loss carryforwards
(1)
|
$
|
194,381
|
|
|
$
|
190,545
|
|
Tax credits
(2)
|
53,323
|
|
|
52,131
|
|
||
Accrued expenses
|
36,336
|
|
|
33,546
|
|
||
Pension plan benefits expense
|
16,822
|
|
|
16,232
|
|
||
Warranty reserves
|
21,306
|
|
|
25,129
|
|
||
Depreciation and amortization
|
15,698
|
|
|
21,499
|
|
||
Equity compensation
|
6,924
|
|
|
9,303
|
|
||
Inventory valuation
|
3,086
|
|
|
4,068
|
|
||
Deferred revenue
|
4,896
|
|
|
9,097
|
|
||
Tax effect of accumulated translation
|
—
|
|
|
291
|
|
||
Other deferred tax assets, net
|
13,621
|
|
|
11,770
|
|
||
Total deferred tax assets
|
366,393
|
|
|
373,611
|
|
||
Valuation allowance
|
(249,560
|
)
|
|
(235,339
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
116,833
|
|
|
138,272
|
|
||
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
||||
Depreciation and amortization
|
(19,995
|
)
|
|
(27,000
|
)
|
||
Tax effect of accumulated translation
|
(100
|
)
|
|
—
|
|
||
Other deferred tax liabilities, net
|
(5,698
|
)
|
|
(3,608
|
)
|
||
Total deferred tax liabilities
|
(25,793
|
)
|
|
(30,608
|
)
|
||
Net deferred tax assets
|
$
|
91,040
|
|
|
$
|
107,664
|
|
(1)
|
For tax return purposes at December 31, 2016, we had U.S. federal loss carryforwards of
$13.2 million
that expire during the years 2020 and 2021. At December 31, 2016, we have net operating loss carryforwards in Luxembourg of
$483.5 million
that can be carried forward indefinitely, offset by a full valuation allowance. The remaining portion of the loss carryforwards are composed primarily of losses in various other state and foreign jurisdictions. The majority of these losses can be carried forward indefinitely. At December 31, 2016, there was a valuation allowance of
$249.6 million
primarily associated with foreign loss carryforwards and foreign tax credit carryforwards (discussed below).
|
(2)
|
For tax return purposes at December 31, 2016, we had: (1) U.S. general business credits of
$15.3 million
, which begin to expire in 2022; (2) U.S. alternative minimum tax credits of
$2.5 million
that can be carried forward indefinitely; (3) U.S. foreign tax credits of
$49.4 million
, which begin to expire in 2024; and (4) state tax credits of
$10.0 million
, which begin to expire in 2017. At December 31, 2016, there was a valuation allowance of
$32.3 million
associated with foreign tax credit carryforwards, and
$6.0 million
associated with state tax credit carryforwards.
|
|
(in thousands)
|
||
Unrecognized tax benefits at January 1, 2014
|
$
|
28,615
|
|
Gross increase to positions in prior years
|
2,749
|
|
|
Gross decrease to positions in prior years
|
(1,641
|
)
|
|
Gross increases to current period tax positions
|
3,008
|
|
|
Audit settlements
|
—
|
|
|
Decrease related to lapsing of statute of limitations
|
(1,715
|
)
|
|
Effect of change in exchange rates
|
(2,870
|
)
|
|
Unrecognized tax benefits at December 31, 2014
|
$
|
28,146
|
|
|
|
||
Gross increase to positions in prior years
|
6,461
|
|
|
Gross decrease to positions in prior years
|
(2,512
|
)
|
|
Gross increases to current period tax positions
|
25,741
|
|
|
Audit settlements
|
—
|
|
|
Decrease related to lapsing of statute of limitations
|
(908
|
)
|
|
Effect of change in exchange rates
|
(2,048
|
)
|
|
Unrecognized tax benefits at December 31, 2015
|
$
|
54,880
|
|
|
|
||
Gross increase to positions in prior years
|
1,164
|
|
|
Gross decrease to positions in prior years
|
(612
|
)
|
|
Gross increases to current period tax positions
|
5,071
|
|
|
Audit settlements
|
(1,116
|
)
|
|
Decrease related to lapsing of statute of limitations
|
(860
|
)
|
|
Effect of change in exchange rates
|
(901
|
)
|
|
Unrecognized tax benefits at December 31, 2016
|
$
|
57,626
|
|
|
At December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate
|
$
|
56,411
|
|
|
$
|
53,602
|
|
|
$
|
26,980
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Net interest and penalties expense
|
$
|
193
|
|
|
$
|
880
|
|
|
$
|
469
|
|
Tax Jurisdiction
|
|
Years Subject to Audit
|
U.S. federal
|
|
Subsequent to 1999
|
France
|
|
Subsequent to 2009
|
Germany
|
|
Subsequent to 2010
|
Brazil
|
|
Subsequent to 2010
|
United Kingdom
|
|
Subsequent to 2012
|
Italy
|
|
Subsequent to 2007
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Rental expense
|
$
|
14,232
|
|
|
$
|
15,524
|
|
|
$
|
19,178
|
|
Year Ending December 31,
|
|
Minimum Payments
|
||
|
|
(in thousands)
|
||
2017
|
|
$
|
13,128
|
|
2018
|
|
12,238
|
|
|
2019
|
|
9,152
|
|
|
2020
|
|
6,026
|
|
|
2021
|
|
5,363
|
|
|
Beyond 2021
|
|
8,510
|
|
|
Future minimum lease payments
|
|
$
|
54,417
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Credit facilities
(1)
|
|
|
|
||||
Multicurrency revolving line of credit
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Long-term borrowings
|
(97,167
|
)
|
|
(151,837
|
)
|
||
Standby LOCs issued and outstanding
|
(46,103
|
)
|
|
(46,574
|
)
|
||
|
|
|
|
||||
Net available for additional borrowings under the multi-currency revolving line of credit
|
$
|
356,730
|
|
|
$
|
301,589
|
|
Net available for additional standby LOCs under sub-facility
(2)
|
203,897
|
|
|
253,426
|
|
||
|
|
|
|
||||
Unsecured multicurrency revolving lines of credit with various financial institutions
|
|
|
|
||||
Multicurrency revolving line of credit
|
$
|
91,809
|
|
|
$
|
97,989
|
|
Standby LOCs issued and outstanding
|
(21,734
|
)
|
|
(31,122
|
)
|
||
Short-term borrowings
(3)
|
(69
|
)
|
|
(3,884
|
)
|
||
Net available for additional borrowings and LOCs
|
$
|
70,006
|
|
|
$
|
62,983
|
|
|
|
|
|
||||
Unsecured surety bonds in force
|
$
|
48,221
|
|
|
$
|
87,558
|
|
(1)
|
Refer to Note 6 for details regarding our secured credit facilities.
|
(2)
|
During the year ended December 31, 2016, as a result of entering into the first and second amendments to the 2015 credit facility, the maximum limit available for additional standby LOCs under sub-facility was reduced from
$300 million
to
$250 million
.
|
(3)
|
Short-term borrowings are included in “Other current liabilities” on the Consolidated Balance Sheets.
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Beginning balance
|
$
|
54,512
|
|
|
$
|
36,548
|
|
New product warranties
|
7,987
|
|
|
8,380
|
|
||
Other adjustments and expirations
|
5,933
|
|
|
37,604
|
|
||
Claims activity
|
(24,364
|
)
|
|
(25,955
|
)
|
||
Effect of change in exchange rates
|
(766
|
)
|
|
(2,065
|
)
|
||
Ending balance
|
43,302
|
|
|
54,512
|
|
||
Less: current portion of warranty
|
24,874
|
|
|
36,927
|
|
||
Long-term warranty
|
$
|
18,428
|
|
|
$
|
17,585
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Total warranty expense
|
$
|
13,920
|
|
|
$
|
45,984
|
|
|
$
|
9,238
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Beginning balance
|
$
|
33,654
|
|
|
$
|
34,138
|
|
Unearned revenue for new extended warranties
|
1,437
|
|
|
2,792
|
|
||
Unearned revenue recognized
|
(3,594
|
)
|
|
(2,832
|
)
|
||
Effect of change in exchange rates
|
52
|
|
|
(444
|
)
|
||
Ending balance
|
31,549
|
|
|
33,654
|
|
||
Less: current portion of unearned revenue for extended warranty
|
4,226
|
|
|
3,565
|
|
||
Long-term unearned revenue for extended warranty within other long-term obligations
|
$
|
27,323
|
|
|
$
|
30,089
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Plan costs
|
$
|
27,276
|
|
|
$
|
25,355
|
|
|
$
|
23,206
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
IBNR accrual
|
$
|
2,441
|
|
|
$
|
2,051
|
|
|
Total Expected Costs at December 31, 2016
|
|
Costs Recognized During the Year Ended December 31, 2016
|
|
Remaining Costs to be Recognized at December 31, 2016
|
||||||
|
(in thousands)
|
||||||||||
Employee severance costs
|
$
|
44,186
|
|
|
$
|
39,686
|
|
|
$
|
4,500
|
|
Asset impairments & net loss on sale or disposal
|
7,219
|
|
|
7,219
|
|
|
—
|
|
|||
Other restructuring costs
|
16,389
|
|
|
889
|
|
|
15,500
|
|
|||
Total
|
$
|
67,794
|
|
|
$
|
47,794
|
|
|
$
|
20,000
|
|
|
|
|
|
|
|
||||||
Segments:
|
|
|
|
|
|
||||||
Electricity
|
$
|
10,827
|
|
|
$
|
8,827
|
|
|
$
|
2,000
|
|
Gas
|
34,468
|
|
|
23,968
|
|
|
10,500
|
|
|||
Water
|
20,061
|
|
|
13,061
|
|
|
7,000
|
|
|||
Corporate unallocated
|
2,438
|
|
|
1,938
|
|
|
500
|
|
|||
Total
|
$
|
67,794
|
|
|
$
|
47,794
|
|
|
$
|
20,000
|
|
|
Total Expected Costs at December 31, 2016
|
|
Costs Recognized in Prior Periods
|
|
Costs Recognized During the Year Ended December 31, 2016
|
|
Remaining Costs to be Recognized at December 31, 2016
|
||||||||
|
(in thousands)
|
||||||||||||||
Employee severance costs
|
$
|
34,630
|
|
|
$
|
34,373
|
|
|
$
|
257
|
|
|
$
|
—
|
|
Asset impairments & net loss on sale or disposal
|
8,849
|
|
|
8,880
|
|
|
(31
|
)
|
|
—
|
|
||||
Other restructuring costs
|
4,999
|
|
|
3,929
|
|
|
1,070
|
|
|
—
|
|
||||
Total
|
$
|
48,478
|
|
|
$
|
47,182
|
|
|
$
|
1,296
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Segments:
|
|
|
|
|
|
|
|
||||||||
Electricity
|
$
|
20,610
|
|
|
$
|
21,743
|
|
|
$
|
(1,133
|
)
|
|
$
|
—
|
|
Gas
|
13,631
|
|
|
11,855
|
|
|
1,776
|
|
|
—
|
|
||||
Water
|
1,995
|
|
|
1,940
|
|
|
55
|
|
|
—
|
|
||||
Corporate unallocated
|
12,242
|
|
|
11,644
|
|
|
598
|
|
|
—
|
|
||||
Total
|
$
|
48,478
|
|
|
$
|
47,182
|
|
|
$
|
1,296
|
|
|
$
|
—
|
|
|
Accrued Employee Severance
|
|
Asset Impairments & Net Loss on Sale or Disposal
|
|
Other
Accrued Costs
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Beginning balance, January 1, 2016
|
$
|
26,533
|
|
|
$
|
—
|
|
|
$
|
3,048
|
|
|
$
|
29,581
|
|
Costs incurred and charged to expense
|
39,943
|
|
|
7,188
|
|
|
1,959
|
|
|
49,090
|
|
||||
Cash payments
|
(18,452
|
)
|
|
—
|
|
|
(2,389
|
)
|
|
(20,841
|
)
|
||||
Non-cash items
|
—
|
|
|
(7,188
|
)
|
|
—
|
|
|
(7,188
|
)
|
||||
Effect of change in exchange rates
|
(2,656
|
)
|
|
—
|
|
|
(16
|
)
|
|
(2,672
|
)
|
||||
Ending balance, December 31, 2016
|
$
|
45,368
|
|
|
$
|
—
|
|
|
$
|
2,602
|
|
|
$
|
47,970
|
|
|
Foreign Currency Translation Adjustments
|
|
Net Unrealized Gain (Loss) on Derivative Instruments
|
|
Net Unrealized Gain (Loss) on Nonderivative Instruments
|
|
Pension Benefit Obligation Adjustments
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Balances at January 1, 2014
|
$
|
4,217
|
|
|
$
|
(1,256
|
)
|
|
$
|
(14,380
|
)
|
|
$
|
(9,885
|
)
|
|
$
|
(21,304
|
)
|
OCI before reclassifications
|
(89,297
|
)
|
|
(566
|
)
|
|
—
|
|
|
(25,702
|
)
|
|
(115,565
|
)
|
|||||
Amounts reclassified from AOCI
|
—
|
|
|
1,054
|
|
|
—
|
|
|
755
|
|
|
1,809
|
|
|||||
Total other comprehensive income (loss)
|
(89,297
|
)
|
|
488
|
|
|
—
|
|
|
(24,947
|
)
|
|
(113,756
|
)
|
|||||
Balances at December 31, 2014
|
$
|
(85,080
|
)
|
|
$
|
(768
|
)
|
|
$
|
(14,380
|
)
|
|
$
|
(34,832
|
)
|
|
$
|
(135,060
|
)
|
OCI before reclassifications
|
(73,891
|
)
|
|
76
|
|
|
—
|
|
|
4,570
|
|
|
(69,245
|
)
|
|||||
Amounts reclassified from AOCI
|
962
|
|
|
1,010
|
|
|
—
|
|
|
1,726
|
|
|
3,698
|
|
|||||
Total other comprehensive income (loss)
|
(72,929
|
)
|
|
1,086
|
|
|
—
|
|
|
6,296
|
|
|
(65,547
|
)
|
|||||
Balances at December 31, 2015
|
$
|
(158,009
|
)
|
|
$
|
318
|
|
|
$
|
(14,380
|
)
|
|
$
|
(28,536
|
)
|
|
$
|
(200,607
|
)
|
OCI before reclassifications
|
(23,570
|
)
|
|
(1,087
|
)
|
|
—
|
|
|
(6,191
|
)
|
|
(30,848
|
)
|
|||||
Amounts reclassified from AOCI
|
(1,407
|
)
|
|
812
|
|
|
—
|
|
|
2,723
|
|
|
2,128
|
|
|||||
Total other comprehensive income (loss)
|
(24,977
|
)
|
|
(275
|
)
|
|
—
|
|
|
(3,468
|
)
|
|
(28,720
|
)
|
|||||
Balances at December 31, 2016
|
$
|
(182,986
|
)
|
|
$
|
43
|
|
|
$
|
(14,380
|
)
|
|
$
|
(32,004
|
)
|
|
$
|
(229,327
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Before-tax amount
|
|
||||||||||
Foreign currency translation adjustment
|
$
|
(23,280
|
)
|
|
$
|
(74,219
|
)
|
|
$
|
(89,329
|
)
|
Foreign currency translation adjustment reclassified into net income on disposal
|
(1,407
|
)
|
|
962
|
|
|
—
|
|
|||
Net unrealized gain (loss) on derivative instruments designated as cash flow hedges
|
(1,768
|
)
|
|
123
|
|
|
(915
|
)
|
|||
Net hedging (gain) loss reclassified into net income (loss)
|
1,322
|
|
|
1,639
|
|
|
1,704
|
|
|||
Pension benefit obligation adjustment
|
(3,504
|
)
|
|
8,971
|
|
|
(25,270
|
)
|
|||
Total other comprehensive income (loss), before tax
|
(28,637
|
)
|
|
(62,524
|
)
|
|
(113,810
|
)
|
|||
|
|
|
|
|
|
||||||
Tax (provision) benefit
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(290
|
)
|
|
328
|
|
|
32
|
|
|||
Foreign currency translation adjustment reclassified into net income on disposal
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net unrealized gain (loss) on derivative instruments designated as cash flow hedges
|
681
|
|
|
(47
|
)
|
|
349
|
|
|||
Net hedging (gain) loss reclassified into net income (loss)
|
(510
|
)
|
|
(629
|
)
|
|
(650
|
)
|
|||
Pension benefit obligation adjustment
|
36
|
|
|
(2,675
|
)
|
|
323
|
|
|||
Total other comprehensive income (loss) tax (provision) benefit
|
(83
|
)
|
|
(3,023
|
)
|
|
54
|
|
|||
|
|
|
|
|
|
||||||
Net-of-tax amount
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
(23,570
|
)
|
|
(73,891
|
)
|
|
(89,297
|
)
|
|||
Foreign currency translation adjustment reclassified into net income on disposal
|
(1,407
|
)
|
|
962
|
|
|
—
|
|
|||
Net unrealized gain (loss) on derivative instruments designated as cash flow hedges
|
(1,087
|
)
|
|
76
|
|
|
(566
|
)
|
|||
Net hedging (gain) loss reclassified into net income (loss)
|
812
|
|
|
1,010
|
|
|
1,054
|
|
|||
Pension benefit obligation adjustment
|
(3,468
|
)
|
|
6,296
|
|
|
(24,947
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
$
|
(28,720
|
)
|
|
$
|
(65,547
|
)
|
|
$
|
(113,756
|
)
|
|
|
Amount Reclassified from AOCI
(1)
|
|
|
||||||||||
|
|
Year Ended December 31,
|
|
Affected Line Item in the Income Statement
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
|
||||||
|
|
(in thousands)
|
|
|
||||||||||
Amortization of defined benefit pension items
|
|
|
|
|
|
|
|
|
||||||
Prior-service costs
|
|
$
|
(58
|
)
|
|
$
|
(59
|
)
|
|
$
|
(138
|
)
|
|
(2)
|
Actuarial losses
|
|
(1,351
|
)
|
|
(1,979
|
)
|
|
(572
|
)
|
|
(2)
|
|||
Loss on settlement
|
|
(1,343
|
)
|
|
(375
|
)
|
|
(55
|
)
|
|
(2)
|
|||
Other
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(2)
|
|||
Total, before tax
|
|
(2,752
|
)
|
|
(2,459
|
)
|
|
(765
|
)
|
|
Income (loss) before income taxes
|
|||
Tax benefit
|
|
29
|
|
|
733
|
|
|
10
|
|
|
Income tax provision
|
|||
Total, net of tax
|
|
$
|
(2,723
|
)
|
|
$
|
(1,726
|
)
|
|
$
|
(755
|
)
|
|
Net income (loss)
|
(1)
|
Amounts in parenthesis indicate debits to the Consolidated Statements of Operations.
|
(2)
|
These AOCI components are included in the computation of net periodic pension cost. Refer to Note 8 for additional details.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
|
|
|
(in thousands)
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
133,565
|
|
|
$
|
133,565
|
|
|
$
|
131,018
|
|
|
$
|
131,018
|
|
Foreign exchange forwards
|
169
|
|
|
169
|
|
|
27
|
|
|
27
|
|
||||
Interest rate swaps
|
1,830
|
|
|
1,830
|
|
|
1,632
|
|
|
1,632
|
|
||||
Interest rate caps
|
946
|
|
|
946
|
|
|
1,423
|
|
|
1,423
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Credit facility
|
|
|
|
|
|
|
|
||||||||
USD denominated term loan
|
$
|
208,125
|
|
|
$
|
205,676
|
|
|
$
|
219,375
|
|
|
$
|
217,830
|
|
Multicurrency revolving line of credit
|
97,167
|
|
|
95,906
|
|
|
151,837
|
|
|
150,570
|
|
||||
Interest rate swaps
|
934
|
|
|
934
|
|
|
868
|
|
|
868
|
|
||||
Foreign exchange forwards
|
449
|
|
|
449
|
|
|
99
|
|
|
99
|
|
Electricity
|
Standard electricity (electromechanical and electronic) meters; smart metering solutions that include one or several of the following: smart electricity meters; smart electricity communication modules; prepayment systems, including smart key, keypad, and smart card communication technologies; smart systems including handheld, mobile, and fixed network collection technologies; smart network technologies; meter data management software; knowledge application solutions; installation; implementation; and professional services including consulting and analysis.
|
|
|
Gas
|
Standard gas meters; smart metering solutions that include one or several of the following: smart gas meters; smart gas communication modules; prepayment systems, including smart key, keypad, and smart card communication technologies; smart systems, including handheld, mobile, and fixed network collection technologies; smart network technologies; meter data management software; knowledge application solutions installation; implementation; and professional services including consulting and analysis.
|
|
|
Water
|
Standard water and heat meters; smart metering solutions that include one or several of the following: smart water meters and communication modules; smart heat meters; smart systems including handheld, mobile, and fixed network collection technologies; meter data management software; knowledge application solutions; installation; implementation; and professional services including consulting and analysis.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Revenues
|
|
|
|
|
|
||||||
Electricity
|
$
|
938,374
|
|
|
$
|
820,306
|
|
|
$
|
771,857
|
|
Gas
|
569,476
|
|
|
543,805
|
|
|
599,091
|
|
|||
Water
|
505,336
|
|
|
519,422
|
|
|
576,668
|
|
|||
Total Company
|
$
|
2,013,186
|
|
|
$
|
1,883,533
|
|
|
$
|
1,947,616
|
|
|
|
|
|
|
|
||||||
Gross profit
|
|
|
|
|
|
||||||
Electricity
|
$
|
282,677
|
|
|
$
|
225,446
|
|
|
$
|
200,249
|
|
Gas
|
205,063
|
|
|
185,559
|
|
|
211,623
|
|
|||
Water
|
172,580
|
|
|
145,680
|
|
|
202,178
|
|
|||
Total Company
|
$
|
660,320
|
|
|
$
|
556,685
|
|
|
$
|
614,050
|
|
|
|
|
|
|
|
||||||
Operating income (loss)
|
|
|
|
|
|
||||||
Electricity
|
$
|
68,287
|
|
|
$
|
31,104
|
|
|
$
|
(77,751
|
)
|
Gas
|
66,813
|
|
|
67,471
|
|
|
76,101
|
|
|||
Water
|
37,266
|
|
|
19,864
|
|
|
71,356
|
|
|||
Corporate unallocated
|
(76,155
|
)
|
|
(65,593
|
)
|
|
(69,226
|
)
|
|||
Total Company
|
96,211
|
|
|
52,846
|
|
|
480
|
|
|||
Total other income (expense)
|
(11,584
|
)
|
|
(15,744
|
)
|
|
(18,745
|
)
|
|||
Income (loss) before income taxes
|
$
|
84,627
|
|
|
$
|
37,102
|
|
|
$
|
(18,265
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
United States and Canada
|
$
|
1,126,787
|
|
|
$
|
997,293
|
|
|
$
|
875,796
|
|
Europe, Middle East, and Africa (EMEA)
|
698,106
|
|
|
701,301
|
|
|
849,841
|
|
|||
Other
|
188,293
|
|
|
184,939
|
|
|
221,979
|
|
|||
Total Company
|
$
|
2,013,186
|
|
|
$
|
1,883,533
|
|
|
$
|
1,947,616
|
|
|
At December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
United States
|
$
|
70,435
|
|
|
$
|
72,179
|
|
Outside United States
|
106,023
|
|
|
118,077
|
|
||
Total Company
|
$
|
176,458
|
|
|
$
|
190,256
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Electricity
|
$
|
28,468
|
|
|
$
|
35,896
|
|
|
$
|
47,889
|
|
Gas
|
20,714
|
|
|
20,288
|
|
|
25,706
|
|
|||
Water
|
18,675
|
|
|
19,459
|
|
|
24,257
|
|
|||
Corporate Unallocated
|
461
|
|
|
350
|
|
|
287
|
|
|||
Total Company
|
$
|
68,318
|
|
|
$
|
75,993
|
|
|
$
|
98,139
|
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of operations data (unaudited):
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
497,590
|
|
|
$
|
513,024
|
|
|
$
|
506,859
|
|
|
$
|
495,713
|
|
|
$
|
2,013,186
|
|
Gross profit
|
163,203
|
|
|
169,705
|
|
|
170,749
|
|
|
156,663
|
|
|
660,320
|
|
|||||
Net income (loss) attributable to Itron, Inc.
|
10,089
|
|
|
19,917
|
|
|
(9,885
|
)
|
|
11,649
|
|
|
31,770
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share - Basic
(1)
|
$
|
0.27
|
|
|
$
|
0.52
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.30
|
|
|
$
|
0.83
|
|
Earnings (loss) per common share - Diluted
(1)
|
$
|
0.26
|
|
|
$
|
0.52
|
|
|
$
|
(0.26
|
)
|
|
$
|
0.30
|
|
|
$
|
0.82
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Total Year
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of operations data (unaudited):
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
446,746
|
|
|
$
|
470,811
|
|
|
$
|
469,528
|
|
|
$
|
496,448
|
|
|
$
|
1,883,533
|
|
Gross profit
|
138,422
|
|
|
118,554
|
|
|
147,290
|
|
|
152,419
|
|
|
556,685
|
|
|||||
Net income (loss) attributable to Itron, Inc.
|
5,398
|
|
|
(14,346
|
)
|
|
12,640
|
|
|
8,986
|
|
|
12,678
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (loss) per common share - Basic
(1)
|
$
|
0.14
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
Earnings (loss) per common share - Diluted
(1)
|
$
|
0.14
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.33
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
(1)
|
The sum of the quarterly EPS data presented in the table may not equal the annual results due to rounding and the impact of dilutive securities on the annual versus the quarterly EPS calculations.
|
ITEM 9:
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
•
|
Performing a revenue controls gap assessment and root cause analysis with the assistance of external advisers and developing detailed remediation plans for all gaps identified;
|
•
|
Implementing a more precise VSOE analysis to determine fair value for Itron’s software products;
|
•
|
Implementing additional revenue internal controls to more effectively monitor complex arrangements; including those containing software elements;
|
•
|
Updating revenue recognition policies and procedures;
|
•
|
Hiring additional resources with technical revenue recognition accounting expertise;
|
•
|
Completion of training for revenue accounting employees and other employees directly associated with sales contracts; and
|
•
|
Engaging external advisers to assist with technical matters related to complex sales contracts.
|
1.
|
On February 23, 2017, Jon Eliassen and Charlie Gaylord, each members of the Board of Itron, Inc. (the “Company”) informed the Board that they will not stand for re-election and will retire at the Company’s next annual general meeting. Mr. Eliassen also serves as a member of the Corporate Governance Committee and the Value Enhancement Committee. Mr. Gaylord also serves as a member of the Audit/Finance Committee and the Corporate Governance Committee. There were no disagreements with the Company on any matter related to the Company’s operations, policies or practices that led to Mr. Eliassen’s or Mr. Gaylord’s decision to retire from the Board. Both directors plan to continue serving on the Board until the Company’s next annual general meeting in the second quarter of 2017. The Company would like to thank each of Mr. Eliassen and Mr. Gaylord for their many contributions to the Company and wish them the best in their future endeavors.
|
2.
|
On February 23, 2017, the Board of the Company authorized the forms of Performance Restricted Share Unit Award Agreement (the “PRSU Agreement”), Stock Option Agreement (the “Stock Option Agreement”) and Restricted Share Unit Award Agreement (the “RSU Agreement” and collectively, the “Award Agreements”) to be used for grants under the Amended and Restated Itron, Inc. 2010 Stock Incentive Plan to, among others, the Company’s executives covered by Section 16 of the Securities Exchange Act of 1934.
|
ITEM 12:
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Exhibit Number
|
|
Description of Exhibits
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation of Itron, Inc. (Filed as Exhibit 3.1 to Itron, Inc.’s Annual Report on Form 10-K, filed on March 27, 2003)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Itron, Inc. (Filed as Exhibit 3.2 to Itron, Inc.'s Annual Report on Form 10-K, filed on June 30, 2016)
|
|
|
|
4.1
|
|
Amended and Restated Credit Agreement dated June 23, 2015 among Itron, Inc. and a syndicate of banks led by Wells Fargo Bank, National Association, JPMorgan Chase Bank, N.A., J.P. Morgan Europe Limited, and BNP Paribas. (Filed as Exhibit 4.1 to Itron, Inc.’s Current Report on Form 8-K, filed on June 23, 2015)
|
|
|
|
4.2
|
|
First Amendment to Security Agreement dated June 23, 2015 among Itron, Inc. and Wells Fargo Bank, National Association. (Filed as Exhibit 4.2 to Itron, Inc.’s Current Report on Form 8-K, filed on June 23, 2015)
|
|
|
|
10.1*
|
|
Form of Amended and Restated Change in Control Severance Agreement for Executive Officers. (Filed as Exhibit 10.1 to Itron, Inc.’s Annual Report on Form 10-K, filed on February 22, 2013)
|
|
|
|
10.2*
|
|
Schedule of certain executive officers who are parties to Change in Control Severance Agreements with Itron, Inc. (filed with this report)
|
|
|
|
10.3*
|
|
Form of Indemnification Agreements between Itron, Inc. and certain directors and officers. (Filed as Exhibit 10.9 to Itron, Inc.’s Annual Report on Form 10-K, filed on March 30, 2000)
|
|
|
|
10.4*
|
|
Schedule of directors and executive officers who are parties to Indemnification Agreements with Itron, Inc. (filed with this report)
|
|
|
|
10.5
|
|
Amended and Restated 2000 Stock Incentive Plan. (Filed as Appendix A to Itron, Inc.’s Proxy Statement for the 2007 Annual Meeting of Shareholders, filed on March 26, 2007)
|
|
|
|
10.6
|
|
Amended and Restated 2010 Stock Incentive Plan. (Filed as Appendix A to Itron, Inc.’s Proxy Statement for the 2014 Annual Meeting of Shareholders, filed on March 13, 2014)
|
|
|
|
10.7*
|
|
Rules of Itron Inc.'s Amended and Restated 2010 Stock Incentive Plan for the grant of Restricted Stock Unit (RSU's) to participants in France. (Filed as Exhibit 10.6 to Itron Inc.'s Quarterly Report on Form 10-Q, filed on August 8, 2014)
|
|
|
|
10.8*
|
|
Executive Management Incentive Plan. (Filed as Appendix B to Itron, Inc.’s Proxy Statement for the 2010 Annual Meeting of Shareholders, filed on March 17, 2010)
|
Exhibit Number
|
|
Description of Exhibits
|
|
|
|
10.9
|
|
Terms of the Amended and Restated Equity Grant Program for Nonemployee Directors under the Itron, Inc. Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.4 to Itron, Inc.’s Annual Report on Form 10-K, filed on February 26, 2008)
|
|
|
|
10.10
|
|
Form of Non-Qualified Stock Option Grant Notice and Agreement for Nonemployee Directors under the Itron, Inc. Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.9 to Itron, Inc.’s Annual Report on Form 10-K, filed on February 26, 2009)
|
|
|
|
10.11*
|
|
Form of Stock Option Grant Notice and Agreement for use in connection with both incentive and non-qualified stock options granted under Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.6 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.12*
|
|
Form of RSU Award Notice and Agreement for U.S. Participants for use in connection with the Company’s Long-Term Performance Plan (LTPP) and issued under Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.1 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.13*
|
|
Form of RSU Award Notice and Agreement for International Participants (excluding France) for use in connection with the Company’s LTPP and issued under Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.2 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.14*
|
|
Form of RSU Award Notice and Agreement for Participants in France for use in connection with Itron, Inc.'s LTPP and issued under Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.3 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.15*
|
|
Form of RSU Award Notice and Agreement for all Participants (excluding France) for use in connection with Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.4 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.16*
|
|
Form of RSU Award Notice and Agreement for Participants in France for use in connection with Itron, Inc.'s Amended and Restated 2000 Stock Incentive Plan. (Filed as Exhibit 10.5 to Itron, Inc.’s Current Report on Form 8-K, filed on February 18, 2010)
|
|
|
|
10.17*
|
|
Form of Long Term Performance RSU Award Notice and Agreement for U.S. Participants for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.4 to Itron, Inc.’s Quarterly Report on Form 10-Q, filed on August 6, 2014)
|
|
|
|
10.18*
|
|
Form of Long Term Performance RSU Award Notice and Agreement for International Participants (excluding France) for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.19 to Itron, Inc.’s Annual Report on Form 10-K, filed on February 25, 2011)
|
|
|
|
10.19*
|
|
Form of Long Term Performance RSU Award Notice and Agreement for Participants in France for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.5 to Itron, Inc.’s Quarterly Report on Form 10-Q, filed on August 6, 2014)
|
|
|
|
10.20*
|
|
Form of RSU Award Notice and Agreement for all Participants (excluding France) for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.2 to Itron, Inc.’s Quarterly Report on Form 10-Q, filed on August 6, 2014)
|
|
|
|
10.21*
|
|
Form of RSU Award Notice and Agreement for Participants in France for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.3 to Itron, Inc.’s Quarterly Report on Form 10-Q, filed on August 6, 2014)
|
|
|
|
10.22*
|
|
Form of RSU Award Notice and Agreement for Non-employee Directors for use in connection with Itron, Inc.'s Amended and Restated 2010 Stock Incentive Plan. (Filed as Exhibit 10.3 to Itron, Inc.’s Quarterly Report on Form 10-Q, filed on May 3, 2013)
|
|
|
|
|
|
ITRON, INC.
|
|
|
|
|
By:
|
/s/ W. MARK SCHMITZ
|
|
|
W. Mark Schmitz
|
|
|
Executive Vice President and Chief Financial Officer
|
Signatures
|
|
Title
|
|
|
|
/s/ PHILIP C. MEZEY
|
|
|
Philip C. Mezey
|
|
President and Chief Executive Officer (Principal Executive Officer), Director
|
|
|
|
/s/ W. MARK SCHMITZ
|
|
|
W. Mark Schmitz
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
|
|
/s/ KIRBY A. DYESS
|
|
|
Kirby A. Dyess
|
|
Director
|
|
|
|
/s/ JON E. ELIASSEN
|
|
|
Jon E. Eliassen
|
|
Director
|
|
|
|
/s/ CHARLES H. GAYLORD, JR.
|
|
|
Charles H. Gaylord, Jr.
|
|
Director
|
|
|
|
/s/ THOMAS S. GLANVILLE
|
|
|
Thomas S. Glanville
|
|
Director
|
|
|
|
/s/ FRANK M. JAEHNERT
|
|
|
Frank M. Jaehnert
|
|
Director
|
|
|
|
/s/ JEROME J. LANDE
|
|
|
Jerome J. Lande
|
|
Director
|
|
|
|
/s/ TIMOTHY M. LEYDEN
|
|
|
Timothy M. Leyden
|
|
Director
|
|
|
|
/s/ PETER MAINZ
|
|
|
Peter Mainz
|
|
Director
|
|
|
|
/s/ DANIEL S. PELINO
|
|
|
Daniel S. Pelino
|
|
Director
|
|
|
|
/s/ GARY E. PRUITT
|
|
|
Gary E. Pruitt
|
|
Director
|
|
|
|
/s/ DIANA D. TREMBLAY
|
|
|
Diana D. Tremblay
|
|
Director
|
|
|
|
/s/ LYNDA L. ZIEGLER
|
|
|
Lynda L. Ziegler
|
|
Chair of the Board
|
Description
|
|
Balance at Beginning of Period
|
|
Other Adjustments
|
|
Additions Charged to Costs and Expenses
|
|
Balance at End of Period, Noncurrent
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets valuation allowance
|
|
$
|
235,339
|
|
|
$
|
(12,419
|
)
|
|
$
|
26,640
|
|
|
$
|
249,560
|
|
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets valuation allowance
|
|
$
|
257,728
|
|
|
$
|
(62,791
|
)
|
|
$
|
40,402
|
|
|
$
|
235,339
|
|
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Deferred tax assets valuation allowance
|
|
$
|
162,588
|
|
|
$
|
(4,913
|
)
|
|
$
|
100,053
|
|
|
$
|
257,728
|
|
1 Year Itron Chart |
1 Month Itron Chart |
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