ITRON INC

Previous wording

Refer to the Non-GAAP Measures section below on pages 40-43 for information about these non-GAAP measures and the detailed reconciliation of items that impacted non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow in the periods presented.

Current wording

Refer to the Non-GAAP Measures section below on pages 44-47 for information about these non-GAAP measures and the detailed reconciliation of items that impacted non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow in the periods presented.

Previous wording

•Revenues were $603.4 million compared with $494.6 million in 2023, an increase of $108.8 million, or 22%

Current wording

•Revenues were $609.1 million compared with $541.1 million in 2023, an increase of 13%

Previous wording

•GAAP diluted EPS increased by $1.38 to a diluted income per share of $1.12 in 2024

Current wording

•GAAP diluted EPS increased by$0.57 to a diluted income per share of $1.10 in 2024

Previous wording

•Total backlog was$4.3 billion and twelve-month backlog was$1.9 billion at March 31, 2024, compared with$4.5 billion and $1.9 billion at March 31, 2023

Current wording

•Total backlog was $4.1 billion and twelve-month backlog was $1.8 billion at June 30, 2024, compared with$4.4 billion and$2.0 billion at June 30, 2023

Previous wording

On March 1, 2024, we completed the acquisition of 100% of the shares of Elpis Squared, a privately held software and services company. This acquisition provides value to Itron through the leverage of Elpis Squared's utility grid analytics, services, and operational software platforms to enhance Itron's Outcomes offerings. The acquisition was deemed a business acquisition. The sales, results of operations, and acquisition-related costs associated with the acquisition were not material. The preliminary purchase price for this acquisition is $34.1 million, with adjustment for the final working capital amount, to be determined in July 2024. The purchase price was allocated to acquired assets and liabilities assumed, primarily$15.0 million in finite-lived intangible assets and$19.7 million in goodwill. Since this was a stock acquisition, none of the goodwill is deductible for tax purposes. The purchase was funded through cash on hand.

Current wording

On March 1, 2024, we completed the acquisition of 100% of the shares of Elpis2, Inc. (Elpis Squared), a privately held software and services company. This acquisition provides value to Itron through the leverage of Elpis Squared's utility grid analytics, services, and operational software platforms to enhance Itron's Outcomes offerings. The acquisition was deemed a business acquisition. The sales, results of operations, and acquisition-related costs associated with the acquisition were not material. The purchase price for this acquisition is $34.1 million. The purchase price was allocated to assets acquired and liabilities assumed, primarily$15.0 million in finite-lived intangible assets and$19.7 million in goodwill. Since this was a stock acquisition, none of the goodwill is deductible for tax purposes. The purchase was funded through cash on hand.

Previous wording

Global economic impacts, such as pandemics and various ongoing conflicts around the world, may create disruption in customer demand and global supply chains, resulting in market volatility, which our management continues to monitor. In the aftermath of these types of events, global supply chains, including labor, struggle to keep pace with rapidly changing demand. While we have had improvements since 2022 levels, our ability to obtain adequate supply of semiconductor components has impacted our ability to service customer demand in a timely manner. The temporary imbalance in supply and demand creates business uncertainties that include costs and availability. Efforts continue with suppliers to improve supply resiliency, including the approval of alternate sources. Recently, inflation in our raw materials and component costs, freight charges, and labor costs have increased above historical levels due to, among other things, the continuing impacts of the uncertain economic environment. We may or may not be able to fully recover these increased costs through pricing actions with our customers. Currently, we have not identified any significant decrease in long-term customer demand for our products and services. Certain of our customer projects have experienced delays in deliveries, with revenues originally forecasted in prior periods shifting to future periods. For more information on risks associated with global economic challenges, please see our risk in Part I, Item 1A: Risk Factors in our 2023 Annual Report.

Current wording

Global economic impacts, such as pandemics and various ongoing conflicts around the world, may create disruption in customer demand and global supply chains, resulting in market volatility, which our management continues to monitor. In the aftermath of these types of events, global supply chains, including labor, may struggle to keep pace with rapidly changing demand. Temporary imbalance in supply and demand may create business uncertainties that include costs and availability. Efforts continue with suppliers to improve supply resiliency, including the approval of alternate sources. Additionally, inflation in our raw materials and component costs, freight charges, and labor costs may increase above historical levels due to, among other things, the continuing impacts of an uncertain economic environment. We may or may not be able to fully recover these increased costs through pricing actions with our customers. Currently, we have not identified any significant decrease in long-term customer demand for our products and services. For more information on risks associated with global economic challenges, please see our risk in Part I, Item 1A: Risk Factors in our 2023 Annual Report.

Previous wording

(1)These measures exclude certain expenses that we do not believe are indicative of our core operating results. See pages 40-43 for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.

Current wording

(1)These measures exclude certain expenses that we do not believe are indicative of our core operating results. See pages 44-47 for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.

Previous wording

This metric primarily includes Itron or third-party endpoints deployed within the electricity, water, and gas utility industries, as well as within cities and municipalities around the globe. Endpoints under management also include smart communication modules and network interface cards (NICs) within Itron's platforms. At times, these NICs are communicating modules that were sold separately from an Itron product directly to our customers or to third party manufacturers for use in endpoints such as electric, water, and gas meters; streetlights and other types of IIoT sensors and actuators; sensors and other capabilities that the end customer would like Itron to connect and manage on their behalf.

Current wording

This metric primarily includes Itron or third-party endpoints deployed within the electricity, water, and gas utility industries, as well as within cities and municipalities around the globe. Endpoints under management also include smart communication modules and network interface cards (NICs) within Itron's platforms. At times, these NICs are communicating modules that were sold separately from an Itron product directly to our customers or to third party manufacturers for use in endpoints such as electric, water, and gas meters; streetlights and other types of IIoT sensors and actuators; sensors and other capabilities that the end customer would like Itron to connect and manage on its behalf.

Previous wording

The "endpoint under management" metric only accounts for the specific, unique endpoint itself, though that endpoint may have multiple applications, services, outcomes, and higher margin recurring offerings associated with it. This metric does not reflect the multi-application value that can be derived from the individual endpoint itself. Additionally, this metric excludes those endpoints that are non-communicating, non-Itron system hardware component sales or licensed applications that Itron does not manage the unit or the data from that unit directly.

Current wording

The endpoints under management metric only accounts for the specific, unique endpoint itself, though that endpoint may have multiple applications, services, outcomes, and higher margin recurring offerings associated with it. This metric does not reflect the multi-application value that can be derived from the individual endpoint itself. Additionally, this metric excludes those endpoints that are non-communicating, non-Itron system hardware component sales or licensed applications for which Itron does not manage the unit or the data from that unit directly.

Previous wording

While the one-time sale of the platform and endpoints are primarily delivered via our Networked Solutions segment, our enhanced solutions, on-going monitoring, maintenance, software, analytics, and distributed intelligent applications are predominantly recognized in our Outcomes segment. We anticipate the opportunity to increase our penetration of Outcomes applications, software, and managed applications will increase as our endpoints under management increases. Management believes using the endpoints under management metric enhances insight of the strategic and operational direction of our Networked Solutions and Outcomes segments to serve clients for years after their one-time installation of an endpoint.

Current wording

While the one-time sale of the platform and endpoints is primarily delivered via our Networked Solutions segment, our enhanced solutions, on-going monitoring, maintenance, software, analytics, and distributed intelligent applications are predominantly recognized in our Outcomes segment. We anticipate the opportunity to increase our penetration of Outcomes applications, software, and managed applications will increase as our endpoints under management increases. Management believes using the endpoints under management metric enhances insight of the strategic and operational direction of our Networked Solutions and Outcomes segments to serve clients for years following their one-time installation of an endpoint.

Previous wording

Total revenues increased $108.8 million, or 22%, compared with the same period in 2023. Product revenues increased by $111.5 million, and service revenues decreased by $2.7 million. Device Solutions increased by $8.5 million; Networked Solutions increased by$94.0 million; and Outcomes increased by $6.3 million when compared with the same period last year. Changes in exchange rates favorably impacted total revenues by$1.2 million, of which$1.0 million favorably impacted Device Solutions.

Current wording

Total revenues increased $176.8 million, or 17%, compared with the same period in 2023. Product revenues increased by $179.6 million, and service revenues decreased by $2.8 million. Device Solutions increased by $13.9 million; Networked Solutions increased by$145.8 million; and Outcomes increased by $17.1 million when compared with the same period last year. Changes in exchange rates unfavorably impacted total revenues by$0.5 million, all of which impacted Networked Solutions.

Previous wording

Gross margin was 34.0%, compared with 31.6% in 2023. Product sales gross margin increased to 32.4%, compared with 28.6% in 2023, and gross margin on service revenues decreased to 45.3%, compared with 47.8% in 2023.

Current wording

Gross margin was 34.3%, compared with 31.9% in 2023. Product sales gross margin increased to 32.7%, compared with 29.7% in 2023, and gross margin on service revenues increased to 45.2%, compared with 44.5% in 2023.

Previous wording

Operating expenses decreased $24.2 million for the three months ended March 31, 2024 as compared with the same period in 2023. This was primarily the result of a $36.4 million decrease in restructuring costs and a $1.1 million decrease in amortization of intangible assets. The decrease was partially offset by an increase of $10.5 million in sales, general and administrative expenses and a $2.8 million increase in research and development expenses. The increases in sales, general and administrative and research and development expenses were primarily driven by increased labor costs. For additional details, refer to Item 1: Financial Statements (Unaudited), Note 12: Restructuring included in this Quarterly Report on Form 10-Q.

Current wording

Operating expenses decreased $17.2 million for the six months ended June 30, 2024 as compared with the same period in 2023. This was primarily the result of a $37.4 million decrease in restructuring costs and a $1.3 million decrease in amortization of intangible assets. The decrease was partially offset by an increase of $19.8 million in sales, general and administrative expenses and a $2.3 million increase in research and development expenses, both driven by increased labor costs and professional services. For additional details, refer to Item 1: Financial Statements (Unaudited), Note 12: Restructuring included in this Quarterly Report on Form 10-Q.

Previous wording

Total other income (expense) for the three months ended March 31, 2024 was income of $2.4 million, compared with net expense of $1.7 million in the same period in 2023. The net other income for the three months ended March 31, 2024, as compared with the same period in 2023, was primarily driven by the $2.0 million increase in interest income.

Current wording

The net other income for the six months ended June 30, 2024, as compared with the same period in 2023, was primarily driven by the $5.6 million increase in interest income as well as increased other income driven by a $1.7 million foreign currency loss recognized in the six months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, our income tax expense was $13.4 million, compared with an income tax benefit of $0.1 million for the same period in 2023. While our tax rate for the three months ended March 31, 2024 of 21% is in line with the federal statutory rate of 21%, it is overall impacted by the effect of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low-Taxed Income), net of Section 250 deduction, Subpart F income, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. Our tax rate for the three months ended March 31, 2023 of 1% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low Taxed Income), net of Section 250 deduction, Subpart F income, an expense related to stock-based compensation, tax credits, and uncertain tax positions.

Current wording

For the three and six months ended June 30, 2024, our income tax expense was $15.2 million and $28.6 million, compared with income tax expense of $9.2 million and $9.1 million for the same periods in 2023. Our tax rate for the three and six months ended June 30, 2024 of 23% and 22% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low-Taxed Income), net of Section 250 deduction, Subpart F income, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. Our tax rate for the three and six months ended June 30, 2023 of 27% and 41%, differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low Taxed Income), net of Section 250 deduction, Subpart F income, an expense related to stock-based compensation, tax credits, and uncertain tax positions.

Previous wording

Revenues increased $8.5 million, or 7%. Changes in foreign currency exchange rates favorably impacted revenues by $1.0 million. The 2024 increase in revenues was driven primarily by increased smart water meter and communication module sales in Europe, Middle East, and Africa.

Current wording

Revenues increased $5.4 million, or 5%. Changes in foreign currency exchange rates unfavorably impacted revenues by $1.1 million. The 2024 increase in revenues was driven primarily by increased smart water and electric product sales.

Previous wording

For the three months ended March 31, 2024, gross margin was 23.7%, compared with 20.1% for the same period in 2023. The 360 basis point increase over the prior year was primarily due to an improved product mix.

Current wording

For the three months ended June 30, 2024, gross margin was 26.3%, compared with 21.8% for the same period in 2023. The 450 basis point increase over the prior year was primarily due to an improved product mix.

Previous wording

Operating expenses decreased $1.3 million, or 13%, for the first three months of 2024, compared with the same period in 2023. The decrease was primarily due to lower product development expenses.

Current wording

Operating expenses decreased $4.4 million, or 22%, for the first six months of 2024, compared with the same period in 2023. The decrease was primarily due to lower product development costs.

Previous wording

Revenues increased $94.0 million, or 30%, for the first three months of 2024 compared with the same period in 2023. The increase was primarily from product revenues due to the ramp of ongoing and new deployments and improved component supply enabling us to fulfill more of the previously constrained customer demand.

Current wording

Revenues increased $145.8 million, or 22%, for the first six months of 2024 compared with the same period in 2023. The increase was primarily from product revenues due to the ramp of ongoing and new project deployments and improved component supply enabling us to fulfill the previously constrained customer demand.

Previous wording

Gross margin was 37.1% for the 2024 period, compared with 33.7% in 2023. The 340 basis point increase was primarily related to favorable product and solutions volumes and mix.

Current wording

Gross margin was 36.9% for the period ending June 30, 2024, compared with 33.8% in 2023. The 310 basis point increase was primarily related to favorable product and solutions volumes and mix.

Previous wording

Operating expenses increased $3.5 million, or 11%, for the first three months of 2024, compared with the same period in 2023. The increase was primarily related to higher product development driven by labor costs.

Current wording

Operating expenses increased $5.0 million, or 8%, for the first six months of 2024, compared with the same period in 2023. The increase was primarily related to higher product development costs.

Previous wording

Revenues increased $6.3 million, or 10%, for the first three months of 2024, compared with 2023. This increase was driven by growth in recurring managed services, distributed energy management, and acquisition-related revenue for grid planning.

Current wording

Revenues increased $17.1 million, or 13%, for the first six months of 2024, compared with 2023. This increase was driven by growth in recurring managed services, delivery services, distributed energy management, and revenue for grid planning solutions from the Elpis Squared acquisition.

Previous wording

Gross margin decreased to 35.1% for the period ending in 2024, compared with 42.7% for last year. The 760 basis point decrease was driven by increased costs for managed services and changes in software and solutions mix.

Current wording

Gross margin decreased to 34.9% for the period ending in 2024, compared with 41.8% for last year. The 690 basis point decrease was driven by increased services cost and lower software sales in the current period.

Previous wording

Operating expenses for the first three months of 2024 increased $1.2 million, or 9%, compared with the same period last year. This was primarily related to increased research and development investment.

Current wording

Operating expenses for the first six months of 2024 increased $3.0 million, or 10%, compared with the same period last year. This was primarily related to increased product development investment.

Previous wording

For the first three months of 2024, Corporate unallocated expenses decreased $27.7 million, or 25%, compared with the 2023 period. This was primarily the result of a $36.4 million decrease in restructuring costs, as well as a $1.1 million decrease in amortization of intangible assets. The decreases were offset by a $9.5 million increase in sales, general and administrative expenses, primarily driven by increased labor costs.

Current wording

For the first six months of 2024, Corporate unallocated expenses decreased $20.7 million, or 11%, compared with the 2023 period. This was primarily the result of a $37.4 million decrease in restructuring costs, as well as a $1.3 million decrease in amortization of intangible assets. The decreases were offset by a $18.4 million increase in sales, general and administrative expenses, primarily driven by increased labor costs and professional services.

Previous wording

Cash and cash equivalents were $300.6 million at March 31, 2024, compared with $302.0 million at December 31, 2023. The $1.4 million decrease in cash and cash equivalents in the 2024 period was primarily the result of cash used in investing activities for the acquisition of Elpis Squared, almost entirely offset by cash provided by operations as a result of higher earnings.

Current wording

Cash and cash equivalents were $920.6 million at June 30, 2024, compared with $302.0 million at December 31, 2023. The $618.6 million increase in cash and cash equivalents in the 2024 period was primarily the net proceeds provided by the convertible notes issuance and cash provided by operations as a result of higher earnings, partially offset by cash used in investing activities for the acquisition of Elpis Squared.

Previous wording

Cash provided by operating activities during the three months in 2024 was $41.3 million compared with $1.4 million during the same period in 2023. The increase was primarily due to increased earnings and working capital, partially offset by higher variable compensation payouts in 2024.

Current wording

Cash provided by operating activities during the six months in 2024 was $93.0 million compared with $43.0 million during the same period in 2023. The increase was primarily due to increased earnings and working capital conversion, partially offset by higher restructuring and variable compensation payouts in 2024.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities was $41.1 million compared with $7.7 million in 2023, resulting in a change of $33.5 million. The increase in cash used was primarily the result of the acquisition of Elpis Squared for $34.1 million in 2024 and increase in property, plant, and equipment purchased of $0.2 million in 2024 compared with the same period in 2023.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities was $47.8 million compared with $13.2 million in 2023, resulting in a change of $34.6 million. The increase in cash used was primarily the result of the acquisition of Elpis Squared for $34.1 million in 2024 and increase in property, plant, and equipment purchased of $1.8 million in 2024 compared with the same period in 2023.

Previous wording

Net cash provided by financing activities during the three months in 2024 was $1.1 million, compared with net cash used of $0.1 million for the same period in 2023. The increase is due primarily to the issuance of common stock in 2024 of $1.6 million.

Current wording

Net cash provided by financing activities during the six months in 2024 was $576.8 million, compared with net cash provided of $0.8 million for the same period in 2023. The increase is due primarily to the issuance of convertible notes, net of total debt issuance cost, totaling $784 million, partially offset by the purchase of the capped call for the convertible offering of $109.0 million and common stock repurchase of $100.0 million.

Previous wording

The effect of exchange rates on the cash balances of currencies held in foreign denominations at March 31, 2024 was a decrease of $2.7 million, compared with an increase of $0.3 million for the same period in 2023. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Current wording

The effect of exchange rates on the cash balances of currencies held in foreign denominations at June 30, 2024 was a decrease of $3.5 million, compared with an increase of $0.2 million for the same period in 2023. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Previous wording

To supplement our Consolidated Statements of Cash Flows presented on a GAAP basis, we use the non-GAAP measure of free cash flow to analyze cash flows generated from our operations. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income (loss) as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. We calculate free cash flows, using amounts from our Consolidated Statements of Cash Flows, as follows:

Current wording

To supplement our Consolidated Statements of Cash Flows presented on a GAAP basis, we use the non-GAAP measure of free cash flow to analyze cash flows generated from our operations. The presentation of non-GAAP free cash flow is not meant to be considered in isolation or as an alternative to net income as an indicator of our performance, or as an alternative to cash flows from operating activities as a measure of liquidity. We calculate free cash flows, using amounts from our Consolidated Statements of Cash Flows, as follows:

Previous wording

Free cash flow fluctuated primarily as a result of changes in cash provided by operating activities. See the cash flow discussion of operating activities above.

Current wording

Free cash flow fluctuated primarily as a result of changes in cash provided by increased earnings. See the cash flow discussion of operating activities above.

Previous wording

We originally entered into our credit facility on January 5, 2018 (together with the subsequent seven amendments, the 2018 credit facility). The 2018 credit facility provides a multicurrency revolving line of credit (the revolver) with a principal amount of up to $500 million. The revolver also contains a $300 million standby letter of credit sub-facility and a $50 million swingline sub-facility. At March 31, 2024, no amount was outstanding under the 2018 credit facility, and $52.4 million was utilized by outstanding standby letters of credit, resulting in $447.6 million available for borrowing or standby letters of credit under the revolver. At March 31, 2024, $247.6 million was available for additional standby letters of credit under the letter of credit sub-facility, and no amounts were outstanding under the swingline sub-facility. Amounts borrowed under the revolver may be repaid and reborrowed until the revolver's maturity on October 18, 2026, at which time all outstanding loans together with all accrued and unpaid interest must be repaid. However, that date may be advanced to December 14, 2025 if Itron does not settle or extend a sufficient portion of outstanding convertible notes, as detailed in the seventh amendment.

Current wording

We originally entered into our credit facility on January 5, 2018 (together with the subsequent eight amendments, the 2018 credit facility). The 2018 credit facility provides a multicurrency revolving line of credit (the revolver) with a principal amount of up to $500 million. The revolver also contains a $300 million standby letter of credit sub-facility and a $50 million swingline sub-facility. At June 30, 2024, no amount was outstanding under the 2018 credit facility, and $46.8 million was utilized by outstanding standby letters of credit, resulting in $453.2 million available for borrowing or standby letters of credit under the revolver. At June 30, 2024, $253.2 million was available for additional standby letters of credit under the letter of credit sub-facility, and no amounts were outstanding under the swingline sub-facility. Amounts borrowed under the revolver may be repaid and reborrowed until the revolver's maturity on October 18, 2026, at which time all outstanding loans together with all accrued and unpaid interest must be repaid. However, that date may be advanced to December 14, 2025 if Itron does not settle or extend a sufficient portion of the outstanding 2021 convertible notes, as detailed in the seventh amendment.

Previous wording

On October 29, 2021, our Board of Directors approved a restructuring plan (the 2021 Projects), which in conjunction with the announcement of the sale of certain Gas product lines from our Device Solutions manufacturing and business operations in Europe and North America to Dresser Utility Solutions, includes activities to drive reductions in certain locations and functional support areas. These projects are expected to be substantially complete by the end of 2024, with an estimated $23 million in cash payments remaining as of March 31, 2024 with cash outflows expected through 2025.

Current wording

On October 29, 2021, our Board of Directors approved a restructuring plan (the 2021 Projects), which in conjunction with the announcement of the sale of certain Gas product lines from our Device Solutions manufacturing and business operations in Europe and North America to Dresser Utility Solutions, includes activities to drive reductions in certain locations and functional support areas. These projects are expected to be substantially complete by the end of 2024, with an estimated $20 million in cash payments remaining as of June 30, 2024 with cash outflows expected through 2025.

Previous wording

On February 23, 2023, our Board of Directors approved a restructuring plan (the 2023 Projects). The 2023 Projects include activities that continue Itron's efforts to optimize its global supply chain and manufacturing operations, sales and marketing organizations, and other overhead. These projects are expected to be substantially complete by early 2025, with an estimated $44 million in cash payments remaining as of March 31, 2024 with cash outflows expected through 2027.

Current wording

On February 23, 2023, our Board of Directors approved a restructuring plan (the 2023 Projects). The 2023 Projects include activities that continue Itron's efforts to optimize its global supply chain and manufacturing operations, sales and marketing organizations, and other overhead. These projects are expected to be substantially complete by early 2025, with an estimated $39 million in cash payments remaining as of June 30, 2024 with cash outflows expected through 2027.

Previous wording

For the three months ended March 31, 2024, we paid out $6.2 million related to all our restructuring projects. As of March 31, 2024, $65.2 million was accrued for these restructuring projects, of which $23.7 million is expected to be paid within the next 12 months.

Current wording

For the six months ended June 30, 2024, we paid out $13.5 million related to all our restructuring projects. As of June 30, 2024, $57.7 million was accrued for these restructuring projects, of which $25.0 million is expected to be paid within the next 12 months.

Previous wording

We have tax credits and net operating loss carryforwards in various jurisdictions that are available to reduce cash taxes. However, utilization of tax credits and net operating losses are limited in certain jurisdictions. Based on current projections, we expect to pay, net of refunds, approximately $40 million in U.S federal taxes, $8 million in state taxes, and $26 million in local and foreign taxes during 2024. For a discussion of our tax provision and unrecognized tax benefits, see Item 1: Financial Statements (Unaudited), Note 10: Income Taxes included in this Quarterly Report on Form 10-Q.

Current wording

We have tax credits and net operating loss carryforwards in various jurisdictions that are available to reduce cash taxes. However, utilization of tax credits and net operating losses are limited in certain jurisdictions. Based on current projections, we expect to pay, net of refunds, approximately $47 million in U.S federal taxes, $9 million in state taxes, and $27 million in local and foreign taxes during 2024. For a discussion of our tax provision and unrecognized tax benefits, see Item 1: Financial Statements (Unaudited), Note 10: Income Taxes included in this Quarterly Report on Form 10-Q.

Previous wording

As of March 31, 2024, there was $49.3 million of cash and short-term investments held by certain foreign subsidiaries in which we are permanently reinvested for tax purposes. As a result of recent changes in U.S. tax legislation, any repatriation in the future would not result in U.S. federal income tax. Accordingly, there is no provision for U.S. deferred taxes on this cash. If this cash were repatriated to fund U.S. operations, additional withholding tax costs may be incurred. Tax is only one of the many factors that we consider in the management of global cash. Accordingly, the amount of taxes that we would need to accrue and pay to repatriate foreign cash could vary significantly.

Current wording

As of June 30, 2024, there was $52.2 million of cash and short-term investments held by certain foreign subsidiaries in which we are permanently reinvested for tax purposes. As a result of recent changes in U.S. tax legislation, any repatriation in the future would not result in U.S. federal income tax. Accordingly, there is no provision for U.S. deferred taxes on this cash. If this cash were repatriated to fund U.S. operations, additional withholding tax costs may be incurred. Tax is only one of the many factors that we consider in the management of global cash. Accordingly, the amount of taxes that we would need to accrue and pay to repatriate foreign cash could vary significantly.

Previous wording

In certain of our consolidated international subsidiaries, we have joint venture partners who are minority shareholders. Although these entities are not wholly-owned by Itron, Inc., we consolidate them because we have a greater than 50% ownership interest and/or because we exercise control over the operations. The noncontrolling interest balance in our Consolidated Balance Sheets represents the proportional share of the equity of the joint venture entities, which is attributable to the minority shareholders. At March 31, 2024, $6.7 million of our consolidated cash balance was held in our joint venture entities. As a result, the minority shareholders of these entities have rights to their proportional share of this cash balance, and there may be limitations on our ability to repatriate cash to the United States from these entities.

Current wording

In certain of our consolidated international subsidiaries, we have joint venture partners who are minority shareholders. Although these entities are not wholly-owned by Itron, Inc., we consolidate them because we have a greater than 50% ownership interest and/or because we exercise control over the operations. The noncontrolling interest balance in our Consolidated Balance Sheets represents the proportional share of the equity of the joint venture entities, which is attributable to the minority shareholders. At June 30, 2024, $3.7 million of our consolidated cash balance was held in our joint venture entities. As a result, the minority shareholders of these entities have rights to their proportional share of this cash balance, and there may be limitations on our ability to repatriate cash to the United States from these entities.

Previous wording

We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as restructuring, loss on sale of business, or acquisition and integration related expenses. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.

Current wording

We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as restructuring, (gain) loss on sale of business, or acquisition and integration related expenses. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business.