ITRON, INC.

Previous wording

To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a

Current wording

To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies.

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 42-45 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

•Operating expenses decreased $1.6 million, or 1%, compared with 2024

Current wording

•Operating expenses increased $1.4 million, or 1%, compared with 2024

Previous wording

•Net income attributable to Itron, Inc. was $65.5 million compared with net income of $51.7 million in 2024

Current wording

•Net income attributable to Itron, Inc. was $68.3 million compared with net income of $51.3 million in 2024

Previous wording

•GAAP diluted EPS increased by $0.30 to $1.42 in 2025

Current wording

•GAAP diluted EPS increased by$0.37 to $1.47 in 2025

Previous wording

•Total backlog was $4.7 billion and twelve-month backlog was $1.6 billion at March 31, 2025, compared with$4.3 billion and$1.9 billion at March 31, 2024

Current wording

•Total backlog was $4.5 billion, and twelve-month backlog was $1.5 billion at June 30, 2025, compared with$4.1 billion and$1.8 billion at June 30, 2024

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 42-45 for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.

Previous wording

Total revenues increased $3.7 million, or 1%, compared with the same period in 2024. Product revenues decreased by $4.7 million, and service revenues increased by $8.4 million. Device Solutions decreased by $0.9 million; Networked Solutions decreased by$4.8 million; and Outcomes increased by $9.4 million when compared with the same period last year. Changes in exchange rates unfavorably impacted total revenues by$5.2 million.

Current wording

Total revenues increased $1.4 million compared with the same period in 2024. Product revenues decreased by $20.4 million, and service revenues increased by $21.8 million. Device Solutions decreased by $6.7 million; Networked Solutions decreased by$8.6 million; and Outcomes increased by $16.6 million when compared with the same period last year. Changes in exchange rates unfavorably impacted total revenues by$0.8 million.

Previous wording

Gross margin was 35.8%, compared with 34.0% in 2024. Product sales gross margin increased to 33.8%, compared with 32.4% in 2024, and gross margin on service revenues increased to 48.2%, compared with 45.3% in 2024.

Current wording

Gross margin was 36.3%, compared with 34.3% in 2024. Product sales gross margin increased to 34.3%, compared with 32.7% in 2024, and gross margin on service revenues increased to 48.6%, compared with 45.2% in 2024.

Previous wording

Operating expenses decreased $1.6 million for the three months ended March 31, 2025 as compared with the same period in 2024. This was primarily the result of a $2.3 million decrease in research and development expenses driven by reduced labor costs.

Current wording

Operating expenses decreased $0.2 million for the six months ended June 30, 2025 as compared with the same period in 2024. This was primarily the result of a $1.6 million decrease in research and development expenses driven by reduced professional service expenses, partially offset by a $0.6 million increase in restructuring expenses and a $0.5 million increase in amortization of intangible assets. Refer to Item 1: Financial Statements (Unaudited), Note 4: Intangible Assets and Note 12: Restructuring for additional information.

Previous wording

Total other income (expense) for the three months ended March 31, 2025 was income of $6.1 million, compared with income of $2.4 million in the same period in 2024. The increase in net other income for the three months ended March 31, 2025, as compared with the same period in 2024, was driven by the $7.9 million increase in interest income primarily due to interest earned from the cash proceeds of the 2024 Notes. This increase was offset by an increase in other interest expense driven by a $2.8 million interest accrual for the 2024 Notes recognized during the period. Refer to Item 1: Financial Statements (Unaudited), Note 6: Debt and Note 13: Shareholders' Equity included in this Quarterly Report on Form 10-Q for additional information.

Current wording

The increase in net other income for the six months ended June 30, 2025, as compared with the same period in 2024, was driven by the $15.0 million increase in interest income primarily due to interest earned on the invested proceeds from the 2024 Notes. This increase was offset by an increase in other interest expense driven by a $5.5 million interest accrual for the 2024 Notes recognized during the period as well as a $1.7 million increase in amortization of prepaid debt fees compared with the same period in 2024. Refer to Item 1: Financial Statements (Unaudited), Note 6: Debt included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

For the three months ended March 31, 2025, our income tax expense was $16.9 million, compared with income tax expense of $13.4 million for the same period in 2024. Our tax rate for the three months ended March 31, 2025 of 21% was in line with the federal statutory rate of 21% and overall was impacted by the effect of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, the effect of cross-border tax laws, nondeductible executive compensation, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. While our tax rate for the three months ended March 31, 2024 of 21% was in line with the federal statutory rate of 21%, it was 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.

Current wording

For the three and six months ended June 30, 2025, our income tax expense was $14.7 million and $31.7 million, compared with income tax expense of $15.2 million and $28.6 million for the same period in 2024. Our tax rate for the three and six months ended June 30, 2025 of 18% and 19% 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, the effect of cross-border tax laws, nondeductible executive compensation, 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, 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.

Previous wording

For the three months ended March 31, 2025, gross margin was 30.0%, compared with 23.7% for the same period in 2024. The 630 basis point increase over the prior year was primarily due to an improved product mix and manufacturing efficiencies.

Current wording

For the three months ended June 30, 2025, gross margin was 29.8%, compared with 26.3% for the same period in 2024. The 350 basis point increase over the prior year was primarily due to an improved product mix.

Previous wording

Operating expenses decreased $1.1 million, or 13%, for the first three months of 2025, compared with the same period in 2024. The decrease was primarily due to lower product development and marketing costs.

Current wording

Operating expenses decreased $0.4 million, or 3%, for the first six months of 2025, compared with the same period in 2024. The decrease was primarily due to lower product development and marketing costs.

Previous wording

Revenues decreased $4.8 million, or 1%, for the first three months of 2025, compared with the same period in 2024. The decrease was primarily due to an unusually large first quarter 2024 level, which included a significant amount of catch-up from previously constrained revenue.

Current wording

Revenues decreased $8.6 million, or 1%, for the first six months of 2025, compared with the same period in 2024. The decline was primarily due to an unusually large first half 2024 level, which included a significant amount of catch-up of previously supply chain constrained revenue. Changes in foreign currency exchange rates unfavorably impacted revenues by $1.5 million.

Previous wording

Operating expenses decreased $1.7 million, or 5%, for the first three months of 2025, compared with the same period in 2024. The decrease was primarily related to lower product development costs.

Current wording

Operating expenses decreased $0.2 million for the first six months of 2025, compared with the same period in 2024. The decrease was primarily related to lower product development costs.

Previous wording

Revenues increased $9.4 million, or 14%, for the first three months of 2025, compared with 2024. This increase was driven by managed services and maintenance, as well as software licenses. Changes in foreign currency exchange rates unfavorably impacted revenues by $0.4 million.

Current wording

For the 2025 period, revenues increased $7.3 million, or 9%, compared with the 2024 period. This increase was driven by recurring revenue, as well as software licenses. Changes in foreign currency exchange rates favorably impacted revenues by $0.5 million.

Previous wording

Gross margin increased to 39.2% for the period ending in 2025, compared with 35.1% for last year. The 410 basis point increase was driven by software license and services mix.

Current wording

Gross margin increased to 38.8% for the period ending in 2025, compared with 34.9% for last year. The 390 basis point increase was driven by software license and services mix.

Previous wording

Operating expenses for the first three months of 2025 increased $1.2 million, or 8%, compared with the same period last year. This was primarily related to increased product development investment.

Current wording

Operating expenses for the first six months of 2025 increased $1.9 million, or 6%, compared with the same period last year. This was primarily related to increased employee costs.

Previous wording

Cash and cash equivalents were $1.12 billion at March 31, 2025, compared with $1.05 billion at December 31, 2024. The $72.0 million increase in cash and cash equivalents during the 2025 period was primarily net cash provided by operations as a result of higher earnings.

Current wording

Cash and cash equivalents were $1.22 billion at June 30, 2025, compared with $1.05 billion at December 31, 2024. The $173.0 million increase in cash and cash equivalents during the 2025 period was primarily net cash provided by operations as a result of higher earnings.

Previous wording

Cash provided by operating activities during the three months in 2025 was $72.1 million compared with $41.3 million during the same period in 2024. The increase was primarily due to increased earnings and working capital conversion, partially offset by increased income tax payments in 2025.

Current wording

Cash provided by operating activities during the six months in 2025 was $168.8 million compared with $93.0 million during the same period in 2024. The increase was primarily due to increased earnings in 2025 and a net increase in working capital (current assets less current liabilities) conversion compared with the same period in 2024, partially offset by increased income tax payments in 2025.

Previous wording

During the three months ended March 31, 2025, net cash used in investing activities was $4.6 million compared with $41.1 million in 2024, resulting in a change of $36.5 million. The movement was primarily related to net cash used for the acquisition of Elpis Squared for $34.1 million in 2024 along with $2.5 million in reduced purchases of property, plant, and equipment in 2025 compared with the same period in 2024.

Current wording

During the six months ended June 30, 2025, net cash used in investing activities was $10.7 million compared with $47.8 million in 2024, resulting in a change of $37.2 million. The movement was primarily related to net cash used for the acquisition of Elpis Squared for $34.1 million in 2024, along with $3.6 million in reduced purchases of property, plant, and equipment in 2025 compared with the same period in 2024.

Previous wording

Net cash provided by financing activities during the three months in 2025 was $1.8 million, compared with net cash provided of $1.1 million for the same period in 2024. The change is due primarily to increased proceeds from the issuance of common stock.

Current wording

Net cash provided by financing activities during the six months in 2025 was $4.8 million, compared with net cash provided of $576.8 million for the same period in 2024. The change is due primarily to the issuance in 2024 of the 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 repurchased totaling $100.0 million.

Previous wording

The effect of exchange rates on the cash balances of currencies held in foreign denominations at March 31, 2025 was an increase of $2.8 million, compared with a decrease of $2.7 million for the same period in 2024. 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, 2025 was an increase of $10.1 million, compared with a decrease of $3.5 million for the same period in 2024. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Previous 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. As of March 31, 2025, no amount was outstanding under the 2018 credit facility, and $45.8 million was utilized by outstanding standby letters of credit, resulting in $454.2 million available for borrowing. As of March 31, 2025, $254.2 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.

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. As of June 30, 2025, no amount was outstanding under the 2018 credit facility, and $45.3 million was utilized by outstanding standby letters of credit, resulting in $454.7 million available for borrowing. As of June 30, 2025, $254.7 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.

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 substantially complete as of March 31, 2025. For the three months ended March 31, 2025, we paid out $9.2 million related to all our restructuring projects. As of March 31, 2025, $33.0 million was accrued for all restructuring projects, of which $19.3 million is expected to be paid within the next 12 months and the remainder 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 were substantially complete as of March 31, 2025. For the six months ended June 30, 2025, we paid out $14.5 million related to all our restructuring projects. As of June 30, 2025, $31.1 million was accrued for all restructuring projects, of which $21.3 million is expected to be paid within the next 12 months and the remainder through 2027.

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 $60 million in U.S federal taxes, $12 million in state taxes, and $16 million in local and foreign taxes during 2025. 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, including anticipated impacts of the Act, we expect to pay, net of refunds, approximately $29 million in U.S federal taxes, $7 million in state taxes, and $17 million in local and foreign taxes during 2025. 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, 2025, there was $44.9 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, 2025, there was $52.8 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, 2025, $3.5 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, 2025, $3.3 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.

Previous wording

Non-GAAP operating expenses andnon-GAAP operating income – We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, loss on sale of business, and acquisition and integration related expenses. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, loss on sale of business, and acquisition and integration related expenses. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are not related to our core operating results. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income.

Current wording

Non-GAAP operating expenses andnon-GAAP operating income – We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, (gain) loss on sale of business, and acquisition and integration related expenses. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, (gain) loss on sale of business, and acquisition and integration related expenses. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are not related to our core operating results. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income.

Previous wording

Non-GAAP net income andnon-GAAP diluted EPS – We define non-GAAP net income as net income attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, acquisition and integration related expenses, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by diluted weighted-average shares outstanding during the period calculated on a GAAP basis and then reduced to reflect any anti-dilutive impact of the convertible notes hedge transactions. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS.

Current wording

Non-GAAP net income andnon-GAAP diluted EPS – We define non-GAAP net income as net income attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, (gain) loss on sale of business, acquisition and integration related expenses, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by diluted weighted-average shares outstanding during the period calculated on a GAAP basis and then reduced to reflect any anti-dilutive impact of the convertible notes hedge transactions. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS.

Previous wording

Adjusted EBITDA – We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization, restructuring, loss on sale of business, acquisition and integration related expenses, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income.

Current wording

Adjusted EBITDA – We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization, restructuring, (gain) loss on sale of business, acquisition and integration related expenses, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income.