Shareholders' Equity

12 Months Ended

Dec. 31, 2024

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders' Equity

Preferred Stock

We have authorized the issuance of 10 million shares of preferred stock with no par value. In the event of a liquidation, dissolution, or winding up of the affairs of the corporation, whether voluntary or involuntary, the holders of any outstanding preferred stock would be entitled to be paid a preferential amount per share to be determined by the Board of Directors prior to any payment to holders of common stock. There was no preferred stock issued or outstanding at December 31, 2024 or 2023.

Stock Repurchase Programs

Effective September 19, 2024, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2024 Stock Repurchase Program). The repurchase program is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. We repurchased no shares under the 2024 Stock Repurchase Program.

Effective May 11, 2023, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2023 Stock Repurchase Program). In June 2024, we repurchased 971,534 shares under the 2023 Stock Repurchase Program at an average price of $102.93 (excluding commissions) for a total of $100.0 million. This repurchase was completed in conjunction with the issuance of the 2024 convertible notes.

2021 Call Option Transactions

We paid an aggregate amount of $84.1 million for the 2021 call option transactions. The 2021 call option transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2021 Notes, approximately 3.7 million shares of our common stock, the same number of shares initially underlying the 2021 Notes, at a strike price of approximately $126.00, subject to customary adjustments. The 2021 call option transactions will expire upon the maturity of the 2021 Notes, subject to earlier exercise or termination. The 2021 call option transactions are expected generally to reduce the potential dilutive effect of the conversion of our 2021 Notes and/or offset any cash payments we are required to make in excess of the principal amount of the converted notes, as the case may be, in the event that the market price per share of our common stock, as measured under the terms of the 2021 call option transactions, is greater than the strike price of the 2021 call option transactions. The 2021 call option transactions meet the criteria in ASC 815-40 to be classified within Stockholders' Equity, and therefore they are not revalued after their issuance.

We made a tax election to integrate the 2021 Notes and the 2021 call option transactions. We are retaining the identification statements in our books and records, together with a schedule providing the accruals on the synthetic debt instruments. The accounting impact of this tax election makes the call options deductible as original issue discount for tax purposes over the term of the 2021 Notes, and results in a $20.6 million deferred tax asset recognized through equity.

Warrant Transactions

In addition, concurrently with entering into the 2021 call option transactions, we separately entered into privately-negotiated warrant transactions (the warrant transactions), whereby we sold to the counterparties warrants to acquire, collectively, subject to anti-dilution adjustments, 3.7 million shares of our common stock at an initial strike price of $180.00 per share, which represents a premium of 100% over the public offering price in the common stock issuance. We received aggregate proceeds of $45.3 million from the warrant transactions with the counterparties, with such proceeds partially offsetting the costs of entering into the convertible note hedge transactions. The warrants expire in June 2026. If the market value per share of our common stock, as measured under the warrant transactions, exceeds the strike price of the warrants, the warrants will have a dilutive effect on our earnings per share, unless we elect, subject to certain conditions, to settle the warrants in cash. The warrants meet the criteria in ASC 815-40 to be classified within Stockholders' Equity, and therefore the warrants are not revalued after issuance.

2024 Capped Call Transactions

In connection with the issuance of the 2024 Notes, we entered into privately negotiated capped call transactions on our common stock with certain commercial banks. The 2024 capped call transactions cover, subject to anti-dilution adjustments substantially similar to those in the 2024 Notes, approximately 6.1 million shares of our common stock, the same number of shares initially underlying the convertible notes, at a strike price of approximately $131.2353, subject to customary adjustments. The cap price of the 2024 capped call transactions will initially be $205.86 per share, which represents a premium of 100% over the last reported stock price per share of the Company's common stock on June 17, 2024, and is subject to certain adjustments under the terms of the 2024 capped call transactions. The 2024 capped call transactions will expire upon the maturity of the 2024 Notes, subject to earlier exercise or termination.

We made a tax election to integrate the 2024 Notes and the 2024 capped call transactions. We are retaining the identification statements in our books and records, together with a schedule providing the accruals on the synthetic debt instruments. The accounting impact of this tax election makes the capped call transactions deductible as original issue discount for tax purposes over the term of the 2024 Notes, and results in a $26.7 million deferred tax asset recognized through equity.

Accumulated Other Comprehensive Income (Loss)

The changes in the components of AOCI, net of tax, were as follows:

In thousands	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)
Balances at January 1, 2022	$	(111,766)	$	(210)	$	(14,380)	$	(21,742)	$	(148,098)
OCI before reclassifications	(28,748)		—		—		23,170		(5,578)
Amounts reclassified from AOCI	57,321		—		—		1,681		59,002
Total other comprehensive income (loss)	28,573		—		—		24,851		53,424
Balances at December 31, 2022	(83,193)		(210)		(14,380)		3,109		(94,674)
OCI before reclassifications	15,550		—		—		(1,947)		13,603
Amounts reclassified from AOCI	—		—		—		(119)		(119)
Total other comprehensive income (loss)	15,550		—		—		(2,066)		13,484
Balances at December 31, 2023	(67,643)		(210)		(14,380)		1,043		(81,190)
OCI before reclassifications	(29,913)		—		—		1,290		(28,623)
Amounts reclassified from AOCI	—		—		—		(118)		(118)
Total other comprehensive income (loss)	(29,913)		—		—		1,172		(28,741)
Balances at December 31, 2024	$	(97,556)	$	(210)	$	(14,380)	$	2,215	$	(109,931)

Upon closing the divestiture transaction in 2022, outstanding amounts in AOCI were reclassified to net income (loss) on the sale of business with a corresponding reversal of the impairment loss originally booked in the prior period. We also substantially liquidated our legal entity in Russia during 2022 recognizing the reclassification of the currency translation adjustment from accumulated other comprehensive income (loss) related to the disposal of the business.

The before-tax, income tax (provision) benefit, and net-of-tax amounts related to each component of OCI were as follows:

	Year Ended December 31,
In thousands	2024		2023		2022
Before-tax amount
Foreign currency translation adjustment	$	(30,238)	$	15,622	$	(28,921)
Foreign currency translation adjustment reclassified to net income (loss) on sale or disposal of business	—		—		57,321
Net unrealized gain (loss) on derivative instruments, designated as cash flow hedges	—		—		—
Net hedging (gain) loss reclassified to net income (loss)	—		—		—
Net unrealized gain (loss) on defined benefit plans	1,999		(2,117)		23,519
Net defined benefit plan (gain) loss reclassified to net income (loss)	(183)		(129)		1,706
Total other comprehensive income (loss), before tax	(28,422)		13,376		53,625
Tax (provision) benefit
Foreign currency translation adjustment	325		(72)		173
Foreign currency translation adjustment reclassified to net income (loss) on sale or disposal of business	—		—		—
Net unrealized gain (loss) on derivative instruments, designated as cash flow hedges	—		—		—
Net hedging (gain) loss reclassified to net income (loss)	—		—		—
Net unrealized gain (loss) on defined benefit plans	(709)		170		(349)
Net defined benefit plan (gain) loss reclassified to net income (loss)	65		10		(25)
Total other comprehensive income (loss) tax (provision) benefit	(319)		108		(201)
Net-of-tax amount
Foreign currency translation adjustment	(29,913)		15,550		(28,748)
Foreign currency translation adjustment reclassified to net income (loss) on sale or disposal of business	—		—		57,321
Net unrealized gain (loss) on derivative instruments, designated as cash flow hedges	—		—		—
Net hedging (gain) loss reclassified to net income (loss)	—		—		—
Net unrealized gain (loss) on defined benefit plans	1,290		(1,947)		23,170
Net defined benefit plan (gain) loss reclassified to net income (loss)	(118)		(119)		1,681
Total other comprehensive income (loss), net of tax	$	(28,741)	$	13,484	$	53,424