UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
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December
20, 2007
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Date
of Report (Date of Earliest Event
Reported)
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ITRON,
INC.
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(Exact
Name of Registrant as Specified in its
Charter)
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Washington
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000-22418
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91-1011792
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(State
or Other Jurisdiction of
Incorporation)
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(Commission
File No.)
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(IRS
Employer Identification
No.)
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2111
N. Molter Road, Liberty Lake,
WA 99019
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(Address
of Principal Executive Offices, Zip
Code)
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(509)
924-9900
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(Registrant’s
Telephone Number, Including Area
Code)
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(Former
Name or Former Address, if Changed Since Last
Report)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
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Written communications pursuant to Rule 425 under Securities Act
(17 CFR
230.425)
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[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR
240.14a-12)
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[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item
7.01 Regulation
FD Disclosure.
On
December 20, 2007, Itron, Inc. reached an agreement with Southern California
Edison (SCE) to deploy Itron’s OpenWay meter and communications system as part
of SCE’s Edison SmartConnect metering program. In connection with this
agreement, Itron issued a press release on December 20, 2007, a copy of which
is
attached as Exhibit 99.1. Itron has prepared answers to common questions
regarding the SCE agreement, a copy of which is attached as Exhibit
99.2.
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Item 9.01
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Financial
Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit
Number
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Description
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99.1
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99.2
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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Dated: December
20, 2007
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ITRON,
INC.
By: Steven
M. Helmbrecht
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Steven
M. Helmbrecht
Sr.
Vice President and Chief Financial
Officer
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EXHIBIT
INDEX
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Exhibit
Number
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Description
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99.1
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99.2
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Exhibit
99.1
FOR
IMMEDIATE RELEASE
ITRON
“OPENWAY” CHOSEN FOR SOUTHERN CALIFORNIA EDISON’S SMARTCONNECT METERING
SYSTEM
LIBERTY
LAKE, Wash., Dec. 20, 2007 — Itron, Inc. (NASDAQ:ITRI) has reached an agreement
with Southern California Edison (SCE) to deploy Itron’s OpenWayTM
meter and communications system as part of SCE’s Edison SmartConnect metering
program.
OpenWay
by Itron is a standards-based, open-architecture smart metering solution that
features two-way wireless communication to state-of-the-art electricity meters
at homes and small businesses. OpenWay is designed to meet a broad set of
customer energy management requirements, such as real-time energy communication
to thermostats, information displays and energy smart appliances using ZigBee™
technology.
“SCE
has
been a leader in the electric industry on smart metering and has been an
important Itron customer for more than two decades, so we are very excited
to be
working with the company on Edison SmartConnect,” said LeRoy Nosbaum, Itron
chairman and CEO. “We look forward to being a part of SCE’s plans.”
The
Edison SmartConnect program is a key component of SCE’s leadership in managing
increasing demand for electricity from customers and providing environmental
leadership through energy efficiency, demand management, electric transportation
and smart technologies. Edison plans to automate 5.3 million meters from 2009
through 2012.
“This
agreement with Itron marks an important milestone in the advancement of Edison
SmartConnect,” said Lynda Ziegler, SCE’s senior vice president of customer
service. “OpenWay’s flexibility and advanced technology is a terrific example of
how companies are rising to the challenge to enable consumers to make more
sophisticated energy choices.”
About
Itron
Itron
is
a leading technology provider and critical source of knowledge to the global
energy and water industries. Itron operates in two divisions; as Itron in North
America and as Actaris outside of North America. The company is the world’s
leading provider of metering, data collection and software solutions, with
nearly 8,000 utilities worldwide relying on our technology to optimize the
delivery and use of energy and water. Itron delivers industry leading solutions
for electricity, gas and water utilities by offering meters; data collection
and
communication systems, including automated meter reading and advanced metering
infrastructure; meter data management and utility software applications; as
well
as comprehensive project management, installation and consulting services.
To
know more, start here: www.itron.com.
About
Southern California Edison
An
Edison
International (NYSE:EIX) company, Southern California Edison is the largest
electric utility in California, serving a population of more than 13 million
via
4.8 million customer accounts in a 50,000-square-mile service area within
central, coastal and Southern California.
For
more
information on Edison SmartConnect, please visit www.sce.com/smartconnect.
For
additional information, including answers to frequently asked questions about
the agreement go to: www.itron.com/pages/investors.asp
and choose SEC Filings.
For
additional information, contact:
Deloris
Duquette
Vice
President, Investor Relations and Corporate Communications
(509)
891-3523
deloris.duquette@itron.com
Exhibit
99.2
ITRON
AND SOUTHERN CALIFORNIA EDISON AGREEMENT FAQ
Answers
to Common Questions Regarding the SCE Agreement
Date: December
20, 2007
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1.
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What
is the value of the
agreement?
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The
value
of the agreement is about $480 million if SCE completes its full deployment
and
purchases 80% of the meters from Itron. SCE is not required to
purchase these quantities, however, and has stated that purchases will be
largely dependent upon the performance of Itron and the OpenWay
system. Because the full deployment is not expected to begin until
January 1, 2009, no orders of equipment were included as part of the initial
purchase order.
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2.
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Will
you book the entire agreement and put it into
backlog?
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Because
the agreement with SCE does not guarantee a volume of meters we will not book
the entire agreement. The initial purchase order we received is for
software license development, maintenance and professional services. We will
book equipment orders and add to backlog as we receive firm purchase orders
from
SCE. We expect SCE to issue firm purchase orders for equipment on a
periodic basis during deployment.
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3.
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What
is the term of the
agreement?
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The
term
of the agreement is 20 years. The meter deployment period is expected
to last four years beginning in 2009 through 2012.
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4.
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Is
the agreement cancellable for
convenience?
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Yes,
the
agreement may be cancelled by SCE for its convenience. Itron does not
expect that SCE will exercise its right to terminate for
convenience.
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5.
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Is
the agreement subject to California Public Utility Commission (CPUC)
approval?
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The
Edison SmartConnect™ program
is subject to approval by the CPUC. SCE filed an application with the
CPUC on July 31, 2007 seeking authority to deploy Edison
SmartConnect™. The agreement is contingent upon approval of the
Edison SmartConnect™ application, expected in summer 2008. If
the application is not approved by the CPUC, then Itron expects that SCE would
exercise its termination for convenience right under the Agreement.
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6.
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Will
SCE split the meter and communication
orders?
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SCE
is
currently planning on contracting with an alternate meter supplier and Itron
has
agreed to cooperate with SCE in its efforts to assure that an alternative meter
can be used with the Itron-provided communication system. We expect
to receive orders for all of the communication system and potentially 80% of
the
meters as we have structured the agreement so it should be beneficial for SCE
to
order a minimum of 80% of its meters from Itron.
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7.
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What
other meter vendor have you agreed to put your communication technology
on?
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We
have
agreed that we will provide our communication technology to any vendor selected
by SCE as its alternative meter provider. The technology may be
provided either with a license of the technology or a communications card or
chip that will allow the alternative meter to communicate with Itron’s
communication system. SCE will be releasing an RFP for a second meter
supplier in January 2008, and Itron is committed to working with the selected
alternate supplier.
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8.
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How
will revenue be
recognized?
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Based
on
a preliminary assessment of the contract terms and revenue recognition guidance,
we expect that we will recognize revenue as products and services are
delivered. This methodology would closely reflect the progressive
installation of the OpenWay AMI network.
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9.
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What
components are included in the
agreement?
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Itron
will be providing meters, communication equipment, software and services as
part
of the agreement. We will also offer maintenance services, trouble
shooting, and sales of additional equipment for the term of the
agreement.
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10.
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Is
the gross margin on this agreement lower than other AMR
projects?
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We
do not
report gross margins by contract; however, we would expect this contract to
have
gross margins similar to the rest of our Itron North America business once
we
begin full deployment.
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11.
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There
are several utilities that have been public about their AMI
deployment plans. Are they each on track with
timing?
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As
we
have previously stated, AMI projects involve significant capital
expenditures by the utility. Those decisions require extensive
planning involving many employees, vendors
and regulatory agencies. Each utility has its own schedule
for investigating, testing, and seeking regulatory approvals for their AMI
project. We are generally restricted by confidentiality
agreements from discussing specific projects but have been advised that
CenterPoint Energy, who had expected to make a filing with the Public
Utility Commission of Texas before the end of the year, does not expect to
file
with the commission until 2008.