Stock-Based Compensation Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2014

Stock-Based Compensation Expense and Related Tax Benefit [Table Text Block]

For the three and six months ended June 30, stock-based compensation expense and the related tax benefit were as follows:



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
Stock options	$	546	$	519	$	1,100	$	992
Restricted stock units	4,094		4,158		7,894		8,393
Unrestricted stock awards	230		205		460		402
ESPP	—		144		—		335
Total stock-based compensation	$	4,870	$	5,026	$	9,454	$	10,122

Related tax benefit	$	1,388	$	1,391	$	2,676	$	2,755

Stock Options, Valuation Assumptions [Table Text Block]

The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:



	Three Months Ended June 30,				Six Months Ended June 30,
	2014 ⁽¹⁾		2013 ⁽¹⁾		2014		2013
Dividend yield	—	%	—	%	—	%	—	%
Expected volatility	—	%	—	%	39.8	%	38.1	%
Risk-free interest rate	—	%	—	%	1.7	%	1.0	%
Expected term (years)	—		—		5.5		5.5

Employee Stock Options Activity [Table Text Block]

A summary of our stock option activity for the six months ended June 30 is as follows:



	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value⁽¹⁾		Weighted Average Grant Date Fair Value
	(in thousands)				(years)	(in thousands)
Outstanding, January 1, 2013	1,137		$	54.06	4.8	$	3,815
Granted	128		42.76					$	15.44
Exercised	(32	)	23.36			$	639
Expired	(8	)	49.92
Outstanding, June 30, 2013	1,225		$	53.71	5.0	$	2,388

Outstanding, January 1, 2014	1,180		$	54.79	4.6	$	1,300
Granted	147		35.19					$	13.64
Exercised	(33	)	23.70			$	510
Expired	(10	)	43.82
Outstanding, June 30, 2014	1,284		$	53.43	4.7	$	1,364

Exercisable, June 30, 2014	944		$	58.53	3.1	$	562

Expected to vest, June 30, 2014	325		$	39.35	8.9	$	756

⁽¹⁾

The aggregate intrinsic value of outstanding stock options represents amounts that would have been received by the optionees had all in- the-money options been exercised on that date. Specifically, it is the amount by which the market value of Itron’s stock exceeded the exercise price of the outstanding in-the-money options before applicable income taxes, based on our closing stock price on the last business day of the period. The aggregate intrinsic value of stock options exercised during the period is calculated based on our stock price at the date of exercise.

Restricted Stock Units, Valuation Assumptions

The weighted-average assumptions used to estimate the fair value of performance-based restricted stock units awarded and the resulting weighted average fair-value are as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Dividend yield	—		%	—		%	—		%	—		%
Expected volatility	34.0		%	39.1		%	32.4		%	39.1		%
Risk-free interest rate	0.6		%	0.3		%	0.4		%	0.3		%
Expected term (years)	2.6			2.5			2.0			2.5

Weighted-average fair value	$	41.47		$	45.70		$	34.87		$	45.03

Restricted Stock Units Award Activity [Table Text Block]

The following table summarizes restricted stock unit activity for the six months ended June 30:



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value⁽¹⁾
	(in thousands)				(in thousands)
Outstanding, January 1, 2013	774
Granted ⁽²⁾	255		$	42.51
Released	(253	)			$	13,562
Forfeited	(11	)
Outstanding, June 30, 2013	765

Outstanding, January 1, 2014	658
Granted ⁽²⁾	320		$	35.49
Released	(261	)			$	12,818
Forfeited	(21	)
Outstanding, June 30, 2014	696

Vested but not released, June 30, 2014	9				$	371

Expected to vest, June 30, 2014	584				$	23,682


⁽¹⁾	The aggregate intrinsic value is the market value of the stock, before applicable income taxes, based on the closing price on the stock release dates or at the end of the period for restricted stock units expected to vest.


⁽²⁾	Restricted stock units granted in 2013 and 2014 do not include awards under the Performance Award Agreement for the respective years, as these awards are not granted until attainment of annual performance goals has been determined at the conclusion of the performance period, which had not occurred as of June 30, 2013 and 2014, respectively.

Nonrestricted Stock Awards Activity [Table Text Block]

The following table summarizes unrestricted stock award activity for the three and six months ended June 30:



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands, except per share data)
Shares of unrestricted stock granted	6		5		13		9

Weighted average grant date fair value per share	$	35.82	$	45.37	$	38.23	$	45.40

Employee Stock Purchase Plan (ESPP) Activity [Table Text Block]

The following table summarizes ESPP activity for the three and six months ended June 30:



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands, except per share data)
Shares of stock sold to employees⁽¹⁾	20		27		34		47

Weighted average fair value per ESPP award⁽²⁾	$	—	$	6.37	$	—	$	6.69


⁽¹⁾	Stock sold to employees during each fiscal quarter under the ESPP is associated with the offering period ending on the last day of the previous fiscal quarter.


⁽²⁾	Effective October 1, 2013, the ESPP is no longer compensatory, and therefore the weighted average fair value per award is not applicable for the three and six months ended June 30, 2014.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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