Key Note Address by Robert Rickard, GM Itron Asia

KEY NOTE ADDRESS123Itron at a GlanceIndustry DynamicsHow Is Itron Evolving ?Itron Australia User Conference 2011Rob Rickard, Itron Asia General Manager9 th March 2011

ITRON AT A GLANCE» Itron provides the knowledge, insight and technology that enablethe responsible management, delivery and use of our preciousenergy and water resources» World’s leading end-to-end solution provider serving 8000customers across 130 countries» Dedicated to supplying products and services for measuring,optimizing and analyzing utility information

2INDUSTRYDYNAMICS

THE WAY WE MANAGE ENERGY ANDWATER WILL SHAPE OUR CENTURY.To allow the use of renewables and ultimately encourage energyefficiency, utilities need flexible solutions, rooted in reality.

BY 2030, ENERGYCONSUMPTION WILLINCREASE BY 40%2009 World Energy Outlook - International Energy Agency

2+ MILLION MILES OFU.S. GAS PIPELINES60% ARE OVER 40YEARS OLDSource: AGA and PHMSA: Hazardous Liquid Pipelines

GLOBAL WATERDEMAND ISPROJECTED TOINCREASE 53%BY 2030Source: Water Resources Group, Charting Our Water Future

REGULATORY ENVIRONMENTNorth America» United States: each state adopts its own regulations» Canada: the provinces of British Columbia and Ontario have mandatedsmart metering20/20/20 by 2020 Directive from European UnionThird Energy package demands smart metering in theEuropean Community» Focus on Climate change – Energy savings – Renewables – EV’s» Consumer’s privacy protection is a key issueImplementation Will Vary» UK: Electric & Gas, fully deregulated market, central com’s, Energy efficiency targets to thesuppliers (CERT) legal framework stillto be finalized» France: Electric and Gas independent, high focus on consumer’s savings and renewablesmanagement» Spain: Electricity driving, smart metering implementation costincluded in tariffs» Germany: smart metering for new connections onlyRegulations in progress in Australia, ChinaSouth America» Brazil: government has issued a draft measure for the adoption of smart meters

WORLD MARKET FORADVANCED METERINGWATERSmart Water Meter CAGR: 12%10,0008,0006,00013%12%20%9%9%8%4,0002,0000(in thousands)2009 2010 2011 2012 2013 2014 2015Sources: Pike Research; IMS Research, The World Market for Water Meters, 2010

3HOW IS ITRONEVOLVING ?

Network CommunicationsEND-TO-END SOLUTIONSAnalyticsActive Smart GridAnalytics (ASA)IEE Meter DataManagementSmart PaymentSystemsDataCollectionMeter DataCollectionFieldOperationsSmartMeteringElectricity Gas Water

Electricity Metering Market SegmentationProduct & Segment Specific Software (e.g. ACE Pilot)Generation, Transmission &Distribution MeteringIndustrial Billing MeteringSmart Metering: Commercial& ResidentialPrimary Drivers: EnergyEfficiency, End UserEngagementAdvanced ResidentialPrimary Drivers: RevenueprotectionBasic Residential:Electromechanical, Static,PrepaymentSL7000 / ACE8000Load ManagementACE5000ACE6000ACE4000KBDCentralized MeteringSolutionFocussed and OptimisedACE100, ACE300 ACE2000& ACE3000, ACE9000• IEE Suite• Eclipse Suite• Frontline / FDM• MV-90• Forecasting• Saturne• EverBlu

Itron Scope & Services PossibilitiesProfessionalServicesItronSoftwareDeliver turnkey servicesFor Tier 3 & 4 UtilitiesSmart FieldServices ToolsIntegrationConsultingProjectManagementIT ServicesNetworkMeterManagedServicesAnalyticsHANTransactionServicesHAN ServicesTechnology

MOVING BEYONDOPERATIONAL EFFICIENCIES

A GLOBAL COMPANY, OPERATING LOCALLY

NORTH AMERICAAMR/AMI PENETRATIONITRON MARKET SHARE2502001501005080.0%70.0%60.0%50.0%40.0%30.0%20.0%10.0%0(in millions)Electric Gas Water47% 57% 37%AUTOMATED UNAUTOMATED0.0%Electric Gas WaterCOMMUNICATIONSMETERSSources: IMS Research, The World Market for Electricity, Gas and Water Meters, 2010; The Scott Report: AMR Deployments inNorth America, Q2, 2010January 2011 Investor Presentation / 22

EUROPETOTAL METERS (millions)25020015010050-50%40%30%20%10%0%Electric Gas WaterMARKET SHAREElectric Gas WaterSMART METERS~ 10%ROADMAPCountry / Utility Electric Gas Deployment SpecificsUnited Kingdom 26 21 2012 - 2020Deregulated, Potential forCentral CommunicationFrance (EDF / GDF) 35 11 2013 - 2020EDF will be PLC, GDF leaningtoward RFSpain 20 6 2010 - 2018Penalties for not havingapproved plan by 2010Germany 45 15 TBDDeregulated, FragmentedMarket, Start with NewConstructionItaly 16 2010 - 2017Electric Automated, GasMandated Start with C&ILarge Countries/Utilities 126 69Remaining Countries 64 41 Electric Smart Meters by 2020» 175 million water meters – no mandates at this time, howeverautomation and smart metering will be driven by conservation efforts» Awarded Azerigas prepayment solutionJanuary 2011 Investor Presentation / 23

UK Smart Metering Benefits Assessment, 2010

UK Cost-Benefit Summary: Smart Metering, 2010

AFRICA / MIDDLE EASTTOTAL METERS (millions)200150100MARKET OPPORTUNITY» Smart metering in the Middle East» Revenue Protection in Africa» Water resource protection500Electric Gas WaterRECENT SMART METERING WINS» Dubai Electricity & Water – full end-to-endMARKET SHARE70%60%50%40%30%20%10%0%Electric Gas WaterKEY BUSINESS DRIVERS IN SOUTH AFRICA» Generation power shortages – revenue protection» STS Prepayment an integral part of the smart meter solution» Itron has 3 million Smart Payment meters under services contractSMART METERS~ 5%January 2011 Investor Presentation / 26

SOUTH AMERICATOTAL METERS (millions)120100806040200Electric Gas WaterMARKET SHARE60%50%40%30%20%10%0%Electric Gas WaterSMART METERS< 1%MARKET OPPORTUNITY» Electric revenue protection» Gas market growth» Water conservation» ISO and national standardsITRON ADVANTAGES» Water conservation programs» Central Metering Systems» Pre-payment products and services» Gas productsJanuary 2011 Investor Presentation / 27

ASIATOTAL METERS (millions)7006005004003002001000Electric Gas WaterMARKET SHARE8%ROADMAPCountry Electric Gas Water SpecificsCapacity requirement should increaseIndia 120 15 50 from 135M E&G to 300MChina 325 30 250 5 Year State Policy for Smart GridJapan 80 25 50 Limited labor will drive Smart MetersAustralia 15 5 10 Smart Meters being deployedLarge Countries 540 75 360Remaining Countries 100 105 2056%4%2%0%Electric Gas Water» Revenue protection and prepayment in Indonesia» New factories in China and India for water» Market leader in Australia for Meter Data ManagementSMART METERS< 1%January 2011 Investor Presentation / 28

AN EXCITING FUTURE1600HIGHLIGHTS1400120010008006004001257853» 2.7 billion meters worldwide» Currently ~ 9% automated» Business, regulatory and environmentaldrivers for automation• Europe moving to smart meters overnext decade» Great opportunity» $1.7 billion backlog as of 9/30/102000371144 51 54Electric Gas Water10% 12% 6%AUTOMATED NON-AUTOMATED(in millions)Sources: The Scott Report: International Deployments of Automated Metering Devices, 7th Edition; IMS Research,Worldwide Meter Market, 2010 EditionJanuary 2011 Investor Presentation / 29

QUESTIONS?

THANK YOU

BACK-UP

Home Area Network (HAN) Services ViewEnergyDistributorEnergySupplier3 rd Party (or Itron)ApplicationDevelopmentHAN / ConsumerServices ProvidersApplicationFirmwareAPP 1Meter FunctionalFirmwareAPP 2APP 3MetrologyFirmwareAPP 4

End2End Security ArchitectureUTILITYMeter DataCollectionEnergySecurityServerCONCENTRATORCONSUMEREncryptedNetworkEncryptedEncryptedNetworkEncryptedEnd2EndEnd2EndSecurity EndpointSecurity EndpointSecurity Endpoint

Virus/Trojan/Root-KitUTILITYEnd2End Security ArchitectureElements AdressedHackingCONCENTRATORBy-passingCONSUMERTerrorismExtortionMeter DataCollectionEnergySecurityServerOrganisedcrimePetty theftCommsbreakMagnetsEncryptedNetworkEncryptedEncryptedNetworkEncryptedEnd2EndEnd2EndSecurity EndpointSecurity EndpointSecurity Endpoint

Low Voltage Distribution Automation:PLC Driven OpportunityLV NetworkSmart ConcentratorSmart PLCMeterGridinstabilityUse Case1. DistributedControl2. Real TimeMonitoringNew Opportunity:• The low voltage grid ismanaged in the meter andthe transformer, in adistributed way• Voltage & distributionfrequency fluctuationsmonitored → smart devicereacts in real time• Monitoring is decentralised:in smart meter and in smarttransformer• With EV’s and Microgeneration,grid stability at LVtransformer level could beactively controlled

UK Envisaged SolutionHighlights• Smart Energy Code to be defined• DCC will manage “thin” communication through many contracts• Gas valve appears to be mandated• Each supplier will require a MDM, with additional functions:• Device configuration, key storage & tariff management• Prepayment (and related functionality)• HAN “Management” and messaging• SLA monitoring