Good day, everyone, and welcome to the Itron, Inc. Q4 2021 earnings conference call. Today's call is being recorded. For opening remarks, I would like to turn the call over to Ken Gianella. Please go ahead. Thank you, operator. Good morning, and welcome to Itron's fourth quarter 2021 earnings conference call. We issued a press release earlier today announcing our results. The press release includes replay information about today's call. A presentation to accompany our remarks on this call is also available through the webcast and on our corporate website under the Investor Relations tab. On the call today, we have Tom Deitrich, Itron's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer. Following our prepared remarks, we'll open the call to take questions using the process the operator described. Before I turn the call over to Tom, let me remind you of our non-GAAP financial presentation and our Safe Harbor statement. Our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our investor relations website. We'll be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and the comments made during this conference call and in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission. In addition, due to the fluid nature of the COVID-19 pandemic and global supply chain constraints, company estimates regarding the impact of these events on current or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment. Materials discussed today, February 28, 2022, may materially change, and we do not undertake any duty to update any of our forward-looking statements. Now please turn to page four in the presentation, and I'll turn the call over to our CEO, Tom Deitrich. Thank you, Ken. Good morning, and thank you for joining us. Turning to slide four, market demand for Itron solutions has reached new heights, resulting in record bookings and backlog for the fourth quarter. Bookings in Q4 were $1.1 billion, which is our largest quarter on record. This pushed 2021 to be a record year with over $2.8 billion in bookings. Due to the strength of our portfolio and domain expertise, we are accelerating our leadership position with utilities and cities around the globe. Our bookings performance drove fourth quarter book-to-bill ratio to 2.2 and 1.4 for full year 2021. This was well above our full year target of a 1-to-1 ratio. Record bookings led to a total backlog exiting the fourth quarter of over $4 billion. This eclipsed our previous record of $3.5 billion. Additionally, we were pleased to see our 12-month backlog increase to approximately $1.5 billion. This is a key metric used to gauge the strength of near-term demand. Based on the rich pipeline of visible opportunities, we anticipate the strong demand environment will continue into 2022, and we are again targeting a full-year book-to-bill ratio of at least 1-to-1. Noting that the vast majority of our Q4 bookings support our Networked Solutions and Outcomes segments, I would like to quickly highlight some examples of our customer wins this quarter. The first is an example of our ability to combine technology and business model innovation to benefit our customers. We are pleased to announce that San Antonio Water System will leverage the existing Itron network technology in San Antonio to deploy their new water AMI solution, proving our build it once and use it multiple times axiom. Itron will also manage the SaaS-based data management solution, ensuring data is safe and secure while lowering the total cost of ownership for both SAWS and CPS Energy. Next, I would like to highlight Itron's commitment to safety in the gas solutions market. CenterPoint Energy, one of the leaders in the utility industry, will deploy our Intelis gas solution across their service territories. Our Intelis solution not only enables CenterPoint with two-way communications for monitoring and billing their gas assets, but will push intelligence to the edge of the network. Our Intelis gas meter offers self-monitoring capabilities so the smart meter can shut itself off without utility intervention in the event of a high flow or high temperature event. Simultaneously, alarms can be sent via the Itron network, alerting both the utility and local authorities of potential concerns, thus minimizing the risk of gas safety incidents. Finally, our Outcomes business signed a 15-year agreement with Sarawak Energy in Malaysia to deploy Itron's Network as a Service solution, including the monitoring and maintenance of the communication network. The NaaS solution for Sarawak Energy includes 180,000 advanced metering infrastructure endpoints, as well as the deployment of our Operations Optimizer and Utility IQ Software as a Service offerings. Itron's open standards-based network enables Sarawak Energy to improve customer service, safety, and operational efficiency by providing valuable insights for daily operations. These are just a few examples of how Itron solutions are driving our bookings and backlog performance. As these projects are executed over the next few years, they will add to our 3.8 million cumulatively deployed distributed intelligence capable endpoints and our 82 million customer endpoints that are under Itron's management. Both metrics are important leading indicators of our outcomes growth. Turning to slide five, I will now provide some operational insights to the prior quarter and 2022. While demand for Itron solutions is at record levels, the supply chain constraints and inflationary pressures continued in Q4. Strong customer demand was more than offset by semiconductor component constraints. For the full year 2021, component supply constraints gated our revenue by approximately $225 million. Additionally, we anticipate our revenue will be impacted by semiconductor constraints through the first half of 2022 at similar levels experienced in the second half of 2021. We continue to manage through these macro constraints. We are grateful for the support and collaboration of our customers on project profiles and emphasize that we have not seen any cancellation of backlog. The long-term nature of our business, particularly in the Networked Solutions and Outcomes areas, serves us well in this regard. Turning next to our efforts around price cost actions, we are actively working to protect our margins from cost pressures that stem from the pandemic and resulting inflation that we saw last year and is continuing into 2022. We are aggressively moving to lower cost, secure supply, and adjust pricing with customers to adapt to the new market realities. As component constraints ease, we anticipate increased factory utilization combined with our continued efforts to move to a more asset-light model will improve our margins. Finally, today we anticipate the completion of the sale of our non-communicating mechanical gas businesses that were announced last fall. Since 2019, we have divested or exited over $300 million of annualized revenue from non-core, non-strategic assets, including an annualized approximately $100 million of revenue in this most recent transaction. While this revenue was highly concentrated in our Device Solutions segment, it has allowed us to focus our efforts and develop innovative product offerings for our Networked Solutions and Outcomes segments, which has led to our record bookings in 2021. The close of this transaction with Dresser Utility Solutions is another milestone on our journey towards more advanced networks, distributed intelligent endpoints, and data-driven outcomes to better serve our customers for the next decade and beyond. Now, please turn to slide seven as I hand off to Joan to cover our fourth quarter results and our 2022 outlook. Thank you, Tom. As Tom discussed, we continue to be impacted by supply chain constraints in the fourth quarter and expect a similar environment through the first half of 2022. Slide seven has a summary of consolidated GAAP results. Fourth quarter revenue of $486 million decreased 8% from last year or 6% in constant currency. The year-over-year decline was due to supply constraints, which limited our ability to meet customer demand, reducing revenue by approximately $75 million in the quarter. Gross margin for the quarter was 25%, 330 basis points lower than last year, primarily due to higher component costs and manufacturing inefficiencies driven by the supply constraints. The GAAP net loss of $59 million or $1.30 per share compares with net income of $22 million or $0.53 per diluted share in the prior year. The net loss in the current period was primarily due to lower gross profit, higher restructuring expenses, and a loss related to the expected sale of our mechanical C&I gas business. Regarding non-GAAP metrics on slide eight, non-GAAP operating income was a loss of $7 million. Adjusted EBITDA was $3 million. Non-GAAP net income for the quarter was $34 million or $0.75 per diluted share. Looking at revenue by business segment on slide nine, Device Solutions revenue was $157 million, a $25 million or 13% year-over-year decline on a constant currency basis. The decrease was due in part to component shortages, which resulted in unfulfilled customer demand. Also, it was a tough year-over-year compare as the fourth quarter of 2020 reflected a catch-up of shipments from delays caused by earlier COVID shutdowns in Europe. Networked Solutions revenue was $265 million, a $12 million or 4% decrease year-over-year in constant currency. The decline is attributable to the component shortages. Revenue in the Outcomes segment was $64 million, a $3 million or 4% increase in constant currency from 2020. The increase was due to higher software and professional services. Lastly, foreign currency changes resulted in $5 million lower revenue versus the prior year. Moving to our non-GAAP year-over-year EPS bridge on slide 10, our Q4 non-GAAP EPS was $0.75 per diluted share, up $0.10 from the prior year. A negative tax provision in 2021 had a very positive benefit to the year-over-year non-GAAP EPS, adding $1 per share. The unusually low tax rate in the quarter was due to a tax benefit driven by the impact of certain transfers of business activities and assets. The tax benefit to EPS was mostly offset by net operating performance, which had a negative $0.96 per share impact versus Q4 of 2020. This was primarily due to the impact of component constraints and cost inflation on gross profit, as well as higher variable compensation. Lower interest expense resulted in a $0.16 increase year over year. Finally, changes in foreign currency and share count resulted in a $0.09 per share decrease year over year. Turning to slides 11 through 13, I'll discuss the Q4 results by business segment compared with the prior year. Device Solutions revenue was $157 million, with gross margin of 9% and operating margin of 2%. Gross margin decreased 280 basis points due to manufacturing inefficiencies related to component shortages and inflationary cost pressures. Operating margin decreased 460 basis points due to the fall through of lower gross profit as well as higher OpEx. Networked Solutions revenue was $265 million with gross margin of 30%. Gross margin decreased 600 basis points from the prior year, primarily due to manufacturing inefficiencies related to the component constraints and inflationary cost pressures. Operating margin of 19% decreased 690 basis points due to the fall through of lower gross profits. Outcomes revenue was $64 million with gross margin of 43%, which was essentially flat with the prior year. I would note that in both Q4 of 2021 and in Q4 of 2020, the Outcomes segment achieved stronger than average gross margin due to the recognition of software license sales. Lastly, Outcomes operating margin was 25%, 450 basis points lower due to higher R&D investment in 2021. Now to briefly recap full year 2021 results on slide 14. The 2021 results were significantly impacted by supply constraints, particularly in the back half of the year. Revenue of approximately $2 billion was down 9% from 2020. The reduction was largely attributable to the impact of the supply constraints, which reduced our full year 2021 revenue by approximately $225 million. Gross margin was 28.9%, 120 basis points higher than 2020. Adjusted EBITDA was $115 million, compared with $178 million in the prior year. Non-GAAP earnings per share was $1.75, compared to $1.85 in 2020. Free cash flow was $120 million, compared with $63 million in the prior year. The strong year-over-year improvement in cash flow was driven primarily by lower variable compensation and interest payments in 2021. Turning to slide 15, I'll cover liquidity and debt. Free cash flow was $7 million in the fourth quarter. Cash and equivalents at the end of the fourth quarter were $172 million, including $10 million related to the pending sale of our mechanical C&I gas business, which was reclassified to assets held for sale. Total debt remained flat at $460 million, and net debt was $288 million. Net leverage was 2.5x at the end of Q4. As we announced on our last earnings call, the board of directors authorized a share repurchase program of up to $100 million over an 18-month period. As of today, we have repurchased $25 million or approximately 400,000 shares under the program with an average repurchase price of $61.67. Please turn to slide 16. I'd like to provide some color on our 2022 expectations. We anticipate full year 2022 revenue to be in a range of $2.0 billion-$2.1 billion. We expect revenue in the first half of 2022 will be constrained by the supply chain shortages, similar to our experience in the back half of 2021. Our current expectation is the supply constraints will begin to improve in the second half of the year, allowing us to catch up on a portion of the first half shortfall. At the midpoint, the 2022 annual revenue guidance is approximately 3% year-over-year growth. This is driven by growth in both our Networked Solutions and Outcomes segments, partially offset by a decline in Device Solutions. We continue to make portfolio decisions in our Device Solutions segment, which has led to lower revenue. This guidance also reflects the sale of our mechanical C&I gas business, which reduced revenue by approximately $100 million on an annualized basis. If you normalize for the impact of this sale, the 2022 revenue growth rate at the midpoint of guidance would be approximately 8%. We anticipate full year non-GAAP EPS to be within a range of $1.25-$1.75 per diluted share. At the midpoint of the guidance and normalizing the tax rate to 25% for both years, the year-over-year earnings growth rate is over 50% higher than our 2021 performance. Given the continued high level of supply constraints we expect in the first half of the year, the earnings will be heavily skewed to the second half of 2022. Other guidance assumptions are a EUR to USD foreign currency exchange rate of 1.14, an average non-GAAP effective tax rate of approximately 25%, average shares outstanding for the full year of approximately 45.5 million shares. In summary, it was a challenging year given the macro supply chain headwinds we faced. We worked diligently to mitigate the impact, but our results were obviously disappointing to us. While we see the supply constraints continuing through the first half of 2022, we anticipate the situation will improve in the second half of the year. Our record bookings and backlog will facilitate a strong recovery when the supply chain rebalances. Now I'll turn the call back to Tom. Thank you, Joan. Despite the impact that semiconductor constraints have had on our 2022 outlook, we are extremely pleased with the demand and opportunity pipeline for our technology and solutions. We continue to organically invest in solutions that enable our customers to overcome the dynamic challenges facing our industry. One final item I would like to highlight prior to opening for Q&A. Earlier this month, Itron formally launched our Optimizer solution set. This solution combines EV charging management, distributed energy resource management, and low voltage distribution management into a platform with real-time insights and distributed intelligence. Available globally, Itron's Optimizer portfolio, including the first-of-its-kind EV Charging Optimizer, is endpoint agnostic, combining grid elements such as EV chargers, electric vehicles, solar inverters, local energy storage, and grid transformers, allowing these disparate distribution network assets to be visible under a single pane of glass for management and service optimization. With Itron's Optimizer portfolio, utilities can use these assets to balance loading, optimize costs, and improve service reliability as part of an end-to-end grid solution. For example, this solution enables EV charging fleet management to work cohesively with other assets present in the grid. A first-of-its-kind solution, Itron has integrated EV charging control and grid management solutions into a single platform, allowing load management and optimization. Our open standards-based solution is vehicle and charger agnostic, and it alleviates a significant barrier in the development and deployment of multiple commercial and industrial EV fleets on the utility's low voltage distribution network. Our Optimizer portfolio is the result of our continued commitment to invest in Outcomes to enable our customers to effectively manage and optimize services in the face of an exponential increase in grid complexity. We covered a lot of ground today, providing insight into the current supply and demand environment, as well as proof points for our belief in our long-term model. We take pride in serving the technology needs of utilities and cities around the globe and are confident in the business. Thank you for joining today. Operator, please open the line for some questions. Yes, thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one if you would like to ask a question. We'll now take a question from Noah Kaye with Oppenheimer. Good morning. Thanks for taking the questions. Pretty impressive bookings. I wonder if we could start there. You know, just give us a sense. You mentioned it's mostly related to networks. You know, how are some of the regulatory changes that are supporting you know transition from CapEx to OpEx in the utility world, how is that manifesting in your bookings pattern? How much growth are you seeing on the outcome side from that transition as well? Any kind of metrics you can provide about on that would be pretty helpful, as well as qualitative color. Sure. I can take that one, Noah. This is Tom. The bookings that we saw in the fourth quarter and really a continuation of the trend that we saw for the full year was heavily tilted towards Networks and Outcomes. That was 90% of the bookings, and that really flows through into the position in the backlog. The type of bookings that we're seeing are for more advanced network applications, and nearly every one of the bookings has an Outcomes component that goes along with it. That Outcomes component is generally a SaaS or a NaaS network as a service-based solution that rides on top of the networking technology itself. That is longer-term recurring revenue in its very essence. We have more than two dozen customers that are already deploying our distributed intelligence-based endpoint solution, and we see good growth in distribution automation and in streetlight smart city applications, which contributes to the bookings. Okay. Very helpful. Thanks. Just on operations and supply chain. Tom, you mentioned that you're expecting facility utilization to improve. I wonder if you could provide a little bit more color there. Of course, you're talking about the back half of the year, so I'm not talking about timing. I'm talking about kind of where your utilization's at and what can bump it up. I guess, you know, can you kind of strategically update us on your progress in, you know, fortifying the supply base, any kind of nearshoring initiatives you can talk about, to help provide a little bit more visibility into the back half of the year? Sure. Happy to do so. As we talked about in our prepared remarks, we do expect the supply chain to begin to rebalance during the second half of the year. What you will see in our results as that begins to happen is factories filling up, and then you get obviously the benefit of the revenue and the fall-through, but also the utilization that goes along with it. Important to note that all of those bookings that we just spoke about a moment ago do flow through. We've got a very strong and healthy demand environment. What we really need is the components that go along with it. We have continued to work hard on optimizing rather the factory footprint itself. Most of our factories are now well-positioned, close to the markets that they serve. For example, the North American market, by and large is served out of supply that comes from, I'll say this side of the globe. The notion of nearshoring has been our supply chain strategy that we undertook over the last four or five years across the board. In terms of the margin improvement, I think it comes in three forms. One is revenue flow-through. As you get components, you start to see the top line grow, and that flows through. You see the cost improvements that we've been working on in terms of the factory footprint. Of course, the third is the utilization of those manufacturing assets. All of that accrues into the back half of the year, which is what our guidance and commentary was based on. Okay. Very helpful. Thanks so much. We'll now take our next question from Jeff Osborne with Cowen and Company. Good morning. A couple on my end. On the semiconductor impact, I was wondering if you could remind us what that was in Q3, Joan. I heard you say 225 for the year, 75 for Q4. I'm just trying to get a sense of impact for the first half of 2022. Yeah, it was about $100 million in Q3. Okay. About $175 is an impact for semis and then $100 from the acquisition? I'm just trying to bridge the gap on the guidance there. 100 is an annualized number on the divestiture. Okay, got it. So if you- And then on the- If you're looking for kind of first half impact, we would have owned that business for through February, so kind of four months worth. Got it. Okay. On the $1.1 billion in bookings, the two you flagged in the prepared remarks, CenterPoint and San Antonio, that I wouldn't think that those are chunky percentages of that. Was there any large electric orders that you didn't name the customer that you could give us a flavor of? Because you mentioned to Noah's question that DA and networking for some electric applications were there. Could you detail that? Sure. The CenterPoint booking clearly was one of the larger that was in that fourth quarter bookings number. It is a territory-wide gas deployment for the smart gas solution that we offer. It was one of the largest. There are numerous other bookings that are inside of there in the electricity space. TNMP, Texas-New Mexico Power is probably one of the larger. But I would say is what you're starting to see in the bookings themselves is a lot of add-on type of business with existing customers. In that particular case, it comes perhaps in smaller pieces, but it's also coming as long-term recurring revenue and added applications, which is exactly what our strategy is playing out to be. Got it. That's helpful, Tom. Is the CenterPoint Energy an upgrade of the network that was put in in 2007 through 2010? I think they had a legacy Itron network pre the Silver Spring Networks acquisition, or was that only for the electric piece and not the gas? It is. Yeah, this is the gas side of it. Think about it as the network and the endpoints, and really because of our solution, the endpoints are the network themselves in terms of how it plays through. It is advanced endpoints. It's the gas meter, the advanced functionality, and the comms equipment that goes along with it. Got it. Lastly, is there any progress that's been made on the semiconductor side in terms of qualifying additional suppliers or product redesign to avoid some of the issues? Or are you just hoping that your existing suppliers have ramped up capacity and you'll have better allocation in the second half of 2022? Certainly, we've made tremendous progress on qualifying multiple suppliers. We do have good support on that front. That said, it's still a very constrained environment. Instead of being on allocation with one supplier, you're likely to be on allocation with two suppliers. As that supply chain begins to rebalance, we do believe that multi-sourcing effort that we have undertaken for certainly the last few years will serve us well in terms of being able to ramp up and service that strong backlog that's ahead of us. It's great to hear. That's all I had. Thank you. Thanks, Jeff. We'll now take our next question from Tommy Moll with Stephens. Good morning, and thanks for taking my questions. Morning, Tommy. Tom, I wanted to circle back on bookings in the quarter. You've been bullish for some time on network and outcomes, and it sounds like those were 90% of the driver there. At the same time, you know, you've been bullish, but maybe not $1.1 billion in a quarter bullish. I just wonder if you could identify anything possibly season-related, calendar year end related, anything that was specific to that quarter, just to walk us back from the potential repeatability there. I mean, I don't think embedded in your outlook for book-to-bill, you're assuming that kind of a run rate on orders going forward. So anything you could do to piece some of that together would be helpful. Thank you. I don't see it as particularly seasonal, meaning a fourth quarter or a particular time of the year. Bookings by their very nature in terms of some of the larger deployments that we do tend to come in buckets or in big chunks. It is a little bit lumpy overall. You're correct. I think it would be unwise to expect a new run rate of $1.1 billion per quarter, for example. That said, we do see a very rich pipeline of opportunities that are ahead of us. All of that is based on just the strength of the technology and the breadth of applications that we provide. We are very bullish about what the demand environment looks like in the short run, but also what the bookings environment will be throughout 2022. The caveat that I would give you, though, is the bookings will be a little bit lumpy quarter to quarter, but I wouldn't blame that necessarily on pure seasonality. Final point I think that is important to point out, that none of the guidance for 2022 and the bookings that you see today are really related to a government stimulus that's still somewhere ahead of us. On the stimulus work that the U.S. government is working through on defining all of the rules on how that money will be allocated and opening up the opportunity for customers of ours to apply for the various grants and things, that will start to happen during this year, which will result in revenue somewhere beyond this year. Our guidance for the year is not based on any tailwinds, nor is the strong pipeline of opportunities that we see today. I still think that's somewhere ahead of us as future opportunity. Thanks, Tom. Shifting gears to the EV Charging Optimizer announcement that you referenced, can you talk to us about how long that had been in development internally? Where you see the solution in terms of the adoption curve? I presume your answer is gonna be very early, but just any context you could give about level of adoption or conversations with customers. I guess finally, can you hazard a guess, quantitative or qualitative on what's the magnitude of the tailwind from EV adoption to Itron as a whole? How big a needle mover can that be for you in the next few years? Sure. The portfolio of the Optimizer solution, EVs that you mentioned, but also the low voltage grid assets, things like transformers, and then distributed energy resources, batteries, rooftop solar, things of that nature. The notion that we've had all the way back since probably the 2018, 2019 time frame is the grid complexity was going to increase pretty dramatically as these things started to show up on the grid, and our customers would need a way to understand where those assets are and be able to begin to optimize and plan load balance around those types of solutions. We've been putting the building blocks in place for a couple of years now and ended up doing some pilots early on this year around very small scale charging management types of things. We formalized all of that with the Optimizer portfolio and launched that during just the last couple of months. What we have today is a number of customer pilots. We've signed Duke Energy as our first commercial deployment on the DER Optimizer portfolio and look to continue to add to it. The really interesting part about this is this is all network or endpoint agnostic. We can apply the analytics package over top of any existing assets that the customer has. Clearly, it works much, much better the more insights you have into those assets. If you have already deployed an Itron network and have distributed intelligence, you can even do quite a bit more with these, the solutions that we do have today. We're fiercely proud of being able to build on all of these solutions, and all of this was done with an organic R&D investment, which is how we've been thinking about it. In terms of future optimization or opportunity rather, to the last point of your question, I don't know that I could hazard a guess. I think distributed energy resource management is one of the largest challenges that electricity utilities have today, and the problem is definitely getting worse in terms of how they can ensure reliable and resilient service in the face of these challenges. I think it is an enormous opportunity, and indeed, it's a place that stimulus money is heading as well. I think it will be a growth driver for our Outcomes-based business and incremental network business in the years ahead. Thanks, Tom. I'll turn it back. We'll now take our next question from Pavel Molchanov with Raymond James. Thanks for taking the question. If component supply was limitless, how much higher would revenue be this year? It's really tough for me to put a perfect number on that. I would guess a couple $100 million higher than what our guidance point is. I say that based on where our 12-month backlog sits today, which is now at $1.5 billion. I look at it through the lens of where our customer deployment projects are today and think about that through the lens of the installed capacity that we have in place that we are eager to fill. I would say a few $100 million higher than what we are expecting today. That is based on a first half that is a bit depressed in terms of where our guidance is, that is, and our ability to begin to catch up and fill some of that in the second half of the year. Okay. Zooming in on backlog, so $4 billion total, how much of that is in the Outcomes segment? Yeah, we haven't really broken out by the outcomes piece specifically. I would say that 90% of that $4 billion is in the Networks and Outcomes space. Clearly, Networks is bigger in that portion just because of the size of the business today. The portion that is Outcomes is steadily growing and we're looking forward to continuing to do that with types of products that I just spoke about in Tommy's question on the Optimizer portfolio. Okay. Thank you very much. We'll now take our next question from Ben Kallo with Baird. Hey, good morning. Thanks for taking my questions. Just as we think about, and maybe just adding on to Pavel's question, as we think about next year, in 2023, could you talk to us about some of the, maybe the cost reductions or restructuring, how that impacts your OpEx first? Then second, you know, how do we think about the cadence of just because you have such big backlog here, you know, flowing through into next year. Is it something that just is like a, you know, when you, when you have the components and all of a sudden you can turn the spigot on, or is it, you know, a more moderate kind of build back than that? Thank you. Yeah. I'll start, Ben, and then I'll pass it to Joan on the restructuring flow through. That $4 billion in backlog, the right way to think about it is that plays out over roughly a three-year, maybe sometimes for the long tail, four-year kind of period. Of that backlog, $1.5 billion of it is in the next 12 months. Once you start a project with a customer and it starts to go well and deployment is underway, we tend to see that our customers generally accelerate that deployment. As it starts a bit slow, but it accelerates along the path. As we can supply the hardware, we do believe we can ramp up and be able to supply and fulfill that backlog over roughly the next three-year kind of period based on the visibility that we have today. The gating item very much is component supply at the moment. Yeah. If I think about the incremental year-over-year 2021 to 2022 from restructuring, it's somewhere between $15 million-$20 million. If you look forward to 2023, maybe it's another $10 million in total. The majority of that's actually not in the OpEx line, though. The majority of that's actually in the gross margin line. Think about the factory closures, et cetera. Got it. When I think about gross margins and just kind of normalizing after you know we get past you know component shortages, what's a good year to look back at? Is it 2018? Just on networks. Maybe Tom, just on the regulatory front, I know that there were you know when we started you know shutdowns and COVID, the you know regulatory delays were happening for a variety of reasons. Could you give us an update there where stuff stands now? Thanks. Let me take a shot at margins, and I wouldn't do it by networks, but for the company. Given that the supply constraints are still with us and we expect them to be comparable in the first half of 2022 versus the last half of 2021, I would say they'll continue to be very challenged in the first half of the year. Assuming the supply does start to rebalance in the second half of the year, which is what we're anticipating, I think our full year margins will get close to kind of the company 2019 level, which was approximately 30%. Again, networks is obviously higher than the average of the company, and given that the preponderance of the backlog is networks, that bodes well for the future. Think about it from that perspective. We're obviously dealing with an inflationary environment now. We're doing everything we can to flow through those cost increases to customers, but that would be the best estimate I'd have right now. Thank you. With respect to the regulatory front, we really have seen the regulatory environment normalize. That happened during 2021 and continues on today. Regulatory decisions are being made and rate cases being approved. That is, I would say more or less a normalized environment today. We do see regulatory commissions very interested in addressing resiliency and reliability types of issues to make sure that their communities are well-served. The regulatory environment is absolutely moving in the right direction. I would suspect as infrastructure money flows, that would continue. Great. Thank you. Thanks, Ben. As a final reminder, that is star one if you would like to ask a question. We'll now take our next question from Chip Moore with EF Hutton. Thanks. Very impressive to see the demand without any stimulus benefit yet. Can you maybe talk about what you're seeing, guys, that gives you comfort to get some improvement on component shortages in the back half of the year? Sure. The environment that we see today with respect to the supply chain, I would summarize it as follows. The number of decommits really has slowed to a trickle. A decommit being when a supplier says they're going to deliver something and then they don't turn up with the goods. I'll say the reliability in terms of component supply from a say-do ratio is certainly much better than it was just several months ago. We definitely see lead times very long. You have lead times that could be 40, 50, 70, 80 weeks long. Those lead times remain elongated, and we have not yet seen any sort of normalization or retraction on those lead times just yet. The situation remains fluid. There are a number of shocks that keep going into the system. Some of the things that happened from the early days of Omicron and Delta rattled through the supply chain. That's not affecting our first-tier suppliers, but it's deeper into the supply chain itself. As we work with our suppliers and try to understand the allocation that we have against those lead times, because we're living in that long range kind of world, that's where we think the second half looks quite a bit better than what we have experienced back half of last year in the environment that we're operating in today. Again, the situation remains fluid, so we've got to continue to watch it really closely. We'll continue to work on self-help on our side, with qualifying multiple suppliers and making sure that we take advantage of every component that is available. We'll work with customers to plan out schedules, and make sure that we can support the projects that they have. Our customers are absolutely working with us and not canceling any backlogs. It is a timing-related issue, but that's the basis that we use for the second half, supply situation being better than what we experience today. Thanks. That's helpful, Tom. Maybe just a quick follow-up there on book and ship. You know, $1.5 billion 12-month backlog. A fair amount of book and ship to get through this year as well, just your positioning there and visibility. The environment certainly on the book and ship business is following what you see in the bookings environment. Customers are hungry for product. We're not always in a great position to be able to fulfill that based on some of the component constraints. The book and ship business has also been healthy. I would watch out closely to see what will happen in Europe with some of the conflict there to make sure that environment remains good. I do believe that it will be a supply-gated environment and not a demand-gated environment even on the book and ship business. Thanks very much. Thanks, Chip. We'll take our next question from Thomas Johnson with Morgan Stanley. Hi. Thanks for taking my call today. I just had a question on the margin side of things. Helpful color in the presentation, just thinking through year-over-year dynamics. Can you kind of just help us think about the sequential change in operating margins for the Device Solutions business in the fourth quarter? Maybe, you know, kind of help us set some expectations on path to normalization and what that might look like in the first half of the year as well. Yeah. Let me focus, I guess, first on just the gross margin level. As Tom indicated, you know, the supply constraints were pretty heavy in Q4, again, total of $75 million. Most of that is networks, but a portion of that impacts devices as well. That creates utilization issues in the factories in addition to kind of inflationary cost pressure. Both of those contributed to the lower gross margin in the quarter versus what we would have experienced in prior quarters in the year. Going forward, obviously, I mentioned we've been doing a lot of work on exiting businesses and kind of reshaping the devices portfolio. Certainly would expect that gross margin to be higher going forward. But again, lower in the first half, higher in the second half as the supply rebalances. Great. Understood. Then maybe just one more on the margin recovery, and you know, this can be at the consolidated basis, but clearly utilization and volume's a big driver of you know, the 2H recovery. Can you maybe add any incremental color on what you guys have been able to achieve from a pricing standpoint and how that might support the kind of 2H normalization as well? Sure. Our guidance is definitely based on working price cost actions. The cost side is component cost as well as utilization, being able to use that gear much better. There are a number of pricing initiatives underway today. We certainly had passed along price increases on terms-based business where we had new orders starting to come in. We have written contracts based on an indexing so that we are better protected in terms of the pricing in contracts going forward. We're working now on the backlog side of things to try to make sure we address the pricing side even on the backlog. That is a more difficult equation, but it is all part of how we are thinking about our 2022 guidance. Great. Thank you guys very much. Thank you. It appears there are no further telephone questions. I'd like to turn the conference back over to Mr. Deitrich for any closing comments. Thank you, operator, and I thank everyone for joining today. We look forward to talking to you again in the next couple of months. Thanks, and have a great day. Once again, that does conclude today's conference. There will be an audio replay of today's conference available this afternoon. You can access the audio replay by dialing 1-888-203-1112 or 1-719-457-0820 with the passcode of 5471582, or you can go to the company's website at www.itron.com. We thank you for your participation. You may now disconnect.