Segment Information (Text Block)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information [Text Block]

Segment Information

As part of the global reorganization we announced in the first quarter of 2011, Itron is now managed and reports under two operating segments, Energy and Water. A transition to the new organizational structure, including changes to operations and financial and operational management systems, was completed in the first quarter of 2012. Therefore, financial reporting as of and for the three and six months ended June 30, 2012 is based on the new operating segments, Energy and Water. Prior period segment information has been recast to reflect our new operating segments.

The Energy operating segment includes our global electricity and gas businesses, while the Water operating segment includes our global water and heat businesses.

We have three measures of segment performance: revenue, gross profit (margin), and operating income (margin). Our operating segments have distinct products, and therefore intersegment revenues are minimal. Corporate operating expenses, interest income, interest expense, other income (expense), and income tax provision (benefit) are not allocated to the segments, nor included in the measure of segment profit or loss. In addition, we allocate only certain production assets and intangible assets to our operating segments. We do not manage the performance of the segments on a balance sheet basis.

Segment Products

Energy

Standard electricity (electromechanical and electronic) and gas meters; advanced electricity and gas meters and communication modules; smart electricity meters; smart electricity and gas communication modules; prepayment systems, including smart key, keypad, and smart card communication technologies; advanced systems including handheld, mobile, and fixed network collection technologies; smart network technologies; meter data management software; knowledge application solutions; and professional services including implementation, installation, consulting, and analysis.

Water

Standard water and heat meters; advanced and smart water meters and communication modules; advanced systems including handheld, mobile, and fixed network collection technologies; meter data management software; knowledge application solutions; and professional services including implementation, installation, consulting, analysis, and system management.

Revenues, gross profit, and operating income associated with our segments were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
	(in thousands)
Revenues
Energy	$	444,598		$	474,415		$	882,345		$	906,231
Water	134,542			137,986			268,435			269,861
Total Company	$	579,140		$	612,401		$	1,150,780		$	1,176,092
Gross profit
Energy	$	148,951		$	144,753		$	283,554		$	282,337
Water	47,794			47,198			96,296			94,592
Total Company	$	196,745		$	191,951		$	379,850		$	376,929
Operating income (loss)
Energy	$	47,069		$	45,463		$	85,233		$	88,631
Water	11,666			13,755			27,603			30,609
Corporate unallocated	(12,672		)	(11,133		)	(27,152		)	(21,066		)
Total Company	46,063			48,085			85,684			98,174
Total other income (expense)	(3,208		)	(12,602		)	(7,628		)	(25,998		)
Income before income taxes	$	42,855		$	35,483		$	78,056		$	72,176

One customer represented 11% of total Company revenues for the three and six months ended June 30, 2012, while no customer represented more than 10% of total Company revenues during the same periods in 2011. One customer represented 15% of the Energy operating segment revenues in the three and six months ended June 30, 2012, and one customer represented 12% and 11% of the Energy operating segment revenues in the three and six months ended June 30, 2011. No single customer represented more than 10% of the Water operating segment revenues for the three and six months ended June 30, 2012 and 2011.

Revenues by region were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
United States and Canada	$	292,999	$	285,931	$	577,586	$	560,393
Europe, Middle East, and Africa	215,899		250,709		436,855		474,412
Other	70,242		75,761		136,339		141,287
Total revenues	$	579,140	$	612,401	$	1,150,780	$	1,176,092

Depreciation and amortization expense associated with our segments was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
Energy	$	20,488	$	24,368	$	41,144	$	47,923
Water	6,539		8,399		13,095		16,374
Corporate Unallocated	17		1		32		2
Total Company	$	27,044	$	32,768	$	54,271	$	64,299