Segment Information (Text Block)

3 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Segment Information [Text Block]

Segment Information

We operate under the Itron brand worldwide and manage and report under two operating segments, Energy and Water. The Energy operating segment includes our global electricity and gas businesses, while the Water operating segment includes our global water and heat businesses.

On March 27, 2013, we separated the management of our Energy operating segment into Electricity and Gas to allow each business to develop its own go-to-market strategy, prioritize its marketing and product development requirements, and focus on its strategic investments. As a result, our sales, marketing, and delivery function will be managed under three operating segments - Electricity, Gas, and Water. At the same time, product development and operations will be centralized and managed on a global basis. Although certain management positions of the new operating segments have been identified, the transition to the new organizational structure is ongoing, and we are currently assessing the implications to our operational and financial reporting systems.

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 March 31,
	2013			2012
	(in thousands)
Revenues
Energy	$	312,678		$	437,747
Water	134,858			133,893
Total Company	$	447,536		$	571,640
Gross profit
Energy	$	95,554		$	134,603
Water	44,569			48,502
Total Company	$	140,123		$	183,105
Operating income (loss)
Energy	$	480		$	38,164
Water	12,575			15,937
Corporate unallocated	(10,708		)	(14,480		)
Total Company	2,347			39,621
Total other income (expense)	(2,094		)	(4,420		)
Income before income taxes	$	253		$	35,201

For the three months ended March 31, 2013, no single customer represented more than 10% of the total Company, the Energy operating segment, or the Water operating segment revenues.

For the three months ended March 31, 2012, one customer from the Energy operating segment accounted for 11% of the total Company revenues, and two customers each accounted for more than 10% of the Energy operating segment revenues. No single customer accounted for more than 10% of the Water operating segment revenues.

Revenues by region were as follows:

	Three Months Ended March 31,
	2013		2012
	(in thousands)
United States and Canada	$	177,206	$	284,587
Europe, Middle East, and Africa	211,895		220,956
Other	58,435		66,097
Total revenues	$	447,536	$	571,640

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

	Three Months Ended March 31,
	2013		2012
	(in thousands)
Energy	$	18,471	$	20,656
Water	6,269		6,556
Corporate Unallocated	17		15
Total Company	$	24,757	$	27,227