Segment Information (Text Block)

6 Months Ended

Jun. 30, 2013

Segment Reporting [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 line 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 are managed under three business lines - Electricity, Gas, and Water. At the same time, product development and operations were centralized and are managed on a global basis. Although most management positions of the new business lines have been identified, the transition to the new organizational structure is ongoing, and we are continuing to assess the implications to our operating segments and 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 June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Revenues
Energy	$	349,623		$	444,598		$	662,301		$	882,345
Water	132,552			134,542			267,410			268,435
Total Company	$	482,175		$	579,140		$	929,711		$	1,150,780
Gross profit
Energy	$	112,673		$	148,951		$	208,227		$	283,554
Water	46,915			47,794			91,484			96,296
Total Company	$	159,588		$	196,745		$	299,711		$	379,850
Operating income (loss)
Energy	$	14,764		$	47,069		$	15,244		$	85,233
Water	15,389			11,666			27,964			27,603
Corporate unallocated	(12,177		)	(12,672		)	(22,885		)	(27,152		)
Total Company	17,976			46,063			20,323			85,684
Total other income (expense)	(3,884		)	(3,208		)	(5,978		)	(7,628		)
Income before income taxes	$	14,092		$	42,855		$	14,345		$	78,056

For the three and six months ended June 30, 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 and six months ended June 30, 2012, one customer from the Energy operating segment accounted for 11% of the total Company revenues. During the same periods, one customer accounted for 15% of the Energy operating segment revenues, and no single customer accounted for more than 10% of the Water operating segment revenues.

Revenues by region were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)
United States and Canada	$	211,565	$	292,999	$	388,771	$	577,586
Europe, Middle East, and Africa	215,250		215,899		427,145		436,855
Other	55,360		70,242		113,795		136,339
Total revenues	$	482,175	$	579,140	$	929,711	$	1,150,780

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)
Energy	$	18,348	$	20,488	$	36,819	$	41,144
Water	5,909		6,539		12,178		13,095
Corporate Unallocated	17		17		34		32
Total Company	$	24,274	$	27,044	$	49,031	$	54,271