Segment Information (Text Block)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information [Text Block]

Segment Information

We operate under the Itron brand worldwide and manage and report under three operating segments, Electricity, Gas, and Water. Our Water operating segment includes both our global water and heat solutions.

In March 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. Our sales, marketing, and delivery functions are managed under three business lines - Electricity, Gas, and Water. Our product development and manufacturing operations are now managed on a worldwide basis to promote a global perspective in our operations and processes while maintaining alignment with the business lines. The transition to the new organizational structure, including changes to operations and financial reporting systems, was completed in the fourth quarter of 2013. Our historical segment information for the three and six months ended June 30, 2013 has been recast to reflect our new operating segments.

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

Electricity	Standard electricity (electromechanical and electronic) meters; advanced electricity meters and communication modules; smart electricity meters; smart electricity 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.
Gas	Standard gas meters; advanced gas meters and communication modules; smart gas meters; smart 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; smart heat meters; 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,
	2014			2013			2014			2013
	(in thousands)
Revenues
Electricity	$	183,755		$	213,612		$	363,973		$	389,375
Gas	154,322			136,011			300,431			272,926
Water	151,276			132,552			299,744			267,410
Total Company	$	489,353		$	482,175		$	964,148		$	929,711
Gross profit
Electricity	$	52,976		$	62,545		$	95,716		$	107,457
Gas	56,711			50,128			115,117			100,770
Water	53,354			46,915			106,743			91,484
Total Company	$	163,041		$	159,588		$	317,576		$	299,711
Operating income (loss)
Electricity	$	(1,247	)	$	(4,117	)	$	(24,216	)	$	(23,167	)
Gas	24,329			18,881			50,053			38,411
Water	20,519			15,389			41,162			27,964
Corporate unallocated	(11,674		)	(12,177		)	(30,533		)	(22,885		)
Total Company	31,927			17,976			36,466			20,323
Total other income (expense)	(4,235		)	(3,884		)	(9,545		)	(5,978		)
Income before income taxes	$	27,692		$	14,092		$	26,921		$	14,345

For the three and six months ended June 30, 2014, no single customer represented more than 10% of total Company or the Electricity, Gas, or Water operating segment revenues.

One customer represented 12% of the Gas operating segment revenues for the three months ended June 30, 2013. No single customer represented more than 10% of the Gas operating segment revenues for the six months ended June 30, 2013. For the three and six months ended June 30, 2013, no single customer represented more than 10% of total Company or the Electricity or Water operating segment revenues.

Revenues by region were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
United States and Canada	$	214,336	$	211,565	$	414,706	$	388,771
Europe, Middle East, and Africa	216,257		215,250		439,761		427,145
Other	58,760		55,360		109,681		113,795
Total revenues	$	489,353	$	482,175	$	964,148	$	929,711

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
Electricity	$	12,391	$	11,714	$	25,158	$	23,344
Gas	6,455		6,634		13,104		13,475
Water	6,119		5,909		12,213		12,178
Corporate Unallocated	49		17		131		34
Total Company	$	25,014	$	24,274	$	50,606	$	49,031