Segment Information (Text Block)

9 Months Ended

Sep. 30, 2016

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. This structure allows each segment 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 each segment. Our product development and manufacturing operations are managed on a worldwide basis to promote a global perspective in our operations and processes and yet still maintain alignment with the segments.

We have three GAAP measures of segment performance: revenue, gross profit (margin), and operating income (margin). Our operating segments have distinct products, and, therefore, intersegment revenues are minimal. Certain operating expenses are allocated to the operating segments based upon internally established allocation methodologies. Corporate operating expenses, interest income, interest expense, other income (expense), and income tax provision 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; installation; implementation; and professional services including 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; installation; implementation; and professional services including 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; installation; implementation; and professional services including consulting and analysis.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
	(in thousands)
Revenues
Electricity	$	242,667		$	206,810		$	692,785		$	602,999
Gas	144,185			136,726			433,707			401,099
Water	120,007			125,992			390,981			382,987
Total Company	$	506,859		$	469,528		$	1,517,473		$	1,387,085
Gross profit
Electricity	$	75,362		$	56,385		$	210,840		$	163,330
Gas	56,096			46,790			158,156			134,854
Water	39,291			44,115			134,661			106,082
Total Company	$	170,749		$	147,290		$	503,657		$	404,266
Operating income (loss)
Electricity	$	20,452		$	9,819		$	51,092		$	14,958
Gas	7,136			15,836			48,811			44,986
Water	(3,546		)	14,265			28,707			11,415
Corporate unallocated	(17,632		)	(12,980		)	(63,153		)	(34,891		)
Total Company	6,410			26,940			65,457			36,468
Total other income (expense)	(1,882		)	(3,738		)	(8,824		)	(11,899		)
Income before income taxes	$	4,528		$	23,202		$	56,633		$	24,569

For the three and nine months ended September 30, 2016, one customer represented 14% and 12%, respectively, of total Electricity segment revenues. For the three months ended September 30, 2015, one customer represented 11% of total Electricity segment revenues, while no customer represented more than 10% of total Electricity segment revenues for the nine months ended September 30, 2015. For the three and nine months ended September 30, 2016 and September 30, 2015, no single customer represented more than 10% of the Gas or Water operating segment revenues, or total company revenues.

Revenues by region were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
	(in thousands)
United States and Canada	$	297,116	$	256,962	$	837,468	$	737,112
Europe, Middle East, and Africa	161,959		167,577		545,517		514,054
Other(1)	47,784		44,989		134,488		135,919
Total revenues	$	506,859	$	469,528	$	1,517,473	$	1,387,085

⁽¹⁾  The Other region includes our operations in Latin America and Asia Pacific.

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

	Three Months Ended September 30,					Nine Months Ended September 30,
	2016			2015		2016		2015
	(in thousands)
Electricity	$	6,682		$	8,878	$	21,715	$	27,427
Gas	5,595			4,743		15,484		15,316
Water	5,022			5,280		14,040		14,806
Corporate unallocated	(1,217		)	97		324		241
Total Company	$	16,082		$	18,998	$	51,563	$	57,790