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Segment Information
12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Information
We operate under the Itron brand worldwide and manage and report under three operating segments: Device Solutions, Networked Solutions, and Outcomes.

We have three GAAP measures of segment performance: revenues, gross profit (gross margin), and operating income (operating margin). 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 the income tax provision (benefit) are neither allocated to the segments, nor are they included in the measure of segment performance. 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

Device Solutions – This segment primarily includes hardware products used for measurement, control, or sensing that do not have communications capability embedded for use with our broader Itron systems, i.e., hardware-based products not part of a complete end-to-end solution. Examples from the Device Solutions portfolio include: standard endpoints that are shipped without Itron communications, such as our standard gas, electricity, and water meters for a variety of global markets and adhering to regulations and standards within those markets, as well as our heat and allocation products; communicating meters that are not a part of an Itron end-to-end solution, such as Smart Spec meters; and the implementation and installation of non-communicating devices, such as gas regulators.

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, and associated application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. Networked Solutions includes products and software for the implementation, installation, and management of communicating devices and data networks. Examples from the Networked Solutions portfolio include: communicating measurement, control, or sensing endpoints, such as our Itron OpenWay® Centron and Riva meters, Itron traditional ERT® technology, Intelis smart gas meters, 500G gas communication modules, 500W water communication modules, GenX networking infrastructure products and network interface cards (NICs); Smart City control and management software; Distribution Automation bridge devices; and specific network control and management software applications. The IIoT solutions supported by this segment include automated meter reading (AMR), advanced metering infrastructure (AMI), smart grid and distribution automation, smart street lighting, and an ever-growing set of smart city applications such as traffic management, smart parking, air quality monitoring, electric vehicle charging, customer engagement, digital signage, acoustic (e.g., gunshot) detection, and leak detection and mitigation for both gas and water systems. Our IIoT platform allows all these industry and smart city applications to be run and managed on a single, multi-purpose network.

Outcomes – This segment primarily includes our value-added, enhanced software and services in which we manage, organize, analyze, and interpret data to improve decision making, maximize operational profitability, drive resource efficiency, and deliver results for consumers, utilities, and smart cities. Outcomes places an emphasis on delivering to Itron customers high-value, turn-key, digital experiences by leveraging the footprint of our Device Solutions and Networked Solutions segments. The revenues from these offerings are primarily recurring in nature and would include any direct management of Device Solutions,
Networked Solutions, and other products on behalf of our end customers. Examples from the Outcomes portfolio include: our meter data management and analytics offerings; our managed service solutions including network-as-a-service and Platform-as-a-Service (PaaS); forecasting software and services; our Distributed Energy Management suite of products and services; our Distributed Intelligence suite of applications and services; and any consulting-based engagement. Within the Outcomes segment, we also identify new business models, including performance-based contracting, to drive broader portfolio offerings across utilities and cities.

Revenues, gross profit, and operating income associated with our operating segments were as follows:
Year Ended December 31,
In thousands202120202019
Product revenues
Device Solutions$635,103 $684,517 $847,580 
Networked Solutions974,531 1,148,698 1,322,382 
Outcomes68,561 55,958 50,433 
Total Company$1,678,195 $1,889,173 $2,220,395 
Service revenues
Device Solutions$10,001 $9,478 $11,301 
Networked Solutions118,100 100,704 94,872 
Outcomes175,276 173,995 175,902 
Total Company$303,377 $284,177 $282,075 
Total revenues
Device Solutions$645,104 $693,995 $858,881 
Networked Solutions1,092,631 1,249,402 1,417,254 
Outcomes243,837 229,953 226,335 
Total Company$1,981,572 $2,173,350 $2,502,470 
Gross profit
Device Solutions$99,355 $86,859 $152,562 
Networked Solutions378,633 432,906 518,749 
Outcomes95,181 82,402 81,008 
Total Company$573,169 $602,167 $752,319 
Operating income (loss)
Device Solutions$57,217 $40,769 $97,753 
Networked Solutions254,434 308,099 397,325 
Outcomes50,631 47,619 43,803 
Corporate unallocated(441,581)(406,882)(406,198)
Total Company(79,299)(10,395)132,683 
Total other income (expense)(44,511)(46,244)(59,651)
Income (loss) before income taxes$(123,810)$(56,639)$73,032 

Our Corporate unallocated operating loss for the years ended December 31, 2021 and 2020 include losses from the sale of businesses of $64.3 million and $59.8 million. Refer to Note 18: Sale of Businesses for additional information on the transactions.

For all periods presented, no single customer represents more than 10% of total company revenue.
Revenues by region were as follows:
Year Ended December 31,
In thousands202120202019
United States and Canada$1,273,868 $1,434,577 $1,629,742 
Europe, Middle East, and Africa568,008 594,264 663,851 
Asia Pacific and Latin America (1)
139,696 144,509 208,877 
Total Company$1,981,572 $2,173,350 $2,502,470 
(1)On June 25, 2020, we sold our Latin American operations. We continue to sell into the region through a distributor.

Property, plant, and equipment, net, by geographic area were as follows:
At December 31,
In thousands20212020
United States$94,899 $100,381 
Outside United States68,285 107,435 
Total Company$163,184 $207,816 

Depreciation expense is allocated to the operating segments and Corporate unallocated based upon each segment's use of the assets. All amortization expense is recognized within Corporate unallocated. Depreciation and amortization of intangible assets expense associated with our operating segments was as follows:
Year Ended December 31,
In thousands202120202019
Device Solutions$22,884 $25,058 $25,542 
Networked Solutions16,607 16,965 13,004 
Outcomes4,454 5,348 5,363 
Corporate unallocated40,208 49,919 70,491 
Total Company$84,153 $97,290 $114,400