Note K - Business Segment and Geographic Disclosures

9 Months Ended

Sep. 30, 2011

Segment Reporting Disclosure [Text Block]

Note K:   Business Segment and Geographic Disclosures

Fuel Tech segregates its financial results into two reportable segments representing two broad technology segments as follows:

- The Air Pollution Control technology segment includes technologies to reduce NOx emissions in flue gas from boilers, incinerators, furnaces and other stationary combustion sources.   These include Low and Ultra Low NOx Burners (LNB and ULNB), Over-Fire Air (OFA) systems, NOxOUT® and HERT™ Selective Non-Catalytic Reduction (SNCR) systems, and Advanced Selective Catalytic Reduction (ASCR™) systems.  The ASCR system includes ULNB, OFA, and SNCR components, along with a downsized SCR catalyst, Ammonia Injection Grid (AIG), and Graduated Straightening Grid™ (GSG) systems to provide high NOx reductions at significantly lower capital and operating costs than conventional SCR systems.  The NOxOUT-CASCADE® and NOxOUT-SCR® processes are basic types of ASCR systems, using just SNCR and SCR catalyst components.  ULTRA™ technology creates ammonia at a plant site using safe urea for use with any SCR application.  Flue Gas Conditioning systems are chemical injection systems offered in markets outside the U.S. and Canada to enhance electrostatic precipitator and fabric filter performance in controlling particulate emissions.

- The FUEL CHEM® technology segment, which uses chemical processes in combination with advanced Computational Fluid Dynamics (CFD) and Chemical Kinetics Modeling (CKM) boiler modeling, for the control of slagging, fouling, corrosion, opacity and other sulfur trioxide-related issues in furnaces and boilers through the addition of chemicals into the furnace using TIFI® Targeted In-Furnace Injection™ technology.

The “Other” classification includes those profit and loss items not allocated by Fuel Tech to each reportable segment.  Further, there are no intersegment sales that require elimination.

Fuel Tech evaluates performance and allocates resources based on reviewing gross margin by reportable segment.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies (Note 1 in our annual report on Form 10-K).  Fuel Tech does not review assets by reportable segment, but rather, in aggregate for Fuel Tech as a whole.

Information about reporting segment net sales and gross margin are provided below:

Three months ended September 30, 2011	Air Pollution Control Segment		FUEL CHEM Segment		Other			Total
Revenues from external customers	$	12,223	$	11,800	$	-		$	24,023
Cost of sales		7,539		5,511		-			13,050
Gross margin		4,684		6,289		-			10,973
Selling, general and administrative		-		-		7,701			7,701
Research and development		-		-		358			358
Operating income (loss)	$	4,684	$	6,289	$	(8,059	)	$	2,914

Three months ended September 30, 2010	Air Pollution Control Segment		FUEL CHEM Segment		Other			Total
Revenues from external customers	$	10,252	$	10,027	$	-		$	20,279
Cost of sales		6,735		4,761		-			11,496
Gross margin		3,517		5,266		-			8,783
Selling, general and administrative		-		-		7,808			7,808
(Gain) from revaluation of contingent      performance obligation		-		-		(768	)		(768	)
Research and development		-		-		264			264
Operating income (loss)	$	3,517	$	5,266	$	(7,304	)	$	1,479

Nine months ended September 30, 2011	Air Pollution Control Segment		FUEL CHEM Segment		Other			Total
Revenues from external customers	$	32,959	$	32,707		-		$	65,666
Cost of sales		18,338		16,731		-			35,069
Gross margin		14,621		15,976		-			30,597
Selling, general and administrative		-		-		23,618			23,618
(Gain) from revaluation of contingent      performance obligation		-		-		(758	)		(758	)
Research and development		-		-		1,075			1,075
Operating income (loss)	$	14,621	$	15,976	$	(23,935	)	$	6,662

Nine months ended September 30, 2010	Air Pollution Control Segment		FUEL CHEM Segment		Other			Total
Revenues from external customers	$	27,757	$	29,041	$	-		$	56,798
Cost of sales		18,039		14,024		-			32,063
Gross margin		9,718		15,017		-			24,735
Selling, general and administrative		-		-		23,306			23,306
(Gain) from revaluation of contingent          performance obligation		-		-		(768	)		(768	)
Research and development		-		-		575			575
Operating income (loss)	$	9,718	$	15,017	$	(23,113	)	$	1,622

Information concerning Fuel Tech’s operations by geographic area is provided below.  Revenues are attributed to countries based on the location of the customer.  Assets are those directly associated with operations of the geographic area.

	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Revenues:
United States	$	19,121	$	17,015	$	54,268	$	46,517
Foreign		4,902		3,264		11,398		10,281
	$	24,023	$	20,279	$	65,666	$	56,798
	September 30, 2011		December 31, 2010
Assets:
United States	$	95,460	$	92,485
Foreign		11,670		10,718
	$	107,130	$	103,203