Note L - Business Segment and Geographic Disclosures

3 Months Ended

Mar. 31, 2013

Segment Reporting Disclosure [Text Block]

Note L:                      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 March 31, 2013	Air Pollution Control Segment			FUEL CHEM Segment			Other			Total
Revenues from external customers	$	12,947		$	9,537		$	-		$	22,484
Cost of sales		(8,583	)		(4,469	)		-			(13,052	)
Gross margin		4,364			5,068			-			9,432
Selling, general and administrative		-			-			(8,458	)		(8,458	)
Research and development		-			-			(933	)		(933	)
Operating income	$	4,364		$	5,068		$	(9,391	)	$	41

Three months ended March 31, 2012	Air Pollution Control Segment			FUEL CHEM Segment			Other			Total
Revenues from external customers	$	15,714		$	9,498		$	-		$	25,212
Cost of sales		(8,751	)		(4,469	)		-			(13,220	)
Gross margin		6,963			5,029			-			11,992
Selling, general and administrative		-			-			(8,994	)		(8,994	)
Research and development		-			-			(506	)		(506	)
Operating income	$	6,963		$	5,029		$	(9,500	)	$	2,492

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 March 31,
	2013		2012
Revenues:
United States	$	12,866	$	22,944
Foreign		9,618		2,268
	$	22,484	$	25,212

	March 31, 2013		December 31, 2012
Assets:
United States	$	85,182	$	86,466
Foreign		18,478		19,431
	$	103,660	$	105,897