Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting

Note 4 – Segment Reporting

Segment information is used by management for making operating decisions and assessing the performance of the Company. Management evaluates the performance of its segments based primarily on operating income.

The Company’s reportable segments are as follows:

Climate Control Seats (CCS) – variable temperature seat climate control system designed to improve the temperature comfort of automobile passengers. This segment also includes the heated and cooled cup holder and heated and cooled mattress divisions. This segment represents historical Gentherm business only.  It does not include seat climate control products of historical W.E.T.

Advanced Technology – a division engaged in research and development efforts to improve the efficiency of thermoelectric devices and to develop, market and distribute products based on this new technology. It includes U.S. Department of Energy sponsored research projects, such as the development of a commercially viable thermoelectric generator.

W.E.T. Automotive AG (W.E.T.) –W.E.T. is being evaluated currently as an individual segment until such time as Gentherm is able to fully evaluate and implement its future integration plans and strategy.

The tables below present segment information about the reported product revenues and operating income of the Company for the three month period ended September30, 2013 and 2012. With the exception of goodwill, asset information by segment is not reported since the Company does not manage assets at a segment level at this time. Goodwill as of September30, 2013 and 2012 pertained entirely to our W.E.T. segment.

Three Months EndedSeptember30,	CCS			Advanced Technology				W.E.T.			Reconciling Items				Consolidated Total
2013:
Product revenues	$	37,697	$		—		$		133,485	$		—		$		171,182
Depreciation and amortization		437			117				6,870			313				7,737
Operating income (loss)		11,152			(1,544	)			11,297			(6,351	)			14,554
2012:
Product revenues	$	33,966	$		—		$		107,092	$		—		$		141,058
Depreciation and amortization		329			82				6,692			342				7,445
Operating income (loss)		9,328			(1,631	)			8,249			(5,908	)			10,038

The Advanced Technology operating loss for the three months ended September30, 2013 and 2012 is net of $375 and $656, respectively, of reimbursed research and development costs. Reconciling items include historical Gentherm’s corporate selling, general and administrative costs and acquisition transaction costs.

Nine Months EndedSeptember30,	CCS			Advanced Technology				W.E.T.			Reconciling Items				Consolidated Total
2013:
Product revenues	$	103,460	$		—		$		376,332	$		—		$		479,792
Depreciation and amortization		1,115			344				21,143			865				23,467
Operating income (loss)		28,953			(5,174	)			28,407			(19,422	)			32,764
2012:
Product revenues	$	96,117	$		—		$		310,620	$		—		$		406,737
Depreciation and amortization		787			388				20,697			865				22,737
Operating income (loss)		25,037			(5,260	)			22,274			(14,962	)			27,089

The Advanced Technology operating loss for the nine months ended September30, 2013 and 2012 is net of $1,597 and $1,763, respectively, of reimbursed research and development costs. Reconciling items include historical Gentherm’s corporate selling, general and administrative costs and acquisition transaction costs.

Note 4 – Segment Reporting – Continued

Total product revenues information by geographic area:

	Three Months Ended September30,
	2013					2012
United States	$	76,543	45	%	$		60,012	42	%
Germany		20,847	12	%			17,773	13	%
China		18,285	11	%			15,694	11	%
South Korea		13,546	8	%			10,716	8	%
Japan		10,281	6	%			10,294	7	%
United Kingdom		5,180	3	%			3,407	2	%
Mexico		4,230	2	%			3,581	3	%
Czech Republic		4,114	2	%			4,375	3	%
Canada		3,432	2	%			2,782	2	%
Other		14,724	9	%			12,424	9	%
Total product revenues	$	171,182	100	%	$		141,058	100	%

	Nine Months Ended September30,
	2013					2012
United States	$	211,462	44	%	$		173,233	43	%
Germany		61,332	13	%			49,405	12	%
China		47,972	10	%			43,510	11	%
South Korea		39,069	8	%			31,213	8	%
Japan		28,591	6	%			24,014	6	%
United Kingdom		13,319	3	%			12,959	3	%
Czech Republic		11,893	3	%			12,102	3	%
Mexico		11,696	2	%			11,467	3	%
Canada		10,533	2	%			9,527	2	%
Other		43,925	9	%			39,307	10	%
Total product revenues	$	479,792	100	%	$		406,737	100	%