Segment Information (Text Block)

9 Months Ended

Sep. 30, 2011

Segment Information [Abstract]

Segment Information [Text Block]

Segment Information

We have two operating segments: Itron North America and Itron International. Itron North America generates the majority of its revenues in the United States and Canada, while Itron International generates the majority of its revenues in Europe, and the balance in Africa, Latin America, and Asia/Pacific.

On March 14, 2011, we announced a global reorganization in which the Company will be managed under two operating segments, Energy and Water. Although certain management positions of the Company’s two new operating segments have been identified, a transition to the new organizational structure, including changes to operations and financial and operational management systems will continue through the remainder of 2011. Throughout 2011, management and external financial reporting will be based on the current geographic operating segments, Itron North America and Itron International, as the new segment information will not be available until changes to the operations have occurred and new systems and processes are deployed. Financial reporting of the Energy and Water operating segments is expected in the first quarter of 2012.

We have three measures of segment performance: revenue, gross profit (margin), and operating income (margin). Intersegment revenues were minimal. Corporate operating expenses, interest income, interest expense, other income (expense), and income tax provision (benefit) are not allocated to the segments, nor included in the measure of segment profit or loss.

Due to a decline in our market capitalization in September 2011, an interim impairment test of goodwill was performed as of September 30, 2011 resulting in a goodwill write-down of $540.4 million in the third quarter of 2011. The goodwill impairment was associated with two reporting units from the Itron International operating segment.

Segment Products

Itron North America

Standard electricity (electronic), gas, and water meters; advanced and smart electricity and water meters and communication modules; advanced and smart gas communication modules; advanced systems including handheld, mobile, and fixed network collection technologies; smart network technologies; meter data management software; knowledge application solutions; and professional services including implementation, installation, consulting, and analysis.

Itron International

Standard electricity (electromechanical and electronic), gas, and water meters; advanced electricity, gas, and water meters; advanced water communication modules; smart electricity meters and 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; and professional services including implementation, installation, consulting/analysis, and system management.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
	(in thousands)
Revenues
Itron North America	$	294,577		$	313,155		$	859,783		$	855,857
Itron International	320,978			260,496			931,864			782,756
Total Company	$	615,555		$	573,651		$	1,791,647		$	1,638,613
Gross profit
Itron North America	$	84,919		$	109,551		$	276,599		$	288,682
Itron International	91,259			72,212			274,772			224,201
Total Company	$	176,178		$	181,763		$	551,371		$	512,883
Operating income (loss)
Itron North America	$	38,018		$	62,274		$	124,550		$	149,694
Itron International	(525,411		)	7,515			(492,700		)	22,969
Corporate unallocated	(9,859		)	(10,853		)	(30,928		)	(32,099		)
Total Company	(497,252		)	58,936			(399,078		)	140,564
Total other income (expense)	(13,788		)	(17,585		)	(40,919		)	(47,212		)
Income (loss) before income taxes	$	(511,040	)	$	41,351		$	(439,997	)	$	93,352

No single customer represented more than 10% of total Company revenues for the three and nine months ended September 30, 2011, while one customer represented more than 10% of total Company revenues during the same periods in 2010. Three customers each accounted for more than 10% of Itron North America revenues for the three months ended September 30, 2011, and two customers each accounted for more than 10% of Itron North America revenues for the nine months ended September 30, 2011. Three customers each accounted for more than 10% of Itron North America revenues for the three and nine months ended September 30, 2010. No single customer represented more than 10% of Itron International revenues for the three and nine months ended September 30, 2011 and 2010.

Revenues by region were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
	(in thousands)
United States and Canada	$	292,323	$	310,671	$	852,715	$	849,174
Europe	207,645		173,936		638,830		562,284
Other	115,587		89,044		300,102		227,155
Total revenues	$	615,555	$	573,651	$	1,791,647	$	1,638,613

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
	(in thousands)
Itron North America	$	11,497	$	11,484	$	33,844	$	34,212
Itron International	21,117		20,628		63,067		62,970
Corporate Unallocated	6		1		8		2
Total Company	$	32,620	$	32,113	$	96,919	$	97,184