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Segment Information
 6 Months Ended
Jun. 30, 2020
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 meters, electricity IEC meters, and water meters, in addition to our heat and allocation products; communicating meters that are not a part of an Itron 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 (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 combines the majority of the assets from the recently acquired SSNI organization with our legacy Itron networking products and software and the implementation and installation of communicating devices into one operating segment. Examples from the Networked Solutions portfolio include: communicating measurement, control, or sensing endpoints such as our Itron® and OpenWay® Riva meters, Itron traditional ERT® technology, Intelis smart gas or water meters, 500G gas communication modules, 500W water communication modules; GenX networking products, network modules and interface cards; 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 (DA), and smart street lighting and smart city solutions.

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, forecasting software 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:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2020201920202019
Product revenues
Device Solutions$126,950  $214,589  $327,118  $433,158  
Networked Solutions300,351  333,422  615,788  647,772  
Outcomes11,684  18,036  24,216  29,967  
Total Company$438,985  $566,047  $967,122  $1,110,897  
Service revenues
Device Solutions$2,215  $3,134  $4,326  $6,320  
Networked Solutions24,129  22,494  49,537  44,571  
Outcomes44,265  43,362  87,024  87,825  
Total Company$70,609  $68,990  $140,887  $138,716  
Total revenues
Device Solutions$129,165  $217,723  $331,444  $439,478  
Networked Solutions324,480  355,916  665,325  692,343  
Outcomes55,949  61,398  111,240  117,792  
Total Company$509,594  $635,037  $1,108,009  $1,249,613  
Gross profit
Device Solutions$11,948  $41,590  $44,315  $81,506  
Networked Solutions108,323  126,243  230,073  253,311  
Outcomes18,246  23,381  35,695  43,660  
Total Company$138,517  $191,214  $310,083  $378,477  
Operating income (loss)
Device Solutions$(1,120) $28,355  $17,078  $53,812  
Networked Solutions77,382  98,035  166,062  193,357  
Outcomes9,226  14,367  17,424  24,777  
Corporate unallocated(130,875) (97,199) (219,581) (207,565) 
Total Company(45,387) 43,558  (19,017) 64,381  
Total other income (expense)(12,299) (15,022) (21,957) (29,873) 
Income (loss) before income taxes$(57,686) $28,536  $(40,974) $34,508  

Our corporate unallocated operating loss for the three and six months ended June 30, 2020 includes a $56.9 million loss from the sale of our Latin American business. Refer to "Note 17: Sale of Business" for additional information on the transaction.

For the three months ended June 30, 2020 and 2019, one customer represented 13% and 11% of total company revenues. For the six months ended June 30, 2020 and 2019, one customer represented 12% and 11% of total company revenues.

We currently buy a majority of our integrated circuit board assemblies from three suppliers. Management believes that other suppliers could provide similar products, but a change in suppliers, disputes with our suppliers, or unexpected constraints on the suppliers' production capacity could adversely affect operating results.
Revenues by region were as follows:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2020201920202019
United States and Canada$369,862  $417,909  $755,187  $815,475  
Europe, Middle East, and Africa (EMEA)107,799  167,314  274,783  338,556  
Latin America and Asia Pacific(1)
31,933  49,814  78,039  95,582  
Total Company$509,594  $635,037  $1,108,009  $1,249,613  
(1) On June 25, 2020, Itron closed on the sale of its Latin American operations. We will continue to sell into the region through an exclusive distributor.

Depreciation expense is allocated to the operating segments 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:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2020201920202019
Device Solutions$6,062  $6,346  $12,497  $12,782  
Networked Solutions4,333  3,205  8,070  6,453  
Outcomes1,412  1,285  2,805  2,587  
Corporate unallocated12,392  17,805  24,858  35,246  
Total Company$24,199  $28,641  $48,230  $57,068