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Segment Information
 9 Months Ended
Sep. 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 September 30,Nine Months Ended September 30,
In thousands2020201920202019
Product revenues
Device Solutions$174,039 $211,096 $501,157 $644,254 
Networked Solutions282,677 330,487 898,465 978,259 
Outcomes13,942 11,314 38,158 41,281 
Total Company$470,658 $552,897 $1,437,780 $1,663,794 
Service revenues
Device Solutions$2,089 $2,253 $6,415 $8,573 
Networked Solutions23,982 25,734 73,519 70,305 
Outcomes43,455 43,590 130,479 131,415 
Total Company$69,526 $71,577 $210,413 $210,293 
Total revenues
Device Solutions$176,128 $213,349 $507,572 $652,827 
Networked Solutions306,659 356,221 971,984 1,048,564 
Outcomes57,397 54,904 168,637 172,696 
Total Company$540,184 $624,474 $1,648,193 $1,874,087 
Gross profit
Device Solutions$20,528 $40,945 $64,843 $122,451 
Networked Solutions102,295 135,406 332,368 388,717 
Outcomes20,428 20,053 56,123 63,713 
Total Company$143,251 $196,404 $453,334 $574,881 
Operating income (loss)
Device Solutions$11,017 $27,905 $28,095 $81,717 
Networked Solutions71,404 105,637 237,466 298,994 
Outcomes12,044 10,843 29,468 35,620 
Corporate unallocated(118,445)(104,946)(338,026)(312,511)
Total Company(23,980)39,439 (42,997)103,820 
Total other income (expense)(13,063)(15,110)(35,020)(44,983)
Income (loss) before income taxes$(37,043)$24,329 $(78,017)$58,837 

Our corporate unallocated operating loss for the three and nine months ended September 30, 2020 includes a $57.3 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 September 30, 2020, no customer represented more than 10% of total company revenue. During the three months ended September 30, 2019, one customer represented 10% of total company revenues. For the nine months ended September 30, 2020 and 2019, one customer represented 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 September 30,Nine Months Ended September 30,
In thousands2020201920202019
United States and Canada$354,841 $405,973 $1,110,028 $1,221,448 
Europe, Middle East, and Africa (EMEA)156,810 157,159 431,593 495,715 
Latin America and Asia Pacific(1)
28,533 61,342 106,572 156,924 
Total Company$540,184 $624,474 $1,648,193 $1,874,087 
(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 September 30,Nine Months Ended September 30,
In thousands2020201920202019
Device Solutions$5,926 $6,373 $18,423 $19,155 
Networked Solutions4,377 3,077 12,447 9,530 
Outcomes1,327 1,408 4,132 3,995 
Corporate unallocated12,446 17,765 37,304 53,011 
Total Company$24,076 $28,623 $72,306 $85,691