Segments and Geographical Information

3 Months Ended

Mar. 31, 2013

Segments and Geographical Information

Segments and Geographical Information

Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. We report segment information based on the management approach. The management approach designates the internal reporting used by CODM for decision making and performance assessment as the basis for determining our reportable segments. The performance measures of our reportable segments include net revenues and gross profit.

We have grouped our operations into two reportable segments which are also our reporting units: Clear Aligner segment and SCCS segment.

• Our Clear Aligner segment consists of our Invisalign system which includes Invisalign Full, Express/Lite, Teen, Assist, Vivera retainers, along with our training and ancillary products for treating malocclusion.

• Our SCCS segment consists of intra-oral scanning systems and additional services available with the intra-oral scanners that provide digital alternatives to the traditional cast models. This segment includes our iTero scanner and OrthoCAD services.

These reportable operating segments are based on how our CODM views and evaluates our operations as well as allocation of resources (in thousands):

	For the Three Months March 31,
Revenue	2013		2012
Clear Aligner
Invisalign Full	$	85,914	$	82,424
Invisalign Express/Lite	16,083		11,806
Invisalign Teen	18,573		15,148
Invisalign Assist	8,293		7,193
Invisalign non-case revenues	12,709		6,757
Scanners and CAD/CAM Services
Scanners	6,625		5,361
CAD/CAM Services	5,383		6,390
Total	$	153,580	$	135,079
Gross profit
Clear Aligner	$	109,327	$	97,389
Scanners and CAD/CAM Services	3,522		3,371
Total	$	112,849	$	100,760

Geographical Information

Net revenues and long-lived assets are presented below by geographic area (in thousands):

	For the Three Months Ended March 31,
	2013		2012
Net revenues (1):
United States	$	119,840	$	103,258
the Netherlands	31,095		29,447
Other international	2,645		2,374
Total net revenues	$	153,580	$	135,079

	As of March 31,		As of December 31,
	2013		2012
Long-lived assets:
United States	$	58,898	$	60,098
Mexico	6,347		6,473
the Netherlands	4,794		4,707
Other international	2,633		7,913
Total long-lived assets	$	72,672	$	79,191

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(1) Net Revenues are attributed to countries based on location of where revenue is recognized.