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Segments and Geographical Information
 3 Months Ended
Mar. 31, 2020
Notes To Financial Statements [Abstract]  
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, gross profit and income from operations. Income from operations for each segment includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the segment. Certain operating expenses are attributable to operating segments and each allocation is measured differently based on the specific facts and circumstances of the costs being allocated. Costs not specifically allocated to segment income from operations include various corporate expenses such as stock-based compensation and costs related to IT, facilities, human resources, accounting and finance, legal and regulatory, and other separately managed general and administrative costs outside the operating segments.

We group our operations into two reportable segments: Clear Aligner segment and Scanner segment.

•Our Clear Aligner segment consists of Comprehensive Products, Non-Comprehensive Products and Non-Case revenues as defined below:

▪Comprehensive Products include, but are not limited to, Invisalign Comprehensive and Invisalign First.
▪Non-Comprehensive Products include, but are not limited to, Invisalign Moderate, Lite and Express packages and Invisalign Go.

▪Non-Case includes, but not limited to, Vivera retainers along with our training and ancillary products for treating malocclusion. 

•Our Scanner segment consists of intraoral scanning systems, which includes a single hardware platform and restorative or orthodontic software options, additional services and ancillary products. 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. The following information relates to these segments (in thousands):
 Three Months Ended
March 31,
20202019
Net revenues
Clear Aligner$481,611  $469,205  
Scanner69,352  79,766  
Total net revenues$550,963  $548,971  
Gross profit
Clear Aligner$351,492  $351,358  
Scanner42,864  50,738  
Total gross profit$394,356  $402,096  
Income from operations
Clear Aligner$166,388  $158,641  
Scanner14,389  28,259  
Unallocated corporate expenses(110,859) (99,199) 
Total income from operations$69,918  $87,701  
Depreciation and amortization
Clear Aligner
$10,121  $9,090  
Scanner
1,785  1,508  
Unallocated corporate depreciation and amortization
8,832  7,718  
Total depreciation and amortization$20,738  $18,316  
Impairments and other charges
Clear Aligner
$—  $29,782  
Total impairments and other charges$—  $29,782  

The following table reconciles total segment income from operations in the table above to net income before provision for (benefit from) income taxes and equity losses of investee (in thousands):
 Three Months Ended
March 31,
20202019
Total segment income from operations$180,777  $186,900  
Unallocated corporate expenses(110,859) (99,199) 
Total income from operations69,918  87,701  
Interest income1,986  2,633  
Other income (expense), net(18,549) (5,746) 
Net income before provision for (benefit from) income taxes and equity in losses of investee$53,355  $84,588  
Geographical Information

Net revenues are presented below by geographic area (in thousands):
 Three Months Ended
March 31,
 20202019
Net revenues 1:
United States $271,705  $279,005  
Switzerland 2
184,317  —  
The Netherlands 2
—  174,744  
China19,725  42,616  
Other International 75,216  52,606  
Total net revenues$550,963  $548,971  

1 Net revenues are attributed to countries based on the location of where revenues are recognized by our legal entities.
2 During the first quarter of 2020, we implemented a new international corporate structure. This changed the structure of our international procurement and sales operations from the Netherlands to Switzerland.

Tangible long-lived assets, which includes Property, plant and equipment, net, and Operating lease right-of-use assets, net, are presented below by geographic area (in thousands):
 March 31,
2020		December 31, 2019
Long-lived assets 1:
Switzerland 2
$229,010  $7,755  
United States 182,131  164,451  
Costa Rica85,573  82,083  
China84,127  73,174  
The Netherlands 2
1,504  226,286  
Other International151,512  134,225  
Total long-lived assets$733,857  $687,974  
 
1 Long-lived assets are attributed to countries based on the location of our entity that owns or leases the assets.
2 As a result of the new international corporate structure changes, most of the long-lived assets were transferred from our Netherlands entity to our Switzerland entity during the first quarter of 2020.