REPORTABLE SEGMENT INFORMATION

The Company is a leading provider of technology solutions and payment processing services primarily for financial services organizations.

Beginning in the first quarter of fiscal 2018, JHA changed its reportable segment structure from two customer-centric segments, Bank and Credit Union, to four product-centric segments. The change was made based on the view of our Chief Executive Officer, who is also our Chief Operating Decision Maker, that the Company could be more effectively managed using a product-centric approach and was driven by the first budgetary process under his administration.

The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services, online and mobile bill pay solutions, and risk management products and services. The Complementary segment provides additional software and services that can be integrated with our core solutions or used independently. The Corporate & Other segment includes hardware revenue and costs, as well as operating costs not directly attributable to the other three segments.

The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.

The prior period presented has been retroactively recast to conform to the new segment structure adopted July 1, 2017.



	Year Ended
	June 30, 2018
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	527,722	$	48,407	$	350,495	$	51,797		$	978,421
Processing	27,565		468,935		61,526		156			558,182
Total Revenue	555,287		517,342		412,021		51,953			1,536,603

Cost of Revenue	248,215		244,718		169,793		210,916			873,642
Research and Development										90,340
Selling, General, and Administrative										182,146
Gain on Disposal of Businesses										(1,894		)
Total Expenses										1,144,234

SEGMENT INCOME	$	307,072	$	272,624	$	242,228	$	(158,963	)

OPERATING INCOME										392,369

INTEREST INCOME (EXPENSE)										(1,345		)

INCOME BEFORE INCOME TAXES										$	391,024



	Year Ended
	June 30, 2017
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	477,985	$	45,980	$	332,958	$	60,625		$	917,548
Processing	25,013		435,645		52,787		124			513,569
Total Revenue	502,998		481,625		385,745		60,749			1,431,117

Cost of Revenue	226,475		224,214		160,016		208,329			819,034
Research and Development										84,753
Selling, General, and Administrative										162,898
Gain on Disposal of Businesses										(3,270		)
Total Expenses										1,063,415

SEGMENT INCOME	$	276,523	$	257,411	$	225,729	$	(147,580	)

OPERATING INCOME										367,702

INTEREST INCOME (EXPENSE)										(748		)

INCOME BEFORE INCOME TAXES										$	366,954



	Year Ended
	June 30, 2016
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	427,882	$	45,270	$	302,258	$	95,421		$	870,831
Processing	21,781		414,509		47,358		167			483,815
Total Revenue	449,663		459,779		349,616		95,588			1,354,646

Cost of Revenue	209,688		215,650		148,906		199,407			773,651
Research and Development										81,234
Selling, General, and Administrative										157,593
Gain on Disposal of Businesses										(19,491		)
Total Expenses										992,987

SEGMENT INCOME	$	239,975	$	244,129	$	200,710	$	(103,819	)

OPERATING INCOME										361,659

INTEREST INCOME (EXPENSE)										(1,123		)

INCOME BEFORE INCOME TAXES										$	360,536

The Company has not disclosed any additional asset information by segment, as the information is not produced internally and its preparation is impracticable.