(15) Segment Information

We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry (“Sleep and Respiratory Care”) and the supply of business management software-as-a-service to out-of-hospital health providers (“SaaS”). However, we have previously determined the SaaS segment as not material to our global operations in terms of revenue and profit, and therefore this has not been separately reported as a segment. Following our recent acquisitions, we have quantitatively and qualitatively reassessed our segment reporting and determined the SaaS segment is material to the group.

We evaluate the performance of our segments based on net sales and income from operations. The accounting policies of the segments are the same as those described in note 1 of our consolidated financial statements included in our Form 10-K for the year ended June 30, 2018, except for revenue recognition, which is described in note - 1 Summary of Significant Accounting Policies. Segment net sales and segment income from operations do not include inter-segment profits.

Certain items are maintained at the corporate level and are not allocated to the segments. The non-allocated items include corporate headquarters costs, stock-based compensation, amortization expense from acquired intangibles, acquisition related expenses, interest income, interest expense and other, net. We neither discretely allocate assets to our operating segments, nor does our Chief Operating Decision Maker evaluate the operating segments using discrete asset information.

The table below presents information about our reportable segments (in millions):


	Three Months Ended December 31,				Six Months Ended December 31,
	2018		2017		2018		2017
Revenue by segment
Devices	$	342.7	$	337.0	$	666.8	$	623.2
Masks and other		245.2		225.6		461.9		424.9
Total Sleep and Respiratory Care	$	587.9	$	562.6	$	1,128.7	$	1,048.1
Software as a Service		65.2		38.7		112.7		76.8
Deferred revenue fair value adjustment*		(2.0)		-		(2.0)		-
Total Software as a Service		63.2		38.7		110.7		76.8
Total	$	651.1	$	601.3	$	1,239.4	$	1,124.9

Net operating profit by segment
Sleep and Respiratory Care	$	196.5	$	171.3	$	372.2	$	306.9
Software as a Service		17.1		12.8		32.4		26.2
Total	$	213.6	$	184.1	$	404.6	$	333.1

Reconciling items
Corporate costs	$	32.6	$	26.7	$	66.5	$	51.4
Amortization of acquired intangible assets		15.8		11.3		28.7		23.1
Acquisition related expenses		6.1		-		6.1		-
Deferred revenue fair value adjustment*		2.0		-		2.0		-
Interest income		(0.7)		(4.6)		(1.6)		(9.5)
Interest expense		7.5		7.4		11.2		15.2
Loss attributable to equity method investments		3.4		-		3.4		-
Other, net		0.6		1.5		3.1		2.6
Income before income taxes	$	146.3	$	141.8	$	285.2	$	250.3

* The deferred revenue fair value adjustment is a purchase price accounting adjustment related to MatrixCare which was acquired on November 13, 2018.