Segment Information

12 Months Ended

Jun. 30, 2020

(15) Segment Information

We have two operating segments, which are the Sleep and Respiratory Care segment and the SaaS segment. 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 2 – significant accounting policies. Segment net sales and segment income from operations do not include inter-segment profits and revenue is allocated to a geographic area based on where the products are shipped to or where the services are performed.

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, net 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 a reconciliation of net revenues, depreciation and amortization and net operating profit by reportable segments for the years ended June 30, 2020, 2019 and 2018 (in thousands):


	2020		2019		2018
Revenue by segment
Total Sleep and Respiratory Care	$	2,602,381	$	2,330,783	$	2,183,193

Software as a Service		356,734		281,137		157,003
Deferred revenue fair value adjustment*		(2,102)		(5,348)		-
Total Software as a Service		354,632		275,789		157,003
Total	$	2,957,013	$	2,606,572	$	2,340,196

Depreciation and amortization by segment
Sleep and Respiratory Care	$	69,444	$	70,094	$	70,366
Software as a Service		3,850		3,250		809
Amortization of acquired intangible assets and corporate costs		81,556		77,451		48,785
Total	$	154,850	$	150,795	$	119,960

Net operating profit by segment
Sleep and Respiratory Care	$	934,697	$	766,068	$	656,311
Software as a Service		82,152		74,886		55,224
Total	$	1,016,849	$	840,954	$	711,535

Reconciling items
Corporate costs	$	125,993	$	124,682	$	104,889
Amortization of acquired intangible assets		79,695		74,938		46,383
Litigation settlement expenses		(600)		41,199		-
Restructuring expenses		-		9,401		18,432
Acquisition related expenses		-		6,123		-
Deferred revenue fair value adjustment*		2,102		5,348		-
Interest expense (income), net		39,356		33,857		11,977
Loss attributable to equity method investments		25,058		15,833		-
Other, net		12,157		10,726		8,542
Income before income taxes	$	733,088	$	518,847	$	521,312

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

The following table summarizes our net revenue disaggregated by segment, product and region for the years ended June 30, 2020, 2019 and 2018 (in thousands):


	2020		2019		2018
U.S., Canada and Latin America
Devices	$	792,766	$	743,066	$	689,603
Masks and other		779,561		677,430		600,480
Total Sleep and Respiratory Care	$	1,572,327	$	1,420,496	$	1,290,083
Software as a Service		354,632		275,789		157,003
Total	$	1,926,959	$	1,696,285	$	1,447,086

Combined Europe, Asia and other markets
Devices	$	715,056	$	618,525	$	613,978
Masks and other		314,998		291,762		279,133
Total Sleep and Respiratory Care	$	1,030,054	$	910,287	$	893,111

Global revenue
Devices	$	1,507,822	$	1,361,591	$	1,303,581
Masks and other		1,094,559		969,192		879,613
Total Sleep and Respiratory Care	$	2,602,381	$	2,330,783	$	2,183,194
Software as a Service		354,632		275,789		157,003
Total	$	2,957,013	$	2,606,572	$	2,340,197

Revenue information by geographic area for the years ended June 30, 2020, 2019 and 2018 is summarized below (in thousands):


	2020		2019		2018
United States	$	1,828,575	$	1,588,655	$	1,345,212
Rest of the World		1,128,438		1,017,917		994,984
Total	$	2,957,013	$	2,606,572	$	2,340,196

Long-lived assets of geographic areas are those assets used in our operations in each geographical area, and excludes goodwill, other intangible assets, and deferred tax assets. Long-lived assets by geographic area as of June 30, 2020, 2019 and 2018, is summarized below (in thousands):


	2020		2019		2018
United States	$	164,155	$	149,706	$	142,337
Australia		162,490		165,425		173,394
Singapore		39,977		19,465		17,657
Rest of the World		50,713		52,864		53,162
Total	$	417,335	$	387,460	$	386,550