Segment Information

3 Months Ended

Sep. 30, 2020

Segment Information [Abstract]

Segment Information

(2)      Segment Information

We have quantitatively and qualitatively determined that we operate in 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 revenues and income from operations. The accounting policies of the segments are the same as those described in note 2 of our consolidated financial statements included in our Form 10-K for the year ended June 30, 2020. Segment net revenues 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, 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 a reconciliation of net revenues and net operating profit by reportable segments (in thousands):

	Three Months Ended ‎September 30,
	2020		2019
Net revenue by segment
Total Sleep and Respiratory Care	$	659,801	$	594,201
Software as a Service		92,143		88,300
Deferred revenue fair value adjustment (1)		-		(1,445)
Total Software as a Service		92,143		86,855
Total	$	751,944	$	681,056
Depreciation and amortization by segment
Sleep and Respiratory Care	$	13,147	$	14,691
Software as a Service		971		978
Amortization of acquired intangible assets and corporate costs		25,348		22,285
Total	$	39,466	$	37,954
Net operating profit by segment (2)
Sleep and Respiratory Care (2)	$	248,181	$	198,159
Software as a Service (2)		23,586		23,797
Total	$	271,767	$	221,956
Reconciling items
Corporate costs	$	34,649	$	30,929
Amortization of acquired intangible assets		20,222		18,480
Deferred revenue fair value adjustment (1)		-		1,445
Interest expense (income), net		6,725		10,543
Loss attributable to equity method investments		2,288		6,863
Other, net		(7,971)		3,109
Income before income taxes	$	215,854	$	150,587

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

(2)During the three months ended September 30, 2020, we recorded $2.8 million of impairment for our operating lease right-of-use asset. The impairment related to leases for office space and was recorded within net operating profit. The impairment for the three months ended September 30, 2020 attributable to Sleep and Respiratory Care was $1.6 million and $1.2 million for SaaS.