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 its Chief Executive Officer, who is also the 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 the Company's core solutions or used independently. The Corporate & Other segment includes revenue and costs from hardware and other products not attributable to the other three segments, 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.

An immaterial adjustment was made to reclassify revenue recognized in fiscal 2018 from the Core to the Corporate and Other Segment. For the fiscal year ended June 30, 2018, the amount reclassified totaled $2,968.



	Year Ended
	June 30, 2019
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	506,007	$	52,756	$	348,631	$	51,095		$	958,489
Processing	28,422		495,563		69,584		633			594,202
Total Revenue	534,429		548,319		418,215		51,728			1,552,691

Cost of Revenue	243,989		273,261		175,737		230,043			923,030
Research and Development										96,378
Selling, General, and Administrative										185,998
Gain on Disposal of Businesses										—
Total Expenses										1,205,406

SEGMENT INCOME	$	290,440	$	275,058	$	242,478	$	(178,315	)

OPERATING INCOME										347,285

INTEREST INCOME (EXPENSE)										(50		)

INCOME BEFORE INCOME TAXES										$	347,235



	Year Ended
	June 30, 2018
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	482,216	$	47,641	$	333,812	$	57,070		$	920,739
Processing	27,605		460,690		61,607		156			550,058
Total Revenue	509,821		508,331		395,419		57,226			1,470,797

Cost of Revenue	232,868		245,269		163,905		211,096			853,138
Research and Development										90,340
Selling, General, and Administrative										171,710
Gain on Disposal of Businesses										(1,894		)
Total Expenses										1,113,294

SEGMENT INCOME	$	276,953	$	263,062	$	231,514	$	(153,870	)

OPERATING INCOME										357,503

INTEREST INCOME (EXPENSE)										(1,345		)

INCOME BEFORE INCOME TAXES										$	356,158



	Year Ended
	June 30, 2017
	Core		Payments		Complementary		Corporate & Other			Total
REVENUE
Services and Support	$	452,712	$	43,477	$	322,784	$	62,762		$	881,735
Processing	24,893		428,511		53,027		124			506,555
Total Revenue	477,605		471,988		375,811		62,886			1,388,290

Cost of Revenue	219,440		222,685		155,084		208,646			805,855
Research and Development										84,753
Selling, General, and Administrative										159,235
Gain on Disposal of Businesses										(3,270		)
Total Expenses										1,046,573

SEGMENT INCOME	$	258,165	$	249,303	$	220,727	$	(145,760	)

OPERATING INCOME										341,717

INTEREST INCOME (EXPENSE)										(748		)

INCOME BEFORE INCOME TAXES										$	340,969

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