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Segment Information
9 Months Ended
Mar. 31, 2021
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, restructuring expenses, litigation settlement expenses, deferred revenue fair value adjustment, 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
March 31,

Nine Months Ended
March 31,

2021

2020

2021

2020

Net revenue by segment

Total Sleep and Respiratory Care

$

674,931 

$

679,895 

$

2,042,909 

$

1,923,513 

Software as a Service

93,836 

89,560 

277,813 

265,258 

Deferred revenue fair value adjustment (1)

-

-

-

(2,102)

Total Software as a Service

93,836 

89,560 

277,813 

263,156 

Total

$

768,767 

$

769,455 

$

2,320,722 

$

2,186,669 

 

  

  

Depreciation and amortization by segment

Sleep and Respiratory Care

$

13,589 

$

14,134 

$

39,979 

$

43,012 

Software as a Service

1,491 

1,025 

3,599 

2,844 

Amortization of acquired intangible assets and corporate assets

24,908 

24,105 

76,456 

70,485 

Total

$

39,988 

$

39,264 

$

120,034 

$

116,341 

Net operating profit by segment (2)

Sleep and Respiratory Care (2)

$

253,693 

$

250,209 

$

763,534 

$

678,468 

Software as a Service (2)

23,052 

18,738 

70,929 

63,874 

Total

$

276,745 

$

268,947 

$

834,463 

$

742,342 

 

   

   

Reconciling items

Corporate costs

$

34,950 

$

31,039 

$

106,307 

$

94,933 

Amortization of acquired intangible assets

18,369 

20,408 

57,443 

59,495 

Restructuring expenses

-

-

8,673 

-

Litigation settlement expenses

-

-

-

(600)

Deferred revenue fair value adjustment (1)

-

-

-

2,102 

Interest expense (income), net

5,823 

9,852 

18,341 

30,414 

Loss attributable to equity method investments

4,969 

5,295 

9,895 

19,082 

Other, net

(5,371)

10,698 

(10,647)

15,922 

Income before income taxes

$

218,005 

$

191,655 

$

644,451 

$

520,994 

(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 and nine months ended March 31, 2021, we recorded $0.0 million and $2.8 million of impairment for our operating lease right-of-use asset, respectively. The impairment related to leases for office space and was recorded within net operating profit. The impairment for the nine months ended March 31, 2021 attributable to Sleep and Respiratory Care was $1.6 million and $1.2 million for SaaS.