(15) Segment Information

Prior to the three months ended December 31, 2018, we had previously determined the software-as-a-service, or SaaS, line of business was not material to our global operations in terms of revenue and profit, and therefore had not been separately reported as a segment. However, following recent acquisitions, we have quantitatively and qualitatively reassessed our segment reporting and determined the SaaS segment is material to the group, and now 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, 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.

Effective July 1, 2018, we refined our operating model to integrate our regional sales structures into our global business segments, which resulted in a reorganization of our internal business reporting. As part of this reorganization, we redesigned our systems and processes in relation to the business segment reporting, including management reporting responsibilities and cost allocations. These changes were made prospectively for the year ended June 30, 2018. As such, we do not have comparable net operating profit by reportable segment for the year ended June 30, 2017, and recreating this reporting is not considered practicable given the redesign of our systems and processes. The net revenues by reportable segment is available for the year ended June 30, 2017, and has been presented in the table summarizing our net revenue disaggregated by segment, product and region below.

The table below presents a reconciliation of net revenues and net operating profit by reportable segments for year ended June 30, 2019 compared to June 30, 2018 (in millions):


	2019		2018
Revenue by segment
Total Sleep and Respiratory Care	$	2,330.8	$	2,183.2

Software as a Service		281.1		157.0
Deferred revenue fair value adjustment*		(5.3)		-
Total Software as a Service		275.8		157.0
Total	$	2,606.6	$	2,340.2

Net operating profit by segment
Sleep and Respiratory Care	$	766.1	$	656.3
Software as a Service		74.9		55.2
Total	$	841.0	$	711.5

Reconciling items
Corporate costs	$	124.9	$	104.9
Amortization of acquired intangible assets		74.9		46.4
Restructuring expenses		9.4		18.4
Acquisition related expenses		6.1		-
Litigation settlement expenses		41.2		-
Deferred revenue fair value adjustment*		5.3		-
Interest income		(2.3)		(16.4)
Interest expense		36.2		28.4
Loss attributable to equity method investments		15.8		-
Other, net		10.7		8.5
Income before income taxes	$	518.8	$	521.3

* 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, 2019, 2018 and 2017 (in millions):


	2019		2018		2017
U.S., Canada and Latin America
Devices	$	743.1	$	689.6	$	632.7
Masks and other		677.4		600.5		539.3
Total Sleep and Respiratory Care	$	1,420.5	$	1,290.1	$	1,172.0
Software as a Service		275.8		157.0		138.1
Total	$	1,696.3	$	1,447.1	$	1,310.1

Combined Europe, Asia and other markets
Devices	$	618.5	$	614.0	$	528.3
Masks and other		291.8		279.1		228.3
Total Sleep and Respiratory Care	$	910.3	$	893.1	$	756.6

Global revenue
Devices	$	1,361.6	$	1,303.6	$	1,161.0
Masks and other		969.2		879.6		767.6
Total Sleep and Respiratory Care	$	2,330.8	$	2,183.2	$	1,928.6
Software as a Service		275.8		157.0		138.1
Total	$	2,606.6	$	2,340.2	$	2,066.7

Revenue information by geographic area for the years ended June 30, 2019, 2018 and 2017 is summarized below (in millions):


	2019		2018		2017
United States	$	1,588.7	$	1,345.2	$	1,229.2
Rest of the World		1,017.9		995.0		837.5
Total	$	2,606.6	$	2,340.2	$	2,066.7

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, 2019, 2018 and 2017, is summarized below (in millions):


	2019		2018		2017
United States	$	149.7	$	142.3	$	150.7
Australia		165.5		173.4		183.1
Rest of the World		72.3		70.8		60.4
Total	$	387.5	$	386.5	$	394.2