21. OPERATING SEGMENTS

Operating segments

The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets or reports material revenues.

The Company currently has three reportable segments: South African transaction processing, International transaction processing and Financial inclusion and applied technologies. The South African transaction processing and Financial inclusion and applied technologies segments operate mainly within South Africa while the International transaction processing segment operates mainly within South Korea, Hong Kong and the European Union. The Company's reportable segments offer different products and services and require different resources and marketing strategies and share the Company's assets.

The South African transaction processing segment currently consists mainly of an ATM infrastructure deployed in South Africa, transaction processing for retailers, utilities, and banks, and a welfare benefit distribution service provided to the South African government through to September 30, 2018. The welfare benefit distribution services ceased following the SASSA contract expiration on September 30, 2018. Fee income is earned from customers utilizing our ATM infrastructure. Utility providers and banks are charged a fee for transaction processing services performed on their behalf at retailers. Fee income was also earned based on the number of recipient cardholders paid through to September 30, 2018. There were no individually significant customers providing more than 10% of total revenue during the year ended June 30, 2019. This segment had an individually significant customer that accounted for more than 10% of the total revenue of the Company during the years ended June 30, 2018 (19%) and 2017 (22%). During the years ended June 30, 2019 and 2018, the operating segment incurred goodwill impairment losses of $1.2 million and $1.1 million, respectively (refer to Note 10).

The International transaction processing segment consists mainly of activities in South Korea from which the Company generates revenue from the provision of payment processing services to merchants and card issuers. This segment generates fee revenue from the provision of payment processing services and to a lesser extent from the sale of goods, primarily point of sale terminals, to customers in South Korea. Fees generated from payment services processing and other processing activities by Transact24 and Masterpayment are included in this segment. During the year ended June 30, 2019 and 2018, the operating segment incurred a goodwill impairment loss of $7.0 million and $19.9 million, respectively (refer to Note 10).

The Financial inclusion and applied technologies segment derives revenue from the provision of short-term loans as a principal and the provision of bank accounts, as a fixed monthly fee per account is charged for the maintenance of these accounts. This segment also includes fee income and associated expenses from merchants and card holders using the Company's merchant acquiring system, the sale of prepaid products (electricity and airtime) as well as the sale of hardware and software. Finally, the Company earns premium income from the sale of life insurance products through its insurance business. DNI was acquired on June 30, 2018, and has been allocated to the Financial inclusion and applied technologies segment. DNI contributed to segment performance for the first nine months of the year ended June 30, 2019. DNI did not contribute to segment performance during the last three months of the year ended June 30, 2019 and during the year ended June 30, 2018.

DNI primarily derives revenue from fees generated through the distribution of starter packs and, to a less extent, from interest income earned through the provision of financing to Cell C in order for it to expand components of Cell C's telecommunications infrastructure in South Africa. During the year ended June 30, 2019, the operating segment incurred a goodwill impairment loss of $6.2 million (refer to Note 10).

Corporate/eliminations includes the Company's head office cost center and the amortization of acquisition-related intangible assets. The $5.3 million impairment loss related to the impairment of DNI intangible assets (refer to Note 3) during the year ended June 30, 2019, has been allocated to corporate/ elimination. The $8.0 million paid to the Company's founder, former chief executive officer and former member of our board of directors during the year ended June 30, 2017, is also included in corporate/ eliminations.

The reconciliation of the reportable segments revenue to revenue from external customers for the years ended June 30, 2019, 2018 and 2017, respectively, is as follows:


				Revenue
				Corporate/					From
		Reportable		Eliminations			Inter-		external
		Segment		(Note 13)			segment		customers
South African transaction processing	$	96,038	$	-		$	6,990	$	89,048
International transaction processing		148,268		-			-		148,268
Financial inclusion and applied technologies		146,184		-			2,801		143,383
Reportable segments		390,490		-			9,791		380,699
Corporate/Eliminations – revenue refund		-		(19,709	)		-		(19,709	)
Total for the year ended June 30, 2019	$	390,490	($	19,709	)	$	9,791	$	360,990
South African transaction processing	$	268,047	$	-		$	29,949	$	238,098
International transaction processing		180,027		-			-		180,027
Financial inclusion and applied technologies		221,906		-			27,142		194,764
Total for the year ended June 30, 2018	$	669,980	$	-		$	57,091	$	612,889
South African transaction processing	$	249,144	$	-		$	24,518	$	224,626
International transaction processing		176,729		-			-		176,729
Financial inclusion and applied technologies		235,901		-			27,190		208,711
Total for the year ended June 30, 2017	$	661,774	$	-		$	51,708	$	610,066

The Company does not allocate interest income, interest expense or income tax expense to its reportable segments. The Company evaluates segment performance based on segment operating income before acquisition-related intangible asset amortization which represents operating income before acquisition-related intangible asset amortization and expenses allocated to Corporate/Eliminations, all under GAAP. The reconciliation of the reportable segments measure of profit or loss to (loss) income before income taxes for the years ended June 30, 2019, 2018 and 2017, respectively, is as follows:


		For the years ended June 30,
		2019⁽¹⁾			2018			2017
Reportable segments measure of profit or loss	$	(42,692	)	$	85,690		$	130,799
Operating loss: Corporate/Eliminations		(70,816	)		(26,741	)		(33,756	)
Change in fair value of equity securities		(167,459	)		32,473			-
Loss on disposal of DNI		(5,771	)		-			-
Interest income		7,229			17,885			20,897
Interest expense		(10,724	)		(8,941	)		(3,484	)
Impairment of Cedar Cellular note		(12,793	)		-			-
(Loss) Income before income taxes	$	(303,026	)	$	100,366		$	114,456

(1) - Operating loss: Corporate/Eliminations includes $34.0 million related to the accrual referred to in Note 13.

The following tables summarize segment information for the years ended June 30, 2019, 2018 and 2017:


		For the years ended June 30,
		2019			2018			2017
Revenues
South African transaction processing	$	96,038		$	268,047		$	249,144
International transaction processing		148,268			180,027			176,729
Financial inclusion and applied technologies		146,184			221,906			235,901
Continuing		89,847			221,906			235,901
Discontinued		56,337			-			-
Total		390,490			669,980			661,774
Continuing		334,153			669,980			661,774
Discontinued		56,337			-			-
Operating income (loss)
South African transaction processing⁽¹⁾		(30,771	)		42,796			59,309
International transaction processing		2,837			(12,478	)		13,705
Financial inclusion and applied technologies⁽¹⁾		(14,758	)		55,372			57,785
Continuing⁽¹⁾		(39,158	)		55,372			57,785
Discontinued		24,400			-			-
Subtotal: Operating segments		(42,692	)		85,690			130,799
Corporate/Eliminations		(70,816	)		(26,741	)		(33,756	)
Continuing		(58,097	)		(22,127	)		(33,756	)
Discontinued		(12,719	)		(4,614	)		-
Total⁽¹⁾		(113,508	)		58,949			97,043
Continuing⁽¹⁾		(125,189	)		63,563			97,043
Discontinued		11,681			(4,614	)		-
Depreciation and amortization
South African transaction processing		3,612			4,625			4,614
International transaction processing		9,962			17,627			21,366
Financial inclusion and applied technologies		1,968			1,441			1,422
Continuing		1,355			1,441			1,422
Discontinued		613			-			-
Subtotal: Operating segments		15,542			23,693			27,402
Corporate/Eliminations		21,807			11,791			13,976
Continuing		14,394			11,791			13,976
Discontinued		7,413			-			-
Total		37,349			35,484			41,378
Continuing		29,323			35,484			41,378
Discontinued		8,026			-			-
Expenditures for long-lived assets
South African transaction processing		3,590			3,988			2,473
International transaction processing		3,607			4,397			7,745
Financial inclusion and applied technologies		2,219			1,264			977
Continuing		1,488			1,264			977
Discontinued		731			-			-
Subtotal: Operating segments		9,416			9,649			11,195
Corporate/Eliminations		-			-			-
Total		9,416			9,649			11,195
Continuing		8,685			9,649			11,195
Discontinued	$	731		$	-		$	-

(1) South African transaction processing and Financial inclusion and applies technologies include retrenchment costs for the year ended June 30, 2019, of: $4,665 and $1,604, respectively, for total retrenchment costs for the year ended June 30, 2019, of $6,269. The retrenchment costs are included in selling, general and administration expense on the consolidated statement of operations for the year ended June 30, 2019.

The segment information as reviewed by the chief operating decision maker does not include a measure of assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does not have dedicated assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented.

Geographic Information

Long-lived assets based on the geographic location for the years ended June 30, 2019, 2018 and 2017, are presented in the table below:


	Long-lived assets
		2019		2018		2017
				(as		(as
				restated^A)		restated^B)

South Africa	$	143,924	$	496,442	$	72,443
South Korea		149,390		177,388		192,473
Rest of world		83,972		116,643		77,723
Total	$	377,286	$	790,473	$	342,639

(A) The South Africa and total amounts have been restated by $1,976 to correct the misstatement discussed in Note 1.

(B) The South Africa and total amounts have been restated by $1,927 to correct the misstatement discussed in Note 1.