Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

	Report of Independent Registered Public Accounting Firm	32
	Management's Annual Report on Internal Control over Financial Reporting	33
	Report of Independent Registered Public Accounting Firm	34
	Financial Statements
	Consolidated Statements of Income,
	Years Ended June 30, 2013, 2012, and 2011	35
	Consolidated Balance Sheets,
	June 30, 2013 and 2012	36
	Consolidated Statements of Changes in Stockholders' Equity,
	Years Ended June 30, 2013, 2012, and 2011	37
	Consolidated Statements of Cash Flows,
	Years Ended June 30, 2013, 2012, and 2011	38
	Notes to Consolidated Financial Statements	39

Financial Statement Schedules

There are no schedules included because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Jack Henry & Associates, Inc.

Monett, Missouri

We have audited the accompanying consolidated balance sheets of Jack Henry & Associates, Inc. and subsidiaries (the “Company”) as of June 30, 2013 and 2012, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the three years in the period ended June 30, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Jack Henry & Associates, Inc. and subsidiaries as of June 30, 2013 and 2012, and the results of their operations and their cash flows for each of the three years in the period June 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of June 30, 2013, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 27, 2013 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri

August 27, 2013

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Jack Henry & Associates, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes policies and procedures pertaining to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurance transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements. All internal controls, no matter how well designed, have inherent limitations. Therefore, even where internal control over financial reporting is determined to be effective, it can provide only reasonable assurance. Projections of any evaluation of effectiveness to future periods are subject to the risk controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

As of the end of the Company’s 2013 fiscal year, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined the Company’s internal control over financial reporting as of June 30, 2013 was effective.

The Company’s internal control over financial reporting as of June 30, 2013 has been audited by the Company’s independent registered public accounting firm, as stated in their report appearing on the next page.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Jack Henry & Associates, Inc.

Monett, Missouri

We have audited the internal control over financial reporting of Jack Henry & Associates, Inc. and subsidiaries (the “Company”) as of June 30, 2013, based on criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2013, based on the criteria established in Internal Control — Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended June 30, 2013 of the Company and our report dated August 27, 2013 expressed an unqualified opinion on those financial statements.

/s/ DELOITTE & TOUCHE LLP

Kansas City, Missouri

August 27, 2013

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
	Year Ended June 30,
	2013				2012				2011
REVENUE
License	$	54,818			$	54,811			$	53,067
Support and service	1,015,211				909,176				852,253
Hardware	59,357				63,122				61,577
Total revenue	1,129,386				1,027,109				966,897
COST OF SALES
Cost of license	4,824				6,111				6,285
Cost of support and service	603,920				551,285				515,917
Cost of hardware	43,650				45,983				45,361
Total cost of sales	652,394				603,379				567,563
GROSS PROFIT	476,992				423,730				399,334
OPERATING EXPENSES
Selling and marketing	81,619				76,500				68,061
Research and development	63,202				60,876				63,395
General and administrative	66,624				50,119				51,561
Total operating expenses	211,445				187,495				183,017
OPERATING INCOME	265,547				236,235				216,317
INTEREST INCOME (EXPENSE)
Interest income	640				1,176				125
Interest expense	(6,337		)		(5,743		)		(8,930		)
Total interest income (expense)	(5,697		)		(4,567		)		(8,805		)
INCOME BEFORE INCOME TAXES	259,850				231,668				207,512
PROVISION FOR INCOME TAXES	83,205				76,684				70,041
NET INCOME	$	176,645			$	154,984			$	137,471
Diluted earnings per share	$	2.04			$	1.78			$	1.59
Diluted weighted average shares outstanding	86,619				87,287				86,687
Basic earnings per share	$	2.05			$	1.79			$	1.60
Basic weighted average shares outstanding	86,040				86,599				85,948
Cash dividends paid per share	$	0.560			$	0.440			$	0.400

See notes to consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share and Per Share Data)
	June 30, 2013				June 30, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	127,905			$	157,313
Receivables, net	231,263				218,305
Income tax receivable	6,107				8,476
Prepaid expenses and other	59,244				61,261
Prepaid cost of product	23,366				23,294
Total current assets	447,885				468,649
PROPERTY AND EQUIPMENT, net	300,511				276,730
OTHER ASSETS:
Non-current prepaid cost of product	27,898				21,344
Computer software, net of amortization	132,612				115,785
Other non-current assets	30,411				30,523
Customer relationships, net of amortization	147,167				162,561
Trade names, net of amortization	9,380				10,380
Goodwill	533,291				533,520
Total other assets	880,759				874,113
Total assets	$	1,629,155			$	1,619,492
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,701			$	16,317
Accrued expenses	68,528				58,260
Deferred income tax liability	30,845				26,256
Notes payable and current maturities of long term debt	7,929				25,503
Deferred revenues	293,255				275,907
Total current liabilities	412,258				402,243
LONG TERM LIABILITIES:
Non-current deferred revenues	11,342				20,093
Non-current deferred income tax liability	120,434				100,932
Debt, net of current maturities	7,366				106,166
Other long-term liabilities	5,586				7,002
Total long term liabilities	144,728				234,193
Total liabilities	556,986				636,436
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—				—
Common stock - $0.01 par value; 250,000,000 shares authorized; 101,993,808 shares issued at June 30, 2013 101,482,461 shares issued at June 30, 2012	1,020				1,015
Additional paid-in capital	400,710				381,919
Retained earnings	1,072,521				944,078
Less treasury stock at cost 16,753,889 shares at June 30, 2013 15,452,064 shares at June 30, 2012	(402,082		)		(343,956		)
Total stockholders' equity	1,072,169				983,056
Total liabilities and equity	$	1,629,155			$	1,619,492

See notes to consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands, Except Share and Per Share Data)
	YEAR ENDED JUNE 30,
	2013				2012				2011
PREFERRED SHARES:	—				—				—
COMMON SHARES:
Shares, beginning of year	101,482,461				100,766,173				99,808,367
Shares issued for equity-based payment arrangements	405,270				594,428				857,348
Shares issued for Employee Stock Purchase Plan	106,077				121,860				100,458
Shares, end of year	101,993,808				101,482,461				100,766,173
COMMON STOCK - PAR VALUE $0.01 PER SHARE:
Balance, beginning of year	$	1,015			$	1,008			$	998
Shares issued for equity-based payment arrangements	4				6				9
Shares issued for Employee Stock Purchase Plan	1				1				1
Balance, end of year	$	1,020			$	1,015			$	1,008
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of year	$	381,919			$	361,131			$	334,817
Shares issued upon exercise of stock options	2,845				6,886				16,837
Shares issued for Employee Stock Purchase Plan	3,699				3,321				2,456
Tax benefits from share-based compensation	3,632				3,631				2,298
Stock-based compensation expense	8,615				6,950				4,723
Balance, end of year	$	400,710			$	381,919			$	361,131
RETAINED EARNINGS:
Balance, beginning of year	$	944,078			$	827,222			$	724,142
Net income	176,645				154,984				137,471
Dividends	(48,202		)		(38,128		)		(34,391		)
Balance, end of year	$	1,072,521			$	944,078			$	827,222
TREASURY STOCK:
Balance, beginning of year	$	(343,956	)		$	(309,585	)		$	(309,585	)
Purchase of treasury shares	(58,126		)		(34,371		)		—
Balance, end of year	$	(402,082	)		$	(343,956	)		$	(309,585	)
TOTAL STOCKHOLDERS' EQUITY	$	1,072,169			$	983,056			$	879,776

See notes to consolidated financial statements.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
	Year Ended
	June 30,
	2013				2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	176,645			$	154,984			$	137,471
Adjustments to reconcile net income to net cash from operating activities:
Depreciation	51,967				45,322				41,912
Amortization	48,374				49,297				48,602
Change in deferred income taxes	24,091				22,610				20,526
Expense for stock-based compensation	8,615				6,950				4,723
(Gain)/loss on disposal of assets	3,908				1,198				1,025
Changes in operating assets and liabilities:
Change in receivables	(12,739		)		(10,795		)		940
Change in prepaid expenses, prepaid cost of product and other	(4,430		)		(22,962		)		(24,543		)
Change in accounts payable	(4,582		)		3,488				(671		)
Change in accrued expenses	7,774				7,770				1,593
Change in income taxes	954				5,792				(10,933		)
Change in deferred revenues	8,597				896				19,487
Net cash from operating activities	309,174				264,550				240,132
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(46,256		)		(41,441		)		(32,085		)
Proceeds from sale of assets	530				2,772				—
Customer contracts acquired	(186		)		(720		)		—
Computer software developed	(51,332		)		(37,873		)		(26,954		)
Proceeds from investments	—				3,000				4,000
Purchase of investments	—				(2,000		)		(3,999		)
Net cash from investing activities	(97,244		)		(76,262		)		(59,038		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	—				—				399
Repayments on credit facilities	(145,180		)		(35,280		)		(229,854		)
Purchase of treasury stock	(58,126		)		(34,371		)		—
Dividends paid	(48,202		)		(38,128		)		(34,391		)
Excess tax benefits from stock-based compensation	3,621				3,465				1,056
Proceeds from issuance of common stock upon exercise of stock options	6,775				11,004				19,375
Minimum tax withholding payments related to share based compensation	(3,926		)		(4,112		)		(2,529		)
Proceeds from sale of common stock, net	3,700				3,322				2,457
Net cash from financing activities	(241,338		)		(94,100		)		(243,487		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(29,408	)		$	94,188			$	(62,393	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	157,313			$	63,125			$	125,518
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	127,905			$	157,313			$	63,125

See notes to consolidated financial statements

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In Thousands, Except Per Share Amounts)

NOTE 1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE COMPANY

Jack Henry & Associates, Inc. and Subsidiaries (“JHA” or the “Company”) is a provider of integrated computer systems and services that has developed and acquired a number of banking and credit union software systems. The Company's revenues are predominately earned by marketing those systems to financial institutions nationwide together with computer equipment (hardware) and by providing the conversion and software implementation services for financial institutions to utilize JHA software systems, and by providing other related services. JHA also provides continuing support and services to customers using in-house or outsourced systems.

CONSOLIDATION

The consolidated financial statements include the accounts of JHA and all of its subsidiaries, which are wholly-owned, and all intercompany accounts and transactions have been eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

The Company derives revenue from the following sources: license fees, support and service fees and hardware sales. There are no rights of return, condition of acceptance or price protection in the Company’s sales contracts.

License Fee Revenue: For software license agreements that do not require significant modification or customization of the software, the Company recognizes software license revenue when persuasive evidence of an arrangement exists, delivery of the product has occurred, the license fee is fixed and determinable and collection is probable. The Company’s software license agreements generally include multiple products and services or “elements.” None of these elements are deemed to be essential to the functionality of the other elements. Accounting principles generally accepted in the Unites States of America (“U.S. GAAP”) generally require revenue earned on software arrangements involving multiple elements to be allocated to each element based on vendor-specific objective evidence (“VSOE”) of fair value. Fair value is determined for license fees based upon the price charged when sold separately or, if the product is not yet sold separately, the price determined by management with relevant authority. In the event that we determine that VSOE does not exist for one or more of the delivered elements of a software arrangement, but does exist for all of the undelivered elements, revenue is recognized using the residual method. Under the residual method, a residual amount of the total arrangement fee is recognized as revenue for the delivered elements after the established fair value of all undelivered elements has been deducted.

Arrangements with customers that include significant customization, modification, or production of software are accounted for under contract accounting, with the revenue being recognized using the percentage-of-completion method.

Support and Service Fee Revenue: Implementation services are generally for installation, training, implementation, and configuration. These services are not considered essential to the functionality of the related software. VSOE of fair value is established by pricing used when these services are sold separately or, if the services are not yet sold separately, the price determined by management with relevant authority. Generally revenue is recognized when services are completed. On certain larger implementations, revenue is recognized based on milestones during the implementation. Milestones are triggered by tasks completed or based on direct labor hours.

Maintenance support revenue is recognized pro-rata over the contract period, typically one year. VSOE of fair value is determined based on contract renewal rates.

Outsourced data processing and ATM, debit card, and other transaction processing services revenue is recognized in the month the transactions are processed or the services are rendered.

Hardware Revenue: Hardware revenue is recognized upon delivery to the customer, when title and risk of loss are transferred. In most cases, we do not stock in inventory the hardware products we sell, but arrange for third-party suppliers to drop-ship the products to our customers on our behalf. To the extent hardware revenue is part of such an

arrangement and is not deemed essential to the functionality of any of the other elements to the arrangement, it is recognized based on fair value at the time of delivery. The Company also remarkets maintenance contracts on hardware to our customers. Hardware maintenance revenue is recognized ratably over the agreement period.

Revenue-based taxes collected from customers and remitted to governmental authorities are presented on a net basis (i.e. excluded from revenues).

PREPAID COST OF PRODUCT

Costs for remarketed hardware and software maintenance contracts, which are prepaid, are recognized ratably over the life of the contract, generally one to five years, with the related revenue amortized from deferred revenues.

DEFERRED REVENUES

Deferred revenues consist primarily of prepaid annual software support fees and prepaid hardware maintenance fees. Hardware maintenance contracts are multi-year; therefore, the deferred revenue and maintenance are classified in accordance with the terms of the contract. Software and hardware deposits received are also reflected as deferred revenues.

COMPUTER SOFTWARE DEVELOPMENT

The Company capitalizes new product development costs incurred from the point at which technological feasibility has been established through the point at which the product is ready for general availability. Software development costs that are capitalized are evaluated on a product-by-product basis annually and are assigned an estimated economic life based on the type of product, market characteristics, and maturity of the market for that particular product. These costs are amortized based on current and estimated future revenue from the product or on a straight-line basis, whichever yields greater amortization expense. All of this amortization expense is included within Cost of support and service.

CASH EQUIVALENTS

The Company considers all highly liquid investments with maturities of three months or less at the time of acquisition to be cash equivalents.

PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.

Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those with an indefinite life (such as goodwill), over an estimated economic benefit period, generally five to twenty years.

The Company reviews its long-lived assets and identifiable intangible assets with finite lives for impairment whenever events or changes in circumstances have indicated that the carrying amount of its assets might not be recoverable. The Company evaluates goodwill and other indefinite-lived intangible assets for impairment of value on an annual basis as of January 1 and between annual tests if events or changes in circumstances indicate that the asset might be impaired.

COMPREHENSIVE INCOME

Comprehensive income for each of the years ended June 30, 2013, 2012, and 2011 equals the Company's net income.

REPORTABLE SEGMENT INFORMATION

In accordance with U.S. GAAP, the Company's operations are classified as two reportable segments: bank systems and services and credit union systems and services (see Note 12). Revenue by type of product and service is presented on the face of the consolidated statements of income. Substantially all the Company’s revenues are derived from operations and assets located within the United States of America.

COMMON STOCK

The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or short-term borrowings on its existing credit facilities. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At June 30, 2013, there were 16,754 shares in treasury stock and the Company had the remaining authority to repurchase up to 8,237 additional shares. The total cost of treasury shares at June 30, 2013 is $402,082. During fiscal 2013, the Company repurchased 1,302 treasury shares for $58,126. At June 30, 2012, there were 15,452 shares in treasury stock and the Company has the authority to repurchase up to 4,539 additional shares.

The total cost of treasury shares at June 30, 2012 is $343,956. During fiscal 2012, the Company repurchased 1,045 treasury shares for $34,371.

INCOME PER SHARE

Per share information is based on the weighted average number of common shares outstanding during the year. Stock options have been included in the calculation of income per diluted share to the extent they are dilutive. The difference between basic and diluted weighted average shares outstanding is the dilutive effect of outstanding stock options (see Note 10).

INCOME TAXES

Deferred tax liabilities and assets are recognized for the tax effects of differences between the financial statement and tax bases of assets and liabilities. A valuation allowance would be established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based upon the technical merits of the position. The tax benefits recognized in the financial statements from such a position is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Also, interest and penalties expense are recognized on the full amount of deferred benefits for uncertain tax positions. Our policy is to include interest and penalties related to unrecognized tax benefits in income tax expense.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income in June 2011, which was effective for the Company beginning July 1, 2012 and ASU No. 2013-02, Comprehensive Income in February 2013, which was effective for the Company beginning January 1, 2013. The updated guidance adjusted the reporting requirements related to comprehensive income. Adoption of these updates did not have any impact on the financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment, which was effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The provisions in this update were effective for the Company beginning July 1, 2012 and its adoption did not have any impact on the financial statements.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other. The amendments in the update permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. The provisions in this update will be effective for the Company beginning July 1, 2013 and we do not anticipate that this update will materially impact the financial statements.

In July 2013, the FASB issued ASU No. 2013-11, Income Taxes. The amendments update guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The provisions in this update will be effective for the Company beginning January 1, 2014 and we do not anticipate that this update will materially impact the financial statements.

NOTE 2. FAIR VALUE OF FINANCIAL INSTRUMENTS

For cash equivalents, amounts receivable or payable and short-term borrowings, fair values approximate carrying value, based on the short-term nature of the assets and liabilities. The fair value of long term debt also approximates carrying value as estimated using discounted cash flows based on the Company’s current incremental borrowing rates or quoted prices in active markets.

The Company's estimates of the fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets, and requires that observable inputs be used in the valuations when available. The three levels of the hierarchy are as follows:

Level 1: inputs to the valuation are quoted prices in an active market for identical assets

Level 2: inputs to the valuation include quoted prices for similar assets in active markets that are observable either directly or indirectly

Level 3: valuation is based on significant inputs that are unobservable in the market and the Company's own estimates of assumptions that we believe market participants would use in pricing the asset

Fair value of financial assets, included in cash and cash equivalents, is as follows:

		Estimated Fair Value Measurements
		Level 1				Level 2				Level 3				Total Fair Value
June 30, 2013
Financial Assets:
Money market funds		$	101,576			$	—			$	—			$	101,576
June 30, 2012
Financial Assets:
Money market funds		$	116,013			$	—			$	—			$	116,013

NOTE 3. PROPERTY AND EQUIPMENT

The classification of property and equipment, together with their estimated useful lives is as follows:

	June 30,
	2013				2012				Estimated Useful Life
Land	$	25,003			$	25,011
Land improvements	25,385				25,954				5 - 20 years
Buildings	142,350				141,733				20 - 30 years
Leasehold improvements	24,037				22,185				5 - 20 years	(1)
Equipment and furniture	293,044				262,497				5 - 8 years
Aircraft and equipment	45,179				35,029				5 - 15 years
Construction in progress	18,099				5,750
	573,097				518,159
Less accumulated depreciation	272,586				241,429
Property and equipment, net	$	300,511			$	276,730

(1) Lesser of lease term or estimated useful life

Property and equipment included $2,179 and $457 that was in accrued liabilities at June 30, 2013 and 2012, respectively. Also, the Company acquired $29,131 and $13,488 of computer equipment through capital leases for the years ended June 30, 2013 and 2012, respectively. These amounts were excluded from capital expenditures on the statement of cash flows.

NOTE 4. OTHER ASSETS

Goodwill

The carrying amount of goodwill for the years ended June 30, 2013 and 2012, by reportable segments, is as follows:

	June 30,
Banking	2013				2012
Beginning balance	$	403,949			$	403,949
Goodwill, written off related to sale	(229		)		—
Ending balance	$	403,720			$	403,949
Credit Union
Beginning balance	$	129,571			$	129,571
Goodwill, acquired during the year	—				—
Ending balance	$	129,571			$	129,571

Other Intangible Assets

Information regarding other identifiable intangible assets is as follows:

	June 30,
	2013				2012
Customer relationships	$	272,391			$	275,005
Less accumulated amortization	(125,224		)		(112,444		)
Customer relationships, net	$	147,167			$	162,561
Trade names	$	10,735			$	11,064
Less accumulated amortization	(1,355		)		(684		)
Trade names, net	$	9,380			$	10,380
Computer software	$	288,095			$	246,707
Less accumulated amortization	(155,483		)		(130,922		)
Computer software, net	$	132,612			$	115,785

Customer relationships have lives ranging from 5 to 20 years. Our trade name assets have useful lives ranging from 5 to 20 years.

Computer software includes the unamortized cost of commercial software products developed or acquired by the Company, which are capitalized and amortized over useful lives ranging from 5 to 10 years. Amortization expense for computer software totaled $33,145, $32,807, and $31,189 for the fiscal years ended June 30, 2013, 2012, and 2011, respectively. There were no material impairments in any of the fiscal years presented.

Amortization expense for all intangible assets was $48,374, $49,297, and $48,602 for the fiscal years ended June 30, 2013, 2012, and 2011, respectively. The estimated aggregate future amortization expense for each of the next five years for all intangible assets remaining as of June 30, 2013, is as follows:

Years Ending June 30,	Computer Software				Customer Relationships				Trade Names				Total
2014	$	32,127			$	14,337			$	690			$	47,154
2015	26,696				13,898				672				41,266
2016	19,665				13,380				472				33,517
2017	10,852				13,209				472				24,533
2018	3,349				12,723				472				16,544

NOTE 5. DEBT

The Company’s outstanding long and short term debt is as follows:

	June 30,				June 30,
	2013				2012
LONG TERM DEBT
Term loan	$	—			$	127,500
Capital leases	14,161				3,518
Other borrowings	120				445
	14,281				131,463
Less current maturities	6,915				25,297
Debt, net of current maturities	$	7,366			$	106,166

SHORT TERM DEBT
Capital leases	$	1,014			$	206
Current maturities of long-term debt	6,915				25,297
Notes payable and current maturities of long term debt	$	7,929			$	25,503

The following table summarizes the annual principal payments required as of June 30, 2013:

Years ended June 30,
2014	$	7,929
2015	5,768
2016	1,598
2017	—
2018	—
Thereafter	—
	$	15,295

Revolving credit facility

The long term revolving credit facility allows for borrowings of up to $150,000, which may be increased by the Company at any time until maturity to $250,000. The revolving loan terminates June 4, 2015. At June 30, 2013, there was no outstanding revolving loan balance.

Term loan

The term loan had an original principal balance of $150,000, with quarterly principal payments of $5,625 that began on September 30, 2011. The remaining balance was repaid in full during fiscal 2013 and at June 30, 2013, there was no outstanding balance.

Each of the above loans bear interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the greater of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate or (c) LIBOR plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The loans are secured by pledges of capital stock of certain subsidiaries of the Company. The loans are also guaranteed by certain subsidiaries of the Company. The credit facility is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the agreement. As of June 30, 2013, the Company was in compliance with all such covenants.

Capital leases

The Company has entered into various capital lease obligations for the use of certain computer equipment. Long term capital lease obligations were entered into of which $14,161 remains outstanding at June 30, 2013 of which $6,795 will be maturing within the next twelve months. The Company also has short term capital lease obligations totaling $1,014 at June 30, 2013. Included in property and equipment are assets under capital leases totaling $39,996, which have accumulated depreciation totaling $7,611.

Other lines of credit

The Company renewed an unsecured bank credit line on April 29, 2012 which provides for funding of up to $5,000 and bears interest at the prime rate less 1% (2.25% at June 30, 2013). The credit line was renewed through April 29, 2014. At June 30, 2013, no amount was outstanding.

Interest

The Company paid interest of $3,549, $3,899, and $8,000 in 2013, 2012, and 2011 respectively.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Impact of Hurricane Sandy

Included within current year general & administrative operating expenses are $12,475, net of insurance recoveries received of $2,390, related to the impact of widespread flooding caused by Hurricane Sandy on our Lyndhurst, New Jersey item processing center. Insurance recovery claims, other than those finalized and included in general & administrative operating expenses, have been made by JHA to recover the portions of the remaining expenses. These open insurance recovery claims have not been finalized and no amounts have been recorded in the financial results for the year ended June 30, 2013. The amount recovered will likely be less than the amount of the expense. Included within accrued expenses is $439 of remaining contingent liabilities.

Litigation

We are subject to various routine legal proceedings and claims, including the following:

In May 2013 a patent infringement lawsuit entitled DataTreasury Corporation v. Jack Henry & Associates, Inc. et. al. was filed against the Company, several subsidiaries and a number of customer financial institutions in the US District Court for the Eastern District of Texas. The complaint seeks damages, interest, injunctive relief, and attorneys' fees for the alleged infringement of two patents, as well as trebling of damage awards for alleged willful infringement. We believe we have strong defenses and intend to defend the lawsuit vigorously. At this early stage, we cannot make a reasonable estimate of possible loss or range of loss, if any, arising from this lawsuit.

Property and Equipment

The Company had $18,779 material commitments at June 30, 2013 to purchase property and equipment related mainly to the purchase of aircraft. There were no material commitments at June 30, 2012.

Leases

The Company leases certain property under operating leases which expire over the next 6 years, but certain of the leases contain options to extend the lease term. All lease payments are based on the lapse of time but include, in some cases, payments for operating expenses and property taxes. There are no purchase options on real estate leases at this time. Certain leases on real estate are subject to annual escalations for increases in operating expenses and property taxes.

As of June 30, 2013, net future minimum lease payments are as follows:

Years Ending June 30,	Lease Payments
2013	$	6,673
2014	5,524
2015	4,488
2016	3,301
2017	2,047
Thereafter	33
Total	$	22,066

Rent expense was $8,124, $8,410, and $8,985 in 2013, 2012, and 2011 respectively.

NOTE 7. INCOME TAXES

The provision for income taxes from continuing operations consists of the following:

	Year ended June 30,
	2013				2012				2011
Current:
Federal	$	54,574			$	48,053			$	43,334
State	4,540				6,022				6,180
Deferred:
Federal	19,553				20,649				18,276
State	4,538				1,960				2,251
	$	83,205			$	76,684			$	70,041

The tax effects of temporary differences related to deferred taxes shown on the balance sheets were:

	June 30,
	2013				2012
Deferred tax assets:
Deferred revenue	$	5,846			$	8,575
Expense reserves (bad debts, insurance, franchise tax and vacation)	12,515				9,349
Net operating loss carryforwards	6,363				9,454
Other, net	1,383				1,410
	26,107				28,788
Deferred tax liabilities:
Accelerated tax depreciation	(35,046		)		(34,636		)
Accelerated tax amortization	(106,147		)		(91,379		)
Prepaid expenses	(25,779		)		(23,331		)
Other, net	(9,714		)		(6,280		)
	(176,686		)		(155,626		)
Net deferred tax liability before valuation allowance	(150,579		)		(126,838		)
Valuation allowance	(700		)		(350		)
Net deferred tax liability	$	(151,279	)		$	(127,188	)

The deferred taxes are classified on the balance sheets as follows:

	2013				2012
Deferred income taxes (current)	$	(30,845	)		$	(26,256	)
Deferred income taxes (long-term)	(120,434		)		(100,932		)
	$	(151,279	)		$	(127,188	)

The following analysis reconciles the statutory federal income tax rate to the effective income tax rates reflected above:

	Year Ended June 30,
	2013			2012			2011
Computed "expected" tax expense	35.0	%		35.0	%		35.0	%
Increase (reduction) in taxes resulting from:
State income taxes, net of federal income tax benefits	2.3	%		2.2	%		2.6	%
Research and development credit	(3.3	)%		(1.8	)%		(2.0	)%
Domestic production activities deduction	(2.2	)%		(2.1	)%		(2.5	)%
Other (net)	0.2	%		(0.2	)%		0.7	%
	32.0	%		33.1	%		33.8	%

As of June 30, 2013, we have $13,631 of net operating loss (“NOL”) carryforwards pertaining to the acquisition of GFSI, which are expected to be utilized after the application of IRC Section 382. Separately, as of June 30, 2013, we had state NOL carryforwards of $2,427. The federal and state losses have varying expiration dates, ranging from 2013 to 2032. Based on state tax rules which restrict our utilization of these losses, we believe it is more likely than not that $700 of these losses will expire unutilized. Accordingly, a valuation allowance of $700 and $350 has been recorded against these assets as of June 30, 2013 and 2012, respectively.

The Company paid income taxes of $54,815, $44,962, and $60,515 in 2013, 2012, and 2011 respectively.

At June 30, 2012, the Company had $6,202 of unrecognized tax benefits. At June 30, 2013, the Company had $4,890 of gross unrecognized tax benefits, $3,312 of which, if recognized, would affect our effective tax rate. We had accrued interest and penalties of $597 and $711 related to uncertain tax positions at June 30, 2013 and 2012, respectively.

A reconciliation of the unrecognized tax benefits for the years ended June 30, 2013 and 2012 follows:

	Unrecognized Tax Benefits
Balance at July 1, 2011	$	8,897
Additions for current year tax positions	1,673
Reductions for current year tax positions	—
Additions for prior year tax positions	8
Reductions for prior year tax positions	(2,904		)
Settlements	(1,454		)
Reductions related to expirations of statute of limitations	(18		)
Balance at June 30, 2012	6,202
Additions for current year tax positions	1,087
Reductions for current year tax positions	—
Additions for prior year tax positions	510
Reductions for prior year tax positions	(2,720		)
Settlements	—
Reductions related to expirations of statute of limitations	(189		)
Balance at June 30, 2013	$	4,890

During the fiscal year ended June 30, 2012, the Internal Revenue Service initiated an examination of the Company’s U.S. federal income tax returns for the fiscal years ended June 30, 2010 and 2011. The exam was completed in fiscal 2013 and did not result in a material change to the financial condition of the Company. The U.S. federal and state income tax returns for June 30, 2010 and all subsequent years remain subject to examination as of June 30, 2013 under statute of limitations rules. We anticipate potential changes could reduce the unrecognized tax benefits balance by $100 - $700 within twelve months of June 30, 2013.

NOTE 8. INDUSTRY AND SUPPLIER CONCENTRATIONS

The Company sells its products to banks, credit unions, and financial institutions throughout the United States and generally does not require collateral. All billings to customers are due 30 days from date of billing. Reserves (which are insignificant at June 30, 2013, 2012, and 2011) are maintained for potential credit losses.

In addition, the Company purchases most of its computer hardware and related maintenance for resale in relation to installation of JHA software systems from two suppliers. There are a limited number of hardware suppliers for these required items. If these relationships were terminated, it could have a negative impact on the operations of the Company.

NOTE 9. STOCK-BASED COMPENSATION

Our pre-tax operating income for the years ended June 30, 2013, 2012 and 2011 includes $8,615, $6,950 and $4,723 of equity-based compensation costs, respectively, of which $7,962, $6,364 and $4,209 relates to the restricted stock plan, respectively.

2005 NSOP and 1996 SOP

The Company previously issued options to employees under the 1996 Stock Option Plan (“1996 SOP”) and to outside directors under the 2005 Non-Qualified Stock Option Plan (“2005 NSOP”).

The 1996 SOP was adopted by the Company on October 29, 1996, for its employees. Terms and vesting periods of the options were determined by the Compensation Committee of the Board of Directors when granted and for options outstanding include vesting periods up to four years. Shares of common stock were reserved for issuance under this plan at the time of each grant, which must be at or above fair market value of the stock at the grant date. The options terminate 30 days after termination of employment, three months after retirement, one year after death or 10 years after the date of grant. The plan terminated by its terms on October 29, 2006, although options previously granted under the 1996 SOP are still outstanding and vested.

The 2005 NSOP was adopted by the Company on September 23, 2005, for its outside directors. Generally, options are exercisable beginning 6 months after grant at an exercise price equal to 100% of the fair market value of the stock at the grant date. For individuals who have served less than 4 continuous years, 25% of all options will vest after one year of service, 50% shall vest after two years, and 75% shall vest after three years of service on the Board. The options terminate upon surrender of the option, upon the expiration of one year following notification of a deceased

optionee, or 10 years after grant. 700 shares of common stock have been reserved for issuance under this plan with a maximum of 100 for each director.

A summary of option plan activity under the plan is as follows:

	Number of Shares			Weighted Average Exercise Price				Aggregate Intrinsic Value
Outstanding July 1, 2010	1,897			$	18.58
Granted	—			—
Forfeited	(47	)		27.84
Exercised	(860	)		21.46
Outstanding July 1, 2011	990			15.65
Granted	—			—
Forfeited	—			—
Exercised	(526	)		15.17
Outstanding July 1, 2012	464			16.19
Granted	—			—
Forfeited	—			—
Exercised	(320	)		13.68
Outstanding June 30, 2013	144			$	21.79			$	3,636
Vested June 30, 2013	144			$	21.79			$	3,636
Exercisable June 30, 2013	144			$	21.79			$	3,636

There were no options granted during any period presented. As of June 30, 2013, there was no unrecognized compensation costs related to stock options since all options have now vested. The weighted average remaining contractual term on options currently exercisable as of June 30, 2013 was 4.03 years.

The income tax benefits from stock option exercises totaled $3,632, $3,631 and $2,298 for the years ended June 30, 2013, 2012 and 2011, respectively.

The total intrinsic value of options exercised was $8,254, $9,654 and $6,342 for the fiscal years ended June 30, 2013, 2012 and 2011, respectively.

Restricted Stock Plan

The Restricted Stock Plan was adopted by the Company on November 1, 2005, for its employees. Up to 3,000 shares of common stock are available for issuance under the plan. Upon issuance, shares of restricted stock are subject to forfeiture and to restrictions which limit the sale or transfer of the shares during the restriction period. The restrictions will be lifted over periods ranging from 3 years to 7 years years from grant date. On certain awards, the restrictions may be lifted sooner if certain targets for shareholder return are met.

The following table summarizes non-vested share awards activity:

Share awards	Shares			Weighted Average Grant Date Fair Value
Outstanding July 1, 2010	387			$	21.96
Granted	102			24.54
Vested	(59	)		23.75
Forfeited	(14	)		21.88
Outstanding July 1, 2011	416			22.34
Granted	42			31.50
Vested	(106	)		22.92
Forfeited	(20	)		25.49
Outstanding July 1, 2012	332			23.13
Granted	53			36.78
Vested	(125	)		23.17
Forfeited	(8	)		23.11
Outstanding June 30, 2013	252			$	25.92

The non-vested share awards will not participate in dividends during the restriction period. As a result, the weighted-average fair value of the non-vested share awards is based on the fair market value of the Company’s equity shares on the grant date, less the present value of the expected future dividends to be declared during the restriction period.

At June 30, 2013, there was $2,071 of compensation expense that has yet to be recognized related to non-vested restricted stock share awards, which will be recognized over a weighted-average period of 0.86 years.

An amendment to the Restricted Stock Plan was adopted by the Company on August 20, 2010, for its executive officers. Unit awards will be made to employees remaining in continuous employment throughout the performance period and vary based on the Company’s percentile ranking in Total Shareholder Return (“TSR”) over the performance period compared to a peer group of companies. TSR is defined as the change in the stock price through the performance period plus dividends per share paid during the performance period, all divided by the stock price at the beginning of the performance period. It is the intention of the Company to settle the unit awards in shares of the Company’s stock.

The following table summarizes non-vested unit awards as of June 30, 2013, as well as activity for the year then ended:

Unit awards	Shares			Weighted Average Grant Date Fair Value
Outstanding July 1, 2010	—			$	—
Granted	293			15.77
Vested	—			—
Forfeited	—			—
Outstanding July 1, 2011	293			15.77
Granted	391			19.69
Vested	—			—
Forfeited	(12	)		15.77
Outstanding July 1, 2012	672			18.05
Granted	174			42.39
Vested	—			—
Forfeited	(32	)		22.45
Outstanding June 30, 2013	814			$	23.08

The weighted average assumptions used in this model to estimate fair value at the measurement date and resulting values are as follows:

	Year Ended June 30,
	2013			2012			2011
Volatility	23.3	%		34.2	%		37.0	%
Risk free interest rate	0.33	%		0.31	%		0.90	%
Dividend yield	1.2	%		1.5	%		1.6	%
Stock Beta	0.864			0.903			0.890

At June 30, 2013, there was $7,728 of compensation expense that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted-average period of 1.08 years.

NOTE 10. EARNINGS PER SHARE

The following table reflects the reconciliation between basic and diluted earnings per share:

	Year Ended June 30,
	2013				2012				2011
Net Income	$	176,645			$	154,984			$	137,471
Common share information:
Weighted average shares outstanding for basic earnings per share	86,040				86,599				85,948
Dilutive effect of stock options and restricted stock	579				688				739
Weighted average shares outstanding for diluted earnings per share	86,619				87,287				86,687
Basic earnings per share	$	2.05			$	1.79			$	1.60
Diluted earnings per share	$	2.04			$	1.78			$	1.59

Per share information is based on the weighted average number of common shares outstanding for each of the fiscal years. Stock options and restricted stock have been included in the calculation of earnings per share to the extent they are dilutive. No anti-dilutive stock options and restricted stock were excluded from the computation of diluted earnings per share for fiscal 2013, with zero shares excluded for fiscal 2012 and 12 shares excluded for fiscal 2011.

NOTE 11. EMPLOYEE BENEFIT PLANS

The Company established an employee stock purchase plan in 2006. The plan allows the majority of employees the opportunity to directly purchase shares of the Company at a 15% discount. The plan does not meet the criteria as a non-compensatory plan. As a result, the Company records the total dollar value of the stock discount given to employees under the plan as expense. Total expense recorded by the Company under the plan for the year ended June 30, 2013, 2012, and 2011 was $653, $586 and $434, respectively.

The Company has a defined contribution plan for its employees: the 401(k) Retirement Savings Plan (the “Plan”). The Plan is subject to the Employee Retirement Income Security Act of 1975 (“ERISA”) as amended. Under the Plan, the Company matches 100% of full time employee contributions up to 5% of compensation subject to a maximum of $5 per year. In order to receive matching contributions, employees must be 18 years of age and be employed for at least six months. The Company has the option of making a discretionary contribution; however, none has been made for any of the three most recent fiscal years. The total matching contributions for the Plan were $12,426, $11,376, and $11,076 for fiscal 2013, 2012, and 2011, respectively.

NOTE 12. REPORTABLE SEGMENT INFORMATION

The Company is a provider of integrated computer systems that perform data processing (available for in-house installations or outsourced services) for banks and credit unions. The Company’s operations are classified into two reportable segments: bank systems and services (“Bank”) and credit union systems and services (“Credit Union”). The Company evaluates the performance of its segments and allocates resources to them based on various factors, including prospects for growth, return on investment, and return on revenue.

	Year Ended
	June 30, 2013
	Bank				Credit Union				Total
REVENUE
License	$	32,933			$	21,885			$	54,818
Support and service	774,073				241,138				1,015,211
Hardware	41,052				18,305				59,357
Total revenue	848,058				281,328				1,129,386
COST OF SALES
Cost of license	3,699				1,125				4,824
Cost of support and service	460,050				143,870				603,920
Cost of hardware	29,936				13,714				43,650
Total cost of sales	493,685				158,709				652,394
GROSS PROFIT	$	354,373			$	122,619			476,992
OPERATING EXPENSES									211,445
INTEREST INCOME (EXPENSE)									(5,697		)
INCOME BEFORE INCOME TAXES									$	259,850

	Year Ended
	June 30, 2012
	Bank				Credit Union				Total
REVENUE
License	$	37,200			$	17,611			$	54,811
Support and service	696,204				212,972				909,176
Hardware	45,051				18,071				63,122
Total revenue	778,455				248,654				1,027,109
COST OF SALES
Cost of license	4,863				1,248				6,111
Cost of support and service	419,954				131,331				551,285
Cost of hardware	32,123				13,860				45,983
Total cost of sales	456,940				146,439				603,379
GROSS PROFIT	$	321,515			$	102,215			423,730
OPERATING EXPENSES									187,495
INTEREST INCOME (EXPENSE)									(4,567		)
INCOME BEFORE INCOME TAXES									$	231,668

	Year Ended
	June 30, 2011
	Bank				Credit Union				Total
REVENUE
License	$	37,424			$	15,643			$	53,067
Support and service	665,297				186,956				852,253
Hardware	44,171				17,406				61,577
Total revenue	746,892				220,005				966,897
COST OF SALES
Cost of license	5,008				1,277				6,285
Cost of support and service	394,040				121,877				515,917
Cost of hardware	31,850				13,511				45,361
Total cost of sales	430,898				136,665				567,563
GROSS PROFIT	$	315,994			$	83,340			399,334
OPERATING EXPENSES									183,017
INTEREST INCOME (EXPENSE)									(8,805		)
INCOME BEFORE INCOME TAXES									$	207,512

	For the Year Ended June 30,
	2013				2012				2011
Depreciation expense, net
Bank systems and services	$	47,789			$	41,053			$	38,830
Credit Unions systems and services	4,178				4,269				3,082
Total	$	51,967			$	45,322			$	41,912
Amortization expense, net
Bank systems and services	$	32,959			$	35,492			$	35,507
Credit Unions systems and services	15,415				13,805				13,095
Total	$	48,374			$	49,297			$	48,602
Capital expenditures
Bank systems and services	$	44,976			$	34,963			$	23,730
Credit Unions systems and services	1,280				6,478				8,355
Total	$	46,256			$	41,441			$	32,085

	June 30,				June 30,
	2013				2012
Property and equipment, net
Bank systems and services	$	265,595			$	245,069
Credit Union systems and services	34,916				31,661
Total	$	300,511			$	276,730
Intangible assets, net
Bank systems and services	$	589,891			$	591,857
Credit Union systems and services	232,559				230,389
Total	$	822,450			$	822,246

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

NOTE 13. SUBSEQUENT EVENTS

The Company has evaluated any significant events occurring from the date of these financial statements through the date they were issued. The effects of any such events upon conditions existing as of the balance sheet date have been reflected within the financial statements to the extent that the effects were material. Any significant events occurring after the balance sheet date that do not relate to conditions existing as of that date are disclosed below.

On August 26, 2013, the Company's Board of Directors declared a cash dividend of $0.20 per share on its common stock, payable on September 27, 2013 to shareholders of record on September 6, 2013.

QUARTERLY FINANCIAL INFORMATION

(unaudited)

	For the Year Ended June 30, 2013
	Quarter 1				Quarter 2				Quarter 3				Quarter 4				Total
REVENUE
License	$	12,864			$	13,210			$	16,681			$	12,063			$	54,818
Support and service	244,585				250,310				250,415				269,901				1,015,211
Hardware	13,552				15,174				14,447				16,184				59,357
Total revenue	271,001				278,694				281,543				298,148				1,129,386
COST OF SALES
Cost of license	1,077				1,251				1,360				1,136				4,824
Cost of support and service	143,418				144,683				155,012				160,807				603,920
Cost of hardware	10,578				10,523				10,581				11,968				43,650
Total cost of sales	155,073				156,457				166,953				173,911				652,394
GROSS PROFIT	115,928				122,237				114,590				124,237				476,992
OPERATING EXPENSES
Selling and marketing	20,189				19,937				20,935				20,558				81,619
Research and development	14,645				15,691				15,996				16,870				63,202
General and administrative	13,578				27,181				11,950				13,915				66,624
Total operating expenses	48,412				62,809				48,881				51,343				211,445
OPERATING INCOME	67,516				59,428				65,709				72,894				265,547
INTEREST INCOME (EXPENSE)
Interest income	187				190				133				130				640
Interest expense	(1,341		)		(1,261		)		(1,034		)		(2,701		)		(6,337		)
Total interest income (expense)	(1,154		)		(1,071		)		(901		)		(2,571		)		(5,697		)
INCOME BEFORE INCOME TAXES	66,362				58,357				64,808				70,323				259,850
PROVISION FOR INCOME TAXES	23,887				17,852				18,812				22,654				83,205
NET INCOME	$	42,475			$	40,505			$	45,996			$	47,669			$	176,645
Diluted earnings per share	$	0.49			$	0.47			$	0.53			$	0.55			$	2.04
Diluted weighted average shares outstanding	86,605				86,639				86,705				86,525				86,619
Basic earnings per share	$	0.49			$	0.47			$	0.53			$	0.56			$	2.05
Basic weighted average shares outstanding	86,109				86,084				86,120				85,845				86,040

	For the Year Ended June 30, 2012
	Quarter 1				Quarter 2				Quarter 3				Quarter 4				Total
REVENUE
License	$	12,264			$	13,552			$	15,009			$	13,986			$	54,811
Support and service	220,270				225,609				226,535				236,762				909,176
Hardware	15,804				16,697				14,760				15,861				63,122
Total revenue	248,338				255,858				256,304				266,609				1,027,109
COST OF SALES
Cost of license	1,127				1,115				2,424				1,445				6,111
Cost of support and service	131,124				135,833				139,593				144,735				551,285
Cost of hardware	11,661				11,501				10,904				11,917				45,983
Total cost of sales	143,912				148,449				152,921				158,097				603,379
GROSS PROFIT	104,426				107,409				103,383				108,512				423,730
OPERATING EXPENSES
Selling and marketing	18,754				18,164				18,994				20,588				76,500
Research and development	14,936				15,075				15,471				15,394				60,876
General and administrative	12,939				13,382				12,421				11,377				50,119
Total operating expenses	46,629				46,621				46,886				47,359				187,495
OPERATING INCOME	57,797				60,788				56,497				61,153				236,235
INTEREST INCOME (EXPENSE)
Interest income	129				106				85				856				1,176
Interest expense	(1,456		)		(1,448		)		(1,464		)		(1,375		)		(5,743		)
Total interest income (expense)	(1,327		)		(1,342		)		(1,379		)		(519		)		(4,567		)
INCOME BEFORE INCOME TAXES	56,470				59,446				55,118				60,634				231,668
PROVISION FOR INCOME TAXES	19,995				20,921				18,461				17,307				76,684
NET INCOME	$	36,475			$	38,525			$	36,657			$	43,327			$	154,984
Diluted net income per share	$	0.42			$	0.44			$	0.42			$	0.50			$	1.78
Diluted weighted average shares outstanding	87,134				87,371				87,592				87,051				87,287
Basic net income per share	$	0.42			$	0.45			$	0.42			$	0.50			$	1.79
Basic weighted average shares outstanding	86,403				86,572				86,824				86,595				86,599