Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

	Report of Independent Registered Public Accounting Firm	35
	Management's Annual Report on Internal Control over Financial Reporting	37
	Financial Statements
	Consolidated Statements of Income,
	Years Ended June 30, 2019, 2018, and 2017	38
	Consolidated Balance Sheets,
	June 30, 2019 and 2018	39
	Consolidated Statements of Changes in Stockholders' Equity,
	Years Ended June 30, 2019, 2018, and 2017	40
	Consolidated Statements of Cash Flows,
	Years Ended June 30, 2019, 2018, and 2017	41
	Notes to Consolidated Financial Statements	42

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.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Jack Henry & Associates, Inc. and its subsidiaries (the “Company”) as of June 30, 2019 and 2018, 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, 2019, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2019 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for revenue from contracts with customers as of July 1, 2018.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, 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 opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A 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 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 (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) 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 (iii) 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - estimating variable consideration and identification of and accounting for performance obligations

As discussed in Note 1 to the consolidated financial statements, the Company recorded revenue of $1.553 billion for the year ended June 30, 2019. The Company enters into contracts with its customers, which frequently contain multiple performance obligations and variable contract consideration. The amount of revenue recognized is based on the consideration the Company expects to receive in exchange for transferring goods and services to the customer. The Company’s contracts with its customers frequently contain some component of variable consideration. Management estimates variable consideration in its contract primarily using the expected value method, based on both historical and current information. Where appropriate, the Company may constrain the estimated variable consideration included in the transaction price in the event of a high degree of uncertainty as to the final consideration amount. At contract inception, management assesses the solutions and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a solution or service (or bundle of solutions or services) that is distinct - that is, if the solution or service is separately identifiable from other items in the arrangement and if the customer can benefit from the solution or service on its own or together with other resources that are readily available. The Company recognizes revenue when or as it satisfies each performance obligation by transferring control of a solution or service to the customer. Significant judgment in revenue recognition for these customer contracts include, where relevant, (i) the estimation of variable consideration, principally, the varying volume of transactional activity over long-term contracts, and (ii) the identification of and accounting for all performance obligations.

The principal considerations for our determination that performing procedures relating to revenue recognition - specifically the estimation of variable consideration and identification of and accounting for performance obligations - is a critical audit matter are there was significant judgment by management to estimate the variable consideration, principally, the varying volume of transactional activity and the identification of and accounting for all performance obligations in a contract. This in turn resulted in significant audit effort, a high degree of auditor judgment and subjectivity, in performing our audit procedures and in evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including the estimation of variable consideration and identification of and accounting for each performance obligation. The procedures also included, among others, evaluating and testing management’s process for determining the variable consideration and testing the reasonableness of management’s estimation of variable consideration. Testing the estimation of variable consideration included evaluating the terms and conditions of the long-term contracts and the related significant assumptions used in the estimate of the variable consideration, principally, the varying volume of transactional activity. The procedures for testing the performance obligations and variable consideration included evaluation of the terms and conditions for a sample of contracts.

/s/ PricewaterhouseCoopers LLP

Kansas City, Missouri

August 26, 2019

We have served as the Company’s auditor since 2015.

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, as such term is defined in Exchange Act Rule 13a-15(f). 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 U.S. GAAP.

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 of the Company; provide reasonable assurance transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with U.S. GAAP, and receipts and expenditures of the Company 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 June 30, 2019, 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 (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has concluded the Company’s internal control over financial reporting as of June 30, 2019 was effective.

The Company’s internal control over financial reporting as of June 30, 2019 has been audited by the Company’s independent registered public accounting firm, as stated in their report appearing in this Item 8.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
	Year Ended
	June 30,
	2019				2018				2017
REVENUE	$	1,552,691			$	1,470,797			$	1,388,290
EXPENSES
Cost of Revenue	923,030				853,138				805,855
Research and Development	96,378				90,340				84,753
Selling, General, and Administrative	185,998				171,710				159,235
Gain on Disposal of Businesses	—				(1,894		)		(3,270		)
Total Expenses	1,205,406				1,113,294				1,046,573
OPERATING INCOME	347,285				357,503				341,717
INTEREST INCOME (EXPENSE)
Interest Income	876				575				248
Interest Expense	(926		)		(1,920		)		(996		)
Total Interest Income (Expense)	(50		)		(1,345		)		(748		)
INCOME BEFORE INCOME TAXES	347,235				356,158				340,969
PROVISION/ (BENEFIT) FOR INCOME TAXES	75,350				(8,876		)		111,408
NET INCOME	$	271,885			$	365,034			$	229,561
Basic earnings per share	$	3.52			$	4.73			$	2.95
Basic weighted average shares outstanding	77,160				77,252				77,856
Diluted earnings per share	$	3.52			$	4.70			$	2.93
Diluted weighted average shares outstanding	77,347				77,585				78,255

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, 2019				June 30, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	93,628			$	31,440
Receivables, net	310,080				297,271
Income tax receivable	17,817				21,671
Prepaid expenses and other	106,466				96,069
Deferred costs	35,102				22,991
Assets held for sale	6,355				1,300
Total current assets	569,448				470,742
PROPERTY AND EQUIPMENT, net	272,474				285,550
OTHER ASSETS:
Non-current deferred costs	90,084				74,865
Computer software, net of amortization	318,969				288,172
Other non-current assets	134,743				110,299
Customer relationships, net of amortization	100,653				115,034
Other intangible assets, net of amortization	31,514				38,467
Goodwill	666,944				649,929
Total other assets	1,342,907				1,276,766
Total assets	$	2,184,829			$	2,033,058
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	9,850			$	30,360
Accrued expenses	120,360				88,764
Deferred revenues	339,752				328,931
Total current liabilities	469,962				448,055
LONG-TERM LIABILITIES:
Non-current deferred revenues	54,554				40,984
Deferred income tax liability	217,010				208,303
Other long-term liabilities	14,290				12,872
Total long-term liabilities	285,854				262,159
Total liabilities	755,816				710,214
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—				—
Common stock - $0.01 par value; 250,000,000 shares authorized; 103,496,026 shares issued at June 30, 2019; 103,278,562 shares issued at June 30, 2018	1,035				1,033
Additional paid-in capital	472,029				464,138
Retained earnings	2,066,073				1,912,933
Less treasury stock at cost 26,507,903 shares at June 30, 2019; 26,107,903 shares at June 30, 2018	(1,110,124		)		(1,055,260		)
Total stockholders' equity	1,429,013				1,322,844
Total liabilities and equity	$	2,184,829			$	2,033,058

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,
	2019				2018				2017
PREFERRED SHARES:	—				—				—
COMMON SHARES:
Shares, beginning of year	103,278,562				103,083,299				102,903,971
Shares issued for equity-based payment arrangements	141,071				118,865				98,781
Shares issued for Employee Stock Purchase Plan	76,393				76,398				80,547
Shares, end of year	103,496,026				103,278,562				103,083,299
COMMON STOCK - PAR VALUE $0.01 PER SHARE:
Balance, beginning of year	$	1,033			$	1,031			$	1,029
Shares issued for equity-based payment arrangements	1				1				1
Shares issued for Employee Stock Purchase Plan	1				1				1
Balance, end of year	$	1,035			$	1,033			$	1,031
ADDITIONAL PAID-IN CAPITAL:
Balance, beginning of year	$	464,138			$	452,016			$	440,123
Shares issued for equity-based payment arrangements	235				174				(1		)
Tax withholding related to share based compensation	(13,972		)		(7,332		)		(5,479		)
Shares issued for Employee Stock Purchase Plan	9,039				7,522				6,244
Stock-based compensation expense	12,589				11,758				11,129
Balance, end of year	$	472,029			$	464,138			$	452,016
RETAINED EARNINGS:
Balance, beginning of year	$	1,912,933			$	1,652,920			$	1,431,192
Cumulative effect of ASC 606 adoption*	—				—				83,874
Net income*	271,885				365,034				229,561
Dividends	(118,745		)		(105,021		)		(91,707		)
Balance, end of year	$	2,066,073			$	1,912,933			$	1,652,920
TREASURY STOCK:
Balance, beginning of year	$	(1,055,260	)		$	(1,006,274	)		$	(876,134	)
Purchase of treasury shares	(54,864		)		(48,986		)		(130,140		)
Balance, end of year	$	(1,110,124	)		$	(1,055,260	)		$	(1,006,274	)
TOTAL STOCKHOLDERS' EQUITY	$	1,429,013			$	1,322,844			$	1,099,693
Dividends declared per share	$	1.54			$	1.36			$	1.18

See notes to consolidated financial statements.

*Retained earnings as of June 30, 2018 and 2017 and net income for the fiscal years ended June 30, 2018 and 2017 have been adjusted as a result of the adoption of ASC 606. Refer to Note 1 for the impact to previously presented Consolidated Balance Sheets and Consolidated Statements of Income. Other components of stockholders' equity were not impacted.

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
	Year Ended
	June 30,
	2019				2018				2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	271,885			$	365,034			$	229,561
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	47,378				47,975				49,677
Amortization	113,255				104,011				90,109
Change in deferred income taxes	7,604				(74,884		)		21,187
Expense for stock-based compensation	12,589				11,758				11,129
(Gain)/loss on disposal of assets and businesses	161				(954		)		4,771
Changes in operating assets and liabilities:
Change in receivables	(11,777		)		21,489				(33,096		)
Change in prepaid expenses, deferred costs and other	(62,165		)		(82,663		)		(24,992		)
Change in accounts payable	(7,526		)		6,922				(7,812		)
Change in accrued expenses	31,889				7,091				(11,966		)
Change in income taxes	4,179				5,108				(6,444		)
Change in deferred revenues	23,656				1,255				35,198
Net cash from operating activities	431,128				412,142				357,322
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired	(19,981		)		(137,562		)		—
Capital expenditures	(53,598		)		(40,135		)		(41,947		)
Proceeds from the sale of businesses	—				350				5,632
Proceeds from the sale of assets	127				306				968
Customer contracts acquired	(20		)		—				—
Purchased software	(6,049		)		(13,138		)		(16,608		)
Computer software developed	(111,114		)		(96,647		)		(89,631		)
Purchase of investments	—				(5,000		)		—
Net cash from investing activities	(190,635		)		(291,826		)		(141,586		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	35,000				125,000				80,000
Repayments on credit facilities	(35,000		)		(175,000		)		(30,200		)
Purchase of treasury stock	(54,864		)		(48,986		)		(130,140		)
Dividends paid	(118,745		)		(105,021		)		(91,707		)
Proceeds from issuance of common stock upon exercise of stock options	237				176				1
Tax withholding payments related to share based compensation	(13,973		)		(7,333		)		(5,480		)
Proceeds from sale of common stock	9,040				7,523				6,245
Net cash from financing activities	(178,305		)		(203,641		)		(171,281		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	62,188			$	(83,325	)		$	44,455
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	31,440			$	114,765			$	70,310
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	93,628			$	31,440			$	114,765

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), by providing the conversion and implementation services for financial institutions to utilize JHA 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 ("U.S. GAAP") 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.

PRIOR PERIOD RECLASSIFICATION

The prior year periods have been recast to reflect the Company's retrospective adoption of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, and related amendments, collectively referred to as Accounting Standards Codification ("ASC") 606.

We also recorded a prior period re-classification of $1,300 to a new assets held for sale caption as of June 30, 2018. These assets were previously recorded under Property and Equipment, net.

PRIOR PERIOD MISCLASSIFICATION

In connection with the preparation of the Company’s 2019 annual financial statements, the Company identified an immaterial prior period misclassification which overstated accounts payable by $4,150, overstated deferred costs by $4,078, and overstated prepaid expenses and other by $72. The Company has corrected for this misclassification in the accompanying Consolidated Balance Sheet by revising the fiscal 2018 balances.

REVENUE RECOGNITION

The Company generates "Services and Support" revenue through software licensing and related services, outsourcing core & complementary software solutions, professional services, and hardware sales. The Company generates "Processing" revenue through processing of remittance transactions, card transactions and monthly fees, and digital transactions.

Significant Judgments in Application of the Guidance

Identification of Performance Obligations

The Company enters into contracts with customers that may include multiple types of goods and services. At contract inception, the Company assesses the solutions and services promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a solution or service (or bundle of solutions or services) that is distinct - that is, if the solution or service is separately identifiable from other items in the arrangement and if the customer can benefit from the solution or service on its own or together with other resources that are readily available. Significant judgment is used in the identification and accounting for all performance obligations. The Company recognizes revenue when or as it satisfies each performance obligation by transferring control of a solution or service to the customer.

Determination of Transaction Price

The amount of revenue recognized is based on the consideration the Company expects to receive in exchange for transferring goods and services to the customer. The Company’s contracts with its customers frequently contain some component of variable consideration. The Company estimates variable consideration in its contracts primarily using

the expected value method, based on both historical and current information. Where appropriate, the Company may constrain the estimated variable consideration included in the transaction price in the event of a high degree of uncertainty as to the final consideration amount. Significant judgment is used in the estimate of variable consideration of customer contracts that are long-term and include uncertain transactional volumes.

Taxes collected from customers and remitted to governmental authorities are not included in revenue. The Company includes reimbursements from customers for expenses incurred in providing services (such as for postage, travel and telecommunications costs) in revenue, while the related costs are included in cost of revenue.

Technology or service components from third parties are frequently included in or combined with the Company’s applications or service offerings. Whether the Company recognizes revenue based on the gross amount billed to the customer or the net amount retained involves judgment in determining whether the Company controls the good or service before it is transferred to the customer. This assessment is made at the performance obligation level.

Allocation of Transaction Price

The transaction price, once determined, is allocated between the various performance obligations in the contract based upon their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using all information that is reasonably available, including reference to historical pricing data.

The following describes the nature of the Company’s primary types of revenue:

Processing

Processing revenue is generated from transaction-based fees for electronic deposit and payment services, electronic funds transfers and debit and credit card processing. The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis by processing an unspecified number of transactions over the contractual term. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Customers are typically billed monthly for transactions processed during the month. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, it determines a material right does exist, it assigns value to the material right based upon standalone selling price after estimation of breakage associated with the material right.

Outsourcing and Cloud

Outsourcing and cloud revenue is generated from data and item processing services and hosting fees. The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Data and item processing services are typically billed monthly. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, it determines a material right does exist, it assigns value to the material right based upon standalone selling price.

Product Delivery and Services

Product delivery and services revenue is generated primarily from software licensing and related professional services and hardware delivery. Software licenses, along with any professional services from which they are not considered distinct, are recognized as they are delivered to the customer. Hardware revenue is recognized upon delivery. Professional services that are distinct are recognized as the services are performed. Deconversion fees are also included within product delivery and services, and are considered a contract modification. Therefore, the Company recognizes these fees over the remaining modified contract term.

In-House Support

In-house support revenue is generated from software maintenance for ongoing client support and software usage, which includes a license and ongoing client support. The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services). Software maintenance fees are typically billed to the customer annually in advance and recognized ratably over the maintenance term. Software usage is typically billed annually in advance, with the license delivered and recognized at the outset, and the maintenance fee recognized ratably over the maintenance term. Accordingly, the Company utilizes the practical expedient which allows entities to disregard the effects of a financing component when the contract period is one year or less.

Disaggregation of Revenue

The tables below present the Company's revenue disaggregated by type of revenue. Refer to Note 13, Reportable Segment Information, for disaggregated revenue by type and reportable segment. The majority of the Company’s revenue is earned domestically, with revenue from customers outside the United States comprising less than 1% of total revenue.

	Year Ended June 30,
	2019				2018				2017
Processing	$	594,202			$	550,058			$	506,555
Outsourcing & Cloud	405,359				361,922				327,738
Product Delivery & Services	231,982				251,743				256,794
In-House Support	321,148				307,074				297,203
Services & Support	958,489				920,739				$	881,735
Total Revenue	$	1,552,691			$	1,470,797			$	1,388,290

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers.

	June 30, 2019				June 30, 2018
Receivables, net	$	310,080			$	297,271
Contract Assets- Current	21,446				14,063
Contract Assets- Non-current	50,640				35,630
Contract Liabilities (Deferred Revenue)- Current	339,752				328,931
Contract Liabilities (Deferred Revenue)- Non-current	54,554				40,984

Contract assets primarily result from revenue being recognized when or as control of a solution or service is transferred to the customer, but where invoicing is delayed until the completion of other performance obligations or payment terms differ from the provisioning of services. The current portion of contract assets is reported within prepaid expenses and other in the consolidated balance sheet, and the non-current portion is included in other non-current assets. Contract liabilities (deferred revenue) primarily relate to consideration received from customers in advance of delivery of the related goods and services to the customer. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

The Company analyzes contract language to identify if a significant financing component does exist, and would adjust the transaction price for any material effects of the time value of money if the timing of payments provides either party to the contract with a significant benefit of financing the transaction.

During the fiscal years ended June 30, 2019, 2018, and 2017, the Company recognized revenue of $265,946, $269,593, and $264,517, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.

Revenue recognized that related to performance obligations satisfied (or partially satisfied) in prior periods were immaterial for each period presented. These adjustments are primarily the result of transaction price adjustments and re-allocations due to changes in estimates of variable consideration.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2019, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $3,640,955. The Company expects to recognize approximately 30% over the next 12 months and 18% in 13-24 months, and the balance thereafter.

Contract Costs

The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with customers that are expected to be recovered. These costs consist primarily of sales commissions, which are incurred only if a contract is obtained, and customer conversion or implementation-related costs. Capitalized costs are amortized based on the transfer of goods or services to which the asset relates, in line with the percentage of revenue recognized for each performance obligation to which the costs are allocated.

Capitalized costs totaled $231,273 and $176,954 at June 30, 2019 and 2018, respectively.

For the fiscal years ended June 30, 2019, 2018, and, 2017 amortization of deferred contract costs totaled $110,894, $94,337, and $88,064, respectively. There were no impairment losses in relation to capitalized costs for the periods presented.

COMPUTER SOFTWARE DEVELOPMENT

The Company capitalizes new product development costs incurred for software to be sold 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 components of operating income, primarily cost of revenue.

The Company capitalizes development costs for internal use software beginning at the start of application development. Amortization begins on the date the software is placed in service and the amortization period is based on estimated useful life.

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.

ACCOUNTS RECEIVABLE

Receivables are recorded at the time of billing. A reasonable estimate of the realizability of customer receivables is made through the establishment of an allowance for doubtful accounts, which is estimated based on a combination of write-off history, aging analysis, and any specifically known collection issues.

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 (goodwill), over an estimated economic benefit period, generally three 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 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.

PURCHASE OF INVESTMENT

In the third quarter of fiscal 2018, the Company made an investment totaling $5,000 for the purchase of preferred stock of Automated Bookkeeping, Inc ("Autobooks"), representing a non-controlling share of the voting equity of Autobooks as of that date. This investment was recorded at cost and is included within other non-current assets on the Company's balance sheet. The fair value of this investment has not been estimated, as estimation is not practicable. There have been no events or changes in circumstances that would indicate an impairment and no price changes resulting from observing a similar or identical investment. An impairment and/or an observable price change would be an adjustment to recorded cost. Fair value will not be estimated unless there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

COMPREHENSIVE INCOME

Comprehensive income for each of the fiscal years ending June 30, 2019, 2018, and 2017 equals the Company’s net income.

REPORTABLE SEGMENT INFORMATION

In accordance with U.S. GAAP, the Company's operations are classified as four reportable segments: Core, Payments, Complementary, and Corporate and Other (see Note 13). 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, 2019, there were 26,508 shares in treasury stock and the Company had the remaining authority to repurchase up to 3,483 additional shares. The total cost of treasury shares at June 30, 2019 is $1,110,124. During fiscal 2019, the Company repurchased 400 treasury shares for $54,864. At June 30, 2018, there were 26,108 shares in treasury stock and the Company had authority to repurchase up to 3,883 additional shares.

EARNINGS PER SHARE

Per share information is based on the weighted average number of common shares outstanding during the year. Stock options and restricted stock 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 and restricted stock (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 benefit 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. The Company's policy is to include interest and penalties related to unrecognized tax benefits in income tax expense.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

The Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, in May 2014. This standard (and related amendments collectively referred to as “ASC 606”) is part of an effort to create a common revenue standard for U.S. GAAP and International Financial Reporting Standards (“IFRS”). The new standard has superseded much of the authoritative literature for revenue recognition. The new model enacts a five-step process for achieving the core principle, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard was effective for the Company on July 1, 2018. Entities are allowed to transition to the new standard by either recasting prior periods (full retrospective) or recognizing the cumulative effect as of the beginning of the period of adoption (modified retrospective).

The Company adopted the new standard using the full retrospective transition approach, using certain practical expedients. The Company has not disclosed the amount of transaction price allocated to remaining performance obligations for reporting periods presented before the date of initial application. Also, the Company did not separately consider the effects of contract modifications that occurred before the beginning of the earliest reporting period presented, but reflects the aggregate effect of all modifications that occurred before the beginning of the earliest period presented. As a result, all fiscal 2018 and fiscal 2017 financial information has been adjusted for the effects of applying ASC 606. The details of the significant changes are disclosed below:

Software Revenue Recognition

The Company previously recognized software license and related services within the scope of ASC Topic 985-605, which required the establishment of vendor-specific objective evidence (“VSOE”) of fair value in order to separately recognize revenue for each software-related good or service. Due to the inability to establish VSOE, the Company had previously deferred all revenue on software-related goods and services on a master contract until all the goods and services had been delivered. Under ASC 606, VSOE is no longer required for separation of otherwise distinct performance obligations within a revenue arrangement. This change has resulted in earlier recognition of revenue for the Company’s software-related goods and services, leading to a decrease in deferred revenue balances within its adjusted consolidated balance sheets.

Impacts on Financial Statements

The following tables summarize the impacts of ASC 606 adoption on the Company’s Consolidated Financial Statements:

Consolidated Balance Sheet as of June 30, 2018:

	As Previously Reported (Adjusted)*			Adjustments			As Adjusted
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	31,440		$	—		$	31,440
Receivables, net	291,630			5,641			297,271
Income tax receivable	21,671			—			21,671
Prepaid expenses and other*	84,738			11,331			96,069
Deferred costs*	34,907			(11,916		)	22,991
Assets held for sale*	1,300			—			1,300
Total current assets	465,686			5,056			470,742
PROPERTY AND EQUIPMENT, net*	285,550			—			285,550
OTHER ASSETS:
Non-current deferred costs	95,540			(20,675		)	74,865
Computer software, net of amortization	288,172			—			288,172
Other non-current assets	107,775			2,524			110,299
Customer relationships, net of amortization	115,034			—			115,034
Other intangible assets, net of amortization	38,467			—			38,467
Goodwill	649,929			—			649,929
Total other assets	1,294,917			(18,151		)	1,276,766
Total assets	$	2,046,153		$	(13,095	)	$	2,033,058
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable*	$	30,360		$	—		$	30,360
Accrued expenses	97,848			(9,084		)	88,764
Deferred revenues	355,538			(26,607		)	328,931
Total current liabilities	483,746			(35,691		)	448,055
LONG-TERM LIABILITIES:
Non-current deferred revenues	93,094			(52,110		)	40,984
Non-current deferred income tax liability	189,613			18,690			208,303
Other long-term liabilities	12,872			—			12,872
Total long-term liabilities	295,579			(33,420		)	262,159
Total liabilities	779,325			(69,111		)	710,214
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—			—			—
Common stock - $0.01 par value; 250,000,000 shares authorized; 103,278,562 shares issued at June 30, 2018	1,033			—			1,033
Additional paid-in capital	464,138			—			464,138
Retained earnings	1,856,917			56,016			1,912,933
Less treasury stock at cost 26,107,903 shares at June 30, 2018	(1,055,260		)	—			(1,055,260		)
Total stockholders' equity	1,266,828			56,016			1,322,844
Total liabilities and equity	$	2,046,153		$	(13,095	)	$	2,033,058
*Adjusted for reclassifications and corrections not related to ASC 606 adoption. See comments under "Prior Period Reclassification" and "Prior Period Misclassification" headings in this Note 1 to the Consolidated Financial Statements.

Consolidated Statements of Income for the fiscal years ended ended June 30, 2018 and June 30, 2017:

	Year Ended June 30, 2018										Year Ended June 30, 2017
	As Previously Reported			Adjustments			As Adjusted				As Previously Reported			Adjustments			As Adjusted
REVENUE	$	1,536,603		$	(65,806	)	$	1,470,797			$	1,431,117		$	(42,827	)	$	1,388,290
EXPENSES
Cost of Revenue	873,642			(20,504		)	853,138				819,034			(13,179		)	805,855
Research and Development	90,340			—			90,340				84,753			—			84,753
Selling, General, and Administrative	182,146			(10,436		)	171,710				162,898			(3,663		)	159,235
Gain on Disposal of a Business	(1,894		)	—			(1,894		)		(3,270		)	—			(3,270		)
Total Expenses	1,144,234			(30,940		)	1,113,294				1,063,415			(16,842		)	1,046,573
OPERATING INCOME	392,369			(34,866		)	357,503				367,702			(25,985		)	341,717
INTEREST INCOME (EXPENSE)
Interest Income	575			—			575				248			—			248
Interest Expense	(1,920		)	—			(1,920		)		(996		)	—			(996		)
Total Interest Income (Expense)	(1,345		)	—			(1,345		)		(748		)	—			(748		)
INCOME BEFORE INCOME TAXES	391,024			(34,866		)	356,158				366,954			(25,985		)	340,969
PROVISION/ (BENEFIT) FOR INCOME TAXES	14,364			(23,240		)	(8,876		)		121,161			(9,753		)	111,408
NET INCOME	$	376,660		$	(11,626	)	$	365,034			$	245,793		$	(16,232	)	$	229,561
Basic earnings per share	$	4.88					$	4.73			$	3.16					$	2.95
Basic weighted average shares outstanding	77,252						77,252				77,856						77,856
Diluted earnings per share	$	4.85					$	4.70			$	3.14					$	2.93
Diluted weighted average shares outstanding	77,585						77,585				78,255						78,255

Consolidated Statement of Cash Flows for the fiscal years ended June 30, 2018 and June 30, 2017:

	Year Ended June 30, 2018										Year Ended June 30, 2017
	As Previously Reported*			Adjustments			As Adjusted				As Previously Reported			Adjustments			As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	376,660		$	(11,626	)	$	365,034			$	245,793		$	(16,232	)	$	229,561
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	47,975			—			47,975				49,677			—			49,677
Amortization	104,011			—			104,011				90,109			—			90,109
Change in deferred income taxes	(51,644		)	(23,240		)	(74,884		)		30,940			(9,753		)	21,187
Expense for stock-based compensation	11,758			—			11,758				11,129			—			11,129
(Gain)/loss on disposal of assets and businesses	(954		)	—			(954		)		4,771			—			4,771
Changes in operating assets and liabilities:
Change in receivables	(9,219		)	30,708			21,489				(22,499		)	(10,597		)	(33,096		)
Change in prepaid expenses, deferred costs and other*	(24,304		)	(58,359		)	(82,663		)		(25,088		)	96			(24,992		)
Change in accounts payable*	6,922			—			6,922				(7,812		)	—			(7,812		)
Change in accrued expenses	9,091			(2,000		)	7,091				(4,454		)	(7,512		)	(11,966		)
Change in income taxes	5,108			—			5,108				(6,444		)	—			(6,444		)
Change in deferred revenues	(63,262		)	64,517			1,255				(8,800		)	43,998			35,198
Net cash from operating activities	412,142			—			412,142				357,322			—			357,322
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired	(137,562		)	—			(137,562		)		—			—			—
Capital expenditures	(40,135		)	—			(40,135		)		(41,947		)	—			(41,947		)
Proceeds from the sale of businesses	350			—			350				5,632			—			5,632
Proceeds from the sale of assets	306			—			306				968			—			968
Purchased software	(13,138		)	—			(13,138		)		(16,608		)	—			(16,608		)
Computer software developed	(96,647		)	—			(96,647		)		(89,631		)	—			(89,631		)
Purchase of investments	(5,000		)	—			(5,000		)		—			—			—
Net cash from investing activities	(291,826		)	—			(291,826		)		(141,586		)	—			(141,586		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	125,000			—			125,000				80,000			—			80,000
Repayments on credit facilities	(175,000		)	—			(175,000		)		(30,200		)	—			(30,200		)
Purchase of treasury stock	(48,986		)	—			(48,986		)		(130,140		)	—			(130,140		)
Dividends paid	(105,021		)	—			(105,021		)		(91,707		)	—			(91,707		)
Proceeds from issuance of common stock upon exercise of stock options	176			—			176				1			—			1
Tax withholding payments related to share based compensation	(7,333		)	—			(7,333		)		(5,480		)	—			(5,480		)
Proceeds from sale of common stock	7,523			—			7,523				6,245			—			6,245
Net cash from financing activities	(203,641		)	—			(203,641		)		(171,281		)	—			(171,281		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	$	(83,325	)	$	—		$	(83,325	)		$	44,455		$	—		$	44,455
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	114,765		$	—		$	114,765			$	70,310		$	—		$	70,310
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	31,440		$	—		$	31,440			$	114,765		$	—		$	114,765
*Adjusted for reclassifications and corrections not related to ASC 606 adoption. See comments under "Prior Period Reclassification" and "Prior Period Misclassification" headings in this Note 1 to the Consolidated Financial Statements.

ASU 2016-15 issued by the FASB in August 2016 clarifies cash flow classification of eight specific cash flow issues and was effective for the Company's annual reporting period beginning July 1, 2018. The adoption of this standard did not have any impact on its financial statements.

Not Yet Adopted

The FASB issued ASU No. 2016-02, Leases, in February 2016. This ASU aims to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and requiring disclosure of key information regarding leasing arrangements to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. Specifically, the standard requires operating lease commitments to be recorded on the balance sheet as operating lease liabilities and right-of-use assets, and the cost of those operating leases to be amortized on a straight-line basis. ASU No. 2016-02 will be effective for JHA's annual reporting period beginning July 1, 2019. The Company established a cross-functional team to implement this standard and evaluated arrangements that would be subject to the standard, implemented software to meet the reporting and disclosure requirements of the standard, and assessed the impact of the standard on its processes and internal controls. The Company will adopt the new standard using the optional transition method in ASU 2018-11. Under this method, the Company will not adjust its comparative period financial statements for the effects of the new standard or make the new, expanded required disclosures for periods prior to the effective date. The Company will recognize a cumulative-effect adjustment, as necessary, to the opening balance of retained earnings for fiscal 2020 in connection with the adoption of the standard.

The Company will take advantage of the transition package of practical expedients permitted within the new standard, which among other things, allows it to carryforward the historical lease classification. In addition, the Company will make an accounting policy election that will keep leases with an initial term of twelve months or less off of the balance sheet. The Company also elected the practical expedient not to separate the non-lease components of a contract from the lease component to which they relate.

Upon adoption of the standard, the Company will record right-of-use assets of approximately $70,000 to $73,000 and lease obligations of approximately $73,000 to $75,000 on the Company's balance sheet as of July 1, 2019. Adoption of the standard is not expected to significantly impact the Company's net income and is not expected to have a material impact on the Company's compliance with the financial covenants under its credit facility.

In August of 2018, the FASB issued ASU No. 2018-15, Intangibles, Goodwill and Other - Internal-Use Software (Subtopic 350-40), which broadens the scope of Subtopic 350-40 to include costs incurred to implement a hosting arrangement that is a service contract. The costs are capitalized or expensed depending on the nature of the costs and the project stage during which they are incurred, consistent with costs for internal-use software. The amendments in this update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The ASU will be effective for the Company on July 1, 2020, with early adoption permitted. The Company is currently evaluating the impact that the guidance will have on its 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 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 it believes market participants would use in pricing the asset

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

		Estimated Fair Value Measurements												Total Fair
Recurring Fair Value Measurements		Level 1				Level 2				Level 3				Value
June 30, 2019
Financial Assets:
Money market funds		$	81,945			$	—			$	—			$	81,945
June 30, 2018
Financial Assets:
Money market funds		$	14,918			$	—			$	—			$	14,918

Non-Recurring Fair Value Measurements
June 30, 2019
Long-lived assets held for sale		$	—			$	1,300			$	—			$	1,300
June 30, 2018
Long-lived assets held for sale (a)		$	—			$	1,300			$	—			$	1,300

(a) In accordance with ASC Subtopic 360-10, long-lived assets held for sale with a carrying value of $4,575 were written down to their fair value of $1,300, resulting in an impairment totaling $3,275, which was included in earnings for the fiscal year ended June 30, 2017. The Company has entered into an agreement to sell these assets. That sale is expected to be completed during the second quarter of fiscal 2020.

NOTE 3. PROPERTY AND EQUIPMENT

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

	June 30,
	2019				2018				Estimated Useful Life
Land (1)	$	23,243			$	24,845
Land improvements (1)	25,209				25,383				5 - 20 years
Buildings (1)	147,220				143,918				20 - 30 years
Leasehold improvements	48,478				48,060				5 - 30 years	(2)
Equipment and furniture	365,101				328,864				3 - 10 years
Aircraft and equipment	39,293				38,761				4 - 10 years
Construction in progress	12,411				39,872
	660,955				649,703
Less accumulated depreciation	388,481				364,153
Property and equipment, net	$	272,474			$	285,550

(1) Excludes assets held for sale

(2) Lesser of lease term or estimated useful life

The change in property and equipment in accrued liabilities was $14,315 and $15,674 for the fiscal years ended June 30, 2019 and 2018, respectively. These amounts were excluded from capital expenditures on the statements of cash flows.

No impairments of property and equipment were recorded in fiscal 2019 or 2018.

During the third quarter of fiscal 2019, the Company received an unsolicited offer to purchase its Houston, TX, facility. At June 30, 2019, the facility included assets with a carrying value of approximately $5,055. Although management has not committed to the sale, a sale of the facility during fiscal 2020 is likely and the Company expects to record a gain on the sale upon closing, since the offer represents full appraisal value for the facility. Therefore, the assets are considered held for sale at June 30, 2019. Also held for sale at June 30, 2019, was the Company's Elizabethtown, KY facility. During the third quarter of fiscal 2018, the Company reached a definitive agreement to sell the property for $1,300 pending an expected closing date during the second quarter of fiscal 2020. An impairment loss was recorded on this facility during fiscal 2017 as disclosed in Note 2 to the Company's

consolidated financial statements. Total assets held for sale by the Company at June 30, 2019 and 2018 were $6,355 and $1,300, respectively, and were included in assets held for sale on the Company's consolidated balance sheet for each year. Those balances are not included on the above table.

NOTE 4. OTHER ASSETS

Goodwill

The carrying amount of goodwill for the fiscal years ended June 30, 2019 and 2018, by reportable segments, is as follows:

	June 30,
Core	2019				2018
Beginning balance	$	195,956			$	195,956
Goodwill, acquired during the year	4,000				—
Goodwill, adjustments related to dispositions	—				—
Ending balance	$	199,956			$	195,956
Payments
Beginning balance	$	325,204			$	234,106
Goodwill, acquired during the year	122				91,098
Goodwill, adjustments related to dispositions	—				—
Ending balance	$	325,326			$	325,204
Complementary
Beginning balance	$	128,769			$	122,403
Goodwill, acquired during the year	12,893				6,499
Goodwill, adjustments related to dispositions	—				(133		)
Ending balance	$	141,662			$	128,769

Goodwill acquired during fiscal 2019 totaled $17,015, with $12,893 of that resulting from the purchase of BOLTS Technologies, Inc., $3,999 resulting from the purchase of Agiletics, Inc., and the remainder resulting from a measurement period adjustment on the Ensenta valuation. The goodwill arising from these acquisitions consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of BOLTS Technologies and Agiletics, together with the value of their assembled workforces. No goodwill was assigned to the Company's Corporate and Other reportable segment.

Goodwill acquired during fiscal 2018 totaled $97,597, with $91,098 of that resulting from the purchase of Ensenta Corporation, included in the Payments segment. The remaining $6,499 of goodwill acquired during fiscal 2018 resulted from the purchase of Vanguard Software Group, which was added to the Company's Complementary segment. The goodwill arising from these acquisitions consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Ensenta and Vanguard, together with the value of their assembled workforces. No goodwill was assigned to the Company's Corporate and Other reportable segment.

The Goodwill reduction during fiscal 2018 was a result of the Company's sale of jhaDirect product line in the first quarter. Goodwill allocated to the carrying amount of the net assets sold was calculated based on the relative fair values of the business disposed and the portion of the reporting unit that was retained.

Other Intangible Assets

Information regarding other identifiable intangible assets is as follows:

	June 30, 2019
	Gross Carrying Amount				Accumulated Amortization				Net
Customer relationships	$	305,512			$	(204,859	)		$	100,653
Computer software	$	759,671			$	(440,702	)		$	318,969
Other intangible assets:	$	93,471			$	(61,957	)		$	31,514
	June 30, 2018
	Gross Carrying Amount				Accumulated Amortization				Net
Customer relationships	$	302,727			$	(187,693	)		$	115,034
Computer software	$	653,407			$	(365,235	)		$	288,172
Other intangible assets:	$	88,017			$	(49,550	)		$	38,467

Customer relationships have useful lives ranging from 5 to 20 years.

Computer software includes cost of software to be sold, leased, or marketed of $135,743 and costs of internal-use software of $183,226 at June 30, 2019. At June 30, 2018, costs of software to be sold, leased, or marketed totaled $125,223, and costs of internal-use software totaled $162,949.

Computer software includes the unamortized cost of commercial software products developed or acquired by the Company, which are capitalized and amortized over useful lives generally ranging from 5 to 15 years. Amortization expense for computer software totaled $82,605, $72,859, and $60,880 for the fiscal years ended June 30, 2019, 2018, and 2017, respectively. There were no material impairments in any of the fiscal years presented.

The Company's other intangible assets have useful lives ranging from 3 to 20 years.

Amortization expense for all intangible assets was $113,255, $104,011, and $90,109 for the fiscal years ended June 30, 2019, 2018, and 2017, respectively. The estimated aggregate future amortization expense for each of the next five years for all intangible assets remaining as of June 30, 2019, is as follows:

Years Ending June 30,	Computer Software				Customer Relationships				Other Intangible Assets				Total
2020	$	77,020			$	14,665			$	9,186			$	100,871
2021	58,153				12,409				6,345				76,907
2022	42,981				11,260				3,437				57,678
2023	27,454				8,808				1,963				38,225
2024	10,975				7,547				1,315				19,837

NOTE 5. DEBT

The Company had no outstanding long-term or short-term debt at June 30, 2019 or June 30, 2018.

Revolving credit facility

The revolving credit facility provides for borrowings of up to $300,000, which may be increased by the Company at any time until maturity to $600,000. The credit facility bears interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the highest of (i) the Prime Rate for such day, (ii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iii) the Eurocurrency Rate for a one-month Interest Period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit facility is 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, 2019, the Company was in compliance with all such covenants. The revolving loan terminates February 20, 2020 and at June 30, 2019 there was no outstanding balance. Prior to termination, the Company plans to renew the current credit facility or replace it with a similar credit facility.

Other lines of credit

The Company renewed an unsecured bank credit line on May 1, 2019 which provides for funding of up to $5,000 and bears interest at the prime rate less 1.0%. The credit line was renewed through April 30, 2021. At June 30, 2019, no amount was outstanding.

Interest

The Company paid interest of $691, $1,747, and $767 during the fiscal years ended June 30, 2019, 2018, and 2017, respectively.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Property and Equipment

The Company had an estimated $2,673 and $2,076 of commitments at June 30, 2019 and 2018, respectively, to purchase property and equipment.

Leases

The Company leases certain property under operating leases which expire over the next 11 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, 2019, net future minimum lease payments are as follows:

Years Ending June 30,	Lease Payments
2020	$	15,559
2021	13,539
2022	11,860
2023	10,169
2024	8,835
Thereafter	11,671
Total	$	71,633

Rent expense was $15,196, $10,835, and $10,195 in fiscal 2019, 2018, and 2017, respectively.

NOTE 7. INCOME TAXES

The provision/ (benefit) for income taxes consists of the following:

	Year Ended June 30,
	2019				2018				2017
Current:
Federal	$	54,800			$	56,060			$	80,752
State	12,946				9,948				9,469
Deferred:
Federal	4,177				(80,509		)		17,017
State	3,427				5,625				4,170
	$	75,350			$	(8,876	)		$	111,408

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

	June 30,
	2019				2018
Deferred tax assets:
Contract and service revenues	$	13,450			$	—
Expense reserves (bad debts, insurance, franchise tax and vacation)	14,325				11,164
Net operating loss and tax credit carryforwards	2,713				2,759
Other, net	851				2,711
Total gross deferred tax assets	31,339				16,634
Valuation allowance	(415		)		(515		)
Net deferred tax assets	30,924				16,119
Deferred tax liabilities:
Accelerated tax depreciation	(31,846		)		(32,026		)
Accelerated tax amortization	(154,633		)		(141,274		)
Contract and service revenues	—				(5,067		)
Contract and service costs	(61,455		)		(46,055		)
Total gross deferred liabilities	(247,934		)		(224,422		)
Net deferred tax liability	$	(217,010	)		$	(208,303	)

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

	Year Ended June 30,
	2019			2018			2017
Computed "expected" tax expense	21.0	%		28.1	%		35.0	%
Increase (reduction) in taxes resulting from:
State income taxes, net of federal income tax benefits	3.7	%		2.9	%		2.6	%
Research and development credit	(2.5	)%		(2.0	)%		(2.1	)%
Domestic production activities deduction	—	%		(1.4	)%		(2.3	)%
TCJA deferred tax rate re-measurement	—	%		(30.0	)%		—	%
Tax effects of share-based payments	(1.4	)%		(0.8	)%		(0.8	)%
Other (net)	0.9	%		0.7	%		0.3	%
	21.7	%		(2.5	)%		32.7	%

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted into law. The TCJA included numerous provisions that impacted the Company, including reducing the U.S. federal tax rate, eliminating the Domestic Production Activities Deduction, and providing expanded asset expensing. The TCJA reduced the U.S. federal statutory corporate income tax rate from 35% to 21%, effective January 1, 2018. For fiscal 2018, a blended U.S. federal statutory tax rate of approximately 28% applied to the Company.

As of June 30, 2019, the Company has $4,542 of gross federal net operating loss (“NOL”) carryforwards pertaining to the acquisition of Goldleaf Financial Solutions, Inc. and Bolts Technologies, Inc., which are expected to be utilized after the application of IRC Section 382. Separately, as of June 30, 2019, the Company has state NOL carryforwards with a tax-effected value of $651. The federal and state losses have varying expiration dates, ranging from fiscal 2019 to 2037. Based on state tax rules which restrict utilization of these losses, the Company believes it is more likely than not that $415 of these losses will expire unutilized. Accordingly, a valuation allowance of $415 and $515 has been recorded against the state net operating losses as of June 30, 2019 and 2018, respectively.

The Company paid income taxes, net of refunds, of $62,005, $60,382, and $96,074 in fiscal 2019, 2018, and 2017, respectively.

At June 30, 2019, the Company had $10,495 of gross unrecognized tax benefits, $9,892 of which, if recognized, would affect its effective tax rate. At June 30, 2018, the Company had $10,227 of unrecognized tax benefits, $9,366 of which, if recognized, would affect its effective tax rate. The Company had accrued interest and penalties of $1,514 and $1,279 related to uncertain tax positions at June 30, 2019 and 2018, respectively. The income tax provision included interest

expense and penalties (or benefits) on unrecognized tax benefits of $128, $165, and $(105) in the fiscal years ended June 30, 2019, 2018, and 2017, respectively.

A reconciliation of the unrecognized tax benefits for the fiscal years ended June 30, 2019 and 2018 follows:

	Unrecognized Tax Benefits
Balance at July 1, 2017	$	5,449
Additions for current year tax positions	2,157
Reductions for current year tax positions	—
Additions for prior year tax positions	3,130
Reductions for prior year tax positions	(55		)
Additions related to business combinations	510
Settlements	(161		)
Reductions related to expirations of statute of limitations	(803		)
Balance at June 30, 2018	10,227
Additions for current year tax positions	1,135
Reductions for current year tax positions	(40		)
Additions for prior year tax positions	562
Reductions for prior year tax positions	(531		)
Additions related to business combinations	43
Settlements	(25		)
Reductions related to expirations of statute of limitations	(876		)
Balance at June 30, 2019	$	10,495

The U.S. federal and state income tax returns for fiscal 2016 and all subsequent years remain subject to examination as of June 30, 2019 under statute of limitations rules. The Company anticipates that potential changes due to lapsing statutes of limitations and examination closures could reduce the unrecognized tax benefits balance by $3,000 - $4,000 within twelve months of June 30, 2019.

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, 2019 and 2018) are maintained for potential credit losses. Customer-related risks are moderated through the inclusion of credit mitigation clauses in the Company's contracts and through the monitoring of timely payments.

In addition, some of the Company’s key solutions are dependent on technology manufactured by IBM Corporation and Microsoft. Termination of the Company’s relationship with either IBM or Microsoft could have a negative impact on the operations of the Company.

NOTE 9. STOCK-BASED COMPENSATION

The Company's pre-tax operating income for the fiscal years ended June 30, 2019, 2018, and 2017 includes $12,589, $11,758, and $11,129 of equity-based compensation costs, respectively, of which $10,828, $10,256, and $9,861 relates to the restricted stock plans, respectively. Costs are recorded net of estimated forfeitures. The income tax benefits from stock option exercises and restricted stock vests totaled $6,191, $3,274, and $2,638 for the fiscal years ended June 30, 2019, 2018, and 2017, respectively.

2015 Equity Incentive Plan and 2005 Non-Qualified Stock Option Plan

On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan ("2015 EIP") for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000. For stock options, terms and vesting periods of the options were determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the options grant date. The options granted under this plan are exercisable beginning three years after grant at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or 10 years after grant.

The Company previously issued options to outside directors under the 2005 Non-Qualified Stock Option Plan (“2005 NSOP”). No additional stock options may be issued under this plan.

The 2005 NSOP was adopted by the Company on September 23, 2005, for its outside directors. Generally, options were exercisable beginning 6 months after grant at an exercise price equal to the fair market value of the stock at the grant date. For individuals who have served less than four 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 were reserved for issuance under this plan with a maximum of 100 for each director.

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

	Number of Shares			Weighted Average Exercise Price				Aggregate Intrinsic Value
Outstanding July 1, 2016	50			$	22.14
Granted	32			87.27
Forfeited	—			—
Exercised	(10	)		28.52
Outstanding July 1, 2017	72			50.04
Granted	—			—
Forfeited	—			—
Exercised	(20	)		17.45
Outstanding July 1, 2018	52			62.65
Granted	—			—
Forfeited	—			—
Exercised	(20	)		23.65
Outstanding June 30, 2019	32			$	87.27			$	1,478
Vested and Expected to Vest June 30, 2019	32			$	87.27			$	1,478
Exercisable June 30, 2019	—			$	—			$	—

There were no options granted in fiscal 2019, no options granted during fiscal 2018, and 32 options granted during fiscal 2017. The weighted-average fair value at the grant date of options granted during fiscal 2017 was $15.78.

The Company utilized a Black-Scholes option pricing model to estimate fair value of the stock option grants at the grant date. All 32 options granted during fiscal 2017 were granted on July 1, 2016. Assumptions such as expected life, volatility, risk-free interest rate, and dividend yield impact the fair value estimate. These assumptions are subjective and generally require significant analysis and judgment to develop. The risk-free interest rate used in the Company's estimate was determined from external data, while volatility, expected life, and dividend yield assumptions were derived from its historical experience with share-based payment arrangements. The appropriate weight to place on historical experience is a matter of judgment, based on relevant facts and circumstances. The assumptions used in estimating fair value and resulting compensation expenses at the grant dates are as follows:

Expected Life (years)	6.50 years
Volatility	19.60	%
Risk-free interest rate	1.24	%
Dividend yield	1.28	%

At June 30, 2019, there was no compensation cost yet to be recognized related to outstanding options.

The total intrinsic value of options exercised was $2,289, $2,165, and $747 for the fiscal years ended June 30, 2019, 2018, and 2017, respectively.

Restricted Stock Plan and 2015 Equity Incentive Plan

The Restricted Stock Plan was adopted by the Company on November 1, 2005, for its employees. The plan expired on November 1, 2015. Up to 3,000 shares of common stock were available for issuance under the plan. The 2015 EIP was adopted by the Company on November 10, 2015 for its employees. Up to 3,000 shares of common stock are available for issuance under the 2015 Equity Incentive 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 are lifted over periods ranging from 3 years to 5 years from grant date.

The following table summarizes non-vested share awards activity:

Share awards	Shares			Weighted Average Grant Date Fair Value
Outstanding July 1, 2016	58			$	44.95
Granted	17			87.27
Vested	(38	)		37.00
Forfeited	(1	)		65.52
Outstanding July 1, 2017	36			73.66
Granted	—			—
Vested	(12	)		58.61
Forfeited	(1	)		64.60
Outstanding July 1, 2018	23			81.33
Granted	—			—
Vested	(17	)		79.41
Forfeited	—			—
Outstanding June 30, 2019	6			$	87.27

The non-vested share awards granted prior to July 1, 2016 do not participate in dividends during the restriction period. As a result, the weighted-average fair value of the non-vested share awards was 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, consistent with the methodology for calculating compensation expense on such awards. The non-vested share awards granted during the fiscal year ended June 30, 2017 do participate in dividends during the restriction period. The weighted-average fair value of such participating awards was based on the fair market value on the grant date.

At June 30, 2019, there was no compensation expense yet to be recognized related to non-vested restricted stock share awards.

An amendment to the Restricted Stock Plan was adopted by the Company on August 20, 2010. Unit awards were 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. Certain Restricted Stock Unit awards are not tied to performance goals, and for such awards, vesting occurs over a period of 1 to 3 years.

The following table summarizes non-vested unit awards as of June 30, 2019, as well as activity for the fiscal year then ended:

Unit awards	Shares			Weighted Average Grant Date Fair Value				Aggregate Intrinsic Value
Outstanding July 1, 2016	429			$	58.06
Granted	130			77.75
Vested	(136	)		50.12
Forfeited	(37	)		54.30
Outstanding July 1, 2017	386			67.84
Granted	125			98.41
Vested	(156	)		57.00
Forfeited	(4	)		81.83
Outstanding July 1, 2018	351			83.37
Granted	80			169.53
Vested	(129	)		82.06
Forfeited	(4	)		92.32
Outstanding June 30, 2019	298			$107.00				$39,867

The Company utilized a Monte Carlo pricing model customized to the specific provisions of the Company’s plan design to value unit awards subject to performance targets on the grant dates. The weighted average assumptions used in this model to estimate fair value at the grant dates are as follows:

	Year Ended June 30,
	2019			2018			2017
Volatility	15.3	%		15.6	%		16.0	%
Risk free interest rate	2.89	%		1.55	%		0.93	%
Dividend yield	0.9	%		1.2	%		1.3	%
Stock Beta	0.669			0.687			0.684

For the fiscal year ended June 30, 2019, 39 unit awards were granted and measured using the above assumptions. The remaining 41 unit awards granted are not subject to performance targets, and therefore the estimated fair value at measurement date is valued in the same manner as restricted stock award grants.

At June 30, 2019, there was $13,444 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 1.04 years.

The fair value of restricted shares and units at vest date totaled $34,645, $17,951, and $15,085 for the fiscal years ended June 30, 2019, 2018, and 2017, respectively.

NOTE 10. EARNINGS PER SHARE

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

	Year Ended June 30,
	2019				2018				2017
Net Income	$	271,885			$	365,034			$	229,561
Common share information:
Weighted average shares outstanding for basic earnings per share	77,160				77,252				77,856
Dilutive effect of stock options and restricted stock	187				333				399
Weighted average shares outstanding for diluted earnings per share	77,347				77,585				78,255
Basic earnings per share	$	3.52			$	4.73			$	2.95
Diluted earnings per share	$	3.52			$	4.70			$	2.93

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. The two-class method for computing EPS has not been applied because no outstanding awards contain non-forfeitable rights to participate in dividends. There were no anti-dilutive stock options and restricted stock excluded for fiscal 2019, 41 shares excluded for fiscal 2018, and 32 shares excluded for fiscal 2017.

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 85% of the closing price of the Company's stock on or around the fifteenth day of each month. During the fiscal years ended June 30, 2019, 2018 and 2017, employees purchased 76, 76, and 81 shares under this plan at average prices of $118.32, $98.46, and $77.52, respectively. As of June 30, 2019, approximately 1,304 shares remained available for future issuance under the plan. 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.

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 eligible compensation. Prior to January 1, 2019, the Company match was subject to a maximum of $5 per year. On January 1, 2019, the maximum limit was removed. 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 $21,003, $18,821, and $17,550 for fiscal 2019, 2018 and 2017, respectively.

NOTE 12. BUSINESS ACQUISITIONS

BOLTS Technologies, Inc

On October 5, 2018, the Company acquired all of the equity interest of BOLTS Technologies, Inc. for $15,046 paid in cash. The acquisition was funded by cash generated from operations. BOLTS Technologies is the developer of boltsOPEN, a digital account opening solution.

Management has completed a purchase price allocation and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of October 5, 2018 are set forth below:

Current assets	$	1,384
Identifiable intangible assets	2,274
Total other liabilities assumed	(1,505		)
Total identifiable net assets	2,153
Goodwill	12,893
Net assets acquired	$	15,046

The amounts shown above include measurement period adjustments made during fiscal 2019 related to income taxes.

The goodwill of $12,893 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of BOLTS, together with the value of BOLTS' assembled workforce. The goodwill from this acquisition has been allocated to the Company's Complementary segment and is not deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $567, computer software of $1,409, and other intangible assets of $298. The weighted average amortization period for acquired customer relationships, computer software, and other intangible assets is 15 years, 10 years, and 10 years, respectively.

Current assets were inclusive of cash acquired of $1,365. The fair value of current assets acquired included accounts receivable of $14, none of which were expected to be uncollectible.

Costs incurred related to the acquisition of BOLTS in fiscal 2019 totaled $23 for legal, valuation, and other fees, and were expensed as incurred within selling, general, and administrative expense.

For the fiscal year ended June 30, 2019, the Company's consolidated statements of income included revenue of $126 and after-tax net loss of $895 resulting from BOLTS' operations.

The accompanying consolidated statements of income for the fiscal years ended June 30, 2019 and 2018 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The impact of this acquisition was considered immaterial to both the current and prior periods of the Company's consolidated financial statements and, accordingly, pro forma financial information has not been provided.

Agiletics, Inc.

On October 1, 2018, the Company acquired all of the equity interest of Agiletics, Inc. for $7,649 paid in cash. The acquisition was funded by cash generated from operations. Agiletics is a provider of escrow, investment, and liquidity management solutions for banks serving commercial customers.

Management has completed a purchase price allocation and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based on their fair values as of October 1, 2018 are set forth below:

Current assets	$	2,170
Identifiable intangible assets	3,090
Non-current deferred income tax liability	(872		)
Total other liabilities assumed	(738		)
Total identifiable net assets	3,650
Goodwill	3,999
Net assets acquired	$	7,649

The amounts shown above include measurement period adjustments made during fiscal 2019 related to income taxes.

The goodwill of $3,999 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Agiletics. The goodwill from this acquisition has been allocated to the Company's Core segment and is not deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $2,198, computer software of $701, and other intangible assets of $191. The weighted average amortization period for acquired customer relationships, computer software, and other intangible assets is 15 years, 10 years, and 10 years, respectively.

Current assets were inclusive of cash acquired of $1,349. The fair value of current assets acquired included accounts receivable of $302, none of which were expected to be uncollectible.

Costs incurred related to the acquisition of Agiletics in fiscal 2019 totaled $36 for legal, valuation, and other fees, and were expensed as incurred within selling, general, and administrative expense.

For the fiscal year ended June 30, 2019, the Company's consolidated statements of income included revenue of $926 and after-tax net loss of $192 resulting from Agiletics' operations.

The accompanying consolidated statements of income for the fiscal years ended June 30, 2019 and 2018 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The impact of this acquisition was considered immaterial to both the current and prior periods of the Company's consolidated financial statements and, accordingly, pro forma financial information has not been provided.

Ensenta Corporation

On December 21, 2017, the Company acquired all of the equity interest of EST Holdings, Inc. and its wholly-owned subsidiary, EST Interco, Inc., for $134,381 paid in cash. EST Holdings, Inc. and EST Interco, Inc. jointly own all of the outstanding equity of Ensenta Corporation ("Ensenta"), a California-based provider of real-time, cloud-based solutions for mobile and online payments and deposits. This acquisition was partially funded by a draw on the Company's revolving credit facility, with the remaining amount funded by existing operating cash. The addition of Ensenta Corporation to the JHA Payment Solutions Group expands the Company’s ability to conduct real-time transactions with third-party platforms, extending its presence in the credit union market through shared branching technology.

Management has completed a purchase price allocation of Ensenta and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of December 21, 2017 are set forth below:

Current assets	$	14,125
Long-term assets	586
Identifiable intangible assets	58,806
Non-current deferred income tax liability	(21,859		)
Total other liabilities assumed	(8,496		)
Total identifiable net assets	43,162
Goodwill	91,219
Net assets acquired	$	134,381

The amounts shown above include measurement period adjustments made during the third and fourth quarters of fiscal 2018, and the second quarter of fiscal 2019, related to income tax adjustments and a fair value assessment.

The goodwill of $91,219 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Ensenta, together with the value of Ensenta's assembled workforce. The goodwill from this acquisition has been allocated to the Company's Payments segment and is not expected to be deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $37,800, computer software of $16,505, and other intangible assets of $4,501. The weighted average amortization period for acquired customer relationships, computer software, and other intangible assets is 15 years, 10 years, and 10 years, respectively.

Current assets were inclusive of cash acquired of $7,274. The fair value of current assets acquired included accounts receivable of $4,668, none of which were expected to be uncollectible.

Costs incurred related to the acquisition of Ensenta in fiscal 2018 totaled $339 for legal, valuation, and other fees, and were expensed as incurred within selling, general, and administrative expense.

For the fiscal year ended June 30, 2019, the Company's consolidated statements of income included revenue of $35,688 and after-tax net income of $11,163. For the fiscal year ended June 30, 2018, Ensenta contributed revenue

of $15,776 and after-tax net income of $8,197. The after-tax net income for the fiscal year ended June 30, 2018 included a large tax benefit recorded as a result of the TCJA. Excluding that benefit, the Company's after tax net income resulting from Ensenta's operations totaled $536.

The accompanying consolidated statements of income for the fiscal year ended June 30, 2019 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The following unaudited pro forma consolidated financial information is presented as if this acquisition had occurred at the beginning of the prior period presented. In addition, this unaudited pro forma financial information is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisition had actually occurred during this period, or the results that may be obtained in the future as a result of the acquisition.

	Year Ended
	June 30,
	2019				2018				2017
	Actuals				Proforma				Proforma
Revenue	$	1,552,691			$	1,483,915			$	1,411,873
Net Income	271,885				366,544				231,696
Basic Earnings Per Share	$	3.52			$	4.74			$	2.98
Diluted Earnings Per Share	$	3.52			$	4.72			$	2.96

Vanguard Software Group

On August 31, 2017, the Company acquired all of the equity interest of Vanguard Software Group, a Florida-based company specializing in the underwriting, spreading, and online decisioning of commercial loans, for $10,744 paid in cash. This acquisition was funded using existing operating cash. The addition of Vanguard Software Group to the Company's ProfitStars® Lending Solutions Group expands functionality offered to clients, allowing for near-real-time communication with JHA's core processing and ancillary solutions, and also enhances cross-sell opportunities.

Management has completed a purchase price allocation of Vanguard Software Group and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their fair values as of August 31, 2017 are set forth below:

Current assets	$	1,153
Long-term assets	9
Identifiable intangible assets	4,200
Total liabilities assumed	(1,117		)
Total identifiable net assets	4,245
Goodwill	6,499
Net assets acquired	$	10,744

The goodwill of $6,499 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Vanguard Software Group, together with the value of Vanguard Software Group's assembled workforce. The goodwill from this acquisition has been allocated to the Company's Complementary segment and is expected to be deductible for income tax purposes.

Identifiable intangible assets from this acquisition consist of customer relationships of $2,234, computer software of $1,426, and other intangible assets of $540. The weighted average amortization periods for acquired customer relationships, computer software, and other intangible assets are 15 years, 10 years, and 10 years, respectively.

Current assets were inclusive of cash acquired of $289. The fair value of current assets acquired included accounts receivable of $847, none of which were expected to be uncollectible.

Costs incurred related to the acquisition of Vanguard Software Group were immaterial for the periods presented.

For the fiscal year ended June 30, 2019, the Company's consolidated statements of income included revenue of $3,120 and after-tax net loss of $243. For the fiscal year ended June 30, 2018, Vanguard contributed revenue of $1,486 and after-tax net loss of $870.

The accompanying consolidated statements of income for the fiscal year ended June 30, 2019 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The impact of this acquisition was

considered immaterial to both the current and prior periods of the Company's consolidated financial statements and, accordingly, pro forma financial information has not been provided.

NOTE 13. 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.

NOTE 14: SUBSEQUENT EVENTS

Dividends

On August 23, 2019, the Company's Board of Directors declared a cash dividend of $0.40 per share on its common stock, payable on September 30, 2019 to shareholders of record on September 9, 2019.

Acquisition

On July 1, 2019, the Company acquired 100% of the equity interest in Geezeo for a net cash outlay of $37,776. The Company has not yet completed its purchase price allocation for this acquisition. Geezeo is a Boston-based provider of retail and business digital financial management solutions and was a privately-held company.

The acquisition was funded with operating cash. Due to the timing of the acquisition, the Company has not yet completed its purchase accounting procedures with respect to this transaction. Geezeo's historical operating results would not materially affect the Company's consolidated financial statements and, accordingly, pro forma financial information has not been provided.

QUARTERLY FINANCIAL INFORMATION

(unaudited)

	For the Year Ended June 30, 2019
	Quarter 1				Quarter 2				Quarter 3				Quarter 4				Total
REVENUE	$	392,543			$	386,275			$	380,364			$	393,509			$	1,552,691
EXPENSES
Cost of Revenue	220,112				227,284				235,594				240,040				923,030
Research & Development	24,026				23,990				23,442				24,920				96,378
Selling, General, & Administrative	45,183				46,797				44,887				49,131				185,998
Total Expenses	289,321				298,071				303,923				314,091				1,205,406
OPERATING INCOME	103,222				88,204				76,441				79,418				347,285
INTEREST INCOME (EXPENSE)
Interest income	291				252				155				178				876
Interest expense	(147		)		(148		)		(224		)		(407		)		(926		)
Total interest income (expense)	144				104				(69		)		(229		)		(50		)
INCOME BEFORE INCOME TAXES	103,366				88,308				76,372				79,189				347,235
PROVISION/ (BENEFIT) FOR INCOME TAXES	19,815				20,219				17,120				18,196				75,350
NET INCOME	$	83,551			$	68,089			$	59,252			$	60,993			$	271,885
Basic earnings per share	$	1.08			$	0.88			$	0.77			$	0.79			$	3.52
Basic weighted average shares outstanding	77,188				77,216				77,177				77,060				77,160
Diluted earnings per share	$	1.08			$	0.88			$	0.77			$	0.79			$	3.52
Diluted weighted average shares outstanding	77,537				77,409				77,286				77,157				77,347

	For the Year Ended June 30, 2018*
	Quarter 1				Quarter 2				Quarter 3				Quarter 4				Total
REVENUE	$	361,284			$	357,209			$	374,048			$	378,256			$	1,470,797
EXPENSES
Cost of Revenue	203,915				207,100				218,517				223,606				853,138
Research & Development	20,929				22,414				22,591				24,406				90,340
Selling, General, & Administrative	41,088				43,094				42,234				45,294				171,710
Gain on disposal of businesses	(1,705		)		(189		)		—				—				(1,894		)
Total Expenses	264,227				272,419				283,342				293,306				1,113,294
OPERATING INCOME	97,057				84,790				90,706				84,950				357,503
INTEREST INCOME (EXPENSE)
Interest income	147				146				130				152				575
Interest expense	(189		)		(250		)		(734		)		(747		)		(1,920		)
Total interest income (expense)	(42		)		(104		)		(604		)		(595		)		(1,345		)
INCOME BEFORE INCOME TAXES	97,015				84,686				90,102				84,355				356,158
PROVISION/ (BENEFIT) FOR INCOME TAXES	30,145				(76,557		)		21,017				16,519				(8,876		)
NET INCOME	$	66,870			$	161,243			$	69,085			$	67,836			$	365,034
Basic net income per share	$	0.87			$	2.09			$	0.89			$	0.88			$	4.73
Basic weighted average shares outstanding	77,283				77,218				77,247				77,261				77,252
Diluted net income per share	$	0.86			$	2.08			$	0.89			$	0.87			$	4.70
Diluted weighted average shares outstanding	77,646				77,565				77,546				77,585				77,585

*As previously disclosed, the Company adopted ASU 2014-09 effective July 1, 2018 using the full retrospective approach. In connection therewith, in its previously filed fiscal 2019 Form 10-Q's, the Company adjusted its comparative fiscal 2018 financial information, including its June 30, 2018 balance sheet, to reflect the retrospective effects of applying ASC 606. In connection with the preparation of the Company's consolidated financial statements for the year ended June 30, 2019, the Company identified a $23,500 error in the as adjusted June 30, 2018 balance sheet that was disclosed within the previously filed fiscal 2019 Form 10-Q's, which resulted in an overstatement of current deferred revenues and a corresponding understatement of non-current deferred revenues in such unaudited quarterly filings. Management has determined that such misclassification error did not result in the previously filed 2019 Form 10-Q's being materially misstated.