# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

ANNUAL	REPORT

# OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# (Mark	One)

ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

(	) TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

Commission	file	number	0-14112

# JACK	HENRY	&	ASSOCIATES,	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	Other	Jurisdiction	of	Incorporation)

(I.R.S	Employer	Identification	No.)

(Address	of	Principle	Executive	Offices)

(Zip	Code)

(Registrant's	telephone	number,	including	area	code)

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:			 None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	15(d)	of	the	Act.

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934 during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing requirements	for	the	past	90	days.

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Website,	if	any,	every	Interactive	Data	File required to	be	submitted	and	posted	pursuant to	Rule	405	of	Regulation	S-T	during the	preceding	12	months	(or for	such	shorter	period that the registrant	was	required	to	submit	and	post	such	files).

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the best	of	registrant's	knowledge,	in	definitive	proxy	or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to this	Form	10-K.	[X]

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	smaller	reporting	company,	or	an emerging	 growth	 company.	See	 the	 definitions	 of	 "large	 accelerated	 filer,"	 "accelerated	 filer,"	 "smaller	 reporting	 company,"	 and	 "emerging	 growth company	in	Rule	12b-2	of	the	Exchange	Act.

Non-accelerated	filer [		] (Do	not	check	if	a	smaller	reporting	company)

Smaller	reporting	company [	]

If	an	emerging	growth	company,	indicate	by	check	mark	if	the	registrant	has	elected	not	to	use	the	extended	transition	period	for	complying	with	any	new or	revised	financial	accounting	standards	provided	pursuant	to	Section	13(a)	of	the	Exchange	Act.	[	]

Indicate	by	check	mark	whether	the	Registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act)

On	December	31,	2016,	the	aggregate	market	value	of	the	Common	Stock	held	by	persons	other	than	those	who	may	be	deemed	affiliates	of	Registrant was	$6,851,199,964	(based	on	the	average	of	the	reported	high	and	low	sales	prices	on	NASDAQ	on	 December	31,	2016).

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	Company's	Notice	of	Annual	Meeting	of	Stockholders	and	Proxy	Statement	for	its 2017	Annual	Meeting	of	Stockholders	(the	"Proxy Statement")	are	incorporated	by	reference	into	Part	II,	Item	5	and	into	Part	III	of	this	Report.

# TABLE	OF	CONTENTS

# Page	Reference

# PART	I

In	this	report,	all	references	to	"JHA",	the	"Company",	"we",	"us",	and	"our",	refer	to	Jack	Henry	&	Associates,	Inc.,	and	its	wholly	owned	subsidiaries.

# FORWARD	LOOKING	STATEMENTS

Certain	statements	in	this	report,	other	than	purely	historical	information,	including	estimates,	projections,	statements	relating	to	our	business	plans, objectives	and	expected	operating	results,	and	the	assumptions	upon	which	those	statements	are	based,	are	"forward-looking	statements"	within	the meaning	of	the	Private	Securities	Litigation	Reform	Act	of	1995,	Section	27A	of	the	Securities	Act	of	1933	and	Section	21E	of	the	Securities	Exchange Act	of	1934.	Forward-looking	statements	may	appear	throughout	this	report,	including	without	limitation,	in	Management's	Discussion	and	Analysis	of Financial	Condition	and	Results	of	Operations.	Forward-looking	statements	generally	are	identified	by	the	words	"believe,"	"project,"	"expect,"	"anticipate," "estimate,"	 and	 similar	 expressions.	 Forward-looking	 statements	 are	 based	 on	 current	 expectations	 and	 assumptions	 that	 are	 subject	 to	 risks	 and uncertainties	which	may	cause	actual	results	to	differ	materially	from	the	forward-looking	statements.	A	detailed	discussion	of	risks	and	uncertainties	that could	cause	actual	results	and	events	to	differ	materially	from	such	forward-looking	statements	is	included	in	the	section	titled	"Risk	Factors"	(Part	I,	Item 1A	of	this	Form	10-K).	We	undertake	no	obligation	to	update	or	revise	publicly	any	forward-looking	statements,	whether	as	a	result	of	new	information, future	events,	or	otherwise.

# ITEM	1.		BUSINESS

Jack	Henry	&	Associates,	Inc.	(JHA)	was	founded	in	1976	as	a	provider	of	core	information	processing	solutions	for	community	banks.	Today,	the Company's	extensive	array	of	products	and	services	includes	processing	transactions,	automating	business	processes,	and	managing	information	for over	9,000	financial	institutions	and	diverse	corporate	entities.

JHA	provides	its	products	and	services	through	three	business	brands:

•Jack	Henry	Banking	is	a	leading	provider	of	integrated	data	processing	systems	to	 approximately	1,080	banks	ranging	from	community	banks	to multi-billion	dollar	institutions	with	assets	of	up	to	$50	billion.	Our	banking	solutions	support	both	in-house	and	outsourced	operating	environments with	three	functionally	distinct	core	processing	platforms	and	more	than	100	integrated	complementary	solutions.

•Symitar	is	a	leading	provider	of	core	data	processing	solutions	for	credit	unions	of	all	sizes,	with	 approximately	820	credit	union	customers.	Symitar markets	two	functionally	distinct	core	processing	platforms	and	more	than	50	integrated	complementary	solutions	that	support	both	in-house	and outsourced	operating	environments.

•ProfitStars is	 a	 leading	 provider	 of	 highly	 specialized	 core	 agnostic	 products	 and	 services	 to	 financial	 institutions	 that	 are	 primarily	 not	 core customers	of	the	Company.	ProfitStars	offers	highly	specialized	financial	performance,	imaging	and	payments	processing,	information	security	and risk	management,	retail	delivery,	and	online	and	mobile	solutions.	ProfitStars'	products	and	services	enhance	the	performance	of	financial	services organizations	of	all	asset	sizes	and	charters,	and	diverse	corporate	entities	with	over	9,000	domestic	and	international	customers.

Our	 products	 and	 services	 enable	 our	 customers	 to	 implement	 technology	 solutions	 that	 can	 be	 tailored	 to	 support	 their	 unique	 growth,	 service, operational,	and	performance	goals.	Our	solutions	also	enable	financial	institutions	to	offer	the	high-demand	products	and	services	required	to	compete more	successfully,	and	to	capitalize	on	evolving	trends	shaping	the	financial	services	industry.

We	are	committed	to	exceeding	our	customers'	service-related	expectations.	We	measure	and	monitor	customer	satisfaction	using	formal	annual	surveys and	online	surveys	 initiated	each	day	randomly	by	routine	support	requests.	The	results	of	 this	extensive	survey	process	confirm	 that	our	service consistently	exceeds	our	customers'	expectations	and	generates	excellent	customer	retention	rates.

We	 also	 focus	 on	 establishing	 long-term	 customer	 relationships,	 continually	 expanding	 and	 strengthening	 those	 relationships	 with	 cross	 sales	 of additional	products	and	services,	earning	new	traditional	and	nontraditional	clients,	and	ensuring	each	product	offering	is	highly	competitive.

The	majority	of	our	revenue	is	derived	from	recurring	electronic	payment	solutions	and	outsourcing	services	that	both	generally	have	contract	terms	of five	years	or	greater,	and	support	and	services	provided	to	our	in-house	customers	that	are	typically	on	a	one	year	contract.	Less	predictable	software license	fees,	paid	by	customers	implementing	our	software	solutions	in-house,	and	hardware	sales,	including	all	non-software	products	that	we	re-market in	order	to	support	our	software	systems,	complement	our	primary	revenue	sources.

JHA	ended	fiscal	 2017	with	$1,431.1	million	in	revenue.	This	has	increased	from	$1,017.7	million	at	the	end	of	fiscal	 2012,	representing	a	compound annual	growth	rate	during	this	five-year	period	of	7%.	Net	income	has	grown	from	$152.0	million	 to	$245.8	million	during	this	same	five-year	period, representing	a	compound	annual	growth	rate	of	10%.	Information	regarding	the	classification	of	our	business	into	separate	segments	serving	the	banking and	credit	union	industries	is	set	forth	in	Note	13	to	the	Consolidated	Financial	Statements	(see	Item	8).

JHA's	progress	and	performance	have	been	guided	by	the	focused	work	ethic	and	fundamental	ideals	fostered	by	the	Company's	founders 41	years	ago: •Do	the	right	thing,

•Do	whatever	it	takes,	and

# •Have	fun.

We	recognize	that	our	associates	and	their	collective	contribution	are	ultimately	responsible	for	JHA's	past,	present,	and	future	success.	Recruiting	and retaining	high-quality	employees	is	essential	to	our	ongoing	growth	and	financial	performance,	and	we	have	established	a	corporate	culture	that	sustains high	levels	of	employee	satisfaction.

# Industry	Background

Jack	Henry	Banking	primarily	serves	commercial	banks	and	savings	 institutions	with	up to $50	billion	in	assets.	According	to	the	Federal	Deposit Insurance	Corporation	("FDIC"),	there	were	more	than	5,870	commercial	banks	and

savings	institutions	in	this	asset	range	as	of	 December	31,	2016.	Jack	Henry	Banking	currently	supports	approximately	1,080	of	these	banks	with	its	core information	processing	platforms	and	complementary	products	and	services.

Symitar	serves	credit	unions	of	all	asset	sizes.	According	to	the	Credit	Union	National	Association	("CUNA"),	there	were	 more	than	6,000	domestic	credit unions	as	of	December	31,	2016.	Symitar	currently	supports	approximately	820	of	these	credit	unions	with	core	information	processing	platforms	and complementary	products	and	services.

ProfitStars	serves	financial	services	organizations	of	all	asset	sizes	and	charters	and	other	diverse	corporate	entities.	ProfitStars	currently	supports	over 9,000	institutions	with	specialized	solutions	for	generating	additional	revenue	and	growth,	increasing	security,	mitigating	operational	risks,	and	controlling operating	costs.

The	FDIC	reports	the	number	of	commercial	banks	and	savings	institutions	declined	 20%	 from	 the	beginning	of	calendar	year	2012	to	the	end	of calendar	year	2016,	due	mainly	to	mergers.	Although	the	number	of	banks	declined	at	a	4%	compound	annual	rate	during	this	period,	aggregate	assets increased	at	a	compound	annual	rate	of	4%	and	totaled	$15.6	trillion	as	of	December	31,	2016.	There	were	no	new	bank	charters	issued	in	calendar	year 2016,	compared	to	one	in	the	2015	calendar	year.	Comparing	calendar	years	2016	to	2015,	mergers	decreased	17%.

CUNA	reports	the	number	of	credit	unions	declined	 18%	from	the	beginning	of	calendar	year	2012	to	the	end	of	calendar	year	 2016.	Although	the number	of	credit	unions	declined	at	a	4%	compound	annual	rate	during	this	period,	aggregate	assets	increased	at	a	compound	annual	rate	of 6%	and totaled	$1.3	trillion	as	of	December	31,	2016.

Community	and	mid-tier	banks	and	credit	unions	are	important	in	the	communities	and	to	the	consumers	they	serve.	Bank	customers	and	credit	union members	rely	on	these	institutions	to	provide	personalized,	relationship-based	service	and	competitive	financial	products	and	services	available	through the	customer's	delivery	channel	of	choice.	Institutions	are	recognizing	that	attracting	and	retaining	customers/members	in	today's	highly	competitive financial	 industry	 and	 realizing	 near	 and	 long	 term	 performance	 goals	 are	 often	 technology-dependent.	Financial	 institutions	 must	 implement technological	solutions	that	enable	them	to:

•Maximize	performance	with	accessible,	accurate,	and	timely	business	intelligence	information;

•Offer	the	high-demand	products	and	services	needed	to	successfully	compete	with	traditional	competitors	and	non-traditional	competitors	created	by convergence	within	the	financial	services	industry;

•Enhance	the	customer/member	experience	at	varied	points	of	contact;

•Expand	existing	customer/member	relationships	and	strengthen	exit	barriers	by	cross	selling	additional	products	and	services;

•Capitalize	on	new	revenue	and	deposit	growth	opportunities;

•Increase	operating	efficiencies	and	reduce	operating	costs;

•Implement	e-commerce,	mobile,	and	digital	strategies	that	provide	the	convenience-driven	services	required	in	today's	financial	services	industry;

•Protect	mission-critical	information	assets	and	operational	infrastructure;

•Protect	customers/members	with	various	security	tools	from	fraud	and	related	financial	losses;

•Maximize	the	day-to-day	use	of	technology	and	return	on	technology	investments;	and

•Ensure	full	regulatory	compliance.

JHA's	extensive	product	and	service	offering	enables	diverse	financial	institutions	to	capitalize	on	these	business	opportunities	and	respond	to	these business	challenges.	We	strive	to	establish	a	long-term,	value-added	technology	partnership	with	each	customer,	and	to	continually	expand	our	offering with	the	specific	solutions	our	customers	need	to	prosper	in	the	evolving	financial	services	industry.

# Mission	Statement

JHA's	mission	is	to	protect	and	increase	the	value	of	its	stockholders'	investment	by	providing	quality	products	and	services	to	our	customers.	We	perform this	mission	by:

•Concentrating	our	activities	on	what	we	know	best	-	information	systems	and	services	for	financial	institutions;

•Providing	outstanding	commitment	and	service	to	our	customers	so	that	the	perceived	value	of	our	products	and	services	is	consistent	with	the	real value;	and

•Maintaining	a	work	environment	that	is	personally,	professionally,	and	financially	rewarding	to	our	employees.

# Business	Strategy

Our	fundamental	business	strategy	is	to	generate	organic	revenue	and	earnings	growth	supplemented	by	strategic	acquisitions.	We	execute	this	strategy by:

•Providing	commercial	banks	and	credit	unions	with	core	operating	systems	that	provide	excellent	functionality,	and	support	in-house	and	outsourced delivery	environments	with	identical	functionality.

•Expanding	each	core	customer	relationship	by	cross-selling	complementary	products	and	services	that	enhance	the	functionality	provided	by	our	core information	processing	systems.

•Maintaining	a	company-wide	commitment	to	customer	service	that	consistently	exceeds	our	customers'	expectations	and	generates	high	levels	of customer	retention.

•Capitalizing	on	our	acquisition	strategy.

# Acquisition	Strategy

We	have	a	disciplined	approach	to	acquisitions	and	have	been	successful	in	supplementing	our	organic	growth	with	strategic	acquisitions,	including	29 acquisitions	since	the	end	of	fiscal	1999.	We	continue	to	explore	acquisitions	that	have	the	potential	to:

•Expand	our	suite	of	complementary	products	and	services;

•Provide	products	and	services	that	can	be	sold	to	both	existing	core	and	non-core	customers	and	outside	our	base	to	new	customers;	and	/or •Provide	selective	opportunities	to	sell	outside	our	traditional	markets	in	the	financial	services	industry.

We	have	completed	one	acquisition	in	the	last	3	years.	After	41	years	in	business	we	have	very	few	gaps	in	our	product	line,	so	it	is	increasingly	difficult to	find	proven	products	or	services	that	would	enable	our	clients	and	prospects	to	better	optimize	their	business	opportunities	or	solve	specific	operational issues.	In	addition,	we	see	few	acquisition	opportunities	that	would	expand	our	market	or	enable	our	entry	into	adjacent	markets	within	the	financial services	industry	that	are	fairly	priced	or	that	we	could	assimilate	into	our	company	without	material	distractions.

We	have	a	solid	 track	record	of	executing	acquisitions	 from	both	a	 financial	and	operational	standpoint	and	we	will	continue	 to	pursue	acquisition opportunities	 that	support	our	strategic	direction,	complement	and	accelerate	our	organic	growth,	and	generate	 long-term	profitable	growth	 for	our shareholders.	Until	we	identify	appropriate	acquisition	opportunities,	we	will	continue	to	find	alternative	ways	to	leverage	our	cash	position	and	balance sheet	to	the	benefit	of	our	shareholders,	such	as	continued	investment	in	new	products	and	services	for	our	customers,	repurchases	of	our	stock,	and continued	payment	of	dividends.

Our	five	most	recent	acquisitions	were:

| Fiscal	Year | Company	or	Product	Name | Products	and	Services |
| :--- | :--- | :--- |
| 2016 | Bayside\tBusiness\tSolutions | Portfolio\tmanagement\tsystems\tand\tfactoring\tsoftware |
| 2014 | Banno | Mobile\tbanking,\tweb\tdevelopment\tand\tdata-enriched\tmarketing |
|  |  | technology |
| 2010 | iPay\tTechnologies | Electronic\tbill\tpayment\tand\tP2P\tservices |
| 2010 | PEMCO\tTechnology\tServices | Payment\ttransaction\tprocessing\tsolutions\tfor\tcredit\tunions |
| 2010 | Goldleaf\tFinancial\tSolutions | Integrated\ttechnology\tand\tpayment\tprocessing\tsolutions |

# Solutions

Our	proprietary	solutions	are	marketed	through	three	business	brands:

•Jack	Henry	Banking	supports	commercial	banks	with	information	and	transaction	processing	platforms	that	provide	enterprise-wide	automation.	We have	three	functionally	distinct	core	bank	processing	systems	and	more	than	100	complementary	solutions,	including	business	intelligence	and	bank management,	retail	and	business	banking,	digital	and	mobile	internet	banking	and	electronic	payment	solutions,	risk	management	and	protection, and	item	and	document	imaging	solutions.	Our	banking	solutions	have	state-of-the-art	functional	capabilities,	and	we	can	re-market	the	hardware required	by	each	software	system.	Our	banking	solutions	can	be	delivered	in-house	or	through	outsourced	delivery	model,	and	are	backed	by	a company-wide	 commitment	 to	 provide	 exceptional	 personal	 service.	 Jack	 Henry	 Banking	 is	 a	 recognized	 market	 leader,	 currently	 supporting approximately	1,080	banks	with	its	technology	platforms.

•Symitar	 supports	 credit	 unions	 of	 all	 sizes	 with	 information	 and	 transaction	 processing	 platforms	 that	 provide	 enterprise-wide	 automation.	 Its solutions	include	two	functionally	distinct	core	processing	systems	and	more	than	50	complementary	solutions,	including	business	intelligence	and credit	 union	 management,	 member	 and	 member	 business	 services,	 digital	 and	 mobile	 internet	 banking	 and	 electronic	 payment	 solutions,	 risk management	and	protection,	and	item	and	document	imaging	solutions.	Our	credit	union	solutions	also	have	state-of-the-art	functional	capabilities, and	we	can	re-market	the	hardware	required	by	each	software	system.	Our	credit	union	solutions	can

be	delivered	in-house	or	through	outsourced	delivery	model,	and	are	also	backed	by	our	company-wide	commitment	to	provide	exceptional	personal service.		Symitar	currently	supports	approximately	820	credit	union	customers.

•ProfitStars	is	a	leading	provider	of	specialized	products	and	services	assembled	through	our	focused	diversification	acquisition	strategy.	These	core agnostic	solutions	are	compatible	with	a	wide	variety	of	information	technology	platforms	and	operating	environments,	and	include	proven	solutions for	generating	additional	revenue	and	growth,	increasing	security	and	mitigating	operational	risks,	and/or	controlling	operating	costs.	ProfitStars' products	and	services	enhance	the	performance	of	financial	services	organizations	of	all	asset	sizes	and	charters,	and	diverse	corporate	entities	with over	9,000	domestic	and	international	customers.	These	distinct	products	and	services	can	be	implemented	individually	or	as	solution	suites	to address	specific	business	problems	or	needs	and	enable	effective	responses	to	dynamic	industry	trends.

We	will	continue	to	develop	and	maintain	functionally	robust,	integrated	solutions	that	are	supported	with	high	service	levels,	regularly	updating	and improving	those	solutions	using	an	interactive	customer	enhancement	process;	ensuring	compliance	with	relevant	regulations;	updated	with	proven advances	in	technology;	and	consistent	with	JHA's	reputation	as	a	premium	product	and	service	provider.

# Core	Software	Systems

Core	software	systems	primarily	consist	of	the	integrated	applications	required	to	process	deposit,	loan,	and	general	ledger	transactions,	and	to	maintain centralized	customer/member	information.

Jack	Henry	Banking	markets	three	core	software	systems	to	banks	and	Symitar	markets	two	core	software	systems	to	credit	unions.	These	core	systems are	available	for	in-house	installation	at	customer	sites,	or	financial	institutions	can	outsource	ongoing	information	processing	to	JHA.

Jack	Henry	Banking's	three	core	banking	platforms	are:

•SilverLake®,	a	robust	IBM	Power	System™	(i/OS)	based	system	primarily	designed	for	commercial-focused	banks	with	assets	ranging	from	$500 million	to	$50	billion.	However,	some	progressive	smaller	banks	and	start-up	banks	also	select	SilverLake.	This	system	is	in	use	by	over	390	banks, and	now	automates	approximately	6.7%	of	the	domestic	banks	with	assets	less	than	 $50	billion.

•CIF	 20/20®,	a	parameter-driven,	easy-to-use	system	 that	now	supports	 over	490	banks	ranging	from	de	novo	institutions	to	those	with	assets exceeding	$2	billion.	CIF	20/20	is	the	most	widely	used	IBM	Power	System™	(i/OS)	core	processing	system	in	the	community	bank	market.

•Core	Director®,	a	Windows®-based,	client/server	system	that	now	supports	 nearly	200	banks	ranging	from	de	novo	institutions	to	those	with	assets exceeding	$1	billion.	Core	Director	is	a	cost-efficient	operating	platform	and	provides	intuitive	point-and-click	operation.

# Symitar's	two	core	credit	union	platforms	are:

•Episys®,	a	robust	IBM	Power	System™	(AIX®)	based	system	primarily	designed	for	credit	unions	with	more	than	$50	million	in	assets.	It	has	been implemented	by	nearly	660	credit	unions	and	is	ranked	as	the	system	implemented	by	more	credit	unions	with	assets	exceeding	$25	million	than	any other	alternative	system.

•CruiseNet®,	 a	 Windows-based,	 client/server	 system	 designed	 primarily	 for	 credit	 unions	 with	 less	 than	 $50	 million in	 assets. It	 has	 been implemented	by	nearly	160	credit	unions,	is	cost-efficient,	and	provides	intuitive	point-and-click,	drag-and-drop	operation.

Customers	electing	to	install	our	solutions	in-house	license	the	proprietary	software	systems.	The	large	majority	of	these	customers	pay	ongoing	annual software	maintenance	fees.	We	also	re-market	the	hardware	and	peripheral	equipment	that	is	required	by	our	software	solutions;	and	we	contract	to perform	software	implementation,	data	conversion,	training,	ongoing	support,	and	other	related	services.	In-house	customers	generally	license	our	core software	systems	under	a	standard	license	agreement	that	provides	a	fully-paid,	nonexclusive,	nontransferable	right	to	use	the	software	on	a	single computer	at	a	single	location.

Customers	can	eliminate	the	significant	up-front	capital	expenditures	required	by	in-house	installations	and	the	responsibility	for	operating	information and	transaction	processing	infrastructures	by	outsourcing	these	functions	to	JHA.	Our	core	outsourcing	services	are	provided	through	a	national	network of	four	data	centers	located	in	three	physical	locations.	We	also	provide	image	item	processing	services	from	two	host/archive	sites	and	several	key	entry and	balancing	locations	throughout	the	country.	We	print	and	mail	customer	statements	for	financial	institutions	from	three	regional	printing	and	rendering centers.	Customers	electing	to	outsource	their	core	processing	typically	sign	contracts	for	five	or	more	years	that	include	transaction-based	processing fees	and	minimum	guaranteed	payments	during	the	contract	period.

We	support	the	dynamic	business	requirements	of	our	core	bank	and	credit	union	clients	with	ongoing	enhancements	to	each	core	system,	the	regular introduction	of	new	integrated	complementary	products,	the	ongoing	integration	of	practical	new	technologies,	and	regulatory	compliance	initiatives.	JHA also	serves	each	core	customer	as	a	single	point	of	contact,	support,	and	accountability.

# Complementary	Products	and	Services

We	provide	more	than	100	complementary	products	and	services	that	are	sold	to	our	core	bank	and	credit	union	customers,	and	selectively	sold	by	our ProfitStars	division	to	financial	services	organizations	that	use	other	core	processing	systems.

These	complementary	solutions	enable	core	bank	and	credit	union	clients	to	respond	to	evolving	customer/member	demands,	expedite	speed-to-market with	competitive	offerings,	increase	operating	efficiency,	address	specific	operational	issues,	and	generate	new	revenue	streams.	The	highly	specialized solutions	 sold	 by	 ProfitStars	 enable	 diverse	 financial	 services	 organizations	 and	 corporate	 entities	 to	 generate	 additional	 revenue	 and	 growth opportunities,	increase	security	and	mitigate	operational	risks,	and	control	operating	costs.

JHA	regularly	introduces	new	products	and	services	based	on	demand	for	integrated	complementary	solutions	from	our	existing	core	clients,	and	based on	the	growing	demand	among	financial	services	organizations	and	corporate	entities	for	specialized	solutions	capable	of	increasing	revenue	and	growth opportunities,	 mitigating	 and	 controlling	 operational	 risks,	 and	 containing	 costs.	 The	 Company's	 Industry	 Research	 department	 solicits	 customer guidance	on	the	business	solutions	they	need,	evaluates	available	solutions	and	competitive	offerings,	and	manages	the	introduction	of	new	product offerings.	JHA's	new	complementary	products	and	services	are	developed	internally,	acquired,	or	provided	through	strategic	alliances.

# Electronic	Payment	Solutions

Electronic	 payment	 solutions	 provides	 our	 customers	 with	 the	 tools	 necessary	 to	 be	 at	 the	 forefront	 of	 payment	 innovations	 with	 secure	 payment processing	designed	to	simplify	complex	payment	processing,	attract	profitable	retail	and	commercial	accounts,	increase	operating	efficiencies,	comply with	regulatory	mandates,	and	proactively	mitigate	and	manage	payments-related	risk.

Jack	Henry	identifies	three	components	of	Electronic	Payment	Solutions:

•Card	 Services	provides	a	comprehensive	suite	of	Automated	Teller	Machine	("ATM"),	debit,	and	credit	card	 transaction	processing	and	 fraud management	solutions.	Our	card	processing	solutions,	which	include	loyalty/	rewards,	multiple	fraud	detection	programs,	and	cardholder	alert	and controls,	as	well	as	other	key	components	that	are	fully	integrated	with	JHA's	core	and	complementary	solutions,	facilitate	seamless	transaction processing.

•Bill	Pay	and	Mobile	banking	platforms	are	offered	through	our	iPay	and	Banno	product	offerings.	iPay	offers	iPay	Business	Bill	Pay™,	a	full	suite	of online	financial	management	solutions	designed	to	meet	the	distinct	needs	of	small	businesses,	as	well	as	iPay	Consumer	Bill	Pay™,	a	solution	that supports	single	or	recurring	payments,	allows	customers	to	receive	full	bills	electronically,	and	easily	integrates	with	any	internet	banking	provider. Banno	Mobile™	offers	a	native	mobile	banking	application	for	both	iOS	and	Android	that	offers	innovative	and	cost-effective	mobile	services	that	can be	marketed	with	customer's	own	brand	identity.	It	allows	customers	to	aggregate	all	of	their	account	balances	and	transactional	data	from	multiple financial	institutions	and	empowers	them	with	the	convenience	of	anytime,	anywhere	account	access.

•Processing/	Other	includes	Enterprise	Payment	Solutions	(EPS),	a	comprehensive	payments	engine	and	the	leading	total	payments	solution	on	the market	today.	EPS	offers	an	integrated	suite	of	remote	deposit	capture,	ACH	and	card	transaction	processing	solutions,	risk	management	tools, reporting	capabilities,	and	more	for	financial	institutions	of	all	sizes.	EPS	helps	financial	institutions	succeed	in	today's	competitive	market	to	increase revenue,	improve	efficiencies,	better	manage	compliance,	and	enhance	customer	relationships.	Furthermore,	Commercial	Lending	Solutions	help financial	institutions	securely	transition	from	a	traditional	lending	portfolio	(focused	on	real	estate-based	consumer	lending)	to	a	more	fully-diversified portfolio	developed	via	commercial	and	industrial	lending.	Our	solutions	also	provide	reliable	ways	to	retain	creditworthy	business	customers	facing financial	hurdles,	without	the	risk	of	loan	loss.

# Hardware	Systems

Our	software	systems	operate	on	a	variety	of	hardware	platforms.	We	have	established	remarketing	agreements	with	IBM	Corporation	(fulfilled	directly and	through	IBM	distributors),	and	many	other	hardware	providers	that	allow	JHA	to	purchase	hardware	and	related	maintenance	services	at	a	discount and	resell	them	directly	to	our	customers.	We	currently	sell	IBM	Power	Systems;	Lenovo,	Dell,	and	HP	servers	and	workstations;	Canon,	Digital	Check,

Epson,	and	Panini	check	scanners;	and	other	devices	that	complement	our	software	solutions.

# Implementation	and	Training

The	majority	of	our	core	bank	and	credit	union	customers	contract	with	us	for	implementation	and	training	services	in	connection	with	their	systems	and additional	complementary	products.

A	 complete	 core	 system	 implementation	 typically	 includes	 detailed	 planning,	 project	 management,	 data	 conversion,	 and	 testing.	 Our	 experienced implementation	teams	travel	to	customer	facilities	to	help	manage	the	process	and	ensure	that	all	data	is	transferred	from	the	legacy	system	to	the	JHA system.	Our	implementation	fees	are	fixed	or	hourly	based	on	the	core	system	being	installed.

We	also	provide	extensive	initial	and	ongoing	education	to	our	customers.	Know-It-All	Education	is	a	comprehensive	training	program	that	supports	new customers	with	basic	training	and	longtime	customers	with	continuing	education.	The	curricula	provide	the	ongoing	training	financial	institutions	need	to maximize	the	use	of	JHA's	core	and	complementary	products,	to	optimize	ongoing	system	enhancements,	and	to	fully	understand	dynamic	year-end legislative	and	regulatory	requirements.	Each	basic,	 intermediate,	and	advanced	course	 is	delivered	by	system	experts,	supported	by	professional materials	and	training	tools,	and	incorporates	different	educational	media	in	a	blended	learning	approach.	Know-It-All	Education	supports	distinct	learning preferences	 with	 a	 variety	 of	 delivery	 channels,	 including	 classroom-based	 courses	 offered	 in	 JHA's	 regional	 training	 centers,	 Internet-based	 live instruction,	eLearning	courses,	on-site	training,	and	train-the-trainer	programs.

# Support	and	Services

We	 serve	 our	 customers	 as	 a	 single	 point	 of	 contact	 and	 support for the	 complex	 solutions	 we	 provide.	 The	 Company's	 comprehensive	 support infrastructure	incorporates:

•Exacting	service	standards;

•Trained	support	staff	available	24	hours-a-day,	365	days-a-year;

•Assigned	account	managers;

•Sophisticated	support	tools,	resources,	and	technology;

•Broad	experience	converting	diverse	banks	and	credit	unions	to	our	core	platforms	from	every	competitive	platform;

•Highly	effective	change	management	and	control	processes;	and

•A	best	practices	methodology	developed	and	refined	through	the	company-wide,	day-to-day	experience	supporting over	9,000	diverse	clients.

Most	in-house	customers	contract	for	annual	software	support	services,	and	this	represents	a	significant	source	of	recurring	revenue	for	JHA.	These support	services	are	typically	priced	at	approximately	18%	to	20%	of	the	respective	product's	software	license	fee.	The	subsequent	years'	service	fees generally	increase	as	customer	assets	increase	and	as	additional	complementary	products	are	purchased.	Annual	software	support	fees	are	typically billed	during	June	and	are	paid	in	advance	for	the	entire	fiscal	year,	with	pro-ration	for	new	product	implementations	that	occur	during	the	year.	Hardware support	fees	also	are	usually	paid	in	advance	for	entire	contract	periods	which	typically	range	from	one	to	five	years.	Most	support	contracts	automatically renew	unless	the	customer	or	JHA	gives	notice	of	termination	at	least	30	days	prior	to	contract	expiration.

High	levels	of	support	are	provided	to	our	outsourced	customers	by	the	same	support	infrastructure	utilized	for	in-house	customers.	However,	these support	fees	are	included	as	part	of	monthly	outsourcing	fees.

JHA	regularly	measures	customer	satisfaction	using	formal	annual	surveys	and	more	frequent	online	surveys	initiated	randomly	by	routine	support requests.	This	process	shows	that	we	consistently	exceed	our	customers'	service-related	expectations.

# Backlog

Backlog	consists	of	contracted	in-house	products	and	services	that	have	not	been	delivered.	Backlog	also	includes	the	minimum	monthly	payments	for the	remaining	portion	of	multi-year	outsourcing	contracts,	and	typically	includes	the	minimum	payments	guaranteed	for	the	remainder	of	the	contract period.

Backlog	as	of	June	30,	2017	totaled	$630.3	million,	consisting	of	contracts	signed	for	future	delivery	of	software,	hardware,	and	implementation	services (in-house	backlog)	of	approximately	$78.9	million,	and	$551.4	million	for	outsourcing	services.	Approximately	$426.0	million	of	the	outsourcing	services backlog	as	of	June	30,	2017	is	not	expected	to	be	realized	during	fiscal	2018	due	to	the	long-term	nature	of	our	outsourcing	contracts.	Backlog	as of	June	30,	2016	totaled	$620.6	million,	consisting	of	$95.6	million	for	future	delivery	of	in-house	software,	hardware,	and	implementation	services	(in- house	backlog),	and	$525.0	million	for	outsourcing	services.

The	in-house	backlog	does	not	include	amounts	related	to	items	that	have	been	delivered	but	cannot	be	recognized	as	revenue	due	to	accounting	rules for	software	revenue	recognition;	those	amounts	are	included	in	deferred	revenue	on	the	balance	sheet	to	the	extent	that	they	have	been	billed	to	the customer	as	of	June	30,	2017	and	2016.

Our	outsourcing	backlog	continues	to	experience	growth	based	on	new	contracting	activities	and	renewals	of	multi-year	contracts,	and	although	the appropriate	portion	of	this	revenue	will	be	recognized	during	fiscal	2018,	the	backlog	is	expected	to	trend	up	gradually	for	the	foreseeable	future	due	to renewals	of	existing	relationships	and	new	contracting	activities.

# Research	and	Development

We	invest	significant	resources	in	ongoing	research	and	development	to	develop	new	software	solutions	and	services,	and	enhance	existing	solutions with	additional	functionality	and	features	required	to	ensure	regulatory	compliance.	Our	core	and	the	majority	of	our	complementary	systems	are	typically enhanced	once	each	year.	Product-specific	enhancements	are	largely	customer-driven	with	recommended	enhancements	formally	gathered	through focus	groups,	change	control	boards,	strategic	initiatives	meetings,	annual	user	group	meetings,	and	ongoing	customer	contact.	We	also	continually evaluate	and	implement	process	improvements	that	expedite	the	delivery	of	new	products	and	enhancements	to	our	customers,	and	reduce	related	costs.

# Sales	and	Marketing

JHA	serves	established,	well	defined	markets	that	provide	ongoing	sales	and	cross-sales	opportunities.

The	marketing	and	sales	initiatives	within	the	Jack	Henry	Banking	and	Symitar	business	lines	are	primarily	focused	on	identifying	banks	and	credit	unions evaluating	alternative	core	information	and	transaction	processing	solutions.	ProfitStars	sells	specialized	core	agnostic	niche	solutions	that	complement existing	technology	platforms	to	domestic	financial	services	organizations	of	all	asset	sizes	and	charters.

Dedicated	sales	forces	support	each	of	JHA's	three	marketed	brands.	Sales	executives	are	responsible	for	the	activities	required	to	earn	new	customers in	assigned	territories,	and	regional	account	executives	are	responsible	for	nurturing	customer	relationships	and	cross	selling	additional	products	and services.	Our	sales	professionals	receive	base	salaries	and	performance-based	commission	compensation.	Brand-specific	sales	support	staff	provide	a variety	 of	 services,	 including	 product	 and	 service	 demonstrations,	 responses	 to	 prospect-issued	 requests-for-proposals,	 and	 proposal	 and	 contract generation.	Our	marketing	department	supports	all	three	brands	with	lead	generation	and	brand-building	activities,	including	participation	in	state-specific, regional,	 and	 national	 trade	 shows;	 print	 and	 online	 advertising;	 telemarketing;	 customer	 newsletters;	 ongoing	 promotional	 campaigns;	 and	 media relations.	JHA	also	hosts	annual	national	education	conferences	which	provide	opportunities	 to	network	with	existing	clients	and	demonstrate	new products	and	services.

JHA	has	sold	select	products	and	services	in	the	Caribbean,	Canada,	Europe,	and	South	America.	International	sales	account	for	less	than	1%	of	JHA's total	revenue	in	the	year	ended	June	30,	2017,	and	were	approximately	1%	of	total	revenue	in	fiscal	years	 2016	and	2015.

# Competition

The	market	for	companies	providing	technology	solutions	to	financial	services	organizations	is	competitive,	and	we	expect	that	competition	from	both existing	competitors	and	companies	entering	our	existing	or	future	markets	will	remain	strong.	Some	of	JHA's	current	competitors	have	longer	operating histories,	larger	customer	bases,	and	greater	financial	resources.	The	principal	competitive	factors	affecting	the	market	for	technology	solutions	include product/service	functionality,	price,	operating	flexibility	and	ease-of-use,	customer	support,	and	existing	customer	references.	For	more	than	a	decade there	has	been	significant	consolidation	among	providers	of	products	and	services	designed	for	financial	institutions,	and	this	consolidation	is	expected	to continue	in	the	future.

Jack	Henry	Banking	and	Symitar	compete	with	large	vendors	that	provide	information	and	transaction	processing	solutions	to	banks	and	credit	unions, including	Fidelity	National	Information	Services,	Inc.;	Fiserv,	Inc.;	and	Finastra.	ProfitStars	competes	with	an	array	of	disparate	vendors	that	provide	niche solutions	to	financial	services	organizations	and	corporate	entities.

# Intellectual	Property,	Patents,	and	Trademarks

Although	we	believe	our	success	depends	upon	our	technical	expertise	more	than	our	proprietary	rights,	our	future	success	and	ability	to	compete depend	in	part	upon	our	proprietary	technology.	We	have	registered	or	filed	applications	for	our	primary	trademarks.	Most	of	our	technology	is	not patented.	Instead,	we	rely	on	a	combination	of	contractual

rights,	copyrights,	trademarks,	and	trade	secrets	to	establish	and	protect	our	proprietary	technology.	We	generally	enter	into	confidentiality	agreements with	our	employees,	consultants,	resellers,	customers,	and	potential	customers.	Access	to	and	distribution	of	our	Company's	source	code	is	restricted, and	the	disclosure	and	use	of	other	proprietary	information	is	further	limited.	Despite	our	efforts	to	protect	our	proprietary	rights,	unauthorized	parties	can attempt	to	copy	or	otherwise	obtain,	or	use	our	products	or	technology.	We	cannot	be	certain	that	the	steps	taken	in	this	regard	will	be	adequate	to prevent	misappropriation	of	our	 technology	or	 that	our	competitors	will	not	 independently	develop	 technologies	 that	are	substantially	equivalent	or superior	to	our	technology.

# Regulatory	Compliance

JHA	 maintains	 a	 corporate	 commitment	 to	 address	 compliance	 issues	 and	 implement	 requirements	 imposed	 by	 the	 federal	 regulators	 prior	 to	 the effective	date	of	such	requirements	when	adequate	prior	notice	is	given.	JHA's	compliance	program	is	provided	by	a	team	of	compliance	analysts	and auditors	that	possess	extensive	regulatory	agency	and	financial	institution	experience,	and	a	thorough	working	knowledge	of	JHA	and	our	solutions. These	compliance	professionals	leverage	multiple	channels	to	remain	informed	about	potential	and	recently	enacted	regulatory	requirements,	including regular	discussions	on	emerging	topics	with	the	Federal	Financial	Institutions	Examination	Council	("FFIEC")	examination	team	and	training	sessions sponsored	by	various	professional	associations.

JHA	has	a	process	to	inform	internal	departments	of	new	and	revised	regulatory	requirements.	Upcoming	regulatory	changes	also	are	presented	to	the Company's	 development	 teams	 through	 monthly	 regulatory	 compliance	 meetings	 and	 the	 necessary	 product	 changes	 are	 included	 in	 the	 ongoing product	 development	 cycle.	JHA	 publishes	 newsletters	 to	 keep	 our	 customers	 informed	 of	 regulatory	 changes	 that	 could	 impact	 their	 operations. Periodically,	customer	advisory	groups	are	assembled	to	discuss	significant	regulatory	changes.

Internal	 audits	 of	 our	 systems,	 networks,	 operations,	 business	 recovery	 plans,	 and	 applications	 are	 conducted	 and	 specialized	 outside	 firms	 are periodically	engaged	to	perform	testing	and	validation	of	our	systems,	processes,	plans	and	security.	Ensuring	that	confidential	information	remains private	is	a	high	priority,	and	JHA's	initiatives	to	protect	confidential	information	include	regular	third-party	application	reviews	intended	to	better	secure information	access.	Additional	third-party	reviews	are	performed	throughout	the	organization,	such	as	vulnerability	tests,	intrusion	tests,	and	System	and Organizations	Controls	(SOC)	1	or	SOC	2	reports.	The	FFIEC	conducts	annual	reviews	throughout	the	Company	and	issues	reports	that	are	reviewed	by the	JHA	Risk	and	Compliance	Committee	of	the	Board	of	Directors.

# Government	Regulation

The	 financial	 services	 industry	 is	 subject	 to	 extensive	 and	 complex	 federal	 and	 state	 regulation.	All	 financial	 institutions	 are	 subject	 to	 substantial regulatory	oversight	and	supervision.	Our	products	and	services	must	comply	with	the	extensive	and	evolving	regulatory	requirements	applicable	to	our customers,	 including	 but	 not	 limited	 to	 those	 mandated	 by	 federal	 truth-in-lending	 and	 truth-in-savings	 rules,	 the	 Privacy	 of	 Consumer	 Financial Information	regulations,	usury	laws,	the	Equal	Credit	Opportunity	Act,	the	Fair	Housing	Act,	the	Electronic	Funds	Transfer	Act,	the	Fair	Credit	Reporting Act,	the	Bank	Secrecy	Act,	the	USA	Patriot	Act,	the	Gramm-Leach-Bliley	Act,	the	Community	Reinvestment	Act	and	the	Dodd-Frank	Wall	Street	Reform and	Consumer	Protection	Act.	The	compliance	of	JHA's	products	and	services	with	these	requirements	depends	on	a	variety	of	factors,	including	the particular	functionality,	the	interactive	design,	the	classification	of	customers,	and	the	manner	in	which	the	customer	utilizes	the	products	and	services. Our	customers	are	contractually	responsible	for	assessing	and	determining	what	is	required	of	them	under	these	regulations	and	then	we	assist	them	in meeting	their	regulatory	needs	through	our	products	and	services.	The	impact	of	the	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act continues	to	evolve	as	the	regulations	are	written	to	implement	the	various	provisions	of	the	law.	We	cannot	predict	the	impact	these	regulations,	any future	amendments	to	these	regulations	or	any	newly	implemented	regulations	will	have	on	our	business	in	the	future.

JHA	is	not	chartered	by	the	Office	of	the	Comptroller	of	Currency,	the	Board	of	Governors	of	the	Federal	Reserve	System,	the	Federal	Deposit	Insurance Corporation,	the	National	Credit	Union	Administration	or	other	 federal	or	state	agencies	 that	regulate	or	supervise	depository	 institutions.	However, operating	as	a	service	provider	 to	 financial	 institutions,	JHA's	operations	are	governed	by	 the	same	regulatory	requirements	as	 those	 imposed	on financial	institutions,	and	subject	to	periodic	reviews	by	FFIEC	regulators	who	have	broad	supervisory	authority	to	remedy	any	shortcomings	identified	in such	reviews.

JHA	 provides	 outsourced	 services	 through	 OutLink ™	 Data	 Centers,	 electronic	 transaction	 processing	 through	 Card	 Processing	 Solutions,	 Internet banking	through	NetTeller,	Banno	online	solutions,	bill	payment	through	iPay,	network	security	monitoring	and	Hosted	Network	Solutions	(HNS)	through our	Gladiator	unit,	and	Cloud	Services	and	business	recovery	services	through	Centurion	Disaster	Recovery.

The	outsourcing	services	provided	by	JHA	are	subject	to	examination	by	FFIEC	regulators	under	the	Bank	Service	Company	Act.	These	examinations cover	a	wide	variety	of	subjects,	including	system	development,	functionality,

reliability,	and	security,	as	well	as	disaster	preparedness	and	business	recovery	planning.	Our	outsourcing	services	are	also	subject	to	examination	by state	banking	authorities	on	occasion.

# Employees

As	of	June	30,	2017	and	2016,	JHA	had	5,972	and	5,861	full-time	employees,	respectively.	Of	our	full-time	employees,	approximately	 983	are	employed in	the	Credit	Union	segment	of	our	business,	with	the	remainder	employed	in	the	Bank	segment	or	in	general	and	administrative	functions	that	serve	both segments.	Our	employees	are	not	covered	by	a	collective	bargaining	agreement	and	there	have	been	no	labor-related	work	stoppages.

# Available	Information

JHA's	Website	is	easily	accessible	to	the	public	at	 www.jackhenry.com.	The	"For	Investors"	portion	of	the	Website	provides	key	corporate	governance documents,	the	code	of	conduct,	an	archive	of	press	releases,	and	other	relevant	Company	information.	Our	annual	report	on	Form	10-K,	quarterly reports	on	Form	10-Q,	current	reports	on	Form	8-K,	and	other	filings	and	amendments	thereto	that	are	made	with	the	U.S.	Securities	and	Exchange Commission	(SEC)	also	are	available	free	of	charge	on	our	Website	as	soon	as	reasonably	practical	after	these	reports	have	been	filed	with	or	furnished to	the	SEC.	The	SEC	also	maintains	a	website	that	contains	reports,	proxy	and	information	statements,	and	other	information	regarding	issuers	that	file electronically	with	the	SEC	at	https://www.sec.gov.

# ITEM	1A.		RISK	FACTORS

The	Company's	business	and	the	results	of	its	operations	are	affected	by	numerous	factors	and	uncertainties,	some	of	which	are	beyond	our	control.	The following	is	a	description	of	some	of	the	important	risks	and	uncertainties	that	may	cause	our	actual	results	of	operations	in	future	periods	to	differ	from those	expected	or	desired.

Security	problems	could	damage	our	reputation	and	business. 	We	rely	on	industry-standard	encryption,	network	and	Internet	security	systems, most	of	which	we	license	from	third	parties,	to	provide	the	security	and	authentication	necessary	to	effect	secure	transmission	of	data.	Our	services	and infrastructure	are	increasingly	reliant	on	the	Internet.	Computer	networks	and	the	Internet	are	vulnerable	to	unauthorized	access,	computer	viruses	and other	 disruptive	 problems	 such	 as	 denial	 of	 service	 attacks	 and	 other	 forms	 of	 cyber-terrorism.	 Individual	 personal	 computers	 can	 be	 stolen,	 and customer	data	media	can	be	lost	in	shipment.	Under	state	and	federal	laws	requiring	consumer	notification	of	security	breaches,	the	costs	to	remediate security	breaches	can	be	substantial.	Advances	in	computer	capabilities,	new	discoveries	in	the	field	of	cryptography	or	other	events	or	developments may	render	our	security	measures	inadequate.	Security	risks	may	result	in	liability	to	our	customers,	damage	to	our	reputation,	and	may	deter	financial institutions	from	purchasing	our	products.	We	will	continue	to	expend	significant	capital	and	other	resources	protecting	against	the	threat	of	security breaches,	and,	in	the	event	of	a	breach,	we	may	need	to	expend	resources	alleviating	problems	caused	by	such	breach.	Addressing	security	problems may	result	in	interruptions,	delays	or	cessation	of	service	to	users,	any	of	which	could	harm	our	business.

Operational failure in	 our	 outsourcing facilities	 could	 expose	 us to	 damage	 claims, increase	 regulatory	 scrutiny	 and	 cause	 us to lose customers.	Damage	or	destruction	that	interrupts	our	outsourcing	operations	could	cause	delays	and	failures	in	customer	processing	which	could	hurt our	relationship	with	customers,	damage	our	reputation,	expose	us	to	damage	claims,	and	cause	us	to	incur	substantial	additional	expense	to	relocate operations	and	repair	or	replace	damaged	equipment.	Our	back-up	systems	and	procedures	may	not	prevent	disruption,	such	as	a	prolonged	interruption of	our	transaction	processing	services.	In	the	event	that	an	interruption	extends	for	more	than	several	hours,	we	may	experience	data	loss	or	a	reduction in	revenues	by	reason	of	such	interruption.	Any	significant	interruption	of	service	could	reduce	revenue,	have	a	negative	impact	on	our	reputation,	result in	damage	claims,	lead	our	present	and	potential	customers	to	choose	other	service	providers,	and	lead	to	increased	regulatory	scrutiny	of	the	critical services	we	provide	to	financial	institutions,	with	resulting	increases	in	compliance	burdens	and	costs.

Failures	associated	with	payment	transactions	could	result	in	financial	loss. 	The	volume	and	dollar	amount	of	payment	transactions	that	we process	is	significant	and	continues	to	grow.	We	settle	funds	on	behalf	of	financial	institutions,	other	businesses	and	consumers	and	receive	funds	from clients,	card	issuers,	payment	networks	and	consumers	on	a	daily	basis	for	a	variety	of	transaction	types.	Transactions	facilitated	by	us	include	debit card,	credit	card,	electronic	bill	payment	transactions,	Automated	Clearing	House	("ACH")	payments	and	check	clearing	that	support	consumers,	financial institutions	 and	 other	 businesses.	 If	 the	 continuity	 of	 operations,	 integrity	 of	 processing,	 or	 ability	 to	 detect	 or	 prevent	 fraudulent	 payments	 were compromised	in	connection	with	payments	transactions,	this	could	result	in	financial	as	well	as	reputational	loss	to	us.	In	addition,	we	rely	on	various	third parties	to	provide	services	in	support	of	the	processing	of	transactions	and	funds	settlement	for	certain	of	our	products.	If	we	are	unable	to	obtain	such services	in	the	future,	that	could	have	a	material	adverse	effect	on	our	business,	financial	position	and	results	of	operations.	In	addition,	we	may	issue credit	to	consumers,	financial	institutions	or	other	businesses	as	part	of	the	funds	settlement.	A	default	on	this	credit	by	a	counterparty	could	result	in	a financial	loss	to	us.

The	services	we	provide	to	our	customers	are	subject	to	government	regulation	that	could	hinder	the	development	of	our	business,	increase costs,	or	impose	constraints	on	the	way	we	conduct	our	operations.	The	financial	services	industry	is	subject	to	extensive	and	complex	federal	and state	regulation.	As	a	supplier	of	services	 to	 financial	 institutions,	portions	of	our	operations	are	examined	by	 the	Office	of	 the	Comptroller	of	 the Currency,	the	Federal	Reserve	Board,	the	Federal	Deposit	Insurance	Corporation,	and	the	National	Credit	Union	Association,	among	other	regulatory agencies.	These	agencies	regulate	services	we	provide	and	the	manner	in	which	we	operate,	and	we	are	required	to	comply	with	a	broad	range	of applicable	laws	and	regulations.

In	addition,	existing	laws,	regulations,	and	policies	could	be	amended	or	interpreted	differently	by	regulators	in	a	manner	that	imposes	additional	costs and	has	a	negative	impact	on	our	existing	operations	or	that	limits	our	future	growth	or	expansion.	The	Dodd-Frank	Wall	Street	Reform	and	Consumer Protection	Act,	signed	into	law	in	2010,	significantly	changed	the	regulation	of	the	financial	services	industry,	producing	new	regulatory	agencies	and voluminous	new	regulations,	some	of	which	are	still	being	written.	The	Consumer	Financial	Protection	Bureau	was	established,	which	is	implementing numerous	 new	 regulations	 applicable	 to	 "supervised	 service	 providers"	 such	 as	 the	 Company.	These	 new	 regulations	 may	 require	 additional programming	or	other	costly	changes	in	our	processes	or	personnel.	Our	customers	are	also	regulated	entities,	and	actions	by	regulatory	authorities could	determine	both	the	decisions	they	make	concerning	the	purchase	of	data	processing	and	other	services	and	the	timing	and	implementation	of	these decisions.	Concerns	are	growing	with	respect	to	the	use,	confidentiality,	and	security	of	private	customer	information.	Regulatory	agencies,	Congress	and state	legislatures	are	considering	numerous	regulatory	and	statutory	proposals	to	protect	the	interests	of	consumers	and	to	require	compliance	with standards	and	policies	that	have	not	been	defined.

The	software	we	provide	to	our	customers	is	also	affected	by	government	regulation. 	We	are	generally	obligated	to	our	customers	to	provide software	solutions	that	comply	with	applicable	federal	and	state	regulations.	In	particular,	numerous	new	regulations	have	been	proposed	and	are	still being	written	to	implement	the	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act	of	2010.	Substantial	software	research	and	development and	other	corporate	resources	have	been	and	will	continue	to	be	applied	to	adapt	our	software	products	to	this	evolving,	complex	and	often	unpredictable regulatory	environment.	Our	failure	to	provide	compliant	solutions	could	result	in	significant	fines	or	consumer	liability	on	our	customers,	for	which	we may	bear	ultimate	liability.

A	material	weakness	in	our	internal	controls	could	have	a	material	adverse	effect	on	us.	Effective	internal	controls	are	necessary	for	us	to	provide reasonable	assurance	with	respect	to	our	financial	reports	and	to	mitigate	risk	of	fraud.	If	additional	material	weaknesses	in	our	internal	control	are discovered	or	occur	in	the	future,	our	consolidated	financial	statements	may	contain	material	misstatements	and	we	could	be	required	to	restate	our financial	results,	which	could	materially	and	adversely	affect	our	business	and	results	of	operations	or	financial	condition,	restrict	our	ability	to	access	the capital	markets,	require	us	to	expend	significant	resources	to	correct	the	weaknesses	or	deficiencies,	subject	us	to	fines,	penalties	or	judgments,	harm our	reputation	or	otherwise	cause	a	decline	in	investor	confidence.

Our	business	may	be	adversely	impacted	by	U.S.	and	global	market	and	economic	conditions. 	We	derive	most	of	our	revenue	from	products	and services	we	provide	to	the	financial	services	industry.	If	the	economic	environment	worsens,	we	could	face	a	reduction	in	demand	from	current	and potential	clients	for	our	products	and	services,	which	could	have	a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition. In	addition,	a	growing	portion	of	our	revenue	is	derived	from	transaction	processing	fees,	which	depend	heavily	on	levels	of	consumer	and	business spending.	Deterioration	in	general	economic	conditions	could	reduce	transaction	volumes	and	the	Company's	related	revenues.

Changes	in	the	banking	and	credit	union	industry	could	reduce	demand	for	our	products .	Cyclical	fluctuations	in	economic	conditions	affect profitability	and	revenue	growth	at	commercial	banks	and	credit	unions.	Because	our	business	 is	concentrated	 in	 financial	 institutions,	unfavorable economic	conditions	negatively	affect	the	spending	of	banks	and	credit	unions,	including	spending	on	computer	software	and	hardware.	Such	conditions could	reduce	both	our	sales	to	new	customers	and	upgrade/complementary	product	sales	to	existing	customers.	The	Company	could	also	experience	the loss	of	customers	due	to	their	acquisition	or	financial	failure.

Competition	or	general	economic	conditions	may	result	in	decreased	demand	or	require	price	reductions	or	other	concessions	to	customers which	could	result	in	lower	margins	and	reduce	income.	We	vigorously	compete	with	a	variety	of	software	vendors	and	service	providers	in	all	of	our major	product	lines.	We	compete	on	the	basis	of	product	quality,	reliability,	performance,	ease	of	use,	quality	of	support	and	services,	integration	with other	products	and	pricing.	Some	of	our	competitors	may	have	advantages	over	us	due	to	their	size,	product	lines,	greater	marketing	resources,	or exclusive	intellectual	property	rights.	New	competitors	regularly	appear	with	new	products,	services	and	technology	for	financial	institutions.	If	competitors offer	 more	 favorable	 pricing,	 payment	 or	 other	 contractual	 terms,	 warranties,	 or	 functionality,	 or	 if	 general	 economic	 conditions	 decline	 such	 that customers	are	 less	willing	or	able	 to	pay	 the	cost	of	our	products	and	services,	we	may	need	 to	 lower	prices	or	offer	 favorable	 terms	 in	order	 to successfully	compete.

The	loss	of	key	employees	could	adversely	affect	our	business. 	We	depend	on	the	contributions	and	abilities	of	our	senior	management	and	other key	employees.	Our	Company	has	grown	significantly	in	recent	years	and	our	management	remains	concentrated	in	a	small	number	of	highly	qualified individuals.	If	we	lose	one	or	more	of	our	key	employees,	we	could	suffer	a	loss	of	managerial	experience,	and	management	resources	would	have	to	be diverted	from	other	activities	to	compensate	for	this	loss.	We	do	not	have	employment	agreements	with	any	of	our	executive	officers.

Our	failure	to	comply	with	regulations	or	to	meet	regulatory	expectations	could	adversely	affect	our	business	and	results	of	operations. 	While much	of	our	operations	are	not	directly	subject	to	regulations	applicable	to	financial	institutions,	as	a	provider	of	processing	services	to	such	institutions, we	are	examined	on	a	regular	basis	by	various	regulatory	authorities.	If	we	fail	to	comply	with	applicable	regulations	or	guidelines,	we	could	be	subject	to regulatory	actions	or	rating	changes	and	suffer	harm	to	our	customer	relationships	and	reputation.	Such	failures	could	require	significant	expenditures	to correct	and	could	negatively	affect	our	ability	to	retain	customers	and	obtain	new	customers.

Our	failure	to	comply	with	the	rules	of	the	payment	card	networks	could	adversely	affect	our	business.	We	are	subject	to	card	association	and network	rules	governing	Visa,	MasterCard	and	similar	organizations,	including	the	Payment	Card	Data	Security	Standards.	If	we	fail	to	comply	with	these rules	we	could	be	fined	or	our	certifications	could	be	suspended	or	terminated,	which	could	limit	our	ability	to	service	our	customers	and	result	in reductions	in	revenues	and	increased	costs	of	operations.

If	we	fail	to	adapt	our	products	and	services	to	changes	in	technology	and	the	markets	we	serve,	we	could	lose	existing	customers	and	be unable	to	attract	new	business.	The	markets	for	our	software	and	hardware	products	and	services	are	characterized	by	changing	customer	and regulatory	requirements	and	rapid	technological	changes.	These	factors	and	new	product	introductions	by	our	existing	competitors	or	by	new	market entrants	could	reduce	the	demand	for	our	existing	products	and	services	and	we	may	be	required	to	develop	or	acquire	new	products	and	services.	Our future	success	is	dependent	on	our	ability	to	enhance	our	existing	products	and	services	in	a	timely	manner	and	to	develop	or	acquire	new	products	and services.	If	we	are	unable	to	develop	or	acquire	new	products	and	services	as	planned,	or	if	we	fail	to	sell	our	new	or	enhanced	products	and	services,	we may	incur	unanticipated	expenses	or	fail	to	achieve	anticipated	revenues,	as	well	as	lose	prospective	sales.

Our	growth	may	be	affected	if	we	are	unable	to	find	or	complete	suitable	acquisitions. 	We	have	augmented	the	growth	of	our	business	with	a number	of	acquisitions	and	we	plan	to	continue	to	acquire	appropriate	businesses,	products	and	services.	This	strategy	depends	on	our	ability	to	identify, negotiate	and	finance	suitable	acquisitions.	Merger	and	acquisition	activity	in	our	industry	has	affected	the	availability	and	pricing	of	such	acquisitions.	If we	are	unable	to	acquire	suitable	acquisition	candidates,	we	may	experience	slower	growth.

If	others	claim	that	we	have	infringed	their	intellectual	property	rights,	we	could	be	liable	for	significant	damages	or	could	be	required	to change	our	processes.	We	have	agreed	to	indemnify	many	of	our	customers	against	claims	that	our	products	and	services	infringe	on	the	proprietary rights	of	others.	Infringement	claims	have	been	and	will	in	the	future	be	asserted	with	regard	to	our	software	solutions	and	services.	Such	claims,	whether with	or	without	merit,	are	time-consuming,	may	result	in	costly	litigation	and	may	not	be	resolved	on	terms	favorable	to	us.	If	our	defense	of	such	claims	is not	successful,	we	could	be	forced	to	pay	damages	or	could	be	subject	to	injunctions	that	would	cause	us	to	cease	making	or	selling	certain	applications or	force	us	to	redesign	applications.

Consolidation	and	failures	of	financial	institutions	will	continue	to	reduce	the	number	of	our	customers	and	potential	customers. 	Our	primary market	consists	of	more	than	5,870	commercial	and	savings	banks	and	 more	than	6,000	credit	unions.	The	number	of	commercial	banks	and	credit unions	has	decreased	because	of	failures	and	mergers	and	acquisitions	and	is	expected	to	continue	to	decrease	as	more	consolidation	occurs.

Acquisitions	may	be	costly	and	difficult	to	integrate. 	We	have	acquired	a	number	of	businesses	in	the	past	and	will	continue	to	explore	acquisitions in	the	future.	We	may	not	be	able	to	successfully	integrate	acquired	companies.	We	may	encounter	problems	with	the	integration	of	new	businesses including:	financial	control	and	computer	system	compatibility;	unanticipated	costs;	unanticipated	quality	or	customer	problems	with	acquired	products	or services;	 differing	 regulatory	 	 and	 industry	 standards;	 diversion	 of	 management's	 attention;	 adverse	 effects	 on	 existing	 business	 relationships	 with suppliers	and	customers;	loss	of	key	employees;	and	significant	amortization	expenses	related	to	acquired	assets.	To	finance	future	acquisitions,	we	may have	to	increase	our	borrowing	or	sell	equity	or	debt	securities	to	the	public.	If	we	fail	to	integrate	our	acquisitions,	our	business,	financial	condition	and results	of	operations	could	be	materially	and	adversely	affected.	Failed	acquisitions	could	also	produce	material	and	unpredictable	impairment	charges	as we	periodically	review	our	acquired	assets.

We	may	not	be	able	to	manage	growth.	We	have	grown	both	internally	and	through	acquisitions.	Our	expansion	has	and	will	continue	to	place significant	demands	on	our	administrative,	operational,	financial	and	management	personnel

and	 systems.	 We	 may	 not	 be	 able to	 enhance	 and	 expand	 our	 product lines,	 manage	 costs,	 adapt	 our infrastructure	 and	 modify	 our	 systems to accommodate	future	growth.

Expansion	of	services	to	non-traditional	customers	could	expose	us	to	new	risks. 	We	have	expanded	our	services	to	business	lines	that	are marketed	outside	our	 traditional,	regulated,	and	 litigation-averse	base	of	 financial	 institution	customers.	These	non-regulated	customers	may	entail greater	operational,	credit	and	litigation	risks	than	we	have	faced	before	and	could	result	in	increases	in	bad	debts	and	litigation	costs.

Failure	to	achieve	favorable	renewals	of	service	contracts	could	negatively	affect	our	outsourcing	business. 	Our	contracts	with	our	customers	for outsourced	data	processing	services	generally	run	for	a	period	of	five	or	more	years.	We	will	continue	to	experience	greater	numbers	of	these	contracts coming	up	for	renewal	each	year.	Renewal	time	presents	our	customers	with	the	opportunity	to	consider	other	providers	or	to	renegotiate	their	contracts with	us.	If	we	are	not	successful	in	achieving	high	renewal	rates	upon	favorable	terms,	our	outsourcing	revenues	and	profit	margins	will	suffer.

The	impairment	of	a	significant	portion	of	our	goodwill	and	intangible	assets	would	adversely	affect	our	results	of	operations. 	Our	balance sheet	includes	goodwill	and	intangible	assets	that	represent	a	significant	portion	of	our	total	assets	at	June	30,	2017.	On	an	annual	basis,	and	whenever circumstances	require,	we	review	our	intangible	assets	for	impairment.	If	the	carrying	value	of	a	material	asset	is	determined	to	be	impaired,	it	will	be written	down	to	fair	value	by	a	charge	to	operating	earnings.	An	impairment	of	a	significant	portion	of	these	intangible	assets	could	have	a	material negative	effect	on	our	operating	results.

# ITEM	1B.			UNRESOLVED	STAFF	COMMENTS

None.

# ITEM	2.			PROPERTIES

We	own	154	acres	located	in	Monett,	Missouri	on	which	we	maintain	 nine	office	buildings,	plus	shipping	&	receiving	and	maintenance	buildings.	We	also own	buildings	in	Houston,	Texas;	Allen,	Texas;	Albuquerque,	New	Mexico;	Birmingham,	Alabama;	Lenexa,	Kansas;	Angola,	Indiana;	Shawnee	Mission, Kansas;	Rogers,	Arkansas;	Oklahoma	City,	Oklahoma;	Elizabethtown,	Kentucky;	Springfield,	Missouri	and	San	Diego,	California.	Our	owned	facilities represent	approximately	1,000,000	square	feet	of	office	space	in	 ten	states.	We	have	35	leased	office	facilities	in	20	states,	which	total	approximately 653,000	square	feet.	All	of	our	owned	and	leased	office	facilities	are	for	normal	business	purposes.

Of	our	facilities,	the	Credit	Union	segment	uses	office	space	totaling	approximately	 195,500	square	feet	in	fifteen	facilities.	The	majority	of	our	San	Diego, California	offices	are	used	 in	 the	Credit	Union	segment,	as	are	portions	of	fourteen	other	office	 facilities.	The	remainder	of	our	 leased	and	owned facilities,	approximately	1,457,500	square	feet	of	office	space,	is	primarily	devoted	to	serving	our	Bank	segment	or	supports	our	whole	business.

We	own	four	aircraft.	Many	of	our	customers	are	located	in	communities	that	do	not	have	an	easily	accessible	commercial	airline	service.	We	primarily use	our	airplanes	in	connection	with	implementation,	sales	of	systems	and	internal	requirements	for	day-to-day	operations.	Transportation	costs	for implementation	and	other	customer	services	are	billed	to	our	customers.	We	lease	property,	including	real	estate	and	related	facilities,	at	the	Monett, Missouri	regional	airport.

# ITEM	3.		LEGAL	PROCEEDINGS

We	are	subject	to	various	routine	 legal	proceedings	and	claims	arising	 in	 the	ordinary	course	of	our	business.	In	the	opinion	of	management,	any liabilities	resulting	from	current	lawsuits	are	not	expected,	either	individually	or	in	the	aggregate,	to	have	a	material	adverse	effect	on	our	consolidated financial	statements.	In	accordance	with	U.S.	GAAP,	we	record	a	liability	when	it	is	both	probable	that	a	liability	has	been	incurred	and	the	amount	of	the loss	can	be	reasonably	estimated.	These	liabilities	are	reviewed	at	least	quarterly	and	adjusted	to	reflect	the	impacts	of	negotiations,	settlements,	rulings, advice	of	legal	counsel,	and	other	information	and	events	pertaining	to	a	particular	case	or	proceeding.

# ITEM	4.		MINE	SAFETY	DISCLOSURES

# PART	II

# ITEM	 5. 	 MARKET	 FOR	 REGISTRANT'S	 COMMON	 EQUITY,	 RELATED	 STOCKHOLDER	 MATTERS	AND ISSUER	 PURCHASES	 OF	 EQUITY SECURITIES

The	Company's	common	stock	is	quoted	on	the	NASDAQ	Global	Select	Market	("NASDAQ")	under	the	symbol	"JKHY".	The	following	table	sets	forth,	for the	periods	indicated,	the	high	and	low	sales	price	per	share	of	the	common	stock	as	reported	by	NASDAQ.

|  | Fiscal	2017 |  | Fiscal	2016 | Fiscal	2016 |
| :--- | :--- | :--- | :--- | :--- |
|  | High | Low | High | Low |
| Fourth\tQuarter | $106.46 | $91.50 | $87.27 | $80.44 |
| Third\tQuarter | 95.64 | 88.11 | 86.23 | 73.19 |
| Second\tQuarter | 91.06 | 79.00 | 79.92 | 68.31 |
| First\tQuarter | 89.89 | 85.00 | 71.75 | 63.84 |

The	Company	established	a	practice	of	paying	quarterly	dividends	at	the	end	of	fiscal	1990	and	has	paid	dividends	with	respect	to	every	quarter	since	that time.	Quarterly	dividends	per	share	paid	on	the	common	stock	for	the	two	most	recent	fiscal	years	ended	2017	and	2016	are	as	follows:

|  | Fiscal	2017 | Fiscal	2016 |
| :--- | :--- | :--- |
| Fourth\tQuarter | $0.310 | $0.280 |
| Third\tQuarter | 0.310 | 0.280 |
| Second\tQuarter | 0.280 | 0.250 |
| First\tQuarter | 0.280 | 0.250 |

The	declaration	and	payment	of	any	future	dividends	will	continue	to	be	at	the	discretion	of	our	Board	of	Directors	and	will	depend	upon,	among	other factors,	our	earnings,	capital	requirements,	contractual	restrictions,	and	operating	and	financial	condition.	The	Company	does	not	currently	foresee	any changes	in	its	dividend	practices.

On	August	16,	2017,	there	were	approximately	94,800	holders	of	the	Company's	common	stock,	including	individual	participants	in	security	position listings.	On	that	same	date	the	last	sale	price	of	the	common	shares	as	reported	on	NASDAQ	was	$101.59	per	share.

# Issuer	Purchases	of	Equity	Securities

The	following	shares	of	the	Company	were	repurchased	during	the	quarter	ended	 June	30,	2017:

|  | Total	Number	of<br>Shares<br>Purchased	(1) | Average	Price<br>of	Share | Total	Number	of<br>Shares	Purchased	as<br>Part	of	Publicly<br>Announced	Plans	(1) | Maximum	Number	of<br>Shares	that	May	Yet	Be<br>Purchased	Under	the<br>Plans	(2) |
| :--- | :--- | :--- | :--- | :--- |
| April\t1-\tApril\t30,\t2017 | — | $— | — | 4,580,404 |
| May\t1-\tMay\t31,\t2017 | — | $— | — | 4,580,404 |
| June\t1-\tJune\t30,\t2017 | 250,345 | $105.02 | 250,000 | 4,330,404 |
| Total | 250,345 | $105.02 | 250,000 | 4,330,404 |

(1)	250,000	shares	were	purchased	through	a	publicly	announced	repurchase	plan.	There	were	 345	shares	surrendered	to	the	Company	to	satisfy	tax withholding	obligations	in	connection	with	employee	restricted	stock	awards.

(2)	Total	stock	repurchase	authorizations	approved	by	the	Company's	Board	of	Directors	as	of February	17,	2015	were	for	30.0	million	shares.	These authorizations	have	no	specific	dollar	or	share	price	targets	and	no	expiration	dates.

# Performance	Graph

The	following	chart	presents	a	comparison	for	the	five-year	period	ended	 June	30,	2017,	of	the	market	performance	of	the	Company's	common	stock with	the	S&P	500	Index	and	an	index	of	peer	companies	selected	by	the	Company:

# COMPARISON	OF	5	YEAR	CUMULATIVE	TOTAL	RETURN

Among	Jack	Henry	&	Associates,	Inc.,	the	S&P	500	Index,	and	a	Peer	Group

The	following	information	depicts	a	line	graph	with	the	following	values:

|  | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| JKHY | 100.00 | 138.34 | 177.10 | 195.72 | 267.64 | 322.60 |
| Peer\tGroup | 100.00 | 117.87 | 161.90 | 203.87 | 233.39 | 271.10 |
| S&amp;P\t500 | 100.00 | 120.60 | 150.27 | 161.43 | 167.87 | 197.92 |

This	comparison	assumes	$100	was	invested	on	June	30,	2012,	and	assumes	reinvestments	of	dividends.	Total	returns	are	calculated	according	to market	capitalization	of	peer	group	members	at	the	beginning	of	each	period.	Peer	companies	selected	are	in	the	business	of	providing	specialized computer	software,	hardware	and	related	services	to	financial	institutions	and	other	businesses.

Companies	in	the	Peer	Group	are	ACI	Worldwide,	Inc.;	Bottomline	Technology,	Inc.;	Broadridge	Financial	Solutions;	Cardtronics,	Inc.;	Convergys	Corp.; Corelogic,	Inc.;	DST	Systems,	Inc.;	Euronet	Worldwide,	Inc.;	Fair	Isaac	Corp.;	Fidelity	National	Information	Services,	Inc.;	Fiserv,	Inc.;	Global	Payments, Inc.;	Moneygram	International,	Inc.;	SS&C	Technologies	Holdings,	Inc.;	Total	Systems	Services,	Inc.;	Tyler	Technologies,	Inc.;	Verifone	Systems,	Inc.; and	WEX,	Inc..

# ITEM	6.			SELECTED	FINANCIAL	DATA

# Selected	Financial	Data

# (In	Thousands,	Except	Per	Share	Data)

| Income	Statement	Data | 2017 | 2016 | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue\t(1) | $1,431,117 | $1,354,646 | $1,256,190 | $1,173,173 | $1,107,524 |
| Net\tIncome | $245,793 | $248,867 | $211,221 | $186,715 | $167,610 |
| Basic\tearnings\tper\tshare | $3.16 | $3.13 | $2.60 | $2.20 | $1.95 |
| Diluted\tearnings\tper\tshare | $3.14 | $3.12 | $2.59 | $2.19 | $1.94 |
| Dividends\tdeclared\tper\tshare | $1.18 | $1.06 | $0.94 | $0.84 | $0.56 |
| Balance\tSheet\tData |  |  |  |  |  |
| Total\tdeferred\trevenue | $511,384 | $521,054 | $531,987 | $492,868 | $439,596 |
| Total\tassets | $1,908,945 | $1,815,512 | $1,836,835 | $1,680,703 | $1,672,386 |
| Long-term\tdebt | $50,000 | $— | $50,102 | $3,729 | $7,366 |
| Stockholders'\tequity | $1,032,051 | $996,210 | $991,534 | $967,387 | $1,015,816 |

(1)	Revenue	includes	license	sales,	support	and	service	revenues,	and	hardware	sales,	less	returns	and	allowances.

# ITEM	7.			MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS

The	 following	section	provides	management's	view	of	 the	 financial	condition	and	results	of	operations	and	should	be	read in	conjunction	with the Selected	Financial	Data,	the	audited	Consolidated	Financial	Statements,	and	related	notes	included	elsewhere	in	this	report.

# OVERVIEW

Jack	Henry	&	Associates,	Inc.	(JHA)	is	headquartered	in	Monett,	Missouri,	employs	nearly	 6,100	associates	nationwide,	and	is	a	leading	provider	of technology	solutions	and	payment	processing	services	primarily	for	financial	services	organizations.	Its	solutions	serve	over	9,000	customers	and	are marketed	and	supported	 through	 three	primary	brands.	Jack	Henry	Banking®	supports	banks	ranging	 from	community	banks	 to	multi-billion	dollar institutions	 with	 assets	 up	 to	$50	billion,	 with	 information	 and	 transaction	 processing	 solutions.	 Symitar®	 is	 a	 leading	 provider	 of	 information	 and transaction	 processing	 solutions	 for	 credit	 unions	 of	 all	 sizes.	 ProfitStars®	 provides	 highly	 specialized	 products	 and	 services	 that	 enable	 financial institutions	of	every	asset	size	and	charter,	and	diverse	corporate	entities	outside	the	financial	services	industry,	to	mitigate	and	control	risks,	optimize revenue	and	growth	opportunities,	and	contain	costs.	JHA's	integrated	solutions	are	available	for	in-house,	outsourced,	or	hosted	delivery.

Each	of	our	brands	share	the	fundamental	commitment	to	provide	high-quality	business	solutions,	service	levels	that	consistently	exceed	customer expectations,	integration	of	solutions	and	practical	new	technologies.	The	quality	of	our	solutions,	our	high	service	standards,	and	the	fundamental	way we	do	business	typically	foster	long-term	customer	relationships,	attract	prospective	customers,	and	have	enabled	us	to	capture	substantial	market share.

Through	internal	product	development,	disciplined	acquisitions,	and	alliances	with	companies	offering	niche	solutions	that	complement	our	proprietary solutions,	we	regularly	introduce	new	products	and	services	and	generate	new	cross-sales	opportunities	across	our	three	business	brands.	We	provide compatible	computer	hardware	for	our	in-house	installations	and	secure	processing	environments	for	our	outsourced	and	hosted	solutions.	We	perform data	conversions,	software	implementations,	initial	and	ongoing	customer	training,	and	ongoing	customer	support	services.

We	believe	our	primary	competitive	advantage	is	customer	service.	Our	support	infrastructure	and	strict	standards	provide	service	levels	we	believe	to	be the	highest	in	the	markets	we	serve	and	generate	high	levels	of	customer	satisfaction	and	retention.	We	consistently	measure	customer	satisfaction using	comprehensive	annual	surveys	and	randomly	generated	daily	surveys	we	receive	in	our	everyday	business.	Dedicated	surveys	are	also	used	to grade	specific	aspects	of	our	customer	experience,	including	product	implementation,	education,	and	consulting	services.

A	significant	proportion	of	our	revenue	is	derived	from	recurring	outsourcing	fees	and	electronic	payment	transaction	processing	fees	that	predominantly have	contract	terms	of	five	years	or	greater	at	inception.	Support	and	service	fees	also	include	in-house	maintenance	fees	which	primarily	contain	annual contract	terms,	implementation	services	revenue,	and	bundled	services	revenue,	which	is	a	combination	of	license,	implementation,	and	maintenance revenue

from	our	revenue	arrangements.	Less	predictable	software	license	fees	and	hardware	sales	complement	our	primary	revenue	sources.	We	continually seek	opportunities	to	increase	revenue	while	at	the	same	time	containing	costs	to	expand	margins.

We	have	two	reportable	segments:	bank	systems	and	services	and	credit	union	systems	and	services.	The	respective	segments	include	all	related license,	support	and	service,	and	hardware	sales	along	with	the	related	cost	of	sales.

We	continue	to	focus	on	our	objective	of	providing	the	best	integrated	solutions,	products	and	customer	service	to	our	clients.	We	are	cautiously	optimistic regarding	ongoing	economic	improvement	and	expect	our	clients	to	continue	investing	in	our	products	and	services	to	improve	their	operating	efficiencies and	performance.	We	anticipate	that	consolidation	within	the	financial	services	industry	will	continue.	Regulatory	conditions	and	legislation	will	continue	to impact	financial	institutions'	discretionary	spending.

A	detailed	discussion	of	the	major	components	of	the	results	of	operations	follows.	All	dollar	and	share	amounts	are	in	thousands	and	discussions compare	fiscal	2017	to	fiscal	2016	and	compare	fiscal	 2016	to	fiscal	2015.

# RESULTS	OF	OPERATIONS

In	 fiscal	2017,	 revenues	 increased	6%	 or	$76,471	 compared	 to	 fiscal	2016,	 with	 strong	 growth	 continuing	 in	 our	 support	 and	 service	 revenues, particularly	our	outsourcing	services,	electronic	payment	services,	and	bundled	services.	Cost	of	sales	increased	6%,	in	line	with	revenue,	and	gross profit	increased	5%.	The	company	continues	to	focus	on	cost	management.

Net	operating	expenses	increased	11%	year	over	year,	due	mainly	to	the	gain	on	the	sale	of	our	Alogent	business	("Alogent")	to	Antelope	Acquisition Co.,	an	affiliate	of	Battery	Ventures,	in	the	prior	year,	which	is	discussed	below	in	the	operating	expenses	section.	Provision	for	income	taxes	increased 9%	compared	to	the	prior	year,	due	a	lower	prior	year	effective	tax	rate,	which	is	described	in	the	following	discussion.	The	above	changes	resulted	in	a 1%	decrease	in	net	income	for	fiscal	 2017.

We	move	into	fiscal	2018	following	a	strong	performance	in	fiscal	2017.	Significant	portions	of	our	business	continue	to	provide	recurring	revenue	and our	healthy	sales	pipeline	is	also	encouraging.	Our	customers	continue	to	face	regulatory	and	operational	challenges	which	our	products	and	services address,	and	in	these	times	they	have	an	even	greater	need	for	our	solutions	that	directly	address	institutional	profitability,	efficiency,	and	security.	 Our strong	balance	sheet,	access	to	extensive	lines	of	credit,	the	strength	of	our	existing	product	line	and	an	unwavering	commitment	to	superior	customer service	position	us	well	to	address	current	and	future	opportunities.

A	detailed	discussion	of	the	major	components	of	the	results	of	operations	for	the	 fiscal	year	ended	June	30,	2017	follows.	All	dollar	amounts	are	in thousands	and	discussions	compare	the	current	fiscal	year	ended	June	30,	2017	to	the	prior	fiscal	year	ended	June	30,	2016.

# REVENUE

License	revenue	represents	the	sale	and	delivery	of	application	software	systems	contracted	with	us	by	the	customer,	which	are	not	part	of	a	bundled arrangement.	We	license	our	proprietary	software	products	under	standard	license	agreements	that	typically	provide	the	customer	with	a	non-exclusive, non-transferable	right	to	use	the	software	on	a	single	computer	and	for	a	single	financial	institution.

Non-bundled	license	revenue	decreased	due	mainly	to	a	reduction	in	standalone	license	sales	in	our	Bank	segment,	with	Alogent	headwinds	accounting for	$570	of	that	decrease.	Excluding	the	Alogent	headwind,	license	revenue	decreased	3%.	Such	license	fees	will	fluctuate	as	non-bundled	license	sales are	sporadic	in	nature.

Support	and	service	revenues	are	generated	from	supporting	our	in-house	customers	in	operating	their	systems	and	to	enhance	and	update	the	software, electronic	payment	services,	outsourced	data	processing	services,	implementation	services	(including	conversion,	installation,	configuration	and	training) and	revenue	from	our	bundled	software	multi-element	agreements.	There	was	growth	in	most	support	and	service	revenue	components	in	fiscal	2017, despite	Alogent	revenue	of	$27,673	included	in	the	prior	year.	Excluding	that	headwind,	support	and	services	grew	9%.

In-house	support	and	other	services	revenue	increased	despite	headwinds	of	 $13,062	created	from	the	Alogent	sale.	Excluding	the	Alogent	headwind, in-house	support	and	other	services	revenue	increased	5%.	The	increase	was	due	mainly	to	increased	revenue	from	work	orders	and	from	customers consulting	with	our	Client	Services	Consulting	group.	The	group's	operational	assessments	help	banks	and	credit	unions	maximize	 their	operating efficiency	and	productivity,	identify	new	revenue	and	market	opportunities,	and	reduce	costs.

Electronic	payment	services	continued	to	show	growth	over	the	prior	year.	The	revenue	increases	are	mainly	attributable	to	strong	performance	across debit/credit	 card	 risk	 management	 and	 transaction	 processing	 services,	remote	 capture	 and	 ACH	 processing,	 and	 online	 bill	 payment	 services. Deconversion	fees	(fees	charged	when	customer	agreements	are	terminated	prior	to	the	end	of	their	contracted	term)	for	electronic	payment	services decreased	$2,901	compared	to	the	prior	year.	Excluding	these	fees	from	both	years,	electronic	payment	services	revenue	increased	6%.

Outsourcing	services	for	banks	and	credit	unions	continue	to	drive	revenue	growth	as	customers	continue	to	show	a	preference	for	outsourced	delivery of	our	solutions.	Revenues	from	outsourcing	services	are	typically	earned	under	multi-year	service	contracts	and	therefore	provide	a	long-term	stream	of recurring	 revenues.	We	expect	the	trend	towards	outsourced	product	delivery	to	benefit	outsourcing	services	revenue	for	the	foreseeable	future.	The increase	in	outsourcing	revenue	was	mainly	due	to	data	processing.	Deconversion	fees	within	outsourcing	services	increased	$4,736.	Excluding	these fees	from	both	years,	outsourcing	services	revenue	increased	12%.

Implementation	services	include	implementation	services	for	our	electronic	payment	services	customers	as	well	as	standalone	customization	services, merger	conversion	services,	 image	conversion	services	and	network	monitoring	services.	Implementation	services	revenue	decreased	due	partly	to Alogent	headwinds	of	$4,465,	with	the	remainder	of	the	decrease	due	mainly	to	a	decline	in	stand-alone	implementations	in	the	Bank	segment.	Revenue from	these	standalone	services	has	decreased	as	implementation	services	related	to	our	bundled	arrangements	have	increased.

Bundled	products	and	services	revenue	is	combined	revenue	from	the	multiple	elements	in	our	bundled	arrangements,	including	license,	implementation services	and	maintenance,	which	cannot	be	recognized	separately	due	to	a	lack	of	vendor-specific	objective	evidence	of	fair	value.	Bundled	products and	services	revenue	increased,	despite	$10,145	of	Alogent	headwinds,	mostly	due	to	terminations	of	pending	products	and	services	on	certain	contracts that	 have	 allowed	 for	 the	 release	 of	 revenue	 that	 was	 being	 deferred	 until	 contract	 completion	 in	 both	 our	 Bank	 and	 Credit	 Union	 core	 and complementary	arrangements,	as	well	as	increased	revenue	being	released	due	to	completion	of	final	installations	and	services	on	our	Bank	multiple element	arrangements.

| Hardware	Revenue | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Hardware | $44,394 | $50,627 | (12)% |
| Percentage\tof\ttotal\trevenue | 3% | 4% |  |

The	Company	has	entered	into	re-marketing	agreements	with	several	hardware	manufacturers	and	suppliers	under	which	we	sell	computer	hardware, hardware	maintenance	and	related	services	to	our	customers.	Revenue	related	to	hardware	sales	is	recognized	when	the	hardware	is	shipped	to	our customers.

Hardware	 revenue	 decreased	 due	 to	 decreases	 in	 revenue	 from	 power	 systems,	 servers,	 and	 other	 complementary	 hardware	 products	 delivered. Although	there	will	be	quarterly	fluctuations,	we	expect	an	overall	decreasing	trend	in	hardware	sales	to	continue	due	to	the	change	in	sales	mix	towards outsourcing	contracts,	which	typically	do	not	include	hardware,	and	the	general	deflationary	trend	of	computer	prices.

# COST	OF	SALES	AND	GROSS	PROFIT

Cost	of	license	represented	the	cost	of	software	from	third-party	vendors	associated	with	non-bundled	application	software	licenses.	These	costs	were recognized	when	license	revenue	was	recognized.

Cost	of	support	and	service	represented	costs	associated	with	conversion	and	implementation	efforts,	ongoing	support	for	our	customers,	operation	of our	data	and	item	centers	providing	services	for	our	outsourced	customers,	electronic	payment	services	and	direct	operating	costs.	These	costs	were recognized	as	they	were	incurred	or,	for	direct	costs	associated	with	obtaining	and	implementing	our	bundled	arrangements,	they	were	deferred	and recognized	ratably	as	the	related	revenues	for	these	arrangements	are	recognized,	typically	beginning	when	Post	Contract	Support	("PCS")	is	the	only remaining	undelivered	element,	and	ending	at	the	end	of	the	initial	bundled	PCS	term.

Cost	of	hardware	consisted	of	the	direct	and	indirect	costs	of	purchasing	the	equipment	from	the	manufacturers	and	delivery	to	our	customers.	These costs	were	recognized	at	the	same	time	as	the	related	hardware	revenue	was	recognized.	Ongoing	operating	costs	to	provide	support	to	our	customers were	recognized	as	they	were	incurred.

|  | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Cost\tof\tLicense | $730 | $1,197 | (39)% |
| Percentage\tof\ttotal\trevenue | &lt;1% | &lt;1% |  |
| License\tGross\tProfit | $1,655 | $1,844 | (10)% |
| Gross\tProfit\tMargin | 69% | 61% |  |
| Cost\tof\tsupport\tand\tservice | $786,143 | $737,108 | 7\t% |
| Percentage\tof\ttotal\trevenue | 55% | 54% |  |
| Support\tand\tService\tGross\tProfit | $598,195 | $563,870 | 6\t% |
| Gross\tProfit\tMargin | 43% | 43% |  |
| Cost\tof\thardware | $32,161 | $35,346 | (9)% |
| Percentage\tof\ttotal\trevenue | 2% | 3% |  |
| Hardware\tGross\tProfit | $12,233 | $15,281 | (20)% |
| Gross\tProfit\tMargin | 28% | 30% |  |
| TOTAL\tCOST\tOF\tSALES | $819,034 | $773,651 | 6\t% |
| Percentage\tof\ttotal\trevenue | 57% | 57% |  |
| TOTAL\tGROSS\tPROFIT | $612,083 | $580,995 | 5\t% |
| Gross\tProfit\tMargin | 43% | 43% |  |

Cost	of	license	consists	of	the	direct	costs	of	third-party	software	that	are	a	part	of	a	non-bundled	arrangement.	Sales	of	these	third-party	software products	decreased	compared	to	the	last	year.	Shifts	in	sales	mix	between	the	products	that	make	up	these	costs	cause	fluctuations	in	the	margins	from period	to	period.

Cost	of	support	and	service	for	fiscal	 2016	includes	$12,332	related	to	Alogent	sales.	Excluding	those	costs,	our	cost	of	support	and	service	increased 8%.	Gross	profit	margins	in	support	and	service	remained	consistent	with	the	prior	year.

In	general,	changes	in	cost	of	hardware	trend	consistently	with	hardware	revenue.	For	the	current	period,	margins	were	lower	due	to	decreased	sales	of higher	margin	hardware	upgrade	products	compared	to	the	prior	year.

# OPERATING	EXPENSES

| Selling	and	Marketing | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Selling\tand\tmarketing | $93,297 | $90,079 | 4% |
| Percentage\tof\ttotal\trevenue | 7% | 7% |  |

Dedicated	 sales	 forces,	 inside	 sales	 teams,	 technical	 sales	 support	 teams	 and	 channel	 partners	 conduct	 our	 sales	 efforts	 for	 our	 two	 reportable segments,	and	are	overseen	by	regional	and	national	sales	managers.	Our	sales	executives	are	responsible	for	pursuing	lead	generation	activities	for new	core	customers.	Our	account	executives	nurture	long-term	relationships	with	our	client	base	and	cross	sell	our	many	complementary	products	and services.

Selling	and	marketing	expenses	increased	compared	to	fiscal	 2016	due	mainly	to	increased	commission	expense,	but	remained	a	consistent	percentage of	total	revenue	in	both	periods.

| Research	and	Development | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Research\tand\tdevelopment | $84,753 | $81,234 | 4% |
| Percentage\tof\ttotal\trevenue | 6% | 6% |  |

We	devote	significant	effort	and	expense	to	develop	new	software,	service	products	and	continually	upgrade	and	enhance	our	existing	offerings.	We believe	our	research	and	development	efforts	are	highly	efficient	because	of	 the	extensive	experience	of	our	research	and	development	staff	and because	our	product	development	is	highly	customer-driven.

Research	and	development	expenses	increased	primarily	due	to	a	4%	increase	in	headcount,	but	were	consistent	with	the	prior	year	as	a	percentage	of total	revenue.

| General	and	Administrative | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| General\tand\tadministrative | $69,601 | $67,514 | 3% |
| Percentage\tof\ttotal\trevenue | 5% | 5% |  |

General	and	administrative	costs	included	all	expenses	related	to	finance,	legal,	and	human	resources,	plus	all	administrative	costs.	These	expenses increased	primarily	due	to	a	4%	increase	in	headcount,	but	were	a	consistent	percentage	of	revenue	in	each	year.

# Gains	on	Disposal	of	Businesses

In	fiscal	2017,	we	recognized	gains	on	the	disposals	of	businesses	totaling	 $3,270.	$2,136	was	related	to	last	year's	sale	of	Alogent,	and $1,134	related to	the	sale	of	our	Regulatory	Filing	products	to	Fed	Reporter	on	May	1,	2017.	In	fiscal	2016,	we	had	a	gain	totaling	 $19,491,	due	to	the	sale	of	Alogent.

| INTEREST	INCOME	AND	EXPENSE | Year	Ended	June	30, | Year	Ended	June	30, | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Interest\tIncome | $248 | $307 | (19)% |
| Interest\tExpense | $(996) | $(1,430) | (30)% |

Interest	income	fluctuated	due	to	changes	in	invested	balances	and	yields	on	invested	balances.	Interest	expense	remained	low	for	both	the	current	and prior	years,	in	line	with	our	average	debt	balances	in	both	years.

| PROVISION	FOR	INCOME	TAXES | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 |  |
| Provision\tFor\tIncome\tTaxes | $121,161 | $111,669 | 9% |
| Effective\tRate | 33.0% | 31.0% |  |

The	increase	in	the	effective	tax	rate	was	primarily	due	the	prior	year's	rate	being	reduced	by	the	tax	basis	in	excess	of	book	basis	in	Alogent	stock	at disposal.

# NET	INCOME

Net	income	decreased	1%	to	$245,793,	or	$3.14	per	diluted	share,	in	fiscal	 2017	from	$248,867,	or	$3.12	per	diluted	share,	in	fiscal	 2016.	This	decrease was	due	to	factors	discussed	above,	including	the	prior	year	Alogent	gain	and	lower	effective	tax	rate	in	fiscal	2016.

In	 fiscal	2016,	 revenues	 increased	8%	 or	$98,456	 compared	 to	 fiscal	2015	 due	 primarily	 to	 strong	 growth	 in	 our	 support	 and	 service	 revenues, particularly	outsourcing	services,	bundled	services,	and	electronic	payment	services.	Cost	of	sales	increased	just	7%,	contributing	to	an	8%	increase	in gross	profit.

Net	operating	expenses	increased	1%	and	the	provision	for	income	taxes	increased	 6%	compared	to	fiscal	2015.	The	increased	revenue	and	above changes	resulted	in	a	combined	18%	increase	in	net	income	for	fiscal	 2016	compared	to	the	prior	fiscal	year.

Non-bundled	license	revenue	increased	due	mainly	to	an	increase	in	standalone	license	sales	in	our	Bank	segment.	Such	license	fees	will	fluctuate	as non-bundled	license	sales	are	sporadic	in	nature.

Support	 and	 service	 revenues	 are	 generated	 from	 supporting	 our	 customers	 in	 operating	 their	 systems	 and	 to	 enhance	 and	 update	 the	 software, electronic	payment	services,	outsourced	data	processing	services,	implementation	service	(including	conversion,	installation,	configuration	and	training) and	revenue	from	our	bundled	software	multi-element	agreements.	There	was	growth	in	most	support	and	service	revenue	components	in	fiscal	2016.

In-house	support	and	other	services	revenue	increased	due	to	annual	maintenance	renewal	fee	increases	for	both	core	and	complementary	products	as our	customers'	assets	grow	and	new	customers	began	renewing	their	annual	maintenance.	Increased	software	usage	revenue	from	Alogent	mobile remote	deposits	also	contributed	to	the	increase.

Electronic	payment	services	continued	to	show	growth	over	the	prior	year,	although	that	growth	slowed	due	to	some	of	our	large	customers	being acquired	and	price	compression	on	contract	renewals	in	our	card	services	offerings.	The

revenue	increases	are	mainly	attributable	to	strong	performance	across	debit/credit	card	transaction	processing	services,	online	bill	payment	services	and ACH	processing.	Deconversion	revenue	for	electronic	payment	services	increased	$9,616	over	the	prior	year.	Excluding	these	fees,	we	had	a 4% increase	in	electronic	payment	services	revenue.

Outsourcing	services	for	banks	and	credit	unions	continue	to	drive	revenue	growth	as	customers	continue	to	show	a	preference	for	outsourced	delivery of	our	solutions.	Revenues	from	outsourcing	services	are	typically	earned	under	multi-year	service	contracts	and	therefore	provide	a	long-term	stream	of recurring	revenues.	We	expect	the	trend	towards	outsourced	product	delivery	to	benefit	outsourcing	services	revenue	for	the	foreseeable	future.

Implementation	services	include	implementation	services	for	our	electronic	payment	services	customers	as	well	as	standalone	customization	services, merger	conversion	services,	image	conversion	services	and	network	monitoring	services.	Implementation	services	revenue	decreased	due	to	a	decrease in	stand-alone	implementations	in	the	Bank	segment.	Revenue	from	these	standalone	services	has	decreased	as	implementation	services	related	to	our bundled	arrangements	have	increased.

Bundled	products	and	services	revenue	is	combined	revenue	from	the	multiple	elements	in	our	bundled	arrangements,	including	license,	implementation services	and	maintenance,	which	cannot	be	recognized	separately	due	to	a	lack	of	vendor-specific	objective	evidence	of	fair	value.	Bundled	products	and services	revenue	increased	over	last	year	mainly	due	to	increased	revenues	from	our	core	and	complementary	credit	union	arrangements.	$26,567	of	the increase	was	due	to	terminations	of	minor	pending	products	and	services	on	certain	contracts	that	have	allowed	for	the	release	of	revenue	that	was	being deferred	until	contract	completion	in	both	our	Credit	Union	and	Bank	core	and	complementary	arrangements.

The	 Company	 has	 entered	 into	 remarketing	 agreements	 with	 several	 hardware	 manufacturers	 under	 which	 we	 sell	 computer	 hardware,	 hardware maintenance	and	related	services	to	our	customers.	Revenue	related	to	hardware	sales	is	recognized	when	the	hardware	is	shipped	to	our	customers.

Hardware	revenue	decreased	due	to	a	decrease	in	complementary	hardware	products	delivered.	Although	there	will	be	quarterly	fluctuations,	we	expect an	overall	decreasing	trend	in	hardware	sales	to	continue	due	to	the	change	in	sales	mix	towards	outsourcing	contracts,	which	typically	do	not	include hardware,	and	the	general	deflationary	trend	of	computer	prices.

Cost	of	license	represented	the	cost	of	software	from	third-party	vendors	through	remarketing	agreements	associated	with	non-bundled	application software	licenses.	These	costs	were	recognized	when	license	revenue	was	recognized.

Cost	of	support	and	service	represented	costs	associated	with	conversion	and	implementation	efforts,	ongoing	support	for	our	customers,	operation	of our	data	and	item	centers	providing	services	for	our	outsourced	customers,	electronic	payment	services	and	direct	operating	costs.	These	costs	were recognized	as	they	were	incurred	or,	for	direct	costs	associated	with	obtaining	and	implementing	our	bundled	arrangements,	they	are	deferred	and recognized	ratably	as	the	related	revenues	for	these	arrangements	are	recognized,	typically	beginning	when	PCS	is	the	only	remaining	undelivered element,	and	ending	at	the	end	of	the	initial	bundled	PCS	term.

|  | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2016 | 2015 |  |
| Cost\tof\tLicense | $1,197 | $1,187 | 1\t% |
| Percentage\tof\ttotal\trevenue | &lt;1% | &lt;1% |  |
| License\tGross\tProfit | $1,844 | $1,448 | 27\t% |
| Gross\tProfit\tMargin | 61% | 55% |  |
| Cost\tof\tsupport\tand\tservice | $737,108 | $680,750 | 8\t% |
| Percentage\tof\ttotal\trevenue | 54% | 54% |  |
| Support\tand\tService\tGross\tProfit | $563,870 | $519,902 | 8\t% |
| Gross\tProfit\tMargin | 43% | 43% |  |
| Cost\tof\thardware | $35,346 | $38,399 | (8)% |
| Percentage\tof\ttotal\trevenue | 3% | 3% |  |
| Hardware\tGross\tProfit | $15,281 | $14,504 | 5\t% |
| Gross\tProfit\tMargin | 30% | 27% |  |
| TOTAL\tCOST\tOF\tSALES | $773,651 | $720,336 | 7\t% |
| Percentage\tof\ttotal\trevenue | 57% | 57% |  |
| TOTAL\tGROSS\tPROFIT | $580,995 | $535,854 | 8\t% |
| Gross\tProfit\tMargin | 43% | 43% |  |

Cost	of	license	consisted	of	the	direct	costs	of	third-party	software	that	was	part	of	a	non-bundled	arrangement.	Sales	of	these	third-party	software products	increased	slightly	in	fiscal	2016	compared	to	fiscal	2015.	Shifts	in	sales	mix	between	the	products	that	make	up	these	costs	cause	fluctuations in	the	margins	from	period	to	period.

Gross	profit	margins	in	support	and	service	remained	consistent	with	the	prior	year.

In	general,	changes	in	cost	of	hardware	trended	consistently	with	hardware	revenue.	For	fiscal	year 2016,	margins	were	slightly	higher	due	to	increased sales	of	higher	margin	hardware	upgrade	products	than	in	the	prior	year.

Dedicated	sales	forces,	inside	sales	teams,	technical	sales	support	teams	and	channel	partners	conducted	our	sales	efforts	for	our	two	reportable segments,	and	were	overseen	by	regional	and	national	sales	managers.	Our	sales	executives	were	responsible	for	pursuing	lead	generation	activities	for new	core	customers.	Our	account	executives	nurtured	long-term	relationships	with	our	client	base	and	cross	sold	our	many	complementary	products	and services.

Selling	and	marketing	expenses	for	fiscal	 2016	increased	slightly	compared	to	fiscal	 2015	due	to	increased	salary	expense,	but	remained	a	consistent percentage	of	total	revenue	in	both	periods.

We	devote	significant	effort	and	expense	to	develop	new	software,	service	products	and	continually	upgrade	and	enhance	our	existing	offerings.

Research	and	development	expenses	increased	in	fiscal	 2016	over	the	prior	fiscal	year,	primarily	due	to	increased	headcount	and	related	personnel costs,	but	were	consistent	with	the	prior	year	as	a	percentage	of	total	revenue.

| General	and	Administrative | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2016 | 2015 |  |
| General\tand\tadministrative | $67,514 | $64,364 | 5% |
| Percentage\tof\ttotal\trevenue | 5% | 5% |  |

General	and	administrative	costs	included	all	expenses	related	to	finance,	legal,	human	resources,	plus	all	administrative	costs.	These	costs	increased	in fiscal	2016	primarily	due	to	increased	headcount	and	related	salaries,	but	were	consistent	with	the	prior	year	as	a	percentage	of	total	revenue.

# Gain	on	Disposal	of	Businesses

| INTEREST	INCOME	AND	EXPENSE | Year	Ended	June	30, | Year	Ended	June	30, | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2016 | 2015 |  |
| Interest\tIncome | $307 | $169 | 82\t% |
| Interest\tExpense | $(1,430) | $(1,594) | (10)% |

| PROVISION	FOR	INCOME	TAXES | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2016 | 2015 |  |
| Provision\tFor\tIncome\tTaxes | $111,669 | $105,219 | 6% |
| Effective\tRate | 31.0% | 33.3% |  |

The	decrease	in	the	effective	tax	rate	was	primarily	due	a	significant	difference	in	the	book	versus	tax	basis	in	Alogent	stock,	as	well	as	the	retroactive permanent	extension	of	the	Research	and	Experimentation	Credit	("R&E	Credit")	to	January	1,	2015	during	fiscal	2016.

# REPORTABLE	SEGMENT	DISCUSSION

The	 Company	 is	 a	 leading	 provider	 of	 technology	 solutions	 and	 payment	 processing	 services	 primarily	 for	 financial	 services	 organizations.	 The Company's	operations	are	classified	into	two	reportable	segments:	bank	systems	and	services	("Bank")	and	credit	union	systems	and	services	("Credit Union").	The	Company	evaluates	the	performance	of	its	segments	and	allocates	resources	to	them	based	on	various	factors,	including	prospects	for growth,	return	on	investment,	and	return	on	revenue.

# Bank	Systems	and	Services

|  | 2017 | %	Change | 2016 | %	Change | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $1,055,763 | 6% | $996,668 | 4% | $962,729 |
| Gross\tprofit | $429,441 | 5% | $407,600 | 2% | $400,659 |
| Gross\tprofit\tmargin | 41% |  | 41% |  | 42% |

In	fiscal	2017,	revenue	in	the	Bank	segment	increased	 6%	compared	to	the	prior	fiscal	year,	despite	revenue	headwinds	of	 $28,422	due	to	the	sale	of Alogent.	The	increase	was	due	to	a	7%	increase	in	support	and	service	revenue,	partially	offset	by	decreased	hardware	and	stand-alone	license	sales. The	increase	in	support	and	service	revenue	was	driven	by	increases	in	the	outsourcing	services,	electronic	payment	services,	and	bundled	products and	services	revenue	streams.	Those	increases	were	partly	offset	by	decreased	revenue	from	in-house	support	and	other	services	and

implementation	services,	due	mainly	to	the	Alogent	headwinds.	Gross	profit	margin	remained	consistent	with	fiscal

In	fiscal	2016,	revenue	in	the	Bank	segment	increased	 4%	compared	to	the	prior	year.	The	increase	was	due	mainly	to	a	12%	increase	in	outsourcing services.	Gross	profit	margins	decreased	only	slightly	compared	to	fiscal	2015.

# Credit	Union	Systems	and	Services

|  | 2017 | %	Change | 2016 | %	Change | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $375,354 | 5% | $357,978 | 22% | $293,461 |
| Gross\tprofit | $182,642 | 5% | $173,395 | 28% | $135,195 |
| Gross\tprofit\tmargin | 49% |  | 48% |  | 46% |

In	 fiscal	2017,	 revenue	 in	 the	 Credit	 Union	 segment	 increased	 5%	 due	 to	 increases	 in	 support	 &	 service	 revenue	totaling	 6%,	 partially	 offset	 by decreased	hardware	and	stand-alone	license	revenue.	Support	&	service	revenues	grew	through	increases	in	bundled	services,	in-house	maintenance renewals	 and	 outsourcing	 services,	 partly	 offset	 by	 decreased	 electronic	 payment	 services	 and	 implementation	 services	 revenue.	The	 increase	 in bundled	services	was	due	to	an	increase	in	terminations	of	pending	products	and	service	obligations	on	certain	contracts	allowing	for	earlier	recognition of	revenue	on	our	bundled	arrangements.	The	decrease	in	electronic	payment	services	revenue	was	mainly	due	to	decreased	deconversion	fees	and decreased	revenue	from	card	manufacturing.	Gross	profit	margin	for	the	Credit	Union	segment	increased	1%.

In	fiscal	2016,	revenue	in	the	Credit	Union	segment	increased	 22%	due	to	increases	in	support	&	service	revenue.	Support	&	service	revenues	grew 22%	through	increases	in	electronic	payment	services,	in-house	maintenance	renewals,	and	bundled	services.	Gross	profit	margins	for	the	Credit	Union segment	increased	2%	mainly	due	to	economies	of	scale	realized	from	growing	transaction	volume	in	our	payment	processing	services.

# LIQUIDITY	AND	CAPITAL	RESOURCES

The	following	table	summarizes	net	cash	from	operating	activities	in	the	statement	of	cash	flows:

|  | Year	Ended | Year	Ended |
| :--- | :--- | :--- |
|  | June\t30, |  |
|  | 2017 | 2016 |
| Net\tincome | $245,793 | $248,867 |
| Non-cash\texpenses | 186,626 | 161,004 |
| Change\tin\treceivables | (22,499) | (13,735) |
| Change\tin\tdeferred\trevenue | (8,800) | 4,364 |
| Change\tin\tother\tassets\tand\tliabilities | (43,798) | (34,078) |
| Net\tcash\tprovided\tby\toperating\tactivities | $357,322 | $366,422 |

Cash	provided	by	operating	activities	decreased	 2%	compared	to	fiscal	2016.	Cash	from	operations	is	primarily	used	to	repay	debt,	pay	dividends, repurchase	stock,	and	for	capital	expenditures.

Cash	used	in	investing	activities	for	fiscal	2017	totaled	$141,586	and	included:	capital	expenditures	on	facilities	and	equipment	of	 $41,947,	which	was mainly	for	the	purchase	of	computer	equipment;	$89,631	for	the	ongoing	enhancements	and	development	of	existing	and	new	product	offerings;	and $16,608	for	the	purchase	and	development	of	internal	use	software.	This	was	partially	offset	by	$5,632	of	proceeds	from	the	sale	of	businesses	and	 $968 of	proceeds	from	the	sale	of	assets.	Cash	used	in	investing	activities	for	fiscal	2016	totaled	$135,963	and	included:	capital	expenditures	on	facilities	and equipment	of	$56,325,	which	mainly	included	the	purchase	of	computer	equipment	and	aircraft,	 $96,411	for	the	development	of	software,	$11,826	for	the purchase	 and	 development	 of	 internal	 use	 software,	 and	$8,275,	 net	 of	 cash	 acquired,	 for	 the	 acquisition	 of	 Bayside	 Business	 Solutions.	 These expenditures	were	partially	offset	by	$34,030	of	proceeds	from	the	sale	of	our	Alogent	division	and	 $2,844	of	proceeds	from	the	sale	of	assets.

Financing	activities	used	cash	of	$171,281	for	fiscal	2017.	Cash	used	was	$130,140	for	the	purchase	of	treasury	shares,	repayment	of	the	revolving credit	facility	and	capital	leases	of	$30,200,	and	dividends	paid	to	stockholders	of

$91,707.	This	was	partially	offset	by	borrowings	of	$80,000	against	our	revolving	credit	facility	and	 $766	net	cash	inflow	from	the	issuance	of	stock	and tax	 related	 to	 stock-based	 compensation.	Financing	 activities	 used	 cash	 in	 fiscal	2016	 of	$308,462.	Cash	 used	 was	$175,662	 for	 the	 purchase	 of treasury	shares,	repayments	of	the	revolving	credit	facility	and	capital	leases	totaling	$152,500,	and	dividends	paid	to	stockholders	of	 $84,118.	This	was partially	offset	by	borrowings	of	$100,000	and	$3,818	net	cash	inflow	from	the	issuance	of	stock	and	tax	related	to	stock-based	compensation.

# Capital	Requirements	and	Resources

The	Company	generally	uses	existing	resources	and	funds	generated	from	operations	to	meet	its	capital	requirements.	Capital	expenditures	totaling $41,947	and	$56,325	for	the	twelve	months	ending	June	30,	2017	and	June	30,	2016,	respectively,	were	made	primarily	for	additional	equipment	and the	improvement	of	existing	facilities.	These	additions	were	funded	from	cash	generated	by	operations.	At	June	30,	2017,	the	Company	had	 no	material outstanding	purchase	commitments	related	to	property	and	equipment.

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,	2017,	there	were	25,660	shares	in	treasury	stock	and	the	Company had	the	remaining	authority	to	repurchase	up	to	4,330	additional	shares.	The	total	cost	of	treasury	shares	at	 June	30,	2017	is	$1,006,274.	During	fiscal 2017,	the	Company	repurchased	1,452	treasury	shares	for	$130,140.	At	June	30,	2016,	there	were	24,209	shares	in	treasury	stock	and	the	Company had	authority	to	repurchase	up	to	5,782	additional	shares.

# Capital	leases

The	 Company	 had	 previously	 entered	 into	 various	 capital	 lease	 obligations	 for	 the	 use	 of	 certain	 computer	 equipment,	 but	 has	 no	 capital	 lease obligations	at	June	30,	2017.	At	June	30,	2016,	the	Company	had	capital	lease	obligations	totaling	 $200	and	property	and	equipment	included	assets under	capital	leases	totaling	$2,329,	with	accumulated	depreciation	totaling	 $898.

# Revolving	credit	facility

The	revolving	credit	facility	allows	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,	2017,	 the	Company	was	 in	compliance	with	all	such	covenants.	The	revolving	 loan	 terminates February	20,	2020	and	at	June	30,	2017	there	was	a	$50,000	outstanding	balance.

# Other	lines	of	credit

The	Company	renewed	an	unsecured	bank	credit	line	on	 April	24,	2017	which	provides	for	funding	of	up	to	 $5,000	and	bears	interest	at	the	prime	rate less	1%.	The	credit	line	was	renewed	through	 April	30,	2019.	At	June	30,	2017,	no	amount	was	outstanding.

# OFF	BALANCE	SHEET	ARRANGEMENTS	AND	CONTRACTUAL	OBLIGATIONS

At	June	30,	2017,	the	Company's	total	off	balance	sheet	contractual	obligations	were	 $633,547.	This	balance	consists	of	 $47,991	of	long-term	operating leases	for	various	facilities	and	equipment	which	expire	from	2018	to	2030	and	$585,556	of	purchase	commitments.	JHA	entered	a	strategic	services agreement	with	First	Data®	and	PSCU®	to	provide	full-service	debit	and	credit	card	processing	on	a	single	platform	to	all	existing	core	bank	and	credit union	customers,	as	well	as	expand	its	card	processing	platform	to	financial	institutions	outside	our	core	customer	base.	This	agreement	includes	a purchase	commitment	of	$559,354	over	the	term	of	the	contract.	The	remainder	of	the	purchase	commitments	relate	to	open	purchase	orders.	The contractual	obligations	table	below	excludes	$6,445	of	liabilities	for	uncertain	tax	positions	as	we	are	unable	to	reasonably	estimate	the	ultimate	amount or	timing	of	settlement.

| Contractual	obligations	by	period	as | Less	than |  |  | More	than |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| of\tJune\t30,\t2017 | 1\tyear | 1-3\tyears | 3-5\tyears | 5\tyears | TOTAL |
| Operating\tlease\tobligations | $10,945 | $14,847 | $7,895 | $14,304 | $47,991 |
| Capital\tlease\tobligations | — | — | — | — | — |
| Revolving\tcredit\tfacility,\tincluding\naccrued\tinterest | — | 50,048 | — | — | 50,048 |
| Purchase\tobligations | 26,202 | 28,518 | 86,875 | 443,961 | 585,556 |
| Total | $37,147 | $93,413 | $94,770 | $458,265 | $683,595 |

# RECENT	ACCOUNTING	PRONOUNCEMENTS

The	 Financial	 Accounting	 Standards	 Board	 ("FASB")	 issued	 Accounting	 Standards	 Update	 ("ASU")	 No.	 2014-09,	 Revenue	 from	 Contracts	 with Customers	in	May	2014.	This	standard	is	part	of	an	effort	to	create	a	common	revenue	standard	for	U.S.	generally	accepted	accounting	principles	(U.S. GAAP)	and	International	Financial	Reporting	Standards	(IFRS).	The	new	standard	will	supersede	much	of	the	existing	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.	In	August	2015,	the	FASB	also	issued	ASU	No.	2015-14	which	deferred	the	effective	date	of	the	new	standard	by	one	year,	but allows	early	application	as	of	the	original	effective	date.	We	do	not	intend	to	adopt	the	provisions	of	the	new	standard	early,	so	the	standard	and	related amendments	will	be	effective	for	the	Company	for	its	annual	reporting	period	beginning	July	1,	2018,	including	interim	periods	within	that	reporting period.	In	March	2016,	the	FASB	issued	ASU	No.	2016-08,	which	addresses	principal	versus	agent	considerations	under	the	new	revenue	standard. ASU	No.	2016-10,	ASU	No.	2016-12,	and	ASU	No.	2016-20	also	address	specific	aspects	of	the	new	standard.	Entities	are	allowed	to	transition	to	the new	standard	by	either	recasting	prior	periods	or	recognizing	the	cumulative	effect	as	of	the	beginning	of	the	period	of	adoption.	The	Company	 is currently	evaluating	the	newly	issued	guidance,	including	which	transition	approach	will	be	applied,	and	continuing	to	assess	all	potential	impacts	of	the standard.	We	expect	the	adoption	of	this	standard	to	have	a	significant	impact	on	our	revenue	recognition	currently	subject	to	Accounting	Standards Codification	(ASC)	Topic	985.	We	are	currently	in	the	process	of	implementing	and	testing	new	software	to	assist	in	applying	the	five-step	model	to	our various	revenue	streams	and	comparing	the	results	to	our	current	accounting	practices.	One	of	the	most	significant	expected	impacts	relates	to	the recognition	of	license	and	implementation	revenue	on	our	multi-element	arrangements.	We	expect	to	recognize	license	and	install	revenue	at	the	time	of the	 install	 completion,	 rather	 than	 over	 the	 maintenance	 period	 of	 the	 software	 on	 our	 multi-element	 agreements.	We	 expect	 revenue	 related	 to hardware,	Outlink	contracts,	payment	processing,	and	professional	services	to	remain	substantially	unchanged.

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.	ASU	No.	2016- 02	will	be	effective	for	Jack	Henry's	annual	reporting	period	beginning	July	1,	2019	and	early	adoption	is	permitted.	The	Company	is	currently	assessing the	impact	this	new	standard	will	have	on	our	consolidated	financial	statements.

The	FASB	issued	ASU	No.	2016-09,	Improvements	to	Employee	Share-Based	Payment	Accounting,	in	March	2016.	 The	new	standard	is	intended	to simplify	several	aspects	of	the	accounting	and	presentation	of	share-based	payment	transactions,	including	reporting	of	excess	tax	benefits	and	shortfalls, statutory	minimum	withholding	considerations,	and	classification	within	the	statement	of	cash	flows.	The	standard	allows	a	one-time	accounting	policy election	to	either	account	for	forfeitures	as	they	occur	or	continue	to	estimate	them.	ASU	No.	2016-09	is	effective	for	the	Company's	annual	reporting period	beginning	July	1,	2017.	Management	elected	to	early	adopt	this	standard	as	of	July	1,	2016	and	has	elected	to	continue	our	current	practice	of estimating	forfeitures.	The	adoption	of	this	standard	had	the	following	impacts	on	our	condensed	consolidated	financial	statements.

•Condensed	consolidated	statements	of	income-	The	new	standard	requires	that	the	tax	effects	of	share-based	compensation	be	recognized	in the	provision	for	income	taxes.	Previously,	these	amounts	were	recognized	in	additional	paid-in	capital.	Net	tax	benefits	related	to	share-based compensation	awards	of	$2,638	for	the	year	ended	June	30,	2017	were	recognized	as	reductions	of	income	tax	expense.	These	tax	benefits reduced	our	effective	income	tax	rate	for	the	year-to-date	period	by	0.72%,	and	caused	an	increase	in	basic	and	diluted	earnings	per	share of	$0.03	for	the	year	ended	June	30,	2017.	In	addition,	in	calculating	potential	common	shares	used	to	determine	diluted	earnings	per	share, generally	accepted	accounting	principles	require	us	to	use	the	treasury	stock	method.	The	new	standard	requires	that	assumed	proceeds	under the	treasury	stock	method	be	modified	to	exclude	the	amount	of	excess	tax	benefits	that

would	have	been	recognized	in	additional	paid-in	capital.	These	changes	were	applied	on	a	prospective	basis.

•Condensed	consolidated	statements	of	cash	flows-	The	Company	elected	to	apply	the	presentation	requirements	for	cash	flows	related	to	excess tax	benefits	retrospectively;	however,	fiscal	2015	was	not	restated	due	to	immateriality.	The	restatement	for	fiscal	2016	resulted	in	an	increase	to both	net	cash	provided	by	operations	and	net	cash	used	in	financing	of	$1,306	for	the	year	ended	June	30,	2016.	The	presentation	requirements for	cash	flows	related	to	employee	taxes	paid	for	withheld	shares	had	no	impact	to	any	of	the	periods	presented	on	our	consolidated	cash	flows statements	since	such	cash	flows	have	historically	been	presented	as	a	financing	activity.

# CRITICAL	ACCOUNTING	POLICIES

We	prepare	our	consolidated	financial	statements	in	accordance	with	U.S.	GAAP.	The	significant	accounting	policies	are	discussed	in	Note	1	to	the consolidated	financial	statements.	The	preparation	of	consolidated	financial	statements	in	accordance	with	U.S.	GAAP	requires	us	to	make	estimates and	judgments	that	affect	the	reported	amounts	of	assets,	liabilities,	revenue	and	expenses,	as	well	as	disclosure	of	contingent	assets	and	liabilities.	We base	 our	 estimates	 and	 judgments	 upon	 historical	 experience	 and	 other	 factors	 believed	 to	 be	 reasonable	 under	 the	 circumstances.	 Changes	 in estimates	or	assumptions	could	result	in	a	material	adjustment	to	the	consolidated	financial	statements.

We	 have	 identified	 several	 critical	 accounting	 estimates.	An	 accounting	 estimate	 is	 considered	 critical	 if	 both:	 (a)	 the	 nature	 of	 the	 estimates	 or assumptions	is	material	due	to	the	levels	of	subjectivity	and	judgment	involved,	and	(b)	the	impact	of	changes	in	the	estimates	and	assumptions	would have	a	material	effect	on	the	consolidated	financial	statements.

# Revenue	Recognition

We	recognize	revenue	net	of	any	applicable	discounts	in	accordance	with	generally	accepted	accounting	principles	and	with	guidance	provided	within Staff	Accounting	Bulletins	issued	by	the	Securities	and	Exchange	Commission.	The	application	of	these	pronouncements	requires	judgment,	including whether	a	software	arrangement	includes	multiple	elements,	whether	any	elements	are	essential	to	the	functionality	of	any	other	elements,	and	whether vendor-specific	objective	evidence	("VSOE")	of	fair	value	exists	for	those	elements.	Customers	receive	certain	elements	of	our	products	and	services over	time.	Changes	to	the	elements	in	a	software	arrangement	or	in	our	ability	to	identify	VSOE	for	those	elements	could	materially	impact	the	amount	of earned	and	deferred	revenue	reflected	in	the	financial	statements.

License Arrangements:		For	software license	agreements,	 the	Company	recognizes	revenue	when	persuasive	evidence	of	an	arrangement	exists, delivery	of	the	product	or	service	has	occurred,	the	fee	is	fixed	or	determinable	and	collection	is	probable.	For	arrangements	where	the	fee	is	not	fixed	or determinable,	revenue	is	deferred	until	payments	become	due.	The	Company's	software	license	agreements	generally	include	multiple	products	and services	or	"elements."		Generally,	none	of	these	elements	are	deemed	to	be	essential	to	the	functionality	of	the	other	elements.

For	multiple	element	arrangements,	which	contain	software	elements	and	non-software	elements,	we	allocate	revenue	to	the	software	deliverables	as	a group	and	the	non-software	deliverables	as	a	group	based	on	the	relative	selling	prices	of	all	of	the	deliverables	in	the	arrangement.	For	our	non-software deliverables,	we	allocate	the	arrangement	consideration	based	on	the	relative	selling	price	of	the	deliverables	using	estimated	selling	price	("ESP").	For our	software	elements,	we	use	VSOE	for	this	allocation	when	it	can	be	established	and	ESP	when	VSOE	cannot	be	established.

The	selling	price	for	each	element	is	based	upon	the	following	selling	price	hierarchy:	VSOE	if	available,	third-party	evidence	("TPE")	if	VSOE	is	not available,	or	ESP	if	neither	VSOE	or	TPE	are	available.	Generally,	we	are	not	able	to	determine	TPE	because	our	go-to-market	strategy	differs	from	that of	our	peers	and	our	offerings	contain	a	significant	level	of	differentiation	such	that	the	comparable	pricing	of	products	with	similar	functionality	cannot	be obtained.	ESP	is	determined	after	considering	both	market	conditions	(such	as	the	sale	of	similar	products	in	the	market	place)	and	entity-specific	factors (such	as	pricing	practices	and	the	specifics	of	each	transaction).

For	our	non-software	deliverables,	a	delivered	item	is	accounted	for	as	a	separate	unit	of	accounting	if	the	delivered	item	has	standalone	value	and	if	the customer	has	a	general	right	of	return	relative	to	the	delivered	item,	delivery	or	performance	of	the	undelivered	item	is	probable	and	substantially	within our	control.

For	our	software	licenses	and	related	services,	including	the	software	elements	of	multiple-element	software	and	non-software	arrangements,	U.S.	GAAP generally	requires	revenue	earned	on	software	arrangements	involving	multiple	elements	to	be	allocated	to	each	element	based	on	VSOE	of	fair	value. VSOE	of	fair	value	is	determined	for	implementation	services	based	on	a	rate	per	hour	for	stand-alone	professional	services	and	the	estimated	hours	for the	bundled	implementation,	if	the	hours	can	be	reasonably	estimated.	VSOE	of	fair	value	is	determined	for	post-

contract	support	("PCS")	based	upon	the	price	charged	when	sold	separately.	For	a	majority	of	the	elements	within	our	software	arrangements,	we	have determined	that	VSOE	cannot	be	established;	therefore,	revenue	on	our	software	arrangements	is	generally	deferred	until	the	only	remaining	element	is PCS.	At	 that	 point,	 the	 entire	 arrangement	 fee	 is	 recognized	 ratably	 over	 the	 remaining	 PCS	 period,	 assuming	 that	 all	 other	 criteria	 for	 revenue recognition	have	been	met.	The	amounts	deferred	are	 included	 in	 the	balance	sheet	as	deferred	revenue	and	recognized	as	Bundled	Products	& Services	revenue	within	Support	&	Service	revenue	in	the	consolidated	statements	of	income.

For	arrangements	that	include	specified	upgrades,	such	upgrades	are	accounted	for	as	a	separate	element	of	the	arrangement.	For	those	specified upgrades	for	which	VSOE	of	fair	value	cannot	be	determined,	revenue	related	to	the	software	elements	within	the	arrangement	is	deferred	until	such specified	upgrades	have	been	delivered.

Support	and	Service	Fee	Revenue	(Non-software):	Maintenance	support	revenue	contracted	for	outside	of	a	license	arrangement	is	recognized	pro-rata over	the	contract	period,	typically	one	year.

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

Hardware	Revenue:		Hardware	revenue	is	recognized	upon	delivery	to	the	customer,	when	title	and	risk	of	loss	are	transferred.	In	most	cases,	we	do	not stock	in	inventory	the	hardware	products	we	sell,	but	arrange	for	third-party	suppliers	to	drop-ship	the	products	to	our	customers	on	our	behalf.	The revenue	related	to	these	hardware	sales	is	recorded	gross,	as	we	are	the	primary	obligor	in	the	contract	with	the	customer.	The	Company	also	re- markets	maintenance	contracts	on	hardware	to	our	customers.	Gross	hardware	maintenance	revenue	is	recognized	ratably	over	the	agreement	period.

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

# Deferred	Costs

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

Direct	and	incremental	fulfillment	costs	associated	with	arrangements	subject	to	Accounting	Standards	Codification	("ASC")	985-605	(for	which	VSOE	of fair	 value	 cannot	 be	 established)	 are	 deferred	 until	 the	 only	 remaining	 element	 in	 the	 revenue	 arrangement	 is	 PCS	 at	 which	 point	 the	 costs	 are recognized	ratably	over	the	remaining	PCS	period	with	the	related	revenue.	Deferred	direct	and	incremental	costs	associated	with	arrangements	not subject	to	ASC	985-605	consist	primarily	of	certain	up-front	costs	incurred	in	connection	with	our	software	hosting	arrangements	and	are	recognized ratably	over	the	contract	period	which	typically	ranges	from	5-7	years.	These	costs	include	commissions,	costs	of	third-party	licenses	and	the	direct	costs of	our	implementation	services,	consisting	of	payroll	and	other	fringe	benefits.

# Depreciation	and	Amortization	Expense

The	calculation	of	depreciation	and	amortization	expense	is	based	on	the	estimated	economic	lives	of	the	underlying	property,	plant	and	equipment	and intangible	assets,	which	have	been	examined	for	their	useful	life	and	determined	that	no	impairment	exists.	We	believe	it	is	unlikely	that	any	significant changes	to	the	useful	lives	of	our	tangible	and	intangible	assets	will	occur	in	the	near	term,	but	rapid	changes	in	technology	or	changes	in	market conditions	 could	 result	 in	 revisions	 to	 such	 estimates	 that	 could	 materially	 affect	 the	 carrying	 value	 of	 these	 assets	 and	 the	 Company's	 future consolidated	operating	results.	We	consider	whether	there	is	potential	for	impairment	of	any	long-lived	assets,	and	perform	testing	for	valuation	if	it	is determined	that	there	is	a	triggering	event	causing	risk	of	impairment.

# Capitalization	of	software	development	costs

We	capitalize	certain	costs	incurred	to	develop	commercial	software	products.	For	software	that	is	to	be	sold,	significant	estimates	and	assumptions include:	establishing	when	technological	feasibility	has	been	met	and	costs	should	be	capitalized,	determining	the	appropriate	period	over	which	to amortize	the	capitalized	costs	based	on	the	estimated	useful	lives,	estimating	the	marketability	of	the	commercial	software	products	and	related	future revenues,	and	assessing	the	unamortized	cost	balances	for	impairment.	Costs	incurred	prior	to	establishing	technological	feasibility	are	expensed	as incurred.	Amortization	begins	on	the	date	of	general	release	and	the	appropriate	amortization	period	is	based	on	estimates	of	future	revenues	from	sales of	the	products.	We	consider	various	factors	to	project	marketability	and	future	revenues,	including	an	assessment	of	alternative	solutions	or	products, current	and	historical	demand	for	the	product,	and	anticipated	changes	in	technology	that	may	make	the	product	obsolete.

For	 internal	use	software,	capitalization	begins	at	 the	beginning	of	application	development.	Costs incurred	prior to this	are	expensed	as incurred. Significant	estimates	and	assumptions	include	determining	the	appropriate	amortization

period	based	on	the	estimated	useful	life	and	assessing	the	unamortized	cost	balances	for	impairment.	Amortization	begins	on	the	date	the	software	is placed	in	service	and	the	amortization	period	is	based	on	estimated	useful	life.

A	significant	change	in	an	estimate	related	to	one	or	more	software	products	could	result	in	a	material	change	to	our	results	of	operations.

# Estimates	used	to	determine	current	and	deferred	income	taxes

We	make	certain	estimates	and	judgments	in	determining	income	tax	expense	for	financial	statement	purposes.	These	estimates	and	judgments	occur	in the	calculation	of	certain	tax	assets	and	liabilities,	which	arise	from	differences	in	the	timing	of	recognition	of	revenue	and	expense	for	tax	and	financial statement	purposes.	We	also	must	determine	the	likelihood	of	recoverability	of	deferred	tax	assets,	and	adjust	any	valuation	allowances	accordingly. Considerations	include	the	period	of	expiration	of	the	tax	asset,	planned	use	of	the	tax	asset,	and	historical	and	projected	taxable	income	as	well	as	tax liabilities	for	the	tax	jurisdiction	to	which	the	tax	asset	relates.	Valuation	allowances	are	evaluated	periodically	and	will	be	subject	to	change	in	each future	reporting	period	as	a	result	of	changes	in	one	or	more	of	these	factors.	Also,	liabilities	for	uncertain	tax	positions	require	significant	judgment	in determining	what	constitutes	an	individual	tax	position	as	well	as	assessing	the	outcome	of	each	tax	position.	Changes	in	judgment	as	to	recognition	or measurement	of	tax	positions	can	materially	affect	the	estimate	of	the	effective	tax	rate	and	consequently,	affect	our	financial	results.

# Assumptions	related	to	purchase	accounting	and	goodwill

We	account	for	our	acquisitions	using	the	purchase	method	of	accounting.	This	method	requires	estimates	to	determine	the	fair	values	of	assets	and liabilities	acquired,	including	judgments	to	determine	any	acquired	intangible	assets	such	as	customer-related	intangibles,	as	well	as	assessments	of	the fair	value	of	existing	assets	such	as	property	and	equipment.	Liabilities	acquired	can	include	balances	for	litigation	and	other	contingency	reserves established	prior	to	or	at	the	time	of	acquisition,	and	require	judgment	in	ascertaining	a	reasonable	value.	third-party	valuation	firms	may	be	used	to assist	in	the	appraisal	of	certain	assets	and	liabilities,	but	even	those	determinations	would	be	based	on	significant	estimates	provided	by	us,	such	as forecast	revenues	or	profits	on	contract-related	intangibles.	Numerous	factors	are	typically	considered	in	the	purchase	accounting	assessments,	which are	conducted	by	Company	professionals	 from	 legal,	 finance,	human	resources,	 information	systems,	program	management	and	other	disciplines. Changes	in	assumptions	and	estimates	of	the	acquired	assets	and	liabilities	would	result	in	changes	to	the	fair	values,	resulting	in	an	offsetting	change	to the	goodwill	balance	associated	with	the	business	acquired.

As	goodwill	is	not	amortized,	goodwill	balances	are	regularly	assessed	for	potential	impairment.	Such	assessments	require	an	analysis	of	future	cash	flow projections	as	well	as	a	determination	of	an	appropriate	discount	rate	to	calculate	present	values.	Cash	flow	projections	are	based	on	management- approved	estimates,	which	involve	the	input	of	numerous	Company	professionals	from	finance,	operations	and	program	management.	Key	factors	used in	estimating	future	cash	flows	include	assessments	of	labor	and	other	direct	costs	on	existing	contracts,	estimates	of	overhead	costs	and	other	indirect costs,	and	assessments	of	new	business	prospects	and	projected	win	rates.	The	Company's	most	recent	assessment	indicates	that	no	reporting	units	are currently	at	risk	of	impairment	as	the	fair	value	of	each	reporting	unit	is	significantly	in	excess	of	the	carrying	value.	However,	significant	changes	in	the estimates	and	assumptions	used	in	purchase	accounting	and	goodwill	impairment	testing	could	have	a	material	effect	on	the	consolidated	financial statements.

# ITEM	7A.				QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

Market	risk	refers	to	the	risk	that	a	change	in	the	level	of	one	or	more	market	prices,	interest	rates,	indices,	volatilities,	correlations	or	other	market	factors such	as	liquidity,	will	result	in	losses	for	a	certain	financial	instrument	or	group	of	financial	instruments.	We	are	currently	exposed	to	credit	risk	on	credit extended	to	customers	and	interest	risk	on	outstanding	debt.	We	do	not	currently	use	any	derivative	financial	instruments.	We	actively	monitor	these	risks through	a	variety	of	controlled	procedures	involving	senior	management.

Based	on	the	controls	in	place	and	the	credit	worthiness	of	the	customer	base,	we	believe	the	credit	risk	associated	with	the	extension	of	credit	to	our customers	will	not	have	a	material	adverse	effect	on	our	consolidated	financial	position,	results	of	operations,	or	cash	flows.

Based	on	our	outstanding	debt	with	variable	interest	rates	as	of	June	30,	2017,	a	1%	increase	in	our	borrowing	rate	would	increase	interest	expense	by $500	on	an	annual	basis.

# ITEM	8.			FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

| Reports	of	Independent	Registered	Public	Accounting	Firm | 35 |
| :--- | :--- |
| Management's\tAnnual\tReport\ton\tInternal\tControl\tover\tFinancial\tReporting | 37 |
| Financial\tStatements |  |
| Consolidated\tStatements\tof\tIncome,\nYears\tEnded\tJune\t30,\t2017,\t2016,\tand\t2015 | 38 |
| Consolidated\tBalance\tSheets,\nJune\t30,\t2017\tand\t2016 | 39 |
| Consolidated\tStatements\tof\tChanges\tin\tStockholders'\tEquity,\nYears\tEnded\tJune\t30,\t2017,\t2016,\tand\t2015 | 40 |
| Consolidated\tStatements\tof\tCash\tFlows,\nYears\tEnded\tJune\t30,\t2017,\t2016,\tand\t2015 | 41 |
| Notes\tto\tConsolidated\tFinancial\tStatements | 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.

In	our	opinion,	the	accompanying	consolidated	balance	sheets	and	the	related	consolidated	statements	of	income,	changes	in	stockholders'	equity	and cash	flows	present	fairly,	in	all	material	respects,	the	financial	position	of	Jack	Henry	&	Associates,	Inc.	and	its	subsidiaries	at	June	30,	2017	and	2016, and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	two	years	in	the	period	ended	June	30,	2017	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,	2017,	based	on	criteria	established in	Internal	Control	-	Integrated	Framework	(2013) issued	by	 the Committee	 of	 Sponsoring	 Organizations	 of	 the	 Treadway	 Commission	 (COSO).	The	 Company's	 management	 is	 responsible	 for	 these	 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	these	financial	statements	and	on	the	Company's	internal	control	over	financial	reporting	based	on	our	integrated	audits.	We	conducted	our audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and perform	 the	audits	 to	obtain	reasonable	assurance	about	whether	 the	 financial	statements	are	 free	of	material	misstatement	and	whether	effective internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audits	of	the	financial	statements	included	examining,	on	a	test	basis, evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements,	assessing	the	accounting	principles	used	and	significant	estimates	made	by management,	and	evaluating	the	overall	financial	statement	presentation.	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.

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.

/s/	PricewaterhouseCoopers	LLP

Kansas	City,	Missouri

# To	the	Board	of	Directors	and	Stockholders	of

# Monett,	Missouri

We	have	audited	the	accompanying	consolidated	statements	of	income,	changes	in	stockholders'	equity,	and	cash	flows	of	Jack	Henry	and	Associates, Inc.	and	subsidiaries	(the	"Company")	for	the	year	ended	June	30,	2015.	These	financial	statements	are	the	responsibility	of	the	Company's management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audit.

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

In	our	opinion,	such	2015	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	results	of	the	operations	and	the	cash	flows	of	Jack Henry	&	Associates,	Inc.	and	subsidiaries	for	the	year	ended	June	30,	2015,	in	conformity	with	accounting	principles	generally	accepted	in	the	United States	of	America.

/s/Deloitte	&	Touche	LLP

# 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	accounting	principles	generally	accepted	in	the	United	States	of	America.

The	Company's	internal	control	over	financial	reporting	includes	policies	and	procedures	pertaining	to	the	maintenance	of	records	that,	in	reasonable detail,	accurately	and	fairly	reflect	transactions	and	dispositions	of	assets	of	the	Company;	provide	reasonable	assurance	transactions	are	recorded	as necessary	to	permit	preparation	of	consolidated	financial	statements	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	of America,	and	receipts	and	expenditures	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,	2017,	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, 2017	was	effective.

The	 Company's	 internal	 control	 over	 financial	 reporting	 as	 of June	30,	2017	 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

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |
| License | $2,385 | $3,041 | $2,635 |
| Support\tand\tservice | 1,384,338 | 1,300,978 | 1,200,652 |
| Hardware | 44,394 | 50,627 | 52,903 |
| Total\trevenue | 1,431,117 | 1,354,646 | 1,256,190 |
| COST\tOF\tSALES |  |  |  |
| Cost\tof\tlicense | 730 | 1,197 | 1,187 |
| Cost\tof\tsupport\tand\tservice | 786,143 | 737,108 | 680,750 |
| Cost\tof\thardware | 32,161 | 35,346 | 38,399 |
| Total\tcost\tof\tsales | 819,034 | 773,651 | 720,336 |
| GROSS\tPROFIT | 612,083 | 580,995 | 535,854 |
| OPERATING\tEXPENSES |  |  |  |
| Selling\tand\tmarketing | 93,297 | 90,079 | 89,004 |
| Research\tand\tdevelopment | 84,753 | 81,234 | 71,495 |
| General\tand\tadministrative | 69,601 | 67,514 | 64,364 |
| Gain\ton\tdisposal\tof\tbusinesses | (3,270) | (19,491) | (6,874) |
| Total\toperating\texpenses | 244,381 | 219,336 | 217,989 |
| OPERATING\tINCOME | 367,702 | 361,659 | 317,865 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |
| Interest\tincome | 248 | 307 | 169 |
| Interest\texpense | (996) | (1,430) | (1,594) |
| Total\tinterest\tincome\t(expense) | (748) | (1,123) | (1,425) |
| INCOME\tBEFORE\tINCOME\tTAXES | 366,954 | 360,536 | 316,440 |
| PROVISION\tFOR\tINCOME\tTAXES | 121,161 | 111,669 | 105,219 |
| NET\tINCOME | $245,793 | $248,867 | $211,221 |
| Basic\tearnings\tper\tshare | $3.16 | $3.13 | $2.60 |
|  | 77,856 | 79,416 | 81,353 |
| Basic\tweighted\taverage\tshares\toutstanding |  |  |  |
| Diluted\tearnings\tper\tshare | $3.14 | $3.12 | $2.59 |
| Diluted\tweighted\taverage\tshares\toutstanding | 78,255 | 79,734 | 81,601 |

See	notes	to	consolidated	financial	statements

# CONSOLIDATED	BALANCE	SHEETS

# (In	Thousands,	Except	Share	and	Per	Share	Data)

|  | June	30,<br>2017 | June	30,<br>2016 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| CURRENT\tASSETS: |  |  |
| Cash\tand\tcash\tequivalents | $114,765 | $70,310 |
| Receivables,\tnet | 276,923 | 253,923 |
| Income\ttax\treceivable | 20,135 | 15,636 |
| Prepaid\texpenses\tand\tother | 66,894 | 56,588 |
| Deferred\tcosts | 41,314 | 35,472 |
| Total\tcurrent\tassets | 520,031 | 431,929 |
| PROPERTY\tAND\tEQUIPMENT,\tnet | 282,934 | 298,564 |
| OTHER\tASSETS: |  |  |
| Non-current\tdeferred\tcosts | 96,847 | 99,799 |
| Computer\tsoftware,\tnet\tof\tamortization | 247,317 | 222,115 |
| Other\tnon-current\tassets | 82,525 | 70,461 |
| Customer\trelationships,\tnet\tof\tamortization | 90,433 | 104,085 |
| Other\tintangible\tassets,\tnet\tof\tamortization | 36,393 | 35,706 |
| Goodwill | 552,465 | 552,853 |
| Total\tother\tassets | 1,105,980 | 1,085,019 |
| Total\tassets | $1,908,945 | $1,815,512 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| CURRENT\tLIABILITIES: |  |  |
| Accounts\tpayable | $6,841 | $14,596 |
| Accrued\texpenses | 81,574 | 85,411 |
| Notes\tpayable\tand\tcurrent\tmaturities\tof\tlong-term\tdebt | — | 200 |
| Deferred\trevenues | 382,777 | 343,525 |
| Total\tcurrent\tliabilities | 471,192 | 443,732 |
| LONG-TERM\tLIABILITIES: |  |  |
| Non-current\tdeferred\trevenues | 128,607 | 177,529 |
| Non-current\tdeferred\tincome\ttax\tliability | 219,541 | 188,601 |
| Debt,\tnet\tof\tcurrent\tmaturities | 50,000 | — |
| Other\tlong-term\tliabilities | 7,554 | 9,440 |
| Total\tlong-term\tliabilities | 405,702 | 375,570 |
| Total\tliabilities | 876,894 | 819,302 |
| STOCKHOLDERS'\tEQUITY |  |  |
| Preferred\tstock\t-\t$1\tpar\tvalue;\t500,000\tshares\tauthorized,\tnone\tissued | — | — |
| Common\tstock\t-\t$0.01\tpar\tvalue;\t250,000,000\tshares\tauthorized; |  |  |
| 103,083,299\tshares\tissued\tat\tJune\t30,\t2017; |  |  |
| 102,903,971\tshares\tissued\tat\tJune\t30,\t2016 | 1,031 | 1,029 |
| Additional\tpaid-in\tcapital | 452,016 | 440,123 |
| Retained\tearnings | 1,585,278 | 1,431,192 |
| Less\ttreasury\tstock\tat\tcost |  |  |
| 25,660,212\tshares\tat\tJune\t30,\t2017; |  |  |
| 24,208,517\tshares\tat\tJune\t30,\t2016 | (1,006,274) | (876,134) |
| Total\tstockholders'\tequity | 1,032,051 | 996,210 |
| Total\tliabilities\tand\tequity | $1,908,945 | $1,815,512 |

# CONSOLIDATED	STATEMENTS	OF	CHANGES	IN	STOCKHOLDERS'	EQUITY

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| PREFERRED\tSHARES: | — | — | — |
| COMMON\tSHARES: |  |  |  |
| Shares,\tbeginning\tof\tyear | 102,903,971 | 102,695,214 | 102,429,926 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | 98,781 | 121,348 | 172,661 |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 80,547 | 87,409 | 92,627 |
| Shares,\tend\tof\tyear | 103,083,299 | 102,903,971 | 102,695,214 |
| COMMON\tSTOCK\t-\tPAR\tVALUE\t\t$0.01\tPER\tSHARE: |  |  |  |
| Balance,\tbeginning\tof\tyear | $1,029 | $1,027 | $1,024 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | 1 | 1 | 2 |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 1 | 1 | 1 |
| Balance,\tend\tof\tyear | $1,031 | $1,029 | $1,027 |
| ADDITIONAL\tPAID-IN\tCAPITAL: |  |  |  |
| Balance,\tbeginning\tof\tyear | $440,123 | $424,536 | $412,512 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | (1) | 696 | 640 |
| Tax\twithholding\trelated\tto\tshare\tbased\tcompensation | (5,479) | (2,590) | (7,951) |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 6,244 | 5,710 | 4,880 |
| Tax\tbenefits\tfrom\tshare-based\tcompensation | — | 1,051 | 4,343 |
| Stock-based\tcompensation\texpense | 11,129 | 10,720 | 10,112 |
| Balance,\tend\tof\tyear | $452,016 | $440,123 | $424,536 |
| RETAINED\tEARNINGS: |  |  |  |
| Balance,\tbeginning\tof\tyear | $1,431,192 | $1,266,443 | $1,131,632 |
| Net\tincome | 245,793 | 248,867 | 211,221 |
| Dividends | (91,707) | (84,118) | (76,410) |
| Balance,\tend\tof\tyear | $1,585,278 | $1,431,192 | $1,266,443 |
| TREASURY\tSTOCK: |  |  |  |
| Balance,\tbeginning\tof\tyear | $(876,134) | $(700,472) | $(577,781) |
| Purchase\tof\ttreasury\tshares | (130,140) | (175,662) | (122,691) |
| Balance,\tend\tof\tyear | $(1,006,274) | $(876,134) | $(700,472) |
| TOTAL\tSTOCKHOLDERS'\tEQUITY | $1,032,051 | $996,210 | $991,534 |
| Dividends\tdeclared\tper\tshare | $1.18 | $1.06 | $0.94 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

# (In	Thousands)

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tFROM\tOPERATING\tACTIVITIES: |  |  |  |
| Net\tIncome | $245,793 | $248,867 | $211,221 |
| Adjustments\tto\treconcile\tnet\tincome\tfrom\toperations\n\t\t\t\t\tto\tnet\tcash\tfrom\toperating\tactivities: |  |  |  |
| Depreciation | 49,677 | 50,571 | 54,155 |
| Amortization | 90,109 | 79,077 | 64,841 |
| Change\tin\tdeferred\tincome\ttaxes | 30,940 | 37,524 | 29,443 |
| Other | — | — | (4,343) |
| Expense\tfor\tstock-based\tcompensation | 11,129 | 10,720 | 10,112 |
| (Gain)/loss\ton\tdisposal\tof\tassets\tand\tbusinesses | 4,771 | (16,888) | (5,046) |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Change\tin\treceivables | (22,499) | (13,735) | (21,346) |
| Change\tin\tprepaid\texpenses,\tdeferred\tcosts\tand\tother | (25,088) | (29,577) | (33,858) |
| Change\tin\taccounts\tpayable | (7,812) | 4,663 | (583) |
| Change\tin\taccrued\texpenses | (4,454) | 7,460 | 14,483 |
| Change\tin\tincome\ttaxes | (6,444) | (16,624) | 14,146 |
| Change\tin\tdeferred\trevenues | (8,800) | 4,364 | 40,565 |
| Net\tcash\tfrom\toperating\tactivities | 357,322 | 366,422 | 373,790 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |
| Payment\tfor\tacquisitions,\tnet\tof\tcash\tacquired | — | (8,275) | — |
| Capital\texpenditures | (41,947) | (56,325) | (54,409) |
| Proceeds\tfrom\tthe\tsale\tof\tbusinesses | 5,632 | 34,030 | 8,135 |
| Proceeds\tfrom\tthe\tsale\tof\tassets | 968 | 2,844 | 182 |
| Internal\tuse\tsoftware | (16,608) | (11,826) | (14,020) |
| Computer\tsoftware\tdeveloped | (89,631) | (96,411) | (76,872) |
| Net\tcash\tfrom\tinvesting\tactivities | (141,586) | (135,963) | (136,984) |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |
| Borrowings\ton\tcredit\tfacilities | 80,000 | 100,000 | 90,000 |
| Repayments\ton\tcredit\tfacilities | (30,200) | (152,500) | (50,783) |
| Debt\tacquisition\tcosts | — | — | (901) |
| Purchase\tof\ttreasury\tstock | (130,140) | (175,662) | (122,691) |
| Dividends\tpaid | (91,707) | (84,118) | (76,410) |
| Other | — | — | 4,343 |
| Proceeds\tfrom\tissuance\tof\tcommon\tstock\tupon\texercise\tof\tstock\toptions | 1 | 697 | 642 |
| Minimum\ttax\twithholding\tpayments\trelated\tto\tshare\tbased\tcompensation | (5,480) | (2,590) | (7,951) |
| Proceeds\tfrom\tsale\tof\tcommon\tstock | 6,245 | 5,711 | 4,881 |
| Net\tcash\tfrom\tfinancing\tactivities | (171,281) | (308,462) | (158,870) |
| NET\tCHANGE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | $44,455 | $(78,003) | $77,936 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tPERIOD | $70,310 | $148,313 | $70,377 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tPERIOD | $114,765 | $70,310 | $148,313 |

# 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	software	implementation	services	for financial	institutions	to	utilize	JHA	software	systems,	and	by	providing	other	related	services.	JHA	also	provides	continuing	support	and	services	to customers	using	in-house	or	outsourced	systems.

# CONSOLIDATION

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

# USE	OF	ESTIMATES

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

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

For	multiple	element	arrangements,	which	contain	software	elements	and	non-software	elements,	we	allocate	revenue	to	the	software	deliverables	and the	 non-software	 deliverables	 as	 a	 group	 based	 on	 the	 relative	 selling	 prices	 of	 all	 of	 the	 deliverables	 in	 the	 arrangement.	For	 our	 non-software deliverables,	we	allocate	the	arrangement	consideration	based	on	the	relative	selling	price	of	the	deliverables	using	estimated	selling	price	("ESP").	For our	software	elements,	we	use	vendor-specific	objective	evidence	("VSOE")	for	this	allocation	when	it	can	be	established	and	ESP	when	VSOE	cannot be	established.

For	our	software	licenses	and	related	services,	including	the	software	elements	of	multiple-element	software	and	non-software	arrangements,	U.S.	GAAP generally	require	revenue	earned	on	software	arrangements	 involving	multiple	elements	 to	be	allocated	 to	each	element	based	on	vendor-specific objective	evidence	("VSOE")	of	 fair	value.	VSOE	of	 fair	value	 is	determined	 for	 implementation	services	based	on	a	rate	per	hour	 for	stand-alone professional	 services	 and	 the	 estimated	 hours	 for	 the	 bundled	 implementation,	 if	 the	 hours	 can	 be	 reasonably	 estimated.	 VSOE	 of	 fair	 value	 is determined	for	post-contract	support	("PCS")	based	upon	the	price	charged	when	sold	separately.	For	a	majority	of	the	elements	within	our	software arrangements,	we	have	determined	that	VSOE	cannot	be	established;	therefore,	revenue	on	our	software	arrangements	is	generally	deferred	until	the only	remaining	element	is	post-contract	support	("PCS").	At	that	point,	the	entire	arrangement	fee	is	recognized	ratably	over	the	remaining	PCS	period, assuming	that

all	other	criteria	for	revenue	recognition	have	been	met.	The	amounts	deferred	are	included	in	the	balance	sheet	as	deferred	revenue	and	recognized	as Bundled	Products	&	Services	revenue	within	Support	&	Service	revenue	in	the	consolidated	statements	of	income.

Hardware	Revenue:		Hardware	revenue	is	recognized	upon	delivery	to	the	customer,	when	title	and	risk	of	loss	are	transferred.	In	most	cases,	we	do	not stock	in	inventory	the	hardware	products	we	sell,	but	arrange	for	third-party	suppliers	to	drop-ship	the	products	to	our	customers	on	our	behalf.	The revenue	related	to	these	hardware	sales	is	recorded	gross,	as	we	are	the	primary	obligor	in	the	contract	with	the	customer.	The	Company	also	remarkets maintenance	contracts	on	hardware	to	our	customers.	Hardware	maintenance	revenue	is	recognized	ratably	over	the	agreement	period.

Direct	and	incremental	costs	associated	with	arrangements	subject	to	Accounting	Standards	Codification	("ASC")	985-605	(for	which	VSOE	of	fair	value cannot	be	established)	are	deferred	until	the	only	remaining	element	in	the	revenue	arrangement	is	PCS	at	which	point	the	costs	are	recognized	ratably over	the	remaining	PCS	period	with	the	related	revenue.	Deferred	direct	and	incremental	costs	associated	with	arrangements	not	subject	to	ASC	985- 605	consist	primarily	of	certain	up-front	costs	incurred	in	connection	with	our	software	hosting	arrangements	and	are	recognized	ratably	over	the	contract period	which	typically	ranges	from	5-7	years.	These	costs	include	commissions,	costs	of	third-party	licenses	and	the	direct	costs	of	our	implementation services,	consisting	of	payroll	and	other	fringe	benefits.

# DEFERRED	REVENUES

Deferred	revenues	consist	primarily	of	prepaid	annual	software	support	fees,	deferred	bundled	software	arrangements	revenue,	and	prepaid	hardware maintenance	fees.	Deferred	bundled	software	arrangements	revenue	and	hardware	maintenance	contracts	may	be	recognized	over	multiple	years; therefore,	the	related	deferred	revenue	and	maintenance	are	classified	as	current	or	non-current	in	accordance	with	the	terms	of	the	contract.	Software and	hardware	deposits	received	are	also	reflected	as	deferred	revenues.

The	vast	majority	of	our	maintenance	(PCS)	renews	annually	and	runs	from	July	1	to	June	30.	Renewal	billings	are	submitted	to	customers	each	June and	the	Company	has	the	right	to	bill	at	that	date;	therefore	we	include	those	billings	as	gross	in	deferred	revenue	and	as	a	receivable	on	our	balance sheet	at	the	end	of	each	fiscal	year.

# 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	Cost	of	support	and	service.

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	(such	as	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	and	other	indefinite-lived intangible	assets	for	impairment	of	value	on	an	annual	basis	as	of	January	1	and	between	annual	tests	if	events	or	changes	in	circumstances	indicate that	the	asset	might	be	impaired.

# COMPREHENSIVE	INCOME

Comprehensive	income	for	each	of	the	years	ending	 June	30,	2017,	2016,	and	2015	equals	the	Company's	net	income.

# REPORTABLE	SEGMENT	INFORMATION

In	accordance	with	U.S.	GAAP,	the	Company's	operations	are	classified	as	two	reportable	segments:	bank	systems	and	services	and	credit	union systems	and	services	(see	Note	13).	Revenue	by	type	of	product	and	service	is	presented	on	the	face	of	the	consolidated	statements	of	income. Substantially	all	the	Company's	revenues	are	derived	from	operations	and	assets	located	within	the	United	States	of	America.

# COMMON	STOCK

# 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.	Our	policy	is	to	include	interest	and	penalties	related to	unrecognized	tax	benefits	in	income	tax	expense.

•Condensed	consolidated	statements	of	income-	The	new	standard	requires	that	the	tax	effects	of	share-based	compensation	be	recognized	in the	provision	for	income	taxes.	Previously,	these	amounts	were	recognized	in	additional	paid-in	capital.	Net	tax	benefits	related	to	share-based compensation	awards	of	$2,638	for	the	year	ended	June	30,	2017	were	recognized	as	reductions	of	income	tax	expense.	These	tax	benefits reduced	our	effective	income	tax	rate	for	the	year-to-date	period	by	0.72%,	and	caused	an	increase	in	basic	and	diluted	earnings	per	share of	$0.03	for	the	year	ended	June	30,	2017.	In	addition,	in	calculating	potential	common	shares	used	to	determine	diluted	earnings	per	share, generally	accepted	accounting	principles	require	us	to	use	the	treasury	stock	method.	The	new	standard	requires	that	assumed	proceeds	under the	treasury	stock	method	be	modified	to	exclude	the	amount	of	excess	tax	benefits	that	would	have	been	recognized	in	additional	paid-in capital.	These	changes	were	applied	on	a	prospective	basis.

# NOTE	2.				FAIR	VALUE	OF	FINANCIAL	INSTRUMENTS

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

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

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

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

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

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

|  |  | Estimated	Fair	Value	Measurements | Estimated	Fair	Value	Measurements | Total	Fair |
| :--- | :--- | :--- | :--- | :--- |
| Recurring\tFair\tValue\tMeasurements | Level\t1 | Level\t2 | Level\t3 | Value |
| June\t30,\t2017 |  |  |  |  |
| Financial\tAssets: |  |  |  |  |
| Money\tmarket\tfunds | $68,474 | $— | $— | $68,474 |
| Certificate\tof\tDeposit | $— | $2,001 | $— | $2,001 |
| Financial\tLiabilities: |  |  |  |  |
| Revolving\tcredit\tfacility | $— | $50,000 | $— | $50,000 |
| June\t30,\t2016 |  |  |  |  |
| Financial\tAssets: |  |  |  |  |
| Money\tmarket\tfunds | $35,782 | $— | $— | $35,782 |
| Certificate\tof\tDeposit | $— | $1,000 | $— | $1,000 |
| Financial\tLiabilities: |  |  |  |  |
| Revolving\tcredit\tfacility | $— | $— | $— | $— |
| Non-Recurring\tFair\tValue\tMeasurements |  |  |  |  |
| June\t30,\t2017 |  |  |  |  |
| Long-lived\tassets\theld\tfor\tsale\t^(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	period.	These	assets	are	expected	to	be	disposed	of	by	sale	within the	twelve	months	of	June	30,	2017.

# NOTE	3.				PROPERTY	AND	EQUIPMENT

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

|  | June	30, | June	30, |  |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 | Estimated\tUseful\tLife |
| Land | $24,987 | $24,987 |  |
| Land\timprovements | 25,362 | 25,470 | 5\t-\t20\tyears |
| Buildings | 143,350 | 146,464 | 20\t-\t30\tyears |
| Leasehold\timprovements | 47,291 | 46,897 | 5\t-\t30\tyears (1) |
| Equipment\tand\tfurniture | 332,465 | 337,565 | 3\t-\t10\tyears |
| Aircraft\tand\tequipment | 38,522 | 37,967 | 4\t-\t10\tyears |
| Construction\tin\tprogress | 15,971 | 7,373 |  |
|  | 627,948 | 626,723 |  |
| Less\taccumulated\tdepreciation | 345,014 | 328,159 |  |
| Property\tand\tequipment,\tnet | $282,934 | $298,564 |  |

# (1)		Lesser	of	lease	term	or	estimated	useful	life

Property	and	equipment	included	$534	and	$651	that	was	in	accrued	liabilities	at	 June	30,	2017	and	2016,	respectively.	These	amounts	were	excluded from	capital	expenditures	on	the	statements	of	cash	flows.

In	fiscal	2017,	we	recorded	an	impairment	loss	on	one	of	our	facilities	of	 $3,275	due	to	damage	caused	by	water	intrusion	around	the	facility's	windows and	roof.	The	impairment	loss	is	included	in	the	caption	"Cost	of	support	and	service"	in	our	consolidated	statements	of	income	and	is	included	in	our Bank	segment.

# NOTE	4.				OTHER	ASSETS

# Goodwill

The	carrying	amount	of	goodwill	for	the	years	ended	 June	30,	2017	and	2016,	by	reportable	segments,	is	as	follows:

|  | June	30, |  |
| :--- | :--- | :--- |
| Bank\tsystems\tand\tservices | 2017 | 2016 |
| Beginning\tbalance | $423,282 | $420,795 |
| Goodwill,\tacquired\tduring\tthe\tyear | — | 6,099 |
| Goodwill,\twritten-off\trelated\tto\tsale | (388) | (3,612) |
| Ending\tbalance | $422,894 | $423,282 |
| Credit\tUnion\tsystems\tand\tservices |  |  |
| Beginning\tbalance | $129,571 | $129,571 |
| Goodwill,\tacquired\tduring\tthe\tyear | — | — |
| Ending\tbalance | $129,571 | $129,571 |

The	Goodwill	written-off	during	fiscal	2017	was	a	result	of	our	sale	of	our	Regulatory	Filing	products	to	Fed	Reporter	on	May	1,	2017.	Goodwill	allocated to	the	carrying	amount	of	the	net	assets	sold	(mainly	computer	software)	was	calculated	based	on	the	relative	fair	values	of	the	business	disposed	and the	portion	of	the	reporting	unit	that	was	retained.

The	goodwill	acquired	during	fiscal	2016	 of	$6,099	was	a	result	of	our	purchase	of	Bayside	Business	Solutions,	Inc.	The	goodwill	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	Bayside	Business	Solutions,	together	with	the	value	of	Bayside	Business	Solutions'	assembled	workforce.	Goodwill	from	this	acquisition	has	been allocated	to	our	Bank	segment.

During	fiscal	2016	the	Company	sold	its	Alogent	business	(Alogent)	to	Antelope	Acquisition	Co.,	an	affiliate	of	Battery	Ventures.	 Alogent	was	included	in our	Bank	segment.	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:

|  | Gross	Carrying<br>Amount | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Customer\trelationships | $262,693 | $(172,260) | $90,433 |
| Computer\tsoftware | $543,913 | $(296,596) | $247,317 |
| Other\tintangible\tassets: | $71,190 | $(34,797) | $36,393 |

|  | Gross	Carrying	Amount | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Customer\trelationships | $266,545 | $(162,460) | $104,085 |
| Computer\tsoftware | $474,738 | $(252,623) | $222,115 |
| Other\tintangible\tassets: | $56,494 | $(20,788) | $35,706 |

Customer	relationships	have	lives	ranging	from	5	to	20	years.

Computer	software	includes	the	unamortized	cost	of	commercial	software	products	developed	or	acquired	by	the	Company,	which	are	capitalized	and amortized	over	useful	lives	generally	ranging	from	5	to	10	years.	Amortization	expense	for	computer	software	totaled	$60,880,	$54,810,	and	$43,798	for the	fiscal	years	ended	June	30,	2017,	2016,	and	2015,	respectively.	There	were	no	material	impairments	in	any	of	the	fiscal	years	presented.

Our	other	intangible	assets	have	useful	lives	ranging	from 3	to	20	years.

| Years	Ending	June	30, | Computer	Software | Customer<br>Relationships | Other	Intangible<br>Assets | Total |
| :--- | :--- | :--- | :--- | :--- |
| 2018 | $60,412 | $12,220 | $12,779 | $85,411 |
| 2019 | 52,157 | 11,978 | 8,462 | 72,597 |
| 2020 | 41,555 | 10,074 | 2,962 | 54,591 |
| 2021 | 24,874 | 8,430 | 641 | 33,945 |
| 2022 | 9,522 | 7,811 | 613 | 17,946 |

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

|  | June	30,<br>2017 | June	30,<br>2016 |
| :--- | :--- | :--- |
| LONG-TERM\tDEBT |  |  |
| Revolving\tcredit\tfacility | $50,000 | $— |
| SHORT-TERM\tDEBT |  |  |
| Capital\tleases | $— | $200 |

# The	following	table	summarizes	the	future	annual	principal	payments	required	for	all	outstanding	debt	as	of June	30,	2017:

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,	2017,	 the	Company	was	 in	compliance	with	all	such	covenants.	The	revolving	 loan	 terminates February	20,	2020	and	at	June	30,	2017	there	was	a	$50,000	outstanding	balance.

The	Company	renewed	an	unsecured	bank	credit	line	on	 April	24,	2017	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,	2019.	At	June	30,	2017,	no	amount	was	outstanding.

# Interest

# NOTE	6.				COMMITMENTS	AND	CONTINGENCIES

# Property	and	Equipment

The	 Company	 had	no	 material	 commitments	 at	June	30,	2017	to	purchase	property	and	equipment.	There	were	also	 no	material	commitments	at June	30,	2016.

# Leases

The	Company	leases	certain	property	under	operating	leases	which	expire	over	the	next	 13	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,	2017,	net	future	minimum	lease	payments	are	as	follows:

# NOTE	7.				INCOME	TAXES

# The	provision	for	income	taxes	consists	of	the	following:

|  | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- |
| Current: |  |  |  |
| Federal | $80,752 | $66,574 | $70,555 |
| State | 9,469 | 7,571 | 5,221 |
| Deferred: |  |  |  |
| Federal | 25,756 | 34,355 | 28,018 |
| State | 5,184 | 3,169 | 1,425 |
|  | $121,161 | $111,669 | $105,219 |

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

|  |  | 2017 | 2016 |
| :--- | :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |  |
| Contract\tand\tservice\trevenues\tand\tcosts | Contract\tand\tservice\trevenues\tand\tcosts | $54,908 | $69,597 |
| Expense\treserves\t(bad\tdebts,\tinsurance,\tfranchise\ttax\tand\tvacation) | Expense\treserves\t(bad\tdebts,\tinsurance,\tfranchise\ttax\tand\tvacation) | 14,648 | 14,770 |
| Net\toperating\tloss\tcarryforwards |  | 3,547 | 3,543 |
| Other,\tnet | Other,\tnet | 2,119 | 2,090 |
| Total\tgross\tdeferred\ttax\tassets |  | 75,222 | 90,000 |
| Valuation\tallowance | Valuation\tallowance | (357) | (608) |
| Net\tdeferred\ttax\tassets |  | 74,865 | 89,392 |
| Deferred\ttax\tliabilities: |  |  |  |
| Accelerated\ttax\tdepreciation | Accelerated\ttax\tdepreciation | (36,994) | (40,857) |
| Accelerated\ttax\tamortization |  | (178,999) | (160,719) |
| Contract\tand\tservice\trevenues\tand\tcosts | Contract\tand\tservice\trevenues\tand\tcosts | (78,413) | (76,417) |
| Total\tgross\tdeferred\tliabilities |  | (294,406) | (277,993) |
| Net\tdeferred\ttax\tliability |  | $(219,541) | $(188,601) |
| The\tfollowing\tanalysis\treconciles\tthe\tstatutory\tfederal\tincome\ttax\trate\tto\tthe\teffective\tincome\ttax\trates\treflected\tabove: |  |  |  |
|  |  | Year\tEnded\tJune\t30, |  |
| 2017 |  | 2016 | 2015 |
| Computed\t"expected"\ttax\texpense | 35.0\t% | 35.0\t% | 35.0\t% |
| Increase\t(reduction)\tin\ttaxes\tresulting\tfrom: |  |  |  |
| State\tincome\ttaxes,\tnet\tof\tfederal\tincome\ttax\tbenefits | 2.6\t% | 1.9\t% | 1.4\t% |
| Research\tand\tdevelopment\tcredit | (2.0)% | (2.5)% | (1.5)% |
| Domestic\tproduction\tactivities\tdeduction | (2.1)% | (1.9)% | (2.0)% |
| Tax\tover\tbook\tbasis\tin\tsubsidiary\tstock | —\t% | (1.7)% | —\t% |
| Tax\teffects\tof\tshare-based\tpayments | (0.7)% | —\t% | —\t% |
| Other\t(net) | 0.2\t% | 0.2\t% | 0.4\t% |
|  | 33.0\t% | 31.0\t% | 33.3\t% |

As	 of	June	30,	2017,	 we	 have	$5,193	of	gross	 federal	net	operating	 loss	("NOL")	carryforwards	pertaining	 to	 the	acquisition	of	Goldleaf	Financial Solutions,	 Inc.,	 which	 are	 expected	 to	 be	 utilized	 after	 the	 application	 of	 IRC	 Section	 382.	 Separately,	 as	 of	June	30,	2017,	 we	 have	 state	 NOL carryforwards	with	a	tax-effected	value	of	$1,731.	The	federal	and	state	losses	have	varying	expiration	dates,	ranging	from	fiscal	year	 2017	to	2036. Based	on	state	tax	rules	which	restrict	our	utilization	of	these	losses,	we	believe	it	is	more	likely	than	not	that	$357	of	these	losses	will	expire	unutilized.

At	June	30,	2017,	the	Company	had	 $5,449	of	gross	unrecognized	tax	benefits,	$3,990	of	which,	if	recognized,	would	affect	our	effective	tax	rate.	At June	30,	2016,	 the	Company	had	 $7,421	of	unrecognized	 tax	benefits,	$5,986	of	which,	if	recognized,	would	affect	our	effective	tax	rate.	We	had accrued	interest	and	penalties	of	$995	and	$1,178	related	to	uncertain	tax	positions	at	June	30,	2017	and	2016,	respectively.	The	income	tax	provision included	interest	expense	and	penalties	(or	benefits)	on	unrecognized	tax	benefits	of	$(105),	$47,	and	$(155)	in	the	years	ending	June	30,	2017,	2016, and	2015,	respectively.

| and	2015,	respectively. |  |
| :--- | :--- |
| A\treconciliation\tof\tthe\tunrecognized\ttax\tbenefits\tfor\tthe\tyears\tended\nJune\t30,\t2017\tand\t2016\tfollows: |  |
|  | Unrecognized\tTax\nBenefits |
| Balance\tat\tJuly\t1,\t2015 | $7,104 |
| Additions\tfor\tcurrent\tyear\ttax\tpositions | 1,581 |
| Reductions\tfor\tcurrent\tyear\ttax\tpositions | (56) |
| Additions\tfor\tprior\tyear\ttax\tpositions | 507 |
| Reductions\tfor\tprior\tyear\ttax\tpositions | (38) |
| Reductions\trelated\tto\texpirations\tof\tstatute\tof\tlimitations | (1,677) |
| Balance\tat\tJune\t30,\t2016 | 7,421 |
| Additions\tfor\tcurrent\tyear\ttax\tpositions | 1,457 |
| Reductions\tfor\tcurrent\tyear\ttax\tpositions | — |
| Additions\tfor\tprior\tyear\ttax\tpositions | 23 |
| Reductions\tfor\tprior\tyear\ttax\tpositions | (766) |
| Settlements | (1,040) |
| Reductions\trelated\tto\texpirations\tof\tstatute\tof\tlimitations | (1,646) |
| Balance\tat\tJune\t30,\t2017 | $5,449 |

During	the	period	ended	June	30,	2016,	the	Internal	Revenue	Service	commenced	an	examination	of	the	Company's	U.S.	federal	income	tax	returns	for fiscal	 years	 ended	June	30,	2014	 and	2015.	The	 examination	 was	 completed	 during	 the	 quarter	 ending	December	 31,	 2016.	 The	 closing	 of	 the examination	did	not	result	in	a	material	change	to	the	Company's	financial	statements.

The	U.S.	federal	and	state	income	tax	returns	for	 June	30,	2014	and	all	subsequent	years	remain	subject	to	examination	as	of	June	30,	2017	under statute	 of	 limitations	 rules.	 We	 anticipate	 that	 potential	 changes	 due	 to	 lapsing	 statutes	 of	 limitations	 and	 examination	 closures	 could	 reduce	 the unrecognized	tax	benefits	balance	by	$500	-	$1,500	within	twelve	months	of	June	30,	2017.

# 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,	2017	and	2016)	are	maintained	for	potential credit	losses.

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

# 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<br>Exercise	Price | Aggregate<br>	Intrinsic<br>	Value |
| :--- | :--- | :--- | :--- |
| Outstanding\tJuly\t1,\t2014 | 125 | $22.29 |  |
| Granted | — | — |  |
| Forfeited | — | — |  |
| Exercised | (25) | 19.17 |  |
| Outstanding\tJuly\t1,\t2015 | 100 | 23.07 |  |
| Granted | — | — |  |
| Forfeited | — | — |  |
| Exercised | (50) | 23.99 |  |
| Outstanding\tJuly\t1,\t2016 | 50 | 22.14 |  |
| Granted | 32 | 87.27 |  |
| Forfeited | — | — |  |
| Exercised | (10) | 28.52 |  |
| Outstanding\tJune\t30,\t2017 | 72 | $50.04 | $3,859 |
| Vested\tand\tExpected\tto\tVest\tJune\t30,\t2017 | 72 | $50.04 | $3,859 |
| Exercisable\tJune\t30,\t2017 | 40 | $20.55 | $3,333 |

There	were	32	options	granted	in	fiscal	2017,	and	no	options	granted	during	either	of	the	two	prior	years	presented.	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 our	 estimate	 was	 determined	 from	 external	 data,	 while	 volatility,	 expected	 life,	 and	 dividend	 yield	 assumptions	 were	 derived	 from	 our	 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 |
| :--- | :--- |
| Volatility | 19.60% |
| Risk\tfree\tinterest\trate | 1.24% |
| Dividend\tyield | 1.28% |

At	June	30,	2017,	there	was	$334	of	compensation	cost	yet	to	be	recognized	related	to	outstanding	options.	The	weighted	average	remaining	contractual term	on	options	currently	exercisable	as	of	June	30,	2017	was	1.88	years.

# 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	will	be	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<br>Average<br>Grant	Date<br>Fair	Value |
| :--- | :--- | :--- |
| Outstanding\tJuly\t1,\t2014 | 138 | 33.56 |
| Granted | 12 | 57.77 |
| Vested | (71) | 35.69 |
| Forfeited | (7) | 46.39 |
| Outstanding\tJuly\t1,\t2015 | 72 | 34.28 |
| Granted | 22 | 66.31 |
| Vested | (24) | 43.45 |
| Forfeited | (12) | 23.82 |
| Outstanding\tJuly\t1,\t2016 | 58 | 44.95 |
| Granted | 17 | 87.27 |
| Vested | (38) | 37.00 |
| Forfeited | (1) | 65.52 |
| Outstanding\tJune\t30,\t2017 | 36 | $73.66 |

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	17	non-vested	share	awards	granted	during	the	year	ending	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,	2017,	there	was	$1,094	of	compensation	expense	that	has	yet	to	be	recognized	related	to	non-vested	restricted	stock	share	awards,	which will	be	recognized	over	a	weighted-average	period	of	0.96	years.

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,	2017,	as	well	as	activity	for	the	year	then	ended:

| Unit	awards | Shares | Weighted<br>Average<br>Grant	Date<br>Fair	Value | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- |
| Outstanding\tJuly\t1,\t2014 | 709 | 31.66 |  |
| Granted | 178 | 53.62 |  |
| Vested | (277) | 19.69 |  |
| Forfeited | (111) | 22.74 |  |
| Outstanding\tJuly\t1,\t2015 | 499 | 48.13 |  |
| Granted | 130 | 75.99 |  |
| Vested | (99) | 44.09 |  |
| Forfeited | (101) | 45.89 |  |
| Outstanding\tJuly\t1,\t2016 | 429 | 58.06 |  |
| Granted | 130 | 77.75 |  |
| Vested | (136) | 50.12 |  |
| Forfeited | (37) | 54.30 |  |
| Outstanding\tJune\t30,\t2017 | 386 | $67.84 | $40,043 |

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, |  |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 | 2015 |
| Volatility | 16.0% | 15.6% | 17.8% |
| Risk\tfree\tinterest\trate | 0.93% | 1.06% | 1.06% |
| Dividend\tyield | 1.3% | 1.5% | 1.5% |
| Stock\tBeta | 0.684 | 0.741 | 0.765 |

For	the	year	ended	June	30,	2017,	85	unit	awards	were	granted	and	measured	using	the	above	assumptions.	The	remaining	45	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,	2017,	there	was	$9,887	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.

# NOTE	10.				EARNINGS	PER	SHARE

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

|  |  | Year	Ended	June	30, |  |
| :--- | :--- | :--- | :--- |
|  | 2017 | 2016 | 2015 |
| Net\tIncome | $245,793 | $248,867 | $211,221 |
| Common\tshare\tinformation: |  |  |  |
| Weighted\taverage\tshares\toutstanding\tfor\tbasic\tearnings\tper\tshare | 77,856 | 79,416 | 81,353 |
| Dilutive\teffect\tof\tstock\toptions\tand\trestricted\tstock | 399 | 318 | 248 |
| Weighted\taverage\tshares\toutstanding\tfor\tdiluted\tearnings\tper\tshare | 78,255 | 79,734 | 81,601 |
| Basic\tearnings\tper\tshare | $3.16 | $3.13 | $2.60 |
| Diluted\tearnings\tper\tshare | $3.14 | $3.12 | $2.59 |

Per	share	information	is	based	on	the	weighted	average	number	of	common	shares	outstanding	for	each	of	the	fiscal	years.	Stock	options	and	restricted stock	have	been	included	in	the	calculation	of	earnings	per	share	to	the	extent	they	are	dilutive.	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	32	anti-dilutive	stock	options	and	restricted stock	excluded	for	fiscal	2017,	0	shares	excluded	for	fiscal	2016,	and	0	shares	excluded	for	fiscal	2015.

# NOTE	11.				EMPLOYEE	BENEFIT	PLANS

The	Company	established	an	employee	stock	purchase	plan	in	 2006.	The	plan	allows	the	majority	of	employees	the	opportunity	to	directly	purchase shares	of	the	Company	at	a	15%	discount.	The	plan	does	not	meet	the	criteria	as	a	non-compensatory	plan.	As	a	result,	the	Company	records	the	total dollar	value	of	the	stock	discount	given	to	employees	under	the	plan	as	expense.	Total	expense	recorded	by	the	Company	under	the	plan	for	the	year ended	June	30,	2017,	2016	and	2015	was	$1,102,	$1,008	and	$861,	respectively.

The	Company	has	a	defined	contribution	plan	for	its	employees:	the	401(k)	Retirement	Savings	Plan	(the	"Plan").	The	Plan	is	subject	to	the	Employee Retirement	Income	Security	Act	of	1975	("ERISA")	as	amended.	Under	the	Plan,	the	Company	matches	100%	of	full	time	employee	contributions	up	to 5%	of	eligible	compensation	subject	to	a	maximum	of	 $5	per	year.	In	order	to	receive	matching	contributions,	employees	must	be	 18	years	of	age	and	be employed	for	at	least	six	months.	The	Company	has	the	option	of	making	a	discretionary	contribution;	however,	 none	has	been	made	for	any	of	the	three most	recent	fiscal	years.	The	total	matching	contributions	for	the	Plan	were	$17,550,	$16,794,	and	$15,378	for	fiscal	2017,	2016	and	2015,	respectively.

# NOTE	12.				BUSINESS	ACQUISITION

# Bayside	Business	Solutions,	Inc.

Effective	July	1,	2015,	 the	Company	acquired	all	of	 the	equity	 interests	of	Bayside	Business	Solutions,	an	Alabama-based	company	 that	provides technology	solutions	and	payment	processing	services	primarily	for	the	financial	services	industry,	for	$10,000	paid	in	cash.	This	acquisition	was	funded using	 existing	 operating	 cash.	The	acquisition	of	Bayside	Business	Solutions	expanded	 the	Company's	presence	 in	commercial	 lending	within	 the industry.

Management	has	completed	a	purchase	price	allocation	of	Bayside	Business	Solutions	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	July	1,	2015	are	set forth	below:

| Current	assets | $1,922 |
| :--- | :--- |
| Long-term\tassets | 253 |
| Identifiable\tintangible\tassets | 5,005 |
| Total\tliabilities\tassumed | (3,279) |
| Total\tidentifiable\tnet\tassets | 3,901 |
| Goodwill | 6,099 |
| Net\tassets\tacquired | $10,000 |

The	goodwill	of	$6,099	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	Bayside	Business	Solutions,	together	with	the	value	of	Bayside	Business	Solutions'	assembled	workforce. Goodwill	from	this	acquisition	has	been	allocated	to	our	Bank	Systems	and	Services	segment.	The	goodwill	is	not	expected	to	be	deductible	for	income tax	purposes.

Identifiable	intangible	assets	from	this	acquisition	consist	of	customer	relationships	of	 $3,402,	$659	of	computer	software	and	other	intangible	assets	of $944.	The	weighted	average	amortization	period	for	acquired	customer	relationships,	acquired	computer	software,	and	other	intangible	assets	is 15 years,	5	years,	and	20	years,	respectively.

Current	assets	were	inclusive	of	cash	acquired	of	 $1,725.	The	fair	value	of	current	assets	acquired	included	accounts	receivable	of $178.	The	gross amount	of	receivables	was	$178,	none	of	which	was	expected	to	be	uncollectible.

During	fiscal	year	2016,	the	Company	incurred	 $55	in	costs	related	to	the	acquisition	of	Bayside	Business	Solutions.	These	costs	included	fees	for	legal, valuation	and	other	fees.	These	costs	were	included	within	general	and	administrative	expenses.

The	results	of	Bayside	Business	Solutions'	operations	 included	 in	 the	Company's	consolidated	statement	of income for the twelve	months	ended June	30,	2017	included	revenue	of	$6,536	and	after-tax	net	income	of	$1,307.	For	the

twelve	months	ended	June	30,	2016,	Bayside	Business	Solutions'	contributed	$4,273	to	revenue,	and	after-tax	net	income	of	 $303.

The	accompanying	consolidated	statements	of	income	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	our	consolidated	financial	statements	and	pro	forma financial	information	has	not	been	provided.

# NOTE	13.				REPORTABLE	SEGMENT	INFORMATION

|  | Bank | Credit	Union | Total |
| :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |
| License | $1,928 | $457 | $2,385 |
| Support\tand\tservice | 1,025,378 | 358,960 | 1,384,338 |
| Hardware | 28,457 | 15,937 | 44,394 |
| Total\trevenue | 1,055,763 | 375,354 | 1,431,117 |
| COST\tOF\tSALES |  |  |  |
| Cost\tof\tlicense | 627 | 103 | 730 |
| Cost\tof\tsupport\tand\tservice | 605,414 | 180,729 | 786,143 |
| Cost\tof\thardware | 20,281 | 11,880 | 32,161 |
| Total\tcost\tof\tsales | 626,322 | 192,712 | 819,034 |
| GROSS\tPROFIT | $429,441 | $182,642 | 612,083 |
| OPERATING\tEXPENSES |  |  | 244,381 |
| INTEREST\tINCOME\t(EXPENSE) |  |  | (748) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  | $366,954 |

# Year	Ended

|  | Bank | Credit	Union | Total |
| :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |
| License | $2,536 | $505 | $3,041 |
| Support\tand\tservice | 960,738 | 340,240 | 1,300,978 |
| Hardware | 33,394 | 17,233 | 50,627 |
| Total\trevenue | 996,668 | 357,978 | 1,354,646 |
| COST\tOF\tSALES |  |  |  |
| Cost\tof\tlicense | 1,058 | 139 | 1,197 |
| Cost\tof\tsupport\tand\tservice | 564,851 | 172,257 | 737,108 |
| Cost\tof\thardware | 23,159 | 12,187 | 35,346 |
| Total\tcost\tof\tsales | 589,068 | 184,583 | 773,651 |
| GROSS\tPROFIT | $407,600 | $173,395 | 580,995 |
| OPERATING\tEXPENSES |  |  | 219,336 |
| INTEREST\tINCOME\t(EXPENSE) |  |  | (1,123) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  | $360,536 |

|  | Bank | Credit	Union | Total |
| :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |
| License | $1,727 | $908 | $2,635 |
| Support\tand\tservice | 922,545 | 278,107 | 1,200,652 |
| Hardware | 38,457 | 14,446 | 52,903 |
| Total\trevenue | 962,729 | 293,461 | 1,256,190 |
| COST\tOF\tSALES |  |  |  |
| Cost\tof\tlicense | 832 | 355 | 1,187 |
| Cost\tof\tsupport\tand\tservice | 533,407 | 147,343 | 680,750 |
| Cost\tof\thardware | 27,831 | 10,568 | 38,399 |
| Total\tcost\tof\tsales | 562,070 | 158,266 | 720,336 |
| GROSS\tPROFIT | $400,659 | $135,195 | 535,854 |
| OPERATING\tEXPENSES |  |  | 217,989 |
| INTEREST\tINCOME\t(EXPENSE) |  |  | (1,425) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  | $316,440 |

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	18,	2017,	the	Company's	Board	of	Directors	declared	a	cash	dividend	of $0.31	per	share	on	its	common	stock,	payable	on	September	28, 2017	to	shareholders	of	record	on	September	8,	2017.

# Change	in	Reportable	Segments

Beginning	in	the	first	quarter	of	fiscal	2018,	JHA	intends	to	make	a	change	to	the	reportable	segment	structure.	The	current	Bank	and	Credit	Union segments	will	be	replaced	by	four	new	segments:	Payments,	Core	Software,	Complementary	Software,	and	Corporate/	Other.	The	proposed	change	is being	made	based	on	the	view	of	our	new	Chief	Operating	Decision	Maker,	David	Foss,	that	the	Company	could	be	more	effectively	managed	using	a product-centric	approach	as	opposed	to	the	customer-centric	approach	that	had	been	previously	used.

# QUARTERLY	FINANCIAL	INFORMATION

# (unaudited)

|  | Quarter	1 | Quarter	2 | For	the	Year	Ended	June	30,	2017<br>Quarter	3 | Quarter	4 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |  |  |
| License | $694 | $849 | $516 | $326 | $2,385 |
| Support\tand\tservice | 333,046 | 337,515 | 342,769 | 371,008 | 1,384,338 |
| Hardware | 11,288 | 10,189 | 10,482 | 12,435 | 44,394 |
| Total\trevenue | 345,028 | 348,553 | 353,767 | 383,769 | 1,431,117 |
| COST\tOF\tSALES |  |  |  |  |  |
| Cost\tof\tlicense | 252 | 59 | 280 | 139 | 730 |
| Cost\tof\tsupport\tand\tservice | 185,892 | 191,269 | 198,844 | 210,138 | 786,143 |
| Cost\tof\thardware | 8,619 | 6,818 | 7,603 | 9,121 | 32,161 |
| Total\tcost\tof\tsales | 194,763 | 198,146 | 206,727 | 219,398 | 819,034 |
| GROSS\tPROFIT | 150,265 | 150,407 | 147,040 | 164,371 | 612,083 |
| OPERATING\tEXPENSES |  |  |  |  |  |
| Selling\tand\tmarketing | 22,127 | 21,903 | 23,571 | 25,696 | 93,297 |
| Research\tand\tdevelopment | 19,739 | 20,873 | 20,801 | 23,340 | 84,753 |
| General\tand\tadministrative | 16,982 | 18,989 | 16,223 | 17,407 | 69,601 |
| Gain\ton\tdisposal\tof\tbusinesses* | — | 36 | (2,286) | (1,020) | (3,270) |
| Total\toperating\texpenses | 58,848 | 61,801 | 58,309 | 65,423 | 244,381 |
| OPERATING\tINCOME | 91,417 | 88,606 | 88,731 | 98,948 | 367,702 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  |  |
| Interest\tincome | 108 | 60 | 42 | 38 | 248 |
| Interest\texpense | (142) | (184) | (278) | (392) | (996) |
| Total\tinterest\tincome\t(expense) | (34) | (124) | (236) | (354) | (748) |
| INCOME\tBEFORE\tINCOME\tTAXES | 91,383 | 88,482 | 88,495 | 98,594 | 366,954 |
| PROVISION\tFOR\tINCOME\tTAXES | 29,139 | 29,668 | 28,451 | 33,903 | 121,161 |
| NET\tINCOME | $62,244 | $58,814 | $60,044 | $64,691 | $245,793 |
| Basic\tearnings\tper\tshare | $0.79 | $0.76 | $0.77 | $0.83 | $3.16 |
| Basic\tweighted\taverage\tshares\toutstanding | 78,413 | 77,814 | 77,597 | 77,602 | 77,856 |
| Diluted\tearnings\tper\tshare | $0.79 | $0.75 | $0.77 | $0.83 | $3.14 |
| Diluted\tweighted\taverage\tshares\toutstanding | 78,844 | 78,180 | 77,932 | 78,064 | 78,255 |

*Gain	on	disposal	of	business	was	included	in	general	and	administrative	expenses	within	the	financial	statements	previously	filed	in	the	Company's Quarterly	Reports	on	Form	10-Q.

|  | Quarter	1 | Quarter	2 | For	the	Year	Ended	June	30,	2016<br>Quarter	3 | Quarter	4 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |  |  |
| License | $1,604 | $634 | $292 | $511 | $3,041 |
| Support\tand\tservice | 307,746 | 320,219 | 319,649 | 353,364 | 1,300,978 |
| Hardware | 12,268 | 12,019 | 13,245 | 13,095 | 50,627 |
| Total\trevenue | 321,618 | 332,872 | 333,186 | 366,970 | 1,354,646 |
| COST\tOF\tSALES |  |  |  |  |  |
| Cost\tof\tlicense | 181 | 498 | 193 | 325 | 1,197 |
| Cost\tof\tsupport\tand\tservice | 174,714 | 181,989 | 184,527 | 195,878 | 737,108 |
| Cost\tof\thardware | 8,768 | 7,958 | 9,553 | 9,067 | 35,346 |
| Total\tcost\tof\tsales | 183,663 | 190,445 | 194,273 | 205,270 | 773,651 |
| GROSS\tPROFIT | 137,955 | 142,427 | 138,913 | 161,700 | 580,995 |
| OPERATING\tEXPENSES |  |  |  |  |  |
| Selling\tand\tmarketing | 21,751 | 22,231 | 22,732 | 23,365 | 90,079 |
| Research\tand\tdevelopment | 18,554 | 18,862 | 19,854 | 23,964 | 81,234 |
| General\tand\tadministrative | 17,113 | 16,547 | 16,497 | 17,357 | 67,514 |
| Gain\ton\tdisposal\tof\tbusinesses | — | — | — | (19,491) | (19,491) |
| Total\toperating\texpenses | 57,418 | 57,640 | 59,083 | 45,195 | 219,336 |
| OPERATING\tINCOME | 80,537 | 84,787 | 79,830 | 116,505 | 361,659 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  |  |
| Interest\tincome | 113 | 91 | 54 | 49 | 307 |
| Interest\texpense | (220) | (276) | (486) | (448) | (1,430) |
| Total\tinterest\tincome\t(expense) | (107) | (185) | (432) | (399) | (1,123) |
| INCOME\tBEFORE\tINCOME\tTAXES | 80,430 | 84,602 | 79,398 | 116,106 | 360,536 |
| PROVISION\tFOR\tINCOME\tTAXES | 29,064 | 25,254 | 25,515 | 31,836 | 111,669 |
| NET\tINCOME | $51,366 | $59,348 | $53,883 | $84,270 | $248,867 |
| Basic\tnet\tincome\tper\tshare | $0.64 | $0.75 | $0.68 | $1.07 | $3.13 |
| Basic\tweighted\taverage\tshares\toutstanding | 80,545 | 79,473 | 78,805 | 78,841 | 79,416 |
| Diluted\tnet\tincome\tper\tshare | $0.64 | $0.74 | $0.68 | $1.06 | $3.12 |
| Diluted\tweighted\taverage\tshares\toutstanding | 80,735 | 79,770 | 79,167 | 79,261 | 79,734 |

# ITEM	9.		CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURES

# ITEM	9A.	CONTROLS	AND	PROCEDURES

# Disclosure	Controls	and	Procedures

As	of	the	end	of	the	period	covered	by	this	Annual	Report	on	Form	10-K,	an	evaluation	was	carried	out	under	the	supervision	and	with	the	participation	of our	management,	including	our	Company's	Chief	Executive	Officer	(CEO)	and	Chief	Financial	Officer	(CFO),	of	the	effectiveness	of	the	design	and operation	of	our	disclosure	controls	and	procedures	pursuant	to	Exchange	Act	Rules	13a-15	and	15d-15.	Based	upon	that	evaluation,	the	CEO	and	CFO concluded	that	our	disclosure	controls	and	procedures	are	effective	to	ensure	that	information	we	are	required	to	disclose	in	reports	that	we	file	or	submit under	the	Exchange	Act	is	recorded,	processed,	summarized	and	reported	within	the	time	periods	specified	in	SEC	rules	and	forms.	For	this	purpose, disclosure	controls	and	procedures	include	controls	and	procedures	designed	to	ensure	that	information	required	to	be	disclosed	under	the	Exchange	Act is	accumulated	and	communicated	to	the	Company's	management,	including	the	CEO	and	CFO,	as	appropriate	to	allow	timely	decisions	regarding required	disclosure.

# Management's	Report	on	Internal	Control	over	Financial	Reporting

The	Management's	Report	on	Internal	Control	over	Financial	Reporting	required	by	this	Item	9A	is	in	Item	8,	"Financial	Statements	and	Supplementary Data."	The	Company's	independent	registered	public	accounting	firm	has	audited	our	internal	control	over	financial	reporting	as	of	June	30,	2017;	their report	is	included	in	Item	8	of	this	Form	10-K.

# Changes	in	Internal	Control	over	Financial	Reporting

There	has	been	no	change	in	internal	control	over	financial	reporting	that	has	materially	affected,	or	is	reasonably	likely	to	affect,	the	Company's	internal control	over	financial	reporting.

# ITEM	9B.		OTHER	INFORMATION

# PART	III

Information	required	by	Items	10,	11,	12,	13	and	14	of	Part	III	is	omitted	from	this	report	and	will	be	filed	within	120	days	after	the	Company's June	30, 2017	fiscal	year	end	in	the	definitive	proxy	statement	for	our	 2017	Annual	Meeting	of	Stockholders	(the	"Proxy	Statement").

# ITEM	10.			DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

See	the	information	under	the	captions	"Election	of	Directors",	"Corporate	Governance",	"Section	16(a)	Beneficial	Ownership	Reporting	Compliance",	and "Executive	Officers	and	Significant	Employees"	in	the	Proxy	Statement,	which	is	incorporated	herein	by	reference.

# ITEM	11.			EXECUTIVE	COMPENSATION

See	 the	 information	 under	 captions	 "Corporate	 Governance",	 "Compensation	 Committee	 Report",	 "Compensation Discussion and	 Analysis", "Compensation	and	Risk",	and	"Executive	Compensation"	in	the	Proxy	Statement,	which	is	incorporated	herein	by	reference.

# ITEM	12.			SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER	MATTERS

See	the	information	under	the	captions	"Stock	Ownership	of	Certain	Stockholders"	and	"Equity	Compensation	Plan	Information"	in	the	Proxy	Statement, which	is	incorporated	herein	by	reference.

# ITEM	13.		CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

See	the	information	under	the	captions	"Election	of	Directors	-	Director	Independence"	and	"Certain	Relationships	and	Related	Transactions"	in	the	Proxy Statement,	which	is	incorporated	herein	by	reference.

# ITEM	14.			PRINCIPAL	ACCOUNTANT	FEES	AND	SERVICES

See	the	information	under	the	captions	"Audit	Committee	Report"	and	"Ratification	of	the	Selection	of	Independent	Registered	Public	Accounting	Firm"	in the	Proxy	Statement,	which	is	incorporated	herein	by	reference.

# PART	IV

# ITEM	15.	EXHIBITS	AND	FINANCIAL	STATEMENT	SCHEDULES

# (a)	The	following	documents	are	filed	as	part	of	this	Report:

(1)		The	following	Consolidated	Financial	Statements	of	the	Company	and	its	subsidiaries	and	the	Report	of	Independent	Registered	Public	Accounting Firm	thereon	appear	under	Item	8	of	this	Report:

-	Reports	of	Independent	Registered	Public	Accounting	Firm

-	Consolidated	Statements	of	Changes	in	Stockholders'	Equity	for	the	years	ended	 June	30,	2017,	2016	and	2015

-	Notes	to	the	Consolidated	Financial	Statements

(2)	The	following	Financial	Statement	Schedules	filed	as	part	of	this	Report	appear	under	Item	8	of	this	Report:

(3)	See	"Index	to	Exhibits"	set	forth	below.

All	exhibits	not	attached	hereto	are	incorporated	by	reference	to	a	prior	filing	as	indicated.

# Index	to	Exhibits

# Exhibit	No.				Description

# 23.2* Consent	of	Independent	Registered	Public	Accounting	Firm-	Deloitte	&	Touche	LLP.

31.1* Certification	of	the	Chief	Executive	Officer.

31.2* Certification	of	the	Chief	Financial	Officer.

32.1* Written	Statement	of	the	Chief	Executive	Officer	Pursuant	to	18	U.S.C.	Section	1350.

32.2* Written	Statement	of	the	Chief	Financial	Officer	Pursuant	to	18	U.S.C.	Section	1350.

101.INS** XBRL	Instance	Document

101.SCH** XBRL	Taxonomy	Extension	Schema	Document

101.CAL** XBRL	Taxonomy	Extension	Calculation	Linkbase	Document

101.DEF** XBRL	Taxonomy	Extension	Definition	Linkbase	Document

101.LAB** XBRL	Taxonomy	Extension	Label	Linkbase	Document

101.PRE** XBRL	Taxonomy	Extension	Presentation	Linkbase	Document

*	Furnished	with	this	report	on	Form	10-K.

**	Filed	with	this	report	on	Form	10-K	are	the	following	documents	formatted	in	XBRL	(Extensible	Business	Reporting	Language):	(i)	the	Consolidated Balance	Sheets	at	June	30,	2017	and	June	30,	2016,	(ii)	the	Consolidated	Statements	of	Income	for	the	years	ended	 June	30,	2017,	2016	and	2015,	(iii) the	Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended	June	30,	2017,	2016	 and	2015,	(iv)	the	Consolidated	Statements	of	Cash Flows	for	the	years	ended	June	30,	2017,	2016	and	2015,	and	(v)	Notes	to	Consolidated	Financial	Statements.

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its behalf	by	the	undersigned,	thereunto	duly	authorized	this	25th	day	of	August,	2017.

# JACK	HENRY	&	ASSOCIATES,	INC.,	Registrant

# Chief	Executive	Officer

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the registrant	and	in	the	capacities	and	on	the	dates	indicated:



Question: what was the 2015 total return for the peer group?
Calculation:   peer_group_2015 = 203.87
 peer_group_2014 = 161.90
 total_return = peer_group_2015 - peer_group_2014
 answer = total_return
Answer: 41.97