# 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	every	Interactive	Data	File	required	to	be	submitted	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	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.

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,	2018,	the	aggregate	market	value	of	the	Common	Stock	held	by	persons	other	than	those	who	may	be	deemed	affiliates	of	Registrant was	$10,791,330,916	(based	on	the	average	of	the	reported	high	and	low	sales	prices	on	NASDAQ	on	 December	31,	2018).

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	Company's	Notice	of	Annual	Meeting	of	Stockholders	and	Proxy	Statement	for	its	 2019	Annual	Meeting	of	Stockholders	(the	"Proxy Statement")	are	incorporated	by	reference	into	Part	III	of	this	Report	to	the	extent	stated	herein.	Such	proxy	statement	will	be	filed	with	the	Securities	and Exchange	Commission	within	120	days	of	the	Company's	fiscal	year	ended	June	30,	2019.

# TABLE	OF	CONTENTS

# Page	Reference

# PART	I

| ITEM	1. | BUSINESS | 5 |
| :--- | :--- | :--- |
| ITEM\t1A. | RISK\tFACTORS | 13 |
| ITEM\t1B. | UNRESOLVED\tSTAFF\tCOMMENTS | 16 |
| ITEM\t2. | PROPERTIES | 16 |
| ITEM\t3. | LEGAL\tPROCEEDINGS | 17 |
| ITEM\t4. | MINE\tSAFETY\tDISCLOSURES | 17 |
| PART\tII |  |  |
| ITEM\t5. | MARKET\tFOR\tREGISTRANT'S\tCOMMON\tEQUITY,\tRELATED\tSTOCKHOLDER\tMATTERS\tAND\tISSUER |  |
|  | PURCHASES\tOF\tEQUITY\tSECURITIES | 18 |
| ITEM\t6. | SELECTED\tFINANCIAL\tDATA | 20 |
| ITEM\t7. | MANAGEMENT'S\tDISCUSSION\tAND\tANALYSIS\tOF\tFINANCIAL\tCONDITION\tAND\tRESULTS\tOF |  |
|  | OPERATIONS | 20 |
| ITEM\t7A. | QUANTITATIVE\tAND\tQUALITATIVE\tDISCLOSURES\tABOUT\tMARKET\tRISK | 32 |
| ITEM\t8. | FINANCIAL\tSTATEMENTS\tAND\tSUPPLEMENTARY\tDATA | 34 |
| ITEM\t9. | CHANGES\tIN\tAND\tDISAGREEMENTS\tWITH\tACCOUNTANTS\tON\tACCOUNTING\tAND\tFINANCIAL |  |
|  | DISCLOSURE | 70 |
| ITEM\t9A. | CONTROLS\tAND\tPROCEDURES | 70 |
| ITEM\t9B. | OTHER\tINFORMATION | 70 |
| PART\tIII |  |  |
| ITEM\t10. | DIRECTORS,\tEXECUTIVE\tOFFICERS\tAND\tCORPORATE\tGOVERNANCE | 71 |
| ITEM\t11. | EXECUTIVE\tCOMPENSATION | 71 |
| ITEM\t12. | SECURITY\tOWNERSHIP\tOF\tCERTAIN\tBENEFICIAL\tOWNERS\tAND\tMANAGEMENT\tAND\tRELATED |  |
|  | STOCKHOLDER\tMATTERS | 71 |
| ITEM\t13. | CERTAIN\tRELATIONSHIPS\tAND\tRELATED\tTRANSACTIONS,\tAND\tDIRECTOR\tINDEPENDENCE | 71 |
| ITEM\t14. | PRINCIPAL\tACCOUNTANT\tFEES\tAND\tSERVICES | 71 |
| PART\tIV |  |  |
| ITEM\t15 | EXHIBITS\tAND\tFINANCIAL\tSTATEMENT\tSCHEDULES | 72 |
| ITEM\t16 | FORM\t10-K\tSUMMARY | 74 |

In	this	report,	all	references	to	"JHA",	the	"Company",	"we",	"us",	and	"our",	refer	to	Jack	Henry	&	Associates,	Inc.,	and	its	wholly	owned	subsidiaries. Unless	 otherwise	 stated,	 references	 to	 particular	 years,	 quarters,	 months,	 or	 periods	 refer	 to	 the	 Company's	 fiscal	 years	 ended	 in	 June	 and	 the associated	quarters,	months,	and	periods	of	those	fiscal	years.

# 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	 (the	 "Exchange	 Act").	 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,"	"future,"	"intend,"	"plan,"	"predict,"	"will,"	"would,"	"could,"	"can,"	"may,"	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,	except	as required	by	law.

# 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	primary	business	brands:

•Jack	Henry	Banking	is	a	leading	provider	of	integrated	data	processing	systems	to	 nearly	1,030	banks	ranging	from	community	banks	to	multi- billion-dollar	institutions	with	assets	of	up	to	$50	billion.	The	number	of	banks	we	serve	has	decreased	in	the	last	year	due	to	acquisitions	and mergers	within	the	banking	industry,	which	are	discussed	further	under	the	heading	"Industry	Background"	in	this	Item	1.	Our	banking	solutions support	both	in-house	and	outsourced	operating	environments	with	three	functionally	distinct	core	processing	platforms	and	more	than	140	integrated complementary	solutions.

•Symitar	is	a	leading	provider	of	core	data	processing	solutions	for	credit	unions	of	all	sizes,	with	 over	830	credit	union	customers.	Symitar	markets two	functionally	distinct	core	processing	platforms	and	more	than	100	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	traditional	financial services	organizations	of	all	asset	sizes	and	charters,	and	non-traditional	diverse	corporate	entities	with	over	9,000	customers,	including	over	7,200 non-core	customers.

Our	products	and	services	provide	our	customers	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	by	their	customers	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.	We	believe	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	support	and	services	provided	to	our	in-house	customers	that	are	typically	on	a	one-year	contract,	outsourcing services	that	are	typically	on	a	five-year	or	greater	contract,	and	recurring	electronic	payment	solutions	that	are	also	generally	on	a	contract	term	of	five years	or	greater.	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.	Information	regarding the	classification	of	our	business	into	four	separate	segments	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 43	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	approximately	5,360	commercial	banks

and	savings	institutions	in	this	asset	range	as	of	 December	31,	2018.	Jack	Henry	Banking	currently	supports	nearly	1,030	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	5,480	domestic	credit unions	 as	 of	December	 31,	 2018.	 Symitar	 currently	 supports	over	 830	 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	 21%	from	the	beginning	of	calendar	year	2014	to	the	end	of	calendar year	2018,	due	mainly	to	mergers.	Although	the	number	of	banks	declined	at	a	5%	compound	annual	rate	during	this	period,	aggregate	assets	increased at	a	compound	annual	rate	of	4%	and	totaled	$16.7	trillion	as	of	December	31,	2018.	There	were	eight	new	bank	charters	issued	in	calendar	year	 2018, compared	to	five	in	the	2017	calendar	year.	Comparing	calendar	years	2018	to	2017,	the	number	of	mergers	increased	 13%.

CUNA	reports	the	number	of	credit	unions	declined	 18%	from	the	beginning	of	calendar	year	2014	to	the	end	of	calendar	year	 2018.	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	$1.5	trillion	as	of	December	31,	2018.

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-term	 and	 long-term	 performance	 goals	 are	 often	 technology-dependent.	Financial	 institutions	 must	 implement technological	solutions	that	enable	them	to:

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

•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;

•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

Our	mission	 is	 to	protect	and	 increase	 the	value	of	 our	 stockholders' investment	 by	 providing	 quality	 solutions	 and industry-leading	 service to	 our customers.	In	accomplishing	this,	we	feel	that	it	is	important	to:

•Maintain	a	work	environment	that	is	personally,	professionally,	and	financially	rewarding	for	our	employees.

•Concentrate	our	activities	on	what	we	know	best	-	technology	solutions	and	services	for	financial	institutions.

•Provide	outstanding	commitment	and	service	to	our	customers	so	that	the	perceived	value	of	our	solutions	and	services	is	consistent	with	the	real value.

# 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.

•Providing	highly	specialized	core	agnostic	complementary	products	and	services	to	financial	institutions,	including	institutions	not	utilizing	a	Jack Henry	core	operating	system,	and	diverse	corporate	entities.

•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	33	strategic	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	four	acquisitions	in	the	last	3	years.	After	43	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:

# Solutions

Our	proprietary	solutions	are	marketed	through	three	primary	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	140	 fully-integrated	 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	 in	our	private	cloud	and	are	backed	by	a	company-wide	commitment	 to	provide	exceptional	personal	service.	Jack	Henry	Banking	 is	a recognized	market	leader,	currently	supporting	nearly	1,030	banks	with	its	technology	platforms.

•Symitar	 supports	 credit	 unions	 of	 all	 sizes	 with	 information	 and	 transaction	 processing	 platforms	 that	 provide	 enterprise-wide	 automation.	 Our solutions	include	two	functionally	distinct	core	processing	systems	and	more	than	100	fully-integrated	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.	We	also	re-market	the	hardware	required	by	each	software	system.	Our	credit	union	solutions	can	be	delivered	in- house	 or	 through	 an	 outsourced	 delivery	 model	 in	 our	 private	 cloud,	 and	 they	 are	 also	 backed	 by	 our	 company-wide	 commitment	 to	 provide exceptional	personal	service.		Symitar	currently	supports	over	830	credit	union	customers.

•ProfitStars	is	a	leading	provider	of	specialized	products	and	services	assembled	primarily	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.	Profitstars	has	over	9,000	customers,	including	over	7,200	non-core	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	de	novo	(start-up)	banks	also	select	SilverLake.	This	system	is	in	use	by	over 410	banks,	and	now	automates	 over	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	410	banks	ranging	from	de	novo	institutions	to	those	with	assets exceeding	$2	billion.	CIF	20/20	is	among	the	most	widely	used	IBM	Power	System™	(i/OS)	core	processing	systems	in	the	United	States	("U.S.") 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	680	credit	unions	and	according	to	National	Credit	Union	Administration	data,	is	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	over	150	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	four	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	140	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/or	 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.

# Implementation	and	Training

Most	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.	Our	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	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	fiscal	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.	We	believe	this	process	confirms	that	we	consistently	exceed	our	customers'	service-related	expectations.

# 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.

# Electronic	Payment	Solutions

Electronic	payment	solutions	provide	our	customers	with	the	tools	necessary	to	be	at	the	forefront	of	payment	innovation	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	payment-related	risk.

Jack	Henry	identifies	four	components	of	Electronic	Payment	Solutions:

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

•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.

•Faster	Payments	includes	the	development	of	JHA	PayCenter,	a	payments	hub	that	provides	streamlined,	secure	payment	capabilities	for	sending and	receiving	transactions	instantly	24	hours	a	day,	365	days	a	year,	through	JHA's	core	and	complementary	solutions	with	direct	connections	to real-time	networks.

•Processing/	 Other	includes	 Enterprise	 Payment	 Solutions	 (EPS),	 a	 comprehensive	 payments	 engine	 and	 one	 of	 the	 leading	 total	 payments solutions	 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.

# 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,	2019	totaled	$785.2	million,	consisting	of	contracts	signed	for	future	delivery	of	software,	hardware,	and	implementation	services (in-house	backlog)	of	$77.6	million,	and	outsourcing	services	of	$707.6	million.	Approximately	$514.0	million	of	the	outsourcing	services	backlog	as of	June	30,	2019	is	not	expected	to	be	realized

during	 fiscal	2020	due	to	the	long-term	nature	of	our	outsourcing	contracts.	Backlog	as	of	 June	30,	2018	 totaled	$676.2	million,	 consisting	 of	$76.3 million	for	future	delivery	of	in-house	software,	hardware,	and	implementation	services	(in-house	backlog),	and	 $599.9	million	for	outsourcing	services.

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	2020,	the	backlog	is	expected	to	trend	up	gradually	for	the	foreseeable	future	due	to renewals	of	existing	relationships,	existing	in-house	customers	electing	to	migrate	to	the	outsourced	model,	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	complementary	systems	are	enhanced	a	minimum	of 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	primary	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	of	our	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	accounted	for	less	than	1%	of JHA's	total	revenue	in	the	fiscal	years	2019,	2018,	and	2017.

# 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	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	a	Report	of	Examination. The	Board	of	Directors	provides	oversight	of	these	activities	through	the	Risk	and	Compliance	Committee	and	the	Audit	Committee.

# 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	and	Banno	online	solutions,	bill	payment	through	iPay,	network	security	monitoring	and	Hosted	Network	Solutions	(HNS) through	our	Gladiator	unit,	Cloud	Services	through	Hosted	Partner	Services	and	Enterprise	Integration	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,	2019	and	2018,	JHA	had	 6,402	and	6,307	full-time	employees,	respectively.	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 materially	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	 and	 to	 prevent unauthorized	access	to	our	computer	networks,	systems	and	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.	Other potential	attacks	include	attempts	to	obtain	unauthorized	access	to	confidential	information	or	destroy	data,	often	through	the	introduction	of	computer viruses,	ransomware	or	malware,	cyber-attacks	and	other	means.	To	date,	none	of	these	types	of	attacks	have	had	a	material	effect	on	our	business	or operations.	Such	security	attacks	can	originate	from	a	wide	variety	of	sources,	including	persons	who	are	involved	with	organized	crime	or	who	may	be linked	to	terrorist	organizations	or	hostile	foreign	governments.	Those	same	parties	may	also	attempt	to	fraudulently	induce	employees,	customers, suppliers,	or	other	users	of	our	systems	to	disclose	sensitive	information	in	order	to	gain	access	to	our	data	or	that	of	our	customers	or	clients.	We	are also	subject	to	the	risk	that	our	employees	may	intercept	and	transmit	unauthorized	confidential	or	proprietary	information.	An	interception,	misuse	or mishandling	of	personal,	confidential	or	proprietary	information	being	sent	to	or	received	from	a	customer	or	third	party	could	result	in	legal	liability, remediation	costs,	regulatory	action	and	reputational	harm,	any	of	which	could	adversely	affect	our	results	of	operations	and	financial	condition.	Individual personal	 computers	 can	 be	 stolen,	 and	 customer	 data	 media	 can	 be	 lost	 in	 shipment.	 Under	 state,	 federal	 and	 foreign	 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 or	other	third	parties,	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,	 real-time	 payments	 through	 faster	 payment	 networks	 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	process	transactions	and	provide	services	in	support	of	the	processing	of	transactions	and	funds	settlement	for	certain	of	our products	and	services.	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.

Failures	of	third	party	service	providers	we	rely	upon	could	lead	to	financial	loss.	 We	rely	on	third	party	service	providers	to	support	key	portions	of our	operations.	We	also	rely	on	third	party	service	providers	to	provide	part	or	all	of	certain	services	we	deliver	to	customers.	While	we	have	selected these	third	party	vendors	carefully,	we	do	not	control	their	actions.	A	failure	of	these	services	by	a	third	party	could	have	a	material	impact	upon	our delivery	of	services	to	customers.	Such	a	failure	could	lead	to	damages	claims,	loss	of	customers,	and	reputational	harm,	depending	on	the	duration	and severity	of	the	failure.	Third	parties	perform	significant	operational	services	on	our	behalf.	These	third-party	vendors	are	subject	to	similar	risks	as	us relating	to	cybersecurity,	breakdowns	or	failures	of	their	own	systems	or	employees.	One	or	more	of	our	vendors	may	experience	a	cybersecurity	event	or operational	disruption	and,	if	any	such	event	does	occur,	it	may	not	be	adequately	addressed,	either	operationally	or	financially,	by	the	third-party	vendor. Certain	of	our	vendors	may	have	limited	indemnification	obligations	or	may	not	have	the	financial	capacity	to	satisfy	their	indemnification	obligations.	If	a critical	vendor	is	unable	to	meet	our	needs	in	a	timely	manner	or	if	the	services	or	products	provided	by	such	a	vendor	are	terminated	or	otherwise delayed	and	if	we	are	not	able	to	develop	alternative	sources	for	these	services	and	products	quickly	and	cost-effectively,	it	could	have	a	material	adverse effect	on	our	business.

The	software	and	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	software	and	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.	New	regulations	could	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. Substantial	research	and	development	and	other	corporate	resources	have	been	and	will	continue	to	be	applied	to	adapt	our	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.

Compliance	with	new	and	existing	privacy laws,	regulations,	and	rules	may	adversely impact	our	expenses,	development,	and	strategy. 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.	This	includes	rules	enacted	by	the	New	York	Department	of	Financial	Services	that	require	covered	financial institutions	 to	 have	 a	 cybersecurity	 program	 along	 with	 other	 compliance	 requirements.	 The	 unique	 data	 protection	 regulations	 issued	 by	 multiple agencies	has	created	a	fragmented	series	of	requirements	that	makes	it	increasingly	complex	to	comply	with	all	of	the	mandates	in	an	efficient	manner and	may	increase	costs	to	deliver	affected	products	and	services	as	those	requirements	are	established.

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	our	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.	We	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.

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.

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	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.

Failure	to	achieve	favorable	renewals	of	service	contracts	could	negatively	affect	our	outsourcing	business. 	Our	contracts	with	our	customers	for outsourced	data	processing	and	electronic	payment	transaction	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	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	the	rules	of	the	payment	card	networks	or	changes	made	by	the	networks	could	adversely	affect	our	business.	We are	subject	to	card	association	and	network	rules	governing	Visa,	MasterCard,	Zelle,	The	Clearing	House's	RTP	network,	and	all	rules	governing	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.	Changes	made	by	the networks,	even	if	complied	with,	may	result	in	reduction	in	revenues	and	increased	cost	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	approximately	5,363	commercial	and	savings	banks	and	 more	than	5,480	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	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	and	liabilities;	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	depreciation	and	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	review	our	acquired	assets.

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.

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,	2019.	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	 eight	office	buildings,	plus	shipping	&	receiving,	security,	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	39	 leased	 office	 facilities	 in	23	 states,	 which	 total approximately	722,275	square	feet.	All	of	our	owned	and	leased	office	facilities	are	for	normal	business	purposes.

We	own	five	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.	generally	accepted	accounting	principles	("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	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.	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	15,	2019,	there	were	approximately	145,300	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	$141.94	per	share.

# Issuer	Purchases	of	Equity	Securities

The	following	shares	of	the	Company	were	repurchased	during	the	quarter	ended	 June	30,	2019:

|  | 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,\t2019 | — | $— | — | 3,732,713 |
| May\t1-\tMay\t31,\t2019 | 250,000 | $134.35 | 250,000 | 3,482,713 |
| June\t1-\tJune\t30,\t2019 | — | $— | — | 3,482,713 |
| Total | 250,000 | $134.35 | 250,000 | 3,482,713 |

(1)	250,000	shares	were	purchased	through	a	publicly	announced	repurchase	plan.	There	were	 no	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,	2019,	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.	Historic	stock	price	performance	is	not	necessarily	indicative	of	future stock	price	performance.

# 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:

|  | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| JKHY | 100.00 | 110.51 | 151.12 | 182.15 | 231.36 | 240.29 |
| 2019\tPeer\tGroup | 100.00 | 126.23 | 142.94 | 166.15 | 224.73 | 281.09 |
| 2018\tPeer\tGroup | 100.00 | 127.40 | 151.16 | 177.26 | 228.97 | 286.22 |
| S&amp;P\t500 | 100.00 | 107.42 | 111.71 | 131.70 | 150.64 | 166.33 |

This	comparison	assumes	$100	was	invested	on	June	30,	2014,	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.

Some	 peer	 participant	 companies	 were	 different	 for	 fiscal	 year	 ended	 2019	 compared	 to	 fiscal	 year	 ended	 2018.	 The	 Company's	 Compensation Committee	of	the	Board	of	Directors	adjusted	the	peer	participants	due	to	consolidations	within	the	industry	during	the	2019	fiscal	year.

Companies	in	the	2019	peer	group	are	ACI	Worldwide,	Inc.;	Black	Knight,	Inc.;	Bottomline	Technologies,	Inc.;	Broadridge	Financial	Solutions,	Inc.; Cardtronics	plc;	CoreLogic,	Inc.;	Euronet	Worldwide,	Inc.;	ExlService	Holdings,	Inc.;	Fair	Isaac	Corp.;	Fidelity	National	Information	Services,	Inc.;	Fiserv, Inc.;	 Fleetcor	 Technologies,	 Inc.;	 Global	 Payments,	 Inc.;	 Square,	 Inc.;	 SS&C	 Technologies	 Holdings,	 Inc.;	 Total	 System	 Services,	 Inc.;	 Tyler Technologies,	Inc.;	Verint	Systems,	Inc.;	and	WEX,	Inc.

Companies	in	the	2018	peer	group	were	ACI	Worldwide,	Inc.;	Bottomline	Technology,	Inc.;	Broadridge	Financial	Solutions;	Cardtronics,	Inc.;	Corelogic,

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.	 DST	Systems, Inc.,	which	had	previously	been	part	of	the	2018	peer	group,	was	acquired	in	2018	and	is	no	longer	a	public	company.	As	a	result,	DST	Systems,	Inc. was	removed	from	the	2018	peer	group	and	stock	performance	graph.

The	stock	performance	graph	shall	not	be	deemed	"filed"	for	purposes	of	Section	18	of	the	Exchange	Act,	or	incorporated	by	reference	into	any	filing	of the	Company	under	the	Securities	Act	of	1933,	as	amended,	or	the	Exchange	Act,	except	as	shall	be	expressly	set	forth	by	specific	reference	in	such filing.

# ITEM	6.			SELECTED	FINANCIAL	DATA

The	following	data	should	be	read	in	conjunction	with	the	consolidated	financial	statements	and	accompanying	notes	included	elsewhere	in	the	Annual Report	on	Form	10-K.	Fiscal	2018	and	2017	have	been	recast	to	reflect	the	Company's	retrospective	adoption	of	Accounting	Standards	Update	("ASU") 2014-09,	Revenue	from	Contracts	with	Customers,	and	related	amendments,	collectively	referred	to	as	Accounting	Standards	Codification	("ASC")	606. Fiscal	2016	and	2015	were	not	recast.	Net	income	for	fiscal	 2018	and	2019	has	been	impacted	by	the	reduced	U.S.	corporate	tax	rate	enacted	by	the Tax	Cuts	and	Jobs	Act	("TCJA")	of	2017,	and	fiscal	2018	net	income	contains	the	related	adjustment	for	the	re-measurement	of	deferred	taxes.

Acquisitions	have	affected	revenue	and	net	income	in	fiscal	2019	as	well	as	the	historical	periods	presented.

# Selected	Financial	Data

# (In	Thousands,	Except	Per	Share	Data)

| Income	Statement	Data | 2019 | 2018 | 2017 | 2016 | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  | *Unadjusted | *Unadjusted |
| Revenue\t(1) | $1,552,691 | $1,470,797 | $1,388,290 | $1,354,646 | $1,256,190 |
| Net\tIncome | $271,885 | $365,034 | $229,561 | $248,867 | $211,221 |
| Basic\tearnings\tper\tshare | $3.52 | $4.73 | $2.95 | $3.13 | $2.60 |
| Diluted\tearnings\tper\tshare | $3.52 | $4.70 | $2.93 | $3.12 | $2.59 |
| Dividends\tdeclared\tper\tshare | $1.54 | $1.36 | $1.18 | $1.06 | $0.94 |
| Balance\tSheet\tData |  |  |  |  |  |
| Total\tdeferred\trevenue | $394,306 | $369,915 | $368,151 | $521,054 | $531,987 |
| Total\tassets | $2,184,829 | $2,033,058 | $1,868,199 | $1,815,512 | $1,836,835 |
| Long-term\tdebt | $— | $— | $50,000 | $— | $50,102 |
| Stockholders'\tequity | $1,429,013 | $1,322,844 | $1,099,693 | $996,210 | $991,534 |

(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	Company's	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.	All	dollar	and	share amounts,	except	per	share	amounts,	are	in	thousands	and	discussions	compare	fiscal	2019	to	fiscal	2018	and	compare	fiscal	 2018	to	fiscal	2017.

# OVERVIEW

Jack	Henry	&	Associates,	Inc.	(JHA)	is	headquartered	in	Monett,	Missouri,	employs	approximately	 6,500	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®	is	a	top	provider	of	information	and	transaction	processing	solutions	to	U.S. banks	ranging	from	community	banks	to	multi-billion-dollar	asset	institutions	with	assets	up	to	$50	billion.	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	installation	and	outsourced	delivery	in	our	private	cloud.

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	primary	marketed	brands.	We provide	compatible	computer	hardware	for	our	in-house	installations	and	secure	processing	environments	for	our	outsourced	solutions	in	our	private cloud.	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.

Our	 two	 primary	 revenue	 streams	 are	 "Services	 and	 support"	 and	 "Processing".	 Services	 and	 support	 includes:	 "Outsourcing	 and	 cloud"	 fees	 that predominantly	have	contract	terms	of	five	years	or	longer	at	inception;	"Product	delivery	and	services"	revenue,	which	includes	revenue	from	the	sales	of licenses,	implementation	services,	deconversion	fees,	consulting,	and	hardware;	and	"In-house	support"	revenue,	which	is	composed	of	maintenance fees	which	primarily	contain	annual	contract	terms.	Processing	revenue	includes:	"Remittance"	revenue	from	payment	processing,	remote	capture,	and automated	 clearing	 house	 (ACH)	 transactions;	 "Card"	 fees,	 including	 card	 transaction	 processing	 and	 monthly	 fees;	 and	 "Transaction	 and	 digital" revenue,	which	includes	transaction	and	mobile	processing	fees.	We	continually	seek	opportunities	to	increase	revenue	while	at	the	same	time	containing costs	to	expand	margins.

We	have	four	reportable	segments:	Core,	Payments,	Complementary,	and	Corporate	and	Other.	The	respective	segments	include	all	related	revenues 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.

# RESULTS	OF	OPERATIONS

In	fiscal	2019,	revenues	increased	6%	or	$81,894	compared	to	fiscal	2018.	Deconversion	fees	decreased	$15,941	compared	to	the	prior	fiscal	year. Revenue	from	fiscal	2019	acquisitions	totaled	$1,052.	Excluding	these	factors,	total	revenue	increased	7%,	with	growth	in	each	of	our	revenue	streams as	discussed	in	detail	below.

Operating	expenses	increased	8%	year	over	year,	primarily	due	to	increased	salaries	and	benefits	in	fiscal	 2019,	partly	due	to	increased	headcount compared	to	fiscal	2018,	costs	related	to	our	new	card	payment	processing	platform,	bonuses	provided	by	the	Company	in	response	to	the	lower	tax	rate resulting	from	the	TCJA,	the	Ensenta	acquisition,	increased	rent	expense	related	to	new	facilities,	and	increased	amortization	expense.

The	TCJA	had	a	large	impact	on	our	fiscal	 2018	provision/	(benefit)	for	income	taxes	and	net	income,	which	impacted	year-over-year	comparison	as discussed	below.

We	move	into	fiscal	2020	following	a	strong	performance	in	fiscal	2019.	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.	 We believe	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,	2019	follows.	Fiscal	years	2018	and	2017 have	been	recast	to	reflect	our	retrospective	adoption	of	Accounting	Standards	Update	("ASU")	2014-09,	Revenue	from	Contracts	with	Customers,	and related	amendments,	collectively	referred	to	as	Accounting	Standards	Codification	("ASC")	606.

# REVENUE

Services	and	support	includes:	"Outsourcing	and	cloud"	fees	that	predominantly	have	contract	terms	of	five	years	or	greater	at	inception;	"Product	delivery &	services"	revenue,	which	includes	revenue	from	the	sales	of	licenses,	implementation	services,	deconversion	fees,	consulting,	and	hardware;	and	"In- house	support"	revenue,	which	is	composed	of	maintenance	fees	which	primarily	contain	annual	contract	terms.

In	the	fiscal	year	ended	June	30,	2019,	services	and	support	revenue	grew	 4%	over	the	prior	fiscal	year.	Excluding	deconversion	fees,	which	totaled $30,230	in	fiscal	2019	and	$46,171	in	fiscal	2018,	and	excluding	revenue	from	fiscal	 2019	acquisitions	totaling	$944,	services	and	support	revenue	grew 6%.	The	increase	was	primarily	driven	by	an	increase	in	outsourcing	and	cloud	revenue	resulting	from	organic	growth	in	hosting	and	data	processing fees	complemented	by	added	revenue	from	Ensenta.	In-house	support	revenue	also	contributed	to	the	increase,	primarily	from	higher	software	usage revenue	resulting	partially	from	the	addition	of	new	customers.	These	increases	were	partially	offset	by	decreased	product	delivery	and	services	revenue due	to	reduced	license	and	in-house	implementation	revenue	as	more	customers	opted	for	outsourced	delivery.

| Processing	Revenue | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Processing | $594,202 | $550,058 | 8% |
| Percentage\tof\ttotal\trevenue | 38% | 37% |  |

Processing	 revenue	 includes:	 "Remittance"	 revenue	 from	 payment	 processing,	 remote	 capture,	 and	 automated	 clearing	 house	 (ACH)	 transactions; "Card"	 fees,	 including	card	 transaction	processing	and	monthly	 fees;	and	"Transaction	and	digital"	revenue,	which	 includes	 transaction	and	mobile processing	fees.	We	continually	seek	opportunities	to	increase	revenue	while	at	the	same	time	containing	costs	to	expand	margins.

Processing	revenue	increased	8%	for	the	fiscal	year	ended	June	30,	2019	as	compared	to	the fiscal	year	ended	June	30,	2018,	with	strong	organic growth	in	each	component,	complemented	by	added	remittance	revenue	from	Ensenta.

# OPERATING	EXPENSES

| Cost	of	Revenue | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Cost\tof\tRevenue | $923,030 | $853,138 | 8% |
| Percentage\tof\ttotal\trevenue | 59% | 58% |  |

Cost	of	Revenue	increased	8%	compared	to	fiscal	2018,	and	increased	1%	as	a	percentage	of	total	revenue.	Excluding	costs	related	to	deconversions, fiscal	2019	acquisitions,	and	bonuses	provided	by	the	Company	in	response	to	the	lower	tax	rate	resulting	from	the	TCJA,	cost	of	revenue	increased	7%. The	increase	was	driven	by	increased	salaries	and	benefits;	higher	direct	costs	of	product,	including	spending	related	to	the	ongoing	project	to	expand our	credit	and	debit	card	platform;	increased	amortization	expense;	and	higher	rent	expense	related	to	new	facilities.	The	Company	continues	to	focus	on cost	management.

| Research	&amp;	Development | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Research\t&amp;\tDevelopment | $96,378 | $90,340 | 7% |
| 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	7%	primarily	due	to	increased	salary	and	benefit	expenses,	in	part	due	to	a	 3%	increase	in	headcount, but	were	consistent	with	the	prior	year	as	a	percentage	of	total	revenue.	Excluding	the	bonuses	provided	by	the	Company	in	response	to	the	lower	tax rate	following	the	TCJA	and	costs	attributable	to	companies	acquired	in	fiscal	2019,	research	and	development	expense	increased	4%.

| Selling,	General,	and	Administrative | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Selling,\tGeneral,\tand\tAdministrative | $185,998 | $171,710 | 8% |
| Percentage\tof\ttotal\trevenue | 12% | 12% |  |

Selling,	general	and	administrative	costs	 included	all	expenses	related	 to	sales	efforts,	commissions,	 finance,	 legal,	and	human	resources,	plus	all administrative	costs.	Excluding	bonuses	provided	by	the	Company	in	response	to	the	lower	tax	rate	resulting	 from	 the	TCJA,	selling,	general,	and administrative	expense	increased	6%.	These	expenses	increased	primarily	due	to	increased	commissions,	salaries,	and	benefits.

# Gains	on	Disposal	of	Businesses

No	businesses	were	disposed	during	fiscal	 2019.	In	fiscal	2018,	we	recognized	gains	on	the	disposal	of	businesses	totaling $1,894	due	to	the	sales	of our	ATM	Manager	and	jhaDirect	product	lines.

| INTEREST	INCOME	AND	EXPENSE | Year	Ended	June	30, | Year	Ended	June	30, | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Interest\tIncome | $876 | $575 | 52\t% |
| Interest\tExpense | $(926) | $(1,920) | (52)% |

Interest	income	fluctuated	due	to	changes	in	invested	balances	and	yields	on	invested	balances.	Interest	expense	decreased	in	fiscal 2019	due	mainly	to lower	amounts	borrowed	on	our	revolving	credit	facility	during	the	year.

| PROVISION/	(BENEFIT)	FOR	INCOME	TAXES | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 |  |
| Provision/\t(Benefit)\tfor\tIncome\tTaxes | $75,350 | $(8,876) | 949% |
| Effective\tRate | 21.7% | (2.5)% |  |

The	increase	 in	 the	effective	 tax	rate	was	primarily	 the	result	of	 the	significant	 tax	benefit	recognized	 in	 the	prior	 fiscal	year	as	a	result	of	 the	re- measurement	of	net	deferred	tax	liabilities	upon	enactment	of	the	TCJA	on	December	22,	2017.	That	increase	in	the	provision/	(benefit)	for	income	taxes is	partially	offset	by	the	reduced	U.S.	federal	corporate	tax	rate	of	21%	effective	for	the	current	year,	and	increased	excess	tax	benefits	from	share-based payments	recognized	during	fiscal	2019.	Excluding	the	fiscal	2018	TCJA	tax	benefit	resulting	from	the	re-measurement	of	net	deferred	tax	liabilities, provision/	(benefit)	for	income	taxes	decreased	23%.

# NET	INCOME

In	 fiscal	2018,	revenues	 increased	6%	 or	$82,507	compared	 to	 fiscal	2017.	Deconversion	 fees	 increased	$7,343	compared	to	the	prior	fiscal	year. Revenue	from	fiscal	2018	acquisitions	totaled	$17,368.	Fiscal	2017	included	$10,897	of	revenue	from	divested	companies.	Excluding	these	factors,	total revenue	increased	5%,	with	growth	in	each	of	our	revenue	streams	as	discussed	in	detail	below.

Operating	expenses	increased	6%,	due	to	increased	headcount	driving	increased	salaries	and	benefits,	costs	related	to	fiscal	 2018	acquisitions,	and professional	 services	 expenses	 incurred	 due	 to	 contracting	 with	 outside	 experts	 in	 preparation	 for	 our	 adoption	 of	 the	 new	Accounting	 Standards Codification	 ("ASC")	 Topic	 606	 revenue	 standard.	Excluding	 costs	 related	 to	 deconversion	 fees	 from	 each	 year,	 expenses	 related	 to	 fiscal	 2018 acquisitions,	fiscal	2017	costs	related	to	divestitures,	and	gains	on	the	disposal	of	businesses	from	each	year,	operating	expenses	increased	5%.

The	TCJA	had	a	large	impact	on	our	provision/	(benefit)	for	income	taxes	and	net	income,	which	are	discussed	below.

| Services	and	Support | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Services\tand\tSupport | $920,739 | $881,735 | 4% |
| Percentage\tof\ttotal\trevenue | 63% | 64% |  |

Services	and	support	revenue	grew	4%	in	fiscal	2018.	Excluding	deconversion	fees,	revenue	from	fiscal	2018	acquisitions	totaling	$9,074,	and	fiscal 2017	revenue	related	to	divestitures	of	 $10,745,	services	and	support	revenue	grew	 4%.	The	growth	was	due	mainly	to	increased	outsourcing	and	cloud revenue,	as	well	as	growth	within	our	in-house	support	revenue	component	due	to	higher	software	usage	revenue.

Processing	revenue	 increased	9%	 in	 fiscal	2018,	with	strong	growth	in	each	of	its	three	components.	Ensenta	contributed	to	the	growth	with	added remittance	revenue.	Excluding	$8,294	of	revenue	from	fiscal	 2018	acquisitions,	and	excluding	fiscal	2017	revenue	related	to	divestitures	totaling	 $152, processing	revenue	increased	7%	for	the	year	with	significant	increases	in	each	of	its	three	components.

| Cost	of	Revenue | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Cost\tof\tRevenue | $853,138 | $805,855 | 6% |
| Percentage\tof\ttotal\trevenue | 58% | 58% |  |

Cost	of	revenue	for	fiscal	 2018	increased	6%	compared	to	fiscal	2017,	in	line	with	the	revenue	increase,	and	remained	a	consistent	percentage	of	total revenue	in	each	year.

| Research	and	Development | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Research\tand\tDevelopment | $90,340 | $84,753 | 7% |
| Percentage\tof\ttotal\trevenue | 6% | 6% |  |

| Selling,	General,	and	Administrative | Year	Ended	June	30, |  | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Selling,\tGeneral,\tand\tAdministrative | $171,710 | $159,235 | 8% |
| Percentage\tof\ttotal\trevenue | 12% | 11% |  |

Selling,	 general,	 and	 administrative	 expenses	 increased	 in	 fiscal	 2018	 primarily	 due	 to	 increased	 commissions,	 salaries,	 and	 benefits,	 and	 higher professional	services	expenses	incurred	due	to	contracting	with	outside	experts	in	preparation	for	our	adoption	of	the	ASC	606	revenue	standard.

# Gain	on	Disposal	of	Businesses

In	fiscal	2018,	we	recognized	gains	on	disposal	of	businesses	totaling $1,894,	due	to	the	sales	of	our	ATM	Manager	and	jhaDirect	product	lines. In	fiscal	2017,	we	recognized	gains	on	the	disposal	of	businesses	totaling $3,270.	$2,136	was	related	to	the	fiscal	2016	sale	of	Alogent,	and	$1,134 related	to	the	sale	of	our	Regulatory	Filing	products	to	Fed	Reporter	on	May	1,	2017.

| INTEREST	INCOME	AND	EXPENSE | Year	Ended	June	30, | Year	Ended	June	30, | %	Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Interest\tIncome | $575 | $248 | 132% |
| Interest\tExpense | $(1,920) | $(996) | 93% |

Interest	income	fluctuated	due	to	changes	in	invested	balances	and	yields	on	invested	balances.	Interest	expense	increased	in	fiscal	2018	due	mainly	to increased	borrowing,	which	was	primarily	used	for	the	acquisition	of	Ensenta	Corporation,	and	has	now	been	re-paid.

| PROVISION/	(BENEFIT)	FOR	INCOME	TAXES | Year	Ended	June	30, |  | %<br>Change |
| :--- | :--- | :--- | :--- |
|  | 2018 | 2017 |  |
| Provision/\t(Benefit)\tfor\tIncome\tTaxes | $(8,876) | $111,408 | (108)% |
| Effective\tRate | (2.5)% | 32.7% |  |

The	significant	decrease	in	the	effective	tax	rate	was	primarily	a	result	of	the	TCJA	enacted	December	22,	2017,	which	included	a	reduction	to	the	U.S. federal	statutory	income	tax	rate	to	21%	effective	January	1,	2018.	A	blended	28%	U.S	federal	statutory	income	tax	rate	was	applied	to	fiscal	2018.	We recorded	a	net	tax	benefit	of	$106,801	related	to	the	re-measurement	of	our	net	deferred	tax	liabilities	and	 $21,551	related	to	the	impacts	on	current	year operations.

# REPORTABLE	SEGMENT	DISCUSSION

The	Company	is	a	leading	provider	of	technology	solutions	and	payment	processing	services	primarily	for	financial	services	organizations.

Beginning	in	the	first	quarter	of	fiscal	2018,	JHA	changed	its	reportable	segment	structure	from	two	customer-centric	segments,	Bank	and	Credit	Union,	to four	product-centric	segments.	The	change	was	made	based	on	the	view	of	our	Chief	Executive	Officer,	who	is	also	our	Chief	Operating	Decision	Maker, that	 the	 Company	 could	 be	 more	 effectively	 managed	 using	 a	 product-centric	 approach	 and	 was	 driven	 by	 the	 first	 budgetary	 process	 under	 his administration.

The	Company's	operations	are	classified	into	four	reportable	segments:	Core,	Payments,	Complementary,	and	Corporate	and	Other.	The	Core	segment provides	core	information	processing	platforms	to	banks	and	credit	unions,	which	consist	of	integrated	applications	required	to	process	deposit,	loan,	and general	ledger	transactions,	and	maintain	centralized	customer/member	information.	The	Payments	segment	provides	secure	payment	processing	tools and	services,	including	ATM,	debit,	and	credit	card	processing	services;	online	and	mobile	bill	pay	solutions;	ACH	origination	and	remote	deposit	capture processing;	and	risk	management	products	and	services.	The	Complementary	segment

provides	additional	software,	processing	platforms,	and	services	that	can	be	integrated	with	our	core	solutions	or	used	independently.	The	Corporate	& Other	segment	includes	revenue	and	costs	from	hardware	and	other	products	not	attributed	to	any	of	the	other	three	segments,	as	well	as	operating	costs not	directly	attributable	to	the	other	three	segments.

The	fiscal	2017	period	presented	below	has	been	retroactively	recast	to	conform	to	the	new	segment	structure	adopted	July	1,	2017.	Both	prior	year periods	presented	have	also	been	recast	to	reflect	the	Company's	retrospective	adoption	of	ASC	606.

|  | 2019 | %	Change | 2018 | %	Change | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $534,429 | 5% | $509,821 | 7% | $477,605 |
| Cost\tof\tRevenue | $243,989 | 5% | $232,868 | 6% | $219,440 |

In	fiscal	2019,	revenue	in	the	Core	segment	increased	 5%	compared	to	fiscal	2018,	driven	by	increases	in	outsourcing	and	cloud	revenue	and	in-house support	revenue.	Excluding	deconversion	fees,	which	totaled	$14,907	 and	$22,161,	for	fiscal	2019	 and	2018,	respectively,	and	excluding	revenue	of $923	from	fiscal	2019	acquisitions,	revenue	in	the	Core	segment	increased	6%,	due	to	increased	outsourcing	and	cloud	and	in-house	support	revenue. Cost	of	revenue	remained	a	consistent	percentage	of	revenue	for	fiscal	2019	and	fiscal	2018.

In	 fiscal	2018,	revenue	in	the	Core	segment	increased	 7%,	primarily	due	to	increased	revenue	within	each	component	of	our	services	and	support revenue	stream.	Cost	of	revenue	increased	6%	for	fiscal	2018	compared	to	fiscal	2017,	but	remained	consistent	as	a	percentage	of	revenue.

# Payments

|  | 2019 | %	Change | 2018 | %	Change | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $548,319 | 8% | $508,331 | 8% | $471,988 |
| Cost\tof\tRevenue | $273,261 | 11% | $245,269 | 10% | $222,685 |

In	 fiscal	2019,	revenue	in	the	Payments	segment	increased	 8%	compared	to	fiscal	2018.	Excluding	deconversion	revenue	of	$8,603	 and	$13,004, respectively,	revenue	increased	9%	in	the	Payments	segment,	due	to	organic	growth	within	remittance	and	card	processing,	as	well	as	added	revenue from	Ensenta.	Cost	of	revenue	increased	11%,	partially	due	to	increased	headcount	and	amortization	expenses	related	to	Ensenta,	as	well	as	increased spending	related	to	the	ongoing	project	to	expand	our	credit	and	debit	card	platform.	Cost	of	revenue	increased	2%	as	a	percentage	of	revenue	in	fiscal 2019	as	compared	to	fiscal	 2018.

In	fiscal	2018,	revenue	in	the	Payments	segment	increased	compared	to	fiscal	 2017,	due	primarily	to	increased	card	and	remittance	processing	revenue. The	increases	were	partially	due	to	the	acquisition	of	Ensenta.	Cost	of	revenue	increased	10%,	and	increased	1%	as	a	percentage	of	revenue.

# Complementary

|  | 2019 | %	Change | 2018 | %	Change | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $418,215 | 6% | $395,419 | 5% | $375,811 |
| Cost\tof\tRevenue | $175,737 | 7% | $163,905 | 6% | $155,084 |

Revenue	in	the	Complementary	segment	increased	6%	for	the	fiscal	year	ended	June	30,	2019	compared	to	the	prior	year.	After	excluding	deconversion revenue	from	each	period,	which	totaled	$6,672	and	$10,855	for	the	fiscal	years	ended	 June	30,	2019	and	2018,	respectively,	and	excluding	revenue	of $126	from	fiscal	2019	acquisitions,	revenue	increased	7%.	The	increase	was	driven	by	increases	in	outsourcing	and	cloud	revenue	and	in-house	support within	our	services	and	support	revenue	stream,	as	well	as	transaction	and	digital	processing	revenue	within	our	processing	revenue	stream.	Cost	of revenue	increased	7%	for	the	year,	and	increased	1%	as	a	percentage	of	revenue.

In	fiscal	2018,	revenue	in	the	Complementary	segment	increased	 5%,	due	to	higher	outsourcing	and	cloud	revenue	within	services	and	support,	as	well as	 increased	 transaction	 and	 digital	 processing	 revenue.	 Cost	 of	 revenue	 increased	6%	 for	 fiscal	2018	 compared	 to	 fiscal	2017,	 but	 remained	 a consistent	percentage	of	revenue.

# Corporate	and	Other

|  | 2019 | %	Change | 2018 | %	Change | 2017 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $51,728 | (10)% | $57,226 | (9)% | $62,886 |
| Cost\tof\tRevenue | $230,043 | 9\t% | $211,096 | 1\t% | $208,646 |

The	decrease	in	revenue	in	the	Corporate	and	Other	segment	for	the	 fiscal	year	ended	June	30,	2019	was	due	to	decreased	services	and	support revenue.	This	is	in	part	due	to	the	sale	of	our	jhaDirect	product	line,	which	was	sold	during	the	first	quarter	of	fiscal	2018.

The	decreased	revenue	in	fiscal	2018	compared	to	fiscal	2017	in	the	Corporate	and	Other	segment	is	largely	due	to	the	loss	of	revenue	following	the	sale of	our	jhaDirect	product.	Fiscal	2017	included	revenue	from	jhaDirect	totaling	$6,571.

Cost	of	revenue	for	the	Corporate	and	Other	segment	includes	operating	costs	not	directly	attributable	to	any	of	the	other	three	segments.	The	increased cost	of	revenue	in	fiscal	2019	is	primarily	related	to	bonuses	provided	by	the	Company	in	response	to	the	lower	tax	rate	resulting	from	the	TCJA	and increased	rent	and	maintenance	contract	expenses	related	to	new	facilities.

# LIQUIDITY	AND	CAPITAL	RESOURCES

The	Company's	cash	and	cash	equivalents	increased	to	 $93,628	at	June	30,	2019	from	$31,440	at	June	30,	2018.	Cash	at	the	end	of	fiscal	2018	was lower	due	primarily	to	the	acquisition	of	Ensenta	and	higher	repayment	of	debt	in	fiscal	2018.

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

|  | Year	Ended | Year	Ended |
| :--- | :--- | :--- |
|  | June\t30, |  |
|  | 2019 | 2018 |
| Net\tincome | $271,885 | $365,034 |
| Non-cash\texpenses | 180,987 | 87,906 |
| Change\tin\treceivables | (11,777) | 21,489 |
| Change\tin\tdeferred\trevenue | 23,656 | 1,255 |
| Change\tin\tother\tassets\tand\tliabilities | (33,623) | (63,542) |
| Net\tcash\tprovided\tby\toperating\tactivities | $431,128 | $412,142 |

Cash	provided	by	operating	activities	increased	5%	compared	to	fiscal	2018.	Cash	from	operations	is	primarily	used	to	repay	debt,	pay	dividends	and repurchase	stock,	and	for	capital	expenditures.

Cash	used	in	investing	activities	for	fiscal	2019	totaled	$190,635	and	included:	$111,114	for	the	ongoing	enhancements	and	development	of	existing	and new	product	and	service	offerings;	capital	expenditures	on	facilities	and	equipment	of	$53,598,	mainly	for	the	purchase	of	computer	equipment;	 $19,981, net	of	cash	acquired,	 for	 the	purchases	of	BOLTS	Technologies,	 Inc.	and	Agiletics,	 Inc.;	 $6,049	for	the	purchase	and	development	of	internal	use software;	and	$20	for	customer	contracts.	This	was	partially	offset	by	 $127	of	proceeds	from	asset	sales.

Cash	used	in	investing	activities	for	fiscal	2018	totaled	$291,826	and	included:	$137,562,	net	of	cash	acquired,	for	the	purchases	of	Ensenta	Corporation and	Vanguard	Software	Group;	$96,647	for	the	development	of	software;	capital	expenditures	on	facilities	and	equipment	of	 $40,135,	mainly	for	the purchase	of	computer	equipment;	$13,138	for	the	purchase	and	development	of	internal	use	software;	and	 $5,000	for	the	purchase	of	preferred	stock	of Automated	Bookkeeping,	Inc.	These	expenditures	were	partially	offset	by	$350	of	proceeds	from	the	sale	of	businesses	and	 $306	of	proceeds	from	the sale	of	assets.

Financing	activities	used	cash	of	$178,305	for	fiscal	2019.	Cash	used	was	$118,745	for	dividends	paid	to	stockholders;	 $54,864	for	the	purchase	of treasury	shares;	and	$4,696	of	net	cash	outflow	from	the	issuance	of	stock	and	tax	related	to	stock-based	compensation.	Borrowings	and	re-payments	on our	revolving	credit	facility	netted	to	$0.

Financing	activities	used	cash	in	fiscal	2018	 of	$203,641.	Cash	used	was	$175,000	for	repayment	on	our	revolving	credit	facility;	dividends	paid	to stockholders	of	$105,021;	and	$48,986	for	the	purchase	of	treasury	shares.	This	was	partially	offset	by	borrowings	of	 $125,000	on	our	revolving	credit facility	and	$366	of	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 $53,598	 and	$40,135	for	fiscal	years	ended	June	30,	2019	 and	June	30,	2018,	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,	2019,	the	Company	had	an	estimated	 $2,673	of	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,	2019,	there	were	26,508	shares	in	treasury	stock	and	the	Company had	the	remaining	authority	to	repurchase	up	to	3,483	additional	shares.	The	total	cost	of	treasury	shares	at	 June	30,	2019	is	$1,110,124.	During	fiscal 2019,	the	Company	repurchased	400	treasury	shares	for	$54,864.	At	June	30,	2018,	there	were	26,108	shares	in	treasury	stock	and	the	Company	had authority	to	repurchase	up	to	3,883	additional	shares.

# 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,	2019,	the	Company	was	in	compliance	with	all	such	covenants.	The	revolving	credit	facility	terminates February	20,	2020	and	at	June	30,	2019	there	was	no	outstanding	balance.	Prior	to	termination,	the	Company	plans	to	renew	the	current	credit	facility	or replace	it	with	a	similar	credit	facility.

# Other	lines	of	credit

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

# OFF-BALANCE	SHEET	ARRANGEMENTS	AND	CONTRACTUAL	OBLIGATIONS

At	June	30,	2019,	the	Company's	total	off-balance	sheet	contractual	obligations	were	 $665,107.	This	balance	consists	of	 $71,633	of	long-term	operating leases	for	various	facilities	and	equipment	which	expire	from	2020	 to	2030	 and	$593,474	 of	 purchase	 commitments.	In	fiscal	2017,	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	$555,754	over	the	remaining	term	of	the	contract.	The	remainder	of	the	purchase	commitments	relate	mainly	to	open purchase	 orders.	The	 contractual	 obligations	 table	 below	 excludes	$12,009	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,\t2019 | 1\tyear | 1-3\tyears | 3-5\tyears | 5\tyears | TOTAL |
| Operating\tlease\tobligations | $15,559 | $25,399 | $19,004 | $11,671 | $71,633 |
| Purchase\tobligations | 62,637 | 86,875 | 107,188 | 336,774 | 593,474 |
| Total | $78,196 | $112,274 | $126,192 | $348,445 | $665,107 |

The	operating	lease	obligations	included	on	this	table	will	be	recorded	on	the	balance	sheet	beginning	in	fiscal	2020	due	to	the	Company's	adoption	of ASU	No.	2016-02,	issued	by	the	FASB	in	February	2016	and	effective	for	the	Company	on	July	1,	2019.

# RECENT	ACCOUNTING	PRONOUNCEMENTS

# Recently	Adopted	Accounting	Guidance

The	Financial	Accounting	Standards	Board	("FASB")	issued	ASU	No.	2014-09,	 Revenue	from	Contracts	with	Customers,	in	May	2014.	This	standard (and	related	amendments	collectively	referred	to	as	"ASC	606")	is	part	of	an	effort	to	create	a	common	revenue	standard	for	U.S.	GAAP	and	International Financial	Reporting	Standards	("IFRS").	The	new	standard	has	superseded	much	of	the	authoritative	literature	for	revenue	recognition.	The	new	model enacts	a	five-step	process	for	achieving	the	core	principle,	which	is	that	an	entity	should	recognize	revenue	to	depict	the	transfer	of	promised	goods	or services	to	customers	in	an	amount	that	reflects	the	consideration	to	which	the	entity

expects	to	be	entitled	in	exchange	for	those	goods	or	services.	The	standard	was	effective	for	the	Company	on	July	1,	2018.	Entities	are	allowed	to transition	to	the	new	standard	by	either	recasting	prior	periods	(full	retrospective)	or	recognizing	the	cumulative	effect	as	of	the	beginning	of	the	period	of adoption	(modified	retrospective).

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

# Software	Revenue	Recognition

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

# Impacts	on	Financial	Statements

See	tables	in	Item	8,	Note	1	to	the	Consolidated	Financial	Statements	for	the	impacts	ASC	606	had	on	prior	period	financial	statements.

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

# Not	Yet	Adopted

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

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

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

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

# 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	generate	revenue	from	data	processing,	transaction	processing,	software	licensing	and	related	services,	professional	services,	and	hardware	sales.

# Significant	Judgments	in	Application	of	the	Guidance

# Identification	of	Performance	Obligations

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

# Determination	of	Transaction	Price

The	amount	of	revenue	recognized	is	based	on	the	consideration	we	expect	to	receive	in	exchange	for	transferring	goods	and	services	to	the	customer. Our	contracts	with	our	customers	frequently	contain	some	component	of	variable	consideration.	We	estimate	variable	consideration	in	our	contracts primarily	using	the	expected	value	method,	based	on	both	historical	and	current	information.	Where	appropriate,	we	may	constrain	the	estimated	variable consideration	included	in	the	transaction	price	in	the	event	of	a	high	degree	of	uncertainty	as	to	the	final	consideration	amount.	Significant	judgment	is used	in	the	estimate	of	variable	consideration	of	customer	contracts	that	are	long-term	and	include	uncertain	transactional	volumes.

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

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

# Allocation	of	Transaction	Price

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

The	following	describes	the	nature	of	our	primary	types	of	revenue:

# Processing

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

# Outsourcing	and	Cloud

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

# Product	Delivery	and	Services

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

# In-House	Support

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

# Contract	Costs

We	incur	incremental	costs	to	obtain	a	contract	as	well	as	costs	to	fulfill	contracts	with	customers	that	are	expected	to	be	recovered.	These	costs	consist primarily	of	sales	commissions,	which	are	incurred	only	if	a	contract	is	obtained,	and	customer	conversion	or	implementation-related	costs.

Capitalized	costs	are	amortized	based	on	the	transfer	of	goods	or	services	to	which	the	asset	relates,	in	line	with	the	percentage	of	revenue	recognized for	each	performance	obligation	to	which	the	costs	are	allocated.

# 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	our	future	consolidated	operating results.	For	 long-lived	 assets,	 we	 consider	 whether	 any	 impairment	 indicators	 are	 present.	 If	 impairment	 indicators	 are	 identified,	 we	 test	 the recoverability	of	the	long-lived	assets.	If	this	recoverability	test	is	failed,	we	determine	the	fair	value	of	the	long-lived	assets	and	recognize	an	impairment loss	if	the	fair	value	is	less	than	its	carrying	value.

# Capitalization	of	software	development	costs

We	capitalize	certain	costs	incurred	to	develop	commercial	software	products.	For	software	that	is	to	be	sold,	significant	areas	of	judgment	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	include	a	qualitative	assessment	of factors	that	may	indicate	a	potential	for	impairment,	such	as:	macroeconomic	conditions,	industry	and	market	changes,	our	overall	financial	performance, changes	in	share	price,	and	an	assessment	of	other	events	or	changes	in	circumstances	that	could	negatively	impact	us.		If	that	qualitative	assessment indicates	a	potential	 for	 impairment,	a	quantitative	assessment	 is	 then	required,	 including	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.	Our	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.

We	have	no	outstanding	debt	with	variable	interest	rates	as	of	 June	30,	2019,	and	are	therefore	not	currently	exposed	to	interest	rate	risk.

# ITEM	8.			FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA

| Report	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,\t2019,\t2018,\tand\t2017 | 38 |
| Consolidated\tBalance\tSheets,\nJune\t30,\t2019\tand\t2018 | 39 |
| Consolidated\tStatements\tof\tChanges\tin\tStockholders'\tEquity,\nYears\tEnded\tJune\t30,\t2019,\t2018,\tand\t2017 | 40 |
| Consolidated\tStatements\tof\tCash\tFlows,\nYears\tEnded\tJune\t30,\t2019,\t2018,\tand\t2017 | 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.

# Opinions	on	the	Financial	Statements	and	Internal	Control	over	Financial	Reporting

We	have	audited	the	accompanying	consolidated	balance	sheets	of	Jack	Henry	&	Associates,	Inc.	and	its	subsidiaries	(the	"Company")	as	of	June	30, 2019	and	2018,	and	the	related	consolidated	statements	of	income,	changes	in	stockholders'	equity	and	cash	flows	for	each	of	the	three	years	in	the period	ended	June	30,	2019,	including	the	related	notes	(collectively	referred	to	as	the	"consolidated	financial	statements").	We	also	have	audited	the Company's	internal	control	over	financial	reporting	as	of	June	30,	2019,	based	on	criteria	established	in	Internal	Control	-	Integrated	Framework	(2013) issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).

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

# Change	in	Accounting	Principle

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

# Basis	for	Opinions

The	Company's	management	is	responsible	for	these	consolidated	financial	statements,	for	maintaining	effective	internal	control	over	financial	reporting, and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	the	accompanying	Management's	Annual	Report	on Internal	 Control	 over	 Financial	 Reporting.	Our	responsibility	 is	 to	express	opinions	on	 the	Company's	consolidated	 financial	statements	and	on	 the Company's	internal	control	over	financial	reporting	based	on	our	audits.	We	are	a	public	accounting	firm	registered	with	the	Public	Company	Accounting Oversight	Board	(United	States)	(PCAOB)	and	are	required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S.	federal	securities laws	and	the	applicable	rules	and	regulations	of	the	Securities	and	Exchange	Commission	and	the	PCAOB.

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

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

# Definition	and	Limitations	of	Internal	Control	over	Financial	Reporting

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal control	over	financial	reporting	includes	those	policies	and	procedures	that	(i)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	company;	(ii)	provide	reasonable	assurance	that	transactions	are	recorded	as necessary	to	permit	preparation	of	financial	statements	in	accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of the	company	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the	company;	and	(iii)	provide	reasonable	assurance regarding

prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of compliance	with	the	policies	or	procedures	may	deteriorate.

# Critical	Audit	Matters

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

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

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

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

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

/s/	PricewaterhouseCoopers	LLP

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

# MANAGEMENT'S	ANNUAL	REPORT	ON	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

The	management	of	Jack	Henry	&	Associates,	Inc.	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as such	term	is	defined	in	Exchange	Act	Rule	13a-15(f).	The	Company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	the	Company's	consolidated	financial	statements	for	external	reporting purposes	in	accordance	with	U.S.	GAAP.

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

As	of	June	30,	2019,	management	conducted	an	assessment	of	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting	based	on	the framework	 established	 in	 Internal	 Control-Integrated	 Framework	 (2013)	 issued	 by	 the	 Committee	 of	 Sponsoring	 Organizations	 of	 the	 Treadway Commission	 (COSO).	Based	on	this	assessment,	management	has	concluded	the	Company's	internal	control	over	financial	reporting	as	of	June	30, 2019	was	effective.

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

# JACK	HENRY	&	ASSOCIATES,	INC.	AND	SUBSIDIARIES

# CONSOLIDATED	STATEMENTS	OF	INCOME

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| REVENUE | $1,552,691 | $1,470,797 | $1,388,290 |
| EXPENSES |  |  |  |
| Cost\tof\tRevenue | 923,030 | 853,138 | 805,855 |
| Research\tand\tDevelopment | 96,378 | 90,340 | 84,753 |
| Selling,\tGeneral,\tand\tAdministrative | 185,998 | 171,710 | 159,235 |
| Gain\ton\tDisposal\tof\tBusinesses | — | (1,894) | (3,270) |
| Total\tExpenses | 1,205,406 | 1,113,294 | 1,046,573 |
| OPERATING\tINCOME | 347,285 | 357,503 | 341,717 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |
| Interest\tIncome | 876 | 575 | 248 |
| Interest\tExpense | (926) | (1,920) | (996) |
| Total\tInterest\tIncome\t(Expense) | (50) | (1,345) | (748) |
| INCOME\tBEFORE\tINCOME\tTAXES | 347,235 | 356,158 | 340,969 |
| PROVISION/\t(BENEFIT)\tFOR\tINCOME\tTAXES | 75,350 | (8,876) | 111,408 |
| NET\tINCOME | $271,885 | $365,034 | $229,561 |
| Basic\tearnings\tper\tshare | $3.52 | $4.73 | $2.95 |
| Basic\tweighted\taverage\tshares\toutstanding | 77,160 | 77,252 | 77,856 |
| Diluted\tearnings\tper\tshare | $3.52 | $4.70 | $2.93 |
| Diluted\tweighted\taverage\tshares\toutstanding | 77,347 | 77,585 | 78,255 |

See	notes	to	consolidated	financial	statements

# CONSOLIDATED	BALANCE	SHEETS

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

|  | June	30,<br>2019 | June	30,<br>2018 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| CURRENT\tASSETS: |  |  |
| Cash\tand\tcash\tequivalents | $93,628 | $31,440 |
| Receivables,\tnet | 310,080 | 297,271 |
| Income\ttax\treceivable | 17,817 | 21,671 |
| Prepaid\texpenses\tand\tother | 106,466 | 96,069 |
| Deferred\tcosts | 35,102 | 22,991 |
| Assets\theld\tfor\tsale | 6,355 | 1,300 |
| Total\tcurrent\tassets | 569,448 | 470,742 |
| PROPERTY\tAND\tEQUIPMENT,\tnet | 272,474 | 285,550 |
| OTHER\tASSETS: |  |  |
| Non-current\tdeferred\tcosts | 90,084 | 74,865 |
| Computer\tsoftware,\tnet\tof\tamortization | 318,969 | 288,172 |
| Other\tnon-current\tassets | 134,743 | 110,299 |
| Customer\trelationships,\tnet\tof\tamortization | 100,653 | 115,034 |
| Other\tintangible\tassets,\tnet\tof\tamortization | 31,514 | 38,467 |
| Goodwill | 666,944 | 649,929 |
| Total\tother\tassets | 1,342,907 | 1,276,766 |
| Total\tassets | $2,184,829 | $2,033,058 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| CURRENT\tLIABILITIES: |  |  |
| Accounts\tpayable | $9,850 | $30,360 |
| Accrued\texpenses | 120,360 | 88,764 |
| Deferred\trevenues | 339,752 | 328,931 |
| Total\tcurrent\tliabilities | 469,962 | 448,055 |
| LONG-TERM\tLIABILITIES: |  |  |
| Non-current\tdeferred\trevenues | 54,554 | 40,984 |
| Deferred\tincome\ttax\tliability | 217,010 | 208,303 |
| Other\tlong-term\tliabilities | 14,290 | 12,872 |
| Total\tlong-term\tliabilities | 285,854 | 262,159 |
| Total\tliabilities | 755,816 | 710,214 |
| 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; |  |  |
| 103,496,026\tshares\tissued\tat\tJune\t30,\t2019; |  |  |
| 103,278,562\tshares\tissued\tat\tJune\t30,\t2018 | 1,035 | 1,033 |
| Additional\tpaid-in\tcapital | 472,029 | 464,138 |
| Retained\tearnings | 2,066,073 | 1,912,933 |
| Less\ttreasury\tstock\tat\tcost |  |  |
| 26,507,903\tshares\tat\tJune\t30,\t2019; |  |  |
| 26,107,903\tshares\tat\tJune\t30,\t2018 | (1,110,124) | (1,055,260) |
| Total\tstockholders'\tequity | 1,429,013 | 1,322,844 |
| Total\tliabilities\tand\tequity | $2,184,829 | $2,033,058 |

# CONSOLIDATED	STATEMENTS	OF	CHANGES	IN	STOCKHOLDERS'	EQUITY

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| PREFERRED\tSHARES: | — | — | — |
| COMMON\tSHARES: |  |  |  |
| Shares,\tbeginning\tof\tyear | 103,278,562 | 103,083,299 | 102,903,971 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | 141,071 | 118,865 | 98,781 |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 76,393 | 76,398 | 80,547 |
| Shares,\tend\tof\tyear | 103,496,026 | 103,278,562 | 103,083,299 |
| COMMON\tSTOCK\t-\tPAR\tVALUE\t$0.01\tPER\tSHARE: |  |  |  |
| Balance,\tbeginning\tof\tyear | $1,033 | $1,031 | $1,029 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | 1 | 1 | 1 |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 1 | 1 | 1 |
| Balance,\tend\tof\tyear | $1,035 | $1,033 | $1,031 |
| ADDITIONAL\tPAID-IN\tCAPITAL: |  |  |  |
| Balance,\tbeginning\tof\tyear | $464,138 | $452,016 | $440,123 |
| Shares\tissued\tfor\tequity-based\tpayment\tarrangements | 235 | 174 | (1) |
| Tax\twithholding\trelated\tto\tshare\tbased\tcompensation | (13,972) | (7,332) | (5,479) |
| Shares\tissued\tfor\tEmployee\tStock\tPurchase\tPlan | 9,039 | 7,522 | 6,244 |
| Stock-based\tcompensation\texpense | 12,589 | 11,758 | 11,129 |
| Balance,\tend\tof\tyear | $472,029 | $464,138 | $452,016 |
| RETAINED\tEARNINGS: |  |  |  |
| Balance,\tbeginning\tof\tyear | $1,912,933 | $1,652,920 | $1,431,192 |
| Cumulative\teffect\tof\tASC\t606\tadoption* | — | — | 83,874 |
| Net\tincome* | 271,885 | 365,034 | 229,561 |
| Dividends | (118,745) | (105,021) | (91,707) |
| Balance,\tend\tof\tyear | $2,066,073 | $1,912,933 | $1,652,920 |
| TREASURY\tSTOCK: |  |  |  |
| Balance,\tbeginning\tof\tyear | $(1,055,260) | $(1,006,274) | $(876,134) |
| Purchase\tof\ttreasury\tshares | (54,864) | (48,986) | (130,140) |
| Balance,\tend\tof\tyear | $(1,110,124) | $(1,055,260) | $(1,006,274) |
| TOTAL\tSTOCKHOLDERS'\tEQUITY | $1,429,013 | $1,322,844 | $1,099,693 |
| Dividends\tdeclared\tper\tshare | $1.54 | $1.36 | $1.18 |

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

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

# (In	Thousands)

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tFROM\tOPERATING\tACTIVITIES: |  |  |  |
| Net\tIncome | $271,885 | $365,034 | $229,561 |
| Adjustments\tto\treconcile\tnet\tincome\tfrom\toperations\n\t\t\t\t\tto\tnet\tcash\tfrom\toperating\tactivities: |  |  |  |
| Depreciation | 47,378 | 47,975 | 49,677 |
| Amortization | 113,255 | 104,011 | 90,109 |
| Change\tin\tdeferred\tincome\ttaxes | 7,604 | (74,884) | 21,187 |
| Expense\tfor\tstock-based\tcompensation | 12,589 | 11,758 | 11,129 |
| (Gain)/loss\ton\tdisposal\tof\tassets\tand\tbusinesses | 161 | (954) | 4,771 |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Change\tin\treceivables | (11,777) | 21,489 | (33,096) |
| Change\tin\tprepaid\texpenses,\tdeferred\tcosts\tand\tother | (62,165) | (82,663) | (24,992) |
| Change\tin\taccounts\tpayable | (7,526) | 6,922 | (7,812) |
| Change\tin\taccrued\texpenses | 31,889 | 7,091 | (11,966) |
| Change\tin\tincome\ttaxes | 4,179 | 5,108 | (6,444) |
| Change\tin\tdeferred\trevenues | 23,656 | 1,255 | 35,198 |
| Net\tcash\tfrom\toperating\tactivities | 431,128 | 412,142 | 357,322 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |
| Payment\tfor\tacquisitions,\tnet\tof\tcash\tacquired | (19,981) | (137,562) | — |
| Capital\texpenditures | (53,598) | (40,135) | (41,947) |
| Proceeds\tfrom\tthe\tsale\tof\tbusinesses | — | 350 | 5,632 |
| Proceeds\tfrom\tthe\tsale\tof\tassets | 127 | 306 | 968 |
| Customer\tcontracts\tacquired | (20) | — | — |
| Purchased\tsoftware | (6,049) | (13,138) | (16,608) |
| Computer\tsoftware\tdeveloped | (111,114) | (96,647) | (89,631) |
| Purchase\tof\tinvestments | — | (5,000) | — |
| Net\tcash\tfrom\tinvesting\tactivities | (190,635) | (291,826) | (141,586) |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |
| Borrowings\ton\tcredit\tfacilities | 35,000 | 125,000 | 80,000 |
| Repayments\ton\tcredit\tfacilities | (35,000) | (175,000) | (30,200) |
| Purchase\tof\ttreasury\tstock | (54,864) | (48,986) | (130,140) |
| Dividends\tpaid | (118,745) | (105,021) | (91,707) |
| Proceeds\tfrom\tissuance\tof\tcommon\tstock\tupon\texercise\tof\tstock\toptions | 237 | 176 | 1 |
| Tax\twithholding\tpayments\trelated\tto\tshare\tbased\tcompensation | (13,973) | (7,333) | (5,480) |
| Proceeds\tfrom\tsale\tof\tcommon\tstock | 9,040 | 7,523 | 6,245 |
| Net\tcash\tfrom\tfinancing\tactivities | (178,305) | (203,641) | (171,281) |
| NET\tCHANGE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | $62,188 | $(83,325) | $44,455 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\tPERIOD | $31,440 | $114,765 | $70,310 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tPERIOD | $93,628 | $31,440 | $114,765 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

(In	Thousands,	Except	Per	Share	Amounts)

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

# DESCRIPTION	OF	THE	COMPANY

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

# CONSOLIDATION

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

# USE	OF	ESTIMATES

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

# PRIOR	PERIOD	RECLASSIFICATION

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

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

# PRIOR	PERIOD	MISCLASSIFICATION

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

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

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

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

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

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

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

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

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

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

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

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

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

# Disaggregation	of	Revenue

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

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
| Processing | $594,202 | $550,058 | $506,555 |
| Outsourcing\t&amp;\tCloud | 405,359 | 361,922 | 327,738 |
| Product\tDelivery\t&amp;\tServices | 231,982 | 251,743 | 256,794 |
| In-House\tSupport | 321,148 | 307,074 | 297,203 |
| Services\t&amp;\tSupport | 958,489 | 920,739 | $881,735 |
| Total\tRevenue | $1,552,691 | $1,470,797 | $1,388,290 |

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

|  | June	30,<br>2019 | June	30,<br>2018 |
| :--- | :--- | :--- |
| Receivables,\tnet | $310,080 | $297,271 |
| Contract\tAssets-\tCurrent | 21,446 | 14,063 |
| Contract\tAssets-\tNon-current | 50,640 | 35,630 |
| Contract\tLiabilities\t(Deferred\tRevenue)-\tCurrent | 339,752 | 328,931 |
| Contract\tLiabilities\t(Deferred\tRevenue)-\tNon-current | 54,554 | 40,984 |

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

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

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

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

# Transaction	Price	Allocated	to	Remaining	Performance	Obligations

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

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

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

# COMPUTER	SOFTWARE	DEVELOPMENT

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

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

# CASH	EQUIVALENTS

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

# ACCOUNTS	RECEIVABLE

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

# PROPERTY	AND	EQUIPMENT	AND	INTANGIBLE	ASSETS

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

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

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

# PURCHASE	OF	INVESTMENT

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

# COMPREHENSIVE	INCOME

# Comprehensive	income	for	each	of	the	fiscal	years	ending

# REPORTABLE	SEGMENT	INFORMATION

In	accordance	with	U.S.	GAAP,	the	Company's	operations	are	classified	as	 four	reportable	segments:	Core,	Payments,	Complementary,	and	Corporate and	Other	(see	Note	13).	Substantially	all	the	Company's	revenues	are	derived	from	operations	and	assets	located	within	the	United	States	of	America.

# COMMON	STOCK

# EARNINGS	PER	SHARE

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

# INCOME	TAXES

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

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

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

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

# Consolidated	Balance	Sheet	as	of	June	30,	2018:

# As	Previously

|  | As	Previously<br>Reported<br>(Adjusted)* | Adjustments | As	Adjusted |
| :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |
| CURRENT\tASSETS: |  |  |  |
| Cash\tand\tcash\tequivalents | $31,440 | $— | $31,440 |
| Receivables,\tnet | 291,630 | 5,641 | 297,271 |
| Income\ttax\treceivable | 21,671 | — | 21,671 |
| Prepaid\texpenses\tand\tother* | 84,738 | 11,331 | 96,069 |
| Deferred\tcosts* | 34,907 | (11,916) | 22,991 |
| Assets\theld\tfor\tsale* | 1,300 | — | 1,300 |
| Total\tcurrent\tassets | 465,686 | 5,056 | 470,742 |
| PROPERTY\tAND\tEQUIPMENT,\tnet* | 285,550 | — | 285,550 |
| OTHER\tASSETS: |  |  |  |
| Non-current\tdeferred\tcosts | 95,540 | (20,675) | 74,865 |
| Computer\tsoftware,\tnet\tof\tamortization | 288,172 | — | 288,172 |
| Other\tnon-current\tassets | 107,775 | 2,524 | 110,299 |
| Customer\trelationships,\tnet\tof\tamortization | 115,034 | — | 115,034 |
| Other\tintangible\tassets,\tnet\tof\tamortization | 38,467 | — | 38,467 |
| Goodwill | 649,929 | — | 649,929 |
| Total\tother\tassets | 1,294,917 | (18,151) | 1,276,766 |
| Total\tassets | $2,046,153 | $(13,095) | $2,033,058 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |
| CURRENT\tLIABILITIES: |  |  |  |
| Accounts\tpayable* | $30,360 | $— | $30,360 |
| Accrued\texpenses | 97,848 | (9,084) | 88,764 |
| Deferred\trevenues | 355,538 | (26,607) | 328,931 |
| Total\tcurrent\tliabilities | 483,746 | (35,691) | 448,055 |
| LONG-TERM\tLIABILITIES: |  |  |  |
| Non-current\tdeferred\trevenues | 93,094 | (52,110) | 40,984 |
| Non-current\tdeferred\tincome\ttax\tliability | 189,613 | 18,690 | 208,303 |
| Other\tlong-term\tliabilities | 12,872 | — | 12,872 |
| Total\tlong-term\tliabilities | 295,579 | (33,420) | 262,159 |
| Total\tliabilities | 779,325 | (69,111) | 710,214 |
| 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;\n103,278,562\tshares\tissued\tat\tJune\t30,\t2018 | 1,033 | — | 1,033 |
| Additional\tpaid-in\tcapital | 464,138 | — | 464,138 |
| Retained\tearnings | 1,856,917 | 56,016 | 1,912,933 |
| Less\ttreasury\tstock\tat\tcost\n26,107,903\tshares\tat\tJune\t30,\t2018 | (1,055,260) | — | (1,055,260) |
| Total\tstockholders'\tequity | 1,266,828 | 56,016 | 1,322,844 |
| Total\tliabilities\tand\tequity | $2,046,153 | $(13,095) | $2,033,058 |

*Adjusted	for	reclassifications	and	corrections	not	related	to	ASC	606	adoption.	See	comments	under	"Prior	Period	Reclassification"	and	"Prior	Period Misclassification"	headings	in	this	Note	1	to	the	Consolidated	Financial	Statements.

# Consolidated	Statements	of	Income	for	the	fiscal	years	ended	ended

|  |  | Year	Ended	June	30,	2018 |  |  | Year	Ended	June	30,	2017 | Year	Ended	June	30,	2017 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | As\tPreviously\nReported | Adjustments | As\tAdjusted | As\tPreviously\nReported | Adjustments | As\tAdjusted |
| REVENUE | $1,536,603 | $(65,806) | $1,470,797 | $1,431,117 | $(42,827) | $1,388,290 |
| EXPENSES |  |  |  |  |  |  |
| Cost\tof\tRevenue | 873,642 | (20,504) | 853,138 | 819,034 | (13,179) | 805,855 |
| Research\tand\tDevelopment | 90,340 | — | 90,340 | 84,753 | — | 84,753 |
| Selling,\tGeneral,\tand\tAdministrative | 182,146 | (10,436) | 171,710 | 162,898 | (3,663) | 159,235 |
| Gain\ton\tDisposal\tof\ta\tBusiness | (1,894) | — | (1,894) | (3,270) | — | (3,270) |
| Total\tExpenses | 1,144,234 | (30,940) | 1,113,294 | 1,063,415 | (16,842) | 1,046,573 |
| OPERATING\tINCOME | 392,369 | (34,866) | 357,503 | 367,702 | (25,985) | 341,717 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  |  |  |
| Interest\tIncome | 575 | — | 575 | 248 | — | 248 |
| Interest\tExpense | (1,920) | — | (1,920) | (996) | — | (996) |
| Total\tInterest\tIncome\t(Expense) | (1,345) | — | (1,345) | (748) | — | (748) |
| INCOME\tBEFORE\tINCOME\tTAXES | 391,024 | (34,866) | 356,158 | 366,954 | (25,985) | 340,969 |
| PROVISION/\t(BENEFIT)\tFOR\tINCOME\nTAXES | 14,364 | (23,240) | (8,876) | 121,161 | (9,753) | 111,408 |
| NET\tINCOME | $376,660 | $(11,626) | $365,034 | $245,793 | $(16,232) | $229,561 |
| Basic\tearnings\tper\tshare | $4.88 |  | $4.73 | $3.16 |  | $2.95 |
| Basic\tweighted\taverage\tshares\toutstanding | 77,252 |  | 77,252 | 77,856 |  | 77,856 |
| Diluted\tearnings\tper\tshare | $4.85 |  | $4.70 | $3.14 |  | $2.93 |
| Diluted\tweighted\taverage\tshares\toutstanding | 77,585 |  | 77,585 | 78,255 |  | 78,255 |

# Consolidated	Statement	of	Cash	Flows	for	the	fiscal	years	ended

|  | As	Previously<br>Reported* | Year	Ended	June	30,	2018<br>Adjustments | As	Adjusted | As	Previously<br>Reported | Year	Ended	June	30,	2017<br>Adjustments | As	Adjusted |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| CASH\tFLOWS\tFROM\tOPERATING\tACTIVITIES: |  |  |  |  |  |  |
| Net\tIncome | $376,660 | $(11,626) | $365,034 | $245,793 | $(16,232) | $229,561 |
| Adjustments\tto\treconcile\tnet\tincome\tfrom\toperations\tto\nnet\tcash\tfrom\toperating\tactivities: |  |  |  |  |  |  |
| Depreciation | 47,975 | — | 47,975 | 49,677 | — | 49,677 |
| Amortization | 104,011 | — | 104,011 | 90,109 | — | 90,109 |
| Change\tin\tdeferred\tincome\ttaxes | (51,644) | (23,240) | (74,884) | 30,940 | (9,753) | 21,187 |
| Expense\tfor\tstock-based\tcompensation | 11,758 | — | 11,758 | 11,129 | — | 11,129 |
| (Gain)/loss\ton\tdisposal\tof\tassets\tand\tbusinesses | (954) | — | (954) | 4,771 | — | 4,771 |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |  |  |  |
| Change\tin\treceivables | (9,219) | 30,708 | 21,489 | (22,499) | (10,597) | (33,096) |
| Change\tin\tprepaid\texpenses,\tdeferred\tcosts\tand\nother* | (24,304) | (58,359) | (82,663) | (25,088) | 96 | (24,992) |
| Change\tin\taccounts\tpayable* | 6,922 | — | 6,922 | (7,812) | — | (7,812) |
| Change\tin\taccrued\texpenses | 9,091 | (2,000) | 7,091 | (4,454) | (7,512) | (11,966) |
| Change\tin\tincome\ttaxes | 5,108 | — | 5,108 | (6,444) | — | (6,444) |
| Change\tin\tdeferred\trevenues | (63,262) | 64,517 | 1,255 | (8,800) | 43,998 | 35,198 |
| Net\tcash\tfrom\toperating\tactivities | 412,142 | — | 412,142 | 357,322 | — | 357,322 |
| CASH\tFLOWS\tFROM\tINVESTING\tACTIVITIES: |  |  |  |  |  |  |
| Payment\tfor\tacquisitions,\tnet\tof\tcash\tacquired | (137,562) | — | (137,562) | — | — | — |
| Capital\texpenditures | (40,135) | — | (40,135) | (41,947) | — | (41,947) |
| Proceeds\tfrom\tthe\tsale\tof\tbusinesses | 350 | — | 350 | 5,632 | — | 5,632 |
| Proceeds\tfrom\tthe\tsale\tof\tassets | 306 | — | 306 | 968 | — | 968 |
| Purchased\tsoftware | (13,138) | — | (13,138) | (16,608) | — | (16,608) |
| Computer\tsoftware\tdeveloped | (96,647) | — | (96,647) | (89,631) | — | (89,631) |
| Purchase\tof\tinvestments | (5,000) | — | (5,000) | — | — | — |
| Net\tcash\tfrom\tinvesting\tactivities | (291,826) | — | (291,826) | (141,586) | — | (141,586) |
| CASH\tFLOWS\tFROM\tFINANCING\tACTIVITIES: |  |  |  |  |  |  |
| Borrowings\ton\tcredit\tfacilities | 125,000 | — | 125,000 | 80,000 | — | 80,000 |
| Repayments\ton\tcredit\tfacilities | (175,000) | — | (175,000) | (30,200) | — | (30,200) |
| Purchase\tof\ttreasury\tstock | (48,986) | — | (48,986) | (130,140) | — | (130,140) |
| Dividends\tpaid | (105,021) | — | (105,021) | (91,707) | — | (91,707) |
| Proceeds\tfrom\tissuance\tof\tcommon\tstock\tupon\nexercise\tof\tstock\toptions | 176 | — | 176 | 1 | — | 1 |
| Tax\twithholding\tpayments\trelated\tto\tshare\tbased\ncompensation | (7,333) | — | (7,333) | (5,480) | — | (5,480) |
| Proceeds\tfrom\tsale\tof\tcommon\tstock | 7,523 | — | 7,523 | 6,245 | — | 6,245 |
| Net\tcash\tfrom\tfinancing\tactivities | (203,641) | — | (203,641) | (171,281) | — | (171,281) |
| NET\tCHANGE\tIN\tCASH\tAND\tCASH\tEQUIVALENTS | $(83,325) | $— | $(83,325) | $44,455 | $— | $44,455 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tBEGINNING\tOF\nPERIOD | $114,765 | $— | $114,765 | $70,310 | $— | $70,310 |
| CASH\tAND\tCASH\tEQUIVALENTS,\tEND\tOF\tPERIOD | $31,440 | $— | $31,440 | $114,765 | $— | $114,765 |

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

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

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

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

# NOTE	2.				FAIR	VALUE	OF	FINANCIAL	INSTRUMENTS

For	cash	equivalents,	amounts	receivable	or	payable	and	short-term	borrowings,	fair	values	approximate	carrying	value,	based	on	the	short-term	nature of	the	assets	and	liabilities.

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

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

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

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

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

|  |  | Estimated	Fair	Value	Measurements | Estimated	Fair	Value	Measurements | Total	Fair |
| :--- | :--- | :--- | :--- | :--- |
| Recurring\tFair\tValue\tMeasurements | Level\t1 | Level\t2 | Level\t3 | Value |
| June\t30,\t2019 |  |  |  |  |
| Financial\tAssets: |  |  |  |  |
| Money\tmarket\tfunds | $81,945 | $— | $— | $81,945 |
| June\t30,\t2018 |  |  |  |  |
| Financial\tAssets: |  |  |  |  |
| Money\tmarket\tfunds | $14,918 | $— | $— | $14,918 |
| Non-Recurring\tFair\tValue\tMeasurements |  |  |  |  |
| June\t30,\t2019 |  |  |  |  |
| Long-lived\tassets\theld\tfor\tsale | $— | $1,300 | $— | $1,300 |
| June\t30,\t2018 |  |  |  |  |
| 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	fiscal	year	ended	June	30,	2017.	The	Company	has	entered	into	an agreement	to	sell	these	assets.	That	sale	is	expected	to	be	completed	during	the	second	quarter	of	fiscal	2020.

# NOTE	3.				PROPERTY	AND	EQUIPMENT

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

|  | June	30, | June	30, |  |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | Estimated\tUseful\tLife |
| Land\t(1) | $23,243 | $24,845 |  |
| Land\timprovements\t(1) | 25,209 | 25,383 | 5\t-\t20\tyears |
| Buildings\t(1) | 147,220 | 143,918 | 20\t-\t30\tyears |
| Leasehold\timprovements | 48,478 | 48,060 | 5\t-\t30\tyears |
| Equipment\tand\tfurniture | 365,101 | 328,864 | 3\t-\t10\tyears |
| Aircraft\tand\tequipment | 39,293 | 38,761 | 4\t-\t10\tyears |
| Construction\tin\tprogress | 12,411 | 39,872 |  |
|  | 660,955 | 649,703 |  |
| Less\taccumulated\tdepreciation | 388,481 | 364,153 |  |
| Property\tand\tequipment,\tnet | $272,474 | $285,550 |  |

(2)	Lesser	of	lease	term	or	estimated	useful	life

The	change	in	property	and	equipment	in	accrued	liabilities	was	 $14,315	and	$15,674	for	the	fiscal	years	ended	 June	30,	2019	and	2018,	respectively.

These	amounts	were	excluded	from	capital	expenditures	on	the	statements	of	cash	flows.

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

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

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

# NOTE	4.				OTHER	ASSETS

# Goodwill

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

|  | June	30, |  |
| :--- | :--- | :--- |
| Core | 2019 | 2018 |
| Beginning\tbalance | $195,956 | $195,956 |
| Goodwill,\tacquired\tduring\tthe\tyear | 4,000 | — |
| Goodwill,\tadjustments\trelated\tto\tdispositions | — | — |
| Ending\tbalance | $199,956 | $195,956 |
| Payments |  |  |
| Beginning\tbalance | $325,204 | $234,106 |
| Goodwill,\tacquired\tduring\tthe\tyear | 122 | 91,098 |
| Goodwill,\tadjustments\trelated\tto\tdispositions | — | — |
| Ending\tbalance | $325,326 | $325,204 |
| Complementary |  |  |
| Beginning\tbalance | $128,769 | $122,403 |
| Goodwill,\tacquired\tduring\tthe\tyear | 12,893 | 6,499 |
| Goodwill,\tadjustments\trelated\tto\tdispositions | — | (133) |
| Ending\tbalance | $141,662 | $128,769 |
| Goodwill\tacquired\tduring\tfiscal\t2019\ttotaled\t$17,015,\twith\t$12,893\tof\tthat\tresulting\tfrom\tthe\tpurchase\tof\tBOLTS\tTechnologies,\tInc., | Goodwill\tacquired\tduring\tfiscal\t2019\ttotaled\t$17,015,\twith\t$12,893\tof\tthat\tresulting\tfrom\tthe\tpurchase\tof\tBOLTS\tTechnologies,\tInc., | $3,999\tresulting |

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

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

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

# Other	Intangible	Assets

Information	regarding	other	identifiable	intangible	assets	is	as	follows:

|  | Gross	Carrying<br>Amount | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Customer\trelationships | $305,512 | $(204,859) | $100,653 |
| Computer\tsoftware | $759,671 | $(440,702) | $318,969 |
| Other\tintangible\tassets: | $93,471 | $(61,957) | $31,514 |

|  | Gross	Carrying	Amount | Accumulated<br>Amortization | Net |
| :--- | :--- | :--- | :--- |
| Customer\trelationships | $302,727 | $(187,693) | $115,034 |
| Computer\tsoftware | $653,407 | $(365,235) | $288,172 |
| Other\tintangible\tassets: | $88,017 | $(49,550) | $38,467 |

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

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

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

| Years	Ending	June	30, | Computer	Software | Customer<br>Relationships | Other	Intangible<br>Assets | Total |
| :--- | :--- | :--- | :--- | :--- |
| 2020 | $77,020 | $14,665 | $9,186 | $100,871 |
| 2021 | 58,153 | 12,409 | 6,345 | 76,907 |
| 2022 | 42,981 | 11,260 | 3,437 | 57,678 |
| 2023 | 27,454 | 8,808 | 1,963 | 38,225 |
| 2024 | 10,975 | 7,547 | 1,315 | 19,837 |
| NOTE\t5.\t\t\t\tDEBT |  |  |  |  |
| Revolving\tcredit\tfacility |  |  |  |  |
| The\trevolving\tcredit\tfacility\tprovides\tfor\tborrowings\tof\tup\tto\t $300,000,\twhich\tmay\tbe\tincreased\tby\tthe\tCompany\tat\tany\ttime\tuntil\tmaturity\tto | The\trevolving\tcredit\tfacility\tprovides\tfor\tborrowings\tof\tup\tto\t $300,000,\twhich\tmay\tbe\tincreased\tby\tthe\tCompany\tat\tany\ttime\tuntil\tmaturity\tto | The\trevolving\tcredit\tfacility\tprovides\tfor\tborrowings\tof\tup\tto\t $300,000,\twhich\tmay\tbe\tincreased\tby\tthe\tCompany\tat\tany\ttime\tuntil\tmaturity\tto | The\trevolving\tcredit\tfacility\tprovides\tfor\tborrowings\tof\tup\tto\t $300,000,\twhich\tmay\tbe\tincreased\tby\tthe\tCompany\tat\tany\ttime\tuntil\tmaturity\tto | $600,000. |

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

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

# Interest

# NOTE	6.				COMMITMENTS	AND	CONTINGENCIES

# Property	and	Equipment

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

# Leases

The	Company	leases	certain	property	under	operating	leases	which	expire	over	the	next	 11	years,	but	certain	of	the	leases	contain	options	to	extend	the lease	term.	All	lease	payments	are	based	on	the	lapse	of	time	but	include,	in	some	cases,	payments	for	operating	expenses	and	property	taxes.	There are	no	purchase	options	on	real	estate	leases	at	this	time.	Certain	leases	on	real	estate	are	subject	to	annual	escalations	for	increases	in	operating expenses	and	property	taxes.

As	of	June	30,	2019,	net	future	minimum	lease	payments	are	as	follows:

# NOTE	7.				INCOME	TAXES

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

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

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

|  |  | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |  |
| Contract\tand\tservice\trevenues | Contract\tand\tservice\trevenues | $13,450 | $— |
| Expense\treserves\t(bad\tdebts,\tinsurance,\tfranchise\ttax\tand\tvacation) | Expense\treserves\t(bad\tdebts,\tinsurance,\tfranchise\ttax\tand\tvacation) | 14,325 | 11,164 |
| Net\toperating\tloss\tand\ttax\tcredit\tcarryforwards |  | 2,713 | 2,759 |
| Other,\tnet | Other,\tnet | 851 | 2,711 |
| Total\tgross\tdeferred\ttax\tassets |  | 31,339 | 16,634 |
| Valuation\tallowance | Valuation\tallowance | (415) | (515) |
| Net\tdeferred\ttax\tassets |  | 30,924 | 16,119 |
| Deferred\ttax\tliabilities: |  |  |  |
| Accelerated\ttax\tdepreciation | Accelerated\ttax\tdepreciation | (31,846) | (32,026) |
| Accelerated\ttax\tamortization |  | (154,633) | (141,274) |
| Contract\tand\tservice\trevenues | Contract\tand\tservice\trevenues | — | (5,067) |
| Contract\tand\tservice\tcosts |  | (61,455) | (46,055) |
| Total\tgross\tdeferred\tliabilities | Total\tgross\tdeferred\tliabilities | (247,934) | (224,422) |
| Net\tdeferred\ttax\tliability | Net\tdeferred\ttax\tliability | $(217,010) | $(208,303) |
| The\tfollowing\tanalysis\treconciles\tthe\tstatutory\tfederal\tincome\ttax\trate\tto\tthe\teffective\tincome\ttax\trates\treflected\tabove: |  |  |  |
|  |  | Year\tEnded\tJune\t30, |  |
| 2019 |  | 2018 | 2017 |
| Computed\t"expected"\ttax\texpense | 21.0\t% | 28.1\t% | 35.0\t% |
| Increase\t(reduction)\tin\ttaxes\tresulting\tfrom: |  |  |  |
| State\tincome\ttaxes,\tnet\tof\tfederal\tincome\ttax\tbenefits | 3.7\t% | 2.9\t% | 2.6\t% |
| Research\tand\tdevelopment\tcredit | (2.5)% | (2.0)% | (2.1)% |
| Domestic\tproduction\tactivities\tdeduction | —\t% | (1.4)% | (2.3)% |
| TCJA\tdeferred\ttax\trate\tre-measurement | —\t% | (30.0)% | —\t% |
| Tax\teffects\tof\tshare-based\tpayments | (1.4)% | (0.8)% | (0.8)% |
| Other\t(net) | 0.9\t% | 0.7\t% | 0.3\t% |
|  | 21.7\t% | (2.5)% | 32.7\t% |

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

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

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

| respectively. |  |
| :--- | :--- |
| A\treconciliation\tof\tthe\tunrecognized\ttax\tbenefits\tfor\tthe\tfiscal\tyears\tended\nJune\t30,\t2019\tand\t2018\tfollows: |  |
|  | Unrecognized\tTax\nBenefits |
| Balance\tat\tJuly\t1,\t2017 | $5,449 |
| Additions\tfor\tcurrent\tyear\ttax\tpositions | 2,157 |
| Reductions\tfor\tcurrent\tyear\ttax\tpositions | — |
| Additions\tfor\tprior\tyear\ttax\tpositions | 3,130 |
| Reductions\tfor\tprior\tyear\ttax\tpositions | (55) |
| Additions\trelated\tto\tbusiness\tcombinations | 510 |
| Settlements | (161) |
| Reductions\trelated\tto\texpirations\tof\tstatute\tof\tlimitations | (803) |
| Balance\tat\tJune\t30,\t2018 | 10,227 |
| Additions\tfor\tcurrent\tyear\ttax\tpositions | 1,135 |
| Reductions\tfor\tcurrent\tyear\ttax\tpositions | (40) |
| Additions\tfor\tprior\tyear\ttax\tpositions | 562 |
| Reductions\tfor\tprior\tyear\ttax\tpositions | (531) |
| Additions\trelated\tto\tbusiness\tcombinations | 43 |
| Settlements | (25) |
| Reductions\trelated\tto\texpirations\tof\tstatute\tof\tlimitations | (876) |
| Balance\tat\tJune\t30,\t2019 | $10,495 |

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

# NOTE	8.				INDUSTRY	AND	SUPPLIER	CONCENTRATIONS

The	Company	sells	its	products	to	banks,	credit	unions,	and	financial	institutions	throughout	the	United	States	and	generally	does	not	require	collateral. All	billings	to	customers	are	due	30	days	from	date	of	billing.	Reserves	(which	are	insignificant	at	June	30,	2019	and	2018)	are	maintained	for	potential credit	 losses.	Customer-related	 risks	 are	 moderated	 through	 the	 inclusion	 of	 credit	 mitigation	 clauses	 in	 the	 Company's	 contracts	 and	 through	 the monitoring	of	timely	payments.

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

# NOTE	9.				STOCK-BASED	COMPENSATION

# 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,\t2016 | 50 | $22.14 |  |
| Granted | 32 | 87.27 |  |
| Forfeited | — | — |  |
| Exercised | (10) | 28.52 |  |
| Outstanding\tJuly\t1,\t2017 | 72 | 50.04 |  |
| Granted | — | — |  |
| Forfeited | — | — |  |
| Exercised | (20) | 17.45 |  |
| Outstanding\tJuly\t1,\t2018 | 52 | 62.65 |  |
| Granted | — | — |  |
| Forfeited | — | — |  |
| Exercised | (20) | 23.65 |  |
| Outstanding\tJune\t30,\t2019 | 32 | $87.27 | $1,478 |
| Vested\tand\tExpected\tto\tVest\tJune\t30,\t2019 | 32 | $87.27 | $1,478 |
| Exercisable\tJune\t30,\t2019 | — | $— | $— |

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

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

# Restricted	Stock	Plan	and	2015	Equity	Incentive	Plan

The	Restricted	Stock	Plan	was	adopted	by	the	Company	on	 November	1,	2005,	for	its	employees.	The	plan	expired	on	November	1,	2015.	Up	to	3,000 shares	 of	 common	 stock	 were	 available	 for	 issuance	 under	 the	 plan.	The	 2015	 EIP	 was	 adopted	 by	 the	 Company	 on	November	10,	2015	 for	 its employees.	Up	to	3,000	shares	of	common	stock	are	available	for	issuance	under	the	2015	Equity	Incentive	Plan.	Upon	issuance,	shares	of	restricted stock	are	subject	to	forfeiture	and	to	restrictions	which	limit	the	sale	or	transfer	of	the	shares	during	the	restriction	period.	The	restrictions	are	lifted	over periods	ranging	from	3	years	to	5	years	from	grant	date.

The	following	table	summarizes	non-vested	share	awards	activity:

| Share	awards | Shares | Weighted<br>Average<br>Grant	Date<br>Fair	Value |
| :--- | :--- | :--- |
| Outstanding\tJuly\t1,\t2016 | 58 | $44.95 |
| Granted | 17 | 87.27 |
| Vested | (38) | 37.00 |
| Forfeited | (1) | 65.52 |
| Outstanding\tJuly\t1,\t2017 | 36 | 73.66 |
| Granted | — | — |
| Vested | (12) | 58.61 |
| Forfeited | (1) | 64.60 |
| Outstanding\tJuly\t1,\t2018 | 23 | 81.33 |
| Granted | — | — |
| Vested | (17) | 79.41 |
| Forfeited | — | — |
| Outstanding\tJune\t30,\t2019 | 6 | $87.27 |

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

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

An	amendment	to	the	Restricted	Stock	Plan	was	adopted	by	the	Company	on	 August	20,	2010.	Unit	awards	were	made	to	employees	remaining	in continuous	employment	throughout	the	performance	period	and	vary	based	on	the	Company's	percentile	ranking	in	Total	Shareholder	Return	("TSR") over	the	performance	period	compared	to	a	peer	group	of	companies.	TSR	is	defined	as	the	change	in	the	stock	price	through	the	performance	period plus	dividends	per	share	paid	during	the	performance	period,	all	divided	by	the	stock	price	at	the	beginning	of	the	performance	period.	It	is	the	intention	of the	Company	to	settle	the	unit	awards	in	shares	of	the	Company's	stock.	Certain	Restricted	Stock	Unit	awards	are	not	tied	to	performance	goals,	and	for such	awards,	vesting	occurs	over	a	period	of	1	to	3	years.

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

| Unit	awards | Shares | Weighted<br>Average<br>Grant	Date<br>Fair	Value | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- |
| Outstanding\tJuly\t1,\t2016 | 429 | $58.06 |  |
| Granted | 130 | 77.75 |  |
| Vested | (136) | 50.12 |  |
| Forfeited | (37) | 54.30 |  |
| Outstanding\tJuly\t1,\t2017 | 386 | 67.84 |  |
| Granted | 125 | 98.41 |  |
| Vested | (156) | 57.00 |  |
| Forfeited | (4) | 81.83 |  |
| Outstanding\tJuly\t1,\t2018 | 351 | 83.37 |  |
| Granted | 80 | 169.53 |  |
| Vested | (129) | 82.06 |  |
| Forfeited | (4) | 92.32 |  |
| Outstanding\tJune\t30,\t2019 | 298 | $107.00 | $39,867 |

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

|  |  | Year	Ended	June	30, |  |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | 2017 |
| Volatility | 15.3% | 15.6% | 16.0% |
| Risk\tfree\tinterest\trate | 2.89% | 1.55% | 0.93% |
| Dividend\tyield | 0.9% | 1.2% | 1.3% |
| Stock\tBeta | 0.669 | 0.687 | 0.684 |

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

At	June	30,	2019,	there	was	$13,444	of	compensation	expense	that	has	yet	to	be	recognized	related	to	non-vested	restricted	stock	unit	awards,	which will	be	recognized	over	a	weighted-average	period	of	1.04	years.

# NOTE	10.				EARNINGS	PER	SHARE

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

|  |  | Year	Ended	June	30, |  |
| :--- | :--- | :--- | :--- |
|  | 2019 | 2018 | 2017 |
| Net\tIncome | $271,885 | $365,034 | $229,561 |
| Common\tshare\tinformation: |  |  |  |
| Weighted\taverage\tshares\toutstanding\tfor\tbasic\tearnings\tper\tshare | 77,160 | 77,252 | 77,856 |
| Dilutive\teffect\tof\tstock\toptions\tand\trestricted\tstock | 187 | 333 | 399 |
| Weighted\taverage\tshares\toutstanding\tfor\tdiluted\tearnings\tper\tshare | 77,347 | 77,585 | 78,255 |
| Basic\tearnings\tper\tshare | $3.52 | $4.73 | $2.95 |
| Diluted\tearnings\tper\tshare | $3.52 | $4.70 | $2.93 |

Per	share	information	is	based	on	the	weighted	average	number	of	common	shares	outstanding	for	each	of	the	fiscal	years.	Stock	options	and	restricted stock	have	been	included	in	the	calculation	of	earnings	per	share	to	the	extent	they	are	dilutive.	The	two-class	method	for	computing	EPS	has	not	been applied	because	no	outstanding	awards	contain	non-forfeitable	rights	to	participate	in	dividends.	There	were	no	anti-dilutive	stock	options	and	restricted stock	excluded	for	fiscal	2019,	41	shares	excluded	for	fiscal	2018,	and	32	shares	excluded	for	fiscal	2017.

# NOTE	11.				EMPLOYEE	BENEFIT	PLANS

The	Company	established	an	employee	stock	purchase	plan	in	 2006.	The	plan	allows	the	majority	of	employees	the	opportunity	to	directly	purchase shares	of	the	Company	at	85%	of	the	closing	price	of	the	Company's	stock	on	or	around	the	fifteenth	day	of	each	month.	During	the	fiscal	years	ended June	30,	2019,	2018	 and	2017,	 employees	 purchased	76,	 76,	 and	81	 shares	 under	 this	 plan	 at	 average	 prices	 of	 $118.32,	 $98.46,	 and	$77.52, respectively.	As	of	June	30,	2019,	approximately	1,304	shares	remained	available	for	future	issuance	under	the	plan.	The	plan	does	not	meet	the	criteria as	 a	 non-compensatory	 plan.	As	a	result,	 the	Company	records	 the	 total	dollar	value	of	 the	stock	discount	given	 to	employees	under	 the	plan	as expense.

The	Company	has	a	defined	contribution	plan	for	its	employees:	the	401(k)	Retirement	Savings	Plan	(the	"Plan").	The	Plan	is	subject	to	the	Employee Retirement	Income	Security	Act	of	1975	("ERISA")	as	amended.	Under	the	Plan,	the	Company	matches	100%	of	full	time	employee	contributions	up	to 5%	of	eligible	compensation.	Prior	to	January	1,	2019,	the	Company	match	was	subject	to	a	maximum	of	 $5	per	year.	On	January	1,	2019,	the	maximum limit	was	removed.	In	order	to	receive	matching	contributions,	employees	must	be	18	years	of	age	and	be	employed	for	at	least	 six	months.	The	Company has	the	option	of	making	a	discretionary	contribution;	however,	none	has	been	made	for	any	of	the	three	most	recent	fiscal	years.	The	total	matching contributions	for	the	Plan	were	$21,003,	$18,821,	and	$17,550	for	fiscal	2019,	2018	and	2017,	respectively.

# NOTE	12.				BUSINESS	ACQUISITIONS

# BOLTS	Technologies,	Inc

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

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

| Current	assets | $1,384 |
| :--- | :--- |
| Identifiable\tintangible\tassets | 2,274 |
| Total\tother\tliabilities\tassumed | (1,505) |
| Total\tidentifiable\tnet\tassets | 2,153 |
| Goodwill | 12,893 |
| Net\tassets\tacquired | $15,046 |

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

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

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

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

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

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

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

# Agiletics,	Inc.

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

| Current	assets | $2,170 |
| :--- | :--- |
| Identifiable\tintangible\tassets | 3,090 |
| Non-current\tdeferred\tincome\ttax\tliability | (872) |
| Total\tother\tliabilities\tassumed | (738) |
| Total\tidentifiable\tnet\tassets | 3,650 |
| Goodwill | 3,999 |
| Net\tassets\tacquired | $7,649 |

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

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

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

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

# Ensenta	Corporation

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

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

| Current	assets | $14,125 |
| :--- | :--- |
| Long-term\tassets | 586 |
| Identifiable\tintangible\tassets | 58,806 |
| Non-current\tdeferred\tincome\ttax\tliability | (21,859) |
| Total\tother\tliabilities\tassumed | (8,496) |
| Total\tidentifiable\tnet\tassets | 43,162 |
| Goodwill | 91,219 |
| Net\tassets\tacquired | $134,381 |

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

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

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

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

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

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

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

|  | 2019 | 2018 | 2017 |
| :--- | :--- | :--- | :--- |
|  | Actuals | Proforma | Proforma |
| Revenue | $1,552,691 | $1,483,915 | $1,411,873 |
| Net\tIncome | 271,885 | 366,544 | 231,696 |
| Basic\tEarnings\tPer\tShare | $3.52 | $4.74 | $2.98 |
| Diluted\tEarnings\tPer\tShare | $3.52 | $4.72 | $2.96 |

# Vanguard	Software	Group

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

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

| Current	assets | $1,153 |
| :--- | :--- |
| Long-term\tassets | 9 |
| Identifiable\tintangible\tassets | 4,200 |
| Total\tliabilities\tassumed | (1,117) |
| Total\tidentifiable\tnet\tassets | 4,245 |
| Goodwill | 6,499 |
| Net\tassets\tacquired | $10,744 |

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

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

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

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

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

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

# NOTE	13.				REPORTABLE	SEGMENT	INFORMATION

Beginning	in	the	first	quarter	of	fiscal	2018,	JHA	changed	its	reportable	segment	structure	from	two	customer-centric	segments,	Bank	and	Credit	Union,	to four	product-centric	segments.	The	change	was	made	based	on	the	view	of	its	Chief	Executive	Officer,	who	is	also	the	Chief	Operating	Decision	Maker, that	 the	 Company	 could	 be	 more	 effectively	 managed	 using	 a	 product-centric	 approach	 and	 was	 driven	 by	 the	 first	 budgetary	 process	 under	 his administration.

The	Company's	operations	are	classified	into	 four	reportable	segments:	Core,	Payments,	Complementary,	and	Corporate	and	Other.	The	Core	segment provides	core	information	processing	platforms	to	banks	and	credit	unions,	which	consist	of	integrated	applications	required	to	process	deposit,	loan,	and general	ledger	transactions,	and	maintain	centralized	customer/member	information.	The	Payments	segment	provides	secure	payment	processing	tools and	services,	including	ATM,	debit,	and	credit	card	processing	services,	online	and	mobile	bill	pay	solutions,	and	risk	management	products	and	services. The	Complementary	segment	provides	additional	software	and	services	that	can	be	integrated	with	the	Company's	core	solutions	or	used	independently. The	Corporate	&	Other	segment	includes	revenue	and	costs	from	hardware	and	other	products	not	attributable	to	the	other	three	segments,	as	well	as operating	costs	not	directly	attributable	to	the	other	three	segments.

The	Company	evaluates	the	performance	of	its	segments	and	allocates	resources	to	them	based	on	various	factors,	including	performance	against	trend, budget,	and	forecast.	Only	revenue	and	costs	of	revenue	are	considered	in	the	evaluation	for	each	segment.

An	immaterial	adjustment	was	made	to	reclassify	revenue	recognized	in	fiscal	2018	from	the	Core	to	the	Corporate	and	Other	Segment.	For	the fiscal year	ended	June	30,	2018,	the	amount	reclassified	totaled	$2,968.

|  | Core | Payments | Complementary | Corporate	&amp;	Other | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |  |  |
| Services\tand\tSupport | $506,007 | $52,756 | $348,631 | $51,095 | $958,489 |
| Processing | 28,422 | 495,563 | 69,584 | 633 | 594,202 |
| Total\tRevenue | 534,429 | 548,319 | 418,215 | 51,728 | 1,552,691 |
| Cost\tof\tRevenue | 243,989 | 273,261 | 175,737 | 230,043 | 923,030 |
| Research\tand\tDevelopment |  |  |  |  | 96,378 |
| Selling,\tGeneral,\tand\tAdministrative |  |  |  |  | 185,998 |
| Gain\ton\tDisposal\tof\tBusinesses |  |  |  |  | — |
| Total\tExpenses |  |  |  |  | 1,205,406 |
| SEGMENT\tINCOME | $290,440 | $275,058 | $242,478 | $(178,315) |  |
| OPERATING\tINCOME |  |  |  |  | 347,285 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  | (50) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  |  |  | $347,235 |

|  | Core | Payments | Complementary | Corporate	&amp;	Other | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |  |  |
| Services\tand\tSupport | $482,216 | $47,641 | $333,812 | $57,070 | $920,739 |
| Processing | 27,605 | 460,690 | 61,607 | 156 | 550,058 |
| Total\tRevenue | 509,821 | 508,331 | 395,419 | 57,226 | 1,470,797 |
| Cost\tof\tRevenue | 232,868 | 245,269 | 163,905 | 211,096 | 853,138 |
| Research\tand\tDevelopment |  |  |  |  | 90,340 |
| Selling,\tGeneral,\tand\tAdministrative |  |  |  |  | 171,710 |
| Gain\ton\tDisposal\tof\tBusinesses |  |  |  |  | (1,894) |
| Total\tExpenses |  |  |  |  | 1,113,294 |
| SEGMENT\tINCOME | $276,953 | $263,062 | $231,514 | $(153,870) |  |
| OPERATING\tINCOME |  |  |  |  | 357,503 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  | (1,345) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  |  |  | $356,158 |

|  | Core | Payments | Complementary | Corporate	&amp;	Other | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE |  |  |  |  |  |
| Services\tand\tSupport | $452,712 | $43,477 | $322,784 | $62,762 | $881,735 |
| Processing | 24,893 | 428,511 | 53,027 | 124 | 506,555 |
| Total\tRevenue | 477,605 | 471,988 | 375,811 | 62,886 | 1,388,290 |
| Cost\tof\tRevenue | 219,440 | 222,685 | 155,084 | 208,646 | 805,855 |
| Research\tand\tDevelopment |  |  |  |  | 84,753 |
| Selling,\tGeneral,\tand\tAdministrative |  |  |  |  | 159,235 |
| Gain\ton\tDisposal\tof\tBusinesses |  |  |  |  | (3,270) |
| Total\tExpenses |  |  |  |  | 1,046,573 |
| SEGMENT\tINCOME | $258,165 | $249,303 | $220,727 | $(145,760) |  |
| OPERATING\tINCOME |  |  |  |  | 341,717 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  | (748) |
| INCOME\tBEFORE\tINCOME\tTAXES |  |  |  |  | $340,969 |

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

# NOTE	14:	SUBSEQUENT	EVENTS

# Dividends

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

# Acquisition

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

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

# QUARTERLY	FINANCIAL	INFORMATION

# (unaudited)

|  | Quarter	1 | Quarter	2 | For	the	Year	Ended	June	30,	2019<br>Quarter	3 | Quarter	4 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE | $392,543 | $386,275 | $380,364 | $393,509 | $1,552,691 |
| EXPENSES |  |  |  |  |  |
| Cost\tof\tRevenue | 220,112 | 227,284 | 235,594 | 240,040 | 923,030 |
| Research\t&amp;\tDevelopment | 24,026 | 23,990 | 23,442 | 24,920 | 96,378 |
| Selling,\tGeneral,\t&amp;\tAdministrative | 45,183 | 46,797 | 44,887 | 49,131 | 185,998 |
| Total\tExpenses | 289,321 | 298,071 | 303,923 | 314,091 | 1,205,406 |
| OPERATING\tINCOME | 103,222 | 88,204 | 76,441 | 79,418 | 347,285 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  |  |
| Interest\tincome | 291 | 252 | 155 | 178 | 876 |
| Interest\texpense | (147) | (148) | (224) | (407) | (926) |
| Total\tinterest\tincome\t(expense) | 144 | 104 | (69) | (229) | (50) |
| INCOME\tBEFORE\tINCOME\tTAXES | 103,366 | 88,308 | 76,372 | 79,189 | 347,235 |
| PROVISION/\t(BENEFIT)\tFOR\tINCOME\nTAXES | 19,815 | 20,219 | 17,120 | 18,196 | 75,350 |
| NET\tINCOME | $83,551 | $68,089 | $59,252 | $60,993 | $271,885 |
| Basic\tearnings\tper\tshare | $1.08 | $0.88 | $0.77 | $0.79 | $3.52 |
| Basic\tweighted\taverage\tshares\toutstanding | 77,188 | 77,216 | 77,177 | 77,060 | 77,160 |
| Diluted\tearnings\tper\tshare | $1.08 | $0.88 | $0.77 | $0.79 | $3.52 |
| Diluted\tweighted\taverage\tshares\toutstanding | 77,537 | 77,409 | 77,286 | 77,157 | 77,347 |

|  | Quarter	1 | Quarter	2 | For	the	Year	Ended	June	30,	2018*<br>Quarter	3 | Quarter	4 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| REVENUE | $361,284 | $357,209 | $374,048 | $378,256 | $1,470,797 |
| EXPENSES |  |  |  |  |  |
| Cost\tof\tRevenue | 203,915 | 207,100 | 218,517 | 223,606 | 853,138 |
| Research\t&amp;\tDevelopment | 20,929 | 22,414 | 22,591 | 24,406 | 90,340 |
| Selling,\tGeneral,\t&amp;\tAdministrative | 41,088 | 43,094 | 42,234 | 45,294 | 171,710 |
| Gain\ton\tdisposal\tof\tbusinesses | (1,705) | (189) | — | — | (1,894) |
| Total\tExpenses | 264,227 | 272,419 | 283,342 | 293,306 | 1,113,294 |
| OPERATING\tINCOME | 97,057 | 84,790 | 90,706 | 84,950 | 357,503 |
| INTEREST\tINCOME\t(EXPENSE) |  |  |  |  |  |
| Interest\tincome | 147 | 146 | 130 | 152 | 575 |
| Interest\texpense | (189) | (250) | (734) | (747) | (1,920) |
| Total\tinterest\tincome\t(expense) | (42) | (104) | (604) | (595) | (1,345) |
| INCOME\tBEFORE\tINCOME\tTAXES | 97,015 | 84,686 | 90,102 | 84,355 | 356,158 |
| PROVISION/\t(BENEFIT)\tFOR\tINCOME\nTAXES | 30,145 | (76,557) | 21,017 | 16,519 | (8,876) |
| NET\tINCOME | $66,870 | $161,243 | $69,085 | $67,836 | $365,034 |
| Basic\tnet\tincome\tper\tshare | $0.87 | $2.09 | $0.89 | $0.88 | $4.73 |
| Basic\tweighted\taverage\tshares\toutstanding | 77,283 | 77,218 | 77,247 | 77,261 | 77,252 |
| Diluted\tnet\tincome\tper\tshare | $0.86 | $2.08 | $0.89 | $0.87 | $4.70 |
| Diluted\tweighted\taverage\tshares\toutstanding | 77,646 | 77,565 | 77,546 | 77,585 | 77,585 |

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

# 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,	2019;	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, 2019	fiscal	year	end	in	the	definitive	proxy	statement	for	our	 2019	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	fiscal	years	ended	 June	30,	2019,	2018	and	2017

-	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

10.46* Jack	Henry	&	Associates,	Inc.	2005	Non-Qualified	Stock	Option	Plan,	as	amended	August	20,	2010,	attached	as	Exhibit	10.1	to	the Company's	Quarterly	Report	on	form	10-Q	filed	February	7,	2013.

10.63* Jack	Henry	&	Associates,	Inc.	2017	Annual	Incentive	Plan,	effective	September	1,	2017	and	approved	by	the	stockholders	on	November 9,	2017,	attached	as	Exhibit	10.63	to	the	Company's	Current	Report	on	Form	8-K	filed	November	13,	2017.

# 21.1** List	of	the	Company's	subsidiaries.

# 23.1** Consent	of	Independent	Registered	Public	Accounting	Firm-	PricewaterhouseCoopers	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

*	Indicates	management	contract	or	compensatory	plan	or	arrangement.

# **	Filed	with	this	report	on	Form	10-K

***	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,	2019	and	June	30,	2018,	(ii)	the	Consolidated	Statements	of	Income	for	the	years	ended	 June	30,	2019,	2018	and	2017,	(iii) the	Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended	June	30,	2019,	2018	 and	2017,	(iv)	the	Consolidated	Statements	of	Cash Flows	for	the	years	ended	June	30,	2019,	2018	and	2017,	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	26th	day	of	August,	2019.

# 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 percentage growth of the 5 year- cumulative total return for the 2018 peer group from 2016 to 2017
Answer: 17.3%