<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                 Amendment No. 1
(Mark One)

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2003

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

            FOR THE TRANSITION PERIOD FROM __________ TO ___________

                        COMMISSION FILE NUMBER: 001-31254

                              THE BISYS GROUP, INC.

             (Exact name of registrant as specified in its charter)

         DELAWARE                                      13-3532663

(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

                       90 PARK AVENUE, NEW YORK, NEW YORK
                                      10016

                    (Address of principal executive offices)
                                   (Zip Code)

                                  212-907-6000

              (Registrant's telephone number, including area code)

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 REPORT(S), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

YES [X]  NO [ ]

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT).

YES [X]  NO [ ]

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE:

AS OF JUNE 30, 2004, THERE WERE 120,677,756 SHARES OF COMMON STOCK, PAR VALUE
$0.02 PER SHARE, OF THE REGISTRANT OUTSTANDING.

                        This document contains 33 pages.

================================================================================

<PAGE>

                              THE BISYS GROUP, INC.

                              INDEX TO FORM 10-Q/A

<TABLE>
<CAPTION>
                                                                                       PAGE
<S>                                                                                    <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                   Condensed Consolidated Statements of Income for the three and six
                         months ended December 31, 2003 and 2002                         4

                   Condensed Consolidated Balance Sheets as of December 31, 2003 and
                         June 30, 2003                                                   5

                   Condensed Consolidated Statements of Cash Flows for the six months
                         ended December 31, 2003 and 2002                                6

                   Notes to Condensed Consolidated Financial Statements                  7

         Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                 19

         Item 4.  Controls and Procedures                                               25

PART II. OTHER INFORMATION

         Item 2.  Changes in Securities and Use of Proceeds                             26

         Item 4.  Submission of Matters to a Vote of Security Holders                   26

         Item 5.  Other Information                                                     26

         Item 6.  Exhibits and Reports on Form 8-K                                      27

SIGNATURES                                                                              28

EXHIBIT INDEX                                                                           29
</TABLE>

                                EXPLANATORY NOTE

Prior to the issuance of the March 31, 2004 financial statements, the Company
determined that it was appropriate to restate previously issued financial
statements to record adjustments for correction of errors resulting from various
accounting matters described herein (see Note 10). The restated financial
statements for the quarter ended December 31, 2003 are reflected in this
Amendment No. 1 to the Company's Quarterly Report on Form 10-Q for the quarter
ended December 31, 2003. Concurrently herewith, the Company is filing its
amended Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2003
and its amended Annual Report on Form 10-K/A for the fiscal year ended June 30,
2003, to reflect the restated financial statements for those periods.

The adjustments reflected in the restatement fall into three general categories:
adjustments to commissions receivable in the Life Insurance division,
adjustments relating to goodwill and deferred taxes established in acquisition
accounting for certain acquired entities in the Life Insurance division, and
adjustments to agent commissions payable in the Life Insurance division.
Additionally, as a result of the restatement adjustments, adjustments to the
computation of deferred tax assets and liabilities were also recorded.

The restatement principally arose from the Company's review and analysis of
estimates used in determining the level of commissions receivable in the Life
Insurance Services division. Based upon this review and analysis, the Company
determined that an adjustment of $80.0 million to reduce commissions receivable
in its Life Insurance division, together with corresponding adjustments to
revenues and expenses, should be recorded and be reflected in a restatement of
its financial results for the affected periods, as described above. The
adjustment to commissions receivable of $80.0 million is primarily attributable
to the over accrual of revenue, based on assumptions underlying the estimates
that were

                                       2

<PAGE>

subsequently determined to be incorrect. The assumptions were used to compute
certain first year, bonus and renewal commissions receivable during the period
July 1999 through December 2003. In connection with the aforementioned review,
the Company also identified adjustments relating to acquisition accounting for
certain acquired entities in the Life Insurance business, resulting in an
adjustment to goodwill, deferred taxes and revenue over the affected periods of
$21.0 million. This adjustment reflects the recording of commissions receivable
as of the date of acquisition to convert the acquired entity from the cash basis
to the accrual basis of accounting, resulting in a corresponding downward
adjustment to revenue incorrectly accrued following each such acquisition.
Additionally, adjustments to commissions payable of $2.6 million, together with
corresponding adjustments to net revenues, were identified as a result of an
understatement in agent commissions payable.

The impact of the restatement on net income for the three and six months ended
December 31, 2003 was an increase in net income of $0.3 million and $1.3
million, respectively. The net impact of the restatement on net income for the
three and six months ended December 31, 2002 was a decrease in net income of
$5.2 million and $7.3 million, respectively.

This Form 10-Q/A amends and restates Items 1, 2 and 4 of Part I and Items 5 and
6 of Part II. All other information contained herein was included in the
original Form 10-Q, which was filed with the Securities and Exchange Commission
("the SEC") on January 29, 2004, and has not been amended or updated hereby. The
foregoing items have been amended to reflect the restatement and have not been
updated to reflect other events occurring after the filing of the original Form
10-Q, or to modify or update those disclosures affected by subsequent events,
except for those disclosures provided in Note 11. Such matters have been
addressed in the Company's Form 10-Q for the quarter ended March 31, 2004 (the
"March 2004 Form 10-Q") and will continue to be addressed in any reports filed
with the SEC subsequent to the date of this filing. All referenced amounts in
this Form 10-Q/A for prior periods and prior period comparisons reflect the
balances and amounts on a restated basis.

The Company did not amend its Annual Report on Form 10-K or Quarterly Reports on
Form 10-Q for periods affected by the restatement that ended prior to June 30,
2003, and the financial statements and related financial information contained
in such reports should no longer be relied upon.

Investors are urged to read this Form 10-Q/A in conjunction with the March 2004
Form 10-Q, which was filed with the SEC on June 16, 2004.

                                       3

<PAGE>

                                     PART I

                          ITEM 1. FINANCIAL STATEMENTS

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (AS RESTATED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                         Three Months Ended         Six Months Ended
                                             December 31,              December 31,
                                         2003         2002         2003         2002
                                       ---------    ---------    ---------    ---------
<S>                                    <C>          <C>          <C>          <C>
Revenues                               $ 261,381    $ 224,736    $ 497,815    $ 448,153
                                       ---------    ---------    ---------    ---------
Operating costs and expenses:
   Service and operating                 166,314      135,095      316,233      270,117
   Selling, general and
   administrative                         49,397       42,593       95,526       87,179
   Amortization of intangible assets       6,693        4,393       12,499        8,665
   Restructuring, impairment and
    other charges                          2,151            -       14,775       12,079
                                       ---------    ---------    ---------    ---------
Total operating costs and expenses       224,555      182,081      439,033      378,040
                                       ---------    ---------    ---------    ---------

Operating earnings                        36,826       42,655       58,782       70,113
Interest income                              282          535          607          908
Interest expense                          (4,735)      (4,568)      (9,399)      (8,953)
                                       ---------    ---------    ---------    ---------
Income before income taxes                32,373       38,622       49,990       62,068
Income taxes                              12,059       15,084       23,833       23,852
                                       ---------    ---------    ---------    ---------
Net income                             $  20,314    $  23,538    $  26,157    $  38,216
                                       =========    =========    =========    =========

Basic earnings per share               $    0.17    $    0.20    $    0.22    $    0.32
                                       =========    =========    =========    =========

Diluted earnings per share             $    0.17    $    0.19    $    0.22    $    0.31
                                       =========    =========    =========    =========
</TABLE>

    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                       4

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (AS RESTATED)
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                             December 31,     June 30,
                                                                 2003           2003
                                                             ------------   -----------
<S>                                                          <C>            <C>
ASSETS

Current assets:
   Cash and cash equivalents                                 $    85,054    $    79,558
   Restricted cash                                                56,324         26,603
   Accounts receivable, net                                       95,055         96,237
   Insurance premiums and commissions receivable                 109,025         87,535
   Deferred tax asset                                             11,123         45,202
   Other current assets                                           44,791         34,806
                                                             -----------    -----------
     Total current assets                                        401,372        369,941
   Property and equipment, net                                   110,391        107,152
   Goodwill                                                      796,672        731,174
   Intangible assets, net                                        222,879        206,036
   Other assets                                                   34,875         43,839
                                                             -----------    -----------
     Total assets                                            $ 1,566,189    $ 1,458,142
                                                             ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Short-term borrowings                                     $   200,000    $   172,000
   Accounts payable                                               21,422         21,518
   Insurance premiums and commissions payable                    132,306         81,840
   Other current liabilities                                     113,583        128,645
                                                             -----------    -----------
     Total current liabilities                                   467,311        404,003
   Long-term debt                                                300,000        300,000
   Deferred tax liability                                         55,344         34,184
   Other liabilities                                               4,492          4,026
                                                             -----------    -----------
     Total liabilities                                           827,147        742,213
                                                             -----------    -----------

Stockholders' equity:
   Common stock, $0.02 par value, 320,000,000 shares
   authorized, 120,790,185 and 120,274,571 shares issued           2,416          2,405
   Additional paid-in capital                                    388,285        378,986
   Retained earnings                                             369,261        348,401
   Notes receivable from stockholders                            (10,776)       (10,776)
   Employee benefit trust, 350,209 and 344,207 shares             (5,632)        (5,676)
   Deferred compensation                                           5,418          5,752
   Unearned compensation - restricted stock                       (7,006)             -
   Accumulated other comprehensive income (loss)                   3,414           (340)
   Treasury stock at cost, 432,158 and 141,118 shares             (6,338)        (2,823)
                                                             -----------    -----------
     Total stockholders' equity                                  739,042        715,929
                                                             -----------    -----------
     Total liabilities and stockholders' equity              $ 1,566,189    $ 1,458,142
                                                             ===========    ===========
</TABLE>

    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                       5

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (AS RESTATED)
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  Six Months Ended
                                                                     December 31,
                                                               ----------------------
                                                                  2003         2002
                                                               ---------    ---------
<S>                                                            <C>          <C>
Cash flows from operating activities:
Net income                                                     $  26,157    $  38,216
Adjustments to reconcile net income to net cash provided
  by operating activities:
   Restructuring, impairment and other charges                    14,775       12,079
   Depreciation and amortization                                  29,251       23,581
   Deferred income tax provision                                   7,968       (1,181)
   Change in operating assets and liabilities, net of
     effects from acquisitions                                     7,056      (10,473)
                                                               ---------    ---------
Net cash provided by operating activities                         85,207       62,222
                                                               ---------    ---------

Cash flows from investing activities:
   Acquisitions of businesses, net of cash acquired              (44,560)     (46,286)
   Purchase of intangible assets                                       -       (7,715)
   Capital expenditures                                          (16,802)     (25,178)
   Change in other investments                                     1,348       (1,516)
                                                               ---------    ---------
Net cash used in investing activities                            (60,014)     (80,695)
                                                               ---------    ---------

Cash flows from financing activities:
   Proceeds from short-term borrowings                           113,000      149,000
   Repayment of short-term borrowings                            (85,000)     (99,000)
   Proceeds from exercise of stock options                         5,547        4,334
   Repurchases of common stock                                   (53,244)     (33,410)
   Other                                                               -         (242)
                                                               ---------    ---------
Net cash (used in) provided by financing activities              (19,697)      20,682
                                                               ---------    ---------

Net increase in cash and cash equivalents                          5,496        2,209

Cash and cash equivalents at beginning of period                  79,558       78,371
                                                               ---------    ---------

Cash and cash equivalents at end of period                     $  85,054    $  80,580
                                                               =========    =========
</TABLE>

    The accompanying notes are an integral part of the condensed consolidated
                              financial statements.

                                       6

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

Throughout these Notes to Condensed Consolidated Financial Statements, all
referenced amounts and comparisons reflect the balances and amounts on a
restated basis. For information on the restatement, see Note 10, Restatements,
to these financial statements.

1.    BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      THE COMPANY

      The BISYS Group, Inc. and subsidiaries (the "Company") is a leading
      provider of business process outsourcing solutions for the financial
      services sector.

      BASIS OF PRESENTATION

      The condensed consolidated financial statements include the accounts of
      The BISYS Group, Inc. and its subsidiaries and have been prepared
      consistent with the accounting policies reflected in the 2003 Annual
      Report on Form 10-K, as amended, filed with the Securities and Exchange
      Commission concurrently herewith and should be read in conjunction
      therewith. The condensed consolidated financial statements include all
      adjustments (consisting only of normal recurring adjustments) which are,
      in the opinion of management, necessary to fairly state this information.

      RECLASSIFICATION

      Certain reclassifications have been made to the fiscal 2003 financial
      statements to conform to the fiscal 2004 presentation.

      INSURANCE PREMIUMS AND COMMISSIONS RECEIVABLE AND PAYABLE

      The Company has separately reflected receivables and payables arising from
      its insurance-related businesses on the accompanying condensed
      consolidated balance sheets. The captions "insurance premiums and
      commissions receivable" and "insurance premiums and commissions payable"
      include insurance premiums and commissions in the Company's commercial
      insurance services division and net commissions in the Company's life
      insurance brokerage division. In its capacity as a commercial property and
      casualty wholesale broker, the Company collects premiums from other agents
      and brokers and, after deducting its commissions, remits the premiums to
      the respective insurers.

      Net commission revenue from insurance distribution operations is
      recognized when all placement services have been provided, protection is
      afforded under the insurance policy, and the premium is known or can be
      reasonably estimated and is billable. Commission revenue in the Life
      Insurance Services division is recorded net of an allowance for commission
      adjustments due to lapses, policy cancellations, and revisions in
      coverage.

      RESTRICTED CASH

      Unremitted insurance premiums are held in a fiduciary capacity and
      approximated $56.3 million and $26.6 million at December 31, 2003 and June
      30, 2003, respectively. The period for which the Company holds such funds
      is dependent upon the date the agent or broker remits the payment of the
      premium to the Company and the date the Company is required to forward
      such payment to the insurer.

      INVESTMENTS

      Management determines the appropriate classification of investments in
      equity securities at the time of purchase. Marketable equity securities
      available for sale are carried at market based upon quoted market prices.
      Unrealized gains or losses on available for sale securities are
      accumulated as an adjustment to stockholders' equity, net of related
      deferred income taxes. Realized gains or losses are computed based on
      specific identification of the securities sold.

      STOCK-BASED COMPENSATION

      The Company accounts for its stock option, restricted stock and stock
      purchase plans under the recognition and measurement principles of APB
      Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly,
      compensation expense has been recorded for restricted stock awards, and no
      expense has been recorded for the Company's other stock-based plans. The
      following table presents the effect on net income and earnings per share
      if the Company had applied the fair value recognition provisions of FASB
      Statement No. 123, "Accounting for Stock-Based Compensation," (in
      thousands, except per share data):

                                       7

<PAGE>

<TABLE>
<CAPTION>
                                                         As Restated
                                         -----------------------------------------------
                                          Three Months Ended        Six Months Ended
                                              December 31,            December 31
                                         -------------------    ------------------------
                                            2003      2002         2003          2002
                                         --------   --------    ----------    ----------
<S>                                      <C>        <C>         <C>           <C>
Net income, as reported                  $ 20,314   $ 23,538    $   26,157    $   38,216

Add: Stock-based employee compensation
   expense included in reported net
   income, net of related tax effects         298          -           463             -

Deduct: Total stock-based employee
   compensation expense determined
   under fair value based method, net
   of related tax effects                  (4,000)    (4,405)       (8,096)       (9,167)
                                         --------   --------    ----------    ----------

Pro forma net income                     $ 16,612   $ 19,133    $   18,524    $   29,049
                                         ========   ========    ==========    ==========

Earnings per share:
   Basic, as reported                    $   0.17   $   0.20    $     0.22    $     0.32
                                         ========   ========    ==========    ==========
   Basic, pro forma                      $   0.14   $   0.16    $     0.15    $     0.24
                                         ========   ========    ==========    ==========

   Diluted, as reported                  $   0.17   $   0.19    $     0.22    $     0.31
                                         ========   ========    ==========    ==========
   Diluted, pro forma                    $   0.14   $   0.16    $     0.15    $     0.24
                                         ========   ========    ==========    ==========
</TABLE>

2.    USE OF ESTIMATES

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make certain
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenue and
      expenses during the reporting period. The most significant estimates are
      related to net commissions receivable, the allowance for doubtful
      accounts, goodwill and intangible assets, revenue recognition, income
      taxes, contingencies, and restructuring, impairment and other charges.

      The Company bases its estimates on historical experience and on various
      other assumptions that are believed to be reasonable under the
      circumstances, the results of which form the basis for making judgments
      about the carrying value of assets and liabilities that are not readily
      apparent from other sources. Actual results may differ from these
      estimates in the near term.

3.    COMPREHENSIVE INCOME

      The components of comprehensive income are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                      As Restated
                                                     ----------------------------------------------
                                                      Three Months Ended         Six Months Ended
                                                          December 31,              December 31,
                                                     --------------------      --------------------
                                                      2003         2002         2003         2002
                                                     -------      -------      -------      -------
<S>                                                  <C>          <C>          <C>          <C>
Net income                                           $20,314      $23,538      $26,157      $38,216
Unrealized gain on investments, net of deferred
  taxes                                                3,126            -        3,138            -
Foreign currency translation adjustment                  360          126          617          195
                                                     -------      -------      -------      -------
  Total comprehensive income                         $23,800      $23,664      $29,912      $38,411
                                                     =======      =======      =======      =======

</TABLE>

                                       8

<PAGE>

4.    EARNINGS PER SHARE

      Basic and diluted EPS computations for the three and six months ended
      December 31, 2003 and 2002 are as follows (in thousands, except per share
      amounts):

<TABLE>
<CAPTION>
                                                                 As Restated
                                             --------------------------------------------------
                                              Three Months Ended           Six Months Ended
                                                  December 31,                December 31,
                                             ----------------------      ----------------------
                                               2003          2002          2003          2002
                                             --------      --------      --------      --------
<S>                                          <C>           <C>           <C>           <C>
Basic EPS

Net income                                   $ 20,314      $ 23,538      $ 26,157      $ 38,216
                                             ========      ========      ========      ========

Weighted average common shares outstanding    119,350       119,273       119,578       119,393
                                             ========      ========      ========      ========

Basic earnings per share                     $   0.17      $   0.20      $   0.22      $   0.32
                                             ========      ========      ========      ========

Diluted EPS

Net income                                   $ 20,314      $ 23,538      $ 26,157      $ 38,216
                                             ========      ========      ========      ========

Weighted average common shares outstanding    119,350       119,273       119,578       119,393

Assumed conversion of common shares
 issuable under stock-based compensation
 plans                                            741         1,694         1,152         2,493
                                             --------      --------      --------      --------

Weighted average common and common
 equivalent shares outstanding                120,091       120,967       120,730       121,886
                                             ========      ========      ========      ========

Diluted earnings per share                   $   0.17      $   0.19      $   0.22      $   0.31
                                             ========      ========      ========      ========
</TABLE>

      The effect of the assumed conversion of the convertible subordinated notes
      into common stock would be antidilutive and therefore is excluded from the
      computation of diluted earnings per share.

      Certain stock options were not included in the computation of diluted EPS
      because the options' exercise prices were greater than the average market
      price of common shares during the period, as follows (in thousands, except
      per share amounts):

<TABLE>
<CAPTION>
                                                Three Months Ended                     Six Months Ended
                                                   December 31,                          December 31,
                                       -----------------------------------    ----------------------------------
                                             2003               2002                2003              2002
                                       ----------------   ----------------    ----------------  ----------------
<S>                                    <C>                <C>                 <C>               <C>
Number of options excluded                  10,365             6,306               8,922              5,910

Option price per share                 $14.21 to $35.30   $18.02 to $35.30    $16.22 to $35.30  $21.25 to $35.30

Average market price of common shares
  for the period                            $14.21            $17.61              $16.02             $21.03
</TABLE>

5.    RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three and six months ended December 31, 2003, the Company
      recorded pre-tax restructuring, impairment and other charges of $2.2
      million and $14.8 million, respectively. The charges relate to the
      integration, consolidation, and reorganization of certain business
      operations, particularly in the Company's

                                       9

<PAGE>

      European Fund Services division and the Insurance and Education Services
      group, and the recording of an estimated charge for litigation expenses.

      A summary of these items follows (in thousands):

<TABLE>
<CAPTION>
                                  Three Months Ended          Six Months Ended
                                   December 31, 2003          December 31, 2003
                                  ------------------          -----------------
<S>                               <C>                         <C>
Restructuring charges                 $    1,950                  $   7,413
Impairment charges                             -                      4,515
Litigation charges                           201                      2,847
                                      ----------                  ---------
  Total pre-tax charges               $    2,151                  $  14,775
                                      ==========                  =========
</TABLE>

      Restructuring charges of $7.4 million were comprised of severance totaling
      $6.1 million and lease termination costs of $1.3 million. Severance
      charges resulted from the termination or planned termination of
      approximately 330 employees representing all levels of staffing.

      In connection with its restructuring activities, the Company recorded
      asset impairment charges of $4.5 million. Of these charges, $3.9 million
      relates to impairment of an intangible asset and other long-lived assets
      as a result of the Company's plan to restructure its European mutual fund
      services operations and to exit certain European locations during the
      calendar year 2004 following the acquisition of two of the Company's
      significant customers by acquirers with existing fund services
      capabilities. The Company also recorded an additional tax valuation
      allowance of $5.2 million for deferred tax assets associated with tax loss
      carryforwards arising from the European mutual fund services operations as
      the Company believes the deferred tax assets will not be realized.

      Based on internal Company analysis and discussions with counsel on the
      status of litigation matters, the Company recorded a charge of
      approximately $2.8 million related to breach of contract claims in the
      life insurance services business. The amount of the charge includes an
      estimated resolution amount and actual legal fees incurred during the six
      months ended December 31, 2003. The Company, however, intends to continue
      to vigorously defend the claims asserted and has asserted a number of
      counterclaims.

      The following summarizes activity with respect to the Company's
      restructuring activities for the six months ended December 31, 2003 (in
      thousands):

<TABLE>
<S>                                         <C>
Expense provision
   Employee severance                       $6,140
   Facility closure                          1,273
                                            ------
                                             7,413
                                            ------

Cash payments and other                      3,186
                                            ------

Remaining accrual at December 31, 2003
Employee severance                           3,275
Facility closure                               952
                                            ------
                                            $4,227
                                            ======
</TABLE>

      In connection with the aforementioned restructuring plans, certain
      severance costs approximating $2.0 million and lease termination costs of
      approximately $2.0 million are expected to be recognized throughout the
      remainder of fiscal 2004 in accordance with FAS No. 146, "Accounting for
      Costs Associated with Exit or Disposal Activities."

      The Company recorded pre-tax restructuring charges of $12.1 million during
      the six months ended December 31, 2002 related to the integration,
      consolidation and relocation of certain business operations, primarily as
      a result of acquisition activity and the downsizing of certain areas in
      the investment, insurance, education, and check imaging businesses in
      fiscal 2003. The restructuring charge included a provision of $7.2 million
      for severance-related costs for approximately 300 employees and $4.9
      million for facility closure and related costs. At December 31, 2003, an
      accrual of $1.1 million remains from this prior year charge and relates to
      lease costs for facility closures.

                                       10

<PAGE>

6.    INTANGIBLE ASSETS AND GOODWILL

      INTANGIBLE ASSETS

      At December 31, 2003, acquired intangible assets were comprised of the
      following (in thousands):

<TABLE>
<CAPTION>
                          Gross Carrying    Accumulated       Net Book
                              Amount       Amortization        Value
                          --------------   ------------       --------
<S>                       <C>              <C>                <C>
Customer related             $216,231        $(41,159)        $175,072
Noncompete agreements          45,846         (14,053)          31,793
Other                          23,195          (7,181)          16,014
                             --------        --------         --------
  Total                      $285,272        $(62,393)        $222,879
                             ========        ========         ========
</TABLE>

      At June 30, 2003, acquired intangible assets were comprised of the
      following (in thousands):

<TABLE>
<CAPTION>
                          Gross Carrying    Accumulated       Net Book
                              Amount       Amortization        Value
                          --------------   ------------       --------
<S>                       <C>              <C>                <C>
Customer related             $190,917        $(32,618)        $158,299
Noncompete agreements          42,451         (11,629)          30,822
Other                          23,070          (6,155)          16,915
                             --------        --------         --------
  Total                      $256,438        $(50,402)        $206,036
                             ========        ========         ========
</TABLE>

      All of the Company's acquired intangible assets are subject to
      amortization. Amortization expense for acquired intangible assets was $6.7
      million and $12.5 million for the three and six months ended December 31,
      2003 and $18.8 million for the year ended June 30, 2003. Estimated annual
      amortization expense is $26.8 million in fiscal 2004, $27.8 million in
      fiscal 2005, $26.7 million in fiscal 2006, $25.4 million in fiscal 2007,
      and $24.6 million in fiscal 2008.

      In connection with the Company's plan to restructure its European fund
      services operations and exit certain European locations during the
      calendar year 2004, an impairment loss of $0.8 million was recognized
      during the six months ended December 31, 2003 for a customer-related
      intangible. The amount of the impairment loss represented the remaining
      net book value of the intangible at September 30, 2003. See Note 5.

      GOODWILL

      The changes in the carrying amount of goodwill by business segment for the
      six months ended December 31, 2003 are as follows (in thousands):

<TABLE>
<CAPTION>
                                     Investment       Insurance and       Information
                                      Services      Education Services     Services      Total
                                     ----------     ------------------    -----------   --------
<S>                                  <C>            <C>                   <C>           <C>
Balance, July 1, 2003, as restated    $311,366           $384,418           $35,390     $731,174

Additions                                    -             64,188                 -       64,188

Adjustments to previous acquisitions         -              1,310                 -        1,310
                                      --------           --------           -------     --------

Balance, December 31, 2003, as
  restated                            $311,366           $449,916           $35,390     $796,672
                                      ========           ========           =======     ========
</TABLE>

      The adjustments to previous acquisitions relate to additional amounts
      recorded for actual deferred taxes as compared to amounts originally
      estimated at the time of acquisition.

                                       11

<PAGE>

7.    SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three and six months ended
      December 31, 2003 and 2002. Additionally, restructuring, impairment and
      other charges are excluded from the operating results of the segment as
      management does not consider such charges in its assessment of segment
      performance, or in allocating resources among segments.

<TABLE>
<CAPTION>
                                                            As Restated
                                                           (in thousands)
                                           Three Months Ended             Six Months Ended
                                               December 31,                  December 31,
                                        ------------------------      ------------------------
                                          2003           2002           2003            2002
                                        ---------      ---------      ---------      ---------
<S>                                     <C>            <C>            <C>            <C>
Revenue:
Investment Services                     $ 138,211      $ 121,853      $ 266,382      $ 242,797
Insurance and Education Services           66,488         50,454        122,666        102,226
Information Services                       56,682         52,429        108,767        103,130
                                        ---------      ---------      ---------      ---------
   Total revenue                        $ 261,381      $ 224,736      $ 497,815      $ 448,153
                                        =========      =========      =========      =========

Operating income (loss):
Investment Services                     $  16,457      $  17,872      $  32,870      $  33,956
Insurance and Education Services           13,841         16,393         24,301         32,662
Information Services                       14,839         13,825         27,726         26,230
Corporate                                  (6,160)        (5,435)       (11,340)       (10,656)
                                        ---------      ---------      ---------      ---------
   Total operating income               $  38,977      $  42,655      $  73,557      $  82,192
                                        =========      =========      =========      =========

Restructuring, impairment and other
 charges:
Investment Services                     $     968      $       -      $   6,406      $   5,430
Insurance and Education Services              755              -          6,931          2,866
Information Services                          353              -            498          1,494
Corporate                                      75              -            940          2,289
                                        ---------      ---------      ---------      ---------
   Total restructuring, impairment
     and other charges                  $   2,151      $       -      $  14,775      $  12,079
                                        =========      =========      =========      =========

                                        =========      =========      =========      =========
   Total consolidated operating
     earnings                           $  36,826      $  42,655      $  58,782      $  70,113
                                        =========      =========      =========      =========
</TABLE>

8.    RESTRICTED STOCK

      Pursuant to the 1999 Equity Participation Plan, the Company provides for
      awards of restricted shares of the Company's common stock to key
      management employees. Restricted shares awarded under the plan are subject
      to certain transfer and forfeiture restrictions that lapse over a
      four-year vesting period. Awards for 450,234 restricted shares were
      granted, net of forfeitures, during the first six months of fiscal 2004 at
      a fair value of $17.13 per share. Unearned compensation expense related to
      the issuance of restricted shares is reported as a reduction of
      stockholders' equity on the accompanying condensed consolidated financial
      statements and compensation expense is recorded ratably over the four-year
      vesting period, during which the shares are subject to transfer and
      forfeiture restrictions, based on the fair value on the award date.
      Compensation expense related to the issuance of restricted shares
      approximated $0.4 million and $0.7 million during the three and six months
      ended December 31, 2003.

9.    BUSINESS COMBINATIONS

      On November 10, 2003, the Company acquired USA Insurance Group, Inc.
      ("USAIG"), a Florida-based managing general agency ("MGA") serving the
      commercial property and casualty insurance marketplace. The acquisition of
      USAIG broadens the product and geographic reach of the Company's
      commercial property and casualty line of business, and complements and
      significantly expands its MGA platform.

                                       12

<PAGE>

      The Company completed its acquisition of USAIG through the exchange of
      approximately 2.8 million shares of BISYS common stock held in treasury
      and $49.7 million cash for all of the equity interests of USAIG. The
      excess purchase price over the fair value of the net tangible assets
      acquired approximates $92.7 million and was allocated to intangible assets
      and goodwill based upon preliminary estimates of fair values. The Company
      has engaged a valuation consultant to determine the values associated with
      certain identifiable assets in connection with the purchase price
      allocation. The Company does not believe that the final purchase price
      allocation, which should be completed by the end of the third fiscal
      quarter, will differ significantly from the preliminary purchase price
      allocation. USAIG's fair value of assets and liabilities, including
      transaction costs, were as follows (in thousands):

<TABLE>
<S>                                         <C>
Estimated fair value of assets acquired     $ 141,246
Liabilities assumed                           (52,746)
Common stock issued                           (38,823)
                                            ---------
    Net cash paid                           $  49,677
                                            =========
</TABLE>

      The following unaudited pro forma consolidated results of operations has
      been prepared as if the acquisition of USAIG had occurred at the beginning
      of each period (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                 As Restated
                               -----------------------------------------------
                                 Three Months Ended        Six Months Ended
                                    December 31,              December 31,
                               ---------------------     ---------------------
                                 2003         2002         2003         2002
                               --------     --------     --------     --------
<S>                            <C>          <C>          <C>          <C>
Revenues                       $263,990     $232,647     $508,161     $463,330
Net income                     $ 20,368     $ 24,068     $ 27,538     $ 36,797
Diluted earnings per share     $   0.17     $   0.19     $   0.22     $   0.32
</TABLE>

      The operations of USAIG are included in the consolidated financial
      statements since the date of acquisition.

10.   RESTATEMENTS

      Prior to the issuance of the March 31, 2004 interim financial statements,
      the Company determined that it was appropriate to restate previously
      issued financial statements to record adjustments for correction of errors
      resulting from various accounting matters described below. The Company
      restated its financial results for the fiscal years ended June 30, 2003,
      2002 and 2001 and the quarters ended December 31 and September 30, 2003.
      The adjustments fall into three general categories: adjustments to
      commissions receivable in the Life Insurance division, adjustments
      relating to goodwill and deferred taxes established in acquisition
      accounting for certain acquired entities in the Life Insurance division,
      and adjustments to agent commissions payable in the Life Insurance
      division. Additionally, as a result of the restatement adjustments,
      adjustments to the computation of deferred tax assets and liabilities were
      also recorded. The impact of the restatement on net income for each of the
      relevant periods for each such category is set forth below (in thousands,
      except per share data):

                                       13

<PAGE>

<TABLE>
<CAPTION>
                               THREE MONTHS     THREE MONTHS                  YEARS ENDED JUNE 30,
                                   ENDED            ENDED        ---------------------------------------------
                               SEPTEMBER 30,     DECEMBER 31,
                                  2003               2003          2003        2002        2001       PRE-2001       TOTAL
                               -------------    -------------   ---------   ---------    --------     --------     ---------
<S>                            <C>              <C>             <C>         <C>          <C>          <C>          <C>
Net income, as reported         $    4,811       $  20,046      $ 111,823   $ 115,861    $ 85,120
                                ----------       ---------      ---------   ---------    --------
Pretax adjustments:
  Commissions receivable             1,744             526        (11,738)    (36,060)    (23,880)    $ (10,567)   $ (79,975)
  Goodwill and deferred taxes            -               -         (7,348)     (6,486)     (7,214)            -      (21,048)
  Commissions payable                  (99)            (99)        (1,221)     (1,221)          -             -       (2,640)
                                ----------       ---------      ---------   ---------    --------     ---------    ---------
Total pretax adjustments             1,645             427        (20,307)    (43,767)    (31,094)      (10,567)    (103,663)

Tax effect of restatement
  adjustment                           613             159         (6,727)    (16,604)    (13,044)         (228)     (35,831)
                                ----------       ---------      ---------   ---------    --------     ---------    ---------

Total net adjustments                1,032             268        (13,580)    (27,163)    (18,050)    $ (10,339)   $ (67,832)
                                ----------       ---------      ---------   ---------    --------     =========    =========

Net income, as restated         $    5,843       $  20,314      $  98,243   $  88,698    $ 67,070
                                ==========       =========      =========   =========    ========
Basic earnings per share,
  as reported                   $     0.04       $    0.17      $    0.93   $    0.98    $   0.74
Effect of net adjustments             0.01               -          (0.11)      (0.23)      (0.16)
                                ----------       ---------      ---------   ---------    --------
Basic earnings per share,
  as restated                   $     0.05       $    0.17      $    0.82   $    0.75    $   0.58
                                ==========       =========      =========   =========    ========

Diluted earnings per share,
  as reported                   $     0.04       $    0.17      $    0.92   $    0.94    $   0.71
Effect of net adjustments             0.01               -          (0.11)      (0.22)      (0.15)
                                ----------       ---------      ---------   ---------    --------
Diluted earnings per share,
  as restated                   $     0.05       $    0.17      $    0.81   $    0.72    $   0.56
                                ==========       =========      =========   =========    ========
</TABLE>

      The restatement principally arose from the Company's review and analysis
      of estimates used in determining the level of commissions receivable in
      the Life Insurance Services division. Based upon this review and analysis,
      the Company determined that an adjustment of $80.0 million to reduce
      commissions receivable in its Life Insurance division, together with
      corresponding adjustments to revenues and expenses, should be recorded and
      be reflected in a restatement of its financial results for the affected
      periods, as described above. The adjustment to commissions receivable of
      $80.0 million is primarily attributable to the over accrual of revenue,
      based on assumptions underlying the estimates that were subsequently
      determined to be incorrect. The assumptions were used to compute certain
      first year, bonus and renewal commissions receivable during the period
      July 1999 through December 2003. In connection with the aforementioned
      review, the Company also identified adjustments relating to acquisition
      accounting for certain acquired entities in the Life Insurance business,
      resulting in an adjustment to goodwill, deferred taxes and revenue over
      the affected periods of $21.0 million. This adjustment reflects the
      recording of commissions receivable as of the date of acquisition to
      convert the acquired entity from the cash basis to the accrual basis of
      accounting, resulting in a corresponding downward adjustment to revenue
      incorrectly accrued following each such acquisition. Additionally,
      adjustments to commissions payable of $2.6 million, together with
      corresponding adjustments to net revenues, were identified as a result of
      an understatement in agent commissions payable.

      Concurrent with the filing of this report on Form 10-Q/A for the period
      ended December 31, 2003, the Company is filing revised financial
      statements reflecting the impact of the restatement on the fiscal years
      ended June 30, 2003, 2002 and 2001 on Form 10-K/A for the fiscal year
      ended June 30, 2003, as well as revised financial statements reflecting
      the impact of the restatement on the quarter ended September 30, 2003 on
      Form 10-Q/A. The restatement also affects periods prior to the fiscal year
      ended June 30, 2001. The net impact of the restatement on such prior
      periods has been reflected as a reduction to beginning stockholders'
      equity as of July 1, 2000 in the amount of $10.3 million.

                                       14

<PAGE>

      In connection with the process, the Company restated its financial
      statements for the three and six months ended December 31, 2003 and 2002.
      The impact of the restatement on net income for the three and six months
      ended December 31, 2003 was an increase in net income of $0.3 million and
      $1.3 million, respectively.

      The impact of the restatement on net income for the three and six months
      ended December 31, 2002 was a decrease in net income of $5.2 million and
      $7.3 million, respectively.

      The following table sets forth the effects of the restatement adjustments
      discussed above on the Condensed Consolidated Statement of Income for the
      three months ended December 31, 2003 and 2002 (in thousands, except per
      share data):

<TABLE>
<CAPTION>
                                             Three Months Ended           Three Months Ended
                                              December 31, 2003            December 31, 2002
                                        --------------------------    --------------------------
                                        As Reported    As Restated    As Reported    As Restated
                                        -----------    -----------    -----------    -----------
<S>                                     <C>            <C>            <C>            <C>
Revenues                                 $ 263,331      $ 261,381      $ 233,112      $ 224,736
                                         ---------      ---------      ---------      ---------
Operating costs and expenses:
   Service and operating                   168,691        166,314        136,126        135,095
   Selling, general and
   administrative                           49,397         49,397         42,593         42,593
   Amortization of intangible assets         6,693          6,693          4,393          4,393
   Restructuring, impairment and
   other charges                             2,151          2,151              -              -
                                         ---------      ---------      ---------      ---------
Total operating costs and expenses         226,932        224,555        183,112        182,081
                                         ---------      ---------      ---------      ---------

Operating earnings                          36,399         36,826         50,000         42,655
Interest income                                282            282            535            535
Interest expense                            (4,735)        (4,735)        (4,568)        (4,568)
                                         ---------      ---------      ---------      ---------
Income before income taxes                  31,946         32,373         45,967         38,622
Income taxes                                11,900         12,059         17,238         15,084
                                         ---------      ---------      ---------      ---------
Net income                               $  20,046      $  20,314      $  28,729      $  23,538
                                         =========      =========      =========      =========

Basic earnings per share                 $    0.17      $    0.17      $    0.24      $    0.20
                                         =========      =========      =========      =========

Diluted earnings per share               $    0.17      $    0.17      $    0.24      $    0.19
                                         =========      =========      =========      =========
</TABLE>

                                       15

<PAGE>

      The following table sets forth the effects of the restatement adjustment
      discussed above on the Condensed Consolidated Statement of Income for the
      six months ended December 31, 2003 and 2002 (in thousands, except per
      share data, except per share data):

<TABLE>
<CAPTION>
                                             Six Months Ended              Six Months Ended
                                             December 31, 2003             December 31, 2002
                                        --------------------------    --------------------------
                                        As Reported    As Restated    As Reported    As Restated
                                        -----------    -----------    -----------    -----------
<S>                                     <C>            <C>            <C>            <C>
Revenues                                 $ 500,713      $ 497,815      $ 460,456      $ 448,153
                                         ---------      ---------      ---------      ---------

Operating costs and expenses:
   Service and operating                   321,203        316,233        271,675        270,117
   Selling, general and
   administrative                           95,526         95,526         87,179         87,179
   Amortization of intangible assets        12,499         12,499          8,665          8,665
   Restructuring, impairment and
   other charges                            14,775         14,775         12,079         12,079
                                         ---------      ---------      ---------      ---------
Total operating costs and expenses         444,003        439,033        379,598        378,040
                                         ---------      ---------      ---------      ---------

Operating earnings                          56,710         58,782         80,858         70,113
Interest income                                607            607            908            908
Interest expense                            (9,399)        (9,399)        (8,953)        (8,953)
                                         ---------      ---------      ---------      ---------
Income before income taxes                  47,918         49,990         72,813         62,068
Income taxes                                23,061         23,833         27,305         23,852
                                         ---------      ---------      ---------      ---------
Net income                               $  24,857      $  26,157      $  45,508      $  38,216
                                         =========      =========      =========      =========

Basic earnings per share                 $    0.21      $    0.22      $    0.38      $    0.32
                                         =========      =========      =========      =========

Diluted earnings per share               $    0.21      $    0.22      $    0.37      $    0.31
                                         =========      =========      =========      =========
</TABLE>

                                       16

<PAGE>

      The following table sets forth the effects of the restatement adjustments
      discussed above on the Condensed Consolidated Balance Sheet at December 31
      and June 30, 2003 (in thousands, except share data):

<TABLE>
<CAPTION>
                                                        December 31, 2003                  June 30, 2003
                                                  ----------------------------      ----------------------------
                                                  As Reported      As Restated      As Reported      As Restated
                                                  -----------      -----------      -----------      -----------
<S>                                               <C>              <C>              <C>              <C>
ASSETS

Current assets:
  Cash and cash equivalents                       $    85,054      $    85,054      $    79,558      $    79,558
  Restricted cash                                      56,324           56,324           26,603           26,603
  Accounts receivable, net                             95,055           95,055           96,237           96,237
  Insurance premiums and commissions receivable       189,000          109,025          169,780           87,535
  Deferred tax asset                                   10,701           11,123           13,655           45,202
  Other current assets                                 44,791           44,791           34,806           34,806
                                                  -----------      -----------      -----------      -----------
     Total current assets                             480,925          401,372          420,639          369,941
  Property and equipment, net                         110,391          110,391          107,152          107,152
  Goodwill                                            814,725          796,672          749,227          731,174
  Intangible assets, net                              222,879          222,879          206,036          206,036
  Other assets                                         34,875           34,875           43,839           43,839
                                                  -----------      -----------      -----------      -----------
     Total assets                                 $ 1,663,795      $ 1,566,189      $ 1,526,893      $ 1,458,142
                                                  ===========      ===========      ===========      ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Short-term borrowings                           $   200,000      $   200,000      $   172,000      $   172,000
  Accounts payable                                     21,422           21,422           21,518           21,518
  Insurance premiums and commissions payable          129,666          132,306           79,398           81,840
  Other current liabilities                           142,934          113,583          127,643          128,645
                                                  -----------      -----------      -----------      -----------
     Total current liabilities                        494,022          467,311          400,559          404,003
  Long-term debt                                      300,000          300,000          300,000          300,000
  Deferred tax liability                               58,407           55,344           37,247           34,184
  Other liabilities                                     4,492            4,492            4,026            4,026
                                                  -----------      -----------      -----------      -----------
     Total liabilities                                856,921          827,147          741,832          742,213
                                                  -----------      -----------      -----------      -----------

Stockholders' equity:
  Common stock, $0.02 par value, 320,000,000
   shares authorized, 120,790,185 and
   120,274,571 shares issued                            2,416            2,416            2,405            2,405
  Additional paid-in capital                          388,285          388,285          378,986          378,986
  Retained earnings                                   437,093          369,261          417,533          348,401
  Notes receivable from stockholders                  (10,776)         (10,776)         (10,776)         (10,776)
  Employee benefit trust, 350,209 and
   344,207 shares                                      (5,632)          (5,632)          (5,676)          (5,676)
  Deferred compensation                                 5,418            5,418            5,752            5,752
  Unearned compensation - restricted stock             (7,006)          (7,006)               -                -
  Accumulated other comprehensive income
   (loss)                                               3,414            3,414             (340)            (340)
  Treasury stock at cost, 432,158 and
   141,118 shares                                      (6,338)          (6,338)          (2,823)          (2,823)
                                                  -----------      -----------      -----------      -----------
     Total stockholders' equity                       806,874          739,042          785,061          715,929
                                                  -----------      -----------      -----------      -----------
     Total liabilities and stockholders'
      equity                                      $ 1,663,795      $ 1,566,189      $ 1,526,893      $ 1,458,142
                                                  ===========      ===========      ===========      ===========
</TABLE>

                                       17

<PAGE>

11.   SUBSEQUENT EVENTS

      On May 17, 2004, the Company announced that it would restate its financial
      results for the fiscal years ended June 30, 2003, 2002, and 2001 and for
      the quarters ended December 31 and September 30, 2003 as described in Note
      10. The Audit Committee of the Company's Board of Directors conducted an
      independent investigation into the events and circumstances that resulted
      in the restatement and retained independent counsel to assist in such
      investigation.

      The Company notified the Securities and Exchange Commission ("SEC") of its
      intention to restate prior period financial results and that there would
      be a delay in the filing of its Form 10-Q for the quarter ended March 31,
      2004. Subsequently, the SEC advised the Company that the SEC is conducting
      an investigation into the facts and circumstances related to the
      restatement. The Company has cooperated and intends to continue to
      cooperate with the SEC.

      Following the Company's May 17, 2004 announcement regarding the
      restatement of its financial results, seven putative class action and two
      derivative lawsuits were filed against the Company and certain of its
      current and former officers in the United States District Court for the
      Southern District of New York. The class action complaints purport to be
      brought on behalf of all shareholders who purchased the Company's
      securities between October 23, 2000 and May 17, 2004 and generally assert
      that the Company and certain of its officers allegedly violated the
      federal securities laws in connection with the purported issuance of false
      and misleading information concerning the Company's financial condition.
      The class action complaints seek damages in an unspecified amount against
      the Company. The derivative complaints purport to be on behalf of the
      Company and generally assert that certain officers and directors are
      liable for alleged breaches of fiduciary duties, abuse of control, gross
      mismanagement, waste, and unjust enrichment that purportedly occurred
      between October 23, 2000 and the present. The derivative complaints seek
      disgorgement, constructive trust, and damages in an unspecified amount.
      The Company intends to defend itself vigorously against these claims but
      is unable to determine the ultimate outcome.

      As part of the Credit Agreement governing the new senior unsecured credit
      facility that was entered into on March 31, 2004, the Company made certain
      representations about its prior period financial statements. In light of
      the need for adjustments to these prior period financial statements, the
      lenders consider these representations to have been inaccurate when made,
      and therefore, the lenders have asserted that there has been a breach
      under the Credit Agreement causing the Company to be in default. The
      Company subsequently procured a waiver from the lenders which allows the
      Company to continue to rollover certain LIBOR-based borrowings. However,
      until the waiver becomes permanent, the terms of the waiver do not cure
      the asserted default and preclude the Company from drawing down additional
      borrowings under the credit facility. The lenders have asserted that they
      have the right to accelerate payment of outstanding borrowings under the
      credit facility until the waiver becomes permanent. The waiver becomes
      permanent for all purposes upon the filing, concurrently herewith, of the
      Company's amended Form 10-K for the fiscal year ended June 30, 2003.

                                       18

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The condensed consolidated financial statements as of December 31, 2003 and for
the three and six month periods ended December 31, 2003, included in this
Quarterly Report on Form 10-Q/A, have been restated as discussed in Note 10 to
the condensed consolidated financial statements. For purposes of this Form
10-Q/A, and in accordance with Rule 12b-15 under the Securities Exchange Act of
1934, as amended, each item of the Form 10-Q for the quarter ended December 31,
2003 as originally filed on January 29, 2004 that was affected by the
restatement has been amended to the extent affected and restated in its
entirety. The disclosure contained in the Original Form 10-Q has not been
modified or updated except for updates made to Part I, Items 1, 2 and 4 and Part
II, Items 5 and 6.

Throughout this discussion and analysis of financial condition and results of
operations, all referenced amounts and comparisons reflect the balance and
amounts on a restated basis.

The Company provides outsourcing solutions to and through financial
organizations. The following table presents the percentage of revenues
represented by each item in the Company's condensed consolidated statements of
income for the periods indicated:

<TABLE>
<CAPTION>
                                                                       As Restated
                                                      ---------------------------------------------
                                                      Three Months Ended         Six Months Ended
                                                          December 31,             December 31,
                                                      -------------------       -------------------
                                                       2003         2002         2003         2002
                                                      ------       ------       ------       ------
<S>                                                   <C>          <C>          <C>          <C>
Revenues                                              100.0%       100.0%       100.0%       100.0%
                                                      -----        -----        -----        -----
Operating costs and expenses:
   Service and operating                               63.6         60.1         63.5         60.3
   Selling, general and administrative                 18.9         18.9         19.2         19.5
   Amortization of intangible assets                    2.6          2.0          2.5          1.9
   Restructuring, impairment and other charges          0.8            -          3.0          2.7
                                                      -----        -----        -----        -----
Total operating costs and expenses                     85.9         81.0         88.2         84.4
                                                      -----        -----        -----        -----
Operating earnings                                     14.1         19.0         11.8         15.6
Interest income                                         0.1          0.2          0.1          0.2
Interest expense                                       (1.8)        (2.0)        (1.9)        (2.0)
                                                      -----        -----        -----        -----
Income before income taxes                             12.4         17.2         10.0         13.8
Income taxes                                            4.6          6.7          4.8          5.3
                                                      -----        -----        -----        -----
Net income                                              7.8%        10.5%         5.2%         8.5%
                                                      =====        =====        =====        =====
</TABLE>

COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 2003 WITH THE THREE MONTHS
ENDED DECEMBER 31, 2002.

      Revenues increased 16.3% from $224.7 million for the three months ended
      December 31, 2002 to $261.4 million for the three months ended December
      31, 2003. This growth was derived from acquired businesses during the past
      twelve months, sales to new clients, existing client growth, and cross
      sales to existing clients. Internal revenue growth increased approximately
      8% for the three months ended December 31, 2003 over the same period last
      year.

      Service and operating expenses increased 23.1% from $135.1 million for the
      three months ended December 31, 2002 to $166.3 million for the three
      months ended December 31, 2003 and increased as a percentage of revenues
      from 60.1% to 63.6%. The dollar and percentage increase resulted from
      additional costs associated with greater revenues, a higher cost base in
      certain areas of the Life Insurance Services division, lower margins in
      the 401(k) administration business, and changes in the mix of the
      Company's business.

      Selling, general and administrative expenses increased 16.0% from $42.6
      million during the three months ended December 31, 2002 to $49.4 million
      for the three months ended December 31, 2003. The dollar increase resulted
      from additional costs associated with greater revenues.

      Amortization of intangible assets increased $2.3 million for the three
      months ended December 31, 2003 over the same period last year due to a
      higher level of intangible assets associated with recently acquired
      businesses and customer contracts.

                                       19

<PAGE>

      Interest expense increased $0.2 million for the three months ended
      December 31, 2003 over the same period last year primarily due to the
      interest costs associated with higher average borrowings under the
      Company's revolving credit facility.

      The income tax provision of $12.1 million for the three months ended
      December 31, 2003 decreased from $15.1 million for the three months ended
      December 31, 2002, due to lower taxable income. The provision represents
      an effective tax rate, excluding the impact of restructuring, impairment
      and other charges, of 37.25% and 39.06% for the periods ended December 31,
      2003 and 2002, respectively. The decrease in the effective tax rate is
      primarily due to the mix of business in foreign tax jurisdictions.

      Operating earnings, before amortization of intangibles and restructuring,
      impairment and other charges, resulted in margins of 17.5% and 20.9% for
      the three months ended December 31, 2003 and 2002, respectively. The
      margin decrease was primarily due to a significant margin decline in the
      Insurance and Education Services segment as a result of a decline in
      internal revenue and a higher cost base in certain areas of the Life
      Insurance Services division.

COMPARISON OF THE SIX MONTHS ENDED DECEMBER 31, 2003 WITH THE SIX MONTHS ENDED
DECEMBER 31, 2002.

      Revenues increased 11.1% from $448.2 million for the six months ended
      December 31, 2002 to $497.8 million for the six months ended December 31,
      2003. This growth was derived largely from acquired businesses during the
      past twelve months. Internal revenue growth increased approximately 4% for
      the six months ended December 31, 2003 over the same period last year. The
      rate of internal growth was negatively impacted by a decline in internal
      revenue in the Life Insurance and Education Services divisions.

      Service and operating expenses increased 17.1% from $270.1 million for the
      six months ended December 31, 2002 to $316.2 million for the six months
      ended December 31, 2003 and increased as a percentage of revenues from
      60.3% to 63.5%. The dollar and percentage increase resulted from
      additional costs associated with greater revenues, a higher cost base in
      certain areas of the Life Insurance Services division and changes in the
      mix of the Company's business.

      Selling, general and administrative expenses increased 9.6% from $87.2
      million during the six months ended December 31, 2002 to $95.5 million for
      the six months ended December 31, 2003 and decreased as a percentage of
      revenues from 19.5% to 19.2%. The dollar increase resulted from additional
      costs associated with greater revenues. The decrease as a percentage of
      revenues resulted from further utilization of existing general and
      administrative support resources.

      Amortization of intangible assets increased $3.8 million for the six
      months ended December 31, 2003 over the same period last year due to a
      higher level of intangible assets associated with recently acquired
      businesses and customer contracts.

      Interest expense increased $0.4 million for the six months ended December
      31, 2003 over the same period last year primarily due to the interest
      costs associated with higher average borrowings under the Company's
      revolving credit facility.

      The income tax provision of $23.8 million for the six months ended
      December 31, 2003 decreased from $23.9 million for the six months ended
      December 31, 2002. The tax provision for the six months ended December 31,
      2003 also includes recognition of an additional tax valuation allowance of
      $5.2 million for deferred tax assets associated with tax loss
      carryforwards from the European mutual fund services operations that are
      not expected to be realized. The provision represents an effective tax
      rate, excluding the impact of restructuring, impairment and other charges,
      of 37.25% and 38.28% for the six months ended December 31, 2003 and 2002,
      respectively. The decrease in the effective tax rate is primarily due to
      the mix of business in foreign tax jurisdictions.

      Operating earnings, before amortization of intangibles and restructuring,
      impairment and other charges, resulted in margins of 17.3% and 20.3% for
      the six months ended December 31, 2003 and 2002, respectively. The margin
      decrease was primarily due to a significant margin decline in the
      Insurance and Education Services segment as a result of a decline in
      internal revenue and a higher cost base in certain areas of the Life
      Insurance Services division.

                                       20

<PAGE>

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three and six months ended December 31, 2003, the Company
      recorded pre-tax restructuring, impairment and other charges of $2.2
      million and $14.8 million, respectively. The charges relate to the
      integration, consolidation, and reorganization of certain business
      operations, particularly in the Company's European Fund Services division
      and the Insurance and Education Services group, and the recording of an
      estimated charge for litigation expenses.

      A summary of these items follows (in thousands):

<TABLE>
<CAPTION>
                                    Three Months Ended          Six Months Ended
                                     December 31, 2003         December 31, 2003
                                    ------------------         -----------------
<S>                                 <C>                        <C>
Restructuring charges                      $1,950                    $ 7,413
Impairment charges                              -                      4,515
Litigation charges                            201                      2,847
                                           ------                    -------
  Total pre-tax charges                    $2,151                    $14,775
                                           ======                    =======
</TABLE>

      Restructuring charges of $7.4 million were comprised of severance totaling
      $6.1 million and lease termination costs of $1.3 million. Severance
      charges resulted from the termination or planned termination of
      approximately 330 employees representing all levels of staffing.

      In connection with its restructuring activities, the Company recorded
      asset impairment charges of $4.5 million. Of these charges, $3.9 million
      relates to impairment of an intangible asset and other long-lived assets
      as a result of the Company's plan to restructure its European mutual fund
      services operations and to exit certain European locations during the
      calendar year 2004 following the acquisition of two of the Company's
      significant customers by acquirers with existing fund services
      capabilities. The Company also recorded an additional tax valuation
      allowance of $5.2 million for deferred tax assets associated with tax loss
      carryforwards arising from the European mutual fund services operations as
      the Company believes the deferred tax assets will not be realized.

      Based on internal Company analysis and discussions with counsel on the
      status of litigation matters, the Company recorded a charge of
      approximately $2.8 million related to breach of contract claims in the
      life insurance services business. The amount of the charge includes an
      estimated resolution amount and actual legal fees incurred during the six
      months ended December 31, 2003. The Company, however, intends to continue
      to vigorously defend the claims asserted and has asserted a number of
      counterclaims.

      The following summarizes activity with respect to the Company's
      restructuring activities for the six months ended December 31, 2003 (in
      thousands):

<TABLE>
<S>                                           <C>
Expense provision
   Employee severance                         $6,140
   Facility closure                            1,273
                                              ------
                                               7,413
                                              ------

Cash payments and other                        3,186
                                              ------

Remaining accrual at December 31, 2003
Employee severance                             3,275
Facility closure                                 952
                                              ------
                                              $4,227
                                              ======
</TABLE>

      In connection with the aforementioned restructuring plans, certain
      severance costs approximating $2.0 million and lease termination costs of
      approximately $2.0 million are expected to be recognized throughout the
      remainder of fiscal 2004 in accordance with FAS No. 146, "Accounting for
      Costs Associated with Exit or Disposal Activities."

      The Company recorded pre-tax restructuring charges of $12.1 million during
      the six months ended December 31, 2002 related to the integration,
      consolidation and relocation of certain business operations, primarily as
      a

                                       21

<PAGE>

      result of acquisition activity and the downsizing of certain areas in
      the investment, insurance, education, and check imaging businesses in
      fiscal 2003. The restructuring charge included a provision of $7.2 million
      for severance-related costs for approximately 300 employees and $4.9
      million for facility closure and related costs. At December 31, 2003, an
      accrual of $1.1 million remains from this prior year charge and relates to
      lease costs for facility closures.

LIQUIDITY AND CAPITAL RESOURCES

      At December 31, 2003, the Company had cash and cash equivalents of $85.1
      million and negative working capital of $65.9 million. At December 31,
      2003, the Company had outstanding borrowings of $200 million against its
      $300 million revolving credit facility. The credit facility bears interest
      at LIBOR plus a margin of 0.65%, resulting in a weighted average interest
      rate of 1.8% on all outstanding borrowings under the facility at December
      31, 2003. The facility is used to support the Company's working capital
      requirements and fund the Company's future acquisitions. On March 31,
      2004, the Company entered into a new senior unsecured credit facility. The
      $400 million facility contains a $300 million revolving line of credit and
      a $100 million term loan. The new facility expires March 31, 2008 and
      replaces the $300 million facility which was due to expire on June 30,
      2004.

      The Company's strategy includes the acquisition of complementary
      businesses financed by a combination of internally generated funds,
      borrowings from the revolving credit facility, long-term debt and common
      stock. The Company's policy is to retain earnings to support future
      business opportunities, rather than to pay dividends. The Company has
      historically used a significant portion of its cash flow from operations
      to fund acquisitions and capital expenditures with any remainder used to
      reduce outstanding borrowings under the credit facility. The Company
      believes that its cash flow from operations together with other available
      sources of funds will be adequate to meet its funding requirements. In the
      event that the Company makes significant future acquisitions, however, it
      may raise funds through additional borrowings or the issuance of
      securities.

      At December 31, 2003, the Company had $3.1 million outstanding in letters
      of credit and $300 million of outstanding 4% convertible subordinated
      notes due March 2006. The Company's debt ratio (total debt/total debt plus
      equity) is 0.40 at December 31, 2003, and the Company's maximum debt ratio
      may not exceed .50 under the terms of the revolving credit facility, as
      amended. At December 31, 2003, the Company is in compliance with all
      financial covenants required by the credit facility.

      Accounts receivable represented 42 and 44 days sales outstanding (DSO) at
      December 31, 2003 and June 30, 2003, respectively, based on quarterly
      revenues. The calculation of DSO for accounts receivable excludes
      insurance premiums and commissions receivable arising from the Company's
      insurance-related businesses. DSO is less relevant for this type of
      receivable because it includes premiums that are ultimately remitted to
      the insurer and not recognized as revenue. Additionally, certain life
      insurance commissions due from the insurance carriers have customary
      payment terms of up to twelve months.

      For the six months ended December 31, 2003, operating activities provided
      cash of $85.2 million. Investing activities used cash of $60.0 million,
      primarily for the acquisition of businesses of $44.6 million and for
      capital expenditures of $16.8 million. Financing activities used cash of
      $19.7 million, comprised of repurchases of Company stock of $53.2 million,
      offset by net proceeds from short-term borrowings of $28.0 million and
      proceeds from exercises of stock options of $5.5 million. Approximately
      2.8 million shares of treasury stock acquired during the six months ended
      December 31, 2003 were issued in connection with the acquisition of USAIG
      in November 2003.

      The Board of Directors has authorized a new stock buy-back program of up
      to $100 million effective November 2003. Through December 31, 2003, the
      Company has purchased 0.5 million shares for $7.3 million under the stock
      buy-back program, leaving $92.7 million available for future purchases.
      Purchases have occurred and are expected to continue to occur from time to
      time in the open market to offset the possible dilutive effect of shares
      issued under employee benefit plans, for possible use in future
      acquisitions, and for general and other corporate purposes.

SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three and six months ended
      December 31, 2003 and 2002 as originally reported in the Form 10-Q and as
      restated for the effects of the restatement adjustments. Restructuring,
      impairment and other charges are

                                       22

<PAGE>

      excluded from the operating results of the segment as management does not
      consider such charges in its assessment of segment performance, or in
      allocating resources among segments (see Note 7).

<TABLE>
<CAPTION>
                                                              As Reported
                                                            (in thousands)
                                           Three Months Ended               Six Months Ended
                                               December 31,                    December 31,
                                        -------------------------      --------------------------
                                           2003           2002            2003            2002
                                        ----------     ----------      ----------      ----------
<S>                                     <C>            <C>             <C>             <C>
Revenue:
   Investment Services                  $  138,211     $  121,853      $  266,382      $  242,797
   Insurance and Education Services         68,438         58,830         125,564         114,529
   Information Services                     56,682         52,429         108,767         103,130
                                        ----------     ----------      -----------     ----------
     Total revenue                      $  263,331     $  233,112      $  500,713      $  460,456
                                        ==========     ==========      ===========     ==========

Operating income (loss):
   Investment Services                  $   16,457     $   17,872      $   32,870      $   33,956
   Insurance and Education Services         13,414         23,738          22,229          43,407
   Information Services                     14,839         13,825          27,726          26,230
   Corporate                                (6,160)        (5,435)        (11,340)        (10,656)
                                        ----------     ----------      -----------     ----------
     Total operating income             $   38,550     $   50,000      $   71,485      $   92,937
                                        ==========     ==========      ===========     ==========
</TABLE>

<TABLE>
<CAPTION>
                                                              As Restated
                                                            (in thousands)
                                           Three Months Ended               Six Months Ended
                                              December 31,                    December 31,
                                        -------------------------      --------------------------
                                           2003           2002            2003            2002
                                        ----------     ----------      -----------     ----------
<S>                                     <C>            <C>             <C>             <C>
Revenue:
   Investment Services                  $  138,211     $  121,853      $  266,382      $  242,797
   Insurance and Education Services         66,488         50,454         122,666         102,226
   Information Services                     56,682         52,429         108,767         103,130
                                        ----------     ----------      -----------     ----------
     Total revenue                      $  261,381     $  224,736      $  497,815      $  448,153
                                        ==========     ==========      ===========     ==========

Operating income (loss):
   Investment Services                  $   16,457     $   17,872      $   32,870      $   33,956
   Insurance and Education Services         13,841         16,393          24,301          32,662
   Information Services                     14,839         13,825          27,726          26,230
   Corporate                                (6,160)        (5,435)        (11,340)        (10,656)
                                        ----------     ----------      -----------     ----------
     Total operating income             $   38,977     $   42,655      $   73,557      $   82,192
                                        ==========     ==========      ===========     ==========
</TABLE>

      Internal revenue growth (excluding acquisitions), as restated, for
      Investment Services, Insurance and Education Services, and Information
      Services approximated 13%, (4)%, and 8%, respectively, during the three
      months ended December 31, 2003 over the same period last year. A
      substantial portion of the Company's revenues are recurring in nature and
      are derived from long-term customer contracts with terms that generally
      average from three to five years. The Company expects to achieve an
      overall annual internal growth rate of 3% to 5% in fiscal 2004.

      Revenue in the Investment Services business segment increased $16.3
      million, or 13.4%, during the three months ended December 31, 2003, over
      the same period last year. The revenue increase was primarily due to the
      acquisition of several new clients and increased assets under
      administration. Operating income in the Investment Services business
      segment decreased $1.4 million, or 7.9%, during the fiscal second quarter.
      Operating margins were 11.9% and 14.7% for the three months ended December
      31, 2003 and 2002, respectively. The margin decreased due primarily to
      lower margins in the 401(k) administration business and, to a lesser
      extent, increased expenses in the Fund Services business and investments
      in the infrastructure of the Alternative Investment business.

      See Note 10, Restatements, which describes the adjustments for correction
      of errors impacting the Life Insurance Services division. The ensuing
      discussion of the results of the Insurance and Education Services

                                       23

<PAGE>

      segment is after the effects of the restatement adjustments. The Company
      has taken steps to improve the internal controls at the Life Insurance
      Services division as more fully described in Item 4 of Part I, Controls
      and Procedures. Revenue in the Insurance and Education Services business
      segment increased $16.0 million, or 31.8%, during the three months ended
      December 31, 2003, over the same period last year. The revenue increase
      was primarily due to acquisitions offset by a decline in internal revenue
      of 4%. The decrease in internal revenue was primarily due to company- and
      industry-wide declines in sales of term life and fixed annuity insurance
      products and lower sales productivity. Operating income in the Insurance
      and Education Services business segment decreased $2.6 million, or 15.6%,
      during the fiscal second quarter. Operating margins were 20.8% and 32.5%
      for the three months ended December 31, 2003 and 2002, respectively.
      Margins decreased in the fiscal second quarter primarily due to a decline
      in internal revenue and a higher cost base in certain areas of the life
      insurance division.

      Revenue in the Information Services business segment increased $4.3
      million, or 8.1%, during the three months ended December 31, 2003, over
      the same period last year. The revenue increase was due to existing client
      growth, cross sales of ancillary products and services to existing
      clients, and sales to new clients. Operating income in the Information
      Services business segment increased $1.0 million, or 7.3%, during the
      fiscal second quarter. Operating margins were 26.2% and 26.4% for the
      three months ended December 31, 2003 and 2002, respectively.

      Corporate operations represent charges for the Company's human resources,
      legal, accounting and finance functions, and various other unallocated
      overhead charges.

FORWARD-LOOKING STATEMENTS

      This Management's Discussion and Analysis of Financial Condition and
      Results of Operations and other sections of this report contain
      forward-looking statements that are based on management's current
      expectations, estimates, forecasts and assumptions concerning future
      events. In addition, other written or oral statements that constitute
      forward-looking statements may be made by or on behalf of management.
      These statements are subject to numerous known and unknown risks,
      uncertainties and assumptions that could cause actual events or results to
      differ materially from those projected. Words such as "believes,"
      "anticipates," "expects," "intends," "estimates, "projects," "plans,"
      "targets," and variations of such words and similar expressions are
      intended to identify such forward-looking statements. Except as required
      under the federal securities laws and the rules and regulations of the
      Securities and Exchange Commission (the "SEC"), the Company does not
      undertake any obligation to update or revise publicly any forward-looking
      statements, whether as a result of new information, future events, changes
      in assumptions or otherwise. Although the Company believes that its plans,
      intentions, and expectations reflected in or suggested by the
      forward-looking statements made in this report are reasonable, there can
      be no assurance that such plans, intentions or expectations will be
      achieved.

      The risks, uncertainties and assumptions include: achieving planned
      revenue growth in each of the Company's business units; renewal of
      material contracts in the Company's business units consistent with past
      experience; successful and timely integration of significant businesses
      acquired by the Company and realization of anticipated synergies;
      increasing price, products, and services competition by U.S. and non-U.S.
      competitors, including new entrants; changes in U.S. and non-U.S.
      governmental regulations; the timely implementation of the Company's
      restructuring program and financial plans; general U.S. and non-U.S.
      economic and political conditions, including the global economic slowdown
      and interest rate and currency exchange rate fluctuation; continuing
      development and maintenance of appropriate business continuity plans for
      the Company's processing systems; absence of consolidation among client
      financial institutions or other client groups; timely conversion of new
      customer data to the Company's platforms; attracting and retaining
      qualified key employees; no material breach of security of any of the
      Company's systems; control of costs and expenses; continued availability
      of financing, and financial resources on the terms required to support the
      Company's future business endeavors; the mix of products and services;
      compliance with the covenants and restrictions of the Company's bank
      credit facility and convertible subordinated notes indenture; the possible
      acceleration of the amounts borrowed under the Company's bank credit
      facility; and the outcome of pending and future litigation and
      governmental or regulatory proceedings.

      These are representative of the risks, uncertainties and assumptions that
      could affect the outcome of the forward-looking statements. In addition,
      such statements could be affected by general industry and market
      conditions and growth rates, and other future events.

                                       24

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

As previously disclosed in the March 2004 10-Q, we engaged in a review and
analysis of estimates used in determining the level of commissions receivable in
our Life Insurance Services division. As a result of our efforts, we have
determined that commissions receivable should be adjusted as described below. In
addition, in reviewing our past practices, procedures and processes, we have
determined that there needs to be revisions to such practices, procedures and
processes. In this regard, we concluded there was a material weakness in our
internal controls over financial reporting relating to the validation and
monitoring of assumptions underlying the estimates used to compute certain first
year, bonus and renewal commissions receivable and with respect to related
documentation and review processes for significant accounting entries, including
entries relating to acquisition accounting. We have taken, and continue to take,
steps to rectify these matters.

Based upon our review and analysis, we determined that an adjustment of $80.0
million to commissions receivable in our Life Insurance division, together with
corresponding adjustments to revenues and expenses, should be recorded. We also
determined that the adjustment requires a restatement of our financial results
for each of the fiscal years ended June 30, 2003, 2002 and 2001, as well as our
interim results for the quarters ended December 31 and September 30, 2003, to
reflect the impact of the adjustment on each of the periods presented.

In connection with the aforementioned review, we also identified adjustments
relating to acquisition accounting for certain acquired entities in the Life
Insurance business, resulting in a reduction in goodwill and deferred tax
liabilities over the affected periods of $21.0 million, and adjustments to
commissions payable of $2.6 million as a result of an understatement in agent
commissions payable. These adjustments will also be reflected in the restatement
of financial results described above.

To date, we have taken steps to improve our internal controls at our Life
Insurance Services division, including the following:

    -   Added personnel to the accounts receivable department to allow for more
        timely reconciliation and adjustment of aged accounts receivable and
        related agent payable accounts;

    -   Enhanced process for reviewing and monitoring reserves for commissions
        receivable;

    -   Augmented review of commission revenue transactions to ensure adherence
        to our revenue recognition policies;

    -   Improved process for documentation and review of significant accounting
        entries;

    -   Initiated system enhancements to further automate processes associated
        with accounts receivable and revenue recognition; and

    -   Implemented systematic review of data quality and control.

We intend to continue to monitor our internal controls, and if further
improvements or enhancements are identified, we will take steps to implement
such improvements or enhancements. Except as set forth above, there have been no
changes in our internal controls over financial reporting, which have materially
affected, or are reasonably likely to materially affect, such internal controls.

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports, filed pursuant to the
Securities Exchange Act of 1934, is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.

We carried out an evaluation as of the end of the period covered by this report
on Form 10-Q/A, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and the
Company's Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on the
foregoing, other than the material weakness described above, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective. Subsequent to March 31, 2004,
the Company has implemented the steps described above and concluded that the
disclosure controls and procedures are effective as of the date of filing of
this report.

It should be noted that the design of any system of controls is based upon
certain assumptions about the likelihood of future events, and there can be no
assurance that such design will succeed in achieving its stated objective under
all potential future conditions, regardless of how remote. However, the
Company's Chief Executive Officer and the Company's Chief Financial Officer
believe the Company's disclosure controls and procedures provide reasonable
assurance that the disclosure controls and procedures are effective.

                                       25

<PAGE>

                                     PART II

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      On November 10, 2003, the Company issued 2,797,753 shares of its common
      stock, $0.02 par value ("Company Common Stock"), to the stockholders of
      USA Insurance Group, Inc. ("USAIG"). Said shares of Company Common Stock
      were not registered under the Securities Act of 1933, as amended (the
      "Securities Act"). There was no underwriter or placement agency.

      In connection with the issuance of shares of Company Common Stock to the
      shareholders of USAIG, the Company relied on exemptions from registration
      under Section 4(2) of the Securities Act, based upon, among other things,
      certain representations and warranties of the investors, the small number
      of investors, the nature of the investors and certain information provided
      to the investors with respect to the Company and the transaction.

      This Item 2 has not been updated to reflect any events or developments
      occurring subsequent to the January 29, 2004 filing of the original Form
      10-Q.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      At the Annual Meeting of Stockholders of the Company, held on November 13,
      2003, the Stockholders approved the following matters:

      1. Election of the eight Directors named below to hold office until the
         next Annual Meeting of Stockholders and until their successors have
         been duly elected and qualified:

                                                      Number of
         Name of Director                          Votes in Favor
         ----------------                          --------------

         Denis A. Bovin                               79,521,742
         Robert J. Casale                            106,348,991
         Thomas A. Cooper                            106,586,688
         Lynn J. Mangum                              105,824,443
         Paula G. McInerney                          107,528,266
         Thomas E. McInerney                         107,589,081
         Joseph J. Melone                            104,644,364
         Dennis R. Sheehan                           108,118,856

                                                   For        Against    Abstain
                                                   ---        -------    -------
      2. Approval of the 2004 Employee Stock
         Purchase Plan                           91,798,947  2,007,229   80,242

                                                   For        Against    Abstain
                                                   ---        -------    -------
      3. Appointment of PricewaterhouseCoopers
         LLP as independent accountants for
         fiscal year 2004                       103,381,790  6,657,639   66,924

      This Item 4 has not been updated to reflect any events or developments
      occurring subsequent to the January 29, 2004 filing of the original Form
      10-Q.

ITEM 5. OTHER INFORMATION

      Subsequent Events

      Following the Company's May 17, 2004 announcement regarding the
      restatement of its financial results, seven putative class action and two
      derivative lawsuits were filed against the Company and certain of its
      current and former officers in the United States District Court for the
      Southern District of New York. The class action complaints purport to be
      brought on behalf of all shareholders who

                                       26

<PAGE>

      purchased the Company's securities between October 23, 2000 and May 17,
      2004 and generally assert that the Company and certain of its officers
      allegedly violated the federal securities laws in connection with the
      purported issuance of false and misleading information concerning the
      Company's financial condition. The class action complaints seek damages in
      an unspecified amount against the Company. The derivative complaints
      purport to be on behalf of the Company and generally assert that certain
      officers and directors are liable for alleged breaches of fiduciary
      duties, abuse of control, gross mismanagement, waste, and unjust
      enrichment that purportedly occurred between October 23, 2000 and the
      present. The derivative complaints seek disgorgement, constructive trust,
      and damages in an unspecified amount. The Company intends to defend itself
      vigorously against these claims but is unable to determine the ultimate
      outcome.

      The Audit Committee of the Company's Board of Directors conducted an
      independent investigation into the events and circumstances that resulted
      in the restatement and retained independent counsel to assist in such
      investigation.

      The Company notified the SEC of its intention to restate prior period
      financial results and that there would be a delay in the filing of its
      Form 10-Q for the quarter ended March 31, 2004. Subsequently, the SEC
      advised the Company that the SEC is conducting an investigation into the
      facts and circumstances related to the restatement. The Company has
      cooperated and intends to continue to cooperate with the SEC.

      As part of the Credit Agreement governing the new senior unsecured credit
      facility that was entered into on March 31, 2004, the Company made certain
      representations about its prior period financial statements. In light of
      the need for adjustments to these prior period financial statements, the
      lenders consider these representations to have been inaccurate when made,
      and therefore, the lenders have asserted that there has been a breach
      under the Credit Agreement causing the Company to be in default. The
      Company subsequently procured a waiver from the lenders which allows the
      Company to continue to rollover certain LIBOR-based borrowings. However,
      until the waiver becomes permanent, the terms of the waiver do not cure
      the asserted default and preclude the Company from drawing down additional
      borrowings under the credit facility. The lenders have asserted that they
      have the right to accelerate payment of outstanding borrowings under the
      credit facility until the waiver becomes permanent. The waiver becomes
      permanent for all purposes upon the filing, concurrently herewith, of the
      Company's amended Form 10-K for the fiscal year ended June 30, 2003.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

 (a)  EXHIBITS

      Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
      Officer

      Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
      Officer

      Exhibit 32 - Section 1350 Certifications

 (b)  REPORTS ON FORM 8-K

      No Current Reports on Form 8-K were filed with the Securities and Exchange
      Commission during the fiscal quarter ended December 31, 2003.

      A Current Report on Form 8-K, dated January 21, 2004, was furnished to the
      Securities and Exchange Commission to report on the announcement of the
      Company's financial results for the fiscal quarter ended December 31, 2003
      (Item 12).

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<PAGE>

                                   SIGNATURES

Pursuant to the requirements 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.

                                         THE BISYS GROUP, INC.

Date: August 9, 2004                     By: /s/ James L. Fox
                                             -----------------------------------

                                             James L. Fox
                                             Executive Vice President and Chief
                                             Financial Officer
                                             (Duly Authorized Officer)

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<PAGE>

                              THE BISYS GROUP, INC.
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.                                                                                       Page
<S>                                                                                               <C>
   (31.1)   Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer..................    30

   (31.2)   Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer..................    31

   (32)     Section 1350 Certifications........................................................    32
</TABLE>

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