UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K





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


For the
Fiscal Year Ended June 30, 2009





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 0-9993





MICROS
SYSTEMS, INC.


(Exact
name of registrant as specified in its charter)





Maryland
              52-1101488(State
      of Incorporation)
              (I.R.S.
      Employer Identification No.)





7031
Columbia Gateway Drive, Columbia, Maryland 21046-2289


(Address
of Principal Executive Offices) (Zip Code)





443-285-6000


(Registrant’s
telephone number, including area code)





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




Title of Each Class
                Name of ExchangeCommon
      Stock, par value $0.00625 per share
                The
      NASDAQ Stock Market LLC





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





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


YES þNO o





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


YES oNO þ





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 þNO o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


YES oNO o





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





þ





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





Large
      accelerated filer þ
              Accelerated
      filer oNon-accelerated
      filer o
              Smaller
      Reporting Company o


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





YES  o    NO
þ





The
aggregate market value of the common equity (all of which is voting) held by
non-affiliates computed by reference to the price at which the common equity was
last sold as of December 30, 2008 was $1,302,679,667





At the
close of business on July 31, 2009, there were issued and outstanding 79,974,255
shares of Registrant’s Common Stock at $0.00625 par value.





DOCUMENTS
INCORPORATED BY REFERENCE





The
definitive proxy statement relating to the registrant’s Annual Meeting of
Stockholders, to be held November 20, 2009, is incorporated by reference in Part
III to the extent described therein.









TABLE
OF CONTENTS





PageNo.PART
      IItem
      1.
                                                      Business
                                                      
                                                      3Item
      1A.
                                                      Risk
      Factors
                                                      
                                                      15Item
      1B.
                                                      Unresolved
      Staff Comments
                                                      
                                                      17Item
      2.
                                                      Properties
                                                      
                                                      18Item
      3.
                                                      Legal
      Proceedings
                                                      
                                                      19Item
      4.
                                                      Submission
      of Matters to a Vote of Security Holders
                                                      
                                                      20PART
      IIItem
      5.
                                                      Market
      for the Registrant’s Common Equity, Related Stockholder Matters
      and
                                                      
                                                      21Issuer
      Purchases of Equity SecuritiesItem
      6.
                                                      Selected
      Financial Data
                                                      
                                                      22Item
      7.
                                                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                      
                                                      23Item
      7A.
                                                      Quantitative
      and Qualitative Disclosures About Market Risk
                                                      
                                                      36Item
      8.
                                                      Financial
      Statements and Supplementary Data
                                                      
                                                      36Item
      9.
                                                      Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure
                                                      
                                                      36Item
      9A.
                                                      Controls
      and Procedures
                                                      
                                                      36Item
      9B.
                                                      Other
      Information
                                                      
                                                      37PART
      IIIItem
      10.
                                                      Directors,
      Executive Officers and Corporate Governance
                                                      
                                                      38Item
      11.
                                                      Executive
      Compensation
                                                      
                                                      38Item
      12.
                                                      Security
      Ownership of Certain Beneficial Owners and Management and
      Related
                                                      
                                                      38Stockholder
      MattersItem
      13.
                                                      Certain
      Relationships and Related Transactions, and Director
      Independence
                                                      
                                                      38Item
      14.
                                                      Principal
      Accounting Fees and Services
                                                      
                                                      38PART
      IVItem
      15.
                                                      Exhibits
      and Financial Statement Schedule
                                                      
                                                      39Signatures
                                                      
                                                      
                                                      73Exhibit
      Index
                                                      
                                                      74




2


PART
I





ITEM
1.      BUSINESS





INTRODUCTION


MICROS
Systems, Inc. is a leading worldwide designer, manufacturer, marketer, and
servicer of enterprise information solutions for the global hospitality and
retail industries. MICROS Systems, Inc. was incorporated in the State of
Maryland in 1977 as Picos Manufacturing, Inc. and, in 1978, changed its name to
MICROS Systems, Inc.


References
to “MICROS,” the “Company,” “we,” “us,” and “our” herein include the operations
of MICROS Systems, Inc. and also our subsidiaries on a consolidated basis,
unless the context indicates otherwise.  Our fiscal year runs from
July 1 through June 30.  Accordingly, references to a fiscal year mean
the 12-month period ending June 30 of that year; i.e., fiscal year 2009 means
the 12-month period ending June 30, 2009.


We
operate in two reportable segments for financial reporting purposes: U.S. and
International.  You can find financial information for each reportable
segment, as well as certain financial information about geographic areas, in
Note 17 “Segment Information” in our Notes to Consolidated Financial Statements
included in this Annual Report on Form 10-K.  In each of these two
reportable segments, we have developed an infrastructure through which we
license and sell all of our products and services.  While the products
and services that are sold may be configured for each segment to address local
issues, laws, tax requirements and customer preferences, the products and
services are substantially similar worldwide.


Almost
all of our customers are in the hospitality industry and the retail
industry.  The hospitality industry encompasses numerous defined
markets, including lodging (including, for example, individual hotel sites,
hotel chains and franchise groups), table service and quick service
restaurants, restaurant chains and franchise groups, entertainment venues
(including, for example, stadiums and arenas), business foodservice operations,
casinos, transportation foodservice, government operations, and cruise
ships.  The retail industry consists of retail operations selling
directly to consumers, including retailers of clothing, shoes, food, hardware,
jewelry, and other specialty items.


Our
enterprise information solutions comprise three major areas: (1) hotel
information systems; (2) restaurant information systems; and (3) retail
information systems.  In addition to our software enterprise solutions
and hardware products, we offer an extensive array of services and other
products for our hotel, restaurant and retail information
systems.  The hotel information systems consist mainly of software,
encompassing property based management systems (“PMS”), related
property-specific modules and applications, and central systems, including
central reservation systems (“CRS”).  The restaurant information
systems consist of hardware and software for point-of-sale (“POS”) and
operational applications, a suite of back office applications, including
inventory, labor and financial management, and certain centrally hosted
enterprise applications.  The retail systems consist of software
encompassing POS, loss prevention, web commerce applications, business
analytics, customer gift cards, electronic payments and enterprise
applications.


We market our hotel systems directly to
U.S.-based customers, and through our subsidiaries and international
distributors to non-U.S.-based customers.  Our hotel PMS applications
are installed worldwide in leading hotel chains, including the
following:




·
      Accor (France)
              
              ·
      Hard Rock Hotels
              
              ·
      Peninsula (Hong Kong)·
      Best Western
              
              ·
      Hyatt International
              
              ·
      Rica Hotels (Sweden)·
      Camino Real (Mexico)
              
              ·
      InterContinental Hotels Group
              
              ·
      Shangri-La (Hong Kong)·
      Carlson Hotels
              
              ·
      ITC Welcome Group (India)
              
              ·
      Société du Louvre (France)·
      Danubius (Bulgaria)
              
              ·
      Kempinski (Germany)
              
              ·
      Solare (Japan)·
      Delta Hotels (Canada)
              
              ·
      Loews
              
              ·
      Starwood International·
      Dusit Thani (Thailand)
              
              ·
      MGM Mirage
              
              ·
      Steigenberger·
      Fairmont
              
              ·
      Marriott International
              
              ·
      Thistle (United Kingdom)·
      Federal (Malaysia)
              
              ·
      Millennium
              
              ·
      Wyndham Worldwide·
      Four Seasons
              
              ·
      Mövenpick (Switzerland)
              
              ·
      Wynn Resorts·
      Hilton Hotels
              
              ·
      Omni





Globally, there are approximately
25,000 MICROS PMS applications installed (most of which are accompanied by other
property-specific modules and applications).


The
MICROS CRS is installed in numerous hotel chains, including the
following:





·
      Boscolo (Italy)
              
              ·
      MacDonalds (UK)
              
              ·
      Shell Hospitality·
      Camino Real
              
              ·
      MGM Mirage
              
              .
      Sokos (Finland)·
      Constellation (Australia)
              
              ·
      Oberoi (India)
              
              ·
      Starhotels (Italy)·
      Equatorial (Malaysia)
              
              ·
      Omni
              
              ·
      Sun International (South Africa)·
      Fairmont
              
              ·
      Pan Pacific (Singapore)
              
              ·
      Thistle·
      Four Seasons
              
              ·
      Red Lion
              
              ·
      Westmark·
      Great Wolf Resorts
              
              ·
      Rydges (Australia)
              
              ·
      Wyndham Worldwide·
      Hard Rock Hotels
              
              ·
      Shangri-La
              
              ·
      Wynn Resorts·
      Loews Hotels
              
              ·
      Société du Louvre
              
              ·
      Xanterra





Globally,
over 500 hotel chains or individual hotel sites have installed MICROS’s CRS
applications.


3


We market our restaurant systems
directly (including through certain of our subsidiaries), and indirectly through
our domestic and international dealers.  Our restaurant POS systems
are installed worldwide.  Major table service restaurant chain
customers include the following:





·
      Bertucci’s
              
              ·
      Friendly’s
              
              ·
      Mitchells and Butlers (U.K.)·
      Chevy’s
              
              ·
      Groupe Le Duff (France)
              
              ·
      Perkins·
      Corporación Mexicana de
              
              ·
      Hard Rock Café
              
              ·
      Rainforest CafeRestaurantes (Mexico)
              
              ·
      HMS Host
              
              ·
      Ruby Tuesday’s·
      Cracker Barrel
              
              ·
      Hooters
              
              ·
      T.G.I. Friday’s·
      Denny’s
              
              ·
      International House of Pancakes
              
              ·
      VIPS (Spain)·
      Eat ‘n Park
              
              ·
      Johnny Carinos
              
              .
      Wagamama (U.K.)·
      El Torito
              
              ·
      La Madeleine
              
              ·
      Whitbread (U.K.)·
      ESPN Zone
              
              ·
      Lone Star·
      Fazer Amica (Finland)
              
              ·
      Marie Callender’s





Major quick service chain restaurant
customers, as well as numerous franchisees of the following,
include:





·
      Atlanta Bread
              
              ·
      Fuddruckers
              
              .
      Saxby’s Coffee·
      Arby’s
              
              ·
      Grandy’s
              
              ·
      Starbucks·
      Auntie Anne’s
              
              ·
      Krispy Kreme
              
              ·
      Subway·
      Baja Fresh
              
              ·
      Nordsee (Germany)
              
              ·
      Tropical Smoothie Café·
      Ben & Jerry’s
              
              ·
      Pollo Campero (Guatemala)
              
              ·
      Wendy’s·
      Burger King
              
              ·
      Panera Bread
              
              ·
      Yum! Brands (Pizza Hut, KFC·
      Coffee Club (Australia)
              
              ·
      Popeye’s
              
              International, and Taco Bell)·
      El Pollo Loco
              
              ·
      Red Rooster (Australia)
              
              .
      Zaxby’s·
      Fazoli’s
              
              ·
      Retail Brand Group





Our restaurant POS systems are also
installed in hotel restaurants in various hotel chains, including Accor, Boyd
Gaming, Camino Real, Danubius, Fairmont, Four Seasons, Global Hyatt, Hilton,
Hyatt, InterContinental Hotels, Kempinski, Mandarin Oriental, MGM Mirage,
Marriott International, Millennium, Omni, Pan Pacific, Peninsula, Radisson,
Starwood, and Wyndham International.  Additional significant markets
for our POS systems include complex foodservice environments, such as casinos,
cruise ships, sports arenas, airport concourses, theme parks, recreational
centers, institutional food service organizations, and specialty retail shops.
Users include Aramark, Centerplate, Compass, Delaware North, HMS Host, and
various government entities.  We have installed large POS systems in
Citi Field (New York City), the Foxwoods Hotel and Casino (Ledyard, CT), Grand
Casino (Australia), Atlantis (Bahamas), Mandalay Resorts Group, Sun City (South
Africa), Harrah’s Casinos, Luxor Hotel and Casino, The Venetian Resort, Wembley
Stadium (U.K.), and Wynn Resorts.  We supply and service POS systems
for users in the complex foodservice environments identified above both directly
and through distribution channels, including through specialty reseller
relationships with Blackboard Inc. and The CBORD Group Inc.


We also market a Windows® based
restaurant POS systems through our Hospitality Solutions International (“HSI”)
division.  Through our JTECH Communications, Inc. (“JTECH”)
subsidiary, we market a range of on-premises paging and alert solutions for
restaurants, retail, and medical environments.


Our
retail solutions are provided through our subsidiaries Datavantage,
CommercialWare, Advance Retail Systems (Mexico), Micros Retail & Supply
Chain aka RedSky (United Kingdom), eOne, and Fry.  In our marketing,
we sometimes refer to this group of subsidiaries as the “MICROS Retail”
group.  Our retail store customers include the following
retailers:





·
      Adidas (Germany and USA)
              
              ·
      Hugo Boss (Germany)
              
              .
      Smith & Hawken·
      Advance Auto Parts
              
              ·
      Jacob
              
              ·
      Starbucks.
      Ann Taylor
              
              ·
      Jos. A. Banks Clothiers
              
              ·
      Steve Madden Retail·
      Armani Exchange
              
              ·
      Limited Too
              
              .
      Stonewall Kitchen·
      Assonate
              
              ·
      Michael’s Arts and Crafts
              
              .
      Sur La Table·
      Barney’s New York
              
              ·
      Pendleton
              
              ·
      Talbots·
      Books-A-Million
              
              ·
      Polo Ralph Lauren
              
              ·
      Tesco (UK)·
      Blain Supply
              
              .
      PPG
              
              ·
      Urban Brands·
      Blue Spirit (Italy)
              
              ·
      Reebok Retail
              
              ·
      The U.S. Mint·
      Brazin (Australia)
              
              ·
      Roots Canada
              
              ·
      Wm Morrison (UK).
      Chelsea and Scott
              
              · S
      & K Famous Brands
              
              ·
      Zales·
      CSK Auto
              
              ·
      Sainsbury’s (UK)·
      Garnet Hill
              
              .
      Senor Frogs (Mexico)·
      Home Depot Canada
              
              ·
      Shaw’s Markets




4


PRODUCTS
AND SERVICES





Summary
of Product Solutions (Software and Hardware):





Hotel Products
                
                DescriptionSoftwareFidelio
      Versions 7 and 8 PMS
                
                PMS
      software products for hotel reservationsOpera
      PMS
                
                PMS
      software product for hotel reservations, targeted to full service
      hotelsOpera
      Xpress PMS
                
                PMS
      software product for hotels, targeted to limited service
      hotelsOperaLite
      PMS
                
                PMS
      software for hotels, targeted to smaller hotelsOperetta
      PMS
                
                PMS
      software and hardware bundle for hotels, targeted to smaller
      hotelsOpera
      Revenue Management System
                
                Software
      that helps hotels develop and manage pricing strategiesOpera
      Central Reservation System
                
                Software
      that manages hotel reservations for hotel chains or hotel
      groupsOpera
      Customer Information System
                
                Software
      that manages customer information and loyalty programsOpera
      Vacation Ownership System
                
                Software
      that manages reservations for hotel condominiums and related condominium
      managementOpera
      Web Booking Suite System
                
                Software
      that enables Opera PMS to receive Internet reservationsOpera
      Sales and Catering
                
                Software
      that helps hotels manage meeting needs (food, hotel rooms, meeting space,
      and other customer needs)Opera
      Sales Force Automation (SFA)
                
                Software
      that manages leads, meeting agendas, and contracting, and provides other
      support to the national and regional sales teams for hotel
      chainsOpera
      Activity Scheduler
                
                Software
      that manages the scheduling and billing for hotel resort recreational
      activities, such as golf, tennis, spas, etc.Opera
      Kiosk
                
                Enables
      guest check-in and check-out at stand-alone kiosk, and other interactive
      featuresmyfidelio.net
                
                An
      Internet based hotel reservation service and networkFidelio
      Cruise Systems
                
                A
      suite of software products that manages reservations, POS and other
      activities for the cruise industryMaterials
      Management
                
                Software
      that provides inventory control and costing for food production, mainly
      marketed to hotel
restaurants





Restaurant Products
                  
                  DescriptionSoftware9700
      HMS
                  
                  POS
      software for large foodservice, leisure and entertainment
      venuesSimphony
                  
                  Centrally-hosted
      POS for large foodservice, leisure and entertainment
  venues3700
      POS
                  
                  POS
      software for table service and quick service
restaurantsRestaurant
      Enterprise Series (RES) 3000
                  
                  Suite
      of software products for 3700 POSKitchen
      Display System
                  
                  Component
      of RES 3000, providing additional reporting capabilities and
      informationRES
      Kiosk
                  
                  Component
      of RES 3000, for self-ordering and customer information via kiosk or other
      hardwareHSI
      Profit Series POS
                  
                  POS
      software for table service restaurants (only marketed through the HSI
      division)mymicros.net
                  
                  Suite
      of web based software products for use with restaurant POS
      productsmyhsi.net
                  
                  Suite
      of web based software products for HSI Profit Seriese7
      POS
                  
                  POS
      product for small restaurants (only marketed in North and South
      America)HardwareWorkstation
      5 Terminal
                  
                  Windows
      CE POS and Windows Embedded POS terminal for
restaurantsWorkstation
      4-LX Terminal;
                  
                  Windows
      CE POS terminal for restaurants-enhanced version of Workstation
      42010
      PC Workstation
                  
                  PC
      based POS terminal for restaurantsKeyboard
      Workstation Terminal
                  
                  Windows
      CE POS terminal used in large complex foodservice, leisure and
      entertainment venuesJTECH
      Paging Products
                  
                  Suite
      of paging productsKitchen
      Display System
                  
                  Hardware
      for kitchen display
systems




5





Retail Products
                  
                  DescriptionSoftwareStore
      21 Store Management System
                  
                  POS
      retail software product targeted for specialty
retailersTradewind
      Store Management System
                  
                  POS
      retail software product targeted for stores with high volume
      transactionsXstore
      Management System
                  
                  Java
      based POS retail software productMICROS
      Enterprise Merchandising
                  
                  Java
      based, centrally hosted merchandising application that manages inventory
      throughout a chain and provides reporting and analytical
      functionsHome
      Office Business Intelligence Suite
                  
                  Suite
      of software products that analyzes, manages and reports on business
      activities at the store level for corporate control (which includes XBR
      Loss Prevention)Gift
      Cards Software
                  
                  Software
      product that manages a retailer’s gift card programCWDirect
      Cross Channel Order Management System
                  
                  Software
      that manages orders across multiple methods of ordering (phone, kiosk,
      Internet, etc.)CWLocate
      Merchandise Location System
                  
                  Software
      that enables a retailer to locate inventory across multiple
      locationsCWCollaborate
                  
                  Software
      that connects retailers with suppliers to efficiently manage inventory and
      reorder levelsCreations
                  
                  Software
      that manages and tracks a product’s lifecycle and its supply
      chainFry
                  
                  Web
      site development, management, hosting and ecommerce
      applicationseOneCommerce
                  
                  Web
      site development and portal management services for business to business
      order management, customer list management and sales promotion
      support


Hotel
Information Systems


For the hotel and resort industry, we
develop, distribute, and support a complete line of hotel software products and
services.  The hotel information systems include PMS, sales and
catering systems, CRS, customer information systems, revenue management systems,
and an Internet/Global Distribution System based hotel reservation service
called myfidelio.net.  We also provide installation and end-user
training services, and support services (including help desk) for our various
software products.  MICROS markets its hotel products under brand
names such as Opera and Fidelio.


Globally,
there are approximately 25,000 active MICROS PMS installations, which includes
some sites using PMS products for which MICROS has ceased ongoing development
(although in many instances we continue to provide limited support services to
those sites).  Most of the hotels using a MICROS PMS have also
installed other MICROS property-specific modules and applications; additionally,
there are over 2,000 hotels running various MICROS property-specific modules and
applications without a MICROS PMS.


The PMS
software provides for check-in and check out, reservations, guest accounting,
travel agent accounting,  and engineering management.  The
PMS software also interfaces to central reservation systems, to on-line travel
services (also known as alternative distribution services, e.g., Expedia), and
to global distribution systems (e.g., Sabre, Galileo, Amadeus and
WorldSpan).  The sales and catering software enables hotel sales staff
to evaluate, reserve and invoice meetings, banquets and related events for a
property.  The CRS software enables hotels to coordinate, process,
track, and analyze hotel room reservations at a central facility for electronic
distribution to the appropriate lodging site.  The customer
information system software enables hotels to efficiently capture and track
relevant guest information.  The revenue management system software
enables hotels to manage room rates, occupancy, and the mix of business between
corporate and transient customers.  We also offer an Internet-based
hotel reservation service via our myfidelio.net service.  This service
enables corporations, tourist representation services, and consumers to reserve
rooms and manage reservations directly with designated hotels.  This
service also enables those hotel properties without internal reservation
capabilities to outsource to us the maintenance of their connectivity to the
global distribution systems, and to certain alternative distribution
systems.


We market
a comprehensive suite of hotel software products under the Opera brand
name.  Opera includes modules for property management, central
reservations, customer information systems, sales and catering, revenue
management, sales support, data mining, financial statements, condominium
reservations and accounting, golf reservations, spa management, and quality
management.  We also offer a module that enables guest check in and
check out, and other interactive features, via kiosk.


In
addition to industry standard PCs, the Opera platform will also run on large PC
servers.  Opera can be run on two operating systems: Microsoft
Windows® (Server
and XP) and IBM AIX®, and
uses an Oracle®
database.


We
believe that the Opera software suite is an important product line for our
continued growth in the hotel information systems market, because we believe it
reflects the future direction of PMS technology for us and the industry, and
because it has been a material source of our revenue growth within the hotel
industry.  Opera is written on current architecture, using an Oracle
database; it is highly configurable, adapted for use in multiple countries, and
fully integrated with modules, features and functions demanded by the
hospitality industry.  Over 100 hotel chains have implemented Opera,
many of which are in the midst of multi-year rollouts.


6


We also
offer limited versions of the Opera property management system called
OperaXpress, OperaLite, and Operetta.  These products enable smaller
properties to deploy the Opera PMS, but at a lower price and with more limited
product features.  As of June 30, 2009, about 14,000hotel sites have
installed either Opera, OperaXpress PMS, OperaLite, or Operetta.


Opera’s
software architecture enables the product to be deployed either on-premises or
hosted in an off-site location.  We offer hosting services for hotel
customers in various data centers around the world (Ashburn and Manassas,
Virginia; Buenos Aires, Argentina; Frankfurt, Germany, and Singapore) with the
application accessed via Internet or similar high speed
connections.  Currently, there are approximately 2,900 hotels running
Opera PMS, Opera Xpress PMS and OperaLite in a hosted environment.


In
addition, we market a suite of hotel software products (PMS and other modules)
under the Fidelio Version 7.0 brand name.  Fidelio Version 7.0 uses
the Microsoft Windows®
graphical user interface and runs on an Oracle®
database.  As of June 30, 2009, over 4,000 hotels were using Fidelio
Version 7.0.  The decrease in hotels using Fidelio Version 7.0
reflects an increasing number of hotel users upgrading to Opera
PMS.


Furthermore,
in Europe we market a PMS product under the brand name Fidelio Version
8.  This product contains certain Internet-based features and uses the
Windows®
operating system with an Oracle®
database.  The product is designed to meet the needs of independent
hotel operators and smaller chains based in Europe. The product is installed in
over 2.300 hotel sites as of June 30, 2009.  The increase in sites
using Fidelio Version 8 reflects additional sales and marketing efforts in
central and southern Europe.


Throughour subsidiaries Fidelio
Cruise, we market the Fidelio Cruise product, which is a PMS product for the
cruise industry. Fidelio Cruise’s PMS enables cruise operators to manage
passengers, visitors, groups and crew information at every stage from check-in
to check-out, including: monitoring all financial transactions on board,
invoicing, credit card handling with online functionality, safety and security,
and automated check-in with picture taking for passengers, crew, and
visitors.  Through the Fidelio Cruise software, cruise lines monitor
all financial transactions on board and operate a central accounting and
invoicing system for each passenger and crew member. Furthermore, the software
maintains the count of passengers and staff on-board, as required by
international industry regulations. Additional Fidelio Cruise modules support
the operation of health spas, on-board MICROS point-of-sale systems, business
centers, shore excursions, medical centers, and casinos onboard.


Fidelio
Cruise software is installed on board 195 cruise ships. Customers include:
Carnival Cruise Lines, Aida Cruises, Cunard Line, Fred Olsen
Line, Holland America Line, MSC Cruises, Norwegian Cruise Line, P&O
Cruises UK, Pullmantur, Oceania, Regent Seven Seas Cruises, Royal Caribbean
International and Silversea Cruises.





Restaurant
Information Systems


Our
restaurant systems include full-featured point of sale (“POS”) applications,
kitchen product applications, marketing applications, and
hardware.  Most of the products are designed to operate on industry
standard PCs.  Our products for order entry operate on either industry
standard PCs or proprietary terminals with additional functionality and design
appropriate for foodservice environments, including three types of proprietary
intelligent terminals developed and designed by us.





Hardware


The
workstations we have designed, and that we currently market and sell, are
Workstation 5, Workstation 4-LX and Workstation 2010.  We also
integrate other hardware devices (e.g., printers, cash drawers, handheld order
entry and credit card remote payment terminals, and pole displays) into our
complete product offerings.


Workstation
5 is a PC based POS terminal using Microsoft’s XP operating system. The terminal
is based upon the successful Workstation 4 POS terminal, which we previously
marketed.  Workstation 5 incorporates a faster microprocessor, a
larger screen and more advanced networking capabilities than Workstation
4.  Key design elements of MICROS’s PC workstations, which Workstation
5 builds upon, are the encased nature of the screen, special materials to
withstand various levels of temperature and humidity, more efficient energy use,
and sound capabilities. Workstation 5 is manufactured for us by GES Singapore
Pte. Ltd. of Singapore (“GES”), a third party contract manufacturing
company.


Workstation
4-LX is a thin-client POS terminal, using Microsoft’s Windows® CE
operating system.  The terminal has standalone resiliency, which means
that even if the system server malfunctions, the POS terminal can continue to
function and store data until the server is operational.  Workstation
4-LX is manufactured by GES. Workstation 4-LX is also an updated version of our
Workstation 4 that has a faster microprocessor and other improvements in memory
management and data recovery as compared to the prior model.


The 2010
Workstation is a high-performance POS terminal designed to run our restaurant
applications and other third party PC-based software
applications.  The product uses an Intel® Pentium
chip architecture.  It can be configured to accommodate various memory
and storage requirements. The product supports various Microsoft operating
systems and Linux.  The 2010 Workstation is manufactured by
GES.


We also
distribute a product named the Keyboard Workstation, which GES also manufactures
for us.  This product enables orders to be entered into the MICROS
9700 HMS (a software product that is described below) via a lower cost, durable
workstation with a keyboard interface in lieu of a touchscreen.  The
Keyboard Workstation is primarily used in institutional foodservice
environments, convention centers, and sports complexes.


Through
our JTECH subsidiary, we offer pagers, wireless systems, alert software, and
related products (all manufactured for us by third party contract manufacturers)
for use in restaurants, retail, medical, and other environments. JTECH primarily
resells MICROS branded hardware to its customers.  It also resells
hardware from IBM and Dell.


7


Additionally,
we resell various other hardware products, including personal computers,
servers, printers, network cards, and other related computer
equipment.  We maintain a global, non-exclusive preferred provider
agreement with Hewlett Packard Corporation.  This relationship enables
us to resell Hewlett Packard personal computers, printers, and networking
equipment on a global basis.





Software


Our main
restaurant POS software systems are the 9700 Hospitality Management System
(“HMS”), Simphony, the 3700 POS system, Profit Series, and the e7
Series.  These systems provide transaction control for table service,
quick service and large foodservice and entertainment venues.





Leisure and Entertainment
Restaurants


The 9700
HMS is designed for larger leisure and entertainment venues, which include
resorts, casinos, airport and other travel-related food service concessions,
stadiums/arenas, theme parks, table service and quick service restaurants in
hotels, and larger stand-alone restaurants.  The 9700 HMS product has
an open systems architecture running on Microsoft’s Windows® 2000
operating system.  The product can be deployed on site in a
client-server configuration or on a multi-property configuration where a remote
server can address multiple restaurant operations.  The product uses
either an Oracle database or a proprietary database.


Simphony
is a centrally-hosted POS product designed for leisure and entertainment
venues.  The product can operate table service and quick service
restaurant applications, as well as retail applications.  Simphony
runs on either Microsoft SQL Server or Oracle databases.  Its features
and functionality are similar to those of the 9700 HMS.  Simphony
enables customers to deploy a POS product via a centrally-hosted architecture,
thus eliminating the overhead cost of having software deployed at multiple
locations.





Table Service and Quick Service
Restaurants


The 3700
POS is designed for table service and quick service restaurants.  It
has an open systems architecture using Microsoft’s Windows® XP
operating system and a Sybase®
relational database, and can run on standard PCs or proprietary
workstations.  It uses a color touch screen with a Microsoft
Windows® based
graphical user interface.


We have
developed and we market a suite of back office and operation focused software
solutions that extend beyond POS.  The suite is called the Restaurant
Enterprise Series (“RES”).  RES is an important component of our
strategy to fully integrate point-of-sale transaction processing with other
restaurant operational and management functions.  The RES software
solutions include point-of-sale transaction control, restaurant operations, data
analysis, and communications.  The POS software comprises the
front-end application for the RES system.  The restaurant operations
modules include inventory, product forecasting, labor management, financial
management, gift cards, and enterprise data management.  One of those
modules is the Kitchen Display System, which displays food orders and offers
additional reporting capabilities on restaurant service.  Another
component is RES Kiosk, which enables customer information and self-ordering on
third-party kiosks or other hardware.  All of these modules are
designed to operate at a single restaurant site.


For
management of multiple restaurants, RES includes a suite of software products
called Enterprise Management.  This suite enables data to be
transmitted to a remote site (e.g., the headquarters of a restaurant chain) for
data collection and analysis.  Additionally, pricing and menu changes
can be made from a remote site and downloaded to specified restaurant
locations.


We market
a POS system called e7 mainly to smaller restaurants in North and South America.
This product runs on the Workstation 5 and uses the Microsoft Windows® CE
Operating system.


Through
our HSI division, we market the HSI Profit Series POS primarily to table service
restaurant customers in North America.  The product contains a wide
array of POS features.





Centrally Hosted
Applications


Our
design architecture enables existing users of many MICROS POS products to access
new technologies and third party software applications in conjunction with their
existing MICROS POS systems.  In addition, many MICROS restaurant
information system products interface with various back office accounting and
property management systems, including our hotel PMS products.


We have
developed and market an Internet-based portal product called
“mymicros.net.”  Mymicros.net posts restaurant transaction POS detail
to a centralized data warehouse in near real time.  This product
enables the customer to view reports and charts for a single site, a group of
restaurants, or the entire enterprise from any location that has an Internet
connection.  In addition, mymicros.net incorporates additional
products for inventory management, labor scheduling and control, gift cards,
loyalty cards and other marketing programs. The mymicros.net software product
can either be purchased via a perpetual use license or by an annual or
multi-year “software as a service” subscription contract.  The HSI
division also markets a portal called “myhsi.net.”  The product’s
functionality is similar to the mymicros.net portal, but is designed for use
with the HSI POS product.


We host
these applications in the same data centers where Opera is hosted.  As
of June 30, 2009, we are hosting applications supporting approximately 8,500
restaurants.





Retail
Information Systems


Through
our MICROS Retail subsidiaries (“MICROS Retail”), we market retail store
software automation systems and business intelligence
applications.  The retail store systems are called Store21 Store
Management System (“Store21”), Tradewind Store Management System (“Tradewind”)
and Xstore Store Management System (“Xstore”).  Store21 is a POS
product designed for smaller retail operations, while Tradewind is a POS product
targeted at larger format stores and at high transaction volume
stores.  The products operate on Microsoft’s Windows® NT and
2000 operating systems and use Sybase® as the
database.  Both products can be integrated with the retailer’s back
office systems, and we also offer certain additional back office,
communications, and reporting modules for use with Tradewind and
Store21.


8


Xstore is
our next generation retail POS software system.  It runs on the Sun
Microsystems®
Java®
operating system, and its architecture enables it to be integrated to both
Windows and Linux-based back office systems.  Like Store21 and
Tradewind, its predecessor products, Xstore is a front-end POS software system
that may be integrated with the retailer’s back office
systems.  Xstore is highly customizable by the customer, and is
designed to respond to the trend among large retailers to move to Linux-based
systems.  Xstore is designed to be able to be run in a Windows or a
Linux environment, while Store21 and Tradewind, as currently designed, can only
operate in a Windows®
environment.


We also
offer the MICROS Retail Home Office Business Intelligence Suite for retail
stores, which includes loss prevention (marketed under the trade name “XBR”),
customer relationship management, gift cards, and audit control. We also offer
XBR to our restaurant customers.


All of
these applications and systems run on both industry standard PCs and specially
designed PC-based POS terminals manufactured by IBM, MICROS, Dell, and
NCR.


MICROS
Retail also offers software and services that enable a retailer to manage
customer purchase transactions across multiple
touch-points.  Specifically, these applications and services enable a
merchant to efficiently handle customer transactions from a store, the Internet,
catalog phone-in orders, call centers, kiosks, and wireless
devices.  The solutions enable the merchant to provide the customer
with full transparency through the purchasing process, e.g., research from one
channel, purchasing from a second channel and implementing a return or exchange
through a third channel.


MICROS
Retail also has developed and distributes Creations, a fully integrated
lifecycle management and supply chain traceability product.  Lifecycle
management refers to the ability to track and manage inventory from the
manufacturer through the point of distribution.  Creations customers,
which are mostly located in the U.K. include accounts such as Tesco,
Sainsbury’s, Wm Morrision, Bodyshop, and Booker.  The product has been
introduced into North America with primary users being Sobeys and Fresh and Easy
retail chains.





Services


We
provide a wide range of services to our customers.  Our services
include system installation, operator and manager training, on-site hardware
maintenance, customized software development, application software support,
credit card software support, systems configuration, network support and
professional consulting.  We also offer software-hosting
capabilities.


We
provide field hardware and software maintenance via a combination of direct and
indirect channels – authorized U.S. dealers and international
distributors.  The field hardware maintenance is provided mainly to
customers using MICROS POS hardware and software systems.  Depot field
maintenance is also provided.  We sometimes contract with PC
manufacturers to provide either first or second line support for PC servers for
hotel, restaurant and retail customers.


We
operate several help desks around the world.  There is a 24 hours per
day, seven days a week (24/7) help desk in our Columbia, Maryland
headquarters.  We also maintain other 24/7 regional and product
specific help desks in the following locations:





·
            Galway,
      Ireland – primarily for customers in Europe, Africa, and the Middle
      East


·
            Buenos
      Aires, Argentina – primarily for customers in Latin
  America


·
            Singapore
      – primarily for customers in the Asia-Pacific
  region


·
            Cleveland,
      Ohio – for MICROS Retail products and
services.


·
            Scottsdale,
      Arizona – for MICROS’s Hospitality Solutions International
      products


·
            Westborough,
      Massachusetts – for MICROS Commercialware and eOne
  products


·
            Ann
      Arbor, Michigan – for MICROS’s Fry, Inc.
  subsidiary





We also
operate other more limited help desk operations, including the myfidelio.net and
Fidelio Cruise support desks in Hamburg, Germany, the Fidelio Cruise support
desk in Fort Lauderdale, Florida, and the JTECH help desk in Boca Raton,
Florida.


The help
desks receive support calls from customers and either address them
telephonically or on-line, or, where appropriate, dispatch a service call to the
appropriate local service provider.  Internationally, in-country
support is provided by the local sales entity, which may be a MICROS subsidiary
or an authorized independent distributor.  Our corporate customer
support center provides back-up support for our regional centers in Buenos
Aires, Singapore, and Galway, and our research and development operation in
Naples, Florida, provides higher-level support for the hotel software
products.  The regional support centers also provide back-up support
and guidance for local and in-country support providers.


We
operate data centers in Ashburn and Manassas, Virginia, Chicago, Frankfurt,
Buenos Aires, and Singapore in conjunction with third-party vendors to serve as
hosting centers for customers deploying our various hosted and application
service products.  We view hosting as an important strategic thrust of
our business as demand shifts from applications being deployed on premise of
customers to centrally hosted applications.


We offer
web site development and portal management for retail customers through MICROS
Retail’s Fry and eOne Group divisions.  These solutions enable a
retailer to have MICROS Retail develop and manage a customer’s web site for
ordering, sales promotion, and marketing.


9


Services
are a critical component of our business.  Service revenue, which is
comprised of software database and configuration programming, installation,
training, in-field support, help desk, custom software development and
maintenance service contracts, constituted approximately
62.1%  ($566.3 million) of our total revenue in fiscal year 2009
compared to approximately 55.5% ($529.5 million) in fiscal year 2008 and
approximately 53.3% ($419.1 million) in fiscal year 2007.


Maintenance
service contracts, which include field service, application hosting, depot
hardware maintenance, and software support, are a significant component of our
service offerings.  Revenues for service maintenance contracts were
approximately $311.2 million for fiscal year 2009, approximately $291.4 million
for fiscal year 2008, and approximately $233.7 million in fiscal year
2007.  Service maintenance contract revenue is included in our service
revenue (described above).





SALES,
MARKETING AND DISTRIBUTION


We
consider our direct and indirect global distribution network to be a major
strength and competitive advantage.  This network has been built over
the past 32 years.  We (including our various subsidiaries), our
U.S.-based dealers, and our international distributors work closely together in
seeking to identify new customers, products, services and markets, as well as to
serve our existing customer base with enhanced products and services. Our
restaurant products and services are sold primarily through three channels: (i)
the Direct Sales Channel, comprised of our sales distribution network consisting
of approximately 80 wholly or majority-owned subsidiaries and branch offices;
(ii) the MICROS Major Accounts program directed to designated regional,
national, and international customers; and (iii) the Indirect Sales Channel, an
independent sales distribution network consisting of approximately 57 domestic
dealersand 58
international distributors and sub-distributors.


Our hotel
and retail products and services are sold through our direct sales forces, and
through some international distributors who sell hotel products outside of the
U.S.


Foreign
sales, including export sales from the United States, accounted for
approximately 52.4% (approximately $477.4 million) of our total revenue in
fiscal year 2009, 56.4% (approximately $537.7million) in fiscal year 2008, and
53.7% (approximately $421.6 million) in fiscal year 2007.


We also
sell products used in the provision of maintenance services, including
miscellaneous spare parts, printer ribbons, paper, printer cartridges, other
consumable media supplies, network products, and printers.  We offer
these supplies through our direct sales offices, our dealers and distributors,
and, in North America, through a telephone and on-line service called POS
Depot.





RESEARCH
AND DEVELOPMENT


Our
products are subject to technological change.  Accordingly, we must
continually devote our efforts toward upgrading our existing products and
developing innovative systems incorporating new technologies.  Our
products, as well as those of our competitors, have offered an increasingly
wider range of features and capabilities.





Locations


We
conduct our core restaurant POS product software and hardware development, and
also development of our Internet-based restaurant software products, at our
Columbia, Maryland corporate headquarters.  To facilitate rapid
responses for various regional application needs, we also conduct restaurant POS
software development in regional offices located in Sydney, Australia; Neuss,
Germany; and Singapore.  Our HSI division conducts restaurant POS
product research and development in its facility in Scottsdale,
Arizona. JTECH conducts its development at its Boca Raton, Florida
location. In addition, we monitor and evaluate software and hardware
products and designs created by third parties, and we have acquired and may in
the future acquire ownership, licensing, or distribution rights to some of those
products and designs. We contract the manufacturing of our POS terminals to GES
Singapore Pte Ltd.  GES also provides certain hardware design services
to us.  Our internal hardware design team participates in the design
and development of these units.  This team also provides oversight of
the manufacturing process as a means of insuring adherence to quality
standards.  See also “Manufacturing and Supplies,” below.


Development
of our hotel property management systems, sales and catering systems, central
reservation systems, and myfidelio.net, is primarily conducted in Naples,
Florida.  Additional development on the Fidelio Version 8.0 suite of
hotel products is conducted in Neuss, Germany.  We maintain close
relationships with major software operating and database companies like Oracle,
IBM, Novell, Sybase, and Microsoft.  These relationships enable us to
incorporate software changes from these companies into our
products.  Our international offices may also conduct specific product
enhancement activities to meet specific interface needs, local requirements, and
specific customer requests.


Product
development for MICROS Retail’s POS products is conducted in Cleveland, Ohio;
MICROS Retail’s other products and services are handled through offices in
Westborough, Massachusetts, and Omaha, Nebraska.  MICROS’s Fry, Inc.
subsidiary conducts its web site and ecommerce application development in Ann
Arbor, Michigan.  MICROS’s Advance Retail Solutions subsidiary
conducts product development in Monterrey, Mexico.


We have
relationships with third party development companies in India and China for
outsourcing of certain development needs.  The amount of work
contracted to these companies is limited.


10


R&D
facilities


The
following table shows the location of our main research and development
facilities and the products addressed at each facility.





Location
              
              ProductsColumbia,
      Maryland
              
              Restaurant
      POS software and hardware, Internet-based restaurant
      applicationsSydney
      ,Australia
              
              Additional
      restaurant POS software developmentNeuss
      ,Germany
              
              Additional
      restaurant POS software development; Fidelio version 8.Singapore
              
              Additional
      restaurant POS software developmentScottsdale,
      Arizona
              
              Restaurant
      POS software (HSI only)Boca
      Raton, Florida
              
              Paging
      software and hardware developmentNaples,
      Florida
              
              Hotel
      PMS software and other modules, also Internet-based hotel
      applicationsCleveland,
      Ohio
              
              Retail
      POS software developmentWestborough,
      Massachusetts
              
              Retail
      Loss Prevention software development, cross-channel software
      developmentOmaha,
      Nebraska
              
              Retail
      web site development and management servicesAnn
      Arbor, Michigan
              
              Retail
      web site and ecommerce
development





Expenses


Research
and development (“R&D”) expenses consist primarily of labor costs less
capitalized software development costs.  A summary of R&D
activities for the past three fiscal years ended June 30 is as
follows:





(in thousands)
                        
                        2009
                        
                        
                        2008
                        
                        
                        2007Total
      R&D incurred
                        
                        $
                        43,100
                        
                        
                        $
                        42,048
                        
                        
                        $
                        35,859Capitalized software development
      costs
                        
                        
                        (470
                        )
                        
                        
                        (1,919
                        )
                        
                        
                        (1,974
                        )Total R&D expenses
                        
                        $
                        42,630
                        
                        
                        $
                        40,129
                        
                        
                        $
                        33,885





COMPETITION


The
markets in which we operate are highly competitive.  We believe that
there are at least 20 significant competitors worldwide that offer some form of
sophisticated restaurant POS system, about 9 that offer competitive POS hardware
platforms, over 15 significant hotel systems competitors, and over 11
significant retail systems competitors.  We compete on various bases,
including product functionality, service capabilities, price, and
geography.  We believe that our competitive strengths include our
established global distribution and service network, our ability to offer a
broad array of hardware, software and service products to the hospitality and
retail industry, and our corporate focus on providing specialized information
systems solutions.


Competitors
in the restaurant POS marketplace include: (i) full service providers (hardware,
software and services), such as NCR, Panasonic, Par Technology, Radiant Systems,
Sharp and Torex Retail; (ii) suppliers that mainly provide software, such as
Agilysys, Positouch and Xpient Solutions; and (iii) providers that mainly
provide hardware, such as Casio, Dell, IBM, NCR and
Wincor-Nixdorf.  There are also numerous other companies that license
their POS-oriented software with PC-based systems in regional markets around the
world.


JTECH’s
competitors include Long Range Systems and certain distributors of Motorola
paging products.


Many of
our competitors in the hotel systems market are companies with software designed
to run on industry standard PCs.  These companies may have several
hotel related software products, or simply one product for a particular
niche.  These competitors include Agilysys, Amadeus Hospitality,
Multi-Systems, Newmarket (sales and catering product only), Northwind, Par
Technology (Springer-Miller), Protel and Softbrands.  Our
products also compete with property management systems developed and marketed by
major hotel chains for their corporate-owned operations and
franchisees.  Internationally, we generally face smaller,
regionally-oriented competitors.


The
central reservation system market is highly fragmented and
competitive.  Many hotel chains and allied reservation groups use
their own customized central reservation systems.  In addition to
these internally developed products, our CRS products compete with those offered
by some of our PMS competitors, e.g., Northwind and Par Technology, and with
those offered by specialized central reservation providers, e.g., Amadeus,
Pegasus, Trust International/TravelPort, and Vantis Corporation.


Competitors
in the retail market include Epicor (through its CRS Retail Systems and NSB
divisions), Econometry, Escalate Retail, JDA Software, Oracle (through its 360
Commerce division), and SAP (through its Triversity division) among many
others.  Internationally, MICROS Retail generally competes with
smaller, regionally-oriented competitors. Fry competes against several companies
such as GSI Commerce and Art Technology Group.





MANUFACTURING
AND SUPPLIES


Our
manufacturing program seeks to maintain flexibility and reduce costs by
outsourcing key products and subassemblies.  Our primary POS
platforms, Workstation 5, Workstation 4 LX, and 2010 Workstation, are
manufactured by GES Singapore Pte Ltd. (“GES”), which is primarily located in
Singapore.


11





Effective
November 6, 2002, we entered into a manufacturing agreement with
GES.  The contract is subject to automatic annual renewal unless
either party elects to terminate the agreement at the end of the term then in
effect by providing notice to the other party at least three months before the
end of such term.  In addition to other termination rights specified
in the contract, either party may terminate the contract for convenience (i.e.,
with or without cause) by providing 120 days’ prior notice of termination to the
other party.  While historically we have enjoyed very good relations
with GES, if it were to exercise its non-renewal or termination rights under the
Agreement or otherwise cease to manufacture our products, we believe we could
readily replace GES with other contract manufacturers or resell appropriate
third party hardware products in lieu of those manufactured by GES.


GES
performs certain warranty and post-warranty repairs on equipment that it
manufactures for MICROS at its facilities in Singapore and in Lowell,
Massachusetts.  In addition, we maintain a repair capability for
certain products in our distribution facility in Hanover,
Maryland.  We also perform repairs at certain of our direct and
subsidiary offices worldwide, and, additionally, we contract with third parties
to provide repair services.


JTECH’s
paging and related products are largely manufactured by several contract
manufacturers in China and GES.  JTECH conducts final assembly of its
paging and related products, including the installation of the applicable
software, in its Boca Raton, Florida facility.


Material
sourcing is based on availability, service, cost, delivery and quality of the
purchased items from domestic and international suppliers.  Some items
are custom manufactured to our design specifications.  We believe that
the loss of our current sources for components would not have a material
adverse effect on our business since other sources of supply are generally
available.  We believe that we maintain good relationships with our
suppliers.





EMPLOYEES


As of
June 30, 2009, we employed 4,757 full-time employees.  The table below
presents employees by geographical region, expressed both as a headcount and as
a percentage of total employees:





By Geographical Region
              
              North
                America
              
              
              Europe/Africa
                Middle East
              
              
              Asia/
                Pacific
              
              
              Latin
                America
              
              
              TotalEmployees
              
              
              2,448
              
              
              
              1,539
              
              
              
              539
              
              
              
              231
              
              
              
              4,757As
      % of total
              
              
              51.5
              %
              
              
              32.4
              %
              
              
              11.3
              %
              
              
              4.8
              %
              
              
              100.0
              %





About 825
employees (34%) of the North America-based employees work out of our two
Maryland locations: our headquarters building in Columbia, Maryland and our
Hanover, Maryland distribution center.


The table
below presents information, as of June 30, 2009, regarding employees organized
by functional skills:





By Functional Skills
              
              Sales &
                Marketing
              
              
              Customer
                Support
              
              
              Product
                Development
              
              
              Admin./
                Finance
              
              
              Operations
              
              
              TotalEmployees
              
              
              2,498
              
              
              
              1,274
              
              
              
              586
              
              
              
              282
              
              
              
              117
              
              
              
              4,757As
      % of total
              
              
              52.5
              %
              
              
              26.8
              %
              
              
              12.3
              %
              
              
              5.9
              %
              
              
              2.5
              %
              
              
              100.0
              %





We are
not a party to any collective bargaining agreements.  None of our
employees are represented by a labor union, except in those countries where
representation is mandated by law, such as France, Germany and
Spain.  We use certain suppliers whose employees may be represented by
labor unions.  We believe that we maintain good relations with our
employees.





EXECUTIVE
OFFICERS OF THE REGISTRANT





Name
              
              PositionA.
      L. Giannopoulos
              
              Chairman,
      President and Chief Executive OfficerBernard
      Jammet
              
              Executive
      Vice President, Latin American SalesGary
      C. Kaufman
              
              Executive
      Vice President, Finance and Administration and Chief Financial
      OfficerJennifer
      Kurdle
              
              Executive
      Vice President, Chief Administrative OfficerThomas
      L. Patz
              
              Executive
      Vice President, Strategic Initiatives, and General
  CounselPeter
      J. Rogers, Jr.
              
              Executive
      Vice President, Investor Relations and Business
  DevelopmentCynthia
      A. Russo
              
              Senior
      Vice President and Corporate
Controller





A. L. Giannopoulos, 69, has
been the Company’s President and Chief Executive Officer since May 1993, and the
Company’s Chairman of the Board since April 2001.  He has been a
Director of the Company since March 1992.  Before 1992, Mr.
Giannopoulos served in a variety of positions for Westinghouse, most recently as
General Manager of the Westinghouse Information and Security Systems
Divisions.  Mr. Giannopoulos is a graduate of Lamar University with a
Bachelor of Science degree in Electrical Engineering.


Bernard Jammet, 51, has been
the Company’s Executive Vice President, Latin American Group since January
2001.  Previously, Mr. Jammet served the Company in various
capacities.  He first joined the Company in July
1984.  Before joining the Company, Mr. Jammet was employed with the
former MICROS distributor for France.  Mr. Jammet is a graduate of the
Hotel School of Lausanne, Switzerland, with a Masters degree in Hotel
Administration.


Gary C. Kaufman, 59, has been
the Company’s Executive Vice President, Finance and Administration and Chief
Financial Officer since September 1999.  Mr. Kaufman served as a
Director of the Company from January 1991 until May 1994, when he became our
Vice President, Finance and Administration and Chief Financial
Officer.  Previously, Mr. Kaufman served the Company in various
capacities.  Mr. Kaufman is a graduate of the University of Dayton
with a Bachelor of Science degree in Accounting and is also a Certified Public
Accountant.


12


Jennifer Kurdle, 42, has been
the Company’s Executive Vice President, Chief Administrative Officer since July
2008.  Previously, Ms. Kurdle was the Executive Vice President,
Leisure & Entertainment since November 2005, and before that (starting in
2000) held the position of Vice President, Leisure &
Entertainment.  Ms. Kurdle first joined the Company in
1990.  Ms. Kurdle is a graduate of Fairmont State
University.


Thomas L. Patz, 49, has been
the Company’s Executive Vice President, Strategic Initiatives, and General
Counsel since January 2000.  Previously, Mr. Patz served the Company
in various legal capacities.  Mr. Patz first joined the Company in
August 1995.  Mr. Patz is a graduate of Brown University and the
University of Virginia School of Law.  Mr. Patz is a member of the
Maryland Bar.


Peter J. Rogers, Jr., 54, has
been the Company’s Executive Vice President of Investor Relations and Business
Development since November 2007.  From 1996 through November 2007, Mr.
Rogers was the Company’s Senior Vice President of Investor Relations and
Business Development. Previously, Mr. Rogers served the Company in various
marketing and business management capacities.  Mr. Rogers joined the
Company in 1987.  Mr. Rogers is a graduate of the University of
Pennsylvania and New York University Stern Graduate School of
Business.


Cynthia A. Russo, 39, has been
the Company’s Senior Vice President and the Corporate Controller since November
2007.  From May 2001 until November 2007, Ms. Russo was the Company’s
Vice President and Corporate Controller.  Ms. Russo previously served
the Company in various capacities, and she joined the Company in January
1996.  Ms. Russo is a graduate of James Madison
University.  She is a Certified Public Accountant and a Certified
Internal Auditor.





FOREIGN
SALES AND FOREIGN MARKET RISK


We
recorded foreign sales, including exports from the United States, of
approximately $477.4 millionduring fiscal year 2009
to customers located primarily in Europe, Asia and Latin
America.  Comparable sales in fiscal years 2008 and 2007 were
approximately $537.7millionand $421.6 million,
respectively.  See Note 17 “Segment Information” in the Notes to
Consolidated Financial Statements as well as Item 7 (Management’s Discussion and
Analysis of Financial Condition and Results of Operations) for additional
geographic data.


Our
international business and presence expose us to certain risks, such as
currency, interest rate and political risks.  With respect to currency
risk, we transact business in different currencies primarily through our foreign
subsidiaries.  The fluctuation of currencies impacts sales and
profitability.  Frequently, sales and the costs associated with those
sales are not denominated in the same currency.


We
transacted business in approximately thirty-nine currencies in fiscal year 2009
compared to thirty-six currencies in fiscal years 2008 and 2007.  The
relative currency mix over the past three fiscal years was as
follows:





Fiscal Year Ended June 30,% of Reported Revenues
                                                  
                                                  
                                                  Exchange RatesRevenues by currency(1):
                                                  
                                                  2009
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2007
                                                  
                                                  
                                                  2009
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  2007United
      States Dollar
                                                  
                                                  
                                                  53
                                                  %
                                                  
                                                  
                                                  49
                                                  %
                                                  
                                                  
                                                  53
                                                  %
                                                  
                                                  
                                                  1.0000
                                                  
                                                  
                                                  
                                                  1.0000
                                                  
                                                  
                                                  
                                                  1.0000European
      Euro
                                                  
                                                  
                                                  21
                                                  %
                                                  
                                                  
                                                  22
                                                  %
                                                  
                                                  
                                                  25
                                                  %
                                                  
                                                  
                                                  1.4029
                                                  
                                                  
                                                  
                                                  1.5744
                                                  
                                                  
                                                  
                                                  1.3535British
      Pound Sterling
                                                  
                                                  
                                                  7
                                                  %
                                                  
                                                  
                                                  9
                                                  %
                                                  
                                                  
                                                  6
                                                  %
                                                  
                                                  
                                                  1.6454
                                                  
                                                  
                                                  
                                                  1.9919
                                                  
                                                  
                                                  
                                                  2.0081Australian
      Dollar
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  0.8058
                                                  
                                                  
                                                  
                                                  0.9587
                                                  
                                                  
                                                  
                                                  0.8478Swiss
      Franc
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  N/A
                                                  
                                                  
                                                  
                                                  0.9203
                                                  
                                                  
                                                  
                                                  0.9788
                                                  
                                                  
                                                  NAJapanese
      Yen
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  0.0104
                                                  
                                                  
                                                  
                                                  0.0094
                                                  
                                                  
                                                  
                                                  0.0081Mexican
      Peso
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  0.0759
                                                  
                                                  
                                                  
                                                  0.0970
                                                  
                                                  
                                                  
                                                  0.0926Canadian
      Dollar
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  2
                                                  %
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  0.8597
                                                  
                                                  
                                                  
                                                  0.9806
                                                  
                                                  
                                                  
                                                  0.9385Singapore
      Dollar
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  1
                                                  %
                                                  
                                                  
                                                  0.6904
                                                  
                                                  
                                                  
                                                  0.7350
                                                  
                                                  
                                                  
                                                  0.6531All Other Currencies(2)
                                                  
                                                  
                                                  10
                                                  %
                                                  
                                                  
                                                  10
                                                  %
                                                  
                                                  
                                                  9
                                                  %
                                                  
                                                  
                                                  0.2014
                                                  
                                                  
                                                  
                                                  0.2183
                                                  
                                                  
                                                  
                                                  0.1631Total
                                                  
                                                  
                                                  100
                                                  %
                                                  
                                                  
                                                  100
                                                  %
                                                  
                                                  
                                                  100
                                                  %





(1)
              Calculated
      using weighted average exchange rates for the fiscal
  year.


(2)
              The
      “% of Reported Revenue” for “All Other Currencies” is calculated based on
      the weighted average twelve month exchange rates for all other currencies.
      The “Exchange Rates as of June 30” for ‘All Other Currencies’ represents
      the weighted average June 30 exchange rates for all other
      currencies.  Weighting is based on the twelve month fiscal year
      revenue for each country or
region.





A 10%
increase or decrease in the value of the Euro and British pound sterling in
relation to the U.S. dollar in fiscal year 2009 would have affected total
revenues by approximately $25.2 million, or 2.8%.  The sensitivity
analysis assumes a weighted average 10% change in the exchange rate during the
year with all other variables being held constant.  This sensitivity
analysis does not consider the effect of exchange rate changes on either cost of
sales, operating expenses, or income taxes, and accordingly, is not necessarily
an indicator of the effect of potential exchange rate changes on our net
income.


We are
also subject to interest rate fluctuations in foreign countries to the extent
that we elect to borrow in the local foreign currency.  In the past,
this has not been an issue of concern as we have the capacity to elect to borrow
in other jurisdictions with more favorable interest rates.  We will
continue to evaluate the need to invest in financial instruments designed to
protect against interest rate fluctuations.


Finally,
we are subject to, among others, those environmental and geopolitical risks, and
economic, pricing, financial, and other risks described in Item 1A, “Risk
Factors.”


13





PATENTS
AND TRADEMARKS


We hold
six patents through our JTECH subsidiary.  In general, we believe
that, historically, our competitive position has not been materially dependent
upon patent protection.  The technology used in the design and
manufacture of most of our hardware products is largely licensed or purchased
from third parties.  With respect to our software products, we have
historically relied on nondisclosure agreements and applicable U.S. and foreign
copyright and trademark laws for protection.  In the U.S. and in most
other countries, we believe that applicable law has provided and will continue
to provide us with sufficient protection.


There are
risks that third party entities, including competitors, could attempt to
misappropriate our intellectual property.  Given these potential
risks, we have implemented procedures to monitor misappropriation of its
intellectual property.  If a misappropriation is detected, we pursue
appropriate legal action when we determine that such action is
appropriate.


“MICROS”,
“Fidelio”, “Datavantage”, “CommercialWare”, “JTECH”, “Go2Team”, “InStorePlus”,
“Ovation”, “Opera”, “e7”, “Store21”, “Tradewind”, “Xstore”, “XBR”, “Premise
Pager System”, “TableAlert”, “ServAlert”, “GuestAlert”,
“HostAlert”,  “CommPass”, “CWDirect”, “CWCollaborate”, “CWStore”,
“CWLocate”, “CWAnalytics”, “CWData”, “CWIntegrate”, “FRY”, and “Open Commerce
Platform” are trademarks or servicemarks of the Company or its
subsidiaries.  We also own numerous other trademarks and
servicemarks.  This Annual Report on Form 10-K also contains
trademarks, trade names and servicemarks of other companies that are the
property of their respective owners.





FLUCTUATIONS
AND CUSTOMERS


Our
quarterly operating results have varied in the past and may vary in the future
depending upon various factors, including the timing of new product
introductions, changes in our pricing and promotion policies and those of our
competitors, market acceptance of new products and enhanced versions of existing
products and the capital expenditure budgets of our
customers.  Political uncertainty and international events that often
are unpredictable, e.g., terrorist attacks, natural disasters, and the volatile
and unpredictable political climate in the Middle East, are expected to continue
to adversely impact travel and tourism and therefore our quarterly operating
results.In
addition, over the last fiscal year, world macro-economic conditions materially
worsened, resulting in the failure of several key global financial services
providers, and a virtual freezing of the credit markets.  These
economic conditions resulted in reduced demand from customers, and the inability
of other customers to secure financing for intended purchases.  We
believe that these economic conditions have resulted in reduced demand for our
products and services.


Historically,
our business has been affected by seasonal trends.  For example, the
European summer holidays tend to lower our sales volume in the European
countries during our first fiscal quarter, as compared to other
quarters.  We also experience a stronger than average sales volume for
the retail products and services in our second fiscal quarter due to the holiday
season.  Additionally, with the relative slowdown in corporate buying
at the beginning of the calendar year, which is our third fiscal quarter,
seasonal weakness for the third quarter ending March 31 has been
experienced.  Therefore, we believe that sequential quarter-to-quarter
historic comparisons of our results are not necessarily meaningful or indicative
of future performance.


No single
customer accounts for 10% or more of our consolidated
revenues.  During the three fiscal years ended June 30, 2009, we have
been a party, directly and indirectly, to certain contracts with the U.S.
Federal Government, which contracts contained standard termination for
convenience clauses.  Our U.S. Government related revenue was
approximately 0.2%, 0.3% and 0.4% of our total consolidated revenue for the
fiscal years ended June 30, 2009, 2008 and 2007, respectively.  We do
not anticipate any material adverse financial impact if the U.S. Government
elected to exercise its rights under a termination for convenience
clause.





ENVIRONMENTAL
MATTERS


We
believe that we are in compliance in all material respects with applicable
environmental laws and do not anticipate that environmental compliance will have
a material effect on our future capital expenditures, earnings or competitive
position with respect to any of our operations.





BACKLOG


We
generally have a backlog of approximately two months revenue, substantially
all of which is cancelable at any time before shipment of hardware and software
or rendering of services.  As of June 30, 2009, 2008 and 2007, the
backlog totaled approximately $224.0 million, $204.6 million and $174.6 million,
respectively.  Historically, only an immaterial portion of the backlog
existing as of the first day of the fiscal year does not result in recognizable
revenue in that fiscal year.





AVAILABLE
INFORMATION


We file with the U.S. Securities and
Exchange Commission (“SEC”) annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K, proxy statements, and other documents as
required by applicable law and regulations.  The public may read and
copy any materials that we file with the SEC at the SEC’s Public Reference Room
at 100 F Street, N. E., Washington, DC 20549.  The public may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330 (1-800-732-0330).  The SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information statements,
and other information regarding issuers that file electronically with the
SEC.  We also maintain an Internet site
(http://www.micros.com).  We make available free of charge on or
through our Internet website our annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K, and amendments to these reports, as
soon as reasonably practicable after electronically filing those documents with
or furnishing them to the SEC.  The information on our website is not
incorporated into and is not a part of this report.


14


ITEM
1A.  RISK FACTORS





There are a number of risks to which we
are subject.  These risks include the following:





1.  ENVIRONMENTAL AND GEOPOLITICAL
RISKS.While we do not sell our products and services directly
to consumers, changes in consumer habits in response to environmental or
geopolitical risks affect demand for our products and services by the
hospitality and tourism industries.


·
            Our business is very sensitive
      to the threat of terrorism and political uncertainty.  As
      the hospitality and tourism industries we serve are highly sensitive to
      consumer sentiments caused by world events, we are very vulnerable to
      downturns in customer buying habits associated with the threat of
      terrorist attacks and uncertain political climates, such as those existing
      in the Middle East and parts of
Asia.


·
            Our business is very sensitive
      to environmental and health disasters. Actual or anticipated
      environmental disasters and epidemics, including for example, hurricanes,
      tsunamis, and disease, such as swine flu, will deter and delay purchases
      of our products by customers, as concerns about potential or anticipated
      instances of environmental or health disasters tend to suppress travel and
      tourism.  Environmental disasters also adversely affect our
      operations in the affected areas.


·
            Higher oil and gas prices
      worldwide could have a material adverse impact on the travel and tourism
      industries, and indirectly, on our business.  Material
      increases in oil and gas prices tend to reduce discretionary spending by
      consumers, such as on travel and dining, as well as on retail spending
      generally.  Reductions in discretionary spending by consumers
      adversely affect our customers and, indirectly, our
      business.  Moreover, increases in oil and gas prices also
      directly adversely affect our customer base in other ways.  For
      example, gas price increases can result in higher ingredient and food
      costs for our restaurant customers.


·
            We maintain offices in certain
      parts of the world that are subject to economic instability, political
      unrest, and terrorism, such as Argentina, Brazil, Israel and
      Thailand.  The performance of our offices in these areas
      will be adversely impacted if these regions become subject to economic
      declines, political strife or episodes of
  terrorism.





2.  ECONOMIC,
PRICING AND FINANCIAL RISKS.


·
            We are subject to the
      variability of world economies.Since a substantial
      portion of our business is conducted in foreign countries, a downturn in
      the economies of foreign countries could adversely affect our financial
      results.  While, under certain circumstances, reliance on
      foreign operations can have a moderating impact (as one region’s improving
      conditions can offset another region’s declining conditions), our foreign
      businesses nonetheless add a degree of uncertainty to our planning and
      forecasting process.


·
            We are subject to the global
      economic crisis.Starting in the summer of 2008, world
      macro-economic conditions materially worsened, resulting in the failure of
      several key global financial services providers, and a virtual freezing of
      the credit markets.  These economic conditions resulted in
      reduced demand from customers, and the inability of other customers to
      secure financing for intended purchases.  While many economists
      have noted signs of slow recovery, and credit markets are operating with
      more efficiencies, the current economic weakness may continue to result in
      the reduced demand for our products.  These economic conditions
      have also increased our bad debts and, notwithstanding our efforts to
      collect on accounts, we may experience greater difficulty in receiving
      monies that we are owed by our
customers.


·
            Ourquarterly financial results are
      dependent upon the timing and size of customer orders and the shipment of
      products for large orders.  Large software orders from
      customers may account for more than an insignificant portion of earnings
      in any quarter.  We expect the customers with whom we do the
      largest amount of business to vary from year to year as a result of the
      timing of the rollout of each customer’s system.  Further, if a
      customer delays or accelerates its delivery requirements, or if a
      product’s completion is delayed or accelerated, revenues that we may have
      expected in a given quarter could be deferred or accelerated into
      subsequent or earlier quarters, respectively.  These events
      could have a meaningful effect on our quarterly
  results.


·
            Our ability to establish
      pricing is subject to rapidly changing market and competitive conditions.To be competitive and to avoid losing business on the basis of
      price, we must evaluate our pricing routinely.  There are
      instances where we may have to reduce our pricing to obtain
      business.  Market forces have and will continue to place
      pressure on our gross margins and overall
  profitability.


·
            Our gross margins will vary
      from quarter to quarter based upon product mix.  Product
      mix can affect our operating results.  For example, as we enjoy
      a higher gross margin on software than on hardware, our overall gross
      margin will vary depending upon the percentage of software licensed and
      the percentage of hardware sold each quarter.  Because actual
      product mix is difficult to predict on a quarter-to-quarter basis, there
      is uncertainty and variability as to the projected gross margin on a
      quarter to quarter basis.


·
            Our non-major account business
      is difficult to predict.  Our major account customers
      (generally those customers who operate 50 or more locations) have longer
      sales cycles and deployments; our non-major account sales have much
      shorter sales cycles and shorter deployments.  As a significant
      portion of our business involves non-major accounts, there is inherent
      difficulty in predicting buying patterns.  Accordingly, it is
      much harder to appropriately staff and prepare for fluctuations in buying
      demand for non-major-account customers.  This can result in
      inefficiencies that adversely affect our operating
  results.


15


·
            Some of the advanced systems we
      sell are very complex and require a high level of technical
      sophistication, which may result in increased costs that adversely affect
      our operating results.  The costs of the implementation
      and operation of an effective service structure capable of addressing
      increasingly complex software systems in more remote locations is high and
      may require us to engage contractors, who generally have a higher cost
      structure than that of our own employees.  The additional costs
      also reflect the complexity of open systems, which generally incorporate
      third party software products that may entail difficult and costly support
      and service, and difficulty in implementing, operating, maintaining and
      supporting centrally hosted systems, such as central reservation systems,
      and centrally-hosted property management systems and reporting
      systems.


·
            We are subject to certain
      material cost increases that may be out of our
      control.  While we attempt to control third party costs,
      we have little or no control over certain material expenses, such as
      health care costs (which are generally experience-based) and costs of
      compliance with new legislation.  Significant increases in any
      of these expenses could adversely affect our operating
      results.


·
            We are subject to fluctuations
      in foreign currencies and exchange rates.  Because we
      conduct significant portions of our business in foreign currencies, we
      experience exchange rate fluctuations that can have a significant impact
      on our reported results.  For example, as much of our European
      business is transacted in Euros, our revenue on a consolidated basis will
      decline if the Euro weakens relative to the U.S. Dollar and increase if
      the Euro strengthens relative to the U.S.
  Dollar.


·
            As a publicly traded company,
      our stock price is subject to certain market trends that are out of our
      control and that may not reflect our actual operating performance.  We can experience short-term increases and declines in
      our stock price due to factors other than those specific to our business,
      such as economic news or other events generally affecting the trading
      markets.  In this regard, the trading markets generally suffered
      a precipitous decline during 2008 and early 2009 in conjunction with the
      global economic crisis.


·
            We have encountered risks
      associated with maintaining large cash balances.  While
      we have attempted to invest our cash balances in investments generally
      considered to be relatively safe, we nevertheless confront credit and
      liquidity risks.  For example, the Company has invested some of
      its cash in auction rate securities, which proved to be illiquid when the
      financial resale markets contracted in February 2008.  Those
      securities may continue to be illiquid, and there can be no assurance of a
      return to pre-February 2008 liquidity levels.  We may continue
      to experience financial losses if these investments remain
      illiquid.  Additionally, bank failures could result in reduced
      liquidity or the actual loss of money held in deposit
      accounts.





3.  TECHNOLOGY
RISKS.


·
            Our customers’ requirements are
      increasingly sophisticated.To be able to continue to
      offer competitive products and to meet our customers’ requirements, we
      must continually develop and update our products.  Unexpected
      costs and delays in development and implementation, and addressing our
      commitments to various customers, could adversely affect our financial
      results.


·
            The development of software is
      an inherently difficult process that may result in software bugs that
      adversely impact a customer’s business.  While we have a
      testing and beta program and protocol that we implement before the general
      release of any product, such processes cannot guarantee that the released
      software will not have any bugs.  Our business could be
      adversely affected if these problems are significant and not readily
      resolvable.


·
            The manufacturing of our
      hardware platform is performed primarily by GES, a company in
      Singapore.  While we believe we have a very good
      relationship with GES, and while we have not experienced any material
      manufacturing problems with GES, we cannot be certain that the
      relationship will remain in force, nor can we be certain that GES will not
      experience labor or manufacturing challenges in the future, which may
      include claims of patent infringement with respect to key product
      components.  Additionally, GES procures many of its components
      from other third parties who could experience manufacturing or labor
      issues.  We believe that, if our relationship with GES were to
      terminate, we could readily replace GES with other contract manufacturers
      or resell appropriate third-party hardware products in lieu of those
      manufactured for us by GES.  However, any disruption or
      interruption of the supply of hardware products from GES could adversely
      affect our business in the short
run.


·
            Large customized deployments
      may be difficult and may result in cost overruns that are not
      recoverable.  We have certain contracts under which we
      are required to provide systems and services at a fixed
      price.  We may be contractually required to absorb costs that
      may not be recoverable if we underestimate the amount of work required or
      if we encounter unanticipated technical issues.  This risk can
      be pronounced given the complexity of some of the systems we install and
      the size and scope of some of the deployments.  Unanticipated
      costs that are not recoverable could adversely affect our
      operations.


·
            Our investment in certain
      technologies may prove to be unsuccessful and may delay our focus on more
      promising technologies.  As we invest significantly in
      research and development, there is a risk that we will pursue technology
      that we ultimately determine is not marketable or does not achieve the
      desired solution.  In such an event, we may be required to write
      off our investment, which could have an adverse impact on our operating
      income.  Moreover, if we are delayed in deploying better
      technologies, our business also could be adversely
    affected.


·
            Actual or perceived security
      vulnerabilities in our software products may result in reduced sales or
      liabilities.  Our software may be used in connection with
      processing sensitive data (e.g., credit card numbers), and is sometimes
      used to store such data.  It may be possible for the data to be
      compromised if our customer does not maintain appropriate security
      procedures.  In those instances, the customer may attempt to
      seek damages from us.  While we believe that all of our current
      software complies with applicable industry security requirements and that
      we use appropriate security measures to reduce the possibility of breach
      through our support and other systems, we cannot assure that our
      customers’ systems will not be breached, or that all unauthorized access
      can be prevented.  If a customer, or other person, seeks redress
      from us as a result of a security breach, our business could be adversely
      affected.


16





·
            Hosting of software
      applications presents increased security and liability
      risks.  As we expand our software hosting capabilities
      and offer more of our software applications to our customers on a hosted
      basis, our responsibility for data and system security with respect to
      data held in the hosting centers increases. While we believe that our
      current software applications comply with applicable laws and industry
      security requirements, and while we believe that we use appropriate
      security measures to reduce the possibility of unauthorized access or
      misuse of data in the hosting center, we cannot provide absolute assurance
      that our hosted systems will not be breached, or that all unauthorized
      access can be prevented.  If a security breach were to occur, a
      customer, regulatory agency, or other person could seek redress from us,
      which could adversely affect our
business.





4.  RESOURCE
AND PERSONNEL RISKS.


·
            We could be adversely affected
      by vendor labor difficulties.  Some of our vendors may
      have employees who are protected by certain labor laws or who may be
      members of unions.  We could experience unanticipated
      manufacturing or supply shortages if any of our key vendors are subject to
      labor difficulties or work slow-downs or
  stoppages.


·
            Our inability to hire qualified
      personnel, including particularly research & development personnel,
      could adversely affect our ability to satisfy customer requirements on an
      efficient basis.  Finding qualified technical personnel
      in all the localities where our research and development facilities are
      situated is an ongoing challenge.  If we cannot find appropriate
      personnel, we risk delays in satisfying customer demands, or may even lose
      the opportunity to provide software to the customer.  If we are
      required to retain a consultant because we do not have available
      personnel, development costs would increase.  In general, our
      inability to recruit and retain appropriate personnel would adversely
      affect our business.





5.  LEGAL
AND ACCOUNTING RISKS.


·
            Although we attempt to protect
      our proprietary technology, these protections do not preclude competitors
      from developing products with features similar to our
      products.  We cannot guarantee that we can effectively
      preserve the proprietary nature and competitive advantages of our
      products, despite our efforts to do so through a combination of trade
      secrets, copyright, trademark law, non-disclosure agreements, and
      technical measures.  Others could attempt to copy what we have
      developed, either through legal or illegal means.  Moreover,
      others have been able to develop competitive products and services that do
      not violate our proprietary rights.


·
            We are subject to litigation,
      which may be costly.As a company that does business
      with many customers, employees, and vendors throughout the world, we are
      subject to litigation, including claims made by or against us relating to
      intellectual property rights and intellectual property
      licenses.  For example, we recently were subject to an adverse
      jury determination that we were liable for $7.5 million in damages in
      connection with the termination of dealer relationships in
      2000.  While we are pursuing an appeal in that particular
      matter, and while we generally take steps to reduce the likelihood that
      disputes will result in litigation and damages, litigation is very
      commonplace and could have an adverse effect on our
    business.


·
            We are subject to claims by
      others that we are infringing their intellectual property
      rights.From time to time we receive letters from
      entities that assert that we are infringing a patent.  In those
      instances, we assess the validity of the claims and the purported patent,
      and determine whether a license is appropriate or necessary.  If
      we conclude that a license is not necessary, there is a risk that we will
      be sued; we may also face indirect liability as a result of infringement
      claims brought against our customers.  There are currently
      several actions pending in which some of our customers have been sued on
      such a claim and have sought indemnity from us.  While we do not
      believe that any of our products and services infringe any patents, we may
      become involved in additional patent infringement
      litigation.  We may incur significant legal expenses and, if we
      are found liable, significant damages in connection with patent
      infringement litigation.


·
            Credit card issuers have
      promulgated credit card security guidelines as part of their ongoing
      effort to battle identity theft and credit card fraud, which may
      substantially increase our expenses; breaches of our customers’ credit
      card security may adversely affect us.  We continue to
      work with credit card issuers to assure that our products and services
      comply with the credit card associations’ security regulations and best
      practices applicable to our products and services.  We cannot
      assure, however, that our products and services are invulnerable to
      unauthorized access or hacking.  Additionally, we cannot assure
      that our customers will implement all of the credit card security features
      that we introduce, or all of the protections and procedures required by
      the credit card issuers.  Our customers may not establish and
      maintain appropriate levels of firewall protection and other security
      measures.  If there is unauthorized access to credit card data
      that results in financial loss, there is a potential that parties could
      seek damages from us.  Additionally, changes in the security
      guidelines could require significant and unanticipated development
      efforts.





ITEM
1B.  UNRESOLVED STAFF COMMENTS





Not
applicable.


17





ITEM
      2.
            PROPERTIES





Our
worldwide corporate headquarters, including our executive offices, are located
in Columbia, Maryland.  We also conduct sales, marketing, customer
support, and product development activities at this location.  We
lease the entire five-story structure, consisting of 247,624 square feet, from
Columbia Gateway Office Corporation, under a lease that, as amended, terminates
on February 29, 2016.  We sublease one of the five floors, consisting
of 49,524 square feet, to Motorola, Inc.  The sublease expires March
1, 2010.


In
addition to over 50 smaller offices, we lease the following larger facilities
(defined, for purposes of this filing, as those locations in which we lease at
least 10,000 square feet:





Location
                                      
                                      Approximate
                                        Size
                                        (SquareFeet)
                                      
                                      Use
                                      
                                      ExpirationDate
                                      
                                      AdditionalCommentsColumbia,
                                        Maryland
                                      
                                      247,624
                                      
                                      Headquarters
      and other functions (see above)
                                      
                                      February
      29, 2016
                                      
                                      See
      aboveHanover,
      Maryland
                                      
                                      75,600
                                      
                                      Warehouse,
      distribution, light assembly, configuration, manufacturing,
      repair
                                      
                                      July
      31, 2015Cleveland,
      Ohio
                                      
                                      69,200
                                      
                                      Sales,
      marketing, support, product development
                                      
                                      February
      28, 2014 (we have an early termination right in 2010)
                                      
                                      Cleveland
      is the headquarters for the MICROS Retail groupNeuss,
      Germany
                                      
                                      42,000
                                      
                                      Sales,
      marketing, product development, and customer support
                                      
                                      December
      31, 2015
                                      
                                      Also
      serves as one of the hub offices for Europe, Africa, and the Middle
      EastAnn
      Arbor, Michigan
                                      
                                      35,748
                                      
                                      Sales,
      marketing, customer support, product development and product
      support
                                      
                                      Ranges
      from November 20, 2010 to July 31, 2012
                                      
                                      Ann
      Arbor is the headquarters for the Fry, Inc. subsidiaryWestborough,
      Massachusetts
                                      
                                      27,234
                                      
                                      Sales,
      marketing, customer support, product development and product
      support
                                      
                                      November
      30, 2013
                                      
                                      MICROS
      Retail maintains this office for its XBR loss prevention products, as well
      as for its CommercialWare products and services.Boca
      Raton, Florida
                                      
                                      19,755
                                      
                                      Sales,
      marketing, product  development, customer support and light
      assembly
                                      
                                      February
      29, 2012
                                      
                                      Boca
      Raton is the headquarters for the JTECH subsidiaryNaples,
      Florida
                                      
                                      18,180
                                      
                                      Software
      development
                                      
                                      December
      31, 2011
                                      
                                      Naples
      is the main site for the development of the Company’s hotel
      productsGalway,
      Ireland
                                      
                                      18,025
                                      
                                      Customer
      support, sales and marketing
                                      
                                      May
      31, 2022 (we have early termination rights in 2012 and
    2017)
                                      
                                      Also
      serves as the regional headquarters for Europe, Africa, and the Middle
      EastNanterre,
      France
                                      
                                      16,867
                                      
                                      Sales,
      marketing, support
                                      
                                      December
      31, 2013 (we have an early termination right in 2010)Buffalo,
      NY
                                      
                                      16,821
                                      
                                      Sales,
      marketing, support
                                      
                                      September
      15, 2015
                                      
                                      We
      have subleased a portion of this property to another
    company.Chicago,
      Illinois
                                      
                                      16,706
                                      
                                      Sales,
      marketing, product development, and hosting
                                      
                                      December
      31, 2009
                                      
                                      Fry,
      Inc. maintains this office for its hosting services as well as for sales
      and
services.





18





Sydney,
      Australia
                            
                            13,500
                            
                            Sales,
      marketing, support, product development
                            
                            December
      14, 2009Scottsdale,
      Arizona
                            
                            12,969
                            
                            Sales,
      marketing, support, product development
                            
                            January
      31, 2016
                            
                            Scottsdale
      is the headquarters for the HSI divisionMexico,
      DF
                            
                            11,946
                            
                            Sales,
      marketing, customer support, operations
                            
                            November
      30, 2009Las
      Vegas, Nevada
                            
                            11,930
                            
                            Sales,
      marketing, support
                            
                            July
      31, 2010Huntington
      Beach, California
                            
                            10,970
                            
                            Sales,
      marketing, support
                            
                            January
      31, 2010Slough,
      England (three sites)
                            
                            25,000
                            
                            Sales,
      marketing, support
                            
                            Ranges
      from September 29, 2013 to December 31, 2016 (we have some early
      termination rights during 2009 - 2010)Singapore
                            
                            9,367
                            
                            Sales,
      marketing, support
                            
                            September
      30, 2009





To
satisfy other sales, service and support, and product development needs, we and
our subsidiaries lease space in other U.S. cities, including Boston, Cincinnati,
Dallas, Denver, Hartford, Houston, Nashville, New Orleans, New York, Pittsburgh,
Portland, San Diego, San Francisco, and Seattle, and in numerous cities
overseas, including Buenos Aires, Argentina; Hamburg, Germany; Helsinki,
Finland; Madrid, Spain; Paris, France; Rome, Italy; São Paulo, Brazil;
Stockholm, Sweden; Tokyo, Japan; Toronto, Canada; Vancouver, Canada; Vienna,
Austria; and Zurich, Switzerland.  In general, we believe that
additional space will be available as needed.





ITEM
      3.
            LEGAL
      PROCEEDINGS





We are
and have been involved in legal proceedings arising in the normal course of
business.





There is
a case pending in the U.S. District Court for the Northern District of Georgia,
styled Ware v.
Abercrombie & Fitch Stores, Inc. et al.; although we are not a party
to that case, we may have some obligation to indemnify certain of the defendants
who are our customers, based on the terms of our contracts with those
customers.  The plaintiff has alleged that the defendants are
infringing a patent relating to the processing of credit card
transactions.  The defendants include approximately 107 individual
retailers, 13 of whom are our customers for retail point-of-sale
software.   We are currently providing indemnity coverage to five
of the defendants who are our customers in accordance with applicable provisions
of the contracts between us and those customers.  Through June 30,
2009, our legal fees with respect to indemnity coverage for this matter have not
been material, and we do not anticipate that our future indemnification
obligations will be material.  The case was subject to a court-ordered
stay pending the completion of the United States Patent and Trademark Office’s
reexamination of the patent that is the subject of the lawsuit.  On
July 14, 2009, the United States Patent and Trademark Office issued a
Reexamination Certificate upholding the validity of the patent and the plaintiff
moved the Court to lift the stay.  As the patent is the subject of
another lawsuit that is significantly further along in the litigation process
than this case, the defendants are opposing the plaintiff’s motion and have also
filed a cross-motion to continue the stay.  Should the case proceed,
we will vigorously defend the action and assert all available defenses and
arguments.  In any event, based on currently available information, we do
not believe that our products infringe the patent.


Heartland
Payment Systems, Inc., has filed an action in the U.S. District Court for the
District of New Jersey naming as defendants MICROS Systems, Inc., Merchant Link
LLC, and Chase Paymentech Solutions, LLC.  In its complaint, Heartland
claims that MICROS, Merchant Link, and Paymentech have engaged in an
anti-competitive arrangement relating to credit and debit card payment
processing for restaurant point-of-sale systems, and further claims that this
arrangement violates federal antitrust law and applicable New Jersey state
laws.  Heartland claims it has been damaged by virtue of being
required to deal with Merchant Link if it wishes to provide services to users of
MICROS point-of-sale software, by being required to pay fees to Merchant Link
that it claims are inappropriate or excessive, and by being competitively
disadvantaged relative to Chase Paymentech’s services.  Heartland
seeks monetary damages in excess of $12 million, and also injunctive and other
equitable relief.  We and the other defendants have filed answers to
the complaint, in which we and the other defendants have denied all material
allegations.  We have also asserted counterclaims, alleging that
Heartland has engaged in tortious activity by defaming and libeling us and by
improperly interfering with our customer contracts and customer
relationships.  Heartland has filed answers to the counterclaims
denying all material allegations.  The case is currently in the
discovery phase, and no trial date has been set in this matter.


19





On May
22, 2008, a jury returned verdicts totaling $7.5 million against us in the
consolidated actions of Roth Cash Register v. MICROS
Systems, Inc., et al. and Shenango Systems Solutions
v. MICROS Systems, Inc., et al.   The cases initially were
filed in 2000 in the Court of Common Pleas of Allegheny County,
Pennsylvania.  The complaints both related to the non-renewal of
dealership agreements in the year 2000 between us and the respective
plaintiffs.  The agreements were non-renewed as part of a
restructuring of the dealer channel.  There are no other litigation
matters relating to the restructuring of the dealer channel in the year
2000.  The plaintiffs alleged that we and certain of our subsidiaries
and employees entered into a plan to eliminate the plaintiffs as authorized
dealers and improperly interfere with the plaintiffs' relationships with their
respective existing and potential future clients and customers without
compensation to the plaintiffs.  As a result, the plaintiffs claimed
that we were liable for, among other things, breach of contract and tortious
interference with existing and prospective contractual
relationships.  We and the plaintiffs have appealed the verdicts on
various grounds.  The initial briefs for the appeals are due in
September 2009.We
have established only an immaterial reserve for any potential liability relating
to these matters, as we believe that we have raised and can present strong
arguments to reverse the verdicts, and therefore believe that an unfavorable
outcome in these cases is not probable. Nevertheless, even if the verdicts
were not reversed or reduced as a result of the post-trial motions or any
subsequent appeals, we are of the opinion, based upon presently available
information and the advice of counsel concerning pertinent legal matters, that
any resulting liability should not have a material adverse effect on our
financial position or liquidity.





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





Not
applicable.


20


PART
II





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





All share
data has been retroactively adjusted for a two-for-one stock split effective
February 5, 2008.





STOCK
PERFORMANCE GRAPH


The
following line graph compares the cumulative total shareholder return on the
Company’s common stock during the past five fiscal years, based on the market
price of MICROS Systems, Inc. common stock, with the cumulative total yearly
return of the S&P 500 Index, and with the S&P Application Software
composite index.  The graph assumes $100 invested on June 30, 2004 in
MICROS Systems, Inc. common stock, and an identical amount in the S&P 500
Index and the S&P 500 Application Software composite index, and assumes the
reinvestment of dividends.











ShareholderReturnsCompany/Index
                                                    
                                                    June2005
                                                    
                                                    
                                                    June2006
                                                    
                                                    
                                                    June2007
                                                    
                                                    
                                                    June2008
                                                    
                                                    
                                                    June2009MICROS
      Systems, Inc.
                                                    
                                                    $
                                                    186.57
                                                    
                                                    
                                                    $
                                                    182.11
                                                    
                                                    
                                                    $
                                                    226.81
                                                    
                                                    
                                                    $
                                                    254.24
                                                    
                                                    
                                                    $
                                                    211.13S&P
      500 Index
                                                    
                                                    $
                                                    106.32
                                                    
                                                    
                                                    $
                                                    115.50
                                                    
                                                    
                                                    $
                                                    139.28
                                                    
                                                    
                                                    $
                                                    121.01
                                                    
                                                    
                                                    $
                                                    89.28S&P
      500 Application Software
                                                    
                                                    $
                                                    114.86
                                                    
                                                    
                                                    $
                                                    125.07
                                                    
                                                    
                                                    $
                                                    151.38
                                                    
                                                    
                                                    $
                                                    134.66
                                                    
                                                    
                                                    $
                                                    105.47





PRICE
RANGE OF COMMON STOCK


The
Company’s common stock is traded on the NASDAQ Stock Market under the symbol
MCRS.  As of August 21, 2009, there were 31,357 record holders of the
Company’s common stock, $.00625 par value.


The following table shows the range of
sales prices for the periods indicated, as reported by NASDAQ.





1stQuarter
                    
                    
                    2ndQuarter
                    
                    
                    3rdQuarter
                    
                    
                    4thQuarterFiscal Year Ended June 30, 2009High
                    
                    $
                    34.41
                    
                    
                    $
                    27.17
                    
                    
                    $
                    20.17
                    
                    
                    $
                    28.65Low
                    
                    $
                    22.98
                    
                    
                    $
                    13.34
                    
                    
                    $
                    13.47
                    
                    
                    $
                    18.45Fiscal Year Ended June 30,
    2008High
                    
                    $
                    33.30
                    
                    
                    $
                    37.49
                    
                    
                    $
                    37.35
                    
                    
                    $
                    36.64Low
                    
                    $
                    26.45
                    
                    
                    $
                    30.29
                    
                    
                    $
                    26.33
                    
                    
                    $
                    28.40





The Company has never paid a cash
dividend and has no current intention to pay any cash dividends.  Its
current policy is to retain earnings and to use those funds for the operation
and expansion of its business as well as the repurchase of the Company’s
stock.  The Company is a party to two credit agreements expiring on
July 31, 2010, which restrict the payment of dividends other than stock
dividends (see Item 7, “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Liquidity and Capital Resources” and
Note 7 “Line of Credit,” in the notes to the Consolidated Financial
Statements included in this report).


21


PURCHASES
OF COMPANY STOCK


In July
2008 the Board of Directors authorized the purchase of two million shares of our
common stock (the “2009 Plan”).  Subsequent to year-end, on August 25,
2009, the Board of Directors authorized the purchase of an additional two
million shares of the Company’s common stock over the next three years, to be
purchased from time to time depending on market conditions and other corporate
considerations as determined by management.


We have
incurred an aggregate of approximately $0.2 million in fees in the aggregate
related to all stock purchase plans.  As of July 31, 2009,
approximately 0.9 million additional shares are available for purchases under
the 2009 Plan.  During the fourth quarter of fiscal year 2009, our
stock purchases under the 2009 Plan were as follows:





Issuer
Purchases of Equity Securities


Total Number
                                      ofShares
                                      Purchased
                                    
                                    
                                    Average
                                      Price
                                      Paidper
                                      Share
                                    
                                    
                                    Total Number of
                                      SharesPurchased
                                      as Part ofPublicly
                                      AnnouncedPlan or
                                      Program
                                    
                                    
                                    Maximum Number
                                      ofShares that May
                                      Yetbe Purchased
                                      Underthe Plan or
                                      Program04/01/09 –
      04/30/09
                                    
                                    
                                    —
                                    
                                    
                                    
                                    N/A
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,542,60005/01/09 –
      05/31/09
                                    
                                    
                                    —
                                    
                                    
                                    
                                    N/A
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,542,60006/01/09–06/30/09
                                    
                                    
                                    260,400
                                    
                                    
                                    $
                                    26.15
                                    
                                    
                                    
                                    260,400
                                    
                                    
                                    
                                    1,282,200260,400
                                    
                                    
                                    $
                                    26.15
                                    
                                    
                                    
                                    260,400
                                    
                                    
                                    
                                    1,282,200





ITEM
      6.
            SELECTED
      FINANCIAL DATA





Fiscal Year Ended June 30,(in thousands, except per share data)
                
                2009(1)
                
                
                2008(1)
                
                
                2007(1)
                
                
                2006
                
                
                2005Statement
      of Operations Data:Revenue
                
                $
                911,847
                
                
                $
                954,184
                
                
                $
                785,727
                
                
                $
                678,953
                
                
                $
                597,264Income
      from operations (2)
                
                $
                143,815
                
                
                $
                139,303
                
                
                $
                110,588
                
                
                $
                91,277
                
                
                $
                78,875Net
      income (2)
                
                $
                99,297
                
                
                $
                101,284
                
                
                $
                79,988
                
                
                $
                63,528
                
                
                $
                53,660Net
      income per diluted share (2),
      (5):Basic
                
                $
                1.22
                
                
                $
                1.23
                
                
                $
                1.00
                
                
                $
                0.82
                
                
                $
                0.72Diluted
                
                $
                1.21
                
                
                $
                1.21
                
                
                $
                0.97
                
                
                $
                0.78
                
                
                $
                0.67Balance
      Sheet Data:Working
      capital (3)
                
                $
                421,016
                
                
                $
                392,939
                
                
                $
                344,566
                
                
                $
                253,121
                
                
                $
                190,436Total
      assets
                
                $
                1,024,086
                
                
                $
                1,003,006
                
                
                $
                846,756
                
                
                $
                647,857
                
                
                $
                547,228Line
      of credit
                
                $
                1,090
                
                
                $
                989
                
                
                $
                2,308
                
                
                $
                2,134
                
                
                $
                2,387Shareholders’
      equity
                
                $
                723,447
                
                
                $
                673,016
                
                
                $
                551,133
                
                
                $
                417,116
                
                
                $
                345,171Book
      value per share (4), (5)
                
                $
                9.00
                
                
                $
                8.32
                
                
                $
                6.80
                
                
                $
                5.35
                
                
                $
                4.47Additional
      Data:Weighted
      average number of common shares outstanding:Basic
                
                
                80,486
                
                
                
                81,546
                
                
                
                79,978
                
                
                
                77,383
                
                
                
                75,029Diluted
                
                
                81,461
                
                
                
                83,346
                
                
                
                82,581
                
                
                
                81,248
                
                
                
                79,607





(1)
              Fiscal
      years ended June 30, 2009, 2008 and 2007 include approximately $13.9
      million ($9.8 million, net of tax or $0.12 per diluted share), $17.2
      million ($13.1 million net of tax or $0.16 per diluted share) and $14.0
      million ($11.1 million net of tax or $0.14 per diluted share),
      respectively, in non-cash share-based compensation expense.  See
      Note 3 “Share-based Compensation” in the Notes to Consolidated Financial
      Statements.


(2)
              Fiscal
      year ended June 30, 2009 includes approximately $3.1 million ($2.1
      million, net of tax) in restructuring charges and approximately $0.7
      million in an inventory provision reflecting adjustments to the Company’s
      cost structure in response to recent lower sales volume in certain of the
      Company’s locations affecting both of its reportable
      segments.  The fiscal year 2009 data also includes an
      other-than-temporary impairment of approximately $1.3 million
      for long-term investments. See Note 2 “Financial Instruments and
      Fair Value Measurements” in the Notes to Consolidated Financial
      Statements.


(3)
            Current
      assets less current liabilities.





(4)
            Calculated
      as shareholders’ equity divided by common stock outstanding at June
      30.


(5)
            Fiscal
      years ended June 30, 2005, 2006 and 2007 retroactively adjusted to reflect
      February 2008 two-for-one stock
split.




22




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




We are a
leading worldwide designer, manufacturer, marketer, and servicer of enterprise
information solutions for the global hospitality and specialty retail
industries.  Our enterprise solutions comprise three major areas:
hotel information systems, restaurant information systems, and specialty retail
information systems.  We also offer a wide range of related
services.  We distribute our products and services directly and
through a network of independent dealers and distributors.


We are
organized and operate in four operating segments:  U.S., Europe, the
Pacific Rim, and Latin America regions.  For the purposes of applying
Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures About
Segments of an Enterprise and Related Information, we have identified our U.S.
operating segment as a separate reportable segment and we have aggregated our
three international operating segments into one reportable segment,
international, as the three international operating segments share many similar
economic characteristics.  Our management views the U.S. and
international segments separately in operating our business, although the
products and services are similar for each segment.





As
further described in Note 18 “Quarterly Financial Information (Unaudited)” to
the Consolidated Financial Statements, we revised to correct our unaudited
consolidated balance sheets and unaudited consolidated statements of cash flows
for each of the first three quarters in fiscal year 2009, to change the
classification of certain marketable securities from cash and cash equivalents
to short-term investments.





CRITICAL
ACCOUNTING ESTIMATES


Our
discussion and analysis of our financial condition and results of operations are
based on the consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses.  On an ongoing basis, we evaluate
our estimates, including those that impact revenue recognition, share-based
compensation, capitalized software, intangible assets, investments, allowance
for doubtful accounts, allowance for obsolescence and income
taxes.  We base our estimates on historical experience and on various
other assumptions that are believed to be reasonable under the circumstances,
and which form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other
sources.  Actual results may differ from these estimates.


The
following comprise the critical accounting estimates that we used in the
preparation of our consolidated financial statements.





Revenue
recognition


Revenue
is generated from the sale of software licenses, hardware, services and support
and is recognized when persuasive evidence of an arrangement exists,
delivery has occurred or services have been rendered, the arrangement fee is
fixed or determinable and collectability of the related receivable is
probable.  Revenue recognition is governed by various accounting
principles, including Statement of Position (“SOP”) 97-2, “Software Revenue
Recognition,” Securities and Exchange Commission Staff Accounting Bulletin No.
104, “Revenue Recognition in Financial Statements” and in some cases, SOP 81-1,
“Accounting for Performance of Construction Type and Certain Production Type
Contracts,”  among others.  The application of the
appropriate accounting principle to our revenue is dependent upon the specific
transaction and whether the sale includes hardware, software and services or a
combination of these items.


Our
revenue recognition involves judgment, including estimates of fair value in
arrangements that contain multiple elements, assessments of the likelihood of
nonpayment and estimates of total costs and costs to complete a
project.  In making these judgments we analyze various factors,
including the nature and terms of the specific transaction, the nature and terms
of comparable transactions, the credit-worthiness of our customers, our
historical experience , accuracy of prior estimates and overall market and
economic conditions.  Changes in judgments related to these items, or
a deterioration in market or economic conditions deteriorate, could materially
impact the timing and amount of revenue and costs recognized.





Allowance
for doubtful accounts


We
maintain an allowance for doubtful accounts for estimated losses that may result
from the inability of our customers to make required payments and for limited
circumstances when the customer disputes the amounts due to us.  Our
methodology for determining this allowance requires estimates and is based on
the age of the receivable, customer payment practices and history, inquiries,
credit reports from third parties and other financial information.  If
the financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required which could affect our financial results in future
periods.  As of June 30, 2009 and 2008, accounts receivable totaled
approximately $157.5 million and $192.4 million, net of an allowance for
doubtful accounts of approximately $32.1 million and $28.3 million,
respectively.  Additionally, bad debt expenses for the fiscal years
2009, 2008 and 2007 were approximately $8.3 million, $7.1 million and $3.4
million, respectively.





Inventory


Inventory
is stated at the lower of cost or market.  Cost is determined
principally by the first-in, first-out pricing method.  We maintain a
reserve for obsolescence for inventory in the amount of approximately $11.4
million and $11.5 million as of June 30, 2009 and 2008,
respectively.  We regularly compare inventory quantities on hand
against historical usage or forecasts related to specific items to evaluate
obsolescence and excessive quantities.  Nevertheless, changes in
business trends, competition and other factors not apparent when we make our
estimates of inventory obsolescence could result in the need to undertake
additional inventory write-offs in future periods.


23





Financial
instruments and fair value measurements


All of our short-term
investments are recorded at fair value, which approximates cost.  Our
investments in auction rate securities(debt instruments with long-term
scheduled maturities and periodic interest rate reset dates, classified as
long-term investments in the accompanying consolidated balance sheets,) as
discussed below, are carried at fair value.


We
periodically review to identify and evaluate each investment that has an
unrealized loss.  Unrealized losses that are determined to be
temporary in nature are reported, net of tax, in accumulated other comprehensive
income.   Prior to April 1, 2009, any unrealized loss identified
as other-than-temporary would have been recorded directly in the consolidated
statements of operations.  Effective upon our adoption of FSP FAS
115-2 and FAS 124-2, “Recognition and Presentation of Other –Than-Temporary
Impairments,” on April 1, 2009, other-than-temporary “credit loss” (loss due to
security issuer’s credit risk) is recognized in the consolidated statements of
operations, while other-than-temporary impairment loss related to factors other
than credit loss, net of tax, is recognized in accumulated other comprehensive
income.


We
estimate the extent to which other-than-temporary credit loss or non-credit loss
was applicable to our investments in auction rate securities.  The
factors considered in classifying the impairment include (a) the credit quality
of the underlying security, (b) the extent to which and time period during which
the fair value of each investment has been below cost, (c) the expected holding
or recovery period for each investment, (d) our intent to hold each investment
until recovery, the likelihood that we will not be required to sell the security
prior to recovery and our expectation of recovery of the entire amortized cost
basis of the security and (e) the existence of any evidence of default by
the issuer.  Applying these factors entails significant judgment and
considerable uncertainty.  Because there does not exist a liquid
market or negotiated transaction history with regard to the auction rate
securities, we engaged an independent valuation firm to perform a valuation of
our investments in auction rate securities at June 30, 2009 and
2008.  We reviewed and agreed with this valuation.


As of
June 30, 2009 and 2008, we held approximately $57.8 million and $65.2 million,
respectively, in auction rate securities.  As of June 30, 2009, these
investments were impaired by approximately $6.5 million, of which approximately
$1.3 million of the impairment losses were determined to be other-than-temporary
credit losses and recorded in our consolidated statements of operations for the
fiscal year ended June 30, 2009.  The remaining impairment losses of
approximately $5.2 million (approximately $3.2 million, net of tax) have been
recorded in accumulated other comprehensive income as of June 30,
2009.  As of June 30, 2008, there were temporary unrealized losses of
approximately $4.2 million (approximately $2.7 million, net of tax) on these
investments which were recorded in accumulated other comprehensive
income.  We had no realized gains or losses related to the sale or
redemption of our investments in auction rate securities during the three fiscal
years ended June 30, 2009.  See Note 2 “Financial Instruments and Fair
Value Measurements” in the Notes to Consolidated Financial Statements for
further detail.


A
change in factors, including economic conditions, rates of default with respect
to the obligations underlying the securities, our liquidity needs, and a variety
of other factors may cause our future valuation results to differ, in which case
our financial results in future periods could be affected
significantly.





Capitalized
software development costs


Costs
incurred in the research and development of new software products to be licensed
to others, primarily consisting of salaries, employee benefits and
administrative costs, are expensed as incurred and included in research and
development expenses until technological feasibility is
established.  The capitalization of software development costs on a
product-by-product basis starts when a product’s technological feasibility has
been established and ends when the product is available for general release to
customers, at which time amortization of the capitalized software development
costs begins.  Technological feasibility is established when the
product reaches the working model stage.  The cost of purchased
software is also capitalized.


Annual
amortization of capitalized software development costs is included in software
cost of sales.  For each capitalized software product, the annual
amortization is equal to the greater of: (i) the amount computed using the ratio
that the software product’s current fiscal year gross revenue bears to the total
current fiscal year and anticipated future gross revenues for that product or
(ii) the amount computed based on straight-line method over the remaining
estimated economic life of the product.  If we incorrectly estimate
the remaining economic life of a product or the anticipated future gross
revenues of a product, our future financial results could be materially affected
if we are required to take a significant write off of capitalized software
development costs or to accelerate amortization.  Amortization
expenses for the fiscal years 2009, 2008 and 2007 were approximately $7.7
million, $9.4 million and $8.4 million, respectively.


During
the fiscal years 2009 and 2008, we wrote off approximately $0.8 million and $0.7
million in capitalized software costs, respectively.  No capitalized
software costs were written off in fiscal year 2007.




Valuation
of long-lived assets and intangible assets


We
evaluate long-lived assets, including finite-lived purchased intangible assets,
for impairment whenever events and changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable in accordance with SFAS
144, “Accounting for the Impairment or Disposal of Long-Lived
Assets.”  When indicators of impairment are present, we compare the
fair value of the asset groups, based on the undiscounted cash flows the asset
groups are expected to generate (or market value, if available), to the net book
value of the asset groups.  If the fair value is less than the net
book value, the asset group is impaired and we recognize an impairment loss
equal to the excess of the net book value over the fair value.


24




The
process of evaluating the potential impairment of long-lived assets including
finite-lived purchased intangible assets is highly subjective and requires
significant judgment at many points during the analysis.  In
estimating the fair value of the asset groups for the purposes of our analyses,
we make estimates and judgments about the future cash flows of these asset
groups.  The cash flow forecasts are based on assumptions that are
consistent with the plans and estimates used to manage the Company.  A
change in assumptions and estimates in future periods could cause us to
determine that asset groups are impaired, resulting in a significant charge in
future periods.





Goodwill
and indefinite-lived intangible assets




SFAS 142,
“Goodwill and Other Intangible Assets,” prohibits the amortization of goodwill
and indefinite-lived purchased intangible assets. In accordance with SFAS 142,
we assess annually, in the first quarter of the fiscal year, whether goodwill
and certain of our trademarks, which are our only indefinite-lived purchased
intangible assets, are impaired.  Goodwill is evaluated for impairment by
comparing the fair value of each of our reporting units (our four operating
segments consisting of U.S., Europe, the Pacific Rim and Latin America) to their
book value.  The fair value of each reporting unit is determined based
on a weighting of future income approach (i.e., discounted future income) and
market approach (i.e., comparison to the purchase and sale of similar assets in
the relevant industry).  If the fair value of the reporting unit
exceeds the book value of the net assets assigned to that unit, goodwill is not
impaired.  If goodwill is impaired, we recognize an impairment loss
based on the amount by which the book value of goodwill exceeds its implied fair
value.  The implied fair value of goodwill is determined by deducting the
fair value of a reporting unit’s identifiable assets and liabilities from the
fair value of the reporting unit as a whole, as if that reporting unit had just
been acquired and the fair value of the individual assets acquired and
liabilities assumed were being determined initially.


Trademarks
are evaluated for impairment by comparing their fair value to book
value.  We estimate the fair value of trademarks using an income
approach to value, and recognize an impairment loss if the estimated fair value
of a trademark is less than its book value.


Additional
impairment assessments may be performed on an interim basis if we encounter
events or changes in circumstances indicating that it is more likely than not
that the book value of goodwill and/or trademarks has been
impaired.


The
process of evaluating the potential impairment of goodwill and/or trademarks is
highly subjective and requires significant judgment at many points during the
analysis.  In estimating the fair value of the reporting units for the
purposes of our annual or interim analyses, we make estimates and judgments
about the future cash flows of these businesses.  The cash flow
forecasts are based on assumptions that are consistent with the plans and
estimates used to manage the underlying reporting units and factor in
assumptions on revenue and expense growth rates. These estimates are based upon
our historical experience and projections of future activity, factoring in
customer demand, changes in technology and a cost structure necessary to achieve
the related revenues. Additionally, these cash flow analyses factor in expected
amounts of working capital and weighted average cost of capital. Changes in
judgments on any of these factors could materially impact the value of the
reporting unit.  We also consider our market capitalization on the
date the analysis is performed.   A determination that goodwill
or intangible assets are impaired (which could result from a change in our
assumptions) could result in a significant charge in future
periods.  As of June 30, 2009 and 2008, goodwill totaled approximately
$190.7 million and $159.7 million, respectively.




Share-based
compensation


We
account for our option awards granted under our stock option program in
accordance with SFAS No. 123(R), “Share-Based Payment”.  The estimated
fair value of option awards granted under the stock option program are measured
as of the date of grant, and non-cash share-based compensation expenses,
adjusted for expected pre-vesting forfeitures, are recognized ratably over the
requisite service (i.e. vesting) period of options in the consolidated statement
of operations.


We value
stock options using the Black-Scholes option pricing model, which was developed
for use in estimating the fair value of traded options that are fully
transferable and have no vesting restrictions.  Therefore, we are
required to input highly subjective assumptions about volatility rates, expected
term of options, dividend yields and applicable interest rates in the option
pricing model.  Expected volatility is based on historical stock
prices.  The expected term of options granted is based on historical
option activities, adjusted for the remaining option life cycle by assuming
ratable exercise of any unexercised vested options over the remaining
term.  For this purpose, we separate groups of employees that have
historically exhibited similar behavior with regard to option exercises and
post-vesting cancellations.  The risk-free interest rate is based on
the U.S. Treasury yield curve in effect at the time of grant.  Total
expense recorded from period to period can be significantly different depending
on several variables, including the number of options granted, any changes to
assumptions such as pre-vesting cancellations and the estimated fair value of
those vested awards.





Income
taxes


Income
taxes are accounted for under the asset and liability
method.  Deferred tax assets and liabilities are recognized for the
expected future tax consequences attributable to the differences between the
financial statement carrying amounts and the tax basis of assets and
liabilities.  Deferred tax assets and liabilities are measured using
the enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.  The effect on
the deferred tax assets and liabilities of a change in tax rate is recognized in
income in the period that includes the enactment date.  Valuation
allowances are established when necessary to reduce deferred tax assets to the
amounts more likely than not to be realized.  If we determine that we
will not be able to realize all or part of our net deferred tax asset in the
future, an adjustment to the deferred tax asset would be charged to income in
the period in which the determination is made.  Our deferred tax
assets and liabilities could be materially affected if, based on subsequent
events, we determine that we must derecognize or recognize a tax
position.  Such a change also could materially affect our annual tax
rate in the year in which the change occurs.


25





Although
we are profitable on a consolidated basis, we have incurred losses in certain
foreign jurisdictions.  We applied valuation allowances in some
circumstances where the prospects of realizing the benefit of net operating loss
carryforwards are subject to uncertainty.  The determination of the
likelihood of realizing this tax benefit requires significant judgment in some
instances, and actual results of our operating subsidiaries, particularly
certain international subsidiaries, could result in material adjustments to our
deferred tax assets or liabilities, and changes in our annual tax rate in the
year in which the adjustments occur.


Effective
July 1, 2007, we adopted the provisions of FASB Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement
No. 109” (“FIN 48”).  Among other things, FIN 48 requires application
of a “more likely than not” threshold to the recognition and derecognition of
tax positions.  The net unrecognized income tax benefits as of June
30, 2009 and 2008 were approximately $18.1 million and $17.4 million, including
interest and penalties of approximately $2.6 million and $2.3 million,
respectively.  Significant judgment is required in determining our tax
positions and evaluating uncertainties relating to these positions.





RESULTS
OF OPERATIONS


During
the three fiscal years ending June 30, 2009, we acquired several businesses and
accordingly, our results include activities from the acquired businesses from
their respective acquisition dates.  See Note 4 “Acquisitions” in the
Notes to Consolidated Financial Statements for further detail on
acquisitions.


All
references to share data have been retroactively adjusted to reflect the
two-for-one stock split effective February 5, 2008.





Comparison of Fiscal Year
2009 to Fiscal Year 2008





Revenue


An
analysis of the sales mix by reportable segments is as follows (amounts are net
of intersegment eliminations, based on location of the selling entity, and
include export sales):





Fiscal Year Ended June 30,U.S.
                      
                      
                      International
                      
                      
                      Total(in thousands)
                      
                      2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008
                      
                      
                      2009
                      
                      
                      2008Hardware
                      
                      $
                      107,960
                      
                      
                      $
                      131,712
                      
                      
                      $
                      102,716
                      
                      
                      $
                      134,253
                      
                      
                      $
                      210,676
                      
                      
                      $
                      265,965Software
                      
                      
                      48,523
                      
                      
                      
                      60,012
                      
                      
                      
                      86,322
                      
                      
                      
                      98,687
                      
                      
                      
                      134,845
                      
                      
                      
                      158,699Service
                      
                      
                      277,999
                      
                      
                      
                      224,734
                      
                      
                      
                      288,327
                      
                      
                      
                      304,786
                      
                      
                      
                      566,326
                      
                      
                      
                      529,520Total Revenue
                      
                      $
                      434,482
                      
                      
                      $
                      416,458
                      
                      
                      $
                      477,365
                      
                      
                      $
                      537,726
                      
                      
                      $
                      911,847
                      
                      
                      $
                      954,184





An
analysis of the total sales mix as a percent of total revenue is as
follows:





Fiscal Year Ended June 30,(in thousands)
                        
                        2009
                        
                        
                        2008Hardware
                        
                        
                        23.1
                        %
                        
                        
                        27.9
                        %Software
                        
                        
                        14.8
                        %
                        
                        
                        16.6
                        %Service
                        
                        
                        62.1
                        %
                        
                        
                        55.5
                        %Total
                        
                        
                        100.0
                        %
                        
                        
                        100.0
                        %





For
fiscal year 2009, total revenue was approximately $911.8 million, a decrease of
approximately $42.3 million, or 4.4% compared to the fiscal year 2008 due to the
following:


·
            The
      unfavorable foreign currency exchange rate fluctuations, for substantially
      all foreign currencies against the U.S. dollar, negatively affected total
      revenue by approximately $54.1
million;


·
            Hardware
      and software revenue, without giving effect to currency translation,
      decreased by 16% and 9%, respectively, compared to fiscal year
      2008.  We believe these decreases were due to a slow-down in
      demand from our customers as a result of adverse U.S. and global economic
      conditions.


·
            The
      decreases noted above were offset partially by additional services revenue
      generated by Fry, a company that we acquired in August 2008, and an
      additional 5% increase in services revenue compared to fiscal year 2008,
      without giving effect to currency
translation.





The
international segment revenue for the fiscal year ended June 30, 2009 decreased
by approximately $60.4 million compared to the fiscal year 2008.  The
unfavorable foreign currency exchange rate fluctuations negatively affected
total revenue by approximately $54.1 million.  The hardware and
software revenues, without giving effect to foreign currency translation
adjustment, decreased 15% and 3%, respectively, both compared to fiscal year
2008.  We believe the decreases in hardware and software revenues were
due to a slowdown in demand from our customers because of adverse global
economic conditions.  The decreases in hardware and software revenues
were partially offset by a 5% increase in services revenue, without giving
effect to foreign currency translation, compared to fiscal year
2008.  The increase in services revenue was due to the continued
expansion of our customer base coupled with increased recurring support revenue
from existing customers (primarily through purchase of additional services).


26





U.S.
segment revenue increased approximately $18.0 million for the fiscal year ended
June 30, 2009 compared to the fiscal year 2008.  The increase was
primarily the result of additional services revenue generated as a result of the
acquisition of Fry in August 2008 and the continued expansion of our customer
base coupled with increased recurring support revenue from existing customers
(primarily through purchase of additional services).  This increase
was partially offset by 18% decrease in hardware and 19% decrease in software
revenues, both compared to fiscal year 2008.  We believe these
decreases were due to a slowdown in demand from our customers because of adverse
U.S. and global economic conditions.





Cost
of Sales


An
analysis of the cost of sales is as follows:


Fiscal Year Ended June 30,2009
                        
                        
                        2008(in thousands)
                        
                        Cost
                          of Sales
                        
                        
                        % of Related
                          Revenue
                        
                        
                        Cost
                          of Sales
                        
                        
                        % of Related
                          RevenueHardware
                        
                        $
                        135,775
                        
                        
                        
                        64.4
                        %
                        
                        $
                        171,779
                        
                        
                        
                        64.6
                        %Software
                        
                        
                        27,244
                        
                        
                        
                        20.2
                        %
                        
                        
                        33,252
                        
                        
                        
                        21.0
                        %Service
                        
                        
                        264,883
                        
                        
                        
                        46.8
                        %
                        
                        
                        247,954
                        
                        
                        
                        46.8
                        %Total Cost of Sales
                        
                        $
                        427,902
                        
                        
                        
                        46.9
                        %
                        
                        $
                        452,985
                        
                        
                        
                        47.5
                        %





For
fiscal year 2009, cost of sales as a percent of revenue decreased 0.6% to 46.9%
compared to fiscal year 2008.  Hardware cost of sales as a percent of
related revenue decreased primarily as a result of a lower freight costs as
compared to fiscal year 2008.  This decrease was partially offset by an
increase in inventory provision of approximately $1.3 million, including,
approximately $0.7 million related to potentially obsolete products resulting
from adjustments to our cost structure in one of our
locations.  Software cost of sales as a percent of related revenue
decreased primarily due to a lower cost of sales on our sale of third party
software and a decrease in capitalized software amortization expense (included
in software cost of sales) as a percent of software revenue as compared to
fiscal year 2008.  Service cost of sales as a percent of related
revenue was constant compared to fiscal year 2008.  The foreign
currency exchange rate fluctuations decreased our cost of sales for the fiscal
year 2009 by approximately $29.9 million.





Selling,
General and Administrative (“SG&A”) Expenses


SG&A
expenses decreased approximately $26.7 million compared to fiscal year 2008 to
approximately $280.0 million.  As a percent of revenue, SG&A
expenses decreased 1.4% to 30.7% compared to 32.1% in fiscal year 2008 primarily
due to:


·
            Our
      ability to manage our variable costs, mainly our compensation related
      expenses; and,


·
            Non-cash
      share-based compensation expense, included in SG&A expenses, for
      fiscal year 2009 was approximately $13.1 million compared to approximately
      $16.2 million for fiscal year 2008.  See “Share-Based
      Compensation Expenses” below for further
  information.





The
decreases in SG&A noted above were partially offset by:


·
            Approximately
      $3.1 million in restructuring charges in fiscal year 2009, primarily
      reflecting adjustments to our cost structure to reflect recent lower sales
      volume in certain of our locations.  The charge includes
      approximately $1.5 million in employee related costs and approximately
      $1.6 million in occupancy related costs for certain of our facilities that
      we have vacated.


·
            Our
      fixed costs represented a higher % to revenue due to lower revenue in
      fiscal year 2009 as compared to fiscal year 2008;
    and,


·
            An
      increase in our bad debt expenses of approximately $1.3 million, due to
      adverse U.S. and global economic
conditions.





The
foreign currency exchange rate fluctuations decreased our SG&A expenses for
the fiscal year 2009 by approximately $15.6 million compared to fiscal year
2008.





Research
and Development (“R&D”)


R&D
expenses consist primarily of labor costs less capitalized software development
costs.  An analysis of R&D activities is as follows:


Fiscal Year Ended June 30,(in thousands)
                            
                            2009
                            
                            
                            2008R&D
      labor and other costs
                            
                            $
                            43,100
                            
                            
                            $
                            42,048Capitalized software development
      costs
                            
                            
                            (470
                            )
                            
                            
                            (1,919
                            )Total R&D expenses
                            
                            $
                            42,630
                            
                            
                            $
                            40,129% of Revenue
                            
                            
                            4.7
                            %
                            
                            
                            4.2
                            %




27





Foreign
currency exchange rate fluctuations decreased our R&D expenses for fiscal
year 2009 by approximately $1.0 million.





Depreciation
and Amortization Expenses


Depreciation
and amortization expenses for fiscal year 2009 increased approximately $2.4
million compared to fiscal year 2008 to approximately $17.5
million.  The increase is primarily due to additional depreciation
expenses on capital expenditures since June 30, 2008 and the acquisition of
Fry.  These increases were partially offset by foreign currency exchange
rate fluctuations which decreased depreciation and amortization expenses for the
fiscal year 2009 by approximately $0.9 million.





Share-Based
Compensation Expenses


For
fiscal years 2009 and 2008, we recognized non-cash share-based compensation
expense of approximately $13.9 million and $17.2 million,
respectively.  The SG&A expenses and R&D expenses discussed
above include the following allocations of non-cash share-based compensation
expense:





Fiscal Year Ended June 30,(in thousands)
                          
                          2009
                          
                          
                          2008SG&A
                          
                          $
                          13,108
                          
                          
                          $
                          16,213R&D
                          
                          
                          792
                          
                          
                          
                          1,016Total
      non-cash share-based compensation expense
                          
                          
                          13,900
                          
                          
                          
                          17,229Income tax benefit
                          
                          
                          (4,100
                          )
                          
                          
                          (4,083
                          )Total non-cash share-based compensation expense,
      net of tax benefit
                          
                          $
                          9,800
                          
                          
                          $
                          13,146Impact on diluted net income per
      share
                          
                          $
                          0.12
                          
                          
                          $
                          0.16





The
non-cash share-based compensation expense allocated to SG&A for the 2009 and
2008 fiscal years include approximately $0.8 million and $3.2 million,
respectively, related to the grant of options during those fiscal years to our
Chairman, President, and Chief Executive Officer, A.L.
Giannopoulos.  In accordance with the terms of our option plan, as he
is over the retirement age of 62, any options that he holds that have not yet
vested at the time of his retirement will vest immediately upon his
retirement.  Although Mr. Giannopoulos has not retired, we expensed
100% of the share-based compensation expense related to his option grant because
he was over the age of 62 at the time he received the options.


As of
June 30, 2009, there was approximately $13.4 million in non-cash share-based
compensation cost related to non-vested awards not yet recognized in our
consolidated statements of operations.  This cost is expected to be
recognized over a weighted-average period of 1.8 years.





Income
from Operations


Income
from operations for fiscal year 2009 increased approximately $4.5 million, or
3.2%, to approximately $143.8 million, compared to fiscal year
2008.  The increase is mainly due to our ability to manage our
variable costs, mainly our compensation related expenses.  Foreign
currency exchange rate fluctuations decreased our income from operations for the
fiscal year 2009 by approximately $6.7 million.





Non-operating
Income (Expense)


Net
non-operating income for fiscal year 2009 was approximately $6.0 million
compared to approximately $15.0 million for fiscal year 2008.  The
decrease of approximately $9.0 million reflects:


·
            A
      decrease in interest income of approximately $6.0 million due to overall
      lower interest earned on cash and cash equivalents and investments
      (short-term and long-term)
balances;


·
            The
      credit based other-than-temporary impairment losses of approximately $1.3
      million for investments in auction rate securities classified as long-term
      investments on our consolidated balance
sheets.


·
            The
      inclusion in fiscal year 2008 of non-operating income of approximately
      $1.7 million for a grant received in fiscal year 2008 from the Irish
      Development Authority related to the number of jobs we created in
      Ireland.


·
            A
      partially offsetting $1.1 million decrease in the foreign currency
      exchange transaction loss from approximately $1.4 million in fiscal year
      2008 to approximately $0.3 million in fiscal year
  2009.





Income
Tax Expense


The
effective tax rates for fiscal years 2009 and 2008 were 32.8% and 33.8%,
respectively.  The effective tax rates for the fiscal years 2009 and
2008 were less than the 35.0% U.S. statutory federal income tax rate, mainly due
to final settlement of certain tax audits resulting in a decrease of certain
unrecognized tax positions, tax benefits realized upon the expiration of
statutes of limitations, the mix of earnings from jurisdictions that have a
lower statutory tax rate than the U.S. and the phase-in of the deduction for
domestic production activities.  These benefits were partially
offset by the non-deductible nature of certain non-cash share-based
compensation items, valuation allowances, other non-deductible compensation
items, non-deductible foreign withholding taxes and the inclusion of foreign
income in our U.S. tax base.


The
decrease in the effective tax rate for fiscal year 2009 as compared to fiscal
year 2008 was primarily attributable to the final settlement of certain tax
audits, and the expiration of statutes of limitations resulting in a decrease of
certain unrecognized tax positions and other non-deductible
compensation.


28





Effective
July 1, 2007, we adopted the provisions of FIN 48, which clarifies the
accounting for income taxes by prescribing a minimum recognition threshold that
a tax position is required to meet before being recognized in the financial
statements.  FIN 48 also provides guidance on derecognition, measurement,
and classification of the effect of a tax position, recognition of interest and
penalties, accounting in interim periods, and disclosure.  The
cumulative effect of adopting FIN 48 of approximately $2.6 million, including
interest and penalties of $0.3 million, was recorded as a reduction to retained
earnings and an increase in income taxes payable.


We
recorded net unrecognized income tax benefits of approximately $18.1 million and
$17.4 million, including accrued interest and penalties of approximately $2.6
million and $2.3 million at June 30, 2009 and 2008, respectively.  We
have recognized approximately $0.7 million of interest expense for each of the
fiscal years 2009 and 2008.  The non-current portion of the net
unrecognized income tax benefits represents benefits with respect to which we do
not anticipate making a payment within 12 months of the balance sheet
date.  If recognized, all of the net unrecognized income tax benefit
would be recognized as a reduction of income tax expense, impacting the
effective income tax rate.


We have
reviewed our uncertain income tax positions in accordance with FIN
48.  We have recognized a decrease of certain unrecognized tax
positions in fiscal year 2009 due to the expiration of statutes of limitations
and final settlement of certain tax audits for tax years 1999 to 2006, which
resulted in a reduction of income tax expense of approximately $3.1 million, and
impacted the effective income tax rate.  We estimate that within the
next 12 months, we will decrease the unrecognized income tax benefits by
approximately $0.5 million to $1.5 million due to the expiration of statues of
limitations and settlement of issues with tax authorities, which we believe
would increase earnings as a result of the impact of decreased unrecognized tax
benefits on the effective tax rate.  However, audit outcomes and the
timing of audit settlements are subject to significant
uncertainty.  Further, over the next 12 months, it is reasonably
possible that our tax positions will continue to generate liabilities for
unrecognized tax benefits.


We
historically classified interest and penalties related to unrecognized income
tax benefits as a component of income tax expense.  We have maintained
this practice following our adoption of FIN 48.


In the
ordinary course of our business, transactions occur for which the ultimate tax
outcome may be uncertain.  In addition, tax authorities periodically
audit our income tax returns. These audits include examination of our
significant tax filing positions, including the timing and amounts of deductions
and the allocation of income and expenses among tax
jurisdictions.  Our major taxing jurisdictions include Australia,
Ireland, Germany, Singapore, the United Kingdom and the United
States.





Net
Income and Diluted Net Income per Common Share


Net
income for fiscal year 2009 decreased approximately $2.0 million, or 2.0%, to
approximately $99.3 million, compared to fiscal year 2008.  The
decrease is mainly due to an overall decrease in sales volume and overall lower
interest earned on our cash and cash equivalents and short-term
investments.  These decreases were substantially offset by our ability
to manage our variable costs, mainly our compensation related expenses, and a
decrease in non-cash share-based compensation expense, all of which are
explained above in more detail.  Foreign currency exchange rate
fluctuations decreased our net income for fiscal year 2009 by approximately $6.1
million.


Diluted
net income per share for fiscal year 2009 and 2008 was $1.21 per diluted
share.





Comparison of Fiscal Year
2008 to Fiscal Year 2007





Revenue


An
analysis of the sales mix by reportable segments was as follows (amounts were
net of intersegment eliminations, based on location of the selling entity, and
include export sales):





Fiscal Year Ended June 30,U.S.
                      
                      
                      International
                      
                      
                      Total(in thousands)
                      
                      2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007Hardware
                      
                      $
                      131,712
                      
                      
                      $
                      126,596
                      
                      
                      $
                      134,253
                      
                      
                      $
                      107,242
                      
                      
                      $
                      265,965
                      
                      
                      $
                      233,838Software
                      
                      
                      60,012
                      
                      
                      
                      50,745
                      
                      
                      
                      98,687
                      
                      
                      
                      82,075
                      
                      
                      
                      158,699
                      
                      
                      
                      132,820Service
                      
                      
                      224,734
                      
                      
                      
                      186,798
                      
                      
                      
                      304,786
                      
                      
                      
                      232,271
                      
                      
                      
                      529,520
                      
                      
                      
                      419,069Total Revenue
                      
                      $
                      416,458
                      
                      
                      $
                      364,139
                      
                      
                      $
                      537,726
                      
                      
                      $
                      421,588
                      
                      
                      $
                      954,184
                      
                      
                      $
                      785,727





An
analysis of the total sales mix as a percent of total revenue was as
follows:





Fiscal Year Ended June 30,(in thousands)
                      
                      2008
                      
                      
                      2007Hardware
                      
                      
                      27.9
                      %
                      
                      
                      29.8
                      %Software
                      
                      
                      16.6
                      %
                      
                      
                      16.9
                      %Service
                      
                      
                      55.5
                      %
                      
                      
                      53.3
                      %Total
                      
                      
                      100.0
                      %
                      
                      
                      100.0
                      %




29




For
fiscal year 2008, total revenue was approximately $954.2 million, an increase of
approximately $168.5 million, or 21.4% compared to the fiscal year 2007, of
which approximately $44.6 million was a result of favorable foreign currency
exchange rate fluctuations, mainly between the Euro and the U.S.
dollar.  The increase in total revenue was a result of the
following:


·
            An
      approximately $110.5 million or 26.4% increase in our service revenue
      primarily resulted from expansion of our customer base and increase in the
      volume of our support services that reflects increased recurring support
      revenue from existing customers.  The increase in our recurring
      support revenue contributed 52.3% and the increase in our installation
      revenue relating to the expansion of our customer base contributed 27.1%
      of the service revenue increase.  Additionally, approximately
      $25.3 million of the increase in our service revenue was due to favorable
      foreign currency exchange rate
fluctuations;


·
            An
      approximately $32.1 million or 13.7% increase in our hardware revenue
      primarily resulted from an overall sales volume increase, including an
      increase in combined sales of our Workstation 4 and Workstation
      5.  Workstation 5 was released in October
      2007.  Additionally, approximately $11.1 million of the increase
      in our hardware revenue was due to favorable foreign currency exchange
      rate fluctuations; and,


·
            An
      approximately $25.9 million or 19.5% increase in our software revenue
      primarily resulted from an overall sales volume increase, including a $7.5
      million increase in sales of our Opera suite of
      products.   Additionally, approximately $8.2 million of the
      increase in our software revenue was due to favorable foreign currency
      exchange rate fluctuations.


The
international segment revenue for fiscal year 2008 increased approximately
$116.1 million, reflecting the following:


·
            An
      approximately $72.5 million or 31.2% increase in our service revenue, of
      which approximately $25.3 million was due to favorable foreign currency
      exchange rate fluctuations;


·
            An
      approximately $27.0 million or 25.2% increase in our hardware revenue, of
      which approximately $11.1 million was due to favorable foreign currency
      exchange rate fluctuations; and,


·
            An
      approximately $16.6 million or 20.2% increase in our software revenue, of
      which approximately $8.2 million was due to favorable foreign currency
      exchange rate fluctuations.


The U.S.
segment revenue increased approximately $52.3 million for fiscal year 2008,
primarily due to additional service revenue reflecting the continued expansion
of our customer base coupled with increased recurring support revenue from
existing customers (primarily through purchase of additional
services).





Cost
of Sales


An
analysis of the cost of sales was as follows:


FiscalYearEndedJune30,2008
                
                
                2007(in thousands)
                
                Cost
                  ofSales
                
                
                %ofRelated
                  Revenue
                
                
                Cost
                  ofSales
                
                
                %ofRelated
                  RevenueHardware
                
                $
                171,779
                
                
                
                64.6
                %
                
                $
                149,085
                
                
                
                63.8
                %Software
                
                
                33,252
                
                
                
                21.0
                %
                
                
                29,531
                
                
                
                22.2
                %Service
                
                
                247,954
                
                
                
                46.8
                %
                
                
                195,600
                
                
                
                46.7
                %Total
      Cost of Sales
                
                $
                452,985
                
                
                
                47.5
                %
                
                $
                374,216
                
                
                
                47.6
                %





For
fiscal year 2008, cost of sales as a percent of revenue decreased 0.1% to 47.5%
compared to fiscal year 2007.  Hardware cost of sales as a percent of
related revenue increased primarily as a result of a less favorable sales mix
(i.e., the sales generated from products with lower margin represented higher
percentage of total hardware sales) and an increase in our freight costs
compared to fiscal year 2007.  Software cost of sales as a percent of
related revenue decreased primarily due to a favorable sales mix, combined with
lower cost of sales on the our sale of third party software sale compared to
fiscal year 2007.  For fiscal year 2008, we also were able to increase
leverage of our software amortization expense (included in software cost of
sales) as a result of an increase in total software revenue compared to fiscal
year 2007.


Service
cost of sales as a percent of related revenue increased compared to fiscal year
2007 primarily due to an increase in our travel costs.


The
foreign currency exchange rate fluctuations increased our cost of sales for the
fiscal year 2008 by approximately $22.6 million.





Selling,
General and Administrative (“SG&A”) Expenses


SG&A
expenses, as a percent of revenue, decreased 0.3% to 32.1% compared to 32.4% in
fiscal year 2007 primarily due to our ability to leverage our costs, mainly our
compensation related expenses, against increased total revenue, despite
increases in our bad debt expenses and travel expenses.  The foreign
currency exchange rate fluctuations increased our SG&A expenses for the
fiscal year 2008 by approximately $12.2 million.  Additionally,
SG&A expenses included non-cash share-based compensation expense of
approximately $16.2 million for fiscal year 2008 compared to approximately $13.2
million for fiscal year 2007.  The fiscal year 2008 non-cash
share-based compensation expense allocated to SG&A included a grant of
options to our Chairman, President, and Chief Executive Officer, A.L.
Giannopoulos, during fiscal year 2008.  See “Share-Based Compensation
Expenses” below for further information.


30





Research
and Development (“R&D”)


R&D
expenses consist primarily of labor costs less capitalized software development
costs.  An analysis of R&D activities was as follows:


Fiscal Year Ended June 30,(in thousands)
                              
                              2008
                              
                              
                              2007Total
      R&D labor and other costs
                              
                              $
                              42,048
                              
                              
                              $
                              35,859Capitalized
      software development costs
                              
                              
                              (1,919
                              )
                              
                              
                              (1,974
                              )Total
      R&D expenses
                              
                              $
                              40,129
                              
                              
                              $
                              33,885%
      of Revenue
                              
                              
                              4.2
                              %
                              
                              
                              4.3
                              %





The
increases in total R&D incurred and total R&D expenses of approximately
$6.2 million were primarily due to increased spending on our retail software
products.  The foreign currency exchange rate fluctuations increased
our R&D expenses for the fiscal year 2008 by approximately $1.1
million.





Depreciation
and Amortization Expenses


Depreciation
and amortization expenses for fiscal year 2008 increased approximately $2.4
million to approximately $15.1 million compared to fiscal year
2007.  The increase was primarily due to additional depreciation
expenses on capital expenditures since June 30, 2007 and recent
acquisitions.  Additionally, foreign currency exchange rate
fluctuations increased depreciation and amortization expenses for the fiscal
year 2008 by approximately $0.6 million.





Share-Based
Compensation Expenses


For
fiscal years 2008 and 2007, we recognized non-cash share-based compensation
expenses adjusted for expected pre-vesting forfeitures of approximately $17.2
million and $14.0 million, respectively.  The SG&A and R&D
expenses discussed above included the following allocations of non-cash
share-based compensation expense:





Fiscal Year Ended June 30,(in thousands)
                    
                    2008
                    
                    
                    2007SG&A
                    
                    $
                    16,213
                    
                    
                    $
                    13,243R&D
                    
                    
                    1,016
                    
                    
                    
                    753Total
      non-cash share-based compensation expense
                    
                    
                    17,229
                    
                    
                    
                    13,996Income
      tax benefit
                    
                    
                    (4,083
                    )
                    
                    
                    (2,884
                    )Total
      non-cash share-based compensation expense, net of tax
    benefit
                    
                    $
                    13,146
                    
                    
                    $
                    11,112Impact
      on diluted net income per share
                    
                    $
                    0.16
                    
                    
                    $
                    0.14





The
non-cash share-based compensation expense allocated to SG&A for fiscal year
2008 included approximately $3.2 million related to grant of options to our
Chairman, President, and Chief Executive Officer, A.L. Giannopoulos, during
fiscal year 2008.  In accordance with the terms of our option plan,
any options that he holds that have not yet vested at the time of his retirement
will vest immediately upon his retirement, as he was over the retirement age of
62.  Although Mr. Giannopoulos had not retired, we expensed 100% of
the share-based compensation expense related to his option grant because he was
over the age of 62 at the time he received the options.  The non-cash
share-based compensation expenses allocated to SG&A for fiscal year ended
June 30, 2007 included a one-time charge of approximately $0.7 million resulting
from an accelerated vesting of unvested options due to the death of an officer
of the Company.  Under our stock option plan, options immediately vest
upon death.


As of
June 30, 2008, there was approximately $22.7 million in non-cash share-based
compensation cost related to non-vested awards not yet recognized in our
consolidated statements of operations.  This cost was expected to be
recognized over a weighted-average period of 1.85 years.





Income
from Operations


Income
from operations for fiscal year 2008 increased approximately $28.7 million, or
26.0%, to approximately $139.3 million, compared to fiscal year
2007.  The increase was mainly due to an overall increase in sales
volume coupled with the improvement in our margins, partially offset by
approximately $3.2 million increase in non-cash share-based compensation
expense, described above.  The foreign currency exchange rate
fluctuations increased our income from operations for the fiscal year 2008 by
approximately $8.1 million.





Non-operating
Income (Expense)


Net
non-operating income for fiscal year 2008 was approximately $15.0 million
compared to approximately $11.1 million for fiscal year 2007.  The
increase of approximately $4.0 million reflected:


·
            An
      increase in interest income of approximately $4.4 million was due to
      overall higher cash and cash equivalents and investment (short-term and
      long-term) balances;


·
            Approximately
      $1.7 million for a grant payment received related to the number of jobs we
      created in Ireland.  Specifically, the Irish Development
      Authority paid MICROS a fee for having engaged and retained employees in
      the MICROS help desk and support center in Ireland;
  and,


31


·
            A
      partially offsetting increase in the foreign exchange transaction loss of
      approximately $1.0 million to a loss of approximately $1.4 million for
      fiscal year 2008 compared to a loss of approximately $0.4 million for
      fiscal year 2007.





Income
Tax Expense


The
effective tax rates for fiscal years 2008 and 2007 were 33.8% and 33.5%,
respectively.  The effective tax rates for the fiscal years 2008 and
2007 were less than the 35.0% U.S. statutory federal income tax rate, mainly due
to the increased proportion of earnings from jurisdictions that have a lower
statutory tax rate than the U.S. and from the phase-in of the deduction for
domestic production activities.  These benefits were partially
offset by the non-deductible nature of certain non-cash share-based
compensation items, other non-deductible compensation items, foreign withholding
taxes and the inclusion of foreign income in our U.S. tax base.  See
“Income Tax Expense” in the “Comparison of Fiscal Year 2009 to Fiscal Year 2008”
discussion above for information on the effect of our adoption of FIN
48.


The
cumulative effect of adopting FIN 48, effective July 1, 2007, of
approximately $2.6 million, including interest and penalties of $0.3 million,
was recorded as a reduction to retained earnings and an increase in net income
taxes payable.  We had net unrecognized income tax benefits of
approximately $17.4 million and $10.9 million, including interest and penalties
of approximately $2.3 million and $1.6 million at June 30, 2008 and July 1,
2007, respectively.  We recognized approximately $0.7 million of
interest expense for the fiscal year 2008.





Net
Income and Diluted Net Income per Common Share


Net
income for fiscal year 2008 increased approximately $21.3 million, or 26.6%, to
approximately $101.3 million, compared to fiscal year 2007.  The
increase was mainly due to an overall increase in sales volume coupled with an
improvement in our margins, and partially offset by the approximately $3.2
million (approximately $2.0 million net of tax) increase in non-cash share-based
compensation expense all of which were explained above in more
detail.  The foreign currency exchange rate fluctuations increased our
net income for the fiscal year 2008 by approximately $6.2 million.


Diluted
net income per share for fiscal year 2008 increased $0.24 per share, or 24.7%,
to $1.21 per diluted share, compared to fiscal year 2007.  Diluted net
income for fiscal year 2008 was negatively impacted by $0.16 per diluted share
for non-cash share-based compensation expense compared to $0.14 per diluted
share for fiscal year 2007.





RECENT
ACCOUNTING STANDARDS





Recently
Adopted Accounting Pronouncements


FSP
FAS 157-4, FSP FAS 115-2 and FAS 124-2 and FSP FAS 107-1 and APB
28-1


On
April 1, 2009, we adopted FASB Staff Positions (“FSP”) FAS 157-4, FSP FAS
115-2 and FAS 124-2, and FSP FAS 107-1 and APB 28-1.  These FSPs are
intended to provide additional application guidance and enhance disclosures
about fair value measurements and impairments of securities.  FSP FAS
157-4 clarifies the objective and method of fair value measurement even when
there has been a significant decrease in market activity for the asset being
measured.  FSP FAS 115-2 and FAS 124-2 establishes a new model for
measuring other-than-temporary impairments for debt securities, including
establishing criteria for when to recognize a write-down through earnings versus
other comprehensive income.  FSP FAS 107-1 and APB 28-1 expands
the fair value disclosures required for all financial instruments within the
scope of SFAS 107, “Disclosures about Fair Value of Financial Instruments,” to
interim periods.  As a result of adopting these FSPs, we recognized
other-than-temporary credit based impairment losses of approximately $1.3
million related to our investments in auction rate securities and have recorded
the losses in the consolidated statement of operations for the fiscal year ended
June 30, 2009.  Adoption of these FSPs also expanded our associated
disclosures.


SFAS
157


On
July 1, 2008, we adopted SFAS 157, “Fair Value Measurements”, for all
financial assets and liabilities and nonfinancial assets and liabilities that
are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually).  This statement defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value
measurements.  This statement does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the
information.  See Note 2 “Financial Instruments and Fair Value
Measurements.”


SFAS
159


On July
1, 2008, we adopted SFAS 159, “The Fair Value Option for Financial Assets and
Financial Liabilities-Including an amendment of FASB Statement
No. 115.”  This statement provided us with the irrevocable option
to elect fair value for the initial and subsequent measurement for certain
financial assets and liabilities on a contract-by-contract basis with the
difference between the carrying value before election of the fair value option
and the fair value recorded upon election as an adjustment to beginning retained
earnings.  As of June 30, 2009, we had not elected the fair value
option for any eligible financial asset or liability.


32





Recent
Accounting Pronouncements Not Yet Adopted


SFAS
167


In June
2009, the FASB issued SFAS 167, “Amendments to FASB Interpretation
No. 46(R)”, which is effective for us beginning July 1,
2010.  This statement amends FASB Interpretation (“FIN”)
No. 46(R), “Consolidation of Variable Interest Entities an interpretation
of ARB No. 51,” to require revised evaluations of whether entities
represent variable interest entities, ongoing assessments of control over such
entities, and additional disclosures for variable interests.  We do
not believe the adoption of this statement will have a material impact on our
consolidated financial statements.


FSP
FAS 142-3


In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets,” which is effective for us beginning July 1,
2009.  This statement amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS 142, “Goodwill and Other Intangible
Assets.”  The statement is intended to improve the consistency between
the useful life of a recognized intangible asset under SFAS 142 and the period
of expected cash flows used to measure the fair value of the asset under SFAS
141(R), “Business Combinations,” and other U.S. generally accepted accounting
principles.  We do not believe the adoption of this statement will
have a material impact on our consolidated financial statements.


SFAS 141(R)


In
December 2007, the FASB issued SFAS 141 (Revised), “Business Combinations”
(“SFAS 141(R)”), which is effective for business combinations with acquisition
dates beginning July 1, 2009.   This statement establishes
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquired
business.  SFAS 141(R) also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and disclosing
information to enable users of the financial statements to evaluate the nature
and financial effects of the business combination.  We do not believe
the adoption of this statement will have a material impact on our consolidated
financial statements.


SFAS
160


In
December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in
Consolidated Financial Statements — an Amendment of ARB 51,” which is
effective for us beginning July 1, 2009.  This statement amends
Accounting Research Bulletin No. 51 to establish accounting and reporting
standards for the noncontrolling interest (minority interest) in a subsidiary
and for the deconsolidation of a subsidiary.  The statement
establishes accounting and reporting standards requiring that noncontrolling
interests be reported as a component of equity, changes in a parent’s ownership
interest while the parent retains its controlling interest be accounted for as
equity transactions, and any retained noncontrolling equity investment upon the
deconsolidation of a subsidiary initially be measured at fair
value.  We do not believe the adoption of this statement will have a
material impact on our consolidated financial statements.





LIQUIDITY
AND CAPITAL RESOURCES





Sources
and Uses of Cash


The
Company’s consolidated statement of cash flows summary for fiscal years is as
follows:





Fiscal Year Ended June 30,(in thousands)
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007Net
      cash provided by (used in):Operating
      activities
                    
                    $
                    165,912
                    
                    
                    $
                    163,648
                    
                    
                    $
                    114,766Investing
      activities
                    
                    
                    (193,219
                    )
                    
                    
                    (15,845
                    )
                    
                    
                    (143,502
                    )Financing
      activities
                    
                    
                    (37,195
                    )
                    
                    
                    (37,463
                    )
                    
                    
                    31,146





Operating
activities:


Net cash
provided by operating activities for fiscal year 2009 increased approximately
$2.3 million compared to fiscal year 2008 which was primarily due to a decrease
in net operating assets for the fiscal year ended June 30, 2009 compared to
fiscal year 2008.


Net cash
provided by operating activities for fiscal year 2008 increased approximately
$48.9 million compared to fiscal year 2007 primarily due to less cash
utilized by accounts receivable in fiscal year 2008 as compared to fiscal year
2007 ofapproximately $24.9 million and increases in net income of
approximately $21.3 million, deferred revenue of approximately $18.1 million and
income taxes payable of approximately $12.5 million.  These increases
were partially reduced by a decrease of approximately $29.7 million in accrued
expenses and other liabilities.


Investing
activities:


Net cash
used by investing activities for fiscal year 2009 was approximately $193.2
million reflecting approximately $37.2 million used in connection with the
acquisition of Fry in August 2008.  Additionally, approximately $13.8
million was used to purchase property, plant and equipment and to internally
develop software to be licensed to others.  We used approximately
$142.4 million to purchase investments, net of proceeds from sales of
investments (including approximately $5.2 million received from the sales of
auction rate securities.)


33


Net cash
used by investing activities for fiscal year 2008 was approximately $15.8
million reflecting approximately $16.1 million used in connection with various
acquisitions, primarily the acquisition of Check-in Data for which we used
approximately $11.5 million.  Additionally, approximately $14.9
million was used to purchase property, plant and equipment and to internally
develop software to be licensed to others.  We received approximately
$14.9 million from the sale of our investments, net of cash used to purchase of
investments.  Included in the sales proceeds was approximately $17.5
million from the sales of auction rate securities.


Net cash
used by investing activities for fiscal year 2007 was approximately $143.5
million, primarily as a result of our net investment in auction rate securities
of approximately $87.0 million.  We also used approximately $40.5
million in connection with various acquisitions, the most significant of which
was the acquisition of RedSky and its various subsidiaries, for which we used
approximately $29.8 million.  Additionally, approximately $13.3
million was used to purchase property, plant and equipment and to internally
develop software to be licensed to others.


Financing
activities:


Net cash
used in financing activities for fiscal year 2009 was approximately $37.2
million, reflecting approximately $22.2 million used to purchase our stock, and
principal payments of approximately $18.1 million on the line of credit and
long-term debt that we assumed as a result of our acquisition of Fry in August
2008.  These amounts were partially offset by proceeds from stock
option exercises of approximately $2.9 million and realized tax benefits from
stock option exercises of approximately $1.1 million.


Net cash
used in financing activities for fiscal year 2008 was approximately $37.5
million, reflecting approximately $74.3 million used to purchase our stock,
partially offset by proceeds from stock option exercises of approximately $27.9
million and realized tax benefits from stock option exercises of approximately
$11.0 million.


Net cash
provided by financing activities for fiscal year 2007 was approximately $31.1
million, reflecting proceeds from stock option exercises of approximately $35.0
million and realized tax benefits from stock option exercises of approximately
$16.8 million, partially offset by approximately $17.9 million used to purchase
our stock.


All cash
and cash equivalents and short-term investments are being retained for the
operation and expansion of the business and the repurchase of our
stock.





Capital
Resources


We have
two credit agreements (the “Credit Agreements”) that in the aggregate provide a
$65.0 million multi-currency committed line of credit.  See
Note 7 “Line of Credit,” in the Notes to the Consolidated Financial
Statements included in this report.  As of June 30, 2009, we had
approximately $1.1 million outstanding under the Credit Agreements and had
applied approximately an additional $0.4 million to guarantees.


We also
have a credit relationship with a European bank in the amount of EUR 1.0 million
(approximately $1.4 million at the June 30, 2009 exchange rate).  As
of June 30, 2009, there were no balances outstanding on this credit facility,
but approximately EUR 0.2 million (approximately $0.3 million at the June 30,
2009 exchange rate) of the credit facility has been used for
guarantees.


As of
June 30, 2009, we had approximately $64.5 million borrowing capacity under all
of the credit facilities described above.  The weighted-average
interest rate on the outstanding balances under the Credit Agreements as of June
30, 2008 was 1.4%


We do not
currently invest in financial instruments designed to protect against interest
rate fluctuations, although we will continue to evaluate the need to do so in
the future.


We
believe that our cash and cash equivalents, short-term investments, cash
generated from operations and our available lines of credit are sufficient to
provide our working capital needs for the foreseeable future.  Based
on our expected operating cash flows and sources of cash, we do not believe that
any reduction in the liquidity of our auction rate securities will have a
material impact on our overall ability to meet our liquidity
needs.  In light of current economic conditions generally and in light
of the overall performance of the stock market in recent months, we cannot
assume that funds would be available from other sources if required to fund
acquisitions or any unanticipated and substantial cash needs.  We
currently anticipate that our property, plant and equipment expenditures for
fiscal year 2010 will be approximately $13 million.


Financial
indicators of our liquidity and capital resources as of June 30, 2009 and June
30, 2008, were as follows:


As of June 30,(in thousands, except
    ratios)
                        
                        2009
                        
                        
                        2008Cash
      and cash equivalents and short-term investments (1)
                        
                        $
                        438,936
                        
                        
                        $
                        381,964Available
      credit facilities
                        
                        $
                        66,403
                        
                        
                        $
                        66,574Outstanding
      credit facilities
                        
                        
                        (1,090
                        )
                        
                        
                        (989
                        )Outstanding
      guarantees
                        
                        
                        (778
                        )
                        
                        
                        (201
                        )Unused
      credit facilities
                        
                        $
                        64,535
                        
                        
                        $
                        65,384Working
      capital (2)
                        
                        $
                        421,016
                        
                        
                        $
                        392,939Shareholders’
      equity
                        
                        $
                        723,447
                        
                        
                        $
                        673,016Current
      ratio (3)
                        
                        
                        2.60
                        
                        
                        
                        2.33





(1)
            Does not
      include approximately $57.8million
      and $65.2 million invested in auction rate securities, classified aslong-term
      investments
      in the accompanying consolidated balance sheet as of June 30, 2009 and
      2008, respectively.


(2)
            Current
      assets less current
liabilities.





(3)
            Current
      assets divided by current liabilities.The Company
      does not have any long-term
debt.


34





Inflation


We have
not experienced any significant impact as a result of inflation.





Contractual
Obligations


The
following table summarizes our contractual arrangements at June 30,
2009:





Payments due by period(inthousands)
                                                            
                                                            Total
                                                            
                                                            
                                                            Less than
                                                              1 year
                                                            
                                                            
                                                            1-3 years
                                                            
                                                            
                                                            3-5 years
                                                            
                                                            
                                                            More than
                                                              5 yearsOperating
      lease obligations
                                                            
                                                            $
                                                            105,273
                                                            
                                                            
                                                            $
                                                            27,572
                                                            
                                                            
                                                            $
                                                            36,519
                                                            
                                                            
                                                            $
                                                            25,189
                                                            
                                                            
                                                            $
                                                            15,993SERP
      liability
                                                            
                                                            
                                                            4,576
                                                            
                                                            
                                                            
                                                            96
                                                            
                                                            
                                                            
                                                            178
                                                            
                                                            
                                                            
                                                            162
                                                            
                                                            
                                                            
                                                            4,140Capital
      lease obligations
                                                            
                                                            
                                                            288
                                                            
                                                            
                                                            
                                                            151
                                                            
                                                            
                                                            
                                                            119
                                                            
                                                            
                                                            
                                                            18
                                                            
                                                            
                                                            
                                                            —Total
                                                            
                                                            $
                                                            110,137
                                                            
                                                            
                                                            $
                                                            27,819
                                                            
                                                            
                                                            $
                                                            36,816
                                                            
                                                            
                                                            $
                                                            25,369
                                                            
                                                            
                                                            $
                                                            20,133





Due to
the uncertainty with respect to the timing of future cash flows associated with
our unrecognized income tax benefits at June 30, 2009, we are unable to
reasonably estimate settlements with taxing authorities.  The above
contractual obligations table does not reflect unrecognized income tax benefits
of approximately $18.1 million.  See Note 13 “Income Taxes” in the
Notes to Consolidated Financial Statements.





FORWARD-LOOKING
STATEMENTS


The preceding management’s discussion
and analysis of financial condition and results of operations should be read in
conjunction with the consolidated financial statements and the related notes and
other financial information included elsewhere in this Annual Report on Form
10-K.  Certain statements contained in this Annual Report on Form 10-K
that are not historical facts are forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), that involve risks and uncertainties.  Our actual
results may differ materially from those anticipated in these forward-looking
statements.


Examples of such forward-looking
statements in this Annual Report on Form 10-K include the
following:


·
            Item
      1, “Business,” statements regarding the future direction of PMS technology
      and the growth of the Opera suite of products, including expansion of
      software hosting capabilities, our strategy for product growth in
      restaurant software, trends in retail software, trends in retailers’ use
      of Linux-based systems, our global distribution network, acquisition of
      rights in third party products and designs, the appropriateness of
      reliance on statutory and common law protections for our intellectual
      property, the risks associated with third party misappropriation of our
      intellectual property, competition, labor relations, quarterly results,
      our belief that a loss of component sources would not materially adversely
      affect our business, the anticipated impact of fluctuations in interest
      rates and in currency exchange rates, the evaluation of the need to use
      financial instruments to hedge against currency risk, the anticipated
      effect of the U.S. Government exercising a termination for convenience
      under one or more contracts that we have with the U.S. Government, and our
      belief that compliance with environmental laws and regulations will not
      have a material effect on expenditures, earnings, or our competitive
      position;


·
            Item
      1A, “Risk Factors,” regarding the anticipated or potential impact on our
      business, financial results, or competitive position of the various risks
      described in that section;


·
            Item
      2, “Properties,” regarding the anticipated availability of additional
      space;


·
            Item
      3, “Legal Proceedings,” regarding the likely effect of litigation on our
      results of operations or financial position;
and


·
            Item
      7A, “Quantitative and Qualitative Disclosures about Market
      Risk.”





Additional
forward-looking statements are contained elsewhere in this report, including in
the preceding Management’s Discussion and Analysis of Financial Condition and
Results of Operations.  Such statements include the
following:


(i)
            our
      statements about the growth and direction of the hospitality and retail
      industries generally, and our analysis of the growth and direction of
      various sectors within those
industries;


(ii)
            our
      expectation that product and service margins may decline in response to
      the competitive nature of our
market;


(iii)
            our
      statements regarding the effects of foreign currency rate fluctuations (in
      particular, Euro and British pound sterling) on our financial
      performance;


(iv)
            our
      expectations that the customers with whom we do the largest amount of
      business will fluctuate from year to year, and our statements about the
      effects of large customer orders on our quarterly earnings, revenues, and
      total revenues;


(v)
            our
      statements regarding the impact on financial results in future periods if
      we determine that the financial condition of customers has
      deteriorated;


(vi)
            our
      statements regarding the impact on financial results in future periods if
      we misjudge the remaining economic life of a
  product;


(vii)
            our
      statements concerning the fluctuations in the market price of our common
      stock, whether as a result of variations in our quarterly operating
      results or other factors;


(viii)
            our
      belief that any existing legal claims or proceedings will not have a
      material adverse effect on our results of operations or financial
      position;


35


(ix)
            our
      beliefs about our competitive
strengths;


(x)
            our
      expectations regarding effective tax rates in future
    periods;


(xi)
            our
      expectations regarding the impact or lack of impact on our financial
      position and results of operations of the application of recent accounting
      standards;


(xii)
            our
      expectations about the adequacy of our cash flows and our available lines
      of credit to meet our working capital needs, and our ability to raise
      additional funds if and when
needed;


(xiii)
            our
      expectations about our capital expenditures for future
      periods;


(xiv)
            our
      expectations that our exposure to interest rate risk will not materially
      change in the future;


(xv)
            our
      expectation that we will evaluate our need to invest in instruments to
      protect against interest rate fluctuations and our exposure to such
      interest rate risk;


(xvi)
            our
      statements about the effects on our revenue recognition as a result of
      changes to a customers’ delivery requirements or a products’
      completion;


(xvii)
            our
      statements regarding our ability to increase sales of our higher margin
      products;


(xviii)
            our
      expected costs associated with modifying our products to comply with
      applicable legal rules, regulations, and guidelines, including the credit
      card associations’ security and data protection rules,
  and


(xix)
            our
      expectations regarding valuation and liquidity of auction rate securities
      in which we have invested.





There are
a number of important factors that could cause actual results to differ
materially from those in the forward looking statements.  These may
include: changes in applicable laws and regulations, other activities of
governments, governmental agencies, or other regulatory bodies that affect our
products, services, or business operations, changes in accounting and auditing
rules (and changes in the interpretations of those rules), as well as those
matters described in Item 1A, “Risk Factors.”





ITEM
      7A.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





We are
exposed to interest rate risk and to foreign currency exchange rate
risk.  See Foreign Sales and Foreign Market Risks in Part 1
“Business”, and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” above for information regarding foreign currency
exchange risks.  Our committed lines of credit bear interest at a
floating rate, which exposes us to interest rate risks.  We manage our
exposure to this risk by minimizing, to the extent feasible, overall borrowing
and monitoring available financing alternatives.  At June 30, 2009, we
had total borrowings of approximately $1.1 million, and had not entered into any
instruments to hedge the resulting exposure to interest-rate
risk.   Management believes that the fair value of the debt
equals its carrying value at June 30, 2009 and June 30, 2008.  Our
exposure to fluctuations in interest rates will increase or decrease in the
future with increases or decreases in the outstanding amount under the line of
credit.  As our total borrowing as of June 30, 2009 was approximately
$1.1 million, a 1% change in interest rate would have resulted in an immaterial
impact on our consolidated financial position, results of operations and cash
flows. Our cash equivalents and our portfolio of marketable securities,
including auction rate securities, are subject to market risk due to changes in
interest rates.  Fixed interest rate securities may have their market
value adversely impacted due to a rise in interest rates, while floating rate
securities may produce less income than expected if interest rates
fall.  Should interest rates fluctuate by 1%, the change in value of
our marketable securities would not have been material as of June 30, 2009,
and the change in our interest income would not have changed by a material
amount for the year then ended.


To
minimize our exposure to credit risk associated with financial instruments, we
place our temporary cash investments with high-credit-quality institutions,
generally with bond rating of “A” and above. See Note 2 “Financial
Instruments and Fair Value Measurements” in the Notes to
Consolidated Financial Statements.





ITEM
      8.
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA





See the
Index to Consolidated Financial Statements on page 41 of this
report.





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





Not
applicable.





ITEM
      9A.
            CONTROLS
      AND PROCEDURES





EVALUATION
OF DISCLOSURE CONTROLS AND PROCEDURES


Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report.  Based
on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures as of the end of the
period covered by this report are functioning effectively to provide reasonable
assurance that the information required to be disclosed by us in reports filed
under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized
and reported within the time periods specified in the SEC's rules and forms and
(ii) accumulated and communicated to our management, including the Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding disclosure.


36





MANAGEMENT’S
ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING


Our
management’s report on internal control over financial reporting is set forth on
page 42 of this annual report on Form 10-K and is incorporated by reference
herein.





CHANGE
IN INTERNAL CONTROL OVER FINANCIAL REPORTING


No change
in our internal control over financial reporting occurred during our most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.





ITEM
9B.  OTHER INFORMATION





Not
applicable.


37


PART
III





ITEM
      10.
            DIRECTORS,
      EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE





See Part
I, Item 1 for information regarding the Company’s Executive
Officers.  Other information required by this Item 10 will be set
forth in the Company’s Proxy Statement under the captions “Information as to
Nominees”, “Section 16(a) Beneficial Ownership Reporting Compliance”, “Corporate
Governance,” and “Audit Committee” and that information is incorporated herein
by reference.





ITEM
      11.
            EXECUTIVE
      COMPENSATION





The
information required by Item 11 will be set forth in the Company’s Proxy
Statement under the caption “Executive Compensation,” and that information is
incorporated herein by reference.





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





Except
for the information set forth below, the information required by Item 12 will be
set forth in the Company’s Proxy Statement under the caption “Security Ownership
of Certain Beneficial Owners and Management,” and that information is
incorporated herein by reference.





EQUITY
COMPENSATION PLAN INFORMATION





As of June 30, 2009Plan category
                                  
                                  Number of
                                    securities to be
                                    issued upon
                                    exercise of
                                    outstanding
                                    options, warrants
                                  
                                  
                                  Weighted-Average
                                    exercise price of
                                    outstanding
                                    options, warrants
                                    and rights
                                  
                                  
                                  Number of securities
                                    remaining available for
                                    future issuance under
                                    equity compensation
                                    plans (excluding
                                    securities reflected in
                                    column (a))(a)
                                  
                                  
                                  (b)
                                  
                                  
                                  (c)Equity
      compensation plans approved by security holders
                                  
                                  
                                  7,131,662
                                  
                                  
                                  $
                                  21.79
                                  
                                  
                                  
                                  3,116,740Equity
      compensation plansnot
      approved by security holders
                                  
                                  
                                  N/A
                                  
                                  
                                  
                                  N/A
                                  
                                  
                                  
                                  N/ATotal
                                  
                                  
                                  7,131,662
                                  
                                  
                                  $
                                  21.79
                                  
                                  
                                  
                                  3,116,740





ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED
TRANSACTIONS





The
information required by Item 13 will be set forth in the Company’s Proxy
Statement under the captions to “Certain Relationships and Related Party
Transactions” and “Corporate Governance” and that information is incorporated
herein by reference.





ITEM
      14.
            PRINCIPAL
      ACCOUNTING FEES AND SERVICES





The
information required by Item 14 will be set forth in the Company’s Proxy
Statement under the section heading “Independent Registered Public Accounting
Firm,” and that information is incorporated herein by reference.




38





PART
IV





ITEM
      15.
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULE





(a)
Exhibits and Financial Statement Schedule:





(1)  Financial
Statements – See the Index to Consolidated Financial Statements on page
41




(2)  Schedule
II – See the Index to Consolidated Financial Statements on page 41




(3) Exhibits:


3(i)
            Articles
      of Incorporation of the Company are incorporated herein by reference to
      Exhibit 3 to the Annual Report on Form 10-K of the Company for the fiscal
      Year ended June 30, 1990.


3(i)(a)
            Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Quarterly Report on Form 10-Q of the Company for the
      period ended March 31, 1997.


3(i)(b)
            Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Quarterly Report on Form 10-Q of the Company for the
      period ended March 31, 1998.


3(i)(c)
            Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Form 8-K filed on November 16,
  2007.


3(ii)
            By-laws
      of the Company, as amended, are incorporated herein by reference to
      Exhibit 3(ii) to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 2008.


10(a)(1)*
            Amendment
      and Restatement of MICROS Systems, Inc. Stock Option Plan is incorporated
      herein by reference to Exhibit 4.1 to the Registration Statement on Form
      S-8 of the Company filed on February 16,
1990.


10(a)(2)*
            First
      Amendment to the Amendment and Restatement of MICROS Systems, Inc. Stock
      Option Plan is incorporated herein by reference to Exhibit 4.2 to the
      Registration Statement on Form S-8 of the Company filed on February 16,
      1990.


10(a)(3)*
            MICROS
      Systems, Inc. 1991 Stock Option Plan as amended, is incorporated herein by
      reference to Exhibit A to the Proxy Statement of the Company for the 2006
      Annual Meeting of Shareholders


10(b)*
            Employment
      Agreement dated June 1, 1995 between MICROS Systems, Inc. and A. L.
      Giannopoulos is incorporated herein by reference to Exhibit 10e to the
      Annual Report on Form 10-K of the Company for the fiscal Year ended June
      30, 1995.


10(b)(1)*
            First
      Amendment to Employment Agreement dated February 6, 1997 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 1996.


10(b)(2)*
            Second
      Amendment to Employment Agreement dated February 1, 1998 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 1997.


10(b)(3)*
            Third
      Amendment to Employment Agreement dated September 8, 1999 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10g to the Annual Report on Form 10-K of the Company for the
      fiscal Year ended June 30, 1999.


10(b)(4)*
            Fourth
      Amendment to Employment Agreement dated November 19, 2001 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 2001.


10(b)(5)*
            Fifth
      Amendment to Employment Agreement dated November 15, 2002 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 2002.


10(b)(6)*
            Sixth
      Amendment to Employment Agreement dated January 28, 2004 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 2003.


10(b)(7)*
            Seventh
      Amendment to Employment Agreement dated August 9, 2005 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Current Report on Form 8-K filed on August 11,
      2005.


10(b)(8)*
            Eighth
      Amendment to Employment Agreement dated June 6, 2006, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on June 8,
      2006.


10(b)(9)*
            Ninth
      Amendment to Employment Agreement dated November 17, 2006, between
      MICROS Systems, Inc. and A.L. Giannopoulos is incorporated herein by
      reference to Exhibit 10 to the Current Report on Form 8-K filed on
      November 17, 2006.


10(b)(10)*
            Tenth
      Amendment to Employment Agreement dated June 12, 2008, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on June 13,
      2008.


10(b)(11)*
            Eleventh
      Amendment to Employment Agreement dated November 21, 2008, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10.1 to the Current Report on Form 8-K filed on November 24,
      2008.


10(c)*
            Employment
      Agreement dated May 28, 1997 between MICROS Systems, Inc. and Gary C.
      Kaufman is incorporated herein by reference to Exhibit 10 to the Annual
      Report on Form 10-K of the Company for the fiscal Year ended June 30,
      1997.


39


10(c)(1)*
            First
      Amendment to Employment Agreement dated October 1, 1998 between MICROS
      Systems, Inc. and Gary C. Kaufman is incorporated herein by reference to
      Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 1998.


10(c)(2)*
            Second
      Amendment to Employment Agreement dated November 17, 2006 between
      MICROS Systems, Inc. and Gary C. Kaufman is incorporated herein by
      reference to Exhibit 10 to the Current Report on Form 8-K filed on
      November 17, 2006.


10(d)*
            Employment
      Agreement dated May 28, 1997 between MICROS Systems, Inc. and Thomas L.
      Patz is incorporated herein by reference to Exhibit 10 to the Annual
      Report on Form 10-K of the Company for the fiscal Year ended June 30,
      1997.


10(d)(1)*
            First
      Amendment to Employment Agreement dated October 1, 1998 between MICROS
      Systems, Inc. and Thomas L. Patz is incorporated herein by reference to
      Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 1998 (see 10(d)(1) above, as Mr. Patz’ amendment
      is an amendment identical (except for the identity of the executive and
      the economic terms) to that entered into by the Company with Mr.
      Kaufman).


10(d)(2)*
            Second
      Amendment to Employment Agreement dated November 17, 2006 between MICROS
      Systems, Inc. and Thomas L. Patz is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on November 17, 2006
      (see 10(d)(2) above, as Mr. Patz’ amendment is an amendment identical
      (except for the identity of the executive and the economic terms) to that
      entered into by the Company with Mr.
Kaufman).


10(e)*
            Employment
      Agreement dated November 19, 2005, between MICROS Systems, Inc. and
      Jennifer Kurdle (filed herewith)


10(f)*
            Restated
      Supplemental Executive Retirement Plan, as approved by the Board of
      Directors on


April
      27, 2005, is incorporated herein by reference to Exhibit 10 to the Annual
      Report on Form 10-K for the fiscal year ended June 30,
    2006.


10(g)
            Amended
      and Restated Credit Agreement, effective as of July 29, 2005, among MICROS
      Systems, Inc., DV Technology Holdings Corporation, Datavantage
      Corporation, MICROS Fidelio Nevada, LLC, MSI Delaware, LLC, MICROS-Fidelio
      Worldwide, Inc., and JTECH Communications, Inc. as Borrower, Bank of
      America, N.A., as administrative agent, swing line lender and L/C issuer,
      and Wachovia Bank, N.A., and US Bank, N.A., and Banc of America Securities
      LLC, as sole lead arranger and book manager, is incorporated herein by
      reference to Exhibit 10 to the Annual Report on Form 10-K for the fiscal
      year ended June 30, 2005.


10(g)(1)
            First
      Amendment to Credit Agreements, dated December 11, 2008 among MICROS
      Systems, Inc. DV Technology Holdings Corporation, Datavantage Corporation,
      Micros Fidelio Nevada, LLC, MSI Delaware, LLC, Micros-Fidelio (Ireland)
      Ltd. as Guarantor, Bank of America, N.A., as Administrative Agent, and
      Bank of America, N.A., Wachovia Bank, N.A., and U.S. Bank, N.A., as
      Lenders is incorporated herein by reference to Exhibit 10(b) to the
      Quarterly Report on Form 10-Q of the Company for the period ended December
      31, 2008.


10(h)
            Amended
      and Restated Credit Agreement, effective as of July 29, 2005, among
      MICROS-Fidelio (Ireland) Ltd., MICROS-Fidelio Systems (UK) Ltd.,
      MICROS-Fidelio España S.L., MICROS Fidelio (Canada), Ltd., MICROS-Fidelio
      Brazil, Ltda., MICROS-Fidelio France S.A.S., Hospitality Technologies,
      S.A., MICROS-Fidelio Mexico S.A. de C.V., MICROS Systems Holding GmbH,
      MICROS-Fidelio GmbH, MICROS-Fidelio Software Portugal Unipessoal Lda,
      MICROS-Fidelio (Thailand) Co., Ltd., MICROS-Fidelio Singapore Pte Ltd.,
      MICROS-Fidelio Software (Philippines), Inc., MICROS-Fidelio Japan Ltd.,
      MICROS-Fidelio Australia Pty. Ltd., MICROS-Fidelio Hong Kong, Ltd.,
      Fidelio Nordic Norway A/S, Fidelio Nordic Oy, Fidelio Nordic Sverige,
      A.B., Hotelbk, A.B., as Borrower, Bank Of America, N.A., as Administrative
      Agent, swing line lender, and L/C issuer, and Wachovia Bank N.A. and US
      Bank N.A., and Banc of America Securities LLC, as sole lead arranger and
      book manager is incorporated herein by reference to Exhibit 10 to the
      Annual Report on Form 10-K for the fiscal year ended June 30,
      2005.


10(i)
            Lease
      Agreement by and between Orix Columbia, Inc. and MICROS Systems, Inc.,
      dated August 17, 1998, with respect to the Company’s corporate
      headquarters located at 7031 Columbia Gateway Dr., Columbia MD 21046-2289,
      as amended by a First Amendment to Lease, dated October 27, 1999, a Second
      Amendment to Lease, dated December 26, 2001, and a Third Amendment to
      Lease, dated March 1, 2006 and by and between MICROS Systems, Inc. and
      Columbia Gateway Office Corporation as successor in interest to Orix
      Columbia, Inc. is incorporated herein by reference to Exhibit 10 to the
      Quarterly Report on Form 10-Q of the Company for the period ended March
      31, 2009.


10(j)
            Manufacturing
      Agreement, by and between MICROS Systems, Inc., and GES Singapore Pte
      Ltd., with an effective date of November 6, 2002 (filed
      herewith)


14
            Code
      of Ethics and Business Practices is incorporated herein by reference to
      Exhibit 14 to the Annual Report on Form 10-K of the Company for the fiscal
      year ended June 30, 2004.


21
            Subsidiaries
      of the Company (filed herewith)


23(a)
            Consent
      of Houlihan Smith & Co., Inc. (filed
  herewith)


23(b)
            Consent
      of PricewaterhouseCoopers LLP (filed
herewith)


31(a)
            Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a) under the
      Securities Exchange Act of 1934 (filed
herewith)


31(b)
            Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) under the
      Securities Exchange Act of 1934 (filed
herewith)


32(a)
            Certification
      of Principal Executive Officer pursuant to Rule 13a-14(b) under the
      Securities Exchange Act of 1934 and 18 U.S.C. 1350 (filed
      herewith)


32(b)
            Certification
      of Principal Financial Officer pursuant to Rule 13a-14(b) under the
      Securities Exchange Act of 1934 and 18 U.S.C. 1350 (filed
      herewith)





*      Management
contract or compensatory plan or arrangement.


40


MICROS
Systems, Inc.


INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS





PageNo.Management’s
      Annual Report on Internal Control Over Financial Reporting
                  42Financial
      Statements:Report
      of Independent Registered Public Accounting Firm
                  43Consolidated
      balance sheets as of June 30, 2009 and 2008
                  44Consolidated
      statements of operations for the fiscal years ended June 30, 2009, 2008
      and 2007
                  45Consolidated
      statements of cash flows for the fiscal years ended June 30, 2009, 2008
      and 2007
                  46Consolidated
      statements of shareholders’ equity and comprehensive income for the fiscal
      years ended June 30, 2009, 2008 and 2007
                  47Notes
      to consolidated financial statements
                  48 - 71Financial
      Statement Schedule:Schedule
      II – Valuation and qualifying accounts and reserves
                  72





All other
schedules are omitted because they are not applicable, not required, or the
required information is included in the financial statements or notes
thereto


41


MANAGEMENT’S
ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





Management of MICROS Systems,
Inc. (the “Company”) is responsible for establishing and maintaining adequate
internal control over financial reporting.  Internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.  A company’s internal control over financial
reporting includes those policies and procedures that pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company, provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the
company; and provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.


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


Management
evaluated the Company’s internal control over financial reporting as of June 30,
2009.  In making this assessment, management used the framework
established in Internal Control-Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”).  As a
result of this assessment and based on the criteria in the COSO framework,
management has concluded that, as of June 30, 2009, the Company’s internal
control over financial reporting was effective.


The
Company’s independent registered public accounting firm, PricewaterhouseCoopers
LLP, has audited the Company’s internal control over financial
reporting.  Their opinion on the effectiveness of the Company’s
internal control over financial reporting is included in this Annual Report on
Form 10-K.


42


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To
the Board of Directors and Shareholders of MICROS Systems, Inc.:




In our
opinion, the consolidated financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of MICROS
Systems, Inc. and its subsidiaries at June 30, 2009 and June 30, 2008, and the
results of their operations and their cash flows for each of the three years in
the period ended June 30, 2009 in conformity with accounting principles
generally accepted in the United States of America.  In addition, in
our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial
statements.  Also in our opinion, the Company maintained, in all
material respects, effective internal control over financial reporting as of
June 30, 2009, based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The Company's management is responsible for these financial
statements and financial statement schedule, for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in Management's Annual
Report on Internal Control over Financial Reporting appearing under Item 9A. Our
responsibility is to express opinions on these financial statements, on the
financial statement schedule, and on the Company's internal control over
financial reporting based on our integrated audits.  We conducted our
audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and whether effective
internal control over financial reporting was maintained in all material
respects.  Our audits of the financial statements included examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation.  Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on
the assessed risk.  Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our
audits provide a reasonable basis for our opinions.





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





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





/s/
PricewaterhouseCoopers LLP


Baltimore,
Maryland


August
31, 2009


43


MICROS
SYSTEMS, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS





June
      30,(in
      thousands, except par value data)
                    
                    2009
                    
                    
                    2008ASSETSCurrent
      Assets:Cash
      and cash equivalents
                    
                    $
                    292,257
                    
                    
                    $
                    377,072Short-term
      investments
                    
                    
                    146,679
                    
                    
                    
                    4,892Accounts
      receivable, net of allowance for doubtful accounts of $32,079 at June 30,
      2009 and $28,348 at June 30, 2008
                    
                    
                    157,479
                    
                    
                    
                    192,445Inventory,
      net
                    
                    
                    39,783
                    
                    
                    
                    64,575Deferred
      income taxes
                    
                    
                    20,283
                    
                    
                    
                    18,724Prepaid
      expenses and other current assets
                    
                    
                    27,238
                    
                    
                    
                    29,737Total
      current assets
                    
                    
                    683,719
                    
                    
                    
                    687,445Long-term
      investments
                    
                    
                    57,823
                    
                    
                    
                    65,216Property,
      plant and equipment, net
                    
                    
                    30,520
                    
                    
                    
                    29,165Deferred
      income taxes, non-current
                    
                    
                    11,483
                    
                    
                    
                    7,108Goodwill
                    
                    
                    190,739
                    
                    
                    
                    159,722Intangible
      assets, net
                    
                    
                    17,709
                    
                    
                    
                    16,168Purchased
      and internally developed software costs, net of accumulated amortization
      of $66,804 at June 30, 2009 and $61,691 at June 30, 2008
                    
                    
                    25,749
                    
                    
                    
                    30,846Other
      assets
                    
                    
                    6,344
                    
                    
                    
                    7,336Total
      assets
                    
                    $
                    1,024,086
                    
                    
                    $
                    1,003,006LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      Liabilities:Bank
      lines of credit
                    
                    $
                    1,090
                    
                    
                    $
                    989Accounts
      payable
                    
                    
                    36,647
                    
                    
                    
                    46,843Accrued
      expenses and other current liabilities
                    
                    
                    104,821
                    
                    
                    
                    124,913Income
      taxes payable
                    
                    
                    7,999
                    
                    
                    
                    6,363Deferred
      revenue
                    
                    
                    112,146
                    
                    
                    
                    115,398Total
      current liabilities
                    
                    
                    262,703
                    
                    
                    
                    294,506Income
      taxes payable, non-current
                    
                    
                    19,611
                    
                    
                    
                    18,302Deferred
      income taxes, non-current
                    
                    
                    1,752
                    
                    
                    
                    2,181Other
      non-current liabilities
                    
                    
                    9,047
                    
                    
                    
                    8,103Total
      liabilities
                    
                    
                    293,113
                    
                    
                    
                    323,092Minority
      interests and minority ownership put arrangement
                    
                    
                    7,526
                    
                    
                    
                    6,898Commitments
      and contingencies (Note 11)Shareholders'
      Equity:Common
      stock, $0.00625 par value; authorized 120,000 shares; issued
      and outstanding 80,310 at June 30, 2009 and 80,898 at June 30,
      2008
                    
                    
                    502
                    
                    
                    
                    506Capital
      in excess of par
                    
                    
                    127,146
                    
                    
                    
                    131,517Retained
      earnings
                    
                    
                    579,331
                    
                    
                    
                    480,777Accumulated
      other comprehensive income
                    
                    
                    16,468
                    
                    
                    
                    60,216Total
      shareholders' equity
                    
                    
                    723,447
                    
                    
                    
                    673,016Total
      liabilities and shareholders' equity
                    
                    $
                    1,024,086
                    
                    
                    $
                    1,003,006





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


44


MICROS
SYSTEMS, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS





Fiscal
      Year Ended June 30,(in
      thousands, except per share data)
                    
                    2009
                    
                    
                    2008
                    
                    
                    2007Revenue:Hardware
                    
                    $
                    210,676
                    
                    
                    $
                    265,965
                    
                    
                    $
                    233,838Software
                    
                    
                    134,845
                    
                    
                    
                    158,699
                    
                    
                    
                    132,820Service
                    
                    
                    566,326
                    
                    
                    
                    529,520
                    
                    
                    
                    419,069Total
      revenue
                    
                    
                    911,847
                    
                    
                    
                    954,184
                    
                    
                    
                    785,727Cost
      of sales:Hardware
      (1)
                    
                    
                    135,775
                    
                    
                    
                    171,779
                    
                    
                    
                    149,085Software
                    
                    
                    27,244
                    
                    
                    
                    33,252
                    
                    
                    
                    29,531Service
                    
                    
                    264,883
                    
                    
                    
                    247,954
                    
                    
                    
                    195,600Total
      cost of sales
                    
                    
                    427,902
                    
                    
                    
                    452,985
                    
                    
                    
                    374,216Gross
      margin
                    
                    
                    483,945
                    
                    
                    
                    501,199
                    
                    
                    
                    411,511Selling,
      general and administrative expenses (1)
                    
                    
                    279,956
                    
                    
                    
                    306,624
                    
                    
                    
                    254,317Research
      and development expenses
                    
                    
                    42,630
                    
                    
                    
                    40,129
                    
                    
                    
                    33,885Depreciation
      and amortization
                    
                    
                    17,544
                    
                    
                    
                    15,143
                    
                    
                    
                    12,721Total
      operating expenses
                    
                    
                    340,130
                    
                    
                    
                    361,896
                    
                    
                    
                    300,923Income
      from operations
                    
                    
                    143,815
                    
                    
                    
                    139,303
                    
                    
                    
                    110,588Non-operating
      income (expense):Interest
      income
                    
                    
                    8,681
                    
                    
                    
                    14,725
                    
                    
                    
                    10,319Interest
      expense
                    
                    
                    (895
                    )
                    
                    
                    (286
                    )
                    
                    
                    (371
                    )Other
      (expense) income, net (2)
                    
                    
                    (1,759
                    )
                    
                    
                    597
                    
                    
                    
                    1,118Total
      non-operating income, net
                    
                    
                    6,027
                    
                    
                    
                    15,036
                    
                    
                    
                    11,066Income
      before taxes, minority interests and equity in net earnings of
      affiliates
                    
                    
                    149,842
                    
                    
                    
                    154,339
                    
                    
                    
                    121,654Income
      tax provision
                    
                    
                    49,148
                    
                    
                    
                    52,167
                    
                    
                    
                    40,754Income
      before minority interests and equity in net earnings of
      affiliates
                    
                    
                    100,694
                    
                    
                    
                    102,172
                    
                    
                    
                    80,900Minority
      interests and equity in net earnings of affiliates
                    
                    
                    (1,397
                    )
                    
                    
                    (888
                    )
                    
                    
                    (912
                    )Net
      income (1), (2),
      (3)
                    
                    $
                    99,297
                    
                    
                    $
                    101,284
                    
                    
                    $
                    79,988Net
      income per common share (1), (2),
      (3), (4):Basic
                    
                    $
                    1.22
                    
                    
                    $
                    1.23
                    
                    
                    $
                    1.00Diluted
                    
                    $
                    1.21
                    
                    
                    $
                    1.21
                    
                    
                    $
                    0.97Weighted-average
      number of shares outstanding (4):Basic
                    
                    
                    80,486
                    
                    
                    
                    81,546
                    
                    
                    
                    79,978Diluted
                    
                    
                    81,461
                    
                    
                    
                    83,346
                    
                    
                    
                    82,581





The
details of total other-then-temporary impairment losses (“OTTI”) of
long-term investments and a reconciliation to OTTI
charge included in other non-operating income (expense)(2):





(in
      thousands, except per share data)
                    
                    Fiscal
      Year Ended
                      June
      30, 2009Total
      other-than-temporary impairment losses
                    
                    $
                    1,978Less:  Non-credit
      based OTTI recognized in other comprehensive income
                    
                    
                    (712
                    )Credit
      based OTTI charge recognized in non-operating income
    (expense)
                    
                    $
                    1,266





(1)
                For
      cost of sales, see Note 5 “Inventory”.  For selling, general and
      administrative expenses, see Note 8 “Accrued Expenses and Other Current
      Liabilities” in Notes to Consolidated Financial
      Statements.


(2)
              See
      Note 2 “Financial Instruments and Fair Value Measurements” in Notes to
      Consolidated Financial
Statements.


(3)
              See
      Note 3 "Share-based Compensation" in Notes to Consolidated Financial
      Statements.


(4)
              All
      share data has been retroactively adjusted for a two-for-one stock split
      effective February 5, 2008.





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


45


MICROS
SYSTEMS, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS





Fiscal
      Year Ended June 30,(in
      thousands)
                        
                        2009
                        
                        
                        2008
                        
                        
                        2007Cash
      flows from operating activities:Net
      income
                        
                        $
                        99,297
                        
                        
                        $
                        101,284
                        
                        
                        $
                        79,988Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
                        
                        
                        17,544
                        
                        
                        
                        15,143
                        
                        
                        
                        12,721Amortization
      of capitalized software
                        
                        
                        7,726
                        
                        
                        
                        9,385
                        
                        
                        
                        8,392Amortization
      of prior service cost
                        
                        
                        —
                        
                        
                        
                        648
                        
                        
                        
                        —Provision
      for losses on accounts receivable
                        
                        
                        8,339
                        
                        
                        
                        7,062
                        
                        
                        
                        3,356Provision
      for inventory obsolescence
                        
                        
                        4,024
                        
                        
                        
                        2,753
                        
                        
                        
                        3,157Other-than-temporary
      impairment losses on investments
                        
                        
                        1,266
                        
                        
                        
                        —
                        
                        
                        
                        —Undistributed
      earnings from equity investment and minority interest
                        
                        
                        1,397
                        
                        
                        
                        888
                        
                        
                        
                        912Provision
      for deferred income taxes (benefit)
                        
                        
                        (3,761
                        )
                        
                        
                        (1,118
                        )
                        
                        
                        (2,087
                        )Net
      (gain) loss on disposal of property, plant and equipment
                        
                        
                        169
                        
                        
                        
                        87
                        
                        
                        
                        (237
                        )Share-based
      compensation
                        
                        
                        13,900
                        
                        
                        
                        17,229
                        
                        
                        
                        13,996Changes
      in assets and liabilities (net of impact of acquisitions):Decrease
      (increase) in accounts receivable
                        
                        
                        17,975
                        
                        
                        
                        (4,316
                        )
                        
                        
                        (29,278
                        )Decrease
      (increase) in inventory
                        
                        
                        15,740
                        
                        
                        
                        (15,566
                        )
                        
                        
                        (1,140
                        )Decrease
      (increase) in prepaid expenses and other assets
                        
                        
                        2,121
                        
                        
                        
                        423
                        
                        
                        
                        (9,142
                        )(Decrease)
      increase in accounts payable
                        
                        
                        (9,343
                        )
                        
                        
                        (168
                        )
                        
                        
                        5,055(Decrease)
      increase in accrued expenses and other current liabilities
                        
                        
                        (14,717
                        )
                        
                        
                        (1,632
                        )
                        
                        
                        28,104(Decrease)
      increase in income taxes payable
                        
                        
                        (911
                        )
                        
                        
                        11,811
                        
                        
                        
                        (694
                        )Increase
      in deferred revenue
                        
                        
                        5,146
                        
                        
                        
                        19,735
                        
                        
                        
                        1,663Net
      cash flows provided by operating activities
                        
                        
                        165,912
                        
                        
                        
                        163,648
                        
                        
                        
                        114,766Cash
      flows from investing activities:Net
      cash paid for acquisitions
                        
                        
                        (37,193
                        )
                        
                        
                        (16,135
                        )
                        
                        
                        (40,541
                        )Purchases
      of property, plant and equipment
                        
                        
                        (13,361
                        )
                        
                        
                        (12,944
                        )
                        
                        
                        (11,279
                        )Internally
      developed software
                        
                        
                        (470
                        )
                        
                        
                        (1,919
                        )
                        
                        
                        (1,974
                        )Disposal
      of property, plant and equipment
                        
                        
                        192
                        
                        
                        
                        227
                        
                        
                        
                        398Purchases
      of short-term investments
                        
                        
                        (264,998
                        )
                        
                        
                        (615,686
                        )
                        
                        
                        (124,718
                        )Proceeds
      from sales of short-term investments
                        
                        
                        122,611
                        
                        
                        
                        630,612
                        
                        
                        
                        35,450Purchases
      of other investments
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (838
                        )Net
      cash flows used in investing activities
                        
                        
                        (193,219
                        )
                        
                        
                        (15,845
                        )
                        
                        
                        (143,502
                        )Cash
      flows from financing activities:Repurchases
      of common stock
                        
                        
                        (22,242
                        )
                        
                        
                        (74,303
                        )
                        
                        
                        (17,870
                        )Proceeds
      from stock option exercises
                        
                        
                        2,866
                        
                        
                        
                        27,884
                        
                        
                        
                        34,966Realized
      tax benefits from stock option exercises
                        
                        
                        1,026
                        
                        
                        
                        11,018
                        
                        
                        
                        16,781Principal
      payments on line of credit
                        
                        
                        (18,124
                        )
                        
                        
                        (1,640
                        )
                        
                        
                        (3,717
                        )Proceeds
      from lines of credit
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        1,650Other
                        
                        
                        (721
                        )
                        
                        
                        (422
                        )
                        
                        
                        (664
                        )Net
      cash flows (used in) provided by financing activities
                        
                        
                        (37,195
                        )
                        
                        
                        (37,463
                        )
                        
                        
                        31,146Effect
      of exchange rate changes on cash and cash equivalents
                        
                        
                        (20,313
                        )
                        
                        
                        26,348
                        
                        
                        
                        752Net
      increase in cash and cash equivalents
                        
                        
                        (84,815
                        )
                        
                        
                        136,688
                        
                        
                        
                        3,162Cash
      and cash equivalents at beginning of year
                        
                        
                        377,072
                        
                        
                        
                        240,384
                        
                        
                        
                        237,222Cash
      and cash equivalents at end of year
                        
                        $
                        292,257
                        
                        
                        $
                        377,072
                        
                        
                        $
                        240,384Supplemental
      disclosures of cash flow information:Cash
      paid during the fiscal year for:Interest
                        
                        $
                        120
                        
                        
                        $
                        137
                        
                        
                        $
                        89Income
      taxes
                        
                        $
                        51,278
                        
                        
                        $
                        28,752
                        
                        
                        $
                        24,561





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


46





MICROS
SYSTEMS, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME





Capital
                        
                        
                        
                        
                        
                        Accumulatedin
                        
                        
                        
                        
                        
                        OtherCommon
      Stock
                        
                        
                        Excess
                        
                        
                        Retained
                        
                        
                        Comprehensive(in
      thousands)
                        
                        Shares (1)
                        
                        
                        Amount
                        
                        
                        of
      Par
                        
                        
                        Earnings
                        
                        
                        Income
                        
                        
                        TotalBalance,
      June 30, 2006
                        
                        
                        77,960
                        
                        
                        $
                        487
                        
                        
                        $
                        100,723
                        
                        
                        $
                        302,848
                        
                        
                        $
                        13,058
                        
                        
                        $
                        417,116Comprehensive
      income:Net
      income
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        79,988
                        
                        
                        
                        —
                        
                        
                        
                        79,988Foreign
      currency translation adjustments
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        11,623
                        
                        
                        
                        11,623Total
      comprehensive income
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        91,611Cumulative
      effect of change in accounting principle, net of tax
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (5,929
                        )
                        
                        
                        (5,929
                        )Minority
      interest put arrangement
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (51
                        )
                        
                        
                        —
                        
                        
                        
                        (51
                        )Share-based
      compensation
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        13,996
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        13,996Stock
      issued upon exercise of options
                        
                        
                        3,834
                        
                        
                        
                        24
                        
                        
                        
                        34,942
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        34,966Repurchases
      of stock
                        
                        
                        (698
                        )
                        
                        
                        (4
                        )
                        
                        
                        (17,866
                        )
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (17,870
                        )Income
      tax benefit from options exercised
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        17,294
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        17,294Balance,
      June 30, 2007, as previously reported
                        
                        
                        81,096
                        
                        
                        
                        507
                        
                        
                        
                        149,089
                        
                        
                        
                        382,785
                        
                        
                        
                        18,752
                        
                        
                        
                        551,133Cumulative
      impact of the adoption of FIN 48
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (2,647
                        )
                        
                        
                        —
                        
                        
                        
                        (2,647
                        )Balance,
      June 30, 2007, adjusted
                        
                        
                        81,096
                        
                        
                        
                        507
                        
                        
                        
                        149,089
                        
                        
                        
                        380,138
                        
                        
                        
                        18,752
                        
                        
                        
                        548,486Comprehensive
      income:Net
      income
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        101,284
                        
                        
                        
                        —
                        
                        
                        
                        101,284Foreign
      currency translation adjustments
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        38,186
                        
                        
                        
                        38,186Unrealized
      loss on long-term investments, net of tax
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (2,651
                        )
                        
                        
                        (2,651
                        )Amortization
      of prior year pension costs, net of tax
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        648
                        
                        
                        
                        648Total
      comprehensive income
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        137,467SERP
      amendment, net of tax
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        5,281
                        
                        
                        
                        5,281Minority
      interest put arrangement
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (645
                        )
                        
                        
                        —
                        
                        
                        
                        (645
                        )Share-based
      compensation
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        17,229
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        17,229Stock
      issued upon exercise of options
                        
                        
                        2,131
                        
                        
                        
                        13
                        
                        
                        
                        27,871
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        27,884Repurchases
      of stock
                        
                        
                        (2,329
                        )
                        
                        
                        (14
                        )
                        
                        
                        (74,289
                        )
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (74,303
                        )Income
      tax benefit from options exercised
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        11,617
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        11,617Balance,
      June 30, 2008
                        
                        
                        80,898
                        
                        
                        
                        506
                        
                        
                        
                        131,517
                        
                        
                        
                        480,777
                        
                        
                        
                        60,216
                        
                        
                        
                        673,016Comprehensive
      income:Net
      income
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        99,297
                        
                        
                        
                        —
                        
                        
                        
                        99,297Foreign
      currency translation adjustments
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (43,188
                        )
                        
                        
                        (43,188
                        )Unrealized
      loss on long-term  investments, net of tax
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (560
                        )
                        
                        
                        (560
                        )Total
      comprehensive income
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        55,549Minority
      interest put arrangement
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (743
                        )
                        
                        
                        —
                        
                        
                        
                        (743
                        )Share-based
      compensation
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        13,900
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        13,900Stock
      issued upon exercise of options
                        
                        
                        267
                        
                        
                        
                        2
                        
                        
                        
                        2,864
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        2,866Repurchases
      of stock
                        
                        
                        (855
                        )
                        
                        
                        (6
                        )
                        
                        
                        (22,236
                        )
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        (22,242
                        )Income
      tax benefit from options exercised
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        1,101
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        1,101Balance,
      June 30, 2009
                        
                        
                        80,310
                        
                        
                        $
                        502
                        
                        
                        $
                        127,146
                        
                        
                        $
                        579,331
                        
                        
                        $
                        16,468
                        
                        
                        $
                        723,447





(1)All
share data has been retroactively adjusted for a two-for-one stock split
effective February 5, 2008.


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


47


MICROS
SYSTEMS, INC. AND SUBSIDIARIES


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





1.
            DESCRIPTION
      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES:





DESCRIPTION
OF BUSINESS


MICROS
Systems, Inc. is a leading worldwide designer, manufacturer, marketer and
servicer of enterprise information solutions for the global hospitality and
specialty retail industries.  The information solutions consist of
application specific software and hardware systems, supplemented by a wide range
of services.  The hospitality industry includes numerous defined
markets such as lodging (including individual hotel sites, hotel central
reservation systems and customer information systems), table service
restaurants, quick service restaurants, entertainment venues such as stadiums
and arenas, business foodservice operations, casinos, transportation
foodservice, government operations, and cruise ships.  The specialty
retail industry consists of retail operations selling to consumers both general
and specific products, such as clothing, shoes, food, hardware, jewelry, and
other specialty items.  (References to “MICROS” or the “Company”
herein include the operations of MICROS Systems, Inc. and its subsidiaries on a
consolidated basis.)





BASIS
OF PREPARATION AND USE OF ESTIMATES


The
preparation of consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the Company’s consolidated financial statements and accompanying
notes.  Although these estimates are based on assumptions that
management believes are reasonable and management’s knowledge of current events
and actions that the Company may undertake in the future, actual results may
differ from these estimates.  Certain amounts reported in the prior
years have been reclassified in the accompanying financial statements to conform
to the current year’s presentation.





PRINCIPLES
OF CONSOLIDATION


The
consolidated financial statements include the accounts of the Company and its
majority-owned subsidiaries.  The net income of the Company’s
subsidiaries is recorded net of minority interests.  Investments in
20% through 50% owned affiliated companies and any investments in other
companies in which the Company exercises significant influence over operating
and financial affairs, are accounted for under the equity
method.  Otherwise, investments are recorded at cost.  All
significant intercompany accounts and transactions have been
eliminated.





STOCK
SPLIT


On
February 5, 2008, the Company effected a two-for-one stock split of the
Company’s common stock, in the form of a stock dividend.  All
references to share data in the accompanying consolidated financial statements
and throughout these notes have been retroactively adjusted to reflect the
two-for-one stock split.





FOREIGN
CURRENCY TRANSLATION


The
financial statements of the Company’s non-U.S. operations are translated into
U.S. dollars for financial reporting purposes.  The assets and
liabilities of non-U.S. operations whose functional currencies are not in U.S.
dollars are translated at the fiscal year-end exchange rates, while revenues and
expenses are translated at month-end exchange rates during the fiscal year which
approximate weighted average exchange rates.  Specifically, the
applicable exchange rates used in the financial statements are based on the
exchange rates in effect on the last business day of each month.  The
cumulative translation effects are reported in accumulated other comprehensive
income, a separate component of shareholders’ equity.  Gains and
losses on monetary transactions denominated in other than the functional
currency of an operation are reflected in other income (expense).





REVENUE
RECOGNITION


Revenue
is generated from the sale of software licenses, hardware, professional services
and maintenance support.  Depending on the nature of the arrangement,
the Company recognizes revenue in accordance with Statement of Position (“SOP”)
97-2, “Software Revenue Recognition,” as modified by SOP 98-9, “Modification of
SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions”,
the Securities and Exchange Commission Staff Accounting Bulletin No. 104,
“Revenue Recognition in Financial Statements” (“SAB NO. 104.”) and in some
cases, SOP 81-1, “Accounting for Performance of Construction Type and Certain
Production Type Contracts” (“SOP 81-1”).





Software


The
Company’s proprietary software consists of hotels, restaurants and retail
software systems.  The Company also resells various third party
software products.  All software products are offered on a stand alone
basis, and can be used either with third party hardware products or the
Company’s hardware products.


Revenue
from software licenses is recognized when the four basic criteria of SOP 97-2
are met as follows:


·
            Persuasive
      evidence of an arrangement exists:  The Company requires a
      contract signed by both parties to the agreement or a purchase order
      received from the customer as persuasive evidence of an
      arrangement.


48





·
            Delivery
      has occurred or services have been rendered: Delivery occurs when risk of
      ownership has passed to the buyer or in the case of electronic delivery,
      when the customer is given access to the licensed programs.  The
      Company deems its Opera software to be delivered when ready to “go live”
      (i.e., the software is ready to be used in the ordinary course of the
      customer’s business).


·
            Fixed
      or determinable fee:  The Company considers the license fee to
      be fixed or determinable if the fee is not subject to refund or adjustment
      and is payable within its normal payment terms, generally, 90 days of
      delivery, with generally no more than 20% of the contract price due at the
      end of the payment term.  If a software license arrangement
      contains significant customer acceptance criteria or a cancellation right,
      recognition of the software revenue is deferred until the earlier of
      customer acceptance or the expiration of the acceptance period or
      cancellation right.  If the arrangement fee is not fixed or
      determinable, the Company recognizes the revenue as amounts become due and
      payable.


·
            Collection
      is probable:  The Company performs a credit review to determine
      the creditworthiness of the customer.  Collection is deemed
      probable if the Company expects that the customer will be able to pay
      amounts under the arrangement as they become due.  If the
      Company determines collection is not probable, revenue is recognized as
      collection occurs.





Hardware


The
Company’s main proprietary hardware is point-of-sale terminals.  The
Company also sells other hardware devices, such as printers, cash drawers,
handheld order entry terminals and pole displays.  The Company also
resells various hardware products, including personal computers, servers,
printers, network cards and other related computer equipment.


Hardware
revenue is recognized in accordance with SAB No. 104.  Hardware
revenue is recognized at FOB shipping point when the hardware is provided to a
common carrier, if at the time of shipment, the Company has an arrangement, the
risk of ownership has passed to the buyer, there is a fixed and determinable
price and collectability is reasonably assured.  If at the time of
shipment, the Company has not met these four criteria, recognition of the
hardware revenue is deferred until all four criteria are determined to have been
met.


Hardware
revenue is outside the scope of SOP 97-2 because any system software embedded in
the hardware is used solely in connection with the operation of the hardware and
is incidental to the hardware product as a whole; once installed, the embedded
system software is not updated for new versions that are subsequently
developed.





Service


The
Company also provides maintenance support, and/or professional services,
such as installation, customer specific development and software-hosting
services.  Revenue from maintenance support and software-hosting
services is initially recorded as deferred revenue and is recognized ratably
over the contract term.  Revenue related to professional services is
recognized as the service is rendered provided all the other criteria for
revenue recognition have been met.


The
Company’s software is ready for use by the customer upon
receipt.  While many of the customers may choose to tailor the
software to fit their specific needs or request the Company’s assistance
activating the programs, the Company’s implementation services do not typically
involve significant customization to, or development of, the underlying source
code.


Revenue
from fixed e-commerce design and development contracts, where the product is
designed, developed or modified to the customer’s specifications is recognized
on a percentage of completion basis in accordance with SOP 81-1 based on the
estimated costs incurred compared to total estimated costs.  This
method is used because reasonably dependable estimates of the revenues and the
project progress applicable to various states of an arrangement can be made,
based on historical experience and milestones set in the contract.





Multiple
Element Arrangements


When more
than one element such as hardware, software and services are sold together in a
single arrangement, revenue is recognized using the residual method as
prescribed by SOP 98-9.  Under the residual method, and provided that
each element meets the criteria for treatment as a separate unit of accounting,
the Company defers revenue for the fair value of the undelivered elements based
on vendor specific objective evidence of fair value (“VSOE”), and the
remaining portion of the arrangement fee is allocated to the delivered elements
and recognized as revenue when all the other criteria for revenue recognition
are met.  An element is considered a separate unit of accounting if it
has value to the customer on a standalone basis and there is objective and
reliable evidence of the fair value of the undelivered elements. VSOE of fair
value for the Company’s services, including maintenance agreements, are based
upon standalone sales of those services.





Other


Costs
related to shipping and handling and billable travel expenses are included in
cost of sales.  The Company’s hardware and software products are sold
under warranty for defects in material and workmanship for a period generally
ranging from 12 to 36 months following delivery.  The Company
establishes an accrual for estimated warranty costs at the time of
sale.  Historically, the Company’s warranty expense has not been
material.


49





FINANCIAL
INSTRUMENTS AND FAIR VALUE MEASUREMENTS





The fair
market values of cash and cash equivalents, marketable securities, accounts
receivable, accounts payable, accrued expenses and income taxes payable at both
June 30, 2009 and 2008 approximate their carrying amounts.


The
Company considers all highly liquid investments with a maturity of generally
three months or less at the date of purchase to be cash
equivalents.  These investments are recorded at cost which
approximates fair value.  Investments with original maturities of
greater than three months and remaining maturities of less than one year are
classified as short-term investments. These
investments are classified as available-for-sale securities and are recorded at
fair value which approximates cost.  Auction rate securities, recorded
at fair value, are
long-term debt instruments with variable interest rates that periodically reset
to prevailing market rates every 7 to 35 days through the auction process
(“auction rate securities.”)


The
Company periodically reviews each investment to identify any unrealized losses
and evaluates whether the losses are temporary in nature.  Unrealized
losses that are determined to be temporary in nature are reported, net of tax,
in accumulated other comprehensive income.   Prior to April 1,
2009, any unrealized loss identified as other-than-temporary would have been
recorded in the consolidated statements of operations.  Effective upon
the Company’s adoption of FASB Staff Positions (“FSP”) FAS 115-2 and FAS 124-2
“Recognition and Presentation of Other-Than-Temporary Impairments” on April 1,
2009, other-than-temporary “credit loss” related to a security (loss due to
security issuer’s credit risk) is recognized, net of tax, in the consolidated
statements of operations, while other-than-temporary impairment loss related to
factors other than credit loss is recognized in accumulated other comprehensive
income.





ALLOWANCE
FOR DOUBTFUL ACCOUNTS


The
Company maintains allowances for doubtful accounts for estimated losses that may
result from the inability of the Company’s customers to make required payments
and for limited circumstances when the customer disputes the amounts due to the
Company.  The Company’s methodology for determining this allowance
requires estimates and is based on the age of the receivable, customer’s payment
practices and history, inquiries, credit reports from third parties and other
financial information.  If the financial condition of the Company’s
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.





INVENTORY


Inventory
is stated at the lower of cost or market.  Cost is determined
principally on a first-in, first-out basis.





PROPERTY,
PLANT AND EQUIPMENT


Property,
plant and equipment are stated at cost and depreciated using the straight-line
method over their estimated useful lives, ranging from three to ten
years.  Leasehold improvements are amortized over the life of the
lease or estimated useful lives, whichever is shorter.  Maintenance
and repairs are charged to expense as incurred, and the costs of additions and
improvements are capitalized.  Any gain or loss from the retirement or
sale of an asset is credited or charged to operations in the current
period.





SOFTWARE
FOR INTERNAL USE


Internally
used computer software is capitalized according to SOP 98-1, “Accounting for the
Costs of Computer Software Developed or Obtained for Internal
Use.”  Capitalized costs are amortized on a straight-line basis over
the estimated life of the software ranging up to ten years.





CAPITALIZED
SOFTWARE DEVELOPMENT COSTS


Costs
incurred in the research and development of new software products to be licensed
to others, primarily consisting of salaries, employee benefits and
administrative costs, are expensed as incurred and included in research and
development expenses until technological feasibility is
established.  The capitalization of software development costs on a
product-by-product basis starts when a product’s technological feasibility has
been established and ends when the product is available for general release to
customers, at which time amortization of the capitalized software development
costs begins.  Technological feasibility is established when the
product reaches the working model stage.  The cost of purchased
software is also capitalized.


Annual
amortization of capitalized software development costs is included in software
cost of sales.  For each capitalized software product, the annual
amortization is equal to the greater of: (i) the amount computed using the ratio
that the software product’s current fiscal year gross revenue bears to the total
current fiscal year and anticipated future gross revenues for that product or
(ii) the amount computed based on straight-line method over the remaining
estimated economic life of the product.  Amortization expenses for the
fiscal years 2009, 2008 and 2007 were approximately $7.7 million, $9.4 million
and $8.4 million, respectively.


During
the fiscal years 2009 and 2008, the Company wrote off approximately $0.8 million
and $0.7 million in capitalized software costs, respectively.  No
capitalized software costs were written off in fiscal year 2007.





LONG-LIVED
ASSETS INCLUDING FINITE-LIVED PURCHASED INTANGIBLE ASSETS


The
Company evaluates long-lived assets, including finite-lived purchased intangible
assets, for impairment whenever events and changes in circumstances indicate
that the carrying amount of an asset may not be fully recoverable in accordance
with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets.”  The Company compares the fair value of the assets based on
the undiscounted cash flows the assets are expected to generate (or market
value, if available) to the net book value of the assets.  If the fair
value is less than net book value, the asset is impaired and the Company
recognizes an impairment loss equal to the excess of the net book value over the
fair value.


50





During
the fiscal year ended June 30, 2009, the Company recorded approximately $1.5
million in accelerated amortization expenses related to finite-lived purchased
intangible assets.  During the three fiscal years ended June 30, 2009,
the Company did not recognize any impairment losses on long-lived assets,
including finite-lived purchased intangible assets.





GOODWILL
AND INDEFINITE-LIVED PURCHASED INTANGIBLE ASSETS


SFAS 142,
“Goodwill and Other Intangible Assets” prohibits the amortization of goodwill
and indefinite-lived purchased intangible assets.  In accordance with
SFAS 142, the Company assesses annually, in the first quarter of its fiscal
year, whether goodwill and certain of its trademarks, which are the Company’s
only indefinite-lived purchased intangible assets, are impaired.  Goodwill
is evaluated for impairment by comparing the fair value of each of the Company’s
reporting units (the Company’s four operating segments consisting of U.S.,
Europe, the Pacific Rim and Latin America) to their respective book
values.  The fair value of each reporting unit is determined based on
a weighting of the income approach (i.e., discounted future income associated
with the item) and market approach (i.e., market value of similar assets
purchased or sold in the same industry).  If the fair value of the
reporting unit exceeds the book value of the net assets assigned to that unit,
goodwill is not impaired.  If goodwill is impaired, the Company
recognizes an impairment loss based on the amount by which the book value of
goodwill exceeds its implied fair value.  The implied fair value of
goodwill is determined by deducting the fair value of a reporting unit’s
identifiable assets and liabilities from the fair value of the reporting unit as
a whole, as if that reporting unit had just been acquired and the fair value of
the individual assets acquired and liabilities assumed initially were being
determined.


Trademarks
are evaluated for impairment by comparing their fair value to book
value.  The Company estimates the fair value of trademarks using an
income approach to value, and recognizes an impairment loss if the estimated
fair value of a trademark is less than its book value.


Additional
impairment assessments may be performed on an interim basis if the Company
encounters events or changes in circumstances indicating that it is more likely
than not that the book value of goodwill and/or trademarks has been
impaired.


The
process of evaluating the potential impairment of goodwill and/or trademarks is
highly subjective and requires significant judgment at many points during the
analysis.  In estimating the fair value of the reporting units with
recognized goodwill for the purposes of its annual or interim analyses, the
Company makes estimates and judgments about the future cash flows of these
businesses.  The cash flow forecasts are based on assumptions that are
consistent with the plans and estimates used to manage the underlying reporting
units. The Company also considers its market capitalization on the date the
analysis is performed.




ADVERTISING
COSTS


Advertising
costs are charged to expense as incurred.  Advertising expenses for
the fiscal years 2009, 2008 and 2007 were approximately $5.2 million, $7.5
million and $6.6 million, respectively.





RESEARCH
AND DEVELOPMENT COSTS


Research
and development costs, primarily consisting of salaries, employee benefits and
administrative costs (other than capitalized software development costs) are
charged to operations as incurred.





SHARE-BASED
COMPENSATION


The
Company accounts for its option awards granted under its stock option program in
accordance with SFAS 123(R), “Share-Based Payment.” The estimated fair value of
option awards granted under the stock option program are measured as of the date
of grant, and non-cash share-based compensation expense, adjusted for expected
pre-vesting forfeitures, are recognized ratably over the requisite service (i.e.
vesting) period of options in the consolidated statement of
operations.


The
Company values stock options using the Black-Scholes option pricing model, which
was developed for use in estimating the fair value of traded options that are
fully transferable and have no vesting restrictions.  Therefore, the
Company is required to make highly subjective assumptions about volatility
rates, expected term of options, dividend yields and applicable interest rates
in the option pricing model.  Expected volatility is based on
historical stock prices.  The expected term of options granted is
based on historical option activities, adjusted for the remaining option life
cycle by assuming ratable exercise of any unexercised vested options over the
remaining term.  The risk-free interest rate is based on the U.S.
Treasury yield curve in effect at the time of grant.  See Note 3
“Share-Based Compensation” for further detail.





WARRANTIES


The
Company’s products are sold under warranty for defects in material and
workmanship for a period ranging generally from 12 to 36 months.  The
Company establishes an accrual for estimated warranty costs at the time of
sale.  Historically, the Company’s warranty expense has not been
material.





INCOME
TAXES


Income
taxes are accounted for under the asset and liability
method.  Deferred tax assets and liabilities are recognized for the
expected future tax consequences attributable to the differences between the
financial statement carrying amounts and the tax basis of assets and
liabilities.  Deferred tax assets and liabilities are measured using
the enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled.  The effect on
the deferred tax assets and liabilities of a change in tax rate is recognized in
the results of operations in the period that includes the enactment
date.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amounts more likely than not to be
realized.  If the Company determines that it will not be able to
realize all or part of its net deferred tax asset in the future, an adjustment
to the deferred tax asset would be charged to the deferred income tax provision
in the period such determination is made.


51





Effective
July 1, 2007, the Company adopted the provisions of Financial Accounting
Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes, an Interpretation of FASB Statement No. 109” (“FIN
48”).  FIN 48 clarifies the accounting for income taxes by prescribing
a minimum recognition threshold that a tax position is required to meet before
being recognized in the financial statements.  FIN 48 also provides
guidance on derecognition, measurement, and classification of the effects of a
tax position, recognition of interest and penalties, accounting in interim
periods, and disclosure. See Note 13 “Income Taxes” below for further
detail.





NET
INCOME PER SHARE


Basic net
income per common share is computed by dividing net income available to common
shareholders by the weighted-average number of shares
outstanding.  Diluted net income per share includes the dilutive
effect of stock options.  A reconciliation of the net income available
to common shareholders and the weighted-average number of common shares
outstanding assuming dilution is as follows:





Fiscal
      Year Ended June 30,(in
      thousands, except per share data)
                      
                      2009
                      
                      
                      2008
                      
                      
                      2007Net
      income
                      
                      $
                      99,297
                      
                      
                      $
                      101,284
                      
                      
                      $
                      79,988Effect
      of minority put arrangement
                      
                      
                      (743
                      )
                      
                      
                      (645
                      )
                      
                      
                      (51
                      )Net
      income available to common shareholders
                      
                      $
                      98,554
                      
                      
                      $
                      100,639
                      
                      
                      $
                      79,937Average
      common shares outstanding
                      
                      
                      80,486
                      
                      
                      
                      81,546
                      
                      
                      
                      79,978Dilutive
      effect of outstanding stock options
                      
                      
                      975
                      
                      
                      
                      1,800
                      
                      
                      
                      2,603Average
      common shares outstanding assuming dilution
                      
                      
                      81,461
                      
                      
                      
                      83,346
                      
                      
                      
                      82,581Basic
      net income per share
                      
                      $
                      1.22
                      
                      
                      $
                      1.23
                      
                      
                      $
                      1.00Diluted
      net income per share
                      
                      $
                      1.21
                      
                      
                      $
                      1.21
                      
                      
                      $
                      0.97Anti-dilutive
      weighted shares excluded from reconciliation
                      
                      
                      4,105
                      
                      
                      
                      1,239
                      
                      
                      
                      2,528





Fiscal
years 2009, 2008 and 2007 include approximately $13.9 million ($9.8 million, net
of tax), $17.2 million ($13.1 million, net of tax) and $14.0 million ($11.1
million, net of tax), in non-cash share-based compensation expense,
respectively.  These non-cash share-based compensation expenses
reduced diluted net income per share by $0.12, $0.16 and $0.14 for fiscal years
2009, 2008 and 2007, respectively.  See Note 3 “Share-based
Compensation” below for further detail.


In
connection with one of the Company’s acquisitions during fiscal year 2007, the
minority shareholders of the acquired company have the option to require the
Company to purchase their remaining shares in the acquired company in accordance
with a pre-defined formula based on specified financial results of the acquired
company.  This arrangement reduced the net income available to common
shareholders in the earnings per diluted share calculation by less than $0.01
per diluted share for each of fiscal years 2009, 2008 and 2007.  See
Note 4 “Acquisitions” below for further detail.





DEFINED
BENEFIT PLAN


The
Company’s Supplemental Executive Retirement Plan (the “SERP”) provides
designated officers and executives of the Company with benefits upon retirement
or immediate vesting of benefits upon a participant’s pre-retirement
death.  This plan is described more fully in Note 16 “Employee Benefit
Plans.”





SUBSEQUENT
EVENTS


In June
2009, the Company adopted SFAS 165, “Subsequent Events,” which addresses the
accounting for and disclosure of subsequent transactions and events not
addressed in other applicable generally accepted accounting
principles.


Subsequent
to year-end, on August 25, 2009, the Board of Directors authorized the purchases
of an additional two million shares of the Company’s common stock over the next
three years, to be purchased from time to time depending on market conditions
and other corporate considerations as determined by management.


There
were no other subsequent events that the Company was required to
recognize or disclose in the accompanying consolidated financial
statements.  Subsequent events have been evaluated through August 31,
2009, which is the date these financial statements are issued.


52





RECENT
ACCOUNTING STANDARDS





Recently
Adopted Accounting Pronouncements





FSP
FAS 157-4, FSP FAS 115-2 and FAS 124-2 and FSP FAS 107-1 and APB
28-1


On
April 1, 2009, the Company adopted FSP FAS 157-4, FSP FAS 115-2 and FAS
124-2, and FSP FAS 107-1 and APB 28-1.  These FSPs are intended to
provide additional application guidance and enhance disclosures about fair value
measurements and impairments of securities.  FSP FAS 157-4 clarifies
the objective and method of fair value measurement even when there has been a
significant decrease in market activity for the asset being
measured.  FSP FAS 115-2 and FAS 124-2 establish a new model for
measuring other-than-temporary impairments for debt securities, including
establishing criteria for when to recognize a write-down through earnings versus
other comprehensive income.  FSP FAS 107-1 and APB 28-1 expands
the fair value disclosures required for all financial instruments within the
scope of SFAS 107, “Disclosures about Fair Value of Financial Instruments,” to
interim periods.  As a result of adopting these FSPs, the Company
recognized other-than-temporary credit based impairment losses of approximately
$1.3 million related to its investments in auction rate securities and have
recorded the losses in its consolidated statement of operations for the fiscal
year ended June 30, 2009.  Adoption of these FSPs  also expanded
the Company’s associated disclosures.


SFAS
157


On
July 1, 2008, the Company adopted SFAS 157, “Fair Value Measurements”, for
all financial assets and liabilities and nonfinancial assets and liabilities
that are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually).  This statement defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value
measurements.  This statement does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the
information.  See Note 2 “Financial Instruments and Fair Value
Measurements.”


SFAS
159


On July
1, 2008, the Company adopted SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities-Including an amendment of FASB Statement
No. 115.”  This statement provided the Company with the
irrevocable option to elect fair value for the initial and subsequent
measurement for certain financial assets and liabilities on a
contract-by-contract basis with the difference between the carrying value before
election of the fair value option and the fair value recorded upon election as
an adjustment to beginning retained earnings.  As of June 30,
2009, the Company had not elected the fair value option for any eligible
financial asset or liability.





Recent
Accounting Pronouncements Not Yet Adopted


SFAS
167


In June
2009, the FASB issued SFAS 167, “Amendments to FASB Interpretation
No. 46(R)”, which is effective for the Company beginning July 1,
2010.  This statement amends FASB Interpretation (“FIN”)
No. 46(R), “Consolidation of Variable Interest Entities an interpretation
of ARB No. 51,” to require revised evaluations of whether entities
represent variable interest entities, ongoing assessments of control over such
entities, and additional disclosures for variable interests.  The
Company does not believe the adoption of this statement will have a material
impact on its consolidated financial statements.


FSP
FAS 142-3


In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets,” which is effective for the Company beginning July 1,
2009.  This statement amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
a recognized intangible asset under SFAS 142, “Goodwill and Other Intangible
Assets.”  The statement is intended to improve the consistency between
the useful life of a recognized intangible asset under SFAS 142 and the period
of expected cash flows used to measure the fair value of the asset under SFAS
141(R), “Business Combinations,” and other U.S. generally accepted accounting
principles.  The Company does not believe the adoption of this
statement will have a material impact on its consolidated financial
statements.


SFAS 141(R)


In
December 2007, the FASB issued SFAS 141 (Revised), “Business Combinations”
(“SFAS 141(R)”), which is effective for the Company’s business combinations with
acquisition dates beginning July 1, 2009.   This statement
establishes principles and requirements for how the acquirer of a business
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquired business.  SFAS 141(R) also provides guidance for recognizing
and measuring the goodwill acquired in the business combination and disclosing
information to enable users of the financial statements to evaluate the nature
and financial effects of the business combination.  The Company does
not believe the adoption of this statement will have a material impact on its
consolidated financial statements.


SFAS
160


In
December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in
Consolidated Financial Statements — an Amendment of ARB 51,” which is
effective for the Company beginning July 1, 2009.  This statement
amends Accounting Research Bulletin No. 51 to establish accounting and reporting
standards for the noncontrolling interest (minority interest) in a subsidiary
and for the deconsolidation of a subsidiary.  The statement
establishes accounting and reporting standards requiring that noncontrolling
interests be reported as a component of equity, changes in a parent’s ownership
interest while the parent retains its controlling interest be accounted for as
equity transactions, and any retained noncontrolling equity investment upon the
deconsolidation of a subsidiary initially be measured at fair
value.  The Company does not believe the adoption of this statement
will have a material impact on its consolidated financial
statements.


53





2.
            FINANCIAL
      INSTRUMENTS AND FAIR VALUE
MEASUREMENTS





Investments,
including short-term and long-term consist of the following:





June
      30, 2009
                    
                    
                    June
      30, 2008(in
      thousands)
                    
                    Amortized
                      Cost
      Basis
                    
                    
                    Aggregate
                      Fair
      Value
                    
                    
                    Amortized
                      Cost
      Basis
                    
                    
                    Aggregate
                      Fair
      ValueTime
      deposit - international
                    
                    $
                    115,762
                    
                    
                    $
                    115,762
                    
                    
                    $
                    4,892
                    
                    
                    $
                    4,892Auction
      rate securities
                    
                    
                    64,275
                    
                    
                    
                    57,823
                    
                    
                    
                    69,450
                    
                    
                    
                    65,216U.S.
      government
                    
                    
                    25,084
                    
                    
                    
                    25,084
                    
                    
                    
                    -
                    
                    
                    
                    -Foreign
      corporate debt security
                    
                    
                    4,209
                    
                    
                    
                    4,209
                    
                    
                    
                    -
                    
                    
                    
                    -Time
      deposit - U.S.
                    
                    
                    970
                    
                    
                    
                    970
                    
                    
                    
                    -
                    
                    
                    
                    -Other
                    
                    
                    654
                    
                    
                    
                    654
                    
                    
                    
                    -
                    
                    
                    
                    -Total
      investments
                    
                    $
                    210,954
                    
                    
                    $
                    204,502
                    
                    
                    $
                    74,342
                    
                    
                    $
                    70,108




SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date (exit price).  SFAS 157 establishes a framework
for measuring fair value and expands disclosure about fair value
measurements.  To increase consistency and comparability in fair value
measurements and related disclosure, SFAS 157 establishes a hierarchy that
prioritizes the inputs (generally, assumptions that market participants use in
pricing an asset or liability) used to measure fair value based on the quality
and reliability of the information provided by the inputs, as
follows:


·
            Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities.  The Company considers active markets as those in
      which transactions for the assets or liabilities occur with sufficient
      frequency and volume to provide pricing information on an ongoing
      basis.


·
            Level
      2 - Quoted prices in markets that are not active, or inputs that are
      observable, either directly or indirectly, for substantially the full term
      of the asset or liability.


·
            Level
      3 - Measured based on prices or valuation models that require inputs that
      are both significant to the fair value measurement and less observable
      from objective sources (i.e., supported by little or no market
      activity).





The
financial assets accounted for at fair value were as follows (excludes cash and
cash equivalents of approximately $292.3 million and $377.1 million as of June
30, 2009 and 2008):





(in thousands)
                  
                  Level 1
                  
                  
                  Level 2
                  
                  
                  Level 3
                  
                  
                  TotalBalance
      at June 30, 2009:Short-term
      and long-term investments:Time
      deposit - international
                  
                  $
                  —
                  
                  
                  $
                  115,762
                  
                  
                  $
                  —
                  
                  
                  $
                  115,762Auction
      rate securities
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  57,823
                  
                  
                  
                  57,823U.S.
      government
                  
                  
                  25,084
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  25,084Foreign
      corporate debt security
                  
                  
                  4,209
                  
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  4,209Time
      deposit - U.S.
                  
                  
                  —
                  
                  
                  
                  970
                  
                  
                  
                  —
                  
                  
                  
                  970Other
                  
                  
                  —
                  
                  
                  
                  654
                  
                  
                  
                  —
                  
                  
                  
                  654Total
      short-term and long-term investments:
                  
                  $
                  29,293
                  
                  
                  $
                  117,386
                  
                  
                  $
                  57,823
                  
                  
                  $
                  204,502Balance
      at June 30, 2008:Short-term
      and long-term investments:Time
      deposit - international
                  
                  $
                  —
                  
                  
                  $
                  4,892
                  
                  
                  $
                  —
                  
                  
                  $
                  4,892Auction
      rate securities
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  65,216
                  
                  
                  
                  65,216Total
      short-term and long-term investments
                  
                  $
                  —
                  
                  
                  $
                  4,892
                  
                  
                  $
                  65,216
                  
                  
                  $
                  70,108





At June
30, 2009, with the exception of the Company’s investments in auction rate
securities, a majority of its investments were priced by pricing
vendors.  These pricing vendors utilize the most recent observable
market information in pricing these securities or, if specific prices are not
available for these securities, other observable inputs are
utilized.  In the event observable inputs are not available, other
factors are assessed to determine the security’s market value, including broker
quotes or model valuations.  At June 30, 2009, all of the Company’s
short-term investments were recognized at fair value determined based upon
observable inputs from the Company’s pricing service vendors for identical or
similar assets. See below for further discussion on the valuation of the
Company’s investments in auction rate securities.


During
the three fiscal years ended June 30, 2009, the Company recognized no realized
gains or losses.


54




The
contractual maturities of investments held at June 30, 2009 are as
follows:





(in
      thousands)
                      
                      Amortized
                        Cost
      Basis
                      
                      
                      Aggregate
                        Fair
      ValueDue
      within one year
                      
                      $
                      146,679
                      
                      
                      $
                      146,679Due
      after 10 years
                      
                      
                      64,275
                      
                      
                      
                      57,823Balance
      at June 30, 2009
                      
                      $
                      210,954
                      
                      
                      $
                      204,502




AUCTION
RATE SECURITIES


The
Company’s investments in auction rate securities, carried at estimated fair
values, were its only assets valued on the basis of Level 3
inputs.  Auction rate securities are long-term debt instruments with
variable interest rates that periodically reset to prevailing market rates every
7 to 35 days through the auction process.  The auction rate securities
held by the Company are supported by student loans for which repayment is
guaranteed either by the Federal Family Education Loan Program or insured by
AMBAC Financial Group.  Due to the liquidity previously provided by
the interest rate reset mechanism and the short-term nature of the Company’s
investment, the auction rate securities previously (prior to February 2008) were
classified as short-term investments available-for-sale in the accompanying
consolidated balance sheets.  Beginning in February 2008, auctions for
these securities failed to obtain sufficient bids to establish a clearing rate
and the securities were not saleable in auction, thereby no longer providing
short-term liquidity.  As a result, the auction rate securities have
been classified as long-term investments available-for-sale as of June 30, 2009
and 2008 instead of being classified as short-term investments, as was the case
prior to February 2008.


During
the fourth quarter of fiscal year 2009 and following the adoption of FSP 115-2,
the Company performed an assessment as to whether it would likely recover the
entire cost basis of each of the auction rate securities, and therefore whether
the securities had incurred an other-than-temporary impairment. Determination of
whether the impairment is temporary or other-than-temporary requires significant
judgment.  The primary factors that are considered in assessing the
nature of the impairment include (a) the credit quality of the underlying
security, (b) the extent to which and time period during which the fair value of
each investment has been below cost, (c) the expected holding or recovery period
for each investment, (d) the Company’s intent to hold each investment until
recovery and likelihood that the Company will not be required to sell the
security prior to recovery, and (e) the existence of any evidence of default by
the issuer. The Company engaged an independent valuation firm to perform a
valuation of its auction rate securities in conjunction with the Company's
assessment of any impairment as temporary versus other than temporary. The
valuation firm used a discounted cash flow model that considered various inputs
including:  (a) the coupon rate specified under the debt instruments,
(b) the current credit ratings of the underlying issuers, (c) collateral
characteristics, (d) discount rates, (e) severity of default and (f) probability
of failing or passing auction or early redemption.  The valuation firm
used a mark to model approach to arrive at this valuation, which the Company
reviewed and with which it agreed.


Based on
its fair value assessment, the Company determined that its investments in
auction rate securities as of June 30, 2009 were impaired by approximately $6.5
million. The June 30, 2009 valuation also further evaluated what portion of the
other-than- temporary impairment represented a credit loss based on the guidance
outlined in FSP FAS 115-2.  The factors considered in making an
evaluation of the amount attributable to credit loss included the
following:  (a) default probability and the likelihood of
restructuring of the security, (b) payment structure of the security to
determine how the expected underlying collateral cash flows will be distributed
to each security issued from the structure and (c) performance indicators of the
underlying assets in the trust (including default and delinquency
rates).  These assumptions are subject to change as the underlying
market conditions change. The Company determined approximately $1.3 million of
the impairment losses were credit based and recorded the losses in its
consolidated statement of operations for the fiscal year ended June 30, 2009.


The
remaining impairment losses of approximately $5.2 million (approximately $3.2
million, net of tax) were determined to be temporary and have been recorded in
accumulated other comprehensive income as of June 30, 2009.  As of
June 30, 2008, the valuation of the auction rate securities indicated a
temporary impairment of approximately $4.2 million (approximately $2.7 million,
net of tax) which was recorded in accumulated other comprehensive
income.


A
reconciliation of changes in the fair value of auction rate securities, and the
related unrealized losses were as follows:





(in
      thousands)
                    
                    Cost
                    
                    
                    Temporary
                      Impairment
                      Loss
      (1)
                    
                    
                    OTTI
      -
                      Non-Credit
                      Loss
      (1)
                    
                    
                    OTTI
      - Credit
                      Loss
      (2)
                    
                    
                    Fair
                      ValueBalance
      at June 30, 2008
                    
                    $
                    69,450
                    
                    
                    $
                    (4,234
                    )
                    
                    $
                    —
                    
                    
                    $
                    —
                    
                    
                    $
                    65,216Changes
      in unrealized losses related to investments
                    
                    
                    —
                    
                    
                    
                    (464
                    )
                    
                    
                    (712
                    )
                    
                    
                    (1,266
                    )
                    
                    
                    (2,442
                    )Redemption
                    
                    
                    (5,175
                    )
                    
                    
                    224
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (4,951
                    )Balance
      at June 30, 2009
                    
                    $
                    64,275
                    
                    
                    $
                    (4,474
                    )
                    
                    $
                    (712
                    )
                    
                    $
                    (1,266
                    )
                    
                    $
                    57,823





(1)
Recorded in the accumulated other comprehensive income (loss) component of
stockholders' equity.


(2)
Recorded in the consolidated statement of operations.


55





During
the fiscal year ended June 30, 2009, the Company redeemed approximately $5.2
million of its auction rate securities at their par value.  The
Company had no realized gains or losses related to the sale or redemption of its
investments in auction rate securities during the three fiscal years ended June
30, 2009.


The
Company plans to continue to monitor its investments, including the liquidity of
and creditworthiness of the issuers of its auction rate securities, on an
ongoing basis for indications of further impairment and, if an impairment is
identified, for proper classification of the impairment.  Based on the
Company’s expected operating cash flows and sources of cash, the Company does
not believe that any reduction in the liquidity of its auction rate securities
will have a material impact on its overall ability to meet its liquidity
needs.





3.
            SHARE-BASED
      COMPENSATION:





The
Company has incentive and non-qualified stock options outstanding that were
granted to directors, officers, and other employees pursuant to authorization by
the Board of Directors.  With respect to directors, the Company’s
policy and practice during fiscal year 2009 was that only those directors who
are employees to the Company were eligible to receive options.  The
exercise price per share of each option equals the market value of a share of
the Company’s common stock on the date of the grant.  Substantially
all of the options granted are exercisable under a three-year vesting schedule
whereby options vest as to one-third of the underlying shares upon the first
anniversary of the grant, as to the second third upon the second anniversary of
the grant, and as to the remaining underlying shares upon the third anniversary
of the grant.  All outstanding options expire ten years from the date
of grant.  Since its inception in 1991, the Company has authorized
approximately 35.2 million shares for issuance upon exercise of options, of
which approximately 3.1 million shares were available for future grants as of
June 30, 2009.


The
non-cash share-based compensation expenses included in the consolidated
statements of operations are as follows:


Fiscal
      Year Ended June 30,(in
      thousands)
                              
                              2009
                              
                              
                              2008
                              
                              
                              2007Selling,
      general and administrative
                              
                              $
                              13,108
                              
                              
                              $
                              16,213
                              
                              
                              $
                              13,243Research
      and development
                              
                              
                              792
                              
                              
                              
                              1,016
                              
                              
                              
                              753Total
      non-cash share-based compensation expense
                              
                              
                              13,900
                              
                              
                              
                              17,229
                              
                              
                              
                              13,996Income
      tax benefit
                              
                              
                              (4,100
                              )
                              
                              
                              (4,083
                              )
                              
                              
                              (2,884
                              )Total
      non-cash share-based compensation expense, net of tax
    benefit
                              
                              $
                              9,800
                              
                              
                              $
                              13,146
                              
                              
                              $
                              11,112Impact
      on diluted net income per share
                              
                              $
                              0.12
                              
                              
                              $
                              0.16
                              
                              
                              $
                              0.14





The
non-cash share-based compensation expense for the fiscal years 2009 and 2008
include approximately $0.8 million and $3.2 million, respectively, related to
grants of options to the Company’s Chairman, President, and Chief Executive
Officer, A.L. Giannopoulos during fiscal years 2009 and 2008.  In
accordance with the terms of the Company’s option plan, as he is over the
retirement age of 62, any options that he holds that have not yet vested will
vest immediately upon his retirement.  Although Mr. Giannopoulos has
not retired, the Company expensed 100% of the share-based compensation expense
related to his option grant because he was over the age of 62 at the time he
received the options.  The non-cash share-based compensation expense
for the fiscal year 2007 also included a one-time charge of approximately $0.7
million resulting from the accelerated vesting of unvested options due to the
death of an officer of the Company.  Under the Company’s stock option
plan, options vest immediately upon death of an option holder.


No
non-cash share-based compensation expense has been capitalized for fiscal years
2009, 2008 and 2007, as stock options were not granted to employees whose labor
cost was capitalized as software development costs or inventory.


The
estimated fair values of options granted during the three fiscal years ended
June 30 were estimated on the date of grant using the following
assumptions:





Fiscal
      Year Ended June 30,2009
                  
                  
                  2008
                  
                  
                  2007Weighted-average
      expected volatility
                  
                  
                  39
                  %
                  
                  
                  35
                  %
                  
                  
                  37
                  %Expected
      volatility
                  
                  
                  35%
      - 42
                  %
                  
                  
                  33%
      - 36
                  %
                  
                  
                  36%
      - 38
                  %Expected
      term
                  
                  4.9
      – 5.3 years
                  
                  
                  4.8
      – 5.3 years
                  
                  
                  4.6
      – 5.7 yearsExpected
      dividend yield
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %Risk-free
      interest rate
                  
                  
                  1.7%
      - 2.8
                  %
                  
                  
                  2.6%
      - 3.7
                  %
                  
                  
                  4.5%
      - 4.9
                  %





The
following is a summary of option activity during the fiscal year ended June 30,
2009:





(in
      thousands, except per share data and number of years)
                            
                            Number
      of
                              Shares
                            
                            
                            Weighted-
                              Average
                              Exercise
                              Price
                            
                            
                            Weighted-
                              Average
                              Remaining
                              Contractual
                              Term
                              (in
      years)
                            
                            
                            Aggregate
                              Intrinsic
                              ValueOutstanding
      at June 30, 2008
                            
                            
                            6,247
                            
                            
                            $
                            22.46
                            
                            
                            
                            7.2
                            
                            
                            $
                            50,192Granted
                            
                            
                            1,203
                            
                            
                            $
                            16.00Exercised
                            
                            
                            (267
                            )
                            
                            $
                            10.75Forfeited
      or expired
                            
                            
                            (51
                            )
                            
                            $
                            24.70Outstanding
      at June 30, 2009
                            
                            
                            7,132
                            
                            
                            $
                            21.79
                            
                            
                            
                            6.9
                            
                            
                            $
                            25,188Exercisable
      at June 30, 2008
                            
                            
                            3,655
                            
                            
                            $
                            17.41
                            
                            
                            
                            6.1
                            
                            
                            $
                            47,802Exercisable
      at June 30, 2009
                            
                            
                            4,857
                            
                            
                            $
                            20.47
                            
                            
                            
                            6.0
                            
                            
                            $
                            23,577




56





The
weighted-average grant-date estimated fair value per share of options granted
during the fiscal years 2009, 2008 and 2007 were $5.93, $12.87 and $21.66,
respectively.  The total intrinsic value, which is the difference
between the exercise price and the market price on the date of exercise, of
options exercised during the fiscal years 2009, 2008 and 2007 was approximately
$3.8 million, $38.9 million and $62.2 million, respectively.


As of
June 30, 2009, there was approximately $13.4 million (net of estimated
forfeitures) in non-cash share-based compensation costs related to non-vested
awards, expected to be recognized in the Company’s consolidated statements of
operations.  This cost is expected to be recognized over a
weighted-average period of 1.8 years.


Cash
received from options exercised during the fiscal years 2009, 2008 and 2007 was
approximately $2.9 million, $27.9 million and $35.0 million,
respectively.





4.
            ACQUISITIONS:





FY
2009:


FRY,
INC.


During
August 2008, the Company acquired Fry, Inc. (“Fry”), an e-commerce design,
development and managed services provider headquartered in Ann Arbor, Michigan,
for a total cash purchase price of approximately $32.7 million, net of cash
acquired.  The Company also assumed debt of approximately $18.1
million, which was paid off immediately after the
acquisition.  Approximately $6.0 million of the total purchase price
was held in escrow and, if specified claims against Fry arise, such amounts may
be used to satisfy these claims.  Any amounts then remaining after the
satisfaction of any such claims are to be paid in two installments, at 12 and 18
months after closing.  The first installment of approximately $2.9
million was paid in August 2009.  The selling Fry shareholders are
eligible to earn up to an additional $17 million in earn out payments over the
approximately two year period following closing, which are payable based upon
achievement of specified financial targets.  In April 2009, the
Company paid approximately $4.5 million to selling Fry shareholders for meeting
the initial set of specified financial targets.  In connection with
the acquisition, the Company recorded goodwill of approximately $38.6 million,
intangible assets of approximately $7.0 million, and capitalized software of
approximately $4.7 million.  The acquisition of Fry has been included
in the Company’s results since the acquisition date.





FY
2008:


CHECK-IN-DATA
AG


During
the first quarter of fiscal year 2008, the Company acquired Check-in Data AG
(“Check in Data”) for an aggregate cash purchase price of approximately $13.5
million, net of cash acquired, in a step acquisition in which the Company
acquired an 80% interest in July 2007 and the remaining 20% interest in
September 2007.  Approximately $2.0 million of the total purchase
price which was initially held back to satisfy certain claims the Company may
have had against Check in Data was released and paid in fiscal year
2009.  Headquartered in Switzerland, Check in Data was a distributor
of MICROS products and services and also provided complementary products and
services.  Goodwill of approximately $11.9 million and intangible
assets and capitalized software of approximately $3.3 million were recorded in
connection with the acquisition.  The acquisition of Check in Data has
been included in the Company’s results since the acquisition date.


OTHER:


During
fiscal year 2008, the Company also acquired another distributor of MICROS
products and services.  The aggregate cash purchase price for this
acquisition was approximately $4.3 million, net of cash acquired, which excluded
certain amounts that were held back to be released on either an agreed upon date
or upon the resolution of contractual indemnity obligations of the sellers, if
any.  The first installment, including working capital adjustment, of
approximately $0.4 million was paid in July 2009.  The balance
remaining after satisfaction of any claims, if any, will be paid at 18 months
and at four years after the April 2008 closing.





FY
2007:


REDSKY


On
January 29, 2007, the Company acquired the RedSky IT Hospitality, Travel, and
Retail subsidiaries (together “RedSky”) of RedSky IT for a total cash purchase
price of approximately $30.8 million, net of cash acquired.  A portion
of the purchase price previously held in escrow, to provide payment if the
Company made and prevailed with respect to certain claims against RedSky IT, has
been released to the former shareholders of RedSky IT.  Headquartered
in the United Kingdom, the acquired companies provide hotel property management
software solutions targeted toward the limited-service, independent and economy
hotel markets, and software solutions for the grocery and travel
industry.  Goodwill of approximately $33.0 million, intangible assets
of approximately $5.2 million and capitalized software costs of approximately
$2.7 million were recorded in connection with the acquisition.


57





OTHERS:


During
fiscal year 2007, the Company also acquired various distributors of MICROS
products and services and other companies with complementary products and
services.  The aggregate cash purchase price for these acquisitions
was approximately $12.6 million, net of cash acquired, which excluded certain
amounts that were held back to be released on either an agreed upon date or, if
applicable, upon the resolution of contractual indemnity obligations of the
sellers. All of the retained funds have been released to the
sellers.


Additionally,
in connection with one of the acquisitions, the arrangement provides the
minority interest holders the option to require the Company to purchase the
minority shares from the minority interest holders (“Put Option”) based on a
formula related to certain financial results of the acquired
company.  The Company had accounted for this arrangement under
Emerging Issues Task Force (“EITF”) Abstract Topic No. D-98 (“D-98”), as
redemption is outside of the control of the Company.  Under EITF D-98,
the carrying value of minority interest reflected on the accompanying
consolidated balance sheets (“Initial Minority Interest”) was increased by an
amount equal to the excess of the value of the Put Option over the Initial
Minority Interest, with an offset to retained earnings and a similar reduction
to the net income available to common shareholders in the earnings per share
calculation.  As permitted in EITF D-98, the Company adopted an
accretion method which allowed the Company to accrete the Put Option value over
the period from the date of acquisition to the Put Option’s earliest possible
redemption date.  As a result, as of June 30, 2009 and 2008, the
Company reflected only a pro-rata portion of the Put Option’s value and increase
in the Initial Minority Interest, with corresponding reductions to retained
earnings and made similar reductions to the net income available to common
shareholders in the earnings per share calculation.  This arrangement
negatively impacted diluted earnings per share by less than $0.01 for fiscal
years 2009, 2008 and 2007.  The Put Option value is revalued on a
quarterly basis based on most recent financial results of the acquired company
and the Put Option value accretion will be adjusted accordingly, but not in a
manner that would reduce the carrying value of the Put Option below the Initial
Minority Interest.


During
fiscal year 2007, the aggregate total assets acquired in all of the acquisitions
as discussed above included total goodwill of approximately $47.1 million,
total intangible assets of approximately $7.6 million and total capitalized
software costs of approximately $2.9 million.





The pro
forma effect of the acquisitions described above was not material to the
consolidated financial statements for any periods presented herein.





5.
            INVENTORY:





The
components of inventory at June 30 are as follows:





(in
      thousands)
                            
                            2009
                            
                            
                            2008Raw
      materials
                            
                            $
                            1,889
                            
                            
                            $
                            5,521Work-in-process
                            
                            
                            15
                            
                            
                            
                            21Finished
      goods
                            
                            
                            37,879
                            
                            
                            
                            59,033$
                            39,783
                            
                            
                            $
                            64,575





The
Company maintained a reserve for inventory obsolescence of approximately $11.4
million as of June 30, 2009 and approximately $11.5 million as of June 30,
2008.  The Company reserved approximately $4.0 million, $2.8 million
and $3.2 million during the three fiscal years ended June 30, 2009,
respectively, all related to potentially obsolete and slow moving
products. The fiscal year 2009 provision includes approximately $0.7
million in incremental inventory provision related to potentially obsolete
products specific to the Company’s decision to adjust to its cost structure in
one of its locations.  See Note 8 “Accrued Expenses and Other Current
Liabilities,” below for further discussion on this restructuring
charge.  The foreign currency translation adjustment decreased the
inventory balance by approximately $5.0 million as of June 30,
2009.





6.
            PROPERTY,
      PLANT AND EQUIPMENT:





The
components of property, plant and equipment at June 30 are as
follows:





(in
      thousands)
                            
                            2009
                            
                            
                            2008
                            
                            Useful
      LifeLeasehold
      improvements
                            
                            $
                            10,655
                            
                            
                            $
                            10,435
                            
                            Shorter
      of useful life or lease termMachinery
      and equipment
                            
                            
                            11,679
                            
                            
                            
                            11,942
                            
                            5-10
      yearsFurniture
      and fixtures
                            
                            
                            19,330
                            
                            
                            
                            18,181
                            
                            7-10
      yearsComputer
      hardware and software
                            
                            
                            74,087
                            
                            
                            
                            67,112
                            
                            3-10
      yearsTotal
      property, plant and equipment
                            
                            
                            115,751
                            
                            
                            
                            107,670Accumulated
      depreciation and amortization
                            
                            
                            (85,231
                            )
                            
                            
                            (78,505
                            )Net
      property, plant and equipment
                            
                            $
                            30,520
                            
                            
                            $
                            29,165




58


Depreciation
expense for the fiscal years 2009, 2008 and 2007 was approximately $13.2
million, $12.6 million and $10.9 million, respectively.
 
 7.
              LINE
      OF CREDIT:
 
 The
Company has two credit agreements (the “Credit Agreements”) that in the
aggregate provide a $65.0 million multi-currency committed line of
credit.  The lenders under the Credit Agreements are Bank of America,
N.A., Wachovia Bank, N.A., and US Bank (“Lenders”).  The international
facility is secured by 65% of the capital stock of the Company’s main operating
Ireland subsidiary and 100% of the capital stock of all of the remaining major
foreign subsidiaries.  The U.S. facility is secured by 100% of the
capital stock of the Company’s major U.S. subsidiaries as well as inventory and
receivables located in the U.S.  During the fiscal year ended June 30,
2009, the Credit Agreements were amended to (i) extend the expiration of the
agreements from July 31, 2009 to July 31, 2010, (ii) modify or eliminate certain
financial reporting requirements, and (iii) modify or eliminate certain
restrictions on the Company’s ability to assume additional debt, repurchase
stock, sell subsidiaries, or acquire companies.
 For
borrowings in U.S. currency, the interest rate under the Credit Agreements is
equal to the higher of the federal funds rate plus 50 basis points or the prime
rate.  For borrowings in foreign currencies, the interest rate is
determined by a LIBOR-based formula, plus an additional margin of 125 to 200
basis points, depending upon the Company’s consolidated earnings before
interest, taxes, depreciation and amortization for the immediately preceding
four calendar quarters.  Under the terms of the Credit Agreements, the
Company is required to pay to the Lenders insignificant commitment fees on the
unused portion of the line of credit.  The Credit Agreements also
contain certain financial covenants and restrictions on the Company’s ability to
assume additional debt, repurchase stock, sell subsidiaries or acquire
companies.  In case of an event of default, as defined in the Credit
Agreements including those not cured within the applicable cure period, if any,
the Lenders’ remedies include their ability to declare all outstanding loans,
plus interest and other related amounts owed, to be immediately due and payable
in full, and to pursue all rights and remedies available to them under the
Credit Agreements or under applicable law.
 As of
June 30, 2009, the Company had approximately $1.1 million outstanding under the
Credit Agreements and has applied approximately an additional $0.4 million to
guarantees.  A total of approximately $63.5 million was available for
future borrowings as of June 30, 2009.  The total outstanding balance
consisted of 105.0 million in JPY (Japanese Yen) (approximately $1.1 million at
the June 30, 2009 exchange rate).
 The
Company also has a credit relationship with a European bank in the amount of EUR
1.0 million (approximately $1.4 million at the June 30, 2009 exchange
rate).  Under the terms of this facility, the Company may borrow in
the form of either a line of credit or term debt.  As of June 30,
2009, there were no balances outstanding on this credit facility, but
approximately EUR 0.2 million (approximately $0.3 million at the June 30, 2009
exchange rate) of the credit facility has been used for guarantees.
 As of
June 30, 2009, the Company had approximately $64.5 million borrowing capacity
under all of the credit facilities described above.  The
weighted-average interest rate on the outstanding balances under the Credit
Agreements as of June 30, 2009 was 1.4%.
 
 8.
              ACCRUED
      EXPENSES AND OTHER CURRENT
LIABILITIES:
 
 The
components of accrued expenses and other current liabilities at June 30 are as
follows:
 
 (in
      thousands)
                        
                        2009
                        
                        
                        2008Compensation,
      benefits and related taxes
                        
                        $
                        40,659
                        
                        
                        $
                        48,299Deposits
      received from customers
                        
                        
                        29,824
                        
                        
                        
                        36,977VAT
      and sales taxes
                        
                        
                        9,197
                        
                        
                        
                        11,378Professional
      services
                        
                        
                        7,808
                        
                        
                        
                        7,068Product
      related
                        
                        
                        3,276
                        
                        
                        
                        4,276Customer
      related
                        
                        
                        2,355
                        
                        
                        
                        3,857Restructuring
      charges
                        
                        
                        1,762
                        
                        
                        
                        —Other
                        
                        
                        9,940
                        
                        
                        
                        13,058$
                        104,821
                        
                        
                        $
                        124,913
 
 During
fiscal year 2009, the Company recorded restructuring charges of approximately
$3.1 million (approximately $2.1 million, net of tax), primarily to reflect
adjustments to its cost structure in response to recent lower sales volume in
certain of its locations.  The charge includes approximately $1.5
million in employee related costs and approximately $1.6 million in occupancy
related costs for certain facilities that the Company has
vacated.  The occupancy related costs are expected to be paid through
September 2013.  The charges affect both of the Company’s reportable
segments.  This reduction is not expected to have a significant impact
on the Company’s future financial results.  As of June 30, 2009, the
remaining accrual related to the charge was approximately $2.7 million, of which
approximately $1.8 million is included in accrued expenses and other current
liabilities, and the remaining non-current balance of approximately $0.9 million
is included in other non-current liabilities in the accompanying consolidated
balance sheets.
  59
  9.
              GOODWILL:
 
 Goodwill
allocated to the Company’s reportable segments as of June 30, 2009 and 2008 and
changes in the carrying amount of goodwill are as follows:
 
 (in
      thousands)
                        
                        United
      States
                        
                        
                        International
                        
                        
                        TotalBalance
      at June 30, 2007
                        
                        $
                        90,266
                        
                        
                        $
                        48,066
                        
                        
                        $
                        138,332Goodwill
      adjustment for prior years’ acquisitions
                        
                        
                        1,587
                        
                        
                        
                        369
                        
                        
                        
                        1,956Goodwill
      acquired:Check
      in Data
                        
                        
                        —
                        
                        
                        
                        11,932
                        
                        
                        
                        11,932Other
      acquisitions
                        
                        
                        4,035
                        
                        
                        
                        —
                        
                        
                        
                        4,035Foreign
      currency translation
                        
                        
                        —
                        
                        
                        
                        3,467
                        
                        
                        
                        3,467Balance
      at June 30, 2008
                        
                        
                        95,888
                        
                        
                        
                        63,834
                        
                        
                        
                        159,722Goodwill
      adjustment for prior years’ acquisitions
                        
                        
                        23
                        
                        
                        
                        (187
                        )
                        
                        
                        (164
                        )Goodwill
      acquired:Fry,
      Inc.
                        
                        
                        38,600
                        
                        
                        
                        —
                        
                        
                        
                        38,600Foreign
      currency translation
                        
                        
                        —
                        
                        
                        
                        (7,419
                        )
                        
                        
                        (7,419
                        )Balance
      at June 30, 2009
                        
                        $
                        134,511
                        
                        
                        $
                        56,228
                        
                        
                        $
                        190,739
 
 During
fiscal years 2009 and 2008, the Company adjusted its goodwill with an offsetting
adjustment to its net deferred tax assets related to its prior year
acquisitions, primarily due to adjustments to purchase accounting and operating
loss carryforwards.
 Based on
the results of its annual impairment tests, the Company determined that no
impairment of goodwill existed as of and for the fiscal years ended June 30,
2009, 2008 and 2007.
 
 10.
              INTANGIBLE
      ASSETS:
  Purchased
intangible assets are amortized over the estimated useful lives of the
respective asset category unless such lives are deemed
indefinite.  Intangible assets were comprised of the
following:
  (in thousands except number of years)
                        
                        Gross
                          Carrying
                          Amount
                        
                        
                        Accumulated
                          Amortization
                        
                        
                        Net Carrying
                          Amount
                        
                        
                        Useful
                          Life
                          (in years)At
      June 30, 2009:Customer
      lists
                        
                        $
                        25,788
                        
                        
                        $
                        (10,554
                        )
                        
                        $
                        15,234
                        
                        
                        4– 10Non-compete
      agreement
                        
                        
                        10
                        
                        
                        
                        (7
                        )
                        
                        
                        3
                        
                        
                        4Product
      lines
                        
                        
                        326
                        
                        
                        
                        (317
                        )
                        
                        
                        9
                        
                        
                        5Service
      revenue backlog
                        
                        
                        906
                        
                        
                        
                        (533
                        )
                        
                        
                        373
                        
                        
                        3 – 5Trademark
                        
                        
                        1,200
                        
                        
                        
                        (44
                        )
                        
                        
                        1,156
                        
                        
                        25Finite-lived
      purchased intangible assets
                        
                        
                        28,230
                        
                        
                        
                        (11,455
                        )
                        
                        
                        16,775Trademarks
                        
                        
                        934
                        
                        
                        
                        —
                        
                        
                        
                        934Total
                        
                        $
                        29,164
                        
                        
                        $
                        (11,455
                        )
                        
                        $
                        17,709At
      June 30, 2008:Customer
      lists
                        
                        $
                        21,264
                        
                        
                        $
                        (6,742
                        )
                        
                        $
                        14,522
                        
                        
                        3 – 10Non-compete
      agreement
                        
                        
                        10
                        
                        
                        
                        (4
                        )
                        
                        
                        6
                        
                        
                        4Product
      lines
                        
                        
                        326
                        
                        
                        
                        (284
                        )
                        
                        
                        42
                        
                        
                        4 – 5Service
      revenue backlog
                        
                        
                        994
                        
                        
                        
                        (371
                        )
                        
                        
                        623
                        
                        
                        3 – 5Finite-lived
      purchased intangible assets
                        
                        
                        22,594
                        
                        
                        
                        (7,401
                        )
                        
                        
                        15,193Trademarks
                        
                        
                        975
                        
                        
                        
                        —
                        
                        
                        
                        975Total
                        
                        $
                        23,569
                        
                        
                        $
                        (7,401
                        )
                        
                        $
                        16,168
 
 Certain
of the Company’s trademarks are deemed to have indefinite lives and therefore
are not amortized.  Amortization expense related to finite-lived
purchased intangible assets was approximately $4.4 million, $2.5 million and
$1.9 million in the fiscal years 2009, 2008 and 2007,
respectively.  During the fiscal year ended June 30, 2009, the Company
recorded approximately $1.5 million in accelerated amortization expenses related
to finite-lived purchased intangible assets.  During the fiscal years
ended June 30, 2008 and 2007, the Company did not recognize any impairment
losses on long-lived assets, including finite-lived purchased intangible
assets.
  60
  Estimated
amortization expense in future fiscal years ending June 30 is as follows (in
thousands):
 
 2010
                    
                    $
                    2,6212011
                    
                    
                    2,5162012
                    
                    
                    2,3382013
                    
                    
                    2,1862014
                    
                    
                    1,655Later
      years
                    
                    
                    5,459Total
                    
                    $
                    16,775
 
 11.
              COMMITMENTS
      AND CONTINGENCIES:
 
 LEASES
 The
Company and its subsidiaries lease office space under operating leases expiring
at various dates through 2022 and lease equipment under both operating and
capital leases.  The capital leases are primarily international
automobile leases used by sales and installation personnel.  Rent
expense under the operating leases for the three fiscal years ending June 30,
2009, was as follows:
 
 (in thousands)
                          
                          Rent
                            Expense
                          
                          
                          Sublease
                            Income
                          
                          
                          Net Rent
                            Expense2009
                          
                          $
                          29,476
                          
                          
                          $
                          (952
                          )
                          
                          $
                          28,5242008
                          
                          
                          27,405
                          
                          
                          
                          (931
                          )
                          
                          
                          26,4742007
                          
                          
                          23,442
                          
                          
                          
                          (934
                          )
                          
                          
                          22,508
 
 As of
June 30, 2009, future minimum lease payments for those leases having an initial
or remaining non-cancelable lease term in excess of one year are as
follows:
 
 (in thousands)
                          
                          Operating
                            Leases
                          
                          
                          Less
                            Sublease
                            Rentals
                          
                          
                          Net
                            Operating
                            Leases
                          
                          
                          Capital
                            LeasesFiscal Year Ending June 30,2010
                          
                          $
                          27,572
                          
                          
                          $
                          (864
                          )
                          
                          $
                          26,708
                          
                          
                          $
                          1512011
                          
                          
                          20,677
                          
                          
                          
                          (67
                          )
                          
                          
                          20,610
                          
                          
                          
                          1002012
                          
                          
                          15,842
                          
                          
                          
                          (17
                          )
                          
                          
                          15,825
                          
                          
                          
                          192013
                          
                          
                          13,348
                          
                          
                          
                          —
                          
                          
                          
                          13,348
                          
                          
                          
                          162014
                          
                          
                          11,841
                          
                          
                          
                          —
                          
                          
                          
                          11,841
                          
                          
                          
                          22015
      and thereafter
                          
                          
                          15,993
                          
                          
                          
                          —
                          
                          
                          
                          15,993
                          
                          
                          
                          —$
                          105,273
                          
                          
                          $
                          (948
                          )
                          
                          $
                          104,325
                          
                          
                          
                          288Less:  current
      portion
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          151Long-term
      obligations under capital lease
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          $
                          137
 
 LEGAL
PROCEEDINGS
 The
Company is and has been involved in legal proceedings arising in the normal
course of business.
 There is
a case pending in the U.S. District Court for the Northern District of Georgia,
styled Ware v.
Abercrombie & Fitch Stores, Inc. et al.; although the Company is not
a party to that case, the Company may have some obligation to indemnify certain
of the defendants who are the Company’s customers, based on the terms of the
Company’s contracts with those customers.  The plaintiff has alleged
that the defendants are infringing a patent relating to the processing of credit
card transactions.  The defendants include approximately 107
individual retailers, 13 of whom are the Company’s customers for retail
point-of-sale software.   The Company is currently providing
indemnity coverage to five of the defendants who are the Company’s customers in
accordance with applicable provisions of the contracts between the Company and
those customers.  Through June 30, 2009, the Company’s legal fees with
respect to indemnity coverage for this matter have not been material, and the
Company does not anticipate that its future indemnification obligations will be
material.  The case was subject to a court-ordered stay pending the
completion of the United States Patent and Trademark Office’s reexamination of
the patent that is the subject of the lawsuit.  On July 14, 2009, the
United States Patent and Trademark Office issued a Reexamination Certificate
upholding the validity of the patent and the plaintiff moved the Court to lift
the stay.  As the patent is the subject of another lawsuit that is
significantly further along in the litigation process than this case, the
defendants are opposing the plaintiff’s motion and have also filed a
cross-motion to continue the stay.  Should the case proceed, the
Company will vigorously defend the action and assert all available defenses and
arguments.  In any event, based on currently available information, the
Company does not believe that the Company’s products infringe the
patent.
  61
  Heartland
Payment Systems, Inc., has filed an action in the U.S. District Court for the
District of New Jersey naming as defendants MICROS Systems, Inc., Merchant Link
LLC, and Chase Paymentech Solutions, LLC.  In its complaint, Heartland
claims that MICROS, Merchant Link, and Paymentech have engaged in an
anti-competitive arrangement relating to credit and debit card payment
processing for restaurant point-of-sale systems, and further claims that this
arrangement violates federal antitrust law and applicable New Jersey state
laws.  Heartland claims it has been damaged by virtue of being
required to deal with Merchant Link if it wishes to provide services to users of
MICROS point-of-sale software, by being required to pay fees to Merchant Link
that it claims are inappropriate or excessive, and by being competitively
disadvantaged relative to Chase Paymentech’s services.  Heartland
seeks monetary damages in excess of $12 million, and also injunctive and other
equitable relief.  The Company and the other defendants have filed
answers to the complaint, in which the Company and the other defendants have
denied all material allegations.  The Company has also asserted
counterclaims, alleging that Heartland has engaged in tortious activity by
defaming and libeling the Company and by improperly interfering with the
Company’s customer contracts and customer relationships.  Heartland
has filed answers to the counterclaims denying all material
allegations.  The case is currently in the discovery phase, and no
trial date has been set in this matter.
 On May
22, 2008, a jury returned verdicts totaling $7.5 million against the Company in
the consolidated actions of Roth Cash Register v. MICROS
Systems, Inc., et al. and Shenango Systems Solutions
v. MICROS Systems, Inc., et al.   The cases initially were
filed in 2000 in the Court of Common Pleas of Allegheny County,
Pennsylvania.  The complaints both related to the non-renewal of
dealership agreements in the year 2000 between the Company and the respective
plaintiffs.  The agreements were non-renewed as part of a
restructuring of the dealer channel.  There are no other litigation
matters relating to the restructuring of the dealer channel in the year
2000.  The plaintiffs alleged that the Company and certain of its
subsidiaries and employees entered into a plan to eliminate the plaintiffs as
authorized dealers and improperly interfere with the plaintiffs' relationships
with their respective existing and potential future clients and customers
without compensation to the plaintiffs.  As a result, the plaintiffs
claimed that the Company was liable for, among other things, breach of contract
and tortious interference with existing and prospective contractual
relationships.  The Company and the plaintiffs have appealed the
verdicts on various grounds.  The initial briefs for the appeals are
due in September 2009.The
Company has established only an immaterial reserve for any potential liability
relating to these matters, as the Company believes that it can present strong
arguments to reverse the verdicts on appeal, and therefore believes that an
unfavorable outcome in these cases is not probable.  Nevertheless,
even if the verdicts were not reversed or reduced as a result of the post-trial
motions or any subsequent appeals, payments of the resulting obligations would
not have a material adverse effect on the Company’s consolidated financial
position or liquidity.
 Subject
to the foregoing, the Company is of the opinion, based upon presently available
information and the advice of counsel concerning pertinent legal matters, that
any resulting liability should not have a material adverse effect on the
Company’s results of operations, financial position or cash flows.
 
 12.
              SHAREHOLDERS’
      EQUITY:
 
 During
the period from fiscal year 2002 through fiscal year 2007, the Board of
Directors authorized the purchase of up to an aggregate of 10 million shares of
the Company’s common stock.  The Company completed the purchases of 10
million shares as of July 2008.  On July 8, 2008, the Board of
Directors authorized the purchase of an additional two million shares of the
Company’s common stock over the next three years, to be purchased from time to
time depending on market conditions and other corporate considerations as
determined by management.  The Company has incurred an aggregate of
approximately $0.2 million in fees related to all stock purchases.  As
of June 30, 2009, approximately 1.3 million additional shares are available for
purchases under the most recent authorization.
 The
following table summarizes the cumulative number of shares purchased under the
purchase authorizations, all of which have been retired:
 
 Number of
                        Shares
                      
                      
                      Average
                        Purchase Price
                        per Share
                      
                      
                      Total Purchase
                        Value
                        (in thousands)Total
      shares purchased:As
      of June 30, 2006
                      
                      
                      6,835,998
                      
                      
                      $
                      13.67
                      
                      
                      
                      93,414Fiscal
      year 2007
                      
                      
                      697,200
                      
                      
                      $
                      25.63
                      
                      
                      
                      17,870As
      of June 30, 2007
                      
                      
                      7,533,198
                      
                      
                      $
                      14.77
                      
                      
                      
                      111,284Fiscal
      year 2008
                      
                      
                      2,329,302
                      
                      
                      $
                      31.90
                      
                      
                      
                      74,303As
      of June 30, 2008
                      
                      
                      9,862,500
                      
                      
                      $
                      18.82
                      
                      
                      
                      185,587Fiscal
      year 2009
                      
                      
                      855,300
                      
                      
                      $
                      26.00
                      
                      
                      
                      22,242As
      of June 30, 2009
                      
                      
                      10,717,800
                      
                      
                      $
                      19.39
                      
                      
                      $
                      207,829
 
 Subsequent
to year-end, on August 25, 2009, the Board of Directors authorized the purchase
of an additional two million shares of the Company’s common stock over the next
three years, to be purchased from time to time depending on market conditions
and other corporate considerations as determined by management.
  13.
              INCOME
      TAXES:
 
 Income
before taxes for the three fiscal years ended June 30, 2009 was taxed under the
following jurisdictions:
 62
 
 (in
      thousands)
                        
                        2009
                        
                        
                        2008
                        
                        
                        2007United
      States
                        
                        $
                        72,039
                        
                        
                        $
                        66,915
                        
                        
                        $
                        52,977International
                        
                        
                        77,803
                        
                        
                        
                        87,424
                        
                        
                        
                        68,677$
                        149,842
                        
                        
                        $
                        154,339
                        
                        
                        $
                        121,654
 
 The
components of income tax expense for the three fiscal years ended June 30, 2009
are as follows:
 
 (in
      thousands)
                        
                        2009
                        
                        
                        2008
                        
                        
                        2007Current:Federal
                        
                        $
                        31,729
                        
                        
                        $
                        29,720
                        
                        
                        $
                        23,233State
                        
                        
                        4,443
                        
                        
                        
                        2,996
                        
                        
                        
                        3,020Foreign
                        
                        
                        16,737
                        
                        
                        
                        20,569
                        
                        
                        
                        16,58852,909
                        
                        
                        
                        53,285
                        
                        
                        
                        42,841Deferred:Federal
                        
                        
                        (2,600
                        )
                        
                        
                        (116
                        )
                        
                        
                        (1,667
                        )State
                        
                        
                        (233
                        )
                        
                        
                        (225
                        )
                        
                        
                        (921
                        )Foreign
                        
                        
                        (928
                        )
                        
                        
                        (777
                        )
                        
                        
                        501(3,761
                        )
                        
                        
                        (1,118
                        )
                        
                        
                        (2,087
                        )$
                        49,148
                        
                        
                        $
                        52,167
                        
                        
                        $
                        40,754
 
 The total
tax provision is different from the amount that would have been recorded by
applying the U.S. statutory federal income tax rate to income before
taxes.  The reconciliation of these differences is as
follows:
 
 2009
                        
                        
                        2008
                        
                        
                        2007Statutory
      rate
                        
                        
                        35.0
                        %
                        
                        
                        35.0
                        %
                        
                        
                        35.0
                        %Increase
      (decrease) resulting from:State
      taxes, net of federal tax benefit
                        
                        
                        1.4
                        
                        
                        
                        1.3
                        
                        
                        
                        1.3Effect
      of tax rates in foreign jurisdictions
                        
                        
                        (8.3
                        )
                        
                        
                        (6.3
                        )
                        
                        
                        (7.6
                        )Share-based
      and other compensation
                        
                        
                        0.9
                        
                        
                        
                        1.8
                        
                        
                        
                        1.8Non-deferred
      foreign income
                        
                        
                        0.8
                        
                        
                        
                        0.9
                        
                        
                        
                        1.4Domestic
      manufacturing deduction
                        
                        
                        (0.7
                        )
                        
                        
                        (0.4
                        )
                        
                        
                        (0.4
                        )Valuation
      allowances
                        
                        
                        1.4
                        
                        
                        
                        1.9
                        
                        
                        
                        1.5Other
      differences
                        
                        
                        2.3
                        
                        
                        
                        (0.4
                        )
                        
                        
                        0.5Effective
      tax rate
                        
                        
                        32.8
                        %
                        
                        
                        33.8
                        %
                        
                        
                        33.5
                        %
  The
Company has not provided U.S. deferred income taxes on the cumulative unremitted
earnings of its significant non-U.S. affiliates as the Company plans to
permanently reinvest cumulative unremitted foreign earnings outside the
U.S.  These cumulative unremitted foreign earnings of approximately
$464 million and $416 million for fiscal years 2009 and 2008, respectively,
relate primarily to ongoing operations in foreign jurisdictions and are required
to fund foreign operations, capital expenditures and expansion
requirements.  It is not practicable to determine the unrecognized
deferred income taxes on these foreign subsidiaries.
 The
following summarizes the significant components of the Company’s deferred tax
assets and liabilities at June
30, 2009 and 2008:
 
 (in
      thousands)
                              
                              2009
                              
                              
                              2008Deferred
      tax assets:Net
      operating loss carryforwards
                              
                              $
                              11,776
                              
                              
                              $
                              10,660Accruals
      not currently deductible for tax
                              
                              
                              10,696
                              
                              
                              
                              9,662Share-based
      compensation (non-qualified stock options)
                              
                              
                              12,337
                              
                              
                              
                              7,454Bad
      debt reserves
                              
                              
                              6,857
                              
                              
                              
                              5,761Inventory
                              
                              
                              2,271
                              
                              
                              
                              2,141Benefit
      related accruals not currently deductible for tax
                              
                              
                              1,737
                              
                              
                              
                              1,653Deferred
      revenues and customer deposits currently taxable
                              
                              
                              1,333
                              
                              
                              
                              1,547Tax
      impact of technology transfer
                              
                              
                              124
                              
                              
                              
                              1,452Other
      unrealized gains and losses
                              
                              
                              2,243
                              
                              
                              
                              2,490Restructuring
                              
                              
                              832
                              
                              
                              
                              —Total
      deferred tax assets
                              
                              
                              50,206
                              
                              
                              
                              42,820Deferred
      tax liabilities:Intangibles
      amortization
                              
                              
                              (8,076
                              )
                              
                              
                              (8,256
                              )Capitalized
      software development costs
                              
                              
                              (4,301
                              )
                              
                              
                              (5,138
                              )Depreciation
                              
                              
                              (1,240
                              )
                              
                              
                              (1,282
                              )Other
                              
                              
                              (13
                              )
                              
                              
                              (248
                              )Total
      deferred tax liabilities
                              
                              
                              (13,630
                              )
                              
                              
                              (14,924
                              )Valuation
      allowance:NOL
                              
                              
                              (4,648
                              )
                              
                              
                              (5,653
                              )Other
                              
                              
                              (2,276
                              )
                              
                              
                              —Total
      valuation allowance
                              
                              
                              (6,924
                              )
                              
                              
                              (5,653
                              )Net
      deferred tax assets
                              
                              $
                              29,652
                              
                              
                              $
                              22,243
 63
 The tax
effected net operating loss carryforwards and related valuation allowance at
June 30, 2009 and 2008 are as follows:
 
 (in
      thousands)
                        
                        2009
                        
                        
                        2008Net
      operating loss carryforwards:U.S.
                        
                        $
                        5,287
                        
                        
                        $
                        4,775International
                        
                        
                        6,489
                        
                        
                        
                        5,885$
                        11,776
                        
                        
                        $
                        10,660Net
      operating loss carryforward valuation allowance:U.S.
                        
                        
                        —
                        
                        
                        
                        —International
                        
                        
                        (4,648
                        )
                        
                        
                        (5,653
                        )(4,648
                        )
                        
                        
                        (5,653
                        )Net
      operating loss carryforwards, net of valuation allowance
                        
                        $
                        7,128
                        
                        
                        $
                        5,007
 
 Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.
 The
Company is profitable on a consolidated basis.  However, it has
incurred losses in certain jurisdictions.  A valuation allowance
has been provided at June 30, 2009 and 2008 to offset the related deferred tax
assets in these jurisdictions due to uncertainty of realizing the benefit of the
net operating loss carryforwards and other deferred tax assets.
 The
Company’s net operating loss carryforwards and tax credit carryforwards (if not
applied against taxable income) as of June 30, 2009 expire as
follows:
 
 Expires
      in Fiscal Year(in
      thousand)
                        
                        2010
                        
                        
                        2011
                        
                        
                        Thereafter
                        
                        
                        No
                          Expiration
                        
                        
                        TotalU.S.:Net
      operating loss carryforwards
                        
                        $
                        —
                        
                        
                        $
                        —
                        
                        
                        $
                        5,287
                        
                        
                        $
                        —
                        
                        
                        $
                        5,287Valuation
      allowances
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        ——
                        
                        
                        
                        —
                        
                        
                        
                        5,287
                        
                        
                        
                        —
                        
                        
                        
                        5,287International:Net
      operating loss carryforwards
                        
                        
                        994
                        
                        
                        
                        —
                        
                        
                        
                        705
                        
                        
                        
                        4,790
                        
                        
                        
                        6,489Valuation
      allowances
                        
                        
                        (994
                        )
                        
                        
                        —
                        
                        
                        
                        (705
                        )
                        
                        
                        (2,949
                        )
                        
                        
                        (4,648
                        )—
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        1,841
                        
                        
                        
                        1,841Net
      operating loss carryforwards,Net
      of valuation allowances
                        
                        $
                        —
                        
                        
                        $
                        —
                        
                        
                        $
                        5,287
                        
                        
                        $
                        1,841
                        
                        
                        $
                        7,128
 
 Effective
July 1, 2007, the Company adopted the provisions of FIN 48, “Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No.
109.”  FIN 48 clarifies the accounting for income taxes by prescribing
a minimum recognition threshold that a tax position is required to meet before
being recognized in the financial statements.  FIN 48 also provides
guidance on derecognition, measurement, and classification of the effects of a
tax position, recognition of interest and penalties, accounting in interim
periods, and disclosure.  The cumulative effect of adopting FIN 48 of
approximately $2.6 million, including interest and penalties of approximately
$0.3 million, was recorded as a reduction to retained earnings and an increase
in net income taxes payable.
  64
  The
Company’s net unrecognized income tax benefits were approximately $18.1 million
and $17.4 million, including interest and penalties of approximately $2.6
million and $2.3 million, at June 30, 2009 and 2008,
respectively.  The Company has recognized approximately $0.7 million
of interest expense for each of the fiscal years ending June 30, 2009 and
2008.  The non-current components of the unrecognized income tax
benefits were recorded as non-current to the extent that the Company does not
anticipate making a payment within 12 months of the balance sheet
date.  If recognized, all of the unrecognized income tax benefit would
be recognized as a reduction of income tax expense, impacting the effective
income tax rate.
 The
following summarizes the significant components of the Company’s gross
unrecognized tax benefits at June 30:
 
 Gross
      Unrecognized Tax Benefits(in
      thousands)
                            
                            2009
                            
                            
                            2008Balance,
      beginning of year
                            
                            $
                            17,190
                            
                            
                            $
                            7,112FIN
      48 adoption transition adjustment
                            
                            
                            —
                            
                            
                            
                            3,674Adjusted
      balance, beginning of year
                            
                            
                            17,190
                            
                            
                            
                            10,786Current
      year uncertain tax positions:Gross
      increases
                            
                            
                            7,086
                            
                            
                            
                            4,182Gross
      decreases
                            
                            
                            —
                            
                            
                            
                            —Prior
      year uncertain tax positions:Gross
      increases
                            
                            
                            50
                            
                            
                            
                            2,277Gross
      decreases
                            
                            
                            (2,699
                            )
                            
                            
                            (55
                            )Expiration
      of statute of limitations
                            
                            
                            (1,166
                            )
                            
                            
                            —Settlements
      with tax authorities
                            
                            
                            (2,627
                            )
                            
                            
                            —Balance,
      end of year
                            
                            $
                            17,834
                            
                            
                            $
                            17,190
 
 The
Company historically classified interest and penalties related to unrecognized
income tax benefits as a component of income tax expense.  The Company
has maintained this practice following its adoption of FIN 48.
 The
Company has reviewed its uncertain income tax positions in accordance with FIN
48.  The Company estimates that within the next 12 months, it will
decrease the unrecognized income tax benefits by approximately $0.5 million to
$1.5 million due to, among other things, the expiration of statutes of
limitations, which the Company believes would increase earnings as a result of
the effect of decreased unrecognized tax benefits on the effective tax
rate.  However, audit outcomes and the timing of audit settlements are
subject to significant uncertainty.  Further, over the next 12 months,
it is reasonably possible that the Company’s tax positions will continue to
generate liabilities for unrecognized tax benefits.
 In the
ordinary course of the Company’s business, transactions occur for which the
ultimate tax outcome may be uncertain.  In addition, tax authorities
periodically audit the Company’s income tax returns. These audits include
examination of the Company’s significant tax filing positions, including the
timing and amounts of deductions and the allocation of income and expenses among
tax jurisdictions.  The Company is not able to reasonably estimate the
completion date of these ongoing audits.  The Company’s major taxing
jurisdictions include Australia, Ireland, Germany, Singapore, the United Kingdom
and the United States.
 
 14.
              OTHER
      INCOME (EXPENSE), NET:
 
 Other
income (expense) for the three fiscal years ended June 30, 2009 comprised of the
following:
 
 Fiscal year ended June 30,(in
      thousands)
                            
                            2009
                            
                            
                            2008
                            
                            
                            2007Credit
      based impairment losses on investments
                            
                            $
                            (1,266
                            )
                            
                            $
                            —
                            
                            
                            $
                            —Grant
                            
                            
                            —
                            
                            
                            
                            1,726
                            
                            
                            
                            —Foreign
      exchange loss, net
                            
                            
                            (297
                            )
                            
                            
                            (1,384
                            )
                            
                            
                            (403
                            )Life
      insurance settlement
                            
                            
                            —
                            
                            
                            
                            —
                            
                            
                            
                            1,325Other,
      net
                            
                            
                            (196
                            )
                            
                            
                            255
                            
                            
                            
                            196Total
      other (expense) income, net
                            
                            $
                            (1,759
                            )
                            
                            $
                            597
                            
                            
                            $
                            1,118
 
 For
fiscal year 2008, the Company recognized approximately $1.7 million in income
due to its receipt in the fourth quarter of fiscal year 2008 of a grant payment
from the Irish Development Authority related to the number of jobs the Company
created in Ireland.  For fiscal year 2007, the Company recognized
approximately $1.3 million in one-time income due to death benefit received on
corporate owned life insurance policy following the death of a covered officer
of the Company.
 
 15.
              RELATED
      PARTY TRANSACTIONS
 
 Effective
June 30, 1995, the Company and Louis M. Brown, Jr., Vice-Chairman of the Board,
entered into a Consulting Agreement that, as amended, expired in accordance with
its terms on June 30, 2008.  Under the Consulting Agreement, Mr. Brown
was to provide during each fiscal year an average of 20 hours per week of
consulting services to the Company in exchange for a base consulting fee of
approximately $0.3 million.  Additionally for fiscal years 2008 and
2007, Mr. Brown’s total compensation also included annual target bonuses of
approximately $0.2 million that were accrued during the fiscal year in which
they were earned and paid in the following fiscal
year.  Notwithstanding the expiration of his Consulting Agreement, Mr.
Brown continues to serve the Company as Vice-Chairman of the Board of
Directors.
  65
  16.
              EMPLOYEE
      BENEFIT PLANS:
 
 DEFINED
CONTRIBUTION PLANS
 The
Company sponsors an employee savings plan (the “Plan”), which conforms to the
provisions of Section 401(k) of the Internal Revenue Code.  The Plan
covers substantially all full-time and part-time employees in the U.S. and
allows employees to voluntarily defer their eligible compensation through
contributions to the Plan, up to the maximum amount per year permitted under the
Internal Revenue Code. The Company matches 50% of the first 5% in eligible
compensation deferred by each participating employee.
 During
each of the three fiscal years ended June 30, 2009, the Company’s matching
contributions to the Plan were approximately $2.3 million, $1.9 million and $1.9
million, respectively. The Company does not have any material obligations
to past or present employees related to post employment benefits under the
Plan.
 
 DEFINED
BENEFIT PLAN
 The
Company’s Supplemental Executive Retirement Plan (“SERP”) provides designated
officers and executives of the Company or their designated beneficiaries with
benefits upon retirement or death.  The Company funds the benefits
under the SERP with corporate owned life insurance policies held by a segregated
trust (known as a “Rabbi Trust”), whose assets are subject to the claims of
creditors of the Company.  The Board of Directors of the Company, in
its sole discretion, had selected the participants in the SERP.
 During
fiscal year 2008, there were 13 participants in the SERP.  As of June
30, 2008, the Board of Directors approved the removal of all participants that
were not vested, leaving three vested participants in the SERP.
 Under the
terms of the SERP, vested participants (or their designated beneficiaries upon
death) will receive ten annual payments over nine years commencing six months
after the earlier of death or retirement on or after age 62.  The
value of benefits under the SERP is not based on years of service, but is
determined based on the (1) participant’s age at retirement, at a change of
control of the Company or at death, and (2) a percentage the base salary
received by the participant during the 12 months immediately preceding his or
her retirement or death.  Two of the three vested participants are
currently receiving their SERP benefits.  The remaining vested
participant is the Company’s Chairman, President and Chief Executive Officer,
A.L. Giannopoulos.  As he is over the age of 65, per the terms of the
SERP, he is entitled to the maximum benefit rate of 30% upon his retirement, at
a change of control of the Company or at death.
 During
fiscal year 2007, the Company received approximately $1.3 million in death
benefits under the corporate owned life insurance policy, which has been
recorded as non-operating “Other Income” in the consolidated statements of
operations.
 On June
30, 2007, the Company adopted the recognition and disclosure provisions of SFAS
158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans – an amendment of FASB Statements 87, 88, 106 and 132(R)” and has included
the effect of adoption in the accompanying consolidated financial
statements.  SFAS 158 requires the Company to recognize the funded
status (the difference between the fair value of plan assets and the projected
benefit obligations) of the SERP in the Company’s statement of financial
position, with a corresponding adjustment to accumulated other comprehensive
income, net of tax, to measure the fair value of plan benefit obligations as of
its fiscal year ending June 30, 2007 and to provide additional
disclosures.
 The
following tables provide information regarding the change in pension benefit
obligation, funded status, and accumulated benefit obligation of the
SERP:
  (in
      thousands)
                                                                                  
                                                                                  2009
                                                                                  
                                                                                  
                                                                                  2008Change
      in Projected Benefit Obligation (“PBO”):PBO
      at the beginning of year
                                                                                  
                                                                                  $
                                                                                  4,393
                                                                                  
                                                                                  
                                                                                  $
                                                                                  13,545Service
      cost
                                                                                  
                                                                                  
                                                                                  —
                                                                                  
                                                                                  
                                                                                  
                                                                                  646Interest
      cost
                                                                                  
                                                                                  
                                                                                  284
                                                                                  
                                                                                  
                                                                                  
                                                                                  869Curtailment
      gain
                                                                                  
                                                                                  
                                                                                  —
                                                                                  
                                                                                  
                                                                                  
                                                                                  (10,435
                                                                                  )Actuarial
      (gain) loss
                                                                                  
                                                                                  
                                                                                  —
                                                                                  
                                                                                  
                                                                                  
                                                                                  (151
                                                                                  )Benefit
      payments
                                                                                  
                                                                                  
                                                                                  (101
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (81
                                                                                  )PBO
      at the end of year
                                                                                  
                                                                                  $
                                                                                  4,576
                                                                                  
                                                                                  
                                                                                  $
                                                                                  4,393Fair
      value of plan assets
                                                                                  
                                                                                  
                                                                                  N/A
                                                                                  
                                                                                  
                                                                                  
                                                                                  N/AFunded
      Status of the Plan(Unfunded)
      status of PBO
                                                                                  
                                                                                  $
                                                                                  (4,576
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (4,393
                                                                                  )Accumulated
      benefit obligation
                                                                                  
                                                                                  $
                                                                                  4,576
                                                                                  
                                                                                  
                                                                                  $
                                                                                  4,393Amount
      recognized in the consolidated balance sheet:Accrued
      benefit liability (1)
                                                                                  
                                                                                  $
                                                                                  (4,576
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (4,393
                                                                                  )
 
 66
  (1)
Accrued benefit liability is included in Other Non-Current Liabilities on the
consolidated balance sheets, except for approximately $0.1 million as of June
30, 2009 and 2008, respectively, included in Accrued Expenses and Other Current
Liabilities.
 
 The
components of amounts recognized in accumulated other comprehensive loss as
of June 30, 2009 and 2008 were as follows:
 
 (in
      thousands)
                                            
                                            2009 (1)
                                            
                                            
                                            2008Prior
      service cost (credit)
                                            
                                            $
                                            —
                                            
                                            
                                            $
                                            (4,246
                                            )Net
      actuarial loss (gain)
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (4,685
                                            )Amortization
      of prior service cost
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (348
                                            )Amortization
      of net loss
                                            
                                            
                                            —
                                            
                                            
                                            
                                            (300
                                            )—
                                            
                                            
                                            
                                            (9,579
                                            )Tax
      effect
                                            
                                            
                                            —
                                            
                                            
                                            
                                            3,650Total
      recognized in accumulated other comprehensive income, net of
      tax
                                            
                                            $
                                            —
                                            
                                            
                                            $
                                            (5,929
                                            )
 
 (1)  As
a result of the SERP plan being fully funded as of June 30, 2008, these items
are no longer applicable.
 
 Assumptions
used to measure benefit obligations at June 30, 2009, 2008, and 2007 were as
follows:
 
 2009
                    
                    
                    2008
                    
                    
                    2007Discount
      rate (1)
                    
                    
                    4.40
                    %
                    
                    
                    6.00
                    %
                    
                    
                    6.10
                    %Expected
      return on plan assets
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —Rate
      of compensation increase (2)
                    
                    
                    N/A
                    
                    
                    
                    N/A
                    
                    
                    
                    9.00
                    %
 
 (1) The
discount rate assumption is based on the internal rate of return for a portfolio
of high-quality bonds (Moody’s Aa Corporate bonds) with maturities that are
consistent with projected future cash flows.
 (2) The
rate of compensation increase is not applicable for fiscal years 2009 and 2008
as the SERP benefits are defined and fixed as of June 30, 2008 for the remaining
SERP participants.
 
 The
incremental effects of adopting the provisions of SFAS 158 on the Company’s
statement of financial position at June 30, 2007 were as follows:
 
 (in thousands)
                      
                      Pre
                        SFAS 158
                      
                      
                      Incremental
                        effect of
                        adopting
                        SFAS 158
                      
                      
                      Post
                        SFAS 158Intangible
      assets – pension
                      
                      $
                      2,869
                      
                      
                      $
                      (2,869
                      )
                      
                      $
                      —Accrued
      benefit liability
                      
                      
                      (6,835
                      )
                      
                      
                      (6,710
                      )
                      
                      
                      (13,545
                      )Non-current
      deferred income tax asset
                      
                      
                      —
                      
                      
                      
                      3,650
                      
                      
                      
                      3,650Accumulated
      other comprehensive income, net of tax
                      
                      
                      —
                      
                      
                      
                      5,929
                      
                      
                      
                      5,929$
                      (3,966
                      )
                      
                      $
                      —
                      
                      
                      $
                      (3,966
                      )
 
 The
adjustments to accumulated other comprehensive income at June 30, 2007 (at
adoption) were previously netted against the plan’s funded status in the
Company’s statement of financial position pursuant to the provisions of SFAS 87.
During fiscal year 2008, these amounts were either recognized as net periodic
pension cost or reversed out due to the removal of unvested SERP participants as
of June 30, 2008. The components of net periodic pension cost and the
assumptions used to determine net cost for the three fiscal years ended June 30,
2009 are as follows:
  67
  (in
      thousands)
                      
                      2009
                      
                      
                      2008
                      
                      
                      2007Service
      cost
                      
                      $
                      —
                      
                      
                      $
                      646
                      
                      
                      $
                      539Interest
      cost
                      
                      
                      264
                      
                      
                      
                      870
                      
                      
                      
                      673Curtailment
      gain (1)
                      
                      
                      —
                      
                      
                      
                      (1,717
                      )
                      
                      
                      —Amortization
      of prior service cost
                      
                      
                      20
                      
                      
                      
                      648
                      
                      
                      
                      529Net
      periodic pension cost
                      
                      $
                      284
                      
                      
                      $
                      447
                      
                      
                      $
                      1,741Discount
      rate
                      
                      
                      5.00
                      %
                      
                      
                      6.10
                      %
                      
                      
                      6.14
                      %Expected
      return on plan assets
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —Rate
      of compensation increase  (2)
                      
                      
                      N/A
                      
                      
                      
                      9.00
                      %
                      
                      
                      8.0
                      %
 
 (1) Due
to the removal of unvested SERP participants as of June 30, 2008.
 (2) The
rate of compensation increase is not applicable for fiscal year 2009 as the SERP
benefits were defined and fixed as of June 30, 2008 for the remaining SERP
participants.
 
 The total
periodic pension costs for fiscal year 2010 consists of an interest cost of
approximately $0.1 million.
 As of
June 30, 2009, the projected benefit payments to be paid from the SERP are as
follows for the following fiscal years (each ending June 30) (in
thousands):
 2010
                    
                    $
                    962011
                    
                    
                    912012
                    
                    
                    872013
                    
                    
                    832014
                    
                    
                    792015
      – 2019
                    
                    
                    2,289
 
 17.
              SEGMENT
      INFORMATION:
 
 SFAS 131,
“Disclosures about Segments of an Enterprise and Related Information,”
establishes standards for reporting information about operating
segments.  This standard requires segmentation based on the Company’s
internal organization and reporting of financial results.  The
Company’s financial reporting systems present various data to enable management
to run the business.  Operating segments are defined as components of
an enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision maker, or decision making
group, in deciding how to allocate resources and in assessing
performance.  The Company’s chief operating decision maker is the
Company’s Chief Executive Officer.
 The
Company is organized and operates in four operating segments:  U.S.,
Europe, the Pacific Rim, and Latin America regions.
 For the
purposes of applying SFAS 131, the Company has identified U.S. as a separate
reportable segment and has aggregated its three international operating segments
into one reportable segment, international, as the three international operating
segments share many similar economical characteristics.  Management
views the U.S. and international segments separately in operating its business,
although the products and services are similar for each segment.
 Historically,
all of the Company’s new business acquisitions have been incorporated into the
existing operating segments, based on their respective geographical locations,
and are subsequently operated and managed as part of that operating
segment.
 A summary
of the Company’s reportable segments is as follows:
  Fiscal Years Ended June 30,(in thousands)
                                                    
                                                    2009
                                                    
                                                    
                                                    2008
                                                    
                                                    
                                                    2007Revenues
      (1):United
      States
                                                    
                                                    $
                                                    488,817
                                                    
                                                    
                                                    $
                                                    484,026
                                                    
                                                    
                                                    $
                                                    411,976International
                                                    
                                                    
                                                    457,979
                                                    
                                                    
                                                    
                                                    514,623
                                                    
                                                    
                                                    
                                                    407,642Intersegment
      eliminations (2)
                                                    
                                                    
                                                    (34,949
                                                    )
                                                    
                                                    
                                                    (44,465
                                                    )
                                                    
                                                    
                                                    (33,891
                                                    )Total
      revenues
                                                    
                                                    $
                                                    911,847
                                                    
                                                    
                                                    $
                                                    954,184
                                                    
                                                    
                                                    $
                                                    785,727Income
      before taxes, minority interests and equity innet
      earnings of affiliates (1):United
      States
                                                    
                                                    $
                                                    78,465
                                                    
                                                    
                                                    $
                                                    80,291
                                                    
                                                    
                                                    $
                                                    65,576International
                                                    
                                                    
                                                    94,912
                                                    
                                                    
                                                    
                                                    104,277
                                                    
                                                    
                                                    
                                                    80,673Intersegment
      eliminations (2)
                                                    
                                                    
                                                    (23,535
                                                    )
                                                    
                                                    
                                                    (30,229
                                                    )
                                                    
                                                    
                                                    (24,595
                                                    )Total
      income before taxes, minority interestsand
      equity in net earnings of affiliates
                                                    
                                                    $
                                                    149,842
                                                    
                                                    
                                                    $
                                                    154,339
                                                    
                                                    
                                                    $
                                                    121,654Capital
      expenditures (3):United
      States
                                                    
                                                    $
                                                    5,635
                                                    
                                                    
                                                    $
                                                    7,419
                                                    
                                                    
                                                    $
                                                    5,481International
                                                    
                                                    
                                                    7,726
                                                    
                                                    
                                                    
                                                    5,525
                                                    
                                                    
                                                    
                                                    5,798Total
      capital expenditures
                                                    
                                                    $
                                                    13,361
                                                    
                                                    
                                                    $
                                                    12,944
                                                    
                                                    
                                                    $
                                                    11,279Depreciation
      and amortization (3):United
      States
                                                    
                                                    $
                                                    10,668
                                                    
                                                    
                                                    $
                                                    7,582
                                                    
                                                    
                                                    $
                                                    7,301International
                                                    
                                                    
                                                    6,876
                                                    
                                                    
                                                    
                                                    7,561
                                                    
                                                    
                                                    
                                                    5,420Total
      depreciation and amortization
                                                    
                                                    $
                                                    17,544
                                                    
                                                    
                                                    $
                                                    15,143
                                                    
                                                    
                                                    $
                                                    12,721
  68
 As
      of June 30,(in
      thousands)
                            
                            2009
                            
                            
                            2008Identifiable
      assets (3):United
      States
                            
                            $
                            492,402
                            
                            
                            $
                            466,028International
                            
                            
                            531,684
                            
                            
                            
                            536,978Total
      identifiable assets
                            
                            $
                            1,024,086
                            
                            
                            $
                            1,003,006Goodwill
      (3):United
      States
                            
                            $
                            134,511
                            
                            
                            $
                            95,888International
                            
                            
                            56,228
                            
                            
                            
                            63,834Total
      goodwill
                            
                            $
                            190,739
                            
                            
                            $
                            159,722
 
 (1)
              Amounts
      based on the location of the selling
entity.
 (2)
              Amounts
      primarily represent elimination of U.S.’s intercompany
      business.
 (3)
              Amounts
      based on the physical location of the
asset.
 
 The
Company’s products are distributed in the U.S. and internationally, primarily in
Europe, the Pacific Rim, and Latin America through its subsidiaries, independent
dealers/distributors and Company-owned sales and service offices.  The
Company’s principal customers are lodging, food service-related businesses,
specialty retail, and entertainment venues.  No single customer
accounts for 10% or more of the Company’s consolidated revenues.
 Revenues
from unaffiliated customers by geographic location are as follows:
 
 Fiscal Years Ended June 30,(in thousands)
                      
                      2009
                      
                      
                      2008
                      
                      
                      2007United
      States
                      
                      $
                      434,482
                      
                      
                      $
                      416,458
                      
                      
                      $
                      364,139International
                      
                      
                      477,365
                      
                      
                      
                      537,726
                      
                      
                      
                      421,588$
                      911,847
                      
                      
                      $
                      954,184
                      
                      
                      $
                      785,727
 
 Long-lived
assets (property, plant, and equipment) organized by geographic locations as of
June 30 of each indicated fiscal year, are as follows:
 
 (in
      thousands)
                        
                        2009
                        
                        
                        2008United
      States
                        
                        $
                        18,458
                        
                        
                        $
                        17,415International
                        
                        
                        12,062
                        
                        
                        
                        11,750$
                        30,520
                        
                        
                        $
                        29,165
 
 The above
chart does not include intangible assets.
 There
were no individual foreign countries in which the Company received material
revenues from unaffiliated customers or in which the Company has material
long-lived assets.
 
 18.
              QUARTERLY
      FINANCIAL INFORMATION (UNAUDITED):
 
 Quarterly
financial information for the fiscal years ended June 30, 2009 and 2008 is
presented in the following tables (in thousands, except per share
data):
  69
  Fiscal Year ended June 30, 20091st Quarter
                    
                    
                    2nd Quarter
                    
                    
                    3rd Quarter
                    
                    
                    4th QuarterRevenue
                    
                    $
                    244,069
                    
                    
                    $
                    237,934
                    
                    
                    $
                    205,666
                    
                    
                    $
                    224,177Gross
      margin
                    
                    
                    125,944
                    
                    
                    
                    126,523
                    
                    
                    
                    111,050
                    
                    
                    
                    120,429Income
      from operations(1), (2),
      (4)
                    
                    
                    34,585
                    
                    
                    
                    39,213
                    
                    
                    
                    32,252
                    
                    
                    
                    37,765Net
      income(1),
      (2)
                    
                    
                    24,882
                    
                    
                    
                    27,074
                    
                    
                    
                    23,353
                    
                    
                    
                    23,990Income
      from operations per common share (1),
      (2:Basic
                    
                    $
                    0.43
                    
                    
                    $
                    0.49
                    
                    
                    $
                    0.40
                    
                    
                    $
                    0.47Diluted
                    
                    
                    0.42
                    
                    
                    
                    0.48
                    
                    
                    
                    0.40
                    
                    
                    
                    0.46Earnings
      per common share(1), (2),
      (3):Basic
                    
                    $
                    0.31
                    
                    
                    $
                    0.33
                    
                    
                    $
                    0.29
                    
                    
                    $
                    0.30Diluted
                    
                    
                    0.30
                    
                    
                    
                    0.33
                    
                    
                    
                    0.29
                    
                    
                    
                    0.29Stock
      Prices (range of sales prices):High
                    
                    $
                    34.41
                    
                    
                    $
                    27.17
                    
                    
                    $
                    20.17
                    
                    
                    $
                    28.65Low
                    
                    
                    22.98
                    
                    
                    
                    13.34
                    
                    
                    
                    13.47
                    
                    
                    
                    18.45
 
 Fiscal
      Year 20081st
      Quarter
                    
                    
                    2nd
      Quarter
                    
                    
                    3rd
      Quarter
                    
                    
                    4th
      QuarterRevenue
                    
                    $
                    216,482
                    
                    
                    $
                    243,952
                    
                    
                    $
                    237,187
                    
                    
                    $
                    256,564Gross
      margin
                    
                    
                    113,242
                    
                    
                    
                    126,562
                    
                    
                    
                    124,259
                    
                    
                    
                    137,138Income
      from operations(1),
      (4)
                    
                    
                    29,085
                    
                    
                    
                    33,397
                    
                    
                    
                    34,759
                    
                    
                    
                    42,064Net
      income(1)
                    
                    
                    21,304
                    
                    
                    
                    24,089
                    
                    
                    
                    25,146
                    
                    
                    
                    30,746Income
      from operations per common share (1):Basic
                    
                    $
                    0.36
                    
                    
                    $
                    0.41
                    
                    
                    $
                    0.43
                    
                    
                    $
                    0.52Diluted
                    
                    
                    0.35
                    
                    
                    
                    0.40
                    
                    
                    
                    0.42
                    
                    
                    
                    0.51Earnings
      per common share(1),
      (3):Basic
                    
                    $
                    0.26
                    
                    
                    $
                    0.29
                    
                    
                    $
                    0.31
                    
                    
                    $
                    0.38Diluted
                    
                    
                    0.25
                    
                    
                    
                    0.29
                    
                    
                    
                    0.30
                    
                    
                    
                    0.37Stock
      Prices (range of sales prices):High
                    
                    $
                    33.30
                    
                    
                    $
                    37.49
                    
                    
                    $
                    37.35
                    
                    
                    $
                    36.64Low
                    
                    
                    26.45
                    
                    
                    
                    30.29
                    
                    
                    
                    26.33
                    
                    
                    
                    28.40
 
 (1)
                Fiscal
      years ended June 30, 2009 and 2008 include approximately $13.9 million
      ($9.8 million, net of tax, or $0.12 per diluted share) and $17.2 million
      ($13.1 million, net of tax, or $0.16 per diluted share), respectively, in
      non-cash share-based compensation expenses.  See Note 3
      “Share-based Compensation.”
 (2)
                Fiscal
      year ended June 30, 2009 includes approximately $3.1 million ($2.1
      million, net of tax) in restructuring charges and approximately $0.7
      million in an inventory provision reflecting adjustments to the Company’s
      cost structure to reflect recent lower sales volume in certain of the
      Company’s locations affecting both of its reportable
      segments.  The fiscal year 2009 also includes
      other-than-temporary impairment of approximately $1.3 million
      for long-term investments.  See Note 2 “Financial
      Instruments and Fair Value
Measurements.”
 (3)
                  Earnings
      available for shareholders for the fiscal years 2009 and 2008 have been
      reduced by $0.7 million and $0.6 million, respectively, for the impact of
      minority interest put arrangement as discussed in Note 4
      “Acquisitions.”
 (4)
                Sum
      of quarterly amounts does not equal the sum of as reported amounts for the
      respective fiscal years due to rounding
  differences.
 
 The
Company classified certain marketable securities as cash and cash equivalents on
each of the fiscal 2009 quarterly unaudited condensed consolidated balance
sheets that should instead have been classified as short-term investments based
on the length of time from original purchase date to the maturity
date.  The Company has revised to correct the unaudited condensed
consolidated balance sheets and unaudited condensed consolidated statements of
cash flows for each of the first three quarters in fiscal year 2009, to change
the classification of these marketable securities from cash and cash equivalents
to short-term investments.  This change in classification affects cash
flows from investing activities on the unaudited condensed consolidated
statements of cash flows, but does not affect the unaudited consolidated
statements of operations.  Additionally, this change in classification has
no effect on previously reported current assets, total assets, total
liabilities, total stockholders’ equity, total liabilities and stockholders’
equity, cash flows from operating activities or cash flows from financing
activities.  The Company has concluded that these amounts are
immaterial to the interim periods affected in fiscal year 2009.  As
detailed on the tables below, this change in classification impacts the
following (in thousands):
 
 Condensed Consolidated Balance Sheets (Unaudited)As Previously
                        Reported
                      
                      
                      Adjustments
                      
                      
                      As RevisedSeptember
      30, 2008:Cash
      and cash equivalents
                      
                      $
                      325,441
                      
                      
                      $
                      (81,443
                      )
                      
                      $
                      243,998Short-term
      investments
                      
                      
                      —
                      
                      
                      
                      81,443
                      
                      
                      
                      81,443Total
      current assets
                      
                      
                      626,334
                      
                      
                      
                      —
                      
                      
                      
                      626,334Total
      assets
                      
                      
                      977,322
                      
                      
                      
                      —
                      
                      
                      
                      977,322December
      31, 2008:Cash
      and cash equivalents
                      
                      $
                      333,160
                      
                      
                      $
                      (53,970
                      )
                      
                      $
                      279,190Short-term
      investments
                      
                      
                      —
                      
                      
                      
                      53,970
                      
                      
                      
                      53,970Total
      current assets
                      
                      
                      605,734
                      
                      
                      
                      —
                      
                      
                      
                      605,734Total
      assets
                      
                      
                      946,214
                      
                      
                      
                      —
                      
                      
                      
                      946,214March
      31, 2009:Cash
      and cash equivalents
                      
                      $
                      383,272
                      
                      
                      $
                      (61,863
                      )
                      
                      $
                      321,409Short-term
      investments
                      
                      
                      —
                      
                      
                      
                      61,863
                      
                      
                      
                      61,863Total
      current assets
                      
                      
                      647,828
                      
                      
                      
                      —
                      
                      
                      
                      647,828Total
      assets
                      
                      
                      983,068
                      
                      
                      
                      —
                      
                      
                      
                      983,068
  70
  Condensed Consolidated Statements of Cash Flows (Unaudited)As Previously
                                    Reported
                                  
                                  
                                  Adjustments
                                  
                                  
                                  As RevisedThree
      months ended September 30, 2008:Net
      cash flows provided by operations
                                  
                                  $
                                  29,658
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  29,658Cash
      flows provided by investing activities:Net
      cash paid for acquisitions
                                  
                                  
                                  (32,288
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (32,288
                                  )Purchases
      of property, plant and equipment
                                  
                                  
                                  (3,343
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (3,343
                                  )Internally
      developed software
                                  
                                  
                                  (125
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (125
                                  )Disposal
      of property, plant and equipment
                                  
                                  
                                  190
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  190Purchases
      of investments
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (82,578
                                  )
                                  
                                  
                                  (82,578
                                  )Proceeds
      from sales of investments
                                  
                                  
                                  3,375
                                  
                                  
                                  
                                  2,816
                                  
                                  
                                  
                                  6,191Net
      cash flows used in investing activities
                                  
                                  
                                  (32,191
                                  )
                                  
                                  
                                  (79,762
                                  )
                                  
                                  
                                  (111,953
                                  )Net
      cash flows used in financing activities
                                  
                                  
                                  (27,510
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (27,510
                                  )Effect
      of exchange rate changes on cash and cash equivalents
                                  
                                  
                                  (26,480
                                  )
                                  
                                  
                                  3,211
                                  
                                  
                                  
                                  (23,269
                                  )Net
      decrease in cash and cash equivalents
                                  
                                  
                                  (56,523
                                  )
                                  
                                  
                                  (76,551
                                  )
                                  
                                  
                                  (133,074
                                  )Cash
      and cash equivalents at beginning of year
                                  
                                  
                                  381,964
                                  
                                  
                                  
                                  (4,892
                                  )
                                  
                                  
                                  377,072Cash
      and cash equivalents at end of period
                                  
                                  
                                  325,441
                                  
                                  
                                  
                                  (81,443
                                  )
                                  
                                  
                                  243,998Six
      months ended December 31, 2008:Net
      cash flows provided by operations
                                  
                                  $
                                  53,580
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  53,580Cash
      flows provided by investing activities:Net
      cash paid for acquisitions
                                  
                                  
                                  (32,701
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (32,701
                                  )Purchases
      of property, plant and equipment
                                  
                                  
                                  (8,631
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (8,631
                                  )Internally
      developed software
                                  
                                  
                                  (233
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (233
                                  )Disposal
      of property, plant and equipment
                                  
                                  
                                  171
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  171Purchases
      of investments
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (131,899
                                  )
                                  
                                  
                                  (131,899
                                  )Proceeds
      from sales of investments
                                  
                                  
                                  3,375
                                  
                                  
                                  
                                  76,545
                                  
                                  
                                  
                                  79,920Net
      cash flows used in investing activities
                                  
                                  
                                  (38,019
                                  )
                                  
                                  
                                  (55,354
                                  )
                                  
                                  
                                  (93,373
                                  )Net
      cash flows used in financing activities
                                  
                                  
                                  (33,422
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (33,422
                                  )Effect
      of exchange rate changes on cash and cash equivalents
                                  
                                  
                                  (30,943
                                  )
                                  
                                  
                                  6,276
                                  
                                  
                                  
                                  (24,667
                                  )Net
      decrease in cash and cash equivalents
                                  
                                  
                                  (48,804
                                  )
                                  
                                  
                                  (49,078
                                  )
                                  
                                  
                                  (97,882
                                  )Cash
      and cash equivalents at beginning of year
                                  
                                  
                                  381,964
                                  
                                  
                                  
                                  (4,892
                                  )
                                  
                                  
                                  377,072Cash
      and cash equivalents at end of period
                                  
                                  
                                  333,160
                                  
                                  
                                  
                                  (53,970
                                  )
                                  
                                  
                                  279,190Nine
      months ended March 31, 2009:Net
      cash flows provided by operations
                                  
                                  $
                                  116,941
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  $
                                  116,941Cash
      flows provided by investing activities:Net
      cash paid for acquisitions
                                  
                                  
                                  (32,701
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (32,701
                                  )Purchases
      of property, plant and equipment
                                  
                                  
                                  (10,437
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (10,437
                                  )Internally
      developed software
                                  
                                  
                                  (702
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (702
                                  )Disposal
      of property, plant and equipment
                                  
                                  
                                  215
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  215Purchases
      of investments
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (166,881
                                  )
                                  
                                  
                                  (166,881
                                  )Proceeds
      from sales of investments
                                  
                                  
                                  4,025
                                  
                                  
                                  
                                  101,167
                                  
                                  
                                  
                                  105,192Net
      cash flows used in investing activities
                                  
                                  
                                  (39,600
                                  )
                                  
                                  
                                  (65,714
                                  )
                                  
                                  
                                  (105,314
                                  )Net
      cash flows used in financing activities
                                  
                                  
                                  (33,710
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (33,710
                                  )Effect
      of exchange rate changes on cash and cash
                                  
                                  
                                  (42,323
                                  )
                                  
                                  
                                  8,743
                                  
                                  
                                  
                                  (33,580
                                  )Net
      decrease in cash and cash equivalents
                                  
                                  
                                  1,308
                                  
                                  
                                  
                                  (56,971
                                  )
                                  
                                  
                                  (55,663
                                  )Cash
      and cash equivalents at beginning of year
                                  
                                  
                                  381,964
                                  
                                  
                                  
                                  (4,892
                                  )
                                  
                                  
                                  377,072Cash
      and cash equivalents at end of period
                                  
                                  
                                  383,272
                                  
                                  
                                  
                                  (61,863
                                  )
                                  
                                  
                                  321,409
 
 71


MICROS
SYSTEMS, INC. AND SUBSIDIARIES


SCHEDULE
II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES


(in
thousands)





Description
                                
                                Balance at
                                  beginning
                                  of period
                                
                                
                                Charged
                                  To
                                  expense
                                
                                
                                Deductions
                                
                                
                                Other (1)
                                
                                
                                Balance
                                  at end
                                  of periodYear
      ended June 30, 2009:Allowance
      for doubtful accounts
                                
                                $
                                28,348
                                
                                
                                $
                                8,339
                                
                                
                                $
                                (2,758
                                )2)
                                
                                $
                                (1,850
                                )
                                
                                $
                                32,079Reserve
      for inventory obsolescence
                                
                                
                                11,479
                                
                                
                                
                                4,024
                                
                                
                                
                                (2,283
                                )(3)
                                
                                
                                (1,823
                                )
                                
                                
                                11,397$
                                39,827
                                
                                
                                $
                                12,363
                                
                                
                                $
                                (5,041
                                )
                                
                                $
                                (3,673
                                )
                                
                                $
                                43,476Year
      ended June 30, 2008:Allowance
      for doubtful accounts
                                
                                $
                                23,110
                                
                                
                                $
                                7,062
                                
                                
                                $
                                (3,993
                                )(2)
                                
                                $
                                2,169
                                
                                
                                $
                                28,348Reserve
      for inventory obsolescence
                                
                                
                                9,893
                                
                                
                                
                                2,753
                                
                                
                                
                                (2,116
                                )(3)
                                
                                
                                949
                                
                                
                                
                                11,479$
                                33,003
                                
                                
                                $
                                9,815
                                
                                
                                $
                                (6,109
                                )
                                
                                $
                                3,118
                                
                                
                                $
                                39,827Year
      ended June 30, 2007:Allowance
      for doubtful accounts
                                
                                $
                                20,335
                                
                                
                                $
                                3,356
                                
                                
                                $
                                (340
                                )(2)
                                
                                $
                                (241
                                )
                                
                                $
                                23,110Reserve
      for inventory obsolescence
                                
                                
                                9,938
                                
                                
                                
                                3,157
                                
                                
                                
                                (2,399
                                )(3)
                                
                                
                                (803
                                )
                                
                                
                                9,893$
                                30,273
                                
                                
                                $
                                6,513
                                
                                
                                $
                                (2,739
                                )
                                
                                $
                                (1,044
                                )
                                
                                $
                                33,003





(1)
            Primarily
      related to foreign currency
translation.


(2)
            Charge
      offs, net of recoveries.


(3)
            Material
      scrapped or otherwise disposed.




72




SIGNATURES





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





MICROS
      SYSTEMS, INC.Date:
                August
      31, 2009
                By:
                /s/Gary C. KaufmanGary
      C. KaufmanExecutive
      Vice President, Finance and
                  Administration/Chief
      Financial Officer





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





Name
                              
                              Title/s/A. L. Giannopoulos
                              
                              Chairman,
      President and
                              
                              August
      31, 2009A.
      L. Giannopoulos
                              
                              Chief
      Executive Officer/s/Gary C. Kaufman
                              
                              Executive
      Vice President
                              
                              August
      31, 2009Gary
      C. Kaufman
                              
                              Finance
      and AdministrationChief
      Financial Officer/s/Cynthia A. Russo
                              
                              Senior
      Vice President
                              
                              August
      31, 2009Cynthia
      A. Russo
                              
                              Corporate
      Controller andPrincipal
      Accounting Officer/s/Louis
      M. Brown, Jr.
                              
                              
                              
                              August
      31, 2009Louis
      M. Brown, Jr.
                              
                              Director
      andVice
      Chairman of the Board/s/B. Gary Dando
                              
                              
                              
                              August
      31, 2009B.
      Gary Dando
                              
                              Director/s/F. Suzanne JennichesF.
      Suzanne Jenniches
                              
                              Director
                              
                              August
      31, 2009/s/John G. Puente
                              
                              
                              
                              August
      31, 2009John
      G. Puente
                              
                              Director/s/Dwight S. Taylor
                              
                              
                              
                              August
      31, 2009Dwight
      S. Taylor
                              
                              Director




73




EXHIBIT
INDEX





3(i)
                                                  Articles
      of Incorporation of the Company are incorporated herein by reference to
      Exhibit 3 to the Annual Report on Form 10-K of the Company for the fiscal
      Year ended June 30, 19903(i)(a)
                                                  Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Quarterly Report on Form 10-Q of the Company for the
      period ended March 31, 19973(i)(b)
                                                  Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Quarterly Report on Form 10-Q of the Company for the
      period ended March 31, 19983(i)(c)
                                                  Amendment
      to Articles of Incorporation is incorporated herein by reference to
      Exhibit 3(i) to the Form 8-K filed on November 16, 20073(ii)
                                                  By-laws
      of the Company, as amended, are incorporated herein by reference to
      Exhibit 3(ii) to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 200810(a)(1)*
                                                  Amendment
      and Restatement of MICROS Systems, Inc. Stock Option Plan is incorporated
      herein by reference to Exhibit 4.1 to the Registration Statement on Form
      S-8 of the Company filed on February 16, 199010(a)(2)*
                                                  First
      Amendment to the Amendment and Restatement of MICROS Systems, Inc. Stock
      Option Plan is incorporated herein by reference to Exhibit 4.2 to the
      Registration Statement on Form S-8 of the Company filed on February 16,
      199010(a)(3)*
                                                  MICROS
      Systems, Inc. 1991 Stock Option Plan as amended, is incorporated herein by
      reference to Exhibit A to the Proxy Statement of the Company for the 2006
      Annual Meeting of Shareholders10(b)*
                                                  Employment
      Agreement dated June 1, 1995 between MICROS Systems, Inc. and A. L.
      Giannopoulos is incorporated herein by reference to Exhibit 10e to the
      Annual Report on Form 10-K of the Company for the fiscal Year ended June
      30, 199510(b)(1)*
                                                  First
      Amendment to Employment Agreement dated February 6, 1997 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 199610(b)(2)*
                                                  Second
      Amendment to Employment Agreement dated February 1, 1998 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 199710(b)(3)*
                                                  Third
      Amendment to Employment Agreement dated September 8, 1999 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10g to the Annual Report on Form 10-K of the Company for the
      fiscal Year ended June 30, 199910(b)(4)*
                                                  Fourth
      Amendment to Employment Agreement dated November 19, 2001 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 200110(b)(5)*
                                                  Fifth
      Amendment to Employment Agreement dated November 15, 2002 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 200210(b)(6)*
                                                  Sixth
      Amendment to Employment Agreement dated January 28, 2004 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 200310(b)(7)*
                                                  Seventh
      Amendment to Employment Agreement dated August 9, 2005 between MICROS
      Systems, Inc. and A. L. Giannopoulos is incorporated herein by reference
      to Exhibit 10 to the Current Report on Form 8-K filed on August 11,
      200510(b)(8)*
                                                  Eighth
      Amendment to Employment Agreement dated June 6, 2006, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on June 8,
      200610(b)(9)*
                                                  Ninth
      Amendment to Employment Agreement dated November 17, 2006, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on November 17,
      200610(b)(10)*
                                                  Tenth
      Amendment to Employment Agreement dated June 12, 2008, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on June 13,
      200810(b)(11)*
                                                  Eleventh
      Amendment to Employment Agreement dated November 21, 2008, between MICROS
      Systems, Inc. and A.L. Giannopoulos is incorporated herein by reference to
      Exhibit 10.1 to the Current Report on Form 8-K filed on November 24,
      200810(c)*
                                                  Employment
      Agreement dated May 28, 1997 between MICROS Systems, Inc. and Gary C.
      Kaufman is incorporated herein by reference to Exhibit 10 to the Annual
      Report on Form 10-K of the Company for the fiscal Year ended June 30,
      199710(c)(1)*
                                                  First
      Amendment to Employment Agreement dated October 1, 1998 between MICROS
      Systems, Inc. and Gary C. Kaufman is incorporated herein by reference to
      Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 199810(c)(2)*
                                                  Second
      Amendment to Employment Agreement dated November 17, 2006 between MICROS
      Systems, Inc. and Gary C. Kaufman is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on November 17,
      200610(d)*
                                                  Employment
      Agreement dated May 28, 1997 between MICROS Systems, Inc. and Thomas L.
      Patz is incorporated herein by reference to Exhibit 10 to the Annual
      Report on Form 10-K of the Company for the fiscal Year ended June 30,
      199710(d)(1)*
                                                  First
      Amendment to Employment Agreement dated October 1, 1998 between MICROS
      Systems, Inc. and Thomas L. Patz is incorporated herein by reference to
      Exhibit 10 to the Quarterly Report on Form 10-Q of the Company for the
      period ended December 31, 1998 (see 10(d)(1) above, as Mr. Patz’ amendment
      is an amendment identical (except for the identity of the executive and
      the economic terms) to that entered into by the Company with Mr.
      Kaufman)10(d)(2)*
                                                  Second
      Amendment to Employment Agreement dated November 17, 2006 between MICROS
      Systems, Inc. and Thomas L. Patz is incorporated herein by reference to
      Exhibit 10 to the Current Report on Form 8-K filed on November 17, 2006
      (see 10(d)(2) above, as Mr. Patz’ amendment is an amendment identical
      (except for the identity of the executive and the economic terms) to that
      entered into by the Company with Mr.
Kaufman)




74




10(e)*
                                                                    Employment
      Agreement dated November 19, 2005, between MICROS Systems, Inc. and
      Jennifer Kurdle (filed herewith)10(f)*
                                                                    Restated
      Supplemental Executive Retirement Plan, as approved by the Board of
      Directors on April 27, 2005, is incorporated herein by reference to
      Exhibit 10 to the Annual Report on Form 10-K for the fiscal year ended
      June 30, 200610(g)
                                                                    Amended
      and Restated Credit Agreement, effective as of July 29, 2005, among MICROS
      Systems, Inc., DV Technology Holdings Corporation, Datavantage
      Corporation, MICROS Fidelio Nevada, LLC, MSI Delaware, LLC, MICROS-Fidelio
      Worldwide, Inc., and JTECH Communications, Inc. as Borrower, Bank of
      America, N.A., as administrative agent, swing line lender and L/C issuer,
      and Wachovia Bank, N.A., and US Bank, N.A., and Banc of America Securities
      LLC, as sole lead arranger and book manager, is incorporated herein by
      reference to Exhibit 10 to the Annual Report on Form 10-K for the fiscal
      year ended June 30, 200510(g)(1)
                                                                    First
      Amendment to Credit Agreements, dated December 11, 2008 among MICROS
      Systems, Inc. DV Technology Holdings Corporation, Datavantage Corporation,
      Micros Fidelio Nevada, LLC, MSI Delaware, LLC, Micros-Fidelio (Ireland)
      Ltd. as Guarantor, Bank of America, N.A., as Administrative Agent, and
      Bank of America, N.A., Wachovia Bank, N.A., and U.S. Bank, N.A., as
      Lenders is incorporated herein by reference to Exhibit 10(b) to the
      Quarterly Report on Form 10-Q of the Company for the period ended December
      31, 200810(h)
                                                                    Amended
      and Restated Credit Agreement, effective as of July 29, 2005, among
      MICROS-Fidelio (Ireland) Ltd., MICROS-Fidelio Systems (UK) Ltd.,
      MICROS-Fidelio España S.L., MICROS Fidelio (Canada), Ltd., MICROS-Fidelio
      Brazil, Ltda., MICROS-Fidelio France S.A.S., Hospitality Technologies,
      S.A., MICROS-Fidelio Mexico S.A. de C.V., MICROS Systems Holding GmbH,
      MICROS-Fidelio GmbH, MICROS-Fidelio Software Portugal Unipessoal Lda,
      MICROS-Fidelio (Thailand) Co., Ltd., MICROS-Fidelio Singapore Pte Ltd.,
      MICROS-Fidelio Software (Philippines), Inc., MICROS-Fidelio Japan Ltd.,
      MICROS-Fidelio Australia Pty. Ltd., MICROS-Fidelio Hong Kong, Ltd.,
      Fidelio Nordic Norway A/S, Fidelio Nordic Oy, Fidelio Nordic Sverige,
      A.B., Hotelbk, A.B., as Borrower, Bank Of America, N.A., as Administrative
      Agent, swing line lender, and L/C issuer, and Wachovia Bank N.A. and US
      Bank N.A., and Banc of America Securities LLC, as sole lead arranger and
      book manager is incorporated herein by reference to Exhibit 10 to the
      Annual Report on Form 10-K for the fiscal year ended June 30,
      200510(i)
                                                                    Lease
      Agreement by and between Orix Columbia, Inc. and MICROS Systems, Inc.,
      dated August 17, 1998, with respect to the Company’s corporate
      headquarters located at 7031 Columbia Gateway Dr., Columbia MD 21046-2289,
      as amended by a First Amendment to Lease, dated October 27, 1999, a Second
      Amendment to Lease, dated December 26, 2001, and a Third Amendment to
      Lease, dated March 1, 2006 and by and between MICROS Systems, Inc. and
      Columbia Gateway Office Corporation as successor in interest to Orix
      Columbia, Inc. is incorporated herein by reference to Exhibit 10 to the
      Quarterly Report on Form 10-Q of the Company for the period ended March
      31, 200910(j)
                                                                    Manufacturing
      Agreement, by and between MICROS Systems, Inc., and GES Singapore Pte
      Ltd., with an effective date of November 6, 2002 (filed
      herewith)14
                                                                    Code
      of Ethics and Business Practices is incorporated herein by reference to
      Exhibit 14 to the Annual Report on Form 10-K of the Company for the fiscal
      year ended June 30, 200421
                                                                    Subsidiaries
      of the Company (filed herewith)23(a)
                                                                    Consent
      of Houlihan Smith & Co., Inc. (filed herewith)23(b)
                                                                    Consent
      of PricewaterhouseCoopers LLP (filed herewith)31(a)
                                                                    Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a) under the
      Securities Exchange Act of 1934 (filed herewith)31(b)
                                                                    Certification
      of Principal Financial Officer pursuant to Rule 13a-14(a) under the
      Securities Exchange Act of 1934 (filed herewith)32(a)
                                                                    Certification
      of Principal Executive Officer pursuant to Rule 13a-14(b) under the
      Securities Exchange Act of 1934 and 18 U.S.C. 1350 (filed
      herewith)32(b)
                                                                    Certification
      of Principal Financial Officer pursuant to Rule 13a-14(b) under the
      Securities Exchange Act of 1934 and 18 U.S.C. 1350 (filed
      herewith)




*      Management
contract or compensatory plan or arrangement.




75