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, 2008





OR





o
            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, Including 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 þ  NO 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 o  NO 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 þ  NO 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 filerþ
            Accelerated
                filero
            Non-accelerated
                filero





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, 2007 was $2,848,019,543.





At
      the
      close of business on July 31, 2008, there were issued and outstanding 80,694,771
      shares of Registrant’s Common Stock at $0.00625 par value.





**DOCUMENTS
      INCORPORATED BY REFERENCE**





Portions
      of the Registrant’s definitive Proxy Statement, to be filed with the Securities
      and Exchange Commission, and delivered to stockholders in connection with the
      Annual Meeting of Stockholders to be held November 21, 2008, are incorporated
      by
      reference into Part III of this Form 10-K.


2


**TABLE
      OF CONTENTS**





**Page
                No.****PART
                I**Item
                1.
            Business
            4Item
                1A.
            Risk
                Factors
            16Item
                1B.
            Unresolved
                Staff Comments
            18Item
                2.
            Properties
            18Item
                3.
            Legal
                Proceedings
            20Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            20**PART
                II**Item
                5.
            Market
                for the Registrant’s Common Equity, Related Stockholder Matters, and
            21Issuer
                Purchases of Equity SecuritiesItem
                6.
            Selected
                Consolidated Financial Data
            22Item
                7.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            22Item
                7A.
            Quantitative
                and Qualitative Disclosures about Market Risk
            36Item
                8.
            Financial
                Statements and Supplementary Data
            37Item
                9.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            37Item
                9A.
            Controls
                and Procedures
            37Item
                9B.
            Other
                Information
            37**PART
                III**Item
                10.
            Directors
                and Executive Officers of the Registrant
            38Item
                11.
            Executive
                Compensation
            38Item
                12.
            Security
                Ownership of Certain Beneficial Owners and Management and
                Related
            38Stockholder
                MattersItem
                13.
            Certain
                Relationships and Related Transactions
            38Item
                14.
            Principal
                Accounting Fees and Services
            38**PART
                IV**Item
                15.
            Exhibits
                and Financial Statement Schedules
            39Signatures
            72Exhibit
                Index
            73




3


**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
      specialty 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, and so that references to a fiscal year mean the 12-month period ending
      June 30 of that year; i.e., fiscal year 2008 means the 12-month period ending
      June 30, 2008.





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 18,
      “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 substantively similar
      worldwide.





Almost
      all of our customers are in the hospitality industry or the specialty retail
      industry. The hospitality industry comprises numerous defined markets, including
      lodging (e.g., individual hotel sites, hotel chains and franchise groups, and
      centrally deployed systems, such as hotel central reservation systems), table
      service restaurants, quick service restaurants, entertainment venues (e.g.,
      stadiums and arenas), business foodservice operations, casinos, transportation
      foodservice, government operations, and cruise ships. The specialty 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) specialty
      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 specialty retail systems consist of software
      encompassing POS, loss prevention, web commerce applications, business
      analytics, customer gift cards, 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)
              ·
                  Hilton International
              ·
                  Peninsula (Hong Kong)·
                  Best Western
              ·
                  Hyatt International
              ·
                  Shangri-La (Hong Kong)·
                  Camino Real (Mexico)
              ·
                  InterContinental Hotels Group
              ·
                  Société du Louvre (France)·
                  Carlson Hotels
              ·
                  Kempinski (Germany)
              ·
                  Solare (Japan)·
                  Danubius (Bulgaria)
              ·
                  Loews
              ·
                  Starwood International·
                  Dusit Thani (Thailand)
              ·
                  MGM Mirage
              ·
                  Steigenberger·
                  Extended Stay America
              ·
                  Marriott International
              ·
                  Thistle (United Kingdom)·
                  Fairmont
              ·
                  Millennium
              ·
                  Wyndham Worldwide, and·
                  Federal (Malaysia)
              ·
                  Mövenpick (Switzerland)
              ·
                  Wynn Resorts·
                  Four Seasons
              ·
                  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)
              ·
                  Sokos (Finland)·
                  Camino Real
              ·
                  MGM Mirage
              ·
                  Starhotels (Italy)·
                  Constellation (Australia)
              ·
                  Oberoi (India)
              ·
                  Sun International (South Africa)·
                  Equatorial (Malaysia)
              ·
                  Omni
              ·
                  Thistle·
                  Fairmont
              ·
                  Pan Pacific (Singapore)
              ·
                  Westmark·
                  Four Seasons
              ·
                  Red Lion
              ·
                  Wyndham Worldwide, and·
                  Great Wolf Resorts
              ·
                  Rydges (Australia)
              ·
                  Wynn Resorts·
                  Hard Rock Hotels
              ·
                  Shangri-La·
                  Loews Hotels
              ·
                  Société du Louvre




Globally,
      over 80 hotel chains or individual hotel sites have installed MICROS’s CRS
      applications.




4




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




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




Major
      quick service chain restaurant (“QSR”) customers include Burger King, as well as
      numerous franchisees of the following:


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




Our
      restaurant POS systems are also installed in hotel restaurants in chains,
      including Boyd Gaming, Camino Real, Danubius, Fairmont, Four Seasons, Global
      Hyatt, Hilton International, Hilton, Hyatt, InterContinental Hotels, Kempinski,
      Mandarin Oriental, 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, Anton’s, Compass, Delaware North, HMS Host,
      and various government entities. We have installed large POS systems in 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 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 restaurant POS systems through our Hospitality Solutions International
      (“HSI”) division. The HSI restaurant POS product is a Windows ® based
      software product. Additionally, we market a POS product through our Indatec
      GmbH
      (“Indatec”) subsidiary. The Indatec product is a proprietary POS hardware system
      with embedded software. The Indatec product is sold exclusively in Europe and
      is
      targeted to small restaurants.




Through
      our JTECH Communications, Inc. (“JTECH”) subsidiary, we market a range of
      on-premises paging and alert solutions for restaurants, retail, and medical
      environments.




MICROS
      Retail customers include the following retailers:


·
                  Abercrombie & Fitch
              ·
                  Home Depot Canada
              ·
S
                  & K Famous Brands·
                  Adidas AG (Germany) and Adidas USA
              ·
                  Hugo Boss AG (Germany)
              ·
                  Señor Frogs (Mexico)·
                  Armani Exchange
              ·
                  J. Jill Group
              ·
                  Shaw’s Markets·
                  Barney’s New York
              ·
                  Jos. A. Banks Clothiers
              ·
                  Steve Madden Retail·
                  Books-A-Million
              ·
                  Limited Too
              ·
                  Talbots·
                  Blain Supply
              ·
                  Michael’s Arts and Crafts
              ·
                  Urban Brands·
                  Blue Spirit (Italy)
              ·
                  Polo Ralph Lauren
              ·
                  the U.S. Mint·
                  Brazin Ltd. (Australia)
              ·
                  Reebok Retail
              ·
                  Zales, and·
                  CSK Auto
              ·
                  Ritz Camera
              · the four largest grocery chains in the
                  UK·
                  Garnet Hill
              ·
                  Roots Canada Ltd.·
                  Starbucks





Our
      specialty retail solutions are provided through our subsidiaries Datavantage, CommercialWare,
      Advance Retails Systems (Mexico), RedSky (United Kingdom), and eOne. In our
      marketing, we sometimes refer to this group of subsidiaries as the “MICROS
      Retail” group.


5


**PRODUCTS
      AND SERVICES**





**Summary
      of Product Solutions (Software and Hardware):**





**Hotel Products**
            
            **Description****Software**Fidelio
                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 hotelsOPERA
                Revenue Management System
            
            Software
                that helps hotels develop and manage pricing strategiesOPERA
                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 restaurantsRedSky
                ImagInn
            
            PMS
                software products for hotels, targeted at limited-service, independent,
                and economy hotels.




**Restaurant Products**
            
            **Description****Software**9700
                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
                HIS
                division)Indatec
            
            POS
                software for small restaurants (only marketed in
                Europe)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)Tangent
                POS
            
            POS
                software for stadiums, arenas, and similar venues


6





**Hardware**Workstation
                5 Terminal
            
            Windows
                CE POS and WEPOS 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 venuesIndatec
                POS Terminal
            
            POS
                terminal that operates the Indatec POS softwareJTECH
                Paging Products
            
            Suite
                of paging productsKitchen
                Display System
            
            Hardware
                for kitchen display systems




**Retail
                Products**
            
            **Description****Software**Store
                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 productHome
                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
                chaineOneCommerce
            
            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.





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 with 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, engineering management, and 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.


7


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 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. Over 75 hotel chains have implemented OPERA, many of which are in
      the
      midst of multi-year rollouts.





We
      also
      offer limited versions of the OPERA property management system called
      OPERAXpress and OPERALite. 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, 2008, about 11,000 hotel sites have installed either Opera,
      OPERAXpress PMS, or OPERALite.





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 2,000 hotels running Opera PMS or Opera Xpress PMS 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, 2008, over 5,100 hotels were using Fidelio Version
      7.0.





We
      also
      offer a comprehensive portfolio of integrated, highly functional hotel PMS
      software solutions under the tradename ImagInn, which is targeted toward the
      limited-service, independent and economy hotel market. We acquired this product
      line as part of our acquisition of RedSky, which is now part of the MICROS
      Retail group. There are more than 2,000 sites using the Red Sky ImagInn PMS
      product.





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
      1,800 hotel sites as of June 30, 2008.





Additionally,
      we market Fidelio Cruise PMS, a specialized version of our PMS product, to
      the
      cruise industry. The Fidelio Cruise PMS enables cruise ships to manage their
      reservations and on-board operational needs including check-in and check-out,
      point-of-sale, passenger and crew administration, invoicing, maintenance
      tracking and passport document management. Fidelio Cruise software is installed
      in over 170 cruise ships. Customers include Carnival Cruise Lines, Cunard Line,
      Holland America, Norwegian Cruise Lines, P. & O. Cruises, Princess Cruises,
      Radisson Seven Seas Cruises, Star Cruises, Royal Caribbean International, and
      the U.S. Navy.





**Restaurant
      Information Systems**





Our
      restaurant systems include full-featured point of sale (“POS”) applications,
      hardware, and support services. 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 two 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 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, but
      has a
      faster microprocessor and other improvements in memory management and data
      recovery over 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.


8


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, HSI POS, Indatec, the e7 Series, and
      Tangent POS. 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.
      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.





The
      Tangent POS includes POS and related functions, and is designed for sports
      and
      entertainment facilities. Tangent POS is currently installed in more than 200
      stadiums, arenas, and other large facilities in North America.





**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 POS product primarily to table service
      restaurant customers in North America. The product contains a wide array of
      POS
      features.





The
      Indatec POS product is marketed only in Europe and primarily to smaller table
      service restaurants and small hotels with restaurants that do not require the
      higher-level functionality of other MICROS POS products. The Indatec POS is
      designed to serve smaller restaurants seeking a lower cost product in terms
      of
      purchase and installation expense.





**Ancillary
      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
      also
      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. 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, 2008, we are hosting applications supporting approximately 6,700
      restaurants.


9


**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.





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 tradename “XBR”),
      customer relationship management, gift cards, and audit control.





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 (CW Direct).
      Specifically, these applications and services enable a merchant to efficiently
      handle customer transactions from a store, the Internet, catalog phone-in
      orders, call centers, kiosk, and wireless devices. The solutions enable the
      merchant to provide the customer with full transparency through the purchasing
      process, e.g., from 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 is currently licensed to the four
      largest grocers located in the United Kingdom.





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





**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, which enable customers
      to use the software without investing in hardware and a network.





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





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, the JTECH help desk in Boca Raton, Florida,
      casino software related support in Las Vegas, and help desks in Westborough,
      Massachusetts, and Omaha, Nebraska, for some of the MICROS Retail products
      and
      services.





These
      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 service 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.


10


We
      have
      implemented data centers in Frankfurt; Ashburn and Manassas, Virginia; 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. This relationship enables us to more efficiently deploy our hosted
      solutions globally.





Services
      are a critical component of our business. Service revenue, which is comprised
      of
      programming, installation, training, in-field support, help desk, and
      maintenance, constituted approximately 55.5% ($529.5 million) of our total
      revenue in fiscal year 2008 compared to approximately 53.3% ($419.1 million)
      in
      fiscal year 2007 and approximately 50.6% ($343.3 million) in fiscal year
      2006.





Maintenance
      service contracts, which include field service, depot hardware maintenance,
      and
      software support, are a large component of our service offerings. Revenues
      for
      service maintenance contracts were approximately $291.4 million for fiscal
      year
      2008, approximately $233.7 million for fiscal year 2007, and approximately
      $190.0 million in fiscal year 2006. 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
      31
      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 more than
      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 55 domestic dealers **** and
      more
      than 60 international distributors and sub-distributors.





During
      fiscal year 2008, we acquired Check-In Data AG (including its various
      subsidiaries), which had previously been our authorized distributor in
      Switzerland. Check-In Data distributed the full line of MICROS restaurant and
      hotel systems. We also acquired Brolin Retail Systems and its subsidiaries,
      which had previously been our authorized distributor in Ohio, Indiana and
      northern Kentucky. Brolin primarily distributed our restaurant systems
      products.





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 56.4% (approximately $537.8 million) of our total revenue in
      fiscal year 2008, 53.7% (approximately $421.6 million) in fiscal year 2007,
      and
      47.7% (approximately $323.8 million) in fiscal year 2006.





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 Indatec subsidiary and our HSI division conduct restaurant
      POS product research and development in their facilities in Bernau am Chiemsee,
      Germany, and Scottsdale, Arizona, respectively. 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” in Item 1.





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, Omaha, Nebraska, and in Hounslow, United Kingdom.
      MICROS’s Advance Retail Solutions subsidiary conducts product development in
      Monterrey, Mexico. JTECH conducts its development at its Boca Raton, Florida
      location.


11


MICROS
      has 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.





**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 developmentBernau
                am Chiemsee, Germany
            
            Restaurant
                POS software and hardware (Indatec only)Scottsdale
                Arizona
            
            Restaurant
                POS software (HSI only)Naples,
                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 servicesBoca
                Raton, Florida
            
            Paging
                software and hardware developmentHounslow
                UK
            
            Hotel
                product development (ImagInn) and retail product development
                (Creations)





**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)
            
            **2008**
            
            **2007**
            
            **2006**Total
                R&D incurred
            
            **$**
            **42,048**
            
            $
            35,859
            
            $
            30,643Capitalized
                software development costs
            
            
            **(1,919**
            **)**
            
            (1,974
            )
            
            (3,523
            )Total
                R&D expenses
            
            **$**
            **40,129**
            
            $
            33,885
            
            $
            27,120





**COMPETITION**





The
      markets in which we operate are highly competitive. There are at least 20
      significant competitors worldwide that offer some form of sophisticated
      restaurant POS system, over 15 significant hotel systems competitors, and over
      10 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 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.





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, Softbrands, Multi-Systems, Northwind, Newmarket
      (sales and catering product only), Amadeus Hospitality, Par Technology, and
      Protel. 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, Vantis Corp., and Trust
      International/TravelPort.





The
      specialty retail market in which Micros Retail operates is highly competitive.
      Competitors include Epicor (through its CRS Retail Systems and NSB divisions),
      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.





JTECH’s
      competitors include Long Range System, NRN and certain distributors of Motorola
      paging products.


12


**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. located in Singapore.





Our
      Indatec operation provides some basic assembly of its POS systems in a facility
      in Bernau am Chiemsee, Germany, and contracts with a third party manufacturer
      in
      Germany for additional production capacity.





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 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, 2008, we employed 4,619 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**
            
            **Total**Employees
            
            
            2,356
            
            
            1,459
            
            
            568
            
            
            236
            
            
            4,619As
                % of total
            
            
            51.0
            %
            
            31.6
            %
            
            12.3
            %
            
            5.1
            %
            
            100.0
            %





Approximately
      35% 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, 2008, regarding employees organized
      by functional skills:





**By Functional Skills**
            
            **Sales &**
              **Marketing**
            
            **Customer**
              **Support**
            
            **Product**
              **Development**
            
            **Admin./**
              **Finance**
            
            **Operations**
            
            **Total**Employees
            
            
            2,628
            
            
            1,049
            
            
            521
            
            
            278
            
            
            143
            
            
            4,619As
                % of total
            
            
            56.9
            %
            
            22.7
            %
            
            11.3
            %
            
            6.0
            %
            
            3.1
            %
            
            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 as 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**
            
            **Position**A.
                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** ,
      68, has
      been the Company’s President and Chief Executive Officer of the Company 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** ,
      50, 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.


13


**Gary
      C. Kaufman** ,
      58, 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 was appointed to 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.





**Jennifer
      Kurdle** ,
      41, 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. Ms. Kurdle first joined the Company in
      1990. Ms. Kurdle graduated from Fairmont State University in 1989.





**Thomas
      L. Patz** ,
      48, 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 1982 graduate of Brown University, and a 1985 graduate of the University
      of
      Virginia School of Law. Mr. Patz is a member of the Maryland Bar.





**Peter
      J. Rogers, Jr.** ,
      53, 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
      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
      1977 graduate of the University of Pennsylvania with a Bachelor of Arts degree
      in Economics. Mr. Rogers is also a 1979 graduate of the New York University
      Stern Graduate School of Business with a Master of Business Administration
      degree in Finance.





**Cynthia
      A. Russo** ,
      38, has
      been the Company’s Senior Vice President and the Corporate Controller since
      November 2007. From May 2001 until November 2007, Ms. Russo was Vice President
      and Corporate Controller. Ms. Russo previously served the Company in various
      capacities, and she joined the Company in January 1996. Ms. Russo holds a
      Bachelor of Science degree in Accounting from 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 $537.8 million **** during
      fiscal year 2008 to customers located primarily in Europe, Asia and Latin
      America. Comparable sales in fiscal years 2007 and 2006 were approximately
      $421.6 million and $323.8 million, respectively. See Note 18, “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-six currencies in fiscal years
      2008
      and 2007 compared to twenty-eight currencies in fiscal year 2006. The relative
      currency mix over the past three fiscal years was as follows:





**Fiscal Year Ended June 30,****% of Reported Revenues**
            
            **Exchange Rates****Revenues by currency****(1)****:**
            
            **2008**
            
            **2007**
            
            **2006**
            
            **2008**
            
            **2007**
            
            **2006**United
                States Dollar
            
            
            **49**
            **%**
            
            53
            %
            
            59
            %
            
            **1.0000**
            
            
            1.0000
            
            
            1.0000European
                Euro
            
            
            **22**
            **%**
            
            25
            %
            
            21
            %
            
            **1.5744**
            
            
            1.3535
            
            
            1.2792British
                Pound Sterling
            
            
            **9**
            **%**
            
            6
            %
            
            5
            %
            
            **1.9919**
            
            
            2.0081
            
            
            1.8493Canadian
                Dollar
            
            
            **2**
            **%**
            
            1
            %
            
            1
            %
            
            **0.9806**
            
            
            0.9385
            
            
            0.8957Australian
                Dollar
            
            
            **2**
            **%**
            
            2
            %
            
            2
            %
            
            **0.9587**
            
            
            0.8478
            
            
            0.7432Mexican
                Peso
            
            
            **2**
            **%**
            
            2
            %
            
            2
            %
            
            **0.0970**
            
            
            0.0926
            
            
            0.0882All
                Other Currencies(2)
            
            
            **14**
            **%**
            
            11
            %
            
            10
            %
            
            **0.2888**
            
            
            0.1631
            
            
            0.1941Total
            
            
            **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 in relation to the U.S. dollar
      in
      fiscal year 2008 would have affected total revenues by approximately $21.2
      million, or 2.2%. 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.


14


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”.





**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”, and
“CWIntegrate” 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.





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, 2008, 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 0.3%, 0.4% and 0.9% of our total consolidated revenue
      for the fiscal years ended June 30, 2008, 2007, and 2006, 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, 2008, 2007 and 2006, the backlog totaled
      approximately $204.6 million, $174.6 million and $134.1 million, respectively.
      Historically, only an immaterial portion of the backlog existing as of the
      first
      day of the fiscal year is not recognized 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 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
      Annual Report.


15


**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
      the
      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, 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 can 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.** Reduction of discretionary spending by consumers, such as on travel and dining,
      as well as on retail spending generally, when there is a material increase
      in
      non-discretionary expenses caused by a rise in oil and gas prices. Moreover,
      the
      increase in oil and gas prices also directly adversely affects our customer
      base
      as a direct result of higher ingredient and food costs for our restaurant
      customers. While in fiscal year 2008 we did not see any material impact in
      connection with spikes in oil and gas prices, these developments may adversely
      affect our business in the future.





· **We
      maintain offices in certain parts of the world that are subject to economic
      instability, political unrest, and terrorism, such as Argentina, Brazil and
      Israel.** 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.





· **Increasing
      tensions between Russia and the United States could adversely affect our
      business in Eastern Europe and Central Asia.** Recent
      events in Georgia could signal increased difficulties in the U.S.-Russia
      relationship, which could adversely affect our customers and our business
      operations in the area, particularly in those countries that were formerly
      part
      of the Soviet Union.





**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.





· **Our
      quarterly 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 and, accordingly, it is much harder to appropriately
      staff and prepare for fluctuations in buying demand. This can result in
      inefficiencies that adversely affect our operating results.





· **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
      are
      also driven by the complexity of open systems, which generally incorporate
      third
      party software products (the support and service of which may be more difficult
      and costly), 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.


16


· **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), compliance with new legislation, and rising oil and gas
      prices. Significant increases in any of these expenses could adversely affect
      our operating results.





· **We
      are subject to fluctuations in foreign currencies and exchange
      rates.** As 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.





· **We
      have encountered risks associated with maintaining large cash
      balances.** While we
      have attempted to invest our cash balances in conservative investments, 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.
      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.





· **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 assure
      that
      GES will not experience labor or manufacturing challenges in the future.
      Additionally, GES procures many of its components from other third parties
      who
      could experience manufacturing or labor issues. Such difficulties could
      interrupt GES’s supply of products to us, which would adversely affect our
      business.





· **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 ever-increasing 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 an ever-present
      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.





**4.
      RESOURCE AND PERSONNEL RISKS.**





· **We
      could be adversely affected by vendor labor difficulties.** Some of
      our vendors 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.


17


·**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 will pursue an appeal in this 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 also face indirect liability as a result of infringement claims brought
      against our customers. There is at least one action pending in which some of
      our
      customers have been sued on such a claim and some of our customers are seeking
      indemnification from us. While we do not believe that any of our products and
      services infringe any patents, we may become involved in 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.





**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, and Motorola has the option to
      terminate the agreement after October 31, 2008.


18


In
      addition to over 50 smaller offices, we lease the following larger
      facilities:





**Location**
            
            **Approximate**
              **Size**
              (Square Feet)
            
            **Use**
            
            **Expiration Date**
            
            **Additional Comments**Columbia,
                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, 2009Cleveland,
                Ohio
            
            69,200
            
            Sales,
                marketing, support, product development
            
            February
                28, 2014 (with 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 the regional headquarters for Europe, Africa, and the Middle
                EastWestborough,
                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 (early termination rights in 2012, and 2017)
            
            Support
                mainly for Europe, Africa, and Middle East customersNanterre,
                France
            
            16,867
            
            Sales,
                marketing, support
            
            December
                31, 2013 (with 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.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 divisionSouth
                Plainfield, New Jersey
            
            12,846
            
            Sales,
                marketing, support
            
            April
                30, 2011
            
            Principal
                site for MICROS Retail - RedSky division sales, marketing and development
                in the U.S.Mexico,
                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, 2010Bernau,
                Germany
            
            10,000
            
            Sales,
                marketing, support, light assembly
            
            June
                30, 2010Slough,
                England (four sites)
            
            25,000
            
            Sales,
                marketing, support
            
            Ranges
                from September 29, 2013 to December 31, 2016 (early termination rights
                ranges from 2009 - 2010)Singapore
            
            9,367
            
            Sales,
                marketing, support
            
            August
                31, 2008




19


To
      satisfy other sales, service and support, and product development needs, we
      and
      our subsidiaries lease space in other U.S. cities, including Boston, Chicago,
      Cincinnati, Dallas, Denver, Hartford, Houston, Nashville, New Orleans,
      Pittsburgh, Portland, San Diego, San Francisco, and Seattle, and in numerous
      cities overseas, including Buenos Aires, Argentina; Hounslow, England; 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. The indemnity coverage estimated as of June 30, 2008 is immaterial.
      Through June 30, 2008, our legal fees with respect to indemnity coverage for
      this matter have not been material. Currently, the case is 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. 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 POS 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. In February 2008, we moved to dismiss the complaint on various
      grounds, but the court has not yet ruled on the motion. Because the motion
      is
      still pending, our answer to the complaint is not yet due; however, we dispute
      the substantive allegations in the complaint. Based on currently available
      information, we do not believe that our relationships and agreements with
      Merchant Link and Paymentech are anti-competitive or otherwise violate either
      federal antitrust law or applicable New Jersey law. If the court does not grant
      MICROS’s motion to dismiss the complaint, MICROS will vigorously contest the
      action.





On
      May
      22, 2008, a jury returned a verdict of $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. 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 have moved for
      reconsideration of the verdict by the trial court, and, if unsuccessful in
      that
      regard, we intend to pursue a appeal, as we believe the instructions to the
      jury, certain rulings made by the trial court, and the jury verdict were
      erroneous on multiple legal grounds. There are no other litigation matters
      relating to the restructuring of the dealer channel in the year 2000.





Subject
      to the foregoing, 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 results
      of operations, financial position or cash flows.





**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.





**PRICE
      RANGE OF COMMON STOCK**




The
      Company’s common stock is traded on the NASDAQ Stock Market under the symbol
      MCRS. As of July 29, 2008, there were 44,716 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.





**1****st****Quarter**
            
            **2****nd****Quarter**
            
            **3****rd****Quarter**
            
            **4****th****Quarter**Fiscal
                Year Ended June 30, 2008High
            
            **$**
            **33.30**
            
            **$**
            **37.49**
            
            **$**
            **37.35**
            
            **$**
            **36.64**Low
            
            **$**
            **26.45**
            
            **$**
            **30.29**
            
            **$**
            **26.33**
            
            **$**
            **28.40**Fiscal
                Year Ended June 30, 2007High
            
            $
            25.63
            
            $
            26.79
            
            $
            28.85
            
            $
            28.38Low
            
            $
            18.04
            
            $
            24.05
            
            $
            25.40
            
            $
            25.13





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, 2009, 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 8, “Line
      of Credit,” in the notes to the Consolidated Financial Statements included in
      this report).





**PURCHASES
      OF COMPANY STOCK**




In
      fiscal
      year 2005, the Board of Directors authorized the purchase of up to four million
      shares of the Company’s common stock. As of October 2007, the Company purchased
      all of the remaining unpurchased shares under the fiscal year 2005
      authorization. In November 2007, the Board of Directors authorized the purchase
      of an additional two million shares of the Company’s common stock (the “2008
      Plan”). The Company has incurred an aggregate of approximately $0.2 million in
      fees related to all stock purchase plans. As of July 31, 2008, 0.1 million
      additional shares may be repurchased under the 2008 Plan. During the fourth
      quarter of fiscal year 2008, the Company’s stock purchases under the 2008 Plan
      were as follows:





**Issuer
      Purchases of Equity Securities**




**Total Number**
              **of Shares**
              **Purchased**
            
            **Average**
              **Price**
              **Paid per**
              **Share**
            
            **Total Number of**
              **Shares Purchased**
              **as Part of Publicly**
              **Announced Plan or**
              **Program**
            
            **Maximum Number**
              **of Shares that May**
              **Yet be Purchased**
              **Under the Plan or**
              **Program**04/01/08
                – 04/30/08
            
            
            100,000
            
            $
            32.45
            
            
            100,000
            
            
            723,20005/01/08
                – 05/31/08
            
            
            309,600
            
            $
            29.37
            
            
            309,600
            
            
            413,60006/01/08
                – 06/30/08
            
            
            276,100
            
            $
            30.66
            
            
            276,100
            
            
            137,500685,700
            
            $
            30.34
            
            
            685,700
            
            
            137,500





As
      noted
      elsewhere in this Annual Report on Form 10-K, subsequent to June 30, 2008,
      our
      Board of Directors approved the repurchase of up to an additional two million
      shares of our common stock over the next three years, to be purchased from
      time
      to time in the open market as business conditions warrant.





**RECENT
      SALES OF UNREGISTERED SECURITIES**





None.




21




**ITEM
              6.**
            **SELECTED
                CONSOLIDATED FINANCIAL
                DATA**


**Fiscal
                  Year Ended June 30,**(in
                  thousands, except per share data)
              
              **2008**(1)
              
              **2007**(1)
              
              **2006**(1)
              
              **2005**
              
              **2004**Statement
                  of Operations Data:Revenue
              
              **$**
              **954,184**
              
              $
              785,727
              
              $
              678,953
              
              $
              597,264
              
              $
              487,443Income
                  from operations
              
              **$**
              **139,303**
              
              $
              110,588
              
              $
              91,277
              
              $
              78,875
              
              $
              56,834Net
                  income
              
              **$**
              **101,284**
              
              $
              79,988
              
              $
              63,528
              
              $
              53,660
              
              $
              33,279Net
                  income per share (6):Basic
              
              **$**
              **1.23**
              
              $
              1.00
              
              $
              0.82
              
              $
              0.72
              
              $
              0.46Diluted
              
              **$**
              **1.21**
              
              $
              0.97
              
              $
              0.78
              
              $
              0.67
              
              $
              0.43Balance
                  Sheet Data:Working
                  capital (2)
              
              **$**
              **392,939**
              
              $
              344,566
              
              $
              253,121
              
              $
              190,436
              
              $
              118,617Total
                  assets
              
              **$**
              **1,003,006**
              
              $
              846,756
              
              $
              647,857
              
              $
              547,228
              
              $
              419,587Capital
                  leases (3)
              
              **$**
              **713**
              
              $
              915
              
              $
              513
              
              $
              413
              
              $
              305Shareholders’
                  equity (4)
              
              **$**
              **673,016**
              
              $
              551,133
              
              $
              417,116
              
              $
              345,171
              
              $
              262,973Book
                  value per share (4), (5), (6)
              
              **$**
              **8.32**
              
              $
              6.80
              
              $
              5.35
              
              $
              4.47
              
              $
              3.59Additional
                  Data:Weighted
                  average number of common shares outstanding
(6):Basic
              
              
              **81,546**
              
              
              79,978
              
              
              77,383
              
              
              75,029
              
              
              72,979Diluted
              
              
              **83,346**
              
              
              82,581
              
              
              81,248
              
              
              79,607
              
              
              76,905





(1)
            Fiscal
                years ended June 30, 2008, 2007 and 2006 include approximately $17.2
                million ($13.1 million net of tax or $0.16 per diluted share), $14.0
                million ($11.1 million net of tax or $0.14 per diluted share) and
                $9.1
                million ($7.1 million net of tax or $0.09 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)
            Current
                assets less current liabilities.


(3)
            Including
                current portion. The Company does not have any long-term
                debt.


(4)
            Includes
                the impact of adoption of SFAS 158. See Note 17, “Employee Benefit Plans”
                in the Notes to Consolidated Financial
                Statements.


(5)
            Calculated
                as shareholders’ equity divided by common stock outstanding at June
                30.


(6)
            Retroactively
                adjusted to reflect February 2008 two-for-one stock
                split.




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





**OVERVIEW**




We
      are a
      leading worldwide designer, manufacturer, marketer, and servicer of enterprise
      information solutions for the global hospitality and specialty retail
      industries. As detailed elsewhere in this report on Form 10-K, 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.




The
      markets in which we operate are highly competitive. 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.




We
      are
      organized and operate in four operating segments: U.S., Europe, the Pacific
      Rim,
      and Latin America regions. As the products and services for all acquired
      entities are all similar to those of ours, the acquired entities have been
      incorporated into the existing four operating segments based on their respective
      geographic locations, and operated and managed as a part of that operating
      segment.




For
      the
      purposes of applying Statement of Financial Accounting Standards No. 131,
“Disclosures About Segments of an Enterprise and Related Information (“SFAS
      131”), we have identified U.S. as a separate reportable segment and 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 its business, although the
      products and services are similar for each segment.




We
      continue to see overall growth in the hospitality and retail industries; slower
      growth in some sectors has historically tended to be offset by faster growth
      in
      other areas.  We have seen particular growth in our quick service
      restaurant business, including that generated by sales to various quick service
      restaurant chains with which we have announced buying agreements.




22




**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, allowance for doubtful accounts, allowance for
      obsolescence, investments (in auction rate securities), income taxes,
      contingencies and litigation. 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 the consolidated financial statements.





**Revenue
      recognition**




Revenue
      is generated from software licenses, hardware and service and support. Revenue
      is recognized in accordance with American Institute of Certified Public
      Accountants 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” and the Securities and Exchange Commission
      Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial
      Statements.” Revenue under multiple element arrangements, which typically
      include hardware, software licenses and maintenance agreements sold together,
      are allocated to each element in the arrangement using the residual method
      prescribed by SOP 98-9, based on vendor specific objective evidence of the
      fair
      value of any undelivered elements of the arrangement, i.e., recognition of
      an
      allocated portion of revenue equivalent to the fair value of undelivered
      elements is deferred.




Revenue
      from software license, hardware and service and support are generally recognized
      when the four basic criteria of SOP 97-2 are met as follows:




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


·
            Delivery
                has occurred or services have been rendered: Delivery occurs at FOB
                shipping point when provided to a common carrier, if the risk of
                ownership
                has passed to the buyer or in the case of electronic delivery, delivery
                occurs when the customer is given access to the licensed programs.
                If the
                risk of ownership has not passed to the buyer when provided to the
                common
                carrier, delivery occurs when the risk has passed to the
                buyer.


·
            Fixed
                or determinable fee: We consider the license fee to be fixed or
                determinable if the fee is not subject to refund or adjustment and
                is
                payable within twelve months of delivery with generally no more than
                20%
                of the contract price due at the end of the payment term. If the
                arrangement fee is not fixed or determinable, we recognize the revenue
                as
                amounts become due and payable. We consider service fees to be fixed
                or
                determinable if the service fee or rates for time and material contracts
                are not subject to refund or
                adjustment.


·
            Collection
                is probable: We perform a credit review for significant transactions
                at
                the time the arrangement is executed to determine the creditworthiness
                of
                the customer. Collection is deemed probable if we expect that the
                customer
                will be able to pay amounts under the arrangement as they become
                due. If
                we determine from the outset of an arrangement that collection is
                not
                probable, revenue is recognized as collection
                occurs.




Costs
      related to shipping and handling and billable travel expenses are included
      in
      cost of sales. The revenue is reduced to reflect estimated customer returns
      and
      allowances.




Since
      our
      revenue deferral for undelivered elements under multiple element arrangements
      is
      based on vendor specific objective evidence of the fair value of any undelivered
      elements of the arrangement, our financial results for current fiscal year
      and
      future periods could be significantly different if our estimates of the vendor
      specific objective evidence of the fair values of undelivered elements change.
      Additionally, significant differences in the actual customer returns and
      allowances from our estimates could also significantly affect our financial
      results.





**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 allowance may be required which could
      affect our financial results in future periods. As of June 30, 2008 and 2007,
      accounts receivable totaled approximately $192.4 million and $180.2 million,
      net
      of an allowance for doubtful accounts of approximately $28.3 million and $23.1
      million, respectively. Additionally, bad debt expenses for the fiscal years
      2008, 2007 and 2006 were approximately $7.1 million, $3.4 million and $5.4
      million, respectively.





**Inventory**




Inventory
      is stated at the lower of standard cost, which approximates cost, or market.
      Standard 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 $11.5
      million and $9.9 million as of June 30, 2008 and 2007,
      respectively.




23




**Investments,
      non-current and short-term**




Our
      investments in auction rate securities, which are debt instruments with
      long-term scheduled maturities and periodic interest rate reset dates, are
      classified as available-for-sale. We carry these securities at estimated fair
      value with any related impairment being classified as either temporary and
      reported as a separate component of stockholders' equity or as
      other-than-temporary and recognize in our consolidated statements of
      operations.




As
      of
      June 30, 2008, we held approximately $65.2 million in auction rate securities,
      classified as investments, non-current in the accompanying consolidated balance
      sheets compared to approximately $87.0 million classified as short-term
      investments as of June 30, 2007. 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. As of June 30, 2007, there were no unrealized
      gains or losses on these investments. We recognized no gains or losses related
      to the sale of our investments in auction rate securities during the three
      fiscal years ended June 30, 2008. See Note 2, “Investments, non-current and
      short-term” in the Notes to Consolidated Financial Statements for further
      detail.





**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 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 are charged to software
      cost of sales, and for each capitalized software product is the greater of
      (1)
      the amount computed using the ratio that of the software product’s current
      fiscal year gross revenue to the total of current fiscal year and anticipated
      future gross revenues for that product, or (2) 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 as a result of the write off of amortized costs
      or
      acceleration of amortization. Amortization expense for the fiscal years 2008,
      2007 and 2006 were approximately $9.4 million, $8.4 million and $7.0 million,
      respectively. Additionally, during the fiscal years 2008 and 2006, we wrote
      off
      approximately $0.7 million and $1.6 million in capitalized software costs
      related to products for which no future revenue was projected. No capitalized
      software was written off in fiscal year 2007.




**Long-lived
      assets including finite-lived purchased 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
      Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for
      the Impairment or Disposal of Long-Lived Assets.” When indicators of impairment
      are present, we compare 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 book value of the assets. If the fair value is less than book value,
      the
      asset is impaired and we recognize an impairment loss equal to the excess of
      book value over fair value.




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 assets for the purposes of our analyses, we make estimates and
      judgments about the future cash flows of these assets. 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 assets are impaired, resulting in a significant
      charge in future periods.





**Goodwill
      and indefinite-lived purchased intangible assets**




SFAS
      No.
      142, “Goodwill and Other Intangible Assets,” prohibits the amortization of
      goodwill and indefinite-lived purchased intangible assets. We assess whether
      goodwill and our only indefinite-lived purchased intangible assets, trademarks,
      are impaired in accordance with SFAS 142 on an annual basis, during the first
      quarter of each fiscal year.  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
      its
      book value. The fair value of each reporting unit is determined based on a
      weighting of the 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) to value. 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 purchase price were being initially allocated.




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.




24




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 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. 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) or a decline in our market capitalization could
      result in a significant charge in future periods.




**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 is 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. In addition, non-cash share-based
      compensation expense adjusted for expected pre-vesting forfeitures is recognized
      for the non-vested portion of awards that were granted before the effective
      date
      of SFAS No. 123(R) as those options become incrementally vested.




As
      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, 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 any changes to these 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.




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”).





**RESULTS
      OF OPERATIONS**




During
      the three fiscal years ending June 30, 2008, we acquired several companies
      and accordingly,
      our results include activities from these acquisitions since 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 2008 to Fiscal Year 2007**





**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)
            
            **2008**
            
            **2007**
            
            **2008**
            
            **2007**
            
            **2008**
            
            **2007**Hardware
            
            **$**
            **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




25




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





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





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 fluctuation, 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 fluctuation;


·
            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 fluctuation;
                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
                fluctuation.





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 fluctuation;


·
            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 fluctuation; 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 fluctuation.




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 is as follows:




**Fiscal
                Year Ended June 30,****2008**
            
            **2007**(in
                thousands)
            
            **Cost**
              **of
                Sales**
            
            **% of Related**
              **Revenue**
            
            **Cost**
              **of Sales**
            
            **% of Related**
              **Revenue**Hardware
            
            **$**
            **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 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 fluctuation increased our cost of sales for the fiscal year
      2008 by approximately $22.6 million.




26




**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
      fluctuation increased our SG&A expenses for the fiscal year 2008 by
      approximately $12.2 million. Additionally, SG&A expenses include 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
      includes 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.





**Research
      and Development (“R&D”)**




R&D
      incurred consists 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)
            
            **2008**
            
            **2007**Total
                R&D incurred
            
            **$**
            **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 are primarily due to increased spending on our retail software
      products. Total R&D incurred for fiscal years 2008 and 2007 includes
      approximately $1.0 million and approximately $0.8 million, respectively, for
      the
      non-cash share-based compensation expenses allocated to R&D. For fiscal
      years 2008 and 2007, non-cash share-based compensation expenses allocated to
      R&D were not capitalized because stock options were not granted to employees
      whose labor costs were capitalized as software development costs. The foreign
      currency fluctuation 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 is primarily due to additional depreciation expenses on capital
      expenditures since June 30, 2007 and recent acquisitions. Additionally, foreign
      currency fluctuation increased depreciation and amortization expenses for the
      fiscal year 2008 by approximately $0.6 million.





**Share-Based
      Compensation Expenses**




We
      account for our option awards granted under the stock option program in
      accordance with SFAS 123(R). The estimated fair value of 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 statements of operations. In addition, non-cash
      share-based compensation expense adjusted for expected pre-vesting forfeitures
      is recognized for the non-vested portion of awards that were granted before
      the
      effective date of SFAS 123(R) as those options become incrementally
      vested.




For
      fiscal year 2008, we recognized non-cash share-based compensation expenses
      adjusted for expected pre-vesting forfeitures of approximately $17.2 million
      based on the estimated fair values of the vested portions of (1) approximately
      1.5 million shares of underlying options granted during the fiscal year 2008;
      (2) approximately 0.7 million shares of underlying options granted during the
      fiscal year 2007, and (3) approximately 0.9 million shares granted during fiscal
      year 2006. For fiscal year 2007, we recognized non-cash share-based compensation
      expenses adjusted for expected pre-vesting forfeitures of approximately $14.0
      million based on the estimated fair values of the vested portions of (1)
      approximately 0.7 million shares of underlying options granted during the fiscal
      year 2007; (2) approximately 0.9 million shares granted during fiscal year
      2006;
      and, (3) approximately 0.7 million shares of underlying options granted before
      the effective date of SFAS 123(R) that were unvested as of the effective date.
      The cost of sales, SG&A expenses and R&D expenses discussed above
      include the following allocations of non-cash share-based compensation
      expense:




27




**Fiscal
                Year Ended June 30,**(in
                thousands)
            
            **2008**
            
            **2007**Cost
                of sales
            
            **$**
            **—**
            
            $
            —SG&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 includes 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 is over the retirement age of 62.
      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. The non-cash share-based compensation
      expenses allocated to SG&A for fiscal year ended June 30, 2007 include 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 is 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 is 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 fluctuation 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 reflects:




·
            An
                increase in interest income of approximately $4.4 million due to
                overall
                higher cash and cash equivalents and investment (non-current and
                short-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
                agreed
                to pay MICROS a fee for having engaged and retained employees in
                the
                MICROS help desk and support center in Ireland. MICROS earned and
                received
                this fee in the fourth quarter of fiscal year 2008.


·
            Approximately
                $1.3 million in one-time income due to a death benefit received on
                corporate owned life insurance policy following the death of a covered
                officer of the Company; and,


·
            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 .




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”). 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, classification, interest and
      penalties, accounting in interim periods, disclosure and transition. 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 net income
      taxes
      payable.




As
      a
      result of the adoption of FIN 48, we recorded 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 have recognized approximately $0.7 million
      of
      interest expense for the fiscal year 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.




28




We
      have
      reviewed our uncertain income tax positions in accordance with FIN 48, and
      currently are not able to reasonably estimate material changes in the
      unrecognized income tax benefits and the impact it would have on our
      consolidated financial position, results of operations and cash flows in the
      next twelve months.




We
      historically classified interest and penalties related to unrecognized income
      tax benefits as a component of income tax expense. We are maintaining 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. We are currently
      under audits in certain of our major taxing jurisdictions, with open tax years
      beginning in fiscal year 1999. Currently, we are not able to reasonably estimate
      the completion date of these ongoing audits. 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 2008 increased
      approximately $21.3 million, or 26.6%, to approximately $101.3 million, compared
      to fiscal year 2007. The increase is 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 are explained above in more detail. The
      foreign currency fluctuation 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 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.





**Comparison
      of Fiscal Year 2007 to Fiscal Year 2006**





**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)
            
            **2007**
            
            **2006**
            
            **2007**
            
            **2006**
            
            **2007**
            
            **2006**Hardware
            
            $
            126,596
            
            $
            127,485
            
            $
            107,242
            
            $
            88,076
            
            $
            233,838
            
            $
            215,561Software
            
            
            50,745
            
            
            54,355
            
            
            82,075
            
            
            65,738
            
            
            132,820
            
            
            120,093Service
            
            
            186,798
            
            
            173,315
            
            
            232,271
            
            
            169,984
            
            
            419,069
            
            
            343,299Total
                Revenue
            
            $
            364,139
            
            $
            355,155
            
            $
            421,588
            
            $
            323,798
            
            $
            785,727
            
            $
            678,953





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





**Fiscal
                Year Ended June 30,**(in
                thousands)
            
            **2007**
            
            **2006**Hardware
            
            
            29.8
            %
            
            31.7
            %Software
            
            
            16.9
            %
            
            17.7
            %Service
            
            
            53.3
            %
            
            50.6
            %Total
            
            
            100.0
            %
            
            100.0
            %





Revenue
      increased approximately $106.8 million, or 15.7% to approximately $785.7 million
      for fiscal year 2007 compared to fiscal year 2006 primarily
      due to the following:




·
            An
                approximately $75.8 million or 22.1% increase in service revenue
                is
                primarily due to additional revenue generated as a result of various
                acquisitions and the continued expansion of our customer base coupled
                with
                increased support revenue from existing customers (primarily through
                additional services). We acquired the RedSky IT Hospitality, Travel,
                and
                Retail subsidiaries of RedSky IT in January 2007 and we acquired
                various
                MICROS distributors during fiscal year 2007. Additionally, we acquired
                CommercialWare, Inc. in February
                2006;


·
            An
                approximately $18.3 million or 8.5% increase in hardware revenue
                is
                primarily due to the foreign currency translation mainly between
                the Euro
                and U.S. dollar and additional revenue generated as a result of the
                acquisitions, as discussed above;
                and,


·
            An
                approximately $12.7 million or 10.6% increase in software revenue
                is
                primarily due to additional revenue generated as a result of the
                acquisitions and foreign currency translation, both as discussed
                above. In
                total, the recurring support revenue contributed approximately 54.4%
                and
                the installation revenue contributed approximately 22.5% of the service
                revenue increase in fiscal year 2007 compared to fiscal year
                2006.




29




The
      international segment revenue for fiscal year 2007 increased approximately
      $97.8
      million as a result of the following:




·
            An
                approximately $62.3 million or 36.6% increase in service revenue
                is due to
                the continued expansion of our customer base coupled with increased
                recurring support revenue from existing customers (primarily through
                purchase of additional services), additional revenue generated through
                the
                acquisitions and foreign currency translation, as discussed
                above;


·
            An
                approximately $19.2 million or 21.8% increase in hardware revenue
                is
                primarily due to increased sales volume and the foreign currency
                translation, as discussed above;
                and,


·
            An
                approximately $16.3 million or 24.9% increase in software revenue
                is due
                to foreign currency translation, increased sales volume and additional
                revenue generated from the acquisitions, as discussed
                above.




The
      U.S.
      segment revenue increased approximately $9.0 million for fiscal year 2007
      primarily resulting from additional revenue generated through the acquisitions,
      as discussed above, and an increase in services revenue due to the continued
      expansion of our customer base coupled with increased recurring support revenue
      from existing customers (primarily through additional services).





**Cost
      of Sales**




An
      analysis of the cost of sales is as follows:




**Fiscal
                Year Ended June 30,****2007**
            
            **2006**(in
                thousands)
            
            **Cost**
              **of Sales**
            
            **% of Related**
              **Revenue**
            
            **Cost**
              **of Sales**
            
            **% of Related**
              **Revenue**Hardware
            
            $
            149,085
            
            
            63.8
            %
            $
            144,061
            
            
            66.8
            %Software
            
            
            29,531
            
            
            22.2
            %
            
            23,488
            
            
            19.6
            %Service
            
            
            195,600
            
            
            46.7
            %
            
            165,721
            
            
            48.3
            %Total
                Cost of Sales
            
            $
            374,216
            
            
            47.6
            %
            $
            333,270
            
            
            49.1
            %





For
      fiscal year 2007, cost of sales as a percent of revenue decreased 1.5% to 47.6%
      compared to fiscal year 2006. Hardware cost of sales as a percent of related
      revenue decreased primarily as a result of an improvement in Workstation 4
      margin percentage, coupled with an increase in Workstation 4 revenue compared
      to
      fiscal year 2006. Workstation 4 generates higher margin than other hardware
      products. Software cost of sales as a percent of related revenue increased
      primarily due to a decrease in the third party software margin percentage
      compared to fiscal year 2006. Additionally, the revenue from the OPERA suite
      of
      products was comparable to fiscal year 2006 revenue, but represented a lower
      percentage of total software revenue. Because the OPERA suite of products
      generates much higher margins than our third party software, this product mix
      change had the impact of increasing the overall software cost of sales as a
      percent of related revenue.




Service
      cost of sales as a percent of related revenue decreased primarily due to a
      decrease in travel expenses and maintenance service part costs. The decreases
      in
      travel expenses and parts costs were partially offset by an increase in overall
      service labor costs mainly associated with some of our newly acquired
      subsidiaries.





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




SG&A
      expenses, as a percent of revenue, increased 0.5% to 32.4% compared to 31.9%
      in
      fiscal year 2006. This increase reflects:




·
            Higher
                SG&A expenses as a percent of related revenue for the newly acquired
                subsidiaries described under Revenue;
                and,


·
            Increase
                in non-cash share-based compensation expense of approximately $4.4
                million
                recorded as a component of SG&A expenses for the fiscal year 2007
                compared to the fiscal year 2006. The non-cash share-based compensation
                expenses for fiscal year 2007 include a one-time charge of approximately
                $0.7 million resulting from accelerated vesting of unvested options
                due to
                the death of an officer of the Company. See “Share-Based Compensation
                Expense” below for further
                discussion.


·
            A
                partial offsetting decrease in remaining SG&A expenses as a percent of
                total revenue, primarily due to our ability to leverage our costs
                against
                the increase in total revenue.





**Research
      and Development (“R&D”)**




R&D
      expenses consisted primarily of labor costs less capitalized software
      development costs.




30




An
      analysis of R&D activities is as follows:




**Fiscal
                Year Ended June 30,**(in
                thousands)
            
            **2007**
            
            **2006**Total
                R&D incurred
            
            $
            35,859
            
            $
            30,643Capitalized
                software development costs
            
            
            (1,974
            )
            
            (3,523
            )Total
                R&D expenses
            
            $
            33,885
            
            $
            27,120%
                of Revenue
            
            
            4.3
            %
            
            4.0
            %





The
      increases in total R&D incurred of approximately $5.2 million and total
      R&D expenses of approximately $6.8 million are primarily due to additional
      expenses incurred by some of our newly acquired subsidiaries, an increase in
      R&D labor costs due to an increase in the number of R&D employees and an
      approximately $0.5 million increase in non-cash share-based compensation
      expenses allocated to R&D. The decrease in total capitalized software
      development costs is primarily due to the release of our capitalized retail
      software product in December of 2005.




For
      fiscal year 2007, non-cash share-based compensation expenses allocated to
      R&D were not capitalized because stock options were not granted to employees
      whose labor costs were capitalized as software development costs. For fiscal
      year 2006, less than $0.1 million in non-cash share-based compensation expenses
      allocated to R&D had been capitalized because stock options were granted to
      employees whose labor is capitalized.




**Depreciation
      and Amortization Expenses**




Depreciation
      and amortization expenses for fiscal year 2007 increased approximately $2.3
      million to approximately $12.7 million compared to fiscal year 2006. The
      increase is primarily due to additional expense incurred as a result of the
      newly acquired subsidiaries as discussed above. Additionally, foreign currency
      fluctuation increased depreciation and amortization expenses for the fiscal
      year
      2007 by approximately $0.5 million.





**Share-Based
      Compensation Expenses**




For
      fiscal year 2007, we recognized non-cash share-based compensation expenses
      adjusted for expected pre-vesting forfeitures of approximately $14.0 million
      based on the estimated fair values of the vested portions of (1) approximately
      0.7 million shares of underlying options granted during the fiscal year 2007;
      (2) approximately 0.9 million shares granted during fiscal year 2006; and,
      (3)
      approximately 0.7 million shares of underlying options granted before the
      effective date of SFAS 123(R) that were unvested as of the effective date.
      For
      fiscal year 2006, the non-cash share-based compensation expenses of
      approximately $9.1 million was based on the estimated fair values of the vested
      portions of (1) approximately 0.9 million shares of underlying options granted
      during fiscal year 2006 and (2) approximately 1.5 million shares of underlying
      options granted before the effective date of SFAS 123(R) that were unvested
      as
      of the effective date. The cost of sales, 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)
            
            **2007**
            
            **2006**Cost
                of sales
            
            $
            —
            
            $
            35SG&A
            
            
            13,243
            
            
            8,851R&D
            
            
            753
            
            
            249Total
                non-cash share-based compensation expense
            
            
            13,996
            
            
            9,135Income
                tax benefit
            
            
            (2,884
            )
            
            (2,026
            )Total
                non-cash share-based compensation expense, net of tax
                benefit
            
            $
            11,112
            
            $
            7,109Impact
                on diluted net income per share
            
            $
            0.14
            
            $
            0.09




**Income
      from Operations**




Income
      from operations for fiscal year 2007 increased
      approximately $19.3 million, or 21.2%, to approximately $110.6 million, compared
      to fiscal year 2006. The increase is mainly due to an overall increase in sales
      volume coupled with lower cost of sales as a percent of revenue. This increase
      was partially offset by an increase in expenses as a percent of revenue and
      approximately $4.9 million increase in non-cash share-based compensation expense all
      of
      which are explained above in more detail.





**Non-operating
      Income (Expense)**




Net
      non-operating income for fiscal year 2007 was approximately $11.1 million
      compared to approximately $4.4 million for fiscal year 2006. The increase of
      approximately $6.7 million is primarily due to:




·
            An
                increase in interest income of approximately $5.3 million due to
                overall
                higher cash and cash equivalents and short-term investment balances
                and
                overall higher interest rates earned on these
                balances;


·
            Approximately
                $1.3 million in one-time income due to a death benefit received on
                corporate owned life insurance policy following the death of a covered
                officer of the Company; and,






31




·
            A
                decrease in the foreign exchange transaction losses of approximately
                $0.5
                million to a loss of approximately $0.4 million for fiscal year 2007
                compared to a loss of approximately $0.9 million for fiscal year
                2006.




**Income
      Tax Expense**




The
      effective tax rates for fiscal year 2007 and 2006 were 33.5% and 32.9%,
      respectively. The increase in tax rate was primarily attributable to the
      negative impact of the changes in legislation related to extraterritorial income
      exclusions as well as the non-deductible nature of certain non-cash share-based
      compensation items and other non-deductible compensation items. These negative
      factors were partially offset by the benefit recognized from certain activities
      where the mix of earnings were subject to a lower statutory tax rate than that
      recognized in the U.S., renewal of research and development tax credit and
      the
      phase-in of the deduction for domestic production activities.





**Net
      Income and Diluted Net Income per Common Share**




Net
      income for fiscal year 2007 increased
      approximately $16.5 million, or 25.9%, to approximately $80.0 million, compared
      to fiscal year 2006. The increase is mainly due to an overall increase in sales
      volume coupled with lower cost of sales as a percent of revenue and an increase
      in interest income of approximately $5.3 million. These increases were partially
      offset by an increase in operating expenses as a percent of revenue and
      approximately $4.9 million increase in non-cash share-based compensation
      expense, all
      of
      which are explained above in more detail.




Diluted
      net income per share for fiscal year 2007 increased
      $0.19 per share, or 24.4%, to $0.97 per share, compared to fiscal year 2006.
      Diluted net income for fiscal year 2007 was negatively impacted by $0.14 per
      diluted share for non-cash share-based compensation expense compared to $0.09
      per diluted share for fiscal year 2006.





**RECENT
      ACCOUNTING STANDARDS**




***FSP
      142-3***




In
      April
      2008, the FASB issued FASB Staff Position (“FSP”) FAS 142-3,
      “Determination of the Useful Life of Intangible Assets”, which 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
      No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”). The intent of
      this FSP is 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 No. 141(R), “Business
      Combinations”, and other GAAP. This FSP is effective for fiscal years beginning
      after December 15, 2008 (our fiscal year 2010), and interim periods within
      those fiscal years.We
      are
      currently reviewing the impact of the adoption of FSP FAS 142-3 on our
      consolidated financial position, results of operations and cash
      flows.




***SFAS
      161***




In
      March
      2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
      Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(“SFAS 161”), which requires additional disclosures about the objectives of the
      derivative instruments and hedging activities, the method of accounting for
      such
      instruments under SFAS 133 and its related interpretations, and a tabular
      disclosure of the effects of such instruments and related hedged items on our
      financial position, results of operations, and cash flows. SFAS 161 is effective
      for financial statements issued for fiscal years and interim periods beginning
      after November 15, 2008 (our fiscal year 2010). Historically we have not had
      material hedging transactions, thus we believe the impact of the adoption of
      SFAS 161 on our consolidated financial position, results of operations and
      cash
      flows will not be material. The ultimate impact of the adoption of SFAS 161
      is
      undeterminable at this time as it will depend on our ultimate hedging
      transactions at the time of the adoption.




***SFAS
      No. 141(R)***




In
      December 2007, the FASB issued SFAS No. 141 (Revised), “Business
      Combinations” (“SFAS 141(R)”), which 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. SFAS 141(R) is effective for business combinations for which the
      acquisition dates are on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008 (our fiscal year 2010). We
      are currently reviewing the impact of the adoption of SFAS 141(R) on our
      consolidated financial position, results of operations and cash flows.




***SFAS
      No. 160***




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements — an Amendment of ARB 51”, (“SFAS 160”).
      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. SFAS
      160
      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. SFAS 160
      is
      effective for business combinations for which the acquisition dates are on
      or
      after the beginning of the first annual reporting period beginning on or after
      December 15, 2008 (our fiscal year 2010). We are currently reviewing the
      impact of the adoption of SFAS 160 on our consolidated financial position,
      results of operations and cash flows.




32




***SFAS
      No. 159***




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (“SFAS 159”), which allows entities
      to choose to measure eligible financial instruments at fair value as of
      specified dates. Such election, which may be applied on an instrument by
      instrument basis, is typically irrevocable once elected. SFAS 159 is effective
      for fiscal years beginning after November 15, 2007 (our fiscal year 2009).
      We do
      not believe the adoption of SFAS 159 will have a material impact on our
      consolidated financial position, results of operations and cash
      flows.




***SFAS
      No. 157***




In
      September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”
(“SFAS 157”) to establish a framework for measuring fair value under generally
      accepted accounting principles and to expand disclosures on fair value
      measurements. The statement applies to previously established valuation
      pronouncements, but is to be applied prospectively, so that it does not require
      the changing of any fair value measurements. SFAS 157 may cause some valuation
      procedures that we use to change after its adoption. Under SFAS 157, fair value
      is established by the price that would be received to sell the item or the
      amount to be paid to transfer the liability or the asset (an exit price), as
      opposed to the price to be paid for the asset or received to assume the
      liability (an entry price). SFAS 157 is effective for all assets valued in
      financial statements for fiscal years beginning after November 15, 2007
      (our fiscal year 2009). In February 2008, the FASB issued FSP 157-2, “Effective
      Date of FASB Statement No. 157” which permits a one-year deferral for the
      implementation of the provisions of SFAS 157 with regard to non-financial assets
      and liabilities that are not carried at fair value on a recurring basis in
      financial statements. We do not believe the adoption of the SFAS 157 will have
      a
      material impact on our consolidated financial position, results of operations
      and cash flows.





**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)
            
            **2008**
            
            **2007**
            
            **2006**Net
                cash provided by (used in):Operating
                activities
            
            **$**
            **163,648**
            
            $
            114,766
            
            $
            121,681Investing
                activities
            
            
            **(13,271**
            **)**
            
            (141,184
            )
            
            (29,320
            )Financing
                activities
            
            
            **(37,463**
            **)**
            
            31,146
            
            
            (9,029
            )





***Operating
      activities:***




Net
      cash
      provided by operating activities for fiscal year 2008 increased approximately
      $48.9 million compared to fiscal year 2007 primarily due to increases in cash
      provided by a decrease in accounts receivable of approximately $24.9 million
      and
      increases net income of approximately $21.3 million, deferred revenue of
      approximately $18.1 million and income taxes payable of approximately $12.5
      million. One source of deferred revenue is prepaid maintenance and support
      fees;
      many of our customers are invoiced annually in advance for maintenance and
      support. These increases were partially reduced by a decrease of approximately
      $29.7 million in accrued expenses and other liabilities.




Net
      cash
      provided by operating activities for fiscal year 2007 decreased approximately
      $6.9 million compared to fiscal year 2006 primarily due to approximately $39.1
      million increase in accounts receivable and prepaid and other current assets,
      substantially reduced by an approximately $16.5 million increase in cash
      provided by net income and approximately $13.8 million in increased accrued
      expenses and other current liabilities.





***Investing
      activities:***




In
      fiscal
      years 2008 and 2007, we invested in auction rate securities which are classified
      as investments, non-current as of June 30, 2008 and as short-term investments
      as
      of June 30, 2007 on the accompanying consolidated balance sheets. As a result,
      net cash flows from investing activities for fiscal year 2008, which includes
      approximately $17.5 million in net proceeds from the sale of auction rate
      securities, and fiscal year 2007, which includes approximately $87.0 million
      in
      net investments in auction rate securities, are not comparable to fiscal year
      2006 as we did not invest in auction rate securities.




Net
      cash
      used by investing activities for fiscal year 2008 was approximately $13.3
      million reflecting approximately $16.1 million used related to 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. Sales of auction rate securities provided cash of
      approximately $17.5 million, as discussed above. Subsequent to June 30, 2008,
      we
      acquired another company, Fry, Inc. The total purchase consideration was
      approximately $31.3 million. This purchase is not reflected in the Consolidated
      Statement of Cash Flows.




Net
      cash
      used by investing activities for fiscal year 2007 was approximately $141.1
      million, primarily as a result of our net investment in auction rate securities
      of approximately $87.0 million, as discussed above. We also used approximately
      $40.5 million related to various acquisitions, the most significant of which
      was
      the acquisition of RedSky 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.




Net
      cash
      used by investing activities for fiscal year 2006 was approximately $29.3
      million, including approximately $14.3 million used to purchase property, plant
      and equipment and to internally develop software to be licensed to others and
      approximately $14.1 million used for the acquisition of
      CommercialWare.




33




***Financing
      activities:***




Net
      cash
      used in financing activities for fiscal year 2008 was approximately $37.5
      million, reflecting approximately $74.3 million used to repurchase 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
      repurchase our stock.




Net
      cash
      used by financing activities for fiscal year 2006 was approximately $9.0
      million, reflecting approximately $40.2 million used to repurchase our stock,
      partially offset by approximately $18.5 million in proceeds from stock option
      exercises and approximately $13.3 million in realized tax benefits from stock
      option exercises.




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





**Purchases
      of Common Stock**





In
      fiscal
      year 2002, the Board of Directors authorized the purchase of up to four million
      shares of the Company’s common stock. In fiscal year 2005, the Board of
      Directors authorized the purchase of an additional four million shares of our
      common stock. In November 2007, the Board of Directors authorized the purchase
      of an additional two million shares of our common stock. Since the inception
      of
      the repurchase programs, we have incurred approximately $0.2 million in fees
      related to the programs. A summary of the cumulative number of shares purchased
      under the Board authorizations, which have all been retired, is as
      follows:




**Number of**
              **Shares**
            
            **Average Purchase**
              **Price Per Share**
            
            **Total Purchase**
              **Value**
              (in
                thousands)Fiscal
                year:2002 –
                2005
            
            
            4,993,324
            
            $
            10.65
            
            $
            53,1802006
            
            
            1,842,674
            
            $
            21.83
            
            
            40,2342007
            
            
            697,200
            
            $
            25.63
            
            
            17,870**2008**
            
            
            **2,329,302**
            
            **$**
            **31.90**
            
            
            **74,303**Total
                as of June 30, 2008
            
            
            **9,862,500**
            
            **$**
            **18.82**
            
            **$**
            **185,587**




As
      noted
      elsewhere in this Annual Report on Form 10-K, subsequent to June 30, 2008,
      our
      Board of Directors approved the repurchase of up to an additional two million
      shares of our common stock over the next three years, to be purchased from
      time
      to time in the open market depending on market conditions and other corporate
      considerations as determined by management.





**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 which expires on July
      31,
      2009.  The lenders under the Credit Agreements are Bank of America, N.A.,
      Wachovia Bank, N.A., and US Bank (the “Lenders”).  The international
      facility is secured by 65% of the capital stock of our main operating Ireland
      subsidiary and 100% of all of the remaining major foreign
      subsidiaries . The
      U.S.
      facility is secured by 100% of the capital stock of our major
      U.S. subsidiaries as well as certain inventory and receivables located in
      the U.S.




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 our consolidated earnings before interest, taxes, depreciation
      and amortization (“EBITDA”) for the immediately preceding four calendar
      quarters. Under the terms of the Credit Agreements, we are 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 our 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, 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, 2008, we had approximately $1.0 million outstanding on the lines of
      credit mentioned above and had approximately $64.0 million available for future
      borrowings. The total outstanding balance consisted of 105.0 million JPY
      (Japanese Yen), or approximately $1.0 million at the June 30, 2008 exchange
      rate.




We
      also
      have a credit relationship with a European bank in the amount of EUR 1.0 million
      (approximately $1.6 million at the June 30, 2008 exchange rate). Under the
      terms
      of this facility, we may borrow in the form of either a line of credit or term
      debt. As of June 30, 2008, there were no balances outstanding on this credit
      facility, but approximately EUR 0.1 million (approximately $0.2 million at
      the
      June 30, 2008 exchange rate) of the credit facility had been used for
      guarantees. As we have significant international operations, we do not believe
      that our Euro-denominated borrowings represent a significant foreign exchange
      risk. On an overall basis, we monitor our cash and debt positions in each
      currency in an effort to reduce our foreign exchange risk.




34




As
      of
      June 30, 2008, we had approximately $65.4 million borrowing capacity under
      all
      of the credit facilities described above. The weighted-average interest rate
      on
      the outstanding balances under the lines of credit as of June 30, 2008 was
      2.2%.
      As of July 31, 2008, the total outstanding balance on the lines of credit was
      approximately $1.0 million and we had approximately $65.4 million borrowing
      capacity under all of the credit facilities at that time.




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, cash generated from operations
      and
      our available lines of credit are sufficient to provide our working capital
      needs for the foreseeable future. Nevertheless, if we need to raise additional
      funds, we believe we will be able to raise the necessary amounts either by
      entering into additional financing agreements or through the issuance of our
      common stock. We currently anticipate that our property, plant and equipment
      expenditures for fiscal year 2009 will be approximately $16
      million.




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





(in
                thousands, except ratios)
            
            **2008**
            
            **2007**Cash,
                cash equivalents and marketable securities(1)
            
            **$**
            **381,964**
            
            $
            329,652Available
                credit facilities
            
            **$**
            **66,574**
            
            $
            66,353Outstanding
                credit facilities
            
            
            **(989**
            **)**
            
            (2,308
            )Outstanding
                guarantees
            
            
            **(201**
            **)**
            
            (248
            )Unused
                credit facilities
            
            **$**
            **65,384**
            
            $
            63,797Working
                capital(2)
            
            **$**
            **392,939**
            
            $
            344,566Capital
                lease obligations(3):Current
            
            **$**
            **403**
            
            $
            655Non-current
            
            
            **310**
            
            
            260Total
            
            **$**
            **713**
            
            $
            915Shareholders’
                equity
            
            **$**
            **673,016**
            
            $
            551,133Current
                ratio(3)
            
            
            **2.33**
            
            
            2.34





(1) For
      June 30, 2008 does not include approximately $65.2 million invested in auction
      rate securities, classified as Investments, long-term in the accompanying
      consolidated balance sheet. Cash, cash equivalents, and marketable securities
      at
      June 30, 2007 includes approximately $87.0 million invested in auction rate
      securities, classified as Short-term investments in the accompanying
      consolidated balance sheets.


(2) Current
      assets less current liabilities.


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





**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,
      2008:


**Payments
                  due by period**(in
                  thousands)
              
              **Total**
              
              **Less than**
                **1
                  year**
              
              **1-3
                  years**
              
              **3-5
                  years**
              
              **More
                  than**
                **5
                  years**Net
                  operating lease obligations
              
              $
              105,444
              
              $
              26,113
              
              $
              35,493
              
              $
              21,409
              
              $
              22,429Capital
                  lease obligations
              
              
              713
              
              
              403
              
              
              292
              
              
              18
              
              
              —Total
              
              $
              106,157
              
              $
              26,516
              
              $
              35,785
              
              $
              21,427
              
              $
              22,429





Due
      to
      the uncertainty with respect to the timing of future cash flows associated
      with
      the Company’s unrecognized income tax benefits at June 30, 2008, we are unable
      to reasonably estimate settlements with taxing authorities.  The above
      Contractual Obligations table does not reflect unrecognized income tax benefits
      of approximately $17.4 million. See Note 14 of the Consolidated Financial
      Statements for further discussion on income taxes.





**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.




E xamples
      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, the Company’s strategy for
                product growth in restaurant software, trends in retail software,
                trends
                in retailers’ use of Linux-based systems, our plan to transition from our
                own data center to third party centers, 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 US Government exercising
                a
                termination for convenience under one or more contracts that we have
                with
                the US Government, and our belief that compliance with environmental
                laws
                and regulations will not have a material effect on expenditures,
                earnings,
                or our competitive position;




35




·
            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 will be found in the preceding Management’s
      Discussion and Analysis of Financial Condition and Results of Operations and
      elsewhere in this report, including:





(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 currency fluctuations (in particular,
                Euro fluctuations) 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;


(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 the increases in 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
      other 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**




The
      Company is exposed to interest rate risk and to foreign currency exchange rate
      risk.  See
      Part
      I, Item I, Foreign Sales and Foreign Market Risks, and Part II, Item 7 for
      information regarding foreign currency exchange risks. The Company’s committed lines of credit bear interest at a floating rate, which exposes the
      Company to interest rate risks. The Company manages its exposure to this risk
      by
      minimizing, to the extent feasible, overall borrowing and monitoring available
      financing alternatives. At June 30, 2008, the Company had total borrowings
      of
      approximately $1.0 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, 2008 and June 30, 2007.
      The Company’s 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 the Company’s total borrowing as of June 30, 2008
      was approximately $1.0 million, a 1% change in interest rate would have resulted
      in an immaterial impact on the Company’s consolidated financial position,
      results of operations and cash flows.




To
      minimize the Company’s exposure to credit risk associated with financial
      instruments, the Company places its temporary cash investments with
      high-credit-quality institutions, generally with bond rating of “A” and
      above.




36




**ITEM
              8.**
            **FINANCIAL
                STATEMENTS AND SUPPLEMENTARY
                DATA**





See
      Part
      IV, Item 15(a)(1).





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





None





**ITEM
              9A.**
            **CONTROLS
                AND PROCEDURES**




See
        Part
        IV, Item 15(a)(1).





**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. A
      controls system cannot provide absolute assurance, however, that the objectives
      of the controls system are met, and no evaluation of controls can provide
      absolute assurance that all control issues and instances of fraud, if any,
      within a company have been detected.





**MANAGEMENT’S
      REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**




Our
      management’s report on internal control over financial reporting is set forth in
      Item 15 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 the Company’s
      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**





None




37


**PART
        III**
  **ITEM
                10.**
              **DIRECTORS
                  AND EXECUTIVE OFFICERS OF THE
                  REGISTRANT**
 
 The
        Company has adopted a Code of Ethics and Business Practices, which applies
        to
        all directors, officers, and U.S.-based employees of the Company (there are
        certain variations with respect to certain international locations so as
        to
        comply with local law). It is posted on the Company’s website at www.micros.com ,
        and is
        available in print free of charge to anyone who requests a copy. Requests
        must
        be in writing and mailed to the Company’s Corporate Secretary.
  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”, 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, 2008****Plan 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
              
              
              6,246,928
              
              $
              22.46
              
              
              3,068,537Equity
                  compensation plans not approved by security holders
              
              
              N/A
              
              
              N/A
              
              
              N/ATotal
              
              
              6,246,928
              
              $
              22.46
              
              
              3,068,537
 
 **ITEM
                13.**
              **CERTAIN
                  RELATIONSHIPS AND RELATED
                  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 on June 30,
        2008
        in accordance with its terms. Under the Consulting Agreement, Mr. Brown was
        to
        provide during each fiscal year on the average 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 year 2007 and 2006, Mr. Brown’s total
        compensation also included annual target bonuses of approximately $0.2 million
        that were accrued during the fiscal year that 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.
 
 **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 SCHEDULES**
 
 PageNo.**(a)
                  The following documents are filed as a part of this
                  report:**(1) 
                  Management’s
                  Annual
                  Report On Internal Control Over Financial Reporting
              41(2) 
                  Financial Statements:Report
                  of Independent Registered Public Accounting Firm
              42Consolidated
                  balance sheets as of June 30, 2008 and 2007
              43Consolidated
                  statements of operations for the fiscal years ended June 30, 2008,
                  2007
                  and 2006
              44Consolidated
                  statements of cash flows for the fiscal years ended June 30, 2008,
                  2007
                  and 2006
              45Consolidated
                  statements of shareholders’ equity and comprehensive income for the fiscal
                  years ended June 30, 2008, 2007 and 2006
              46Notes
                  to consolidated financial statements
              47 - 70(3) 
                  Financial Statement Schedules:Schedule
                  II – Valuation and qualifying accounts and reserves
              71
  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.
  (4) 
        Exhibits:
 3(i)
                Articles
                    of Incorporation, as amended, are 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 Form 8-K filed on October 17,
                    2007.10(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 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, 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 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 November
                    17,
                    2006.
  39
  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(c)*
                Consulting
                    Agreement dated June 30, 1995 between MICROS Systems, Inc. and
                    Louis M.
                    Brown, Jr. 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,
                    1995.10(c)(1)*
                First
                    Amendment to Consulting Agreement dated February 1, 1999 between
                    MICROS
                    Systems, Inc. and Louis M. Brown, Jr. 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 Consulting Agreement dated April 26, 2001 between
                    MICROS
                    Systems, Inc. and Louis M. Brown, Jr. 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, 2001.10(c)(3)*
                Third
                    Amendment to Consulting Agreement dated September 4, 2003 between
                    MICROS
                    Systems, Inc. and Louis M. Brown, Jr. 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, 2003.10(c)(4)*
                Fourth
                    Amendment to Consulting Agreement dated June 12, 2007 between
                    MICROS
                    Systems, Inc. and Louis M. Brown, Jr. is incorporated herein
                    by reference
                    to Exhibit 10 to the Current Report on Form 8-K filed on June
                    12,
                    2007.10(d)*
                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,
                    1997.10(d)(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(d)(2)*
                Second
                    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 Current Report on Form 8-K filed on November
                    17,
                    2006.10(e)*
                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(e)(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(e)(2)*
                Second
                    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 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(f)*
                Restated
                    Supplemental Executive Retirement Plan, as approved by the Board
                    of
                    Directors onApril
                    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)
                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,
                    2005.14
                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
                Consent
                    of Independent Registered Public Accounting Firm (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 (furnished
                    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 (furnished
                    herewith)
  *
              Management
                  contract or compensatory plan or
                  arrangement.
 
 40
  **MANAGEMENT’S
        ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**
  M anagement
        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,
        2008. 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, 2008, the Company’s internal control over
        financial reporting was effective.
  The
        Company’s independent auditors, PricewaterhouseCoopers LLP, have audited the
        Company’s internal control over financial reporting. Their opinion on the
        effectiveness of the Company’s internal control over financial reporting and on
        the Company’s financial statements is included in this Annual Report on Form
        10 -K.
 
 41
  **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 index appearing
        under Item 15(a)(1) present fairly, in all material respects, the financial
        position of MICROS Systems, Inc. and its subsidiaries at June 30, 2008 and
        June
        30, 2007, and the results of their operations and their cash flows for each
        of
        the three years in the period ended June 30, 2008 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
        present 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, 2008, 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 the Management's Annual Report on Internal Control
        over
        Financial Reporting under Item 8. 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.
 
 As
        discussed in Note 1 to the consolidated financial statements, the Company
        changed the manner in which it accounts for defined benefit pension and other
        post retirement plans effective June 30, 2007.
 
 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.
 
 [PricewaterhouseCoopers
        LLP (signed)]
 Baltimore,
        Maryland
 August
        29, 2008
 42
  **MICROS
        SYSTEMS, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **June 30,**(in
                  thousands, except par value data)
              
              **2008**
              
              **2007**ASSETSCurrent
                  Assets:Cash
                  and cash equivalents
              
              **$**
              **381,964**
              
              $
              242,702Short-term
                  investments
              
              
              **—**
              
              
              86,950Accounts
                  receivable, net of allowance for doubtful accounts of$28,348
                  at June 30, 2008 and $23,110 at June 30, 2007
              
              
              **192,445**
              
              
              180,203Inventory,
                  net
              
              
              **64,575**
              
              
              47,790Deferred
                  income taxes
              
              
              **18,724**
              
              
              16,683Prepaid
                  expenses and other current assets
              
              
              **29,737**
              
              
              27,650Total
                  current assets
              
              
              **687,445**
              
              
              601,978Investments,
                  non-current
              
              
              **65,216**
              
              
              —Property,
                  plant and equipment, net
              
              
              **29,165**
              
              
              27,955Deferred
                  income taxes, non-current
              
              
              **7,108**
              
              
              23,145Goodwill
              
              
              **159,722**
              
              
              138,332Intangible
                  assets, net
              
              
              **16,168**
              
              
              14,509Purchased
                  and internally developed software costs, net of
                  accumulatedamortization
                  of $61,691 at June 30, 2008 and $54,708 at June 30, 2007
              
              
              **30,846**
              
              
              36,296Other
                  assets
              
              
              **7,336**
              
              
              4,541Total
                  assets
              
              **$**
              **1,003,006**
              
              $
              846,756LIABILITIES
                  AND SHAREHOLDERS' EQUITYCurrent
                  Liabilities:Bank
                  lines of credit
              
              **$**
              **989**
              
              $
              2,308Accounts
                  payable
              
              
              **46,843**
              
              
              43,126Accrued
                  expenses and other current liabilities
              
              
              **124,913**
              
              
              117,142Income
                  taxes payable
              
              
              **6,363**
              
              
              8,094Deferred
                  revenue
              
              
              **115,398**
              
              
              86,742Total
                  current liabilities
              
              
              **294,506**
              
              
              257,412Income
                  taxes payable, non-current
              
              
              **18,302**
              
              
              —Deferred
                  income taxes, non-current
              
              
              **2,181**
              
              
              15,934Other
                  non-current liabilities
              
              
              **8,103**
              
              
              17,554Total
                  liabilities
              
              
              **323,092**
              
              
              290,900Minority
                  interests and minority ownership put arrangement
              
              
              **6,898**
              
              
              4,723Commitments
                  and contingencies (Note 12)Shareholders'
                  Equity:Common
                  stock, $0.00625 par value; authorized 120,000 shares; issued
                  andoutstanding
                  80,898 at June 30, 2008 and 81,096 at June 30, 2007
              
              
              **506**
              
              
              507Capital
                  in excess of par
              
              
              **131,517**
              
              
              149,089Retained
                  earnings
              
              
              **480,777**
              
              
              382,785Accumulated
                  other comprehensive income
              
              
              **60,216**
              
              
              18,752Total
                  shareholders' equity
              
              
              **673,016**
              
              
              551,133Total
                  liabilities and shareholders' equity
              
              **$**
              **1,003,006**
              
              $
              846,756
 
 The
        accompanying notes are an integral part of the consolidated financial
        statements.
 43
 
 **MICROS
        SYSTEMS, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 
 **Fiscal Year Ended June 30,**(in
                  thousands, except per share data)
              
              **2008**
              
              **2007**
              
              **2006**Revenue:Hardware
              
              **$**
              **265,965**
              
              $
              233,838
              
              $
              215,561Software
              
              
              **158,699**
              
              
              132,820
              
              
              120,093Service
              
              
              **529,520**
              
              
              419,069
              
              
              343,299Total
                  revenue
              
              
              **954,184**
              
              
              785,727
              
              
              678,953Cost
                  of sales:Hardware
              
              
              **171,779**
              
              
              149,085
              
              
              144,061Software
              
              
              **33,252**
              
              
              29,531
              
              
              23,488Service
              
              
              **247,954**
              
              
              195,600
              
              
              165,721Total
                  cost of sales
              
              
              **452,985**
              
              
              374,216
              
              
              333,270Gross
                  margin
              
              
              **501,199**
              
              
              411,511
              
              
              345,683Selling,
                  general and administrative expenses
              
              
              **306,624**
              
              
              254,317
              
              
              216,827Research
                  and development expenses
              
              
              **40,129**
              
              
              33,885
              
              
              27,120Depreciation
                  and amortization
              
              
              **15,143**
              
              
              12,721
              
              
              10,459Total
                  operating expenses
              
              
              **361,896**
              
              
              300,923
              
              
              254,406Income
                  from operations
              
              
              **139,303**
              
              
              110,588
              
              
              91,277Non-operating
                  income (expense):Interest
                  income
              
              
              **14,725**
              
              
              10,319
              
              
              5,066Interest
                  expense
              
              
              **(286**
              **)**
              
              (371
              )
              
              (210
              )Other
                  income (expense), net
              
              
              **597**
              
              
              1,118
              
              
              (468
              )Total
                  non-operating income, net
              
              
              **15,036**
              
              
              11,066
              
              
              4,388Income
                  before taxes, minority interests and equity in net earnings of
                  affiliates
              
              
              **154,339**
              
              
              121,654
              
              
              95,665Income
                  tax provision
              
              
              **52,167**
              
              
              40,754
              
              
              31,455Income
                  before minority interests and equity in net earnings of
                  affiliates
              
              
              **102,172**
              
              
              80,900
              
              
              64,210Minority
                  interests and equity in net earnings of affiliates
              
              
              **(888**
              **)**
              
              (912
              )
              
              (682
              )Net
                  income (1)
              
              **$**
              **101,284**
              
              $
              79,988
              
              $
              63,528Net
                  income per common share (1) (2):Basic
              
              **$**
              **1.23**
              
              $
              1.00
              
              $
              0.82Diluted
              
              **$**
              **1.21**
              
              $
              0.97
              
              $
              0.78Weighted-average
                  number of shares outstanding (2):Basic
              
              
              **81,546**
              
              
              79,978
              
              
              77,383Diluted
              
              
              **83,346**
              
              
              82,581
              
              
              81,248
 
 (1) See
        Note
        3, "Share-based Compensation" in Notes to Consolidated Financial
        Statements.
 (2) 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.
 
 44
  **MICROS
        SYSTEMS, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **Fiscal Year Ended June 30,**(in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Cash
                  flows from operating activities:Net
                  income
              
              **$**
              **101,284**
              
              $
              79,988
              
              $
              63,528Adjustments
                  to reconcile net income to net cash provided byoperating
                  activities:Depreciation
                  and amortization
              
              
              **15,143**
              
              
              12,721
              
              
              10,459Amortization
                  of capitalized software
              
              
              **9,385**
              
              
              8,392
              
              
              6,978Amortization
                  of prior service cost
              
              
              **648**
              
              
              —
              
              
              —Provision
                  for losses on accounts receivable excluding recoveries
              
              
              **7,135**
              
              
              3,356
              
              
              5,454Provision
                  for inventory obsolescence
              
              
              **2,753**
              
              
              3,157
              
              
              3,530Undistributed
                  earnings from equity investment and minority interest
              
              
              **888**
              
              
              912
              
              
              682Provision
                  for deferred income taxes (benefit)
              
              
              **(1,118**
              **)**
              
              (2,087
              )
              
              (1,950
              )Net
                  (gain) loss on disposal of property, plant and equipmentand
                  capitalized software
              
              
              **87**
              
              
              (237
              )
              
              1,492Share-based
                  compensation
              
              
              **17,229**
              
              
              13,996
              
              
              9,135Changes
                  in assets and liabilities (net of impact of acquisitions):Increase
                  in accounts receivable
              
              
              **(4,389**
              **)**
              
              (29,278
              )
              
              (12,306
              )Increase
                  in inventory
              
              
              **(15,566**
              **)**
              
              (1,140
              )
              
              (7,182
              )(Increase)
                  decrease in prepaid expenses and other assets
              
              
              **423**
              
              
              (9,142
              )
              
              12,975Increase
                  (decrease) in accounts payable
              
              
              **(168**
              **)**
              
              5,055
              
              
              (2,944
              )Increase
                  in accrued expenses and other current liabilities
              
              
              **(1,632**
              **)**
              
              28,104
              
              
              14,282Increase
                  (decrease) in income taxes payable
              
              
              **11,811**
              
              
              (694
              )
              
              10,193Increase
                  in deferred revenue
              
              
              **19,735**
              
              
              1,663
              
              
              7,355Net
                  cash flows provided by operating activities
              
              
              **163,648**
              
              
              114,766
              
              
              121,681Cash
                  flows from investing activities:Net
                  cash paid for acquisitions
              
              
              **(16,135**
              **)**
              
              (40,541
              )
              
              (14,094
              )Purchases
                  of property, plant and equipment
              
              
              **(12,944**
              **)**
              
              (11,279
              )
              
              (10,740
              )Internally
                  developed software
              
              
              **(1,919**
              **)**
              
              (1,974
              )
              
              (3,523
              )Purchases
                  of other intangible assets
              
              
              **—**
              
              
              —
              
              
              (575
              )Disposal
                  of property, plant and equipment
              
              
              **227**
              
              
              398
              
              
              112Purchases
                  of short-term investments
              
              
              **(610,650**
              **)**
              
              (122,400
              )
              
              —Proceeds
                  from sales of short-term investments
              
              
              **628,150**
              
              
              35,450
              
              
              —Purchases
                  of other investments
              
              
              **—**
              
              
              (838
              )
              
              (500
              )Net
                  cash flows used in investing activities
              
              
              **(13,271**
              **)**
              
              (141,184
              )
              
              (29,320
              )Cash
                  flows from financing activities:Repurchases
                  of common stock
              
              
              **(74,303**
              **)**
              
              (17,870
              )
              
              (40,234
              )Proceeds
                  from stock option exercises
              
              
              **27,884**
              
              
              34,966
              
              
              18,532Realized
                  tax benefits from stock option exercises
              
              
              **11,018**
              
              
              16,781
              
              
              13,305Principal
                  payments on line of credit
              
              
              **(1,640**
              **)**
              
              (3,717
              )
              
              (628
              )Proceeds
                  from lines of credit
              
              
              **—**
              
              
              1,650
              
              
              318Other
              
              
              **(422**
              **)**
              
              (664
              )
              
              (322
              )Net
                  cash flows (used in) provided by financing activities
              
              
              **(37,463**
              **)**
              
              31,146
              
              
              (9,029
              )Effect
                  of exchange rate changes on cash and cash equivalents
              
              
              **26,348**
              
              
              752
              
              
              369Net
                  increase in cash and cash equivalents
              
              
              **139,262**
              
              
              5,480
              
              
              83,701Cash
                  and cash equivalents at beginning of year
              
              
              **242,702**
              
              
              237,222
              
              
              153,521Cash
                  and cash equivalents at end of year
              
              **$**
              **381,964**
              
              $
              242,702
              
              $
              237,222Supplemental
                  disclosures of cash flow information:Cash
                  paid (received) during the fiscal year for:Interest
              
              **$**
              **137**
              
              $
              89
              
              $
              213Income
                  taxes (net refund)
              
              **$**
              **28,752**
              
              $
              24,561
              
              $
              (971
              )
 
 The
        accompanying notes are an integral part of the consolidated financial
        statements.
 
 45
 
 **MICROS
        SYSTEMS, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE
        INCOME**
 
 **Common Stock**
              
              **Capital**
                **in**
                **Excess**
              
              **Retained**
              
              **Accumulated**
                **Other**
                **Comprehensive**(in thousands)
              
              **Shares**(1)
              
              **Amount**
              
              **of Par**
              
              **Earnings**
              
              **Income**
              
              **Total**Balance,
                  June 30, 2005
              
              
              77,290
              
              $
              482
              
              $
              99,990
              
              $
              239,320
              
              $
              5,379
              
              $
              345,171Comprehensive
                  income:Net
                  income
              
              
              —
              
              
              —
              
              
              —
              
              
              63,528
              
              
              —
              
              
              63,528Foreign
                  currency translation adjustments
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              7,679
              
              
              7,679Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              71,207Share-based
                  compensation
              
              
              —
              
              
              —
              
              
              9,135
              
              
              —
              
              
              —
              
              
              9,135Stock
                  issued upon exercise of options
              
              
              2,512
              
              
              16
              
              
              18,516
              
              
              —
              
              
              —
              
              
              18,532Repurchases
                  of stock
              
              
              (1,842
              )
              
              (11
              )
              
              (40,223
              )
              
              —
              
              
              —
              
              
              (40,234
              )Income
                  tax benefit from options exercised
              
              
              —
              
              
              —
              
              
              13,305
              
              
              —
              
              
              —
              
              
              13,305Balance,
                  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 ofFIN
                  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**
              
              
              **—**
              
              
              **101,284**Foreign
                  currency translation adjustments
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **38,186**
              
              
              **38,186**Unrealized
                  loss on non-current investments, net of tax
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **(2,651**
              **)**
              ****
              **(2,651**
              **)**Amortization
                  of prior year pension costs, net of tax
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **648**
              
              
              **648**Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              **137,467**SERP
                  amendment, net of tax
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **5,281**
              
              
              **5,281**Minority
                  interest put arrangement
              
              
              **—**
              
              
              **—**
              
              
              **—**
              
              
              **(645**
              **)**
              ****
              **—**
              ****
              ****
              **(645**
              **)**Share-based
                  compensation
              
              
              **—**
              
              
              **—**
              
              
              **17,229**
              
              
              **—**
              
              
              **—**
              
              
              **17,229**Stock
                  issued upon exercise of options
              
              
              **2,131**
              
              
              **13**
              
              
              **27,871**
              
              
              **—**
              
              
              **—**
              
              
              **27,884**Repurchases
                  of stock
              
              
              **(2,329**
              **)**
              ****
              **(14**
              **)**
              ****
              **(74,289**
              **)**
              ****
              **—**
              ****
              ****
              **—**
              ****
              ****
              **(74,303**
              **)**Income
                  tax benefit from options exercised
              
              
              **—**
              
              
              **—**
              
              
              **11,617**
              
              
              **—**
              
              
              **—**
              
              
              **11,617**Balance,
                  June 30, 2008
              
              
              **80,898**
              
              **$**
              **506**
              
              **$**
              **131,517**
              
              **$**
              **480,777**
              
              **$**
              **60,216**
              
              **$**
              **673,016**
 
 (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.
  46
  **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.
 
 **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
        rate(s) in effect on the last business day of each month as reported in the
        Wall
        Street Journal. The cumulative translation effects are reflected as a component
        of the Company’s accumulated other comprehensive income within 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 software licenses, hardware and service and support. Revenue
        is recognized in accordance with American Institute of Certified Public
        Accountants 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” and the Securities and Exchange Commission
        Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial Statements
        (“SAB NO. 104”).” Revenue under multiple-element arrangements, which typically
        include hardware, software licenses, and maintenance agreements sold together,
        are allocated to each element in the arrangement using the residual method
        prescribed by SOP 98-9, based on vendor specific objective evidence of the
        fair
        value of any undelivered elements of the arrangement, i.e., recognition of
        an
        allocated portion of revenue, equivalent to the fair value of undelivered
        elements, is deferred.
  Revenue
        from software license, hardware and service and support are generally 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.
 ·
              Delivery
                  has occurred or services have been rendered: Delivery occurs at
                  FOB
                  shipping point when provided to a common carrier, if the risk of
                  ownership
                  has passed to the buyer or in the case of electronic delivery,
                  delivery
                  occurs when the customer is given access to the licensed programs.
                  If the
                  risk of ownership has not passed to the buyer when provided to
                  the common
                  carrier, delivery occurs when the risk has passed to the
                  buyer.
  47
    ·
                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 twelve months of delivery with generally no more
                    than 20%
                    of the contract price due at the end of the payment term. If
                    the
                    arrangement fee is not fixed or determinable, the Company recognizes
                    the
                    revenue as amounts become due and payable. The Company considers
                    service
                    fees to be fixed or determinable if the services fee or rates
                    for time and
                    material contracts are not subject to refund or
                    adjustment. ·
                Collection
                    is probable: The Company performs credit review for significant
                    transactions at the time the arrangement is executed 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 from
                    the outset
                    of an arrangement that collection is not probable, revenue is
                    recognized
                    as collection occurs.
 Costs
        related to shipping and handling and billable travel expenses are included
        in
        cost of sales. The Company reduces revenue to reflect estimated customer
        returns
        and allowances.
 
 ***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.
 
 ***Software***
  The
        Company’s proprietary software consists of hotel software systems, restaurant
        software systems and retail software systems. The Company also resells various
        third party software products. All software products are sold on a stand
        alone
        basis and can be used with third party hardware products and do not require
        the
        Company’s hardware products.
  Revenue
        related to all software products, whether sold stand alone or with the Company’s
        hardware products, is recognized in accordance with SOP 97-2. If the software
        license agreement contains 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
        a third party can install the software, revenue is recognized when shipped,
        with
        an appropriate deferral for any undelivered software contract elements. For
        OPERA software, the Company is the principal party that has the proprietary
        knowledge to install the software. The Company deems OPERA software to be
        delivered when ready to go live, thus software and related installation services
        revenue is recognized upon installation and when ready to go live, with an
        appropriate deferral for any undelivered software contract elements. Fees
        are
        allocated to the various elements of software license agreements using the
        residual method prescribed by SOP 98-9, based on vendor specific objective
        evidence (“VSOE”) of the fair value of any undelivered elements of the
        arrangement. VSOE of fair value for the Company’s services, including
        maintenance agreements, are based upon separate sales of those arrangements,
        which are consistently applied. Under the residual method, the Company defers
        revenue for the fair value of its undelivered elements based on VSOE of fair
        value, and the remaining portion of the arrangement fee is allocated to the
        delivered elements and recognized as revenue when the basic criteria in SOP
        97-2
        are met.
  Typically,
        payments for software licenses are due within twelve months of the agreement
        date. When software license agreements call for escalating payment terms,
        or
        payment terms of twelve months or more from the delivery date, software revenue
        is recognized as payments become due and only if all other conditions for
        revenue recognition have been satisfied.
 
 ***Service***
  The
        Company provides maintenance support, installation, customer specific
        development and, more recently, software-hosting services. Maintenance support
        and software-hosting services are initially recorded as deferred revenue
        and are
        recognized ratably over the contract term. Revenue related to installation
        services, which include project management, systems planning, design and
        implementation, customer configurations, training and assistance activating
        the
        Company’s products are recognized as the service is rendered.
  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.
  48
  When
        the
        Company provides services deemed to be essential to the functionality of
        the
        software products licensed, or when a customer requires significant production,
        modification, or customization to the licensed software, the Company recognizes
        software and services revenue under the completed contract method in accordance
        with SOP 81-1, “Accounting for Performance of Construction Type and Certain
        Production Type Contracts.” Once acceptance occurs, revenue is recognized for
        all delivered elements based on vendor specific objective evidence, and
        maintenance service revenue is deferred and recognized ratably over the contract
        term. The completed contract method of accounting is followed rather than
        the
        percentage of completion method as the production cycles are usually not
        long
        term (less than one year).
 
 **CASH
        EQUIVALENTS**
  The
        Company considers all highly liquid investments with original maturities
        of
        three months or less to be cash equivalents. The
        Company's cash equivalents are recorded at cost, which approximates fair
        value,
        and consist primarily of high-grade commercial paper, money market funds,
        U.S.
        government agency securities and tax-exempt notes and bonds.
 
 **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. As of June 30, 2008 and
        2007,
        accounts receivable totaled approximately $192.4 million and $180.2 million,
        net
        of an allowance for doubtful accounts of approximately $28.3 million and
        $23.1
        million, respectively. Additionally, bad debt expenses, net of recoveries,
        for
        the fiscal years 2008, 2007 and 2006 were approximately $7.1 million, $3.4
        million and $5.4 million, respectively.
 
 **INVENTORY**
  Inventory
        is stated at the lower of standard cost which approximates cost, or market.
        Standard cost is determined principally by the first-in, first-out basis,
        or
        market. The Company maintains a reserve for obsolescence for inventory in
        the
        amount of approximately $11.5 million and $9.9 million as of June 30, 2008
        and
        June 30, 2007.
 
 **INVESTMENTS,
        NON-CURRENT AND SHORT-TERM**
  The
        Company’s investments in auction rate securities, which are debt instruments
        with long-term scheduled maturities and periodic interest rate reset dates,
        are
        classified as available-for-sale. The Company carries these securities at
        estimated fair value with any related impairment being classified as either
        temporary and reported as a separate component of stockholders' equity or
        as
        other-than-temporary and recognized in its consolidated statements of
        operations.
  As
        of
        June 30, 2008, the Company held approximately $65.2 million in auction rate
        securities, classified as investment, non-current available for sale in the
        accompanying consolidated balance sheets compared to approximately $87.0
        million, classified as short-term investments available for sale as of June
        30,
        2007. As of June 30, 2008, there were temporary unrealized losses of
        approximately $4.2 million (approximately $2.7 million, net of tax). As of
        June
        30, 2007, there were no unrealized gains or losses on these investments.
        The
        Company recognized no gains or losses related to the sale of its investments
        in
        auction rate securities during the three fiscal years ended June 30, 2008.
        See
        Note 2, “Investments, non-current and short-term” for further
        detail.
 
 **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 seven years.
 
 **CAPITALIZED
        SOFTWARE DEVELOPMENT COSTS**
  Costs
        incurred in the research and development of new software products to be licensed
        to others, costs 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 begins. Technological feasibility is reached when the product
        reaches the working model stage. The cost of purchased software is also
        capitalized.
  49
  Annual
        amortization of capitalized software development costs are charged to software
        cost of sales and for each capitalized software product is the greater of:
        (i)
        the amount computed using the ratio that of the software product’s current
        fiscal year gross revenue 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 2008, 2007 and 2006 were
        approximately $9.4 million, $8.4 million and $7.0 million, respectively.
        Additionally, during the fiscal years 2008 and 2006, the Company wrote off
        approximately $0.7 million and approximately $1.6 million in capitalized
        software costs related to products for which no future revenue was projected.
        No
        capitalized software was 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 Statement of Financial Accounting Standards (“SFAS”) No. 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 book value of
        the
        assets. If the fair value is less than book value, the asset is impaired
        and an
        impairment loss would be recognized by the Company equal to the excess of
        book
        value over fair value.
  During
        the last three fiscal years ended June 30, 2008, 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
        No.
        142, “Goodwill and Other Intangible Assets” prohibits the amortization of
        goodwill and indefinite-lived purchased intangible assets. The Company assesses
        whether goodwill and the Company’s only indefinite-lived purchased intangible
        assets, trademarks, are impaired on an annual basis in accordance with SFAS
        142
        during the first quarter of its fiscal year.  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 its book value. 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) to value. 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 purchase
        price
        were being initially allocated.
  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 2008, 2007 and 2006 were
        approximately $7.5 million, $6.6 million and $4.9 million, respectively.
 
 **RESEARCH
        AND DEVELOPMENT COSTS**
  Research
        and development costs, primarily consisting of salaries, employee benefits
        and
        administrative costs, not capitalized as Capitalized Software Development
        Costs
        are charged to operations as incurred. Research and development costs for
        the
        fiscal years 30, 2008, 2007 and 2006 were approximately $40.1 million, $33.9
        million and $27.1 million, respectively.
 
 **SHARE-BASED
        COMPENSATION**
  The
        Company accounts for its option awards granted under its stock option program
        in
        accordance with SFAS No. 123(R), “Share-Based Payment.” The estimated fair value
        of option awards is 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. In addition, non-cash share-based
        compensation expense adjusted for expected pre-vesting forfeitures is recognized
        for the non-vested portion of awards that were granted before the effective
        date
        of SFAS 123(R) as those options become incrementally vested.
  50
  As
        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, the Company is 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. 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” below for further detail.
  **WARRANTIES**
  The
        Company’s products are under warranty for defects in material and workmanship
        for a period ranging from 12 to 36 months. The Company establishes an accrual
        for estimated warranty costs at the time of sale and 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.
  Effective
        July 1, 2007, the Company adopted the provisions of 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, classification, interest
        and
        penalties, accounting in interim periods, disclosure and transition. See Note
        14, “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)
              
              **2008**
              
              **2007**
              
              **2006**Net
                  income
              
              **$**
              **101,284**
              
              $
              79,988
              
              $
              63,528Effect
                  of minority put arrangement
              
              
              **(645**
              **)**
              
              (51
              )
              
              —Net
                  income available to common shareholders
              
              **$**
              **100,639**
              
              $
              79,937
              
              $
              63,528Average
                  common shares outstanding
              
              
              **81,546**
              
              
              79,978
              
              
              77,383Dilutive
                  effect of outstanding stock options
              
              
              **1,800**
              
              
              2,603
              
              
              3,865Average
                  common shares outstanding assuming dilution
              
              
              **83,346**
              
              
              82,581
              
              
              81,248Basic
                  net income per share
              
              **$**
              **1.23**
              
              $
              1.00
              
              $
              0.82Diluted
                  net income per share
              
              **$**
              **1.21**
              
              $
              0.97
              
              $
              0.78Anti-dilutive
                  weighted shares excluded from reconciliation
              
              
              **1,239**
              
              
              2,528
              
              
              1,092
 
 Fiscal
        years 2008, 2007 and 2006 include approximately $17.2 million ($13.1 million,
        net of tax), $14.0 million ($11.1 million, net of tax) and $9.1 million ($7.1
        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 $0.16, $0.14 and $0.09 for fiscal years 2008, 2007
        and
        2006, respectively. See Note 3, “Share-based Compensation” below for further
        detail.
  51
  In
        connection with one of the Company’s acquisitions during fiscal year 2007, the
        minority shareholders of the acquired company had the option to require the
        Company to purchase their shares 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 share
        calculation by less than $0.01 per diluted share for fiscal years 2008 and
        2007.
        See Note 4, “Acquisitions” below for further detail.
 
 **FAIR
        VALUE OF FINANCIAL INSTRUMENTS**
  The
        carrying amounts of the Company’s financial instruments reflected in the
        consolidated balance sheets approximate their fair values.
 
 **DEFINED
        BENEFIT PLAN**
  The
        Company’s Supplemental Executive Retirement Plan (the “SERP Plan”) provides
        designated officers and executives of the Company with benefits upon retirement
        or immediate vesting of benefits upon a participant’s pre-retirement death. The
        SERP Plan is accounted for in accordance with SFAS No. 87, “Employers Accounting
        for Pensions.”
  In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
        87, 88, 106 and 132(R)” (“SFAS 158”). 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 Plan 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 Company adopted the recognition and disclosure provisions
        of
        SFAS 158 on June 30, 2007, and included the effect of adoption in the
        accompanying consolidated financial statements. This plan is described more
        fully in Note 17, “Employee Benefit Plans.”
 
 **RECENT
        ACCOUNTING STANDARDS**
  ***FSP
        142-3***
  In
        April
        2008, the FASB issued FASB Staff Position (“FSP”) FAS 142-3, “Determination of
        the Useful Life of Intangible Assets”, which 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 No. 142, “Goodwill
        and Other Intangible Assets” (“SFAS 142”). The intent of this FSP is 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 No. 141(R), “Business Combinations”, and other GAAP.
        This FSP is effective for fiscal years beginning after December 15, 2008
        (the Company’s fiscal year 2010), and interim periods within those fiscal years.
        The Company is currently reviewing the impact of the adoption of FSP FAS 142-3 on its
        consolidated financial position, results of operations and cash
        flows.
  ***SFAS
        161***
  In
        March
        2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
        Instruments and Hedging Activities, an amendment of FASB Statement
        No. 133,” which requires additional disclosures about the objectives of the
        derivative instruments and hedging activities, the method of accounting for
        such
        instruments under SFAS 133 and its related interpretations, and a tabular
        disclosure of the effects of such instruments and related hedged items on
        our
        financial position, financial performance, and cash flows. SFAS 161 is effective
        for financial statements issued for fiscal years and interim periods beginning
        after November 15, 2008 (the Company’s fiscal year 2010). Historically the
        Company has not had material hedging transactions, thus the Company believes
        the
        impact of the adoption of SFAS 161 on its consolidated financial position,
        results of operations and cash flows will not be material. The ultimate impact
        of the adoption of SFAS 161 is undeterminable at this time as it will depend
        on
        the Company’s hedging transactions, if any, in effect at the time of the
        adoption.
  ***SFAS
        141(R)***
  In
        December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combinations” (“SFAS 141(R)”) ,
        which 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 non-controlling 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. SFAS 141(R) is effective for business combinations
        for
        which the acquisition dates are on or after the beginning of the first annual
        reporting period beginning on or after December 15, 2008 (the Company’s
        fiscal year 2010). The Company is currently reviewing the impact of the adoption
        of SFAS 141(R)
        on the Company’s consolidated financial position, results of operations and cash
        flows.
  ***SFAS
        160***
  In
        December 2007, the FASB issued SFAS No. 160,
        “Noncontrolling Interests in Consolidated Financial Statements — an
        Amendment of ARB 51”, (“SFAS 160”).
        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.
        SFAS 160
        establishes accounting and reporting standards that require noncontrolling
        interests to 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. SFAS 160 is
        effective for business combinations for which the acquisition dates are on
        or
        after the beginning of the first annual reporting period beginning on or
        after
        December 15, 2008 (the Company’s fiscal year 2010). The Company is
        currently reviewing the impact of the adoption of SFAS 160 on
        the Company’s consolidated financial position, results of operations and cash
        flows.
  52
  ***SFAS
        No. 159***
  In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities” (“SFAS 159”), which allows entities
        to choose to measure eligible financial instruments at fair value as of
        specified dates. The election, which may be applied on an instrument by
        instrument basis, is typically irrevocable once elected. SFAS 159 is effective
        for fiscal years beginning after November 15, 2007 (the Company’s fiscal year
        2009). The Company does not believe the adoption of SFAS 159 will have a
        material impact on the Company’s consolidated financial position, results of
        operations and cash flows.
  ***SFAS
        No. 157***
  In
        September 2006, the FASB issued SFAS No. 157 “Fair Value Measurements”
(“SFAS 157”) to establish a framework for measuring fair value under generally
        accepted accounting principles and to expand disclosures on fair value
        measurements. The statement applies to previously established valuation
        pronouncements, but is to be applied prospectively, so that it does not require
        the changing of any previous fair value measurements. Under SFAS 157, fair
        value
        is established by the price that would be received to sell the item or the
        amount to be paid to transfer the liability or the asset (an exit price),
        as
        opposed to the price to be paid for the asset or received to assume the
        liability (an entry price). SFAS 157 is effective for all assets valued in
        financial statements for fiscal years beginning after November 15, 2007
        (the Company’s fiscal year 2009). In February 2008, the FASB issued FASB Staff
        Position FAS 157-2, “Effective Date of FASB Statement No. 157” which permits a
        one-year deferral for the implementation of the provisions of SFAS 157 with
        regard to non-financial assets and liabilities that are not carried at fair
        value on a recurring basis in financial statements. SFAS 157 may cause some
        valuation procedures used by the Company to change after its adoption. However,
        the Company does not believe the adoption of the SFAS 157 will have a material
        impact on the Company’s consolidated financial position, results of operations
        and cash flows.
 
 **2.**
              **INVESTMENTS,
                  NON-CURRENT AND SHORT-TERM**
 
 The
        Company’s investments in auction rate securities are carried at estimated fair
        value. 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 (“auction rate securities”). 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 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 the auction, thereby no longer providing short-term liquidity.
        As a
        result, the auction rate securities have been classified as non-current
        investments available-for-sale as of June 30, 2008 instead of being classified
        as short-term investments, as was the case as of June 30, 2007.
  In
        the
        absence of a liquid market or a negotiated sales transaction, the Company
        engaged an independent valuation firm to provide a valuation for its auction
        rate securities as of June 30, 2008. The valuation firm used a mark to model
        approach to arrive at this valuation, which was reviewed and agreed to by
        the
        Company. The assumptions used in preparing the valuation analysis include
        estimates for interest rates, timing and amount of cash flows, credit and
        liquidity premiums, and expected holding periods of the auction rate securities.
        These assumptions are subject to change as the underlying market conditions
        change. The assumptions used represent the Company’s estimates based on
        available data as of June 30, 2008.
  The
        valuation of the auction rate securities as of June 30, 2008 indicated a
        fair
        value of approximately $65.2 million for which the Company has recorded a
        temporary unrealized impairment loss of approximately $4.2 million
        (approximately $2.7 million, net of tax). The Company reviews impairments
        in
        accordance with Emerging Issues Task Force 03-1 and FSP FAS 115-1 and FAS
        124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to
        Certain Investments” to determine the classification of the impairment as
        temporary or other-than-temporary. A temporary impairment charge results
        in an
        unrealized loss being recorded in the other comprehensive income component
        of
        stockholders' equity. Such an unrealized loss does not reduce net income
        for the
        applicable accounting period because the loss is viewed as temporary. Unrealized
        losses are recognized in the statement of operations when a decline in fair
        value is determined to be other-than-temporary. Determination of whether
        the
        impairment is temporary or other-than-temporary requires significant judgment.
        The primary factors that are considered in classifying the impairment include
        the extent and time the fair value of each investment has been below cost,
        the
        expected holding or recovery period for each investment, and the Company’s
        intent and ability to hold each investment until recovery.
  The
        Company has recorded a temporary unrealized loss of approximately $4.2 million
        (approximately $2.7 million, net of tax) on these investments in the other
        comprehensive income component of stockholders’ equity during the fiscal year
        2008. As of June 30, 2007, there were no unrealized gains or losses on these
        investments. The Company recognized no gains or losses related to the sale
        of
        its investments in auction rate securities during the three fiscal years
        ended
        June 30, 2008. The Company reviews its investments on an ongoing basis for
        indications of possible impairment and proper classification of any impairment
        once identified and will continue to monitor the liquidity and creditworthiness
        of its auction rate securities holdings.
  53
 
 **3.**
              **SHARE-BASED
                  COMPENSATION:**
 
 The
        Company has granted incentive and non-qualified stock options 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 2008 was that only those directors who are also either employees
        of
        or consultants 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 pursuant to a three-year vesting schedule
        whereby one-third of the options vest upon the first anniversary of the grant,
        the second third of the options vest upon the second anniversary of the grant,
        and the final third of the options vest 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 34.0 million
        shares
        for issuance upon exercise of options, of which approximately 3.1 million
        shares
        were available for future grants as of June 30, 2008. Options to purchase
        approximately 6.2 million shares were outstanding as of June 30, 2008, including
        currently exercisable options to purchase approximately 3.7 million
        shares.
  The
        non-cash share-based compensation expenses included in the consolidated
        statements of operations are as follows:
 
 **Fiscal Year Ended June 30,**(in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Cost
                  of sales
              
              **$**
              **—**
              
              $
              —
              
              $
              35Selling,
                  general and administrative
              
              
              **16,213**
              
              
              13,243
              
              
              8,851Research
                  and development
              
              
              **1,016**
              
              
              753
              
              
              249Total
                  non-cash share-based compensation expense
              
              
              **17,229**
              
              
              13,996
              
              
              9,135Income
                  tax benefit
              
              
              **(4,083**
              **)**
              
              (2,884
              )
              
              (2,026
              )Total
                  non-cash share-based compensation expense, net of tax
                  benefit
              
              **$**
              **13,146**
              
              $
              11,112
              
              $
              7,109Impact
                  on diluted net income per share
              
              **$**
              **0.16**
              
              $
              0.14
              
              $
              0.09
 
 The
        non-cash share-based compensation expense for the fiscal year 2008 includes
        approximately $3.2 million related to a grant of options to the Company’s
        Chairman, President, and Chief Executive Officer, A.L. Giannopoulos during
        fiscal year 2008. In accordance with the terms of the Company’s option plan, any
        options that he holds that have not yet vested will vest immediately upon
        his
        retirement, as he is over the retirement age of 62. 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
        2008 and 2007, as stock options were not granted to employees whose labor
        was
        capitalized as software development costs or inventory. For fiscal year 2006,
        less than $0.1 million in non-cash share-based compensation expense had been
        capitalized as a result of stock options granted to employees whose labor
        was
        capitalized as software development costs.
  The
        estimated fair values of options granted during the three fiscal years ended
        June 30, 2008 were estimated on the date of grant using the following
        assumptions:
 
 **Fiscal Year Ended June 30,****2008**
              
              **2007**
              
              **2006**Weighted-average
                  expected volatility
              
              
              **35**
              **%**
              
              37
              %
              
              41
              %Expected
                  volatility
              
              
              **33% - 36**
              **%**
              
              36% - 38
              %
              
              33% - 46
              %Expected
                  term
              
              
              **4.8 – 5.3 years**
              
              
              4.6 – 5.7 years
              
              
              4.0 – 5.7 yearsExpected dividend yield
              
              
              **0**
              **%**
              
              0
              %
              
              0
              %Risk-free
                  interest rate
              
              
              **2.6% - 3.7**
              **%**
              
              4.5% - 4.9
              %
              
              3.9% - 5.0
              %
 
 54
  The
        following is a summary of option activity:
  (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**
                **Value**Outstanding
                  at June 30, 2007
              
              
              7,120
              
              $
              17.17
              
              
              6.7
              
              $
              71,432Granted
              
              
              1,491
              
              $
              34.73Exercised
              
              
              (2,132
              )
              $
              13.07Forfeited
                  or expired
              
              
              (232
              )
              $
              25.14Outstanding
                  at June 30, 2008
              
              
              6,247
              
              $
              22.46
              
              
              7.2
              
              $
              50,192Exercisable
                  at June 30, 2007
              
              
              4,236
              
              $
              12.78
              
              
              5.4
              
              $
              61,075Exercisable
                  at June 30, 2008
              
              
              3,655
              
              $
              17.41
              
              
              6.1
              
              $
              47,802
 
 The
        weighted-average grant-date estimated fair value per share of options granted
        during the fiscal years 2008, 2007 and 2006 were $12.87, $21.66 and $20.02,
        respectively. The total intrinsic value, the difference between the exercise
        price and the market price on the date of exercise, of options exercised
        during
        the fiscal years 2008, 2007 and 2006 were approximately $38.9 million, $62.2
        million and $37.5 million, respectively.
  As
        of
        June 30, 2008, there was approximately $19.7 million (net of estimated
        forfeiture) 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 1.85 years.
  Cash
        received from options exercised during the fiscal years 2008, 2007 and 2006
        were
        approximately $27.9 million, $35.0 million and $18.5 million,
        respectively.
 
 **4.**
              **ACQUISITIONS:**
 
 **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 $3.6 million in 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
        was
        held back to satisfy certain claims the Company may have against Check in
        Data.
        Any amounts remaining after satisfaction of any claims will be paid in two
        installments, at 12 months and 18 months after the July 2007 closing. Subsequent
        to June 30, 2008, the first installment, net of working capital adjustment,
        of
        approximately $0.8 million was paid in July 2008. 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 purchase price
        allocation is not finalized and is subject to the final working capital
        adjustments, which are currently not expected to be material. The acquisition
        of
        Check in Data has been included in the results of the Company 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.
  The
        pro
        forma effect of these acquisitions was not material to the consolidated
        financial position and results of operations presented herein.
 
 **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 have 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 $33.2 million, intangible assets of approximately $5.2 million
        and
        capitalized software costs of approximately $2.7 million were recorded in
        connection with the acquisition.
  55
 
 **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 $3.2 million in 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 which have been released to the
        sellers.
  Additionally,
        in connection with one of the acquisitions, the minority interest holders
        were
        provided a 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, 2008 and 2007, 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 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 adjusted accordingly, with the
        floor
        in all cases being 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 $47.0 million, total intangible
        assets of approximately $7.6 million and total capitalized software costs
        of
        approximately $2.9 million. The pro forma effect of these acquisitions was
        not
        material to the consolidated financial position and results of operations
        presented herein.
 
 **FY
        2006:**
  **COMMERCIALWARE,
        INC.**
  On
        February 1, 2006, the Company acquired CommercialWare, Inc. (“CommercialWare”),
        a privately held provider of cross-channel retail solutions, by acquiring
        all of
        the issued and outstanding stock of CommercialWare. The acquisition, for
        a total
        cash purchase of approximately $14.2 million, net of cash acquired, did not
        include a subsidiary of CommercialWare, which developed and supported a limited
        version of certain CommercialWare products targeted toward particular retail
        sectors. During fiscal year 2008, all of the portion of the purchase price
        remaining in escrow was released to the former shareholders of CommercialWare,
        with approximately $0.3 million remaining in escrow pending resolution of
        outstanding issues. Headquartered in Westborough, Massachusetts, CommercialWare
        is operating as a subsidiary of Datavantage Corporation (“Datavantage”), a
        wholly-owned subsidiary of the Company.
  In
        aggregate, goodwill of approximately
        $8.3 million and intangible assets of approximately $2.8 million were recorded
        in connection with the acquisition. The pro forma effect of this acquisition
        was
        not material to the consolidated financial position and results of operations
        presented herein. During
        fiscal years 2008 and 2007, the Company adjusted its realization of operating
        loss carryforwards related to CommercialWare acquisition which resulted in
        adjustments in non-current deferred tax assets and goodwill associated with
        the
        acquisitions.
 
 **5.**
              **INVENTORY:**
 
 The
        components of inventory at June 30 are as follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**Raw
                  materials
              
              **$**
              **5,521**
              
              $
              5,687Work-in-process
              
              
              **21**
              
              
              38Finished
                  goods
              
              
              **59,033**
              
              
              42,065**$**
              **64,575**
              
              $
              47,790
 
 The
        Company maintains a reserve for obsolescence for inventory in the amount
        of
        approximately $11.5 million as of June 30, 2008 and approximately $9.9 million
        as of June 30, 2007. The Company reserved approximately $2.8 million, $3.2
        million and $3.5 million during the three fiscal years 2008, 2007 and 2006,
        respectively, all related to potentially obsolete and slow moving products.
        The
        foreign currency translation adjustment on inventory balance was approximately
        $3.2 million as of June 30, 2008.
  56


**6.**
              **PROPERTY,
                  PLANT AND EQUIPMENT:**
 
 The
        components of property, plant and equipment at June 30 are as
        follows:
  (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **Useful Life**Leasehold
                  improvements
              
              **$**
              **10,435**
              
              $
              8,953
              
              
              Shorter of useful life or lease termMachinery and equipment
              
              
              **11,942**
              
              
              11,505
              
              
              5-10
                  yearsFurniture
                  and fixtures
              
              
              **18,181**
              
              
              18,657
              
              
              7-10
                  yearsComputer
                  hardware and software
              
              
              **67,112**
              
              
              65,192
              
              
              3-7
                  yearsTotal
                  property, plant and equipment
              
              
              **107,670**
              
              
              104,307Accumulated
                  depreciation and amortization
              
              
              **(78,505**
              **)**
              
              (76,352
              )Net
                  property, plant and equipment
              
              **$**
              **29,165**
              
              $
              27,955
 
 Depreciation
        expense for the fiscal years 2008, 2007 and 2006 was approximately $12.6
        million, $10.9 million and $9.4 million, respectively.
 
 **7.**
              **ACCUMULATED
                  OTHER COMPREHENSIVE
                  INCOME:**
 
 The
        components of comprehensive income, net of tax, for the fiscal years ended
        June
        30, were as follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Net
                  income
              
              **$**
              **101,284**
              
              $
              79,988
              
              $
              63,528Other
                  comprehensive income:Foreign
                  currency translation adjustments
              
              
              **38,186**
              
              
              11,623
              
              
              7,679Unrealized
                  loss on non-current investments
              
              
              **(2,651**
              **)**
              
              —
              
              
              —Amortization
                  of prior year pension costs
              
              
              **648**
              
              
              —
              
              
              —Total
                  comprehensive income
              
              **$**
              **137,467**
              
              $
              91,611
              
              $
              71,207
 
 Net
        income for fiscal years 2008, 2007 and 2006 includes approximately $17.2
        million
        ($13.1 million, net of tax or $0.16 per diluted share), $14.0 million ($11.1
        million, net of tax or $0.14 per diluted share) and $9.1 million ($7.1 million,
        net of tax or $0.09 per diluted share), respectively in non-cash share-based
        compensation expense. See Note 3, “Share-based Compensation.” See Note 2,
“Investments, short-term and non-current” for further detail on unrealized loss
        on non-current investments.
 
 **8.**
              **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
        which
        expires on July 31, 2009.  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 all 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 our major U.S. subsidiaries as
        well as certain inventory and receivables located in the U.S.
  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 (“EBITDA”) 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 specified cure period, if applicable, 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, 2008, the Company had approximately $1.0 million outstanding under
        the
        Credit Agreements and had approximately $64.0 million available for future
        borrowings. The total outstanding balance consisted of 105.0 million JPY
        (Japanese Yen), or approximately $1.0 million at the June 30, 2008 exchange
        rate.
  The
        Company also has a credit relationship with a European bank in the amount
        of EUR
        1.0 million (approximately $1.6 million at the June 30, 2008 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, 2008, there were no balances
        outstanding on this credit facility, but approximately EUR 0.1 million
        (approximately $0.2 million at the June 30, 2008 exchange rate) of the credit
        facility has been used for guarantees.
  57
  As
        of
        June 30, 2008, the Company had approximately $65.4 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 2.2%.
 
 **9.**
              **ACCRUED
                  EXPENSES AND OTHER CURRENT
                  LIABILITIES:**
 
 The
        components of accrued expenses and other current liabilities at June 30 are
        as
        follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**Compensation,
                  benefits and related taxes
              
              **$**
              **48,299**
              
              $
              43,307Deposits
                  received from customers
              
              
              **36,977**
              
              
              35,422VAT
                  and sales taxes
              
              
              **9,970**
              
              
              10,644Professional
                  services
              
              
              **7,068**
              
              
              4,453Product
                  related
              
              
              **4,276**
              
              
              7,487Other
              
              
              **18,323**
              
              
              15,829**$**
              **124,913**
              
              $
              117,142
 
 **10.**
              **GOODWILL:**
 
 Goodwill
        allocated to the Company’s reportable segments as of June 30, 2008 and 2007 and
        changes in the carrying amount of goodwill are as follows:
 
 (in
                  thousands)
              
              **United States**
              
              **International**
              
              **Total**Balance
                  at June 30, 2006
              
              $
              87,223
              
              $
              11,358
              
              $
              98,581Goodwill
                  adjustment for prior years’ acquisitions
              
              
              (3,788
              )
              
              (2,732
              )
              
              (6,520
              )Goodwill
                  acquired:RedSky
              
              
              3,371
              
              
              28,592
              
              
              31,963Other
                  acquisitions
              
              
              3,460
              
              
              10,345
              
              
              13,805Foreign
                  currency translation
              
              
              —
              
              
              503
              
              
              503Balance
                  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**
              
              
              **11,932**Other
                  acquisition
              
              
              **4,035**
              
              
              **—**
              
              
              **4,035**Foreign
                  currency translation
              
              
              **—**
              
              
              **3,467**
              
              
              **3,467**Balance
                  at June 30, 2008
              
              **$**
              **95,888**
              
              **$**
              **63,834**
              
              **$**
              **159,722**
 
 During
        fiscal years 2008 and 2007, 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 at June 30, 2008, 2007 and 2006.
 
 **11.**
              **INTANGIBLE
                  ASSETS:**
  Purchased
        intangible assets are amortized over the estimated useful lives of the
        respective asset category unless such lives are deemed indefinite. The Company
        has identified trademarks as an indefinite-lived purchased intangible asset.
        Intangible assets were comprised of the following:
  58
 (in
                    thousands except number of years)
                
                **Gross**
                  **Carrying**
                  **Amount**
                
                **Accumulated**
                  **Amortization**
                
                **Net Carrying**
                  **Amount**
                
                **Useful**
                  **Life**
                  (in years)At
                    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**
                **)**
                
                **15,193**Trademarks
                
                
                **975**
                
                
                **—**
                
                
                **975**Total
                
                **$**
                **23,569**
                
                **$**
                **(7,401**
                **)**
                **$**
                **16,168**At
                    June 30, 2007:Customer
                    lists
                
                $
                16,953
                
                $
                (4,380
                )
                $
                12,573
                
                
                3
                    – 10Non-compete
                    agreement
                
                
                10
                
                
                (2
                )
                
                8
                
                
                4Product
                    lines
                
                
                326
                
                
                (236
                )
                
                90
                
                
                4
                    – 5Service
                    revenue backlog
                
                
                1,002
                
                
                (108
                )
                
                894
                
                
                4
                    – 5Finite-lived
                    purchased intangible assets
                
                
                18,291
                
                
                (4,726
                )
                
                13,565Trademarks
                
                
                944
                
                
                —
                
                
                944Total
                
                $
                19,235
                
                $
                (4,726
                )
                $
                14,509
 
 Trademarks
        are deemed to have indefinite lives and therefore are not amortized.
        Amortization expense related to finite-lived purchased intangible assets
        was
        approximately $2.5 million, $1.9 million and $1.1 million in the fiscal years
        2008, 2007 and 2006, respectively. Based on the results of its annual impairment
        tests, the Company determined that no impairment of trademarks existed as
        of
        June 30, 2008, 2007 and 2006. Additionally, during the three fiscal years
        ended
        June 30, 2008, the Company did not encounter any events or circumstances
        indicating that the carrying amounts of its finite-lived purchased intangible
        assets may not be fully recoverable and thus may have been impaired.
        Accordingly, the Company did not recognize any impairment losses during the
        three fiscal years ended June 30, 2008.
  Estimated
        amortization expense in future fiscal years ending June 30 is as follows
        (in
        thousands):
  2009
              
              $
              2,4632010
              
              
              2,2862011
              
              
              2,1642012
              
              
              1,9952013
              
              
              1,848Later
                  years
              
              
              4,437Total
              
              $
              15,193
 
 **12.**
              **COMMITMENTS
                  AND CONTINGENCIES:**
 
 **LEASES**
 The
        Company and its subsidiaries lease office space under operating leases expiring
        at various dates through 2016 and leases 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 each of the last three fiscal years ending June 30 was as
        follows:
 
 (in
                  thousands)
              
              **Rent**
                **Expense**
              
              **Sublease**
                **Income**
              
              **Net Rent**
                **Expense**2008
              
              **$**
              **27,405**
              
              **$**
              **(931**
              **)**
              **$**
              **26,474**2007
              
              
              23,442
              
              
              (934
              )
              
              22,5082006
              
              
              19,189
              
              
              (998
              )
              
              18,191
  59
  As
        of
        June 30, 2008, 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**
                **Leases**Fiscal
                  year ending June 30,2009
              
              $
              27,242
              
              $
              (1,129
              )
              $
              26,113
              
              $
              4032010
              
              
              22,132
              
              
              (872
              )
              
              21,260
              
              
              1582011
              
              
              14,305
              
              
              (72
              )
              
              14,233
              
              
              1342012
              
              
              11,419
              
              
              (18
              )
              
              11,401
              
              
              122013
              
              
              10,007
              
              
              —
              
              
              10,008
              
              
              62014
                  and thereafter
              
              
              22,429
              
              
              —
              
              
              22,429
              
              
              —$
              107,534
              
              $
              (2,091
              )
              $
              105,444
              
              
              713Less:
                  current portion
              
              
              
              
              
              
              
              
              
              
              
              403Long-term
                  obligations under capital lease
              
              
              
              
              
              
              
              
              
              
              $
              310
 
 The
        Company leases its worldwide corporate headquarters located in Columbia,
        Maryland, consisting of 247,624 square feet, pursuant to a lease that expires
        February 29, 2016. The Company subleases one of the five floors, consisting
        of
        49,524 square feet, to Motorola, Inc., under a sublease that expires March
        1,
        2010 (which Motorola may terminate after October 31, 2008.)
  The
        Company leases its corporate central warehouse, distribution center in Hanover,
        Maryland, consisting of 75,600 square feet, pursuant to a lease that expires
        July 31, 2009.
  The
        Company’s Datavantage subsidiary leases approximately 69,200 square feet of
        office and warehouse space in the Cleveland, Ohio area, from which it conducts
        the majority of its sales, marketing, customer support, and product development
        activities, and an additional approximately 27,234 square feet of office
        space
        in the Boston, Massachusetts area, primarily for customer support and research
        and development activities. The Cleveland lease expires February 28, 2014,
        (with
        a termination right available to the Company in 2010) and the Boston lease
        expires November 30, 2013.
 
 **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 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.
        The
        Company is 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. The indemnity coverage estimated as of June
        30,
        2008 is immaterial. Through June 30, 2008, the Company’s legal fees with respect
        to indemnity coverage for this matter have not been material. Currently,
        the
        case is 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. 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, 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 POS 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. In February 2008, the Company moved to dismiss the complaint
        on various grounds, but the court has not yet ruled on the motion. Because
        the
        motion is still pending, the Company’s answer to the complaint is not yet due;
        however, the Company disputes the substantive allegations in the complaint.
        Based on currently available information, the Company does not believe that
        its
        relationships and agreements with Merchant Link and Paymentech are
        anti-competitive or otherwise violate either federal antitrust law or applicable
        New Jersey law. If the court does not grant the Company’s motion to dismiss the
        complaint, the Company will vigorously contest the action.
  60
  On
        May
        22, 2008, a jury returned a verdict of $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. The plaintiffs alleged that the Company 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
        the Company was liable for, among other things, breach of contract and tortious
        interference with existing and prospective contractual relationships. The
        Company has moved for reconsideration of the verdict by the trial court,
        and, if
        unsuccessful in that regard, the Company intends to pursue a appeal, as the
        Company believes the instructions to the jury, certain rulings made by the
        trial
        court, and the jury verdict were erroneous on multiple legal grounds. There
        are
        no other litigation matters relating to the restructuring of the dealer channel
        in the year 2000. The Company has established only an immaterial reserve
        for any
        potential liability relating to the dealer litigation, as the Company believes
        that it has raised and can present strong points through post-trial motions
        and,
        if necessary, appeal, and therefore that an unfavorable outcome in the case
        is
        not probable. However, even if the verdict were not reversed or reduced as
        a
        result of the post-trial motions or any subsequent appeals, payment of the
        resulting obligation would not have a material adverse effect on the Company’s
        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.
 
 **13.**
              **SHAREHOLDERS’
                  EQUITY:**
 
 In
        fiscal
        year 2002, the Board of Directors authorized the purchase of up to four million
        shares of the Company’s common stock, and during fiscal year 2005 the Company
        purchased all of the remaining unpurchased shares under the fiscal year 2002
        authorization. In fiscal year 2005, the Board of Directors authorized the
        purchase of an additional four million shares of the Company’s common stock. As
        of October 2007, the Company purchased all of the remaining unpurchased shares
        under the fiscal year 2005 authorization. In November 2007, the Board of
        Directors authorized the purchase of an additional two million shares of
        the
        Company’s common stock. The Company has incurred an aggregate of approximately
        $0.2 million in fees related to all three of the stock purchase plans. As
        of
        June 30, 2008, approximately 0.1 million additional shares may be repurchased
        under the November 2007 authorization.
  The
        following table summarizes the cumulative number of shares purchased under
        the
        repurchase authorizations. All repurchased shares have been
        retired:
 
 **Number of**
                **Shares**
              
              **Average**
                **Purchase Price**
                **per Share**
              
              **Total Purchase**
                **Value**
                (in thousands)Total
                  shares purchased as of June 30, 2005
              
              
              4,993,324
              
              $
              10.65
              
              $
              53,180Shares
                  purchased during fiscal year 2006
              
              
              1,842,674
              
              $
              21.83
              
              
              40,234Total
                  shares purchased as of June 30, 2006
              
              
              6,835,998
              
              $
              13.67
              
              
              93,414Shares
                  purchased during fiscal year 2007
              
              
              697,200
              
              $
              25.63
              
              
              17,870Total
                  shares purchased as of June 30, 2007
              
              
              7,533,198
              
              $
              14.77
              
              
              111,284**Shares
                  purchased during fiscal year 2008**
              
              
              **2,329,302**
              
              **$**
              **31.90**
              
              
              **74,303****Total
                  shares purchased as of June 30, 2008**
              
              
              **9,862,500**
              
              **$**
              **18.82**
              
              **$**
              **185,587**
 
 **14.**
              **INCOME
                  TAXES:**
  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, classification, interest and penalties, accounting
        in interim periods, disclosure and transition. 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.
  As
        a
        result of the adoption of FIN 48, the Company’s net unrecognized income tax
        benefits were 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. The Company has recognized approximately
        $0.7
        million of interest expense for the fiscal year 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.
  61
  The
        following summarizes the significant components of the Company’s gross
        unrecognized tax benefits:
 
 (in
                  thousands)
              
              **Total Gross**
                **Unrecognized Tax**
                **Benefits**Balance,
                  June 30, 2007
              
              $
              7,112Transition
                  adjustments
              
              
              3,674Balance,
                  July 1, 2007
              
              
              10,786Current
                  year uncertain tax positions:Gross
                  increases
              
              
              4,182Gross
                  decreases
              
              
              —Prior
                  year uncertain tax positions:Gross
                  increases
              
              
              2,277Gross
                  decreases
              
              
              (55
              )Expiration
                  of statute of limitations
              
              
              —Settlements
                  with tax authorities
              
              
              —Balance,
                  June 30, 2008
              
              $
              17,190
 
 The
        Company historically classified interest and penalties related to unrecognized
        income tax benefits as a component of income tax expense. The Company is
        maintaining this practice following its adoption of FIN 48.
  The
        Company has reviewed its uncertain income tax positions in accordance with
        FIN
        48, and currently is not able to reasonably estimate material changes in
        the
        unrecognized income tax benefits and the impact it would have on its
        consolidated financial position, results of operations and cash flows in
        the
        next twelve months. In addition, the Company reclassified certain tax
        liabilities, including penalties and interest for unrecognized tax benefits
        from
        current liabilities to long-term liabilities. The Company’s unrecognized tax
        benefits related to U.S. and various foreign jurisdictions.
  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 currently under audits in certain of its major taxing
        jurisdictions, with open tax years beginning in fiscal year 1999. Currently,
        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.
  Income
        before taxes for the fiscal years ended June 30 was taxed under the following
        jurisdictions:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**United
                  States
              
              **$**
              **66,915**
              
              $
              52,977
              
              $
              36,202International
              
              
              **87,424**
              
              
              68,677
              
              
              59,463**$**
              **154,339**
              
              $
              121,654
              
              $
              95,665
 
 The
        components of income tax expense for the fiscal years ended June 30 are as
        follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Current:Federal
              
              **$**
              **29,720**
              
              $
              23,233
              
              $
              19,137State
              
              
              **2,996**
              
              
              3,020
              
              
              3,168Foreign
              
              
              **20,569**
              
              
              16,588
              
              
              11,100****
              **53,285**
              
              
              42,841
              
              
              33,405Deferred:Federal
              
              
              **(116**
              **)**
              
              (1,667
              )
              
              (2,118
              )State
              
              
              **(225**
              **)**
              
              (921
              )
              
              (524
              )Foreign
              
              
              **(777**
              **)**
              
              501
              
              
              692**(1,118**
              **)**
              
              (2,087
              )
              
              (1,950
              )**$**
              **52,167**
              
              $
              40,754
              
              $
              31,455
  62
  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:
 
 **2008**
              
              **2007**
              
              **2006**Statutory
                  rate
              
              
              **35.0**
              **%**
              
              35.0
              %
              
              35.0
              %Increase
                  (decrease) resulting from:State
                  taxes, net of federal tax benefit
              
              
              **1.3**
              
              
              1.3
              
              
              1.6Effect
                  of tax rates in foreign jurisdictions
              
              
              **(6.3**
              **)**
              
              (7.6
              )
              
              (8.4
              )Prior
                  years true up
              
              
              **0.5**
              
              
              1.0
              
              
              3.5Share-based
                  and other compensation
              
              
              **1.8**
              
              
              1.8
              
              
              1.4Non-deferred
                  foreign income
              
              
              **0.9**
              
              
              1.4
              
              
              —Domestic
                  manufacturing deduction /extraterritorial
                  income exclusion benefit
              
              
              **(0.4**
              **)**
              
              (0.4
              )
              
              (1.0
              )Other
                  differences
              
              
              **1.0**
              
              
              1.0
              
              
              0.8Effective
                  tax rate
              
              
              **33.8**
              **%**
              
              33.5
              %
              
              32.9
              %
 
 The
        Company has not provided U.S. deferred income taxes on the cumulative unremitted
        earnings of its non-U.S. affiliates as the Company plans to permanently reinvest
        cumulative unremitted foreign earnings outside the U.S. and it is not
        practicable to determine the unrecognized deferred income taxes. These
        cumulative unremitted foreign earnings of approximately $457 million and
        $389
        million for fiscal years 2008, 2007, respectively, relate primarily to ongoing
        operations in foreign jurisdictions and are required to fund foreign operations,
        capital expenditure and expansion requirements.
  The
        following summarizes the significant components of the Company’s deferred tax
        assets and liabilities at
        June
        30:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**Deferred
                  tax assets:Net
                  operating loss carryforwards
              
              **$**
              **10,660**
              
              $
              10,713Accruals
                  not currently deductible for tax
              
              
              **9,662**
              
              
              8,709Share-based
                  compensation (non-qualified stock options)
              
              
              **7,454**
              
              
              4,464Bad
                  debt reserves
              
              
              **5,761**
              
              
              5,336Inventory
              
              
              **2,141**
              
              
              2,552Benefit
                  related accruals not currently deductible for tax
              
              
              **1,653**
              
              
              5,200Deferred
                  revenues and customer deposits currently taxable
              
              
              **1,547**
              
              
              781Tax
                  impact of technology transfer
              
              
              **1,452**
              
              
              3,221Other
                  unrealized gains and losses
              
              
              **2,490**
              
              
              987Tax
                  credit carryforwards
              
              
              **—**
              
              
              581Total
                  deferred tax assets
              
              
              **42,820**
              
              
              42,544Deferred
                  tax liabilities:Intangibles
                  amortization
              
              
              **(8,256**
              **)**
              
              (8,137
              )Capitalized
                  software development costs
              
              
              **(5,138**
              **)**
              
              (5,880
              )Depreciation
              
              
              **(1,282**
              **)**
              
              (1,917
              )Other
              
              
              **(248**
              **)**
              
              (160
              )Total
                  deferred tax liabilities
              
              
              **(14,924**
              **)**
              
              (16,094
              )Valuation
                  allowance
              
              
              **(5,653**
              **)**
              
              (2,716
              )Net
                  deferred tax asset
              
              **$**
              **22,243**
              
              $
              23,734
  63
  The
        tax
        effected net operating loss carryforwards and related valuation allowance
        components of deferred taxes for the fiscal years ended June 30 are as
        follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**Net
                  operating loss carryforwards:U.S.
              
              **$**
              **4,775**
              
              $
              6,298International
              
              
              **5,885**
              
              
              4,415**$**
              **10,660**
              
              
              10,713Net
                  operating loss carryforward valuation allowance:U.S.
              
              
              **—**
              
              
              —International
              
              
              **(5,653**
              **)**
              
              (2,716
              )**(5,653**
              **)**
              
              (2,716
              )Net
                  operating loss carryforwards, net of valuation
              
              **$**
              **5,007**
              
              $
              7,997
 
 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, has incurred losses
        in
        certain foreign jurisdictions. A valuation allowance has been provided at
        June
        30, 2008 and 2007 to offset the related deferred tax assets due to uncertainty
        of realizing the benefit of the net operating loss carryforwards.
  The
        Company’s net operating loss carryforwards and tax credit carryforwards (if not
        applied against taxable income) as of June 30, 2008 expire as
        follows:
 
 **Expires in Fiscal Year**(in
                  thousand)
              
              **2009**
              
              **2010**
              
              **Thereafter**
              
              **No**
                **Expiration**
              
              **Total**U.S.:Net
                  operating loss carryforwards
              
              $
              —
              
              $
              —
              
              $
              4,775
              
              $
              —
              
              $
              4,775Valuation
                  allowances
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              ——
              
              
              —
              
              
              4,775
              
              
              —
              
              
              4,775International:Net
                  operating loss carryforwards
              
              
              213
              
              
              —
              
              
              1,674
              
              
              3,998
              
              
              5,885Valuation
                  allowances
              
              
              (213
              )
              
              —
              
              
              (1,533
              )
              
              (3,907
              )
              
              (5,653
              )—
              
              
              —
              
              
              141
              
              
              91
              
              
              232Net
                  operating loss carryforwards,Net
                  of valuation allowances
              
              $
              —
              
              $
              —
              
              $
              4,916
              
              $
              91
              
              $
              5,007
 
 **15.**
              **OTHER
                  INCOME (EXPENSE), NET:**
 
 Other
        income (expense) for the fiscal years ended June 30 comprised of the
        following:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Grant
              
              **$**
              **1,726**
              
              $
              —
              
              $
              —Foreign
                  exchange loss, net
              
              
              **(1,384**
              **)**
              
              (403
              )
              
              (940
              )Life
                  insurance settlement
              
              
              **—**
              
              
              1,325
              
              
              —Other,
                  net
              
              
              **255**
              
              
              196
              
              
              472Total
                  other income (expense), net
              
              **$**
              **597**
              
              $
              1,118
              
              $
              (468
              )
 
 For
        fiscal year 2008, the Company recognized approximately $1.7 million in income
        due to a grant payment received related to the number of jobs we created
        in
        Ireland. Specifically, the Irish Development Authority agreed to pay MICROS
        a
        fee for having engaged and retained employees in the MICROS help desk and
        support center in Ireland. MICROS earned and received this fee in the fourth
        quarter of fiscal year 2008. 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.
  64
 
 **16.**
              **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 on the average 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 year 2007 and 2006, Mr. Brown’s total
        compensation also included annual target bonuses of approximately $0.2 million
        that were accrued during the fiscal year that 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.
 
 **17.**
              **EMPLOYEE
                  BENEFIT PLANS:**
 
 **DEFINED
        CONTRIBUTION PLANS**
  The
        Company sponsors 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 up to the government maximum per year of their
        income through contributions to the Plan. The Plan matches 50% of the first
        5%
        in compensation deferred by each participating employee.
  The
        Company also sponsors additional employee savings plans, which cover the
        Company’s employees in certain of its subsidiaries acquired during fiscal years
        2008 and 2007. Similar to the Plan, these plans also conform to the provisions
        of Section 401(k) of the Internal Revenue Code, but have different terms
        and
        benefits. Typically, plans of acquired companies are terminated within
        approximately one year of the acquisitions, and subsequently the participants
        in
        these plans become participants in the Plan.
  During
        each of the three fiscal years ended June 30, 2008, the Company’s matching
        contributions to the Plan were approximately $1.9 million. The Company does
        not
        have any material obligations to past or present employees related to post
        employment benefits.
 
 **DEFINED
        BENEFIT PLAN**
  The
        Company’s Supplemental Executive Retirement Plan (“SERP Plan”) 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 Plan 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 SERP Plan is accounted for in
        accordance with SFAS 87, “Employers Accounting for Pensions”. The Board of
        Directors of the Company, in its sole discretion, selects the participants
        in
        the SERP Plan. The Board may remove participants, or modify benefit accrual
        levels for any participant who is not vested.
  Under
        the
        terms of the SERP Plan, participants who are vested (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. Participants
        become vested after completing eight years of service with the Company and:
        (i)
        the participant attains age 62 (provided the person is employed by the Company
        on his or her 62 nd birthday); or (ii) there is a change in control of the Company (which is
        defined
        in the SERP Plan to include, generally, the acquisition of 50% or more of
        the
        outstanding shares of common stock or the combined voting power of the
        securities of the Company entitled to vote generally in the election of
        directors, or a merger or similar business combination that results in people
        or
        entities holding at least 50% of the outstanding stock or voting power of
        the
        stock who did not hold such stock or interests before the transaction); or
        (iii)
        the participant dies before attaining age 62. The value of benefits under
        the
        SERP Plan 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. The annual benefit rates are as follows:
 
 Benefit
                  rate18%
              
              Participant’s
                  retirement between 62ndand 63rdbirthdayParticipant’s
                  death or change of control of the Company before 63rdbirthday21%
              
              Participant’s
                  retirement, death or change of control of the Company after 63rdbirthday but before 64thbirthday24%
              
              Participant’s
                  retirement, death or change of control of the Company after 64thbirthday but before 65thbirthday30%
              
              Participant’s
                  retirement, death or change of control of the Company after 65thbirthday
 
 During
        fiscal year 2008, there were 13 participants in the SERP Plan. As of June
        30,
        2008, the Board of Directors approved the removal of all participants that
        were
        not vested, and as a result, there were 3 participants in the SERP Plan as
        of
        June 30, 2008. As a result, during fiscal year 2008, the Company recorded
        a gain
        of approximately $1.7 million as a component of its periodic pension costs
        in
        the consolidated statement of operations related to the removal of all
        non-vested SERP participants. 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.
  65
  In
        September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans – an amendment of FASB
        Statements 87, 88, 106 and 132(R)” (“SFAS 158”). 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 Plan 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 Company adopted the recognition and disclosure
        provisions of SFAS 158 on June 30, 2007, and has included the effect of adoption
        in the accompanying consolidated financial statements. SFAS 158 did not have
        an
        effect on the Company’s consolidated financial condition at June 30, 2006 or
        operating results of fiscal year 2008, and will not affect the operating
        results
        of future periods. Due to the removal of non-vested participants as discussed
        above, the SERP Plan was fully funded as June 30, 2008.
 
 The
        following tables provide information regarding the change in pension benefit
        obligation, funded status, and accumulated benefit obligation of the SERP
        Plan:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Change
                  in Projected Benefit Obligation (“PBO”):PBO
                  at the beginning of year
              
              **$**
              **13,545**
              
              $
              7,019
              
              $
              7,060Service
                  cost
              
              
              **646**
              
              
              539
              
              
              377Interest
                  cost
              
              
              **869**
              
              
              673
              
              
              369Curtailment
                  gain
              
              
              **(10,435**
              **)**
              
              —
              
              
              —Actuarial
                  (gain) loss
              
              
              **(151**
              **)**
              
              5,314
              
              
              (787
              )Benefit
                  payments
              
              
              **(81**
              **)**
              
              —
              
              
              —PBO
                  at the end of year
              
              **$**
              **4,393**
              
              $
              13,545
              
              $
              7,019Fair
                  value of plan assets
              
              
              **N/A**
              
              
              N/A
              
              
              N/AFunded
                  Status of the Plan(Unfunded)
                  status of PBO
              
              **$**
              **(4,393**
              **)**
              $
              (13,545
              )
              $
              (7,019
              )Unrecognized
                  prior service cost(1)
              
              
              N/A
              
              
              N/A
              
              
              4,942Unrecognized
                  net actuarial (gain) losses(1)
              
              
              N/A
              
              
              N/A
              
              
              (148
              )Accrued
                  benefit cost(1)
              
              
              N/A
              
              
              N/A
              
              $
              (2,225
              )Accumulated
                  benefit obligation
              
              **$**
              **4,393**
              
              $
              6,835
              
              $
              4,709Amount
                  recognized in the consolidated balance sheet:Accrued
                  benefit liability(2)
              
              **$**
              **(4,393**
              **)**
              $
              (13,545
              )
              $
              (4,709
              )Intangible
                  asset(1)
              
              
              N/A
              
              
              N/A
              
              
              2,484Accrued
                  benefit cost
              
              **$**
              **(4,393**
              **)**
              $
              (13,545
              )
              $
              (2,225
              )Accumulated
                  other comprehensive loss:Net
                  unrecognized actuarial losses
              
              
              **N/A**
              
              $
              4,985
              
              
              N/AUnrecognized
                  prior service costs
              
              
              **N/A**
              
              
              4,594
              
              
              N/A**N/A**
              
              
              9,579
              
              
              N/ATax
                  benefit
              
              
              **N/A**
              
              
              (3,650
              )
              
              N/AAccumulated
                  other comprehensive loss, net of tax
              
              **$**
              **N/A**
              
              $
              5,929
              
              
              N/A
 
 (1)
        As a
        result of the adoption of SFAS 158 on June 30, 2007, these items are no longer
        applicable.
 (2)
        Accrued benefit liability is included in Other Non-Current Liabilities on
        the
        consolidated balance sheets, except for approximately $0.1 million and less
        than
        $0.1 million as of June 30, 2008 and 2007, respectively, included in Accrued
        Expenses and Other Current Liabilities.
  66
  The
        components of amounts recognized in other comprehensive loss for fiscal years
        ended June 30 were as follows:
  (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Prior
                  service cost (credit)
              
              **$**
              **(4,246**
              **)**
              $
              4,594
              
              
              **N/A**Net
                  actuarial loss (gain)
              
              
              **(4,685**
              **)**
              
              4,985
              
              
              **N/A**Amortization
                  of prior service cost
              
              
              **(348**
              **)**
              
              N/A
              
              
              **N/A**Amortization
                  of net loss
              
              
              **(300**
              **)**
              
              N/A
              
              
              **N/A****(9,579**
              **)**
              
              9,579
              
              
              **N/A**Tax
                  effect
              
              
              **3,650**
              
              
              (3,650
              )
              
              **N/A**Total
                  recognized in other comprehensive loss, net of tax
              
              **$**
              **(5,929**
              **)**
              $
              5,929
              
              
              **N/A**
 
 Assumptions
        used to measure benefit obligations at June 30 were as follows:
 
 **2008**
              
              **2007**
              
              **2006**Discount
                  rate(1)
              
              
              **6.00**
              **%**
              
              6.10
              %
              
              6.14
              %Expected
                  return on plan assets
              
              
              **—**
              
              
              —
              
              
              —Rate
                  of compensation increase(2)
              
              
              **N/A**
              
              
              9.00
              %
              
              5.00
              %
 
 (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 year 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 158**Intangible
                  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 loss, 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.
        These amounts will be subsequently recognized as net periodic pension cost.
        The
        actuarial gains and losses that arise in subsequent periods and are not
        recognized as a net periodic pension cost in the same periods will be recognized
        as a component of other comprehensive income and will be subsequently recognized
        as a component of net periodic pension cost on the same basis as the amount
        recognized in accumulated other comprehensive income at adoption of SFAS
        158.
  The
        components of net periodic pension cost and the assumptions used to determine
        net cost for the fiscal years ended June 30 are as follows:
 
 (in
                  thousands)
              
              **2008**
              
              **2007**
              
              **2006**Service
                  cost
              
              **$**
              **646**
              
              $
              539
              
              $
              377Interest
                  cost
              
              
              **870**
              
              
              673
              
              
              369Curtailment
                  gain(1)
              
              
              **(1,717**
              **)**
              
              —
              
              
              —Amortization
                  of prior service cost
              
              
              **648**
              
              
              529
              
              
              429Net
                  periodic pension cost
              
              **$**
              **447**
              
              $
              1,741
              
              $
              1,175Discount
                  rate
              
              
              **6.10**
              **%**
              
              6.14
              %
              
              4.96
              %Expected
                  return on plan assets
              
              
              **—**
              
              
              —
              
              
              —Rate
                  of compensation increase
              
              
              **9.00**
              **%**
              
              8.0
              %
              
              5.0
              %
 
 (1)
        Due
        to the removal of unvested SERP participants as of June 30,
        2008.
  67
  The
        total
        periodic pension costs for fiscal year 2009 consists of an interest cost
        of
        approximately $0.3 million.
  As
        of
        June 30, 2008, the projected benefit payments to be paid from the SERP Plan
        are
        as follows for the fiscal years ending June 30 (in thousands):
  2009
              
              $
              1012010
              
              
              1012011
              
              
              1012012
              
              
              7012013
              
              
              7012014 –
                  2018
              
              
              3,423
 
 **18.**
              **SEGMENT
                  INFORMATION:**
 
 SFAS
        No.
        131, “Disclosures about Segments of an Enterprise and Related Information,”
(“SFAS 131”) 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. As the products and services for
        all new
        business acquisitions are all similar to those of the Company, the new business
        acquisitions have been incorporated into the existing four operating segments
        based on their respective geographical locations, and operated and managed
        as a
        part of that operating segment.
  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.
  A
        summary
        of the Company’s reportable segments is as follows:
 **Fiscal Years Ended June 30,**(in
                    thousands)
                
                **2008**
                
                **2007**
                
                **2006**Revenues(1):United
                    States
                
                **$**
                **430,081**
                
                $
                379,272
                
                $
                365,642International
                
                
                **743,442**
                
                
                567,862
                
                
                433,256Intersegment
                    eliminations(2)
                
                
                **(219,339**
                **)**
                
                (161,407
                )
                
                (119,945
                )Total
                    revenues
                
                **$**
                **954,184**
                
                $
                785,727
                
                $
                678,953Income
                    before taxes, minority interests and equity innet
                    earnings of affiliates(1):United
                    States
                
                **$**
                **51,097**
                
                $
                43,186
                
                $
                26,719International
                
                
                **281,660**
                
                
                211,284
                
                
                165,263Intersegment
                    eliminations(2)
                
                
                **(178,418**
                **)**
                
                (132,816
                )
                
                (96,317
                )Total
                    income before taxes, minority interestsand
                    equity in net earnings of affiliates
                
                **$**
                **154,339**
                
                $
                121,654
                
                $
                95,665Capital
                    expenditures(3):United
                    States
                
                **$**
                **7,419**
                
                $
                5,481
                
                $
                7,256International
                
                
                **5,525**
                
                
                5,798
                
                
                3,484Total
                    capital expenditures
                
                **$**
                **12,944**
                
                $
                11,279
                
                $
                10,740Depreciation
                    and amortization(3):United
                    States
                
                **$**
                **7,582**
                
                $
                7,301
                
                $
                6,660International
                
                
                **7,561**
                
                
                5,420
                
                
                3,799Total
                    depreciation and amortization
                
                **$**
                **15,143**
                
                $
                12,721
                
                $
                10,459
  68


**As
                of June 30,**(in
                thousands)
            
            **2008**
            
            **2007**Identifiable
                assets (3):United
                States
            
            **$**
            **466,028**
            
            $
            443,331International
            
            
            **536,978**
            
            
            403,425Total
                identifiable assets
            
            **$**
            **1,003,006**
            
            $
            846,756Goodwill
                (3):United
                States
            
            **$**
            **95,888**
            
            $
            90,266International
            
            
            **63,834**
            
            
            48,066Total
                goodwill
            
            **$**
            **159,722**
            
            $
            138,332





(1)
            Amounts
                based on the location of the selling entity, and include export
                sales.


(2)
            Amounts
                primarily represent elimination of intercompany business in
                Ireland.


(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)
            
            **2008**
            
            **2007**
            
            **2006**United
                States
            
            **$**
            **416,458**
            
            $
            364,139
            
            $
            355,155International
            
            
            **537,726**
            
            
            421,588
            
            
            323,798**$**
            **954,184**
            
            $
            785,727
            
            $
            678,953





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)
            
            **2008**
            
            **2007**United
                States
            
            **$**
            **17,415**
            
            $
            16,809International
            
            
            **11,750**
            
            
            11,146**$**
            **29,165**
            
            $
            27,955





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.




69




**19.**
            **QUARTERLY
                FINANCIAL INFORMATION
                (UNAUDITED):**





Quarterly
      financial information for the fiscal years ended June 30, 2008 and 2007 is
      presented in the following tables (in thousands, except per share
      data):





**Fiscal
                Year 2008****1****st****Quarter**
            
            **2****nd****Quarter**
            
            **3****rd****Quarter**
            
            **4****th****Quarter**Revenue
            
            **$**
            **216,482**
            
            **$**
            **243,952**
            
            **$**
            **237,187**
            
            **$**
            **256,564**Gross
                margin
            
            **$**
            **113,242**
            
            **$**
            **126,562**
            
            **$**
            **124,259**
            
            **$**
            **137,138**Income
                from operations(1), (3)
            
            **$**
            **29,085**
            
            **$**
            **33,397**
            
            **$**
            **34,759**
            
            **$**
            **42,064**Net
                income(1)
            
            **$**
            **21,304**
            
            **$**
            **24,089**
            
            **$**
            **25,146**
            
            **$**
            **30,746**Income
                from operations per common share(1):Basic
            
            **$**
            **0.36**
            
            **$**
            **0.41**
            
            **$**
            **0.43**
            
            **$**
            **0.52**Diluted
            
            **$**
            **0.35**
            
            **$**
            **0.40**
            
            **$**
            **0.42**
            
            **$**
            **0.51**Earnings
                per common share(1), (2), (3):Basic
            
            **$**
            **0.26**
            
            **$**
            **0.29**
            
            **$**
            **0.31**
            
            **$**
            **0.38**Diluted
            
            **$**
            **0.25**
            
            **$**
            **0.29**
            
            **$**
            **0.30**
            
            **$**
            **0.37**Stock
                Prices (range of sales prices):High
            
            **$**
            **33.30**
            
            **$**
            **37.49**
            
            **$**
            **37.35**
            
            **$**
            **36.64**Low
            
            **$**
            **26.45**
            
            **$**
            **30.29**
            
            **$**
            **26.33**
            
            **$**
            **28.40**Fiscal
                Year 20071st
                Quarter
            
            
            2nd
                Quarter
            
            
            3rd
                Quarter
            
            
            4th
                QuarterRevenue
            
            $
            173,701
            
            $
            189,875
            
            $
            200,556
            
            $
            221,594Gross
                margin
            
            $
            88,669
            
            $
            98,854
            
            $
            105,015
            
            $
            118,973Income
                from operations(1)
            
            $
            20,649
            
            $
            25,096
            
            $
            27,214
            
            $
            37,629Net
                income(1)
            
            $
            15,111
            
            $
            18,018
            
            $
            19,450
            
            $
            27,410Income
                from operations per common share (1):Basic
            
            $
            0.26
            
            $
            0.32
            
            $
            0.34
            
            $
            0.46Diluted
            
            $
            0.25
            
            $
            0.30
            
            $
            0.33
            
            $
            0.45Earnings
                per common share(1):Basic
            
            $
            0.19
            
            $
            0.23
            
            $
            0.24
            
            $
            0.34Diluted
            
            $
            0.19
            
            $
            0.22
            
            $
            0.23
            
            $
            0.33Stock
                Prices (range of sales prices):High
            
            $
            25.63
            
            $
            26.79
            
            $
            28.85
            
            $
            28.38Low
            
            $
            18.04
            
            $
            24.05
            
            $
            25.40
            
            $
            25.13





(1)
            Fiscal
                years ended June 30, 2008 and 2007 include approximately $17.2 million
                ($13.1 million, net of tax, or $0.16 per share) and $14.0 million
                ($11.1
                million, net of tax, or $0.14 per share), respectively, in non-cash
                share-based compensation expenses. See Note 3, “Share-based
                Compensation.”


(2)
            Earnings
                available for shareholders for the fiscal years 2008 and 2007 have
                been
                reduced by $0.6 million and less than $0.1 million, respectively,
                for the
                impact of minority interest put arrangement as discussed in Note
                4,
                “Acquisitions.”


(3)
            Sum
                of quarterly amounts does not equal the sum of as reported amounts
                due to
                rounding differences.





**20.**
            **SUBSEQUENT
                EVENTS:**




On
      July
      9, 2008, the Board of Directors authorized the repurchase of up to 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.




On
      August
      9, 2008, the Company acquired all of the issued and outstanding stock of Fry,
      Inc. (“Fry”), an e-commerce design, development, and managed services provider.
      Fry was headquartered in Ann Arbor, Michigan, with offices in Chicago, New
      York,
      and San Francisco. The total purchase consideration for the stock in Fry is
      approximately $31.3 million, plus the assumption of approximately $18.4M in
      debt; further, the selling Fry shareholders are eligible to earn up to an
      additional $17 million in earn out payments over the 23 months following closing
      on the acquisition, based upon meeting specified financial targets.




70




**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
                period****Year
                ended June 30, 2008:****Allowance
                for doubtful accounts**
            
            **$**
            **23,110**
            
            **$**
            **7,135**
            
            **$**
            **4,066**(2
            )
            **$**
            **(2,169**
            **)**
            **$**
            **28,348****Reserve
                for inventory obsolescence**
            
            
            **9,893**
            
            
            **2,753**
            
            
            **2,116**(3
            )
            
            **949**
            
            
            **11,479****$**
            **33,003**
            
            **$**
            **9,888**
            
            **$**
            **6,182**
            
            **$**
            **(1,220**
            **)**
            **$**
            **39,827**Year
                ended June 30, 2007:Allowance
                for doubtful accounts
            
            $
            20,335
            
            $
            3,356
            
            $
            340(2
            )
            $
            (241
            )
            $
            23,110Reserve
                for inventory obsolescence
            
            
            9,938
            
            
            3,156
            
            
            2,399(3
            )
            
            (802
            )
            
            9,893$
            30,273
            
            $
            6,512
            
            $
            2,739
            
            $
            (1,043
            )
            $
            33,003Year
                ended June 30, 2006:Allowance
                for doubtful accounts
            
            $
            16,202
            
            $
            5,409
            
            $
            375(2
            )
            $
            (901
            )
            $
            20,335Reserve
                for inventory obsolescence
            
            
            7,352
            
            
            3,530
            
            
            802(3
            )
            
            (142
            )
            
            9,938$
            23,554
            
            $
            8,939
            
            $
            1,177
            
            $
            (1,043
            )
            $
            30,273





(1)
            Primarily
                related to foreign currency
                translation.


(2)
            Charge
                offs, net of recoveries.


(3)
            Material
                scrapped or otherwise disposed.




71




**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
                29, 2008
            By:
            /s/Gary
                C. KaufmanGary
                C. KaufmanExecutive
                Vice President, Finance and
              Administration/Chief
                Financial OfficerDate:
            August
                29, 2008
            By:
            /s/Cynthia
                A. RussoCynthia
                A. RussoSenior
                Vice President and
              Corporate
                Controller





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
                29, 2008A.
                  L. Giannopoulos
            
            Chief
                Executive Officer/s/Gary
                C. Kaufman
            
            Executive
                Vice President
            
            August
                29, 2008Gary
                  C. Kaufman
            
            Finance
                and AdministrationChief
                Financial Officer, andPrincipal
                Accounting Officer/s/Louis
                  M. Brown, Jr.
            
            
            
            August
                29, 2008Louis
                      M. Brown, Jr.
            
            Director
                andVice
                Chairman of the Board/s/B.
                Gary Dando
            
            
            
            August
                29, 2008B.
                  Gary Dando
            
            Director/s/John
                G. Puente
            
            
            
            August
                29, 2008John
                  G. Puente
            
            Director/s/Dwight
                S. Taylor
            
            
            
            August
                29, 2008Dwight
                  S. Taylor
            
            Director/s/William
                S. Watson
            
            
            
            August
                29, 2008William
                  S. Watson
            
            Director




72




**EXHIBIT
      INDEX**


3(i)
              Articles
                  of Incorporation, as amended, are 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 Form 8-K filed on October 17,
                  2007.10(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 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, 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 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 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(c)*
              Consulting
                  Agreement dated June 30, 1995 between MICROS Systems, Inc. and
                  Louis M.
                  Brown, Jr. 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,
                  1995.10(c)(1)*
              First
                  Amendment to Consulting Agreement dated February 1, 1999 between
                  MICROS
                  Systems, Inc. and Louis M. Brown, Jr. 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 Consulting Agreement dated April 26, 2001 between
                  MICROS
                  Systems, Inc. and Louis M. Brown, Jr. 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, 2001.10(c)(3)*
              Third
                  Amendment to Consulting Agreement dated September 4, 2003 between
                  MICROS
                  Systems, Inc. and Louis M. Brown, Jr. 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, 2003.10(c)(4)*
              Fourth
                  Amendment to Consulting Agreement dated June 12, 2007 between MICROS
                  Systems, Inc. and Louis M. Brown, Jr. is incorporated herein by
                  reference
                  to Exhibit 10 to the Current Report on Form 8-K filed on June 12,
                  2007.10(d)*
              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,
                  1997.10(d)(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.
  73
  10(d)(2)*
              Second
                  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 Current Report on Form 8-K filed on November
                  17,
                  2006.10(e)*
              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(e)(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(e)(2)*
              Second
                  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 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(f)*
              Restated
                  Supplemental Executive Retirement Plan, as approved by the Board
                  of
                  Directors onApril
                  27, 2005, 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
                  period
                  ended June 30, 2005.10(g)(1)
              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,
                  2005.14
              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
              Consent
                  of Independent Registered Public Accounting Firm (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 (furnished
                  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 (furnished
                  herewith)





*  Management
      contract or compensatory plan or arrangement.




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