UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
 For the quarterly period ended March 31,September 30, 2018
OR
  
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from ______________ to ________________
Commission file number 0-14112

JACK HENRY & ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware 43-1128385
(State or Other Jurisdiction of Incorporation) (I.R.S Employer Identification No.)

663 Highway 60, P.O. Box 807, Monett, MO 65708
(Address of Principle Executive Offices)
(Zip Code)

417-235-6652
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ]  No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [ X ]  No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” ”accelerated filer,” “smaller reporting company,” and "emerging growth companycompany" in Rule 12b-2 of the Exchange Act.
Large accelerated filer[X]Accelerated filer[ ]
    
Non-accelerated filer[  ](Do not check if a smaller reporting company)
Smaller reporting company[ ]
    
Emerging growth company[ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  
Yes [  ] No [ X ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of April 30,November 2, 2018, the Registrant had 77,294,55777,298,318 shares of Common Stock outstanding ($0.01 par value).

TABLE OF CONTENTS
  Page Reference
   
PART IFINANCIAL INFORMATION 
   
ITEM 1.Condensed Consolidated Balance Sheets as of March 31,September 30, 2018 and June 30, 20172018 (Unaudited)
   
 Condensed Consolidated Statements of Income for the Three and Nine Months Ended March 31,September 30, 2018 and 2017 (Unaudited)
   
 Condensed Consolidated Statements of Cash Flows for the NineThree Months Ended March 31,September 30, 2018 and 2017 (Unaudited)
   
 Notes to Condensed Consolidated Financial Statements (Unaudited)
   
ITEM 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
   
ITEM 3.Quantitative and Qualitative Disclosures about Market Risk
   
ITEM 4.Controls and Procedures
   
PART IIOTHER INFORMATION
   
ITEM1.Legal Proceedings
   
ITEM 2.Unregistered Sales Of Equity Securities And Use Of Proceeds
   
ITEM 6.Exhibits
   
 Signatures
   

In this report, all references to “JHA”, the “Company”, “we”, “us”, and “our”, refer to Jack Henry & Associates, Inc., and its wholly owned subsidiaries.
FORWARD LOOKING STATEMENTS
Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this report, including without limitation, in Management's Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements are identified at “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2017.2018. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.


PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands, Except Share and Per Share Data)(Unaudited)
September 30,
2018
 June 30,
2018
March 31,
2018
 June 30,
2017
  *As Adjusted
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents$57,402
 $114,765
$114,872
 $31,440
Receivables, net168,934
 276,923
198,564
 297,271
Income tax receivable13,381
 20,135
4,142
 21,671
Prepaid expenses and other76,306
 66,894
102,425
 96,141
Deferred costs46,007
 41,314
37,836
 27,069
Total current assets362,030
 520,031
457,839
 473,592
PROPERTY AND EQUIPMENT, net261,220
 282,934
286,497
 286,850
OTHER ASSETS:      
Non-current deferred costs93,734
 96,847
77,539
 74,865
Computer software, net of amortization284,083
 247,317
294,836
 288,172
Other non-current assets99,891
 82,525
119,500
 110,299
Customer relationships, net of amortization115,760
 90,433
110,812
 115,034
Other intangible assets, net of amortization36,405
 36,393
36,150
 38,467
Goodwill652,245
 552,465
649,929
 649,929
Total other assets1,282,118
 1,105,980
1,288,766
 1,276,766
Total assets$1,905,368
 $1,908,945
$2,033,102
 $2,037,208
LIABILITIES AND STOCKHOLDERS' EQUITY      
CURRENT LIABILITIES:      
Accounts payable$7,332
 $6,841
$10,477
 $34,510
Accrued expenses82,790
 81,574
113,074
 88,764
Deferred revenues199,116
 382,777
296,675
 352,431
Total current liabilities289,238
 471,192
420,226
 475,705
LONG-TERM LIABILITIES:      
Non-current deferred revenues106,420
 128,607
21,089
 17,484
Non-current deferred income tax liability169,324
 219,541
209,033
 208,303
Debt, net of current maturities105,000
 50,000
Other long-term liabilities12,301
 7,554
14,190
 12,872
Total long-term liabilities393,045
 405,702
244,312
 238,659
Total liabilities682,283
 876,894
664,538
 714,364
STOCKHOLDERS' EQUITY      
Preferred stock - $1 par value; 500,000 shares authorized, none issued
 

 
Common stock - $0.01 par value; 250,000,000 shares authorized;
103,249,409 shares issued at March 31, 2018;
103,083,299 shares issued at June 30, 2017
1,032
 1,031
Common stock - $0.01 par value; 250,000,000 shares authorized;
103,398,501 shares issued at September 30, 2018;
103,278,562 shares issued at June 30, 2018
1,034
 1,033
Additional paid-in capital458,116
 452,016
454,869
 464,138
Retained earnings1,800,229
 1,585,278
1,967,921
 1,912,933
Less treasury stock at cost
25,961,920 shares at March 31, 2018;
25,660,212 shares at June 30, 2017;
(1,036,292) (1,006,274)
Less treasury stock at cost
26,107,903 shares at September 30, 2018;
26,107,903 shares at June 30, 2018
(1,055,260) (1,055,260)
Total stockholders' equity1,223,085
 1,032,051
1,368,564
 1,322,844
Total liabilities and equity$1,905,368
 $1,908,945
$2,033,102
 $2,037,208
See notes to condensed consolidated financial statements
*Refer to Note 2 for the impact to previously presented financial statements as a result of the adoption of ASC 606

    
JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF INCOME(In Thousands, Except Per Share Data)(Unaudited)
Three Months Ended
Three Months Ended Nine Months EndedSeptember 30,
March 31, March 31,2018 2017
2018 2017 2018 2017  *As Adjusted
REVENUE$384,684
 $353,767
 $1,119,374
 $1,047,349
$392,543
 $361,284
          
EXPENSES          
Cost of Revenue221,592
 206,727
 637,960
 599,636
220,112
 203,915
Research and Development22,591
 20,801
 65,934
 61,413
24,026
 20,929
Selling, General, and Administrative44,185
 39,794
 133,532
 119,795
45,183
 41,088
Gain on Disposal of a Business
 (2,286) (1,894) (2,250)
 (1,705)
Total Expenses288,368
 265,036
 835,532
 778,594
289,321
 264,227
          
OPERATING INCOME96,316
 88,731
 283,842
 268,755
103,222
 97,057
          
INTEREST INCOME (EXPENSE)          
Interest Income130
 42
 424
 209
291
 147
Interest Expense(734) (278) (1,173) (604)(147) (189)
Total Interest Income (Expense)(604) (236) (749) (395)144
 (42)
          
INCOME BEFORE INCOME TAXES95,712
 88,495
 283,093
 268,360
103,366
 97,015
          
PROVISION/ (BENEFIT) FOR INCOME TAXES23,317
 28,451
 (8,287) 87,258
19,815
 30,145
          
NET INCOME$72,395
 $60,044
 $291,380
 $181,102
$83,551
 $66,870
          
Basic earnings per share$0.94
 $0.77
 $3.77
 $2.32
$1.08
 $0.87
Basic weighted average shares outstanding77,247
 77,597
 77,249
 77,941
77,188
 77,283
          
Diluted earnings per share$0.93
 $0.77
 $3.76
 $2.31
$1.08
 $0.86
Diluted weighted average shares outstanding77,546
 77,932
 77,586
 78,319
77,537
 77,646

See notes to condensed consolidated financial statements
*Refer to Note 2 for the impact to previously presented financial statements as a result of the adoption of ASC 606

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands)(Unaudited)
Three Months Ended
Nine Months EndedSeptember 30,
March 31,2018 2017
2018 2017  *As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net Income$291,380
 $181,102
$83,551
 $66,870
Adjustments to reconcile net income from operations
to net cash from operating activities:
      
Depreciation36,470
 37,554
10,903
 12,419
Amortization75,787
 66,882
27,827
 23,856
Change in deferred income taxes(70,104) 14,830
730
 3,390
Expense for stock-based compensation7,834
 7,362
1,771
 1,513
(Gain)/loss on disposal of assets and businesses(1,673) 1,442
30
 (1,620)
Changes in operating assets and liabilities:      
Change in receivables 113,465
 114,420
98,708
 101,933
Change in prepaid expenses, deferred costs and other(17,332) (22,153)(28,926) (18,069)
Change in accounts payable(432) (9,388)(9,932) 2,000
Change in accrued expenses(6,971) (16,103)(4,278) (6,107)
Change in income taxes12,806
 5,228
18,501
 25,446
Change in deferred revenues(206,358) (182,309)(52,151) (72,909)
Net cash from operating activities234,872
 198,867
146,734
 138,722
      
CASH FLOWS FROM INVESTING ACTIVITIES:      
Payment for acquisitions, net of cash acquired(137,654) 

 (10,455)
Capital expenditures(17,858) (28,150)(24,001) (3,708)
Proceeds from the sale of businesses350
 2,286

 200
Proceeds from the sale of assets258
 949
33
 106
Internal use software(6,965) (14,780)(1,626) (3,452)
Computer software developed(72,186) (63,804)(26,669) (22,976)
Purchase of investments(5,000) 
Net cash from investing activities(239,055) (103,499)(52,263) (40,285)
      
CASH FLOWS FROM FINANCING ACTIVITIES:      
Borrowings on credit facilities125,000
 80,000
Repayments on credit facilities(70,000) (30,200)
 (50,000)
Purchase of treasury stock(30,018) (103,885)
 (30,018)
Dividends paid(76,429) (67,641)
 (23,904)
Proceeds from issuance of common stock upon exercise of stock options176
 1
1
 1
Tax withholding payments related to share based compensation(7,279) (5,443)(13,257) (7,033)
Proceeds from sale of common stock5,370
 4,406
2,217
 1,792
Net cash from financing activities(53,180) (122,762)(11,039) (109,162)
NET CHANGE IN CASH AND CASH EQUIVALENTS$(57,363) $(27,394)$83,432
 $(10,725)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD$114,765
 $70,310
$31,440
 $114,765
CASH AND CASH EQUIVALENTS, END OF PERIOD$57,402
 $42,916
$114,872
 $104,040

See notes to condensed consolidated financial statements
*Refer to Note 2 for the impact to previously presented financial statements as a result of the adoption of ASC 606

JACK HENRY & ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands, Except Per Share Amounts)
(Unaudited)

NOTE 1.NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of the Company
Jack Henry & Associates, Inc. and subsidiaries (“JHA” or the “Company”) is a provider of integrated computer systems and services that has developed and acquired a number of banking and credit union software systems. The Company's revenues are predominately earned by marketing those systems to financial institutions nationwide together with computer equipment (hardware), by providing the conversion and implementation services for financial institutions to utilize JHA systems, and by providing other related services. JHA also provides continuing support and services to customers using in-house or outsourced systems.
Consolidation
The condensed consolidated financial statements include the accounts of JHA and all of its subsidiaries, which are wholly-owned, and all intercompany accounts and transactions have been eliminated.
Comprehensive Income
Comprehensive income for the three and nine months ended March 31,September 30, 2018 and 2017 equals the Company’s net income.
Prior Period Reclassification
During the first quarter of fiscal 2018,The prior year periods have been recast to reflect the Company's management decidedretrospective adoption of Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers, and related amendments, collectively referred to changeas Accounting Standards Codification ("ASC") 606.
Revenue Recognition
The Company generates revenue from data processing, transaction processing, software licensing and related services, professional services, and hardware sales.
Significant Judgments in Application of the presentationGuidance
Identification of Performance Obligations
The Company enters into contracts with customers that may include multiple types of goods and services. At contract inception, the Company assesses the solutions and services promised in its income statement,contracts with customers and identifies a performance obligation for each promise to transfer to the customer a solution or service (or bundle of solutions or services) that is distinct - that is, if the solution or service is separately identifiable from other items in the arrangement and if the customer can benefit from the solution or service on its own or together with other resources that are readily available. The Company recognizes revenue when or as it satisfies each performance obligation by transferring control of a solution or service to the customer.
Determination of Transaction Price
The amount of revenue recognized is based on the consideration the Company expects to receive in exchange for transferring goods and services to the customer. The Company’s contracts with its customers frequently contain some component of variable consideration. The Company estimates variable consideration in its contracts primarily using the expected value method, based on both historical and current information. Where appropriate, the Company may constrain the estimated variable consideration included in the transaction price in the event of a high degree of uncertainty as to the final consideration amount.
Taxes collected from customers and remitted to governmental authorities are not included in revenue. The Company includes reimbursements from customers for expenses incurred in providing services (such as for postage, travel and telecommunications costs) in revenue, while the related costs are included in cost of revenue.
Technology or service components from third parties are frequently included in or combined with the Company’s applications or service offerings. Whether the Company recognizes revenue based on the gross amount billed to the customer or the net amount retained involves judgment in determining whether the Company controls the good or service before it is transferred to the customer. This assessment is made at the performance obligation level.

Allocation of Transaction Price
The transaction price, once determined, is allocated between the various performance obligations in the contract based upon their relative standalone selling prices. The standalone selling prices are determined based on the prices at which the Company separately sells each good or service. For items that are not sold separately, the Company estimates the standalone selling prices using all information that is reasonably available, including reference to historical pricing data.
The following describes the nature of the Company’s primary types of revenue:
Processing
Processing revenue is generated from transaction-based fees for electronic deposit and payment services, electronic funds transfers and debit and credit card processing. The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis by processing an unspecified number of transactions over the contractual term. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Customers are typically billed monthly for transactions processed during the month. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, we determine a material right does exist, we assign value to the material right based upon standalone selling price.
Outsourcing and Cloud
Outsourcing and cloud revenue is generated from data and item processing services and hosting fees.The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services), and pricing may include tiered pricing structures. Amounts of revenue allocated to these services are recognized as those services are performed. Data and item processing services are typically billed monthly. The Company evaluates tiered pricing to determine if a material right exists. If, after that evaluation, we determine a material right does exist, we assign value to the material right based upon standalone selling price.
Product Delivery and Services
Product delivery and services revenue is generated primarily from software licensing and related professional services and hardware delivery. Software licenses, along with any professional services from which they are not considered distinct, are recognized as they are delivered to the customer. Hardware revenue is recognized upon delivery. Professional services that are distinct are recognized as the services are performed. Deconversion fees are also included within Product delivery and services, and are considered a changecontract modification. Therefore, the Company recognizes these fees over the remaining modified contract term.
In-House Support
In-house support revenue is generated from software maintenance for ongoing client support and software usage, which includes a license and ongoing client support. The Company’s arrangements for these services typically require the Company to “stand-ready” to provide specific services on a when and if needed basis. The fees for these services may be fixed or variable (based upon performing an unspecified quantity of services). Software maintenance fees are typically billed to the customer annually in advance and recognized ratably over the segment structure (see Note 10),maintenance term. Software usage is typically billed annually in order to more clearly alignadvance, with the way management manageslicense delivered and recognized at the outset, and the maintenance fee recognized ratably over the maintenance term. Accordingly, the Company utilizes the practical expedient which allows entities to disregard the effects of a financing component when the contract period is one year or less.

Disaggregation of Revenue
The tables below present the Company's revenue disaggregated by type of revenue. Refer to Note 9, Reportable Segment Information, for disaggregated revenue by type and evaluates performance. Amountsreportable segment. The majority of the Company’s revenue is earned domestically, with revenue from customers outside the United States comprising less than 1% of total revenue.
 Three Months Ended September 30,
 2018 2017
Processing145,975
 134,532
    
Outsourcing & Cloud97,359
 85,134
Product Delivery & Services57,964
 59,070
In-House Support91,245
 82,548
Services & Support246,568
 226,752
    
Total Revenue392,543
 361,284
Contract Balances
The following table provides information about contract assets and contract liabilities from contracts with customers.
 September 30,
2018
 June 30,
2018
Receivables, net198,564
 297,271
Contract Assets- Current16,484
 14,063
Contract Assets- Non-current41,765
 35,630
Contract Liabilities (Deferred Revenue)- Current296,675
 352,431
Contract Liabilities (Deferred Revenue)- Non-current21,089
 17,484
Contract assets primarily result from revenue being recognized when or as control of a solution or service is transferred to the customer, but where invoicing is contingent upon the completion of other performance obligations or contract milestones. The current portion of contract assets is reported within prepaid expenses and other in the condensed consolidated statementsbalance sheet, and the non-current portion is included in other non-current assets. Contract Liabilities (deferred revenue) primarily relate to consideration received from customers in advance of incomedelivery of the related goods and services to the customer. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.
The Company analyzes contract language to identify if a significant financing component does exists, and would adjust the transaction price for any material effects of the time value of money if the timing of payments provides either party to the contract with a significant benefit of financing the transaction.
During the three months ended September 30, 2018 and 2017, the Company recognized revenue of $88,121 and $93,167, respectively, that was included in the corresponding deferred revenue balance at the beginning of the periods.
Amounts recognized related to performance obligations satisfied (or partially satisfied) in prior periods were immaterial for each period presented. These adjustments are primarily the result of transaction price re-allocations due to changes in estimates of variable consideration.
Transaction Price Allocated to Remaining Performance Obligations
As of September 30, 2018, estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period totaled $3,783,844. The Company expects to recognize approximately 30% over the next 12 months, 20% in 13-24 months, and the balance thereafter.

Contract Costs
The Company incurs incremental costs to obtain a contract as well as costs to fulfill contracts with customers that are expected to be recovered. These costs consist primarily of sales commissions incurred only if a contract is obtained and customer conversion or implementation related costs. Capitalized costs totaled $200,870 and $181,032, at September 30, 2018 and June 30, 2018, respectively.
Capitalized costs are amortized based on the transfer of goods or services to which the asset relates, in line with the percentage of revenue recognized for each performance obligation to which the costs are allocated. For the three months ended September 30, 2018 and 2017, amortization of deferred contract costs was $26,821 and $22,508, respectively. There were no impairment losses in relation to capitalized costs for the three and nine months ended March 31, 2017 have been reclassified to improve comparability with the three and nine months ended March 31, 2018. Revenue was previously classified as license, support and service, and hardware, and has been reclassified into one "Revenue" caption. Cost of sales was previously presented under three captions to correspond with our three lines of revenue, and has now been condensed to one caption, "Cost of Revenue". We have elected to include all operating expenses, including cost of revenue, under one expenses heading. Previously, cost of revenue was presented separately from operating expenses in order to show gross profit. Gross profit has been removed from our current presentation due to management's focus on operating income. Additionally, within operating expenses, selling and marketing expense and general and administrative expense were previously presented under two captions, but are now condensed under one caption, labeled "Selling, General, and Administrative."
The condensed consolidated statement of income within our Form 10-Q filed for the third quarter of fiscal 2017 did not include the "Gain on Disposal of a Business" caption. The amounts shown on that line were previously included within general and administrative expense.periods presented.
Property and Equipment
Property and equipment is stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets.  Accumulated depreciation at March 31,September 30, 2018 totaled $373,116$372,059 and at June 30, 20172018 totaled $345,014.$364,153.
Intangible Assets
Intangible assets consist of goodwill, customer relationships, computer software, and trade names acquired in business acquisitions in addition to internally developed computer software. The amounts are amortized, with the exception of those intangible assets with an indefinite life (such as goodwill), over an estimated economic benefit period, generally three to twenty years.  Accumulated amortization of intangible assets totaled $578,771$630,161 and $503,653$602,479 at March 31,September 30, 2018 and June 30, 2017,2018, respectively.
Purchase of Investment
In the third quarter of fiscal 2018, the Company made an investment totaling $5,000 for the purchase of preferred stock of Automated Bookkeeping, Inc ("Autobooks"), representing a non-controlling share of the voting equity of Autobooks as of that date. This investment was recorded at cost and is included within other non-current assets on our balance sheet. The fair value of this investment has not been estimated, as estimation is not practicable. There have been no events or changes in circumstances that would indicate an impairment. Fair value will not be estimated unless there

are identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.
Common Stock
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line-of-credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At March 31,September 30, 2018, there were 25,96226,108 shares in treasury stock and the Company had the remaining authority to repurchase up to 4,0293,883 additional shares. The total cost of treasury shares at March 31,September 30, 2018 is $1,036,292.$1,055,260. During the first ninethree months of fiscal 2018,2019, the Company repurchased 302no treasury shares for $30,018.shares. At June 30, 2017,2018, there were 25,66026,108 shares in treasury stock and the Company had authority to repurchase up to 4,3303,883 additional shares.
Dividends declared per share were $0.37 and $0.31, for the three months ended March 31, 2018 and 2017, respectively, and totaled $0.99 and $0.87 for the nine months ended March 31,September 30, 2018 and 2017, respectively.
The dividend declared during the first quarter of fiscal 2019 was paid on October 2, 2018, therefore is not reported as a cash outflow for the period ended September 30, 2018. The payment totaled $28,563.
Interim Financial Statements
The accompanying condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States of America applicable to interim condensed consolidated financial statements, and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes, which are included in its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended June 30, 2017.2018. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the fiscal year ended June 30, 2017.2018, with updates to certain policies included in this Note 1.
In the opinion of the management of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary (consisting of normal recurring adjustments) to state fairly the financial position of the Company as of March 31,September 30, 2018, the results of its operations for the three and nine months ending March 31,September 30, 2018 and 2017, and its cash flows for the ninethree months ending March 31,September 30, 2018 and 2017. The condensed consolidated balance sheet at June 30, 20172018 was derived from audited annual financial statements, but does not contain all of the footnote disclosures from the annual financial statements.
The results of operations for the three and nine months ended March 31,September 30, 2018 are not necessarily indicative of the results to be expected for the entire year.

NOTE 2: RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Guidance
The Financial Accounting Standards Board ("FASB"(“FASB”) issued Accounting Standards Update ("ASU")ASU No. 2014-09, Revenue from Contracts with Customers, in May 2014. This standard (and related amendments collectively referred to as “ASC 606”) is part of an effort to create a common revenue standard for U.S. generally accepted accounting principles ("(“U.S. GAAP"GAAP”) and International Financial Reporting Standards ("IFRS"(“IFRS”). The new standard will supersedehas superseded much of the existing authoritative literature for revenue recognition. The new model enacts a five-step process for achieving the core principle, which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB also issued ASU No. 2015-14 which deferred the effective date of the newThe standard by one year, but allows early application as of the original effective date. We do not intend to adopt the provisions of the new standard early, so the standard and related amendments will bewas effective for the Company for its annual reporting period beginningon July 1, 2018, including interim periods within that reporting period. In March 2016, the FASB issued ASU No. 2016-08, which addresses principal versus agent considerations under the new revenue standard. Additional updates, including ASU No. 2016-10, ASU No. 2016-12, and ASU No. 2016-20, also address specific aspects of the new standard and are being considered.2018. Entities are allowed to transition to the new standard by either recasting prior periods (full retrospective) or recognizing the cumulative effect as of the beginning of the period of adoption (modified retrospective).
The Company has takenadopted the following steps in evaluating and planning for the implementation of the new standard:
Organization of a cross-functional implementation team whose goals are to: assess the impact of the guidance on each of our revenue streams by applying the five step model; determine new processes and procedures necessary to ensure proper revenue and cost recognition; quantify the effects of the new standard on prior and current year revenue; determine opening balances for deferred revenues and costs as of the beginning of fiscal 2017; develop disclosures required upon the adoption of the new standard; and develop new internal controls to ensure compliance with the new standard.

Continued implementation and testing of new revenue recognition software that will apply the five-step model to each of our customer contracts.
Continued comparisons of revenue recognition under current accounting methods versus under Accounting Standards Codification ("ASC") Topic 606 for each of our revenue streams.
Determinations that have been made regarding the effect of the new standard are as follows:
We expect the adoption of this standard to have a significant impact on our revenue recognition currently subject to ASC Topic 985. One of the most significant expected impacts relates to the recognition of license and implementation revenue on our multi-element arrangements. Under the current standard, license and implementation revenue on these arrangements is often recognized over the maintenance period of the software due to a lack of vendor-specific objective evidence of fair value ("VSOE") for these elements. Under ASC Topic 606, revenue for license and implementation will no longer be deferred due solely to a lack of VSOE.
This new model will require more use of judgments and estimates than the current standard, including identifying performance obligations, estimating variable consideration, allocating the transaction price to each performance obligation based on stand-alone selling price, and allocating commissions to the proper performance obligations so that costs are correctly recognized in line with revenue. We will be required to estimate the total expected value of variable consideration, arising from items such as maintenance and transaction or item processing, at contract inception and include those estimates in the total transaction price of the contract to be allocated to each performance obligation. These estimates will be modified over the term of the contract, resulting in re-allocations of the transaction price and adjustments to revenue recognized on the contract.
Significant implementation matters still being addressed include:
Which transition approach will be applied. While we plan to adopt the standard using the full retrospective method,transition approach, using certain practical expedients. The Company has not disclosed the amount of transaction price allocated to remaining performance obligations for reporting periods presented before the date of initial application. Also, the Company did not separately consider the effects of contract modifications that occurred before the beginning of the earliest reporting period presented, but reflects the aggregate effect of all modifications that occurred before the beginning of the earliest period presented. As a result, all fiscal 2018 financial information has been adjusted for the effects of applying ASC 606. The details of the significant changes are disclosed below:
Software Revenue Recognition
The Company previously recognized software license and related services within the scope of ASC Topic 985-605, which required the establishment of vendor-specific objective evidence (“VSOE”) of fair value in order to separately recognize revenue for each software-related good or service. Due to the inability to establish VSOE, the Company had previously deferred all revenue on software-related goods and services on a master contract until all the goods and services had been delivered. Under ASC 606, VSOE is no longer required for separation of otherwise distinct performance obligations within a revenue arrangement. This change has resulted in earlier recognition of revenue for the Company’s software-related goods and services, leading to a decrease in deferred revenue balances within our ability to useadjusted condensed consolidated balance sheets.
Impacts on Financial Statements
The following tables summarize the impacts of ASC 606 adoption on the Company’s Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheet as of June 30, 2018:
 As Previously ReportedAdjustmentsAs Adjusted
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$31,440
$
$31,440
Receivables, net291,630
5,641
297,271
Income tax receivable21,671

21,671
Prepaid expenses and other84,810
11,331
96,141
Deferred costs38,985
(11,916)27,069
Total current assets468,536
5,056
473,592
PROPERTY AND EQUIPMENT, net286,850

286,850
OTHER ASSETS:   
Non-current deferred costs95,540
(20,675)74,865
Computer software, net of amortization288,172

288,172
Other non-current assets107,775
2,524
110,299
Customer relationships, net of amortization115,034

115,034
Other intangible assets, net of amortization38,467

38,467
Goodwill649,929

649,929
Total other assets1,294,917
(18,151)1,276,766
Total assets$2,050,303
$(13,095)$2,037,208
LIABILITIES AND STOCKHOLDERS' EQUITY   
CURRENT LIABILITIES:   
Accounts payable$34,510
$
$34,510
Accrued expenses97,848
(9,084)88,764
Deferred revenues355,538
(3,107)352,431
Total current liabilities487,896
(12,191)475,705
LONG-TERM LIABILITIES:   
Non-current deferred revenues93,094
(75,610)17,484
Non-current deferred income tax liability189,613
18,690
208,303
Other long-term liabilities12,872

12,872
Total long-term liabilities295,579
(56,920)238,659
Total liabilities783,475
(69,111)714,364
STOCKHOLDERS' EQUITY   
Preferred stock - $1 par value; 500,000 shares authorized, none issued


Common stock - $0.01 par value; 250,000,000 shares authorized;
103,278,562 shares issued at June 30, 2018
1,033

1,033
Additional paid-in capital464,138

464,138
Retained earnings1,856,917
56,016
1,912,933
Less treasury stock at cost
26,107,903 shares at June 30, 2018
(1,055,260)
(1,055,260)
Total stockholders' equity1,266,828
56,016
1,322,844
Total liabilities and equity$2,050,303
$(13,095)$2,037,208


Condensed Consolidated Statement of Income for the three months ended September 30, 2017:
 Three Months Ended September 30, 2017
 As Previously ReportedAdjustmentsAs Adjusted
REVENUE$359,934
$1,350
$361,284
    
EXPENSES   
Cost of Revenue204,715
(800)203,915
Research and Development20,929

20,929
Selling, General, and Administrative43,733
(2,645)41,088
Gain on Disposal of a Business(1,705)
(1,705)
Total Expenses267,672
(3,445)264,227
    
OPERATING INCOME92,262
4,795
97,057
    
INTEREST INCOME (EXPENSE)   
Interest Income147

147
Interest Expense(189)
(189)
Total Interest Income (Expense)(42)
(42)
    
INCOME BEFORE INCOME TAXES92,220
4,795
97,015
    
PROVISION/ (BENEFIT) FOR INCOME TAXES28,809
1,336
30,145
    
NET INCOME$63,411
$3,459
$66,870
    
Basic earnings per share$0.82
 $0.87
Basic weighted average shares outstanding77,283
 77,283
    
Diluted earnings per share$0.82
 $0.86
Diluted weighted average shares outstanding77,646
 77,646


Condensed Consolidated Statement of Cash Flows for the three months ended September 30, 2017:
 Three Months Ended September 30, 2017
 As Previously ReportedAdjustmentsAs Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net Income$63,411
$3,459
$66,870
Adjustments to reconcile net income from operations
     to net cash from operating activities:
   
Depreciation12,419

12,419
Amortization23,856

23,856
Change in deferred income taxes1,359
2,031
3,390
Expense for stock-based compensation1,513

1,513
(Gain)/loss on disposal of assets and businesses(1,620)
(1,620)
Changes in operating assets and liabilities:   
Change in receivables  105,243
(3,310)101,933
Change in prepaid expenses, deferred costs and other(13,645)(4,424)(18,069)
Change in accounts payable2,000

2,000
Change in accrued expenses(9,881)3,774
(6,107)
Change in income taxes26,141
(695)25,446
Change in deferred revenues(72,074)(835)(72,909)
Net cash from operating activities138,722

138,722
    
CASH FLOWS FROM INVESTING ACTIVITIES:   
Payment for acquisitions, net of cash acquired(10,455)
(10,455)
Capital expenditures(3,708)
(3,708)
Proceeds from the sale of businesses200

200
Proceeds from the sale of assets106

106
Internal use software(3,452)
(3,452)
Computer software developed(22,976)
(22,976)
Net cash from investing activities(40,285)
(40,285)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
Repayments on credit facilities(50,000)
(50,000)
Purchase of treasury stock(30,018)
(30,018)
Dividends paid(23,904)
(23,904)
Proceeds from issuance of common stock upon exercise of stock options1

1
Tax withholding payments related to share based compensation(7,033)
(7,033)
Proceeds from sale of common stock1,792

1,792
Net cash from financing activities(109,162)
(109,162)
NET CHANGE IN CASH AND CASH EQUIVALENTS$(10,725)$
$(10,725)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD$114,765
$
$114,765
CASH AND CASH EQUIVALENTS, END OF PERIOD$104,040
$
$104,040
ASU 2016-15 issued by the FASB in August 2016 clarifies cash flow classification of eight specific cash flow issues and is effective for our annual reporting period beginning July 1, 2018. The adoption of this method dependsstandard did not have any impact on system readiness, including software procured from third-party providers, and the completion of our analysis of information necessary to restate prior period consolidated financial statements.
Determination of opening balances for deferred revenues and costs, and the quantitative effect of the new standard on prior and current year revenues and costs. Our analysis of the quantitative effects of the new standard on fiscal years 2017 and 2018 will continue at least through the filing of our fiscal 2018 Form 10-K.
Development of required disclosures under the new standard.
Updates to our internal controls surrounding the new system and processes.
Assessment of the impacts of the new standard on deferred income taxes and provision for income taxes.Not Yet Adopted
The FASB issued ASU No. 2016-02, Leases, in February 2016. This ASU aims to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and requiring disclosure of key information regarding leasing arrangements. Specifically, the standard requires operating lease commitments to be recorded on the balance sheet as operating lease liabilities and right-of-use assets, and the cost of those operating leases to be amortized on a straight-line basis. ASU No. 2016-02 will be effective for JHA's annual reporting period beginning July 1, 2019 and early adoption is permitted. At transition, a modified retrospective approach must be utilized to measure leases as of the beginning of the earliest period presented, however, the FASB has provided certain practical expedients, which the Company is currently evaluating. The Company is currently assessing the impact this new standard will have on our consolidated financial statements and when we will adopt it.
ASU 2016-15 issued byIn August of 2018, the FASB issued ASU No. 2018-15, Intangibles, Goodwill and Other - Internal-Use Software (Subtopic 350-40), which broadens the scope of Subtopic 350-40 to include costs incurred to implement a hosting arrangement that is a service contract. The costs are capitalized or expensed depending on the nature of the costs and the project stage during which they are incurred, consistent with costs for internal-use software. The amendments in August 2016 clarifies cash flow classificationthis update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of eight specific cash flow issues and isadoption. The ASU will be effective for our annual reporting period beginningthe Company on July 1, 2018. Early2020, with early adoption permitted. The Company is permitted. We do not expect any significantcurrently evaluating the impact tothat the guidance will have on our financial statements as a result of this standard.statements.

NOTE 3.    FAIR VALUE OF FINANCIAL INSTRUMENTS
For cash equivalents, amounts receivable or payable and short-term borrowings, fair values approximate carrying value, based on the short-term nature of the assets and liabilities.
The Company's estimates of the fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets, and requires that observable inputs be used in the valuations when available. The three levels of the hierarchy are as follows:
Level 1: inputs to the valuation are quoted prices in an active market for identical assets

Level 2: inputs to the valuation include quoted prices for similar assets in active markets that are observable either directly or indirectly
Level 3: valuation is based on significant inputs that are unobservable in the market and the Company's own estimates of assumptions that we believe market participants would use in pricing the asset
Fair value of financial assets, included in cash and cash equivalents, and financial liabilities is as follows:
  Estimated Fair Value Measurements Total Fair
  Level 1 Level 2 Level 3 Value
March 31, 2018        
Financial Assets:        
Money market funds $29,969
 $
 $
 $29,969
Financial Liabilities:        
Revolving credit facility $
 $105,000
 $
 $105,000
June 30, 2017  
      
Financial Assets:        
Money market funds $68,474
 $
 $
 $68,474
  Certificate of Deposit $
 $2,001
 $
 $2,001
Financial Liabilities:        
Revolving credit facility $
 $50,000
 $
 $50,000
  Estimated Fair Value Measurements Total Fair
  Level 1 Level 2 Level 3 Value
September 30, 2018        
Financial Assets:        
Money market funds $85,704
 $
 $
 $85,704
June 30, 2018  
      
Financial Assets:        
Money market funds $14,918
 $
 $
 $14,918
Non-Recurring Fair Value Measurements                
June 30, 2017        
September 30, 2018        
Long-lived assets held for sale (a)
 $
 $1,300
 $
 $1,300
 $
 $1,300
 $
 $1,300
June 30, 2018        
Long-lived assets held for sale (a)
 $
 $1,300
 $
 $1,300
(a) In accordance with ASC Subtopic 360-10, long-lived assets held for sale with a carrying value of $4,575 were written down to their fair value of $1,300, resulting in an impairment totaling $3,275, which was included in earnings for the period ended June 30, 2017. These assets are expected to be disposed of by sale in the third quarter of fiscal 2019.

NOTE 4.    INTANGIBLE ASSETS
The estimated aggregate future amortization expense for the remainder of fiscal 2018 and each of the next four years for all intangible assets remaining as of March 31, 2018, is as follows:
Years Ending June 30,Computer Software 
Customer
Relationships
 Other Intangible Assets Total
2018 (remainder)$15,979
 $4,017
 $3,739
 $23,735
201966,148
 16,399
 12,015
 94,562
202055,595
 13,906
 6,518
 76,019
202137,372
 11,750
 1,854
 50,976
202222,199
 10,689
 1,121
 34,009

NOTE 5.    DEBT
Revolving credit facility
The revolving credit facility allows for borrowings of up to $300,000, which may be increased by the Company at any time until maturity to $600,000. The credit facility bears interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the highest of (i) the Prime Rate for such day, (ii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iii) the Eurocurrency Rate for a one-month Interest Period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit facility is guaranteed by certain subsidiaries of the Company. The credit facility is subject to various financial covenants that require the Company to maintain certain financial ratios as defined in the agreement. As of March 31,September 30, 2018, the Company was in compliance with all such covenants. The revolving loan terminates February 20, 2020. At March 31,September 30, 2018, there was anno outstanding revolving loan balance of $105,000.balance. There was a $50,000also no outstanding balance at June 30, 2017.2018.

Other lines of credit
The Company has an unsecured bank credit line which provides for funding of up to $5,000 and bears interest at the prime rate less 1%. The credit line was renewed in April 2017 and expires on April 30, 2019. At March 31,September 30, 2018, no amount was outstanding. There was also no balance outstanding at June 30, 2017.2018.
Interest
The Company paid interest of $632$65 and $418$189 during the ninethree months ended March 31,September 30, 2018 and 2017, respectively.

NOTE 6.5.    INCOME TAXES
On December 22, 2017, the Tax Cuts and Jobs Act of 2017 ("TCJA") was enacted into law, which includes numerous provisions that impact the Company, including reducing the U.S. federal tax rate, eliminating the Domestic Production Activities Deduction in future tax years, and providing expanded asset expensing. The TCJA reduced the U.S. federal statutory corporate income tax rate from 35% to 21%, effective January 1, 2018. For the Company’s fiscal year 2018, a blended U.S. federal statutory tax rate of approximately 28% will apply to the Company.
The effective tax rate was 24.4%19.2% of income before income taxes for the quarter ended March 31,September 30, 2018, compared to 32.1%31.1% for the same quarter in fiscal 2017. For the nine months ended March 31, 2018 the effective tax rate was (2.9)%, compared to 32.5% for the nine months ended March 31, 2017.2018. The significant decrease to the Company's tax rate was primarily due to $96,766 and $8,746 ofthe reduction in the U.S. federal income tax rate from 35% to 21% due to tax reform enacted December 22, 2017, as well as the increase in excess tax benefits recorded as a resultfrom share-based payments in the first quarter of fiscal 2019.
The Company has recognized provisional amounts for tax reform items in its annual and interim financial statements for each reporting period since the enactment of the TCJATax Cuts and Jobs Act ("TCJA") on December 22, 2017, in the quarters ended December 31, 2017, and March 31, 2018, respectively.
accordance with Staff Accounting Bulletin 118 ("SAB 118"). The staff of the U.S. SEC has recognized the complexity of reflecting the impacts of the TCJA and on December 22, 2017, issued guidance in Staff Accounting Bulletin No. 118 ("SAB 118") which118. The guidance clarifies accounting for income taxes under ASC Topic 740 if information is not available or complete and provides for up to a one-year period in which to complete the required analyses and accounting.  The Company relied on SAB 118 in computing its accounting for income taxesAs the amounts are finalized during the periods ended December 31, 2017 and March 31, 2018. The computation of income taxes payable, deferred tax liability, and income tax expense for these periods reflect provisional amounts for whichmeasurement period, the income tax effects of the TCJA have not been completed, but for which reasonable estimates are available.  As a fiscal year taxpayer, the Company has utilized certain estimates and forecasts of future operations in estimating both the reversal of deferred tax assets and liabilities that existed on the enactment date, as well as the generation of additional deferred tax assets and liabilities for the remainder of the year ending June 30, 2018. The Company analyzed its deferred tax balances to estimate which of those balances are expected to reverse in fiscal 2018 (at a blended U.S. federal income tax rate of approximately 28.0%), or thereafter (at a 21.0% U.S. federal income tax rate). These estimates may change as we receive additional information about the timing of deferred tax reversals. The Company included a re-measurement of $800 of income tax benefits in the quarter ended March 31, 2018. It is anticipated thatrequired adjustments, if any, additional income tax effects from the TCJA will be recorded in the period ending Junequarter when the final amount is determined. No adjustments were recorded in the three months ended September 30, 2018 as2018.
The Company paid income taxes of $388 and received refunds of $679 for the deferred tax activity becomes known as a result of actual operations. 
Thethree months ended September 30, 2018. For the three months ended September 30, 2017, the Company paid income taxes, net of refunds, of $48,301 and $66,683 in the nine months ended March 31, 2018 and 2017, respectively.$747.
At March 31,September 30, 2018, the Company had $9,914$11,065 of gross unrecognized tax benefits, $9,006$10,188 of which, if recognized, would affect our effective tax rate. We had accrued interest and penalties of $1,249$1,413 and $1,083$1,051 related to uncertain tax positions at March 31,September 30, 2018 and 2017, respectively.
The U.S. federal and state income tax returns for fiscal year 20142015 and all subsequent years remain subject to examination as of March 31,September 30, 2018 under statute of limitations rules. We anticipate potential changes due to lapsing statutes of limitations and examination closures could reduce the unrecognized tax benefits balance by $500 - $1,500 within twelve months of March 31,September 30, 2018.

NOTE 7.6.    STOCK-BASED COMPENSATION
Our operating income for the three months ended March 31,September 30, 2018 and 2017 included $3,225$1,771 and $3,132$1,513 of stock-based compensation costs, respectively. For the nine months ended March 31, 2018 and 2017, stock-based compensation costs included in operating income totaled $7,834 and $7,362, respectively.

Stock Options
On November 10, 2015, the Company adopted the 2015 Equity Incentive Plan ("2015 EIP") for its employees and non-employee directors. The plan allows for grants of stock options, stock appreciation rights, restricted stock shares or units, and performance shares or units. The maximum number of shares authorized for issuance under the plan is 3,000. For stock options, terms and vesting periods of the options are determined by the Compensation Committee of the Board of Directors when granted. The option period must expire not more than ten years from the option grant date. The options granted under this plan are exercisable beginning three years after the grant date at an exercise price equal to 100% of the fair market value of the stock at the grant date. The options terminate upon surrender of the option, ninety days after termination of employment, upon the expiration of one year following notification of a deceased optionee, or ten years after grant.
The Company previously issued options to outside directors under the 2005 Non-Qualified Stock Option Plan (“2005 NSOP”). No additional stock options may be issued under this plan.
A summary of option plan activity under these plans is as follows:
 Number of Shares Weighted Average Exercise Price 
Aggregate
 Intrinsic
 Value
Outstanding July 1, 201772
 $50.04
  
Granted
 
  
Forfeited
 
  
Exercised(10) 17.45
  
Outstanding March 31, 201862
 $55.32
 $4,048
Vested and Expected to Vest March 31, 201862
 $55.32
 $4,048
Exercisable March 31, 201830
 $21.58
 $2,981
 Number of Shares Weighted Average Exercise Price 
Aggregate
 Intrinsic
 Value
Outstanding July 1, 201852
 $62.65
  
Granted
 
  
Forfeited
 
  
Exercised
 
  
Outstanding September 30, 201852
 $62.65
 $5,036
Vested and Expected to Vest September 30, 201852
 $62.65
 $5,036
Exercisable September 30, 201820
 $23.65
 $2,729
At March 31,September 30, 2018, there was $209$125 of compensation cost yet to be recognized related to outstanding options. The weighted average remaining contractual term on options currently exercisable as of March 31,September 30, 2018 was 1.250.75 years.
Restricted Stock Awards
The Company issues both share awards and unit awards under the 2015 EIP, and previously issued these awards through the 2005 Restricted Stock Plan. The following table summarizes non-vested share awards as of March 31,September 30, 2018, as well as activity for the ninethree months then ended:
Share awardsShares 
Weighted
Average
Grant Date
Fair Value
Shares 
Weighted
Average
Grant Date
Fair Value
Outstanding July 1, 201736
 $73.66
Outstanding July 1, 201823
 $81.33
Granted
 

 
Vested(11) 58.30
(17) 79.52
Forfeited(1) 64.60

 
Outstanding March 31, 201824
 $80.54
Outstanding September 30, 20186
 $86.47
At March 31,September 30, 2018, there was $407127 of compensation expense that has yet to be recognized related to non-vested restricted stock share awards, which will be recognized over a weighted average period of 0.540.72 years.

The following table summarizes non-vested unit awards as of March 31,September 30, 2018, as well as activity for the ninethree months then ended:
Unit awardsUnits 
Weighted
Average
Grant Date
Fair Value
 Aggregate Intrinsic ValueUnits 
Weighted
Average
Grant Date
Fair Value
 Aggregate Intrinsic Value
Outstanding July 1, 2017386
 $67.84
  
Outstanding July 1, 2018351
 $83.37
  
Granted115
 96.46
  39
 202.92
  
Vested(155) 56.87
  (104) 76.41
  
Forfeited(4) 80.81
  (4) 86.89
  
Outstanding March 31, 2018342
 $82.28
 $41,322
Outstanding September 30, 2018282
 $102.33
 $45,161
The Company utilized a Monte Carlo pricing model customized to the specific provisions of the Company’s plan design to value unit awards subject to performance targets on the grant dates. The weighted average assumptions used in this model to estimate fair value at the measurement date and resulting values for 8139 unit awards granted in fiscal 20182019 are as follows:
Volatility15.6015.30%
Risk free interest rate1.552.89%
Dividend yield1.200.90%
Stock Beta0.6870.669
The remaining 34 unit awards granted are not subject to performance targets, and therefore the estimated fair value at measurement date is valued in the same manner as restricted stock share award grants.
At March 31,September 30, 2018, there was $13,385$17,204 of compensation expense that has yet to be recognized related to non-vested restricted stock unit awards, which will be recognized over a weighted average period of 1.371.59 years.

NOTE 8.7.    EARNINGS PER SHARE
The following table reflects the reconciliation between basic and diluted earnings per share.
Three Months Ended March 31, Nine Months Ended March 31,Three Months Ended September 30,
2018 2017 2018 20172018 2017
Net Income$72,395
 $60,044
 $291,380
 $181,102
$83,551
 $66,870
Common share information:          
Weighted average shares outstanding for basic earnings per share77,247
 77,597
 77,249
 77,941
77,188
 77,283
Dilutive effect of stock options and restricted stock299
 335
 337
 378
349
 363
Weighted average shares outstanding for diluted earnings per share77,546
 77,932
 77,586
 78,319
77,537
 77,646
Basic earnings per share$0.94
 $0.77
 $3.77
 $2.32
$1.08
 $0.87
Diluted earnings per share$0.93
 $0.77
 $3.76
 $2.31
$1.08
 $0.86
Per share information is based on the weighted average number of common shares outstanding for the three and nine months ended March 31,September 30, 2018 and 2017. Stock options and restricted stock have been included in the calculation of earnings per share to the extent they are dilutive. There were 49no anti-dilutive stock options or restricted stock shares excluded for the quarter ended March 31,September 30, 2018 compared to 89and no anti-dilutive stock options or restricted stock shares excluded for the quarter ended March 31,September 30, 2017. For the nine months ended March 31, 2018 and 2017, respectively, there were 36 and 74 anti-dilutive securities excluded.


NOTE 9.8.    BUSINESS ACQUISITIONS
Ensenta Corporation
On December 21, 2017, the Company acquired all of the equity interest of EST Holdings, Inc. and its wholly-owned subsidiary, EST Interco, Inc., for $134,472$134,381 paid in cash. EST Holdings, Inc. and EST Interco, Inc. jointly own all of the outstanding equity of Ensenta Corporation ("Ensenta"), a California-based provider of real-time, cloud-based solutions for mobile and online payments and deposits. This acquisition was partially funded by a draw on the Company's revolving credit facility, with the remaining amount funded by existing operating cash. The addition of Ensenta

Corporation to the JHA Payment Solutions Group expands the Company’s ability to conduct real-time transactions with third-party platforms, extending its presence in the credit union market through shared branching technology.
Management has completed a preliminary purchase price allocation of Ensenta and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of December 21, 2017 are set forth below:
Current assets$13,950
$14,057
Long-term assets585
586
Identifiable intangible assets55,001
58,806
Non-current deferred income tax liability(19,888)(21,716)
Total other liabilities assumed(8,590)(8,450)
Total identifiable net assets41,058
43,283
Goodwill93,414
91,098
Net assets acquired$134,472
$134,381
The amounts shown above include an immaterial measurement period adjustmentadjustments made during the third quarter that impacted non-current deferredand fourth quarters of fiscal 2018 related to income tax liabilityadjustments and goodwill.a fair value assessment. The amounts shown above may change as management finalizes its assessment of the fair value of acquired assets and liabilities and evaluatescontinues to evaluate the income tax implications of this business combination.
The goodwill of $93,414$91,098 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Ensenta, together with the value of Ensenta's assembled workforce. The goodwill from this acquisition has been allocated to our Payments segment and is not expected to be deductible for income tax purposes.
Identifiable intangible assets from this acquisition consist of customer relationships of $33,824,$37,800, computer software of $16,639,$16,505, and other intangible assets of $4,538.$4,501. The weighted average amortization period for acquired customer relationships, computer software, and other intangible assets is 15 years, 10 years, and 10 years, respectively.
Current assets were inclusive of cash acquired of $7,273.$7,274. The fair value of current assets acquired included accounts receivable of $4,668, none of which were expected to be uncollectible.
Costs incurred related to the acquisition of Ensenta in fiscal 2018 totaled $324$339 for legal, valuation, and other fees, and were expensed as incurred within selling, general, and administrative expense.
The Company's consolidated statements of income for the three months ended March 31, 2018first quarter of fiscal 2019 included revenue of $7,160$8,172 and after-tax net income of $199$2,044 resulting from Ensenta's operations.
For the nine months ended March 31, 2018, the Company's consolidated statements of income included revenue of $8,087 and after-tax net income of $6,566. The after-tax net income included a large tax benefit recorded as a result of the TCJA. Excluding the effects of the TCJA, the Company's after-tax net income resulting from Ensenta's operations totaled $225.
The accompanying consolidated statements of income for the three and nine months ended March 31,September 30, 2018 and 2017 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The following unaudited pro forma consolidated financial information for the period ended September 30, 2017 is presented as if this acquisition had occurred at the beginning of the earliest period presented. In addition, this unaudited pro forma financial information is provided for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the acquisition had actually occurred during those periods, or the results that may be obtained in the future as a result of the acquisition.

Three Months Ended Nine Months EndedThree Months Ended
March 31, March 31,September 30,
2018 2017 2018 20172018 2017
Actual Proforma Proforma ProformaActual Proforma
Revenue$384,684
 $359,779
 $1,132,492
 $1,064,530
$392,543
 $368,048
Net Income72,395
 60,569
 292,890
 182,633
83,551
 67,733
Basic Earnings Per Share$0.94
 $0.78
 $3.79
 $2.34
$1.08
 $0.88
Diluted Earnings Per Share$0.93
 $0.78
 $3.78
 $2.33
$1.08
 $0.87
Vanguard Software Group
On August 31, 2017, the Company acquired all of the equity interest of Vanguard Software Group, a Florida-based company specializing in the underwriting, spreading, and online decisioning of commercial loans, for $10,744 paid in cash. This acquisition was funded using existing operating cash. The addition of Vanguard Software Group to the

Company's ProfitStars® Lending Solutions Group expands functionality offered to clients, allowing for near-real-time communication with JHA's core processing and ancillary solutions, and also enhances cross-sell opportunities.
Management has completed a preliminary purchase price allocation of Vanguard Software Group and its assessment of the fair value of acquired assets and liabilities assumed. The recognized amounts of identifiable assets acquired and liabilities assumed, based upon their preliminary fair values as of August 31, 2017 are set forth below:
Current assets$1,153
Long-term assets9
Identifiable intangible assets4,200
Total liabilities assumed(1,117)
Total identifiable net assets4,245
Goodwill6,499
Net assets acquired$10,744
The amounts shown above may change in the near term as management finalizes its calculation of the fair value of acquired assets and liabilities and evaluates the income tax implications of this business combination.
The goodwill of $6,499 arising from this acquisition consists largely of the growth potential, synergies and economies of scale expected from combining the operations of the Company with those of Vanguard Software Group, together with the value of Vanguard Software Group's assembled workforce. The goodwill from this acquisition has been allocated to our Complementary segment and is expected to be deductible for income tax purposes.
Identifiable intangible assets from this acquisition consist of customer relationships of $2,234, computer software of $1,426, and other intangible assets of $540. The weighted average amortization periods for acquired customer relationships, computer software, and other intangible assets are 15 years, 10 years, and 10 years, respectively.
Current assets were inclusive of cash acquired of $289. The fair value of current assets acquired included accounts receivable of $847, none of which were expected to be uncollectible.
Costs incurred related to the acquisition of Vanguard Software Group were immaterial for the periods presented.
The Company's consolidated statements of income for the thirdfirst quarter of fiscal 20182019 included revenue of $477$525 and an after-tax net loss of $238$180 resulting from Vanguard Software Group's operations. For the nine months ended March 31,first quarter of fiscal 2018, Vanguard Software Group contributed revenue of $99 and an after-tax net loss of $127 to the Company's consolidated statements of income included revenue of $970 and after-tax net loss of $635.income.
The accompanying consolidated statements of income for the three and nine months ended March 31,September 30, 2018 and 2017 do not include any revenues and expenses related to this acquisition prior to the acquisition date. The impact of this acquisition was considered immaterial to both the current and prior periods of our consolidated financial statements and pro forma financial information has not been provided.

NOTE 10.9.    REPORTABLE SEGMENT INFORMATION
The Company is a provider of integrated computer systems that perform data processing (available for in-house installations or outsourced services) for banks and credit unions. Beginning in the first quarter of fiscal 2018, JHA changed its reportable segment structure from two customer-centric segments, Bank and Credit Union, to four product-centric segments. The change was made based on the view of our Chief Executive Officer, who is also our Chief

Operating Decision Maker, that the Company could be more effectively managed using a product-centric approach and was driven by the first budgetary process under his administration. He requested changes in reports he regularly reviews for the purposes of allocating resources and assessing performance.
The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate & Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including: ATM, debit, and credit card transaction processing services; online and mobile bill pay solutions; ACH origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software and services that can be integrated with our Core solutions or used independently. The Corporate & Other segment includes hardware revenue and costs, as well as operating costs not directly attributable to the other three segments.
The Company evaluates the performance of its segments and allocates resources to them based on various factors, including performance against trend, budget, and forecast. Only revenue and costs of revenue are considered in the evaluation for each segment.
The prior period presented has been retroactively restatedAn immaterial adjustment was made to conformreclassify revenue recognized in fiscal 2018 from the Core to the new segment structure adopted July 1, 2017.
 Three Months Ended
 March 31, 2018
 Core Payments Complementary Corporate & Other Total
REVENUE         
Services and Support$129,787
 $14,950
 $89,151
 $10,942
 $244,830
Processing6,824
 117,624
 15,355
 51
 139,854
Total Revenue136,611
 132,574
 104,506
 10,993
 384,684
          
Cost of Revenue63,157
 62,783
 42,837
 52,815
 221,592
Research and Development        22,591
Selling, General, and Administrative        44,185
Gain on Disposal of Businesses        
Total Expenses        288,368
          
SEGMENT INCOME$73,454
 $69,791
 $61,669
 $(41,822)  
          
OPERATING INCOME        96,316
          
INTEREST INCOME (EXPENSE)        (604)
          
INCOME BEFORE INCOME TAXES        $95,712

 Three Months Ended
 March 31, 2017
 Core Payments Complementary Corporate & Other Total
REVENUE         
Services and Support$120,978
 $10,805
 $81,076
 $13,997
 $226,856
Processing6,192
 107,588
 13,122
 9
 126,911
Total Revenue127,170
 118,393
 94,198
 14,006
 353,767
          
Cost of Revenue58,983
 55,802
 39,488
 52,454
 206,727
Research and Development        20,801
Selling, General, and Administrative        39,794
Gain on Disposal of Businesses        (2,286)
Total Expenses        265,036
          
SEGMENT INCOME$68,187
 $62,591
 $54,710
 $(38,448)  
          
OPERATING INCOME        88,731
          
INTEREST INCOME (EXPENSE)        (236)
          
INCOME BEFORE INCOME TAXES        $88,495

 Nine Months Ended
 March 31, 2018
 Core Payments Complementary Corporate & Other Total
REVENUE         
Services and Support$379,643
 $34,950
 $252,746
 $39,540
 $706,879
Processing20,300
 346,787
 45,338
 70
 412,495
Total Revenue399,943
 381,737
 298,084
 39,610
 1,119,374
          
Cost of Revenue178,619
 179,100
 124,693
 155,548
 637,960
Research and Development        65,934
Selling, General, and Administrative        133,532
Gain on Disposal of Businesses        (1,894)
Total Expenses        835,532
          
SEGMENT INCOME$221,324
 $202,637
 $173,391
 $(115,938)  
          
OPERATING INCOME        283,842
          
INTEREST INCOME (EXPENSE)        (749)
          
INCOME BEFORE INCOME TAXES        $283,093
Corporate and Other Segment. For the period ended September 30, 2017, the amount reclassified totaled $738.


Nine Months EndedThree Months Ended
March 31, 2017September 30, 2018
Core Payments Complementary Corporate & Other TotalCore Payments Complementary Corporate & Other Total
REVENUE                  
Services and Support$345,660
 $35,688
 $240,487
 $44,227
 $666,062
$130,388
 $12,770
 $90,063
 $13,347
 $246,568
Processing18,304
 324,179
 38,720
 84
 381,287
7,164
 121,427
 17,245
 139
 145,975
Total Revenue363,964
 359,867
 279,207
 44,311
 1,047,349
137,552
 134,197
 107,308
 13,486
 392,543
                  
Cost of Revenue164,820
 166,615
 117,290
 150,911
 599,636
59,216
 65,707
 41,830
 53,359
 220,112
Research and Development        61,413
        24,026
Selling, General, and Administrative        119,795
        45,183
Gain on Disposal of Businesses        (2,250)
Total Expenses        778,594
        289,321
                  
SEGMENT INCOME$199,144
 $193,252
 $161,917
 $(106,600)  $78,336
 $68,490
 $65,478
 $(39,873)  
                  
OPERATING INCOME        268,755
        103,222
                  
INTEREST INCOME (EXPENSE)        (395)        144
                  
INCOME BEFORE INCOME TAXES        $268,360
        $103,366

 Three Months Ended
 September 30, 2017
 Core Payments Complementary Corporate & Other Total
REVENUE         
Services and Support$120,477
 $9,964
 $80,297
 $16,014
 $226,752
Processing6,868
 112,930
 14,731
 3
 134,532
Total Revenue127,345
 122,894
 95,028
 16,017
 361,284
          
Cost of Revenue55,585
 57,323
 39,992
 51,015
 203,915
Research and Development        20,929
Selling, General, and Administrative        41,088
Gain on Disposal of Businesses        (1,705)
Total Expenses        264,227
          
SEGMENT INCOME$71,760
 $65,571
 $55,036
 $(34,998)  
          
OPERATING INCOME        97,057
          
INTEREST INCOME (EXPENSE)        (42)
          
INCOME BEFORE INCOME TAXES        $97,015

The Company has not disclosed any additional asset information by segment, as the information is not generated for internal management reporting to the Chief Operating Decision Maker.


NOTE 11:10: SUBSEQUENT EVENTS
Dividends
Acquisitions of Agiletics, Inc and BOLTS Technologies, Inc.
On May 4,October 1, 2018, the Company's BoardCompany acquired 100% equity interest in Agiletics, Inc. for a net cash outlay of Directors declared$6,300. Agiletics is a provider of escrow, investment, and liquidity management solutions for banks serving commercial customers.
On October 5, 2018, the Company acquired 100% equity interest in BOLTS Technologies, Inc., for a net cash dividendoutlay of $0.37 per share on its common stock, payable on June 7, 2018$15,000. BOLTS Technologies is the developer of boltsOPEN, a next-generation digital account opening solution.
Both acquisitions were funded with operating cash. We have not yet completed our purchase accounting procedures with respect to shareholdersthese acquisitions. The impact of record on May 23, 2018.these acquisitions is considered immaterial to our condensed consolidated financial statements and pro forma financial information has not been provided.







ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis should be read in conjunction with the condensed consolidated financial statements and the accompanying notes to the condensed consolidated financial statements included in this Form 10-Q for the quarter ended March 31,September 30, 2018.
OVERVIEW
Jack Henry & Associates, Inc. ("JHA") is a leading provider of technology solutions and payment processing services primarily for financial services organizations. Its solutions are marketed and supported through three primary brands. Jack Henry Banking® is a top provider of information and transaction processing solutions to U.S. banks ranging from community banks to multi-billion dollar asset institutions.  Symitar® is a leading provider of information and transaction processing solutions for credit unions of all sizes.  ProfitStars® provides specialized products and services that enable financial institutions of every asset size and charter, and diverse corporate entities outside the financial services industry, to mitigate and control risks, optimize revenue and growth opportunities, and contain costs. JHA's integrated solutions are available for in-house installation and outsourced delivery.
Our two primary revenue streams are "Services and support" and "Processing". Services and support includes: "Outsourcing and cloud" fees that predominantly have contract terms of five years or longer at inception; "Product delivery and services" revenue, which includes revenue from the sales of licenses, implementation services, consulting, and hardware; and "In-house support" revenue, which is composed of maintenance fees which primarily contain annual contract terms. Processing revenue includes: "Remittance" revenue from payment processing, remote capture, and automated clearing house (ACH) transactions; "Card" fees, including card transaction processing and monthly fees; and "Transaction and digital" revenue, which includes transaction and mobile processing fees. We continually seek opportunities to increase revenue while at the same time containing costs to expand margins.
All dollar amounts in the following discussion are in thousands, except per share amounts.
RESULTS OF OPERATIONS
The adoption of ASC 606 has impacted the timing of our revenue recognition, as discussed in detail in Note 1, Nature of Operations and Summary of Significant Accounting Policies, of the condensed consolidated financial statements within this Quarterly Report on Form 10-Q. The prior year numbers presented below have been re-cast as part of our full retrospective adoption of the new standard.
In the thirdfirst quarter of fiscal 2018,2019, total revenue increased 9%, or $30,917,$31,259, compared to the same quarter in the prior year. Excluding an increasea decrease of $3,846$2,883 in deconversion fees quarter-over-quarter, revenue from fiscal 2018 acquisitions of $7,637, and excluding prior year revenue related to divestitures of $2,261 total revenue increased 6%10% for the quarter.
Operating expenses increased 9% compared to the thirdfirst quarter of fiscal 2017, mainly due to a 5% increase in headcount2018. Headcount increased 6% at March 31,September 30, 2018 compared to March 31,September 30, 2017, leading to increased salaries and benefits. This was partially due to the Ensenta acquisition, which occurred during the second quarter of fiscal 2018. Other reasons for the increase includeinclude: bonuses provided by the Company in response to the lower tax rate resulting from the Tax Cuts and Jobs Act ("TCJA"); increased amortization of capitalized software; higher direct cost of product, including costs related to our new card payment processing platform and faster payments incentives,incentives.
Operating income increased 6% for the quarter, but excluding deconversion fees and the increased amortization of capitalized software. bonus, operating income increased 16%.
The Tax Cuts and Jobs Act enacted December 22, 2017 had a large impact onTCJA lowered our effective income tax rate, which is the primary reason for the decrease in our provision for income taxes which decreased 18%by 34% compared to the prior year quarter. As discussed
The above changes led to an increase in Note 6net income of 25% for the condensed consolidated financial statements, the amounts recorded under provision for income taxes are reasonable estimates, but are subject to change as additional calculations are completed based on actual results during the fourthfirst quarter of fiscal 2018.
Net income increased 21% for the third quarter of fiscal 20182019 compared to the thirdfirst quarter in fiscal 2017, largely due to adjustments recorded as a result of the TCJA.
In the nine months ended March 31, 2018, total revenue increased 7%, or $72,025, over the nine months ended March 31, 2017. Deconversion fees in the year-to-date period increased $865 compared to the same nine months in the prior fiscal year, and we had revenue from 2018 acquisitions totaling $9,057. Excluding these factors, and excluding $7,497 of revenue from the fiscal 2017 year-to-date period related to divestitures, total revenue increased 7%.
Operating expenses for the nine months ended March 31, 2018 increased 7% compared to the equivalent period in the prior year, primarily due to increased headcount, higher direct cost of product, costs related to our new card payment processing platform and faster payments incentives, and increased amortization of capitalized software. Provision for income taxes decreased 109% compared to the prior year-to-date period as a result of the TCJA.
For the nine months ended March 31, 2018, net income increased 61%, with most of the increase attributable to the Tax Cuts and Jobs Act.2018.
We move into the fourthsecond quarter of fiscal 20182019 following strong performance in the thirdfirst quarter. Significant portions of our business continue to come from recurring revenues and our healthy sales pipeline is also encouraging. Our customers continue to face regulatory and operational challenges which our products and services address, and in these times we believe they have an even greater need for our solutions that directly address institutional profitability, efficiency, and security. Our strong balance sheet, access to extensive lines of credit, the strength of our existing

product line and an unwavering commitment to superior customer service should position us well to address current and future opportunities.
In the second quarter of fiscal 2018, we completed the acquisition of Ensenta Corporation, strengthening our electronic payments offering and making JHA a leading provider of consumer remote deposit capture services.
A detailed discussion of the major components of the results of operations for the three and nine months ending March 31,September 30, 2018 follows. Discussions compare the current three and nine months ending March 31,September 30, 2018 to the prior year's three and nine months ending March 31,September 30, 2017.

REVENUE
Services and SupportThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, % ChangeThree Months Ended September 30, %
Change
2018 2017   2018 2017  2018 2017  
Services and Support$244,830
 $226,856
 8% $706,879
 $666,062
 6%$246,568
 $226,752
 9%
Percentage of total revenue64% 64%   63% 64%  
63% 63%  
There was 8%9% growth in services and support revenue in the thirdfirst quarter of fiscal 20182019 compared to the same quarter last year. Excluding a $2,883 reduction in deconversion fees, services and support revenue grew 11%. The increase was primarily due to increases in our outsourcing and cloud and in-house support revenue streams. The increased outsourcing and cloud revenue was partially driven by added revenue from Ensenta, as well assupplemented by organic growth in hosting and data processing. The increased product delivery and services revenue. Excluding deconversion fees from each period presented, revenue from fiscal 2018 acquisitions totaling $3,911, and fiscal 2017 revenue related to divestitures totaling $2,223, services andin-house support revenue grew 6% forwas primarily due to higher software usage revenue, resulting mainly from the third quarteraddition of fiscal 2018 compared to the same quarter of fiscal 2017.
In the nine months ended March 31, 2018, services and support revenue grew 6% over the equivalent nine monthsnew customers in the prior fiscal year. The increase was primarily driven by an increase in outsourcing and cloud revenue, along with an increase in product delivery and services revenue resulting from completion of revised contractual obligations on several of our bundled arrangements. Excluding deconversion fees from each period presented, revenue from fiscal 2018 acquisitions totaling $4,858, and fiscal 2017 revenue related to divestitures of $7,383, services and support revenue grew 7%.trailing twelve months.
ProcessingThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, 
%
Change
Three Months Ended September 30, 
%
Change
2018 2017   2018 2017  2018 2017  
Processing$139,854
 $126,911
 10% $412,495
 $381,287
 8%$145,975
 $134,532
 9%
Percentage of total revenue36% 36%   37% 36%  37% 37%  
Processing revenue increased 10%9% in the thirdfirst quarter of fiscal 20182019 compared to the same quarter last year, primarily due to increased transaction volumes within each of the three components of processing revenue and added revenue from Ensenta. Excluding revenue from fiscal 2018 acquisitions totaling $3,726, and excluding fiscal 2017 revenue related to divestitures of $38, processing revenue increased 7% for the quarter.
Each component also experienced volume growth in the fiscal year-to-date period, leading to an increase in processing revenue of 8% for the nine months ended March 31, 2018 as compared to the nine months ended March 31, 2017. Excluding $4,199 of revenue from fiscal 2018 acquisitions, and excluding fiscal 2017 revenue related to divestitures totaling $114, processing revenue increased 7% for the year-to-date period.

OPERATING EXPENSES
Cost of RevenueThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, %
Change
Three Months Ended September 30, %
Change
2018 2017   2018 2017  2018 2017  
Cost of Revenue$221,592
 $206,727
 7% $637,960
 $599,636
 6%$220,112
 $203,915
 8%
Percentage of total revenue58% 58%   57% 57%  56% 56%  
Cost of revenue for the thirdfirst quarter of fiscal 20182019 increased 7%8% over the prior year, but remained consistent as a percentage of total revenue. Excluding costs related to deconversions and bonuses provided by the Company in response to the lower tax rate resulting from the TCJA, cost of revenue increased 7%. The increase was primarily due to a 6%7% expansion in headcount at March 31,September 30, 2018 compared to March 31,September 30, 2017 driving increased salaries and benefits.benefits, partially due to the acquisition of Ensenta. Other factors contributing to the increase include higher direct costs of product, including spending related to our strategic partnership with First Data and PSCU to expand our credit and debit card platform, and increased amortization related to capitalized software. The Company continues to focus on cost management.

For the year-to-date period, cost of revenue increased 6% due to the same factors discussed above, but remained a consistent percentage of revenue.
Research and DevelopmentThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, %
Change
Three Months Ended September 30, %
Change
2018 2017   2018 2017  2018 2017  
Research and Development$22,591
 $20,801
 9% $65,934
 $61,413
 7%$24,026
 $20,929
 15%
Percentage of total revenue6% 6%   6% 6%  6% 6%  
Research and development expensesexpense increased for both the first quarter andof fiscal year-to-date period2019 primarily due to increased salary and personnel costs driven by increased headcount at March 31,September 30, 2018 compared to a year ago.ago, partially due to the acquisition of Ensenta. However, both periodsthese expenses remained consistent with the prior year as a percentage of total revenue. Excluding the bonuses provided by the Company in response to the lower tax rate resulting from the TCJA, research and development expense increased 12%.

Selling, General, and AdministrativeThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, %
Change
Three Months Ended September 30, %
Change
2018 2017   2018 2017  2018 2017  
Selling, General, and Administrative$44,185
 $39,794
 11% $133,532
 $119,795
 11%$45,183
 $41,088
 10%
Percentage of total revenue11% 11%   12% 11%  12% 11%  
The 11%10% increase in selling, general and administrative expense in the current quarter was mainly due to increased commissions, salaries, and benefits. The fiscal year-to-date increase was also drivenExcluding bonuses provided by those factors, as well as increased professional service expenses duethe Company in response to contracting with outside experts in preparation for our adoption of the new ASC Topic 606 revenue standard. Selling,lower tax rate resulting from the TCJA, selling, general, and administrative expense remained a consistent percentage of revenue in both the quarter and fiscal year-to-date periods.increased 9%.
Gain on Disposal of a Business
For the ninethree months ended March 31,September 30, 2018, gains on disposalsthe Company did not dispose of businesses totaled $1,894, due toany businesses. In the salesfirst quarter of our ATM Manager and jhaDirect product lines. During the nine months ended March 31, 2017,fiscal 2018, we recorded a gain totaling $1,705 related to the sale of our Alogent sale totaling $2,250, the majority of which was recorded during the third quarter of fiscal 2017.jhaDirect product line.
INTEREST INCOME AND EXPENSEThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, 
%
Change
Three Months Ended September 30, 
%
Change
2018 2017   2018 2017  2018 2017  
Interest Income$130
 $42
 210% $424
 $209
 103%$291
 $147
 98 %
Interest Expense$(734) $(278) 164% $(1,173) $(604) 94%$(147) $(189) (22)%
Interest income fluctuated due to changes in invested balances and yields on invested balances. Interest expense increaseddecreased in the current periods due mainly to increased borrowing.period since there were no outstanding borrowings on our revolving credit facility during the first quarter of fiscal 2019.
PROVISION FOR INCOME TAXESThree Months Ended March 31, 
%
Change
 Nine Months Ended March 31, 
%
Change
Three Months Ended September 30, 
%
Change
2018 2017   2018 2017  2018 2017  
Provision for Income Taxes$23,317
 $28,451
 (18)% $(8,287) $87,258
 (109)%$19,815
 $30,145
 (34)%
Effective Rate24.4% 32.1%   (2.9)% 32.5%  19.2% 31.1%  
The large decreasessignificant decrease in the effective tax rate werewas primarily a result of the Tax Cuts and Jobs ActTCJA enacted December 22, 2017, which is discussed in detail in Note 65 of the condensed consolidated financial statements.statements, as well as an increase in excess tax benefits from share-based payments in the first quarter of fiscal 2019.
NET INCOME
Net income increased 21%25% to $72,395,$83,551, or $0.93$1.08 per diluted share for the thirdfirst quarter of fiscal 2018,2019, compared to $60,044,$66,870, or $0.77$0.86 per diluted share, in the same period of fiscal 2017,2018, resulting in a 21%25% increase in diluted earnings per share. Adjustments related to the TCJAThe lowered effective tax rate contributed to the large increase.
In the nine months ended March 31, 2018, net income increased to $291,380 from $181,102 for the same period of fiscal 2017, for an increase of 61%. Diluted earnings per share increased 62% to $3.76, compared to $2.31 last year. The increase is primarily attributable to the TCJA.

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

Beginning in the first quarter of fiscal 2018, JHA changed its reportable segment structure from two customer-centric segments, Bank and Credit Union, to four product-centric segments. The change was made based on the view of our Chief Executive Officer, who is also our Chief Operating Decision Maker, that the Company could be more effectively managed using a product-centric approach and was driven by the first budgetary process under his administration.
The Company’s operations are classified into four reportable segments: Core, Payments, Complementary, and Corporate and Other. The Core segment provides core information processing platforms to banks and credit unions, which consist of integrated applications required to process deposit, loan, and general ledger transactions, and maintain centralized customer/member information. The Payments segment provides secure payment processing tools and services, including ATM, debit, and credit card processing services,services; online and mobile bill pay solutions,solutions; ACH origination and remote deposit capture processing; and risk management products and services. The Complementary segment provides additional software and services that can be integrated with our core solutions or used independently. The Corporate & Other segment includes hardware revenue and costs, as well as operating costs not directly attributable to the other three segments.
The prior period presented has been retroactively restated to conform to the new segment structure adopted July 1, 2017.
Core
Three Months Ended March 31, % Change Nine Months Ended March 31, % ChangeThree Months Ended September 30, % Change
2018 2017   2018 2017  2018 2017  
Revenue$136,611
 $127,170
 7% $399,943
 $363,964
 10%$137,552
 $127,345
 8%
Cost of Revenue$63,157
 $58,983
 7% $178,619
 $164,820
 8%$59,216
 $55,585
 7%
Revenue in the Core segment increased 7%8%, while cost of revenue also increased 7%, for the three months ended March 31,September 30, 2018. Excluding deconversion fees, which totaled $3,985 for the first quarter of fiscal 2019, compared to $7,080 for the first quarter of fiscal 2018, revenue in the Core segment increased 11%. The increased revenue in the Core segment was driven by an 11% increase in product delivery and servicesincreased in-house support revenue, and a 7% increase in Outsourcing and Cloud revenue. Costresulting mainly from the addition of revenue remained consistent as a percentage of revenue.
Comparing the nine months ended March 31, 2018 to the equivalent nine months of fiscal 2017, revenuenew software usage customers in the Core segment increased 10%, driven by 6% increases in bothtrailing twelve months, and higher outsourcing and cloud revenue and in-house support, as well as increased product delivery and services revenue. The increase in product delivery and services revenue was mainly due mostly to increased revenue being recognized as a result of the completion of revised contractual obligations on several long-term contracts that permitted the Company to recognize previously deferred revenue related to our bundled arrangements.data processing. Cost of revenue for the Core segment increased 8% for the year-to-date period, but remained consistentdecreased 1% as a percentage of revenue.
Payments                
Three Months Ended March 31, % Change Nine Months Ended March 31, % ChangeThree Months Ended September 30, % Change
2018 2017   2018 2017  2018 2017  
Revenue$132,574
 $118,393
 12% $381,737
 $359,867
 6%$134,197
 $122,894
 9%
Cost of Revenue$62,783
 $55,802
 13% $179,100
 $166,615
 7%$65,707
 $57,323
 15%
Revenue in the Payments segment increased 12%9% for the thirdfirst quarter of fiscal 20182019 compared to the equivalent quarter last fiscal year. Excluding deconversion revenue of $2,073 from the first quarter of fiscal 2019 and $3,099 from the first quarter of fiscal 2018, revenue increased 10% in the Payments segment. The improvement in the most recent quarter was primarily due to increased remittance revenue within the processing line, partially due to added revenue from Ensenta, and increased outsourcing and cloud revenue resulting fromin the addition of Ensenta, as well as increasesservices and support line. Card processing also increased in card processing and transaction and digital revenue. Excluding deconversion revenue from each period and revenue from Ensenta from the thirdfirst quarter of fiscal 2018, revenue increased 5% in2019 compared to the Payments segment.prior year first quarter. Cost of revenue increased 13%15%, in part due to increased headcount and amortization expenses related to Ensenta.
For the nine months ended March 31, 2018, Payments segment revenue increased 6% due to the same factors listed above, despite decreased deconversion fees. Excluding deconversion fees from each nine month period and Ensenta revenue from fiscal 2018, revenue increased 5%. Cost of revenue increased 7% for the fiscal year-to-date period, partially due to increased headcount and amortization expenses related to Ensenta, as well as increased spending related to our strategic partnership with First Data and PSCU to expand our credit and debit card platform.

Complementary
Three Months Ended March 31, % Change Nine Months Ended March 31, % ChangeThree Months Ended September 30, % Change
2018 2017   2018 2017  2018 2017  
Revenue$104,506
 $94,198
 11% $298,084
 $279,207
 7%$107,308
 $95,028
 13%
Cost of Revenue$42,837
 $39,488
 8% $124,693
 $117,290
 6%$41,830
 $39,992
 5%
Revenue in the Complementary segment increased 11%13% for the quarter, or 12% after excluding deconversion revenue from each period, which totaled $1,792 and $527 for the quarters ended September 30, 2018 and 2017, respectively. The increase was driven by increases in product deliveryall three categories of services and services, outsourcing and cloud services,support revenue, as well as transaction and digital processing. Excluding deconversion fees from each period and Vanguard Software Groupprocessing revenue. Cost of revenue fromincreased 5% for the thirdfirst quarter of fiscal 2019 compared to the first quarter of fiscal 2018, revenue increased 9%. Cost of revenue increased 8% for the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017, andbut declined 1% as a percentage of revenue.
Revenue in the Complementary segment increased 7% for the nine months ended March 31, 2018 compared to the prior year-to-date period. The increase was driven by increased outsourcing and cloud services, as well as increased transaction and digital processing. Cost of revenue remained a consistent percentage of revenue in each nine month period.
Corporate and Other
Three Months Ended March 31, % Change Nine Months Ended March 31, % ChangeThree Months Ended September 30, % Change
2018 2017   2018 2017  2018 2017  
Revenue$10,993
 $14,006
 (22)% $39,610
 $44,311
 (11)%$13,486
 $16,017
 (16)%
Cost of Revenue$52,815
 $52,454
 1 % $155,548
 $150,911
 3 %$53,359
 $51,015
 5 %
Revenue in the Corporate and Other segment for the three and nine months ended March 31,September 30, 2018 each decreased mainly due to decreased hardware sales as well as a loss of revenue from our jhaDirect product line.line, which was sold during the first quarter of fiscal 2018. Revenue classified in the Corporate and Other segment includes revenue from hardware and other products not specifically attributed to any of the other three segments. Revenue within this segment is expected to be lower in fiscal 2018 compared to fiscal 2017 due to the sale of the jhaDirect product line in the first quarter of fiscal 2018. For the full fiscal year 2017, revenue from jhaDirect totaled $6,536.
Cost of revenue for the Corporate and Other segment includes operating cost not directly attributable to any of the other three segments. The increased cost of revenue in the thirdfirst quarter and year-to-dateof fiscal 2019 is primarily related to increased salary and benefit costs.bonuses provided by the Company in response to the lower tax rate resulting from the TCJA.

LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents decreasedincreased to $57,402$114,872 at March 31,September 30, 2018 from $114,765$31,440 at June 30, 2017.2018. The decreaseincrease from June 30, 20172018 is primarily due to our acquisitionscash generated from operations, including collection of Vanguard Software Group and Ensenta, the latter of which was partially funded by borrowing on our revolving credit facility.annual software maintenance billed in June 2018.
The following table summarizes net cash from operating activities in the statement of cash flows:
Nine Months EndedThree Months Ended
March 31,September 30,
2018 20172018 2017
Net income$291,380
 $181,102
$83,551
 $66,870
Non-cash expenses48,314
 128,070
41,261
 39,558
Change in receivables113,465
 114,420
98,708
 101,933
Change in deferred revenue(206,358) (182,309)(52,151) (72,909)
Change in other assets and liabilities(11,929) (42,416)(24,635) 3,270
Net cash provided by operating activities$234,872
 $198,867
$146,734
 $138,722
Cash provided by operating activities increased 18%6% compared to the same period last year. Cash from operations is primarily used to repay debt, pay dividends, repurchase stock, and for capital expenditures.
Cash used in investing activities for the first ninethree months of fiscal 20182019 totaled $239,055$52,263 and included: $137,654, net of cash acquired,$26,669 for the purchases of Ensenta Corporation and Vanguard Software Group; $72,186 for the ongoing

enhancements and development of existing and new product and service offerings; capital expenditures on facilities and equipment of $17,858; $6,965$24,001; and $1,626 for the purchase and development of internal use software; and $5,000 for the purchase of preferred stock of Automated Bookkeeping, Inc.software. This was partially offset by $350 of proceeds from the sale of businesses, and $258$33 of proceeds from asset sales. Cash used in investing activities for the first ninethree months of fiscal 20172018 totaled $103,499$40,285 and included $63,804$22,976 for the development of software,software; $10,455 for the acquisition of Vanguard Software Group; capital expenditures of $28,150,$3,708; and $14,780$3,452 for the purchase and development of internal use software, partially offset by $2,286$200 of proceeds from the sale of businesses and $949$106 of proceeds from the sale of assets.
Financing activities used cash of $53,180$11,039 for the first ninethree months of fiscal 2018. Cash used2019, all of which was $70,000 for repayment on our revolving credit facility, $30,018 for the purchase of treasury shares, dividends paid to stockholders of $76,429, and $1,733 net cash outflow from the issuance of stock and tax related to stock-based compensation. These uses were partially offset by borrowings of $125,000 on our revolving credit facility. Financing activities used cash in the first ninethree months of fiscal 20172018 totaling $122,762.$109,162. Cash used was $103,885$50,000 for repayments on borrowings, $30,018 for the purchase of treasury shares, dividends paid to stockholders of $67,641, repayments on borrowings$23,904, and capital leases of $30,200, and $1,036$5,240 net cash outflow from the issuance of stock and tax related to stock-based compensation, partially offset by borrowings on our revolving credit facility of $80,000.compensation.
Capital Requirements and Resources
The Company generally uses existing resources and funds generated from operations to meet its capital requirements. Capital expenditures totaling $17,858$24,001 and $28,150$3,708 for the ninethree months ending March 31,September 30, 2018 and March 31,September 30, 2017, respectively, were made primarily for additional equipment and the improvement of existing facilities. These additions were funded from cash generated by operations. Total consolidated capital expenditures on facilities and equipment for the Company for fiscal year 20182019 are not expected to exceed $62,000$50,000 and will be funded from cash generated by operations.
The Board of Directors has authorized the Company to repurchase shares of its common stock. Under this authorization, the Company may finance its share repurchases with available cash reserves or borrowings on its existing line-of-credit. The share repurchase program does not include specific price targets or timetables and may be suspended at any time. At March 31,September 30, 2018, there were 25,96226,108 shares in treasury stock and the Company had the remaining authority to repurchase up to 4,0293,883 additional shares. The total cost of treasury shares at March 31,September 30, 2018 is $1,036,292.$1,055,260. During the first ninethree months of fiscal 2018,2019, the Company repurchased 302no treasury shares for $30,018.shares. At June 30, 2017,2018, there were 25,66026,108 shares in treasury stock and the Company had authority to repurchase up to 4,3303,883 additional shares.
Revolving credit facility
The revolving credit facility allows for borrowings of up to $300,000, which may be increased by the Company at any time until maturity to $600,000. The credit facility bears interest at a variable rate equal to (a) a rate based on LIBOR or (b) an alternate base rate (the highest of (i) the Prime Rate for such day, (ii) the sum of the Federal Funds Effective Rate for such day plus 0.50% and (iii) the Eurocurrency Rate for a one month Interest Period on such day for dollars plus 1.0%), plus an applicable percentage in each case determined by the Company's leverage ratio. The credit facility is guaranteed by certain subsidiaries of the Company. The credit facility is subject to various financial covenants that

require the Company to maintain certain financial ratios as defined in the agreement. As of March 31,September 30, 2018, the Company was in compliance with all such covenants. The revolving loan terminates February 20, 2020. At March 31,September 30, 2018, there was anno outstanding revolving loan balance of $105,000.balance. There was a $50,000also no outstanding balance at June 30, 2017.2018.
Other lines of credit
The Company has an unsecured bank credit line which provides for funding of up to $5,000 and bears interest at the prime rate less 1%. The credit line was renewed in April 2017 and expires on April 30, 2019. At March 31,September 30, 2018, no amount was outstanding. There was also no balance outstanding at June 30, 2017.2018.



ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk refers to the risk that a change in the level of one or more market prices, interest rates, indices, volatilities, correlations or other market factors such as liquidity, will result in losses for a certain financial instrument or group of financial instruments. We are currently exposed to credit risk on credit extended to customers and at times are exposed to interest risk on outstanding debt. We do not currently use any derivative financial instruments. We actively monitor these risks through a variety of controlled procedures involving senior management.
Based on the controls in place and the credit worthiness of the customer base, we believe the credit risk associated with the extension of credit to our customers will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.
Based on ourWe have no outstanding debt with variable interest rates as of March 31,September 30, 2018, a 1% increase in our borrowingand are therefore not currently exposed to interest rate would increase our annual interest expense by $1,050.risk.

ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. For this purpose, disclosure controls and procedures include controls and procedures designed to ensure that information that is required to be disclosed under the Exchange Act is accumulated and communicated to the Company's management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
DuringIn connection with the fiscal quarter ending March 31, 2018, there wasadoption of the new revenue recognition standard, Topic 606, we did implement changes to our processes related to revenue recognition and the control activities within those processes. These included the development of new policies based on the new standard, implementation of a new system utilized to track revenue based on the new standard, and changes to gathering of information provided for disclosures. There were no changeadditional changes in our internal control over financial reporting that hasoccurred during the fiscal quarter ending September 30, 2018 that have materially affected, or isare reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION
ITEM 1.        LEGAL PROCEEDINGS
We are subject to various routine legal proceedings and claims arising in the ordinary course of our business. In the opinion of management, any liabilities resulting from current lawsuits are not expected, either individually or in the aggregate, to have a material adverse effect on our consolidated financial statements. In accordance with U.S. GAAP, we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These liabilities are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case or proceeding.

ITEM 2.        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
The following shares of the Company were repurchased during the quarter ended March 31,September 30, 2018:

 
Total Number of Shares Purchased (1)
 Average Price of Share 
Total Number of Shares Purchased as Part of Publicly Announced Plans (1)
 
Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
January 1- January 31, 201890
 $116.34
 
 4,028,696
February 1- February 28, 2018
 
 
 4,028,696
March 1- March 31, 2018
 
 
 4,028,696
Total90
 116.34
 
 4,028,696

 
Total Number of Shares Purchased (1)
 Average Price of Share 
Total Number of Shares Purchased as Part of Publicly Announced Plans (1)
 
Maximum Number of Shares that May Yet Be Purchased Under the Plans (2)
July 1- July 31, 20185,182
 $130.36
 
 3,882,713
August 1- August 31, 2018
 
 
 3,882,713
September 1- September 30, 20181,653
 160.00
 
 3,882,713
Total6,835
 137.53
 
 3,882,713
(1) No shares were purchased through a publicly announced repurchase plan. There were 906,835 shares surrendered to the Company to satisfy tax withholding obligations in connection with employee restricted stock awards.
(2) Total stock repurchase authorizations approved by the Company's Board of Directors as of February 17, 2015 were for 30 million shares. These authorizations have no specific dollar or share price targets and no expiration dates.

ITEM 6.        EXHIBITS

31.1

31.2

32.1

32.2

101.INS*XBRL Instance Document

101.SCH*XBRL Taxonomy Extension Schema Document

101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*XBRL Taxonomy Extension Label Linkbase Document

101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document

* Furnished with this quarterly report on Form 10-Q are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at March 31,September 30, 2018 and June 30, 2017,2018, (ii) the Condensed Consolidated Statements of Income for the three and nine months ended March 31,September 30, 2018 and 2017, (iii) the Condensed Consolidated Statements of Cash Flows for the ninethree months ended March 31,September 30, 2018 and 2017, and (iv) Notes to Condensed Consolidated Financial Statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

   JACK HENRY & ASSOCIATES, INC.
    
Date:May 7,November 8, 2018 /s/ David B. Foss
   David B. Foss
   Chief Executive Officer and President
    
Date:May 7,November 8, 2018 /s/ Kevin D. Williams
   Kevin D. Williams
   Chief Financial Officer and Treasurer


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