RESTATEMENT OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Correction of Accounting Errors

During the current fiscal year, management identified historical accounting errors relating to its accounting for certain software license, maintenance and service agreements. The prior period errors primarily relate to the Company's accounting for its bundled software multi-element arrangements.

More specifically, the Company concluded it had improperly accounted for contracts containing multiple software products delivered at different points in time as separate arrangements within a contract versus as a single arrangement with multiple elements, resulting in revenue being recognized on these contracts before all licenses, for which no vendor-specific objective evidence (“VSOE”) of fair value exists, had been delivered. Furthermore, the Company concluded that its mechanisms for tracking and estimating implementation hours was not capable of producing reliable estimates in support of its assertion of VSOE for its implementation services and that its pricing for stand-alone sales of post-contract support ("PCS") was not consistent enough to support its assertion of VSOE for PCS during prior periods.

Our previous accounting resulted in revenue being recognized earlier than would be appropriate for bundled software multi-element arrangements where VSOE does not exist for any of the software elements. Our current conclusions result in the deferral of revenue on such arrangements until the only undelivered element is PCS. The total arrangement revenue is then recognized ratably over the remaining initial bundled PCS period provided all other revenue recognition criteria have been met. Direct and incremental costs, including direct labor and sales commissions, related to obtaining and implementing these contracts have also been deferred until the only undelivered element is PCS and are recognized ratably over the remaining initial bundled PCS period.

Due to the above errors, including the related tax impact, net income for the fiscal quarter ended March 31, 2014 was overstated by $4,150 and net income for the nine months ended March 31, 2014 was overstated by $16,339. On the balance sheet, total assets as of June 30, 2014 increased $56,411, total liabilities increased $127,185, and stockholders' equity decreased $70,774.

The following tables present the effects of the restatement on each line of the Company's previously issued condensed consolidated financial statements as of June 30, 2014 and for the fiscal quarter and nine-month period ended March 31, 2014.



Condensed Consolidated Statements of Income:
(In Thousands, Except Per Share Data)

	Quarter Ended
	March 31, 2014
	As Previously Reported			Effect of Restatement			As Restated
REVENUE
License	$	15,267		$	(14,664	)	$	603
Support and service	270,931			5,169			276,100
Hardware	14,731			—			14,731
Total revenue	300,929			(9,495		)	291,434

COST OF SALES
Cost of license	1,167			(940		)	227
Cost of support and service	164,223			(1,399		)	162,824
Cost of hardware	11,008			—			11,008
Total cost of sales	176,398			(2,339		)	174,059

GROSS PROFIT	124,531			(7,156		)	117,375

OPERATING EXPENSES
Selling and marketing	22,034			(315		)	21,719
Research and development	17,485			—			17,485
General and administrative	13,630			—			13,630
Total operating expenses	53,149			(315		)	52,834

OPERATING INCOME	71,382			(6,841		)	64,541

INTEREST INCOME (EXPENSE)
Interest income	84			—			84
Interest expense	(262		)	—			(262		)
Total interest income (expense)	(178		)	—			(178		)

INCOME BEFORE INCOME TAXES	71,204			(6,841		)	64,363

PROVISION FOR INCOME TAXES	24,448			(2,691		)	21,757

NET INCOME	$	46,756		$	(4,150	)	$	42,606

Diluted earnings per share	$	0.55		$	(0.05	)	$	0.50
Diluted weighted average shares outstanding	85,467			85,467			85,467

Basic earnings per share	$	0.55		$	(0.05	)	$	0.50
Basic weighted average shares outstanding	84,981			84,981			84,981



Condensed Consolidated Statements of Income:
(In Thousands, Except Per Share Data)

	Nine-Month Period Ended
	March 31, 2014
	As Previously Reported			Effect of Restatement			As Restated
REVENUE
License	$	39,938		$	(38,328	)	$	1,610
Support and service	814,751			(2,779		)	811,972
Hardware	44,425			—			44,425
Total revenue	899,114			(41,107		)	858,007

COST OF SALES
Cost of license	3,526			(2,766		)	760
Cost of support and service	476,700			(9,951		)	466,749
Cost of hardware	32,816			—			32,816
Total cost of sales	513,042			(12,717		)	500,325

GROSS PROFIT	386,072			(28,390		)	357,682

OPERATING EXPENSES
Selling and marketing	64,562			(1,602		)	62,960
Research and development	49,300			—			49,300
General and administrative	40,011			—			40,011
Total operating expenses	153,873			(1,602		)	152,271

OPERATING INCOME	232,199			(26,788		)	205,411

INTEREST INCOME (EXPENSE)
Interest income	344			—			344
Interest expense	(808		)	—			(808		)
Total interest income (expense)	(464		)	—			(464		)

INCOME BEFORE INCOME TAXES	231,735			(26,788		)	204,947

PROVISION FOR INCOME TAXES	81,208			(10,449		)	70,759

NET INCOME	$	150,527		$	(16,339	)	$	134,188

Diluted earnings per share	$	1.76		$	(0.19	)	$	1.56
Diluted weighted average shares outstanding	85,769			85,769			85,769

Basic earnings per share	$	1.77		$	(0.19	)	$	1.57
Basic weighted average shares outstanding	85,242			85,242			85,242



Condensed Consolidated Balance Sheets:
(In Thousands, Except Share and Per Share Data)
	June 30, 2014
	As Previously Reported			Effect of Restatement			As Restated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	70,377		$	—		$	70,377
Receivables, net	224,041			—			224,041
Income tax receivable	7,937			—			7,937
Prepaid expenses and other	59,824			1,250			61,074
Deferred costs	22,202			4,875			27,077
Total current assets	384,381			6,125			390,506
PROPERTY AND EQUIPMENT, net	291,675			—			291,675
OTHER ASSETS:
Non-current deferred costs	34,708			43,750			78,458
Computer software, net of amortization	160,391			—			160,391
Other non-current assets	38,121			6,536			44,657
Customer relationships, net of amortization	136,602			—			136,602
Other intangible assets, net of amortization	25,653			—			25,653
Goodwill	552,761			—			552,761
Total other assets	948,236			50,286			998,522
Total assets	$	1,624,292		$	56,411		$	1,680,703
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	10,516		$	—		$	10,516
Accrued expenses	63,299			—			63,299
Deferred income tax liability	37,592			(7,498		)	30,094
Notes payable and current maturities of long term debt	5,407			—			5,407
Deferred revenues	312,002			25,491			337,493
Total current liabilities	428,816			17,993			446,809
LONG TERM LIABILITIES:
Non-current deferred revenues	8,985			146,390			155,375
Non-current deferred income tax liability	134,918			(37,198		)	97,720
Debt, net of current maturities	3,729			—			3,729
Other long-term liabilities	9,683			—			9,683
Total long term liabilities	157,315			109,192			266,507
Total liabilities	586,131			127,185			713,316
STOCKHOLDERS' EQUITY
Preferred stock - $1 par value; 500,000 shares authorized, none issued	—			—			—
Common stock - $0.01 par value; 250,000,000 shares authorized; 102,429,926 shares issued at June 30, 2014	1,024			—			1,024
Additional paid-in capital	412,512			—			412,512
Retained earnings	1,202,406			(70,774		)	1,131,632
Less treasury stock at cost; 19,794,559 shares at June 30, 2014	(577,781		)	—			(577,781		)
Total stockholders' equity	1,038,161			(70,774		)	967,387
Total liabilities and equity	$	1,624,292		$	56,411		$	1,680,703



Condensed Consolidated Statements of Cash Flows:
(In Thousands)

	Nine-Month Period Ended
	March 31, 2014
	As Previously Reported			Effect of Restatement			As Restated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	150,527		$	(16,339	)	$	134,188
Adjustments to reconcile net income from operations to net cash from operating activities:
Depreciation	39,581			—			39,581
Amortization	39,936			—			39,936
Change in deferred income taxes	1,056			(10,450		)	(9,394		)
Excess tax benefits from stock-based compensation	(3,320		)	—			(3,320		)
Expense for stock-based compensation	7,303			—			7,303
(Gain)/loss on disposal of assets	(255		)	—			(255		)
Changes in operating assets and liabilities:
Change in receivables	91,529			—			91,529
Change in prepaid expenses, deferred costs and other	(13,892		)	(14,318		)	(28,210		)
Change in accounts payable	(4,670		)	—			(4,670		)
Change in accrued expenses	(11,019		)	—			(11,019		)
Change in income taxes	15,992			—			15,992
Change in deferred revenues	(151,331		)	41,107			(110,224		)
Net cash from operating activities	161,437			—			161,437
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisitions, net of cash acquired	(27,894		)	—			(27,894		)
Capital expenditures	(27,697		)	—			(27,697		)
Proceeds from sale of assets	5,392			—			5,392
Internal use software	(11,365		)	—			(11,365		)
Computer software developed	(44,511		)	—			(44,511		)
Net cash from investing activities	(106,075		)	—			(106,075		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on credit facilities	—			—			—
Repayments on credit facilities	(15,556		)	—			(15,556		)
Purchase of treasury stock	(62,995		)	—			(62,995		)
Dividends paid	(52,770		)	—			(52,770		)
Debt acquisition costs	—			—			—
Excess tax benefits from stock-based compensation	3,320			—			3,320
Proceeds from issuance of common stock upon exercise of stock options	408			—			408
Minimum tax withholding payments related to share based compensation	(6,511		)	—			(6,511		)
Proceeds from sale of common stock, net	3,081			—			3,081
Net cash from financing activities	(131,023		)	—			(131,023		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	(75,661		)	—			(75,661		)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	127,905			—			127,905
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	52,244		$	—		$	52,244

Prior Period Reclassification

Certain amounts included within the condensed consolidated statement of cash flows for the nine months ended March 31, 2014 have been restated to correct an error related to the presentation of excess tax benefits from stock based compensation within cash flows from operating activities. Such correction adjusted the cash flow statement for the nine months ended March 31, 2014 by presenting excess tax benefits from stock based compensation as a separate line item and increasing the change in income taxes by $3,320. There was no change in total cash flows from operating, investing or financing activities.