10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2009

Commission file number 0-9993

MICROS SYSTEMS, INC.

——————————————————————

(Exact name of Registrant as specified in its charter)

MARYLAND	52-1101488
(State of incorporation)	(IRS Employer Identification Number)
7031 Columbia Gateway Drive, Columbia, Maryland 21046-2289
(Address of principal executive offices)	(Zip code)
443-285-6000
Registrant’s telephone number, including area code

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 þ NO o

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

YES o NO o

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

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

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

YES o NO þ

As of April 30, 2009, there were issued and outstanding 80,400,968 shares of Registrant’s Common Stock, $0.00625 par value.

MICROS SYSTEMS, INC. AND SUBSIDIARIES

Form 10-Q

For the three and nine months ended March 31, 2009

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

2

MICROS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands, except per share data)

	March 31, 2009			June 30, 2008
ASSETS
Current Assets:
Cash and cash equivalents	$	383,272		$	381,964
Accounts receivable, net of allowance for doubtful accounts of $29,432 at March 31, 2009 and $28,348 at June 30, 2008		173,259			192,445
Inventory, net		41,764			64,575
Deferred income taxes		19,734			18,724
Prepaid expenses and other current assets		29,799			29,737
Total current assets		647,828			687,445
Investments, non-current		56,625			65,216
Property, plant and equipment, net of accumulated depreciation and amortization of $81,331 at March 31, 2009 and $78,505 at June 30, 2008		30,541			29,165
Deferred income taxes, non-current		8,583			7,108
Goodwill		186,360			159,722
Intangible assets, net of accumulated amortization of $9,475 at March 31, 2009 and $7,401 at June 30, 2008		18,899			16,168
Purchased and internally developed software costs, net of accumulated amortization of $62,851 at March 31, 2009 and $61,691 at June 30, 2008		27,490			30,846
Other assets		6,742			7,336
Total assets	$	983,068		$	1,003,006
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Bank lines of credit	$	1,061		$	989
Accounts payable		33,520			46,843
Accrued expenses and other current liabilities		106,677			124,913
Income taxes payable		9,911			6,363
Deferred revenue		125,119			115,398
Total current liabilities		276,288			294,506
Income taxes payable, non-current		16,339			18,302
Deferred income taxes, non-current		2,002			2,181
Other non-current liabilities		8,425			8,103
Total liabilities		303,054			323,092
Minority interests and minority ownership put arrangement		6,761			6,898
Commitments and contingencies (Note 14)
Shareholders' Equity:
Common stock, $0.00625 par value; authorized 120,000 shares; issued and outstanding 80,384 shares at March 31, 2009 and 80,898 shares at June 30, 2008		502			506
Capital in excess of par		128,594			131,517
Retained earnings		555,546			480,777
Accumulated other comprehensive (loss) income		(11,389	)		60,216
Total shareholders' equity		673,253			673,016
Total liabilities and shareholders' equity	$	983,068		$	1,003,006

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

3

MICROS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2009			2008			2009			2008
Revenue:
Hardware	$	42,757		$	65,289		$	162,596		$	197,384
Software		28,322			37,910			104,094			113,278
Services		134,587			133,988			420,980			386,958
Total revenue		205,666			237,187			687,670			697,620
Cost of sales:
Hardware		26,284			42,882			104,099			127,105
Software		6,565			7,648			20,963			25,671
Services		61,767			62,398			199,090			180,783
Total cost of sales		94,616			112,928			324,152			333,559
Gross margin		111,050			124,259			363,518			364,061
Selling, general and administrative expenses		64,349			75,838			213,545			226,593
Research and development expenses		10,260			10,382			31,355			29,474
Depreciation and amortization		4,189			3,280			12,567			10,755
Total operating expenses		78,798			89,500			257,467			266,822
Income from operations		32,252			34,759			106,051			97,239
Non-operating income (expense):
Interest income		1,696			4,226			7,514			11,472
Interest expense		(535	)		(29	)		(817	)		(197	)
Other income (expense), net		107			(868	)		527			(771	)
Total non-operating income, net		1,268			3,329			7,224			10,504
Income before taxes, minority interests and equity in net earnings of affiliates		33,520			38,088			113,275			107,743
Income tax provision		9,888			12,378			37,005			35,862
Income before minority interests and equity in net earnings of affiliates		23,632			25,710			76,270			71,881
Minority interests and equity in net earnings of affiliates, net of taxes		(279	)		(564	)		(962	)		(1,342	)
Net income (1)	$	23,353		$	25,146		$	75,308		$	70,539
Net income per common share (1):
Basic	$	0.29		$	0.31		$	0.93		$	0.86
Diluted	$	0.29		$	0.30		$	0.92		$	0.84
Weighted-average number of shares outstanding:
Basic		80,382			81,368			80,499			81,655
Diluted		81,047			83,174			81,449			83,532

(1) See Note 9, "Share-based Compensation" in Notes to Condensed Consolidated Financial Statements.

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

4

MICROS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

	Nine Months Ended
	March 31,
	2009			2008
Net cash flows provided by operating activities	$	116,941		$	129,263
Cash flows provided by investing activities:
Net cash paid for acquisitions		(32,701	)		(12,858	)
Purchases of property, plant and equipment		(10,437	)		(10,188	)
Internally developed software		(702	)		(1,759	)
Disposal of property, plant and equipment		215			527
Purchases of investments		-			(610,650	)
Proceeds from sales of investments		4,025			627,950
Net cash flows used in investing activities		(39,600	)		(6,978	)
Cash flows provided by financing activities:
Principal payments on line of credit and long-term debt related to an acquisition		(18,124	)		-
Repurchases of stock		(15,431	)		(53,499	)
Proceeds from stock option exercises		1,395			27,111
Realized tax benefits from stock option exercises		84			11,117
Other		(1,634	)		(2,403	)
Net cash flows used in financing activities		(33,710	)		(17,674	)
Effect of exchange rate changes on cash and cash equivalents		(42,323	)		27,489
Net increase in cash and cash equivalents		1,308			132,100
Cash and cash equivalents at beginning of year		381,964			242,702
Cash and cash equivalents at end of period	$	383,272		$	374,802

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

5

MICROS SYSTEMS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE (LOSS) INCOME

(Unaudited, in thousands)

													Accumulated
							Capital						Other
	Common Stock						in Excess			Retained			Comprehensive
	Shares			Amount			of Par			Earnings			Income (Loss)			Total
Balance, June 30, 2008		80,898		$	506		$	131,517		$	480,777		$	60,216		$	673,016
Comprehensive income (loss):
Net income		-			-			-			75,308			-			75,308
Foreign currency translation adjustments, net of tax														(68,746	)		(68,746	)
Changes in unrealized losses on non-current investments, net of tax														(2,859	)		(2,859	)
Total comprehensive income																	3,703
Minority interest put arrangement		-			-			-			(539	)		-			(539	)
Share-based compensation		-			-			11,018			-			-			11,018
Stock issued upon exercise of options		81			-			1,395			-			-			1,395
Repurchases of stock		(595	)		(4	)		(15,427	)		-			-			(15,431	)
Income tax benefit from options exercised		-			-			91			-			-			91
Balance, March 31, 2009		80,384		$	502		$	128,594		$	555,546		$	(11,389	)	$	673,253

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

6

1.     Basis of presentation

The accompanying condensed consolidated financial statements of MICROS Systems, Inc. and its subsidiaries (collectively, the “Company”) have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2008.

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X, promulgated by the Securities and Exchange Commission. Accordingly, they do not include all disclosures required by U.S. generally accepted accounting principles for complete financial statements.

All references to share data in the accompanying condensed consolidated financial statements and throughout these notes have been retroactively adjusted to reflect the February 2008 two-for-one stock split.

The condensed consolidated financial statements included in this report reflect all normal and recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial position of the Company, its results of operations and cash flows for the interim periods set forth herein. The results for the three and nine months ended March 31, 2009 are not necessarily indicative of the results to be expected for the full year or any future periods.

2.     Acquisitions

During August 2008, the Company acquired Fry, Inc. (“Fry”), an e-commerce design, development and managed services provider headquartered in Ann Arbor, Michigan, for a total cash purchase price of approximately $32.7 million, net of cash acquired. The Company also assumed debt of approximately $18.1 million, which was paid off immediately after the acquisition. Approximately $6.0 million of the total purchase price is currently held in escrow and, if specified claims against Fry arise, such amounts may be used to satisfy these claims. Any amounts then remaining after the satisfaction of any such claims will be paid in two installments, at 12 and 18 months after closing. The selling Fry shareholders are eligible to earn up to an additional $17 million in earn out payments over the next approximately two year period following closing, which are payable based upon achievement of specified financial targets. As of March 31, 2009, the Company has accrued approximately $4.5 million payable to selling Fry shareholders for meeting the initial set of specified financial targets, and will pay that amount during the quarter ended June 30, 2009. In connection with the acquisition, the Company recorded goodwill of approximately $39.1 million, intangible assets of approximately $7.0 million, and capitalized software of approximately $4.7 million. The acquisition of Fry has been included in the Company’s results since the acquisition date. The pro forma effect of this acquisition is not material to the consolidated financial position and results of operations presented herein.

3.     Inventory

The components of inventory are as follows:

(in thousands)	March 31, 2009		June 30, 2008
Raw materials	$	3,603	$	5,521
Work-in-process		6		21
Finished goods		38,155		59,033
Total inventory	$	41,764	$	64,575

The Company maintained a reserve for inventory obsolescence of approximately $10.4 million at March 31, 2009, compared to approximately $11.5 million at June 30, 2008. During the three months ended March 31, 2009 and March 31, 2008, the Company reserved approximately $0.4 million and approximately $0.6 million, respectively. During the nine months ended March 31, 2009 and March 31, 2008, the Company reserved approximately $2.1 million and approximately $1.7 million, respectively. All reserves related to potentially obsolete and slow moving products. As of March 31, 2009, foreign currency translation decreased the reserve for inventory obsolescence by approximately $1.7 million as compared to June 30, 2008.

7

4.     Investments, non-current

As of March 31, 2009, the Company continued to hold auction rate securities that were classified as available for sale, investments, non-current. These investments were classified as non-current, because, beginning February 2008, auctions for these securities failed to obtain sufficient bids to establish a clearing rate. As a result, the securities were not saleable in the auction, thereby no longer providing short-term liquidity. In the absence of a liquid market or a negotiated sales transaction, the Company engaged an independent valuation firm to update the valuation of its auction rate securities as of March 31, 2009. The valuation firm used a mark to model approach to arrive at this valuation, which the Company reviewed and with which it agreed. Based on the fair value determination described below in Note 5 - Fair value measurements, the fair value of the auction rate securities held as of March 31, 2009 decreased compared to the cost and the fair value of the securities as of June 30, 2008. Accordingly, the Company has recorded temporary unrealized losses on these investments of approximately $8.8 million (approximately $5.5 million, net of tax). These amounts are recorded in the other comprehensive income component of stockholders’ equity as of March 31, 2009.

5.     Fair value measurements

Effective July 1, 2008, the Company adopted the Financial Accounting Standards Board’s (FASB) Statement of Financial Accounting Standards (SFAS) 157, “Fair Value Measurements,” for financial assets and liabilities and for non-financial assets and liabilities recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Additionally, the Company also adopted FASB Staff Position (FSP) No.157-2, which delayed the effective date of SFAS No. 157 by one year for other non-financial assets and liabilities. As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). SFAS No. 157 establishes a framework for measuring fair value and expands disclosure about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosure, SFAS No. 157 establishes a hierarchy that prioritizes the inputs (generally, assumptions that market participants use in pricing an asset or liability) used to measure fair value based on the quality and reliability of the information provided by the inputs, as follows:

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

· Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data.

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

The Company’s investments in auction rate securities, classified as investments, non-current, were its only Level 3 assets. The Company engaged an independent valuation firm to update the valuation of its auction rate securities as of March 31, 2009. The Company’s valuation methodology for investments was a discounted cash flow model that considers various inputs including: (a) the coupon rate specified under the debt instruments, (b) the current credit ratings of the underlying issuers, (c) collateral characteristics and (d) risk adjusted discount rates. The valuation firm used a mark to model approach to arrive at this valuation, which the Company reviewed and with which it agreed. The valuation was prepared in accordance with FSP No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active,” which the FASB issued in October 2008. FSP No. 157-3 clarified the application of SFAS No. 157 in determining the fair value of an asset where the market for that asset is not active.

The Company reviews impairments in accordance with Emerging Issues Task Force Issue No. 03-1 and FSP No. 115-1 and FAS No. 124-1, each of which is titled “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments” to determine the classification of the impairment as temporary or other-than-temporary. A temporary impairment charge results in an unrealized loss being recorded in the other comprehensive income component of stockholders' equity. Such an unrealized loss does not reduce net income for the applicable accounting period because the loss is viewed as temporary. Unrealized losses are recognized in the statement of operations when a decline in fair value is determined to be other-than-temporary. Determination of whether the impairment is temporary or other-than-temporary requires significant judgment. The primary factors that are considered in classifying the impairment include the credit quality of the underlying security, the extent to which and time period during which the fair value of each investment has been below cost, the expected holding or recovery period for each investment, the Company’s intent and ability to hold each investment until recovery and the existence of any evidence of default by the issuer. Based on its review, the Company determined that its investments in auction rate securities were impaired and also determined that the impairment was temporary. The Company plans to continue to monitor the liquidity of its auction rate securities in the marketplace and the creditworthiness of the entities supporting the obligations under these securities, and will perform another impairment analysis as of the Company’s fiscal year-end. If, as a result of its analysis, the Company determines that the decline in fair value of the auction rate securities is other-than-temporary, the Company will recognize the impairment as a loss in its consolidated statement of operations.

8

The financial assets and liabilities accounted for at fair value as of March 31, 2009 were as follows (does not include cash on hand or assets and liabilities that are measured at historical cost or any basis other than fair value):

(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents (1)	$	290,699	$	-	$	-	$	290,699
Investments, non-current:
Auction rate securities		-		-		56,625		56,625
Balance at March 31, 2009	$	290,699	$	-	$	56,625	$	347,324

(1) Cash equivalents consisted primarily of certificates of deposit, in addition to money market funds and overnight repurchase agreements.

A reconciliation of changes in the fair value of investments, non-current, classified as Level 3, and the related unrealized losses included in other comprehensive income was as follows:

(in thousands)	Cost			Temporary Unrealized Loss			Fair Value
Balance at June 30, 2008	$	69,450		$	(4,234	)	$	65,216
Changes in unrealized losses related to investments		-			676			676
Redemption		(3,375	)		145			(3,230	)
Balance at September 30, 2008		66,075			(3,413	)		62,662
Changes in unrealized losses related to investments		-			(5,121	)		(5,121	)
Balance at December 31, 2008		66,075			(8,534	)		57,541
Changes in unrealized losses related to investments		-			(358	)		(358	)
Redemption		(650	)		92			(558	)
Balance at March 31, 2009	$	65,425		$	(8,800	)	$	56,625

During the nine months ended March 31, 2009, the Company redeemed approximately $4.0 million of its auction rate securities at their par value. The Company recognized no gains or losses related to the sale or partial redemption of its investments in auction rate securities during the nine months ended March 31, 2009 and 2008.

6.     Goodwill and intangible assets

During its first quarter of fiscal year 2009, the Company completed its annual impairment tests on its goodwill and trademarks as of July 1, 2008. Based on its annual impairment test results, the Company determined that no impairment of goodwill or trademarks existed as of July 1, 2008, and subsequent to July 1, 2008, there has not been any event or change in circumstances that have impaired goodwill or trademarks.

7.     Other comprehensive income (loss)

The components of comprehensive income (loss), net of tax, were as follows:

	Three Months Ended March 31,					Nine Months Ended March 31,
(in thousands)	2009			2008		2009			2008
Net income	$	23,353		$	25,146	$	75,308		$	70,539
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(16,029	)		20,865		(68,746	)		37,252
Unrealized loss on non-current investments		(167	)		—		(2,859	)		—
Amortization of prior year pension costs		—			160		—			486
Total comprehensive income	$	7,157		$	46,171	$	3,703		$	108,277

9

The foreign currency translation adjustments of approximately $16.0 million (unfavorable) and approximately $20.9 million (favorable) for the three months ended March 31, 2009 and 2008, respectively, and approximately $68.7 million (unfavorable) and approximately $37.3 million (favorable) for the nine months ended March 31, 2009 and 2008, respectively, were due to foreign currency exchange rate fluctuations, mainly between the U.S. dollar and the Euro, and between the British pound sterling and the U.S. dollar. The Euro has suffered approximately a 16% devaluation against the dollar since June 30, 2008 and a 5% devaluation since December 31, 2008. The British pound sterling has suffered approximately a 28% devaluation against the U.S. dollar since June 30, 2008, and a 2% devaluation since December 31, 2008. Approximately $306.4 million and $40.7 million of the Company’s net assets at March 31, 2009 are denominated in Euros and British pound sterling, respectively.

8.     Line of credit

The Company has two credit agreements (the “Credit Agreements”) that in the aggregate provide a $65.0 million multi-currency committed line of credit. The lenders under the Credit Agreements are Bank of America, N.A., Wachovia Bank, N.A., and US Bank (“Lenders”). The international facility is secured by 65% of the capital stock of the Company’s main operating Ireland subsidiary and 100% of the capital stock of all of the remaining major foreign subsidiaries. The U.S. facility is secured by 100% of the capital stock of the Company’s major U.S. subsidiaries as well as inventory and receivables located in the U.S. During the three months ended December 31, 2008, the Credit Agreements were amended to (i) extend the expiration of the agreements from July 31, 2009 to July 31, 2010 (ii) modify or eliminate certain financial reporting requirements, and (iii) modify or eliminate certain restrictions on the Company’s ability to assume additional debt, repurchase stock, sell subsidiaries, or acquire companies. For borrowings in U.S. currency, the interest rate under the Credit Agreements is equal to the higher of the federal funds rate plus 50 basis points or the prime rate. For borrowings in foreign currencies, the interest rate is determined by a LIBOR-based formula, plus an additional margin of 125 to 200 basis points, depending upon the Company’s consolidated earnings before interest, taxes, depreciation and amortization for the immediately preceding four calendar quarters. Under the terms of the Credit Agreements, the Company is required to pay to the Lenders insignificant commitment fees on the unused portion of the line of credit. The Credit Agreements also contain certain financial covenants and restrictions on the Company’s ability to assume additional debt, repurchase stock, sell subsidiaries or acquire companies. In case of an event of default, as defined in the Credit Agreements including those not cured within the applicable cure period, if any, the Lenders’ remedies include their ability to declare all outstanding loans, plus interest and other related amounts owed, to be immediately due and payable in full, and to pursue all rights and remedies available to them under the Credit Agreements or under applicable law.

As of March 31, 2009, the Company had approximately $1.1 million outstanding under the Credit Agreements and has applied approximately an additional $0.4 million to guarantees. A total of approximately $63.5 million was available for future borrowings as of March 31, 2009. The total outstanding balance consisted of 105.0 million in JPY (Japanese Yen) (approximately $1.1 million at the March 31, 2009 exchange rate).

The Company also has a credit relationship with a European bank in the amount of EUR 1.0 million (approximately $1.3 million at the March 31, 2009 exchange rate.) Under the terms of this facility, the Company may borrow in the form of either a line of credit or term debt. As of March 31, 2009, there were no balances outstanding on this credit facility, but approximately EUR 0.1 million (approximately $0.1 million at the March 31, 2009 exchange rate) of the credit facility has been applied to guarantees.

As of March 31, 2009, the Company had approximately $64.7 million borrowing capacity under all of the credit facilities described above. The weighted-average interest rate on the outstanding balances under the lines of credit as of March 31, 2009 was 2.3% per annum.

9.     Share-based compensation

The Company has incentive and non-qualified stock options outstanding that were granted to directors, officers, and other employees. With respect to directors, the Company’s policy and practice during the relevant period was that only those directors who are employees of the Company were eligible to receive options. The exercise price per share of each option equals the market value of a share of the Company’s common stock on the date of the grant. Substantially all of the options granted are exercisable pursuant to a three-year vesting schedule whereby one-third of the options vest upon the first anniversary of the grant, the second third of the options vest upon the second anniversary of the grant, and the final third of the options vest upon the third anniversary of the grant. All outstanding options expire ten years from the date of grant. Since the inception of the stock option plan in 1991, the Company has authorized 35.2 million shares for issuance upon exercise of options, of which approximately 3.2 million shares are available for future grants as of March 31, 2009. On that date, options to purchase approximately 7.3 million shares were outstanding, including currently exercisable options to purchase approximately 5.0 million shares.

10

The Company accounts for its option awards in accordance with SFAS No. 123(R), “Share-Based Payment.” The estimated fair value of option awards is measured as of the date of grant, and non-cash share-based compensation expenses adjusted for expected pre-vesting forfeitures are recognized ratably over the requisite service (i.e. vesting) period of options in the consolidated statements of operations. In addition, for the three and nine months ended March 31, 2008, non-cash share-based compensation expenses adjusted for expected pre-vesting forfeitures were also recognized for the non-vested portion of awards that were granted before the effective date of SFAS No. 123(R) as those options vested.

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in thousands)	2009			2008			2009			2008
Selling, general and administrative	$	2,953		$	3,373		$	10,364		$	12,645
Research and development		233			243			654			799
Total non-cash share-based compensation expense		3,186			3,616			11,018			13,444
Income tax benefit		(825	)		(801	)		(2,644	)		(3,315	)
Total non-cash share-based compensation expense, net of tax benefit	$	2,361		$	2,815		$	8,374		$	10,129
Impact on diluted net income per share	$	0.03		$	0.04		$	0.10		$	0.13

During the three months ended December 31, 2008 and 2007, the Company granted to the Company’s Chairman, President, and CEO, A.L. Giannopoulos, options to purchase 150,000 shares and 240,000 shares, respectively. In accordance with the terms of the option plan, any options that he holds that have not yet vested at the time of his retirement will vest immediately upon his retirement as he is over the retirement age of 62. Mr. Giannopoulos has not retired, but because he was over the age of 62 at the time he received the options, the Company recorded 100% of the non-cash share-based compensation expense related to the options granted to Mr. Giannopoulos during the three months ended December 31, 2008 and 2007. As a result, the Company recorded approximately $0.8 million (approximately $0.5 million net of tax benefits or $0.01 diluted earnings per share) for the nine months ended March 31, 2009 and approximately $3.2 million (approximately $2.0 million net of tax benefits or $0.02 diluted earnings per share) for the nine months ended March 31, 2008 related to options granted to Mr. Giannopoulos.

No compensation expense was capitalized for the three and nine months ended March 31, 2009 and 2008 because no stock options were granted to employees whose labor costs were capitalized as software development costs.

As of March 31, 2009, there was approximately $15.7 million in non-cash share-based compensation costs related to non-vested awards not yet recognized in the Company’s consolidated statements of operations. This cost is expected to be recognized over a weighted-average period of 1.9 years.

11

10.   Net income per share

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in thousands, except per share data)	2009			2008			2009			2008
Net income	$	23,353		$	25,146		$	75,308		$	70,539
Effect of minority put arrangement		(181	)		(153	)		(539	)		(480	)
Net income available to common shareholders	$	23,172		$	24,993		$	74,769		$	70,059
Average number of common shares outstanding		80,382			81,368			80,499			81,655
Dilutive effect of outstanding stock options		665			1,806			950			1,877
Average number of common shares outstanding assuming dilution		81,047			83,174			81,449			83,532
Basic net income per share	$	0.29		$	0.31		$	0.93		$	0.86
Diluted net income per share	$	0.29		$	0.30		$	0.92		$	0.84
Anti-dilutive weighted average number of shares excluded from reconciliation		5,664			1,340			4,077			1,030

Net income for the three months ended March 31, 2009 and 2008 reflects approximately $3.2 million ($2.4 million, net of tax) and $3.6 million ($2.8 million, net of tax), respectively, in non-cash share-based compensation expense. These non-cash share-based compensation expenses reduced diluted net income per share by $0.03 and $0.04 per share for the three months ended March 31, 2009 and March 31, 2008, respectively.

Net income for the nine months ended March 31, 2009 and 2008 reflects approximately $11.0 million ($8.4 million, net of tax) and $13.4 million ($10.1 million, net of tax), respectively, in non-cash share-based compensation expense. These non-cash share-based compensation expenses reduced diluted net income per share by $0.10 and $0.13 per share for the nine months ended March 31, 2009 and March 31, 2008, respectively.

11.   Recent accounting pronouncements

FSP 157-4

In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” which indicates that if an entity determines that either the volume and/or level of activity for an asset or liability has significantly decreased when compared to normal activity for the asset or liability, further analysis of transactions or price quotations is needed and a significant adjustment to the transactions or quoted prices may be necessary to estimate fair value. This FSP also reaffirms the fair value measurement objective promulgated under FAS 157, “Fair Value Measurements,” namely, to measure the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants under market conditions at the measurement date. This FSP is effective for interim and annual periods ending after June 15, 2009 (the Company’s fiscal year ending June 30, 2009). The Company does not believe the adoption of FSP 157-4 will have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

FSP 115-2 and FSP 124-2

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” to provide guidance for assessing whether an impairment of a debt security is other than temporary and requires additional disclosures with respect to both debt and equity securities. This FSP is effective for reporting periods ending after June 15, 2009. The Company is currently reviewing the impact of the adoption of FSP 115-2 and FSP 124-2 on the Company’s consolidated financial position, results of operations and cash flows.

FSP 107-1 and APB 28-1

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP FAS 107-1 and APB 28-1 amend SFAS No. 107 “Disclosures about Fair Value of Financial Instruments,” and Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” to require publicly-traded companies to include disclosures about fair value of financial instruments in summarized financial information for interim reporting periods as well as in annual financial statements. This FSP is effective for reporting periods ending after June 15, 2009. The Company does not believe the adoption of FSP 107-1 and APB 28-1 will have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

12

FSP 142-3

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets,” which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), “Business Combinations,” and other U.S. generally accepted accounting principles. This FSP is effective for fiscal years beginning after December 15, 2008 (the Company’s fiscal year ending June 30, 2010), and interim periods within those fiscal years. The Company does not believe the adoption of FSP 142-3 will have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

SFAS No. 161

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133,” (“SFAS No. 161”) which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 (the Company’s fiscal year ending June 30, 2010). Historically the Company has not had material hedging transactions and unless the Company engages in such transactions, the impact of the adoption of SFAS No. 161 on its consolidated financial position, results of operations and cash flows will not be material. Nevertheless, the impact of the adoption of SFAS No. 161 cannot currently be determined, as it will depend on the nature and extent of any hedging transactions, if any, that are in effect at the time of the adoption or thereafter.

SFAS No. 141(R)

In December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combinations” (“SFAS No. 141(R)”), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquired business. SFAS No. 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and disclosing information to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for business combinations for which the acquisition dates are on or after the beginning of the first fiscal year beginning on or after December 15, 2008 (the Company’s fiscal year ending June 30, 2010). The Company is currently reviewing the impact of the adoption of SFAS No. 141(R) on the Company’s consolidated financial position, results of operations and cash flows.

SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB 51”, (“SFAS No. 160”). This statement amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the noncontrolling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 establishes accounting and reporting standards that require noncontrolling interests to be reported as a component of equity, changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and any retained noncontrolling equity investment upon the deconsolidation of a subsidiary initially be measured at fair value. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008 (the Company’s fiscal year ending June 30, 2010). The Company does not believe the adoption of SFAS No. 160 will have a material impact on the Company’s consolidated financial position, results of operations and cash flows.

12.   Segment reporting data

The Company is organized and operates in four operating segments: U.S., Europe, the Pacific Rim, and Latin America. For the purposes of applying SFAS No. 131, the Company has identified the U.S. as a separate reportable segment and has aggregated its three international operating segments into one reportable segment, international, as the three international operating segments share many similar economic characteristics. Management views the U.S. and international segments separately in operating its business, although the products and services are similar for each segment.

All of the Company’s recent business acquisitions involved companies offering products and services that are similar or complementary to those currently offered by the Company; accordingly, the acquired businesses have been incorporated into the existing four operating segments based on their geographic locations, and they are then operated, managed, and evaluated as a part of the applicable operating segment.

13

A summary of the Company’s reportable segments was as follows:

	Three Months Ended March 31,						Nine Months Ended March 31,
(in thousands)	2009			2008			2009			2008
Revenue(1):
U.S.	$	104,456		$	107,891		$	338,235		$	316,385
International		144,630			184,462			494,650			533,461
Intersegment eliminations		(43,420	)		(55,166	)		(145,215	)		(152,226	)
Total revenue	$	205,666		$	237,187		$	687,670		$	697,620
Income before taxes, minority interests and equity in net earnings of affiliates(1):
U.S.	$	13,648		$	13,994		$	39,911		$	32,156
International		56,152			68,681			192,659			199,178
Intersegment eliminations		(36,280	)		(44,587	)		(119,295	)		(123,591	)
Total income before taxes, minority interests and equity in net earnings of affiliates	$	33,520		$	38,088		$	113,275		$	107,743

	As of
(in thousands)	March 31, 2009		June 30, 2008
Identifiable assets (2):
U.S.	$	478,047	$	466,028
International		505,021		536,978
Total identifiable assets	$	983,068	$	1,003,006

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

(2)  Amounts are based on the physical location of the asset.

13.   Shareholders’ equity

During the period from fiscal year 2002 through fiscal year 2007, the Board of Directors authorized the purchase of up to an aggregate of 10 million shares of the Company’s common stock. The Company completed the repurchases of 10 million shares as of July 2008. On July 9, 2008, the Board of Directors authorized the repurchase of up to an additional two million shares of the Company’s common stock over the next three years, to be purchased from time to time depending on market conditions and other corporate considerations as determined by management. The Company has incurred an aggregate of approximately $0.2 million in fees related to all stock repurchases. As of March 31, 2009, approximately 1.5 million additional shares may be repurchased under the most recent authorization.

The following table provides a summary of the cumulative number of shares purchased since the inception of the current repurchase program through March 31, 2009, plus the shares purchased under the previous repurchase programs. All repurchased shares reverted to the status of authorized but unissued shares.

	Number of Shares		Purchase Price per Share		Total Price Paid (in thousands)
Total shares purchased as of June 30, 2008		9,862,500	$	18.82	$	185,587
July 1, 2008 – March 31, 2009		594,900	$	25.94		15,431
Total shares purchased as of March 31, 2009		10,457,400	$	19.22	$	201,018

14

14.   Contingencies

In Part I, Item 3 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2008 (the “Form 10-K”), the Company provided disclosure regarding a case pending in the U.S. District Court for the Northern District of Georgia, styled Ware v. Abercrombie & Fitch Stores, Inc. et al. Although the Company is not a party to that case, the Company may have some obligation to indemnify certain of the defendants who are its customers, based on the terms of its contracts with those customers. The plaintiff has alleged that the defendants are infringing a patent relating to the processing of credit card transactions. The defendants include approximately 107 individual retailers, 13 of whom are the Company’s customers for retail point-of-sale software.  The Company is currently providing indemnity coverage to five of the defendants who are the Company’s customers in accordance with applicable provisions of the contracts between the Company and those customers. As of March 31, 2009, the Company’s estimated indemnity obligation is not material, and through March 31, 2009, the Company’s legal fees with respect to indemnity coverage for this matter have not been material. The case had been stayed pending the completion of the United States Patent and Trademark Office’s reexamination of the plaintiff’s patent that is the subject of the lawsuit. On April 24, 2009, the United States Patent and Trademark Office issued a Notice of Intent to Issue Ex Parte Reexamination Certificate indicating the withdrawal of its prior rejection of the claims of the patent and the confirmation of such claims. As a result of this action, it is likely that the court-ordered stay of the case will eventually be lifted, and the litigation will proceed. Nevertheless, the Company continues to believe, based on currently available information, that its products do not infringe upon the patent and will vigorously defend the action.

On November 26, 2007, Heartland Payment Systems, Inc., filed an action in the U.S. District Court for the District of New Jersey naming as defendants MICROS Systems, Inc., Merchant Link LLC, and Chase Paymentech Solutions, LLC. The case is styled Heartland Payment Systems, Inc. v. MICROS Systems, Inc., et al. In its complaint, Heartland claims that MICROS, Merchant Link, and Paymentech have engaged in an anti-competitive arrangement relating to credit and debit card payment processing for restaurant point-of-sale systems, and further claims that this arrangement violates federal antitrust law and applicable New Jersey state laws. Heartland claims it has been damaged by virtue of being required to deal with Merchant Link if it wishes to provide services to users of MICROS point-of-sale software, by being required to pay fees to Merchant Link that it claims are inappropriate or excessive, and by being competitively disadvantaged relative to Chase Paymentech’s services. Heartland seeks monetary damages in excess of $12 million, and also injunctive and other equitable relief. The Company and the other defendants have filed answers to the complaint, in which the Company and the other defendants have denied all material allegations, and the Company has asserted counterclaims, alleging that Heartland has engaged in tortious activity by defaming and libeling the Company, and by improperly interfering with the Company’s customer contracts and customer relationships. Heartland has filed answers to the counterclaims denying all material allegations. The case is currently in the discovery phase, and no trial date has been set in this matter. There were no material developments to this proceeding during the three-month period ended March 31, 2009.

In Part I, Item 3 of the Form 10-K, the Company also provided disclosure regarding two consolidated cases pending in the Court of Common Pleas of Allegheny County, Pennsylvania, styled Roth Cash Register v. MICROS Systems, Inc., et al., and Shenango Systems Solutions v. MICROS Systems, Inc., et al. On May 22, 2008, a jury returned a combined verdict of $7.5 million against the Company in those actions.  The cases initially were filed in 2000, and the complaints both related to the non-renewal of dealership agreements in the year 2000 between the Company and the respective plaintiffs. There are, however, no other litigation matters relating to the restructuring of the dealer channel in the year 2000. The agreements were non-renewed as part of a restructuring of the dealer channel. The plaintiffs alleged that the Company and certain of its subsidiaries and employees entered into a plan to eliminate the plaintiffs as authorized dealers and improperly interfere with the plaintiffs' relationships with their respective existing and potential future clients and customers without compensation to the plaintiffs. As a result, the plaintiffs claimed that the Company was liable for, among other things, breach of contract and tortious interference with existing and prospective contractual relationships. Following the jury verdict, the Company moved for judgment notwithstanding the verdict and for a new trial, and the plaintiffs also moved for judgment notwithstanding the verdict and for a new trial. On December 23, 2008, the Court denied all of the motions. On December 30, 2008, the plaintiffs filed praecipes for entry of judgment on the verdicts. The Company filed its notices of appeal on January 27, 2009. On February 3, 2009, both plaintiffs filed notices of cross appeal. There were no other material developments to this proceeding during the three-month period ended March 31, 2009. The Company has established only an immaterial reserve for any potential liability relating to these matters, as the Company believes that it has raised and can present strong points through appeal, and therefore that an unfavorable outcome in these cases is not probable. However, even if the verdicts were not reversed or reduced as a result of the post-trial motions or any subsequent appeals, payments of the resulting obligations would not have a material adverse effect on the Company’s consolidated financial position or liquidity. 

15

The Company is and has been involved in legal proceedings arising in the normal course of business, and, subject to the matters referenced above, the Company is of the opinion, based upon presently available information and the advice of counsel concerning pertinent legal matters, that any resulting liability should not have a material adverse effect on the Company’s results of operations or financial position or cash flows.

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

We are a leading worldwide designer, manufacturer, marketer, and servicer of software and systems for the global hospitality industry (including, e.g., hotels and restaurants) and the specialty retail industry. In addition to our software and hardware products, we offer an extensive array of related services to our customers, including, e.g., implementation, training, and support. We distribute our products and services directly and through our domestic branch offices and our international subsidiary offices, as well as indirectly (both domestically and internationally) through a network of independent dealers and distributors.

We manage our business geographically and are organized and operate in two reportable segments for financial reporting purposes: U.S. and International. International reportable segment operations are primarily in Europe, the Pacific Rim and Latin America. For purposes of applying Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and Related Information,” management views the U.S. and International reportable segments separately in operating our business, although the products and services are similar for each segment. In each of these two reportable segments, we have developed an infrastructure through which we license and sell all of our products and services. While the products and services that are sold must be customized to address local issues, laws, tax requirements and customer preferences, the products and services are substantially similar worldwide.

We have been and continue to be adversely affected by the current global recession. We believe that weakened consumer spending, coupled with difficulties in obtaining credit (including the cost of credit) have negatively affected our customers’ abilities to acquire or open new hospitality and retail venues, and also limit their willingness and ability to make significant capital expenditures on new systems and system upgrades. In light of the very challenging and uncertain conditions, we continue to implement actions to enhance our liquidity and maintain a solid balance sheet. Several of these actions are as follows: (i) reducing certain discretionary expenses; (ii) reducing certain rates for third party contractors; (iii) tactically implementing headcount reductions in certain departments; and (iv) tactically implementing hiring freezes in certain departments.

Forward-looking statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of specified factors, including those set forth in the section titled “Business and Investment Risks; Information Relating to Forward-Looking Statements,” in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the Fiscal Year ended June 30, 2008 and in Part II, Item 1A, “Risk Factors” in this report.

Examples of such forward-looking statements include:

· Our assumptions regarding the materiality of any subsequent adjustments to the purchase price of our acquisitions during the relevant period;

· Our expectations regarding the effect of the adoption of various accounting pronouncements;

· Our expectations regarding the impact of competition on product and service margins;

· Our statements regarding the effects of Euro fluctuations (and other currency fluctuations) on our financial performance;

· Our expectation that customers with which we do the largest amount of business will change from period to period;

· Our belief that our reserve against future indemnity expenditures will be sufficient;

16

· Our belief that any liability from ongoing legal proceedings will not have a material adverse effect on the Company’s results of operations or financial position or cash flows;

· Our expectations regarding the future course of the three legal proceedings described in this report;

· Our statements about the effects of larger customer orders on our quarterly earnings and revenues;

· Our statements regarding the costs associated with maintaining compliance with applicable legal, financial, and industry requirements and standards;

· Our beliefs regarding the effects on our results of operations or financial position of any current legal proceedings in which we may be involved;

· Our expectations regarding effective tax rates in future periods, and the effects of tax audits in certain jurisdictions;

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

· Our beliefs regarding impairment of our investments in auction rate securities, and our intention and ability to retain those investments under current market conditions;

· Our expectations regarding our exposure to interest rate risk; and

· Our expectation that we will evaluate our need to invest in instruments to protect against interest rate fluctuations and our exposure to such interest rate risk.

Results of Operations

The results of our operations were adversely affected by the strengthening of U.S. dollar against foreign currencies as 52% of our total revenue for the nine months ended March 31, 2009 was generated by our international segment. The results were also adversely affected by a slow down in demand from our customers which we believe was due to the uncertainties arising from the current U.S. and global economic conditions. All references to share data in this Item 2 have been adjusted to reflect the two-for-one stock split effected on February 5, 2008.

Revenue:

Three Months Ended March 31, 2009:

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

	Three Months Ended March 31,
	U.S.				International				Total
(in thousands)	2009		2008		2009		2008		2009		2008
Hardware	$	24,358	$	32,813	$	18,399	$	32,476	$	42,757	$	65,289
Software		11,458		14,189		16,864		23,721		28,322		37,910
Service		66,445		57,830		68,142		76,158		134,587		133,988
	$	102,261	$	104,832	$	103,405	$	132,355	$	205,666	$	237,187

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

	Three Months Ended March 31,
	2009			2008
Hardware		20.8	%		27.5	%
Software		13.8	%		16.0	%
Service		65.4	%		56.5	%
		100.0	%		100.0	%

17

For the three months ended March 31, 2009, total revenue was approximately $205.7 million, a decrease of approximately $31.5 million, or 13.3% compared to the same period last year due to the following:

· The unfavorable foreign currency exchange rate fluctuations, for substantially all foreign currencies against the U.S. dollar, negatively affected total revenue by approximately $21.3 million;

· Hardware and software revenue, without giving effect to currency translation, decreased by 29% and 16%, respectively, compared to the same period last year. We believe these decreases were due to a slow down in demand from our customers as a result of the adverse U.S. and global economic conditions.

· The decreases noted above were offset partially by additional services revenue generated by Fry, a company which we acquired in August 2008.

The international segment revenue for the three months ended March 31, 2009 decreased by approximately $29.0 million compared to the same period last year. The unfavorable foreign currency exchange rate fluctuations negatively affected international segment revenue by approximately $21.3 million. Without giving effect to currency translation, hardware revenue decreased 32% and software revenue decreased 14%, respectively, compared to the same period last year. As stated above, we believe these decreases excluding the impact of foreign currency exchange rate fluctuations were due to a slowdown in demand from our customers because of the adverse U.S. and global economic conditions. These decreases were partially offset by an 8% increase in overall services revenue, without giving effect to foreign currency translation, compared to the same period last year, which was due to the continued expansion of our customer base coupled with increased recurring support revenue from existing customer (primarily through purchase of additional services).

U.S. segment revenue decreased approximately $2.6 million for the three months ended March 31, 2009 compared to the same period last year. The decrease in U.S. segment revenue was due primarily to a 26% decrease in hardware revenue and 19% decrease in software revenue, both compared to the same period last year. These decreases were substantially offset by additional services revenue generated as a result of the acquisition of Fry in August 2008 and an overall increase in services revenue which was due to the continued expansion of our customer base coupled with increased recurring support revenue from existing customers (primarily through purchase of additional services). We believe the decreases in hardware and software revenues were due to a slowdown in demand from our customers because of the uncertainties arising from the overall current U.S. and global economic conditions.

Nine months ended March 31, 2009:

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

	Nine Months Ended March 31,
	U.S.				International				Total
(in thousands)	2009		2008		2009		2008		2009		2008
Hardware	$	86,026	$	99,292	$	76,570	$	98,092	$	162,596	$	197,384
Software		38,668		43,847		65,426		69,431		104,094		113,278
Service		206,934		164,283		214,046		222,675		420,980		386,958
	$	331,628	$	307,422	$	356,042	$	390,198	$	687,670	$	697,620

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

	Nine Months Ended March 31,
	2009			2008
Hardware		23.7	%		28.3	%
Software		15.1	%		16.2	%
Service		61.2	%		55.5	%
		100.0	%		100.0	%

18

For the nine months ended March 31, 2009, total revenue was approximately $687.7 million, a decrease of approximately $10.0 million, or 1.4% compared to the same period last year due to the following:

· The unfavorable foreign currency exchange rate fluctuations, for substantially all foreign currencies against the U.S. dollar, negatively affected total revenue by approximately $36.6 million;

· Hardware and software revenues, without giving effect to foreign currency translation, decreased by 14% and 2%, respectively, compared to the same period last year. We believe these decreases were due to a slow down in demand from our customers because of adverse U.S. and global economic conditions.

· The decreases described above were offset partially by additional services revenue generated by Fry, a company we acquired in August 2008. Additionally, overall services revenue, without giving effect to foreign currency translation and Fry, increased by 6% due to the continued expansion of our customer base coupled with increased recurring support revenue from existing customers (primarily through purchase of additional services).

The international segment revenue for the nine months ended March 31, 2009 decreased by approximately $34.2 million compared to the same period last year. The unfavorable foreign currency exchange rate fluctuations negatively affected total revenue by approximately $36.6 million. Services revenue, without giving effect to foreign currency translation, increased 6% and software revenue, also without giving effect to foreign currency translation, increased 4%, both compared to the same period last year. The increase in service revenue was due to the continued expansion of our customer base coupled with increased recurring support revenue from existing customers (primarily through purchase of additional services). The increases in services and software revenue were partially offset by a 14% decrease (without giving effect to foreign currency translation) in hardware revenue. As stated above, we believe the decrease in hardware revenue was due to a slowdown in demand from our customers because of adverse U.S. and global economic conditions.

U.S. segment revenue increased approximately $24.2 million for the nine months ended March 31, 2009 compared to the same period last year. The increase was primarily the result of additional services revenue generated as a result of the acquisition of Fry in August 2008 and the continued expansion of our customer base coupled with increased recurring support revenue from existing customers (primarily through purchase of additional services). This increase was partially offset by 13% decrease in hardware and 12% decrease in software revenues, both compared to the same period last year. We believe these decreases were due to a slowdown in demand from our customers because of adverse U.S. and global economic conditions.

Cost of Sales:

Three Months Ended March 31, 2009:

An analysis of the cost of sales was as follows:

	Three Months Ended March 31,
	2009					2008
(in thousands)	Cost of Sales		% of Related Revenue			Costs of Sales		% of Related Revenue
Hardware	$	26,284		61.5	%	$	42,882		65.7	%
Software		6,565		23.2	%		7,648		20.2	%
Service		61,767		45.9	%		62,398		46.6	%
	$	94,616		46.0	%	$	112,928		47.6	%

For the three months ended March 31, 2009 and 2008, cost of sales as a percent of revenue were 46.0% and 47.6%, respectively. Hardware cost of sales as a percent of related revenue for the three months ended March 31, 2009 decreased 4.2% compared to the same period last year primarily as a result of a decrease in freight costs, and an overall improvement in margins on substantially all hardware product sales.

Software cost of sales as a percent of related revenue increased approximately 3.0% compared to the same period last year primarily as a result of (1) an unfavorable change in sales mix, (2) lower margin realized on third party software sales compared to same period last year, and (3) an increase in capitalized software amortization expense as a percent of software. These increases in software costs were partially offset by a 10% increase in the sale of Opera suite software products compared to the same period last year. Sales of Opera suite software products (and other internally developed software applications) generally generate higher margins than sales of third party software.

19

Service costs as a percent of related revenue decreased approximately 0.7% compared to the same period last year due to lower travel costs, substantially offset by lower margin realized on Fry services revenue compared to MICROS’ services revenue, excluding Fry.

Nine months ended March 31, 2009:

An analysis of the cost of sales was as follows:

	Nine Months Ended March 31,
	2009					2008
(in thousands)	Cost of Sales		% of Related Revenue			Costs of Sales		% of Related Revenue
Hardware	$	104,099		64.0	%	$	127,105		64.4	%
Software		20,963		20.1	%		25,671		22.7	%
Service		199,090		47.3	%		180,783		46.7	%
	$	324,152		47.1	%	$	333,559		47.8	%

For the nine months ended March 31, 2009 and 2008, cost of sales as a percent of revenue were 47.1% and 47.8%, respectively. Hardware cost of sales as a percent of related revenue for the nine months ended March 31, 2009 decreased 0.4% compared to the same period last year primarily as a result of a decrease in freight costs, partially offset by lower margin realized on the combined sale of Workstation 4 and Workstation 5 during the nine months ended March 31, 2009 compared to the same period last year. Workstation 5 was released in October 2007 and is the larger version of the Workstation 4.

Software cost of sales as a percent of related revenue decreased approximately 2.6% compared to the same period last year. The decrease in the software cost of sales was primarily as a result of a 25% increase in the sale of Opera suite software products compared to the same period last year. Sales of Opera suite software products (and other internally developed software applications) generally generate higher margins than sales of third party software.

Service costs as a percent of related revenue increased approximately 0.6% compared to the same period last year due to lower margins generally realized on Fry services revenue compared to MICROS’ services revenue, excluding Fry.

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

SG&A expenses, as a percentage of revenue, for the three months ended March 31, 2009, were 31.3%, a decrease of 0.7% compared to the same period last year. This decrease was primarily due to our ability to manage our variable costs, partially offset by unfavorable leveraging of fixed costs as a result of lower revenue during the three months ended March 31, 2009 compared to same period last year.

SG&A expenses, as a percentage of revenue, for the nine months ended March 31, 2009, were 31.1%, a decrease of 1.4% compared to the same period last year. This decrease primarily was due to our ability to manage our variable costs and lower share-based compensation expense compared to the same period last year.

20

Research and Development (“R&D”) Expenses:

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

	Three Months Ended March 31,						Nine Months Ended March 31,
(in thousands)	2009			2008			2009			2008
Total R&D incurred	$	10,729		$	10,782		$	32,057		$	31,233
Capitalized software development costs		(469	)		(400	)		(702	)		(1,759	)
Total R&D expenses	$	10,260		$	10,382		$	31,355		$	29,474
% of Revenue		5.0	%		4.4	%		4.6	%		4.2	%

Depreciation and Amortization Expenses:

Depreciation and amortization expenses for the three months ended March 31, 2009 increased approximately $0.9 million to approximately $4.2 million compared to the same period last year. The increase was primarily due to additional depreciation expense incurred on capital expenditures made since March 31, 2008 and the acquisition of Fry.

Depreciation and amortization expenses for the nine months ended March 31, 2009 increased approximately $1.8 million to approximately $12.6 million compared to the same period last year. The increase was primarily due to additional depreciation expense incurred on capital expenditures made since March 31, 2008 and the recent acquisition of Fry.

Share-Based Compensation Expenses:

We account for our option awards in accordance with SFAS No. 123(R), “Share-Based Payment.” The estimated fair value of awards granted under the stock option program are measured as of the date of grant, and non-cash share-based compensation expenses, adjusted for expected pre-vesting forfeitures, are recognized ratably over the requisite service (i.e., vesting) period of options in the consolidated statements of operations. In addition, for the three and nine months ended March 31, 2008, non-cash share-based compensation expenses, adjusted for expected pre-vesting forfeitures, also were recognized for the non-vested portion of awards that were granted before the effective date of SFAS No. 123(R) as those options vested. The SG&A expenses and R&D expenses discussed above include the following allocations of non-cash share-based compensation expense:

	Three Months Ended March 31,						Nine Months Ended March 31,
(in thousands)	2009			2008			2009			2008
SG&A	$	2,953		$	3,373		$	10,364		$	12,645
R&D		233			243			654			799
Total non-cash share-based compensation expense		3,186			3,616			11,018			13,444
Income tax benefit		(825	)		(801	)		(2,644	)		(3,315	)
Total non-cash share-based compensation expense, net of tax benefit	$	2,361		$	2,815		$	8,374		$	10,129
Impact on diluted net income per share	$	0.03		$	0.04		$	0.10		$	0.13

During the three months ended December 31, 2008 and 2007, we granted to our Chairman, President, and CEO, A.L. Giannopoulos, options to purchase 150,000 shares and 240,000 shares, respectively. In accordance with the terms of the option plan, any options that he holds that have not yet vested at the time of his retirement will vest immediately upon his retirement as he is over the retirement age of 62. Mr. Giannopoulos has not retired, but because he was over the age of 62 at the time he received the options, we recorded 100% of the non-cash share-based compensation expense related to the options granted to Mr. Giannopoulos during the nine months ended March 31, 2009 and 2008. As a result, we recorded approximately $0.8 million (approximately $0.5 million net of tax benefits or $0.01 diluted earnings per share) for the nine months ended March 31, 2009 and approximately $3.2 million (approximately $2.0 million net of tax benefits or $0.02 diluted earnings per share) for the nine months ended March 31, 2008 related to options granted to Mr. Giannopoulos.

Non-operating Income:

Net non-operating income for the three months ended March 31, 2009, was approximately $1.3 million, a decrease of approximately $2.1 million compared to the same period last year. The decrease was due to a decline in interest income of approximately $2.5 million due to overall lower interest rates earned on cash and cash equivalents.

21

Net non-operating income for the nine months ended March 31, 2009, was approximately $7.2 million, a decrease of approximately $3.3 million compared to the same period last year. The decrease was due to a decrease in interest income of approximately $4.0 million due to overall lower interest rates earned on cash and cash equivalents.

Income Tax Provisions:

The effective tax rate for the three months ended March 31, 2009 and 2008 was 29.5% and 32.5%, respectively. The effective tax rate for the nine months ended March 31, 2009 and 2008 was 32.7% and 33.3%, respectively. The effective tax rates for the three and nine months ended March 31, 2009 and March 31, 2008 were less than the 35.0% U.S. statutory federal income tax rate primarily due to decreases in certain unrecognized tax positions as a result of the expiration of statutes of limitations, the mix of earnings from jurisdictions that have a lower statutory tax rate than the U.S., and from the phase-in of the deduction for domestic production activities under the Internal Revenue Code.  These benefits were partially offset by the non-deductible nature of certain non-cash share-based compensation items, other non-deductible compensation items, non-deductible foreign withholding taxes and the inclusion of foreign income in our U.S. tax base. The decreases in tax rates as compared to the same periods last year were primarily attributable to decreases of certain unrecognized tax positions as a result of the expiration of statutes of limitations, changes in the mix of earnings from foreign jurisdictions included in our U.S. tax base and other non-deductible compensation.

We have reviewed our uncertain income tax positions in accordance with FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109.” We are currently under audit in certain major taxing jurisdictions, with open tax years beginning in fiscal year 1999.  It is reasonably possible to estimate that within the next 12 months we will decrease unrecognized tax benefits by approximately $1 million to $6 million due to the expiration of statutes of limitations, settlement of issues with tax authorities and other events. Based on current estimates, this estimated decrease in unrecognized tax benefits could increase earnings by approximately $0.5 million to $2 million as a result of its impact on the effective tax rate. However, audit outcomes and the timing of audit settlements are subject to significant uncertainty. Further, over the next twelve months, it is reasonably possible that our tax positions will continue to generate liabilities for unrecognized tax benefits.

Based on currently available information, we estimate that the fiscal year 2009 effective tax rate will be approximately 33%.  We believe that due to changes in the mix of earnings among jurisdictions, the fluctuation of earnings, and the impact of certain discrete items recognized in accordance with the interim reporting requirements of FASB Interpretation No. 18, “Accounting for Income Taxes in Interim Periods,” there may be some degree of adjustment to the effective tax rate on a quarterly basis.

Recent accounting pronouncements

FSP 157-4

In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” which indicates that if an entity determines that either the volume and/or level of activity for an asset or liability has significantly decreased when compared to normal activity for the asset or liability, further analysis of transactions or price quotations is needed and a significant adjustment to the transactions or quoted prices may be necessary to estimate fair value. This FSP also reaffirms the fair value measurement objective promulgated under FAS 157, “Fair Value Measurements,” namely, to measure the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants under market conditions at the measurement date. This FSP is effective for interim and annual periods ending after June 15, 2009 (our fiscal year ending June 30, 2009). We do not believe the adoption of FSP 157-4 will have a material impact on our consolidated financial position, results of operations and cash flows.

FSP 115-2 and FSP 124-2

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” to provide guidance for assessing whether an impairment of a debt security is other than temporary and requires additional disclosures with respect to both debt and equity securities. This FSP is effective for reporting periods ending after June 15, 2009. We are currently reviewing the impact of the adoption of FSP 115-2 and FSP 124-2 on our consolidated financial position, results of operations and cash flows.

22

FSP 107-1 and APB 28-1

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP FAS 107-1 and APB 28-1 amend SFAS No. 107 “Disclosures about Fair Value of Financial Instruments,” and Accounting Principles Board Opinion No. 28, “Interim Financial Reporting,” to require publicly-traded companies to include disclosures about fair value of financial instruments in summarized financial information for interim reporting periods as well as in annual financial statements. This FSP is effective for reporting periods ending after June 15, 2009. We do not believe the adoption of FSP 107-1 and APB 28-1 will have a material impact on our consolidated financial position, results of operations and cash flows.

FSP 142-3

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets,” which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), “Business Combinations,” and other U.S. generally accepted accounting principles. This FSP is effective for fiscal years beginning after December 15, 2008 (our fiscal year ending June 30, 2010), and interim periods within those fiscal years. We do not believe the adoption of FSP FAS 142-3 will have a material impact on our consolidated financial position, results of operations and cash flows.

SFAS No. 161

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS No. 161”), which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, results of operations, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 (our fiscal year ending June 30, 2010). Historically we have not had material hedging transactions and, unless we engage in such transactions, the impact of the adoption of SFAS No. 161 on our consolidated financial position, results of operations and cash flows will not be material. Nevertheless, the impact of the adoption of SFAS No. 161 cannot currently be determined, as it will depend on the nature and extent of any hedging transactions, if any, that are in effect at the time of the adoption or thereafter.

SFAS No. 141(R)

In December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combinations” (“SFAS No. 141(R)”), which establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired business. SFAS No. 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and disclosing information to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141(R) is effective for business combinations for which the acquisition dates are on or after the beginning of the first fiscal year beginning on or after December 15, 2008 (our fiscal year ending June 30, 2010). We are currently reviewing the impact of the adoption of SFAS No. 141(R) on our consolidated financial position, results of operations and cash flows.

SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB 51”, (“SFAS No. 160”). This statement amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the noncontrolling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 establishes accounting and reporting standards requiring that noncontrolling interests be reported as a component of equity, changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, and any retained noncontrolling equity investment upon the deconsolidation of a subsidiary initially be measured at fair value. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008 (our fiscal year ending June 30, 2010). We do not believe the adoption of SFAS No. 160 will have a material impact on our consolidated financial position, results of operations and cash flows.

23

Critical accounting policies and estimates

Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various assumptions that we believe to be reasonable under the circumstances. Different assumptions would affect these estimates, and actual results may differ from these estimates.

We believe the following are our accounting policies and estimates that involve our more significant judgments and estimates used in the preparation of the condensed financial statements:

· Revenue recognition and deferred revenue;

· Allowance for doubtful accounts;

· Inventory;

· Investments, non-current;

· Non-cash share-based compensation;

· Capitalized software development costs;

· Valuation of long-lived assets, including intangible assets and impairment review of goodwill;

· Contingencies and litigation;

· Income taxes; and

· Foreign currency translation.

We have reviewed our critical accounting policies and estimates and the related disclosures with our Audit Committee. These policies and procedures are described further in our Annual Report on Form 10-K for the year ended June 30, 2008 in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Estimates.”

Liquidity and capital resources

Sources and Uses of Cash and Cash Equivalents

The Company’s consolidated statements of cash flows summary is as follows:

	Nine Months Ended March 31,
(in thousands)	2009			2008
Net cash provided by (used in):
Operating activities	$	116,941		$	129,263
Investing activities		(39,600	)		(6,978	)
Financing activities		(33,710	)		(17,674	)

Operating activities:

Net cash provided by operating activities for the nine months ended March 31, 2009 decreased approximately $12.3 million compared to the nine months ended March 31, 2008. The decrease was primarily due to an increase in net operating assets for the nine months ended March 31, 2009 compared to the same period last year, partially offset by an increase in net income of approximately $4.8 million.

Investing activities:

Net cash used in investing activities for the nine months ended March 31, 2009 was approximately $39.6 million, as a result of approximately $32.7 million used for our acquisition of Fry and approximately $11.1 million used to purchase property, plant and equipment and internally developed software to be licensed to others. During the nine months ended March 31, 2009, we redeemed approximately $4.0 million of our auction rate securities at par value. See “Capital Resources,” below, for a discussion of our investments in auction rate securities.

24

Net cash provided by investing activities for the nine months ended March 31, 2008 was approximately $7.0 million, primarily as a result of approximately $12.9 million used for acquisitions, substantially in connection with our acquisition of Check-in Data AG, and approximately $11.9 million used to purchase property, plant and equipment and internally developed software to be licensed to others. The cash used in investing activities was partially offset by net proceeds from the sale of auction rate securities exceeding investments in auction rate securities by approximately $17.3 million. See “Capital Resources,” below, for a discussion of our investments in auction rate securities.

Financing activities:

Net cash used in financing activities for the nine months ended March 31, 2009 was approximately $33.7 million, primarily due to principal payments of approximately $18.1 million on the line of credit and long-term debt that we assumed as a result of our acquisition of Fry in August 2008. Additionally, we used approximately $15.4 million for our stock repurchases during the period.

Net cash provided by financing activities for the nine months ended March 31, 2008 was approximately $17.7 million, primarily due to stock repurchases of approximately $53.5 million, offset by proceeds from stock option exercises of approximately $27.1 million and realized tax benefits from stock option exercises of approximately $11.1 million.

During the nine months ended March 31, 2009, the unfavorable foreign exchange rate fluctuations, for substantially all foreign currencies against the U.S. dollar, negatively affected cash and cash equivalents’ balance by approximately $42.3 million. Our March 31, 2009 cash and cash equivalents’ balance of approximately $383.3 million is an increase of approximately $50.1 million from the December 31, 2008 balance. All cash and cash equivalents were being retained for the operation and expansion of the business, as well as for the repurchase of our common stock.

Capital Resources

At March 31, 2009, we had approximately $383.3 million in cash and cash equivalents. Additionally, we continued to hold auction rate securities (long-term instruments with variable interest rates that are designed to periodically reset to prevailing market rates every 7 to 35 days through an auction process) with a fair value of approximately $56.6 million. These securities are supported by student loans for which repayment is either backed by the Federal Family Education Loan Program or insured by AMBAC Financial Group. Due to the liquidity previously provided by the interest reset mechanism and the short-term nature of our investments, we initially classified the auction rate securities as short-term investments. Beginning in February 2008, there were insufficient bids in the auctions for these auction rate securities to establish a clearing rate, and the securities were not saleable in the auction. As a result, the auction process no longer provided short-term liquidity and the auction rate securities have been classified as non-current investments available-for-sale as of March 31, 2009 and June 30, 2008. We also engaged an independent valuation firm to update the valuation of the auction rate securities as of March 31, 2009. The valuation of auction rate securities held as of March 31, 2009 reflected a further decrease in fair value of those securities of approximately $4.7 million (approximately $2.9 million, net of tax) as compared to their fair value as of June 30, 2008. We do not believe the decrease in fair value to be other-than-temporary based on the extent to which and time during which the fair value of each investment has been below cost, the expected holding or recovery period for each investment, and our intention and ability to hold each investment until recovery. During the nine months ended March 31, 2009, we redeemed approximately $4.0 million of our auction rate securities at their par value and have not recognized any gains or losses related to the sale or partial redemption of our investments in auction rate securities. Based on the valuation, we have increased the temporary unrealized losses on these investments to approximately $8.8 million (approximately $5.5 million, net of tax). We plan to continue to monitor the liquidity of the auction rate securities in the marketplace and the creditworthiness of the entities supporting the obligations under these securities, and will perform another impairment analysis as of our fiscal year-end.

25

We have two credit agreements (the “Credit Agreements”) that in the aggregate provide a $65.0 million multi-currency committed line of credit. During the quarter ended December 31, 2008, the Credit Agreements were amended to (i) extend the expiration of the agreements from July 31, 2009 to July 31, 2010 (ii) modify or eliminate certain financial reporting requirements, and (iii) modify or eliminate certain restrictions on our ability to assume additional debt, repurchase stock, sell subsidiaries, or acquire companies. For borrowings in U.S. currency, the interest rate under the Credit Agreements is equal to the higher of the federal funds rate plus 50 basis points or the prime rate. For borrowings in foreign currencies, the interest rate is determined by a LIBOR-based formula, plus an additional margin of 125 to 200 basis points, depending upon our consolidated earnings before interest, taxes, depreciation and amortization for the immediately preceding four calendar quarters. As of March 31, 2009, we had approximately $1.1 million outstanding under the Credit Agreements and had applied approximately an additional $0.4 million to guarantees. A total of approximately $63.5 million was available for future borrowings as of March 31, 2009. The total outstanding balance consisted of 105.0 million in JPY (Japanese Yen) (approximately $1.1 million at the March 31, 2009 exchange rate).

We also have a credit relationship with a European bank in the amount of EUR 1.0 million (approximately $1.3 million at the March 31, 2009 exchange rate.) Under the terms of this facility, we may borrow in the form of either a line of credit or term debt. As of March 31, 2009, there were no balances outstanding on this credit facility, but approximately EUR 0.1 million (approximately $0.1 million at the March 31, 2009 exchange rate) of the credit facility has been applied to guarantees.

As of March 31, 2009, we had approximately $64.7 million borrowing capacity under all of the credit facilities described above. The weighted-average interest rate on the outstanding balances under the lines of credit as of March 31, 2009 was 2.3% per annum. See Note 8 to the condensed consolidated financial statements included in this report for additional information regarding the Credit Agreements.

Except for approximately $1.1 million outstanding on the Credit Agreements, as described above, our only other long-term debt was approximately $0.3 million, substantially in capital lease related obligations.

We believe that our cash and cash equivalents, additional cash to be generated from operations during the foreseeable future and our available lines of credit will be sufficient to provide our working capital needs for the foreseeable future. In light of current economic conditions generally and in light of the overall performance of the stock market in recent months, we cannot assume that funds would be available from other sources if required to fund acquisitions or any unanticipated and substantial cash needs. We currently anticipate that our property, plant, and equipment expenditures for fiscal year 2009 will be approximately $13 million.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We recorded foreign sales, including exports from the United States, of approximately $356.0 million and approximately $390.2 millionduring the nine months ended March 31, 2009 and March 31, 2008, respectively.

Since a substantial portion of our business is conducted in foreign countries, a downturn in the economies of foreign countries could adversely affect our financial results. Our significant international business and presence expose us to certain market risks, such as currency fluctuation, interest rate changes, and political risks. While, under certain circumstances, reliance on foreign operations can have a moderating impact (as one region’s improving conditions can offset another region’s declining conditions), our foreign businesses nonetheless add a degree of uncertainty to our planning and forecasting process.

With respect to currency risk, we transact business in different currencies through our foreign subsidiaries. The fluctuation of currencies affects sales and profitability. Frequently, sales and the costs associated with those sales are not denominated in the same currency. Refer to Note 7 to the condensed consolidated financial statements of this Form 10-Q for information regarding foreign currency translation effects, and to the portion of Item 2, Managements’ Discussion and Analysis, regarding revenue, for additional information regarding the effects of foreign currency translation.

In the nine months ended March 31, 2009 and March 31, 2008, we transacted business in 39 and 37 currencies, respectively.

26

The relative currency mix for the three and nine months ended March 31, 2009 and 2008 were as follows:

	% of Reported Revenue
	Three Months Ended March 31,						Nine Months Ended March 31,						Exchange Rates March 31,
	2009			2008			2009			2008			2009		2008
Revenues by currency (1):
United States Dollar		55	%		49	%		54	%		49	%		1.0000		1.0000
European Euro		21	%		23	%		21	%		22	%		1.3286		1.5787
British Pound Sterling		6	%		9	%		7	%		9	%		1.4347		1.9846
Australian Dollar		2	%		1	%		2	%		2	%		0.6952		0.9140
Japanese Yen		1	%		1	%		1	%		1	%		0.0101		0.0100
Swiss Franc		2	%		2	%		2	%		2	%		0.8785		1.0068
Mexican Peso		1	%		2	%		1	%		2	%		0.0706		0.0940
Canadian Dollar		1	%		2	%		1	%		2	%		0.7931		0.9740
All Other Currencies (2)		11	%		11	%		11	%		11	%		0.2093		0.2205
Total		100	%		100	%		100	%		100	%

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

(2) The “% of Reported Revenue” for “All Other Currencies” is calculated based on the weighted average three and nine months’ exchange rates for all other currencies. The “Exchange Rates as of March 31” for “All Other Currencies” represents the weighted average March 31 exchange rates for all other currencies based on the nine months revenue for each country or region.

A 10% increase or decrease in the value of the Euro and British pound sterling in relation to the U.S. dollar in the nine months ended March 31, 2009 would have affected total revenues by approximately $18.9 million, or 2.8%. The sensitivity analysis assumes a weighted average 10% change in the exchange rate during the respective period with all other variables being held constant. This sensitivity analysis does not consider the effect of exchange rate changes on either cost of sales, operating expenses, or income taxes, and therefore is not necessarily an indicator of the effect of potential exchange rate changes on our net income.

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

Our committed lines of credit bear interest at a floating rate, which exposes us to interest rate risks. We manage our exposure to this risk by minimizing, to the extent feasible, overall borrowing and monitoring available financing alternatives. Our interest rate risk has not changed materially from June 30, 2008, and we do not currently foresee any significant changes in exposure or in how we manage this exposure in the near future. For borrowings in U.S. currency, the Credit Agreements bear interest at higher of the federal funds rate plus 50 basis points or the prime rate. For borrowings in foreign currencies, the interest rate is determined by a LIBOR-based formula plus an additional margin of 125 to 200 basis points, depending upon our consolidated earnings before interest, taxes, depreciation and amortization for the immediately preceding four calendar quarters.  At March 31, 2009, we had total borrowings of approximately $1.1 million, and had not entered into any instruments to hedge the resulting exposure to interest-rate risk. Management believes that the fair value of the debt equals its carrying value at March 31, 2009. Our exposure to fluctuations in interest rates will be affected by the outstanding amount under the Credit Agreements, the applicable interest rate, and any outstanding instruments to hedge exposure to interest rate risk. As our total borrowing as of March 31, 2009 was approximately $1.1 million, a 1% change in interest rate would have resulted in an immaterial impact on our consolidated financial position, results of operations and cash flows.

To minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments with high-credit-quality institutions, typically maintaining an investment grade rating from at least one of the three credit rating institutions. See “Capital Resources,” in Item 2 above for a discussion of our investments in auction rate securities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

27

Change in Internal Control over Financial Reporting

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Refer to Note 14 to the condensed consolidated financial statements of this Form 10-Q for information regarding certain pending legal proceedings.

ITEM 1A.  RISK FACTORS.

In addition to other information presented in this report, including the risk factors set forth below, you should consider carefully the factors discussed in Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2008.

We face risks related to the current economic crisis. Economic conditions that are beyond our control may result in decreases in demand for our products and services. Such conditions include the U.S. and global recession, tightening of the credit markets, reductions in consumer spending, and fluctuations in exchange rates. Our primary customers – the hospitality, restaurant, and retail industries – are highly sensitive to economic, political, and environmental disturbances and uncertainty, all of which are not only outside of our and our customers’ control, but also are difficult to predict with any accuracy. In particular, declines in consumer spending and general recessionary conditions directly affect our primary customers, limiting their ability to purchase our systems and services.

We have experienced declines in total revenues that we believe are attributable to reduced demand resulting from current U.S. and international economic conditions. Continued adverse economic conditions likely will affect our customers’ operating performance which, in turn, may continue to result in reduced demand for our products and services. Moreover, weakened consumer spending, coupled with difficulties many businesses are encountering in obtaining credit, have negatively affected our customers’ ability to acquire or open new hospitality and retail venues, as well as their ability to make significant capital expenditures on the systems that we sell. We believe these constraints may cause and in some cases may have already caused our customers to maintain their existing systems rather than purchase newer systems.

In addition, continued weakness in domestic and foreign economies may cause some of our distributors and customers to become illiquid and delay payments, or may otherwise adversely affect our ability to collect on their accounts, which would result in higher levels of bad debt expense. Although adverse changes in the financial condition of our customers and distributors have not had a material effect on our financial condition or operating results, continued adverse economic conditions may require that we institute protective measures such as financial reviews, modified customer credit limits and identification of alternative vendors, and ultimately could materially adversely affect our business.

While we believe that our cash and cash equivalents, additional cash generated from operations, and available lines of credit will be sufficient to provide working capital needs for the foreseeable future, current economic conditions, including the overall performance of the stock market beginning in 2008, may limit the availability of funds from other sources if we encounter an extraordinary need for external capital. These factors also affect us indirectly, to the extent that they serve to limit our customers’ ability to purchase our systems and services.

Public health concerns, including those related to the spread of disease such as the swine flu, could adversely affect travel and tourism, which are the primary businesses of many of our customers, and therefore could adversely affect our business. The recent outbreak of swine flu in Mexico, the United States and other countries, or other public health concerns, could potentially reduce travel and tourism, which could adversely affect demand for hotel rooms and restaurants. Because hotels and restaurants constitute a substantial portion of our customer base, our business could be adversely affected if public health concerns cause a reduction in travel and tourism.

28

Similarly, because of the nature of the industries in which our customers operate, we are subject to political risk, including as a result of instability in the Middle East and the worldwide threat of terrorism, and especially in developing countries with uncertain or unstable political structures or regimes.

ITEM 6. EXHIBITS

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

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

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

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

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

10 Lease Agreement by and between Orix Columbia, Inc. and MICROS Systems, Inc., dated August 17, 1998, with respect to the Company’s corporate headquarters located at 7031 Columbia Gateway Dr., Columbia MD 21046-2289, as amended by a First Amendment to Lease, dated October 27, 1999, a Second Amendment to Lease, dated December 26, 2001, and a Third Amendment to Lease, dated March 1, 2006 and by and between MICROS Systems, Inc. and Columbia Gateway Office Corporation as successor in interest to Orix Columbia, Inc. (filed herewith)

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

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

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

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

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

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		MICROS SYSTEMS, INC.
		(Registrant)
Date: May 7, 2009	/s/	Gary C. Kaufman
		Gary C. Kaufman
		Executive Vice President,
		Finance and Administration/
		Chief Financial Officer
Date: May 7, 2009	/s/	Cynthia A. Russo
		Cynthia A. Russo
		Senior Vice President and
		Corporate Controller

30

EX-10

Exhibit 10

FIRST AMENDMENT TO LEASE AGREEMENT

THIS FIRST AMENDMENT TO LEASE AGREEMENT (the “First Amendment”) is made as of the 27th day of October, 1999, by and between ORIX COLUMBIA, INC, an Illinois corporation (“Landlord”), and MICROS SYSTEMS, INC., a Maryland corporation (“Tenant”).

RECITALS

A.  Landlord and Tenant entered into that certain Lease Agreement (the “Original Lease”) dated as of August 17, 1999, for approximately 200,000 square feet of space on the second, third, fourth, and fifth floors of an office building to be constructed for Tenant's headquarters on certain land (the “Land”) described in the Original Lease in an office park development known as “Columbia Gateway” in Columbia, Maryland.

B.  The Building and the interior improvements to Tenant's premises are being constructed in accordance with the Construction Agreement dated as of even date with the Original Lease between Landlord and Tenant, as amended by the First Amendment to Construction Agreement dated as of even date herewith.  (Said Construction Agreement as amended is hereinafter referred to as the “Construction Agreement”.)

C.  Pursuant to Section 1(b) of the Original Lease, Tenant has the right to lease all or a portion of the remaining space in the Building (the “Expansion Space”), and Tenant has notified Landlord that Tenant desires to lease all of the remaining space in the Building, which consists of approximately 50,000 square feet on the first floor of the Building.

NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

1.  Recitals.  The foregoing recitals are correct and complete and are hereby incorporated into this First Amendment by this reference.

2.  Defined Terms.  Any capitalized terms not defined in this First Amendment shall have the meanings ascribed thereto in the Original Lease.  From and after the date hereof, the term “Lease” as used in the Original Lease shall mean the Original Lease as amended by this First Amendment.  From and after the date hereof, the term “Construction Agreement” as used in the Original Lease shall mean the Construction Agreement as amended by the First Amendment to Construction Agreement dated as of even date herewith.

3.  Amendments to Lease.

(a)  Section 1(a) of the Original Lease is deleted in its entirety, and in lieu thereof, the following is substituted:

1(a).  Landlord does hereby lease and demise unto Tenant, and Tenant does hereby lease from Landlord, approximately 250,000 rentable square feet of space (the “Demised Premises”) on the entire first, second, third, fourth and fifth floors of the two towers of the Building.  The lease of the Demised Premises includes the right, together with other tenants of the Building and members of the public, to use the common public areas of the Building, but includes no other rights not specifically set forth herein.  Upon Substantial Completion of the Demised Premises, the Demised Premises shall be measured in accordance with the GWCAR Standard (as hereinafter defined) and shall be outlined in red on Exhibit B to be attached hereto.  The actual amount of rentable square feet comprising the Demised Premises shall be confirmed in the Declaration (the “Declaration”) attached hereto as Exhibit I-C, executed by Landlord and Tenant.  Any references in this Lease to a dollar amount per square foot of rentable floor area of the Demised Premises shall mean such dollar amount multiplied by the number of square feet of rentable floor area.

(b)  Section 1(b) of the Original Lease, which provides Tenant the option to lease the Expansion Space, is hereby deleted in its entirety.

(c)  The vesting of Tenant's leasehold estate under the Original Lease was contingent upon the consummation of the sale of the Land to Landlord.  Landlord has consummated the purchase of the Land and the Building Two Land; therefore, Section 1(c) of the Original Lease is hereby deleted in its entirety.  In addition, Exhibit A attached to the Original Lease is also deleted in its entirety and in lieu thereof, Exhibit I-A attached hereto and made a part hereof is substituted therefor.

(d)  The address for copies of notices to Landlord in Section 36(b) of the Original Lease has been changed.  Therefore, “Suite 550” is deleted, and “Suite 260” is substituted therefor.

(e)  Since Tenant has leased the entire Expansion Space, Article 49 of the Original Lease, which gives Tenant the right to expand into the Expansion Space in the future, and Article 50 of the Original Lease, which gives Tenant the right of first offer on the Expansion Space, are deleted in their entirety.

(f)  Exhibit C attached to the Original Lease is deleted in its entirety, and in lieu thereof, Exhibit I-C attached hereto and made a part hereof shall be substituted.

2

4.  Counterparts.  This First Amendment may be executed in counterparts with the same force and effect as if all signatures were set forth in a single document.

5.  Entire Agreement.  This First Amendment contains and embodies the entire agreement of the parties hereto, and no representations, inducements, or agreements, oral or otherwise, not contained in this First Amendment shall be of any force or effect.  This First Amendment may not be modified or changed in whole or in part in any manner other than by an instrument in writing duly signed by the parties hereto.  Except as modified by this First Amendment, the terms and provisions of the Original Lease, which are incorporated herein by this reference, are hereby reaffirmed and shall be binding upon the parties hereto.  In the event of any inconsistencies between the provisions of the Original Lease and of this First Amendment, the provisions of this First Amendment shall control.

6.  Governing Law.  This First Amendment shall be governed by, and construed in accordance with, the laws of the State of Maryland.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Lease Agreement as of the date first above written.

WITNESS OR ATTEST:	LANDLORD:
	ORIX COLUMBIA, INC.,
	an Illinois corporation
	By:		[SEAL]
		Name:
		Title:
WITNESS OR ATTEST:	TENANT:
	MICROS SYSTEMS, INC.,
	a Maryland corporation
	By:		[SEAL]
		Name:
		Title:

3

EXHIBIT I-A

PROPERTY DESCRIPTION

(the “Land”)

All that lot or parcel of ground situate in the Sixth Election District of Howard County, in the State of Maryland, and described as follows:

Being known and designated as Parcel T-2, as shown on the Plat entitled, “Columbia Gateway, Parcels ‘T-1’ through ‘T-5’, a Resubdivision of Columbia Gateway, Parcel ‘T’, as shown on Plat No. 7542, Sheet 3 of 4” which Plat is recorded among the Land Records of Howard County, Maryland, as Plat No. 13463.

BEING part of the land which was acquired by HRD Holdings, Inc. from The Howard Research And Development Corporation by deed dated November 14, 1997, and recorded among the Land Records of Howard County, Maryland, in Liber 4118, folio 16, HRD Holdings, Inc. having thereafter changed its name to The Howard Research And Development Corporation by Articles of Amendment filed January 5, 1998.

(the “Building Two Land”)

All that lot or parcel of ground situate in the Sixth Election District of Howard County, in the State of Maryland, and described as follows:

Being known and designated as Parcel T-1, as shown on the Plat entitled, “Columbia Gateway, Parcels ‘T-1’ through ‘T-5’, a Resubdivision of Columbia Gateway, Parcel ‘T’, as shown on Plat No. 7542, Sheet 3 of 4” which Plat is recorded among the Land Records of Howard County, Maryland, as Plat No. 13463.

BEING part of the land which was acquired by HRD Holdings, Inc. from The Howard Research And Development Corporation by deed dated November 14, 1997, and recorded among the Land Records of Howard County, Maryland, in Liber 4118, folio 16, HRD Holdings, Inc. having thereafter changed its name to The Howard Research And Development Corporation by Articles of Amendment filed January 5, 1998.

4

EXHIBIT I-C

DECLARATION

THIS DECLARATION is made as of the 9 day of March, 2001, by and between ORIX COLUMBIA, INC., an Illinois corporation (“Landlord”), and MICROS SYSTEMS, INC., a Maryland corporation (“Tenant”).

Recitals

A.  Pursuant to the terms of the Construction Agreement dated as of August 17, 1998, as amended by the First Amendment to Construction Agreement dated as of Oct. 27, 1999, Landlord agreed to construct for Tenant a five-story office building (the “Building”) as Tenant's corporate headquarters in an office park development known as “Columbia Gateway” in Columbia, Maryland.  (Said Construction Agreement as amended is hereinafter referred to as the “Construction Agreement”.)

B.  Pursuant to the terms of the Lease Agreement (the “Original Lease”) dated as of even date with the Construction Agreement, as amended by the First Amendment to Lease Agreement (the “First Amendment”) dated as of Oct. 27, 1999 (the Original Lease as amended by the First Amendment being hereinafter referred to as the “Lease”), Tenant agreed to lease approximately 250,000 rentable square feet of space (the “Demised Premises”) on the entire first, second, third, fourth and fifth floors of the two towers of the Building.

C.  Under the terms of the Lease, after Substantial Completion (as defined in the Construction Agreement) of the Demised Premises, Landlord and Tenant agreed to confirm, among other things, the actual amount rentable area of the space leased, the Rent Commencement Date, and other economic terms which can only be determined upon Substantial Completion of the Demised Premises.

NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Lease and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1.  Recitals.  The foregoing recitals are a material part of this Agreement and are incorporated herein by this reference.

2.  Terms of Declaration Prevail.  The Lease is incorporated herein by this reference.  In the event of any inconsistencies between the terms of this Declaration and the Lease, the terms of this Declaration shall control and take precedence.

3.  Defined Terms.  Unless otherwise provided herein, all capitalized terms used in this Declaration shall have the meanings ascribed thereto in the Lease.

5

4.  Measurement of Demised Premises.  Landlord and Tenant have determined that the Demised Premises comprise 247,624 rentable square feet of area in accordance with the GWCAR Standard.  Therefore, Article 1 of the Lease is deleted in its entirety, and in lieu thereof the following is substituted:

1.  Landlord does hereby lease and demise unto Tenant, and Tenant does hereby lease from Landlord, 247,624 rentable square feet of space (the “Demised Premises”) on the entire first, second, third, fourth and fifth floors of the two towers of the Building.  The Demised Premises are outlined in red on Exhibit B attached hereto.  The lease of the Demised Premises includes the right, together with other tenants of the Building and members of the public, to use the common public areas of the Building, but includes no other rights not specifically set forth herein.  Any references in this Lease to a dollar amount per square foot of rentable floor area of the Demised Premises shall mean such dollar amount multiplied by the number of square feet of rentable floor area.

5.  Rent Commencement Date.  Landlord and Tenant have agreed that the Rent Commencement Date is March 10, 2000.  Therefore, the first two sentences of Section 2(a) of the Lease are deleted in their entirety, and in lieu thereof the following is substituted:

Subject to the terms and conditions set forth herein, the term (“Term”) of this Lease shall commence on March 10, 2000 (the “Rent Commencement Date”), and shall expire at 11:59 p.m. on March 9, 2010, unless sooner terminated or extended in accordance with the provisions hereof.

6.  Base Rent.  Pursuant to the terms of the Construction Agreement, Landlord and Tenant have determined the Base Rent.  Therefore, the first two sentences of Section 3(a) of the Lease are deleted in their entirety, and in lieu thereof, the following is substituted:

During the Term hereof, commencing on the Rent Commencement Date, Tenant covenants to pay to Landlord monthly, without prior notice or demand therefor, and without any deductions or setoffs whatsoever, a minimum monthly rent (the “Monthly Base Rent”) of one twelfth (1/12th) of the Base Rent times the number of rentable square feet of the Demised Premises as follows:

Lease Years One through Three:	$13.66
Lease Years Four through Six:	$14.71
Lease Years Seven through Nine:	$15.84
Lease Year Ten:	$17.06.

6

7.  Pro Rata Share.  Based on the GWCAR Standard, Landlord and Tenant have determined that the total rentable floor area of the Building is 247,624 square feet.  Therefore the first two sentences of subsection (iv) of Section 4(b) of the Lease are deleted in their entirety, and in lieu thereof, the following is substituted:

“Pro Rata Share” shall initially be one hundred percent (100%) (the ratio of Tenant's rentable floor area divided by 247,624, the total of all rentable floor area of the Building).

8.  Estoppel.  Tenant represents and warrants to Landlord as follows:

(a)  The improvements and space required to be furnished to Tenant under the terms of the Lease and all other matters required to be furnished or performed by Landlord have been completed in all respects in accordance with the terms of the Lease and the Construction Agreement.  Tenant acknowledges that Tenant has had an opportunity to inspect the Demised Premises and accepts the Demised Premises except for the punch list items detailed in Schedule A attached hereto, which shall be completed as provided in said Schedule A.

(b)  Except for the punch list items in Schedule A, all duties of Landlord of an inducement nature have been fulfilled and all other obligations required to be performed or observed by Landlord have been duly and fully performed or observed by Landlord.

(c)  Landlord has not waived the performance or observance by Tenant of any of the terms, covenants, or conditions to be performed or observed by Tenant under the Lease.  Landlord has made no representations or commitments, oral or written, or undertaken any obligations other than as may be expressly set forth in the Lease.

(d)  Except as amended by this Declaration, the Lease continues in full force and effect in accordance with its terms and is enforceable against Landlord and Tenant in accordance with its terms.  No claim, set-off or defense exists for the benefit of Tenant against Landlord in connection with the Lease, and to the extent any claims, set-offs or defenses exist, they are hereby waived and relinquished in their entirety.

7

IN WITNESS WHEREOF, Landlord and Tenant have executed this Declaration as of the date first above written.

WITNESS OR ATTEST:	LANDLORD:
	ORIX COLUMBIA, INC.,
	an Illinois corporation
	By:		[SEAL]
		Name:
		Title:
WITNESS OR ATTEST:	TENANT:
	MICROS SYSTEMS, INC.,
	a Maryland corporation
/s/ Kimbery A. Makin	By:	/s/ Gary C. Kaufman	[SEAL]
Kimbery A. Makin		Name: Gary C. Kaufman
Executive Assistant		Title: EVP/CFO

8

SECOND AMENDMENT TO LEASE AGREEMENT

THIS SECOND AMENDMENT TO LEASE AGREEMENT (the “Second Amendment”) is made as of the 26th day of December, 2001, by and between ORIX COLUMBIA, INC, an Illinois corporation (“Landlord"), and MICROS SYSTEMS, INC., a Maryland corporation (“Tenant”).

RECITALS

A.  Landlord and Tenant entered into that certain Lease Agreement dated as of August 17, 1998 (the “Original Lease”), as amended by that certain First Amendment to Lease Agreement (the "First Amendment") dated as of October 27, 1999, and the certain Declaration (the "Declaration") dated March 9, 2001, for approximately 247,624 square feet of space (the "Demised Premises") comprising all of the rentable area in a five-story office building (the "Building") constructed for Tenant's headquarters on certain land (the “Land”) described in Exhibit I-A of the First Amendment in an office park development known as “Columbia Gateway” in Columbia, Maryland.  The Lease Agreement as amended by the First Amendment, and the Declaration is hereinafter referred to as the "Lease."

B.  Tenant has certain option and expansion rights with respect to certain space in a possible future office building (“Building Two”) on the Building Two Land (as defined in Exhibit 1-A of the First Amendment).

C.  Landlord and Tenant desire to amend the Lease to modify Tenant’s option and expansion rights with respect to Building Two.

D.  All capitalized terms herein shall have the meaning ascribed thereto in the Lease unless otherwise specifically defined herein.

NOW, THEREFORE, FOR AND IN CONSIDERTATION of the entry into this Second Amendment by the parties hereto, and for the good other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto do hereby agree as follows:

1.Recitals.  The foregoing recitals are in all respects true and correct and are incorporated herein by reference in their entirety.

2.  Article 51.  Effective as of the date hereinabove first written, Article 51 of the Original Lease shall be deleted in its entirety and the following shall be substituted therefore:

“Article 51

EXTENSION OPTION

If ORIX Columbia Maryland, Inc. an Illinois corporation (“Building Two Owner”), and Tenant (or any successor-in-interest under Parcel T-1 Agreement (as defined herein) which would qualify as a Permitted Transferee under this Lease), as contemplated by that certain Agreement Regarding Development of Parcel T-1 dated as even date herewith (“Parcel T-1 Agreement”), enter into both (i) a binding construction agreement for the construction of Building Two (the “Building Two Construction Agreement”),and (ii) a binding lease agreement (the “Building Two Lease”) for the lease of not less than fifty thousand (50,000) contiguous square feet of rentable area in Building Two (the “Building Two Space”) for a term, commencing upon delivery of the Building Two Space, of not less than 10 years, then, in such event, and provided that Tenant (or a Permitted Transferee) is the tenant under this Lease as of the effective date of the Building Two Construction Agreement and the Building Two Lease (but not otherwise), this Lease shall be amended to extend the initial ten (10)-year term to a date which is ten (10) years from the date of delivery of the Building Two Space.  The Base Rent payable for the Demised Premises in the Building for the Lease Years beyond the original ten (10)-year Term shall continue to be escalated at the rate of seven and 69/100 percent (7.69%) every three years.”

It is the intention and agreement of the parties that the automatic extension of the Term of the Lease provided for in Article 51 of the Original Lease (as amended above in this Paragraph 2 of this Second Amendment) shall only occur if the entry by Tenant and Building  Two Owner into Building Two Construction Agreement and the Building Two Lease is initiated, negotiated and consummated in strict accordance with all of the specific deadlines, terms and conditions which govern the right of Tenant to exercise its option to expand into Building Two Expansion Space (as such term was defined in Section 51(a)(1) of the Original Lease) under Article 51 of the Original Lease, but not otherwise.

3.  Article 52.  Effective as of the date hereinabove first written, Article 52 of the Original Lease shall be deleted in its entirety and the following shall be substituted therefore:

“Article 52

RIGHT OF FIRST OFFER FOR AVAILABLE SPACE

52(a).  If Tenant (or any successor-in-interest under Parcel T-1 Agreement which would qualify as a Permitted Transferee under this Lease), as contemplated by the Parcel T-1 Agreement, enter into both (i) the Building Two Construction Agreement and (ii) the Building Two Lease for the Building Two Space, then, in such event, and provided that Tenant (or a Permitted Transferee) is the tenant under this Lease as of the effective date of the Building Two Construction Agreement and the Building Two Lease (but not otherwise), Tenant shall have a right of first offer in accordance with the terms of this Article for any remaining space in the Building that becomes available after the initial leasing thereof.  As used herein, the term “Available Space” shall mean any space in the Building for which the current lease expires or is otherwise terminated.  Available Space shall not include space which is (i) assigned or subleased by the current tenant of the space; (ii) re-leased by the current tenant of the space by renewal, extension, or renegotiation; (iii) subject to a specific expansion right, right of first refusal, or right of first offer of another tenant in the Building unless and until such tenant shall have failed to timely exercise its option.

2

52(b).  At lease ten (10) months before any Available Space will be vacant (or earlier if a lease thereof is terminated before the expiration of its term), Landlord shall notify Tenant in writing of the amount of Available Space and the financial terms upon which it is being offered to prospective tenants.  Tenant shall have fifteen (15) days after its receipt of such notification to inform Landlord that it will lease the Available Space upon the terms offered by the Landlord.  If within such fifteen (15)-day period, Tenant fails to so inform Landlord or to inform Landlord that it does not intend to lease such space, then Tenant’s right to lease the Available Space shall expire, and Landlord shall be free to lease such space to any third party upon terms no more favorable than those offered to Tenant.  If Tenant accepts Landlord’s offer, Tenant must lease all of the Available Space offered.

52(c).  If within one hundred eighty (180) days after Landlord first notified Tenant of any Available Space, such Available Space remains unleased, Landlord shall again inform Tenant that the Available Space still exists and the financial terms upon which it is then being offered to prospective tenants.  Tenant shall have shall have fifteen (15) days after its receipt of such notification to inform Landlord that it will lease the Available Space upon the terms offered by the Landlord.  If Tenant fails to so inform Landlord or to inform Landlord that it does not intend to lease such space, then Tenant’s right to lease the Available Space shall expire, and Landlord shall be free to lease such space to any third party upon terms no more favorable than those offered to Tenant.  Tenant’s right of first offer under this Article shall be reinstated every one hundred eighty (180) days until the Available Space is leased.

52(d).  The term of the lease for the Available Space shall commence on the date that Landlord delivers the Available Space to Tenant for occupancy (the “Available Space Commencement Date”) and shall expire upon expiration of the Term unless Landlord and Tenant agree otherwise; however, if the previous tenant or occupant of all or any portion of the Available Space holds over or otherwise refuses to surrender or vacate such space on or before the date such space was to be made available to Tenant, Landlord shall not be liable to Tenant for any wrongful holdover by such tenant or occupant.  In such event, the date on which Tenant is obligated to commence payment of Monthly Base Rent in respect of such Available Space shall be postponed by the sum of the number of days required for Landlord to obtain and deliver to Tenant possession of such space.

52(e).  Within fifteen (15) days after Tenant’s notification to Landlord that Tenant will lease the Available Space, Landlord shall prepare and submit to Tenant an addendum to this Lease incorporating such space as part of the Demised Premises and the financial terms of the accepted offer into this Lease.  In all other respects, the terms and conditions of this Lease shall remain in effect and shall apply to the Available Space leased.  If Tenant does not execute such addendum within fifteen (15) days of its receipt of the same, then, at Landlord’s option, Tenant’s rights to lease the Available Space shall be null and void and of no further force and effect.

3

52(f).  At Landlord’s option, Tenant shall have no right to lease the Available Space, if any of the following are true either at the time Tenant send to Landlord notice of Tenant’s exercise of its intention to lease the Available Space or on the Available Space Commencement Date: (i) the Lease has been terminated (either at the time of sending notice or on the Available Space Commencement Date); (ii) an Event of Default has occurred or an event has occurred which with the giving of notice would constitute an Event of Default; (iii) Tenant or its Permitted Transferees do not occupy at least 200,000 rentable square feet of the Demised Premises; or (iv) there has been a material adverse change in Tenant’s net worth since the date this Lease was originally executed and delivered .  At such time as Tenant sends notice to Landlord of its intent to exercise its right to lease the Available Space, Tenant shall be bound to lease such space on the terms set forth in this Article.  If Tenant shall not be entitled to exercise such right to lease Available Space because of the foregoing provisions of this subsection, such right shall be rendered void and of no force and effect.

52(g).  The right of first offer under this Article is personal to Tenant and its Permitted Transferees and may not be exercised by an assignees or subtenants of Tenant or its Permitted Transferees, whether or not Landlord has consented to such assignment or subletting.”

It is the intention and agreement of the parties that Tenant’s right of first offer provided for in Article 52 of the Original Lease (as amended above in Paragraph 3 of this Second Amendment) shall only come into existence if the entry by Tenant and Building  Two Owner into Building Two Construction Agreement and the Building Two Lease is initiated, negotiated and consummated in strict accordance with all of the specific deadlines, terms and conditions which govern the right of Tenant to exercise its option to expand into Building Two Expansion Space (as such term was defined in Section 51(a)(1) of the Original Lease) under Article 51 of the Original Lease, but not otherwise.

4.  Counterparts.  This Second Amendment may be executed in any number of identical counterparts, any or all of which may contain the signatures of fewer than all of the parties but all of which shall be taken together in a single document.

5.  Effect of This Second Amendment.  As expressly amended hereby, the Lease shall remain in full force and effect and fully binding upon the Landlord and its successors and assigns and the Tenant and its permitted successors and assigns.  In the event of any conflict between the terms of the Lease and the terms of this Second Agreement, the terms of this Second Amendment shall govern.

6.  Governing Law.  This Second Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Maryland, without regard to the conflicts of law principles thereof.

4

IN WITNESS WHEREOF, each party hereto has executed this Second Amendment by its duly authorized representative as of the day, month and year first above written.

ORIX COLUMBIA, INC.

By:

Name:

Title:

MICROS SYSTEMS, INC.

By:

Name:

Title:

5

THIRD AMENDMENT TO LEASE AGREEMENT

THIS THIRD AMENDMENT TO LEASE AGREEMENT (the “Third Amendment”) is made as of the 1st day of March, 2006, by and between COLUMBIA GATEWAY OFFICE CORPORATION, a Delaware corporation (“Landlord”), and MICROS SYSTEMS, INC., a Maryland corporation (“Tenant”).

RECITALS

A.  Landlord (as successor-in-interest to Orix Columbia, Inc.) and Tenant entered into that certain Lease Agreement dated as of August 17, 1998 (the “Original Lease”), as amended by that certain First Amendment to Lease Agreement (the “First Amendment”) dated as of October 27, 1999, that certain Declaration (the “Declaration”) dated as of March 9, 2001 and that certain Second Amendment to Lease Agreement dated as of December 26, 2001, for 247,624 rentable square feet ("RSF") of space (the “Demised Premises”) comprising all of the rentable area in a five-story office building (the “Building”) constructed for Tenant’s headquarters on certain land (the “Land”) described in Exhibit I-A of the First Amendment in an office park development known as “Columbia Gateway” in Columbia, Maryland.  The Lease Agreement, as amended by the First Amendment, the Declaration and the Second Amendment, is hereinafter referred to as the “Lease.”

B.  Landlord and Tenant desire to enter into this Third Amendment for the purpose of extending the Term of the Lease, upon the terms and conditions set forth hereinbelow.

C.  All capitalized terms herein shall have the meaning ascribed thereto in the Lease unless otherwise specifically defined herein.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the entry into this Third Amendment by the parties hereto, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto do hereby agree as follows:

1.  Recitals.  The foregoing recitals are in all respects true and correct and are incorporated herein by this reference in their entirety.

2.  Term.  Effective as of March 1, 2006, the Term of the Lease shall be extended so as to be comprised of a ten (10) year period commencing March 1, 2006 and expiring at 11:59 p.m. on February 28, 2016.  All references to the "Term" in the Lease shall hereafter be deemed to mean and refer to the Term, as so extended by this Third Amendment.

3.  Base Rent.  Effective as of March 1, 2006 and continuing throughout the balance of the Term (as extended hereby), the calculation of the annual Base Rent and Monthly Base Rent payable by Tenant to Landlord under the Lease shall be changed from being based upon the rates set forth in Paragraph 6 of the Declaration to the rates and amounts set forth immediately below for the indicated periods of the Term:

Period	Base Rent Per RSF Per Annum	Monthly Base Rent
3/1/06-3/31/06	$14.71	$303,545.75
4/1/06-2/28/07	$15.00	$309,530.00
3/1/07-2/29/08	$15.00	$309,530.00
3/1/08-2/28/09	$15.00	$309,530.00
3/1/09-2/28/10	$17.00	$350,800.67
3/1/10-2/28/11	$17.00	$350,800.67
3/1/11-2/29/12	$17.00	$350,800.67
3/1/12-2/28/13	$17.50	$361,118.33
3/1/13-2/28/14	$18.00	$371,436.00
3/1/14-2/28/15	$18.00	$371,436.00
3/1/15-2/29/16	$18.00	$371,436.00

  4.  Additional Rent.  Effective as of March 1, 2006 and continuing throughout the balance of the Term (as extended hereby), Tenant shall continue to be obligated to pay, monthly in advance, as Additional Rent, Tenant’s Pro Rata Share (i.e., 100%) of Operating Expenses (based upon Estimated Operating Expenses), all as contemplated by and provided for in Articles 4 and 5 and the other relevant provisions of the Lease.

5.  Counterparts.  This Third Amendment may be executed in any number of identical counterparts, any or all of which may contain the signatures of fewer than all of the parties but all of which shall be taken together as a single instrument.

6.  Effect of This Third Amendment.  As expressly amended hereby, the Lease shall remain in full force and effect and fully binding upon the Landlord and its successors and assigns and the Tenant and its permitted successors and assigns.  In the event of any conflict between the terms of the Lease and the terms of this Third Amendment, the terms of this Third Amendment shall govern.

7.  Governing Law.  This Third Amendment shall be governed by and construed in accordance with the internal laws of the State of Maryland, without regard to the conflicts of law principles thereof.

IN WITNESS WHEREOF, each party hereto has executed this Third Amendment by its duly authorized representative as of the day, month and year first above written.

COLUMBIA GATEWAY OFFICE CORPORATION

By:

Name:

Title:

MICROS SYSTEMS, INC.

By:

Name:

Title:

2

EX-31.A

EXHIBIT 31(a)

CERTIFICATIONS

I, A.L. Giannopoulos, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of MICROS Systems, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2009	/s/	A.L. Giannopoulos
		A.L. Giannopoulos
		Chairman, President and
		Chief Executive Officer

EX-31.B

EXHIBIT 31(b)

CERTIFICATIONS

I, Gary C. Kaufman, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of MICROS Systems, Inc.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2009	/s/	Gary C. Kaufman
		Gary C. Kaufman
		Executive Vice President,
		Finance and Administration,
		and Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

MICROS SYSTEMS, INC.

Certification of Principal Executive Officer

Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. 1350

In connection with the quarterly report of MICROS Systems, Inc. (the “Company”) on Form 10-Q (Form 10-Q”) for the three months ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof, I, A.L. Giannopoulos, Chairman, President and Chief Executive Officer of the Company, certify that to the best of my knowledge:

(1)       The Form 10-Q fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2)       The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 7, 2009	/s/	A.L. Giannopoulos
		A.L. Giannopoulos

EX-32.B

EXHIBIT 32(b)

MICROS SYSTEMS, INC.

Certification of Principal Financial Officer

Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. 1350

In connection with the quarterly report of MICROS Systems, Inc. (the “Company”) on Form 10-Q (Form 10-Q”) for the three months ended March 31, 2009 as filed with the Securities and Exchange Commission on the date hereof, I, Gary C. Kaufman, Executive Vice President of Finance and Administration and Chief Financial Officer of the Company, certify that to the best of my knowledge:

(1)       The Form 10-Q fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

(2)       The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 7, 2009	/s/	Gary C. Kaufman
		Gary C. Kaufman