Exhibit 99.1
SunGard Data Systems Inc.
Consolidated Statements of Operations
(in millions)
Consolidated Statements of Operations
(in millions)
Three Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
Reported | Adjustment | As Adjusted | ||||||||||
Revenue: | ||||||||||||
Services | $ | 1,274 | $ | — | $ | 1,274 | ||||||
License and resale fees | 148 | — | 148 | |||||||||
Total products and services | 1,422 | — | 1,422 | |||||||||
Reimbursed expenses | 45 | — | 45 | |||||||||
1,467 | — | 1,467 | ||||||||||
Costs and expenses: | ||||||||||||
Cost of sales and direct operating | 671 | — | 671 | |||||||||
Sales, marketing and administration | 320 | — | 320 | |||||||||
Product development | 77 | — | 77 | |||||||||
Depreciation and amortization | 76 | — | 76 | |||||||||
Amortization of acquisition-related intangible assets | 136 | — | 136 | |||||||||
Goodwill impairment charge and merger costs | 1,129 | — | 1,129 | |||||||||
2,409 | — | 2,409 | ||||||||||
Income (loss) from operations | (942 | ) | — | (942 | ) | |||||||
Interest income | 1 | — | 1 | |||||||||
Interest expense and amortization of deferred financing fees | (166 | ) | — | (166 | ) | |||||||
Other income (expense) | 9 | — | 9 | |||||||||
Loss before income taxes | (1,098 | ) | — | (1,098 | ) | |||||||
Benefit from (provision for) income taxes | 9 | 52 | 61 | |||||||||
Net loss | $ | (1,089 | ) | $ | 52 | $ | (1,037 | ) | ||||
SunGard Data Systems Inc.
Consolidated Statements of Operations
(in millions)
Consolidated Statements of Operations
(in millions)
Twelve Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
Reported | Adjustment | As Adjusted | ||||||||||
Revenue: | ||||||||||||
Services | $ | 4,961 | $ | — | $ | 4,961 | ||||||
License and resale fees | 384 | — | 384 | |||||||||
Total products and services | 5,345 | — | 5,345 | |||||||||
Reimbursed expenses | 163 | — | 163 | |||||||||
5,508 | — | 5,508 | ||||||||||
Costs and expenses: | ||||||||||||
Cost of sales and direct operating | 2,709 | — | 2,709 | |||||||||
Sales, marketing and administration | 1,112 | — | 1,112 | |||||||||
Product development | 302 | — | 302 | |||||||||
Depreciation and amortization | 291 | — | 291 | |||||||||
Amortization of acquisition-related intangible assets | 540 | — | 540 | |||||||||
Goodwill impairment charge and merger costs | 1,130 | — | 1,130 | |||||||||
6,084 | — | 6,084 | ||||||||||
Income (loss) from operations | (576 | ) | — | (576 | ) | |||||||
Interest income | 7 | — | 7 | |||||||||
Interest expense and amortization of deferred financing fees | (637 | ) | — | (637 | ) | |||||||
Other income (expense) | 15 | — | 15 | |||||||||
Loss before income taxes | (1,191 | ) | — | (1,191 | ) | |||||||
Benefit from (provision for) income taxes | 21 | 52 | 73 | |||||||||
Net loss | $ | (1,170 | ) | $ | 52 | $ | (1,118 | ) | ||||
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Consolidated Condensed Balance Sheets
(in millions)
Consolidated Condensed Balance Sheets
(in millions)
December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
Reported | Adjustment | As Adjusted | ||||||||||
Assets: | ||||||||||||
Current: | ||||||||||||
Cash and cash equivalents | $ | 664 | $ | — | $ | 664 | ||||||
Accounts receivable, net | 1,136 | — | 1,136 | |||||||||
Clearing broker assets | 332 | — | 332 | |||||||||
Prepaid expenses and other current assets | 211 | — | 211 | |||||||||
Total current assets | 2,343 | — | 2,343 | |||||||||
Property and equipment, net | 925 | — | 925 | |||||||||
Software products, net | 1,020 | — | 1,020 | |||||||||
Customer base, net | 2,294 | — | 2,294 | |||||||||
Other assets, net | 1,220 | — | 1,220 | |||||||||
Goodwill | 6,178 | — | 6,178 | |||||||||
Total Assets | $ | 13,980 | $ | — | $ | 13,980 | ||||||
Liabilities and Stockholder’s Equity: | ||||||||||||
Current: | ||||||||||||
Short-term and current portion of long-term debt | $ | 64 | $ | — | $ | 64 | ||||||
Accounts payable and accrued expenses | 950 | — | 950 | |||||||||
Clearing broker liabilities | 294 | — | 294 | |||||||||
Deferred revenue | 1,040 | — | 1,040 | |||||||||
Total current liabilities | 2,348 | — | 2,348 | |||||||||
Long-term debt | 8,251 | — | 8,251 | |||||||||
Deferred income taxes | 1,366 | (52 | ) | 1,314 | ||||||||
Total liabilities | 11,965 | (52 | ) | 11,913 | ||||||||
Stockholder’s equity | 2,015 | 52 | 2,067 | |||||||||
Total Liabilities and Stockholder’s Equity | $ | 13,980 | $ | — | $ | 13,980 | ||||||
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Notes to Consolidated Condensed Financial Information
Notes to Consolidated Condensed Financial Information
Note 1. Reconciliation of Net Income (Loss) to EBITDA and Reconciliation of EBITDA to Adjusted EBITDA
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization and goodwill impairment. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to certain items that are required in calculating covenant compliance under our senior and senior subordinated notes as well as under our senior secured credit facilities, which were entered into in August 2005 and our senior notes entered into in September 2008. Adjusted EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles (GAAP). EBITDA and Adjusted EBITDA do not represent net income (loss), as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of our operating performance. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures (including capitalized software expense), tax payments and debt service requirements. SunGard considers EBITDA and Adjusted EBITDA to be key indicators of our ability to pay our debt. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures. The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the GAAP measure we believe to be most directly comparable to EBITDA and Adjusted EBITDA. Further information regarding this reconciliation is included in our periodic filings with the U.S. Securities and Exchange Commission.
Three Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
(in millions) | Reported | Adjustment | As Adjusted | |||||||||
Net loss | $ | (1,089 | ) | $ | 52 | $ | (1,037 | ) | ||||
Interest expense, net | 165 | — | 165 | |||||||||
Income tax (benefit) expense | (9 | ) | (52 | ) | (61 | ) | ||||||
Depreciation and amortization | 212 | — | 212 | |||||||||
Goodwill impairment charge | 1,126 | — | 1,126 | |||||||||
EBITDA | 405 | — | 405 | |||||||||
Purchase accounting adjustments | 4 | — | 4 | |||||||||
Non-cash charges | 11 | — | 11 | |||||||||
Restructuring and other charges | 21 | — | 21 | |||||||||
Adjusted EBITDA — senior secured credit facilities | 441 | 441 | ||||||||||
Loss on sale of receivables | — | — | — | |||||||||
Adjusted EBITDA — senior notes due 2013 and 2015 and senior subordinated notes due 2015 | $ | 441 | $ | — | $ | 441 | ||||||
Twelve Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
(in millions) | Reported | Adjustment | As Adjusted | |||||||||
Net loss | $ | (1,170 | ) | $ | 52 | $ | (1,118 | ) | ||||
Interest expense, net | 630 | — | 630 | |||||||||
Income tax expense (benefit) | (21 | ) | (52 | ) | (73 | ) | ||||||
Depreciation and amortization | 831 | — | 831 | |||||||||
Goodwill impairment charge | 1,126 | — | 1,126 | |||||||||
EBITDA | 1,396 | — | 1,396 | |||||||||
Purchase accounting adjustments | 17 | — | 17 | |||||||||
Non-cash charges | 36 | — | 36 | |||||||||
Restructuring and other charges | 42 | — | 42 | |||||||||
Pro forma expense savings related to acquisitions | 3 | — | 3 | |||||||||
Other | 5 | — | 5 | |||||||||
Adjusted EBITDA — senior secured credit facilities | 1,499 | 1,499 | ||||||||||
Loss on sale of receivables | — | — | — | |||||||||
Adjusted EBITDA — senior notes due 2013 and 2015 and senior subordinated notes due 2015 | $ | 1,499 | $ | — | $ | 1,499 | ||||||
SunGard Data Systems Inc.
Notes to Consolidated Condensed Financial Information
Notes to Consolidated Condensed Financial Information
Note 2. Reconciliation of Income from Operations to Adjusted Income from Operations
Adjusted income from operations represents income from operations adjusted for goodwill impairment charges, amortization of acquisition-related intangible assets, merger costs, purchase accounting adjustments for deferred revenue, stock-based compensation expense and management fee expense. Adjusted income from operations is not a recognized term under generally accepted accounting principles (GAAP). Adjusted income from operations does not represent income from operations, as that term is defined under GAAP, and should not be considered as an alternative to income from operations as an indicator of our operating performance. We have included information concerning adjusted income from operations because we use such information when evaluating income from operations to better evaluate the underlying performance of the Company. Adjusted income from operations as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted income from operations and income from operations, the GAAP measure we believe to be most directly comparable to adjusted income from operations.
Three Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
(in millions) | Reported | Adjustment | As Adjusted | |||||||||
Income (loss) from operations | $ | (942 | ) | $ | — | $ | (942 | ) | ||||
Amortization of acquisition-related intangible assets | 136 | — | 136 | |||||||||
Goodwill impairment charge | 1,126 | — | 1,126 | |||||||||
Merger costs | 3 | — | 3 | |||||||||
Purchase accounting adjustments | 4 | — | 4 | |||||||||
Stock-based compensation and other costs | 15 | — | 15 | |||||||||
Adjusted income from operations | $ | 342 | $ | — | $ | 342 | ||||||
Twelve Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
(in millions) | Reported | Adjustment | As Adjusted | |||||||||
Income (loss) from operations | $ | (576 | ) | $ | — | $ | (576 | ) | ||||
Amortization of acquisition-related intangible assets | 540 | — | 540 | |||||||||
Goodwill impairment charge | 1,126 | — | 1,126 | |||||||||
Merger costs | 4 | — | 4 | |||||||||
Purchase accounting adjustments | 17 | — | 17 | |||||||||
Stock-based compensation and other costs | 48 | — | 48 | |||||||||
Adjusted income from operations | $ | 1,159 | $ | — | $ | 1,159 | ||||||
SunGard Data Systems Inc.
Notes to Consolidated Condensed Financial Information
Notes to Consolidated Condensed Financial Information
Note 3. Impact of Broker/Dealer on Organic Revenue Growth
The Company defines organic revenue as revenue from businesses owned for at least one year and excluding revenue from businesses sold in the previous twelve months further adjusted to remove the impact of changes in currency exchange rates. When assessing its financial results, the Company focuses on organic revenue because reported revenue is affected by the timing and magnitude of acquisitions, dispositions and currency. Beginning in 2007, the Company began to experience significant revenue growth in one of our trading systems businesses, a broker/dealer business with inherently lower margins than the rest of the financial systems business, and whose revenue is a function of market volatility and customer mix. Reported revenue and organic revenue growth with and without the broker/dealer business for the total Company and Financial Systems for 2008 and 2009 follows:
Twelve Months Ended December 31, 2009 | ||||||||||||
As Originally | ||||||||||||
Reported | Adjustment | As Adjusted | ||||||||||
Revenue growth as reported: | ||||||||||||
Total SunGard | -2 | % | — | -2 | % | |||||||
Financial Systems | — | % | — | — | % | |||||||
Organic revenue growth: | ||||||||||||
Total SunGard | -3 | % | — | -3 | % | |||||||
Financial Systems | -5 | % | — | -5 | % | |||||||
Organic revenue growth without broker/dealer business: | ||||||||||||
Total SunGard | -3 | % | — | -3 | % | |||||||
Financial Systems | -6 | % | — | -6 | % |