Exhibit 99.1
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Balance Sheet
September 30, 2004
(In thousands)
Historical SunGard (1) | Historical Availability (2) | Pro Forma Adjustments | Pro Forma Software and Processing Business | ||||||||||||
(A) | (B) | (C) | (A) minus (B + C) | ||||||||||||
Assets: | |||||||||||||||
Current: | |||||||||||||||
Cash and equivalents | $ | 487,341 | $ | 36,806 | $ | 206,865 | (3) | $ | 243,670 | ||||||
Accounts receivable, net | 708,254 | 244,356 | — | 463,898 | |||||||||||
Prepaid expenses and other current assets | 107,344 | 41,905 | — | 65,439 | |||||||||||
Clearing broker assets | 138,499 | — | — | 138,499 | |||||||||||
Deferred income taxes | 49,307 | 20,663 | — | 28,644 | |||||||||||
Total current assets | 1,490,745 | 343,730 | 206,865 | 940,150 | |||||||||||
Property and equipment, net | 588,153 | 450,899 | — | 137,254 | |||||||||||
Software products, net | 351,151 | 9,151 | — | 342,000 | |||||||||||
Customer base, net | 560,166 | 262,380 | — | 297,786 | |||||||||||
Other assets | 58,810 | 18,491 | — | 40,319 | |||||||||||
Goodwill | 1,787,986 | 622,060 | — | 1,165,926 | |||||||||||
Total Assets | $ | 4,837,011 | $ | 1,706,711 | $ | 206,865 | $ | 2,923,435 | |||||||
Liabilities and Stockholders’ Equity: | |||||||||||||||
Current: | |||||||||||||||
Current portion of notes to affiliated company | $ | — | $ | 28,750 | $ | (28,750 | )(3) | $ | — | ||||||
Short-term and current portion of long-term debt | 48,948 | 6,482 | — | 42,466 | |||||||||||
Accounts payable | 36,339 | 16,715 | — | 19,624 | |||||||||||
Accrued compensation and benefits | 142,021 | 27,863 | — | 114,158 | |||||||||||
Other accrued expenses | 223,206 | 92,520 | — | 130,686 | |||||||||||
Clearing broker liabilities | 113,462 | — | — | 113,462 | |||||||||||
Deferred revenue | 592,111 | 270,454 | — | 321,657 | |||||||||||
Total current liabilities | 1,156,087 | 442,784 | (28,750 | ) | 742,053 | ||||||||||
Notes to affiliated company | — | 493,692 | (493,692 | )(3) | — | ||||||||||
Long-term debt | 510,014 | 7,496 | 250,000 | (3) | 252,518 | ||||||||||
Deferred income taxes | 68,832 | 36,412 | — | 32,420 | |||||||||||
Total Liabilities | 1,734,933 | 980,384 | (272,442 | ) | 1,026,991 | ||||||||||
Stockholders’ equity | |||||||||||||||
Owner’s net investment | — | 630,943 | 479,307 | (3) | — | ||||||||||
(1,110,250 | )(3) | ||||||||||||||
Common stock | 2,914 | — | — | 2,914 | |||||||||||
Capital in excess of par value | 941,205 | — | — | 941,205 | |||||||||||
Restricted stock plans | (2,373 | ) | — | — | (2,373 | ) | |||||||||
Retained earnings | 2,108,752 | — | 1,110,250 | (4) | 998,502 | ||||||||||
Accumulated other comprehensive income | 117,510 | 95,384 | — | 22,126 | |||||||||||
3,168,008 | 726,327 | 479,307 | 1,962,374 | ||||||||||||
Treasury stock, at cost | (65,930 | ) | — | — | (65,930 | ) | |||||||||
Total Stockholders’ Equity | 3,102,078 | 726,327 | 479,307 | 1,896,444 | |||||||||||
Total Liabilities and Stockholders’ Equity | $ | 4,837,011 | $ | 1,706,711 | $ | 206,865 | $ | 2,923,435 | |||||||
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Statement of Income
For the nine months ended September 30, 2004
(In thousands)
Historical SunGard (1) | Historical Availability (2) | Pro Forma Adjustments | Pro Forma Software and Processing Business | |||||||||||||
(A) | (B) | (C) | (A) minus (B + C) | |||||||||||||
Revenue | $ | 2,638,706 | $ | 866,318 | $ | — | $ | 1,772,388 | ||||||||
Operating expenses | 2,130,577 | 615,328 | (8,477 | )(5) | 1,523,726 | |||||||||||
Income from operations | 508,129 | 250,990 | 8,477 | 248,662 | ||||||||||||
Interest income | 5,233 | 1,009 | — | 4,224 | ||||||||||||
Interest expense | (22,173 | ) | (17,351 | ) | 7,976 | (6) | (11,086 | ) | ||||||||
(1,712 | )(6) | |||||||||||||||
Gain on sale of Brut | 79,362 | — | — | 79,362 | ||||||||||||
Income before income taxes | 570,551 | 234,648 | 14,741 | 321,162 | ||||||||||||
Income taxes | 228,789 | 98,083 | 6,162 | (7) | 124,544 | |||||||||||
Net income | $ | 341,762 | $ | 136,565 | $ | 8,579 | $ | 196,618 | ||||||||
Basic net income per common share | $ | 1.18 | $ | 0.68 | ||||||||||||
Diluted net income per common share | $ | 1.16 | $ | 0.67 | ||||||||||||
Shares used to compute net income per common share: | ||||||||||||||||
Basic | 288,937 | 288,937 | ||||||||||||||
Diluted (Note 8) | 295,053 | 295,053 | ||||||||||||||
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Statement of Income
For the year ended December 31, 2003
(In thousands)
Historical SunGard (1) | Historical Availability (2) | Pro Forma Adjustments | Pro Forma Software and Processing Business | |||||||||||||
(A) | (B) | (C) | (A) minus (B + C) | |||||||||||||
Revenue | $ | 2,955,252 | $ | 1,136,138 | $ | — | $ | 1,819,114 | ||||||||
Operating expenses | 2,331,643 | 821,756 | (11,119 | )(5) | 1,521,006 | |||||||||||
Income from operations | 623,609 | 314,382 | 11,119 | 298,108 | ||||||||||||
Interest income | 6,048 | 1,104 | — | 4,944 | ||||||||||||
Interest expense | (11,653 | ) | (38,642 | ) | 26,142 | (6) | (5,827 | ) | ||||||||
6,674 | (6) | |||||||||||||||
Other expense | (2,880 | ) | — | — | (2,880 | ) | ||||||||||
Income before income taxes | 615,124 | 276,844 | 43,935 | 294,345 | ||||||||||||
Income taxes | 244,814 | 115,839 | 18,383 | (7) | 110,592 | |||||||||||
Net income | $ | 370,310 | $ | 161,005 | $ | 25,552 | $ | 183,753 | ||||||||
Basic net income per common share | $ | 1.30 | $ | 0.64 | ||||||||||||
Diluted net income per common share | $ | 1.27 | $ | 0.63 | ||||||||||||
Shares used to compute net income per common share: | ||||||||||||||||
Basic | 285,679 | 285,679 | ||||||||||||||
Diluted (Note 8) | 292,067 | 292,067 | ||||||||||||||
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Statement of Income
For the year ended December 31, 2002
(In thousands)
Historical SunGard (1) | Historical Availability (2) | Pro Forma Adjustments | Pro Forma Software and Processing Business | |||||||||||||
(A) | (B) | (C) | (A) minus (B + C) | |||||||||||||
Revenue | $ | 2,593,237 | $ | 1,008,963 | $ | — | $ | 1,584,274 | ||||||||
Operating expenses | 2,046,004 | 793,693 | (10,521 | )(5) | 1,262,832 | |||||||||||
Income from operations | 547,233 | 215,270 | 10,521 | 321,442 | ||||||||||||
Interest income | 8,408 | 834 | — | 7,574 | ||||||||||||
Interest expense | (13,074 | ) | (36,919 | ) | 24,419 | (6) | (6,537 | ) | ||||||||
5,963 | (6) | |||||||||||||||
Other income | 730 | 730 | — | — | ||||||||||||
Income before income taxes | 543,297 | 179,915 | 40,903 | 322,479 | ||||||||||||
Income taxes | 217,656 | 75,716 | 17,214 | (7) | 124,726 | |||||||||||
Net income | $ | 325,641 | $ | 104,199 | $ | 23,689 | $ | 197,753 | ||||||||
Basic net income per common share | $ | 1.15 | $ | 0.70 | ||||||||||||
Diluted net income per common share | $ | 1.12 | $ | 0.68 | ||||||||||||
Shares used to compute net income per common share: | ||||||||||||||||
Basic | 282,420 | 282,420 | ||||||||||||||
Diluted (Note 8) | 289,654 | 289,654 | ||||||||||||||
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
SunGard Data Systems Inc.
Unaudited Pro Forma Condensed Statement of Income
For the year ended December 31, 2001
(In thousands)
Historical SunGard (1) | Historical Availability (2) | Pro Forma Adjustments | Pro Forma Software and Processing Business | |||||||||||||
(A) | (B) | (C) | (A) minus (B + C) | |||||||||||||
Revenue | $ | 1,981,837 | $ | 482,922 | $ | — | $ | 1,498,915 | ||||||||
Operating expenses | 1,582,627 | 363,629 | (6,000 | )(5) | 1,224,998 | |||||||||||
Income from operations | 399,210 | 119,293 | 6,000 | 273,917 | ||||||||||||
Interest income | 26,793 | 2,342 | — | 24,451 | ||||||||||||
Interest expense | (3,641 | ) | (6,339 | ) | (6,161 | )(6) | (1,821 | ) | ||||||||
10,680 | (6) | |||||||||||||||
Loss on write-off of investment | (11,890 | ) | (11,890 | ) | — | — | ||||||||||
Income before income taxes | 410,472 | 103,406 | 10,519 | 296,547 | ||||||||||||
Income taxes | 164,417 | 43,299 | 4,404 | (7) | 116,714 | |||||||||||
Net income | $ | 246,055 | $ | 60,107 | $ | 6,115 | $ | 179,833 | ||||||||
Basic net income per common share | $ | 0.89 | $ | 0.65 | ||||||||||||
Diluted net income per common share | $ | 0.86 | $ | 0.63 | ||||||||||||
Shares used to compute net income per common share: | ||||||||||||||||
Basic | 276,057 | 276,057 | ||||||||||||||
Diluted (Note 8) | 285,112 | 285,112 | ||||||||||||||
See accompanying Notes to Unaudited Pro Forma Condensed Financial Statements.
SunGard Data Systems Inc.
Notes to Unaudited Pro Forma Condensed Financial Statements
The unaudited pro forma condensed financial information is presented for illustrative purposes only and should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the availability services business had not been part of SunGard Data Systems Inc. during the periods presented or of the results that may be obtained in the future.
Note 1 | - | The historical consolidated financial statements of SunGard Data Systems Inc. (SDS) are as previously filed with the U.S. Securities and Exchange Commission. | ||
Note 2 | - | The historical combined financial statements of the availability services business of SDS are as filed by SunGard Availability Inc. with the U.S. Securities and Exchange Commission on Form 10 on December 30, 2004.
SDS currently operates its availability services business through wholly owned subsidiaries. On October 4, 2004, SDS announced its plan to spin off its availability services business through a tax-free distribution of shares to its stockholders. The shares distributed will be those of SunGard Availability Inc., which will hold the availability services business at the time of the spin-off. SDS currently expects to complete the spin-off on March 31, 2005. The spin-off is subject to certain conditions, including receipt of a favorable ruling from the Internal Revenue Service and/or an acceptable tax opinion, and may or may not occur by the contemplated time or at all.
The historical combined financial statements of the availability services business have been derived from the consolidated financial statements and accounting records of SDS using the historical results of operations and historical bases of assets and liabilities of the availability services business. These combined financial statements may not necessarily be indicative of the historical results that would have been obtained if the availability services business had been a separate company during the periods presented or of the results that may be obtained in the future. | ||
Note 3 | - | Cash and Debt - The actual capitalization of SunGard Availability Inc. has not yet been determined and will be updated to the distribution date, considering the sources and uses of cash and payment of debt, if any, up to the distribution date. The pro forma adjustments assume that cash and long-term notes of SDS are split equally between SDS and its availability services business. SDS management expects that the final capitalization will result in investment grade credit ratings for both SDS and SunGard Availability Inc. | ||
Note 4 | - | Retained Earnings - This adjustment reflects the pro forma dividend of shares of SunGard Availability Inc. to stockholders of SDS based on the assumptions described in Note 3. | ||
Note 5 | - | Operating expenses - This adjustment adds back the corporate costs that were required to be included in the historical combined financial statements of the availability services business filed in the Form 10. | ||
Note 6 | - | Interest expense - For purposes of the pro forma income statements, total SDS interest expense is assumed to be split equally. | ||
Note 7 | - | Income taxes - This adjustment reflects the tax effect of the other pro forma adjustments. | ||
Note 8 | - | Diluted shares outstanding is subject to adjustment based on the effect of the final distribution ratio on outstanding stock options. |