Exhibit 99.3
SUNGARD DATA SYSTEMS INC.
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
The following unaudited pro forma combined condensed financial data of SunGard Data Systems Inc. as of December 31, 2007 have been derived by applying pro forma adjustments attributable to the GL TRADE S.A. acquisition and related debt financing (the “Transactions”) to our historical audited and unaudited financial statements. We have based our unaudited pro forma adjustments upon available information and assumptions that we consider reasonable under the circumstances. Our unaudited pro forma combined condensed financial data is not necessarily indicative of what our actual financial position or results of operations would have been had the Transactions occurred as of the date or for the periods indicated, nor does it purport to represent our future financial position or results of operations.
The unaudited pro forma combined condensed balance sheet data as of June 30, 2008 gives effect to the Transactions as if they were consummated on June 30, 2008. The unaudited pro forma combined condensed statements of operations data for the six months ended June 30, 2008 and year ended December 31, 2007 give effect to the Transactions as if they were consummated on January 1, 2008 and January 1, 2007, respectively. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with these unaudited pro forma combined condensed financial data.
In our unaudited pro forma combined condensed financial data, we have accounted for the GL TRADE S.A. acquisition as a purchase in accordance with SFAS No. 141, “Business Combinations.” Under purchase accounting, the total acquisition consideration is allocated to our assets and liabilities based upon preliminary estimates of fair value. The final allocations of acquisition consideration will be based on management’s final valuation analyses, which we expect to be completed in mid-2009. Any adjustments based on these final valuation analyses may change the allocations of the acquisition consideration, which could affect the fair value assigned to our assets and liabilities and could result in a material change to the unaudited pro forma combined condensed financial data.
The unaudited pro forma combined condensed financial data is presented for information purposes only and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes of SunGard Data Systems Inc. previously filed with the Securities and Exchange Commissions and the historical financial statements and related notes of GL TRADE S.A. included elsewhere in this Current Report on Form 8-K/A.
SunGard Data Systems Inc.
Pro Forma Combined Balance Sheet
June 30, 2008
(Unaudited)
(in millions except share and per-share amounts) | Historical GL TRADE (1) | Historical GL TRADE (1) | Historical SunGard (2) | Pro Forma Adjustments (3) | Pro Forma Combined | |||||||||||||
Exchange Rate | $ | 1.57485 | ||||||||||||||||
Assets | ||||||||||||||||||
Current: | ||||||||||||||||||
Cash and cash equivalents | € | 31 | $ | 49 | $ | 448 | $ | 323 | (4)(7) | $ | 820 | |||||||
Trade receivables, less allowance for doubtful accounts of €-, $- and $12 | 50 | 79 | 320 | — | 399 | |||||||||||||
Earned but unbilled receivables | — | — | 85 | — | 85 | |||||||||||||
Prepaid expenses and other current assets | 10 | 16 | 166 | — | 182 | |||||||||||||
Clearing broker assets | — | — | 429 | — | 429 | |||||||||||||
Retained interest in accounts receivable sold | — | — | 264 | — | 264 | |||||||||||||
Deferred income taxes | — | — | 34 | — | 34 | |||||||||||||
Total current assets | 91 | 144 | 1,746 | 323 | 2,213 | |||||||||||||
Property and equipment, less accumulated depreciation of €28, $44 and $533 | 6 | 9 | 905 | — | (5) | 914 | ||||||||||||
Software products, less accumulated amortization of €3, $5 and $542 | 5 | 8 | 1,228 | 86 | (6) | 1,322 | ||||||||||||
Customer base, less accumulated amortization of €1, $2 and $475 | 1 | 2 | 2,693 | 155 | (6) | 2,850 | ||||||||||||
Other tangible and intangible assets, less accumulated amortization of €3, $5 and $21 | 17 | 27 | 202 | 22 | (6)(7) | 251 | ||||||||||||
Trade name | — | — | 1,022 | 63 | (6) | 1,085 | ||||||||||||
Goodwill | 117 | 184 | 7,169 | 339 | (6)(7) | 7,692 | ||||||||||||
Total Assets | € | 237 | $ | 374 | $ | 14,965 | $ | 988 | $ | 16,327 | ||||||||
Liabilities and Stockholder’s Equity | ||||||||||||||||||
Current: | ||||||||||||||||||
Short-term and current portion of long-term debt | € | 28 | $ | 44 | $ | 318 | $ | (13 | )(7) | $ | 349 | |||||||
Accounts payable | 13 | 20 | 80 | — | 100 | |||||||||||||
Accrued compensation and benefits | 17 | 27 | 228 | — | 255 | |||||||||||||
Accrued interest expense | — | — | 139 | — | 139 | |||||||||||||
Other accrued expenses | 31 | 50 | 334 | — | 384 | |||||||||||||
Clearing broker liabilities | — | — | 423 | — | 423 | |||||||||||||
Deferred revenue | 60 | 94 | 894 | — | 988 | |||||||||||||
Total current liabilities | 149 | 235 | 2,416 | (13 | ) | 2,638 | ||||||||||||
Long-term debt | 21 | 33 | 7,347 | 994 | (4)(7) | 8,374 | ||||||||||||
Deferred income taxes | 3 | 5 | 1,622 | 108 | (6) | 1,735 | ||||||||||||
Total liabilities | 173 | 273 | 11,385 | 1,089 | 12,747 | |||||||||||||
Commitments and contingencies | ||||||||||||||||||
Stockholder’s equity: | ||||||||||||||||||
Common stock | — | — | — | — | — | |||||||||||||
Capital in excess of par value | 2 | 3 | 3,709 | (3 | ) (8) | 3,709 | ||||||||||||
Accumulated deficit | 62 | 98 | (227 | ) | (98 | ) (8) | (227 | ) | ||||||||||
Accumulated other comprehensive income | — | — | 98 | — | 98 | |||||||||||||
Total stockholder’s equity | 64 | 101 | 3,580 | (101 | ) | 3,580 | ||||||||||||
Total Liabilities and Stockholder’s Equity | € | 237 | $ | 374 | $ | 14,965 | $ | 988 | $ | 16,327 | ||||||||
The accompanying notes are an integral part of these unaudited pro forma combined condensed financial statements.
SunGard Data Systems Inc.
Pro Forma Combined Condensed Statement of Operations
For the Year Ended December 31, 2007
(Unaudited)
(in millions) | Historical GL TRADE (1) | Historical GL TRADE (1) | Historical SunGard (2) | Pro Forma Adjustments (3) | Pro Forma Combined | |||||||||||
Exchange Rate | $ | 1.37505 | ||||||||||||||
Revenues | € | 203 | $ | 279 | $ | 4,901 | $ | — | $ | 5,180 | ||||||
Operating expenses | 169 | 233 | 4,270 | (34) | (6) | 4,537 | ||||||||||
Income from operations | 34 | 46 | 631 | 34 | 643 | |||||||||||
Interest income | — | — | 19 | — | 19 | |||||||||||
Interest expense and amortization of deferred financing fees | (2) | (3) | (645) | (98) | (4) | (746) | ||||||||||
Other income (expense) | 1 | 1 | (68) | — | (67) | |||||||||||
Income (loss) before income taxes | 33 | 44 | (63) | (132) | (151) | |||||||||||
Provision (benefit) for income taxes | 11 | 15 | (3) | (46) | (9) | (34) | ||||||||||
Income (loss) from continuing operations | € | 22 | $ | 29 | $ | (60) | $ | (86) | $ | (117) | ||||||
The accompanying notes are an integral part of these unaudited pro forma combined condensed financial statements.
SunGard Data Systems Inc.
Pro Forma Combined Condensed Statement of Operations
For the Six Months Ended June 30, 2008
(Unaudited)
(in millions) | Historical GL TRADE (1) | Historical GL TRADE (1) | Historical SunGard (2) | Pro Forma Adjustments (3) | Pro Forma Combined | |||||||||||
Exchange Rate | $ | 1.53378 | ||||||||||||||
Revenues | € | 108 | $ | 166 | $ | 2,659 | $ | — | $ | 2,825 | ||||||
Operating expenses | 88 | 135 | 2,390 | 18 | (6) | 2,543 | ||||||||||
Income from operations | 20 | 31 | 269 | (18) | 282 | |||||||||||
Interest income | — | 9 | — | 9 | ||||||||||||
Interest expense and amortization of deferred financing fees | (1) | (2) | (291) | (49) | (4) | (342) | ||||||||||
Other expense | (1) | (2) | (25) | — | (27) | |||||||||||
Income (loss) before income taxes | 18 | 27 | (38) | (67) | (78) | |||||||||||
Provision (benefit) for income taxes | 5 | 8 | (18) | (23) | (9) | (33) | ||||||||||
Net income (loss) | € | 13 | $ | 19 | $ | (20) | $ | (44) | $ | (45) | ||||||
The accompanying notes are an integral part of these unaudited pro forma combined condensed financial statements.
SunGard Data Systems Inc.
Notes to Unaudited Pro Forma Combined Condensed Financial Statements
(Unaudited)
The pro forma combined 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 companies had been combined during the periods presented or the results that may be obtained in the future.
Note 1 – GL TRADE Historical Financial Information
GL TRADE S.A. (GL TRADE) has a calendar yearend. GL TRADE’s financial position and results of operations have been translated into English from previously issued financial statements. GL TRADE’s financial statements and notes thereto have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the IASB and in accordance with IFRS adopted by the European Union. SunGard has concluded that there are no material differences between GL TRADE’s financial position and results of operations under IFRS compared to accounting principles generally accepted in the United States. Historical GL Trade amounts were converted to US dollars using an exchange rate as of June 30, 2008 for the Pro Forma Combined Balance Sheet and using the average exchange rates during the respective periods for the Pro Forma Combined Condensed Statement of Operations.
Note 2 – SunGard Historical Financial Information
SunGard’s historical financial information as previously filed with the Securities and Exchange Commission.
Note 3 – Allocation of the purchase price
The allocation of the estimated $629 million purchase price is preliminary and is subject to change based on the completion of independent appraisals of intangible assets, actual costs as compared with estimated costs used in the preliminary purchase price allocation, and completion of financial information as of October 1, 2008, the date of closing of the acquisition. The finalization of the allocation of the purchase price which we expect to be completed in mid-2009 will result in adjustment to certain assets acquired and liabilities assumed, with an offsetting increase or decrease to goodwill.
Note 4 – Financing of the acquisition
In connection with the acquisition of GL TRADE, SunGard borrowed $500 million under a secured incremental credit facility and $500 million through issuance of Senior unsecured notes. The interest rate of credit facility debt will adjust periodically. For purposes of the pro forma financial statements, the weighted interest rate on the debt is assumed to be approximately 9.2%. For every one-eighth percent adjustment to the interest rate, interest expense increases or decreases by $1.25 million per year and net income increases or decreases by $0.8 million per year. The pro forma rules require using current borrowing rates and do not reflect rates that would have been charged during the periods presented.
Note 5 – Valuation of property and equipment
Book value of property and equipment approximates fair value.
Note 6 – Other tangible and intangible assets
An independent appraisal is in process of being performed in connection with acquired technology, contracts and customer relationships. The fair value of these intangible assets will be amortized, on a straight line basis over their estimated useful life, which for software, customer base and trade name, we currently estimate to be approximately seven years, ten years and ten years, respectively. In accordance with Statement of Financial Accounting Standards Number 142, goodwill is not amortized and will be evaluated for impairment. Deferred income taxes have been provided for the step-up in basis of intangible assets excluding goodwill.
Note 7 – Other pro forma adjustments
Other pro forma adjustments include estimated acquisition costs and costs associated with issuance of the debt which are capitalized and amortized as non-cash interest expense over the term of the debt.
Note 8 – Equity
Removes historical equity of GL TRADE.
Note 9 – Income taxes
Assumes an effective income tax rate equal to the statutory rates in France and the US, as appropriate. The actual effective tax rate may be different due to the mix of income from different jurisdictions.