Q4 2016

FY 2016

Adjusted Revenue ($M)

$394.0 – $403.0

$1,513.4 – $1,522.4

Adjusted Net Income ($M)

$89.4 – $92.4

$331.8 – $334.8

Cash from Operating Activities ($M)

—

$380.0 - $390.0

Capital Expenditures (% of revenue)

—

2.5% – 2.8%

Diluted Shares (M)

207.8 – 208.2

205.9 – 206.1

Effective Income Tax Rate (%)

—

27% – 29%

SS&C Technologies Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operation

(in thousands, except per share data)

(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Revenues:

Software-enabled services

$

248,772

$

180,744

$

699,091

$

484,434

Maintenance and term licenses

106,925

80,097

305,437

159,049

Total recurring revenues

355,697

260,841

1,004,528

643,483

Perpetual licenses

4,389

6,508

14,643

22,526

Professional services

23,218

13,545

61,341

33,388

Total non-recurring revenues

27,607

20,053

75,984

55,914

Total revenues

383,304

280,894

1,080,512

699,397

Cost of revenues:

Software-enabled services

143,074

96,151

403,045

273,301

Maintenance and term licenses

45,458

43,391

138,864

69,896

Total recurring cost of revenues

188,532

139,542

541,909

343,197

Perpetual licenses

608

1,036

1,749

3,081

Professional services

18,887

11,286

51,532

27,396

Total non-recurring cost of revenues

19,495

12,322

53,281

30,477

Total cost of revenues

208,027

151,864

595,190

373,674

Gross profit

175,277

129,030

485,322

325,723

Operating expenses:

Selling and marketing

27,328

37,082

85,724

64,400

Research and development

37,701

37,389

114,975

74,517

General and administrative

33,345

39,607

91,239

70,370

Total operating expenses

98,374

114,078

291,938

209,287

Operating income

76,903

14,952

193,384

116,436

Interest expense, net

(31,648)

(32,645)

(97,583)

(43,664)

Other income, net

2,655

6,953

820

5,282

Loss on extinguishment of debt

—

(30,417)

—

(30,417)

Income (loss) before income taxes

47,910

(41,157)

96,621

47,637

Provision (benefit) for income taxes

9,163

(6,547)

22,648

16,873

Net income (loss)

$

38,747

$

(34,610)

$

73,973

$

30,764

Basic earnings (loss) per share

$

0.19

$

(0.18)

$

0.37

$

0.17

Basic weighted average number of common shares

outstanding

201,782

193,706

199,365

177,772

Diluted earnings (loss) per share

$

0.19

$

(0.18)

$

0.36

$

0.16

Diluted weighted average number of common and common

equivalent shares outstanding

206,635

193,706

205,334

186,470

Net income (loss)

$

38,747

$

(34,610)

$

73,973

$

30,764

Other comprehensive loss, net of tax:

Foreign currency exchange translation adjustment

(12,060)

(38,005)

(29,532)

(51,416)

Total comprehensive loss, net of tax

(12,060)

(38,005)

(29,532)

(51,416)

Comprehensive income (loss)

$

26,687

$

(72,615)

$

44,441

$

(20,652)

SS&C Technologies Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 30,

December 31,

2016

2015

ASSETS

Current assets:

Cash and cash equivalents

$

101,800

$

434,159

Accounts receivable, net

237,495

169,951

Prepaid expenses and other current assets

32,720

27,511

Prepaid income taxes

39,776

40,627

Restricted cash

2,116

2,818

Total current assets

413,907

675,066

Property, plant and equipment, net

71,128

67,143

Deferred income taxes

2,071

2,199

Goodwill

3,616,060

3,549,212

Intangible and other assets, net

1,519,294

1,508,622

Total assets

$

5,622,460

$

5,802,242

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Current portion of long-term debt

$

29,813

$

32,281

Accounts payable

16,480

11,957

Income taxes payable

—

1,428

Accrued employee compensation and benefits

74,006

83,894

Interest payable

13,259

28,903

Other accrued expenses

50,979

36,231

Deferred revenue

231,285

222,024

Total current liabilities

415,822

416,718

Long-term debt, net of current portion

2,460,457

2,719,070

Other long-term liabilities

61,968

51,434

Deferred income taxes

459,025

509,574

Total liabilities

3,397,272

3,696,796

Total stockholders' equity

2,225,188

2,105,446

Total liabilities and stockholders' equity

$

5,622,460

$

5,802,242

SS&C Technologies Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

For the Nine Months Ended September 30,

2016

2015

Cash flow from operating activities:

Net income

$

73,973

$

30,764

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

170,910

100,840

Stock-based compensation expense

40,402

31,435

Income tax benefit related to exercise of stock options

(44,975)

(11,141)

Amortization and write-offs of loan origination costs

7,994

5,473

Loss on extinguishment of debt

—

3,954

Loss on sale or disposition of property and equipment

159

339

Deferred income taxes

(39,712)

(27,030)

Provision for doubtful accounts

2,684

601

Changes in operating assets and liabilities, excluding effects from acquisitions:

Accounts receivable

(14,603)

(5,234)

Prepaid expenses and other assets

(2,595)

(5,109)

Accounts payable

2,610

(1,755)

Accrued expenses

(18,429)

(28,437)

Income taxes prepaid and payable

44,840

(1,125)

Deferred revenue

13,758

26,992

Net cash provided by operating activities

237,016

120,567

Cash flow from investing activities:

Additions to property and equipment

(18,870)

(9,462)

Proceeds from sale of property and equipment

69

56

Cash paid for business acquisitions, net of cash acquired

(309,432)

(2,614,785)

Additions to capitalized software

(6,137)

(3,370)

Purchase of long-term investment

(1,000)

—

Net changes in restricted cash

700

—

Net cash used in investing activities

(334,670)

(2,627,561)

Cash flow from financing activities:

Cash received from debt borrowings, net of original issue discount

—

3,068,075

Repayments of debt

(268,550)

(823,448)

Proceeds from exercise of stock options

34,767

10,618

Withholding taxes related to equity award net share settlement

(7,051)

—

Income tax benefit related to exercise of stock options

44,975

11,141

Proceeds from common stock issuance, net

—

717,802

Purchase of common stock for treasury

(13)

—

Payment of fees related to refinancing activities

(503)

(45,781)

Dividends paid on common stock

(37,452)

(33,216)

Net cash (used in) provided by financing activities

(233,827)

2,905,191

Effect of exchange rate changes on cash and cash equivalents

(878)

(3,964)

Net (decrease) increase in cash and cash equivalents

(332,359)

394,233

Cash and cash equivalents, beginning of period

434,159

109,577

Cash and cash equivalents, end of period

$

101,800

$

503,810

SS&C Technologies Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Information

Note 1. Reconciliation of Revenues to Adjusted Revenues

Adjusted revenues represents revenues adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Adjusted revenues are presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of the Company. Adjusted revenues is not a recognized term under generally accepted accounting principles (GAAP). Adjusted revenues does not represent revenues, as that term is defined under GAAP, and should not be considered as an alternative to revenues as an indicator of our operating performance. Adjusted revenues as presented herein is not necessarily comparable to similarly titled measures. Below is a reconciliation between adjusted revenues and revenues, the GAAP measure we believe to be most directly comparable to adjusted revenues.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2016

2015

2016

2015

Revenues

$

383,304

$

280,894

$

1,080,512

$

699,397

Purchase accounting adjustments to deferred revenue

8,562

30,532

38,880

31,231

Adjusted revenues

$

391,866

$

311,426

$

1,119,392

$

730,628

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2016

2015

2016

2015

Software-enabled services

$

248,772

$

180,744

$

699,091

$

484,434

Maintenance and term licenses

106,925

80,097

305,437

159,049

Total recurring revenues

355,697

260,841

1,004,528

643,483

Perpetual licenses

4,389

6,508

14,643

22,526

Professional services

23,218

13,545

61,341

33,388

Total non-recurring revenues

27,607

20,053

75,984

55,914

Total revenues

$

383,304

$

280,894

$

1,080,512

$

699,397

Software-enabled services

$

248,809

$

180,744

$

699,358

$

484,434

Maintenance and term licenses

111,527

107,296

332,801

186,947

Total adjusted recurring revenues

360,336

288,040

1,032,159

671,381

Perpetual licenses

4,389

6,508

14,643

22,526

Professional services

27,141

16,878

72,590

36,721

Total adjusted non-recurring revenues

31,530

23,386

87,233

59,247

Total adjusted revenues

$

391,866

$

311,426

$

1,119,392

$

730,628

Note 2. Reconciliation of Operating Income to Adjusted Operating Income

Adjusted operating income represents operating income adjusted for amortization of acquisition-related intangible assets, stock-based compensation, purchase accounting adjustments for deferred revenue and other expenses. Adjusted operating income is presented because we use this measure to evaluate performance of our business and believe it is a useful indicator of the underlying performance of the Company. Adjusted operating income is not a recognized term under GAAP. Adjusted operating income does not represent operating income, as that term is defined under GAAP, and should not be considered as an alternative to operating income as an indicator of our operating performance. Adjusted operating income as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted operating income and operating income, the GAAP measure we believe to be most directly comparable to adjusted operating income.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

2016

2015

2016

2015

Operating income

$

76,903

$

14,952

$

193,384

$

116,436

Amortization of intangible assets

51,539

43,289

153,214

87,782

Stock-based compensation

12,489

23,121

40,402

31,435

Capital-based taxes

1,000

—

1,472

(636)

Unusual or non-recurring charges (1)

2,966

16,672

7,885

25,251

Purchase accounting adjustments (2)

5,573

27,274

29,831

27,973

Adjusted operating income

$

150,470

$

125,308

$

426,188

$

288,241

(1)

Unusual or non-recurring charges include proceeds from legal and other settlements, severance expenses, transaction costs and other one-time expenses, such as expenses associated with facilities consolidations and acquisitions.

(2)

Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.

Note 3. Reconciliation of Net Income (Loss) to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA

EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. Consolidated EBITDA, defined under our Credit Agreement entered into in July 2015, is used in calculating covenant compliance, and is EBITDA adjusted for certain items. Consolidated EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. Adjusted consolidated EBITDA is calculated by subtracting acquired EBITDA from consolidated EBITDA. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are presented because we use these measures to evaluate performance of our business and believe them to be useful indicators of an entity's debt capacity and its ability to service debt. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are not recognized terms under GAAP and should not be considered in isolation or as alternatives to operating income, net income or cash flows from operating activities as indicators of our operating performance. The following is a reconciliation of EBITDA, consolidated EBITDA and adjusted consolidated EBITDA to net income.

Three Months Ended September 30,

Nine Months Ended September 30,

Twelve Months Ended September 30,

(in thousands)

2016

2015

2016

2015

2016

Net income (loss)

$

38,747

$

(34,610)

$

73,973

$

30,764

$

86,071

Interest expense, net

31,648

32,645

97,583

43,664

131,276

Income tax provision (benefit)

9,163

(6,547)

22,648

16,873

23,755

Depreciation and amortization

57,470

48,737

170,910

100,840

220,904

EBITDA

137,028

40,225

365,114

192,141

462,006

Stock-based compensation

12,489

23,121

40,402

31,435

53,046

Capital-based taxes

1,000

—

1,472

(636)

2,936

Acquired EBITDA and cost savings (1)

—

1,482

5,814

92,717

14,670

Unusual or non-recurring charges (2)

311

9,719

7,065

19,969

13,244

Loss on extinguishment of debt

—

30,417

—

30,417

—

Purchase accounting adjustments (3)

5,573

27,274

29,831

27,973

51,785

Other (4)

269

78

1,822

220

2,452

Consolidated EBITDA

$

156,670

$

132,316

$

451,520

$

394,236

$

600,139

Less: acquired EBITDA

—

(1,482)

(5,814)

(92,717)

(14,670)

Adjusted Consolidated EBITDA

$

156,670

$

130,834

$

445,706

$

301,519

$

585,469

(1)

Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period, as well as cost savings enacted in connection with acquisitions.

(2)

Unusual or non-recurring charges include foreign currency gains and losses, proceeds from legal and other settlements, severance expenses, transaction costs and other one-time expenses, such as expenses associated with the facilities consolidations, acquisitions and the sale of fixed assets.

(3)

Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.

(4)

Other includes the non-cash portion of straight-line rent expense.

Note 4. Reconciliation of Net Income (Loss) to Adjusted Net Income and Diluted Earnings (Loss) Per Share to Adjusted Diluted Earnings Per Share

Adjusted net income and adjusted diluted earnings per share represent net income (loss) and earnings (loss) per share before amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items. Adjusted net income and adjusted diluted earnings per share are not recognized terms under GAAP, do not represent net income (loss) or diluted earnings (loss) per share, as those terms are defined under GAAP, and should not be considered as alternatives to net income (loss) or diluted earnings (loss) per share as indicators of our operating performance. Adjusted net income and adjusted diluted earnings per share are important to management and investors because they represent our operational performance exclusive of the effects of amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes, other unusual and non-recurring items, purchase accounting adjustments, and loss on extinguishment of debt that are not operational in nature or comparable to those of our competitors. The following is a reconciliation between adjusted net income and adjusted diluted earnings per share and net income (loss) and diluted earnings (loss) per share.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share data)

2016

2015

2016

2015

GAAP – Net income (loss)

$

38,747

$

(34,610)

$

73,973

$

30,764

Plus: Amortization of intangible assets

51,539

43,289

153,214

87,782

Plus: Amortization of deferred financing costs and original issue discount

2,682

2,599

7,994

5,473

Plus: Stock-based compensation

12,489

23,121

40,402

31,435

Plus: Capital-based taxes

1,000

—

1,472

(636)

Plus: Unusual and non-recurring items (1)

311

9,719

7,065

19,969

Plus: Loss on extinguishment of debt

—

30,417

—

30,417

Plus: Purchase accounting adjustments (2)

5,573

27,274

29,831

27,973

Income tax effect (3)

(24,858)

(33,220)

(71,600)

(53,140)

Adjusted net income

$

87,483

$

68,589

$

242,351

$

180,037

Adjusted diluted earnings (loss) per share

$

0.42

$

0.34

$

1.18

$

0.97

GAAP diluted earnings per share

$

0.19

$

(0.18)

$

0.36

$

0.16

Diluted weighted-average shares outstanding

206,635

202,624

205,334

186,470

(1)

Unusual or non-recurring charges include foreign currency gains and losses, proceeds from legal and other settlements, severance expenses, transaction costs and other one-time expenses, such as expenses associated with the facilities consolidations, acquisitions and the sale of fixed assets.

(2)

Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.

(3)

An estimated normalized effective tax rate of 28% has been used to adjust the provision for income taxes for the purpose of computing adjusted net income.