##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 001-34675
 SS&C TECHNOLOGIES HOLDINGS, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    71-0987913
(I.R.S. Employer Identification No.)
 
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



SS&C TECHNOLOGIES HOLDINGS, INC.
 INDEX
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets at September 30, 2010
and December 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the three
months and nine months ended September 30, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2010 and 2009
    
    
    5Notes to unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    22PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    23Item 6. Exhibits
    
    
    34SIGNATURE
    
    
    35EXHIBIT INDEX
    
    
    36Exhibit 31.1Exhibit 31.2Exhibit 32
    2




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1.
Financial Statements
 
 
  
 September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    86,975
    
    
    $
    19,055Accounts receivable, net of allowance for doubtful accounts of $1,981 and $1,425,
respectively
    
    
    44,834
    
    
    
    41,600Prepaid expenses and other current assets
    
    
    5,950
    
    
    
    6,164Prepaid income taxes
    
    
    6,282
    
    
    
    669Deferred income taxes
    
    
    1,467
    
    
    
    1,780Total current assets
    
    
    145,508
    
    
    
    69,268Property and equipment:Leasehold improvements
    
    
    5,363
    
    
    
    5,358Equipment, furniture, and fixtures
    
    
    28,754
    
    
    
    25,91534,117
    
    
    
    31,273Less accumulated depreciation
    
    
    (20,953
    )
    
    
    (17,237
    )Net property and equipment
    
    
    13,164
    
    
    
    14,036Deferred income taxes
    
    
    649
    
    
    
    499Goodwill (Note 10)
    
    
    895,182
    
    
    
    885,517Intangible and other assets, net of accumulated amortization of $143,291 and $116,670, respectively
    
    
    191,136
    
    
    
    216,321Total assets
    
    $
    1,245,639
    
    
    $
    1,185,641LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt (Note 6)
    
    $
    1,719
    
    
    $
    4,270Accounts payable
    
    
    2,666
    
    
    
    4,804Income taxes payable
    
    
    
    
    
    
    703Accrued employee compensation and benefits
    
    
    12,654
    
    
    
    14,693Other accrued expenses
    
    
    10,530
    
    
    
    16,938Interest payable
    
    
    5,219
    
    
    
    2,070Deferred maintenance and other revenue
    
    
    41,656
    
    
    
    40,400Total current liabilities
    
    
    74,444
    
    
    
    83,878Long-term debt, net of current portion (Note 6)
    
    
    288,685
    
    
    
    392,989Other long-term liabilities
    
    
    13,570
    
    
    
    12,779Deferred income taxes
    
    
    40,451
    
    
    
    50,008Total liabilities
    
    
    417,150
    
    
    
    539,654Commitments and contingencies (Note 8)Stockholders equity (Notes 3 and 4):Common stock:Class A non-voting common stock, $0.01 par value, 5,000 shares authorized; 638 shares issued and outstanding
    
    
    6
    
    
    
    Common stock, $0.01 par value, 100,000 shares authorized; 71,773 shares and 60,807 shares issued,
respectively, and 71,285 shares and 60,400 shares outstanding, respectively
    
    
    718
    
    
    
    608Additional paid-in capital
    
    
    740,304
    
    
    
    587,293Accumulated other comprehensive income
    
    
    23,743
    
    
    
    16,436Retained earnings
    
    
    69,537
    
    
    
    46,300834,308
    
    
    
    650,637Less: cost of common stock in treasury, 488 shares and 407 shares, respectively
    
    
    (5,819
    )
    
    
    (4,650
    )Total stockholders equity
    
    
    828,489
    
    
    
    645,987Total liabilities and stockholders equity
    
    $
    1,245,639
    
    
    $
    1,185,641
 See accompanying notes to Condensed Consolidated Financial Statements.
  3




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    $
    5,966
    
    
    $
    5,829
    
    
    $
    17,629
    
    
    $
    15,632Maintenance
    
    
    18,294
    
    
    
    16,959
    
    
    
    54,130
    
    
    
    48,565Professional services
    
    
    4,896
    
    
    
    4,283
    
    
    
    15,384
    
    
    
    14,872Software-enabled services
    
    
    53,847
    
    
    
    41,826
    
    
    
    155,652
    
    
    
    120,801Total revenues
    
    
    83,003
    
    
    
    68,897
    
    
    
    242,795
    
    
    
    199,870Cost of revenues:Software licenses
    
    
    1,918
    
    
    
    2,133
    
    
    
    5,754
    
    
    
    6,304Maintenance
    
    
    8,224
    
    
    
    7,025
    
    
    
    24,305
    
    
    
    20,352Professional services
    
    
    3,625
    
    
    
    3,170
    
    
    
    10,243
    
    
    
    10,659Software-enabled services
    
    
    28,570
    
    
    
    22,473
    
    
    
    82,137
    
    
    
    65,079Total cost of revenues
    
    
    42,337
    
    
    
    34,801
    
    
    
    122,439
    
    
    
    102,394Gross profit
    
    
    40,666
    
    
    
    34,096
    
    
    
    120,356
    
    
    
    97,476Operating expenses:Selling and marketing
    
    
    6,275
    
    
    
    4,962
    
    
    
    18,910
    
    
    
    15,229Research and development
    
    
    7,867
    
    
    
    6,969
    
    
    
    23,486
    
    
    
    19,593General and administrative
    
    
    6,939
    
    
    
    4,502
    
    
    
    19,165
    
    
    
    14,683Total operating expenses
    
    
    21,081
    
    
    
    16,433
    
    
    
    61,561
    
    
    
    49,505Operating income
    
    
    19,585
    
    
    
    17,663
    
    
    
    58,795
    
    
    
    47,971Interest expense, net
    
    
    (6,743
    )
    
    
    (9,147
    )
    
    
    (23,818
    )
    
    
    (27,791
    )Other income (expense), net
    
    
    653
    
    
    
    (334
    )
    
    
    653
    
    
    
    (1,256
    )Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (5,480
    )
    
    
    Income before income taxes
    
    
    13,495
    
    
    
    8,182
    
    
    
    30,150
    
    
    
    18,924Provision for income taxes
    
    
    3,641
    
    
    
    2,575
    
    
    
    6,913
    
    
    
    5,928Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996Basic earnings per share
    
    $
    0.14
    
    
    $
    0.09
    
    
    $
    0.34
    
    
    $
    0.22Basic weighted average number of common shares outstanding
    
    
    71,889
    
    
    
    60,388
    
    
    
    67,919
    
    
    
    60,378Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.09
    
    
    $
    0.32
    
    
    $
    0.21Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    75,441
    
    
    
    63,339
    
    
    
    71,499
    
    
    
    63,132
 See accompanying notes to Condensed Consolidated Financial Statements.
  4




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Nine months ended September 30,2010
    
    
    2009Cash flow from operating activities:Net income
    
    $
    23,237
    
    
    $
    12,996Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    30,356
    
    
    
    26,707Amortization of loan origination costs
    
    
    2,896
    
    
    
    1,724(Gain) loss on sale or disposition of property and equipment
    
    
    (1
    )
    
    
    13Deferred income taxes
    
    
    (12,467
    )
    
    
    (8,727
    )Stock-based compensation expense
    
    
    9,181
    
    
    
    4,363Provision for doubtful accounts
    
    
    580
    
    
    
    300Changes in operating assets and liabilities, excluding effects
from acquisitions:Accounts receivable
    
    
    (2,009
    )
    
    
    2,594Prepaid expenses and other assets
    
    
    80
    
    
    
    132Accounts payable
    
    
    (2,151
    )
    
    
    (184
    )Accrued expenses and other liabilities
    
    
    90
    
    
    
    3,491Income taxes prepaid and payable
    
    
    (2,392
    )
    
    
    (2,224
    )Deferred maintenance and other revenues
    
    
    229
    
    
    
    3,815Net cash provided by operating activities
    
    
    47,629
    
    
    
    45,000Cash flow from investing activities:Additions to property and equipment
    
    
    (3,265
    )
    
    
    (1,192
    )Proceeds from sale of property and equipment
    
    
    51
    
    
    
    3Cash paid for business acquisitions, net of cash acquired
    
    
    (11,372
    )
    
    
    (10,327
    )Additions to capitalized software and other intangibles
    
    
    (171
    )
    
    
    (46
    )Net cash used in investing activities
    
    
    (14,757
    )
    
    
    (11,562
    )Cash flow from financing activities:Repayment of debt
    
    
    (107,670
    )
    
    
    (11,735
    )Proceeds from common stock issuance, net of issuance costs
    
    
    134,613
    
    
    
    Proceeds from the exercise of stock options
    
    
    5,880
    
    
    
    1,991Purchase of common stock for treasury
    
    
    (1,169
    )
    
    
    (2,216
    )Income tax benefit related to exercise of stock options
    
    
    3,453
    
    
    
    Net cash provided by (used in) financing activities
    
    
    35,107
    
    
    
    (11,960
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (59
    )
    
    
    1,684Net increase in cash and cash equivalents
    
    
    67,920
    
    
    
    23,162Cash and cash equivalents, beginning of period
    
    
    19,055
    
    
    
    29,299Cash and cash equivalents, end of period
    
    $
    86,975
    
    
    $
    52,461Supplemental disclosure of cash paid for:Interest
    
    $
    19,187
    
    
    $
    19,861Income taxes, net
    
    $
    15,679
    
    
    $
    16,689Supplemental disclosure of non-cash investing activities:See Note 9 for a discussion of acquisitions
 See accompanying notes to Condensed Consolidated Financial Statements.
  5




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SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
 
   SS&C Technologies Holdings, Inc. is our top-level holding company. SS&C Technologies, Inc., or
SS&C, is our primary operating company and a wholly-owned subsidiary of SS&C Technologies
Holdings, Inc. We, us, our and the Company mean SS&C Technologies Holdings, Inc. and its
consolidated subsidiaries, including SS&C.
 1.
Basis of Presentation
  Reclassifications
  2. The Transaction
  3.
Equity and Stock-based Compensation
      6




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,Statements of operations classification
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Cost of maintenance
    
    $
    106
    
    
    $
    33
    
    
    $
    231
    
    
    $
    89Cost of professional services
    
    
    146
    
    
    
    59
    
    
    
    332
    
    
    
    163Cost of software-enabled services
    
    
    834
    
    
    
    315
    
    
    
    1,924
    
    
    
    875Total cost of revenues
    
    
    1,086
    
    
    
    407
    
    
    
    2,487
    
    
    
    1,127Selling and marketing
    
    
    594
    
    
    
    259
    
    
    
    1,359
    
    
    
    754Research and development
    
    
    409
    
    
    
    169
    
    
    
    924
    
    
    
    467General and administrative
    
    
    1,860
    
    
    
    734
    
    
    
    4,411
    
    
    
    2,015Total operating expenses
    
    
    2,863
    
    
    
    1,162
    
    
    
    6,694
    
    
    
    3,236Total stock-based compensation
expense
    
    $
    3,949
    
    
    $
    1,569
    
    
    $
    9,181
    
    
    $
    4,363
  7




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Shares ofUnderlyingOptionsOutstanding at January 1, 2010
    
    
    12,737,559Granted
    
    
    2,154,135Cancelled/forfeited
    
    
    (182,330
    )Exercised
    
    
    (1,770,035
    )Outstanding at September 30, 2010
    
    
    12,939,329
 4. Comprehensive Income
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996Foreign currency translation gains
    
    
    8,726
    
    
    
    17,869
    
    
    
    5,536
    
    
    
    29,410Unrealized gains on interest rate
swaps, net of tax
    
    
    585
    
    
    
    238
    
    
    
    1,771
    
    
    
    1,021Total comprehensive income
    
    $
    19,165
    
    
    $
    23,714
    
    
    $
    30,544
    
    
    $
    43,427
 5.
Basic and Diluted Earnings Per Share
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Weighted average common shares outstanding
    
    
    71,889
    
    
    
    60,388
    
    
    
    67,919
    
    
    
    60,378Weighted average common stock equivalents  options
    
    
    3,552
    
    
    
    2,951
    
    
    
    3,580
    
    
    
    2,754Weighted average common and common equivalent
shares outstanding
    
    
    75,441
    
    
    
    63,339
    
    
    
    71,499
    
    
    
    63,132
   8




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##### Table of Contents



6. Debt
  September 30,
    
    
    December 31,2010
    
    
    2009Senior credit facility, revolving portion
    
    $
    
    
    
    $
    2,000Senior credit facility, term loan portion,
weighted-average interest rate of 2.52%
and 2.39%, respectively
    
    
    157,072
    
    
    
    190,032113/4% senior subordinated notes due 2013
    
    
    133,250
    
    
    
    205,000Capital leases
    
    
    82
    
    
    
    227290,404
    
    
    
    397,259Short-term borrowings and current portion
of long-term debt
    
    
    (1,719
    )
    
    
    (4,270
    )Long-term debt
    
    $
    288,685
    
    
    $
    392,989
   3 4
 7.
Derivatives and Hedging Activities
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Interest rate swap
    
    $
    1,085
    
    
    $
    1,070
    
    
    $
    3,352
    
    
    $
    2,815
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of gain
recognized in AOCI,
net of tax
    
    $
    585
    
    
    $
    238
    
    
    $
    1,771
    
    
    $
    1,021
    9




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##### Table of Contents



8. Commitments and Contingencies
  9. Acquisitions
    Accounts receivable
    
    $
    1,680Tangible assets acquired, net of cash received
    
    
    32Acquired customer relationships and contracts
    
    
    2,500Goodwill
    
    
    8,404Deferred revenue
    
    
    (1,126
    )Other liabilities assumed
    
    
    (118
    )Consideration paid, net of cash received
    
    $
    11,372
  10




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues
    
    $
    83,003
    
    
    $
    77,022
    
    
    $
    243,451
    
    
    $
    229,581Net income
    
    $
    9,854
    
    
    $
    6,042
    
    
    $
    23,313
    
    
    $
    15,067Basic earnings per share
    
    $
    0.14
    
    
    $
    0.10
    
    
    $
    0.34
    
    
    $
    0.25Basic weighted average number of common shares outstanding
    
    
    71,889
    
    
    
    60,388
    
    
    
    67,919
    
    
    
    60,378Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.10
    
    
    $
    0.33
    
    
    $
    0.24Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    75,441
    
    
    
    63,339
    
    
    
    71,499
    
    
    
    63,132
 10. Goodwill
  Balance at December 31, 2009
    
    $
    885,5172010 acquisition
    
    
    8,404Adjustments to previous acquisitions
    
    
    (352
    )Income tax benefit on rollover options exercised
    
    
    (3,873
    )Effect of foreign currency translation
    
    
    5,486Balance at September 30, 2010
    
    $
    895,182
 11.
Product and Geographic Sales Information
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009United States
    
    $
    58,079
    
    
    $
    43,078
    
    
    $
    164,791
    
    
    $
    127,213Canada
    
    
    12,338
    
    
    
    10,774
    
    
    
    36,697
    
    
    
    30,437Americas excluding
United States and
Canada
    
    
    1,684
    
    
    
    2,674
    
    
    
    4,962
    
    
    
    5,924Europe
    
    
    9,028
    
    
    
    10,898
    
    
    
    30,597
    
    
    
    30,723Asia Pacific and Japan
    
    
    1,874
    
    
    
    1,473
    
    
    
    5,748
    
    
    
    5,573$
    83,003
    
    
    $
    68,897
    
    
    $
    242,795
    
    
    $
    199,870
  11




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Portfolio management/accounting
    
    $
    66,837
    
    
    $
    57,224
    
    
    $
    194,388
    
    
    $
    163,716Trading/treasury operations
    
    
    9,650
    
    
    
    5,379
    
    
    
    29,810
    
    
    
    17,455Financial modeling
    
    
    2,309
    
    
    
    2,296
    
    
    
    6,905
    
    
    
    6,592Loan management/accounting
    
    
    1,232
    
    
    
    981
    
    
    
    3,263
    
    
    
    3,271Property management
    
    
    1,233
    
    
    
    1,328
    
    
    
    3,451
    
    
    
    3,818Money market processing
    
    
    1,117
    
    
    
    993
    
    
    
    3,100
    
    
    
    2,894Training
    
    
    625
    
    
    
    696
    
    
    
    1,878
    
    
    
    2,124$
    83,003
    
    
    $
    68,897
    
    
    $
    242,795
    
    
    $
    199,870
 12. Recent Accounting Pronouncements
  13.
Subsequent Events
   12




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 CRITICAL ACCOUNTING POLICIES
  
    
    Revenue Recognition
    
    Allowance for Doubtful Accounts
    
    Long-Lived Assets, Intangible Assets and Goodwill
    
    Acquisition Accounting
    
    Income Taxes
    
    Stock-Based Compensation
 Results of Operations for the Three Months and Nine Months Ended September 30, 2010 and 2009
  Three months ended
    
    
    
    
    
    
    Nine months endedSeptember 30,
    
    
    %
    
    
    September 30,
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeRevenues:Software licenses
    
    $
    5,966
    
    
    $
    5,829
    
    
    
    2
    %
    
    $
    17,629
    
    
    $
    15,632
    
    
    
    13
    %Maintenance
    
    
    18,294
    
    
    
    16,959
    
    
    
    8
    %
    
    
    54,130
    
    
    
    48,565
    
    
    
    11
    %Professional services
    
    
    4,896
    
    
    
    4,283
    
    
    
    14
    %
    
    
    15,384
    
    
    
    14,872
    
    
    
    3
    %Software-enabled
services
    
    
    53,847
    
    
    
    41,826
    
    
    
    29
    %
    
    
    155,652
    
    
    
    120,801
    
    
    
    29
    %Total revenues
    
    
    83,003
    
    
    
    68,897
    
    
    
    20
    %
    
    
    242,795
    
    
    
    199,870
    
    
    
    21
    %
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    
    7
    %
    
    
    8
    %
    
    
    7
    %
    
    
    8
    %Maintenance
    
    
    22
    %
    
    
    25
    %
    
    
    22
    %
    
    
    24
    %Professional services
    
    
    6
    %
    
    
    6
    %
    
    
    7
    %
    
    
    8
    %Software-enabled services
    
    
    65
    %
    
    
    61
    %
    
    
    64
    %
    
    
    60
    %Total revenues
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  13




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##### Table of Contents



Revenues
   Software Licenses
 Maintenance
 Professional Services
  14




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##### Table of Contents



Software-Enabled Services
 Cost of Revenues
  Cost of Software Licenses
 Cost of Maintenance
 Cost of Professional Services
  15




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##### Table of Contents



Cost of Software-Enabled Services
 Operating Expenses
  Selling and Marketing
 Research and Development
  16




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##### Table of Contents



General and Administrative
 Interest Expense, Net. 3 4 3 4 Liquidity and Capital
Resources
 Other Income (Expense), Net
 Loss on Extinguishment of Debt Liquidity and Capital Resources
 Provision for Income Taxes.
 Liquidity and Capital Resources
     17




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##### Table of Contents



3 4
 Off-Balance Sheet Arrangements
  Senior Credit Facilities
     18




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113/4% Senior Subordinated Notes due 2013
 3 4 pari passu
 3 4
  Covenant Compliance
       19




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##### Table of Contents




    
    Consolidated EBITDA does not reflect the provision of income tax expense in our various
jurisdictions;
 
    
    Consolidated EBITDA does not reflect the significant interest expense we incur as a
result of our debt leverage;
 
    
    Consolidated EBITDA does not reflect any attribution of costs to our operations related
to our investments and capital expenditures through depreciation and amortization charges;
 
    
    Consolidated EBITDA does not reflect the cost of compensation we provide to our
employees in the form of stock option awards; and
 
    
    Consolidated EBITDA excludes expenses that we believe are unusual or non-recurring, but
which others may believe are normal expenses for the operation of a business.
  TwelveThree Months Ended
    
    
    Nine Months Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996
    
    
    $
    29,259Interest expense (1)
    
    
    6,743
    
    
    
    9,147
    
    
    
    29,298
    
    
    
    27,791
    
    
    
    38,370Income taxes
    
    
    3,641
    
    
    
    2,575
    
    
    
    6,913
    
    
    
    5,928
    
    
    
    10,789Depreciation and amortization
    
    
    10,059
    
    
    
    9,109
    
    
    
    30,356
    
    
    
    26,707
    
    
    
    39,677EBITDA
    
    
    30,297
    
    
    
    26,438
    
    
    
    89,804
    
    
    
    73,422
    
    
    
    118,095Purchase accounting adjustments (2)
    
    
    (87
    )
    
    
    (58
    )
    
    
    (124
    )
    
    
    (163
    )
    
    
    (54
    )Unusual or non-recurring charges (3)
    
    
    (533
    )
    
    
    400
    
    
    
    (449
    )
    
    
    1,683
    
    
    
    (142
    )Acquired EBITDA and cost savings (4)
    
    
    
    
    
    
    
    
    
    
    192
    
    
    
    2,025
    
    
    
    2,121Stock-based compensation
    
    
    3,949
    
    
    
    1,569
    
    
    
    9,181
    
    
    
    4,363
    
    
    
    10,425Capital-based taxes
    
    
    407
    
    
    
    (4
    )
    
    
    861
    
    
    
    672
    
    
    
    984Other (5)
    
    
    (47
    )
    
    
    337
    
    
    
    114
    
    
    
    977
    
    
    
    338Consolidated EBITDA
    
    $
    33,986
    
    
    $
    28,682
    
    
    $
    99,579
    
    
    $
    82,979
    
    
    $
    131,767
 (1)
    
    Interest expense includes loss from extinguishment of debt shown as a separate line
item on our Statement of Operations.(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 rent expense by the
amount that would have been recognized if lease obligations were not adjusted to fair
value at the date of the Transaction.(3)
    
    Unusual or non-recurring charges include foreign currency gains and losses, the
adjustment to the TNR contingent consideration liability, proceeds from legal and other
settlements and other one-time expenses.(4)
    
    Acquired EBITDA and cost savings reflects the EBITDA impact of significant
businesses that were acquired during the period as if the acquisition occurred at the
beginning of the period and cost savings to be realized from such acquisitions.(5)
    
    Other includes management fees and related expenses paid to The Carlyle Group and
the non-cash portion of straight-line rent expense.  20




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Covenant
    
    
    ActualRequirements
    
    
    RatiosMaximum consolidated total leverage to Consolidated EBITDA ratio (1)
    
    
    5.50
    x
    
    
    1.98
    xMinimum Consolidated EBITDA to consolidated net interest coverage ratio
    
    
    2.25
    x
    
    
    4.30
    x
 (1)
    
    Calculated as the ratio of funded debt, less cash on hand up to a maximum of $30.0
million, to Consolidated EBITDA, as defined by our senior credit facility, for the period
of four consecutive fiscal quarters ended on the measurement date. Funded debt is
comprised of indebtedness for borrowed money, notes, bonds or similar instruments, and
capital lease obligations. This covenant is applied at the end of each quarter. Recent Accounting Pronouncements
   21




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4. Controls and Procedures
    22




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PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
 Our business is subject to numerous risks. We caution you that the following important factors,
among others, could cause our actual results to differ materially from those expressed in
forward-looking statements made by us or on our behalf in filings with the SEC, press releases,
communications with investors and oral statements. Any or all of the forward-looking statements we
make in this Quarterly Report on Form 10-Q and in any other public statements may turn out to be
wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks
and uncertainties. Many factors mentioned in the discussion below will be important in determining
future results. Consequently, no forward-looking statement can be guaranteed. Actual future results
may differ materially from those anticipated in forward-looking statements. We undertake no
obligation to update any forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any further disclosure we make in our
reports filed with the SEC.
 Risks relating to our business
 Our business is greatly affected by changes in the state of the general economy and the financial
markets, and a prolonged downturn in the general economy or the financial services industry could
disproportionately affect the demand for our products and services.
   
    
    cancel or reduce planned expenditures for our products and services;
    
    process fewer transactions through our software-enabled services;
    
    seek to lower their costs by renegotiating their contracts with us;
    
    move their IT solutions in-house;
    
    switch to lower-priced solutions provided by our competitors; or
    
    exit the industry.
 3 4
  23




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Further or accelerated consolidations and failures in the financial services industry could
adversely affect our results of operations due to a resulting decline in demand for our products
and services.
  If we are unable to retain and attract clients, our revenues and net income would remain stagnant
or decline.
 
 
    
    the level of demand for our products and services;
    
    the level of client spending for information technology;
    
    the level of competition from internal client solutions and from other vendors;
    
    the quality of our client service;
    
    our ability to update our products and services and develop new products and services needed by clients;
    
    our ability to understand the organization and processes of our clients; and
    
    our ability to integrate and manage acquired businesses.
 We face significant competition with respect to our products and services, which may result in
price reductions, reduced gross margins or loss of market share.
   Catastrophic events may adversely affect our ability to provide, our clients ability to use, and
the demand for, our products and services, which may disrupt our business and cause a decline in
revenues
   24




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##### Table of Contents



Our software-enabled services may be subject to disruptions that could adversely affect our
reputation and our business.
  We may not achieve the anticipated benefits from our acquisitions and may face difficulties in
integrating our acquisitions, which could adversely affect our revenues, subject us to unknown
liabilities, increase costs and place a significant strain on our management.
   
    
    combine operations, facilities and differing firm cultures;
    
    retain the clients or employees of acquired entities;
    
    generate market demand for new products and services;
    
    coordinate geographically dispersed operations and successfully adapt to the complexities of
international operations;
    
    integrate the technical teams of these companies with our engineering organization;
    
    incorporate acquired technologies and products into our current and future product lines; and
    
    integrate the products and services of these companies with our business, where we do not
have distribution, marketing or support experience for these products and services.
   25




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##### Table of Contents



We expect that our operating results, including our profit margins and profitability, may fluctuate
over time.
  
    
    the timing of the introduction and the market acceptance of new products, product
enhancements or services by us or our competitors;
    
    the lengthy and often unpredictable sales cycles of large client engagements;
    
    the amount and timing of our operating costs and other expenses;
    
    the financial health of our clients;
    
    changes in the value of assets under our clients management;
    
    cancellations of maintenance and/or software-enabled services arrangements by our clients;
    
    changes in local, national and international regulatory requirements;
    
    changes in our personnel;
    
    implementation of our licensing contracts and software-enabled services arrangements;
    
    changes in economic and financial market conditions; and
    
    changes in the mix of the products and services we provide.
 If we cannot attract, train and retain qualified managerial, technical and sales personnel, we may
not be able to provide adequate technical expertise and customer service to our clients or maintain
focus on our business strategy.
    If we are unable to protect our proprietary technology, our success and our ability to compete will
be subject to various risks, such as third-party infringement claims, unauthorized use of our
technology, disclosure of our proprietary information or inability to license technology from third
parties.
   26




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##### Table of Contents



We could become subject to litigation regarding intellectual property rights, which could seriously
harm our business and require us to incur significant costs, which, in turn, could reduce or
eliminate profits.
  Our failure to continue to derive substantial revenues from the licensing of, or the provision of
software-enabled services related to, our CAMRA, TradeThru, Pacer, AdvisorWare and Total Return
software, and the provision of maintenance and professional services in support of such licensed
software, could adversely affect our ability to sustain or grow our revenues and harm our business,
financial condition and results of operations.
   27




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##### Table of Contents



We may be unable to adapt to rapidly changing technology and evolving industry standards and
regulatory requirements, and our inability to introduce new products and services could result in a
loss of market share.
  
    
    we may find it difficult or costly to update our services and software
and to develop new products and services quickly enough to meet our
clients needs;
    
    we may find it difficult or costly to make some features of our
software work effectively and securely over the Internet or with new
or changed operating systems;
    
    we may find it difficult or costly to update our software and services
to keep pace with business, evolving industry standards, regulatory
and other developments in the industries where our clients
operate; and
    
    we may be exposed to liability for security breaches that allow
unauthorized persons to gain access to confidential information stored
on our computers or transmitted over our network.
  Undetected software design defects, errors or failures may result in loss of our clients data,
litigation against us and harm to our reputation and business.
  Challenges in maintaining and expanding our international operations can result in increased costs,
delayed sales efforts and uncertainty with respect to our intellectual property rights and results
of operations.
  
    
    changes in a specific countrys or regions political or economic condition;
    
    difficulties in obtaining U.S. export licenses;
    
    potentially longer payment cycles;
    
    increased costs associated with maintaining international marketing efforts;
    
    foreign currency fluctuations;
    
    the introduction of non-tariff barriers and higher duty rates;
    
    foreign regulatory compliance; and
    
    difficulties in enforcement of third-party contractual obligations and intellectual property rights.
  28




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##### Table of Contents



Risks relating to our indebtedness
 Our substantial indebtedness could adversely affect our financial health and prevent us from
fulfilling our obligations under our 113/4% senior subordinated notes due 2013 and our senior credit
facilities.
 3 4
  
    
    make it more difficult for us to satisfy our obligations with respect to our notes and our senior credit facilities;
    
    require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness,
thereby reducing the availability of our cash flow to fund acquisitions, working capital, capital expenditures,
research and development efforts and other general corporate purposes;
    
    increase our vulnerability to and limit our flexibility in planning for, or reacting to, changes in our business
and the industry in which we operate;
    
    expose us to the risk of increased interest rates as borrowings under our senior credit facilities are subject to
variable rates of interest;
    
    place us at a competitive disadvantage compared to our competitors that have less debt; and
    
    limit our ability to borrow additional funds.
  To service our indebtedness, we require a significant amount of cash. Our ability to generate cash
depends on many factors beyond our control.
    29




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##### Table of Contents



Despite current indebtedness levels, we and our subsidiaries may still be able to incur
substantially more debt. This could
further exacerbate the risks associated with our substantial financial leverage.
  Restrictive covenants in the indenture governing the notes and the agreement governing our senior
credit facilities may restrict our ability to pursue our business strategies.
  
    
    incur additional indebtedness;
    
    sell assets, including capital stock of restricted subsidiaries;
    
    agree to payment restrictions affecting SS&Cs restricted subsidiaries;
    
    pay dividends;
    
    consolidate, merge, sell or otherwise dispose of all or substantially all of SS&Cs assets;
    
    make strategic acquisitions;
    
    enter into transactions with SS&Cs affiliates;
    
    incur liens; and
    
    designate any of SS&Cs subsidiaries as unrestricted subsidiaries.
    
    
    declare all borrowings outstanding, together with accrued interest and
other fees, to be immediately due and payable; or
    
    prevent us from making payments on the notes,
   30




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We may not have the ability to raise the funds necessary to finance the change of control offer
required by the indenture governing the notes.
  We are a holding company with no operations or assets of our own and our ability to pay dividends
is limited or otherwise restricted.
  Risks relating to ownership of our common stock
 Prior to the completion of our IPO in April 2010, there was no public market for shares of our
common stock. An active trading market for our common stock may not develop, and you may not be
able to sell your shares of our common stock at or above the price at which you purchased them.
  If equity research analysts do not publish or cease publishing research or reports about our
business or if they issue unfavorable commentary or downgrade our common stock, the price of our
common stock could decline.
  The market price of our common stock may be volatile.
  
    
    fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to
be similar to us;
    
    changes in estimates of our financial results or recommendations by securities analysts;
    
    failure of any of our products to achieve or maintain market acceptance;
    
    changes in market valuations of similar companies;
    
    success of competitive products;
    
    changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
  31




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##### Table of Contents




    
    announcements by us or our competitors of significant products, contracts, acquisitions or strategic alliances;
    
    regulatory developments in the United States, foreign countries or both;
    
    litigation involving our company, our general industry or both;
    
    additions or departures of key personnel;
    
    investors general perception of us; and
    
    changes in general economic, industry and market conditions.
  A significant portion of our outstanding shares may be sold into the public market, which could
cause the market price of our common stock to drop significantly, even if our business is doing
well.
   A few significant stockholders control the direction of our business. If the ownership of our
common stock continues to be highly concentrated, it will prevent you and other stockholders from
influencing significant corporate decisions.
   Our management has broad discretion over the use of our existing cash resources and might not use
such funds in ways that increase the value of our common stock.
   32




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Provisions in our certificate of incorporation and bylaws might discourage, delay or prevent a
change of control of our company or changes in our management and, therefore, depress the trading
price of our common stock.
 
 
    
    limitations on the removal of directors;
    
    a classified board of directors so that not all members of our board are elected at one time;
    
    advance notice requirements for stockholder proposals and nominations;
    
    the inability of stockholders to call special meetings;
    
    the ability of our board of directors to make, alter or repeal our bylaws;
    
    the ability of our board of directors to designate the terms of and issue new series of
preferred stock without stockholder approval, which could be used to institute a rights
plan, or a poison pill, that would work to dilute the stock ownership of a potential hostile
acquirer, likely preventing acquisitions that have not been approved by our board of
directors; and
    
    a prohibition on stockholders from acting by written consent if William C. Stone, investment
funds affiliated with Carlyle, and certain transferees of Carlyle cease to collectively hold
a majority of our outstanding common stock.
  As a new public company, we incur significant additional costs which could harm our operating
results.
  As a result of our operating as a public company, our management is required to devote significant
time to public company compliance requirements. This may divert managements attention from the
growth and operation of the business.
    33




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Item 6. Exhibits
   34




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##### Table of Contents



SIGNATURE
  SS&C TECHNOLOGIES HOLDINGS, INC.Date: November 10, 2010
    By:
    /s/ Patrick J. PedontiPatrick J. PedontiSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  35




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Description31.1
    
    
    Certification of the Registrants Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of the Registrants Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    
    Certification of the Registrants Chief Executive Officer
and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
  36