##### 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 June 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
    
    71-0987913(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
 
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ




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##### 



SS&C TECHNOLOGIES HOLDINGS, INC.
 INDEX
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets at June 30, 2010 and December 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the three months and six
months ended June 30, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended June
30, 2010 and 2009
    
    
    5Notes to 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 4T. 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
 
 
  
 June 30,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    88,886
    
    
    $
    19,055Accounts receivable, net of allowance for doubtful accounts of $1,760 and $1,425,
respectively
    
    
    44,744
    
    
    
    41,600Prepaid expenses and other current assets
    
    
    5,243
    
    
    
    6,164Income taxes receivable
    
    
    7,896
    
    
    
    669Deferred income taxes
    
    
    1,988
    
    
    
    1,780Total current assets
    
    
    148,757
    
    
    
    69,268Property and equipment:Leasehold improvements
    
    
    5,340
    
    
    
    5,358Equipment, furniture, and fixtures
    
    
    27,932
    
    
    
    25,91533,272
    
    
    
    31,273Less accumulated depreciation
    
    
    (19,960
    )
    
    
    (17,237
    )Net property and equipment
    
    
    13,312
    
    
    
    14,036Deferred income taxes
    
    
    559
    
    
    
    499Goodwill (Note 10)
    
    
    886,982
    
    
    
    885,517Intangible and other assets, net of accumulated amortization of $133,343 and $116,670,
respectively
    
    
    199,002
    
    
    
    216,321Total assets
    
    $
    1,248,612
    
    
    $
    1,185,641LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt (Note 6)
    
    $
    2,011
    
    
    $
    4,270Accounts payable
    
    
    3,921
    
    
    
    4,804Income taxes payable
    
    
    
    
    
    
    703Accrued employee compensation and benefits
    
    
    8,341
    
    
    
    14,693Other accrued expenses
    
    
    12,184
    
    
    
    16,938Interest payable
    
    
    1,305
    
    
    
    2,070Deferred maintenance and other revenue
    
    
    45,827
    
    
    
    40,400Total current liabilities
    
    
    73,589
    
    
    
    83,878Long-term debt, net of current portion (Note 6)
    
    
    313,387
    
    
    
    392,989Other long-term liabilities
    
    
    9,574
    
    
    
    10,764Deferred income taxes
    
    
    47,043
    
    
    
    52,023Total liabilities
    
    
    443,593
    
    
    
    539,654Commitments and contingencies (Note 8)Stockholders equity (Note 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; 71,720 shares and 60,807
shares issued, respectively, and 71,232 shares and 60,400 shares outstanding,
respectively
    
    
    717
    
    
    
    608Additional paid-in capital
    
    
    736,000
    
    
    
    587,293Accumulated other comprehensive income
    
    
    14,432
    
    
    
    16,436Retained earnings
    
    
    59,683
    
    
    
    46,300810,838
    
    
    
    650,637Less: cost of common stock in treasury, 488 shares and 407 shares, respectively
    
    
    (5,819
    )
    
    
    (4,650
    )Total stockholders equity
    
    
    805,019
    
    
    
    645,987Total liabilities and stockholders equity
    
    $
    1,248,612
    
    
    $
    1,185,641
 See accompanying notes to Condensed Consolidated Financial Statements.
  3




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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    $
    6,074
    
    
    $
    3,983
    
    
    $
    11,663
    
    
    $
    9,803Maintenance
    
    
    17,817
    
    
    
    16,066
    
    
    
    35,836
    
    
    
    31,606Professional services
    
    
    5,099
    
    
    
    5,393
    
    
    
    10,488
    
    
    
    10,589Software-enabled services
    
    
    52,628
    
    
    
    41,809
    
    
    
    101,805
    
    
    
    78,975Total revenues
    
    
    81,618
    
    
    
    67,251
    
    
    
    159,792
    
    
    
    130,973Cost of revenues:Software licenses
    
    
    1,908
    
    
    
    2,123
    
    
    
    3,836
    
    
    
    4,171Maintenance
    
    
    8,084
    
    
    
    6,853
    
    
    
    16,081
    
    
    
    13,327Professional services
    
    
    3,260
    
    
    
    3,512
    
    
    
    6,618
    
    
    
    7,489Software-enabled services
    
    
    27,688
    
    
    
    22,033
    
    
    
    53,567
    
    
    
    42,606Total cost of revenues
    
    
    40,940
    
    
    
    34,521
    
    
    
    80,102
    
    
    
    67,593Gross profit
    
    
    40,678
    
    
    
    32,730
    
    
    
    79,690
    
    
    
    63,380Operating expenses:Selling and marketing
    
    
    6,483
    
    
    
    5,039
    
    
    
    12,635
    
    
    
    10,267Research and development
    
    
    7,860
    
    
    
    6,757
    
    
    
    15,619
    
    
    
    12,624General and administrative
    
    
    6,546
    
    
    
    5,099
    
    
    
    12,226
    
    
    
    10,181Total operating expenses
    
    
    20,889
    
    
    
    16,895
    
    
    
    40,480
    
    
    
    33,072Operating income
    
    
    19,789
    
    
    
    15,835
    
    
    
    39,210
    
    
    
    30,308Interest expense, net
    
    
    (8,058
    )
    
    
    (9,294
    )
    
    
    (17,075
    )
    
    
    (18,644
    )Other income (expense), net
    
    
    115
    
    
    
    (1,479
    )
    
    
    
    
    
    
    (922
    )Loss on extinguishment of debt
    
    
    (5,480
    )
    
    
    
    
    
    
    (5,480
    )
    
    
    Income before income taxes
    
    
    6,366
    
    
    
    5,062
    
    
    
    16,655
    
    
    
    10,742Provision for income taxes
    
    
    2,004
    
    
    
    1,571
    
    
    
    3,272
    
    
    
    3,353Net income
    
    $
    4,362
    
    
    $
    3,491
    
    
    $
    13,383
    
    
    $
    7,389Basic earnings per share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.20
    
    
    $
    0.12Basic weighted average number of common shares outstanding
    
    
    70,960
    
    
    
    60,382
    
    
    
    65,900
    
    
    
    60,372Diluted earnings per share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.19
    
    
    $
    0.12Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    74,538
    
    
    
    63,376
    
    
    
    69,424
    
    
    
    63,134
 See accompanying notes to Condensed Consolidated Financial Statements.
  4




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Six months ended June 30,2010
    
    
    2009Cash flow from operating activities:Net income
    
    $
    13,383
    
    
    $
    7,389Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    20,297
    
    
    
    17,598Amortization of loan origination costs
    
    
    2,403
    
    
    
    1,145(Gain) loss on sale or disposition of property and equipment
    
    
    (2
    )
    
    
    3Deferred income taxes
    
    
    (6,090
    )
    
    
    (5,628
    )Stock-based compensation expense
    
    
    5,232
    
    
    
    2,794Provision for doubtful accounts
    
    
    454
    
    
    
    327Changes in operating assets and liabilities, excluding
effects from acquisitions:Accounts receivable
    
    
    (2,423
    )
    
    
    1,649Prepaid expenses and other assets
    
    
    818
    
    
    
    1,634Accounts payable
    
    
    (857
    )
    
    
    (145
    )Accrued expenses and other liabilities
    
    
    (10,914
    )
    
    
    (7,136
    )Income taxes receivable and payable
    
    
    (3,838
    )
    
    
    (2,549
    )Deferred maintenance and other revenues
    
    
    4,971
    
    
    
    3,824Net cash provided by operating activities
    
    
    23,434
    
    
    
    20,905Cash flow from investing activities:Additions to property and equipment
    
    
    (2,238
    )
    
    
    (621
    )Proceeds from sale of property and equipment
    
    
    52
    
    
    
    3Cash paid for business acquisitions, net of cash acquired
    
    
    (11,372
    )
    
    
    (10,327
    )Additions to capitalized software and other intangibles
    
    
    (99
    )
    
    
    Net cash used in investing activities
    
    
    (13,657
    )
    
    
    (10,945
    )Cash flow from financing activities:Repayment of debt
    
    
    (81,597
    )
    
    
    (1,153
    )Proceeds from common stock issuance, net of issuance costs
    
    
    134,611
    
    
    
    Proceeds from the exercise of stock options
    
    
    5,396
    
    
    
    1,592Purchase of common stock for treasury
    
    
    (1,169
    )
    
    
    (1,776
    )Income tax benefit related to exercise of stock options
    
    
    3,583
    
    
    
    Net cash provided by (used in) financing activities
    
    
    60,824
    
    
    
    (1,337
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (770
    )
    
    
    1,145Net increase in cash and cash equivalents
    
    
    69,831
    
    
    
    9,768Cash and cash equivalents, beginning of period
    
    
    19,055
    
    
    
    29,299Cash and cash equivalents, end of period
    
    $
    88,886
    
    
    $
    39,067Supplemental disclosure of cash paid for:Interest
    
    $
    16,826
    
    
    $
    17,380Income taxes, net
    
    $
    10,861
    
    
    $
    11,791Supplemental 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.
           6




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,Statements of operations classification
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Cost of maintenance
    
    $
    98
    
    
    $
    31
    
    
    $
    125
    
    
    $
    56Cost of professional services
    
    
    140
    
    
    
    57
    
    
    
    186
    
    
    
    104Cost of software-enabled services
    
    
    823
    
    
    
    307
    
    
    
    1,090
    
    
    
    560Total cost of revenues
    
    
    1,061
    
    
    
    395
    
    
    
    1,401
    
    
    
    720Selling and marketing
    
    
    557
    
    
    
    258
    
    
    
    765
    
    
    
    495Research and development
    
    
    383
    
    
    
    164
    
    
    
    515
    
    
    
    298General and administrative
    
    
    1,881
    
    
    
    708
    
    
    
    2,551
    
    
    
    1,281Total operating expenses
    
    
    2,821
    
    
    
    1,130
    
    
    
    3,831
    
    
    
    2,074Total stock-based compensation
expense
    
    $
    3,882
    
    
    $
    1,525
    
    
    $
    5,232
    
    
    $
    2,794
  Shares ofUnderlyingOptionsOutstanding at January 1, 2010
    
    
    12,737,559Granted
    
    
    2,139,635Cancelled/forfeited
    
    
    (107,626
    )Exercised
    
    
    (1,716,240
    )Outstanding at June 30, 2010
    
    
    13,053,328
  7




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##### Table of Contents



4.
    
    Comprehensive Income (Loss)   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    4,362
    
    
    $
    3,491
    
    
    $
    13,383
    
    
    $
    7,389Foreign currency translation gains (losses)
    
    
    (11,632
    )
    
    
    18,646
    
    
    
    (3,190
    )
    
    
    11,541Unrealized gains on interest rate swaps,
net of tax
    
    
    692
    
    
    
    432
    
    
    
    1,186
    
    
    
    783Total comprehensive income (loss)
    
    $
    (6,578
    )
    
    $
    22,569
    
    
    $
    11,379
    
    
    $
    19,713
 5.
    
    Basic and Diluted Earnings Per Share   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Weighted average common shares outstanding
    
    
    70,960
    
    
    
    60,382
    
    
    
    65,900
    
    
    
    60,372Weighted average common stock equivalents
 options
    
    
    3,578
    
    
    
    2,994
    
    
    
    3,524
    
    
    
    2,762Weighted average common and common
equivalent shares outstanding
    
    
    74,538
    
    
    
    63,376
    
    
    
    69,424
    
    
    
    63,134
   8




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##### Table of Contents



June 30,
    
    
    December 31,2010
    
    
    2009Senior credit facility, revolving portion
    
    $
    
    
    
    $
    2,000Senior credit facility, term loan
portion, weighted-average interest rate
of 2.62% and 2.39%, respectively
    
    
    182,021
    
    
    
    190,032113/4% senior subordinated notes due 2013
    
    
    133,250
    
    
    
    205,000Capital leases
    
    
    127
    
    
    
    227315,398
    
    
    
    397,259Short-term borrowings and current
portion of long-term debt
    
    
    (2,011
    )
    
    
    (4,270
    )Long-term debt
    
    $
    313,387
    
    
    $
    392,989
   3 4
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Interest rate swap
    
    $
    1,135
    
    
    $
    907
    
    
    $
    2,267
    
    
    $
    1,746
  Three Months Ended June    30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of gain
recognized in AOCI,
net of tax
    
    $
    692
    
    
    $
    432
    
    
    $
    1,186
    
    
    $
    783
   9




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##### Table of Contents



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 June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues
    
    $
    81,618
    
    
    $
    77,067
    
    
    $
    160,448
    
    
    $
    152,559Net income
    
    $
    4,362
    
    
    $
    4,581
    
    
    $
    13,459
    
    
    $
    9,025Basic earnings per share
    
    $
    0.06
    
    
    $
    0.08
    
    
    $
    0.20
    
    
    $
    0.15Basic weighted average
number of common shares
outstanding
    
    
    70,960
    
    
    
    60,382
    
    
    
    65,900
    
    
    
    60,372Diluted earnings per share
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.19
    
    
    $
    0.14Diluted weighted average
number of common and common
equivalent shares outstanding
    
    
    74,538
    
    
    
    63,376
    
    
    
    69,424
    
    
    
    63,134
 10.
    Goodwill  Balance at December 31, 2009
    
    $
    885,5172010 acquisition
    
    
    8,404Income tax benefit on rollover options exercised
    
    
    (4,049
    )Effect of foreign currency translation
    
    
    (2,890
    )Balance at June 30, 2010
    
    $
    886,982
 11.
    Product and Geographic Sales Information   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009United States
    
    $
    54,596
    
    
    $
    43,205
    
    
    $
    106,711
    
    
    $
    84,135Canada
    
    
    12,674
    
    
    
    9,947
    
    
    
    24,359
    
    
    
    19,663Americas
excluding United States and
Canada
    
    
    2,277
    
    
    
    972
    
    
    
    3,279
    
    
    
    3,250Europe
    
    
    10,172
    
    
    
    10,353
    
    
    
    21,569
    
    
    
    19,825Asia Pacific and Japan
    
    
    1,899
    
    
    
    2,774
    
    
    
    3,874
    
    
    
    4,100$
    81,618
    
    
    $
    67,251
    
    
    $
    159,792
    
    
    $
    130,973
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Portfolio management/accounting
    
    $
    65,326
    
    
    $
    55,101
    
    
    $
    127,551
    
    
    $
    106,491Trading/treasury operations
    
    
    10,240
    
    
    
    5,958
    
    
    
    20,160
    
    
    
    12,076Financial modeling
    
    
    2,250
    
    
    
    2,197
    
    
    
    4,596
    
    
    
    4,296Loan management/accounting
    
    
    1,082
    
    
    
    1,022
    
    
    
    2,031
    
    
    
    2,290Property management
    
    
    1,028
    
    
    
    1,222
    
    
    
    2,218
    
    
    
    2,491Money market processing
    
    
    1,077
    
    
    
    1,068
    
    
    
    1,983
    
    
    
    1,901Training
    
    
    615
    
    
    
    683
    
    
    
    1,253
    
    
    
    1,428$
    81,618
    
    
    $
    67,251
    
    
    $
    159,792
    
    
    $
    130,973
  11




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12.
    Recent Accounting Pronouncements     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 Six Months Ended June 30, 2010 and 2009
  Three months ended June 30,
    
    
    %
    
    
    Six months ended June 30,
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeRevenues:Software licenses
    
    $
    6,074
    
    
    $
    3,983
    
    
    
    52
    %
    
    $
    11,663
    
    
    $
    9,803
    
    
    
    19
    %Maintenance
    
    
    17,817
    
    
    
    16,066
    
    
    
    11
    %
    
    
    35,836
    
    
    
    31,606
    
    
    
    13
    %Professional services
    
    
    5,099
    
    
    
    5,393
    
    
    
    -5
    %
    
    
    10,488
    
    
    
    10,589
    
    
    
    -1
    %Software-enabled services
    
    
    52,628
    
    
    
    41,809
    
    
    
    26
    %
    
    
    101,805
    
    
    
    78,975
    
    
    
    29
    %Total revenues
    
    $
    81,618
    
    
    $
    67,251
    
    
    
    21
    %
    
    $
    159,792
    
    
    $
    130,973
    
    
    
    22
    %
  Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    
    7
    %
    
    
    6
    %
    
    
    7
    %
    
    
    8
    %Maintenance
    
    
    22
    %
    
    
    24
    %
    
    
    22
    %
    
    
    24
    %Professional services
    
    
    6
    %
    
    
    8
    %
    
    
    7
    %
    
    
    8
    %Software-enabled services
    
    
    65
    %
    
    
    62
    %
    
    
    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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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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3 4
 Off-Balance Sheet Arrangements
  Senior Credit Facilities
    113/4% Senior Subordinated Notes due 2013
 3 4 pari passu
  18




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3 4
  Covenant Compliance
       
    
    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;
  19




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
    
    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.
  Three Months Ended
    
    
    Six Months Ended
    
    
    Twelve 
Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010Net income
    
    $
    4,362
    
    
    $
    3,491
    
    
    $
    13,383
    
    
    $
    7,389
    
    
    $
    25,012Interest expense (1)
    
    
    13,538
    
    
    
    9,294
    
    
    
    22,555
    
    
    
    18,644
    
    
    
    40,774Income taxes
    
    
    2,004
    
    
    
    1,571
    
    
    
    3,272
    
    
    
    3,353
    
    
    
    9,723Depreciation and amortization
    
    
    10,184
    
    
    
    9,025
    
    
    
    20,297
    
    
    
    17,598
    
    
    
    38,727EBITDA
    
    
    30,088
    
    
    
    23,381
    
    
    
    59,507
    
    
    
    46,984
    
    
    
    114,236Purchase accounting adjustments (2)
    
    
    (60
    )
    
    
    (54
    )
    
    
    (37
    )
    
    
    (105
    )
    
    
    (25
    )Unusual or non-recurring charges (3)
    
    
    (267
    )
    
    
    1,755
    
    
    
    84
    
    
    
    1,283
    
    
    
    791Acquired EBITDA and cost savings (4)
    
    
    
    
    
    
    857
    
    
    
    192
    
    
    
    2,025
    
    
    
    4,041Stock-based compensation
    
    
    3,882
    
    
    
    1,525
    
    
    
    5,232
    
    
    
    2,794
    
    
    
    8,045Capital-based taxes
    
    
    228
    
    
    
    342
    
    
    
    454
    
    
    
    676
    
    
    
    573Other (5)
    
    
    (45
    )
    
    
    295
    
    
    
    161
    
    
    
    640
    
    
    
    722Consolidated EBITDA
    
    $
    33,826
    
    
    $
    28,101
    
    
    $
    65,593
    
    
    $
    54,297
    
    
    $
    128,383
 (1)
    
    Interest expense includes loss from extinguishment of debt shown as a separate line item on our
Statement of Operations for the three months and six months ended June 30, 2010 and 2009.(2)
    
    Purchase accounting adjustments include 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, 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, or Carlyle, and
the non-cash portion of straight-line rent expense.  Covenant
    
    
    ActualRequirements
    
    
    RatiosMaximum consolidated total leverage to Consolidated EBITDA ratio
    
    
    5.50x
    
    
    
    2.22xMinimum
Consolidated EBITDA to consolidated net interest coverage ratio
    
    
    2.25x
    
    
    
    3.89x
  20




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Recent Accounting Pronouncements
     21




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4T.
    
    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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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;
  28




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##### Table of Contents




    
    foreign regulatory compliance; and
 
    
    difficulties in enforcement of third-party contractual obligations and intellectual
property rights.
  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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##### Table of Contents



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 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;
  31




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##### Table of Contents




    
    success of competitive products;
 
    
    changes in our capital structure, such as future issuances of securities or the incurrence
of additional debt;
 
    
    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 total outstanding shares may be sold into the public market in the
near future, 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.
    32




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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.
  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.
  We do not expect to declare any dividends in the foreseeable future.
  As a new public company, we incur significant additional costs which could harm our operating
results.
   33




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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.
   
 Item 6.
    
    Exhibits
   34




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##### Table of Contents



SIGNATURE
  SS&C TECHNOLOGIES HOLDINGS, INC.Date: August 9, 2010
    By:
    /s/ Patrick J. PedontiPatrick J. PedontiSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  35




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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