##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Amendment No. 1

to


Form 10-K/A

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO

SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
    2003                                             
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-28430

SS&C Technologies, Inc.

(Exact name of Registrant as Specified in Its
Charter)


|                                                                   |  |                                     
|------------------------------------------------------------------ |  | ------------------------------------
|Delaware                                                           |  | 06-1169696                          
|(State or Other Jurisdiction of Incorporation
    or Organization) |  | (I.R.S. Employer Identification No.)

80 Lamberton Road

Windsor, CT 06095


(Address of Principal Executive
Offices, Including Zip Code)


860-298-4500

(Registrants Telephone
Number, Including Area Code)


Securities registered pursuant to
Section 12(b) of the Act: None

Securities registered pursuant to
Section 12(g) of the Act: Common Stock, $.01 par value
per share


Indicate by check
mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.     Yes þ          No o

Indicate by check
mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.     o

Indicate by check
mark whether the registrant in an accelerated filer (as defined
in Exchange Act
Rule 12b-2).     Yes þ          No o

As of June 30,
2003, the aggregate market value of the Registrants Common
Stock held by non-affiliates was approximately $118,935,000
based on the closing sale price per share of the
Registrants Common Stock on the Nasdaq National Market on
such date.

As of March 8,
2004, 18,750,996 shares of the Registrants Common
Stock were outstanding.

Documents Incorporated by Reference:

Part III 
Portions of the Registrants definitive proxy statement to
be issued in conjunction with the Registrants annual
meeting of stockholders to be held on May 20, 2004.



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##### Table of Contents



EXPLANATORY NOTE

This Amendment No. 1 to the
Registrants Annual Report on Form 10-K/A for the year
ended December 31, 2003, filed with the Securities and
Exchange Commission on March 12, 2004, is being filed:
(1) to provide additional information in Items 1, 7
and 8 primarily in response to comments from the staff of the
Securities and Exchange Commission, (2) to correct
typographical errors in Item 6, (3) to update the
cross references in Items 10, 11 and 14 to information
incorporated by reference from the Registrants proxy
statement for the 2004 annual meeting, and (4) to provide
additional information in the notes to the Registrants
consolidated financial statements, including information
relating to revenue recognition policies in note 2, a
clarification with respect to stockholders equity in
note 5, additional information relating to international
sales in note 15 as well as minor changes in notes 1,
11 and 14. In addition, although no revisions were made to
Items 5 and 7A, such items have been included in this
Amendment No. 1 because it is the Registrants
intention to distribute this Amendment No. 1 to its
stockholders in satisfaction of its obligations under
Rule 14a-3 promulgated under the Securities Exchange Act of
1934.

This Amendment No. 1 does not reflect events
occurring after the filing of the original Annual Report on
Form 10-K on March 12, 2003, or modify or update the
disclosures prescribed in the original Annual Report on
Form 10-K, except to reflect the revisions noted above.

1



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SS&C TECHNOLOGIES, INC.

YEAR 2003 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

|                                            |  |                                                                                                                      |  |      |     | 
|------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                            |  |                                                                                                                      |  | Page
|                                            |  |                                                                                                                      |  |     
|PART I                                     
|Item 1.                                     |  | Business                                                                                                             |  |      | 3   | 
|PART II                                    
|Item 5.                                     |  | Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities |  |      | 17  | 
|Item 6.                                     |  | Selected Financial Data                                                                                              |  |      | 17  | 
|Item 7.                                     |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations                            |  |      | 18  | 
|Item 7A.                                    |  | Quantitative and Qualitative
    Disclosures about Market Risk                                                       |  |      | 36  | 
|Item 8.                                     |  | Financial Statements and
    Supplementary Data                                                                      |  |      | 36  | 
|PART III                                   
|Item 10.                                    |  | Directors and Executive
    Officers of the Registrant                                                               |  |      | 37  | 
|Item 11.                                    |  | Executive Compensation                                                                                               |  |      | 37  | 
|Item 14.                                    |  | Principal Accountant Fees
    and Services                                                                           |  |      | 37  | 
|PART IV                                    
|Item 15.                                    |  | Exhibits, Financial
    Statement Schedules, and Reports on Form 8-K                                                 |  |      | 38  | 
|                                            |  | Signatures Page                                                                                                      |  |      | 39  | 
|                                            |  | Consolidated Financial
    Statements                                                                                |  |      | F-1 | 
|                                            |  | Exhibit Index                                                                                                        |  |      |     | 
|Ex-21 Subsidiaries                         
|Ex-23 Consent of PricewaterhouseCoopers LLP
|Ex-31.1 Certification of C.E.O.            
|Ex-31.2 Certification of C.F.O.            
|Ex-32 Sect. 906 Certification of CEO & CFO 



FORWARD-LOOKING INFORMATION

This annual report contains forward-looking
statements within the meaning of Section 21E of the
Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933. For this purpose, any statements
contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the
foregoing, the words believes,
anticipates, plans, expects,
should and similar expressions are intended to
identify forward-looking statements. The factors discussed under
the caption Certain Factors That May Affect Future
Operating Results in Item 7, among others, could
cause actual results to differ materially from those indicated
by forward-looking statements made herein and presented
elsewhere by management from time to time. We expressly disclaim
any obligation to update or alter our forward-looking
statements, whether as a result of new information, future
events or otherwise.

AdvisorWare, DBC, Heatmaps, HedgeWare, PortPro,
Quantra and TradeDesk are registered trademarks; Altair,
AnalyticsExpress, Antares, CAMRA, CAMRA D Class,
Debt & Derivatives, Finesse, Lightning, LMS, Mabel,
PTS, SKYLINE II, The BANC Mall and Total Return are
trademarks; and SS&C Direct is a service mark of SS&C
Technologies, Inc. or one of its subsidiaries. All other
trademarks or trade names referred to in this annual report are
the property of their respective owners.

Unless the context otherwise requires, all share
and per share numbers in this annual report give effect to our
three-for-two common stock split in the form of a common stock
dividend, which was payable on March 5, 2004 to
stockholders of record as of February 20, 2004.

We use the terms SS&C, the
company, we, us and
our in this annual report to refer to SS&C
Technologies, Inc. and its subsidiaries, unless the context
requires otherwise.

2



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##### Table of Contents






PART I






|        |         
|------- | --------
|Item 1. | Business

Overview

SS&C Technologies, Inc. provides the
financial services industry with a broad range of highly
specialized software, business process outsourcing (BPO)
services and application service provider (ASP) solutions. We
deliver mission-critical processing for information management,
analysis, trading, accounting, reporting and compliance. We
provide our products and related services in seven vertical
markets in the financial services industry:



| |   |                                                                    
| | - | -------------------------------------------------------------------
| |  | insurance entities and pension funds,                              
|
| |  | institutional asset management,                                    
|
| |  | hedge funds and family offices,                                    
|
| |  | financial institutions, such as retail banks and
    credit unions,
|
| |  | commercial lending,                                                
|
| |  | real estate property management, and                               
|
| |  | municipal finance.                                                 

Our clients include some of the largest and most
well recognized entities in the financial services industry, who
manage in the aggregate over $4 trillion in assets.

For financial information relating to our
business, including geographic information, please see our
consolidated financial statements, including the notes thereto.
For risks relating to our business, including the risks of our
foreign operations, see Certain Factors That May Affect
Future Operating Results  Risks Relating to Our
Business.

Industry Background

The financial services industry is a large market
that is expected to grow significantly over the next several
years. According to a February 2003 Empirical Research Partners,
the total financial assets under management in the U.S. were
$18 trillion in 2002, and are expected to grow to
$26 trillion in 2007, a compound annual growth rate of 8%.

The financial services industry traditionally
invests more heavily in information technology, or IT, than
other industries, and as the financial services market grows,
IT budgets are expected to increase. According to a January
2004 IDC report, the banking, insurance and financial services
markets are expected to spend $83 billion on IT in 2004. Of
the $83 billion, $62 billion is expected to be spent
on software and services in 2004, which is expected to grow at a
compound annual growth rate of over 6% to $75 billion in
2007.

Todays participants in the financial
services industry face a number of challenges, including:



| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | rapidly changing market conditions,                                                        
|
| |  | increasing transaction volumes with shorter
    settlement cycles,                         
|
| |  | fierce competition,                                                                        
|
| |  | constantly evolving regulatory requirements with
    increasing regulatory oversight, and  
|
| |  | an increasing number, and greater complexity, of
    asset classes and securities products.

Many financial services organizations face an
increasing gap between the amount and complexity of data that
they must analyze and control and their finite IT resources.
Financial services organizations rely in large part on internal
IT departments to supply the systems required to meet their
information analysis requirements. Typically, the systems used
are a mix of internally developed programs implemented on
expensive mainframes and externally developed software
applications deployed in a distributed computing

3



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environment. These systems require large IT
departments, are expensive to implement, support and modify,
have limited interoperability and often cannot fully support
specialized asset classes or regulatory compliance and
reporting. To meet their requirements, financial services
organizations require flexible, cost-effective, rapidly
deployable systems that support informed, real-time business
decision making and regulatory compliance.


The SS&C Solution

We offer a family of highly specialized,
mission-critical software and services that help automate and
simplify information management, analysis, accounting, reporting
and compliance for investment professionals in a broad range of
financial services segments. We have designed our solutions to
improve the effectiveness of decision making by executives,
portfolio managers and other investment professionals by
allowing them to rapidly access, manage and analyze large
amounts of transactions-based data both in the aggregate and in
detail. We also provide our clients with comprehensive
professional service and support organizations that facilitate
successful product implementation and provide ongoing training
and support.

Our clients choose us because we offer the
following benefits:



| |   |                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Range of Solution Delivery Methods.Our solution delivery methods
    include licenses, BPO services, ASP solutions, or
    blended solutions that allow clients to take
    advantage of our technology in the manner best suited to their
    individual needs.                                                                                  
|
| |  | Rapidly Deployable and Cost-Effective
    Outsourcing Solutions.By offering
    outsourcing solutions that can be easily and rapidly deployed,
    we allow our clients to meet the challenges of a rapidly
    changing industry and regulatory environment in a cost-effective
    manner.                                                        
|
| |  | Deep Vertical Market Expertise.Our deep vertical market
    experience enables us to provide advanced quantitative
    analytical tools tailored to the requirements of particular
    industry segments or asset classes. We maintain and market these
    tools based on our robust technology and highly specialized
    knowledge and expertise.
|
| |  | Scalability and
    Flexibility.We provide highly
    scalable and flexible solutions addressing our clients
    requirements and priorities, regardless of client size,
    organizational structure and number of relevant portfolios,
    securities types, asset classes, accounting methods or
    regulatory regimes.                        
|
| |  | End-to-End Solutions.Our integrated end-to-end
    solutions enable straight-through processing, which provides
    integration of front-end trading and modeling 
    straight through to portfolio management, compliance and
    reporting  to back-office processing, clearing and
    accounting.                                            
|
| |  | Global Presence.We are strategically positioned in
    the global financial services marketplace, with a presence in
    North America, Europe and Asia Pacific, allowing us to better
    serve the needs of our international clients.                                                                                                            

Our products help enable users to efficiently and
rapidly analyze and manage information, increase productivity,
reduce costs and devote more time to critical business decisions
rather than administrative, reporting and compliance matters.

Our Strategy

Our goal is to be the leading provider of
superior technology solutions to the financial services
industry. To achieve our goal, we intend to:

Maintain Our Commitment to the Highest
Level of Client Service.We
believe that one of the factors that distinguishes us from our
competition is our commitment to the highest level of client
service. Our clients include large, sophisticated institutions
with complex systems and requirements, and we understand the
importance of providing them with both the experience of our
senior management and the subject matter expertise of our sales,
professional services and support staffs. Our commitment begins
with our senior management team. Our top three executives have
in the aggregate over 50 years of experience

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in the software and financial services industries
and actively participate in creating and building client
relationships. For each solution deployment, we analyze our
clients needs and assemble a team of appropriate industry
vertical and technical experts who can quickly and efficiently
deliver tailored solutions to the client. We provide our larger
clients with a dedicated client support team whose primary
responsibility is to resolve questions and provide solutions to
address ongoing needs. We believe that the individual attention
and industry expertise provided by our senior management and
staff help solidify strong relationships with our clients. Our
strong client relationships in turn build client loyalty,
including a base of clients who are more likely to buy our other
products and services and serve as references for future clients.


Leverage Our Existing Client Relationships.We intend to continue to expand
the scope of existing client relationships by marketing and
delivering the full range of our capabilities to our clients.
Our clients include many large and sophisticated organizations
in the financial services industry with extensive, highly
specialized software and service needs across the multiple
vertical markets we serve. Our business with existing clients
generally increases along with the volume of assets that they
manage. We can also provide additional modules or features to
the products and services currently used by our clients as well
as cross sell products and services that may address
our clients other information management, analysis,
trading, accounting, reporting or compliance needs. For
instance, users of our CAMRA asset management product may also
have a need for our Antares trading product or our
AnalyticsExpress financial modeling product. Our critical
understanding of our clients businesses is a competitive
advantage in capturing additional sales opportunities in our
referenceable client base.

Grow Our Outsourcing Business and Increase
Our Recurring Revenues.We plan to
further increase our recurring revenue streams from our
outsourcing solutions and maintenance services, because they
provide us with greater predictability in the operation of our
business and enable us to build valued relationships with our
clients. We believe that our outsourcing services provide an
attractive alternative to clients that do not wish to install,
run and maintain complicated financial software. We generally
provide our outsourcing services under three- to five-year
contracts with minimum fee commitments that are often renewed at
the expiration of their terms. Our outsourcing revenues under
these contracts are predictable and recurring. Our outsourcing
revenues increased from $6.3 million, or 11.2% of total
revenues, in 2001 to $13.2 million, or 20.2% of total
revenues, in 2003. Maintenance revenues also provide another
source of recurring revenues and represented 47.8% of total
revenues in 2003.

Continue to Address the Specialized Needs
of the Financial Services
Industry.We have accumulated
substantial financial expertise since our founding in 1986
through close working relationships with our clients, resulting
in a deep knowledge base that enables us to respond to their
most complex financial, accounting, actuarial, tax and
regulatory needs. We intend to build on this expertise by
continuing to offer products and services that address the
highly specialized needs of the financial services industry. We
believe that we enjoy a competitive advantage because we can
address the investment and financial management needs of
high-end clients by providing industry-tested products and
services that meet global market demands while also providing
integrated, straight thru processing for improved
productivity, reduced manual intervention and bottom-line
savings.

Capitalize on Acquisition Opportunities.We employ a disciplined and highly
focused acquisition strategy in which we seek to acquire
businesses, products and technologies in our existing or
complementary vertical markets. We believe that the market for
financial services software and services is highly fragmented
and rapidly evolving, with many new product introductions and
industry participants. These factors create both the need and
the opportunity to effect strategic transactions to increase the
breadth and depth of our product and service offerings and
capitalize on evolving market opportunities. Our experienced
senior management team leads a rigorous evaluation of our
acquisition candidates to ensure that they satisfy our product
or service needs and can be integrated with our business while
meeting our financial metrics, including expected return on
investment.

5



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Our Acquisitions

Since 1995, we have acquired more than a dozen
businesses within our industry. We generally seek to acquire
companies that:



| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | provide complementary products or services in the
    financial services industry,                                                                                                       
|
| |  | address a highly specialized problem or a market
    niche in the financial services industry,                                                                                           
|
| |  | have solutions that lend themselves to being
    delivered as either a BPO service or an ASP solution,                                                                                   
|
| |  | possess proven technology and an established
    client base that will provide a source of ongoing revenue and to
    whom we may be able to sell existing products and
    services, and
|
| |  | satisfy our financial metrics, including expected
    return on investment.                                                                                                              

Our senior management receives numerous
acquisition proposals and chooses to evaluate several proposals
each quarter. We receive referrals from several sources,
including clients, investment banks and industry contacts. We
believe based on our experience that there are numerous solution
providers addressing highly particularized financial services
needs or providing specialized services that would meet our
acquisition criteria.

Below is a table summarizing our acquisitions.

|     |               |                   |  |                             |  |                                               |  |                              
|---- | ------------- | ----------------- |  | --------------------------- |  | --------------------------------------------- |  | -----------------------------
|     |               |                   |  |                             |  | Acquired Products and                        
|Date |               | Acquired Business |  | Contract Purchase Price     |  | Services Currently Offered                   
|     |               |                   |  |                             |  |                                              
|     | March 1995    |                   |  | Chalke                      |  | $10,000,000                                   |  | PTS                          
|    
|     | November 1997 |                   |  | Mabel Systems               |  | $850,000 and 109,224 shares of common stock   |  | Mabel                        
|    
|     | December 1997 |                   |  | Shepro Braun Systems        |  | 1,500,000 shares of common stock              |  | Total Return, Antares        
|    
|     | March 1998    |                   |  | Quantra                     |  | $2,269,800 and 819,028 shares of common stock |  | SKYLINE                      
|    
|     | April 1998    |                   |  | The Savid Group             |  | $821,500                                      |  | Debt & Derivatives           
|    
|     | March 1999    |                   |  | HedgeWare                   |  | 1,028,524 shares of common stock              |  | AdvisorWare                  
|    
|     | March 1999    |                   |  | Brookside                   |  | 41,400 shares of common stock                 |  | Consulting services          
|    
|     | November 2001 |                   |  | Digital Visions             |  | $1,350,000                                    |  | PortPro, The BANC Mall, PALMS
|    
|     | January 2002  |                   |  | Real-Time, USA              |  | $4,000,000                                    |  | Real-Time, Lightning         
|    
|     | November 2002 |                   |  | DBC                         |  | $4,500,000                                    |  | Municipal finance products   
|    
|     | December 2003 |                   |  | Amicorp Fund Services       |  | $1,800,000                                    |  | Fund services                
|    
|     | January 2004  |                   |  | Investment Advisory Network |  | $3,000,000                                    |  | Compass, Portfolio Manager   
|    
|     | February 2004 |                   |  | NeoVision Hypersystems      |  | $1,600,000                                    |  | Heatmaps                     

Many of our acquisitions have enabled us to
expand our product and services offerings into new markets or
client bases. For example, with our acquisitions of Shepro Braun
Systems and HedgeWare we began providing portfolio management
and accounting software to the hedge funds and family offices
market. We began offering property management products to the
real estate property management industry after we

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acquired Quantra and started selling financial
modeling products to the municipal finance market after the DBC
acquisition. The addition of new products and services also has
enabled us to market other products and services to acquired
client bases.


To date, all of our acquisitions have resulted in
a marketable product or service that has added to our revenues.
We also have generally been able to reduce the costs of
providing such products or services following the acquisition,
such as by consolidating sales and marketing efforts for such
products or services with our ongoing operations.

Products and Services

We offer a family of application software
products and services designed to address the requirements of
professionals in the financial services industry and meet the
day-to-day processing needs of a broad range of users within
financial services organizations.

7



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The following chart summarizes our principal
products and services, typical users and the vertical markets
each product serves:

|                                                                                                                                                                                                     |  |                                                                                                                                                                                        |  |                                                                                                                                                             
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|PRODUCTS AND SERVICES                                                                                                                                                                                |  | TYPICAL USERS                                                                                                                                                                          |  | VERTICAL MARKETS SERVED                                                                                                                                     
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|Portfolio Management/AccountingAdvisorWare
    Altair
    CAMRA
    CAMRA D Class
    Debt & Derivatives
    Lightning
    Mabel
    PortPro
    SS&C Direct
    SS&C Fund Services
    Total Return |  | Portfolio Managers
    Asset Managers
    Fund Administrators
    Investment Advisors
    Accountants
    Auditors                                                                     |  | Financial Institutions
    Hedge Funds and Family Offices
    Institutional Asset Management
    Insurance Companies and Pension Funds
    Municipal Finance
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|TradingAntares
    TradeDesk                                                                                                                                                                         |  | Securities Traders                                                                                                                                                                     |  | Financial Institutions
    Hedge Funds and Family Offices
    Institutional Asset Management
    Insurance Companies and Pension Funds                      
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|Financial ModelingAnalyticsExpress
    Finesse
    PTS
    DBC (family of products)                                                                                                                  |  | CEO/ CFOs
    Risk Managers
    Actuarial Professionals
    Bank Asset/ Liability Managers
    Investment Bankers
    State/ Local Treasury Staff
    Financial Advisors               |  | Insurance Companies and Pension Funds
    Municipal Finance                                                                                                 
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|Lending/ LeasingLMS
    The BANC Mall                                                                                                                                                                |  | Mortgage Originators
    Commercial Lenders
    Mortgage Loan Servicers
    Mortgage Loan Portfolio  Managers
    Real Estate Investment Managers
    Bank/ Credit Union Loan Officers |  | Commercial Lending
    Financial Institutions
    Institutional Asset Management
    Insurance Companies and Pension Funds                                  
|                                                                                                                                                                                                    
|                                                                                                                                                                                                    
|Property ManagementSKYLINE II                                                                                                                                                                        |  | Real Estate Investment Managers
    Real Estate Leasing Agents
    Real Estate Property Managers                                                                                       |  | Real Estate
    Leasing/Property  Management                                                                                                                
|                                                                                                                                                                                                    



| |                                     
| | ------------------------------------
| | Portfolio Management/
    Accounting

Our products and services for portfolio
management span most of our vertical markets and offer our
clients a wide range of investment management solutions.

AdvisorWare.AdvisorWare software supports hedge funds and family offices
with sophisticated global investment, trading and management
concerns, and/or complex financial, tax, partnership and
allocation reporting requirements. It delivers comprehensive
multi-currency investment management,

8



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financial reporting, performance fee
calculations, net asset value calculations, contact management
and partnership accounting in a straight-through processing
environment.


Altair;
Mabel.Altair software is a
portfolio management system designed for companies that are
looking for a solution that meets Benelux market requirements,
and want client/server architecture with SQL support. We sell
Altair primarily to European asset managers, stockbrokers,
custodians, banks, pension funds and insurance companies. Altair
supports a full range of financial instruments, including fixed
income, equities, real estate investments and alternative
investment vehicles.

We offer Mabel to smaller-sized companies that
are looking for a portfolio management system that meets Benelux
market requirements and provides a range of functionality but do
not need client/server architecture with SQL support. We sell
Mabel to the same types of clients as Altair, and Mabel supports
the same financial investments.

CAMRA.CAMRA
(Complete Asset Management, Reporting and Accounting) software
supports the integrated management of asset portfolios by
investment professionals operating across a wide range of
institutional investment entities. CAMRA is a 32-bit,
multi-user, integrated solution tailored to support the entire
portfolio management function, and includes features to execute,
account for and report on all typical securities transactions.

We have designed CAMRA to account for all
activities of the investment operation and to continually update
investment information through the processing of day-to-day
securities transactions. CAMRA maintains transactions and
holdings and stores the results of most accounting calculations
in its open, relational database, providing user-friendly,
flexible data access and supporting data warehousing.

CAMRA offers a broad range of integrated modules
that can support specific client requirements, such as TBA
dollar rolls, trading, compliance monitoring, net asset value
calculations, performance measurement, fee calculations and
reporting.

In 2002, we introduced the CAMRA D Class product
for smaller U.S. insurance companies that need to account
for their trades and holdings and comply with statutory
reporting requirements, but do not require a software
application as sophisticated as CAMRA.

Debt &
Derivatives.Debt &
Derivatives is a comprehensive financial application software
package designed to process and analyze all activities relating
to derivative and debt portfolios, including pricing, valuation
and risk analysis, derivative processing, accounting, management
reporting and regulatory reporting.

We have designed Debt & Derivatives to
deliver real-time transaction processing to treasury and
investment professionals, including traders, operations staff,
accountants and auditors.

Lightning.Lightning is a comprehensive ASP solution supporting the front-,
middle- and back-office processing needs of commercial banks and
broker-dealers of all sizes and complexity. Lightning fully
automates a number of processes, including:



| |   |                            
| | - | ---------------------------
| |  | trading,                   
|
| |  | sales,                     
|
| |  | funding,                   
|
| |  | accounting,                
|
| |  | risk analysis,             
|
| |  | asset/liability management,
|
| |  | portfolio management, and  
|
| |  | safekeeping.               

9



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Lightning also provides comprehensive regulatory
reporting and books and records maintenance for various
regulatory regimes.

PortPro.PortPro is a suite of Internet-based information tools available
on an ASP basis that help financial institutions effectively
measure, analyze and manage balance sheets and investment
portfolios. The PortPro suite includes:



| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | PortPro Bond Accounting  Manages bond
    portfolios and provides accurate accounting and performance
    results.                                                                              
|
| |  | PortPro Analytics  Provides
    performance and risk analysis of investment portfolios,
    including interest rate risk reporting, pre-purchase and swap
    analysis tools and stress testing.
|
| |  | PortPro PALMS (Portfolio Asset Liability
    Management System)  Manages and analyzes a financial
    institutions balance sheet.                                                              

SS&C
Direct.We provide comprehensive
ASP/ BPO services through our SS&C Direct operating unit for
portfolio accounting, reporting and analysis functions. The
SS&C Direct service includes:



| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | hosting of a companys application software,                                                                                               
|
| |  | automated workflow integration,                                                                                                            
|
| |  | automated quality control mechanisms, and                                                                                                  
|
| |  | extensive interface and connectivity services to
    custodian banks, data service providers, depositories and other
    external entities.

SS&C Directs Outsourced Investment
Accounting Services option includes comprehensive investment
accounting and investment operations services for sophisticated,
global organizations.

SS&C Fund
Services.With our acquisition of
Amicorp Groups fund services business in December 2003, we
now provide administrative, financial, corporate and management
services to international and U.S. domestic alternative
investment funds. SS&C Fund Services offers fund manager
services, transfer agency services, fund of funds services and
accounting and processing. SS&C Fund Services also assists
clients in establishing various types of funds, including:



| |   |                           
| | - | --------------------------
| |  | hedge funds,              
|
| |  | investment companies,     
|
| |  | private equity structures,
|
| |  | umbrella funds,           
|
| |  | multi-manager funds,      
|
| |  | fund of funds, and        
|
| |  | partnership structures.   

Total Return.Total Return is a portfolio management and partnership
accounting system directed toward the hedge fund and family
office markets. It is a multi-currency system, designed to
provide financial and tax accounting and reporting for
businesses with high transaction volumes.



| |        
| | -------
| | Trading

Our comprehensive trading systems offer a wide
range of trade order management solutions that support both
buy-side and sell-side trading. Automated, real-time trading is
available to clients on a license or ASP basis.

Antares.Antares is a comprehensive, real-time, event-driven trading and
profit and loss reporting system designed to integrate trade
modeling with trade order management. Antares enables clients to
trade

10



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##### Table of Contents



and report fixed-income, equities, foreign
exchange, futures, options, repos and many other instruments
across different asset classes.


TradeDesk.TradeDesk is a comprehensive paperless trading system that
automates front- and middle-office aspects of fixed-income
transaction processing. In particular, TradeDesk enables clients
to automate ticket entry, confirmation and access to offerings
and provides clients with immediate, on-line access to complete
client information and holdings.



| |                   
| | ------------------
| | Financial Modeling

We offer several powerful analytical software and
financial modeling applications for the insurance industry. We
also provide analytical software and services to the municipal
finance marketplace.

AnalyticsExpress.AnalyticsExpress is a reporting and data visualization tool that
translates actuarial analysis into meaningful management
information. AnalyticsExpress brings flexibility to the
reporting process and allows clients to:



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | analyze and present output at varying levels of
    detail,              
|
| |  | create high-level reports and charts, and                                
|
| |  | separate management information into a multitude
    of detailed reports.

Finesse.Finesse is a financial simulation tool for the property/casualty
insurance industry that uses the principles of dynamic financial
analysis. Finesse measures multiple future risk scenarios to
provide a more accurate picture of financial risk. Designed to
generate iterative computer-simulated scenarios, Finesse helps
clients:



| |   |                                                                   
| | - | ------------------------------------------------------------------
| |  | model operating results,                                          
|
| |  | gauge the effects of reinsurance,                                 
|
| |  | validate pricing,                                                 
|
| |  | value business transactions, such as mergers and
    acquisitions,
|
| |  | measure the impact of new products,                               
|
| |  | predict cash flows,                                               
|
| |  | analyze the impact of investment
    decisions, and               
|
| |  | improve the overall strategic planning process.                   

PTS.PTS is a
pricing and financial modeling tool for life insurance
companies. PTS provides an economic model of insurance assets
and liabilities, generating option-adjusted cash flows to
reflect the complex set of options and covenants frequently
encountered in insurance contracts or comparable agreements.

DBC Product
Suite.We are a leading provider
of analytical software and services to the municipal finance
community. Our suite of DBC products addresses a broad spectrum
of municipal finance concerns, including:



| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | general bond structures,                                                     
|
| |  | revenue bonds,                                                               
|
| |  | housing bonds,                                                               
|
| |  | student loans, and                                                           
|
| |  | Federal Housing Administration-insured revenue
    bonds and securitizations.

11



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##### Table of Contents



Our DBC products also deliver solutions for debt
structuring, cash flow modeling and database management. Typical
users of our DBC products include investment banks, municipal
issuers and financial advisors for structuring new issues,
securitizations, strategic planning and asset/liability
management.



| |                    
| | -------------------
| | Lending and Leasing

Our products that support lending and leasing
activities are LMS and The BANC Mall.

LMS Loan
Suite.In 2003, we introduced the
LMS Loan Suite, a single database application that provides
comprehensive loan management throughout the life cycle of a
loan, from the initial request to final disposition. We have
structured the flexible design of the LMS Loan Suite to meet the
most complex needs of commercial lenders and servicers
worldwide. The LMS Loan Suite includes both the LMS Originator
and the LMS Servicer, facilitating fully integrated loan
portfolio processing.

The BANC
Mall.The BANC Mall is an
Internet-based lending and leasing tool designed for loan
officers and loan administrators. The BANC Mall provides, on an
ASP basis, on-line lending, leasing and research tools that
deliver streamlined credit processing. Clients use The BANC Mall
on a fee-for-service basis to access more than a dozen data
providers.



| |                                    
| | -----------------------------------
| | Real Estate Property
    Management

SKYLINE II.SKYLINE II is a comprehensive property management system
that simplifies real estate property management by providing a
single-source view of all real estate holdings. SKYLINE II
functions as an integrated lease administration system, a
historical property/portfolio knowledge base and a robust
accounting and financial reporting system, enabling users to
track each property managed, including data on specific units
and tenants. In 2003, we released the fully integrated
SKYLINE II Residential module designed to provide a
front-end residential marketing solution. SKYLINE II
Residential provides for:



| |   |                                             
| | - | --------------------------------------------
| |  | prospect source campaign management,        
|
| |  | campaign setup and tracking,                
|
| |  | online unit tracking and traffic monitoring,
|
| |  | applicant processing, and                   
|
| |  | lease and move-in processing.               

Product Delivery Options

Our products are available via license, BPO, ASP
or blended solutions. Clients looking to outsource
investment accounting operations, or needing a blended solution,
work with SS&C Direct and SS&C Fund Services. Several of
our product offerings are available via ASP only: Lightning,
PortPro, TradeDesk, TradePath and The BANC Mall. These products
enable smaller institutions, such as community banks and credit
unions, to access sophisticated functionality that previously
had been available only to our larger institutional clients.

The prices of our products and services vary
depending upon the features being provided, the number of users,
the assets under management and, with respect to our outsourcing
solutions, the transaction volume. SS&C Direct and SS&C
Fund Services strive to price their delivery options to make
them competitive with other offerings in the marketplace.

Professional Services

We offer a range of professional services to
assist clients in implementing our software products, including
the initial installation of the system, conversion of historical
data and ongoing training and support. Our consulting team works
closely with the client to ensure the smooth transition and
operation of our systems. Consultants have a broad range of
experience in the financial services industry and include

12



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##### Table of Contents



certified public accountants, chartered financial
analysts, mathematicians and professionals from the asset
management, real estate, investment, insurance, hedge fund,
municipal finance and banking industries. We believe our
commitment to professional services facilitates the adoption of
our software products across our target markets.


Product Support

We believe a close and active service and support
relationship is important to enhancing client satisfaction and
furnishes an important source of information regarding evolving
client issues. We provide our larger clients with a dedicated
client support team whose primary responsibility is to resolve
questions and provide solutions to address ongoing needs. Direct
telephone support is provided during extended business hours,
and additional hours are available during peak periods. We also
offer the Solution Center, a website that serves as an exclusive
on-line community for clients, where clients can find answers to
product questions, exchange information, share best practices
and comment on business issues. We regularly distribute via the
Internet our Software and Services eBRIEFINGs, which are
industry-specific articles targeted to participants in our seven
vertical markets and in geographic regions around the world. We
supplement our service and support activities with comprehensive
training. Training options include both regularly hosted
classroom instruction and online client seminars, or
webinars, that address current, often technical
issues in the financial services industry, such as Price
Behavior Curves and Option Pricing Methodology.

Clients receive the latest product information
via the Internet. We periodically make maintenance releases of
licensed software available to our clients, as well as
regulatory updates (generally during the fourth quarter), to
meet industry reporting obligations and other processing
requirements.

Clients

We have a global client base of financial
services enterprises and other organizations that require a full
range of information management and analysis, accounting,
actuarial, reporting and compliance software on a timely and
flexible basis. Our clients include financial institutions,
hedge funds, funds of funds and family offices, institutional
asset managers, insurance companies and pension funds, municipal
finance professionals, real estate lenders and asset managers.



| |           
| | ----------
| | Case Study

LSV Asset
Management.LSV Asset Management
is a quantitative value equity manager providing active
management for institutional investors through the application
of proprietary investment models. Founded in 1994 and located in
Chicago, LSV offers a variety of value equity strategies for
institutional investors. LSV sought a solution that could
support its strategic plan to grow its core business without
investing heavily in costly and resource-intensive back-office
systems, technology and staff. In 1998, we licensed Antares to
LSV for its trade order management needs and provided our
SS&C Direct outsourcing services for LSVs portfolio
accounting, custodian reconciliation and reporting requirements.
In 1998, LSV had $4 billion of assets under management in
75 portfolios with an operations staff of five. As of
December 31, 2003, LSV had $19 billion of assets under
management, an increase of 375%, and managed 300 portfolios
in 15 currencies with an operations staff of seven. LSV was
able to control its costs during this period of growth in both
the volume and complexity of its assets under management by
utilizing our products and services, which are designed to adapt
to changing industry conditions.

Sales and Marketing

We believe a direct sales organization is
essential to the successful implementation of our business
strategy, given the complexity and importance of the operations
and information managed by our products, the extensive
regulatory and reporting requirements of each industry, and the
unique dynamics of each vertical market. Our dedicated direct
sales and support personnel continually undergo extensive
product and sales training, and are located in our various sales
offices worldwide. We also use telemarketing to

13



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support sales of our real estate property
management products and work through alliance partners who sell
our ASP solution to their correspondent banking clients in the
financial institutions market.


Our marketing personnel are responsible for
identifying market trends, evaluating and developing marketing
opportunities, generating client leads and providing sales
support. Our marketing activities, which focus on use of the
Internet as a cost-effective means of reaching current and
potential clients, include:



| |   |                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | content-rich, periodic Software and Services
    eBRIEFINGstargeted at clients and prospects in each of our
    vertical and geographic markets,
|
| |  | seminars and webinars,                                                                                                                          
|
| |  | trade shows,                                                                                                                                    
|
| |  | conferences, and                                                                                                                                
|
| |  | public relations efforts.                                                                                                                       

Some of the benefits of our shift in focus to an
Internet-based marketing strategy include lower marketing costs,
more direct contacts with actual and potential clients,
increased marketing leads, distribution of more up-to-date
marketing information and an improved ability to measure
marketing initiatives.

The marketing department also supports the sales
force with appropriate documentation or electronic materials for
use during the sales process.

Product Development and Engineering

We believe we must introduce new products and
offer product innovation on a regular basis to maintain our
competitive advantage. To meet these goals, we use
multidisciplinary teams of highly trained personnel and leverage
this expertise across all product lines. We have invested
heavily in developing a comprehensive product analysis process
to insure a high degree of product functionality and quality.
Maintaining and improving the integrity and quality of existing
products is the responsibility of individual product managers.
Product engineering management efforts focus on enterprise-wide
strategies, implementing best-practice technology regimens,
maximizing resources, and mapping out an integration plan for
our entire umbrella of products as well as third-party products.
Our research and development expenses for the years ended
December 31, 2001, 2002 and 2003 were $11.3 million,
$11.8 million and $11.2 million, respectively.

Our research and development engineers work
closely with our marketing and support personnel to ensure that
product evolution reflects developments in the marketplace and
trends in client requirements. We have generally issued a major
functional release of our core products during the second or
third quarter of each fiscal year, including functional
enhancements, as well as an annual fourth quarter release to
reflect evolving regulatory changes in time to meet
clients year-end reporting requirements.

Competition

The market for institutional and financial
management software and services is competitive, rapidly
evolving and highly sensitive to new product introductions and
marketing efforts by industry participants. The market is also
highly fragmented and served by numerous firms that target only
local markets or specific client types. We also face competition
from information systems developed and serviced internally by
the IT departments of financial services firms. The major
competitors in our primary markets include:



| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Insurance entities and pension funds: Princeton
    Financial Systems (subsidiary of State Street Bank), Bloomberg,
    Charles River, Classic Solutions/ Tillinghast, DFA Capital
    Management and SunGard.
|
| |  | Institutional asset management: Bloomberg,
    Charles River, Eagle Investment Systems (subsidiary of Mellon
    Financial Company), Financial Models Corporation, Macgregor and
    Thomson Financial.       
|
| |  | Hedge funds and family offices: Advent Software,
    EZ Castle, Globe Ops and IMS.                                                                                                                            

14



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##### Table of Contents





| |   |                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Financial institutions: ADP, SunGard, Thomson
    Financial and TPG.                                                                                                       
|
| |  | Commercial lending: McCracken (subsidiary of
    GMAC), Midland Loan Services (subsidiary of PNC Financial
    Services), Princeton Financial Systems and Synergy Software.
|
| |  | Real estate property management: MRI (subsidiary
    of Intuit), Best Software and Yardi.                                                                                  
|
| |  | Municipal finance: Ferrand Jordan and Prescient
    Software.                                                                                                              

We believe we compete on the basis of:



| |   |                                   
| | - | ----------------------------------
| |  | consistent product performance,   
|
| |  | broad, demonstrated functionality,
|
| |  | ease of use,                      
|
| |  | scalability,                      
|
| |  | integration capabilities,         
|
| |  | product and company reputation,   
|
| |  | client service and support, and   
|
| |  | price.                            

Proprietary Rights

We rely on a combination of trade secret,
copyright and trademark law, nondisclosure agreements and
technical measures to protect our proprietary technology. We
have registered trademarks for many of our products and will
continue to evaluate the registration of additional trademarks
as appropriate. We generally enter into confidentiality and/or
license agreements with our employees, distributors, clients and
potential clients. We seek to protect our software,
documentation and other written materials under trade secret and
copyright laws, which afford limited protection. These efforts
may be insufficient to prevent third parties from asserting
intellectual property rights in our technology. Furthermore, it
may be possible for unauthorized third parties to copy portions
of our products or to reverse engineer or otherwise obtain and
use proprietary information, and third parties may assert
ownership rights in our proprietary technology. For additional
risks relating to our proprietary technology, please see
If we are unable to protect our proprietary technology,
our success and our ability to compete will be subject to
various risks in Certain Factors That May Affect
Future Operating Results.

Rapid technological change characterizes the
software development industry. We believe factors such as the
technological and creative skills of our personnel, new product
developments, frequent product enhancements, name recognition,
and reliable service and support are more important to
establishing and maintaining a leadership position than legal
protections of our technology.

Employees

As of December 31, 2003, we had
318 full-time employees, consisting of:



| |   |                                            
| | - | -------------------------------------------
| |  | 85 employees in research and development,  
|
| |  | 95 employees in consulting and services,   
|
| |  | 51 employees in sales and marketing,       
|
| |  | 54 employees in client support, and        
|
| |  | 33 employees in finance and administration.

15



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##### Table of Contents



As of December 31, 2003, 54 of our employees
were in our international operations. None of our employees is
covered by any collective bargaining agreement. In the opinion
of management, we have a good relationship with our employees.

During the first quarter of 2004, we added an
aggregate of 25 employees as a result of our acquisitions
of IAN and NeoVision.

Additional Information

We were organized as a Connecticut corporation in
March 1986 and reincorporated as a Delaware corporation in
April 1996. Our principal executive offices are located at
80 Lamberton Road, Windsor, Connecticut 06095. The
telephone number of our principal executive offices is
(860) 298-4500.

Our Internet address is www.ssctech.com.
The contents of our website are not part of this annual report
on Form 10-K, and our Internet address is included in this
document as an inactive textual reference only. We make our
annual reports on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and all
amendments to those reports available free of charge through our
website as soon as reasonably practicable after we file such
reports with, or furnish such reports to, the Securities and
Exchange Commission.

16



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##### Table of Contents






PART II






|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

Our common stock has been trading on the Nasdaq
National Market under the symbol SSNC since our
initial public offering of common stock on May 31, 1996.
The following table sets forth, for the fiscal periods
indicated, the high and low sales prices per share of common
stock as reported on the Nasdaq National Market:

|        |  |                |       |                |  |      |       |     |  |   |      |  |  |   |      | 
|------- |  | -------------- | ----- | -------------- |  | ---- | ----- | --- |  | - | ---- |  |  | - | ---- | 
|        |  |                |       |               
|        |  | Fiscal 2003    |       | Fiscal 2002   
|        |  | Price Range(1) |       | Price Range(1)
|        |  |                |       |               
|Quarter |  | High           |       | Low            |  | High |       | Low
|        |  |                |       |                |  |      |       |    
|First   |  | $              | 8.37  |                |  | $    | 5.83  |     |  | $ | 6.93 |  |  | $ | 4.69 | 
|Second  |  |                | 11.39 |                |  |      | 7.74  |     |  |   | 9.73 |  |  |   | 6.73 | 
|Third   |  |                | 14.08 |                |  |      | 10.40 |     |  |   | 9.47 |  |  |   | 4.93 | 
|Fourth  |  |                | 21.95 |                |  |      | 12.40 |     |  |   | 7.87 |  |  |   | 4.93 | 



---



|    |                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts have been restated to reflect our
    three-for-two common stock split in the form of a common stock
    dividend, effective on March 5, 2004.

There were 49 stockholders of record of our
common stock as of March 8, 2004. The number of
stockholders of record may not be representative of the number
of beneficial owners because many shares are held by
depositories, brokers or other nominees.

In July 2003, our board of directors declared its
first semi-annual cash dividend of $0.067 per share of
common stock, which was paid in September 2003. On
February 5, 2004, our board of directors declared a $0.07
cash dividend per share of common stock, payable on or about
March 24, 2004 to stockholders of record as of
March 10, 2004. Although we expect to declare cash
dividends in the future, various factors, including our
financial condition, operating results, current and anticipated
cash needs and plans for expansion, will affect our
decision-making process.






|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The selected financial data set forth below
should be read in conjunction with our consolidated financial
statements and related notes and Managements
Discussion and Analysis of Financial Condition and Results of
Operations appearing elsewhere herein.

|                                     |                                              |                |         |        |   |         |        |         |  |         |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------ | -------------------------------------------- | -------------- | ------- | ------ | - | ------- | ------ | ------- |  | ------- | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                     |                                              |               
|                                     |                                              | December 31,  
|                                     |                                              |               
|                                     |                                              | 1999           |         | 2000   |   | 2001(2) |        | 2002(3) |  | 2003(4)
|                                     |                                              |                |         |        |   |         |        |         |  |        
|                                     |                                              |               
|                                     |                                              | (In thousands)
|Statement of Operations Data:        |                                              |                |         |        |   |         |        |         |  |         |        |        |  |   |        |        |  |   |        |       
|Revenues                             |                                              | $              | 68,503  |        |   | $       | 61,406 |         |  | $       | 56,369 |        |  | $ | 62,434 |        |  | $ | 65,531 |       
|Income (loss) before taxes           |                                              |                | (19,191 | )      |   |         | 3,333  |         |  |         | 6,487  |        |  |   | 12,300 |        |  |   | 19,337 |       
|Net income (loss)                    |                                              |                | (12,648 | )      |   |         | 2,172  |         |  |         | 4,022  |        |  |   | 7,305  |        |  |   | 11,796 |       
|Net income (loss) per share(1):      |                                              |                |         |        |   |         |        |         |  |         |        |        |  |   |        |        |  |   |        |       
|                                     | Basic earnings (loss) per share              |                | $       | (0.54  | ) |         | $      | 0.09    |  |         | $      | 0.18   |  |   | $      | 0.38   |  |   | $      | 0.63   | 
|                                     | Shares used in basic per share calculation   |                |         | 23,517 |   |         |        | 23,877  |  |         |        | 22,506 |  |   |        | 19,473 |  |   |        | 18,617 | 
|                                     | Diluted earnings (loss) per share            |                | $       | (0.54  | ) |         | $      | 0.09    |  |         | $      | 0.18   |  |   | $      | 0.36   |  |   | $      | 0.59   | 
|                                     | Shares used in diluted per share calculation |                |         | 23,517 |   |         |        | 23,943  |  |         |        | 22,752 |  |   |        | 20,531 |  |   |        | 19,832 | 
|Cash dividends declared per share(5) |                                              | $              |        |        |   | $       |       |         |  | $       |       |        |  | $ |       |        |  | $ | 0.067  |       

17



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|                                     |  |                |        |      |  |         |        |         |  |         |        |  |  |   |        |  |  |   |        | 
|------------------------------------ |  | -------------- | ------ | ---- |  | ------- | ------ | ------- |  | ------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                     |  |               
|                                     |  | December 31,  
|                                     |  |               
|                                     |  | 1999           |        | 2000 |  | 2001(2) |        | 2002(3) |  | 2003(4)
|                                     |  |                |        |      |  |         |        |         |  |        
|                                     |  |               
|                                     |  | (In thousands)
|Balance Sheet Data:                  |  |                |        |      |  |         |        |         |  |         |        |  |  |   |        |  |  |   |        | 
|Cash and cash equivalents            |  | $              | 14,304 |      |  | $       | 20,690 |         |  | $       | 28,425 |  |  | $ | 18,336 |  |  | $ | 15,261 | 
|Investments in marketable securities |  |                | 36,034 |      |  |         | 35,840 |         |  |         | 31,077 |  |  |   | 23,383 |  |  |   | 37,120 | 
|Working capital                      |  |                | 53,617 |      |  |         | 54,330 |         |  |         | 56,284 |  |  |   | 36,699 |  |  |   | 42,009 | 
|Total assets                         |  |                | 89,717 |      |  |         | 90,858 |         |  |         | 88,779 |  |  |   | 75,480 |  |  |   | 82,585 | 
|Long-term obligations                |  |                | 11     |      |  |         | 5      |         |  |         |       |  |  |   |       |  |  |   |       | 
|Stockholders equity                 |  |                | 72,553 |      |  |         | 72,654 |         |  |         | 72,948 |  |  |   | 57,270 |  |  |   | 61,588 | 



---



|    |                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Earnings per share have been restated for all
    periods presented to reflect a three-for-two common stock split
    in the form of a common stock dividend effective on
    March 5, 2004.                                                                                      
|   
|(2) | On November 15, 2001, we acquired Digital
    Visions, a division of Netzee Inc. See notes 2 and 11
    of notes to our consolidated financial statements.                                                                                                                        
|   
|(3) | On January 15, 2002, we acquired the assets
    and business of Real-Time USA, Inc. On November 15,
    2002, we acquired the assets and business of DBC, a business
    within the Thomson Corporation. See notes 2 and 11 of
    notes to our consolidated financial statements.
|   
|(4) | On December 12, 2003, we acquired the assets
    and business of Amicorp Groups fund services business. See
    notes 2 and 11 of notes to our consolidated financial
    statements.                                                                                            
|   
|(5) | As part of our semi-annual cash dividend program,
    our board of directors declared a cash dividend of
    $0.07 per share during the first quarter of 2004.                                                                                                                    






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Overview

We provide the financial services industry with a
broad range of highly specialized software, BPO services and ASP
solutions. We deliver mission-critical processing for
information management, analysis, trading, accounting, reporting
and compliance. We provide our products and related services in
seven vertical markets in the financial services industry:



| |   |                                                                    
| | - | -------------------------------------------------------------------
| |  | insurance entities and pension funds,                              
|
| |  | institutional asset management,                                    
|
| |  | hedge fund and family offices,                                     
|
| |  | financial institutions, such as retail banks and
    credit unions,
|
| |  | commercial lending,                                                
|
| |  | real estate property management, and                               
|
| |  | municipal finance.                                                 

In 2003, we continued our focus on the four
primary objectives that we use in measuring our financial
performance:



| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | increasing recurring revenues as a percentage of
    total revenues,                            
|
| |  | enhancing our profitability,                                                                    
|
| |  | entering new markets through acquisitions and
    expanding our presence in current markets, and
|
| |  | improving operating cash flow.                                                                  

We continue to focus on increasing the portion of
our revenues derived from our outsourcing solutions and
maintenance services because these provide us with recurring
revenue streams. We have taken a

18



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number of steps to increase recurring revenues,
such as automating our outsourcing delivery methods, providing
our employees with sales incentives, and acquiring businesses
that offer outsourcing services, such as Amicorp Groups
fund services business, or that have a large base of maintenance
clients, such as DBC. Moving our business to a recurring revenue
model gives us the ability to better plan and manage our
business going forward, and should help us reduce the quarterly
fluctuations in revenues and operating results typically
associated with software license revenues. We expect our
maintenance and outsourcing revenues to continue to increase as
a percentage of total revenues. Our outsourcing revenues
increased from $6.3 million, or 11.2% of total revenues, in
2001 to $13.2 million, or 20.2% of total revenues, in 2003,
a 108.6% increase. Our maintenance revenues increased from
$26.7 million, or 47.4% of total revenues, in 2001 to
$31.3 million, or 47.8% of total revenues, in 2003, a 17.1%
increase.


While increasing our revenues, we maintained our
focus on profitability in 2003. We decreased our operating
expenses from $30.3 million in 2002 to $26.7 million
in 2003, while also lowering our cost of revenues from
$21.0 million to $20.4 million over the same period.
These efforts contributed to a 65% increase in our operating
income from 2002 to 2003. We believe that our success in
lowering operating expenses results from a disciplined approach
to cost cutting, an efficient use of personnel and outside
consultants, and more cost-effective marketing programs.

We continue to increase our market presence
through acquisitions. In January 2002, we acquired Real-Time
USA, Inc., a provider of ASP and license office
applications to commercial banks and broker-dealers, and in
November 2002, we acquired DBC, a provider of financial software
for fixed-income analysis in the municipal finance market. In
December 2003, we acquired Amicorp Groups fund services
line of business, which we believe will significantly expand our
capacity in the global hedge fund market. We named this business
SS&C Fund Services and expect it to be an important element
of our strategy to increase our outsourcing business. During the
first quarter of 2004, we acquired the businesses of Investment
Advisory Network, which provides web-based wealth management
services to financial institutions, and NeoVision Hypersystems,
which provides tactical visual analytic solutions for the
financial services industry. Based on historical trends and
current expectations, we expect SS&C Fund Services,
Investment Advisory Network and NeoVision to contribute in the
aggregate approximately 4% to 8% of 2004 revenues and have an
immaterial impact on cash flows and working capital
requirements. All of our acquisitions have added new SS&C
clients as well as additional products and services to our
portfolio.

Net cash provided by operating activities was
$23.7 million in 2003, and we ended the period with
$52.4 million in cash, cash equivalents and marketable
securities and $8.6 million in accounts receivable.

Critical Accounting Estimates and
Assumptions

Our significant accounting policies are
summarized in note 2 to our consolidated financial
statements. A number of our accounting policies require the
application of significant judgment by our management, and such
judgments are reflected in the amounts reported in our
consolidated financial statements. In applying these policies,
our management uses its judgment to determine the appropriate
assumptions to be used in the determination of estimates. Those
estimates are based on our historical experience, terms of
existing contracts, managements observation of trends in
the industry, information provided by our clients and
information available from other outside sources, as
appropriate. On an ongoing basis, we evaluate our estimates and
judgments, including those related to revenue recognition,
doubtful accounts receivable, goodwill and other intangible
assets and other contingent liabilities. Actual results may
differ significantly from the estimates contained in our
consolidated financial statements. We believe that the following
are our critical accounting policies.

19



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| |                    
| | -------------------
| | Revenue Recognition

Our revenues consist primarily of software
license revenues, maintenance revenues, and professional and
outsourcing services revenues.

We apply the provisions of Statement of Position
No. 97-2, Software Revenue Recognition
(SOP 97-2) to all software transactions. We recognize
revenues from the sale of software licenses when persuasive
evidence of an arrangement exists, the product has been
delivered, the fee is fixed and determinable, and collection of
the resulting receivable is reasonably assured. Our products
generally do not require significant modification or
customization of software. Installation of the products is
generally routine and is not essential to the functionality of
the product.

We use a signed license agreement as evidence of
an arrangement for the majority of our transactions. Delivery
occurs when the product is delivered to a common carrier F.O.B.
shipping point. Although our arrangements generally do not have
acceptance provisions, if such provisions are included in the
arrangement, then delivery occurs at acceptance. At the time of
the transaction, we assess whether the fee is fixed and
determinable based on the payment terms. Collection is assessed
based on several factors, including past transaction history
with the client and the creditworthiness of the client. The
arrangements for software licenses are generally sold with
maintenance and professional services. We allocate revenue to
the delivered components, normally the license component, using
the residual value method based on objective evidence of the
fair value of the undelivered elements. The total contract value
is attributed first to the maintenance and support arrangement
based on the fair value, which is derived from renewal rates.
Fair value of the professional services is based upon
stand-alone sales of those services. Professional services are
generally billed at an hourly rate plus out-of-pocket expenses.
Professional services revenues are recognized as the services
are performed. Maintenance revenues are recognized ratably over
the term of the contract. Outsourcing services revenues, which
are based on a monthly fee or transaction-based, are recognized
as the services are performed.

We occasionally enter into software license
agreements requiring significant customization or fixed-fee
professional service arrangements. We account for these
arrangements in accordance with the percentage-of-completion
method based on the ratio of hours incurred to expected total
hours; accordingly we must estimate the costs to complete the
arrangement utilizing an estimate of man-hours remaining. Due to
uncertainties inherent in the estimation process, it is at least
reasonably possible that completion costs may be revised. Such
revisions are recognized in the period in which the revisions
are determined. Due to the complexity of some software license
agreements, we routinely apply judgments to the application of
software recognition accounting principles to specific
agreements and transactions. Different judgments and/or
different contract structures could have led to different
accounting conclusions, which could have a material effect on
our reported quarterly results of operations.



| |                                    
| | -----------------------------------
| | Allowance for Doubtful
    Accounts

The preparation of financial statements requires
our management to make estimates relating to the collectability
of our accounts receivable. Management establishes the allowance
for doubtful accounts based on historical bad debt experience.
In addition, management analyzes client accounts, client
concentrations, client creditworthiness, current economic trends
and changes in our clients payment terms when evaluating
the adequacy of the allowance for doubtful accounts. Such
estimates require significant judgment on the part of our
management. Therefore, changes in the assumptions underlying our
estimates or changes in the financial condition of our clients
could result in a different required allowance, which could have
a material effect on our reported results of operations.



| |                                                      
| | -----------------------------------------------------
| | Long-lived Assets, Intangible Assets
    and Goodwill

Under Statement of Financial Accounting Standards
No. 142, Goodwill and Other Intangible Assets,
we must test goodwill and indefinite-lived intangible assets
annually for impairment (and in interim periods if certain
events occur indicating that the carrying value of goodwill
and/or indefinite-lived intangible assets may be impaired) using
reporting units identified for the purpose of assessing
potential future impairments of goodwill.

20



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We assess the impairment of identifiable
intangibles, long-lived assets and goodwill whenever events or
changes in circumstances indicate that the carrying value may
not be recoverable. Factors we consider important which could
trigger an impairment review include the following:



| |   |                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------
| |  | significant underperformance relative to
    historical or projected future operating results,                           
|
| |  | significant changes in the manner of our use of
    the acquired assets or the strategy for our overall
    business, and
|
| |  | significant negative industry or economic trends.                                                                        

When we determine that the carrying value of
intangibles, long-lived assets and goodwill may not be
recoverable based upon the existence of one or more of the above
indicators of potential impairment, we assess whether an
impairment has occurred based on whether net book value of the
assets exceeds related projected undiscounted cash flows from
these assets, considering a number of factors including past
operating results, budgets, economic projections, market trends
and product development cycles. Differing estimates and
assumptions as to any of the factors described above could
result in a materially different impairment charge and thus
materially different results of operations.



| |                       
| | ----------------------
| | Acquisition Accounting

In connection with our acquisitions, we must
allocate the purchase price to the assets we acquire, such as
net tangible assets, completed technology, in-process research
and development (IPR&D), client contracts, other
identifiable intangible assets and goodwill. We apply
significant judgments and estimates in determining the fair
market value of the assets acquired and their useful lives. For
example, we have determined the fair value of existing client
contracts based on the discounted estimated net future cash
flows from such client contracts existing at the date of
acquisition and the fair value of the completed technology based
on the discounted estimated future cash flows from the product
sales of such completed technology. While actual results during
the years ended December 31, 2002 and 2003 were consistent
with our estimated cash flows and we did not incur any
impairment charges in 2002 or 2003, different estimates and
assumptions in valuing acquired assets could yield materially
different results.



| |             
| | ------------
| | Income Taxes

The carrying value of our net deferred tax assets
assumes that we will be able to generate sufficient future
taxable income in certain tax jurisdictions, based on estimates
and assumptions. If these estimates and related assumptions
change in the future, we may be required to record additional
valuation allowances against our deferred tax assets resulting
in additional income tax expense in our consolidated statement
of operations. On a quarterly basis, we evaluate whether
deferred tax assets are realizable and assess whether there is a
need for additional valuation allowances. Such estimates require
significant judgment on the part of our management. In addition,
we evaluate the need to provide additional tax provisions for
adjustments proposed by taxing authorities.



| |                      
| | ---------------------
| | Marketable Securities

We classify our entire investment portfolio,
consisting of corporate equities and debt securities issued by
federal government agencies, state and local governments of the
United States and corporations, as available for sale
securities. Carrying amounts approximate fair value, as
estimated based on market prices and any unrealized gain or loss
is recognized in stockholders equity. Statement of
Financial Accounting Standards No. 115, Accounting
for Certain Investments in Debt and Equity Securities, and
Securities and Exchange Commission Staff Accounting Bulletin
(SAB) 59, Accounting for Noncurrent Marketable Equity
Securities, provide guidance on determining when an
investment is other than temporarily impaired. In making this
judgment, we evaluate, among other factors, the duration and
extent to which the fair value of the investment is less than
its cost and the financial health of and the business outlook
for the investee, including factors in the industry and
financing cash flows. Incorrect assessments could adversely
affect our working capital.

21



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##### Table of Contents



Results of Operations for the Years Ended
December 31, 2001, 2002 and 2003

The following table sets forth revenues (in
thousands) and changes in revenues for the periods indicated:

|          |                       |                         |   |            |        |      |   |        |        |      |   |        |        |  |  |       |      |  |  |      |     | 
|--------- | --------------------- | ----------------------- | - | ---------- | ------ | ---- | - | ------ | ------ | ---- | - | ------ | ------ |  |  | ----- | ---- |  |  | ---- | --- | 
|          |                       |                         |   |            |        |      |   |       
|          |                       |                         |   | Percentage
|          |                       | Year Ended December 31, |   | Change in 
|          |                       |                         |   |           
|          |                       | 2001                    |   | 2002       |        | 2003 |   | 2002   |        | 2003
|          |                       |                         |   |            |        |      |   |        |        |     
|Revenues: |                       |                         |   |            |        |      |   |        |        |      |   |        |        |  |  |       |      |  |  |     
|          | Software licenses     |                         | $ | 15,291     |        |      | $ | 15,631 |        |      | $ | 14,233 |        |  |  | 2.2   | %    |  |  | (8.9 | )% 
|          | Maintenance           |                         |   | 26,737     |        |      |   | 27,850 |        |      |   | 31,318 |        |  |  | 4.2   |      |  |  | 12.5 |    
|          | Professional services |                         |   | 8,002      |        |      |   | 6,326  |        |      |   | 6,757  |        |  |  | (20.9 | )    |  |  | 6.8  |    
|          | Outsourcing           |                         |   | 6,339      |        |      |   | 12,627 |        |      |   | 13,223 |        |  |  | 99.2  |      |  |  | 4.7  |    
|          |                       |                         |   |            |        |      |   |        |        |      |   |        |        |  |  |       |      |  |  |     
|          |                       | Total revenues          |   | $          | 56,369 |      |   | $      | 62,434 |      |   | $      | 65,531 |  |  |       | 10.8 |  |  |      | 5.0 | 
|          |                       |                         |   |            |        |      |   |        |        |      |   |        |        |  |  |       |      |  |  |     

The following table sets forth the percentage of
our total revenues represented by each of the following sources
of revenues for the periods indicated:

|          |                       |              |  |      |   |      |  |      |   |  |  |      |  
|--------- | --------------------- | ------------ |  | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|          |                       |             
|          |                       | Year Ended  
|          |                       | December 31,
|          |                       |             
|          |                       | 2001         |  | 2002 |   | 2003
|          |                       |              |  |      |   |     
|Revenues: |                       |              |  |      |   |      |  |      |   |  |  |     
|          | Software licenses     |              |  | 27.1 | % |      |  | 25.0 | % |  |  | 21.7 | %
|          | Maintenance           |              |  | 47.4 |   |      |  | 44.6 |   |  |  | 47.8 |  
|          | Professional services |              |  | 14.2 |   |      |  | 10.1 |   |  |  | 10.3 |  
|          | Outsourcing           |              |  | 11.2 |   |      |  | 20.2 |   |  |  | 20.2 |  

Revenues

We derive our revenues from software licenses,
related maintenance and professional services and outsourcing
services. Revenues were $56.4 million, $62.4 million
and $65.5 million in 2001, 2002 and 2003, respectively.
Revenue growth in 2002 was primarily a result of our
acquisitions of Digital Visions in November 2001, Real-Time in
January 2002 and DBC in November 2002, which added an aggregate
of $8.7 million in revenues, offset by a decrease of
$2.7 million from sales of products and services that were
not related to these acquired companies. The decrease in
revenues from these other products and services in 2002 resulted
primarily from the unfavorable global economic conditions, which
led to decreased spending by our clients and fewer opportunities
to sell our products and services. The increase in revenues from
2002 to 2003 of $3.1 million, or 5.0%, was due to an
increase of $3.6 million as a result of a full year of
sales of our DBC products, including maintenance revenues
associated with such products, offset by a decrease of
$0.5 million from sales of other products and services. As
a general matter, our software license and professional services
revenues tend to fluctuate based on the number of new licensing
clients, while fluctuations in our outsourcing revenues are
attributable to the number of new outsourcing clients as well as
the number of outsourced transactions provided to our existing
clients. Maintenance revenues vary primarily on the rate by
which we add or lose maintenance clients over time and, to a
lesser extent, the annual increases in maintenance fees, which
are generally tied to the consumer price index.

During 2003, we experienced improved sales
opportunities, as clients began to increase spending following
the economic conditions of 2002, and a trend toward sales of
outsourcing services over software licenses. We have diverse
product and service offerings and, as a result, different
products and services show strength in given years due to
factors such as fluctuating economic conditions affecting the
vertical markets for such products and services, shifts in
client preferences for licensing software or obtaining
outsourcing services, improvements in technology leading to new
software releases and changing regulatory environments adding to
the complexity of managing client data. As noted above, however,
we intend to

22



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##### Table of Contents



continue to focus on providing outsourcing
services to our clients, as these services can result in a more
predictable, recurring source of our revenues.




| |                  
| | -----------------
| | Software Licenses

Software license revenues were
$15.3 million, $15.6 million and $14.2 million in
2001, 2002 and 2003, respectively. The increase in software
license revenues from 2001 to 2002 of $0.3 million, or
2.2%, was mainly due to an increase in sales resulting from our
acquisitions of Real-Time and DBC, which added an aggregate of
$2.0 million in software license revenues, and an increase
of $1.8 million in sales of our LMS product, offset by
decreases in sales of our CAMRA, Total Return and PTS products
of $1.6 million, $1.0 million and $0.6 million,
respectively. As noted above, the decrease in sales of these
products was due primarily to unfavorable global economic
conditions during 2002, which resulted in reduced sales
opportunities and client spending, including on software
licenses. The decrease in software license revenues from 2002 to
2003 of $1.4 million, or 8.9%, was primarily due to
decreases in sales of LMS, SKYLINE and CAMRA licenses of
$1.1 million, $0.6 million and $0.5 million,
respectively. Sales of DBC products increased in 2003 by
$0.9 million, representing a full year of activity
following our acquisition of this business in November 2002.
During 2003, we increased our emphasis on providing outsourcing
services over software licenses, in part in reaction to client
preferences, and also because these services are potential
sources of recurring and more predictable revenues. Software
license revenues will vary depending on the timing, size and
nature of our license transactions. For example, the average
size of our software license transactions and the number of
large transactions may fluctuate on a period-to-period basis.
Additionally, software license revenues will vary among the
various products that we offer, due to differences such as the
timing of new releases and variances in economic conditions
affecting opportunities in the vertical markets served by such
products.



| |            
| | -----------
| | Maintenance

Maintenance revenues were $26.7 million,
$27.9 million and $31.3 million in 2001, 2002 and
2003, respectively. The increase in maintenance revenues from
2001 to 2002 of $1.1 million, or 4.2%, was primarily due to
the acquisitions of Real-Time and DBC in January and November of
2002, which added an aggregate of $0.9 million in
maintenance revenues, and annual maintenance fee increases. This
was offset by a decrease of $0.6 million in maintenance
revenues from discontinued products. Maintenance revenues
increased from 2002 to 2003 by $3.4 million, or 12.5%,
primarily as a result of a full year of maintenance revenues
from DBC, which contributed $2.7 million to the overall
increase, as well as annual maintenance fee increases for most
of our products. We typically provide maintenance services under
one-year renewable contracts that provide for an annual increase
in fees, generally tied to the percentage change in the consumer
price index. Future maintenance revenue growth is dependent on
our ability to retain existing clients, add new license clients
and increase average maintenance fees.



| |                      
| | ---------------------
| | Professional Services

Professional services revenues were
$8.0 million, $6.3 million and $6.8 million in
2001, 2002 and 2003, respectively. Professional services
revenues decreased from 2001 to 2002 by $1.7 million, or
20.9%. The decline in professional services revenues during 2002
resulted from unfavorable global economic conditions, which led
to decreased spending by our clients and fewer opportunities to
sell our services. Professional services revenues increased from
2002 to 2003 by $0.4 million, or 6.8%, primarily due to a
significant professional services project during the third and
fourth quarters of 2003, which contributed $1.6 million in
revenues for that period. This project, which was completed in
the first quarter of 2004, represented a unique opportunity, and
we do not expect single projects of comparable size in the near
future. Our overall software license revenue levels and market
demand for professional services will continue to have an effect
on our professional services revenues.

23



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| |            
| | -----------
| | Outsourcing

Outsourcing revenues were $6.3 million,
$12.6 million and $13.2 million in 2001, 2002 and
2003, respectively. The increase in outsourcing revenues from
2001 to 2002 by $6.3 million, or 99.2%, was primarily
attributable to the outsourcing services provided by Digital
Visions and Real-Time, which added an aggregate of
$5.4 million in outsourcing revenues, and increased demand
by clients for outsourcing services provided by SS&C Direct
as an alternative to license purchases, which added an aggregate
of $0.9 million in outsourcing revenues. Outsourcing
revenues increased from 2002 to 2003 by $0.6 million, or
4.7%, as a result of increased demand for our SS&C Direct
services, which added $1.6 million in outsourcing revenues,
and the introduction of our Lightning product in 2002, which
added $0.3 million in outsourcing revenues. These increases
were offset by a $1.4 million decrease in PortPro revenues.
In 2002, we significantly increased the pricing of our PortPro
product, which caused us to lose some of our PortPro clients in
2003. Future outsourcing revenue growth is dependent on our
ability to retain existing clients, add new clients and increase
average outsourcing fees.

Cost of Revenues

The total cost of revenues was
$20.3 million, $21.0 million and $20.4 million in
2001, 2002 and 2003, respectively. Our gross margin increased
from 64% in 2001 to 66% in 2002, and increased to 69% in 2003.
The increase in gross margin from 2001 to 2002 was primarily due
to increased outsourcing revenues and lower cost of maintenance
revenues due to our cost reduction programs initiated in late
2001, which continued in 2002. The increase in gross margin from
2002 to 2003 was primarily attributable to efficiencies gained
in providing an increased level of outsourcing and professional
services without incurring the same level of increase in our
costs.



| |                                      
| | -------------------------------------
| | Cost of Software License
    Revenues

Cost of software license revenues consists
primarily of amortization expense of completed technology,
royalties, third-party software, the costs of product media,
packaging and documentation. The cost of software license
revenues was $0.7 million, $1.3 million and
$1.9 million in 2001, 2002 and 2003, respectively. The cost
of software license revenues as a percentage of these revenues
was 5%, 8% and 13% in 2001, 2002, and 2003, respectively. Costs
increased from 2001 to 2002 primarily due to the amortization
expense of completed technology relating to the acquisitions of
Real-Time in January 2002 and DBC in November 2002 of an
aggregate of $0.5 million. The increase in costs from 2002
to 2003 resulted primarily from a full year of amortization
expense of completed technology relating to the November 2002
acquisition of DBC of $0.6 million.



| |                             
| | ----------------------------
| | Cost of Maintenance Revenues

Cost of maintenance revenues consists primarily
of technical client support and costs associated with the
distribution of product and regulatory updates. The cost of
maintenance revenues was $6.8 million, $5.6 million
and $6.2 million in 2001, 2002 and 2003, respectively. The
decrease in costs from 2001 to 2002 of $1.2 million, or
17.2%, was primarily due to improved efficiencies and cost
reductions initiated by us in late 2001 and continuing in 2002,
including the adoption of web-based client maintenance support,
which requires lower headcount and is thus less expensive. These
cost reductions resulted in lower personnel-related costs of
$1.3 million and lower operating costs of
$0.5 million, which was offset by a $0.7 million
increase in costs due to the acquisitions of Real-Time and DBC.
Average staffing levels, excluding acquisitions, fell by 17
employees from 2002 to 2003, mainly from staff reductions and
attrition. Costs increased in absolute dollars from 2002 to 2003
due to a $0.4 million engagement of a third party with
actuarial expertise to assist with the management of our PTS
business. Costs, as a percentage of revenues, relating to these
management services are expected to continue at approximately
these levels for the near term. The cost of maintenance revenues
as a percentage of these revenues was 25%, 20% and 20% in 2001,
2002 and 2003, respectively.

24



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| |                                           
| | ------------------------------------------
| | Cost of Professional Services
    Revenues

Cost of professional services revenues consists
primarily of the cost related to personnel utilized to provide
implementation, conversion and training services to our software
licensees, as well as system integration, custom programming and
actuarial consulting services. The cost of professional services
revenues was $6.9 million, $5.4 million and
$4.4 million in 2001, 2002 and 2003, respectively. The cost
of professional services revenues as a percentage of these
revenues was 86%, 86% and 65% in 2001, 2002 and 2003,
respectively. Our professional services margin improved from
2002 to 2003 primarily due to a significantly large consulting
project that commenced during the third quarter of 2003. The
decrease in costs, in terms of dollars, is a product of our
effort to align the size of our professional consulting
organization with the demand for our implementation and
consulting services. As a result, average headcount decreased by
13 employees from 2001 to 2002 and by an additional seven
employees from 2002 to 2003.



| |                             
| | ----------------------------
| | Cost of Outsourcing Revenues

Cost of outsourcing revenues consists primarily
of the cost related to personnel utilized in servicing our
outsourcing clients. The cost of outsourcing revenues was
$5.9 million, $8.6 million and $8.0 million in
2001, 2002 and 2003, respectively. The cost of outsourcing
revenues as a percentage of these revenues was 93%, 68% and 61%
in 2001, 2002 and 2003, respectively. We have improved margins
for outsourcing revenues by managing costs and improving
efficiencies through the automation of processes that were
previously done manually. The increase in costs, in terms of
dollars, from 2001 to 2002 was due to the Digital Visions and
Real-Time acquisitions, which accounted for an aggregate of
$3.2 million of costs, and was partially offset by cost
reductions of $0.4 million in the SS&C Direct business
unit. The decrease in costs from 2002 to 2003 was largely
attributable to our ability to effectively service a larger base
of outsourcing clients with a lower average headcount. Average
headcount decreased by two employees from 2002 to 2003.
Additionally, we were able to manage our costs for outside data
fees, which decreased by $0.3 million from 2002 to 2003,
due to successful negotiation of a new agreement.

Operating Expenses

Our total operating expenses were
$33.5 million, $30.3 million and $26.7 million in
2001, 2002 and 2003, respectively and represent 59%, 49% and
41%, respectively, of total revenues in those years. The
decrease in total operating expenses was primarily due, in 2002,
to a decrease in personnel-related costs of $1.9 million
and, in 2003, the absence of the $1.7 million of IPR&D
expense we took in 2002, as well as a decrease of
$0.8 million of depreciation and $0.7 million of
personnel-related costs. We initiated cost reduction programs
and improved operating efficiency in both 2001 and 2002 to
reduce operating costs and bring them more in-line with our
revenues. We continued to manage spending levels through 2003
and, although we expect some increase in our operating expenses
due to increased sales of our products and services, we expect
to continue to manage spending levels in 2004.



| |                      
| | ---------------------
| | Selling and Marketing

Selling and marketing expenses consist primarily
of the personnel costs associated with the selling and marketing
of our products, including salaries, commissions and travel and
entertainment. Such expenses also include the cost of branch
sales offices, trade shows and marketing and promotional
materials. Selling and marketing expenses were
$11.4 million, $9.1 million and $8.4 million in
2001, 2002 and 2003, respectively, representing 20%, 15% and
13%, respectively, of total revenues in those years. Our costs
decreased in both 2002 and 2003 primarily due to reductions in
support personnel costs and continued reductions in advertising
and promotion expenses as a result of our increased focus on
using the Internet to provide current and potential clients with
information about our products and services, such as through our
Software and Services eBRIEFINGsand webinars, rather
than using traditional forms of advertising such as radio and
print media, which are considerably more expensive. The decrease
in expenses of $2.3 million in 2002 was due to a reduction
in personnel-related costs of $2.7 million, a reduction of
marketing and promotional costs of $0.6 million, a
reduction of $0.2 million in rent costs and a reduction in
other

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operating costs of $0.6 million. These
reductions were offset by an increase of $1.8 million due
to acquisitions. Staff reductions in 2002 totaled 22 employees.
In 2003, selling and marketing expenses decreased by
$0.7 million due to a reduction in various operating costs,
including travel expenses and various facilities expenses.




| |                         
| | ------------------------
| | Research and Development

Research and development expenses consist
primarily of personnel costs attributable to the development of
new software products and the enhancement of existing products.
Research and development expenses were $11.3 million,
$11.8 million and $11.2 million in 2001, 2002 and
2003, respectively, representing 20%, 19% and 17%, respectively,
of total revenues in those years. The increase in expenses in
2002 was mainly due to the acquisitions of Digital Visions,
Real-Time and DBC, which added costs of $2.5 million, and
was offset by cost reductions in personnel and other related
support costs of $2.0 million. This cost reduction was the
result of staffing reductions in late 2001 and 2002 of
approximately 22 employees. The decrease in research and
development expenses in 2003 was primarily due to lower
compensation expense of $0.9 million as a result of
staffing reductions and decreases in other operating expenses of
$0.7 million. This was offset by expense increases of
$1.0 million as a result of the DBC acquisition.



| |                           
| | --------------------------
| | General and Administrative

General and administrative expenses consist
primarily of personnel costs related to management, accounting
and finance, information management, human resources and
administration and associated overhead costs, as well as fees
for professional services. General and administrative expenses
were $10.0 million, $7.7 million and $7.2 million
in 2001, 2002 and 2003, respectively, representing 18%, 12% and
11%, respectively, of total revenues in those years. The
decrease in expenses in 2002 was attributable to lower
personnel-related costs of $1.4 million and improved cost
controls in the areas of professional services and other
operating costs for an aggregate of $0.9 million. The lower
personnel-related costs were due to a reduction of 12 employees.
General and administrative expenses decreased in 2003 primarily
due to lower personnel-related costs of $0.7 million,
offset by a small increase in all other operating expenses.



| |                     
| | --------------------
| | Restructuring Charge

In 2001, we incurred a restructuring charge of
$0.8 million related to the elimination of
55 positions and the closing of several branches. This
charge primarily consisted of severance pay for terminated
employees of $0.4 million, ongoing lease commitments of
$0.3 million and fixed assets write-offs of
$0.1 million.



| |                                                               
| | --------------------------------------------------------------
| | Write-off of Purchased In-Process Research
    and Development

In January 2002, we acquired Real-Time. The
acquisition was accounted for as a purchase and, accordingly,
the purchase price was allocated among tangible and intangible
assets, liabilities, and IPR&D based on their fair values on
the date of the acquisition. The acquired IPR&D had not yet
reached technological feasibility and had no alternative future
use and, accordingly, $1.7 million was expensed on the date
of the acquisition.



| |                                   
| | ----------------------------------
| | Interest and Other Income,
    Net

Interest income, net consists of interest income
less interest expense. Interest income, net was
$2.7 million, $1.4 million and $0.9 million in
2001, 2002 and 2003, respectively. The decrease in interest
income, net in 2002 was the result of lower market interest
rates on investments and a reduction in the cash and investment
balance due to our stock repurchase program. Interest income,
net decreased in 2003 primarily due to lower market interest
rates on investments. Included in other income, net in 2001 were
net gains of $2.4 million resulting from sales of equity
investments, offset by the write-off of $1.3 million
related to an investment in a privately held company. Included
in other income, net in 2002 were net

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losses of $0.2 million related to the sale
of investments. Included in other income, net in 2003 were net
gains of $0.3 million resulting from sale of equity
investments, offset by $0.2 million in expenses related to
the settlement of outstanding tax-related issues.




| |                           
| | --------------------------
| | Provision for Income Taxes

We had effective tax rates of approximately 38%,
41% and 39% in 2001, 2002 and 2003, respectively. The higher tax
rate in 2002 was primarily due to lower tax credits in the
period and the impact of a settlement reached with the Internal
Revenue Service in the third quarter of 2002 of a dispute
arising out of our deductions related to the 1999 litigation
settlement payment of $9.3 million. We reached a settlement
with the IRS that allowed us to deduct $5.5 million of the
original $6.8 million deduction. The impact of this
settlement was a tax cost of $0.5 million, which was
included in our 2002 income tax provision. Although a
substantial number of the issues raised by the IRS for the years
audited in connection with the dispute have been resolved, we
also received notice of proposed tax deficiencies for the years
1996 to 1999 relating to our research and experimentation
credits. In 2003, we reached a tentative settlement with the IRS
that allowed 50% of the research and experimentation credits
associated with the 1996 to 1999 years, or $351,000. This amount
has been included in our tax provision as of December 31,
2003. We had $7.0 million of deferred tax assets at
December 31, 2003. In future years, we expect to have
sufficient levels of profitability to realize the deferred tax
assets at December 31, 2003.

Liquidity and Capital Resources

Our liquidity needs have historically been to
finance the costs of operations pending the billing and
collection of client receivables, to acquire complementary
businesses or assets, to invest in research and development and
to repurchase shares of our common stock. We have historically
relied on cash flow from operations for liquidity. We expect
that our future liquidity needs will consist of financing the
costs of operations pending the billing and collection of client
receivables, strategic acquisitions that allow us to expand our
product offerings and client base, investments in research and
development and payment of dividends, if any, to our
stockholders. We do not expect to undertake any additional
repurchases of our common stock in the near future. Our
operating cash flow is primarily affected by the overall
profitability of the sales of our products and services, our
ability to invoice and collect from clients in a timely manner,
our ability to efficiently implement our acquisition strategy
and our ability to manage costs.



| |           
| | ----------
| | Cash Flows

Our cash, cash equivalents and marketable
securities at December 31, 2003 were $52.4 million,
which represents an increase of $10.7 million from
$41.7 million at December 31, 2002. The increase in
cash, cash equivalents and marketable securities was mainly due
to operations and proceeds from stock option exercises, offset
by purchases of common stock for treasury. In 2003, we used
$17.7 million in cash for the repurchase of
1.7 million shares of our common stock. Equity investments
valued at $7.0 million, which are subject to market risk
due to their volatility, are included in marketable securities
at December 31, 2003.

Net cash provided by operating activities was
$23.7 million in 2003, an increase of $8.2 million
from $15.5 million in 2002. Net cash provided by operating
activities was primarily due to earnings of $11.8 million
adjusted for depreciation and amortization of $3.6 million,
tax benefits related to option exercises of $3.3 million
and an increase in customer payments from accounts receivable
and deferred revenue of $1.8 million and $3.1 million,
respectively. Our accounts receivable days sales outstanding at
December 31, 2003 was 43 days, compared to
61 days at December 31, 2002. This improvement by
18 days resulted primarily from efficiencies gained in our
billing process, as well as favorable collections.

Cash used in investing activities was
$15.3 million in 2003. Cash used in investing activities
consisted primarily of net purchases of marketable securities of
$12.4 million and cash paid for the acquisition of Amicorp
Groups fund services business of $1.8 million.

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Cash used in financing activities was
$12.1 million in 2003. Cash used in financing activities
was primarily due to our stock repurchase plan. In 2003, we
purchased 1.7 million shares of our common stock for
treasury for a total of $17.7 million. Additionally, we
paid our first-ever cash dividend, using $1.2 million. This
use of cash was partially offset by the proceeds from the
exercise of stock options and the issuance of common stock
pursuant to our employee stock purchase plan, which provided
cash of $6.6 million and $0.3 million, respectively.

As of December 31, 2003, we had
$15.3 million in cash and cash equivalents and
$37.1 million in marketable securities. We believe that our
current cash, cash equivalents and marketable securities
balances and anticipated cash flow from operations will be
sufficient to meet our working capital and capital expenditure
requirements for at least the next 12 months. During the
first quarter of 2004, we expect to use approximately
$1.3 million for the payment of the semi-annual cash
dividend of $0.07 per share.



| |                        
| | -----------------------
| | Contractual Obligations

The following table summarizes our contractual
obligations as of December 31, 2003 that require us to make
future cash payments (in thousands):

|                               |  |                        |       |           |  |           |       |           |  |         |       |  |  |   |       |  |  |   |   | 
|------------------------------ |  | ---------------------- | ----- | --------- |  | --------- | ----- | --------- |  | ------- | ----- |  |  | - | ----- |  |  | - | - | 
|                               |  |                       
|                               |  | Payments Due by Period
|                               |  |                       
|                               |  |                        |       | Less than |  |           |       | More than
|Contractual Obligations        |  | Total                  |       | 1 Year    |  | 1-3 Years |       | 3-5 Years |  | 5 Years
|                               |  |                        |       |           |  |           |       |           |  |        
|Operating lease obligations(1) |  | $                      | 8,993 |           |  | $         | 2,921 |           |  | $       | 4,450 |  |  | $ | 1,622 |  |  | $ |  | 
|Purchase obligations(2)        |  |                        | 730   |           |  |           | 403   |           |  |         | 284   |  |  |   | 43    |  |  |   |  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We are obligated under noncancelable operating
    leases for office space and office equipment. The lease for the
    corporate facility in Windsor, Connecticut expires in 2008 and
    we have the right to extend the lease for an additional term of
    five years. We sublease office space under noncancelable leases.
    We received rental income under these leases of $569,000,
    $512,000 and $500,000 for the years ended December 31,
    2001, 2002 and 2003, respectively.
|   
|(2) | Purchase obligations include the minimum amounts
    committed under contracts for goods and services.                                                                                                                                                                                                                                                                                                                                                                                        

In July 2003, our board of directors declared its
first semi-annual cash dividend of $0.067 per share of
common stock, which was paid in September 2003. On
February 5, 2004, our board of directors declared a $0.07
cash dividend per share of common stock, payable on or about
March 24, 2004 to stockholders of record as of
March 10, 2004. Although we expect to declare cash
dividends in the future, various factors, including our
financial condition, operating results, current and anticipated
cash needs and plans for expansion, will affect our
decision-making process.

In addition, from time to time, we are subject to
certain legal proceedings and claims that arise in the normal
course of our business. In the opinion of management, we are not
a party to any litigation that we believe could have a material
effect on us or our business.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect
on our financial condition, changes in financial condition,
revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.

Recent Accounting Pronouncements

Effective July 1, 2003, we adopted EITF
Issue No. 00-21, Revenue Arrangements with Multiple
Deliverables. This issue addresses accounting for
arrangements with multiple revenue-generating activities and
applies to our non-software transactions. The adoption of this
standard did not have a material impact on our financial
statements.

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In May 2003, the Emerging Issues Task Force
(EITF) reached a consensus on EITF Issue No. 03-5,
Applicability of AICPA Statement of Position 97-2 to
Non-Software Deliverables in an Arrangement Containing
More-Than-Incidental Software. This issue addresses
revenue recognition for arrangements that include non-software
deliverables, such as hardware, that are more than incidental to
the products or services as a whole. The consensus indicates
that, if the software is not essential to the functionality of
the non-software deliverable, the non-software deliverable is
excluded from the scope of SOP 97-2. We do not have any
arrangements that include non-software deliverables.

In November 2002, the FASB issued Interpretation
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees
of Indebtedness of Others (FIN 45). FIN 45 requires a
company, at the time it issues a guarantee, to recognize an
initial liability for the fair value of obligations assumed
under the guarantees and warranties. The initial recognition
requirements of FIN 45 were effective for guarantees issued
or modified after December 31, 2002, and adoption of the
disclosure requirements was effective for us during the quarter
ended March 31, 2003. The adoption of FIN 45 did not
have a significant impact on our consolidated financial position
or results of operations.

Certain Factors That May Affect Future
Operating Results

Risks Relating to Our Business

Our revenues and operating results have
fluctuated significantly, and may continue to fluctuate
significantly, from quarter to quarter

Historically, our revenues and operating results
have fluctuated significantly from quarter to quarter. Our
quarterly operating results may continue to fluctuate due to a
number of factors, including:



| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the timing, size and nature of our individual
    license and service transactions,                                                                    
|
| |  | the timing of the introduction and the market
    acceptance of new products, product enhancements or services by
    us or our competitors,           
|
| |  | the relative proportions of revenues derived from
    license fees, maintenance, professional services and outsourcing,                                
|
| |  | the tendency of some of our clients to wait until
    the end of a fiscal quarter or our fiscal year in the hope of
    obtaining more favorable terms,
|
| |  | changes in client budgets and decision-making
    processes that could affect both the timing and the size of any
    transaction,                     
|
| |  | the amount and timing of operating costs and
    other expenses,                                                                                       
|
| |  | cancellations of maintenance and/or outsourcing
    arrangements by our clients,                                                                       
|
| |  | changes in local, national and international
    regulatory requirements,                                                                              
|
| |  | changes in our personnel, and                                                                                                                          
|
| |  | fluctuations in economic and financial market
    conditions.                                                                                          

The timing, size and nature of individual license
and outsourcing transactions are important factors in our
quarterly operating results. Many of the products we provide
through licensing transactions are relatively complex, and
licensing transactions involve a significant commitment of
capital, with attendant delays frequently associated with large
capital expenditures and implementation procedures within an
organization. Moreover, licensing arrangements may require
coordination within an organizations various divisions and
operations. For these and other reasons, the sales cycles for
these transactions are often lengthy and unpredictable. Our
inability to close license transactions on a timely basis or at
all could adversely affect our quarterly revenues and operating
results.

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General economic and market conditions and a
weakening of the financial services industry may cause clients
and potential clients to reduce expenditures on our products and
services, which would result in lost revenues and reduced
income

Our clients include a range of organizations in
the financial services industry. The success of these clients is
intrinsically linked to the health of the financial markets. In
addition, we believe that fluctuations, disruptions, instability
or downturns in the financial markets, which may cause clients
and potential clients to exit the industry or delay, cancel or
reduce any planned expenditures for investment management
systems and software products, could disproportionately affect
demand for our products and services. In addition, if financial
services firms continue to consolidate, as they have over the
past decade, there could be a material adverse effect on our
business and financial results. For example, if a client merges
with a firm using its own solution or another vendors
solution, it could decide to consolidate its processing on a
non-SS&C system, which could have an adverse effect on our
financial results. Any resulting decline in demand for our
products and services could have a material adverse effect on
our business, financial condition and results of operations.

Our business and financial results may suffer
if we are unable to retain and attract clients

If we are unable to keep existing clients
satisfied, sell additional products and services to existing
clients or attract new clients, then our business and financial
results may suffer. A variety of factors could affect our
ability to successfully retain and attract clients, including:



| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | 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 may not achieve the anticipated benefits
from our acquisitions and may face difficulties in integrating
our acquisitions, which could adversely affect our business,
results of operations and cash flow

We have made and may in the future make
acquisitions of companies, products or technologies that we
believe could complement or expand our business, augment our
market coverage, enhance our technical capabilities or otherwise
offer growth opportunities. Failure to achieve the anticipated
benefits of an acquisition could harm our business, results of
operations and cash flows. Acquisitions could subject us to
contingent or unknown liabilities, and we may have to incur debt
or severance liabilities, write-off investments, infrastructure
costs, impaired goodwill or other assets, or issue equity
securities to pay for any future acquisitions. The issuance of
equity securities could dilute our existing stockholders
ownership.

Our success is also dependent on our ability to
complete the integration of the operations of recently acquired
businesses, including Amicorp Groups fund services
business, Investment Advisory Network and NeoVision
Hypersystems, and any businesses we acquire in the future in an
efficient and effective manner. Successful integration in the
rapidly changing financial services industry may be more
difficult to accomplish than in other industries. We may not
realize the benefits we anticipate from these acquisitions, such
as lower costs or increased revenues. We may also realize such
benefits more slowly than anticipated, due to our inability to:



| |   |                                                                
| | - | ---------------------------------------------------------------
| |  | combine operations, facilities and differing firm
    cultures,
|
| |  | retain the clients or employees of acquired
    entities,      

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| |   |                                                                                                                                                                                      
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.

Integration may not be smooth or successful. The
inability of management to successfully integrate the operations
of acquired companies could have a material adverse effect on
our business, financial condition and results of operations. The
acquisitions may also place a significant strain on our
management, administrative, operational and other resources. To
manage growth effectively, we must continue to improve our
management and operational controls, enhance our reporting
systems and procedures, integrate new personnel and manage
expanded operations. If we are unable to manage our growth and
the related expansion in our operations from recent and future
acquisitions, our business may be harmed through a decreased
ability to monitor and control effectively our operations, and a
decrease in the quality of work and innovation of our employees.

We may be unable to identify suitable
businesses to acquire, which would hinder our ability to grow
and compete and adversely affect our business and financial
results

We may not identify suitable businesses to
acquire or negotiate acceptable terms for acquisitions.
Historically, a significant portion of our growth has occurred
as a result of our ability to acquire similar or complementary
businesses on favorable terms. We have relied heavily on
acquisitions for adding new products, increasing revenues and
adding to our client base, and we expect to continue to do so in
the future. This growth strategy is subject to a number of risks
that could adversely affect our business and financial results,
including:



| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we may not be able to find suitable businesses to
    acquire at affordable valuations or on other acceptable terms,                                                                       
|
| |  | we may face competition for acquisitions from
    other potential acquirers or from the possibility of the
    acquisition target pursuing an initial public offering of its
    stock, and
|
| |  | we may find it more difficult or costly to
    complete acquisitions due to changes in accounting, tax,
    securities or other regulations.                                               

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

Our success and ability to compete depends in
part upon our ability to protect our proprietary technology. We
rely on a combination of trade secret, copyright and trademark
law, nondisclosure agreements and technical measures to protect
our proprietary technology. We have registered trademarks for
many of our products and will continue to evaluate the
registration of additional trademarks as appropriate. We
generally enter into confidentiality agreements with our
employees and clients. We seek to protect our software,
documentation and other written materials under trade secret and
copyright laws, which afford only limited protection. These
efforts may be insufficient to prevent third parties from
asserting intellectual property rights in our technology.
Furthermore, it may be possible for unauthorized third parties
to copy portions of our products or to reverse engineer or
otherwise obtain and use our proprietary information, and third
parties may assert ownership rights in our proprietary
technology.

We do not have any patents, and existing
copyright laws afford only limited protection. Others may
develop substantially equivalent or superseding proprietary
technology, or competitors may offer equivalent

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products in competition with our products,
thereby substantially reducing the value of our proprietary
rights. We cannot be sure that our proprietary technology does
not include open-source software, free-ware, share-ware or other
publicly available technology. There are many patents in the
investment management field. As a result, we are subject to the
risk that others will claim that the important technology we
have developed, acquired or incorporated into our products will
infringe the rights, including the patent rights, such persons
may hold. Third parties also could claim that our software
incorporates publicly available software and that, as a result,
we must publicly disclose our source code. Because we rely on
confidentiality for protection, such an event could result in a
material loss of intellectual property rights. We cannot be sure
that we will develop proprietary products or technologies that
are patentable, that any patent, if issued, would provide us
with any competitive advantages or would not be challenged by
third parties, or that the patents of others will not adversely
affect our ability to do business. Expensive and time-consuming
litigation may be necessary to protect our proprietary rights.


We have acquired and may acquire important
technology rights through our acquisitions and have often
incorporated and may incorporate features of this technology
across many products and services. As a result, we are subject
to the above risks and the additional risk that the seller of
the technology rights may not have appropriately protected the
intellectual property rights we acquired. Indemnification and
other rights under applicable acquisition documents are limited
in term and scope and therefore provide us with only limited
protection.

In addition, we currently rely on third-party
licenses in providing our products and services. If we lost such
licenses or such licenses were found to infringe upon the rights
of others, we would need to seek alternative means of obtaining
the licensed technology to continue to provide our products or
services. Our inability to replace such technology, or to
replace such technology in a timely manner, could have a
negative impact on our operations and financial results.



| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

In recent years, there has been significant
litigation in the United States involving patents and other
intellectual property rights. While we are not currently a party
to any litigation asserting that we have violated third-party
intellectual property rights, we may be a party to litigation in
the future to enforce our intellectual property rights or as a
result of an allegation that we infringe others
intellectual property, including patents, trademarks and
copyrights. Any parties asserting that our products or services
infringe upon their proprietary rights would force us to defend
ourselves and possibly our clients against the alleged
infringement. Third parties could claim that our software
incorporates publicly available software and that, as a result,
we must publicly disclose our source code. These claims and any
resulting lawsuit, if successful, could subject us to
significant liability for damages and invalidation of our
proprietary rights. These lawsuits, regardless of their success,
could be time-consuming and expensive to resolve, adversely
affect our sales, profitability and prospects and divert
management time and attention away from our operations. We may
be required to re-engineer our products or services or obtain a
license of third-party technologies on unfavorable terms.

We expect our gross and operating margins may
fluctuate over time, which could cause our financial results to
differ from investor expectations or negatively affect our
profitability

We expect that our gross and operating margins
may fluctuate from period to period as we continue to introduce
new products, experience fluctuations in the relative
proportions of revenues derived from our products and services,
continue to hire and acquire additional personnel and increase
other expenses to support our business. Historically, we derived
our revenues principally from the licensing of our products.
However, we are increasingly deriving our revenues from
outsourcing and related services, which have lower profit
margins. For the years ended December 31, 2001, 2002 and
2003, our outsourcing revenues represented 11%, 20% and 20%,
respectively, of our total revenues. The gross margins for
outsourcing services were 7%, 32% and 39% in 2001, 2002 and
2003, respectively. We expect that the portion of our revenues
derived from outsourcing and related services will continue to
increase, which, because of the lower margins associated with
such revenues, could adversely affect our profitability.

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| |                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our failure to continue to derive substantial
    revenues from CAMRA, AdvisorWare, SKYLINE and LMS software, and
    the provision of maintenance and professional services in
    support of such software, could adversely affect our business,
    financial condition and results of operations

To date, substantially all of our revenues have
been attributable to the licensing of our CAMRA, AdvisorWare,
SKYLINE and LMS software and the provision of maintenance and
professional services in support of such software. During the
year ended December 31, 2003, we derived an aggregate of
$32.6 million in revenues from CAMRA, AdvisorWare, SKYLINE
and LMS licenses and related maintenance and professional
services revenues. Our license revenues have been declining as a
percentage of our total revenues, and we expect this trend to
continue. Despite this shift in the sources of our revenues, we
expect that the revenues from these software products and
related services will continue to account for a significant
portion of our total revenues for the foreseeable future. As a
result, factors adversely affecting the pricing of or demand for
such products and services, such as competition or technological
change, could have a material adverse effect on our business,
financial condition and results of operations.

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

The market for financial services software and
services is competitive, rapidly evolving and highly sensitive
to new product and service introductions and marketing efforts
by industry participants. The market is also highly fragmented
and served by numerous firms that target only local markets or
specific client types. We also face competition from information
systems developed and serviced internally by the IT departments
of financial services firms.

Some of our current and potential competitors
have significantly greater financial, technical and marketing
resources, generate higher revenues and have greater name
recognition. Our current or potential competitors may develop
products comparable or superior to those developed by us, or
adapt more quickly than us to new technologies, evolving
industry trends or changing client or regulatory requirements.
It is also possible that alliances among competitors may emerge
and rapidly acquire significant market share. Increased
competition may result in price reductions, reduced gross
margins and loss of market share, any of which could materially
adversely affect our business, financial condition and results
of operations.



| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | Our inability to introduce new products and
    services could adversely affect our business and results of
    operations

Rapidly changing technology, evolving industry
standards and new product and service introductions characterize
the market for our products and services. Our future success
will depend in part upon our ability to enhance our existing
products and services and to develop and introduce new products
and services to meet changing client needs and evolving
regulatory requirements. The process of developing software
products such as those offered by us is extremely complex and is
expected to become increasingly complex and expensive in the
future due to the introduction of new platforms and
technologies. Our ability to keep up with technology and
business changes is subject to a number of risks, including:



| |   |                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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,                                                                   
|
| |  | we may find it difficult or costly to update our
    software and services to keep pace with business, 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.

33



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##### Table of Contents



Our failure to develop new products and services
in a timely fashion or to address promptly the needs of the
financial markets could adversely affect our business, financial
condition and results of operations.



| |                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Undetected software design defects, errors or
    failures may result in loss of or delay in market acceptance of
    our products that could adversely affect our revenues, financial
    condition and results of operations

Our software products are highly complex and
sophisticated and could contain design defects or software
errors that are difficult to detect and correct. Errors or bugs
may result in loss of or delay in market acceptance of our
software products or loss of client data or require design
modifications. We cannot assure you that, despite testing by us
and our clients, errors will not be found in new products, which
errors could result in a delay in or an inability to achieve
market acceptance and thus could have a material adverse effect
upon our revenues, financial condition and results of operations.



| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

We believe that our success is due in part to our
experienced management team. We depend in large part upon the
continued contribution of our senior management and, in
particular, William C. Stone, our president, chief executive
officer and chairman of the board. Losing the services of one or
more members of our senior management could adversely affect our
business and results of operations. Mr. Stone has been
instrumental in developing our business strategy and forging our
business relationships since he founded the company in 1986. We
maintain no key man life insurance policies for Mr. Stone
or any other senior officers or managers.

Our success is also dependent upon our ability to
attract, train and retain highly skilled technical and sales
personnel. Competition for the hiring of such personnel in the
software industry can be intense. Locating candidates with the
appropriate qualifications, particularly in the desired
geographic location and with the necessary subject matter
expertise, is difficult. Our failure to attract and retain a
sufficient number of highly skilled employees could adversely
affect our business, financial condition and results of
operations.



| |                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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

For the years ended December 31, 2001, 2002
and 2003, international revenues accounted for 19%, 16% and 17%,
respectively, of our total revenues. We sell certain of our
products, such as Altair and Mabel, primarily overseas. Our
international business may be subject to a variety of risks,
including:



| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | 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, and                                  
|
| |  | difficulties in enforcement of third-party
    contractual obligations and intellectual property rights.

Such factors could have a material adverse effect
on our business, financial condition or results of operations.



| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Catastrophic events may disrupt our business
    and hurt our results of operations

A war, terrorist attack, natural disaster or
other catastrophe may adversely affect our business. A
catastrophic event could have a direct negative impact on us or
an indirect impact on us by, for example,

34



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##### Table of Contents



affecting our clients, the financial markets or
the overall economy. The potential for a direct impact is due
primarily to our significant investment in infrastructure.
Although we maintain redundant facilities and have contingency
plans in place to protect against both man-made and natural
threats, it is impossible to fully anticipate and protect
against all potential catastrophes. A computer virus, security
breach, criminal act, military action, power or communication
failure, flood, severe storm or the like could lead to service
interruptions and data losses for clients, disruptions to our
operations, or damage to important facilities. In addition, such
an event may cause clients to cancel their agreements with us
for our products or services. Any of these could have a material
adverse effect on our business, financial condition or results
of operations.


Recently enacted and proposed regulatory
changes may cause us to incur increased costs and failure or
circumvention of our controls and procedures could seriously
harm our business, financial condition, results of operations
and cash flows

Recently enacted and proposed changes in the laws
and regulations affecting public companies, including the
provisions of the Sarbanes-Oxley Act of 2002 and rules proposed
by the Securities and Exchange Commission and NASDAQ, could
cause us to incur increased costs as we evaluate the
implications of new rules and respond to new requirements. The
Sarbanes-Oxley Act requires, among other things, that we
maintain effective disclosure controls and procedures and
internal control for financial reporting. We currently do not
have an internal audit group and we will require significant
resources and management oversight to maintain and improve the
effectiveness of our disclosure controls and procedures and
internal control over financial reporting. As a result,
managements attention may be diverted from other business
concerns, which could have a material adverse effect on our
business, financial condition, results of operations and cash
flows. In addition, we may need to hire additional accounting
and financial staff with appropriate public company experience
and technical accounting knowledge, and we cannot assure you
that we will be able to do so in a timely fashion.

As we evaluate our internal controls and
procedures in order to determine whether they are effective, we
may determine that significant changes to such controls and
procedures are necessary. In addition, our controls and
procedures may not be able to prevent other than inconsequential
error or fraud in the future. Any system of controls, however
well designed and operated, is based in part on certain
assumptions and can provide only reasonable, and not absolute,
assurances that the objectives of the system are met. Faulty
judgments, simple errors or mistakes, or the failure of our
personnel to adhere to established controls and procedures may
make it impossible for us to ensure that the objectives of the
control system are met. A failure of our controls and procedures
to detect other than inconsequential error or fraud could
seriously harm our business, results of operations and financial
condition.

Risks Relating to Our Common Stock

Our stock price is volatile and may continue
to be volatile in the future, which could result in substantial
losses for our investors

The trading price of our common stock has been,
and is expected to continue to be, highly volatile. The
following factors may significantly and adversely affect the
trading price of our common stock:



| |   |                                                                             
| | - | ----------------------------------------------------------------------------
| |  | actual or anticipated fluctuations in our
    operating results,            
|
| |  | announcements of technological innovations,                                 
|
| |  | new products or new contracts by us or our
    competitors,                 
|
| |  | developments with respect to copyrights or
    propriety rights,            
|
| |  | conditions and trends in the financial services
    and software industries,

35



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##### Table of Contents





| |   |                                                               
| | - | --------------------------------------------------------------
| |  | changes in financial estimates by securities
    analysts, and
|
| |  | general market conditions and other factors.                  

Provisions of our charter and bylaws may delay
or prevent transactions that are in your best
interests

Our charter and bylaws contain provisions,
including a staggered board of directors, that may make it more
difficult for a third party to acquire us, or may discourage
bids to do so. These provisions could limit the price that
investors might be willing to pay for shares of our common stock
and could make it more difficult for a third party to acquire,
or could discourage a third party from acquiring, a majority of
our outstanding common stock. Our board of directors also has
the authority to issue up to 1,000,000 shares of preferred
stock and to determine the price, rights, preferences,
privileges and restrictions, including voting rights, of those
shares without any further vote or action by the stockholders.
The rights of the holders of common stock will be subject to,
and may be adversely affected by, the rights of the holders of
any preferred stock that may be issued in the future. The
issuance of preferred stock could make it more difficult for a
third party to acquire, or may discourage a third party from
acquiring, a majority of our outstanding common stock.






|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures
    About Market Risk

We have no derivative financial instruments. We
generally place our marketable security investments in high
credit quality instruments, primarily U.S. Government and
Federal Agency obligations, tax-exempt municipal obligations and
corporate obligations. We do not expect any material loss from
our marketable security investments and therefore believe that
our potential interest rate exposure is not material.

The following table provides information about
our financial instruments that are sensitive to changes in
interest rates (dollars in thousands):

|                       |  |                                 |       |      |  |                   |        |   |  |   |      |  
|---------------------- |  | ------------------------------- | ----- | ---- |  | ----------------- | ------ | - |  | - | ---- | -
|                       |  |                                
|                       |  | Fair Value of Investments as of
|                       |  | December 31, 2003 maturing in: 
|                       |  |                                
|Investments            |  | 2004                            |       | 2005 |  | 2006 through 2007
|                       |  |                                 |       |      |  |                  
|Fixed Rate Investments |  | $                               | 1,325 |      |  | $                 | 10,103 |   |  | $ | 511  |  
|Average Interest       |  |                                 | 2.38  | %    |  |                   | 2.00   | % |  |   | 4.75 | %

We invoice clients primarily in U.S. dollars
and in local currency in those countries in which we have branch
and subsidiary operations. We are exposed to foreign exchange
rate fluctuations from the time clients are invoiced in local
currency until collection occurs. Through December 31,
2003, foreign currency fluctuations have not had a material
effect on our financial position or results of operations, and
therefore we believe that our potential foreign currency
exchange rate exposure is not material.

The foregoing risk management discussion and the
effect thereof are forward-looking statements. Actual results in
the future may differ materially from these projected results
due to actual developments in global financial markets. The
analytical methods used by us to assess and minimize risk
discussed above should not be considered projections of future
events or losses.






|        |                                                
|------- | -----------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data

Information required by this item is contained in
our consolidated financial statements, related footnotes and the
reports of PricewaterhouseCoopers LLP appearing in this annual
report, which information is incorporated herein by reference.

36



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##### Table of Contents






PART III

Certain information required by Part III is
omitted from this annual report as we intend to file our
definitive proxy statement for our annual meeting of
stockholders to be held on May 20, 2004, pursuant to
Regulation 14A of the Securities Exchange Act of 1934, not
later than 120 days after the end of the fiscal year
covered by this annual report, and certain information included
in the proxy statement is incorporated herein by reference.






|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

Information required by this Item 10 is set
forth in the proxy statement under the headings Directors
and Nominees for Director, Board Committees
and Section 16(a) Beneficial Ownership Reporting
Compliance, which information is incorporated herein by
reference. The name, age, and position of each of our executive
officers is set forth under the heading Executive Officers
of the Registrant in Part I of this annual report,
which information is incorporated herein by reference.

Our board of directors has adopted a new code of
business conduct and ethics that applies to all of our executive
officers, directors and employees. The code was approved by the
audit committee of our board of directors and by the full board
of directors. We have posted a current copy of our code under
Corporate Governance in the Investor
Information section of our website at www.ssctech.com. To
the extent permitted by applicable rules of the NASDAQ Stock
Market, we intend to satisfy the disclosure requirements under
Item 10 of Form 8-K regarding an amendment to, or
waiver from, a provision of the code of business conduct and
ethics with respect to our principal executive officer,
principal financial officer, principal accounting officer or
controller, or persons performing similar functions, by posting
such information on our website.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Information required by this Item 11 is set
forth in the proxy statement under the headings
Compensation of Executive Officers,
Compensation Committee Interlocks and Insider
Participation, Proposal 2  Amendment to
the 1996 Director Stock Option Plan and Compensation
of Directors, which information is incorporated herein by
reference.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant Fees and
    Services

Information required by this Item 14 is set
forth in the proxy statement under the heading Independent
Auditors Fees, which information is incorporated
herein by reference.

37



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##### Table of Contents






PART IV






|         |                                                                     
|-------- | --------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules,
    and Reports on Form 8-K

(a)

1.     Financial
Statements

The following financial statements are filed as a
part of this annual report:

|                                   |                                                                                                        |      |     |     | 
|---------------------------------- | ------------------------------------------------------------------------------------------------------ | ---- | --- | --- | 
|Document                           |                                                                                                        | Page
|                                   |                                                                                                        |     
|Report of Independent Auditors     |                                                                                                        |      | F-1 |    
|Consolidated Financial Statements: |                                                                                                        |      |     |    
|                                   | Balance Sheets as of December 31, 2002 and
    2003                                                    |      |     | F-2 | 
|                                   | Statements of Operations for the years ended
    December 31, 2001, 2002 and 2003                      |      |     | F-3 | 
|                                   | Statements of Cash Flows for the years ended
    December 31, 2001, 2002 and 2003                      |      |     | F-4 | 
|                                   | Statements of Changes in Stockholders
    Equity for the years ended December 31, 2001, 2002 and 2003 |      |     | F-5 | 
|                                   | Notes to Consolidated Financial Statements                                                             |      |     | F-6 | 

2.     Financial
Statement Schedules

Financial statement schedules are not submitted
because they are not applicable, not required or the information
is included in our consolidated financial statements.

3.     Exhibits

The exhibits listed in the Exhibit Index
immediately preceding the exhibits are filed as part of this
annual report.

(b) Reports on Form 8-K

On October 16, 2003, we furnished a current
report on Form 8-K under Item 12 (Results of
Operations and Financial Condition) containing a copy of our
earnings release for the quarter ended September 30, 2003.

38



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on April 21, 2004.



| |                        
| | -----------------------
| | SS&C TECHNOLOGIES, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ WILLIAM C. STONE

| |                                           
| | ------------------------------------------
| |                                           
| | William C. Stone                          
| | President, Chief Executive Officer        
| | and Chairman of the Board of
    Directors

39



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders of

SS&C Technologies, Inc. and Subsidiaries:


In our opinion, the consolidated financial
statements listed in the index appearing under
Item 15(a)(1) present fairly, in all material respects, the
financial position of SS&C Technologies, Inc. and its
subsidiaries at December 31, 2002 and 2003, and the results
of their operations and their cash flows for each of the three
years in the period ended December 31, 2003 in conformity
with accounting principles generally accepted in the United
States of America. These financial statements are the
responsibility of the Companys management; our
responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally
accepted in the United States of America, which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

The Company adopted Statement of Accounting
Standards No. 142, Goodwill and Other Intangible
Assets, effective January 1, 2002.



| |                               
| | ------------------------------
| | /s/ PRICEWATERHOUSECOOPERS LLP

Hartford, Connecticut

January 29, 2004, except as to Note 14,


for which the date is March 5, 2004


F-1



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##### Table of Contents






SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |         |  
|--------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | ------ | ------- | - | - | ------- | ------- | -
|                                                                                                    |                                                                                                                                                                                                                                                                |                      
|                                                                                                    |                                                                                                                                                                                                                                                                | December 31,         
|                                                                                                    |                                                                                                                                                                                                                                                                |                      
|                                                                                                    |                                                                                                                                                                                                                                                                | 2002                  |        | 2003   
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                      
|                                                                                                    |                                                                                                                                                                                                                                                                | (In thousands, except
|                                                                                                    |                                                                                                                                                                                                                                                                | per share data)      
|ASSETS                                                                                             
|Current assets:                                                                                     |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    | Cash and cash equivalents                                                                                                                                                                                                                                      |                       | $      | 18,336  |   |   | $       | 15,261  |  
|                                                                                                    | Investments in marketable securities (Note 3)                                                                                                                                                                                                                  |                       |        | 23,383  |   |   |         | 37,120  |  
|                                                                                                    | Accounts receivable, net of allowance for
    doubtful accounts of $1,353 and $1,449, respectively
    (Note 4)                                                                                                                                                |                       |        | 10,983  |   |   |         | 8,571   |  
|                                                                                                    | Prepaid expenses and other current assets                                                                                                                                                                                                                      |                       |        | 1,065   |   |   |         | 1,434   |  
|                                                                                                    | Deferred income taxes (Note 6)                                                                                                                                                                                                                                 |                       |        | 1,142   |   |   |         | 620     |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Total current assets                                                                                |                                                                                                                                                                                                                                                                |                       | 54,909 |         |   |   | 63,006  |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Property and equipment:                                                                             |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    | Leasehold improvements                                                                                                                                                                                                                                         |                       |        | 3,301   |   |   |         | 3,593   |  
|                                                                                                    | Equipment, furniture, and fixtures                                                                                                                                                                                                                             |                       |        | 16,144  |   |   |         | 15,805  |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       | 19,445 |         |   |   | 19,398  |        
|                                                                                                    | Less accumulated depreciation                                                                                                                                                                                                                                  |                       |        | (13,700 | ) |   |         | (14,634 | )
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    | Net property and equipment                                                                                                                                                                                                                                     |                       |        | 5,745   |   |   |         | 4,764   |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Deferred income taxes (Note 6)                                                                      |                                                                                                                                                                                                                                                                |                       | 6,762  |         |   |   | 6,417   |        
|Goodwill                                                                                            |                                                                                                                                                                                                                                                                |                       | 2,355  |         |   |   | 3,841   |        
|Intangible and other assets, net of accumulated
    amortization of $1,723 and $3,434, respectively |                                                                                                                                                                                                                                                                |                       | 5,709  |         |   |   | 4,557   |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Total assets                                                                                        |                                                                                                                                                                                                                                                                | $                     | 75,480 |         |   | $ | 82,585  |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                   
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                           
|                                                                                                   
|Current liabilities:                                                                                |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    | Accounts payable                                                                                                                                                                                                                                               |                       | $      | 844     |   |   | $       | 916     |  
|                                                                                                    | Income taxes payable                                                                                                                                                                                                                                           |                       |        | 646     |   |   |         | 91      |  
|                                                                                                    | Accrued employee compensation and benefits                                                                                                                                                                                                                     |                       |        | 3,462   |   |   |         | 3,484   |  
|                                                                                                    | Other accrued expenses                                                                                                                                                                                                                                         |                       |        | 2,044   |   |   |         | 2,039   |  
|                                                                                                    | Deferred maintenance and other revenue                                                                                                                                                                                                                         |                       |        | 11,214  |   |   |         | 14,467  |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Total current liabilities                                                                           |                                                                                                                                                                                                                                                                |                       | 18,210 |         |   |   | 20,997  |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Commitments and contingencies (Notes 6, 7
    and 12)                                               |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Stockholders equity (Notes 5 and 14):                                                              |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    | Common stock, $0.01 par value,
    50,000 shares authorized; 25,491 and 26,806 shares
    issued and 18,996 and 18,615 shares outstanding,
    respectively (including 6,205 shares issued on
    March 5, 2004 as a stock dividend to effect the stock split) |                       |        | 255     |   |   |         | 268     |  
|                                                                                                    | Additional paid in capital                                                                                                                                                                                                                                     |                       |        | 95,239  |   |   |         | 105,359 |  
|                                                                                                    | Accumulated other comprehensive (loss) income                                                                                                                                                                                                                  |                       |        | (735    | ) |   |         | 588     |  
|                                                                                                    | Accumulated (deficit) earnings                                                                                                                                                                                                                                 |                       |        | (1,767  | ) |   |         | 8,793   |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       | 92,992 |         |   |   | 115,008 |        
|                                                                                                    | Less: cost of common stock in treasury; 6,495 and
    8,191 shares, respectively (Note 5)                                                                                                                                                                      |                       |        | 35,722  |   |   |         | 53,420  |  
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Total stockholders equity                                                                          |                                                                                                                                                                                                                                                                |                       | 57,270 |         |   |   | 61,588  |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        
|Total liabilities and stockholders equity                                                          |                                                                                                                                                                                                                                                                | $                     | 75,480 |         |   | $ | 82,585  |        
|                                                                                                    |                                                                                                                                                                                                                                                                |                       |        |         |   |   |         |        

The accompanying notes are an integral part of
these financial statements.

F-2



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |        |        | 
|-------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | ------------------------ | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                                                       |                                                                          |                         
|                                                                                       |                                                                          | Year Ended December 31, 
|                                                                                       |                                                                          |                         
|                                                                                       |                                                                          | 2001                     |        | 2002   |        | 2003
|                                                                                       |                                                                          |                          |        |        |        |     
|                                                                                       |                                                                          |                         
|                                                                                       |                                                                          | (In thousands, except   
|                                                                                       |                                                                          | per share data)         
|Revenues:                                                                              |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       | Software licenses                                                        |                          | $      | 15,291 |        |      | $      | 15,631 |        |   | $      | 14,233 |       
|                                                                                       | Maintenance                                                              |                          |        | 26,737 |        |      |        | 27,850 |        |   |        | 31,318 |       
|                                                                                       | Professional services                                                    |                          |        | 8,002  |        |      |        | 6,326  |        |   |        | 6,757  |       
|                                                                                       | Outsourcing                                                              |                          |        | 6,339  |        |      |        | 12,627 |        |   |        | 13,223 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       |                                                                          | Total revenues           |        |        | 56,369 |      |        |        | 62,434 |   |        |        | 65,531 | 
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Cost of revenues:                                                                      |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       | Software licenses                                                        |                          |        | 717    |        |      |        | 1,316  |        |   |        | 1,866  |       
|                                                                                       | Maintenance                                                              |                          |        | 6,812  |        |      |        | 5,640  |        |   |        | 6,170  |       
|                                                                                       | Professional services                                                    |                          |        | 6,857  |        |      |        | 5,412  |        |   |        | 4,387  |       
|                                                                                       | Outsourcing                                                              |                          |        | 5,865  |        |      |        | 8,621  |        |   |        | 8,003  |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       |                                                                          | Total cost of revenues   |        |        | 20,251 |      |        |        | 20,989 |   |        |        | 20,426 | 
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Gross profit                                                                           |                                                                          |                          | 36,118 |        |        |      | 41,445 |        |        |   | 45,105 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Operating expenses:                                                                    |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       | Selling and marketing                                                    |                          |        | 11,355 |        |      |        | 9,078  |        |   |        | 8,393  |       
|                                                                                       | Research and development                                                 |                          |        | 11,291 |        |      |        | 11,760 |        |   |        | 11,180 |       
|                                                                                       | General and administrative                                               |                          |        | 10,037 |        |      |        | 7,721  |        |   |        | 7,154  |       
|                                                                                       | Restructuring (Note 13)                                                  |                          |        | 840    |        |      |        |       |        |   |        |       |       
|                                                                                       | Write-off of purchased in-process research and
    development (Note 11) |                          |        |       |        |      |        | 1,744  |        |   |        |       |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|                                                                                       |                                                                          | Total operating expenses |        |        | 33,523 |      |        |        | 30,303 |   |        |        | 26,727 | 
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Operating income                                                                       |                                                                          |                          | 2,595  |        |        |      | 11,142 |        |        |   | 18,378 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Interest income                                                                        |                                                                          |                          | 2,690  |        |        |      | 1,431  |        |        |   | 912    |       
|Other income (expense), net                                                            |                                                                          |                          | 1,202  |        |        |      | (273   | )      |        |   | 47     |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Income before income taxes                                                             |                                                                          |                          | 6,487  |        |        |      | 12,300 |        |        |   | 19,337 |       
|Provision for income taxes (Note 6)                                                    |                                                                          |                          | 2,465  |        |        |      | 4,995  |        |        |   | 7,541  |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Net income                                                                             |                                                                          | $                        | 4,022  |        |        | $    | 7,305  |        |        | $ | 11,796 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Basic earnings per share                                                               |                                                                          | $                        | 0.18   |        |        | $    | 0.38   |        |        | $ | 0.63   |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Basic weighted average number of common shares
    outstanding                         |                                                                          |                          | 22,506 |        |        |      | 19,473 |        |        |   | 18,617 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Diluted earnings per share                                                             |                                                                          | $                        | 0.18   |        |        | $    | 0.36   |        |        | $ | 0.59   |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       
|Diluted weighted average number of common and
    common equivalent shares outstanding |                                                                          |                          | 22,752 |        |        |      | 20,531 |        |        |   | 19,832 |       
|                                                                                       |                                                                          |                          |        |        |        |      |        |        |        |   |        |       

The accompanying notes are an integral part of
these financial statements.

F-3



---



##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |         |       |        | 
|-------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | --------------------------------------- | ----------------- | ------- | ------ | ----- | ------- | ------- | ------ | ----- | ------ | ------- | ----- | ------ | 
|                                                                                                               |                                                                                       |                                        
|                                                                                                               |                                                                                       | Year Ended December 31,                
|                                                                                                               |                                                                                       |                                        
|                                                                                                               |                                                                                       | 2001                                    |                   | 2002    |        | 2003 
|                                                                                                               |                                                                                       |                                         |                   |         |        |      
|                                                                                                               |                                                                                       |                                        
|                                                                                                               |                                                                                       | (In thousands)                         
|Cash flow from operating activities:                                                                           |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Net income                                                                            |                                         | $                 | 4,022   |        |       | $       | 7,305   |        |       | $      | 11,796  |      
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Adjustments to reconcile net income to net cash
    provided by operating activities:                          |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Depreciation and amortization                                                         |                                         |                   | 3,699   |        |       |         | 3,939   |        |       |        | 3,563   |      
|                                                                                                               | Net realized losses (gains) on equity
    investments                                 |                                         |                   | (1,233  | )      |       |         | 208     |        |       |        | (259    | )    
|                                                                                                               | Loss on sale or disposition of property and
    equipment                             |                                         |                   | 7       |        |       |         | 2       |        |       |        | 25      |      
|                                                                                                               | Deferred income taxes                                                                 |                                         |                   | 1,444   |        |       |         | 1,222   |        |       |        | 620     |      
|                                                                                                               | Income tax benefit related to exercise of stock
    options                           |                                         |                   | 52      |        |       |         | 1,073   |        |       |        | 3,280   |      
|                                                                                                               | Purchased in-process research and development                                         |                                         |                   |        |        |       |         | 1,744   |        |       |        |        |      
|                                                                                                               | Provision for doubtful accounts                                                       |                                         |                   | 561     |        |       |         | 452     |        |       |        | 689     |      
|                                                                                                               | Changes in operating assets and liabilities,
    excluding effects from acquisitions: |                                         |                   |         |        |       |         |         |        |       |        |         |      
|                                                                                                               |                                                                                       | Accounts receivable                     |                   |         | 1,286  |       |         |         | (1,238 | )     |        |         | 1,784 |       
|                                                                                                               |                                                                                       | Prepaid expenses and other assets       |                   |         | 440    |       |         |         | 286    |       |        |         | (346  | )     
|                                                                                                               |                                                                                       | Taxes receivable                        |                   |         | 143    |       |         |         |       |       |        |         |      |       
|                                                                                                               |                                                                                       | Accounts payable                        |                   |         | (324   | )     |         |         | (202   | )     |        |         | 65    |       
|                                                                                                               |                                                                                       | Accrued expenses                        |                   |         | 83     |       |         |         | 488    |       |        |         | (13   | )     
|                                                                                                               |                                                                                       | Taxes payable                           |                   |         | 696    |       |         |         | (52    | )     |        |         | (581  | )     
|                                                                                                               |                                                                                       | Deferred maintenance and other revenues |                   |         | (3,096 | )     |         |         | 268    |       |        |         | 3,088 |       
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               |                                                                                       |                                         | Total adjustments |         |        | 3,758 |         |         |        | 8,190 |        |         |       | 11,915 | 
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Net cash provided by operating activities                                             |                                         |                   | 7,780   |        |       |         | 15,495  |        |       |        | 23,711  |      
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Cash flow from investing activities:                                                                           |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Additions to property and equipment                                                   |                                         |                   | (1,818  | )      |       |         | (554    | )      |       |        | (1,100  | )    
|                                                                                                               | Proceeds from sale of property and equipment                                          |                                         |                   | 61      |        |       |         | 7       |        |       |        |        |      
|                                                                                                               | Cash paid for business acquisitions, net of cash
    acquired (Note 11)               |                                         |                   | (1,584  | )      |       |         | (8,332  | )      |       |        | (1,817  | )    
|                                                                                                               | Additions to capitalized software and other
    intangibles                           |                                         |                   | (221    | )      |       |         |        |        |       |        |        |      
|                                                                                                               | Purchases of marketable securities                                                    |                                         |                   | (33,105 | )      |       |         | (17,965 | )      |       |        | (28,579 | )    
|                                                                                                               | Sales of marketable securities                                                        |                                         |                   | 38,271  |        |       |         | 24,106  |        |       |        | 16,175  |      
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Net cash provided by (used in) investing
    activities                               |                                         |                   | 1,604   |        |       |         | (2,738  | )      |       |        | (15,321 | )    
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Cash flow from financing activities:                                                                           |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Repayment of debt and acquired debt                                                   |                                         |                   |        |        |       |         | (146    | )      |       |        |        |      
|                                                                                                               | Issuance of common stock                                                              |                                         |                   | 316     |        |       |         | 252     |        |       |        | 290     |      
|                                                                                                               | Exercise of options                                                                   |                                         |                   | 494     |        |       |         | 4,323   |        |       |        | 6,563   |      
|                                                                                                               | Purchase of common stock for treasury                                                 |                                         |                   | (2,303  | )      |       |         | (27,719 | )      |       |        | (17,698 | )    
|                                                                                                               | Common stock dividends                                                                |                                         |                   |        |        |       |         |        |        |       |        | (1,236  | )    
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Net cash used in financing activities                                                 |                                         |                   | (1,493  | )      |       |         | (23,290 | )      |       |        | (12,081 | )    
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Effect of exchange rate changes on cash                                                                        |                                                                                       |                                         | (156              | )       |        |       | 444     |         |        |       | 616    |        
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Net increase (decrease) in cash and cash
    equivalents                                                       |                                                                                       |                                         | 7,735             |         |        |       | (10,089 | )       |        |       | (3,075 | )      
|Cash and cash equivalents, beginning of year                                                                   |                                                                                       |                                         | 20,690            |         |        |       | 28,425  |         |        |       | 18,336 |        
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Cash and cash equivalents, end of year                                                                         |                                                                                       | $                                       | 28,425            |         |        | $     | 18,336  |         |        | $     | 15,261 |        
|                                                                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|Supplemental disclosure of cash flow information                                                               |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        
|                                                                                                               | Cash paid for                                                                         |                                         |                   |         |        |       |         |         |        |       |        |         |      
|                                                                                                               |                                                                                       | Interest expense                        |                   | $       | 13     |       |         | $       | 2      |       |        | $       | 1     |       
|                                                                                                               |                                                                                       | Income taxes                            |                   | $       | 128    |       |         | $       | 2,560  |       |        | $       | 4,245 |       
|Supplemental disclosure of non-cash investing
    activities
    See Note 11 for a discussion of acquisitions. |                                                                                       |                                         |                   |         |        |       |         |         |        |       |        |        

The accompanying notes are an integral part of
these financial statements.

F-4



---



##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY

For the Years Ended December 31, 2001,
2002 and 2003


|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |               |         |        |   |   |       |        |   |   |         |         |   |   |        |         |  
|----------------------------- | ----------------------------------------------------------- | -------------- | ------ | ------ |  | ---------- | --- | ----------- |  | ------------- | ------- | -------- |  | ------------- | ------- | ------ | - | - | ----- | ------ | - | - | ------- | ------- | - | - | ------ | ------- | -
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |         
|                              |                                                             | Common Stock   |        |        |  |            |     | Accumulated |  |               |         |         
|                              |                                                             |                |        |        |  |            |     | Other       |  |               |         |         
|                              |                                                             | Number         |        |        |  | Additional |     | Accumulated |  | Comprehensive |         |          |  | Total        
|                              |                                                             | of Issued      |        |        |  | Paid-in    |     | Earnings    |  | Income        |         | Treasury |  | Stockholders
|                              |                                                             | Shares         |        | Amount |  | Capital    |     | (Deficit)   |  | (Loss)        |         | Stock    |  | Equity       
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |              
|                              |                                                             |               
|                              |                                                             | (In thousands)
|Balance, at December 31, 2000 |                                                             |                | 24,293 |        |  | $          | 243 |             |  | $             | 88,771  |          |  | $             | (13,094 | )      |   | $ | 2,434 |        |   | $ | (5,700  | )       |   | $ | 72,654 |        
|                              | Exercise of options                                         |                |        | 142    |  |            |     | 1           |  |               |         | 494      |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 495     |  
|                              | Issuance of common stock                                    |                |        | 99     |  |            |     | 1           |  |               |         | 275      |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 276     |  
|                              | Purchase of common stock                                    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       |       |   |   |         | (2,303  | ) |   |        | (2,303  | )
|                              | Income tax benefit related to exercise of stock
    options |                |        |       |  |            |     |            |  |               |         | 52       |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 52      |  
|                              | Net income                                                  |                |        |       |  |            |     |            |  |               |         |         |  |               |         | 4,022  |   |   |       |       |   |   |         |        |   |   |        | 4,022   |  
|                              | Foreign exchange translation adjustment                     |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | (170   | ) |   |         |        |   |   |        | (170    | )
|                              | Change in unrealized loss on investments                    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | (2,078 | ) |   |         |        |   |   |        | (2,078  | )
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |               |         |        |   |   |       |        |   |   |         |         |   |   |        |        
|Balance, at December 31, 2001 |                                                             |                | 24,534 |        |  |            | 245 |             |  |               | 89,592  |          |  |               | (9,072  | )      |   |   | 186   |        |   |   | (8,003  | )       |   |   | 72,948 |        
|                              | Exercise of options                                         |                |        | 890    |  |            |     | 9           |  |               |         | 4,314    |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 4,323   |  
|                              | Issuance of common stock                                    |                |        | 67     |  |            |     | 1           |  |               |         | 251      |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 252     |  
|                              | Issuance of warrants                                        |                |        |       |  |            |     |            |  |               |         | 9        |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 9       |  
|                              | Purchase of common stock                                    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       |       |   |   |         | (27,719 | ) |   |        | (27,719 | )
|                              | Income tax benefit related to exercise of stock
    options |                |        |       |  |            |     |            |  |               |         | 1,073    |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 1,073   |  
|                              | Net income                                                  |                |        |       |  |            |     |            |  |               |         |         |  |               |         | 7,305  |   |   |       |       |   |   |         |        |   |   |        | 7,305   |  
|                              | Foreign exchange translation adjustment                     |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | 424    |   |   |         |        |   |   |        | 424     |  
|                              | Change in unrealized loss on investments                    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | (1,345 | ) |   |         |        |   |   |        | (1,345  | )
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |               |         |        |   |   |       |        |   |   |         |         |   |   |        |        
|Balance, at December 31, 2002 |                                                             |                | 25,491 |        |  |            | 255 |             |  | $             | 95,239  |          |  | $             | (1,767  | )      |   | $ | (735  | )      |   | $ | (35,722 | )       |   | $ | 57,270 |        
|                              | Exercise of options                                         |                |        | 1,262  |  |            |     | 13          |  |               |         | 6,550    |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 6,563   |  
|                              | Issuance of common stock                                    |                |        | 53     |  |            |     |            |  |               |         | 290      |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 290     |  
|                              | Purchase of common stock                                    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       |       |   |   |         | (17,698 | ) |   |        | (17,698 | )
|                              | Cash dividends declared 
    $0.067 per share (see Note 5) |                |        |       |  |            |     |            |  |               |         |         |  |               |         | (1,236 | ) |   |       |       |   |   |         |        |   |   |        | (1,236  | )
|                              | Income tax benefit related to exercise of stock
    options |                |        |       |  |            |     |            |  |               |         | 3,280    |  |               |         |       |   |   |       |       |   |   |         |        |   |   |        | 3,280   |  
|                              | Net income                                                  |                |        |       |  |            |     |            |  |               |         |         |  |               |         | 11,796 |   |   |       |       |   |   |         |        |   |   |        | 11,796  |  
|                              | Foreign exchange translation adjustment                     |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | 496    |   |   |         |        |   |   |        | 496     |  
|                              | Change in unrealized gain on investments, net of
    tax    |                |        |       |  |            |     |            |  |               |         |         |  |               |         |       |   |   |       | 827    |   |   |         |        |   |   |        | 827     |  
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |               |         |        |   |   |       |        |   |   |         |         |   |   |        |        
|Balance, at December 31, 2003 |                                                             |                | 26,806 |        |  | $          | 268 |             |  | $             | 105,359 |          |  | $             | 8,793   |        |   | $ | 588   |        |   | $ | (53,420 | )       |   | $ | 61,588 |        
|                              |                                                             |                |        |        |  |            |     |             |  |               |         |          |  |               |         |        |   |   |       |        |   |   |         |         |   |   |        |        

The accompanying notes are an integral part of
these financial statements.

F-5



---



##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS



|   |             
|-- | ------------
|1. | Organization

SS&C Technologies, Inc.
(SS&C or the Company) was organized
as a Connecticut corporation in March 1986 and reincorporated as
a Delaware corporation in April 1996. The Company provides
software, business process outsourcing (BPO) services and
application service provider (ASP) solutions to the
financial services industry, primarily in the United States of
America. The Company also has operations in the U.K., the
Netherlands, Malaysia, the Netherlands Antilles, Japan and
Singapore. The Company delivers a broad range of highly
specialized software products and services that provide
mission-critical processing for information management,
analysis, trading, accounting, reporting and compliance. The
Company provides its products and related services in seven
vertical markets in the financial services industry:

1. Insurance entities and pension funds;

2. Institutional asset management;

3. Hedge funds and family offices;

4. Financial institutions, such as retail
banks and credit unions;

5. Commercial lending;

6. Real estate property management; and

7. Municipal finance.



|   |                                               
|-- | ----------------------------------------------
|2. | Summary of Significant Accounting
    Policies



| |                 
| | ----------------
| | Use of Estimates

The preparation of the consolidated financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Estimates are used
for, but not limited to, collectibility of accounts receivables,
costs to complete certain contracts, income tax accruals and the
value of deferred tax assets. Estimates are also used to
determine the remaining economic lives and carrying value of
fixed assets, goodwill and intangible assets. Actual results
could differ from those estimates.



| |                            
| | ---------------------------
| | Principles of Consolidation

The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant
accounts, transactions and profits between the consolidated
companies have been eliminated in consolidation.



| |                    
| | -------------------
| | Revenue Recognition

The Company follows the principles of Statement
of Position (SOP) No. 97-2, Software Revenue
Recognition (SOP 97-2), which provides
guidance on applying generally accepted accounting principles in
recognizing revenue on software transactions. SOP 97-2
requires that revenue recognized from software transactions be
allocated to each element of the transaction based on the
relative fair values of the elements, such as software products,
specified upgrades, enhancements, post-contract client support,
installation or training. The determination of fair value is
based upon vendor-specific objective evidence. Under
SOP 97-2, the Company recognizes software license revenue
allocated to software products,

F-6



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

specified upgrades and enhancements generally
upon delivery of each of the related products, upgrades or
enhancements, assuming all other revenue criteria are met.

The Companys payment terms for software
licenses typically require that the total fee be paid upon
signing of the contract. Maintenance services are typically due
in full at the beginning of the maintenance period. Professional
services and outsourcing services are typically due and payable
monthly in arrears. Normally the Companys arrangements do
not provide for any refund rights, and payments are not
contingent on specific milestones or customer acceptance
conditions. The Company defers revenue in accordance with
SOP 97-2, paragraph 14. For arrangements that do
contain such provisions, the Company defers revenue until the
rights or conditions have expired or have been met.

Unbilled accounts receivable primarily relates to
professional services and outsourcing revenue that has been
earned as of month end but is not invoiced until the subsequent
month, and to software license revenue that has been earned and
is realizable but not invoiced to clients until future dates
specified in the client contract.

Deferred revenue consists of payments received
related to product delivery, maintenance and other services,
which have been paid by customers prior to the recognition of
revenue. Deferred revenue relates primarily to cash received for
maintenance contracts in advance of services performed.



| |                
| | ---------------
| | License Revenue

The Company generally recognizes revenue from
sales of software or products including proprietary software
upon product shipment and receipt of a signed contract, provided
that collection is probable and all other revenue recognition
criteria of SOP 97-2 are met. The Company sells software
licenses in conjunction with professional services for
installation and maintenance. For these arrangements, the total
contract value is attributed first to the maintenance
arrangement based on its fair value, which is derived from
renewal rates. The contract value is then attributed to
professional services based on estimated fair value, which is
derived from the rates charged for similar services provided on
a stand-alone basis. The Companys software license
agreements generally do not require significant modification or
customization of the underlying software, and, accordingly,
installation services are not considered essential to
functionality. The remainder of the total contract value is then
attributed to the software license based on the residual method
described in SOP 98-9, Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain
Transactions.

The Company occasionally enters into license
agreements requiring significant customization of the
Companys software. The Company accounts for the license
fees under these agreements on the percentage-of-completion
basis. This method requires estimates to be made for costs to
complete the agreement utilizing an estimate of development
man-hours remaining. Due to uncertainties inherent in the
estimation process, it is at least reasonably possible that
completion costs may be revised. Such revisions are recognized
in the period in which the revisions are determined. Provisions
for estimated losses on uncompleted contracts are determined on
a contract-by-contract basis, and are made in the period in
which such losses are first estimated or determined.



| |                       
| | ----------------------
| | Maintenance Agreements

Maintenance agreements generally require the
Company to provide technical support and software updates to its
clients. Such services are generally provided under one-year
renewable contracts. Maintenance revenues are recognized ratably
over the term of the maintenance agreement.

F-7



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                                          
| | -----------------------------------------
| | Professional and Outsourcing
    Services

The Company provides consulting, training and
outsourcing services to its clients. Revenue for such services
is generally recognized over the period during which the
services are performed. The Company typically charges for
professional services on a time and materials basis. However,
some contracts are for a fixed fee. For the fixed-fee
arrangements, an estimate is made of the total hours expected to
be incurred to complete the project. Due to uncertainties
inherent in the estimation process, it is at least reasonably
possible that completion costs may be revised. Such revisions
are recognized in the period in which the revisions are
determined. Revenue is recognized each period based on the hours
incurred to date compared to the total hours expected to
complete the project.



| |                         
| | ------------------------
| | Research and Development

Research and development costs associated with
computer software are charged to expense as incurred. In
accordance with SFAS No. 86, Accounting for the
Costs of Computer Software to be Sold, Leased, or Otherwise
Marketed, capitalization of internally developed computer
software costs begins upon the establishment of technological
feasibility based on a working model. Net capitalized software
costs of $401,000 and $151,000 are included in the
December 31, 2002 and 2003 balance sheets, respectively,
under Intangible and other assets.

The Companys policy is to amortize these
costs upon a products general release to the client.
Amortization of capitalized software costs is calculated by the
greater of (a) the ratio that current gross revenues for a
product bear to the total of current and anticipated future
gross revenues for that product or (b) the straight-line
method over the remaining estimated economic life of the
product, including the period being reported on, typically two
to six years. It is reasonably possible that those estimates of
anticipated future gross revenues, the remaining estimated
economic life of the product, or both could be reduced
significantly due to competitive pressures. Amortization expense
related to capitalized software development costs for 2001, 2002
and 2003 was $222,000, $294,000 and $250,000, respectively.



| |                   
| | ------------------
| | Stock Compensation

The Company has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25), and related
interpretations in accounting for its stock options. Under
APB 25, because the exercise price of employee stock
options equals the market price of the underlying stock on the
date of grant and the grants are for a fixed number of shares,
no compensation expense is recorded.

In December 2002, the FASB issued
SFAS No. 148, Accounting for Stock-Based Compensation-
Transition and Disclosure. SFAS No. 148 amends
SFAS No. 123, Accounting for Stock-Based Compensation,
to provide alternative methods of accounting for stock-based
employee compensation. We have adopted the disclosure provisions
of SFAS No. 148. SFAS No. 148 did not
require us to change to the fair value method of accounting for
stock-based compensation.

The Company follows the disclosure-only
provisions of SFAS No. 123, Accounting for
Stock-Based Compensation, amended by SFAS No. 148.
Accordingly, no compensation cost has been recognized for the
stock option plans and employee stock purchase plan. Had
compensation cost for the Companys stock option plans and
employee stock purchase plan been determined consistent with
SFAS No. 123, the

F-8



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Companys net income and earnings per share
would have been adjusted to the pro forma amounts indicated in
the table below for the years ending December 31 (in
thousands except per share amounts):

|                                                                                                                                            |  |      |        |      |  |      |        |   |  |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                                                                                                                                            |  | 2001 |        | 2002 |  | 2003
|                                                                                                                                            |  |      |        |      |  |     
|Net income, as reported                                                                                                                     |  | $    | 4,022  |      |  | $    | 7,305  |   |  | $ | 11,796 |  
|Deduct: total stock-based employee compensation
    determined under fair value based method for all awards, net of
    related tax effects |  |      | (3,497 | )    |  |      | (2,490 | ) |  |   | (1,229 | )
|                                                                                                                                            |  |      |        |      |  |      |        |   |  |   |        |  
|Net income, pro forma                                                                                                                       |  | $    | 525    |      |  | $    | 4,815  |   |  | $ | 10,567 |  
|                                                                                                                                            |  |      |        |      |  |      |        |   |  |   |        |  
|Basic earnings per share, as reported                                                                                                       |  | $    | 0.18   |      |  | $    | 0.38   |   |  | $ | 0.63   |  
|Basic earnings per share, pro forma                                                                                                         |  |      | 0.02   |      |  |      | 0.25   |   |  |   | 0.57   |  
|Diluted earnings per share, as reported                                                                                                     |  |      | 0.18   |      |  |      | 0.36   |   |  |   | 0.59   |  
|Diluted earnings per share, pro forma                                                                                                       |  |      | 0.02   |      |  |      | 0.23   |   |  |   | 0.53   |  

The fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions used for
grants in 2001, 2002 and 2003, respectively: dividend yield of
0%; expected lives of five years; expected volatility of 58%,
59% and 57%; and risk-free interest rate of 4.49%, 3.9% and
2.9%. The weighted-average fair value of options granted using
this option-pricing model in 2001, 2002 and 2003 was $1.65,
$2.78 and $4.04, respectively.

The fair value of each estimated stock grant
under the employee stock purchase plan is based on the price of
the stock at the beginning of the offering period using the
Black-Scholes option-pricing model with the following weighted
average assumptions used for grants in 2001, 2002 and 2003,
respectively: dividend yield of 0%; expected volatility of 58%,
59% and 50%; risk-free interest rate of 5.39%, 2.27% and 1.43%
and expected lives of 6 months.



| |             
| | ------------
| | Income Taxes

The Company accounts for income taxes in
accordance with SFAS No. 109, Accounting for
Income Taxes. Under SFAS No. 109, an asset and
liability approach is used to recognize deferred tax assets and
liabilities for the future tax consequences of items that have
already been recognized in its financial statements and tax
returns. A valuation allowance is established against net
deferred tax assets if, based on the weight of available
evidence, it is more likely than not that some or all of the net
deferred tax assets will not be realized.



| |                                                        
| | -------------------------------------------------------
| | Cash and Cash Equivalents and Marketable
    Securities

The Company considers all highly liquid
marketable securities with original maturities of three months
or less at the date of acquisition to be cash equivalents. Debt
securities with original maturities of more than three months at
the date of acquisition are classified as marketable securities.
The Company classifies its entire investment portfolio,
consisting of debt securities issued by state and local
governments of the United States, debt securities issued by
corporations and equities, as available for sale securities. All
available for sale securities are recorded at fair market value,
and changes in fair market value are recorded in
stockholders equity until the securities are sold.

F-9



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                       
| | ----------------------
| | Property and Equipment

Property and equipment are stated at cost.
Depreciation of property and equipment is calculated using a
combination of straight-line and accelerated methods over the
estimated useful lives of the assets as follows:

|                       |  |                                               
|---------------------- |  | ----------------------------------------------
|Description            |  | Useful Life                                   
|                       |  |                                               
|Equipment              |  | 3-5 years                                     
|Furniture and fixtures |  | 7-10 years                                    
|Leasehold improvements |  | Shorter of lease term or estimated useful life

Depreciation expense for the years ended
December 31, 2001, 2002 and 2003 was $3,269,000, $2,906,000
and $2,119,000, respectively.

Maintenance and repairs are expensed as incurred.
The costs of sold or retired assets are removed from the related
asset and accumulated depreciation accounts and any gain or loss
is included in other income, net.



| |                                   
| | ----------------------------------
| | Goodwill and Intangible
    Assets

On January 1, 2002, the Company adopted
SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 142 requires that goodwill and
intangible assets with indefinite useful lives no longer be
amortized, but instead be tested for impairment at least
annually. The Company has completed the required impairment
tests for goodwill and has determined that no impairment existed
as of December 31, 2002 or 2003. Amortization expense
associated with goodwill was $64,000 for the year ended
December 31, 2001.

Completed technology and other identifiable
intangible assets are amortized over four to five years based on
the ratio that current gross revenues of the product bear to the
total of current and anticipated future gross revenues of the
product or on a straight-line method, whichever is shorter.
Amortization expense associated with completed technology and
other amortizable intangible assets was $34,000, $739,000 and
$1,193,000 for the years ended December 31, 2001, 2002, and
2003, respectively.

Amortization expense, related to intangible
assets, for each of the next five years ending December 31
is expected to approximate:

|                    |  |   |           | 
|------------------- |  | - | --------- | 
|2004                |  | $ | 1,258,000 | 
|2005                |  |   | 1,258,000 | 
|2006                |  |   | 802,000   | 
|2007                |  |   | 559,000   | 
|2008 and thereafter |  |   | 71,000    | 
|                    |  |   |           | 
|                    |  | $ | 3,948,000 | 



| |                                    
| | -----------------------------------
| | Impairment of Long-Lived
    Assets

The Company evaluates the recoverability of its
long-lived assets in accordance with SFAS No. 144,
Accounting for the Impairment of Long-Lived Assets to be
Disposed of. The Company assesses potential impairments to
its long-lived assets when there is evidence that events or
changes in circumstances have made recovery of the assets
carrying value unlikely. An impairment loss would be recognized
when the sum of the expected future undiscounted net cash flows
is less than the carrying amount of the asset. The Company has
identified no such impairment losses. Substantially all of the
Companys long-lived assets are located in the United
States.

F-10



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



| |                             
| | ----------------------------
| | Concentration of Credit Risk

Financial instruments, which potentially subject
the Company to concentrations of credit risk, consist
principally of cash, cash equivalents, marketable securities,
and trade receivables. The Company has cash investment policies
that limit investments to investment grade securities.
Concentrations of credit risk, with respect to trade
receivables, are limited due to the fact that the Companys
client base is highly diversified. As of December 31, 2002
and 2003, the Company had no significant concentrations of
credit risk and the carrying value of these assets approximates
fair value.



| |                                                  
| | -------------------------------------------------
| | International Operations and Foreign
    Currency

The functional currency of each foreign
subsidiary is the local currency. Accordingly, assets and
liabilities of foreign subsidiaries are translated to
U.S. dollars at period-end exchange rates, and capital
stock accounts are translated at historical rates. Revenues and
expenses are translated using the average rates during the
period. The resulting translation adjustments are excluded from
net earnings and accumulated as a separate component of
stockholders equity. Foreign currency transaction gains
and losses are included in the results of operations in the
periods in which they occur and are immaterial for all periods
presented.



| |                                         
| | ----------------------------------------
| | Basic and Diluted Earnings Per
    Share

Basic earnings per share is calculated by
dividing net income by the weighted average number of common
shares outstanding during the period. Diluted earnings per share
is computed by dividing net income by the weighted average
number of common shares and common equivalent shares outstanding
during the period.

The following table sets forth the weighted
average common shares used in the computation of basic and
diluted earnings per share (in thousands):

|                                                                     |  |      |        |      |  |      |        |  |  |  |        | 
|-------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                                     |  | 2001 |        | 2002 |  | 2003
|                                                                     |  |      |        |      |  |     
|Weighted average common shares outstanding                           |  |      | 22,506 |      |  |      | 19,473 |  |  |  | 18,617 | 
|Weighted average common stock
    equivalents  options              |  |      | 246    |      |  |      | 1,058  |  |  |  | 1,215  | 
|                                                                     |  |      |        |      |  |      |        |  |  |  |        | 
|Weighted average common and common equivalent
    shares outstanding |  |      | 22,752 |      |  |      | 20,531 |  |  |  | 19,832 | 
|                                                                     |  |      |        |      |  |      |        |  |  |  |        | 

Options to purchase 3,204,768, 1,109,949 and
0 shares were outstanding at December 31, 2001, 2002
and 2003, respectively, but were not included in the computation
of diluted earnings per share because the effect of including
the options would be antidilutive.



| |                     
| | --------------------
| | Comprehensive Income

Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income,
requires that items defined as comprehensive income, such as
foreign currency translation adjustments and unrealized gains
(losses) on marketable securities, be separately classified in
the financial statements and that the accumulated balance of
other comprehensive income be reported separately from retained
earnings and additional paid-in capital in the equity section of
the balance sheet. Total comprehensive income consists of net
income and other accumulated comprehensive income disclosed in
the equity section of the balance sheet.

F-11



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table sets forth the components of
comprehensive income (in thousands):

|                                                   |  |      |        |      |  |      |        |   |  |   |        | 
|-------------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | 
|                                                   |  | 2001 |        | 2002 |  | 2003
|                                                   |  |      |        |      |  |     
|Net income                                         |  | $    | 4,022  |      |  | $    | 7,305  |   |  | $ | 11,796 | 
|Foreign currency translation gains (losses)        |  |      | (170   | )    |  |      | 424    |   |  |   | 496    | 
|Unrealized gains (losses) on marketable securities |  |      | (2,078 | )    |  |      | (1,345 | ) |  |   | 827    | 
|                                                   |  |      |        |      |  |      |        |   |  |   |        | 
|Total comprehensive income                         |  | $    | 1,774  |      |  | $    | 6,384  |   |  | $ | 13,119 | 
|                                                   |  |      |        |      |  |      |        |   |  |   |        | 



| |                                     
| | ------------------------------------
| | Recent Accounting
    Pronouncements

Effective July 1, 2003, the Company adopted
EITF Issue No. 00-21, Revenue Arrangements with
Multiple Deliverables. This issue addresses accounting for
arrangements with multiple revenue-generating activities and
applies to the Companys non-software transactions. The
adoption of this standard did not have a material impact on the
Companys financial statements.

In May 2003, the Emerging Issues Task Force
(EITF) reached a consensus on EITF Issue No. 03-5,
Applicability of AICPA Statement of Position 97-2 to
Non-Software Deliverables in an Arrangement Containing
More-Than-Incidental Software. This issue addresses
revenue recognition for arrangements that include non-software
deliverables, such as hardware, that are more than incidental to
the products or services as a whole. The consensus indicates
that, if the software is not essential to the functionality of
the non-software deliverable, the non-software deliverable is
excluded from the scope of SOP 97-2. We do not have any
arrangements that include non-software deliverables.

In November 2002, the FASB issued Interpretation
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees
of Indebtedness of Others (FIN 45). FIN 45 requires a
company, at the time it issues a guarantee, to recognize an
initial liability for the fair value of obligations assumed
under the guarantees and warranties. The initial recognition
requirements of FIN 45 were effective for guarantees issued
or modified after December 31, 2002, and adoption of the
disclosure requirements was effective for the Company during the
quarter ended March 31, 2003. The adoption of FIN 45
did not have a significant impact on the Companys
consolidated financial position or results of operations.



|   |                      
|-- | ---------------------
|3. | Marketable Securities

At December 31, 2002 and 2003, the cost
basis, fair value, and unrealized gains and losses by major
security type, were as follows (in thousands):

|                                             |       |      |        |                |  |       |      |      |   |   |        |        | 
|-------------------------------------------- | ----- | ---- | ------ | -------------- |  | ----- | ---- | ---- | - | - | ------ | ------ | 
|                                             |       |      |        | Gross          |  |      
|                                             |       |      |        | Unrealized     |  | Fair 
|December 31, 2002:                           |       | Cost |        | Gains/(Losses) |  | Value
|                                             |       |      |        |                |  |      
|State, municipal and county government bonds |       | $    | 4,093  |                |  | $     | (9   | )    |   | $ | 4,084  |       
|US government securities                     |       |      | 2,530  |                |  |       | 36   |      |   |   | 2,566  |       
|Corporate bonds                              |       |      | 11,196 |                |  |       | 73   |      |   |   | 11,269 |       
|Equities                                     |       |      | 6,026  |                |  |       | (562 | )    |   |   | 5,464  |       
|                                             |       |      |        |                |  |       |      |      |   |   |        |       
|                                             | Total |      | $      | 23,845         |  |       | $    | (462 | ) |   | $      | 23,383 | 
|                                             |       |      |        |                |  |       |      |      |   |   |        |       

F-12



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                             |       |      |        |            |  |       |     |     |  |   |        |        | 
|-------------------------------------------- | ----- | ---- | ------ | ---------- |  | ----- | --- | --- |  | - | ------ | ------ | 
|                                             |       |      |        | Gross      |  |      
|                                             |       |      |        | Unrealized |  | Fair 
|December 31, 2003:                           |       | Cost |        | Gains      |  | Value
|                                             |       |      |        |            |  |      
|State, municipal and county government bonds |       | $    | 8,777  |            |  | $     | 2   |     |  | $ | 8,779  |       
|US government securities                     |       |      | 3,531  |            |  |       | 6   |     |  |   | 3,537  |       
|Corporate bonds                              |       |      | 17,722 |            |  |       | 42  |     |  |   | 17,764 |       
|Equities                                     |       |      | 6,479  |            |  |       | 561 |     |  |   | 7,040  |       
|                                             |       |      |        |            |  |       |     |     |  |   |        |       
|                                             | Total |      | $      | 36,509     |  |       | $   | 611 |  |   | $      | 37,120 | 
|                                             |       |      |        |            |  |       |     |     |  |   |        |       

The following table summarizes the maturities of
marketable securities at December 31 (in thousands):

|                   |       |      |        |        |  |   |        |        | 
|------------------ | ----- | ---- | ------ | ------ |  | - | ------ | ------ | 
|                   |       | 2002 |        | 2003  
|                   |       |      |        |       
|Less than one year |       | $    | 19,714 |        |  | $ | 25,506 |       
|Due in 1-2 years   |       |      | 2,121  |        |  |   | 11,104 |       
|Due in 3-5 years   |       |      | 1,548  |        |  |   | 510    |       
|                   |       |      |        |        |  |   |        |       
|                   | Total |      | $      | 23,383 |  |   | $      | 37,120 | 
|                   |       |      |        |        |  |   |        |       

In 2000, the Company obtained 277,052 shares
of common stock of a public company through exercise of a
warrant. From 2000 to 2002, the Company sold all of these
shares, for realized gains of $2.4 million and
$0.5 million for the years ended December 31, 2001 and
2002, respectively.



|   |                    
|-- | -------------------
|4. | Accounts Receivable

Accounts receivable are as follows (in thousands):

|                                                                                                      |  |              |        |      |  |   |       | 
|----------------------------------------------------------------------------------------------------- |  | ------------ | ------ | ---- |  | - | ----- | 
|                                                                                                      |  |             
|                                                                                                      |  | December 31,
|                                                                                                      |  |             
|                                                                                                      |  | 2002         |        | 2003
|                                                                                                      |  |              |        |     
|Accounts receivable, net of allowance for
    doubtful accounts of $1,282 and $1,404, respectively    |  | $            | 8,628  |      |  | $ | 6,426 | 
|Unbilled accounts receivable, net of allowance
    for doubtful accounts of $71 and $45, respectively |  |              | 2,355  |      |  |   | 2,145 | 
|                                                                                                      |  |              |        |      |  |   |       | 
|Total accounts receivable                                                                             |  | $            | 10,983 |      |  | $ | 8,571 | 
|                                                                                                      |  |              |        |      |  |   |       | 

The following table represents the activity for
the allowance for doubtful accounts during the years ended
December 31, 2001, 2002 and 2003 (in thousands):

|                                 |      |              |   |           |  |           |   |             |  |            |   |   |  |  |   |       |  |  |   |       | 
|-------------------------------- | ---- | ------------ | - | --------- |  | --------- | - | ----------- |  | ---------- | - | - |  |  | - | ----- |  |  | - | ----- | 
|                                 |      |              |   |           |  |           |   |            
|                                 |      |              |   | Additions |  |           |   |            
|                                 |      |              |   |           |  |           |   |            
|                                 |      | Balance at   |   | Charge to |  | Charge to |   |             |  | Balance at
|                                 |      | Beginning of |   | Costs and |  | Other     |   | Deductions, |  | End of    
|Description                      |      | Period       |   | Expenses  |  | Accounts  |   | Net         |  | Period    
|                                 |      |              |   |           |  |           |   |             |  |           
|Allowance for Doubtful Accounts: |      |              |   |           |  |           |   |             |  |            |   |   |  |  |   |       |  |  |   |      
|Years Ended December 31          |      |              |   |           |  |           |   |             |  |            |   |   |  |  |   |       |  |  |   |      
|                                 | 2001 |              | $ | 3,092     |  |           | $ | 561         |  |            | $ |  |  |  | $ | 2,653 |  |  | $ | 1,000 | 
|                                 | 2002 |              |   | 1,000     |  |           |   | 452         |  |            |   |  |  |  |   | 99    |  |  |   | 1,353 | 
|                                 | 2003 |              |   | 1,353     |  |           |   | 689         |  |            |   |  |  |  |   | 593   |  |  |   | 1,449 | 

Management establishes the allowance for doubtful
accounts based on historical bad debt experience. In addition,
management analyzes client accounts, client concentrations,
client creditworthiness, current

F-13



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

economic trends and changes in the clients
payment terms when evaluating the adequacy of the allowance for
doubtful accounts.



|   |                     
|-- | --------------------
|5. | Stockholders Equity

At December 31, 2002, 50,000,000 shares
of Common Stock were authorized and 18,996,167 shares were
outstanding and 1,000,000 shares of preferred stock were
authorized, none of which were issued or outstanding. At
December 31, 2003, 50,000,000 shares of Common Stock
were authorized and 18,614,765 shares were outstanding and
1,000,000 shares of preferred stock were authorized, none of
which were issued or outstanding.

On May 22, 2003, the Companys Board of
Directors authorized the continued repurchase of shares of the
Companys Common Stock up to an additional expenditure of
$30 million. Under the repurchase programs, the Company
purchased a total of 1.7 million shares for approximately
$17.7 million during the year ended December 31, 2003.
As of December 31, 2003, the Company had repurchased a
total of 8.2 million shares of Common Stock for
approximately $53.4 million.

The Company uses the cost method to account for
treasury stock purchases. Under the cost method, the price paid
for the stock is charged to the treasury stock account.

The following table summarizes information about
quarterly share repurchases (shares in thousands):

|        |       |        |       |             |  |     |      |             |  |      |      |      |  |  |     |       |  |   |       |       |  |   |       |      | 
|------- | ----- | ------ | ----- | ----------- |  | --- | ---- | ----------- |  | ---- | ---- | ---- |  |  | --- | ----- |  | - | ----- | ----- |  | - | ----- | ---- | 
|        |       |        |       |             |  |     |      |            
|        |       |        |       | Fiscal 2002 |  |     |      | Fiscal 2003
|        |       |        |       | Price Range |  |     |      | Price Range
|        |       |        |       |             |  |     |      |            
|Quarter |       | Shares |       | High        |  | Low |      | Shares      |  | High |      | Low 
|        |       |        |       |             |  |     |      |             |  |      |      |     
|First   |       |        | 2,146 |             |  | $   | 5.99 |             |  | $    | 5.04 |      |  |  | 259 |       |  | $ | 8.03  |       |  | $ | 6.63  |     
|Second  |       |        | 1,806 |             |  |     | 7.97 |             |  |      | 6.75 |      |  |  | 854 |       |  |   | 10.03 |       |  |   | 7.16  |     
|Third   |       |        |      |             |  |     |     |             |  |      |     |      |  |  | 384 |       |  |   | 13.73 |       |  |   | 10.95 |     
|Fourth  |       |        | 386   |             |  |     | 7.81 |             |  |      | 6.49 |      |  |  | 199 |       |  |   | 19.39 |       |  |   | 14.89 |     
|        |       |        |       |             |  |     |      |             |  |      |      |      |  |  |     |       |  |   |       |       |  |   |       |     
|        | Total |        |       | 4,338       |  |     | $    | 7.97        |  |      | $    | 5.04 |  |  |     | 1,696 |  |   | $     | 19.39 |  |   | $     | 6.63 | 
|        |       |        |       |             |  |     |      |             |  |      |      |      |  |  |     |       |  |   |       |       |  |   |       |     

On July 31, 2003, the Companys Board
of Directors declared a semi-annual cash dividend of
$0.067 per share on its Common Stock, payable
September 12, 2003 to stockholders of record at the close
business on August 22, 2003.



|   |             
|-- | ------------
|6. | Income Taxes

The sources of income (loss) before income taxes
were as follows (in thousands):

|                    |  |                         |       |      |  |      |        |  |  |   |        | 
|------------------- |  | ----------------------- | ----- | ---- |  | ---- | ------ |  |  | - | ------ | 
|                    |  |                        
|                    |  | Year Ended December 31,
|                    |  |                        
|                    |  | 2001                    |       | 2002 |  | 2003
|                    |  |                         |       |      |  |     
|U.S.                |  | $                       | 6,592 |      |  | $    | 11,455 |  |  | $ | 18,547 | 
|Foreign             |  |                         | (105  | )    |  |      | 845    |  |  |   | 790    | 
|                    |  |                         |       |      |  |      |        |  |  |   |        | 
|Income before taxes |  | $                       | 6,487 |      |  | $    | 12,300 |  |  | $ | 19,337 | 
|                    |  |                         |       |      |  |      |        |  |  |   |        | 

F-14



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The income tax provision consists of the
following (in thousands):

|          |         |                         |       |       |  |      |       |       |  |   |       |       | 
|--------- | ------- | ----------------------- | ----- | ----- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|          |         |                        
|          |         | Year Ended December 31,
|          |         |                        
|          |         | 2001                    |       | 2002  |  | 2003
|          |         |                         |       |       |  |     
|Current:  |         |                         |       |       |  |      |       |       |  |   |       |      
|          | Federal |                         | $     | 845   |  |      | $     | 2,748 |  |   | $     | 5,524 | 
|          | Foreign |                         |       | 97    |  |      |       | 375   |  |   |       | 182   | 
|          | State   |                         |       | 79    |  |      |       | 493   |  |   |       | 1,110 | 
|Deferred: |         |                         |       |       |  |      |       |       |  |   |       |      
|          | Federal |                         |       | 1,220 |  |      |       | 1,025 |  |   |       | 442   | 
|          | State   |                         |       | 224   |  |      |       | 354   |  |   |       | 283   | 
|          |         |                         |       |       |  |      |       |       |  |   |       |      
|Total     |         | $                       | 2,465 |       |  | $    | 4,995 |       |  | $ | 7,541 |      
|          |         |                         |       |       |  |      |       |       |  |   |       |      

The effective tax rates were 38.0%, 40.6% and
39.0% for the years ended December 31, 2001, 2002 and 2003,
respectively. The reconciliation between the effective tax rates
and the expected tax expense is computed by applying the
U.S. federal corporate income tax rate of 34% to income
before income taxes as follows (in thousands):

|                                                        |                                                            |                         |       |      |   |      |       |      |   |   |       |     |  
|------------------------------------------------------- | ---------------------------------------------------------- | ----------------------- | ----- | ---- | - | ---- | ----- | ---- | - | - | ----- | --- | -
|                                                        |                                                            |                        
|                                                        |                                                            | Year Ended December 31,
|                                                        |                                                            |                        
|                                                        |                                                            | 2001                    |       | 2002 |   | 2003
|                                                        |                                                            |                         |       |      |   |     
|Computed expected tax expense                         |                                                            | $                       | 2,206 |      |   | $    | 4,182 |      |   | $ | 6,575 |    
|Increase (decrease) in income taxes resulting
    from: |                                                            |                         |       |      |   |      |       |      |   |   |       |    
|                                                        | State income taxes (net of federal income tax
    benefit) |                         |       | 200  |   |      |       | 558  |   |   |       | 920 |  
|                                                        | Tax-exempt interest income                                 |                         |       | (17  | ) |      |       |     |   |   |       | (34 | )
|                                                        | Foreign operations                                         |                         |       | 82   |   |      |       | (145 | ) |   |       | (94 | )
|                                                        | Litigation settlement                                      |                         |       |     |   |      |       | 515  |   |   |       |    |  
|                                                        | Goodwill amortization                                      |                         |       | 22   |   |      |       |     |   |   |       |    |  
|                                                        | Other                                                      |                         |       | (28  | ) |      |       | (115 | ) |   |       | 174 |  
|                                                        |                                                            |                         |       |      |   |      |       |      |   |   |       |    
|Provision for income taxes                              |                                                            | $                       | 2,465 |      |   | $    | 4,995 |      |   | $ | 7,541 |    
|                                                        |                                                            |                         |       |      |   |      |       |      |   |   |       |    

The Company has recorded valuation allowances of
$357,000 and $273,000 at December 31, 2002 and 2003 related
to net operating loss carryforwards in certain foreign
jurisdictions. No portion of these valuation allowances relates
to current deferred assets for the years ended December 31,
2002 and 2003.

F-15



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The components of deferred income taxes at
December 31, 2002 and 2003 are as follows (in thousands):

|                                              |       |              |       |             |  |          |     |             |  |   |       |       |  |   |     |     | 
|--------------------------------------------- | ----- | ------------ | ----- | ----------- |  | -------- | --- | ----------- |  | - | ----- | ----- |  | - | --- | --- | 
|                                              |       |             
|                                              |       | December 31,
|                                              |       |             
|                                              |       |              |       |            
|                                              |       | 2002         |       | 2003       
|                                              |       |              |       |            
|                                              |       | Deferred     |       | Deferred    |  | Deferred |     | Deferred   
|                                              |       | Tax          |       | Tax         |  | Tax      |     | Tax        
|                                              |       | Assets       |       | Liabilities |  | Assets   |     | Liabilities
|                                              |       |              |       |             |  |          |     |            
|Purchased in-process research and development |       | $            | 3,750 |             |  | $        |    |             |  | $ | 3,304 |       |  | $ |    |    
|Net operating loss carryforwards              |       |              | 357   |             |  |          |    |             |  |   | 273   |       |  |   |    |    
|Acquired technology                           |       |              | 2,712 |             |  |          |    |             |  |   | 2,745 |       |  |   |    |    
|Accounts receivable                           |       |              | 772   |             |  |          |    |             |  |   | 562   |       |  |   |    |    
|Tax credit carryforwards                      |       |              | 679   |             |  |          |    |             |  |   | 502   |       |  |   |    |    
|Accrued expenses                              |       |              | 120   |             |  |          |    |             |  |   | 202   |       |  |   |    |    
|Unrealized gain on marketable securities      |       |              |      |             |  |          |    |             |  |   |      |       |  |   | 246 |    
|Fixed assets                                  |       |              |      |             |  |          | 19  |             |  |   |      |       |  |   | 103 |    
|Capitalized software                          |       |              |      |             |  |          | 157 |             |  |   |      |       |  |   | 57  |    
|Other                                         |       |              | 47    |             |  |          |    |             |  |   | 128   |       |  |   |    |    
|                                              |       |              |       |             |  |          |     |             |  |   |       |       |  |   |     |    
|                                              | Total |              |       | 8,437       |  |          |     | 176         |  |   |       | 7,716 |  |   |     | 406 | 
|Valuation Allowance                           |       |              | (357  | )           |  |          |    |             |  |   | (273  | )     |  |   |    |    
|                                              |       |              |       |             |  |          |     |             |  |   |       |       |  |   |     |    
|                                              | Total |              | $     | 8,080       |  |          | $   | 176         |  |   | $     | 7,443 |  |   | $   | 406 | 
|                                              |       |              |       |             |  |          |     |             |  |   |       |       |  |   |     |    

At December 31, 2003, no deferred taxes have
been provided on the unremitted earnings of the Companys
foreign subsidiaries, which have been, or intend to be,
permanently reinvested. Undistributed earnings amounted to
approximately $2,263,000.

At December 31, 2003, the Company had
foreign net operating loss carryforwards other than Japan of
$429,000, which are available to offset foreign income on an
indefinite carryforward basis. Japans net operating loss
carryforward of $470,000 begins to expire in 2004.

At December 31, 2003, the Company had
federal tax credit carryforwards of $312,000 that begin to
expire in 2005 and state credit carryforwards of $289,000 that
begin to expire in 2011.

In 2001, the Internal Revenue Service
(IRS) notified the Company of purported federal
income tax deficiencies for the years 1997 through 1999. At
issue was the Companys deduction of an aggregate of
$6.8 million of payments made by the Company pursuant to
the settlement, on May 7, 1999, of a consolidated
securities class action lawsuit. In 2002, the Company reached a
settlement with the IRS that allowed the Company to deduct
$5.5 million of the original $6.8 million deduction.
The impact of this settlement has been included in the
Companys 2002 income tax provision.

Although a substantial number of issues for the
years being audited have been resolved, the Company also
received notice of proposed tax deficiencies for the years 1996
to 1999, relating to the Companys research and
experimentation credits. In 2003, the Company reached a
tentative settlement with the IRS that allowed 50% of the
research and experimentation credits associated with the 1996 to
1999 years, or $351,000. This amount has been included in the
Companys tax provision as of December 31, 2003.



|   |       
|-- | ------
|7. | Leases

The Company is obligated under noncancelable
operating leases for office space and office equipment. Total
rental expense was $3,095,000, $2,709,000 and $3,137,000 for the
years ended December 31, 2001,

F-16



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

2002 and 2003, respectively. The lease for the
corporate facility in Windsor, Connecticut expires in 2008 and
the Company has the right to extend the lease for an additional
term of five years. Future minimum lease payments under the
Companys operating leases as of December 31, 2003,
are as follows (in thousands):

|                    |  |              |       | 
|------------------- |  | ------------ | ----- | 
|                    |  | Year Ending 
|                    |  | December 31,
|                    |  |             
|2004                |  | $            | 2,921 | 
|2005                |  |              | 2,415 | 
|2006                |  |              | 2,035 | 
|2007                |  |              | 1,413 | 
|2008 and thereafter |  |              | 209   | 
|                    |  |              |       | 
|                    |  | $            | 8,993 | 
|                    |  |              |       | 

The Company subleases office space under
noncancelable leases. The Company received rental income under
these leases of $569,000, $512,000 and $500,000 for the years
ended December 31, 2001, 2002 and 2003, respectively.
Future minimum lease receipts under these leases as of
December 31, 2003 are as follows (in thousands):

|     |  |              |     | 
|---- |  | ------------ | --- | 
|     |  | Year Ending 
|     |  | December 31,
|     |  |             
|2004 |  | $            | 509 | 
|2005 |  |              | 340 | 
|2006 |  |              | 113 | 
|     |  |              |     | 
|     |  | $            | 962 | 
|     |  |              |     | 



|   |                               
|-- | ------------------------------
|8. | License and Royalty Agreements

The Company has non-exclusive rights to integrate
certain third-party software into certain of the Companys
products. Under the terms of an agreement, the licensor of the
software is paid royalties based on a percentage of the related
license fee revenues collected by the Company. Under another
agreement, the Company is obligated to pay at least
$25,000 per quarter. The total royalty expense under these
agreements for the years ended December 31, 2001, 2002 and
2003 was $456,000, $458,000 and $490,000, respectively.

In connection with the Savid acquisition, the
Company was obligated to pay 10% of license fees with respect to
sales and/or licensing of the Savid system during the period
commencing on April 15, 1998 and ending on April 14,
2003. Royalty expense for the years ended December 31,
2001, 2002 and 2003 was $0, $47,000 and $13,000, respectively.

In connection with the Quantra acquisition in
1998, the Company is party to three royalty agreements as a
result of utilities that interface with the Companys
SKYLINE II product. The royalties are paid based on either
annual guaranteed total unit sales of the product at a rate of
$15 per user, or as a percentage of the utility list price,
which is typically 33.33%. Royalty expense under these
agreements for the years ended December 31, 2001, 2002 and
2003 was $25,000, $39,000 and $21,000, respectively.



|   |                           
|-- | --------------------------
|9. | Defined Contribution Plans

The Company has a 401(k) Retirement Plan (the
Plan) that covers substantially all employees. Each
employee may elect to contribute to the Plan, through payroll
deductions, up to 20% of his or her salary, subject to certain
limitations. The Plan provides for a Company match of
employees contributions

F-17



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

in an amount equal to 50% of an employees
contributions up to $3,000 per year. The Company offers
employees a selection of various public mutual funds but does
not include Company common stock as an investment option in its
Plan.

During the years ended December 31, 2001,
2002 and 2003, the Company incurred $339,000, $426,000 and
$500,000, respectively, of expenses related to these plans.



|    |                                
|--- | -------------------------------
|10. | Stock Option and Purchase Plans

During 1994, the Board of Directors approved a
new plan (1994 Plan), effective January 1,
1995, for which 1,500,000 shares of common stock were
reserved. The 1994 Plan was amended in October 1995 and April
1996 to reserve additional shares of common stock for issuance
under the 1994 Plan, bringing the total shares of common stock
reserved for issuance to 4,500,000. Options under the 1994 Plan
generally vest ratably over four years and expire ten years
after the date of grant. The Board of Directors, as of
April 30, 1998, decided that no further options would be
granted under the 1994 plan. Under the 1994 Plan, there were
options to purchase 1,802,501, 1,415,550 and 140,550 shares
of common stock outstanding as of December 31, 2001, 2002
and 2003, respectively, of which options to purchase 1,292,985,
961,437 and 140,550 shares of common stock were exercisable
as of December 31, 2001, 2002 and 2003, respectively.

The Companys 1996 Director Stock Option
Plan (1996 Plan) provides for non-employee directors
to receive options to purchase common stock of the Company at an
exercise price equal to the fair market value of the common
stock at the date of grant. Each option granted under the 1996
Plan is fully vested immediately upon the option grant date and
expires ten years from the grant date. On May 23, 2000, the
1996 Plan was amended to increase the number of shares of Common
Stock reserved for issuance to 450,000. At December 31,
2001, 2002 and 2003, there were 217,500, 127,500 and
82,500 shares, respectively, available for director option
grants. There were options to purchase 210,000, 300,000 and
345,000 shares of common stock outstanding as of
December 31, 2001, 2002 and 2003, respectively. All options
outstanding were exercisable as of December 31, 2001, 2002
and 2003, respectively.

During 1998, the Board of Directors approved the
1998 Stock Incentive Plan (1998 Plan), for which
2,250,000 shares of common stock were reserved for
issuance. The number of reserved shares was increased by 750,000
in both May 2000 and 2001. In May 2003, the number of reserved
shares was further increased by 1,500,000 for a total of
5,250,000 shares. Generally, options under the 1998 Plan
vest ratably over four years and expire ten years subsequent to
the grant. Shares available for option grants under the 1998
Plan were 1,778,943, 657,210 and 2,839,938 at December 31,
2001, 2002 and 2003, respectively. There were options to
purchase 1,958,246, 2,066,193 and 1,702,923 shares of
common stock outstanding at December 31, 2001, 2002 and
2003, respectively, of which options to purchase 754,545,
920,616 and 678,573 shares were exercisable.

In 1999, the Board of Directors approved the
Companys 1999 Non-Officer Employee Stock Incentive Plan
(1999 Plan) and reserved 1,875,000 shares of
common stock for issuance under the 1999 Plan. All of the
Companys employees, consultants, and advisors other than
the Companys executive officers and directors are eligible
to participate in the 1999 Plan. Only non-statutory stock
options, restricted stock awards, and other stock-based awards
may be granted under the 1999 Plan. Shares available for option
grants under the 1999 Plan were 680,072, 805,089 and 799,659 at
December 31, 2001, 2002 and 2003, respectively. There were
options to purchase 1,002,735, 612,855 and 382,493 shares
of common stock outstanding at December 31, 2001, 2002 and
2003, respectively, of which options to purchase 451,155,
383,412 and 325,806 shares were exercisable.

F-18



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes stock option
transactions for the years ended December 31, 2001, 2002
and 2003.

|                                 |           |        |           |                  |   |   |      |      | 
|-------------------------------- | --------- | ------ | --------- | ---------------- | - | - | ---- | ---- | 
|                                 |           |        |           | Weighted Average
|                                 |           | Shares |           | Exercise Price  
|                                 |           |        |           |                 
|Outstanding at December 31, 2000 |           |        | 4,856,935 |                  |   | $ | 6.19 |     
|                                 | Granted   |        |           | 945,750          |   |   |      | 3.61 | 
|                                 | Cancelled |        |           | (686,855         | ) |   |      | 5.15 | 
|                                 | Exercised |        |           | (142,348         | ) |   |      | 3.48 | 
|                                 |           |        |           |                  |   |   |      |     
|Outstanding at December 31, 2001 |           |        | 4,973,482 |                  |   |   | 5.93 |     
|                                 | Granted   |        |           | 651,000          |   |   |      | 6.43 | 
|                                 | Cancelled |        |           | (340,441         | ) |   |      | 6.23 | 
|                                 | Exercised |        |           | (889,443         | ) |   |      | 4.87 | 
|                                 |           |        |           |                  |   |   |      |     
|Outstanding at December 31, 2002 |           |        | 4,394,598 |                  |   |   | 6.19 |     
|                                 | Granted   |        |           | 637,500          |   |   |      | 8.04 | 
|                                 | Cancelled |        |           | (1,199,298       | ) |   |      | 8.78 | 
|                                 | Exercised |        |           | (1,261,834       | ) |   |      | 5.20 | 
|                                 |           |        |           |                  |   |   |      |     
|Outstanding at December 31, 2003 |           |        | 2,570,966 |                  |   | $ | 5.92 |     
|                                 |           |        |           |                  |   |   |      |     

The following table summarizes information about
stock options outstanding at December 31, 2003:

|                |  |                |           |                       |  |                     |     |                |  |                  |       |  |  |  |           |  |  |   |       | 
|--------------- |  | -------------- | --------- | --------------------- |  | ------------------- | --- | -------------- |  | ---------------- | ----- |  |  |  | --------- |  |  | - | ----- | 
|                |  |                |           |                       |  |                    
|                |  |                |           | Options Outstanding   |  | Options Exercisable
|                |  |                |           |                       |  |                    
|                |  | Number         |           | Weighted Average      |  |                     |     | Number         |  |                 
|Range of        |  | Outstanding at |           | Remaining Contractual |  | Weighted Average    |     | Exercisable at |  | Weighted Average
|Exercise Price  |  | 12/31/03       |           | Life (years)          |  | Exercise Price      |     | 12/31/03       |  | Exercise Price  
|                |  |                |           |                       |  |                     |     |                |  |                 
|$ 2.63  $ 3.83 |  |                | 1,229,784 |                       |  |                     | 6.4 |                |  | $                | 3.45  |  |  |  | 1,006,430 |  |  | $ | 3.45  | 
|4.00    6.00   |  |                | 216,996   |                       |  |                     | 7.3 |                |  |                  | 5.19  |  |  |  | 71,828    |  |  |   | 4.75  | 
|6.13    8.64   |  |                | 842,936   |                       |  |                     | 8.7 |                |  |                  | 7.67  |  |  |  | 164,171   |  |  |   | 7.86  | 
|10.00   12.09  |  |                | 194,250   |                       |  |                     | 6.8 |                |  |                  | 10.41 |  |  |  | 160,500   |  |  |   | 10.40 | 
|15.17   15.75  |  |                | 87,000    |                       |  |                     | 4.5 |                |  |                  | 15.59 |  |  |  | 87,000    |  |  |   | 15.59 | 
|                |  |                |           |                       |  |                     |     |                |  |                  |       |  |  |  |           |  |  |   |       | 
|                |  |                | 2,570,966 |                       |  |                     | 7.2 |                |  | $                | 5.92  |  |  |  | 1,489,929 |  |  | $ | 5.46  | 

The exercise price for each of the above grants
was determined by the Board of Directors to be equal to the fair
market value of the Companys common stock on the date of
grant.

The Companys 1996 Employee Stock Purchase
Plan (ESPP) permits employees to purchase shares of
common stock pursuant to payroll deductions at a price equal to
85% of the fair market value of the Companys common stock
on either the first or last day of the purchase period,
whichever is lower. The Company has adopted semi-annual purchase
periods of October through March and April through September. As
of December 31, 2003, employees had deposited with the
Company, through payroll deductions, approximately $107,000 to
purchase shares through the ESPP at March 31, 2004. In May
2003, the ESPP was further amended to increase the reserved
shares from 900,000 to 1,200,000.

At December 31, 2001, 2002 and 2003, an
aggregate of 7,867,500, 6,135,000 and 6,691,000 shares,
respectively, were reserved for issuance under the
Companys stock option plans and employee stock purchase
plan.

F-19



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |             
|--- | ------------
|11. | Acquisitions

On December 12, 2003, the Company acquired
substantially all of the assets of Amicorp Groups fund
services business for $1.8 million in cash. The fund
services business, named SS&C Fund Services N.V., is
headquartered in Curacao, the Netherlands Antilles. SS&C
Fund Services serves the fund community with both on and
offshore services, including transfer agency, net asset
valuation, account control and reconciliation, set up of
investment funds, maintenance of corporate vehicles and client
service management.

The acquisition was accounted for as a purchase.
The net assets and results of operations of the fund services
business have been included in the consolidated financial
statements from December 12, 2003. A summary of the
purchase price allocation appears below. The purchase price was
allocated to tangible and intangible assets based on their fair
market value on the date of the acquisition. There was no
technology acquired as part of this acquisition. The fair value
of acquired client contracts of $0.4 million was determined
based on the discounted future cash flows method. This
intangible asset is amortized on a straight-line basis over five
years, the estimated future period over which the Company
expects to derive an economic benefit from the contracts.

On November 15, 2002, the Company acquired
the assets and business of DBC, a business within The Thomson
Corporation and assumed certain liabilities. DBC provides
financial software for fixed income analysis in municipal
finance in the United States. DBC products are widely used for
structuring general obligation and revenue bond issues,
including asset-backed housing and student loan securitizations.
The consideration for the deal was $4.6 million in cash and
the costs of the transaction.

The acquisition was accounted for as a purchase.
The net assets and results of operations of DBC have been
included in the consolidated financial statements of the Company
from November 1, 2002. The purchase price was first
allocated to tangible assets and liabilities based on their fair
value on the date of the acquisition. The fair value of acquired
completed technology of $2.9 million was determined based
on the future cash flows method. The acquired completed
technology is amortized on a straight-line basis over five
years, the estimated life of the product. The remainder of the
purchase price was allocated to goodwill.

On January 15, 2002, the Company acquired
the assets and business of Real-Time USA, Inc.
(Real-Time), a solution provider of sell-side fixed
income applications. Real-Time delivers a comprehensive suite of
front-, mid-, and back-office applications via Application
Service Provider (ASP) or license, to commercial
banks and broker-dealers throughout the United States. The
consideration for the deal was $3.9 million in cash and the
assumption of certain liabilities by the Company, and a
potential earn-out payment by the Company of up to
$1.2 million in cash if certain 2002 revenue targets were
achieved. The earn-out targets were not attained in 2002 and
thus no payment was made. A summary of the allocation of the
purchase price appears below.

The acquisition was accounted for as a purchase.
The net assets and results of operations of Real-Time have been
included in the consolidated financial statements of the Company
from January 1, 2002. The purchase price was allocated to
tangible and intangible assets, liabilities, and in-process
research and development (IPR&D) based on their
fair value on the date of the acquisition. The fair value
assigned to intangible assets acquired was based on an
independent appraisal. The fair value of acquired completed
technology of $1.7 million was determined based on the
future cash flows method. The acquired completed technology is
amortized on a straight-line basis over four years, the
estimated life of the product.

The Company recorded a one-time write-off of
$1.7 million in the period ended March 31, 2002
related to the value of IPR&D acquired as part of the
purchase of Real-Time that had not yet reached technological
feasibility and had no alternative future use. Accordingly,
these costs were expensed upon acquisition. At the acquisition
date, Real-Time was developing Lightning, a full-service ASP
bond accounting solution designed specifically for large
regional banks. The allocation of $1.7 million to IPR&D

F-20



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

represents the estimated fair value related to
this incomplete project based on risk-adjusted cash flows
adjusted to reflect the contribution of core technology. The net
cash flows were then discounted utilizing a weighted average
cost of capital of 26%. This discount rate takes into
consideration the inherent uncertainties surrounding the
successful development of the in-process research and
development, the profitability levels of such technology and the
potential for other competing technological advances which could
potentially impact the estimates. The Lightning project was
completed in 2002.

On November 15, 2001, the Company acquired
substantially all of the assets of Digital Visions
(DVI), a division of Netzee, Inc. and assumed
certain liabilities, for $1.6 million. DVI delivers two
major products over the Internet to over 1,700 community
financial institutions. The first is a suite of bond accounting,
interest rate analytic, and asset liability management services
under the brand name PortPro, which is primarily sold through
dealer banks and bond brokers. The second is a Mall
of information services designed to help retail and small
business lending officers at these institutions.

The acquisition was accounted for as a purchase.
The net assets and results of operations of DVI have been
included in the consolidated financial statements from
November 1, 2001. A summary of the purchase price
allocation appears below. The purchase price was allocated to
tangible and intangible assets and liabilities based on their
fair market value on the date of the acquisition. The fair value
of acquired completed technology of $0.9 million was
determined based on the future cash flows method. The acquired
completed technology is amortized on a straight-line basis over
5 years, the estimated life of the product.

The following summarizes the allocation of the
purchase price for the Amicorp Groups fund services
business, Real-Time, DBC, and DVI acquisitions (in thousands):

|                                      |  |          |       |           |  |        |       |        |  |   |        |   |  |   |       |  
|------------------------------------- |  | -------- | ----- | --------- |  | ------ | ----- | ------ |  | - | ------ | - |  | - | ----- | -
|                                      |  | Fund     |       |           |  |        |       |       
|                                      |  | Services |       | Real-Time |  | DBC    |       | DVI   
|                                      |  | (2003)   |       | (2002)    |  | (2002) |       | (2001)
|                                      |  |          |       |           |  |        |       |       
|Assets acquired, net of cash received |  | $        | 41    |           |  | $      | 664   |        |  | $ | 819    |   |  | $ | 926   |  
|Acquired client contracts             |  |          | 366   |           |  |        |      |        |  |   |       |   |  |   |      |  
|Purchased technology                  |  |          |      |           |  |        | 1,743 |        |  |   | 2,912  |   |  |   | 910   |  
|In-process research & development     |  |          |      |           |  |        | 1,744 |        |  |   |       |   |  |   |      |  
|Goodwill                              |  |          | 1,410 |           |  |        |      |        |  |   | 2,368  |   |  |   |      |  
|Liabilities assumed                   |  |          |      |           |  |        | (221  | )      |  |   | (1,534 | ) |  |   | (252  | )
|                                      |  |          |       |           |  |        |       |        |  |   |        |   |  |   |       |  
|Consideration paid                    |  | $        | 1,817 |           |  | $      | 3,930 |        |  | $ | 4,565  |   |  | $ | 1,584 |  
|                                      |  |          |       |           |  |        |       |        |  |   |        |   |  |   |       |  

The following unaudited pro forma combined
results of operations is provided for illustrative purposes only
and assumes that the acquisitions of Real-Time, DBC and DVI
occurred on January 1, 2001. The unaudited pro forma
combined results of operations for the year ended
December 31, 2002 excludes the $1.7 million write-off of
purchased IPR&D related to Real-Time. This unaudited pro
forma information (in thousands, except per share amounts)
should not be relied upon as necessarily being indicative of the
historical results that would have been obtained if these
acquisitions had actually occurred on that date, nor of the
results that may be obtained in the future.

|                           |  |      |        |      |  |      |        |  |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                           |  | 2001 |        | 2002 |  | 2003
|                           |  |      |        |      |  |     
|Revenues                   |  | $    | 63,747 |      |  | $    | 65,945 |  |  | $ | 65,531 | 
|Net income                 |  |      | 3,427  |      |  |      | 9,102  |  |  |   | 11,796 | 
|Basic earnings per share   |  | $    | 0.15   |      |  | $    | 0.47   |  |  | $ | 0.63   | 
|Diluted earnings per share |  | $    | 0.15   |      |  | $    | 0.44   |  |  | $ | 0.59   | 

Pro forma results of operations have not been
presented for the acquisition of Amicorp Groups fund
services business, as results of operations of the acquired
business are not significant to the Company.

F-21



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|    |                              
|--- | -----------------------------
|12. | Commitments and Contingencies

From time to time, the Company is subject to
certain legal proceedings and claims that arise in the normal
course of its business. In the opinion of management, the
Company is not a party to any litigation that it believes could
have a material effect on the Company or its business.



|    |                     
|--- | --------------------
|13. | Restructuring Charge

As a result of a review of its resource needs,
the Company made the decision in 2001 to close several branches
and eliminate redundant positions. The restructuring charge
incurred in connection with the branch closings and the
elimination of positions was $0.8 million for the year
ended December 31, 2001. The charge primarily consisted of
severance pay for terminated employees, ongoing lease
commitments and fixed assets write-offs.



|    |                  
|--- | -----------------
|14. | Subsequent Events

On February 17, 2004, the Company acquired
substantially all the assets of NeoVision
Hypersystems, Inc. (NeoVision) for
$1.6 million and the assumption of certain liabilities.
NeoVision is a provider of tactical visual analytical solutions
for the financial industry. The net assets and results of
operations of NeoVision will be included in the Companys
consolidated financial statements as of February 15, 2004.

On January 16, 2004, the Company acquired
substantially all the assets of Investment Advisory Network, LLC
(IAN) for $3 million and the assumption of
certain liabilities. IAN provides web-based wealth management
services to financial institutions, broker-dealers and financial
advisors who offer managed accounts to the private wealth
market. The net assets and results of operations of IAN will be
included in the Companys consolidated financial statements
as of January 1, 2004.

On February 5, 2004, the Companys
Board of Directors approved a three-for-two stock split to be
effected in the form of a stock dividend. The record date for
the stock split was February 20, 2004 and the payment date
was March 5, 2004. All share and per share amounts for all
periods presented have been retroactively restated to reflect
the stock split.

As part of its semi-annual cash dividend program,
the Companys Board of Directors declared a post-split
dividend of $0.07 per share to be payable on or about
March 24, 2004 to stockholders of record as of
March 10, 2004.



|    |                                                   
|--- | --------------------------------------------------
|15. | International Sales and Geographic
    Information

The Company operates in one segment, as defined
by SFAS No. 131, Disclosures about Segments of
an Enterprise and Related Information. There were no sales
to any individual clients during the years in the three-year
period ended December 31, 2003 that represented 10% or more
of net sales. The Company attributes net sales to an individual
country based upon location of the client.

The Company manages its business primarily on a
geographic basis. The Companys reportable regions consist
of the Americas and Europe. The European region includes
European countries as well as the Middle East and Africa. Other
operating regions include Asia Pacific and Japan.

The Company relies exclusively on its operations
in the Netherlands for sales of its Mabel product. Total revenue
derived from this product was $1.3 million,
$1.9 million and $1.7 million in the years ended
December 31, 2001, 2002 and 2003, respectively.

F-22



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##### Table of Contents



SS&C TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Revenues by geography for the years ended
December 31, were (in thousands):

|                                 |  |      |        |      |  |      |        |  |  |   |        | 
|-------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                 |  | 2001 |        | 2002 |  | 2003
|                                 |  |      |        |      |  |     
|United States                    |  | $    | 45,517 |      |  | $    | 52,436 |  |  | $ | 54,379 | 
|Americas excluding United States |  |      | 3,356  |      |  |      | 3,165  |  |  |   | 4,050  | 
|Europe                           |  |      | 5,087  |      |  |      | 4,546  |  |  |   | 4,796  | 
|Other                            |  |      | 2,409  |      |  |      | 2,287  |  |  |   | 2,306  | 
|                                 |  |      |        |      |  |      |        |  |  |   |        | 
|                                 |  | $    | 56,369 |      |  | $    | 62,434 |  |  | $ | 65,531 | 
|                                 |  |      |        |      |  |      |        |  |  |   |        | 

Long-lived assets as of December 31, were
(in thousands):

|                                 |  |      |        |      |  |   |        | 
|-------------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                                 |  | 2002 |        | 2003
|                                 |  |      |        |     
|United States                    |  | $    | 13,221 |      |  | $ | 10,869 | 
|Americas excluding United States |  |      |       |      |  |   | 1,813  | 
|Europe                           |  |      | 440    |      |  |   | 352    | 
|Other                            |  |      | 148    |      |  |   | 128    | 
|                                 |  |      |        |      |  |   |        | 
|                                 |  | $    | 13,809 |      |  | $ | 13,162 | 
|                                 |  |      |        |      |  |   |        | 



|    |                                                  
|--- | -------------------------------------------------
|16. | Selected Quarterly Financial Data
    (Unaudited)

|                           |  |                                       |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|-------------------------- |  | ------------------------------------- | ------ | ------- |  | ------- | ------ | ------- |  | - | ------ |  |  | - | ------ | 
|                           |  | First                                 |        | Second  |  | Third   |        | Fourth 
|                           |  | Quarter                               |        | Quarter |  | Quarter |        | Quarter
|                           |  |                                       |        |         |  |         |        |        
|                           |  |                                      
|                           |  | (In thousands, except per share data)
|2002                       |  |                                       |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Revenue                    |  | $                                     | 15,215 |         |  | $       | 15,872 |         |  | $ | 15,109 |  |  | $ | 16,238 | 
|Gross profit               |  |                                       | 9,918  |         |  |         | 10,640 |         |  |   | 10,003 |  |  |   | 10,884 | 
|Operating income           |  |                                       | 661    |         |  |         | 3,116  |         |  |   | 3,339  |  |  |   | 4,026  | 
|Net income                 |  |                                       | 935    |         |  |         | 1,597  |         |  |   | 2,146  |  |  |   | 2,627  | 
|Basic earnings per share   |  | $                                     | 0.05   |         |  | $       | 0.08   |         |  | $ | 0.11   |  |  | $ | 0.14   | 
|Diluted earnings per share |  |                                       | 0.04   |         |  |         | 0.08   |         |  |   | 0.11   |  |  |   | 0.13   | 
|2003                       |  |                                       |        |         |  |         |        |         |  |   |        |  |  |   |        | 
|Revenue                    |  | $                                     | 15,738 |         |  | $       | 15,906 |         |  | $ | 16,008 |  |  | $ | 17,879 | 
|Gross profit               |  |                                       | 10,595 |         |  |         | 10,816 |         |  |   | 11,094 |  |  |   | 12,600 | 
|Operating income           |  |                                       | 3,565  |         |  |         | 4,173  |         |  |   | 4,609  |  |  |   | 6,031  | 
|Net income                 |  |                                       | 2,329  |         |  |         | 2,734  |         |  |   | 3,041  |  |  |   | 3,692  | 
|Basic earnings per share   |  | $                                     | 0.12   |         |  | $       | 0.15   |         |  | $ | 0.16   |  |  | $ | 0.20   | 
|Diluted earnings per share |  |                                       | 0.12   |         |  |         | 0.14   |         |  |   | 0.15   |  |  |   | 0.19   | 

The first quarter of 2002 includes a
$1.7 million pretax write-off of purchased in-process
research and development.

F-23



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##### Table of Contents






Exhibit Index

|        |       |             |  |                                                                                                                                                                                                                                                                                                           
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |       |            
|No.     |       | Description
|        |       |            
|        | 2.1  |             |  | Asset Purchase Agreement, dated November 15,
    2001, by and between the Registrant and Netzee, Inc. is
    incorporated herein by reference to Exhibit 2.1 to the
    Registrants Current Report on Form 8-K, dated
    November 15, 2001 (File No. 000-28430)                                         
|        | 3.1   |             |  | Amended and Restated Certificate of Incorporation
    of the Registrant, as amended is, incorporated herein by
    reference to Exhibit 3.1 to the Registrants Quarterly
    Report on Form 10-Q for the quarterly period ended
    June 30, 1999 (File No. 000-28430)                                   
|        | 3.2   |             |  | Second Amended and Restated By-Laws of the
    Registrant is incorporated herein by reference to Exhibit 3
    to the Registrants Quarterly Report on Form 10-Q for
    the quarterly period ended September 30, 2000 (File
    No. 000-28430)                                                           
|        | 4.1   |             |  | Specimen Certificate for shares of Common Stock,
    $.01 par value per share, of the Registrant is incorporated
    herein by reference to Exhibit 4 to the Registrants
    Registration Statement on Form S-1, as amended (File
    No. 333-3094) (the Form S-1)                                     
|        | 4.2   |             |  | Warrant, dated March 29, 2002, made by the
    registrant in favor of Conseco, Inc. is incorporated herein
    by reference to Exhibit 4.1 to Registrants Annual
    Report on Form 10-K for the year ended December 31,
    2002 (File No. 000-28430) (the 2002
    Form 10-K)                        
|        | 10.1* |             |  | 1994 Stock Option Plan, as amended, is
    incorporated herein by reference to Exhibit 10.2 to the
    Registrants Annual Report on Form 10-K for the year
    ended December 31, 1996 (File No. 000-28430)                                                                                              
|        | 10.2* |             |  | 1996 Director Stock Option Plan, as amended is
    incorporated herein by reference to Appendix D to the
    Registrants Definitive Schedule 14A, filed April 28,
    2000 (File No. 000-28430)                                                                                                          
|        | 10.3* |             |  | 1998 Stock Incentive Plan, as amended, is
    incorporated by reference to appendix C to the Registrants
    Definitive Schedule 14A, filed April 27, 2001 (File
    No. 000-28430)                                                                                                                      
|        | 10.4* |             |  | 1999 Non-Officer Employee Stock Incentive Plan is
    incorporated herein by reference to Exhibit 10.5 to the
    2002 Form 10-K                                                                                                                                                                          
|        | 10.5* |             |  | Employment Agreement, dated March 28, 1996,
    between the Registrant and William C. Stone is incorporated
    herein by reference to Exhibit 10.5 to the Form S-1                                                                                                                                       
|        | 10.6  |             |  | Lease Agreement, dated September 23, 1997,
    by and between the Registrant and Monarch Life Insurance
    Company, as amended, is incorporated herein by reference to
    Exhibit 10.15 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 1997 (File
    No. 000-28430)
|        | 10.7  |             |  | Stock and Note Purchase Agreement, dated
    September 25, 1990, as amended on September 20, 1994,
    among the Registrant and certain stockholders of the Registrant
    is incorporated herein by reference to Exhibit 10.10 to the
    Form S-1                                                       
|        | 10.8  |             |  | Series B Preferred Stock Purchase Agreement,
    dated September 20, 1994, among the Registrant and certain
    stockholders of the Registrant is incorporated herein by
    reference to Exhibit 10.11 to the Form S-1                                                                                   
|        | 10.9  |             |  | Series C Preferred Stock Purchase Agreement,
    dated March 31, 1995, among the Registrant and certain
    stockholders of the Registrant is incorporated herein by
    reference to Exhibit 10.12 to the Form S-1                                                                                       
|        | 21    |             |  | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                            
|        | 23    |             |  | Consent of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                     
|        | 31.1  |             |  | Certification of the Registrants Chief
    Executive Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                               
|        | 31.2  |             |  | Certification of the Registrants Chief
    Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                               
|        | 32    |             |  | 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                                                                                                



---



|  |                                                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Management contract or compensatory plan or
    arrangement filed herewith in response to Item 15(a)(3) of
    the Instructions to the Annual Report on Form 10-K.



|  |                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Registrant hereby agrees to furnish
    supplementally a copy of any omitted schedules to this agreement
    to the Securities and Exchange Commission upon its request.