EX-99.1 2 dex991.htm ADJUSTED EARNINGS RELEASE FINANCIAL STATEMENTS Adjusted Earnings Release Financial Statements

Exhibit 99.1

SunGard Data Systems Inc.

Consolidated Statements of Operations

(in millions)

 

     Three Months Ended Dec. 31, 2008  
     As Originally
Reported
    Adjustment     As
Adjusted
 

Revenue:

      

Services

   $ 1,404     $ —       $ 1,404  

License and resale fees

     134       —         134  
                        

Total products and services

     1,538       —         1,538  

Reimbursed expenses

     5       —         5  
                        
     1,543       —         1,543  
                        

Costs and expenses:

      

Cost of sales and direct operating

     720       —         720  

Sales, marketing and administration

     336       —         336  

Product development

     67       —         67  

Depreciation and amortization

     71       —         71  

Amortization of acquisition-related intangible assets

     154       —         154  

Goodwill impairment and merger costs

     130       —         130  
                        
     1,478       —         1,478  
                        

Income from operations

     65       —         65  

Interest income

     5       —         5  

Interest expense and amortization of deferred financing fees

     (166 )     —         (166 )

Other expense

     (27 )     (17 )     (44 )
                        

Loss before income taxes

     (123 )     (17 )     (140 )

Income tax expense (benefit)

     51       (4 )     47  
                        

Net loss

   $ (174 )   $ (13 )   $ (187 )
                        

SunGard Data Systems Inc.

Consolidated Statements of Operations

(in millions)

 

     Twelve Months Ended Dec. 31, 2008  
     As Originally
Reported
    Adjustment     As
Adjusted
 

Revenue:

      

Services

   $ 5,083     $ —       $ 5,083  

License and resale fees

     369       —         369  
                        

Total products and services

     5,452       —         5,452  

Reimbursed expenses

     144       —         144  
                        
     5,596       —         5,596  
                        

Costs and expenses:

      

Cost of sales and direct operating

     2,744       —         2,744  

Sales, marketing and administration

     1,151       —         1,151  

Product development

     308       —         308  

Depreciation and amortization

     278       —         278  

Amortization of acquisition-related intangible assets

     515       —         515  

Goodwill impairment and merger costs

     130       —         130  
                        
     5,126       —         5,126  
                        

Income from operations

     470       —         470  

Interest income

     18       —         18  

Interest expense and amortization of deferred financing fees

     (599 )     —         (599 )

Other expense

     (76 )     (17 )     (93 )
                        

Loss before income taxes

     (187 )     (17 )     (204 )

Income tax expense (benefit)

     42       (4 )     38  
                        

Net loss

   $ (229 )   $ (13 )   $ (242 )
                        

See Notes to Consolidated Condensed Financial Information.


SunGard Data Systems Inc.

Consolidated Condensed Balance Sheets

(in millions)

 

     Dec. 31, 2008
     As Originally
Reported
   Adjustment     As
Adjusted

Assets:

       

Current:

       

Cash and cash equivalents

   $ 975    $ —       $ 975

Accounts receivable, net

     782      —         782

Clearing broker assets

     309      —         309

Prepaid expenses and other current assets

     140      4       144

Retained interest in accounts receivable sold

     302      (17 )     285
                     

Total current assets

     2,508      (13 )     2,495

Property and equipment, net

     898      —         898

Software products, net

     1,159      —         1,159

Customer base, net

     2,616      —         2,616

Other assets, net

     1,282      —         1,282

Goodwill

     7,328      —         7,328
                     

Total Assets

   $ 15,791    $ (13 )   $ 15,778
                     

Liabilities and Stockholder's Equity:

       

Current:

       

Short-term and current portion of long-term debt

   $ 322    $ —       $ 322

Accounts payable and accrued expenses

     973      (12 )     961

Clearing broker liabilities

     310      —         310

Deferred revenue

     977      —         977
                     

Total current liabilities

     2,582      (12 )     2,570

Long-term debt

     8,553      —         8,553

Deferred income taxes

     1,584      8       1,592
                     

Total liabilities

     12,719      (4 )     12,715

Stockholder's equity

     3,072      (9 )     3,063
                     

Total Liabilities and Stockholder's Equity

   $ 15,791    $ (13 )   $ 15,778
                     

See Notes to Consolidated Condensed Financial Information.


SunGard Data Systems Inc.

Notes to Consolidated Condensed Financial Information

Note 1. Reconciliation of Income from Operations to Adjusted Income from Operations

Adjusted income from operations represents income from operations adjusted for amortization of acquisition-related intangible assets, goodwill impairment charges, merger costs, adjustments for deferred revenue, stock-based compensation expense and management fee expense. Adjusted income from operations is not a recognized term under generally accepted accounting principles (GAAP). Adjusted income from operations does not represent income from operations, as that term is defined under GAAP, and should not be considered as an alternative to income from operations as an indicator of our operating performance. We have included information concerning adjusted income from operations because we use such information when evaluating income from operations to better evaluate the underlying performance of the Company. Adjusted income from operations as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted income from operations and income from operations, the GAAP measure we believe to be most directly comparable to adjusted income from operations.

 

     Three Months Ended Dec. 31, 2008

(in millions)

   As Originally
Reported
   Adjustment    As
Adjusted

Income from operations

   $ 65    $ —      $ 65

Amortization of acquisition-related intangible assets

     154      —        154

Goodwill impairment charge

     128      —        128

Merger costs

     2      —        2

Purchase accounting adjustments

     11      —        11

Stock-based compensation and other costs

     23      —        23
                    

Adjusted income from operations

   $ 383    $ —      $ 383
                    
     Twelve Months Ended Dec. 31, 2008

(in millions)

   As Originally
Reported
   Adjustment    As
Adjusted

Income from operations

   $ 470    $ —      $ 470

Amortization of acquisition-related intangible assets

     515      —        515

Goodwill impairment charge

     128      —        128

Merger costs

     2      —        2

Purchase accounting adjustments

     43      —        43

Stock-based compensation and other costs

     57      —        57
                    

Adjusted income from operations

   $ 1,215    $ —      $ 1,215
                    


SunGard Data Systems Inc.

Notes to Consolidated Condensed Financial Information

Note 2. Reconciliation of Net Loss to EBITDA and Reconciliation of EBITDA to Adjusted EBITDA

EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization and goodwill impairment. Adjusted EBITDA is defined as EBITDA further adjusted to give effect to certain items that are required in calculating covenant compliance under our senior and senior subordinated notes as well as under our senior secured credit facilities, which were entered into in August 2005 and our senior notes entered into in September 2008. Adjusted EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles, or GAAP. EBITDA and Adjusted EBITDA do not represent net income (loss), as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of our operating performance. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures (including capitalized software expense), tax payments and debt service requirements. SunGard considers EBITDA and Adjusted EBITDA to be key indicators of our ability to pay our debt. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures. The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the GAAP measure we believe to be most directly comparable to EBITDA and Adjusted EBITDA. Further information regarding this reconciliation is included in our periodic filings with the U.S. Securities and Exchange Commission.

 

     Three Months Ended Dec. 31, 2008  

(in millions)

   As Originally
Reported
    Adjustment     As
Adjusted
 

Net loss

   $ (174 )   $ (13 )   $ (187 )

Interest expense, net

     161       —         161  

Income tax expense (benefit)

     51       (4 )     47  

Depreciation and amortization

     225       —         225  

Goodwill impairment charge

     128       —         128  
                        

EBITDA

     391       (17 )     374  

Purchase accounting adjustments

     11       —         11  

Non-cash charges

     13       —         13  

Unusual or non-recurring charges

     34       —         34  

Pro forma expense savings related to acquisitions

     —         4       4  

Other

     45       —         45  
                        

Adjusted EBITDA—senior secured credit facilities

     494       (13 )     481  

(Gain) Loss on sale of receivables

     (5 )     17       12  
                        

Adjusted EBITDA—senior notes due 2013 and 2015 and senior subordinated notes due 2015

   $ 489     $ 4     $ 493  
                        
     Twelve Months Ended Dec. 31, 2008  

(in millions)

   As Originally
Reported
    Adjustment     As
Adjusted
 

Net loss

   $ (229 )   $ (13 )   $ (242 )

Interest expense, net

     581       —         581  

Income tax expense (benefit)

     42       (4 )     38  

Depreciation and amortization

     793       —         793  

Goodwill impairment charge

     128       —         128  
                        

EBITDA

     1,315       (17 )     1,298  

Purchase accounting adjustments

     39       —         39  

Non-cash charges

     35       —         35  

Unusual or non-recurring charges

     68       —         68  

Acquired EBITDA, net of disposed EBITDA

     57       —         57  

Pro forma expense savings related to acquisitions

     —         17       17  

Other

     76       —         76  
                        

Adjusted EBITDA—senior secured credit facilities

     1,590       —         1,590  

Loss on sale of receivables

     8       17       25  
                        

Adjusted EBITDA—senior notes due 2013 and 2015 and senior subordinated notes due 2015

   $ 1,598     $ 17     $ 1,615