UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2017~~2022


☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-34675

SS&C TECHNOLOGIES HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware

71-0987913

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

80 Lamberton Road

Windsor, CT06095

(Address of principal executive offices, including zip code)

~~860-298-4500~~860-298-4500

(Registrant’s telephone number, including area code)

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☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	SSNC	The Nasdaq Global Select Market

There were ~~205,860,743~~251,910,816 shares of the registrant’s common stock outstanding as of October ~~25, 2017.~~27, 2022.

SS&C TECHNOLOGIES HOLDINGS, INC.

INDEX


		Page Number

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)		3

Condensed Consolidated Balance Sheets at September 30, ~~2017~~2022 and December 31, ~~2016~~2021		3

Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021		4

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021		5

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021		6

Notes to Condensed Consolidated Financial Statements		68

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1820

Item 3. Quantitative and Qualitative Disclosures About Market Risk		2829

Item 4. Controls and Procedures		2830

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		2931

Item ~~6. Exhibits~~1A. Risk Factors		2931

~~EXHIBIT INDEX~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3031

~~SIGNATURE~~Item 6. Exhibits		3132

EXHIBIT INDEX		32

SIGNATURE		33

SS&C Technologies Holdings, Inc., or “SS&C Holdings,” is our top-level holding company. SS&C Technologies, Inc., or “SS&C,” is our primary operating company and a wholly-owned subsidiary of SS&C Technologies Holdings, Inc. “We,” “us,” “our” and the “Company” mean SS&C Technologies Holdings, Inc. and its consolidated subsidiaries, including SS&C.

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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”, “estimates”, “projects”, “forecasts”, “may”, “assume”, “intend”, “will”, “continue”, “opportunity”, “predict”, “potential”, “future”, “guarantee”, “likely”, “target”, “indicate”, “would”, “could” and “should” and similar expressions are intended to identify forward-looking statements. The important factors discussed under the caption “Risk Factors” in ~~the Company’s~~this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021, filed with the Securities and Exchange Commission on February ~~28, 2017,~~25, 2022, 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. ~~The Company does~~We do not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

~~Explanatory Note~~

On June 24, 2016, SS&C Technologies Holdings, Inc. completed a two-for-one stock split, effective in the form of a stock dividend. All share and per share amounts (other than for the Company’s Class A non-voting common stock) have been retroactively restated for all periods presented to reflect the stock split.

~~PART~~ I

PART I

Item 1. Financial Statements

~~Item 1.~~

~~Financial Statements~~

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In ~~thousands,~~millions, except ~~share and~~ per share data) (Unaudited)

September 30,

December 31,

2017

2016

ASSETS

Current assets:

Cash and cash equivalents

$
103,279

$
117,558

Accounts receivable, net of allowance for doubtful accounts of $7,711 and $5,944,
   respectively

238,677

241,307

Prepaid expenses and other current assets

32,688

31,119

Prepaid income taxes

13,832

23,012

Restricted cash

592

2,116

Total current assets

389,068

415,112

Property, plant and equipment:

Land

2,655

2,655

Building and improvements

59,974

42,749

Equipment, furniture, and fixtures

136,623

120,011

199,252

165,415

Less: accumulated depreciation

(95,672
)

(85,020
)
Net property, plant and equipment

103,580

80,395

Deferred income taxes

2,166

2,410

Goodwill (Note 3)

3,692,573

3,652,733

Intangible and other assets, net of accumulated amortization of $899,922 and $730,234,
   respectively

1,411,234

1,556,321

Total assets

$
5,598,621

$
5,706,971

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt (Note 2)

$
39,527

$
126,144

Accounts payable

27,776

16,490

Income taxes payable

—

3,473

Accrued employee compensation and benefits

73,521

104,118

Interest payable

7,344

21,470

Other accrued expenses

45,087

53,708

Deferred revenue

212,811

235,222

Total current liabilities

406,066

560,625

Long-term debt, net of current portion (Note 2)

2,177,681

2,374,986

Other long-term liabilities

85,767

59,227

Deferred income taxes

421,468

453,555

Total liabilities

3,090,982

3,448,393

Commitments and contingencies (Note 8)

Stockholders’ equity (Note 5):

Preferred stock, $0.01 par value per share, 5,000,000 shares authorized; no shares issued

—

—

Class A non-voting common stock, $0.01 par value per share, 5,000,000 shares authorized;
   no shares issued

—

—

Common stock, $0.01 par value per share, 400,000,000 shares authorized;  207,402,636 shares
   and 204,616,054 shares issued, respectively, and 205,829,297 shares and 203,042,715 shares
   outstanding, respectively, of which 1,314 and 11,252 are unvested, respectively

2,074

2,046

Additional paid-in capital

1,994,985

1,921,256

Accumulated other comprehensive loss

(87,377
)

(139,073
)
Retained earnings

615,957

492,349

2,525,639

2,276,578

Less: cost of common stock in treasury, 1,573,339 shares

(18,000
)

(18,000
)
Total stockholders’ equity

2,507,639

2,258,578

Total liabilities and stockholders’ equity

$
5,598,621

$
5,706,971


	September 30,			December 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	401.9		$	564.0
Funds receivable and funds held on behalf of clients		1,115.1			2,755.7
Accounts receivable, net of allowance for credit losses of $22.3 and $17.9, respectively		760.5			713.4
Contract asset		37.4			27.4
Prepaid expenses and other current assets		154.4			187.5
Restricted cash and cash equivalents		3.0			4.2
Total current assets		2,472.3			4,252.2
Property, plant and equipment, net (Note 2)		346.1			382.0
Operating lease right-of-use assets		266.1			291.2
Investments (Note 3)		154.6			172.8
Unconsolidated affiliates (Note 4)		236.2			306.1
Contract asset		107.8			77.9
Goodwill (Note 6)		8,713.2			8,045.5
Intangible and other assets, net of accumulated amortization of $3,257.2 and $2,890.5, respectively		4,204.3			3,805.3
Total assets	$	16,500.6		$	17,333.0
Liabilities, Redeemable Noncontrolling Interest and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt (Note 7)	$	57.4		$	47.4
Client funds obligations		1,115.1			2,755.7
Accounts payable		34.7			28.7
Income taxes payable		—			25.5
Accrued employee compensation and benefits		212.2			322.2
Interest payable		—			27.5
Other accrued expenses		342.3			310.1
Deferred revenues		435.9			334.0
Total current liabilities		2,197.6			3,851.1
Long-term debt, net of current portion (Note 7)		7,183.7			5,901.5
Operating lease liabilities		242.9			268.2
Other long-term liabilities		246.9			254.0
Deferred income taxes		843.2			835.0
Total liabilities		10,714.3			11,109.8
Commitments and contingencies (Note 14)
Redeemable noncontrolling interest (Note 3)		2.8			—
Stockholders’ equity (Note 8):
Preferred stock, $0.01 par value per share, 5.0 million shares authorized; no shares issued		—			—
Class A non-voting common stock, $0.01 par value per share, 5.0 million shares authorized; no shares issued		—			—
Common stock, $0.01 par value per share, 400.0 million shares authorized; 271.0 million shares and 269.1 million shares issued, respectively, and 251.9 million shares and 256.0 million shares outstanding, respectively		2.7			2.7
Additional paid-in capital		5,061.7			4,895.7
Accumulated other comprehensive loss		(750.3	)		(242.0	)
Retained earnings		2,582.3			2,293.0
		6,896.4			6,949.4
Less: cost of common stock in treasury, 19.1 and 13.1 million shares, respectively		(1,169.4	)		(784.0	)
Total SS&C stockholders’ equity		5,727.0			6,165.4
Noncontrolling interest (Note 9)		56.5			57.8
Total stockholders’ equity		5,783.5			6,223.2
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	16,500.6		$	17,333.0

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

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In ~~thousands,~~millions, except per share data) (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Revenues:
Software-enabled services	$	1,049.8		$	1,069.9		$	3,205.7		$	3,170.4
License, maintenance and related		271.2			194.5			739.0			586.4
Total revenues		1,321.0			1,264.4			3,944.7			3,756.8
Cost of revenues:
Software-enabled services		605.8			563.7			1,811.6			1,742.0
License, maintenance and related		91.4			76.7			265.2			236.7
Total cost of revenues		697.2			640.4			2,076.8			1,978.7
Gross profit		623.8			624.0			1,867.9			1,778.1
Operating expenses:
Selling and marketing		120.9			96.4			371.1			286.1
Research and development		107.6			97.7			331.8			306.4
General and administrative		91.1			89.8			323.4			263.5
Total operating expenses		319.6			283.9			1,026.3			856.0
Operating income		304.2			340.1			841.6			922.1
Interest expense, net		(86.0	)		(50.2	)		(203.0	)		(152.6	)
Other income (expense), net		1.1			(44.9	)		(28.3	)		(20.4	)
Equity in earnings of unconsolidated affiliates, net		(5.1	)		2.0			(2.7	)		1.9
Loss on extinguishment of debt		(1.0	)		(1.7	)		(4.1	)		(3.5	)
Income before income taxes		213.2			245.3			603.5			747.5
Provision for income taxes		53.4			60.6			162.1			198.1
Net income		159.8			184.7			441.4			549.4
Net loss (income) attributable to noncontrolling interest		0.2			(0.3	)		1.3			(0.3	)
Net income attributable to SS&C common stockholders	$	160.0		$	184.4		$	442.7		$	549.1

Basic earnings per share attributable to SS&C common stockholders	$	0.63		$	0.72		$	1.74		$	2.15
Diluted earnings per share attributable to SS&C common stockholders	$	0.61		$	0.69		$	1.68		$	2.05

Basic weighted-average number of common shares outstanding		253.9			254.7			254.8			255.8
Diluted weighted-average number of common and common equivalent shares outstanding		260.9			266.5			263.7			267.3

Net income	$	159.8		$	184.7		$	441.4		$	549.4
Other comprehensive loss, net of tax:
Change in unrealized gain on interest rate swaps		3.3			—			4.8			0.3
Foreign currency exchange translation adjustment		(248.6	)		(55.7	)		(512.0	)		(45.4	)
Change in defined benefit pension obligation		—			0.1			(1.1	)		0.2
Total other comprehensive loss, net of tax		(245.3	)		(55.6	)		(508.3	)		(44.9	)
Comprehensive (loss) income		(85.5	)		129.1			(66.9	)		504.5
Comprehensive loss (income) attributable to noncontrolling interest		0.2			(0.3	)		1.3			(0.3	)
Comprehensive (loss) income attributable to SS&C common stockholders	$	(85.3	)	$	128.8		$	(65.6	)	$	504.2

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues:

Software-enabled services

$
282,133

$
248,772

$
831,103

$
699,091

Maintenance and term licenses

112,819

106,925

336,990

305,437

Total recurring revenues

394,952

355,697

1,168,093

1,004,528

Perpetual licenses

3,576

4,389

10,226

14,643

Professional services

19,723

23,218

58,611

61,341

Total non-recurring revenues

23,299

27,607

68,837

75,984

Total revenues

418,251

383,304

1,236,930

1,080,512

Cost of revenues:

Software-enabled services

155,497

143,074

468,391

403,045

Maintenance and term licenses

46,662

45,458

140,927

138,864

Total recurring cost of revenues

202,159

188,532

609,318

541,909

Perpetual licenses

642

608

1,857

1,749

Professional services

17,001

18,887

49,778

51,532

Total non-recurring cost of revenues

17,643

19,495

51,635

53,281

Total cost of revenues

219,802

208,027

660,953

595,190

Gross profit

198,449

175,277

575,977

485,322

Operating expenses:

Selling and marketing

28,181

27,328

88,544

85,724

Research and development

37,376

37,701

114,904

114,975

General and administrative

28,975

33,345

88,910

91,239

Total operating expenses

94,532

98,374

292,358

291,938

Operating income

103,917

76,903

283,619

193,384

Interest expense, net

(26,250
)

(31,648
)

(81,565
)

(97,583
)
Other (expense) income, net

(2,535
)

2,655

(3,803
)

820

Loss on extinguishment of debt

—

—

(2,326
)

—

Income before income taxes

75,132

47,910

195,925

96,621

Provision for income taxes

10,905

9,163

32,400

22,648

Net income

$
64,227

$
38,747

$
163,525

$
73,973

Basic earnings per share

$
0.31

$
0.19

$
0.80

$
0.37

Diluted earnings per share

$
0.30

$
0.19

$
0.77

$
0.36

Basic weighted average number of common shares outstanding

205,568

201,782

204,506

199,365

Diluted weighted average number of common and common equivalent shares outstanding

212,359

206,635

211,080

205,334

Cash dividends declared and paid per common share

$
0.07

$
0.0625

$
0.195

$
0.1875

Net income

$
64,227

$
38,747

$
163,525

$
73,973

Other comprehensive income (loss), net of tax:

Foreign currency exchange translation adjustment

19,951

(12,060
)

51,696

(29,532
)
Total comprehensive income (loss), net of tax

19,951

(12,060
)

51,696

(29,532
)
Comprehensive income

$
84,178

$
26,687

$
215,221

$
44,441

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

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In ~~thousands)~~millions) (Unaudited)


	Nine Months Ended September 30,							Nine Months Ended September 30,
	2017			2016				2022			2021
Cash flow from operating activities:
Net income	$	163,525		$	73,973			$	441.4		$	549.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		176,879			170,910				494.2			500.2
Equity in earnings of unconsolidated affiliates, net									2.7			(1.9	)
Distributions received from unconsolidated affiliates									2.3			10.0
Gain on bargain purchase									—			(3.2	)
Stock-based compensation expense		31,572			40,402				93.3			82.7
Income tax benefit related to exercise of stock options		—			(44,975	)
Amortization and write-offs of loan origination costs		7,915			7,994
Net losses (gains) on investments									14.7			(17.3	)
Amortization and write-offs of loan origination costs and original issue discounts									10.2			10.0
Loss on extinguishment of debt		963			—				4.1			3.5
Loss on sale or disposition of property and equipment		730			159				1.0			0.6
Deferred income taxes		(24,661	)		(39,712	)			(78.6	)		(82.5	)
Provision for doubtful accounts		2,829			2,684
Provision for credit losses									9.1			6.5
Changes in operating assets and liabilities, excluding effects from acquisitions:
Accounts receivable		1,820			(14,603	)			(30.3	)		(72.6	)
Prepaid expenses and other assets		1,416			(2,595	)			54.8			15.8
Contract assets									(41.6	)		(1.1	)
Accounts payable		8,597			2,610				(4.4	)		(3.3	)
Accrued expenses		(45,644	)		(18,429	)
Accrued expenses and other liabilities									(160.5	)		(49.9	)
Income taxes prepaid and payable		6,781			44,840				12.3			33.8
Deferred revenue		(25,632	)		13,758				(60.1	)		(35.8	)
Net cash provided by operating activities		307,090			237,016				764.6			944.9
Cash flow from investing activities:
Cash paid for business acquisitions, net of cash acquired and asset acquisitions									(1,629.5	)		7.3
Additions to property and equipment		(29,779	)		(18,870	)			(53.3	)		(31.0	)
Proceeds from sale of property and equipment		1			69				10.9			0.2
Cash paid for business acquisitions, net of cash acquired		1,805			(309,432	)
Additions to capitalized software		(8,168	)		(6,137	)			(108.2	)		(65.2	)
Purchase of long-term investment		—			(1,000	)
Investments in securities									(10.0	)		(20.1	)
Proceeds from sales / maturities of investments									8.6			42.3
Distributions received from unconsolidated affiliates									66.2			—
Collection of other non-current receivables									7.5			8.3
Net cash used in investing activities		(36,141	)		(335,370	)			(1,707.8	)		(58.2	)
Cash flow from financing activities:
Cash received from debt borrowings		45,000			—
Cash received from debt borrowings, net of original issue discount									1,702.1			370.0
Repayments of debt		(337,800	)		(268,550	)			(408.5	)		(687.8	)
Payment of deferred financing fees									(14.7	)		—
Net (decrease) increase in client funds obligations									(1,564.5	)		1,226.3
Proceeds from exercise of stock options		46,278			34,767				73.3			124.2
Withholding taxes related to equity award net share settlement		(4,090	)		(7,051	)
Income tax benefit related to exercise of stock options		—			44,975
Purchase of common stock for treasury		—			(13	)
Payment of fees related to refinancing activities		—			(503	)
Withholding taxes paid related to equity award net share settlement									(0.6	)		(5.8	)
Purchases of common stock for treasury									(385.4	)		(487.9	)
Dividends paid on common stock		(39,917	)		(37,452	)			(153.4	)		(122.8	)
Net cash used in financing activities		(290,529	)		(233,827	)
Proceeds from noncontrolling interests									—			67.3
Net cash (used in) provided by financing activities									(751.7	)		483.5
Effect of exchange rate changes on cash, cash equivalents and restricted cash		3,777			(880	)			(32.9	)		(4.2	)
Net decrease in cash, cash equivalents and restricted cash		(15,803	)		(333,061	)
Net (decrease) increase in cash, cash equivalents and restricted cash									(1,727.8	)		1,366.0
Cash, cash equivalents and restricted cash, beginning of period		119,674			436,977				3,171.4			1,337.9
Cash, cash equivalents and restricted cash, end of period	$	103,871		$	103,916
Cash, cash equivalents and restricted cash and cash equivalents, end of period								$	1,443.6		$	2,703.9

Supplemental disclosure of non-cash activities:
Property and equipment acquired through tenant improvement allowances	$	10,846		$	—
Reconciliation of cash, cash equivalents and restricted cash and cash equivalents:							Reconciliation of cash, cash equivalents and restricted cash and cash equivalents:
Cash and cash equivalents								$	401.9		$	351.1
Restricted cash and cash equivalents									3.0			3.7
Restricted cash and cash equivalents included in funds receivable and funds held on behalf of clients									1,038.7			2,349.1
								$	1,443.6		$	2,703.9

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

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In millions) (Unaudited)


	Three Months Ended September 30, 2022
	SS&C Stockholders
	Common Stock
	Number									Accumulated
	of				Additional					Other									Total
	Issued				Paid-in		Retained			Comprehensive			Treasury			Noncontrolling			Stockholders’
	Shares		Amount		Capital		Earnings			(Loss) Income			Stock			Interest			Equity
Balance, at June 30, 2022		270.3	$	2.7	$	5,039.3	$	2,473.3		$	(505.0	)	$	(954.9	)	$	56.7		$	6,112.1
Net income		—		—		—		160.0			—			—			(0.2	)		159.8
Foreign exchange translation adjustment		—		—		—		—			(248.6	)		—			—			(248.6	)
Net change in interest rate swaps		—		—		—		—			3.3			—			—			3.3
Change in defined benefit plan obligation		—		—		—		—			—			—			—			—
Stock-based compensation expense		—		—		7.4		—			—			—			—			7.4
Exercise of options, net of withholding taxes		0.7		—		15.0		—			—			—			—			15.0
Purchases of common stock		—		—		—		—			—			(214.5	)		—			(214.5	)
Cash dividends declared - $0.20 per share		—		—		—		(51.0	)		—			—			—			(51.0	)
Balance, at September 30, 2022		271.0	$	2.7	$	5,061.7	$	2,582.3		$	(750.3	)	$	(1,169.4	)	$	56.5		$	5,783.5


	Three Months Ended September 30, 2021
	SS&C Stockholders
	Common Stock
	Number									Accumulated
	of				Additional					Other								Total
	Issued				Paid-in		Retained			Comprehensive			Treasury			Noncontrolling		Stockholders’
	Shares		Amount		Capital		Earnings			(Loss) Income			Stock			Interest		Equity
Balance, at June 30, 2021		266.2	$	2.7	$	4,682.8	$	1,949.6		$	(190.3	)	$	(621.1	)	$	—	$	5,823.7
Noncontrolling interest upon consolidation		—		—		46.8		—			—			—			57.2		104.0
Net income		—		—		—		184.4			—			—			0.3		184.7
Foreign exchange translation adjustment		—		—		—		—			(55.7	)		—			—		(55.7	)
Change in defined benefit plan obligation		—		—		—		—			0.1			—			—		0.1
Stock-based compensation expense		—		—		27.2		—			—			—			—		27.2
Exercise of options, net of withholding taxes		1.1		—		35.1		—			—			—			—		35.1
Purchases of common stock		—		—		—		—			—			(162.9	)		—		(162.9	)
Cash dividends declared - $0.16 per share		—		—		—		(40.8	)		—			—			—		(40.8	)
Balance, at September 30, 2021		267.3	$	2.7	$	4,791.9	$	2,093.2		$	(245.9	)	$	(784.0	)	$	57.5	$	5,915.4

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In millions) (Unaudited)


	Nine Months Ended September 30, 2022
	SS&C Stockholders
	Common Stock
	Number									Accumulated
	of				Additional					Other									Total
	Issued				Paid-in		Retained			Comprehensive			Treasury			Noncontrolling			Stockholders’
	Shares		Amount		Capital		Earnings			(Loss) Income			Stock			Interest			Equity
Balance, at December 31, 2021		269.1	$	2.7	$	4,895.7	$	2,293.0		$	(242.0	)	$	(784.0	)	$	57.8		$	6,223.2
Net income		—		—		—		442.7			—			—			(1.3	)		441.4
Foreign exchange translation adjustment		—		—		—		—			(512.0	)		—			—			(512.0	)
Net change in interest rate swaps		—		—		—		—			4.8			—			—			4.8
Change in defined benefit plan obligation		—		—		—		—			(1.1	)		—			—			(1.1	)
Stock-based compensation expense		—		—		93.3		—			—			—			—			93.3
Exercise of options, net of withholding taxes		1.9		—		72.7		—			—			—			—			72.7
Purchases of common stock		—		—		—		—			—			(385.4	)		—			(385.4	)
Cash dividends declared - $0.60 per share		—		—		—		(153.4	)		—			—			—			(153.4	)
Balance, at September 30, 2022		271.0	$	2.7	$	5,061.7	$	2,582.3		$	(750.3	)	$	(1,169.4	)	$	56.5		$	5,783.5


	Nine Months Ended September 30, 2021
	SS&C Stockholders
	Common Stock
	Number									Accumulated
	of				Additional					Other								Total
	Issued				Paid-in		Retained			Comprehensive			Treasury			Noncontrolling		Stockholders’
	Shares		Amount		Capital		Earnings			(Loss) Income			Stock			Interest		Equity
Balance, at December 31, 2020		263.9	$	2.6	$	4,544.0	$	1,667.0		$	(201.0	)	$	(296.1	)	$	—	$	5,716.5
Noncontrolling interest upon consolidation		—		—		46.8		—			—			—			57.2		104.0
Net income		—		—		—		549.1			—			—			0.3		549.4
Foreign exchange translation adjustment		—		—		—		—			(45.4	)		—			—		(45.4	)
Net change in interest rate swaps		—		—		—		—			0.3			—			—		0.3
Change in defined benefit plan obligation		—		—		—		—			0.2			—			—		0.2
Stock-based compensation expense		—		—		82.7		—			—			—			—		82.7
Exercise of options, net of withholding taxes		3.4		0.1		118.3		—			—			—			—		118.4
Purchases of common stock		—		—		—		—			—			(487.9	)		—		(487.9	)
Cash dividends declared - $0.48 per share		—		—		0.1		(122.9	)		—			—			—		(122.8	)
Balance, at September 30, 2021		267.3	$	2.7	$	4,791.9	$	2,093.2		$	(245.9	)	$	(784.0	)	$	57.5	$	5,915.4

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

SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1—Basis of Presentation and Principles of Consolidation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles were applied on a basis consistent with those of the audited Consolidated Financial Statements contained in ~~the Company’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2021, filed with the Securities and Exchange Commission (the “SEC”) on February ~~28, 2017~~25, 2022 (the ~~“2016~~“2021 Form 10-K”). In the opinion of ~~the Company,~~management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (consisting of only normal recurring adjustments, except as noted elsewhere in the notes to the Condensed Consolidated Financial Statements) necessary for a fair statement of ~~its~~our financial position as of September 30, ~~2017,~~2022, the results of ~~its~~our operations for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021, and ~~its~~our cash flows for the nine months ended September 30, ~~2017~~2022 and ~~2016. Certain prior year balances have been reclassified to conform to the current year presentation. Such reclassifications did not affect total revenues, operating income or net income.~~2021. These statements do not include all of the information and footnotes required by GAAP for annual financial statements. The Condensed Consolidated Financial Statements contained herein should be read in conjunction with the audited Consolidated Financial Statements and footnotes as of and for the year ended December 31, ~~2016,~~2021, which were included in the ~~2016~~2021 Form 10-K. The December 31, ~~2016~~2021 Consolidated Balance Sheet data were derived from audited financial statements but do not include all disclosures required by GAAP for annual financial statements. The results of operations for the three and nine months ended September 30, ~~2017~~2022 are not necessarily indicative of the expected results for any subsequent quarters or the full year.

The accompanying unaudited condensed consolidated financial statements include the accounts of SS&C Technologies Holdings, Inc. and its subsidiaries, including a variable interest entity (“VIE”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Recently Adopted Accounting ~~Pronouncements~~Pronouncement

In ~~November 2016,~~October 2021, the ~~Financial~~FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting ~~Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash~~for Contract Assets and Contract Liabilities From Contracts with Customers. ~~This~~ ASU ~~provides guidance~~2021-08 requires companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination on the ~~classification of restricted cash~~acquisition date. Generally, this new guidance will result in an acquirer recognizing contract assets and contract liabilities at the ~~statement of cash flows. This~~same amounts recorded by the acquiree. Under current GAAP, we have historically recognized contract assets and contract liabilities acquired in a business combination at fair value. ASU ~~requires that restricted cash be included within cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18~~2021-08 is effective for ~~the Company for its first quarter of~~ fiscal ~~2018.~~years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted, ~~and~~including adoption in an interim period. ASU 2021-08 should be applied prospectively to business combinations that occur after the ~~guidance requires application using a retrospective method. The Company has early~~effective date. We adopted ASU ~~2016-18, which~~2021-08 as of January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on ~~the Company’s~~our financial position, results of operations or cash flows.

Recent Accounting Pronouncement Not Yet Effective

In March ~~2016,~~2020, the FASB issued ASU ~~2016-09,~~ ~~Compensation – Stock Compensation~~2020-04, Reference Rate Reform (Topic ~~718)~~848): ~~Improvements to Employee Share-Based Payment Accounting. This ASU was intended to simplify several aspects~~Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP if certain criteria are met to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued Update 2021-01, Reference Rate Reform (Topic 848): Scope. The update provides additional optional guidance on the transition from LIBOR to include derivative instruments that use an interest rate for margining, discounting or contract price alignment. The standard will ease, if warranted, the requirements for accounting for ~~share-based payment transactions, including~~ the ~~income tax consequences, classification~~future effects of ~~awards~~the rate reform. An entity may elect to apply the amendments prospectively to contract modifications made on or before December 31, 2022. A substantial portion of our indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts, hedging relationships and other transactions. We are currently assessing the impact of this standard but do not expect it to have a material impact on our financial condition and results of operations.

Note 2—Property, Plant and Equipment, net

Property, plant and equipment and the related accumulated depreciation are as ~~either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective~~follows (in millions):


	September 30,			December 31,
	2022			2021
Land	$	38.1		$	49.8
Building and improvements		278.8			307.5
Equipment, furniture, and fixtures		513.8			475.4
		830.7			832.7
Less: accumulated depreciation		(484.6	)		(450.7	)
Total property, plant and equipment, net	$	346.1		$	382.0

Depreciation expense for the Company for its first quarter of fiscal 2017. Effective January 1, 2017, excess tax benefits will be prospectively reported as an operating activity in the Company’s Condensed Consolidated Statements of Cash Flows. As the Company has applied this guidance prospectively as of January 1, 2017, excess tax benefits for thethree and nine months ended September 30, ~~2016 will not be adjusted~~2022 was $18.7 million and ~~continue~~$56.9 million, respectively. Depreciation expense for the three and nine months ended September 30, 2021 was $18.1 million and $62.6 million, respectively. As of September 30, 2022, property, plant and equipment assets, net of $8.7 million have been reclassified as held for sale and are presented in prepaid expenses and other current assets in our condensed consolidated balance sheet. Unpaid property, plant and equipment additions of $3.7 million are included in accounts payable and other accrued expenses as of September 30, 2022 in our condensed consolidated balance sheet.

Note 3—Investments

Investments are as follows (in millions):


	September 30,		December 31,
	2022		2021
Non-marketable equity securities	$	84.5	$	84.5
Seed capital investments		30.1		32.0
Marketable equity securities		24.2		40.8
Partnership interests in private equity funds		15.8		15.5
Total investments	$	154.6	$	172.8

Realized and unrealized gains and losses for our equity securities are as follows (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Unrealized (losses) gains on equity securities held as of the end of the period	$	(3.4	)	$	(2.0	)	$	(15.0	)	$	6.9
Realized (losses) gains for equity securities sold during the period		-			(0.3	)		(1.1	)		9.0
Total (losses) gains recognized in other income, net	$	(3.4	)	$	(2.3	)	$	(16.1	)	$	15.9

Fair Value Measurement

Authoritative accounting guidance on fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of September 30, 2022 and December 31, 2021, we held certain investment assets and certain liabilities that are required to be ~~reported~~measured at fair value on a recurring basis. These investments include money market funds and marketable equity securities where fair value is determined using quoted prices in ~~financing activities~~active markets. Accordingly, the fair value measurements of these investments have been classified as Level 1 in the tables below. Investments for which we elected net asset value as a practical expedient for fair value and investments measured using the fair value measurement alternative are excluded from the tables below. Fair value for deferred compensation liabilities that are credited with deemed gains or losses of the underlying hypothetical investments, primarily equity securities, have been classified as Level 1 in the tables below.

The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):


				Fair Value Measurements at Reporting Date Using
	September 30, 2022			Quoted prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds (1)	$	363.5		$	363.5		$	—	$	—
Seed capital investments (2)		30.1			30.1			—		—
Marketable equity securities (2)		24.2			24.2			—		—
Deferred compensation liabilities (3)		(13.5	)		(13.5	)		—		—
Total	$	404.3		$	404.3		$	—	$	—


				Fair Value Measurements at Reporting Date Using
	December 31, 2021			Quoted prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds (1)	$	1,961.0		$	1,961.0		$	—	$	—
Seed capital investments (2)		32.0			32.0			—		—
Marketable equity securities (2)		40.8			40.8			—		—
Deferred compensation liabilities (3)		(21.3	)		(21.3	)		—		—
Total	$	2,012.5		$	2,012.5		$	—	$	—

_____________________________________________________

(1)

Included in Cash and cash equivalents and Funds receivable and funds held on behalf of clients on the Condensed Consolidated Balance Sheet.

(2)

Included in Investments on the Condensed Consolidated Balance Sheet.

(3)

Included in Other long-term liabilities on the Condensed Consolidated Balance Sheet.

We have partnership interests in various private equity funds that are not included in the tables above. Our investments in private equity funds were $15.8 million and $15.5 million at September 30, 2022 and December 31, 2021, respectively, of which $11.6 million and $12.7 million, respectively, were measured using net asset value as a practical expedient for fair value and $4.2 million and $2.8 million, respectively, were accounted for under the equity method of accounting. The investments in private equity funds represent underlying investments in domestic and international markets across various industry sectors.

Generally, our investments in private equity funds are non-transferable or are subject to long holding periods, and withdrawals from the private equity firm partnerships are typically not permitted. The maximum risk of loss related to our private equity fund investments is limited to the carrying value of its investments in the entities.

We add new investment products such as mutual funds and exchange traded funds, through our subsidiary, ALPS Advisors, from time to time by providing the initial cash investments as seed capital. We consolidate seed capital investments when our ownership percentage exceeds 50%. Shares in those investments not owned by us are reflected as a redeemable noncontrolling interest on the condensed consolidated balance sheet.

Note 4—Unconsolidated Affiliates

Investments in unconsolidated affiliates are as follows (in millions):


		September 30, 2022				December 31, 2021
	Ownership Percentage	Carrying Value		Excess carrying value of investment over proportionate share of net assets		Carrying Value		Excess carrying value of investment over proportionate share of net assets
Orbit Private Investments L.P.	9.8%	$	86.0	$	—	$	86.0	$	—
International Financial Data Services L.P.	50.0%		83.1		35.6		87.8		38.2
Pershing Road Development Company, LLC	50.0%		11.0		58.5		74.0		65.9
Broadway Square Partners, LLP	50.0%		54.0		30.6		54.3		29.8
Other unconsolidated affiliates			2.1		—		4.0		—
Total		$	236.2	$	124.7	$	306.1	$	133.9

Investments in unconsolidated affiliates are accounted for under the equity method of accounting. We record our proportionate share of the results of the unconsolidated affiliates and amortization expense related to basis differences in Equity in earnings of unconsolidated affiliates, net on the Condensed Consolidated Statements of Comprehensive (Loss) Income.

During the three months ended September 30, 2022, we received a distribution of $64.5 million from our unconsolidated affiliate, Pershing Road Development Company, LLC ("PRDC") which reduced our investment in the affiliate. In addition, the interest rate swap agreement to which PRDC was a party was terminated during the three months ended September 30, 2022. Amounts that had been recorded in Accumulated other comprehensive loss were reclassified to Equity in earnings of unconsolidated affiliates, net as a result of the swap termination.

Equity in earnings of unconsolidated affiliates, net are as follows (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
International Financial Data Services L.P.	$	(0.6	)	$	(0.4	)	$	0.6		$	1.7
Pershing Road Development Company, LLC		(5.2	)		1.0			(5.1	)		2.2
Broadway Square Partners, LLP		0.7			0.3			1.9			1.1
Other unconsolidated affiliates		—			1.1			(0.1	)		(3.1	)
Total	$	(5.1	)	$	2.0		$	(2.7	)	$	1.9

Note 5—Acquisitions

Blue Prism

On March 16, 2022, we purchased all of the outstanding stock of Blue Prism Group plc (“Blue Prism”) for approximately $1.6 billion in cash, plus the costs of effecting the transaction pursuant to a Scheme of Arrangement entered into under the U.K. Takeover Code. We financed the acquisition by entering into an Incremental Joinder (the “Incremental Joinder”) to the amended and restated credit agreement. Blue Prism is a global leader in enterprise robotics process automation and intelligent automation.

The net assets and results of operations of Blue Prism have been included in our Condensed Consolidated Financial Statements from March 16, 2022. The preliminary fair value of the intangible assets, consisting of customer relationships, completed technologies and trade names, was determined using the income approach. Specifically, the relief-from-royalty method was utilized for completed technologies and trade names, and the excess earnings method was utilized for customer relationships. Completed technologies and customer relationships are amortized each year based on the ratio that the projected cash flows for the intangible assets bear to the total of current and expected future cash flows for the intangible assets. Trade names are amortized on a straight-line basis. Customer relationships, completed technologies and trade names are expected to be amortized over approximately fifteen, eight and fourteen years, respectively, in each case the estimated life of the assets. The remainder of the purchase price was allocated to goodwill and is not tax deductible.

There are $62.5 million and $136.0 million in revenues from Blue Prism’s operations included in the Condensed Consolidated Statements of Cash Flows. As a result of the adoption, the Company recognized discrete tax benefits of $2.7 million and $12.8 million in the provision for income taxes line of the Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, ~~2017~~2022, respectively. Blue Prism generates revenues primarily from software license fees and related tomaintenance and service fees.

Hubwise

On March 25, 2022, we purchased all of the outstanding stock of Hubwise Holdings Limited (“Hubwise”) for approximately $75.0 million in cash, plus the costs of effecting the transaction. Hubwise is a regulated business-to-business investment platform serving advisers, discretionary wealth managers and self-directed direct-to-consumer propositions.

The net assets and results of operations of Hubwise have been included in our Condensed Consolidated Financial Statements from March 25, 2022. The preliminary fair value of the intangible assets, consisting of customer relationships, completed technologies and trade names, was determined using the income approach. Specifically, the relief-from-royalty method was utilized for completed technologies and trade names, and the excess ~~tax benefits upon vesting of a restricted-stock award or stock option exercise event relative~~earnings method was utilized for customer relationships. Completed technologies and customer relationships are amortized each year based on the ratio that the projected cash flows for the intangible assets bear to the ~~deferred~~total of current and expected future cash flows for the intangible assets. Trade names are amortized on a straight-line basis. Customer relationships, completed technologies and trade name are expected to be amortized over approximately twelve, eight and fourteen years, respectively, in each case the estimated life of the assets. The remainder of the purchase price was allocated to goodwill and is not tax ~~asset position established. The Company has elected to account for forfeitures as they occur~~deductible.

There are $1.4 million and ~~there was no material effect recorded upon adoption of this change. The Company has also excluded the excess tax benefits~~$3.0 million in revenues from ~~the assumed proceeds available to repurchase shares~~Hubwise’s operations included in the ~~computation~~Condensed Consolidated Statements of ~~the Company’s diluted earnings per share~~Comprehensive (Loss) Income for the three and nine months ended September 30, ~~2017, which had~~2022, respectively.

Tier1

On August 23, 2022, we purchased the ~~effect~~sell-side Tier1 customer relationship management business (“Tier1”) and related assets from Tier1 Financial Solutions for approximately $32.5 million in cash, plus the costs of ~~increasing~~effecting the ~~weighted average common stock equivalents. Prior~~transaction. Tier1 is a leading provider of sell-side customer relationship management solutions targeting capital markets and investment banks. Tier1 supplies customer relationship management capabilities to the adoption of ASU 2016-09, the Company included excess tax benefits in assessing whether common equivalent shares were dilutive in the Company’s calculations of weighted average dilutive shares under the treasury stock method. Presentation requirements for cash flows relatedsell-side financial services firms, including research, trading, and sales teams within capital markets groups, and provides deal management experience to ~~employee taxes paid for withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities.~~investment banks.

~~Recent Accounting Pronouncements Not Yet Effective~~

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment~~. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 of the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of itsThe net assets and ~~liabilities (including unrecognized assets and liabilities) following the procedure that would be required~~results of operations of Tier1 have been included in determining the fair value of assets acquired and liabilities assumed in a business combination. As a result of ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2019, and early adoption is permitted for interim or annual goodwill impairment tests performed after January 1, 2017. The Company expects to adopt ASU 2017-04 for the Company’s goodwill impairment tests in 2017.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments~~. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash flow, and other Topics. ASU 2016-15 is effective for the Company for its first quarter of fiscal 2018 and the guidance requires application using a retrospective method. The impact of the Company’s adoption of ASU 2016-15 to the Company’sour Condensed Consolidated Financial Statements ~~will~~from August 23, 2022. The preliminary fair value of the intangible assets, consisting of customer relationships and completed technologies, was determined using the income approach. Specifically, the relief-from-royalty method was utilized for completed technologies, and the excess earnings method was utilized for customer relationships. Completed technologies and customer relationships are amortized each year based on the ratio that the projected cash flows for the intangible assets bear to the total of current and expected future cash flows for the intangible assets. Customer relationships and completed technologies are expected to be amortized over approximately fourteen and six years, respectively, in each case the estimated life of the assets. The remainder of the purchase price was allocated to ~~reflect~~goodwill and is tax deductible.

There are $1.4 million in revenues from Tier1’s operations included in the ~~presentation of debt prepayment or debt extinguishment costs as cash outflows for financing activities within the Company’s~~ Condensed Consolidated ~~Statement~~Statements of ~~Cash Flows. This ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.~~

The following summarizes the preliminary allocation of the purchase price for ~~its first quarter~~the 2022 acquisitions of ~~fiscal~~Blue Prism, Hubwise and Tier1 (in millions). The fair values of the acquired intangible assets, and the related evaluation of taxes, are provisional pending receipt of the final valuation for those assets. The valuation of the acquired liabilities is also preliminary.


	Blue Prism			Hubwise			Tier1
Accounts receivable	$	50.1		$	0.7		$	0.3
Property, plant and equipment		1.9			0.1			0.1
Other assets		10.7			0.3			0.2
Operating lease right-of-use assets		4.4			—			—
Customer relationships		520.0			23.0			16.3
Completed technologies		250.0			8.7			6.4
Trade names		38.0			1.0			—
Goodwill		945.3			50.5			21.3
Accounts payable		(6.6	)		(0.2	)		(1.0	)
Accrued employee compensation and benefits		(23.2	)		—			(0.5	)
Deferred revenue		(166.9	)		—			(8.6	)
Deferred income taxes		(109.7	)		(7.9	)		—
Other liabilities assumed		(36.5	)		(0.7	)		(2.0	)
Consideration paid, net of cash acquired	$	1,477.5		$	75.5		$	32.5

Additionally, we acquired 5 M’s Minerals Management, LLC (“MineralWare”) in May 2022 for approximately $18.0 million. We acquired assets related to O’Shares exchange traded funds (“O’Shares”) in June 2022 for approximately $28.3 million.

The following unaudited pro forma information is provided for illustrative purposes only and assumes that the acquisitions of Blue Prism, Hubwise, MineralWare and Tier1 occurred on January 1, 2021 and the acquisition of Capita Life & Pensions Services (Ireland) Limited (“Capita”) occurred on January 1, 2020, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and ~~earlier adoption is permitted beginning~~tax effects. This unaudited pro forma information (in millions) should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had actually occurred on those dates, nor of the results that may be obtained in the ~~first quarter~~future.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues	$	1,322.9	$	1,330.7	$	4,011.6	$	3,956.7
Net income	$	160.1	$	165.1	$	425.9	$	446.6

During the nine months ended September 30, 2022 and 2021, we recorded severance expense related to personnel reductions in several of ~~fiscal 2019. Application~~our financial services and healthcare businesses. The amount of severance expense recognized in our Condensed Consolidated Statements of Comprehensive (Loss) Income for the ~~ASU is through a cumulative-effect adjustment to retained earnings~~nine months ended September 30, 2022 and 2021 was as follows (in millions):


	Nine Months Ended September 30,
Consolidated Statements of Comprehensive (Loss) Income Classification	2022		2021
Cost of software-enabled services	$	8.1	$	12.3
Cost of license, maintenance and other related		2.3		1.1
Total cost of revenues		10.4		13.4
Selling and marketing		2.6		1.4
Research and development		2.0		5.8
General and administrative		0.8		2.2
Total operating expenses		5.4		9.4
Total severance expense	$	15.8	$	22.8

Note 6—Goodwill

The change in carrying value of goodwill as of the effective date. The Company is currently evaluating the impact of the pending adoption of ASU 2016-13 on the Company’s Condensed Consolidated Financial Statements. This ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~. This ASU would require lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date; (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and ~~(ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset~~ for the ~~lease term. Lessor accounting~~nine months ended September 30, 2022 is largely unchanged under the amendments of this ASU. Additional disclosures will be required to allow the user to assess the amount, timing and uncertainty of cash flows arising from leasing activities. A modified retrospective transition approach is required for leases existing at the time of adoption. ASU 2016-02 is effective for the Company for its first quarter of fiscal 2019 and earlier adoption is permitted. The impact of the Company’s adoption of ASU 2016-02 to the Company’s Condensed Consolidated Financial Statements will be to ~~recognize the majority of the Company’s operating lease commitments~~ as operating lease liabilities and right-of-use assets upon adoption, which will result in a material increase in the assets and liabilities recorded on the Company’s Condensed Consolidated Balance Sheet. The Company is continuing its assessment, which may identify additional impacts this ASU will have on the Company’s Condensed Consolidated Financial Statements and related disclosures and internal controls over financial reporting.follows (in millions):


Balance at December 31, 2021	$	8,045.5
Acquisitions completed in the current year		1,023.3
Adjustments to prior acquisitions		0.3
Effect of foreign currency translation		(355.9	)
Balance at September 30, 2022	$	8,713.2

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. On August 12, 2015, the FASB issued ASU 2015-14, deferring the effective date by one year for ASU 2014-09. ASU 2014-09 is effective for the Company for its first quarter of 2018, with early adoption permitted for annual periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or as a cumulative effect adjustment on the date of initial application.

~~Subsequent to the issuance of ASU 2014-09, the FASB has issued the following updates: ASU 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing; ASU 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients~~ ~~and ASU 2016-20,~~ ~~Revenue from Contracts with Customers (Topic 606) –Technical Corrections and Improvements to Topic 606. The amendments in these updates affect the guidance contained within ASU 2014-09.~~

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

portion of deferred revenue recorded in accordance with the current revenue standard will never be recognized as revenue upon adoption of the new revenue standard and instead will be part of the cumulative effect adjustment within retained earnings. The Company is also evaluating the timing and recognition of costs to obtain contracts with customers, such as commissions, under the new revenue standard. The Company is continuing to assess the new revenue standard along with industry trends and additional interpretive guidance and may adjust its interpretation and implementation plan accordingly.

Note 2—7—Debt

At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, debt consisted of the following (in ~~thousands)~~millions):

September 30, 2017

December 31, 2016
Senior secured credit facilities, weighted-average interest rate of 3.42% and 3.94%, respectively

$            1,666,825

$            1,865,625
5.875% senior notes due 2023

600,000

600,000
Senior secured credit facilities revolving portion, weighted-average interest rate of 3.50%

—

94,000
Unamortized original issue discount and debt issuance costs

(49,617)

(58,495)

2,217,208

2,501,130
Less current portion of long-term debt

39,527

126,144
Long-term debt

$            2,177,681

$            2,374,986


	September 30,			December 31,
	2022			2021
Senior secured credit facilities, weighted-average interest rate of 5.00% and 1.85%, respectively	$	5,295.1		$	3,974.5
5.5% senior notes due 2027		2,000.0			2,000.0
Other indebtedness		1.0			5.2
Unamortized original issue discount and debt issuance costs		(55.0	)		(30.8	)
		7,241.1			5,948.9
Less: current portion of long-term debt		57.4			47.4
Long-term debt	$	7,183.7		$	5,901.5

Senior Secured Credit Facilities

On March ~~2, 2017, the Company~~22, 2022, in connection with our acquisition of Blue Prism, we entered into an ~~amendment (the “Amendment”)~~Incremental Joinder to the ~~Company’s senior secured~~amended and restated credit agreement dated ~~July 8, 2015.~~April 16, 2018 (“Credit Agreement”) with certain of our subsidiaries. Pursuant to the ~~Amendment,~~Incremental Joinder, a new $650.0 million senior secured incremental term loan B facility (“Term B-6 Loan”) and a new $880.0 million senior secured incremental term loan B facility (“Term B-7 Loan” and, together with the ~~highest (non-default) interest rate margin applicable~~Term B-6 Loan, the “Incremental Term Loans”) was made available to ~~Term Loan A was reduced from LIBOR plus 2.75%~~us, the proceeds of which were used to ~~LIBOR plus 1.75%, and~~finance substantially all of the ~~highest (non-default) interest rate margin applicable to Term Loan B was reduced from LIBOR plus 3.25% to LIBOR plus 2.25%. The LIBOR “floor” was also amended~~consideration for the acquisition of Blue Prism.

The Incremental Term ~~Loan A~~Loans mature on March 22, 2029 and bear interest at, at our option, the Base Rate, plus 1.25% per annum or the Term ~~Loan B~~Secured Overnight Financing Rate (“SOFR”), which is subject to ~~be 0%. No changes were made to the financial covenants, outstanding principal amounts or the scheduled amortization.~~

~~The Amendment was evaluated in accordance with FASB Accounting Standards Codification 470-50,~~ ~~Debt-Modifications and~~

~~Extinguishments~~a floor of 0.50%, ~~for debt modification and extinguishment accounting. The Company accounted for the debt re-pricing as~~plus a ~~debt modification with respect to amounts that remained obligations of the same lender~~credit spread adjustment set forth in the ~~syndicate with minor changes in cash flows and as~~Credit Agreement, plus 2.25% per annum. The Incremental Term Loans are also subject to a ~~debt extinguishment with respect to amounts that were obligations of lenders that exited the syndicate or remained in the syndicate but experienced a change in cash flows of greater than 10%. See~~ ~~Loss on extinguishment of debt~~ ~~section below.~~

~~Loss on extinguishment of debt. The Company recorded a $2.3 million loss on extinguishment of debt in the three months ended March 31, 2017~~1.00% repricing premium, which will be payable in connection with certain repricing transactions (if any) completed prior to the ~~Amendment. The loss on early extinguishment of debt includes the write-off of a portion~~six-month anniversary of the ~~unamortized~~incurrence of the Incremental Term Loans. In connection with the Incremental Joinder, we capitalized an aggregate of $37.7 million in financing ~~fees related~~costs during the nine months ended September 30, 2022.

Except as described above, the terms, covenants and events of default applicable to the ~~senior secured credit facility for amounts accounted for as a debt extinguishment, as well as new financing fees related~~Incremental Term Loans are materially consistent with the terms, covenants and events of default applicable to the ~~senior secured credit facility for amounts accounted for as a debt modification.~~other term loans incurred under the Credit Agreement.

Fair ~~value~~Value of ~~debt.~~ Debt

The carrying amounts and fair values of financial instruments are as follows (in ~~thousands)~~millions):


	September 30, 2017				December 31, 2016				September 30, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair		Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value		Amount		Value		Amount		Value
Financial liabilities:
Senior secured credit facilities	$	1,666,825	$	1,673,024	$	1,865,625	$	1,887,043	$	5,295.1	$	5,175.9	$	3,974.5	$	3,943.5
5.875% senior notes due 2023		600,000		633,255		600,000		619,500
Senior secured credit facilities, revolving portion		—		—		94,000		93,883
5.5% senior notes due 2027										2,000.0		1,832.7		2,000.0		2,094.8
Other indebtedness										1.0		1.1		5.2		5.2

The above fair values, which are Level 2 liabilities, were computed based on comparable quoted market prices. The fair values of cash, accounts receivable, net, short-term borrowings, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments.

Note 8—Stockholders’ Equity

Stock repurchase program

In July 2021, our Board of Directors authorized a stock repurchase program, which enabled us to repurchase up to $1 billion in the aggregate of our outstanding common stock on the open market or in privately negotiated transactions until the one-year anniversary of the Board’s authorization, unless earlier terminated by the Board. In July 2022, our Board of Directors authorized a new stock repurchase program, which also enables us to repurchase up to $1 billion in the aggregate of our outstanding common stock on the open market or in privately negotiated transactions. Our authority to repurchase shares under the program will continue until the one-year anniversary of the Board’s authorization, unless earlier terminated by the Board. During the three and nine months ended September 30, 2022, we repurchased 3.7 million and 6.0 million shares, respectively, of common stock for approximately $214.5 and $385.4 million, respectively. During the three and nine months ended September 30, 2021, we repurchased 2.1 million and 6.8 million shares, respectively, of common stock for approximately $162.9 million and $487.9 million, respectively. We use 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.

Dividends

We paid quarterly cash dividends of $0.20 per share of common stock in each of March, June and September of 2022 totaling $153.4 million. We paid quarterly cash dividends of $0.16 per share of common stock in each of March, June and September of 2021 totaling $122.8 million.

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~AccumulatedOther Comprehensive Loss

Accumulated other comprehensive loss balances, net of tax, consists of the following (in millions):


	Interest Rate Swap			Foreign Currency Translation			Defined Benefit Obligation			Accumulated Other Comprehensive Loss
Balance, December 31, 2021	$	(4.8	)	$	(237.4	)	$	0.2		$	(242.0	)
Net current period other comprehensive income (loss)		4.8			(512.0	)		(1.1	)		(508.3	)
Balance, September 30, 2022	$	—		$	(749.4	)	$	(0.9	)	$	(750.3	)

Adjustments to accumulated other comprehensive loss are as follows (in millions):


	Three Months Ended September 30,											Nine Months Ended September 30,
	2022						2021					2022						2021
	Pretax			Tax Effect			Pretax			Tax Effect		Pretax			Tax Effect			Pretax			Tax Effect
Interest Rate Swap
Unrealized gains (losses) on interest rate swaps	$	6.0		$	(1.2	)	$	(0.8	)	$	—	$	8.8		$	(1.7	)	$	0.4		$	(0.2	)
Reclassification of (gains) losses into net earnings on interest rate swaps		(1.5	)		—			0.8			—		(2.3	)		—			0.1			—
Net change in cash flow hedges		4.5			(1.2	)		—			—		6.5			(1.7	)		0.5			(0.2	)
Defined Benefit Pension
Unrealized net gains (losses) on defined benefit pension plan		—			—			0.1			—		(0.3	)		(0.8	)		0.2			—
Net change in defined benefit pension		—			—			0.1			—		(0.3	)		(0.8	)		0.2			—
Foreign Currency Translation
Current period translation adjustments		(263.9	)		15.3			(56.5	)		0.8		(540.4	)		28.4			(46.6	)		1.2
Net cumulative translation adjustments		(263.9	)		15.3			(56.5	)		0.8		(540.4	)		28.4			(46.6	)		1.2
Total other comprehensive (loss) income	$	(259.4	)	$	14.1		$	(56.4	)	$	0.8	$	(534.2	)	$	25.9		$	(45.9	)	$	1.0

~~(Unaudited)~~

Note ~~3—Goodwill~~9—Variable Interest Entity

On July 15, 2021, we entered into an agreement whereby we obtained an 80.2% interest in DomaniRx, LLC (“DomaniRx”), a variable interest entity under GAAP. We have the power to direct the majority of the activities of DomaniRx that most significantly impact its economic performance, the obligation to absorb losses and the right to receive benefits from DomaniRx. Accordingly, we determined that we are the primary beneficiary of DomaniRx and consolidate its results.

The ~~change in~~ carrying value of ~~goodwill~~the assets and liabilities associated with DomaniRx included in our condensed consolidated balance sheet as of September 30, 2022, which are limited for use in its operations and do not have recourse against our general credit or our senior secured credit facilities, are as follows:


	September 30,
	2022
Assets:
Cash and cash equivalents	$	151.6
Intangible assets		151.6
Liabilities:
Other liabilities		17.5

Note 10—Revenues

We generate revenues primarily through our software-enabled services. Our software-enabled services are generally provided under contracts with initial terms of one to five years that require monthly or quarterly payments and are subject to automatic annual renewal at the end of the initial term unless terminated by either party. We also generate revenues by licensing our software to clients through either perpetual or term licenses and by selling maintenance services. We classify license revenues related to sales-based royalty arrangements as term license revenue. Maintenance services are generally provided under annually renewable contracts. Our pricing typically scales as a function of our clients’ assets under management, the complexity of asset classes managed, the volume of transactions and the level of service the client requires. Revenues from professional services consist mostly of services provided on a time and materials basis.

Deferred revenues primarily represent unrecognized fees billed or collected for maintenance and professional services. Deferred revenues are recognized as (or when) we perform under the contract. Deferred revenues are recorded on a net basis with

contract assets at the contract level. Accordingly, as of September 30, 2022 and December 31, 2021, approximately $65.6 million and $61.0 million, respectively, of deferred revenue is presented net within contract assets arising from the same contracts. The amount of revenues recognized in the period that was included in the opening deferred revenues balance was $50.5 million and $231.8 million for the three and nine months ended September 30, 2022, respectively. The amount of revenues recognized in the period that was included in the opening deferred revenue balance was $56.3 million and $238.1 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, revenue of approximately $923.2 million is expected to be recognized from remaining performance obligations for license, maintenance and related revenues, of which $449.0 million is expected to be recognized over the next twelve months.

We record revenue net of any taxes assessed by governmental authorities.

Revenue Disaggregation

The following table disaggregates our revenues by geography (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
United States	$	927.1	$	909.6	$	2,787.5	$	2,682.6
United Kingdom		138.2		143.9		433.8		449.4
Europe (excluding United Kingdom), Middle East and Africa		105.2		84.4		292.8		240.1
Asia-Pacific and Japan		62.5		57.8		193.3		183.2
Canada		64.9		48.3		169.5		141.6
Americas, excluding United States and Canada		23.1		20.4		67.8		59.9
Total	$	1,321.0	$	1,264.4	$	3,944.7	$	3,756.8

The following table disaggregates our revenues by source (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Software-enabled services	$	1,049.8	$	1,069.9	$	3,205.7	$	3,170.4
Maintenance and term licenses		237.4		167.3		639.5		497.0
Professional services		27.7		25.4		81.4		74.6
Perpetual licenses		6.1		1.8		18.1		14.8
Total	$	1,321.0	$	1,264.4	$	3,944.7	$	3,756.8

Note 11—Stock Based Compensation

Stock options, SARs, PSUs and RSUs

The amount of stock-based compensation expense recognized in our Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2022 and 2021 was as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
Condensed Consolidated Statements of Comprehensive (Loss) Income Classification	2022		2021		2022		2021
Cost of software-enabled services	$	2.3	$	10.4	$	34.6	$	31.1
Cost of license, maintenance and other related		1.3		1.5		4.0		4.6
Total cost of revenues		3.6		11.9		38.6		35.7
Selling and marketing		1.5		4.6		17.2		14.3
Research and development		2.0		3.8		12.3		11.0
General and administrative		0.3		6.9		25.2		21.7
Total operating expenses		3.8		15.3		54.7		47.0
Total stock-based compensation expense	$	7.4	$	27.2	$	93.3	$	82.7

The stock-based compensation expense related to performance awards is adjusted for changes in our assessment of the performance target level that is probable of being achieved and the number of performance-based equity awards expected to vest. During the three months ended September 30, 2022, we recorded a true-up to reduce previously recorded stock-based compensation

expense relating to performance-based equity awards by $25.7 million as the number of performance-based options and performance-based units expected to vest has decreased.

The following table summarizes stock option and stock appreciation rights (“SARs”) activity, as well as performance stock units (“PSUs”) and restricted stock units (“RSUs”) activity, for the nine months ended September 30, ~~2017~~2022 (shares in millions):


	Stock Options and SARs			PSUs and RSUs
Outstanding at December 31, 2021		44.9			0.4
Granted		0.1			1.0
Cancelled/forfeited		(1.5	)		(0.1	)
Exercised		(1.9	)		—
Outstanding at September 30, 2022		41.6			1.3

Note 12—Income Taxes

The effective tax rate was 25.0% and 24.7% for the three months ended September 30, 2022 and 2021, respectively, and 26.9% and 26.5% for the nine months ended September 30, 2022 and 2021, respectively. The change in the effective tax rate for the three and nine months ended September 30, 2022 compared to the respective prior year periods was primarily due to a decrease in recognition of windfall tax benefits from stock awards in the current year, an increase in valuation allowances on deferred tax assets in the current year and a proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions. In addition, the effective tax rate for the nine months ended September 30, 2021 included tax expense related to a law change in the United Kingdom.

During the nine months ended September 30, 2022, we recorded a net deferred tax liability of $117.6 million related primarily to acquired intangible assets in the allocation of the purchase price for the acquisitions of Blue Prism and Hubwise, which will not be deductible for tax purposes and is ~~as follows (in thousands):~~partially offset by net operating loss carryforwards.

Balance at December 31, 2016

$
3,652,733

Adjustments to prior acquisitions

(621
)
Effect of foreign currency translation

40,461

Balance at September 30, 2017

$
3,692,573

Note 4—13—Earnings per Share

Earnings per share (“EPS”) is calculated in accordance with the relevant standards. Basic EPS includes no dilution and is computed by dividing net income available to the Company’s common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of stock options, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) using the treasury stock method. Common equivalent shares are excluded from the computation of diluted earnings per share if the effect of including such common equivalent shares is anti-dilutive because their total assumed proceeds exceed the average fair value of common stock for the period.

The following table sets forth the computation of basic and diluted EPS (in ~~thousands,~~millions, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income attributable to SS&C common stockholders	$	160.0	$	184.4	$	442.7	$	549.1

Shares attributable to SS&C:
Weighted-average common shares outstanding – used in calculation of basic EPS		253.9		254.7		254.8		255.8
Weighted-average common stock equivalents – stock options and restricted shares		7.0		11.8		8.9		11.5
Weighted-average common and common equivalent shares outstanding – used in calculation of diluted EPS		260.9		266.5		263.7		267.3

Earnings per share attributable to SS&C common stockholders – Basic	$	0.63	$	0.72	$	1.74	$	2.15
Earnings per share attributable to SS&C common stockholders – Diluted	$	0.61	$	0.69	$	1.68	$	2.05

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2017

2016

2017

2016

Net income

64,227

38,747

163,525

73,973

Shares:

Weighted average common shares outstanding — used in calculation of basic EPS

205,568

201,782

204,506

199,365

Weighted average common stock equivalents — options and restricted shares

6,791

4,853

6,574

5,969

Weighted average common and common equivalent shares outstanding — used in calculation of diluted EPS

212,359

206,635

211,080

205,334

Earnings per share - Basic

$
0.31

$
0.19

$
0.80

$
0.37

Earnings per share - Diluted

$
0.30

$
0.19

$
0.77

$
0.36

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

~~Weighted average stock~~Stock options, SARs and ~~SARs~~PSUs representing ~~641,227 and 10,702,466~~22.0 million shares were outstanding for the three ~~months ended September 30, 2017~~ and ~~2016, respectively, and weighted average stock options and SARs representing 10,779,326 and 14,094,402 were outstanding for the~~ nine months ended September 30, ~~2017~~2022, but were not included in the computation of diluted EPS because the effect of including them would be anti-dilutive. Stock options, SARs and ~~2016,~~PSUs representing 8.3 million and 8.8 million shares were outstanding for the three and nine months ended September 30, 2021, respectively, but were not included in the computation of diluted EPS because the effect of including them would be anti-dilutive.

~~Dividends~~. In 2017, the Company paid a quarterly cash dividend of $0.0625 per share of common stock on March 15, 2017 and June 15, 2017 and $0.07 per share of common stock on September 15, 2017 to stockholders of record as of the close of business on March 1, 2017, June 1, 2017 and September 1, 2017, totaling $39.9 million. In 2016, the Company paid a quarterly cash dividend of $0.0625 per share of common stock on March 15, 2016, June 15, 2016 and September 15, 2016, to stockholders of record as of the close of business on March 7, 2016, June 1, 2016 and September 1, 2016, totaling $37.5 million.

Note ~~5—Equity and Stock-based Compensation~~

~~Total stock options, SARs, RSUs and RSAs~~. The amount of stock-based compensation expense recognized in the Company’s Condensed Consolidated Statements of Comprehensive Income for three and nine months ended September 30, 2017 and 2016 was as follows (in thousands):

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Consolidated Statements of Comprehensive Income Classification

2017

2016

2017

2016

Cost of software-enabled services

$
2,903

$
2,732

$
8,525

$
7,916

Cost of maintenance and term licenses

485

605

1,572

2,116

Cost of recurring revenues

3,388

3,337

10,097

10,032

Cost of professional services

565

493

1,695

1,736

Cost of non-recurring revenues

565

493

1,695

1,736

Total cost of revenues

3,953

3,830

11,792

11,768

Selling and marketing

2,387

2,521

7,550

8,966

Research and development

1,817

2,004

5,522

6,402

General and administrative

2,137

4,134

6,708

13,266

Total operating expenses

6,341

8,659

19,780

28,634

Total stock-based compensation expense

$
10,294

$
12,489

$
31,572

$
40,402

~~The following table summarizes stock option and SAR activity as of and for the nine months ended September 30, 2017:~~

	~~Shares~~
~~Outstanding at December 31, 2016~~		~~25,028,100~~
~~Granted~~		~~5,152,728~~
~~Cancelled/forfeited~~		~~(1,165,514~~	)
~~Exercised~~		~~(2,983,441~~	)
~~Outstanding at September 30, 2017~~		~~26,031,873~~

~~The following table summarizes RSU activity as of and for the nine months ended September 30, 2017:~~

	~~Shares~~
~~Outstanding at December 31, 2016~~		~~357,292~~
~~Granted~~		-
~~Cancelled/forfeited~~		~~(20,458~~	)
~~Vested~~		~~(146,528~~	)
~~Outstanding at September 30, 2017~~		~~190,306~~

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

~~Note 6—Income Taxes~~

The effective tax rate was 14.5% and 19.1% for the three months ended September 30, 2017 and 2016, respectively, and the effective tax rate was 16.5% and 23.4% for the nine months ended September 30, 2017 and 2016, respectively. The change in the effective tax rate for the three months ended September 30, 2017 was primarily due to the recognition of windfall tax benefits from stock awards as a component of the income tax provision in the current quarter as well as the recognition of previously unrecognized tax benefits due to a lapse in the statute of limitations in the current quarter. ~~The change in the effective tax rate for the nine months ended September 30, 2017~~ ~~was primarily due to the recognition of windfall tax benefits from stock awards in the current year as a component of the income tax provision and the absence of~~ ~~the~~ unfavorable impact of a change in state apportionment on the Company’s domestic deferred tax liabilities as a result of the acquisition of Citigroup AIS in the first quarter of 2016, partially offset by the unfavorable impact from an increase in pre-tax income in the current year from domestic operations taxed at a high statutory rate.

~~Note 7—Acquisitions~~

The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and assume that the acquisitions of Conifer Financial Services LLC (“Conifer”), Wells Fargo's Global Fund Services business (“GFS”) and Citigroup’s Alternative Investor Services business occurred on January 1, 2015. This unaudited pro forma information (in thousands, except per share data) should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had actually occurred on that date, nor of the results that may be obtained in the future.

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2016

2016

Revenues

$
412,954

$
1,221,894

Net income

$
43,692

$
93,856

Basic EPS

$
0.22

$
0.47

Diluted EPS

$
0.21

$
0.46

Basic weighted average number of common shares outstanding

201,782

199,365

Diluted weighted average number of common and common equivalent shares outstanding

206,635

205,334

During the nine months ended September 30, 2017, the Company received cash purchase price adjustments totaling $1.8 million related to the acquisitions of Conifer and GFS. This amount is reflected in “Cash paid for business acquisitions, net of cash acquired” for the nine months ended September 30, 2017 on the Company’s Condensed Consolidated Statement of Cash Flows.

~~Note 8—~~14—Commitments and Contingencies

From time to time, ~~the Company is~~we are subject to legal proceedings and claims. In ~~the~~our opinion, ~~of the Company's management, the Company is~~we are not involved in any litigation or proceedings that would have a material adverse effect on us or our business.

Legal Proceedings

During the ~~Company~~ third quarter of 2021, in connection with the ongoing DST ERISA matters and associated legal proceedings described below, including the arbitration awards, we recorded an accrued liability and expense of $43.4 million to Other (expense) income, net on the Condensed Consolidated Statements of Comprehensive (Loss) Income. Due to the inherent uncertainties associated with the resolution of these matters, the ultimate resolution of and any additional potential exposure related to these matters are uncertain at this time.

On September 1, 2017, a putative representative action was filed on behalf of the DST 401(k) Profit Sharing Plan (the “Plan”) in the United States District Court for the Southern District of New York, captioned Ferguson, et al v. Ruane Cunniff & Goldfarb Inc., et al. (“Ferguson”), naming as defendants DST, the Compensation Committee of DST’s Board of Directors, the Advisory Committee of the Plan and certain of DST’s present and/or ~~its business.~~

~~Note 9—Supplemental Guarantor Financial Statements~~

~~On July 8, 2015,~~former officers and directors (collectively the ~~Company issued $600.0 million aggregate principal amount~~“DST Defendants”), alleging breach of ~~5.875% Senior Notes due 2023 (the “Senior Notes”~~fiduciary duties and other violations of the Employee Retirement Income Security Act (“ERISA”). The ~~Senior Notes are jointly~~DST Defendants answered the operative complaint and ~~severally~~asserted crossclaims for contribution and/or indemnification against Ruane, Cunniff & Goldfarb Inc. (“Ruane”). On January 9, 2020, Ruane filed an amended answer to the amended complaint and asserted crossclaims for contribution and/or indemnification against DST. Both DST and Ruane have filed answers denying the crossclaims asserted against them. On March 8, 2021, the Court entered an order denying without prejudice the plaintiffs’ (the “Ferguson Plaintiffs”) then-pending motions for leave to file a third amended complaint and for class certification, ordering that the parties address the effect, if any, on the Ferguson Plaintiffs’ motions of the March 4, 2021 decision by the United States Court of Appeals for the Second Circuit Court in Cooper v. Ruane Cunniff & Goldfarb Inc. The Ferguson Plaintiffs renewed their motions for leave to file a third amended complaint and for class certification, which motions were fully briefed on May 10, 2021. On August 17, 2021, the Court entered an order certifying a mandatory, non-opt-out class under Federal Rule of Civil Procedure 23(b)(1) that includes all plan participants other than certain plan fiduciaries. Arbitration Claimants, and ~~unconditionally guaranteed,~~the Canfield Plaintiffs and Mendon Plaintiffs, each as defined below, filed petitions under Federal Rule of Civil Procedure 23(f) with the Second Circuit on August 30, 2021 and August 31, 2021, respectively, seeking interlocutory review of the Ferguson class certification order, which the Ferguson Plaintiffs and the DST Defendants opposed. The Second Circuit denied the Rule 23(f) petitions on May 24, 2022 and May 25, 2022, respectively. On February 4, 2022, the Ferguson Plaintiffs filed a third amended complaint, which included the class allegations. On March 7, 2022, the DST Defendants and Ruane each filed answers to the Ferguson Plaintiffs’ third amended complaint and reasserted their respective cross-claims. On August 23, 2021, the DST Defendants moved for a temporary restraining order and preliminary injunction against other proceedings, including the below-described arbitrations, which arise out of or relate to the allegations in Ferguson. Following briefing, on November 18, 2021, the Court granted the DST Defendants’ motion and entered a preliminary injunction enjoining the Ferguson class members, including Arbitration Claimants, from instituting new actions or litigating in arbitration or other proceedings against the DST Defendants matters arising out of or relating to the facts or transactions alleged in the Ferguson amended complaint. On November 18, 2021, the Court also ordered the DST Defendants and Arbitration Claimants to submit briefing regarding how the arbitration awards that have been entered against the DST Defendants should be handled in light of the Court’s class certification order and preliminary injunction.

On December 15, 2021, Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs filed appeals of the Court’s preliminary injunction. On December 23, 2021, the DST Defendants, Arbitration Claimants, and the Ferguson Plaintiffs submitted briefs concerning the treatment of the arbitration awards that have been entered against the DST Defendants, and further briefing by the DST Defendants and Arbitration Claimants was submitted on January 26, 2022. On December 31, 2021, Arbitration Claimants moved by order to show cause for an immediate stay of the preliminary injunction pending their appeal to the Second Circuit. On January 3, 2022, the Court denied Arbitration Claimants’ motion for an immediate stay and ordered the DST Defendants to show cause as to why the Court should not issue a stay of the preliminary injunction pending appeal. The show-cause order was fully briefed on January 10, 2022. On February 3, 2022, the Court denied Arbitration Claimants’ motion to stay the preliminary injunction pending appeal. In the same order, the Court held that it would determine the status of the arbitration awards already entered against DST at final judgment in the Ferguson action, either after trial or after settlement. On February 4, 2022, Arbitration Claimants filed a motion in the Second Circuit to stay the preliminary injunction pending their appeal of the Court’s preliminary injunction. On June 7, 2022, the Second Circuit denied Arbitration Claimants’ motion to stay the preliminary injunction pending appeal. On February 8, 2022, Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs noticed an appeal of the Court’s February 3, 2022 order. The February 8, 2022 appeal was consolidated with the December 15, 2021 appeal of the preliminary injunction. On May 17, 2022, Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs filed their opening brief in the consolidated appeals. The DST Defendants filed their answering brief on September 15, 2022. Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs filed their reply brief on October 20, 2022. This appeal remains pending.

On July 10, 2020, the Ferguson Plaintiffs and the DST Defendants reached an agreement in principle to settle the class claims for $27 million, subject to the occurrence of certain conditions, including: Court certification of a “non‑opt-out” class in the case that includes as class members all participants of the Plan, Court approval of the settlement in accordance with applicable law and the satisfactory resolution of claims made by certain other litigants. On September 18, 2020, the parties submitted a letter to the Court disclosing that the Ferguson Plaintiffs and Ruane also had reached a settlement in principle, subject to Court approval. The Ferguson Plaintiffs and the DST Defendants entered into a settlement agreement dated January 8, 2021 memorializing the terms of their

proposed settlement, which was filed by the Ferguson Plaintiffs with the Court on the same date. On January 12, 2021, the Ferguson Plaintiffs moved for preliminary approval of the settlement with the DST Defendants, as well as preliminary approval of a separate settlement reached between the Ferguson Plaintiffs and Ruane. Arbitration Claimants and the U.S. Department of Labor (“DOL”) objected to various aspects of those settlements in filings dated January 15, 2021, January 27, 2021, and February 5, 2021. On August 17, 2021, the Court denied the Ferguson Plaintiffs’ motion for preliminary approval of the settlement on the terms proposed.

On September 28, 2018, a complaint was filed in the United States District Court for the Southern District of New York captioned Robert Canfield, et al. v. SS&C Technologies Holdings, Inc., et al., on behalf of five individual plaintiffs (the “Canfield Plaintiffs”). On November 5, 2018, a similar complaint was filed in the United States District Court for the Southern District of New York captioned Mark Mendon, et al. v. SS&C Technologies Holdings, Inc., et al., on behalf of two individual plaintiffs (the “Mendon Plaintiffs”). These complaints name as defendants SS&C, the DST Defendants, and Ruane. The underlying claim in each ~~case subject~~complaint is the same as in the above-described Ferguson matter, with the exception that these actions purport to ~~certain customary release provisions,~~be brought as individual actions and not putative class actions. On July 10, 2020, the Court entered an order granting the DST Defendants’ motion to disqualify plaintiffs’ counsel in the Canfield and Mendon actions. On March 17, 2021, the Court issued an opinion and order denying the DST Defendants’ motion to disqualify counsel from the arbitrations described below. On April 12, 2021, the Canfield Plaintiffs and Mendon Plaintiffs filed notices of voluntary dismissal dismissing their claims against Ruane with prejudice, which were entered by the Court on April 13, 2021. On April 22, 2021, the DST Defendants filed motions to dismiss the Canfield and Mendon actions. Those motions were fully briefed on May 28, 2021. On November 19, 2021, the Court dismissed the Canfield and Mendon actions. On December 17, 2021, the Canfield Plaintiffs and Mendon Plaintiffs appealed the Court’s November 19, 2021 orders dismissing their respective actions to the Second Circuit. On May 17, 2022, the Canfield Plaintiffs and Mendon Plaintiffs filed their opening briefs in those appeals. The DST Defendants filed their answering briefs on September 15, 2022. The Canfield Plaintiffs and Mendon Plaintiffs filed their reply briefs on October 20, 2022. These appeals remain pending.

On October 8, 2019, a substantially ~~all wholly-owned domestic subsidiaries~~similar action to the above-described Ferguson, Canfield, Mendon and below-described arbitration matters captioned Scalia v. Ruane, Cunniff & Goldfarb Inc. was filed by the DOL in the United States District Court for the Southern District of New York naming as defendants DST, the Advisory Committee of the ~~Company~~Plan, the Compensation Committee of DST’s Board of Directors and certain of DST’s former officers and directors, and alleging that ~~guarantee~~ the ~~Company’s Amended Senior Secured Credit Agreement (collectively “Guarantors”). All~~DST Defendants breached fiduciary duties in violation of ERISA in connection with the Plan. The complaint also names as defendants Ruane and its former Chairman and Chief Executive Officer Robert D. Goldfarb. In the complaint, the DOL seeks disgorgement, damages and any other appropriate injunctive or equitable relief. The DST Defendants moved to dismiss the complaint on December 4, 2020 on the ground that the DOL’s complaint is time-barred. Other defendants also filed motions to dismiss on the same and other grounds. Briefing on the motions to dismiss was completed on February 5, 2021. On March 28, 2022, the court denied Defendants’ motions to dismiss, and Martin J. Walsh was substituted for Eugene Scalia as the plaintiff. On April 11, 2022, the DST Defendants answered the DOL’s complaint.

DST, the Advisory Committee of the ~~Guarantors are 100% owned~~Plan, and the Compensation Committee of DST’s Board of Directors have been named in 579 substantially similar individual demands for arbitration to date, by former and current DST employees demanding arbitration under the ~~Company. All other subsidiaries~~DST Employee Arbitration Program and Agreement (the “Arbitration Claimants”). The underlying claim in each is the same as in the above-described Ferguson matter, with the exception that the arbitrations purport to be brought as individual actions. On November 24, 2021, in light of the ~~Company, either direct or indirect, do not guarantee~~preliminary injunction entered in Ferguson discussed above, the ~~Senior Notes (“Non-Guarantors”). The Guarantors also unconditionally guarantee the Amended Senior Secured Credit Agreement. There are no significant restrictions on the ability~~American Arbitration Association ceased administration of the ~~Company or any~~arbitrations brought by members of the subsidiaries that are Guarantors to obtain funds from its subsidiaries by dividend or loan. During the three months ended March 31, 2017, the Company added certain U.S. subsidiaries as Guarantors to the Senior Notes. The condensed consolidating balance sheet as of December 31, 2016 below reflects the addition of these entities as Guarantor Subsidiaries.

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

Condensed consolidating financial information as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016 are presented. The condensed consolidating financial information of the Company and its subsidiaries are as follows (in thousands):

September 30, 2017

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Cash and cash equivalents

$
—

$
19,294

$
83,985

$
—

$
103,279

Accounts receivable, net

—

165,723

72,954

—

238,677

Prepaid expenses and other current assets

—

18,469

14,219

—

32,688

Prepaid income taxes

—

13,803

29

—

13,832

Restricted cash

—

592

—

—

592

Net property, plant and equipment

—

62,791

40,789

—

103,580

Investment in subsidiaries

3,186,168

910,117

—

(4,096,285
)

—

Intercompany receivables

—

223,838

92,305

(316,143
)

—

Deferred income taxes, long-term

—

—

2,166

—

2,166

Goodwill, intangible and other assets, net

—

3,906,024

1,197,783

—

5,103,807

Total assets

$
3,186,168

$
5,320,651

$
1,504,230

$
(4,412,428
)

$
5,598,621

Current portion of long-term debt

—

13,797

25,730

—

39,527

Accounts payable

—

18,866

8,910

—

27,776

Accrued expenses

7,344

74,419

44,189

—

125,952

Deferred revenue

—

187,157

25,654

—

212,811

Long-term debt, net of current portion

600,000

1,313,753

263,928

—

2,177,681

Other long-term liabilities

—

50,829

34,938

—

85,767

Intercompany payables

71,185

92,305

152,653

(316,143
)

—

Deferred income taxes, long-term

—

383,357

38,111

—

421,468

Total liabilities

678,529

2,134,483

594,113

(316,143
)

3,090,982

Total stockholders’ equity

2,507,639

3,186,168

910,117

(4,096,285
)

2,507,639

Total liabilities and stockholders’ equity

$
3,186,168

$
5,320,651

$
1,504,230

$
(4,412,428
)

$
5,598,621

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

December 31, 2016

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Cash and cash equivalents

$
—

$
33,723

$
83,835

$
—

$
117,558

Accounts receivable, net

—

174,927

66,380

—

241,307

Prepaid expenses and other current assets

—

18,129

12,990

—

31,119

Prepaid income taxes

—

21,600

1,412

—

23,012

Restricted cash

—

1,788

328

—

2,116

Net property, plant and equipment

—

42,358

38,037

—

80,395

Investment in subsidiaries

2,910,669

769,716

—

(3,680,385
)

—

Intercompany receivables

—

162,791

39,894

(202,685
)

—

Deferred income taxes, long-term

—

—

2,410

—

2,410

Goodwill, intangible and other assets, net

—

4,021,445

1,187,609

—

5,209,054

Total assets

$
2,910,669

$
5,246,477

$
1,432,895

$
(3,883,070
)

$
5,706,971

Current portion of long-term debt

—

108,989

17,155

—

126,144

Accounts payable

—

10,714

5,776

—

16,490

Accrued expenses

16,155

109,746

53,395

—

179,296

Income taxes payable

—

—

3,473

—

3,473

Deferred revenue

—

212,890

22,332

—

235,222

Long-term debt, net of current portion

600,000

1,416,695

358,291

—

2,374,986

Other long-term liabilities

—

29,827

29,400

—

59,227

Intercompany payables

35,936

39,894

126,855

(202,685
)

—

Deferred income taxes, long-term

—

407,053

46,502

—

453,555

Total liabilities

652,091

2,335,808

663,179

(202,685
)

3,448,393

Total stockholders’ equity

2,258,578

2,910,669

769,716

(3,680,385
)

2,258,578

Total liabilities and stockholders’ equity

$
2,910,669

$
5,246,477

$
1,432,895

$
(3,883,070
)

$
5,706,971

For the Three Months Ended September 30, 2017

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Revenues

$
—

$
290,020

$
128,593

$
(362
)

$
418,251

Cost of revenues

—

145,925

74,239

(362
)

219,802

Gross profit

—

144,095

54,354

—

198,449

Operating expenses:

Selling and marketing

—

20,760

7,421

—

28,181

Research and development

—

25,592

11,784

—

37,376

General and administrative

—

20,732

8,243

—

28,975

Total operating expenses

—

67,084

27,448

—

94,532

Operating income

—

77,011

26,906

—

103,917

Interest expense, net

(8,813
)

(12,952
)

(4,485
)

—

(26,250
)
Other (expense) income, net

—

(24,854
)

22,319

—

(2,535
)
Earnings from subsidiaries

73,040

39,491

—

(112,531
)

—

Income before income taxes

64,227

78,696

44,740

(112,531
)

75,132

Provision for income taxes

—

5,656

5,249

—

10,905

Net income

$
64,227

$
73,040

$
39,491

$
(112,531
)

$
64,227

Other comprehensive income, net of tax:

Foreign currency exchange translation adjustment

19,951

19,951

16,898

(36,849
)

19,951

Comprehensive income

$
84,178

$
92,991

$
56,389

$
(149,380
)

$
84,178

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

For the Three Months Ended September 30, 2016

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Revenues

$
—

$
262,350

$
121,385

$
(431
)

$
383,304

Cost of revenues

—

137,369

71,089

(431
)

208,027

Gross profit

—

124,981

50,296

—

175,277

Operating expenses:

Selling and marketing

—

20,448

6,880

—

27,328

Research and development

—

26,575

11,126

—

37,701

General and administrative

—

24,824

8,521

—

33,345

Total operating expenses

—

71,847

26,527

—

98,374

Operating income

—

53,134

23,769

—

76,903

Interest expense, net

(8,812
)

(16,651
)

(6,185
)

—

(31,648
)
Other (expense) income, net

—

(15,364
)

18,019

—

2,655

Earnings from subsidiaries

47,559

30,522

—

(78,081
)

—

Income before income taxes

38,747

51,641

35,603

(78,081
)

47,910

Provision for income taxes

—

4,082

5,081

—

9,163

Net income

$
38,747

$
47,559

$
30,522

$
(78,081
)

$
38,747

Other comprehensive loss, net of tax:

Foreign currency exchange translation adjustment

(12,060
)

(12,060
)

(10,844
)

22,904

(12,060
)
Comprehensive income

$
26,687

$
35,499

$
19,678

$
(55,177
)

$
26,687

For the Nine Months Ended September 30, 2017

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Revenues

$
—

$
866,090

$
372,124

$
(1,284
)

$
1,236,930

Cost of revenues

—

441,464

220,773

(1,284
)

660,953

Gross profit

—

424,626

151,351

—

575,977

Operating expenses:

Selling and marketing

—

66,093

22,451

—

88,544

Research and development

—

79,988

34,916

—

114,904

General and administrative

—

63,112

25,798

—

88,910

Total operating expenses

—

209,193

83,165

—

292,358

Operating income

—

215,433

68,186

—

283,619

Interest expense, net

(26,438
)

(40,974
)

(14,153
)

—

(81,565
)
Other (expense) income, net

—

(58,033
)

54,230

—

(3,803
)
Loss on extinguishment of debt

—

(1,743
)

(583
)

—

(2,326
)
Earnings from subsidiaries

189,963

94,182

—

(284,145
)

—

Income before income taxes

163,525

208,865

107,680

(284,145
)

195,925

Provision for income taxes

—

18,902

13,498

—

32,400

Net income

$
163,525

$
189,963

$
94,182

$
(284,145
)

$
163,525

Other comprehensive income, net of tax:

Foreign currency exchange translation adjustment

51,696

51,696

45,905

(97,601
)

51,696

Comprehensive income

$
215,221

$
241,659

$
140,087

$
(381,746
)

$
215,221

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

For the Nine Months Ended September 30, 2016

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Revenues

$
—

$
738,655

$
343,153

$
(1,296
)

$
1,080,512

Cost of revenues

—

389,133

207,353

(1,296
)

595,190

Gross profit

—

349,522

135,800

—

485,322

Operating expenses:

Selling and marketing

—

64,313

21,411

—

85,724

Research and development

—

80,794

34,181

—

114,975

General and administrative

—

65,906

25,333

—

91,239

Total operating expenses

—

211,013

80,925

—

291,938

Operating income

—

138,509

54,875

—

193,384

Interest expense, net

(26,274
)

(52,116
)

(19,193
)

—

(97,583
)
Other (expense) income, net

—

(47,381
)

48,201

—

820

Earnings from subsidiaries

100,247

71,885

—

(172,132
)

—

Income before income taxes

73,973

110,897

83,883

(172,132
)

96,621

Provision for income taxes

—

10,650

11,998

—

22,648

Net income

$
73,973

$
100,247

$
71,885

$
(172,132
)

$
73,973

Other comprehensive loss, net of tax:

Foreign currency exchange translation adjustment

(29,532
)

(29,532
)

(33,293
)

62,825

(29,532
)
Comprehensive income

$
44,441

$
70,715

$
38,592

$
(109,307
)

$
44,441

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

For the Nine Months Ended September 30, 2017

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Cash Flow from Operating Activities:

Net income

$
163,525

$
189,963

$
94,182

$
(284,145
)

$
163,525

Non-cash adjustments

—

147,277

48,950

—

196,227

Intercompany transactions

35,251

5,875

(41,126
)

—

—

Earnings from subsidiaries

(189,963
)

(94,182
)

—

284,145

—

Changes in operating assets and liabilities

(8,813
)

(35,024
)

(8,825
)

—

(52,662
)
Net cash provided by operating activities

—

213,909

93,181

—

307,090

Cash Flow from Investment Activities:

Additions to property and equipment

—

(22,850
)

(6,929
)

—

(29,779
)
Proceeds from sale of property and equipment

—

1

—

—

1

Cash paid for business acquisitions, net of cash acquired

—

1,802

3

—

1,805

Additions to capitalized software

—

(5,645
)

(2,523
)

—

(8,168
)
Net cash used in investing activities

—

(26,692
)

(9,449
)

—

(36,141
)
Cash Flow from Financing Activities:

Cash received from debt borrowings

—

45,000

—

—

45,000

Repayments of debt

—

(249,800
)

(88,000
)

—

(337,800
)
Transactions involving Holding's common stock

—

2,273

(2
)

—

2,271

Intercompany transactions

—

(315
)

315

—

—

Net cash used in financing activities

—

(202,842
)

(87,687
)

—

(290,529
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash

—

—

3,777

—

3,777

Net decrease in cash, cash equivalents and restricted cash

—

(15,625
)

(178
)

—

(15,803
)
Cash, cash equivalents and restricted cash, beginning of period

—

35,511

84,163

—

119,674

Cash, cash equivalents and restricted cash, end of period

$
—

$
19,886

$
83,985

$
—

$
103,871

~~SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued~~

~~(Unaudited)~~

For the Nine Months Ended September 30, 2016

Parent

Guarantor Subsidiaries

Non-guarantor Subsidiaries

Consolidating and Eliminating Adjustments

Consolidated

Cash Flow from Operating Activities:

Net income

$
73,973

$
100,247

$
71,885

$
(172,132
)

$
73,973

Non-cash adjustments

—

89,915

47,547

—

137,462

Intercompany transactions

35,935

(21,251
)

(14,684
)

—

—

Earnings from subsidiaries

(100,247
)

(71,885
)

—

172,132

—

Changes in operating assets and liabilities

(9,661
)

40,315

(5,073
)

—

25,581

Net cash provided by operating activities

—

137,341

99,675

—

237,016

Cash Flow from Investment Activities:

Additions to property and equipment

—

(7,672
)

(11,198
)

—

(18,870
)
Proceeds from sale of property and equipment

—

67

2

—

69

Cash paid for business acquisitions, net of cash acquired

—

(214,689
)

(94,743
)

—

(309,432
)
Additions to capitalized software

—

(3,860
)

(2,277
)

—

(6,137
)
Purchase of long-term investment

—

(1,000
)

—

—

(1,000
)
Net cash used in investing activities

—

(227,154
)

(108,216
)

—

(335,370
)
Cash Flow from Financing Activities:

Repayments of debt

—

(195,500
)

(73,050
)

—

(268,550
)
Transactions involving Holding's common stock

—

35,226

—

—

35,226

Intercompany transactions

—

(87,272
)

87,272

—

—

Payment of fees related to refinancing activities

—

(503
)

—

—

(503
)
Net cash (used in) provided by financing activities

—

(248,049
)

14,222

—

(233,827
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash

—

—

(880
)

—

(880
)
Net (decrease) increaase in cash, cash equivalents and restricted cash

—

(337,862
)

4,801

—

(333,061
)
Cash, cash equivalents and restricted cash, beginning of period

—

363,073

73,904

—

436,977

Cash, cash equivalents and restricted cash, end of period

$
—

$
25,211

$
78,705

$
—

$
103,916

~~Note 10—Subsequent Events~~

~~On October 13, 2017, the Company purchased~~Ferguson class, which includes all of the ~~outstanding stock~~Arbitration Claimants with the exception of ~~CommonWealth Fund Services Ltd. (“CommonWealth”), a Canadian fund administrator,~~certain former Plan fiduciaries. As of November 24, 2021, 557 demands for ~~approximately $16.4 million,~~arbitration had been submitted to the American Arbitration Association (the “AAA”). As of the date on which the preliminary injunction was entered, those individual arbitrations were at various stages depending on the particular proceeding. Certain of those arbitrations had resulted in awards against DST and others had resulted in decisions finding no liability as against DST. Many of those decisions were subject to further appeal within the AAA. Certain of the arbitration proceedings had been resolved in whole or in part by settlement. Since November 24, 2021, the AAA has administered only those arbitration proceedings associated with claimants who are not members of the Ferguson class, certain ~~adjustments. CommonWealth provides~~of which have resulted in awards against DST. Between August 20, 2021 and November 17, 2021, counsel for Arbitration Claimants filed 177 motions to confirm certain of the arbitration awards. DST filed responses to those motions. Between October 4 and December 22, 2021, the Western District of Missouri issued orders confirming those 177 arbitration awards and entering judgments against DST. DST has appealed those judgments to the Eighth Circuit. On November 20, 2021, DST requested that the Eighth Circuit stay the pending appeals in light of the preliminary injunction entered in Ferguson. On December 3, 2021, the Eighth Circuit ordered the parties to brief DST’s stay request. On December 17, 2021, Arbitration Claimants and DST filed with the Eighth Circuit their respective briefs addressing the DST’s stay request. On January 3, 2022, the Eighth Circuit declined to stay the briefing schedule on the pending appeals and consolidated those appeals. DST filed its opening brief in the Eighth Circuit on March 24, 2022. Arbitration Claimants filed their opposition brief on April 26, 2022, and DST filed its reply brief on May 18, 2022. The Eighth Circuit heard oral argument on June 14, 2022, and those appeals remain pending. On November 9, 2021, counsel for Arbitration Claimants filed in the Western District of Missouri a ~~full range~~petition to compel arbitration captioned Addison v. DST Systems, Inc. (the “Addison Petition”) on behalf of ~~administration services~~155 Arbitration Claimants, which DST opposed. On September 15, 2022, the Western District of Missouri dismissed the Addison Petition without prejudice, subject to ~~hedge funds, private equity funds, real estate funds, fund~~that action being reopened after the Eighth Circuit’s rulings on DST’s appeals of ~~funds, family offices,~~the 177 orders confirming arbitration awards.

We continue to vigorously defend these matters.

On November 11, 2020, DST, the Compensation Committee of DST’s Board of Directors, and ~~other institutions.~~the Advisory Committee of the Plan as plaintiffs filed a complaint in the United States District Court for the Southern District of New York against Ruane, certain of its related entities, and certain of its current and former employees. The complaint asserts claims for contribution, indemnification, and breach of contract arising out of Ruane’s management of the Plan’s investments and claims for actual and constructive fraudulent conveyances. On May 24, 2021, Defendant Robert Goldfarb filed an answer to the complaint. On September 17, 2021, the remaining defendants filed a pre-motion letter requesting permission to file a motion to dismiss the complaint. On September 22, 2021, the DST plaintiffs responded to the remaining defendants’ pre-motion letter. On November 5, 2021, the Court denied the remaining defendants’ request for a pre-motion conference and granted the remaining defendants leave to file a motion to dismiss. On December 17, 2021, the remaining defendants filed a motion to dismiss the DST plaintiffs’ complaint. On July 27, 2022, the Court denied without prejudice the pending motion to dismiss, and ordered the parties to submit by October 3, 2022 a joint status report with a new briefing schedule on the motion. On October 3, 2022, the parties filed a joint status report with a new briefing schedule on the motion, which the court approved on October 4, 2022. The remaining defendants' opening brief is due on November 10, 2022, and the motion is scheduled to be fully briefed by December 23, 2022.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

This ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is intended to provide readers of our Condensed Consolidated Financial Statements with the perspectives of management. It presents, in narrative form, information regarding our financial condition, results of operations, liquidity and certain other factors that may affect our future results. It should be read in conjunction with our ~~2016~~2021 Form 10-K and the Condensed Consolidated Financial Statements included in this Form 10-Q. We use the term organic to refer to the businesses and operations that are included in the comparable prior year period on a constant currency basis. Organic excludes the impact of any business which we acquired for the time period which would impact the comparable prior year period.

The COVID-19 pandemic and ongoing macroeconomic conditions, such as increases in interest rates, inflation and changes in foreign currency exchange rates, could have impacts on our results that are uncertain and, in many respects, outside our control. The situations remain dynamic and subject to rapid and possibly material change, which ultimately could result in material negative effects on our business and results of operations. We will continue to evaluate the nature and extent of the potential impacts to our business, consolidated results of operations, liquidity and capital resources.

Critical Accounting Policies

Certain of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our Condensed 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. Actual results may differ significantly from the estimates contained in our Condensed Consolidated Financial Statements. There have been no material changes to our critical accounting estimates and assumptions or the judgments affecting the application of those estimates and assumptions since the filing of our ~~2016~~2021 Form 10-K. Our critical accounting policies are described in the ~~2016~~2021 Form 10-K and include:

•

~~Revenue Recognition~~

Investments

•

Long-Lived Assets, Intangible Assets and Goodwill

•

Software Capitalization

•

Acquisition Accounting

•

Revenue Recognition

•

Stock-based Compensation

•

Income Taxes

Results of Operations

Revenues

We derive our ~~revenue~~revenues from two sources: ~~recurring~~software-enabled services revenues and ~~to a lesser degree, non-recurring revenues. Recurring revenues consist of software-enabled services and~~license, maintenance and ~~term licenses.~~related revenues. As a general matter, fluctuations in our software-enabled services revenues are attributable to the number of new software-enabled services clients as well as total assets under management in our clients’ portfolios and the number of outsourced transactions provided to our existing clients. Software-enabled services revenues also fluctuate as a result of reimbursements received for “out-of-pocket” expenses, such as postage and telecommunications charges, which are recorded as revenues on an accrual basis. Because these additional revenues are offset by the reimbursable expenses incurred, there is no impact on gross profit, operating income and net income, however the reimbursements billed and expenses incurred can lead to fluctuations in revenues, cost of revenues and gross margin percentage each period. License, maintenance and related revenues consist primarily of term and perpetual license fees, maintenance fees and professional services. Maintenance revenues vary based on customer retention ~~the number of perpetual licenses~~ and on the annual increases in fees, which are generally tied to the consumer price ~~index, while term license revenues vary based on the rate by which we add or lose clients over time. Non-recurring revenues consist of~~index. License and professional services ~~and perpetual license fees and~~revenues tend to fluctuate based on the number of new licensing clients, the timing and terms of contract renewals and demand for consulting services.

~~Revenues~~Our results of operations below include the results of our recent acquisitions from the date which they were acquired, including Capita in March 2021, Blue Prism and Hubwise in March 2022, MineralWare in May 2022, O’Shares in June 2022 and Tier1 in August 2022.

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

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Revenues:

Software-enabled services

67
%

65
%

67
%

65
%
Maintenance and term licenses

27

28

27

28

Total recurring revenues

94

93

94

93

Perpetual licenses

1

1

1

1

Professional services

5

6

5

6

Total non-recurring revenues

6

7

6

7

Total revenues

100
%

100
%

100
%

100
%


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Software-enabled services		79.5	%		84.6	%		81.3	%		84.4	%
License, maintenance and related		20.5	%		15.4	%		18.7	%		15.6	%
Total revenues		100.0	%		100.0	%		100.0	%		100.0	%

The following table sets forth revenues (dollars in ~~thousands)~~millions) and percent change in revenues for the periods indicated:


	Three Months Ended September 30,				Percent Change from Prior Period			Nine Months Ended September 30,				Percent Change from Prior Period
	2022		2021					2022		2021
Software-enabled services	$	1,049.8	$	1,069.9		(1.9	)%	$	3,205.7	$	3,170.4		1.1	%
License, maintenance and related		271.2		194.5		39.4	%		739.0		586.4		26.0	%
Total revenues	$	1,321.0	$	1,264.4		4.5	%	$	3,944.7	$	3,756.8		5.0	%

Three Months Ended September 30,

Percent
Change from
Prior
Period

Nine Months Ended September 30,

Percent
Change from
Prior
Period

2017

2016

2017

2016

Revenues:

Software-enabled services

$
282,133

$
248,772

13
%

$
831,103

$
699,091

19
%
Maintenance and term licenses

112,819

106,925

6

336,990

305,437

10

Total recurring revenues

394,952

355,697

11

1,168,093

1,004,528

16

Perpetual licenses

3,576

4,389

(19
)

10,226

14,643

(30
)
Professional services

19,723

23,218

(15
)

58,611

61,341

(4
)
Total non-recurring revenues

23,299

27,607

(16
)

68,837

75,984

(9
)
Total revenues

$
418,251

$
383,304

9

$
1,236,930

$
1,080,512

14

Three Months Ended September 30, ~~2017~~2022 and ~~2016~~2021. Our revenues increased $56.6 million, or 4.5%, primarily due to revenues ~~related to~~associated with our acquisitions ~~which included Wells Fargo’s Global Fund Services business (“GFS”)~~of Blue Prism and ~~Conifer Financial Services (“Conifer”)~~Hubwise in ~~the fourth quarter of 2016,~~March 2022, MineralWare in May 2022, O’Shares in June 2022 and Tier1 in August 2022, which contributed ~~$20.9~~$68.2 million in revenues net of a reduction of $0.5 million in revenues related to the loss of sales to these businesses. Additionally, organic revenues increased $12.7 million, of which approximately $7.2 million was the result of the impact of the fair value adjustment for acquired deferred revenue on the periods. The change in organic revenues also reflects a reduction of $5.9 million related to fund administration service clients that were acquired through the Citigroup Alternative Investor Services business (“Citigroup AIS”) acquisition who had indicated they were terminating their contracts prior to the acquisition closing. The final purchase price of the Citigroup AIS business acquisition included an adjustment for these terminated clients. The remaining increase in organic revenues was primarily due to a continued increase in demand for our fund administration services. Our revenues also increased $1.4 million due to the favorable impact from foreign currency translation, which resulted primarily from the weakness of the U.S. dollar relative to the Euro and ~~Canadian dollar. Recurring revenues increased primarily due to the acquisitions, which added revenues of $20.4 million, as well as from~~ an increase in organic revenues of ~~$17.7~~$20.9 million ~~of which $4.6 million was~~driven by strength in the result of the impact of the fair value adjustment of acquired deferred revenue on the periods. The organic recurring revenue increase was primarily due to an increase in software-enabled services revenues within ourSS&C GlobeOp fund administration business as well as an increase in license revenues from term licenses. Non-recurring revenues decreased primarily due to a decrease in organic revenues of $5.0 million, which is net of an increase of approximately $2.7 million resulting from the impact of the fair value adjustment of acquired deferred revenue, partially offset by our acquisitions, which contributed $0.5 million. The organic non-recurring revenue decrease was due to decreases of $4.2 million and ~~$0.8 million in professional~~virtual data room services ~~and perpetual licenses revenues, respectively.~~

~~Nine Months Ended September 30, 2017 and 2016.~~ Our revenues increased primarily due to revenues related to our acquisitions, which included GFS and Conifer in the fourth quarter of 2016 and Citigroup AIS in the first quarter of 2016, which contributed $99.1 million in revenues, net of a reduction of $2.2 million in revenues related to the loss of sales to these businesses. Additionally, organic revenues increased $58.8 million, of which approximately $32.6 million was the result of the impact of the fair value adjustment for acquired deferred revenue on the periods. The change in organic revenues also reflects a reduction of $13.3 million related to fund administration service clients that were acquired through the Citigroup AIS acquisition who had indicated they were terminating their contracts prior to the acquisition closing. The final purchase price of the Citigroup AIS business acquisition included an adjustment for these terminated clients. The remaining increase in organic revenues was primarily due to a continued increase in demand for our fund administration services. These increases were partially offset by the unfavorable impact from foreign currency translation of ~~$1.5~~$32.5 million. Software-enabled services revenues decreased $20.1 million, ~~which resulted primarily from the strength of the U.S. dollar relative to the British pound. Recurring revenues increased~~or 1.9%, primarily due to the unfavorable impact from foreign currency translation of $25.2 million and a decrease in organic revenues of $5.4 million, partially offset by revenues of $10.5 million from our acquisitions. License, maintenance and related revenues increased $76.7 million, or 39.4%, primarily due to acquisitions, which added $57.7 million in revenues ~~of $97.8 million, as well as from~~and an increase in organic revenues of ~~$67.1~~$26.3 million, partially offset by the unfavorable impact from foreign currency translation of $7.3 million.

Nine Months Ended September 30, 2022 and 2021. Our revenues increased $187.9 million, or 5.0%, due to revenues associated with our acquisitions of Blue Prism and Hubwise in March 2022, MineralWare in May 2022, O’Shares in June 2022, Tier1 in August 2022 and Capita in March 2021, which ~~$26.0~~contributed $151.2 million ~~was~~in revenues, and an increase in organic revenues of $101.7 million driven by strength in the ~~result~~SS&C GlobeOp fund administration, Eze, Black Diamond, Geneva and virtual data room services businesses. Those increases were partially offset by the unfavorable impact from foreign currency translation of ~~the impact of the fair value adjustment of acquired deferred revenue on the periods. The organic recurring revenue increase was~~$65.0 million. Software-enabled services revenues increased $35.3 million, or 1.1%, primarily due to an increase in ~~software-enabled services~~organic revenues ~~within our fund administration business as well as an increase~~of $60.9 million, and acquisitions, which added $25.0 million in ~~license~~ revenues, partially offset by the unfavorable impact from ~~term licenses revenues. Non-recurring~~foreign currency translation of $50.6 million. License, maintenance and related revenues ~~decreased~~increased $152.6 million, or 26.0%, primarily due to ~~a decrease~~acquisitions, which

added $126.2 million in revenues, and an increase in organic revenues of ~~$8.3~~$40.8 million, ~~which is net of an increase of approximately $6.6 million resulting from the impact of the fair value adjustment of acquired deferred revenue,~~ partially offset by ~~our acquisitions, which contributed $1.3~~the unfavorable impact from foreign currency translation of $14.4 million. ~~The organic non-recurring revenue decrease was due to decreases of $4.3 million and $4.0 million in perpetual licenses and professional services revenues, respectively.~~

Cost of Revenues

Cost of ~~recurring~~software-enabled services revenues consists primarily of costs related to personnel utilized in ~~servicing~~providing our software-enabled services ~~and maintenance contracts~~ and amortization of intangible assets. Cost of ~~non-recurring~~license, maintenance and other related revenues consists primarily of the ~~cost~~costs related to personnel utilized in servicing our maintenance contracts and to provide implementation, conversion and training services to our software licensees, as well as system integration and custom programming consulting services and amortization of intangible assets.

The following tables set forth each of the following cost of revenues as a percentage of their respective revenue source for the periods indicated:

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Cost of revenues:

Cost of software-enabled services

55
%

58
%

56
%

58
%
Cost of maintenance and term licenses

41

43

42

45

Total cost of recurring revenues

51

53

52

54

Cost of perpetual licenses

18

14

18

12

Cost of professional services

86

81

85

84

Total cost of non-recurring revenues

76

71

75

70

Total cost of revenues

53

54

53

55

Gross margin percentage

47

46

47

45


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Cost of software-enabled services		57.7	%		52.7	%		56.5	%		54.9	%
Cost of license, maintenance and related		33.7	%		39.4	%		35.9	%		40.4	%
Total cost of revenues		52.8	%		50.6	%		52.6	%		52.7	%
Gross margin percentage		47.2	%		49.4	%		47.4	%		47.3	%

The following table sets forth cost of revenues (dollars in ~~thousands)~~millions) and percent change in cost of revenues for the periods indicated:

Three Months Ended September 30,

Percent
Change from
Prior
Period

Nine Months Ended September 30,

Percent
Change from
Prior
Period

2017

2016

2017

2016

Cost of revenues:

Cost of software-enabled services

$
155,497

$
143,074

9
%

$
468,391

$
403,045

16
%
Cost of maintenance and term licenses

46,662

45,458

3

140,927

138,864

1

Total cost of recurring revenues

202,159

188,532

7

609,318

541,909

12

Cost of perpetual licenses

642

608

6

1,857

1,749

6

Cost of professional services

17,001

18,887

(10
)

49,778

51,532

(3
)
Total cost of non-recurring revenues

17,643

19,495

(9
)

51,635

53,281

(3
)
Total cost of revenues

$
219,802

$
208,027

6

$
660,953

$
595,190

11


	Three Months Ended September 30,				Percent Change from Prior Period			Nine Months Ended September 30,				Percent Change from Prior Period
	2022		2021					2022		2021
Cost of software-enabled services	$	605.8	$	563.7		7.5	%	$	1,811.6	$	1,742.0		4.0	%
Cost of license, maintenance and related		91.4		76.7		19.2	%		265.2		236.7		12.0	%
Total cost of revenues	$	697.2	$	640.4		8.9	%	$	2,076.8	$	1,978.7		5.0	%

Three Months Ended September 30, ~~2017~~2022 and ~~2016~~2021. Our total cost of revenues increased by $56.8 million, or 8.9%, primarily due to ~~our~~an increase of $57.7 million in organic costs and acquisitions, which ~~included GFS and Conifer, which~~ added ~~costs of $14.3~~$19.6 million for the three months ended September 30, 2017. This increase was also affected by the unfavorable impact from foreign currency translation of $1.1 million, which resulted primarily from the weakness of the U.S. dollar relative to the Canadian dollar.in costs. These increases were partially offset by ~~a decrease~~the favorable impact from foreign currency translation, which decreased costs by $20.5 million. Organic cost increases are primarily due to personnel costs, including the impact of wage inflation and costs to support organic growth. These increases were partially offset by decreases in stock-based compensation expense, depreciation, amortization and rent expense. Cost of software-enabled services revenues increased $42.1 million, or 7.5%, primarily due to an increase of $54.1 million in organic costs and acquisitions, which added $6.0 million in costs. These costs were partially offset by the favorable impact from foreign currency translation which decreased costs by $18.0 million. Cost of license, maintenance and related revenues increased $14.7 million, or 19.2%, primarily due to acquisitions, which added $13.6 million in costs, as well as an increase in organic costs of $3.6 million, ~~in costs of organic revenues, primarily related to cost synergies from acquisitions.~~ ~~Recurring cost of revenues increased primarily due to the acquisitions, which added costs of $14.1 million. Non-recurring cost of revenues decreased primarily due to~~ ~~lower personnel and personnel related costs~~.

~~Nine Months Ended September 30, 2017 and 2016.~~ ~~Our total cost of revenues increased~~ ~~primarily due to our acquisitions, which included GFS, Conifer and Citigroup AIS, which added costs of $74.6 million for the nine months ended September 30, 2017. This increase was~~ partially offset ~~by a decrease of $6.0 million in costs of organic revenues, primarily related to cost synergies from acquisitions as well as~~ by the favorable impact from foreign currency translation of ~~$2.8 million, which resulted primarily from the strength of the U.S. dollar relative to the British pound.~~ ~~Recurring~~$2.5 million.

Nine Months Ended September 30, 2022 and 2021. Our total cost of revenues increased by $98.1 million, or 5.0%, primarily due to ~~the~~an increase of $92.6 million in organic costs and acquisitions, which added $46.7 million in costs. These costs ~~of $74.2~~were partially offset by the favorable impact from foreign currency translation, which decreased costs by $41.2 million. ~~Non-recurring~~Organic cost ~~of revenues decreased~~increases are primarily due to ~~lower~~ personnel costs, including the impact of wage inflation, costs to support organic growth and ~~personnel~~travel and entertainment expenses. These increases were partially offset by decreases in depreciation, amortization and rent expense. Cost of software-enabled services revenues increased $69.6 million, or 4.0%, primarily due to an increase of $89.5 million in organic costs, and acquisitions, which added $15.7 million in costs. These increases were partially offset by the favorable impact from foreign currency translation, which decreased costs by $35.6 million. Cost of license, maintenance and related revenues increased $28.5 million, or 12.0%, primarily due to acquisitions, which added $31.0 million in costs,. and an increase of $3.1 million in organic costs, partially offset by the favorable impact from foreign currency translation of $5.6 million.

Operating Expenses

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 amortization of intangible assets,

the cost of branch sales offices, trade shows and marketing and promotional materials. Research and development expenses consist primarily of personnel costs attributable to the enhancement of existing products and the development of new software products. 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.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			Three Months Ended September 30,						Nine Months Ended September 30,
Operating expenses:
													2022			2021			2022			2021
Selling and marketing		7	%		7	%		7	%		8	%		9.2	%		7.6	%		9.4	%		7.6	%
Research and development		9			10			10			11			8.1	%		7.7	%		8.4	%		8.2	%
General and administrative		7			9			7			8			6.9	%		7.1	%		8.2	%		7.0	%
Total operating expenses		23	%		26	%		24	%		27	%		24.2	%		22.4	%		26.0	%		22.8	%

The following table sets forth operating expenses (dollars in ~~thousands)~~millions) and percent change in operating expenses for the periods indicated:

	Three Months Ended September 30,				Percent Change from Prior Period			Nine Months Ended September 30,				Percent Change from Prior Period
	2017		2016					2017		2016					Three Months Ended September 30,				Percent Change from Prior Period			Nine Months Ended September 30,				Percent Change from Prior Period
Operating expenses:
															2022		2021					2022		2021
Selling and marketing	$	28,181	$	27,328		3	%	$	88,544	$	85,724		3	%	$	120.9	$	96.4		25.4	%	$	371.1	$	286.1		29.7	%
Research and development		37,376		37,701		(1	)		114,904		114,975		(0	)		107.6		97.7		10.1	%		331.8		306.4		8.3	%
General and administrative		28,975		33,345		(13	)		88,910		91,239		(3	)		91.1		89.8		1.4	%		323.4		263.5		22.7	%
Total operating expenses	$	94,532	$	98,374		(4	)	$	292,358	$	291,938		0		$	319.6	$	283.9		12.6	%	$	1,026.3	$	856.0		19.9	%

Three ~~and Nine~~ Months Ended September 30, ~~2017~~2022 and ~~2016~~2021. The decrease in total operating expenses for the three months ended September 30, 2017 was primarily due to a decrease in organic operating expenses of $7.7 million, partially offset by our acquisitions, which included GFS and Conifer, which added expenses of $3.4 million as well as the unfavorable impact from foreign currency translation of $0.4 million, which resulted primarily from the weakness of the U.S. dollar relative to the Canadian dollar. Organic operating expenses decreased due to lower personnel-related costs, stock-based compensation, bad debt expense and independent contractor costs partially offset by higher professional fees. Total operatingOperating expenses increased ~~slightly for the nine months ended September 30, 2017 as compared to the same period in 2016~~$35.7 million, or 12.6%, primarily due to our acquisitions, which ~~included Citi, GFS and Conifer, which~~ added expenses of ~~$15.0 million,~~$48.7 million. This increase was partially offset by ~~decreases in organic operating expenses of $12.7 million as well as~~ the favorable impact from foreign currency translation which decreased expenses by $11.6 million and a decrease of ~~$1.9~~$1.4 million ~~which resulted from the strength of the U.S. dollar relative to the British pound. Organic~~in organic operating expenses. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily decreased due to ~~lower~~a decrease in personnel-related costs due in part to a non-recurring stock-based compensation expense true-up. These decreases were partially offset by increased legal fees.

Nine Months Ended September 30, 2022 and 2021. Operating expenses increased $170.3 million, or 19.9%, primarily due our acquisitions, which added expenses of $127.7 million and an increase of $66.0 million in organic operating expenses. These increases were partially offset by the favorable impact from foreign currency translation which decreased expenses by $23.4 million. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to an increase in personnel-related costs, including the impact of increased headcount, wage inflation, stock-based compensation and ~~independent contractor costs offset by higher professional fees.~~ travel-related expenses and information technology related expenses.

Comparison of the Three and Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021 for Interest, Taxes and Other

Interest expense, net. We had net interest expense of ~~$26.3~~$86.0 million and ~~$81.6~~$203.0 million for the three and nine months ended September 30, ~~2017,~~2022, respectively, compared to ~~$31.6~~$50.2 million and ~~$97.6~~$152.6 million for the three and nine months ended September 30, ~~2016,~~2021, respectively. The ~~decrease~~increase in interest expense, net for ~~2017~~2022 as compared to ~~2016 for both periods presented~~ ~~was primarily~~2021, is due to ~~a lower average debt balance and a lower~~higher average interest rate on debt and higher average debt balances. We had an average interest rate of 4.55% and 3.12%, respectively, for the three months ended September 30, 2022 and 2021. Our total debt balance as ~~a result~~ of September 30, 2022 was higher compared to the prior year due to the Incremental Joinder we entered into in connection with our acquisition of Blue Prism on March ~~2017 Amendment to our Credit Agreement.~~22, 2022. These facilities are discussed further in “Liquidity and Capital Resources”.

Other ~~(expense)~~ income (expense), net. We had other ~~expense,~~income (expense), net of ~~$2.5~~$1.1 million and ~~$3.8~~$(28.3) million for the three and nine months ended September 30, ~~2017,~~2022, respectively, compared to other ~~income,~~expense, net of ~~$2.7~~$44.9 million and ~~$0.8~~$20.4 million for the three and nine months ended September 30, ~~2016,~~2021, respectively. ~~Other (expense)~~For the three and nine months ended September 30, 2022, other expense, net

consisted primarily of foreign currency translation losses of $0.1 million and $22.0 million, respectively, and investment losses due to mark-to-market adjustments of $2.5 million and $14.7 million, respectively, partially offset by dividend income of $1.2 million and $10.3 million, respectively. For the three and nine months ended September 30, 2021, other expense, net included an expense of $43.4 million relating to a legal accrual recorded in connection with the DST ERISA litigation discussed in Note 14 - Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements. During the three and nine months ended September 30, 2021, other expense, net also included investment gains of $0.1 million and $17.3 million, respectively, and dividend income of $0.5 million and $9.4 million, respectively. The remaining portion of other income, net ~~consists~~consisted primarily of foreign currency transaction gains and losses ~~for all periods presented except~~of $3.9 million and $9.1 million for the three and nine months ended September 30, ~~2016, which consisted primarily~~2021, respectively.

Equity in earnings of ~~a gain from a legal settlement.~~

~~Loss on extinguishment~~unconsolidated affiliates, net. We had equity in earnings of ~~debt. We recorded a $2.3~~unconsolidated affiliates, net of $(5.1) million ~~loss on extinguishment of debt~~and $(2.7) million for the three and nine months ended September 30, 2022, respectively, compared to $2.0 million and $1.9 million in the three and nine months ended ~~March 31, 2017~~September 30, 2021, respectively. Our equity in ~~connection with~~earnings of unconsolidated affiliates, net is a loss in the ~~amendment~~three and nine months ended September 30, 2022 primarily as a result of debt refinancing at one of our ~~senior secured credit facility. The~~affiliates, which resulted in a loss ~~on early extinguishment~~ of ~~debt includes the write-off of a portion of the unamortized capitalized financing fees related to the senior secured credit facility for amounts accounted~~

~~for as a debt extinguishment, as well as the new financing fees related to the senior secured credit facility for amounts accounted for as a debt modification.~~ $5.2 million and $5.1 million, respectively.

Provision for income taxes. The following table sets forth the provision for income taxes (dollars in ~~thousands)~~millions) and effective tax rates for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2022			2021			2022			2021
Provision for income taxes	$	10,905		$	9,163		$	32,400		$	22,648		$	53.4		$	60.6		$	162.1		$	198.1
Effective tax rate		15	%		19	%		17	%		23	%		25.0	%		24.7	%		26.9	%		26.5	%

Our effective tax rates for the three and nine months ended September 30, ~~2017~~2022 and ~~2016 effective tax rates~~2021 differ from the statutory rate of 21.0% primarily due to the ~~effect~~composition of ~~our~~income before income taxes from foreign ~~operations.~~and domestic tax jurisdictions, foreign income that is being taxed in the U.S. offset by foreign tax credits that are being limited and the recognition of windfall tax benefits from stock awards. The ~~decrease~~change in the effective tax rate for the three months ended September 30, ~~2017~~ 2022 compared to the prior year was primarily due to ~~the~~a decrease in recognition of windfall tax benefits from stock awards in the current ~~quarter as a component of the income~~year, an increase in valuation allowances on deferred tax ~~provision as well as the recognition of previously unrecognized tax benefits due to a lapse in the statute of limitations~~assets in the current ~~quarter.~~year and a proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions. The ~~decrease~~change in the effective tax rate for the nine months ended September 30, ~~2017~~2022 compared to the prior year was primarily due to ~~the~~a decrease in recognition of windfall tax benefits from stock awards in the current year, ~~as a component of the income tax provision and the absence of~~ ~~the~~ unfavorable impact of a change in state apportionment on our domestic deferred tax liabilities as a result of the acquisition of Citigroup AIS in the first quarter of 2016, partially offset by the unfavorable impact from an increase in ~~pre-tax~~valuation allowances on deferred tax assets in the current year and a proportionate change in the composition of income taxes from foreign and domestic ~~operations taxed at a high statutory rate. Our~~tax jurisdictions. In addition, the effective tax rate ~~includes~~for the ~~effect of operations outside~~nine months ended September 30, 2021 included tax expense related to a law change in the United ~~States, which historically have been taxed at rates lower than the U.S. statutory rate.~~Kingdom. While we have income from multiple foreign sources, the majority of our non-U.S. operations are in ~~Canada, India and~~ the United Kingdom and India, where we anticipate the statutory tax rates to be ~~26.5%, 34.6%~~19.0% and, ~~19.3%~~on a blended basis, approximately 29.0%, respectively, in ~~2017. The consolidated expected effective tax rate for the year ended December 31, 2017 is forecasted to be between 18% and 19%.~~2022. A future ~~proportionate~~ change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.

Liquidity and Capital Resources

Our principal cash requirements are to finance the costs of our operations pending the billing and collection of client receivables, to fund payments with respect to our indebtedness, to invest in research and development, to acquire complementary businesses or assets, to repurchase shares of our common stock and to pay dividends on our common stock. We expect our cash on hand, cash flows from operations and cash available under ~~the~~our Credit Agreement to provide sufficient liquidity to fund our current obligations, projected working capital requirements and capital spending for at least the next twelve months.

~~In 2017,~~During the nine months ended September 30, 2022, we paid a quarterly cash ~~dividends~~dividend of ~~$0.0625~~$0.20 per share of common stock ~~on March 15, 2017 and June 15, 2017 and $0.07~~totaling $153.4 million in the aggregate. During the nine months ended September 30, 2021, we paid a quarterly cash dividend of $0.16 per share of common stock totaling $122.8 million.

Client funds obligations include our transfer agency client balances invested overnight as well as our contractual obligations to remit funds to satisfy client pharmacy claim obligations and are recorded on ~~September 15, 2017~~the Condensed Consolidated Balance Sheet when incurred, generally after a claim has been processed by us. Our contractual obligations to ~~stockholders~~remit funds to satisfy client obligations are primarily sourced by funds held on behalf of ~~record as~~clients. We had $1,115.1 million of ~~the close of business on March 1, 2017, June 1, 2017 and September 1, 2017, respectively, totaling $39.9 million.~~

~~Our cash, cash equivalents and restricted cash~~client funds obligations at September 30, ~~2017 were $103.9 million, a decrease~~2022.

Cash flows from operating, investing and financing activities, as reflected in our Condensed Consolidated Statements of ~~$15.8 million from $119.7 million at December 31, 2016. The decrease~~Cash Flows, are summarized in cash, cash equivalents and restricted cash is primarily due to net repayments of debt, payment of dividends and capital expenditures. These decreases were partially offset by cash provided by operations and proceeds from stock option exercises.the following table (in millions):


	Nine Months Ended September 30,
Net cash, cash equivalents and restricted cash (used in) provided by:	2022			2021			Change From Prior Year
Operating activities	$	764.6		$	944.9		$	(180.3	)
Investing activities		(1,707.8	)		(58.2	)		(1,649.6	)
Financing activities		(751.7	)		483.5			(1,235.2	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(32.9	)		(4.2	)		(28.7	)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(1,727.8	)	$	1,366.0		$	(3,093.8	)

2022 versus 2021

Net cash provided by operating activities was ~~$307.1~~$764.6 million for the nine months ended September 30, ~~2017.~~2022. Cash provided by operating activities primarily resulted from net income of ~~$163.5~~$441.4 million adjusted for non-cash items of ~~$196.2~~$553.0 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling ~~$52.7~~$229.8 million. The changes in our working capital accounts were driven by ~~a decrease~~decreases in accrued expenses and deferred revenue ~~partially offset by~~and an increase in accounts ~~payable.~~receivable, partially offset by a decrease in prepaid expenses. Cash provided by operating activities was negatively affected by approximately $68.0 million of transaction costs related to the Blue Prism acquisition. The decrease in accrued expenses was primarily due to the payment of annual employee bonuses in the first quarter of ~~2017. The decrease in deferred revenue was primarily due to an increase in~~2022 and the ~~number~~payment of new license contracts and contract renewals that qualified for up-front revenue recognition as well as the decline in deferred revenue associated with the completion of professional services installations of our software. The increase in accounts payable was primarily duetransaction costs related to the ~~timing~~Blue Prism acquisition that were recorded as liabilities at the time of ~~payments.~~ acquisition.

Investing activities used net cash of ~~$36.1~~$1,707.8 million for the nine months ended September 30, ~~2017,~~2022, primarily related to ~~$29.8~~$1,629.5 million ~~in capital expenditures and $8.2~~paid for business acquisitions, net of cash acquired, $108.2 million in capitalized software development costs, $53.3 million in capital expenditures and seed capital investments of $10.0 million, partially offset by ~~cash~~distributions received from unconsolidated affiliates of ~~$1.8~~$66.2 million, ~~related to purchase price adjustments for prior acquisitions.~~proceeds from the sale of property of $10.9 million, proceeds from sales and maturities of investments of $8.6 million and collection of other non-current receivables of $7.5 million.

Financing activities used net cash of ~~$290.5~~$751.7 million for the nine months ended September 30, ~~2017,~~2022, primarily representing a net ~~repayments~~decrease in client fund obligations of ~~debt totaling $292.8~~$1,564.5 million, ~~$39.9~~$385.4 million of purchases of common stock for treasury, $153.4 million in quarterly dividends paid, $14.7 million of deferred financing fees payments and ~~$4.1~~$0.6 million in withholding taxes paid related to equity award net share ~~settlements,~~settlements. These expenditures were partially offset by net borrowings of $1,293.6 million and proceeds of $73.3 million from stock option exercises.

2021 versus 2020

Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, were $2,703.9 million at September 30, 2021, an increase of $1,366.0 million from $1,337.9 million at December 31, 2020.

Net cash provided by operating activities was $944.9 million for the nine months ended September 30, 2021. Cash provided by operating activities primarily resulted from net income of $549.4 million adjusted for non-cash items of $508.6 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $113.1 million. The changes in our working capital accounts were driven by an increase in accounts receivable, a decrease in accrued expenses and other liabilities, a decrease in deferred revenue and a decrease in accounts payable, partially offset by changes in income tax prepaid and payable and a decrease in prepaid expenses and other assets. The increase in accounts receivable was primarily due to an increase in days’ sales outstanding. The decrease in accrued expenses and other liabilities was primarily due to the payment of annual employee bonuses in the first quarter of 2021. The decrease in deferred revenue was primarily due to the recognition of revenue associated with multi-year license agreements where we received payment in 2020 as well as the revenue associated with annual maintenance fees. The change in income taxes prepaid and payable is primarily driven by the timing of tax payments. The decrease in prepaid expenses and other assets was primarily due to the timing of payments.

Investing activities used net cash of $58.2 million for the nine months ended September 30, 2021, primarily related to $65.2 million in capitalized software development costs, $31.0 million in capital expenditures and $20.1 million in investments in securities, partially offset by proceeds from sales and maturities of ~~$46.3~~investments of $42.3 million, collection of other non-current receivables of $8.3 million and net cash acquired for business acquisitions of $7.3 million.

Financing activities provided net cash of $483.5 million for the nine months ended September 30, 2021, primarily representing a net increase in client funds obligations of $1,226.3 million, proceeds of $124.2 million from stock option ~~exercises.~~exercises and proceeds from noncontrolling interests of $67.3 million. These proceeds were partially offset by $487.9 million of purchases of common stock for

treasury, net repayments of debt of $317.8 million, $122.8 million in quarterly dividends paid and $5.8 million in withholding taxes paid related to equity award net share settlements.

We have made a permanent reinvestment determination in certain non-U.S. operations that have historically generated positive operating cash flows. At September 30, ~~2017,~~2022, we held approximately ~~$80.4~~$184.2 million in cash and cash equivalents at non-U.S. subsidiaries where we had made such a determination and in turn, no provision for foreign withholding, foreign local, or U.S. state income taxes had been made. At September 30, ~~2017,~~2022, we held approximately ~~$74.6~~$102.2 million in cash that was available to our foreign borrowers under our senior secured credit facility and will be used to facilitate debt servicing of those entities.

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.

Senior Secured Credit Facilities

On March 2, 2017 (“Amendment Effective Date”), we entered into an amendment (the “Amendment”) to our senior secured credit agreement (“Amended Senior Secured Credit Agreement”) dated July 8, 2015. Pursuant to the Amendment, the highest (non-default) interest rate margin applicable to Term Loan A was reduced from LIBOR plus 2.75% to LIBOR plus 1.75%, and the highest (non-default) interest rate margin applicable to Term Loan B was reduced from LIBOR plus 3.25% to LIBOR plus 2.25%. The LIBOR “floor” was also amended for the Term Loan A and the Term Loan B to be 0%. N~~o changes were made to the financial covenants, outstanding principal amounts or the scheduled amortization.~~

~~The Amendment was evaluated in accordance with FASB Accounting Standards Codification 470-50,~~ ~~Debt-Modifications and Extinguishments, for modification and extinguishment accounting.~~ The Company accounted the debt re-pricing as a debt modification with respect to amounts that remained obligations of the same lender in the syndicate with minor changes in cash flows and as a debt extinguishment with respect to amounts that were obligations of lenders that exited the syndicate or remained in the syndicate but experienced a change in cash flows of greater than 10%. ~~See Note 2 to our Condensed Consolidated Financial Statements for further discussion of debt.~~

The Company recorded a $2.3 million loss on extinguishment of debt in the three months ended March 31, 2017 in connection with the Amendment. The loss on early extinguishment of debt includes the write-off of a portion of the unamortized capitalized financing fees related to the s~~enior secured credit facility~~ ~~for amounts accounted for as a debt extinguishment, as well as new financing fees related to the~~ ~~Amendment~~ ~~for amounts accounted for as a debt modification.~~

As of September 30, ~~2017,~~2022, there was ~~$88.2~~$1,234.0 million in principal amount outstanding under the Term B-3 Loan, ~~A-1, $136.8~~$1,001.8 million in principal amount outstanding under the Term B-4 Loan, ~~A-2, $1,369.4~~$1,706.1 million in principal amount outstanding under the Term B-5 Loan, ~~B-1 and $72.4~~$561.0 million in principal amount outstanding under the Term B-6 Loan ~~B-2~~.and $792.2 million in principal amount outstanding under the Term B-7 Loan. In addition, the ~~Amended Senior Secured Credit Agreement~~ amended senior secured credit facility has a revolving credit facility with a ~~five year~~five-year term available for borrowings by SS&C with ~~$150~~$250 million in available commitments ~~or the~~ (“Revolving Credit ~~Facility,~~Facility”), of which ~~$0.0 million~~ ~~and $94.0~~$247.5 million was ~~outstanding~~available as of September 30, ~~2017 and December 31, 2016, respectively.~~2022. The Revolving Credit Facility also contains a $25 million letter of credit sub-facility, of which ~~$0.9 million and $0.6~~$2.5 million was ~~outstanding~~utilized as of September 30, ~~2017 and December 31, 2016, respectively.~~2022.

We are required to make scheduled quarterly payments of 0.25% of the original principal amount of the Term B-3 Loan, ~~B-1~~Term B-4 Loan and Term B-5 Loan, ~~B-2,~~ with the balance due and payable on ~~the seventh anniversary of its incurrence.~~April 16, 2025. We are required to make scheduled quarterly payments of ~~1.25%~~0.25% of the original principal amount of the Term B-6 Loan ~~A-1~~ and Term B-7 Loan ~~A-2 until~~commencing with the fiscal quarter ending September 30, ~~2017 and quarterly payments of 2.50% of the original principal amount of the Term Loan A-1 and Term Loan A-2 from December 31, 2017 until June 30, 2020~~2022, with the balance due and payable on ~~the fifth anniversary of the incurrence thereof.~~March 22, 2029. No amortization is required under the Revolving Credit Facility. We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing term loans, through tender offers, in privately negotiated or open market transactions, or otherwise.

Our obligations under the Term Loans are guaranteed by (i) ~~Holdings and each of~~ our existing and future U.S. wholly-owned restricted subsidiaries, in the case of the Term B-3 Loan, ~~B-1~~Term B-5 Loan, Term B-6 Loan and the Revolving Credit Facility and (ii) ~~Holdings, SS&C and each of~~ our existing and future wholly-owned restricted subsidiaries, in the case of the Term B-4 Loan ~~A-1, the~~and Term ~~Loan A-2 and the Term Loan B-2.~~B-7 Loan.

The obligations of the U.S. loan parties under the ~~Amended Senior Secured Credit Agreement~~amended senior secured credit facility are secured by substantially all of the assets of such persons (subject to customary exceptions and limitations), including a pledge of all of the capital stock of

substantially all of the U.S. wholly-owned restricted subsidiaries of such persons (with customary exceptions and limitations) and 65% of the capital stock of certain foreign restricted subsidiaries of such persons (with customary exceptions and limitations). All obligations of the non-U.S. loan parties under the ~~Amended Senior Secured Credit Agreement~~amended senior secured credit facility are secured by substantially all of ~~Holdings’~~our and the other guarantors’ assets (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of ~~Holdings’~~our wholly-owned restricted subsidiaries (with customary exceptions and limitations).

The ~~Amended~~ ~~Senior Secured Credit Agreement~~ amended senior secured credit facility includes negative covenants that, among other things and subject to certain thresholds and exceptions, limit our ability and the ability of our restricted subsidiaries to incur debt or liens, make investments (including in the form of loans and acquisitions), merge, liquidate or dissolve, sell property and assets, including capital stock of our subsidiaries, pay dividends on our capital stock or redeem, repurchase or retire our capital stock, alter the business we conduct, amend, prepay, redeem or purchase subordinated debt, or engage in transactions with our affiliates. The amended senior secured credit facility also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions. In addition, the ~~Amended~~ ~~Senior Secured Credit Agreement~~ amended senior secured credit facility contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a minimum consolidated net ~~senior~~ secured leverage ratio. In addition, under the ~~Amended~~ ~~Senior Secured Credit Agreement~~,amended senior secured credit facility, certain defaults under agreements governing other material indebtedness could result in an event of default under the ~~Amended~~ ~~Senior Secured Credit Agreement~~,amended senior secured credit facility, in which case the lenders could elect to accelerate payments under the ~~Amended~~ ~~Senior Secured Credit Agreement~~ amended senior secured credit facility and terminate any commitments they have to provide future borrowings. As of September 30, ~~2017,~~2022, we were in compliance with ~~the~~all financial and non-financial covenants.

Senior Notes

On ~~July 8, 2015, in connection with the acquisition of Advent,~~March 28, 2019, we issued ~~$600.0~~$2,000.0 million aggregate principal amount of ~~5.875%~~5.5% Senior Notes due ~~2023.~~2027 (“Senior Notes”), the proceeds of which were used to repay a portion of the outstanding Term B-3 Loan under our existing senior secured credit facilities. The Senior Notes are guaranteed, jointly and severally, by SS&C Holdings and ~~each~~all of ~~our wholly-owned~~its existing and future domestic restricted subsidiaries that ~~borrows~~guarantee our existing senior secured credit facilities or ~~guarantees obligations under the Amended Senior Secured Credit Agreement. The guarantees are full and unconditional and joint and several.~~certain other indebtedness. The Senior Notes are unsecured senior obligations that are equal in right of ~~payments~~payment to all of our existing and future senior ~~debt, including the Amended Senior Secured Credit Agreement.~~

~~On April 20, 2016, we commenced an offer to exchange for~~unsecured indebtedness. Interest on the Senior Notes ~~new notes identical in all material respects to the Senior Notes, except that the new notes were registered under the Securities Act~~is payable on March 30 and September 30 of ~~1933. The exchange offer expired on May 18, 2016 and 100% of the Senior Notes were exchanged for the new notes.~~each year.

At any time ~~after July 15, 2018,~~and from time to time, we may, at our option, redeem some or all of the Senior Notes, in whole or in part, at the redemption prices set forth in the ~~indenture governing~~following table, expressed as a percentage of the ~~Senior Notes~~principal amount, plus accrued and unpaid interest to the redemption ~~date. At~~date:


Redemption Date	Price
On or after March 30, 2022		104.125	%
On or after March 30, 2023		102.750	%
On or after March 30, 2024		101.375	%
March 30, 2025 and thereafter		100.000	%

We may also, from time to time in our sole discretion, purchase, redeem, or retire any ~~time on or before July 15, 2018, we may redeem all or any portion of the notes at 100% of their principal amount, plus a “make whole” premium calculated pursuant to the indenture governing the~~outstanding Senior Notes, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, prior to July 15, 2018, we may redeem up to 35% of the aggregate principal amount of the Senior Notes at a redemption price equal to 105.875% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of onethrough tender offers, in privately negotiated or ~~more equity offerings.~~open market transactions, or otherwise.

The indenture governing the Senior Notes contains a number of covenants that restrict, subject to certain thresholds and exceptions, our ability and the ability of our domestic restricted subsidiaries to incur debt or liens, make certain investments, pay dividends, dispose of certain assets, ~~engage in mergers~~ or ~~acquisitions or engage in~~enter into transactions with ~~our~~its affiliates. Any event of default under the amended senior secured credit facility that leads to an acceleration of those amounts due also results in a default under the indenture governing the Senior Notes.

As of September 30, ~~2017,~~2022, there ~~were $600.0~~was $2,000.0 million in principal amount of Senior Notes outstanding.

Covenant Compliance

Under the ~~Amended~~ ~~Senior Secured~~Revolving Credit ~~Agreement,~~Facility portion of the amended senior secured credit facility, we are required to satisfy and maintain a specified financial ~~ratio.~~ratio at the end of each fiscal quarter if the sum of (i) outstanding amount of all loans under the Revolving Credit Facility and (ii) all non-cash collateralized letters of credit issued under the Revolving Credit Facility in excess of $20 million is equal to or greater than 30% of the total commitments under the Revolving Credit Facility. Our ~~continued~~ ability to meet this financial ratio can be affected by events beyond our control, and we cannot assure you that we will ~~continue to~~ meet this ratio. Any breach of ~~these covenants~~this covenant could result in an event of default under the ~~Amended~~ ~~Senior Secured Credit Agreement.~~amended senior secured credit facility. Upon the occurrence of any event of default under the ~~Amended~~ ~~Senior Secured Credit Agreement,~~amended senior secured credit facility, the lenders could elect to declare all amounts outstanding under the ~~Amended~~ ~~Senior Secured Credit Agreement~~amended senior secured credit facility to be immediately due and payable and terminate all commitments to extend further credit. Any default and subsequent acceleration of payments under the amended senior secured credit facility would have a material adverse effect on our results of operations, financial position and cash flows. Additionally, under the amended senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to baskets and ratios based on Consolidated EBITDA.

Consolidated EBITDA is a non-GAAP financial measure used in key financial covenants contained in the ~~Amended~~ ~~Senior Secured Credit Agreement,~~amended senior secured credit facility, which is athe material facility supporting our capital structure and providing liquidity to our business. Consolidated EBITDA is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), further adjusted to exclude unusual items and other adjustments permitted in calculating covenant compliance under the ~~Amended~~ ~~Senior Secured Credit Agreement.~~amended senior secured credit facility. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Consolidated EBITDA is appropriate to provide additional information to investors to demonstrate compliance with the specified financial ratio and other financial condition tests contained in the ~~Amended~~ ~~Senior Secured Credit Agreement.~~amended senior secured credit facility.

Management uses Consolidated EBITDA to gauge the costs of our capital structure on a day-to-day basis when full financial statements are unavailable. Management further believes that providing this information allows our investors greater transparency and a better understanding of our ability to meet our debt service obligations and make capital expenditures.

~~Any breach of covenants in the~~ ~~Amended~~ Senior Secured Credit Agreement that are tied to ratios based on Consolidated EBITDA could result in an event of default under that agreement, in which case the lenders could elect to declare all amounts borrowed immediately due and payable and to terminate any commitments they have to provide further borrowings. Any default and subsequent acceleration of payments under the ~~Amended~~ ~~Senior Secured Credit Agreement would have a material adverse effect on our results of operations, financial position and cash flows. Additionally, under the~~ ~~Amended~~ Senior Secured Credit Agreement, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to ratios based on Consolidated EBITDA.

Consolidated EBITDA does not represent net income or cash flow from operations as those terms are defined by generally accepted accounting principles, or GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Further, the ~~Amended~~ ~~Senior Secured Credit Agreement~~amended senior secured credit facility requires that Consolidated EBITDA be calculated for the most recent four fiscal

quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year.

Consolidated EBITDA is not a recognized measurement under GAAP and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities. Because other companies may calculate Consolidated EBITDA differently than we do, Consolidated EBITDA may not be comparable to similarly titled measures reported by other companies. Consolidated EBITDA has other limitations as an analytical tool, when compared to the use of net income, which is the most directly comparable GAAP financial measure, including:

•

~~Consolidated EBITDA does not reflect the provision of income tax expense in our various jurisdictions;~~

Consolidated EBITDA does not reflect the significant interest expense we incur as a result of our debt leverage;

•

Consolidated EBITDA does not reflect the provision of income tax expense in our various jurisdictions;

•

Consolidated EBITDA does not reflect any attribution of costs to our operations related to our investments and capital expenditures through depreciation and amortization charges;

•

Consolidated EBITDA does not reflect the cost of compensation we provide to our employees in the form of ~~stock option~~stock-based awards; ~~and~~

•

Consolidated EBITDA does not reflect the equity in earnings of unconsolidated affiliates; and

•

Consolidated EBITDA excludes expenses and income that are permitted to be excluded per the terms of our ~~Amended Senior Secured Credit Agreement,~~amended senior secured credit facility, but which others may believe are normal expenses for the operation of a business.

The following is a reconciliation of net income to Consolidated EBITDA attributable to SS&C common stockholders as defined in our ~~Amended~~ ~~Senior Secured Credit Agreement.~~amended senior secured credit facility.


	Three Months Ended September 30,						Nine Months Ended September 30,						Twelve Months Ended September 30,
(in millions)	2022			2021			2022			2021			2022
Net income	$	159.8		$	184.7		$	441.4		$	549.4		$	692.7
Interest expense, net		86.0			50.2			203.0			152.6			251.9
Provision for income taxes		53.4			60.6			162.1			198.1			200.3
Depreciation and amortization		164.6			165.0			494.2			500.2			661.4
EBITDA		463.8			460.5			1,300.7			1,400.3			1,806.3
Stock-based compensation		7.4			27.2			93.3			82.7			124.6
Acquired EBITDA and cost savings (1)		—			—			(1.2	)		1.3			(3.6	)
Non-cash portion of straight-line rent expense		(0.2	)		(0.7	)		(1.1	)		(1.4	)		(1.6	)
Loss on extinguishment of debt		1.0			1.7			4.1			3.5			11.5
Equity in earnings of unconsolidated affiliates, net		5.1			(2.0	)		2.7			(1.9	)		(20.8	)
Purchase accounting adjustments (2)		2.3			1.6			7.2			4.8			8.7
ASC 606 adoption impact		(0.5	)		0.3			(1.3	)		0.7			(1.0	)
Other (3)		23.2			51.2			82.6			54.1			84.5
Consolidated EBITDA	$	502.1		$	539.8		$	1,487.0		$	1,544.1		$	2,008.6
Consolidated EBITDA attributable to noncontrolling interest (4)		(0.4	)		(0.9	)		(0.7	)		(0.9	)		(1.8	)
Consolidated EBITDA attributable to SS&C common stockholders	$	501.7		$	538.9		$	1,486.3		$	1,543.2		$	2,006.8

________________________

(1)

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

(2)

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

(3)

Other includes expenses and income that are permitted to be excluded per the terms of our amended senior secured credit facility from Consolidated EBITDA, a financial measure used in calculating our covenant compliance. These include expenses and income related to foreign currency transactions, investment gains and losses, facilities and workforce restructuring, legal settlements, business combinations and other items.

(4)

Consolidated EBITDA attributable to noncontrolling interest represents Consolidated EBITDA based on the ownership interest retained by the noncontrolling parties of DomaniRx.

Three Months Ended September 30,

Nine Months Ended September 30,

Twelve Months Ended September 30,

(in thousands)

2017

2016

2017

2016

2017

Net income

$
64,227

$
38,747

$
163,525

$
73,973

$
220,548

Interest expense, net

26,250

31,648

81,565

97,583

112,436

Provision for income tax

10,905

9,163

32,400

22,648

42,372

Depreciation and amortization

59,666

57,470

176,879

170,910

234,652

EBITDA

161,048

137,028

454,369

365,114

610,008

Stock-based compensation

10,294

12,489

31,572

40,402

41,734

Capital-based taxes

250

1,000

1,000

1,472

1,010

Acquired EBITDA and cost savings (1)

365

—

3,581

5,814

6,859

Non-cash portion of straight-line rent expense

1,933

269

2,479

1,822

2,855

Loss on extinguishment of debt

—

—

2,326

—

2,326

Purchase accounting adjustments (2)

777

5,573

3,782

29,831

5,570

Other (3)

4,540

311

8,704

7,065

7,530

Consolidated EBITDA

$
179,207

$
156,670

$
507,813

$
451,520

$
677,892

~~________________________~~

~~(1)~~

~~(2)~~

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

~~(3)~~

~~Other includes expenses and income that are permitted to be excluded per the terms of our~~ ~~Amended~~ Senior Secured Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance. These include expenses and income related to currency transactions, facilities and workforce restructuring, legal settlements and business combinations, among other infrequently occurring transactions.

Our covenant requirement for consolidated net ~~senior~~ secured leverage ratio and the actual ratio as of September 30, ~~2017~~2022 are as follows:

Covenant

Requirement

Actual
Ratio

~~Ratio~~

Maximum consolidated net ~~senior~~ secured leverage to

Consolidated EBITDA ratio⁽¹⁾

~~5.25x~~6.25x

~~2.31x~~

2.52

~~________________________~~_____________________________________________________

~~(1)~~

(1)

Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, to Consolidated EBITDA, as defined by the Amended Senior Secured Credit Agreement, for the period of four consecutive fiscal quarters ended on the measurement date. Consolidated net secured funded indebtedness is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

~~Recently Adopted Accounting Pronouncements~~

~~In November 2016, the~~ ~~Financial Accounting Standards Board (“FASB”)~~ ~~issued~~ ~~Accounting Standards Update (��ASU”)~~ ~~No. 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash. This ASU provides guidance on the classification of restricted cash in the statement of cash flows.~~ ~~This ASU requires that restricted cash be included within~~ cash and cash equivalents, ~~when reconciling~~excluding $151.6 million of cash and cash equivalents held at DomaniRx, to Consolidated EBITDA, as defined by the ~~beginning-of-period and end-of-period total amounts shown~~amended senior secured credit facility, for the period of four consecutive fiscal quarters ended on the ~~statement~~measurement date. Consolidated net secured funded indebtedness is comprised of ~~cash flows.~~indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

Recently Adopted Accounting Pronouncement

In October 2021, the FASB issued ASU ~~2016-18~~2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities From Contracts with Customers. ASU 2021-08 requires companies to apply ASC 606 to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination on the acquisition date. Generally, this new guidance with result in an acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Under current GAAP, we have historically recognized contract assets and contract liabilities acquired in a business combination at fair value. ASU 2021-08 is effective for ~~the Company for its first quarter of~~ fiscal ~~2018.~~years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted, ~~and~~including adoption in an interim period. ASU 2021-08 should be applied prospectively to business combinations that occur after the ~~guidance requires application using a retrospective method.~~ ~~The Company has early~~effective date. We adopted ASU ~~2016-18, which~~2021-08 as of January 1, 2022 on a prospective basis. The adoption of this standard did not have a material impact on ~~the Company’s~~our financial position, results of operations or cash flows.

Recent Accounting Pronouncement Not Yet Effective

In March ~~2016,~~2020, the FASB issued ASU ~~2016-09,~~ ~~Compensation – Stock Compensation(Topic 718)~~2020-04, Reference Rate Reform (Topic 848):~~Improvements to Employee Share-Based Payment Accounting. This ASU is intended to simplify several aspects~~ Facilitation of the ~~accounting~~Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for ~~share-based payment~~applying GAAP if certain criteria are met to contracts, hedging relationships and other transactions ~~including the income tax consequences, classification of awards as either equity~~that reference LIBOR or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for the Company for its first quarter of fiscal 2017. Effective January 1, 2017, excess tax benefits will be prospectively reported as an operating activity in the Company’s Condensed Consolidated Statements of Cash Flows.~~As the Company has applied this guidance prospectively as of January 1, 2017, excess tax benefits for the nine months ended September 30, 2016 will not be adjusted and continue~~another reference rate expected to be reported in financing activities in the Condensed Consolidated Statements of Cash Flows. As a result of the adoption, the Company recognized discrete tax benefits of $2.7 million and $12.8 million in the provision for income taxes line of the Condensed Consolidated Statement of Comprehensive Income for the three and nine months ended September 30, 2017 related to excess tax benefits upon vesting of a restricted-stock award or stock option exercise event relative to the deferred tax asset position established. The Company has elected to account for forfeitures as they occur and there was no material effect recorded upon adoption of this change. The Company has also excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of the Company’s diluted earnings per share for the three and nine months ended September 30, 2017, which had the effect of increasing the weighted average common stock equivalents. Prior to the adoption of ASU 2016-09, the Company included excess tax benefits in assessing whether common equivalent shares were dilutive in the Company’s calculations of weighted average dilutive shares under the treasury stock method. Presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to all periods presented as such cash flows have historically been presented as financing activities.

~~Recent Accounting Pronouncements Not Yet Effective~~

discontinued. In January ~~2017,~~2021, the FASB issued ~~ASU 2017-04,~~ ~~Goodwill and Other~~Update 2021-01, Reference Rate Reform (Topic ~~350) – Simplifying~~848): Scope. The update provides additional optional guidance on the ~~Test~~transition from LIBOR to include derivative instruments that use an interest rate for ~~Goodwill Impairment. ASU 2017-04 simplifies~~margining, discounting or contract price alignment. The standard will ease, if warranted, the ~~subsequent measurement of goodwill by eliminating Step 2~~requirements for accounting for the future effects of the ~~goodwill impairment test.~~

~~In computing~~rate reform. An entity may elect to apply the ~~implied fair value~~amendments prospectively to contract modifications made on or before December 31, 2022. A substantial portion of ~~goodwill under Step 2, an entity had~~our indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. We continue to ~~perform procedures to determine~~monitor the ~~fair value at~~impact the ~~impairment testing date~~discontinuance of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. As a result of ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge, as necessary, for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2019, and early adoption is permitted for interimLIBOR or ~~annual goodwill impairment tests performed after January 1, 2017. The Company expects to adopt ASU 2017-04 for the Company’s goodwill impairment tests in 2017.~~

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash flow,~~another reference rate will have on our contracts, hedging relationships and other ~~Topics.~~ ~~ASU 2016-15 is effective for the Company for its first quarter of fiscal 2018 and the guidance requires application using a retrospective method.~~ The impact of the Company’s adoption of ASU 2016-15 to the Company’s Condensed Consolidated Financial Statements will be to reflect the presentation of debt prepayment or debt extinguishment costs as cash outflows for financing activities within the Company’s Condensed Consolidated Statement of Cash Flows. This ASU is not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Measurement of Credit Losses on Financial Instruments~~. ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for the Company for its first quarter of fiscal 2020 and earlier adoption is permitted beginning in the first quarter of fiscal 2019. Application of the ASU is through a cumulative-effect adjustment to retained earnings as of the effective date. The Company istransactions. We are currently ~~evaluating~~assessing the impact of ~~the pending adoption of ASU 2016-13~~this standard on ~~the Company’s Condensed Consolidated Financial Statements. This ASU is not expected to have a material impact on the Company’s~~our financial ~~position,~~condition and results of ~~operations or cash flows.~~operations.

Item 3. Quantitative and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged under the amendments of this ASU. Additional disclosures will be required to allow the user to assess the amount, timing and uncertainty of cash flows arising from leasing activities. A modified retrospective transition approach is required for leases existing at the time of adoption. ASU 2016-02 is effective for the Company for its first quarter of fiscal 2019 and earlier adoption is permitted. The impact of the Company’s adoption of ASU 2016-02 to the Company’s Condensed Consolidated Financial Statements will be to recognize the majority of the Company’s operating lease commitments as operating lease liabilities and right-of-use assets upon adoption, which will result in a material increase in the assets and liabilities recorded on the Company’s Condensed Consolidated Balance Sheet. The Company is continuing its assessment, which may identify additional impacts this ASU will have on the Company’s Condensed Consolidated Financial Statements and related disclosures and internal controls over financial reporting.Qualitative Disclosures About Market Risk

~~In May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~. The objective of ASU 2014-09 is to clarify the principles for recognizing revenue by removing inconsistencies and weaknesses in revenue requirements; providing a more robust framework for addressing revenue issues; improving comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets; and providing more useful information to users of financial statements through improved revenue disclosure requirements. On August 12, 2015, the FASB issued ASU 2015-14, deferring the effective date by one year for ASU 2014-09. ASU 2014-09 is effective for the Company for its first quarter of 2018, with early adoption permitted for annual periods beginning after December 15, 2016. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application.

~~Subsequent to the issuance of ASU 2014-09, the FASB has issued the following updates: ASU 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations (Reporting Revenue Gross versus Net); ASU 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing; and ASU 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients. The amendments in these updates affect the guidance contained within ASU 2014-09.~~

The Company plans to adopt the new revenue standard using the modified retrospective approach when it becomes effective for the Company in the first quarter of fiscal 2018. The Company is continuing to evaluate the impact on the Company’s financial position, results of operations and cash flows, and associated processes, systems and internal controls. Based upon the Company’s continued assessments of the new revenue standard, the Company would be required to recognize the license component of term license arrangements upfront and the associated maintenance component over the contract period. Under the current revenue standard, the Company recognizes both the term license and maintenance revenues ratably over the contract period. In addition, a portion of deferred revenue recorded in accordance with the current revenue standard will never be recognized as revenue upon adoption of the new revenue standard and instead will be part of the cumulative effect adjustment within retained earnings. The Company is also evaluating the timing and recognition of costs to obtain contracts with customers, such as commissions, under the new revenue standard. The Company is continuing to assess the new revenue standard along with industry trends and additional interpretive guidance and may adjust its interpretation and implementation plan accordingly.

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

We do not use derivative financial instruments for trading or speculative purposes. We have generally invested our available cash in short-term, highly liquid financial instruments, having initial maturities of three months or less. When necessary, we have borrowed to fund acquisitions.

Interest Rate Risk

We derive service revenues from investment earnings related to cash balances maintained in bank accounts on which we are the agent for clients. The balances maintained in the bank accounts will fluctuate. For the nine months ended September 30, 2022, we had average daily cash balances of approximately $2,449.8 million maintained in such accounts. We estimate that a 100 basis point change in the interest earnings rate would equal approximately $9.1 million of net income, net of income taxes, on an annual basis. The effect of changes in interest rates attributable to earnings derived from cash balances we hold for clients is offset by changes in interest rates on our variable debt.

At September 30, ~~2017,~~2022, we had total ~~debt of $2,266.8 million, including $1,666.8 million of~~ variable interest rate ~~debt.~~debt of approximately $5,295.1 million. As of September 30, ~~2017,~~2022, a 1%100 basis point increase in interest rates would result in an increase in interest expense of approximately ~~$16.7~~$53.0 million per year.

Equity Price Risk

We have exposure to equity price risk as a result of our investments in equity securities. Equity price risk results from changes in the level or volatility of equity prices which affect the value of equity securities or instruments that derive their value from such securities or indexes. The fair value of our investments that are subject to equity price risk as of September 30, 2022 was approximately $61.4 million. The impact of a 10% change in fair value of these investments would have been approximately $4.2 million to net income, net of income taxes. Changes in equity values of our investments could have a material effect on our results of operations and our financial position.

Foreign Currency Exchange Rate Risk

During the nine months ended September 30, ~~2017,~~2022, approximately ~~27%~~30% of our revenues were from clients located outside the United States. A portion of the revenues from clients located outside the United States is denominated in foreign currencies, the majority being the ~~Canadian dollar.~~British pound. While revenues and expenses of our foreign operations are primarily denominated in their respective local currencies, some subsidiaries do enter into certain transactions in currencies that are different from their local currency. These transactions consist primarily of cross-currency intercompany balances and trade receivables and payables. As a result of these transactions, we have exposure to changes in foreign currency exchange rates that result in foreign currency transaction gains and losses, which we report in other income (expense). These ~~outstanding~~ amounts were not material for the nine months ended September 30, ~~2017.~~2022. The amount of these balances can fluctuate in the future as we bill customers and buy products or services in currencies other than our functional currency, which could increase our exposure to foreign currency exchange rates. We continue to monitor our exposure to foreign exchange rates ~~as a result~~because of our acquisitions and changes in our operations. We do not enter into any market risk sensitive instruments for trading purposes.

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 4. Controls and Procedures

~~Item 4.~~

~~Controls and Procedures~~

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of September 30, ~~2017.~~2022. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, ~~2017,~~2022, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

~~There~~As a result of the Blue Prism acquisition on March 16, 2022, we have implemented internal controls over financial reporting to include consolidation of Blue Prism. The Blue Prism operations utilize separate information and accounting systems and processes. Our management is in the process of reviewing and evaluating the design and operating effectiveness of internal control over financial reporting relating to the Blue Prism operations.

Except as disclosed above, there have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, ~~2017,~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

~~Item 1.~~

~~Legal Proceedings~~

The information regarding certain legal proceedings in which we are involved as set forth in Note 814 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1 of this Quarterly Report on Form 10-Q) is incorporated by reference into this Item 1.

In addition, we are involved in various other legal proceedings arising in the normal course of our businesses. At this time, we do not believe any material losses under these claims to be probable. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, it is in the opinion of management, after consultation with legal counsel, that the final outcome in such proceedings, in the aggregate, would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

~~Item 6.~~

~~Exhibits~~

Item 1A. Risk Factors

As of the date of this report, there have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following is a summary of the repurchases of our common stock in the third quarter of 2022 (in millions, except average price per share):


Period (1)	(a) Total Number of Shares Purchased (2)		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)		(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under Plans or Programs (3)
July 1, 2022 – July 31, 2022		—	$	—		—	$	1,000.0
August 1, 2022 – August 31, 2022		2.1	$	60.19		2.1	$	875.4
September 1, 2022 – September 30, 2022		1.7	$	54.39		1.7	$	785.5
Total		3.8				3.8

(1) Information is based on trade dates of repurchase transactions.

(2) Represents shares repurchased in open market transactions pursuant to the Common Stock Repurchase Program.

(3) Share repurchases were made pursuant to our Common Stock Repurchase Program, most recently authorized by our Board of Directors in July 2022. The program allows for the purchase of up to $1 billion of outstanding common stock in one or more transactions on the open market or in privately negotiated purchases.

Item 6. Exhibits

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

EXHIBIT INDEX


Exhibit Number		Description of Exhibit

31.1		~~Certifications~~Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		~~Certifications~~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 (furnished and not filed for purposes of sections 11 or 12 of the Securities Act and section 18 of the Exchange Act)

101.INS		Inline XBRL Instance Document.*Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.*

101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document.*

101.LAB		Inline XBRL Taxonomy Label Linkbase Document.*

101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document.*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.*

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	~~submitted electronically herewith~~

Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016, (iii) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 and (iv) Notes to Condensed Consolidated Financial Statements.

~~SIGNATURE~~SIGNATURE

Pursuant to the requirements 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.


SS&C TECHNOLOGIES HOLDINGS, INC.

By:		/s/ Patrick J. Pedonti
		Patrick J. Pedonti Senior Vice President and Chief Financial Officer (Duly Authorized Officer, Principal Financial and Accounting Officer)

Date: November ~~2, 2017~~3, 2022

Balance at December 31, 2016	$	3,652,733
Adjustments to prior acquisitions		(621	)
Effect of foreign currency translation		40,461
Balance at September 30, 2017	$	3,692,573

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2017		2016		2017		2016
Net income		64,227		38,747		163,525		73,973

Shares:
Weighted average common shares outstanding — used in calculation of basic EPS		205,568		201,782		204,506		199,365
Weighted average common stock equivalents — options and restricted shares		6,791		4,853		6,574		5,969
Weighted average common and common equivalent shares outstanding — used in calculation of diluted EPS		212,359		206,635		211,080		205,334

Earnings per share - Basic	$	0.31	$	0.19	$	0.80	$	0.37
Earnings per share - Diluted	$	0.30	$	0.19	$	0.77	$	0.36

	September 30, 2017
	Parent		Guarantor Subsidiaries		Non-guarantor Subsidiaries		Consolidating and Eliminating Adjustments			Consolidated
Cash and cash equivalents	$	—	$	19,294	$	83,985	$	—		$	103,279
Accounts receivable, net		—		165,723		72,954		—			238,677
Prepaid expenses and other current assets		—		18,469		14,219		—			32,688
Prepaid income taxes		—		13,803		29		—			13,832
Restricted cash		—		592		—		—			592
Net property, plant and equipment		—		62,791		40,789		—			103,580
Investment in subsidiaries		3,186,168		910,117		—		(4,096,285	)		—
Intercompany receivables		—		223,838		92,305		(316,143	)		—
Deferred income taxes, long-term		—		—		2,166		—			2,166
Goodwill, intangible and other assets, net		—		3,906,024		1,197,783		—			5,103,807
Total assets	$	3,186,168	$	5,320,651	$	1,504,230	$	(4,412,428	)	$	5,598,621

Current portion of long-term debt		—		13,797		25,730		—			39,527
Accounts payable		—		18,866		8,910		—			27,776
Accrued expenses		7,344		74,419		44,189		—			125,952
Deferred revenue		—		187,157		25,654		—			212,811
Long-term debt, net of current portion		600,000		1,313,753		263,928		—			2,177,681
Other long-term liabilities		—		50,829		34,938		—			85,767
Intercompany payables		71,185		92,305		152,653		(316,143	)		—
Deferred income taxes, long-term		—		383,357		38,111		—			421,468
Total liabilities		678,529		2,134,483		594,113		(316,143	)		3,090,982
Total stockholders’ equity		2,507,639		3,186,168		910,117		(4,096,285	)		2,507,639
Total liabilities and stockholders’ equity	$	3,186,168	$	5,320,651	$	1,504,230	$	(4,412,428	)	$	5,598,621