<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 1999
------------------
or
[ ] 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 1-12989
SunGard(R) DATA SYSTEMS INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-0267091
-------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1285 Drummers Lane, Wayne, Pennsylvania 19087
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(610) 341-8700
____________________________________________________
(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 X No___
---
There were 128,236,692 shares of the registrant's common stock, par value $.01
per share, outstanding at September 30, 1999.
<PAGE>
SUNGARD DATA SYSTEMS INC.
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION Page
----
<S> <C> <C>
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 1999
and December 31, 1998 (unaudited).............................. 1
Consolidated Statements of Income for the nine and three months
ended September 30, 1999 and 1998 (unaudited).................. 2
Consolidated Statements of Cash Flows for the nine months
ended September 30, 1999 and 1998 (unaudited).................. 3
Notes to Consolidated Financial Statements (unaudited)......... 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 10
Item 3. Quantitative and Qualitative Disclosures about Market Risk..... 19
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 19
Item 2. Changes in Securities and Use of Proceeds...................... 19
Item 3. Defaults upon Senior Securities................................ 20
Item 4. Submission of Matters to a Vote of Security Holders............ 20
Item 5. Other Information.............................................. 20
Item 6. Exhibits and Reports on Form 8-K............................... 20
SIGNATURES................................................................ 21
</TABLE>
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
SunGard Data Systems Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Sept. 30, December 31,
1999 1998 (1)
---------------- ---------------
<S> <C> <C>
Assets
Current:
Cash and equivalents.............................................................. $ 331,866 $ 265,011
Short-term investments, at cost, which approximates market........................ 56,619 26,001
Trade receivables, less allowance for doubtful accounts of $33,021 and $28,988.... 269,805 269,729
Earned but unbilled receivables................................................... 47,362 42,830
Prepaid expenses and other current assets......................................... 38,108 36,106
Deferred income taxes............................................................. 25,862 22,208
-------------- -------------
Total current assets.......................................................... 769,622 661,885
Property and equipment, less accumulated depreciation of $306,861 and $267,243....... 164,846 149,334
Software products, less accumulated amortization of $136,295 and $123,220............ 104,418 83,929
Goodwill, less accumulated amortization of $56,540 and $49,010....................... 192,172 161,404
Deferred income taxes and other intangible assets, less accumulated
amortization of $72,684 and $60,814............................................... 251,721 157,640
-------------- -------------
$ 1,482,779 $ 1,214,192
============== =============
Liabilities and Stockholders' Equity
Current:
Short-term and current portion of long-term debt.................................. $ 11,595 $ 17,310
Accounts payable.................................................................. 15,136 21,256
Accrued compensation and benefits................................................. 73,899 96,371
Other accrued expenses............................................................ 62,753 56,358
Accrued income taxes.............................................................. 16,188 22,947
Deferred revenues................................................................. 153,548 149,655
-------------- -------------
Total current liabilities..................................................... 333,119 363,897
-------------- -------------
Long-term debt....................................................................... 5,287 9,848
-------------- -------------
Commitments..........................................................................
Stockholders' equity:
Preferred stock, par value $.01 per share; 5,000 shares authorized................ - -
Common stock, par value $.01 per share; 320,000 shares authorized;
128,237 and 122,559 shares issued.............................................. 1,282 1,226
Capital in excess of par value.................................................... 588,931 316,922
Notes receivable for common stock................................................. (169) (1,538)
Restricted stock plans............................................................ (1,606) (1,591)
Retained earnings................................................................. 563,269 536,523
Accumulated other comprehensive loss.............................................. (7,334) (7,299)
-------------- -------------
1,144,373 844,243
Treasury stock, at cost, 0 and 641 shares.......................................... - (3,796)
-------------- -------------
Total stockholders' equity...................................................... 1,144,373 840,447
-------------- -------------
$ 1,482,779 $ 1,214,192
============== =============
</TABLE>
(1) Restated for poolings of interests with Automated Securities Clearance,
Ltd., FDP Corp., Oshap Technologies Ltd., Pentamation Enterprises, Inc.,
and Sterling Wentworth Corporation.
See accompanying notes
1
<PAGE>
SunGard Data Systems Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
--------------------------------- -----------------------------
1999 1998 (1) 1999 1998 (1)
---------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues....................................................... $ 1,056,199 $ 945,865 $ 351,679 $ 329,892
---------------- -------------- ------------ --------------
Costs and expenses:
Cost of sales and direct operating........................... 444,791 398,527 141,693 137,255
Sales, marketing and administration.......................... 227,165 209,381 76,474 73,394
Product development.......................................... 96,234 89,933 32,996 30,749
Depreciation of property and equipment....................... 47,601 44,482 16,147 15,352
Amortization of intangible assets............................ 41,534 39,604 15,006 13,893
Merger costs, including noncash of $71,459 (see note 2)...... 99,184 13,650 8,738 3,100
---------------- -------------- ------------ --------------
956,509 795,577 291,054 273,743
---------------- -------------- ------------ --------------
Income from operations......................................... 99,690 150,288 60,625 56,149
Interest income.............................................. 12,046 6,444 4,376 2,288
Interest expense............................................. (1,746) (1,552) (612) (545)
---------------- -------------- ------------ --------------
Income before income taxes and extraordinary gains............. 109,990 155,180 64,389 57,892
Income taxes................................................. 84,830 64,488 29,647 23,892
---------------- -------------- ------------ --------------
Net income before extraordinary gains ......................... 25,160 90,692 34,742 34,000
Extraordinary gains, net of income taxes .................... 10,670 2,307 - 2,307
---------------- -------------- ------------ --------------
Net income .................................................... 35,830 92,999 34,742 36,307
Pro forma income tax expense (benefit) resulting from acquired
Sub S corporation........................................... (27,381) 1,927 - 608
---------------- -------------- ------------ --------------
Pro forma net income........................................... $ 63,211 $ 91,072 $ 34,742 $ 35,699
================ ============== ============ =============
Pro forma basic net income per common share:
Before extraordinary items.................................. $ 0.42 $ 0.74 $ 0.27 $ 0.28
================ ============== ============ =============
After extraordinary items................................... $ 0.50 $ 0.76 $ 0.27 $ 0.29
================ ============== ============ =============
Pro forma diluted net income per common share:
Before extraordinary items.................................. $ 0.40 $ 0.71 $ 0.27 $ 0.26
================ ============== ============ =============
After extraordinary items................................... $ 0.49 $ 0.73 $ 0.27 $ 0.28
================ ============== ============ =============
Shares used to compute pro forma net income per common share:
Basic....................................................... 126,519 119,874 127,774 121,145
================ ============== ============ =============
Diluted..................................................... 130,182 125,124 130,367 126,303
================ ============== ============ =============
</TABLE>
(1) Restated for poolings of interests with Automated Securities Clearance,
Ltd., FDP Corp., Oshap Technologies Ltd., Pentamation Enterprises, Inc.,
and Sterling Wentworth Corporation.
See accompanying notes
2
<PAGE>
SunGard Data Systems Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------------------
1999 1998 (1)
---------------- ----------------
<S> <C> <C>
Cash flow from operations:
Net income......................................................................... $ 35,830 $ 92,999
Reconciliation of net income to cash flow from operations:
Depreciation and amortization................................................... 89,135 84,086
Extraordinary gains, net of income taxes........................................ (10,670) -
Noncash compensation charge resulting from acquisition of ASC................... 71,459 -
Other noncash charges........................................................... 3,843 11,535
Deferred income tax benefit..................................................... (11,308) (8,066)
Accounts receivable and other current assets.................................... (4,854) (56,898)
Accounts payable and accrued expenses........................................... (1,496) 25,807
Deferred revenues............................................................... 3,396 15,961
---------------- ----------------
Cash flow from operations..................................................... 175,335 165,424
---------------- ----------------
Financing activities:
Cash received under employee stock plans........................................... 36,167 23,065
Cash received from borrowings...................................................... 4,648 5,227
Pre-acquisition cash distributions to shareholders of acquired corporations, net... (3,637) (5,958)
Pre-acquisition cash received from minority shareholders of BRUT................... - 8,500
Cash paid for debt repayments...................................................... (19,914) (13,811)
---------------- ----------------
Total financing activities.................................................... 17,264 17,023
---------------- ----------------
Investment activities:
Cash paid for acquired businesses, net of cash acquired............................ (53,964) (19,798)
Cash paid for property and equipment............................................... (62,330) (55,468)
Cash paid for software and other assets............................................ (11,910) (15,771)
Cash paid for purchases of short-term investments.................................. (35,038) (19,816)
Cash received from sale of subsidiaries............................................ 25,000 -
Cash received from sales and maturities of marketable securities................... 12,498 34,274
---------------- ----------------
Total investment activities................................................... (125,744) (76,579)
---------------- ----------------
Increase in cash and equivalents..................................................... 66,855 105,868
Beginning cash and equivalents....................................................... 265,011 90,916
---------------- ----------------
Ending cash and equivalents.......................................................... $ 331,866 $ 196,784
================ ================
Supplemental information:
Acquired businesses:
Property and equipment.......................................................... 2,278 1,061
Software products............................................................... 30,111 675
Goodwill and other intangible assets............................................ 50,254 25,354
Deferred income taxes........................................................... 100,011 318
Purchase price obligations and debt assumed..................................... (5,342) (2,600)
Net current liabilities assumed................................................. 1,156 (12,017)
Common stock issued and net equity acquired in poolings of interests ........... (124,504) 7,007
---------------- ----------------
Cash paid for acquired businesses, net of cash acquired.............................. $ 53,964 $ 19,798
================ ================
</TABLE>
(1) Restated for poolings of interests with Automated Securities Clearance,
Ltd., FDP Corp., Oshap Technologies Ltd., Pentamation Enterprises, Inc.,
and Sterling Wentworth Corporation.
See accompanying notes
3
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation:
The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries, and have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All significant intercompany transactions and accounts have been eliminated. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included in the
accompanying financial statements. Operating results for the nine and three
month periods ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for the year ended
December 31, 1998.
2. Acquisitions, Merger Costs and Sale of Subsidiaries:
Acquisitions:
Pooling-of-Interests Transactions:
During the nine months ended September 30, 1999, the Company completed the
acquisitions of Automated Securities Clearance, Ltd. (ASC), DollarMark
Solutions, Inc., Exchange Market Systems E.M.S. Inc., FDP Corp.
(FDP), Objective Resources Group, Inc., Oshap Technologies Ltd. (Oshap), Peak 1
Resources, Inc., Pentamation Enterprises, Inc. (PEI), Sterling Wentworth
Corporation (SWC), and Tiger Systems, Inc. A total of 18,757,000 shares of
common stock were issued in connection with these acquisitions, and issued and
outstanding options to buy common stock were converted into options to buy
1,625,000 shares of the Company's common stock.
The ten acquisitions described above have been accounted for as poolings of
interests. All historical financial information of the Company has been
restated to include the historical financial information of ASC, FDP, Oshap, PEI
and SWC. Historical financial information has not been restated for the other
acquisitions due to immateriality. Each immaterial acquisition was recorded as
of the beginning of the quarter during which it was completed. Except for the
merger costs described below, the Company does not expect that these immaterial
acquisitions, individually or in the aggregate, will have a material effect on
its 1999 financial condition or results of operations.
The Company and the former shareholder of ASC have agreed, for federal
income tax purposes, to treat the Company's acquisition of ASC stock as an
acquisition of assets pursuant to Section 338 (h)(10) of the Internal Revenue
Code of 1986. The primary effect of this election enables the Company to
deduct, as amortization expense against taxable income over the next fifteen
years, the fair value of the intangible assets acquired. While the tax
deduction will reduce current income taxes payable over that fifteen year
period, it will not reduce the Company's overall effective income tax rate since
it arose in connection with a
4
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. Acquisitions, Merger Costs and Sale of Subsidiaries, continued:
Acquisitions, continued:
Pooling-of-Interests Transactions, continued:
pooling-of-interests transaction, and generally accepted accounting principles
require that such benefit be credited to additional paid-in capital. The
deferred income tax asset recorded in connection with this transaction was
$103,004,000.
ASC was an "S" corporation before the Company acquired it; therefore, all
income passed through directly to and substantially all income taxes were paid
directly by the former shareholder of ASC. Net income and all net income per
share amounts are presented on a pro forma basis since generally accepted
accounting principles require the presentation of pro forma income tax expense
for ASC under the assumption that ASC had been a "C" corporation for all periods
presented.
A reconciliation of 1998 revenues, pro forma net income and pro forma net
income per common share from those amounts originally reported to the amounts
presented in the accompanying Consolidated Statements of Income follows (in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
Sept. 30, 1998 Sept. 30, 1998
-------------- --------------
<S> <C> <C>
Revenues:
SunGard, as originally reported $838,882 $291,982
ASC, FDP, Oshap, PEI and SWC 106,983 37,910
-------- --------
Combined $945,865 $329,892
======== ========
Pro forma net income, before extraordinary items:
SunGard, as originally reported $ 80,705 $ 31,187
ASC, FDP, Oshap, PEI and SWC 8,060 2,205
-------- --------
Combined $ 88,765 $ 33,392
======== ========
Pro forma net income, after extraordinary items:
SunGard, as originally reported $ 80,705 $ 31,187
ASC, FDP, Oshap, PEI and SWC 10,367 4,512
-------- --------
Combined $ 91,072 $ 35,699
======== ========
</TABLE>
5
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. Acquisitions, Merger Costs and Sale of Subsidiaries, continued:
Acquisitions, continued:
Pooling-of-Interests Transactions, continued:
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
Sept. 30, 1998 Sept. 30, 1998
-------------- --------------
<S> <C> <C>
Pro forma basic net income per common
share, before extraordinary items:
SunGard, as originally reported $0.78 $0.30
===== =====
Combined $0.74 $0.28
===== =====
Pro forma basic net income per common
share, after extraordinary items:
SunGard, as originally reported $0.78 $0.30
===== =====
Combined $0.76 $0.29
===== =====
Pro forma diluted net income per common
share, before extraordinary items:
SunGard, as originally reported $0.75 $0.29
===== =====
Combined $0.71 $0.26
===== =====
Pro forma diluted net income per common
share, after extraordinary items:
SunGard, as originally reported $0.75 $0.29
===== =====
Combined $0.73 $0.28
===== =====
</TABLE>
Purchase Transactions:
During the first nine months of 1999, the Company completed seven
acquisitions accounted for by the purchase method. Total cash paid in
connection with these seven acquisitions was $55,629,000. The Company also paid
a total of $1,364,000 of contingent payments related to businesses previously
acquired. In addition, in connection with the Company's purchase of minority
interests in MINT Software Technologies Ltd. and Decalog N.V., two majority-
owned subsidiaries of Oshap, the Company issued 407,000 shares of common stock,
and converted unvested stock options into 434,000 options to purchase common
stock of the Company. Goodwill recorded in connection with these acquisitions
was $40,279,000.
6
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. Acquisitions, Merger Costs and Sale of Subsidiaries, continued:
Merger Costs:
During the nine months ended September 30, 1999 and 1998, the Company
recorded merger costs of $99,184,000 and $13,650,000 ($72,744,000 pro forma
after-tax, or $0.56 per pro forma diluted share, and $11,961,000 after-tax, or
$0.10 per pro forma diluted share), respectively. During the three months ended
September 30, 1999 and 1998, the Company recorded merger costs of $8,738,000 and
$3,100,000 ($8,738,000 after-tax, or $0.07 per pro forma diluted share, and
$2,510,000 after-tax, or $0.02 per pro forma diluted share).
The 1999 merger costs are associated with poolings of interests, and
include a noncash compensation charge of $71,459,000 ($45,019,000 pro forma
after-tax, or $0.35 per pro forma diluted share) in connection with a pre-
existing employment agreement with an executive of ASC, which obligated ASC to
issue to the executive 25% of the shares issued in the merger. The fair value
of those shares and related payroll costs were recorded as one-time costs
associated with the merger.
The 1998 merger costs are also associated with poolings of interests, and
include restructuring costs of $2,700,000 ($1,601,000 after-tax, or $0.01 per
pro forma diluted share) related to the merger with Infinity Financial
Technology, Inc. Approximately $1,500,000 of these costs were severance
payments associated with twenty-seven employees in duplicate software
development and administrative functions (all of whom have been terminated), and
approximately $1,200,000 of these costs were associated with the closing of
duplicate office facilities.
The balance of the 1999 and 1998 merger costs are primarily investment
banking, legal, accounting and printing fees that generally are not deductible
for income tax purposes.
Sale of Subsidiaries:
On March 31, 1999, the Company sold two wholly owned subsidiaries which
provided healthcare information systems (HIS sale). Total cash received in
connection with the HIS sale was $25,000,000, resulting in an after-tax gain of
$10,371,000 ($0.08 per pro forma diluted share). The gain on sale was reflected
on the Consolidated Statements of Income as an extraordinary item since a sale
of assets following a recently completed business combination that was accounted
for as a pooling of interests must be reported as an extraordinary item. The
Company does not expect that the HIS sale will have a material effect on its
financial condition or results of operations.
7
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. Acquisitions, Merger Costs and Sale of Subsidiaries, continued:
Debt Extinguishment:
During the nine months ended September 30, 1999, an extraordinary gain of
$299,000 (less than $0.01 per pro forma diluted share) was recorded. During the
nine and three month periods ended September 30, 1998, an extraordinary gain of
$2,307,000 ($0.02 per pro forma diluted share) was recorded. These extraordinary
gains resulted from an early extinguishment of debt related to an affiliate of
Oshap.
3. Comprehensive Income:
Comprehensive income consists of net income, adjusted for other increases
and decreases affecting stockholders' equity that are excluded from the
determination of net income. The calculation of comprehensive income for the
nine and three months ended September 30, 1999 and 1998 follows (in thousands):
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
Sept. 30, Sept. 30,
----------- ------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
------- ------- ------- -------
Pro forma net income, after extraordinary
items $63,211 $91,072 $34,742 $35,699
Foreign currency translation gain 5 1,060 4,115 997
Securities valuation adjustment (40) 64 (24) 71
Estimated income tax benefit (expense) 14 (457) (1,659) (435)
------- ------- ------- -------
Comprehensive pro forma net income,
after extraordinary items $63,190 $91,739 $37,174 $36,332
======= ======= ======= =======
</TABLE>
8
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
4. Shares Used in Computing Pro Forma Net Income Per Common Share:
The computation of the number of shares used in computing pro forma basic
and diluted net income per common share for each of the nine and three months
ended September 30, 1999 and 1998 follows (in thousands):
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
Sept. 30, Sept. 30,
----------- --------------
1999 1998 1999 1998
----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Weighted-average number of common shares
outstanding 126,376 119,845 127,774 121,145
Contingent shares 143 29 - -
------- ------- ------- -------
Total shares used for calculation of pro forma
basic net income per common share 126,519 119,874 127,774 121,145
Employee stock options 3,663 5,150 2,593 4,893
Contingent stock options - 100 - 265
------- ------- ------- -------
Total shares used for calculation of pro forma
diluted net income per common share 130,182 125,124 130,367 126,303
======= ======= ======= =======
</TABLE>
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Statements about the Company's expectations and all other statements in
this quarterly report on Form 10-Q other than historical facts are forward-
looking statements. Since these statements involve risks and uncertainties and
are subject to change at any time, the Company's actual results could differ
materially from expected results. The Company derives most of its forward-
looking statements from its operating budgets and forecasts, which are based
upon many detailed assumptions. While the Company believes that its assumptions
are reasonable, it cautions that there are inherent difficulties in predicting
certain important factors, especially the timing and magnitude of software
sales, the effect of Y2K issues on software and services buying decisions, the
timing and scope of technological advances and Y2K compliance, the integration
and performance of recently acquired businesses, the prospects for future
acquisitions, and the overall condition of the financial services industry.
These factors, as and when applicable, are discussed in the Company's filings
with the Securities and Exchange Commission, including its most recent Form
10-K, a copy of which may be obtained from the Company without charge.
During 1999 and 1998, the Company completed certain acquisitions accounted
for as poolings of interests, which required restatement of prior period
results. Also during 1999 and 1998, the Company recorded merger costs
associated with poolings of interests and, on March 31, 1999, the Company sold
two wholly owned healthcare information systems businesses (HIS sale). See Note
2 of Notes to Unaudited Consolidated Financial Statements.
The following supplemental unaudited income statement information should be
read along with the unaudited consolidated financial statements and notes
thereto included in this report.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
SunGard Data Systems Inc.
Supplemental Income Statement Information
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Three Months
Ended Ended
September 30, September 30,
------------- --------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Investment support systems $ 768,764 $685,868 $255,002 $240,177
Disaster recovery services 236,088 200,111 80,249 70,352
Computer services and other 51,347 59,886 16,428 19,363
---------- -------- -------- --------
$1,056,199 $945,865 $351,679 $329,892
========== ======== ======== ========
Operating margin, excluding merger costs:
Investment support systems $ 141,271 $123,777 $ 45,378 $ 41,535
Disaster recovery services 57,449 41,497 21,393 18,256
Computer services and other 11,277 8,703 5,562 3,314
Corporate administration (11,123) (10,039) (2,970) (3,856)
Merger costs (99,184) (13,650) (8,738) (3,100)
---------- -------- -------- --------
$ 99,690 $150,288 $ 60,625 $ 56,149
========== ======== ======== ========
Operating margin, excluding merger costs:
Investment support systems 18.4% 18.0% 17.8% 17.3%
========== ======== ======== ========
Disaster recovery services 24.3% 20.7% 26.7% 25.9%
========== ======== ======== ========
Computer services and other 22.0% 14.5% 33.9% 17.1%
========== ======== ======== ========
Total, excluding merger costs 18.8% 17.3% 19.7% 18.0%
========== ======== ======== ========
</TABLE>
11
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
INCOME FROM OPERATIONS:
Investment Support Systems (ISS):
The Company's ISS business is comprised of approximately fifty operating
units organized into twelve groups of businesses. Historically, most operating
units have met or exceeded expectations, while some have not, yielding overall
results for the entire business at approximately the levels expected. During the
third quarter of 1999, overall results were below expectations due primarily to
a revenue shortfall in the Company's four derivatives and risk management
software license businesses. The Company's other ISS units performed well
overall, but could not make up the shortfall. Much of this shortfall, the
Company believes, is due to a slowdown in new derivatives and risk management
system purchases in both large and medium-sized financial institutions as a
result of the industry's focus on Y2K testing and preparation. For the nine
months ended September 30, 1999 and 1998, software license revenues derived from
the four affected businesses were 36% and 54%, respectively, of the Company's
total software license revenues.
The ISS operating margin was 18.4% and 17.8% for the nine and three month
periods ended September 30, 1999, as compared with 18.0% and 17.3% for the
comparable periods in 1998. The increases in the operating margins are due
primarily to a decline in compensation expenses associated with the Company's
long-term incentive plan, an increase in revenues in our Brokerage Systems
business, and a reduction in executive compensation expenses associated with an
acquired "S" corporation, partially offset by a decline in software license
revenues.
The Company expects that the full-year 1999 ISS operating margin will be
approximately 18.5%. The most important factors affecting the ISS operating
margin continue to be the timing and magnitude of software license revenues, the
operating margin of recently acquired businesses and the level of product
development spending.
Disaster Recovery Services (DRS):
The DRS operating margin was 24.3% and 26.7% during the nine and three
month periods ended September 30, 1999, as compared with 20.7% and 25.9% for the
comparable periods in 1998. The increases in the operating margins are due
primarily to increases in revenues, especially in connection with mid-range,
work-group recovery and network services, the favorable settlement of a contract
dispute, and a decline in compensation expenses associated with the Company's
long-term incentive plan. The increases in the operating margins were partially
offset by equipment additions and upgrades, increases in commission expenses
resulting from new contract signings, and severance costs.
The Company expects that the 1999 full-year DRS operating margin will
approximate the 1998 full-year DRS operating margin. The most important factors
affecting the DRS operating margin are the rate of new contract signings and
contract renewals, and the timing and magnitude of equipment and
12
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
INCOME FROM OPERATIONS, CONTINUED:
Disaster Recovery Services (DRS), continued:
facilities expenditures.
Computer Services and Other (CS):
The CS operating margin was 22.0% and 33.9% during the nine and three month
periods ended September 30, 1999, as compared with 14.5% and 17.1% for the
comparable periods in 1998. The increases in the operating margins are due to
the HIS sale (see Note 2 of Notes to Unaudited Consolidated Financial
Statements) and an increase in revenues in the Company's remote-access computer
processing business, partially offset by lower revenues in the Company's
automated mailing services business and an increase in operating costs
associated with equipment upgrades.
The Company expects that the 1999 full-year CS operating margin will be
slightly higher than the 1998 full-year CS operating margin. The most important
factors affecting the CS operating margin continue to be the timing and
magnitude of software license revenues related to the Company's work-flow
productivity system, and revenue variability and timing of computer upgrades in
both remote-access computer processing and automated mailing services
businesses.
REVENUES:
Total revenues for the nine and three month periods ended September 30,
1999 increased $110.3 million, or 12%, and $21.8 million, or 7%, as compared
with the corresponding periods in 1998. Excluding acquired businesses, revenues
increased approximately 11% and 7% during the nine and three month periods, as
compared with 18% during the nine and three month periods in 1998. The decline
in the internal growth rate was due primarily to lower derivatives and risk
management software license revenues, professional services revenues related to
a large shareholder accounting systems conversion in 1998, and, to a lesser
extent, to a decline in revenues resulting from the HIS sale.
During the nine and three month periods ended September 30, 1999, recurring
revenues derived from computer processing, disaster recovery fees, professional
services, software maintenance, and software and hardware rentals were $886.2
million, or 84% of total revenues, and $305.5 million, or 87% of total revenues,
respectively, as compared with $754.3 million, or 80% of total revenues, and
$265.1 million, or 80% of total revenues, respectively, during the comparable
periods in 1998.
Professional services revenues totaled $210.4 million and $74.9 million
during the nine and three month periods ended September 30, 1999, respectively,
as compared with $169.7 million and $63.1 million during the comparable periods
in 1998. The increases in professional services revenues are due primarily to
acquired businesses and an increase in risk management and brokerage system
professional services,
13
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
REVENUES, CONTINUED:
partially offset by a large shareholder accounting system conversion which
occurred in 1998 and the HIS sale.
Nonrecurring revenues, derived from software licenses and sales of third-
party software and hardware, were $170.0 million and $46.1 million during the
nine and three month periods ended September 30, 1999, respectively, as compared
with $191.5 million and $64.8 million during the comparable periods in 1998.
Software license revenues totaled $147.3 million and $40.8 million during the
nine and three month periods ended September 30, 1999, respectively, as compared
with $151.2 million and $49.9 million during the comparable periods in 1998.
The lower software license revenues during the nine and three month periods are
due primarily to a continued decline in derivatives and risk management software
license revenues, as well as a decline in software license revenues resulting
from the HIS sale, partially offset by acquired businesses. The lower revenues
from third-party software and hardware is due primarily to a decline in sales of
hardware related to large systems installations in 1998 in our public sector and
trust and custody software businesses, and a decline in revenues resulting from
the HIS sale.
The Company sells a significant portion of its products and services to the
financial services industry and could be directly affected by the overall
condition of that industry. The Company expects that the consolidation trend in
the financial services industry will continue, but it is unable to predict what
effect, if any, this trend may have on the Company.
Investment Support Systems:
ISS revenues for the nine and three month periods ended September 30, 1999
increased $82.9 million and $14.8 million, or 12% and 6%, respectively, as
compared with the corresponding periods in 1998. The increases in ISS revenues
during the nine and three month periods are attributable to increases in
recurring revenues of $96.8 million and $31.2 million, respectively, partially
offset by declines in nonrecurring revenues of $13.9 million and $16.4 million
during the nine and three months ended September 30, 1999, respectively. The
increases in recurring revenues are due primarily to growth in brokerage systems
and investment systems, and to acquired businesses. The increases were partially
offset by a large shareholder system conversion in 1998. The decline in
nonrecurring revenues is due to lower derivatives and risk management software
license revenues, partially offset by acquired businesses.
Excluding acquired businesses, ISS revenues increased approximately 10% and
4% during the nine and three month periods ended September 30, 1999,
respectively, compared with 18% during the nine and three month periods in 1998.
The decline in the internal growth rate was due primarily to lower derivatives
and risk management software license revenues and professional services revenues
related to a large shareholder accounting systems conversion in 1998.
14
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
REVENUES, CONTINUED:
Disaster Recovery Services:
DRS revenues for the nine and three month periods ended September 30, 1999
increased $36.0 million, or 18%, and $9.9 million, or 14%, respectively, as
compared with the corresponding periods in 1998. The increases are attributable
primarily to increases in revenues resulting from new contract signings and
contract renewals, growth in mid-range, work-group recovery and network
services, and an increase in both professional services and software licenses in
the Company's Disaster Recovery Planning Solutions business.
Computer Services and Other:
CS revenues for the nine and three month periods ended September 30, 1999
decreased $8.5 million, or 14%, and $2.9 million, or 15%, respectively, as
compared with the corresponding periods in 1998. Excluding the HIS sale,
revenues increased 1% and 12% during the nine and three month periods,
respectively. The increases are due to an increase in revenues from the
Company's remote-access computer services business, partially offset by a
decline in revenues from automated mailing services. The higher revenue growth
rate during the three month period was due primarily to an increase in volume
associated with government contracts for remote-access computer services, and,
to a lesser extent, an increase in volume associated with Y2K testing.
COSTS AND EXPENSES:
Cost of sales and direct operating expenses for the nine and three month
periods ended September 30, 1999 increased $46.3 million, or 12%, and $4.4
million, or 3%, as compared with the corresponding periods in 1998. The
increases are due primarily to DRS and ISS equipment upgrades and DRS facilities
improvements, acquired businesses, and an increase in costs associated with
professional services provided to customers, partially offset by lower costs
resulting from the HIS sale.
Sales, marketing and administration expenses for the nine and three month
periods ended September 30, 1999 increased $17.8 million, or 8%, and $3.1
million, or 4%, as compared with the corresponding periods in 1998. The
increases are due primarily to acquired businesses and DRS severance costs,
partially offset by a reduction in expenses associated with the Company's long-
term incentive plan, a favorable settlement of a DRS contract dispute, and lower
costs resulting from the HIS sale.
Product development expenses for the nine and three month periods ended
September 30, 1999 increased $6.3 million, or 7%, and $2.2 million, or 7%, as
compared with the corresponding periods in 1998. The increases are due primarily
to acquired businesses, partially offset by a decline in development spending
associated with derivatives and risk management software products and lower
costs resulting from the HIS sale.
15
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
COSTS AND EXPENSES, CONTINUED:
Development costs capitalized during the nine and three month periods ended
September 30, 1999 were $2.9 million and $0.9 million, respectively, as compared
with $6.1 million and $2.1 million during the comparable periods in 1998.
Depreciation of property and equipment for the nine and three month periods
ended September 30, 1999 increased $3.1 million, or 7%, and $0.8 million, or 5%,
as compared with the corresponding periods in 1998. The increases are due
primarily to purchases of computer and telecommunications equipment, DRS
facility improvements and acquired businesses.
Amortization of intangible assets for the nine and three month periods
ended September 30, 1999 increased $1.9 million, or 5%, and $1.1 million, or 8%,
as compared with the corresponding periods in 1998. The increases are due to
recently acquired businesses, partially offset by fully amortized intangible
assets of previously acquired businesses.
Interest income for the nine and three month periods ended September 30,
1999 increased $5.6 million, or 87%, and $2.1 million, or 91%, as compared with
the corresponding periods in 1998. The increases are due to higher cash and
short-term investment balances.
Excluding the effect of merger costs, which are generally nondeductible,
extraordinary gains resulting from the HIS sale and early extinguishment of debt
related to an affiliate of Oshap, the Company's pro forma effective income tax
rate was 40.1% for the nine month period ended September 30, 1999, as compared
with a pro forma effective income tax rate of 40.3% during the nine month period
ended September 30, 1998.
Due to the pooling of interests with ASC (an "S" corporation prior to the
merger with the Company), net income and all net income per share amounts are
presented on a pro forma basis since generally accepted accounting principles
require that pro forma income taxes, which would have been incurred by ASC as if
ASC had been a "C" corporation, be reflected on the Statements of Income for all
periods presented. The pro forma income tax benefit during the nine month
period ended September 30, 1999 is primarily attributable to the one-time non-
cash compensation charge in connection with the ASC acquisition (see Note 2 of
Notes to Unaudited Consolidated Financial Statements).
LIQUIDITY AND CAPITAL RESOURCES:
Cash and short-term investments were $388.5 million at September 30, 1999,
an increase of $97.5 million from December 31, 1998. At September 30, 1999,
short and long-term debt totaled $16.9 million, a decrease of $10.3 million from
December 31, 1998.
16
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES, CONTINUED:
The Company expects that its existing cash resources and cash generated
from operations will be sufficient to meet its operating requirements,
contingent payments in connection with business acquisitions, and ordinary
capital spending needs for at least the next twelve months. Furthermore, the
Company has a $150.0 million credit agreement and believes it has the capacity
to secure additional credit or issue equity to finance additional capital needs.
YEAR 2000 ISSUES:
The Company has a comprehensive program to evaluate and address the impact
of the year 2000 issues on its software products, processing services and
disaster recovery operations. As part of this program, each of the Company's
operating units identified each item that had to be modified or replaced,
established a plan to complete and test all required modifications and
replacements, and then implemented that plan. This program encompasses the
Company's products that are sold to its customers, as well as third-party
products that are resold to customers or are used internally by the Company. The
Company has been closely monitoring the progress of each of its operating units
with their year 2000 compliance plans. The Company believes that it will
successfully complete its year 2000 compliance program on a timely basis,
without significant disruption to its customers or operations.
Substantially all of the Company's software and other products already are
year 2000 compliant, so that they can handle dates in the year 2000 and beyond.
The Company is still working on final year 2000 testing and modification
projects for some of its important products. The Company estimates that
modification and testing for over 95% of its software products were
substantially completed as of September 30, 1999. The Company's goal is to
substantially complete modification and testing for all of its software products
during the fourth quarter of 1999. Nevertheless, year 2000 compliance testing
will continue through the fourth quarter of 1999 for some of its products, which
may uncover the need for additional modifications. In addition to its internal
testing, the Company has successfully participated in certain industry-wide year
2000 compliance tests such as those being conducted by the Securities Industry
Association.
The Company will carefully monitor its year 2000 compliance projects
through the fourth quarter of 1999 and will continue to develop and refine
contingency plans for these projects as testing results are analyzed. If the
Company fails to make any of its significant products year 2000 compliant, or
fails to meet its commitments to customers to complete major conversions to year
2000 compliant systems during 1999, then its business and financial results may
be materially and adversely affected.
The Company continues to believe that year 2000 compliance issues caused
some acceleration of software buying and conversion activity in 1998 and delays
in certain software buying decisions in 1999. The Company does not expect an
improvement in the demand for derivatives and risk management software systems
before the second quarter of 2000.
17
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
YEAR 2000 ISSUES, CONTINUED:
Many third-party computer hardware, network, telecommunications, software
and other products, services, and utilities interact with the Company's products
and services, or are used by the Company as an integral part of its operations.
The Company continues to evaluate these third-party products for year 2000
compliance, so that non-compliant products may be modified or replaced in a
timely manner. In doing so, the Company is working with, and must rely upon,
its outside vendors to meet year 2000 requirements. If any of the Company's
important vendors fails to meet its year 2000 requirements, then the Company
will switch to another vendor as soon as possible, which may have a material and
adverse impact on the Company's business and financial results. Although the
Company believes that all of its important vendors eventually will meet their
year 2000 requirements, the Company cannot determine at this time whether or
when year 2000 related problems will arise with its third-party products or
whether any problems that do arise will have a material and adverse impact on
the Company's business or financial results.
The Company's overall year 2000 compliance program is on schedule, and the
Company has paid and believes that it will continue to pay the expenses of this
program using existing product development and support resources, without
incurring significant incremental development expense, and using budgeted
capital expenditures. Nevertheless, year 2000 modification and testing
activities have required the deferral of lower priority development projects.
The Company does not maintain detailed accounting records that separately
identify all of the costs associated with its year 2000 activities. In response
to the disclosure requirements regarding year 2000 matters, the Company has
reviewed its accounting and product development records for the period beginning
January 1, 1996 in an effort to estimate the costs of its year 2000 compliance
program. The Company currently estimates that the total costs of its year 2000
compliance program since January 1, 1996 will be approximately $28.5 million in
direct labor and benefit costs for modification and testing activities, plus
approximately $8.4 million in capital expenditures. Through September 30, 1999,
the Company has spent approximately $26.1 million in direct labor and benefit
costs for modification and testing, plus approximately $6.0 million in capital
expenditures. The remaining estimated direct labor and benefit costs for
modification and testing activities of approximately $2.4 million include, in
part, rough estimates to cover unanticipated modification work that may arise as
a result of continued testing activity throughout 1999. The remaining estimated
capital expenditures of approximately $2.4 million are to replace non-compliant
computer and communications equipment, principally in the Company's DRS
business.
THE FOREGOING IS A YEAR 2000 READINESS DISCLOSURE MADE PURSUANT TO THE
TERMS AND PROTECTIONS OF THE YEAR 2000 INFORMATION AND READINESS DISCLOSURE ACT.
18
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
The Company does not use derivative financial instruments to manage risk
exposures or for trading or speculative purposes. The Company invests available
cash in short-term, highly liquid financial instruments, with a substantial
portion of such investments having initial maturities of three months or less.
While changes in interest rates could decrease the Company's interest income,
the Company does not consider the interest rate risk for these investments to be
material.
While approximately 25% of the Company's revenues come from sales to
customers located outside of the United States, almost one-half of those
revenues are U.S. dollar-denominated sales by the Company's U.S.- based
operations. For the Company's foreign operations, the Company generally matches
local currency revenues with local currency costs. For these reasons, the
Company does not believe that it has a material exposure to changes in foreign
currency exchange rates.
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings: None.
Item 2. Changes in Securities and Use of Proceeds:
(a) Not applicable.
(b) Not applicable.
(c) During the third quarter of 1999, the Company issued the below
number of unregistered shares of the Company's common stock in
connection with the acquisitions listed below:
On August 31, 1999, the Company issued 470,401 shares of the
Company's common stock in exchange for the outstanding capital
stock of Exchange Market Systems E.M.S. Inc. ("EMS"). These
shares were issued in connection with a transaction exempt from
the registration requirements of the Securities Act of 1933, as
amended (the "Act"), pursuant to Regulation S, which exempts
offers and sales by an issuer that occur outside of the United
States. Each purchaser was a shareholder of EMS and a non-"U.S.
Person," as such term is defined in Regulation S. The Company
has filed a Registration Statement on Form S-3 covering the
resale of such shares (excluding those shares held in escrow by
the Company).
On August 31, 1999, the Company issued 686,111 shares of the
Company's common stock in exchange for the outstanding capital
stock of Peak 1 Resources Inc. ("Peak 1"). These shares were
issued in connection with a transaction exempt from the
registration requirements of the Securities Act of 1933, as
amended (the "Act"), pursuant to Section 4(2) of the Act, which
exempts transactions by an issuer not involving any public
offering. Each purchaser was a shareholder of Peak 1 and an
accredited investor or a sophisticated investor with access to
all relevant information necessary. The Company has filed a
Registration
19
<PAGE>
PART II. OTHER INFORMATION, CONTINUED:
Statement on Form S-3 covering the resale of such shares
(excluding those shares held in escrow by the Company).
(d) Not applicable.
Item 3. Defaults Upon Senior Securities: None.
Item 4. Submission of Matters to a Vote of Security Holders: None.
Item 5. Other Information: None.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
3.1 Amended and Restated Bylaws of the Company
27.1 Financial Data Schedule for the quarter ended
September 30, 1999
27.2 Financial Data Schedule for the quarter ended
June 30, 1999*
27.3 Financial Data Schedule for the quarter ended
March 31, 1999*
27.4 Financial Data Schedule for the quarter ended
September 30, 1998*
27.5 Financial Data Schedule for the quarter ended
June 30, 1998*
27.6 Financial Data Schedule for the quarter ended
March 31, 1998*
27.7 Financial Data Schedule for the year ended
December 31, 1998*
27.8 Financial Data Schedule for the year ended
December 31, 1997*
27.9 Financial Data Schedule for the year ended
December 31, 1996*
* Restated for poolings of interests.
(b) Reports on Form 8-K: None.
20
<PAGE>
Signatures
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.
SunGard Data Systems Inc.
Date: November 15, 1999 By: s/Michael J. Ruane
----------------------------------------
Michael J. Ruane
Vice President-Finance and
Chief Financial Officer
(Principal Financial Officer)
21
<PAGE>
LIST OF EXHIBITS
NUMBER EXHIBIT
- ------ -------
3.1 Amended and Restated Bylaws of the Company
27.1 Financial Data Schedule for the quarter ended September 30, 1999
27.2 Financial Data Schedule for the quarter ended June 30, 1999 *
27.3 Financial Data Schedule for the quarter ended March 31, 1999 *
27.4 Financial Data Schedule for the quarter ended September 30, 1998 *
27.5 Financial Data Schedule for the quarter ended June 30, 1998 *
27.6 Financial Data Schedule for the quarter ended March 31, 1998 *
27.7 Financial Data Schedule for the year ended December 31, 1998 *
27.8 Financial Data Schedule for the year ended December 31, 1997 *
27.9 Financial Data Schedule for the year ended December 31, 1996 *
* Restated for poolings of interests.
22
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED BY-LAWS
OF
SUNGARD DATA SYSTEMS INC.
(a Delaware Corporation)
ARTICLE I
OFFICES
The registered office of the Corporation in the State of Delaware shall be
located in the City of Wilmington, County of New Castle. The Corporation may
establish or discontinue, from time to time, such other offices, within or
without the State of Delaware, as the Board of Directors may designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place of the Meetings. All meetings of stockholders shall be
held at such place or places, within or without the State of Delaware, as may
from time to time be fixed by the Board of Directors, or as shall be specified
in the respective notices, or waivers of notice, thereof.
Section 2. Annual Meeting. The annual meeting of Stockholders for the
election of Directors and the transaction of other business shall be held on
such date and at such place as may be designated by the Board of Directors. At
each annual meeting, the stockholders entitled to vote shall elect a Board of
Directors and may transact such other proper business as may come before the
meeting, irrespective of whether the notice of said meeting contains any
reference thereto, except as otherwise provided by applicable law.
Section 3. Special Meetings. A special meeting of the stockholders, or
of any class thereof entitled to vote, for any other purpose or purposes, may be
called at any time by the Board of Directors, the Chairman of the Board or the
President and shall be called by the Chairman of the Board, the President or the
Secretary upon the written request of stockholders holding of record at least
50% of the outstanding shares of stock of the Corporation entitled to vote at
such meeting. Such written request shall state the purpose or purposes for which
such meeting is to be called.
Section 4. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of stockholders, whether annual or special,
stating the place, date and hour of the meeting, shall be given not less than
ten days nor more than sixty days before the date on which the meeting is to be
held to each stockholder of recorded entitled to vote thereat by delivering a
notice thereof to him personally or by mailing such notice in a postage prepaid
envelope directed to him at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices intended for him be directed to another address, in
which case such notice shall be directed to him at the address designated in
such request. Notice shall not be required to be given to any stockholder who
shall waive such notice in writing, whether prior to or after such meeting, or
who shall attend such meeting in person or by proxy unless such attendance is
for the express purpose of objecting, at the beginning of such meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Every notice of a special meeting of the stockholders shall state, in
addition to the place, date and hour of the meeting, the purpose or purposes
thereof.
<PAGE>
Section 5. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of the stock ledger
to prepare and make, at least ten days before every meeting of the stockholders,
a complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in his name. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting or, if not so specified, at the place
where the meeting is to be held. The list shall be kept and produced at the time
and place of the meeting during the whole time thereof and subject to inspection
of any stockholder who may be present. The original or duplicate ledger shall be
the only evidence as to who are the stockholders entitled to examine such list
or books of the Corporation or to vote in person or by proxy at such meeting.
Section 6. Quorum. At each meeting of the stockholders, the holders of
record of a majority of the issued and outstanding stock of the Corporation
entitled to vote at such meeting, present in person or by proxy, shall
constitute a quorum for the transaction of business, except where otherwise
provided by law, the Certificate of Incorporation or these By-laws. In the
absence of a quorum, any officer entitled to preside at, or act as secretary of,
such meeting shall have the power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
constituted, and thereupon, any business may be transacted at the adjourned
meeting that might have been transacted at the meeting as originally called.
Section 7. Conduct of the Meetings. The Chairman of the Board shall
preside at all meetings. In the absence of the Chairman of the Board, the
President shall preside or, in his absence, any officer designated by the Board
of Directors. The officer presiding over the meeting of stockholders may
establish such rules and regulations for the conduct of the meeting as he may
deem to be reasonably necessary or desirable for the orderly and expeditious
conduct of the meeting.
Section 8. Voting. Every stockholder of record who is entitled to vote
shall at every meeting of the stockholders be entitled to one vote for each
share of stock held by him on the record date; except, however, that shares of
its own stock belonging to the Corporation or to another corporation, if a
majority of the shares entitled to vote in the election of the directors of such
other corporation is held by the Corporation, shall neither be entitled to vote
nor counted for the quorum purposes. Nothing in this Section shall be construed
as limiting the right of the Corporation to vote its own stock held by it in a
fiduciary capacity. At all meetings of the stockholders at which a quorum is
present, all matters shall be decided by majority vote of the shares of the
stock present in person or by proxy and entitled to vote thereon, except as
otherwise required by law or the Certificate of Incorporation. The vote on all
elections of Directors shall be by written ballot, and upon demand of any
stockholder, the vote on any other question before the meeting shall be by
ballot or otherwise as determined by the chairman of the meeting. On a vote by
written ballot, each ballot shall be signed by the stockholder voting, or in
his name by his proxy, if there be such proxy, and shall state the number of
shares voted by him and the number of votes to which each share is entitled.
Section 9. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent to corporate action in writing without a
meeting shall have the right to do so either in person or by an agent or agents
authorized by a proxy granted in accordance with Delaware law. An agent so
appointed need not be a stockholder. No proxy shall be valid after the
expiration of three years from the date thereof unless the proxy provides for a
longer period.
<PAGE>
Section 10. Action without a Meeting. Any action required to be taken
at any annual or special meeting of stockholders or any action which may be
taken at any annual or special meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in writing
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
------------------
Section 1. Powers. The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors.
Section 2. Nomination. Beginning with the annual meeting of the
stockholders to be held in 1987, nominations for directors to be elected at an
annual meeting of the stockholders must be submitted to the Secretary of the
Corporation in writing not later than the close of business on the thirtieth
calendar day immediately preceding the date of the meeting. All late nominations
shall be rejected. Notwithstanding the forgoing, at any time prior to the
election of directors at a meeting of stockholders, the Board of Directors may
designate a substitute nominee to replace any bona fide nominee who was
nominated as set forth above and who, for any reason, becomes unavailable for
election as a director.
Section 3. Election and Term. Except as otherwise provided by law,
Directors shall be elected at the annual meeting of stockholders and shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualify, or until they sooner die, resign or are removed. At
each annual meeting of stockholders at which a quorum is present, the persons
receiving a plurality of the votes cast shall be the Directors.
Section 4. Number. The number of Directors shall be such number as
shall be determined from time to time by the Board of Directors but shall not be
less than two nor more than nine.
Section 5. Quorum and Manner of Acting. Unless otherwise provided by
law, the presence of 50% of the whole Board of Directors shall be necessary to
constitute a quorum for the transaction of business. In the absence of a quorum,
a majority of the Directors present may adjourn the meeting from time to time
until the quorum shall be present. Notice of any adjourned meeting need not be
given. At all meetings of Directors at which a quorum is present, all matters
shall be decided by the affirmative vote of the majority of the Directors
present, except as otherwise required by law. The Board of Directors may hold
its meetings at such place or places within or without the State of Delaware as
the Board of Directors may from time to time determine or as shall be specified
in the respective notices, or waivers of notice, thereof.
Section 6. Organization Meeting. Immediately after each annual meeting
of stockholders for the election of the Directors, the Board of Directors shall
meet at the place of the annual meeting of the stockholders for the purpose of
organization, the election of officers and the transaction of other business.
Notice of such meeting need not be given. If such meeting is held at any other
time or place, notice thereof must be given as hereinafter provided for special
meetings of the Board of Directors, subject to the execution of a waiver of the
notice thereof signed by, or the attendance at such meeting of, all Directors
who may not have received such notice.
Section 7. Regular Meetings. Regular meetings of the Board of Directors
may be held, without notice, at such time and place, within or without the State
of Delaware, as shall from time to time be determined by resolution of the Board
of Directors. At such meetings, the Board of Directors may transact such
business as may be brought before the meeting.
<PAGE>
Section 8. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board or the President or
by a majority of the Directors. Notice of each such meeting should be mailed to
each Director, addressed to him at his residence or usual place of business, at
least five days before the date on which the meeting is to be held, or shall be
sent to him at such place by telegraph, cable, radio or wireless, or be
delivered personally or by telephone, not later than the day before the day on
which such meeting is to be held. Each such notice shall state the time and
place of the meeting and, as may be required, the purposes thereof. Notice of
any meeting of the Board of Directors need not be given to any Director if he
shall sign a written waiver thereof either before or after the time stated
therein for such meeting, or if he shall be present at the meeting. Unless
limited by law, the Certificate of Incorporation, these By-laws or terms of the
notice thereof, any and all business may be transacted at any meeting even
though no notice shall have been given.
Section 9. Removal of Directors. Any Director or the entire Board of
Directors may be removed, with or without cause, at any time, by action of the
holders of record of the majority of the issued and outstanding stock of the
Corporation entitled to vote at an election of the directors (a) present in
person or by proxy at a meeting of the holder of such stock, or (b) by a consent
in writing in the manner contemplated in Section 10 of Article II, and the
vacancy or vacancies in the Board of Directors caused by any such removal may be
filled by action of such a majority at such meeting or at any subsequent meeting
or by consent.
Section 10. Resignations. Any Director of the Corporation may resign at
any time by giving notice to the Chairman of the Board, the President or the
Secretary of the Corporation. The resignation of any Director shall take effect
upon receipt of notice thereof or at such later time as shall be specified in
such notice, and acceptance of such resignation shall not be necessary to make
it effective.
Section 11. Vacancies. Any newly created directorships or vacancies
occurring in the Board by reason of death, resignation, retirement,
disqualification or removal, with or without cause, may be filled by a majority
of the directors then in office though less than a quorum. Any Director so
chosen, whether selected to fill a vacancy or elected to a new directorship,
shall hold office until the next meeting of stockholders at which an election of
directors is in the regular order of business, and until his successor has been
elected and qualifies, or until he sooner dies, resigns or is removed.
Section 12. Compensation of Directors. No Director shall be entitled to
any salary as such, but the Board of Directors may fix, from time to time, a
reasonable annual fee for acting as a director and a reasonable fee to be paid
each Director for his services in attending meetings of the Board. Directors may
also be reimbursed by the Corporation for all reasonable expenses incurred in
travelling to and from meetings of the Board.
Section 13. Action without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if written consent thereto is signed by all member of the Board, and
such written consent is filed with the minutes or proceedings of the Board.
Section 14. Telephonic Participation in Meetings. Members of the Board
of Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall constitute presence in person at such meetings.
<PAGE>
ARTICLE IV
COMMITTEES
----------
Section 1. Committees. The Bard of Directors may, by resolution passed
by a majority of the entire Board, designate one or more committees, each
committee to consist of one or more of the Directors of the Corporation, which,
to the extent provided in the resolution and permitted by law, shall have and
may exercise the powers of the Board of Directors in the management of the
business and the affairs of the Corporation and may authorize the seal of the
Corporation to be affixed to all papers which may require it. The Board of
Directors may designate one or more Directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Such committee or committees shall have such name or names as may
be determined from time to time by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
Section 2. Appointment of Additional Members to Committees. In the
absence or disqualification of any member of such committee or committees, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another Director to act at the meeting in the place of any such absent or
disqualified members.
ARTICLE V
OFFICERS
--------
Section 1. Principal Officers. The Board of Directors shall elect a
Chairman of the Board, a President, a Secretary and a Treasurer, and may in
addition elect one or more Vice Presidents and such other officers as it deems
fit; The Chairman of the Board, the President, the Secretary, the Treasurer, the
Vice Presidents, if any, being the principal officers of the Corporation. One
person may hold, and perform the duties of, any two or more of the said offices.
Section 2. Election and Term of Office. The principal officers of the
Corporation shall be elected annually by the Board of Directors at the
organization meeting thereof. Each such officer shall hold office until his
successor shall have been elected and shall qualify, or until his earlier death,
resignation or removal.
Section 3. Other Officers. In addition, the Board may elect, or the
Chairman of the Board or President may appoint, such other officers as they deem
fit. Any such other officers chosen by the Board of Directors shall be
subordinate officers and shall hold office for such period, have such authority
and perform such duties as the Board of Directors, the Chairman of the Board or
the President may from time to time determine.
Section 4. Removal. Any officer may be removed, either with or without
cause, at any time, by resolution adopted by the Board of Directors at any
regular meeting of the Board, or at any special meeting of the Board called for
that purpose, at which a quorum is present.
Section 5. Resignations. Any officer may resign at any time by giving
written notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors. Any such resignation shall take effect upon receipt of such
notice or at any later time specified therein, and the acceptance of such
resignation shall not be necessary to make it effective.
Section 6. Vacancies. A vacancy in any office may be filled for the
unexpired portion of the term in the manner prescribed in these By-laws for
election or appointment to such office for such term.
<PAGE>
Section 7. Chairman of the Board. The Chairman of the Board shall have
general powers and duties of supervision and management usually vested in the
office of the chairmen of the board of a corporation. The Chairman of the Board
of Directors shall preside, if present, at all meetings of the Board of
Directors and at all meetings of the stockholders. He shall have and perform
such other duties as from time to time may be assigned to him by the Board of
Directors.
Section 8. President. The President shall be the chief executive
officer of the Corporation and shall have the general powers and duties vested
in the office of chief executive officer of a corporation. He shall have
general supervision, direction and control of the business of the corporation.
He shall, in the absence of the Chairman, preside at all meetings of the
shareholders and the Board of Directors.
Section 9. Vice President. Each Vice President shall have such powers
and shall perform such duties as shall be assigned to him by the Board of
Directors.
Section 10. Treasurer. The Treasurer shall have charge and custody of,
and be responsible for, all funds and securities of the Corporation. He shall
exhibit at all reasonable times his books of account and records to any of the
Directors of the Corporation upon application during business hours at the
office of the Corporation where such books and records shall be kept; when
requested by the Board of Directors, he shall render a statement of the
condition of the finances of the Corporation at any meeting of the Board or at
the annual meeting of stockholders; he shall receive, and give receipt for,
moneys due and payable to the Corporation from any source whatsoever; in
general, he shall perform all the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the Chairman of
the Board, the President or the Board of Directors. The Treasurer shall give
such bond, if any, for the faithful discharge of his duties as the Board of
Directors may require.
Section 11. Secretary. The Secretary, if present, shall act as
secretary at all meetings of the Board of Directors and of the stockholders and
keep the minutes thereof in a book or books to be provided for that purpose; he
shall see that all notices required to be given by the Corporation are duly
given and served; he shall have charge of the stock records of the corporation,
he shall see that all reports, statements and other documents required by law
are properly kept and filed; and in general he shall perform all the duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him by the Chairman of the Board, the President or the Board
of Directors.
Section 12. Salaries. The salaries of the principal officers shall be
fixed from time to time by the Board of Directors, and the salaries of any other
officers may be fixed by the Chairman.
ARTICLE VI
INDEMNIFICATION
---------------
Section 1. Mandatory Indemnification. The Corporation shall, to the
full extent permitted by Section 145 of the Delaware General Corporation Law, as
amended from time to time, indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director, officer or employee of the
Corporation or of any of its subsidiaries.
Section 2. Optional Indemnification. In all situations in which
indemnification is not mandatory under Section 1 of this Article VI, the
Corporation may, to the full extent permitted by Section 145 of the Delaware
General Corporation Law, as amended from time to time, indemnify all persons
whom it is empowered to indemnify pursuant thereto.
ARTICLE VII
SHARES AND THEIR TRANSFER
-------------------------
<PAGE>
Section 1. Certificate for Stock. Every stockholder of the Corporation
shall be entitled to a certificate or certificates, to be in such form as the
Board of Directors shall prescribe, certifying the number of shares of the
capital stock of the Corporation owned by him. No certificates shall be issued
for partly paid shares.
Section 2. Stock Certificate Signature. The certificates for such stock
shall be numbered in the order in which they shall be issued and shall be signed
by the Chairman of the Board or the President and the Secretary or Treasurer of
the Corporation and its seal shall be affixed thereto. If such certificate is
countersigned (1) by a transfer agent other than the Corporation or its
employee, or (2) by a registrar other than the Corporation or its employee, the
signatures of such officers of the Corporation may be facsimiles. In case any
officer of the Corporation who has signed, or whose facsimile signature has
been placed upon, any such certificate shall have ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of issue.
Section 3. Stock Ledger. A record shall be kept by the Secretary or by
any other officer, employee or agent designated by the Board of Director of the
name of each person, firm or corporation holding capital stock of the
Corporation, the number of shares represented by, and the respective dates of,
each certificate for such capital stock, and in case of cancellation of any such
certificate, the respective dates of cancellation.
Section 4. Registrations of Transfers of Stock. Registrations of
transfers of shares of the capital stock of the Corporation shall be made on the
books of the Corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary of the Corporation or with a transfer clerk or a transfer agent
appointed as provided in Section 5 of this Article VII, and on surrender of the
certificate or certificates for such shares properly endorsed, with such proof
of authenticity of the signature as the Corporation or its agents may reasonably
require, and the payment of all taxes thereon. The person in whose name shares
of stock stand on the books of the Corporation shall be deemed the owner thereof
for all purposes as regards the Corporation; provided, however, that whenever
any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
certificates are presented to the Corporation for transfer, both the transferor
and the transferee request the Corporation to do so.
Section 5. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient, not inconsistent with the Certificate of
the Incorporation or these By-laws, concerning the issue, transfer and
registration of certificates for shares of the stock of the Corporation. It may
appoint, or authorize any principal officer or officers to appoint, one or more
transfer clerks or one or more transfer agents and one or more registrars, and
may require all certificates of stock to bear the signature or signatures of any
of them.
Section 6. Lost, Stolen, Destroyed or Mutilated Certificates. Before
any certificates for stock of the Corporation shall be issued in exchange for
certificates which shall become mutilated or shall be lost, stolen, or
destroyed, proper evidence of such loss, theft, mutilation or destruction shall
be furnished to the Corporation, and if required by the Board of Directors, the
owner of the lost, stolen or destroyed certificate, or his legal
representatives, shall be required to give the Corporation a bond sufficient to
indemnify the Corporation against any claim made against it on account of the
alleged loss, theft or destruction of any such certificate.
Section 7. Record Dates. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect to any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a date as a
record date for any such determination of stockholders. Such record date shall
not be more than sixty nor less than ten days before the date of such meeting,
nor shall it be more than sixty days prior to any other action.
<PAGE>
ARTICLE VIII
MISCELLANEOUS PROVISIONS
------------------------
Section 1. Corporate Seal. The Board of Directors shall provide a
corporate seal, which shall be in the form of a circle and shall bear the name
of the Corporation and words and figures showing that it was incorporated in the
State of Delaware in the year 1982. The Secretary shall be the custodian of the
seal. The Board of Directors may authorize a duplicate seal to be kept and used
by any other officer.
Section 2. Voting of Stock Owned by the Corporation. The Board of
Directors may authorize any person on behalf of the Corporation to attend, vote
and grant proxies to be used at any meeting of stockholders of any corporation
(except the Corporation) in which the Corporation may hold stock.
Section 3. Dividends. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting, declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend, there may be set apart out of any funds of the Corporation available
for dividends such sum or sums as the Directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the Corporation.
Section 4. Emergency By-laws. In the event of any emergency resulting
from a nuclear attack or similar disaster, and during the continuance of such
emergency, the following By-law provisions shall be in effect, notwithstanding
any other provisions of these By-laws:
(a) A meeting of the Board of Directors or of any committee
thereof may be called by any officer or director upon
one hour's notice to all persons entitled to notice
whom, in the sole judgment of the notifier, it is
feasible to notify;
(b) The director or directors in attendance at the meeting
of the Board of Directors or of any committee thereof
shall constitute a quorum; and
(c) These By-laws may be amended or repealed, in whole or in
part, by a majority vote of the directors attending
any meeting of the Board of Directors, provided such
amendment or repeal shall only be effective for the
duration of such emergency.
Section 5. Severability. If any provision of these By-laws is illegal
or unenforceable as such, such illegality or unenforceability shall not affect
any other provision of these By-laws and such other provisions shall continue in
full force and effect.
ARTICLE IX
AMENDMENTS OR REPEAL
--------------------
Section 1. Amendments or Repeal. These By-laws of the Corporation may
be altered, amended or repealed, in whole or in part, by the Board of Directors
at any regular or special meeting of the Board of Directors or by the
affirmative vote of the holders of record of a majority of the issued and
outstanding stock of the Corporation (a)present in person or by proxy at a
meeting of holders of such stock and entitled to vote thereon, or (b) by a
consent in writing in the manner contemplated in Section 10 of Article II;
provided, however, that notice of the proposed alteration, amendment or repeal
is contained in the notice of such meeting. By-laws, whether made or altered by
the stockholders or by the Board of Directors, shall be subject to alteration or
repeal by the stockholders as provided in this Section 1 of Article IX.
<PAGE>
Section 2. Recording Amendments and Repeals. The text of all amendments
and repeals to these By-laws shall be attached to the By-laws with a notation of
the date of each such amendment or repeal and a notation of whether such
amendment or repeal was adopted by the Board of Directors or the stockholders.
ARTICLE X
APPROVAL OF AMENDED BYLAWS AND
RECORD OF AMENDMENTS AND REPEALS
--------------------------------
Section 1. Approval and Effective Date. These By-laws have been
approved as the By-laws of the Corporation this 31st day of January, 1986 and
shall be effective as of said date.
Section 2. Amendments or Repeals.
Date Amended or
Section Involved Repealed Approved By
- ---------------- -------- -----------
Article II, Section 9 March 30, 1999 Board of Directors
Article III, Section 4 August 11, 1999 Board of Directors
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF
SEPTEMBER 30, 1999 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1999 BOTH INCORPORATED BY REFERENCE INTO THE
FORM 10-Q OF SUNGARD DATA SYSTEMS INC. FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
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</LEGEND>
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0
0
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<EPS-DILUTED> 0.49 <F5>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, AND MERGER COSTS.
<F2>MERGER COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
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<F4>AFTER-TAX GAINS ON SALE OF TWO SUBSIDIARIES AND DEBT EXTINGUISHMENT.
<F5>INCLUDES MERGER COSTS TOTALING $0.57 PER PRO FORMA BASIC
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF JUNE 30,
1999 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1999 BOTH INCORPORATED BY REFERENCE INTO THE FORM 10-Q OF SUNGARD DATA
SYSTEMS INC. FOR THE SIX MONTHS ENDED JUNE 30, 1999, AS ADJUSTED TO RESTATE FOR
THE POOLINGS OF INTERESTS WITH OSHAP TECHNOLOGIES LTD. ON JULY 15, 1999 AND
PENTAMATION ENTERPRISES, INC. ON AUGUST 17, 1999, AND IS QUALIFIED IN ITS
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0
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<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, AND MERGER COSTS.
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<F4>AFTER-TAX GAINS ON SALE OF TWO SUBSIDIARIES AND DEBT EXTINGUISHMENT.
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</FN>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF MARCH
31, 1999 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 1999 BOTH INCORPORATED BY REFERENCE INTO THE FORM 10-Q OF
SUNGARD DATA SYSTEMS INC. FOR THE THREE MONTHS ENDED MARCH 31, 1999, AS ADJUSTED
TO RESTATE FOR THE POOLINGS OF INTERESTS WITH FDP CORP. ON APRIL 28, 1999, OSHAP
TECHNOLOGIES LTD. ON JULY 15, 1999 AND PENTAMATION ENTERPRISES, INC. ON AUGUST
17, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
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</LEGEND>
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0
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<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, AND MERGER COSTS.
<F2>MERGER COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
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<F4>AFTER-TAX GAINS ON SALE OF TWO SUBSIDIARIES AND DEBT EXTINGUISHMENT.
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</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF
SEPTEMBER 30, 1998 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1998, BOTH INCORPORATED BY REFERENCE INTO THE
FORM 10-Q OF SUNGARD DATA SYSTEMS INC. FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1998, AS ADJUSTED TO RESTATE FOR THE POOLINGS OF INTERESTS WITH STERLING
WENTWORTH CORPORATION ON FEBRUARY 18, 1999, AUTOMATED SECURITIES CLEARANCE,
LTD. ON MARCH 1, 1999, FDP CORP. ON APRIL 28, 1999, OSHAP TECHNOLOGIES LTD. ON
JULY 15, 1999 AND PENTAMATION ENTERPRISES, INC. ON AUGUST 17, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 196,784
<SECURITIES> 28,945
<RECEIVABLES> 339,159
<ALLOWANCES> 34,849
<INVENTORY> 0
<CURRENT-ASSETS> 588,132
<PP&E> 408,313
<DEPRECIATION> 261,726
<TOTAL-ASSETS> 1,149,867
<CURRENT-LIABILITIES> 325,653
<BONDS> 12,400
0
0
<COMMON> 1,223
<OTHER-SE> 810,591
<TOTAL-LIABILITY-AND-EQUITY> 1,149,867
<SALES> 0
<TOTAL-REVENUES> 945,865
<CGS> 0
<TOTAL-COSTS> 572,546<F1>
<OTHER-EXPENSES> 13,650<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,552
<INCOME-PRETAX> 155,180
<INCOME-TAX> 64,488
<INCOME-CONTINUING> 88,765<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 2,307<F4>
<CHANGES> 0
<NET-INCOME> 91,072<F3>
<EPS-BASIC> 0.76<F5>
<EPS-DILUTED> 0.73<F5>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, PURCHASED IN-PROCESS
RESEARCH AND DEVELOPMENT, AND MERGER AND RESTRUCTURING COSTS.
<F2>PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND RESTRUCTURING
COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>AFTER-TAX GAIN ON DEBT EXTINGUISHMENT.
<F5>INCLUDES PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND
RESTRUCTURING COSTS TOTALING $0.10 PER PRO FORMA SHARE, AND AN EXTRAORDINARY
GAIN ON DEBT EXTINGUISHMENT TOTALING $0.02 PER PRO FORMA SHARE.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF JUNE 30,
1998 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED
JUNE 30, 1998 BOTH INCORPORATED BY REFERENCE INTO THE FORM 10-Q OF SUNGARD DATA
SYSTEMS INC. FOR THE SIX MONTHS ENDED JUNE 30, 1998 AS ADJUSTED TO RESTATE FOR
THE POOLINGS OF INTERESTS WITH STERLING WENTWORTH CORPORATION ON FEBRUARY 18,
1999, AUTOMATED SECURITIES CLEARANCE, LTD. ON MARCH 1, 1999, FDP CORP. ON APRIL
28, 1999, OSHAP TECHNOLOGIES LTD. ON JULY 15, 1999 AND PENTAMATION ENTERPRISES,
INC. ON AUGUST 17, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 145,473
<SECURITIES> 36,624
<RECEIVABLES> 319,437
<ALLOWANCES> 25,794
<INVENTORY> 0
<CURRENT-ASSETS> 528,963
<PP&E> 392,556
<DEPRECIATION> 245,634
<TOTAL-ASSETS> 1,070,435
<CURRENT-LIABILITIES> 294,939
<BONDS> 11,604
0
0
<COMMON> 1,210
<OTHER-SE> 762,682
<TOTAL-LIABILITY-AND-EQUITY> 1,070,435
<SALES> 0
<TOTAL-REVENUES> 615,973
<CGS> 0
<TOTAL-COSTS> 375,297<F1>
<OTHER-EXPENSES> 10,550<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,007
<INCOME-PRETAX> 97,288
<INCOME-TAX> 40,596
<INCOME-CONTINUING> 55,373<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,373<F3>
<EPS-BASIC> 0.46<F4>
<EPS-DILUTED> 0.44<F4>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, PURCHASED IN-PROCESS
RESEARCH AND DEVELOPMENT, AND MERGER AND RESTRUCTURING COSTS.
<F2>PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND RESTRUCTURING
COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>INCLUDES PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND
RESTRUCTURING COSTS TOTALING $0.08 PER PRO FORMA SHARE.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF MARCH
31, 1998 AND THE UNAUDITED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 1998, BOTH INCORPORATED BY REFERENCE INTO THE FORM 10-Q OF
SUNGARD DATA SYSTEMS INC. FOR THE THREE MONTHS ENDED MARCH 31, 1998 AS ADJUSTED
TO RESTATE FOR THE POOLINGS OF INTERESTS WITH STERLING WENTWORTH CORPORATION ON
FEBRUARY 18, 1999, AUTOMATED SECURITIES CLEARANCE, LTD. ON MARCH 1, 1999, FDP
CORP. ON APRIL 28, 1999, OSHAP TECHNOLOGIES LTD. ON JULY 15, 1999 AND
PENTAMATION ENTERPRISES, INC. ON AUGUST 17, 1999, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 116,320
<SECURITIES> 41,224
<RECEIVABLES> 293,551
<ALLOWANCES> 20,762
<INVENTORY> 0
<CURRENT-ASSETS> 479,415
<PP&E> 374,445
<DEPRECIATION> 228,746
<TOTAL-ASSETS> 1,022,981
<CURRENT-LIABILITIES> 292,247
<BONDS> 11,762
0
0
<COMMON> 1,197
<OTHER-SE> 717,775
<TOTAL-LIABILITY-AND-EQUITY> 1,022,981
<SALES> 0
<TOTAL-REVENUES> 298,433
<CGS> 0
<TOTAL-COSTS> 183,147<F1>
<OTHER-EXPENSES> 8,147<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 537
<INCOME-PRETAX> 42,988
<INCOME-TAX> 18,476
<INCOME-CONTINUING> 23,720<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,720<F3>
<EPS-BASIC> 0.20<F4>
<EPS-DILUTED> 0.19<F4>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, AND MERGER AND
RESTRUCTURING COSTS.
<F2>MERGER AND RESTRUCTURING COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>INCLUDES MERGER AND RESTRUCTURING COSTS TOTALING $0.06 PER PRO FORMA SHARE.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF DECEMBER 31, 1998
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1998,
BOTH INCLUDED IN THE FORM 10-K OF SUNGARD DATA SYSTEMS INC. FOR THE YEAR ENDED
DECEMBER 31, 1998, AS ADJUSTED TO RESTATE FOR THE POOLINGS OF INTERESTS
WITH STERLING WENTWORTH CORPORATION ON FEBRUARY 18, 1999, AUTOMATED SECURITIES
CLEARANCE, LTD. ON MARCH 1, 1999, FDP CORP. ON APRIL 28, 1999, OSHAP
TECHNOLOGIES LTD. ON JULY 15, 1999 AND PENTAMATION ENTERPRISES, INC. ON AUGUST
17, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 265,011
<SECURITIES> 26,001
<RECEIVABLES> 341,546
<ALLOWANCES> 28,987
<INVENTORY> 0
<CURRENT-ASSETS> 661,885
<PP&E> 416,577
<DEPRECIATION> 267,243
<TOTAL-ASSETS> 1,214,192
<CURRENT-LIABILITIES> 363,898
<BONDS> 9,848
0
0
<COMMON> 1,226
<OTHER-SE> 839,220
<TOTAL-LIABILITY-AND-EQUITY> 1,214,192
<SALES> 0
<TOTAL-REVENUES> 1,312,248
<CGS> 0
<TOTAL-COSTS> 790,110<F1>
<OTHER-EXPENSES> 14,584<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,398
<INCOME-PRETAX> 222,248
<INCOME-TAX> 93,546
<INCOME-CONTINUING> 127,308<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 3,074<F4>
<CHANGES> 0
<NET-INCOME> 130,382<F3>
<EPS-BASIC> 1.08<F5>
<EPS-DILUTED> 1.04<F5>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, PURCHASED IN-PROCESS
RESEARCH AND DEVELOPMENT, AND MERGER AND RESTRUCTURING COSTS.
<F2>PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND RESTRUCTURING
COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>AFTER-TAX GAIN ON DEBT EXTINGUISHMENT.
<F5>INCLUDES PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT, MERGER AND
RESTRUCTURING COSTS TOTALING $0.10 PER PRO FORMA SHARE AND AN EXTRAORDINARY GAIN
ON DEBT EXTINGUISHMENT TOTALING $0.03 PER PRO FORMA BASIC SHARE AND $0.02 PER
PRO FORMA DILUTED SHARE.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF DECEMBER 31, 1997
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997,
BOTH INCORPORATED BY REFERENCE IN THE FORM 10-K OF SUNGARD DATA SYSTEMS INC. FOR
THE YEAR ENDED DECEMBER 31, 1997, AS ADJUSTED TO RESTATE FOR THE POOLINGS OF
INTERESTS WITH STERLING WENTWORTH CORPORATION ON FEBRUARY 18, 1999, AUTOMATED
SECURITIES CLEARANCE, LTD. ON MARCH 1, 1999, FDP CORP. ON APRIL 28, 1999, OSHAP
TECHNOLOGIES LTD. ON JULY 15, 1999 AND PENTAMATION ENTERPRISES, INC. ON AUGUST
17, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 90,916
<SECURITIES> 43,701
<RECEIVABLES> 272,801
<ALLOWANCES> 20,360
<INVENTORY> 0
<CURRENT-ASSETS> 436,334
<PP&E> 351,130
<DEPRECIATION> 216,224
<TOTAL-ASSETS> 973,405
<CURRENT-LIABILITIES> 274,661
<BONDS> 10,618
0
0
<COMMON> 1,189
<OTHER-SE> 686,937
<TOTAL-LIABILITY-AND-EQUITY> 973,405
<SALES> 0
<TOTAL-REVENUES> 1,037,639
<CGS> 0
<TOTAL-COSTS> 634,443<F1>
<OTHER-EXPENSES> 13,669<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,213
<INCOME-PRETAX> 157,681
<INCOME-TAX> 62,947
<INCOME-CONTINUING> 92,902<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,902<F3>
<EPS-BASIC> 0.80<F4>
<EPS-DILUTED> 0.77<F4>
<FN>
<F1>EXCLUDES SELLING, MARKETING, AND ADMINISTRATIVE COSTS, PURCHASED IN-PROCESS
RESEARCH AND DEVELOPMENT, AND MERGER COSTS.
<F2>PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT AND MERGER COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>INCLUDES PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT AND MERGER COSTS
TOTALING $0.08 PER PRO FORMA SHARE. ALSO REFLECTS THE SEPTEMBER 1997
TWO-FOR-ONE STOCK SPLIT.
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF SUNGARD DATA SYSTEMS INC. AS OF DECEMBER 31, 1996
AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996,
BOTH INCLUDED IN THE FORM 10-K OF SUNGARD DATA SYSTEMS INC. FOR THE YEAR ENDED
DECEMBER 31, 1996, AS ADJUSTED TO RESTATE FOR THE POOLINGS OF INTERESTS WITH
STERLING WENTWORTH CORPORATION ON FEBRUARY 18, 1999, AUTOMATED SECURITIES
CLEARANCE, LTD. ON MARCH 1, 1999, FDP CORP. ON APRIL 28, 1999, OSHAP
TECHNOLOGIES LTD. ON JULY 15, 1999 AND PENTAMATION ENTERPRISES, INC. ON AUGUST
17, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 95,192
<SECURITIES> 22,622
<RECEIVABLES> 210,347
<ALLOWANCES> 11,140
<INVENTORY> 0
<CURRENT-ASSETS> 352,591
<PP&E> 290,758
<DEPRECIATION> 171,312
<TOTAL-ASSETS> 843,283
<CURRENT-LIABILITIES> 254,365
<BONDS> 12,750
0
0
<COMMON> 720
<OTHER-SE> 575,448
<TOTAL-LIABILITY-AND-EQUITY> 843,283
<SALES> 0
<TOTAL-REVENUES> 810,067
<CGS> 0
<TOTAL-COSTS> 499,533<F1>
<OTHER-EXPENSES> 51,083<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,028
<INCOME-PRETAX> 106,839
<INCOME-TAX> 34,516
<INCOME-CONTINUING> 70,380<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,380<F3>
<EPS-BASIC> 0.64<F4>
<EPS-DILUTED> 0.61<F4>
<FN>
<F1>EXCLUDES SELLING, MARKETING AND ADMINISTRATIVE COSTS, AND PURCHASED IN-
PROCESS RESEARCH AND DEVELOPMENT COSTS.
<F2>PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT COSTS.
<F3>REPRESENTS PRO FORMA INCOME DUE TO PRO FORMA INCOME TAXES RESULTING FROM A
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>INCLUDES PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT COSTS TOTALING $0.30
PER PRO FORMA BASIC SHARE AND $0.29 PER PRO FORMA DILUTED SHARE. ALSO REFLECTS
THE SEPTEMBER 1997 TWO-FOR-ONE STOCK SPLIT.
</FN>
</TABLE>
