<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 March 31, 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 115,323,033 shares of the registrant's common stock, par value $.01
per share, outstanding at March 31, 1999.
<PAGE>
SUNGARD DATA SYSTEMS INC.
AND SUBSIDIARIES
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1999
(unaudited) and December 31, 1998.......................... 1
Consolidated Statements of Income for the three months
ended March 31, 1999 and 1998 (unaudited).................. 2
Consolidated Statements of Cash Flows for the three months
ended March 31, 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.................................. 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk. 20
Part II. Other Information
Item 1. Legal Proceedings.......................................... 20
Item 2. Changes in Securities...................................... 20
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
<PAGE>
<TABLE>
<CAPTION>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
SunGard Data Systems Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)
March 31,
1999 December 31,
(Unaudited) 1998 (1)
--------------- ----------------
<S> <C> <C>
Assets
Current:
Cash and equivalents................................................................. $ 329,650 $ 252,122
Short-term investments, at cost, which approximates market........................... 16,807 18,802
Trade receivables, less allowance for doubtful accounts of $25,706 and $27,300....... 234,113 247,941
Earned but unbilled receivables...................................................... 45,383 38,534
Prepaid expenses and other current assets............................................ 32,846 31,203
Deferred income taxes................................................................ 27,519 21,570
--------------- ----------------
Total current assets............................................................. 686,318 610,172
Property and equipment, less accumulated depreciation of $264,949 and $254,389.......... 140,615 139,002
Software products, less accumulated amortization of $109,351 and $109,606............... 67,526 72,250
Goodwill, less accumulated amortization of $46,623 and $46,242.......................... 153,444 156,305
Deferred income taxes and other intangible assets, less accumulated
amortization of $64,250 and $60,814.................................................. 228,804 131,067
--------------- ----------------
$ 1,276,707 $ 1,108,796
=============== ================
Liabilities and Stockholders' Equity
Current:
Short-term and current portion of long-term debt..................................... $ 15,665 $ 14,766
Accounts payable..................................................................... 14,518 15,568
Accrued compensation and benefits.................................................... 79,655 89,320
Other accrued expenses............................................................... 53,402 48,967
Accrued income taxes................................................................. 37,117 22,292
Deferred revenues.................................................................... 139,324 138,020
--------------- ----------------
Total current liabilities........................................................ 339,681 328,933
--------------- ----------------
Long-term debt.......................................................................... 2,563 2,816
--------------- ----------------
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;
115,323 and 113,598 shares issued................................................. 1,153 1,136
Capital in excess of par value....................................................... 478,947 281,802
Restricted stock plans............................................................... (1,268) (1,591)
Retained earnings.................................................................... 465,091 503,674
Accumulated other comprehensive loss................................................. (9,460) (6,933)
--------------- ----------------
934,463 778,088
Treasury stock, at cost, 0 and 45 shares.............................................. -- (1,041)
--------------- ----------------
Total stockholders' equity......................................................... 934,463 777,047
--------------- ----------------
$ 1,276,707 $ 1,108,796
=============== ================
(1) Restated for poolings of interests with Automated Securities Clearance, Ltd. and Sterling
Wentworth Corporation.
See accompanying notes
1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SunGard Data Systems Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
--------------------------------
1999 1998 (1)
------------- -------------
Revenues.............................................................$ 319,581 $ 276,303
------------- -------------
<S> <C> <C>
Costs and expenses:
Cost of sales and direct operating................................. 136,085 116,350
Sales, marketing and administration................................ 68,550 59,898
Product development................................................ 28,439 25,817
Depreciation of property and equipment............................. 14,757 13,634
Amortization of intangible assets.................................. 12,083 12,376
Merger costs....................................................... 81,400 8,147
------------- -------------
341,314 236,222
------------- -------------
Income (loss) from operations........................................ (21,733) 40,081
Interest income.................................................... 3,355 1,356
Interest expense................................................... (380) (404)
------------- -------------
Income (loss) before income taxes and extraordinary gain............. (18,758) 41,033
Income taxes....................................................... 25,496 18,040
------------- -------------
Net income (loss) before extraordinary gain ......................... (44,254) 22,993
Extraordinary gain on sale of subsidiaries, net of income
taxes of $6,096................................................. 10,371 --
------------- -------------
Net income (loss) ...................................................$ (33,883) $ 22,993
============= =============
Pro forma net income (loss)..........................................$ (6,949) $ 22,201
============= =============
Pro forma basic net income (loss) per common share:
Before extraordinary item.........................................$ (0.15) $ 0.20
============= =============
After extraordinary item..........................................$ (0.06) $ 0.20
============= =============
Pro forma diluted net income (loss) per common share:
Before extraordinary item.........................................$ (0.15) $ 0.19
============= =============
After extraordinary item..........................................$ (0.06) $ 0.19
============= =============
Shares used to compute pro forma net income (loss) per common share:
Basic............................................................. 114,945 110,355
============= =============
Diluted........................................................... 114,945(2) 115,491
============= =============
(1) Restated for poolings of interests with Automated Securities Clearance, Ltd. and Sterling
Wentworth Corporation.
(2) Excludes 4,388 shares which are anti-dilutive because of a net loss during the quarter.
See accompanying notes
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SunGard Data Systems Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
------------------------------
1999 1998 (1)
---------------- -------------
<S> <C> <C>
Cash flow from operations:
Net income (loss)..................................................................... $ (33,883) $ 22,993
Reconciliation of net income to cash flow from operations:
Depreciation and amortization...................................................... 26,840 26,010
Extraordinary gain on sale of subsidiaries, net of income taxes.................... (10,371) --
Noncash compensation charge resulting from acquisition of ASC...................... 71,459 --
Other noncash charges.............................................................. 3,249 3,117
Deferred income tax benefit........................................................ (3,996) (2,688)
Accounts receivable and other current assets....................................... 727 (19,183)
Accounts payable and accrued expenses.............................................. 5,173 8,613
Deferred revenues.................................................................. 3,059 7,228
---------------- -------------
Cash flow from operations........................................................ 62,257 46,090
---------------- -------------
Financing activities:
Cash received under employee stock plans.............................................. 13,439 6,324
Cash received from borrowings......................................................... 3,006 50
Pre-acquisition cash distributions to shareholders of acquired "S" corporations, net.. (2,922) (1,223)
Cash paid for debt repayments......................................................... (2,434) (1,686)
---------------- -------------
Total financing activities....................................................... 11,089 3,465
---------------- -------------
Investment activities:
Cash paid for acquired businesses, net of cash acquired............................... (563) (1,288)
Cash paid for property and equipment.................................................. (16,942) (23,207)
Cash paid for software and other assets............................................... (5,308) (2,254)
Cash paid for purchase of short-term investments...................................... -- (6,734)
Cash received from sale of subsidiaries............................................... 25,000 --
Cash received from sales and maturities of short-term investments..................... 1,995 8,671
---------------- -------------
Total investment activities...................................................... 4,182 (24,812)
---------------- -------------
Increase in cash and equivalents........................................................ 77,528 24,743
Beginning cash and equivalents.......................................................... 252,122 84,087
---------------- -------------
Ending cash and equivalents............................................................. $ 329,650 $ 108,830
================ =============
Supplemental information:
Acquired businesses:
Property and equipment............................................................. 503 24
Software products.................................................................. 650 --
Goodwill and other intangible assets............................................... 160 2,025
Deferred income taxes.............................................................. 103,004 --
Purchase price obligations and debt assumed........................................ (107) --
Net current liabilities assumed.................................................... (1,193) (761)
Common stock issued and net equity acquired in poolings of interests .............. (102,454) --
---------------- -------------
Cash paid for acquired businesses, net of cash acquired................................. $ 563 $ 1,288
================ =============
(1) Restated for poolings of interests with Automated Securities Clearance, Ltd. and Sterling Wentworth
Corporation.
See accompanying notes
3
</TABLE>
<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 three month period
ended March 31, 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:
POOLING-OF-INTERESTS TRANSACTIONS:
During the first three months of 1999, the Company completed the
acquisitions of Automated Securities Clearance, Ltd. (ASC), Sterling Wentworth
Corporation (SWC), Tiger Systems, Inc. (Tiger), and DollarMark Solutions, Inc.
(DollarMark). A total of 8,497,000 shares of common stock were issued in
connection with these acquisitions, and all issued and outstanding options to
buy common stock were converted into options to buy 1,400,000 shares of SunGard
common stock. Except for the merger costs described below, the Company does not
expect that these acquisitions will have a material effect on its financial
condition or results of operations.
The four 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 and SWC.
Historical financial information has not been restated for the acquisitions of
Tiger and DollarMark due to immateriality. These two acquisitions were recorded
as of January 1, 1999.
The Company and the former shareholder of ASC have jointly 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, the fair value of the
intangible assets acquired over the next fifteen years. 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 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 $103,000,000.
4
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. ACQUISITIONS, MERGER COSTS AND SALE OF SUBSIDIARIES, CONTINUED:
POOLING-OF-INTERESTS TRANSACTIONS, CONTINUED:
ASC was an "S" corporation prior to the merger with the Company; therefore,
all income passed through directly to and all income taxes were paid directly by
the 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 that pro forma income taxes, which would have been incurred by ASC if
ASC had been a "C" corporation, be reflected on the Consolidated Statements of
Income for all periods presented.
On March 9, 1999, the Company signed an agreement to acquire Oshap
Technologies Ltd. (Oshap). Oshap is an Israeli-based technology company which
has two principal majority-owned subsidiaries. One majority-owned subsidiary,
MINT Software Technologies Ltd. (MINT), is a leading provider to the financial
services industry of software solutions that enable the integration of disparate
applications and networks. The other majority-owned subsidiary, Decalog N.V.
(Decalog), provides comprehensive software solutions that enable global asset
management organizations to automate critical steps in the investment management
process. The acquisition is expected to be accounted for as a pooling of
interests. A maximum of approximately 5,750,000 shares of SunGard common stock
will be issued in connection with the acquisition of Oshap. The Company will
also offer to acquire the minority interests in MINT and Decalog at a fixed
price, which could result in an additional issuance of approximately 450,000
shares of SunGard common stock, plus a cash payment of between $25,000,000 and
$35,000,000. Also, options to buy common stock of MINT and Decalog will be
converted into approximately 500,000 options to buy shares of common stock of
the Company. Total merger costs in connection with this acquisition, consisting
primarily of investment banking, legal, accounting, and printing fees, are
estimated to be approximately $5,000,000. These merger costs, which generally
are not deductible for income tax purposes, will be recorded as an operating
expense during the quarter in which the acquisition is completed, which is
expected to be the third quarter of 1999. The acquisition of the minority
interests will result in recording intangible assets of approximately
$51,000,000.
During the year ended December 31, 1998, Oshap recorded total revenues of
$32,319,000, and a net loss (before an extraordinary gain, which totalled
$3,074,000 after-tax) of $1,902,000. During the three months ended March 31,
1999, Oshap recorded total revenues of $10,599,000, and a net loss of
$3,303,000. The net loss during the three months ended March 31, 1999 includes
a write-off of approximately $2,020,000 (both before and after-tax) for fees
incurred in connection with the aborted initial public offerings of MINT and
Decalog, which had been planned prior to the Company signing an agreement to
acquire Oshap, and $1,500,000 for Oshap's proportional share of one-time after-
tax items incurred by Tecnomatix Technologies Ltd., a minority-owned investment.
During the three months ended March 31, 1998, Oshap recorded total revenues of
$6,426,000 and net income of $463,000.
5
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. ACQUISITIONS, MERGER COSTS AND SALE OF SUBSIDIARIES, CONTINUED:
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>
THREE MONTHS
ENDED
MARCH 31, 1998
--------------
<S> <C>
REVENUES:
SunGard, as originally reported $264,553
ASC and SWC 11,750
--------
Combined $276,303
========
PRO FORMA NET INCOME:
SunGard, as originally reported $ 19,796
ASC and SWC 2,405
--------
Combined $ 22,201
========
PRO FORMA BASIC NET INCOME PER COMMON
SHARE:
SunGard, as originally reported $ 0.19
========
Combined $ 0.20
========
PRO FORMA DILUTED NET INCOME PER COMMON
SHARE:
SunGard, as originally reported $ 0.19
========
Combined $ 0.19
========
</TABLE>
During the first three months of 1998, the Company completed the
acquisition of Infinity Financial Technology, Inc. (Infinity). A total of
13,223,000 shares of common stock were issued in connection with the
acquisition. The acquisition was accounted for as a pooling of interests, and
all historical financial information of the Company was restated to include the
historical financial information of Infinity.
PURCHASE TRANSACTIONS:
During the first three months of 1999, the Company completed the purchase
of an insurance software system product line. Total cash paid in connection
with this acquisition was $796,000, with no goodwill recorded.
6
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. ACQUISITIONS, MERGER COSTS AND SALE OF SUBSIDIARIES, CONTINUED:
PURCHASE TRANSACTIONS, CONTINUED:
During the first three months of 1998, the Company completed the purchase
of a disaster recovery professional services business. Total cash paid in
connection with this acquisition was $1,288,000. Goodwill recorded in
connection with this acquisition was $744,000.
MERGER COSTS:
During the three months ended March 31, 1999 and 1998, the Company recorded
merger costs of $81,400,000 ($54,960,000 pro forma after-tax, or $0.46 per pro
forma diluted share) and $8,147,000 ($7,048,000 after-tax, or $0.06 per pro
forma diluted share), respectively.
The 1999 merger costs are associated with poolings of interests, and
include a noncash compensation charge of $71,459,000 ($0.38 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 ($0.01 per pro forma diluted share)
associated with 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 consist primarily of
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
provide healthcare information systems. Total cash received in connection with
the sale was $25,000,000, resulting in an after-tax gain of $10,371,000 ($0.09
per pro forma diluted share). The gain on sale was reflected on the
Consolidated Statements of Income as an extraordinary item since generally
accepted accounting principles require that a sale of assets following a
recently completed business combination that was accounted for as a pooling of
interests be reported as an extraordinary item. The Company does not expect
that the sale of the two subsidiaries described above 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)
3. SUBSEQUENT EVENT:
On April 28, 1999, the Company issued 2,841,000 shares of common stock in
exchange for all of the common stock of FDP Corp. (FDP). The acquisition will
be accounted for as a pooling of interests, and all historical financial
information of the Company will be restated to include the historical financial
information of FDP. The transaction is not expected to have a material effect
on the Company's financial condition or results of operations.
4. SHARES USED IN COMPUTING PRO FORMA NET INCOME (LOSS) PER COMMON SHARE:
The computation of the number of shares used in computing pro forma basic
and diluted net income (loss) per common share for each of the three months
ended March 31, 1999 and 1998 follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
-------------------
1999(a) 1998
---------- -------
<S> <C> <C>
Weighted-average number of common shares
outstanding 114,645 110,268
Contingent shares 300 87
------- -------
Total shares used for calculation of pro
forma basic net income (loss) per
common share 114,945 110,355
Employee stock options (a) - 5,083
Contingent stock options (a) - 53
------- -------
Total shares used for calculation of pro
forma diluted net income (loss) per
common share 114,945 115,491
======= =======
</TABLE>
(a) Diluted shares for the three months ended March 31, 1999 exclude 4,218
employee stock options and 170 contingent stock options, which are anti-dilutive
because of a net loss during the quarter.
8
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. UNAUDITED SUPPLEMENTAL 1998 AND 1999 QUARTERLY FINANCIAL AND SEGMENT
INFORMATION RESTATED FOR POOLINGS OF INTERESTS:
The following unaudited supplemental 1998 quarterly financial information
(in thousands, except per share amounts) has been restated for the 1999
poolings of interests with ASC, SWC and FDP, and should be read in conjunction
with the 1998 Form 10-K. The following unaudited supplemental financial
information for the three months ended March 31, 1999 (in thousands, except per
share amounts) has been restated for the April 1999 pooling of interests with
FDP.
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
1998 (1) 1998 (1) 1998 (1) 1998 (1)
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Revenues............................................... $ 285,493 $ 303,888 $ 314,704 $ 348,506
-------------- ------------- ------------- --------------
Costs and expenses:
Cost of sales and direct operating................... 121,267 128,262 130,392 138,731
Sales, marketing and administration.................. 61,197 65,426 67,174 76,461
Product development.................................. 27,638 29,829 29,168 38,043
Depreciation of property and equipment............... 13,933 14,483 15,016 14,869
Amortization of intangible assets.................... 12,393 11,993 13,041 15,228
Merger costs......................................... 8,147 600 3,100 -
-------------- ------------- ------------- --------------
244,575 250,593 257,891 283,332
-------------- ------------- ------------- --------------
Income (loss) from operations.......................... 40,918 53,295 56,813 65,174
Interest income...................................... 1,647 1,914 2,208 2,949
Interest expense..................................... (411) (359) (340) (693)
-------------- ------------- ------------- --------------
Income (loss) before income taxes and extraordinary gain 42,154 54,850 58,681 67,430
Income taxes......................................... 18,432 21,896 23,729 29,090
-------------- ------------- ------------- --------------
Net income (loss) before extraordinary gain ........... 23,722 32,954 34,952 38,340
Extraordinary gain on sale of subsidiaries, net of
income taxes of $6,096............................ - - - -
-------------- ------------- ------------- --------------
Net income (loss) ..................................... $ 23,722 $ 32,954 $ 34,952 $ 38,340
============== ============= ============= ==============
Pro forma net income (loss)............................ $ 22,930 $ 32,427 $ 34,344 $ 38,873
============== ============= ============= ==============
Pro forma basic net income (loss) per common share:
Before extraordinary item........................... $ 0.20 $ 0.28 $ 0.30 $ 0.34
============== ============= ============ =============
After extraordinary item............................ $ 0.20 $ 0.28 $ 0.30 $ 0.34
============== ============= ============ =============
Pro forma diluted net income (loss) per common share:
Before extraordinary item........................... $ 0.19 $ 0.27 $ 0.29 $ 0.32
============= ============= ============ =============
After extraordinary item............................ $ 0.19 $ 0.27 $ 0.29 $ 0.32
============= ============= ============ =============
Shares used to compute pro forma net income per
common share:
Basic............................................... 112,748 114,001 115,277 115,853
============= ============= ============ =============
Diluted............................................. 118,006 118,996 120,331 120,455
============= ============= ============ =============
Three
Year Months
Ended Ended
---------------- -------------
Dec. 31, March 31,
1998 (1) 1999 (2)
---------------- -------------
Revenues............................................... $ 1,252,591 $ 331,788
---------------- -------------
Costs and expenses:
Cost of sales and direct operating.................... 518,652 142,731
Sales, marketing and administration................... 270,258 70,423
Product development................................... 124,678 30,229
Depreciation of property and equipment................ 58,301 15,129
Amortization of intangible assets..................... 52,655 12,300
Merger costs.......................................... 11,847 81,400(3)
---------------- -------------
1,036,391 352,212
---------------- -------------
Income (loss) from operations........................... 216,200 (20,424)
Interest income....................................... 8,718 3,656
Interest expense...................................... (1,803) (381)
---------------- -------------
Income (loss) before income taxes and extraordinary gain 223,115 (17,149)
Income taxes.......................................... 93,147 26,011
---------------- -------------
Net income (loss) before extraordinary gain ............ 129,968 (43,160)
Extraordinary gain on sale of subsidiaries, net of
income taxes of $6,096............................. - 10,371
---------------- -------------
Net income (loss) ...................................... $ 129,968 $ (32,789)
================ =============
Pro forma net income (loss)............................. $ 128,574 $ (5,855)
================ =============
Pro forma basic net income (loss) per common share:
Before extraordinary item............................ $ 1.12 $ (0.14)
================ =============
After extraordinary item............................. $ 1.12 $ (0.05)
================ =============
Pro forma diluted net income (loss) per common share:
Before extraordinary item............................ $ 1.08 $ (0.14)
================ =============
After extraordinary item............................. $ 1.08 $ (0.05)
================ =============
Shares used to compute pro forma net income per
common share:
Basic................................................ 114,467 117,489
================ =============
Diluted.............................................. 119,512 117,489(4)
================ =============
(1)Restated for 1999 poolings of interests with ASC, SWC and FDP.
(2)Restated for April 1999 pooling of interests with FDP.
(3)Excludes estimated merger costs of $1,500 related to the pooling of interests with FDP,
which will be recorded during the second quarter of 1999.
(4)Excludes 4,498 shares which are anti-dilutive because of a net loss during the quarter.
</TABLE>
9
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. UNAUDITED SUPPLEMENTAL 1998 AND 1999 QUARTERLY FINANCIAL AND SEGMENT
INFORMATION RESTATED FOR POOLINGS OF INTERESTS, CONTINUED:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------------
March 31, June 30, Sept. 30, Dec. 31,
Revenues: 1998 (1) 1998 (1) 1998 (1) 1998 (1)
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment support systems............................ $ 201,175 $ 217,924 $ 224,989 $ 253,630
Disaster recovery services............................ 62,576 67,183 70,352 75,171
Computer services and other .......................... 21,742 18,781 19,363 19,705
-------------- ------------- ------------- --------------
$ 285,493 $ 303,888 $ 314,704 $ 348,506
============== ============= ============= ==============
Income from operations:
Investment support systems............................ $ 38,919 $ 41,594 $ 42,199 $ 41,833
Disaster recovery services............................ 10,213 13,028 18,256 23,357
Computer services and other .......................... 2,971 2,418 3,314 3,803
Corporate administration.............................. (3,038) (3,145) (3,856) (3,819)
Merger costs.......................................... (8,147) (600) (3,100) -
-------------- ------------- ------------- --------------
$ 40,918 $ 53,295 $ 56,813 $ 65,174
============== ============= ============= ==============
Operating margin:
Investment support systems............................ 19.3% 19.1% 18.8% 16.5%
Disaster recovery services............................ 16.3% 19.4% 25.9% 31.1%
Computer services and other .......................... 13.7% 12.9% 17.1% 19.3%
Total................................................. 14.3% 17.5% 18.1% 18.7%
Total, excluding merger costs......................... 17.2% 17.7% 19.0% 18.7%
Three
Year Months
Ended Ended
---------------- -------------
Dec. 31, March 31,
Revenues: 1998 (1) 1999 (2)
---------------- -------------
Investment support systems............................ $ 897,718 $ 238,899
Disaster recovery services............................ 275,282 74,719
Computer services and other .......................... 79,591 18,170
---------------- -------------
$ 1,252,591 $ 331,788
================ =============
Income from operations:
Investment support systems............................ $ 164,545 $ 50,130
Disaster recovery services............................ 64,854 13,202
Computer services and other .......................... 12,506 1,741
Corporate administration.............................. (13,858) (4,097)
Merger costs.......................................... (11,847) (81,400)(3)
---------------- -------------
$ 216,200 $ (20,424)
================ =============
Operating margin:
Investment support systems............................ 18.3% 21.0%
Disaster recovery services............................ 23.6% 17.7%
Computer services and other .......................... 15.7% 9.6%
Total................................................. 17.3% -6.2%
Total, excluding merger costs......................... 18.2% 18.4%
</TABLE>
(1)Restated for 1999 poolings of interests with ASC, SWC and FDP.
(2)Restated for April 1999 pooling of interests with FDP.
(3)Excludes estimated merger costs of $1,500 related to the
pooling of interests with FDP, which will be recorded during
the second quarter of 1999.
10
<PAGE>
SUNGARD DATA SYSTEMS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
6. COMPREHENSIVE INCOME:
Comprehensive income consists of net income, adjusted for other increases
and decreases affecting stockholders' equity that, under generally accepted
accounting principles, are excluded from the determination of net income. The
calculation of comprehensive income for each of the three months ended March 31,
1999 and 1998 follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Pro forma net income (loss) $(6,949) $22,201
Foreign currency translation loss (2,527) (359)
Estimated income tax benefit 1,028 145
------- -------
Comprehensive pro forma net income (loss) $(8,448) $21,987
======= =======
</TABLE>
11
<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 timing and scope of technological advances and year 2000 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 the three months ended March 31, 1999 and 1998, the Company recorded
merger costs of $81,400,000 and $8,147,000 ($54,960,000 pro forma after-tax, or
$0.46 per pro forma diluted share, and $7,048,000 after-tax, or $0.06 per pro
forma diluted share, respectively). The 1999 merger costs include a noncash
compensation charge of $71,459,000 ($0.38 per pro forma diluted share) related
to a pre-existing employment agreement with an executive of Automated Securities
Clearance, Ltd. (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. ASC was an "S"
corporation prior to the merger with SunGard; therefore, all income passed
through directly to and all income taxes were paid directly by the 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 that pro
forma income taxes, which would have been paid by ASC if ASC had been a "C"
corporation, be reflected on the Statement of Income for all periods presented.
The 1998 merger costs include $2,700,000 ($0.01 per pro forma diluted
share) for restructuring costs associated with the merger with Infinity
Financial Technology, Inc. These costs were for severance associated with the
elimination of duplicate development and administrative functions, and costs
for the closing of duplicate office facilities.
The balance of the 1999 and 1998 merger costs consist primarily of
investment banking, legal, accounting and printing fees that generally are not
deductible for income tax purposes.
On March 31, 1999, the Company sold two wholly-owned healthcare information
systems subsidiaries, Intelus Corporation and Med Data Systems, Inc. Total cash
received in connection with the sale was $25,000,000, resulting in an after-tax
gain of $10,371,000 ($0.09 per pro forma diluted share). The gain on sale was
reflected on the Consolidated Statements of Income as an extraordinary item
since generally accepted accounting principles require that a sale of assets
following a business combination that was accounted for as a pooling of
interests be reported as an extraordinary item.
12
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Continued)
The following supplemental unaudited income statement information and the
following discussion of income from operations excludes all of the charges to
operations and the extraordinary gain on sale of subsidiaries described above.
The following supplemental unaudited income statement information should be read
along with the consolidated unaudited financial statements and notes thereto
included in this report. All 1998 financial information has been restated for
the poolings of interests with ASC and SWC.
SUNGARD DATA SYSTEMS INC.
SUPPLEMENTAL INCOME STATEMENT INFORMATION
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31,
----------------------
<S> <C> <C>
Revenues: 1999 1998
-------- --------
Investment support systems $226,692 $191,985
Disaster recovery services 74,719 62,576
Computer services and other 18,170 21,742
-------- --------
$319,581 $276,303
======== ========
Income (loss) from operations:
Investment support systems $ 48,821 $ 38,082
Disaster recovery services 13,202 10,213
Computer services and other 1,741 2,971
Corporate administration (4,097) (3,038)
Merger costs (81,400) (8,147)
-------- --------
$(21,733) $ 40,081
======== ========
Operating margin, excluding merger costs:
Investment support systems 21.5% 19.8%
======== ========
Disaster recovery services 17.7% 16.3%
======== ========
Computer services and other 9.6% 13.7%
======== ========
Total 18.7% 17.5%
======== ========
</TABLE>
13
<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 more than forty-five operating
units of various size and complexity. 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. Since overall ISS
results reflect the sum of the diverse results of individual operating units,
there could be an adverse impact on ISS revenues and margins if too many
individual units are unable to meet expectations.
The ISS operating margin was 21.5% for the three month period ended March
31, 1999, as compared with 19.8% for the comparable period in 1998. The
increase in the operating margin is due primarily to an increase in professional
services revenues, productivity improvements, and, to a lesser extent, an
increase in software license revenues.
The Company expects that the full-year 1999 ISS operating margin will be
slightly higher than the full-year 1998 ISS operating margin. 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 17.7% during the three month period ended
March 31, 1999, as compared with 16.3% for the comparable period in 1998. The
increase in the operating margin is due primarily to an increase in revenues,
especially in connection with mid-range, work-group recovery and network
services, and a favorable settlement of a contract dispute, partially offset by
equipment additions and upgrades, an increase 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 facilities
expenditures.
14
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
INCOME FROM OPERATIONS, CONTINUED:
Computer Services and Other (CS):
The CS operating margin was 9.6% during the three month period ended March
31, 1999, as compared with 13.7% for the comparable period in 1998. The
decrease in the operating margin is due to a decline in revenues in the
Company's healthcare information systems (HIS) business, and an increase in
operating costs associated with equipment upgrades in the Company's remote-
access computer processing business. On March 31, 1999, the Company sold two
subsidiaries which provide healthcare information systems (see Note 2 of Notes
to Unaudited Consolidated Financial Statements).
The Company expects that the 1999 full-year CS operating margin will
approximate 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
product, and revenue variability and timing of computer upgrades in both remote-
access computer processing and automated mailing services businesses.
REVENUES:
Total revenues for the three month period ended March 31, 1999 increased
$43.3 million, or 16%, as compared with the corresponding period in 1998.
Excluding acquired businesses, revenues increased approximately 12% during the
three month period compared with the corresponding period in 1998. Excluding
the restatement of 1998 revenues for the poolings of interests with ASC and SWC,
total revenues increased 21%.
Recurring revenues derived from computer processing, disaster recovery
fees, professional services, software maintenance, and software and hardware
rentals were $269.3 million, or 84% of total revenues, as compared with $224.4
million, or 81% of total revenues, during the comparable period in 1998.
Professional services revenues totaled $56.6 million during the three month
period ended March 31, 1999, as compared with $39.8 million during the
comparable period in 1998. The increase in professional services revenues is
due primarily to large installation and conversions of trust shareholder
accounting and non-profit enterprise resource planning systems, and acquired
businesses.
Nonrecurring revenues, derived from software licenses and sales of third-
party software and hardware, were $50.3 million during the three month period
ended March 31, 1999, as compared with $51.9 million during the comparable
period in 1998. Software license revenues totaled $44.6 million during the
three month period ended March 31, 1999, as compared with $42.7 million during
the comparable period in 1998. The increase in software license revenues was
due primarily to investment support systems businesses acquired in 1998. The
decline in third-party software and
15
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
REVENUES, CONTINUED:
hardware is primarily related to the timing and magnitude of system
installations in the Company's HIS businesses.
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 three month period ended March 31, 1999 increased
$34.7 million, or 18%, as compared with the corresponding period in 1998. The
increases in ISS revenues during the three month period is attributable to
increases in recurring revenues of $32.7 million, and an increase in
nonrecurring revenues of $2.0 million. Excluding acquired businesses, revenues
increased approximately 14% during the three month period ended March 31, 1999,
compared with the corresponding period in 1998. Excluding the restatement of
1998 revenues for the poolings of interests with ASC and SWC, ISS revenues
increased 26%.
Disaster Recovery Services:
DRS revenues for the three month period ended March 31, 1999 increased
$12.1 million, or 19%, as compared with the corresponding period in 1998. The
increase, virtually all of which is internal growth, is attributable primarily
to increases in revenues resulting from new contract signings and contract
renewals, and to growth in mid-range, work-group recovery and network services.
Computer Services and Other:
CS revenues for the three month period ended March 31, 1999 decreased $3.6
million, or 16%, as compared with the corresponding period in 1998. The
decrease is due to a decline in revenues in the Company's HIS businesses, offset
partially by an increase in the Company's remote access computer services
business. On March 31, 1999, the Company sold two subsidiaries which provide
healthcare information systems (see Note 2 of Notes to Unaudited Consolidated
Financial Statements).
COSTS AND EXPENSES:
Cost of sales and direct operating expenses for the three month period
ended March 31, 1999 increased $19.7 million, or 17%, as compared with the
corresponding period in 1998. The increase is due primarily to an increase in
professional services provided to customers, DRS and ISS equipment upgrades and
DRS facilities improvements, and acquired businesses.
16
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
COSTS AND EXPENSES, CONTINUED:
Sales, marketing and administration expenses for the three month period
ended March 31, 1999 increased $8.7 million, or 14%, as compared with the
corresponding period in 1998. The increase is due primarily to acquired
businesses, and DRS severance costs and incremental sales employees hired during
the past year.
Product development expenses for the three month period ended March 31,
1999 increased $2.6 million, or 10%, as compared with the corresponding period
in 1998. The increase is due primarily to an increase in development spending
in connection with various ISS products and acquired businesses. Development
costs capitalized during the three month periods ended March 31, 1999 and 1998
were $100 thousand and $700 thousand, respectively.
Depreciation of property and equipment for the three month period ended
March 31, 1999 increased $1.1 million, or 8%, as compared with the corresponding
period in 1998. The increase is due primarily to purchases of computer and
telecommunications equipment and acquired businesses.
Amortization of intangible assets for the three month period ended March
31, 1999 decreased $300 thousand, or 2%, as compared with the corresponding
period in 1998. The decline is due primarily to fully amortized intangible
assets of previously acquired businesses.
Interest income for the three month period ended March 31, 1999 increased
$2.0 million, or 147%, as compared with the corresponding period in 1998. The
increase is due to higher cash and short-term investment balances.
Excluding the effect of merger costs, which are generally nondeductible,
and the extraordinary gain resulting from the sale of subsidiaries, the
Company's pro forma effective income tax rate was 40.7% for the three month
period ended March 31, 1999, as compared with a pro forma effective income tax
rate of 40.5% during the three month period ended March 31, 1998, and a full-
year 1998 effective income tax rate, excluding merger costs, of 40.7%.
Due to the pooling of interests with ASC (an "S" corporation prior to the
merger with the Company) during the first quarter of 1999, 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 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 three month period ended March 31, 1999 is primarily
attributable to the one-time noncash compensation charge in connection with the
ASC acquisition (see Note 2 of Notes to Unaudited Consolidated Financial
Statements).
17
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES:
Cash and short-term investments were $346.5 million at March 31, 1999, an
increase of $75.5 million from December 31, 1998. At March 31, 1999, short and
long-term debt totalled $18.2 million, an increase of $646 thousand from
December 31, 1998.
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 is required to identify each item that must be modified or
replaced, establish a plan to complete and test all required modifications and
replacements, and then implement 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 is 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.
Many 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, however, is still working on year 2000 compliance projects for some of
its important products. The Company estimates that modification and testing for
approximately 95% of its software products were substantially completed as of
March 31, 1999. The Company's goal is to substantially complete modification
and testing for all of its software products by June 30, 1999. Nevertheless,
year 2000 compliance testing will continue throughout 1999 for many of its
products, which may uncover the need for additional modifications. In addition
to its internal testing, the Company is participating 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
throughout 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.
18
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Continued)
YEAR 2000 ISSUES, CONTINUED:
The Company believes that year 2000 compliance issues have caused some
acceleration of software buying and conversion activity, and, therefore, that
the Company's rate of internal growth may decline in the second half of 1999 or
in the year 2000.
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 recent 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 $25.0 million in
direct labor and benefit costs for modification and testing activities, plus
approximately $12.0 million in capital expenditures. Through March 31, 1999,
the Company has spent approximately $18.0 million in direct labor and benefit
costs for modification and testing, plus approximately $3.0 million in capital
expenditures. The remaining estimated direct labor and benefit costs for
modification and testing activities of approximately $7.0 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 $9.0 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.
19
<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 23% of the Company's 1998 revenues came from sales to
customers located outside of the United States, more than half of those sales
were 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: None
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:
<TABLE>
<S> <C>
27.1 Financial Data Schedule for the quarter ended March 31, 1999
27.2 Financial Data Schedule for the quarter ended March 31, 1998 (restated)
27.3 Financial Data Schedule for the quarter ended June 30, 1998 (restated)
27.4 Financial Data Schedule for the quarter ended September 30, 1998 (restated)
27.5 Financial Data Schedule for the year ended December 31, 1998 (restated)
27.6 Financial Data Schedule for the year ended December 31, 1997 (restated)
27.7 Financial Data Schedule for the year ended December 31, 1996 (restated)
</TABLE>
(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: May 14, 1999 By: s/Michael J. Ruane
-----------------------------------------------
Michael J. Ruane
Vice President-Finance and Chief Financial Officer
(Principal Financial Officer)
21
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
NUMBER EXHIBIT
- ------ -------
<S> <C>
27.1 Financial Data Schedule for the quarter ended March 31, 1999
27.2 Financial Data Schedule for the quarter ended March 31, 1998 (restated)
27.3 Financial Data Schedule for the quarter ended June 30, 1998 (restated)
27.4 Financial Data Schedule for the quarter ended September 30, 1998 (restated)
27.5 Financial Data Schedule for the year ended December 31, 1998 (restated)
27.6 Financial Data Schedule for the year ended December 31, 1997 (restated)
27.7 Financial Data Schedule for the year ended December 31, 1996 (restated)
</TABLE>
22
<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, 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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 329,650
<SECURITIES> 16,807
<RECEIVABLES> 305,202
<ALLOWANCES> 25,706
<INVENTORY> 0
<CURRENT-ASSETS> 686,318
<PP&E> 405,564
<DEPRECIATION> 264,949
<TOTAL-ASSETS> 1,276,707
<CURRENT-LIABILITIES> 339,681
<BONDS> 2,563
0
0
<COMMON> 1,153
<OTHER-SE> 933,310
<TOTAL-LIABILITY-AND-EQUITY> 1,276,707
<SALES> 0
<TOTAL-REVENUES> 319,581
<CGS> 0
<TOTAL-COSTS> 191,364 <F1>
<OTHER-EXPENSES> 81,400 <F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 380
<INCOME-PRETAX> (18,758)
<INCOME-TAX> 25,496
<INCOME-CONTINUING> (17,320)<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 10,371 <F4>
<CHANGES> 0
<NET-INCOME> (6,949)<F3>
<EPS-PRIMARY> (0.06)<F5>
<EPS-DILUTED> (0.06)<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
POOLING OF INTERESTS WITH AN "S" CORPORATION.
<F4>AFTER-TAX GAIN ON SALE OF TWO SUBSIDIARIES.
<F5>INCLUDES MERGER COSTS TOTALING $0.48 PER PRO FORMA BASIC
SHARE AND $0.46 PER PRO FORMA DILUTED SHARE, AND AN EXTRAORDINARY GAIN ON SALE
OF TWO SUBSIDIARIES TOTALING $0.09 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 AND AUTOMATED SECURITIES CLEARANCE, LTD. ON MARCH 1, 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> 108,830
<SECURITIES> 24,375
<RECEIVABLES> 269,643
<ALLOWANCES> 20,241
<INVENTORY> 0
<CURRENT-ASSETS> 428,049
<PP&E> 355,382
<DEPRECIATION> 218,224
<TOTAL-ASSETS> 918,024
<CURRENT-LIABILITIES> 265,845
<BONDS> 2,835
0
0
<COMMON> 1,108
<OTHER-SE> 648,213
<TOTAL-LIABILITY-AND-EQUITY> 918,024
<SALES> 0
<TOTAL-REVENUES> 276,303
<CGS> 0
<TOTAL-COSTS> 168,177<F1>
<OTHER-EXPENSES> 8,147<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 404
<INCOME-PRETAX> 41,033
<INCOME-TAX> 18,040
<INCOME-CONTINUING> 22,201<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,201<F3>
<EPS-PRIMARY> 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
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 AND AUTOMATED SECURITIES CLEARANCE, LTD. ON MARCH 1, 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> 140,187
<SECURITIES> 23,285
<RECEIVABLES> 295,276
<ALLOWANCES> 25,308
<INVENTORY> 0
<CURRENT-ASSETS> 483,382
<PP&E> 372,998
<DEPRECIATION> 234,722
<TOTAL-ASSETS> 965,883
<CURRENT-LIABILITIES> 269,421
<BONDS> 2,769
0
0
<COMMON> 1,120
<OTHER-SE> 692,573
<TOTAL-LIABILITY-AND-EQUITY> 965,883
<SALES> 0
<TOTAL-REVENUES> 570,517
<CGS> 0
<TOTAL-COSTS> 345,471<F1>
<OTHER-EXPENSES> 8,747<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 734
<INCOME-PRETAX> 94,467
<INCOME-TAX> 39,439
<INCOME-CONTINUING> 53,709<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,709<F3>
<EPS-PRIMARY> 0.48<F4>
<EPS-DILUTED> 0.46<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 $0.07 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
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 AND AUTOMATED SECURITIES CLEARANCE,
LTD. ON MARCH 1, 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> 187,244
<SECURITIES> 21,077
<RECEIVABLES> 311,926
<ALLOWANCES> 34,272
<INVENTORY> 0
<CURRENT-ASSETS> 539,732
<PP&E> 387,423
<DEPRECIATION> 250,009
<TOTAL-ASSETS> 1,038,505
<CURRENT-LIABILITIES> 298,458
<BONDS> 3,002
0
0
<COMMON> 1,133
<OTHER-SE> 735,912
<TOTAL-LIABILITY-AND-EQUITY> 1,038,505
<SALES> 0
<TOTAL-REVENUES> 874,954
<CGS> 0
<TOTAL-COSTS> 525,703<F1>
<OTHER-EXPENSES> 11,847<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,058
<INCOME-PRETAX> 114,382
<INCOME-TAX> 62,593
<INCOME-CONTINUING> 86,985<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 86,985<F3>
<EPS-PRIMARY> 0.77<F4>
<EPS-DILUTED> 0.74<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 $0.09 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 AND AUTOMATED
SECURITIES CLEARANCE, LTD. ON MARCH 1, 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> 252,122
<SECURITIES> 18,802
<RECEIVABLES> 313,775
<ALLOWANCES> 27,300
<INVENTORY> 0
<CURRENT-ASSETS> 610,172
<PP&E> 393,391
<DEPRECIATION> 254,389
<TOTAL-ASSETS> 1,108,796
<CURRENT-LIABILITIES> 328,930
<BONDS> 2,816
0
0
<COMMON> 1,136
<OTHER-SE> 775,913
<TOTAL-LIABILITY-AND-EQUITY> 1,108,796
<SALES> 0
<TOTAL-REVENUES> 1,211,657
<CGS> 0
<TOTAL-COSTS> 724,014<F1>
<OTHER-EXPENSES> 11,847<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,741
<INCOME-PRETAX> 217,479
<INCOME-TAX> 91,343
<INCOME-CONTINUING> 124,742<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 124,742<F3>
<EPS-PRIMARY> 1.11<F4>
<EPS-DILUTED> 1.07<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 $0.09 PER PRO FORMA BASIC
SHARE AND $0.08 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 AND AUTOMATED
SECURITIES CLEARANCE, LTD. ON MARCH 1, 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> 84,087
<SECURITIES> 26,439
<RECEIVABLES> 250,738
<ALLOWANCES> 19,782
<INVENTORY> 0
<CURRENT-ASSETS> 387,787
<PP&E> 333,662
<DEPRECIATION> 205,821
<TOTAL-ASSETS> 873,687
<CURRENT-LIABILITIES> 250,127
<BONDS> 3,080
0
0
<COMMON> 1,100
<OTHER-SE> 619,380
<TOTAL-LIABILITY-AND-EQUITY> 873,687
<SALES> 0
<TOTAL-REVENUES> 963,425
<CGS> 0
<TOTAL-COSTS> 583,574<F1>
<OTHER-EXPENSES> 13,669<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,584
<INCOME-PRETAX> 151,798
<INCOME-TAX> 60,924
<INCOME-CONTINUING> 89,042<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,042<F3>
<EPS-PRIMARY> 0.83<F4>
<EPS-DILUTED> 0.79<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 $0.09 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 AND AUTOMATED SECURITIES
CLEARANCE, LTD. ON MARCH 1, 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> 87,565
<SECURITIES> 1,688
<RECEIVABLES> 191,948
<ALLOWANCES> 10,646
<INVENTORY> 0
<CURRENT-ASSETS> 304,025
<PP&E> 276,592
<DEPRECIATION> 162,523
<TOTAL-ASSETS> 752,460
<CURRENT-LIABILITIES> 233,591
<BONDS> 5,767
0
0
<COMMON> 633
<OTHER-SE> 512,469
<TOTAL-LIABILITY-AND-EQUITY> 752,460
<SALES> 0
<TOTAL-REVENUES> 739,534
<CGS> 0
<TOTAL-COSTS> 452,956<F1>
<OTHER-EXPENSES> 51,083<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,224
<INCOME-PRETAX> 79,970
<INCOME-TAX> 32,820
<INCOME-CONTINUING> 45,208<F3>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,208<F3>
<EPS-PRIMARY> 0.44<F4>
<EPS-DILUTED> 0.42<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 $0.33
PER PRO FORMA BASIC SHARE AND $0.31 PER PRO FORMA DILUTED SHARE. ALSO REFLECTS
THE SEPTEMBER 1997 TWO-FOR-ONE STOCK SPLIT.
</FN>
</TABLE>
