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Item 5. Market for Registrant’s Common Equity

2023-02-28 compared with 2022-02-25 · 161 added, 140 removed, 347 unchanged (46% of the section changed)

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Issuer Purchases of Equity Securities

In July 2021, our Board of Directors authorized a stock repurchase program, which enables us to repurchase up to $1 billion in the aggregate of our outstanding common stock.

Our authority to repurchase shares under the program will continue until the one-year anniversary of the Board ’

s authorization, unless earlier terminated by the Board.

There were no repurchases during the fourth quarter of 2021.

As of December 31, 2021, $837.1 million remains available for repurchase.

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

(a) Total Number of Shares Purchased (2)

(b) Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)

Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under Plans or Programs (3)

October 1, 2022 –

October 31, 2022

November 1, 2022 –

November 30, 2022

December 1, 2022 –

December 31, 2022

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

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

(3) Share repurchases were made pursuant to our Common Stock Repurchase Program authorized by our Board of Directors in July 2022.

The program allows for the purchase of up to $1 billion of outstanding common stock in one or more transactions on the open market or in privately negotiated purchases.

Performance Graph

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The following graph shows a comparison from December 31, 2017 through December 31, 2022 of cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index.

The Nasdaq Technology Dividend TR Index replaces the Nasdaq Computer and Data Processing Index in this analysis and going forward, as the Nasdaq Computer and Data Processing Index data is no longer available.

The Nasdaq Computer and Data Processing Index has been included with data through 2020.

Such returns are based on historical results and are not intended to suggest future performance.

Data for the Nasdaq Composite Index, the Nasdaq Computer and Data Processing Index and the Nasdaq Technology Dividend TR Index assume reinvestment of dividends.

Data for the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index assume reinvestment of dividends.

COMPARISON OF CUMULATIVE TOTAL RETURN*

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Nasdaq Composite - Total Returns

Nasdaq Computer & Data Processing Index

Nasdaq Technology Dividend TR Index

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To supplement our growth, we evaluate and execute acquisitions that provide complementary products or services, add proven technology and an established client base and expand our intellectual property portfolio or address a highly specialized problem or a market niche.

Since the beginning of 2019, we have spent approximately $224.6 million on our three most significant acquisitions, using a combination of cash on hand and equity financing (as discussed in Notes 8 and 11 to our Consolidated Financial Statements).

Since the beginning of 2020, we have spent approximately $1.9 billion on our seven most significant acquisitions, using a combination of cash on hand and debt financing (as discussed in Notes 8 and 11 to our Consolidated Financial Statements).

The following table lists the significant businesses we have acquired since January 1, 2020:

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Acquired Capabilities, Products and Services

Extended SS&C's customer relationship management offerings

Expanded the offerings of SS&C ALPS Advisors, SS&C's wholly-owned asset manager

Minerals Management, LLC

Extended SS&C's offerings into the energy market while helping clients streamline operations across all asset classes and type

Hubwise Holdings Limited

Enhanced SS&C's capacity to help customers create highly automated and efficient multi-asset, multi-currency and multi-wrapper strategies

Blue Prism Group Plc

Added deep expertise in intelligent automation and robotic process automation

Added web-based trust accounting and unique asset servicing solutions

Added data transformation platform to extract handwritten and machine printed data from paper documents

November 2019

Added cloud-based risk analytics and additional regulatory solutions

The discussion in this Part II, Item 7 of this Annual Report on Form 10-K includes the operations of the businesses listed in the table above for the respective time periods each was owned by SS&C.

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We have also acquired businesses that offer software-enabled services or have a large base of term license or maintenance clients.

In particular, the acquisition of Blue Prism increased our term license and maintenance revenues.

Our software-enabled services revenues increased from $3,891.3 million and 83% of total revenues in 2020 to $4,273.9 million and 81% of revenues in 2022.

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To support the growth in our software-enabled services revenues and maintain our level of customer service, we have added personnel, expanded our facilities and invested in IT.

In March of 2019, we issued $2.0 billion aggregate principal amount of 5.5% Senior Notes due 2027 (“Senior Notes”), the proceeds of which were used to repay a portion of the outstanding Term B-3 Loan under our existing senior secured credit facilities.

In January 2020, we entered into an amendment to our senior secured credit agreement, whereby the interest rate margin applicable to the term loans was reduced from LIBOR plus 2.25% to LIBOR plus 1.75%.

No changes were made to the financial covenants, outstanding principal amounts or the scheduled amortization.

In March 2022, in connection with our acquisition of Blue Prism, we entered into an Incremental Joinder to our credit agreement, which is described in Contractual Obligations, resulting in new term loans totaling $1,530.0 million.

In December 2022, we entered into an amendment to our revolving credit facility, which is also described in Contractual Obligations, which increased the capacity of our revolving credit facility from $250.0 million to $600.0 million.

We generated $1,134.3 million in cash from operating activities in 2022, compared to $1,429.0 million and $1,184.7 million in 2021 and 2020, respectively.

In 2021, we used our operating cash flow, $197.7 million in proceeds from the exercise of stock options and existing cash to repay $519.9 million of net debt, pay $174.0 million in dividends, purchase $487.9 million of common stock for treasury and invest in capital expenditures in our business.

The impacts of COVID-19 and related economic conditions on our results are uncertain and, in many respects, outside our control.

While we have experienced some client delays in committing to services and products, to date we have experienced no direct

material negative effects on our business and results of operations as a result of the COVID-19 pandemic.

In 2022, we used our operating cash flow, $91.8 million in proceeds from the exercise of stock options and existing cash to fund acquisitions, pay $203.1 million in dividends, purchase $476.1 million of common stock for treasury and invest in capital expenditures in our business.

The COVID-19 pandemic and ongoing macroeconomic conditions, such as increases in interest rates and inflation rates and changes in foreign currency exchange rates, could have impacts on our results that are uncertain and, in many respects, outside our control.

The situation remains dynamic and subject to rapid and possibly material change, which ultimately could result in material negative effects on our business and results of operations.

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License and professional services revenues tend to fluctuate based on the number of new licensing clients, the timing and terms of contract renewals and demand for consulting services.

Our results of operations below include the results of our recent acquisitions from the date which they were acquired, including Investrack in November 2019, Algorithmics in December 2019, Captricity in March 2020, Innovest in May 2020, Millennium in December 2020 and Capita in March 2021.

Our results of operations below include the results of our recent acquisitions from the date which they were acquired, including Captricity in March 2020, Innovest in May 2020, Millennium in December 2020, Capita in March 2021, Blue Prism and Hubwise in March 2022, MineralWare in May 2022, O'Shares in June 2022, Tier1 in August 2022 and CFO in December 2022.

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

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Fiscal 2022 versus Fiscal 2021 .

Our revenues increased $232.0 million, or 4.6%, primarily due to acquisitions, which contributed $223.6 million in revenues, and an increase of $101.7 million in organic revenues driven by strength in the SS&C GlobeOp fund administration, Eze, Black Diamond, Geneva, and virtual data room services and products.

These increases were partially offset by the unfavorable impact from foreign currency translation of $93.3 million.

Software-enabled services revenues increased $17.8 million, or 0.4%, primarily due to an increase in organic revenues of $54.8 million, and acquisitions, which added $37.2 million.

These increases were partially offset by the unfavorable impact from foreign currency translation of $74.2 million.

License, maintenance and related revenues increased $214.2 million, or 26.9%, primarily due to acquisitions, which added $186.4 million in revenues, and an increase in organic revenues of $46.9 million.

These increases were partially offset by the unfavorable impact from foreign currency translation of $19.1 million.

Fiscal 2021 versus Fiscal 2020 .

Our revenues increased $383.1 million, or 8.2%, primarily due to an increase of $272.7 million in organic revenues driven by strength in the SS&C GlobeOp fund administration, Black Diamond, Geneva, Retirement Solutions, ALPS Advisors and virtual data room services and products.

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License, maintenance and related revenues increased $18.3 million, or 2.4%, due to an increase in organic revenues of $9.5 million and the favorable impact from foreign currency translation of $8.8 million.

Fiscal 2020 versus Fiscal 2019 .

Our revenues increased $35.0 million, or 0.8%, primarily due to our acquisitions, which, combined, contributed $100.4 million to the increase in revenues.

This increase was partially offset by a decrease of $65.3 million in organic revenues.

The unfavorable impact from foreign currency translation reduced revenues by $0.1 million.

Software-enabled services revenues increased $22.1 million, or 0.6%, primarily due to our acquisitions, which contributed $40.4 million to the increase in revenues, as well as from the favorable impact from foreign currency translation of $0.7 million.

These increases were partially offset by a decrease in organic revenues of $19.0 million.

License, maintenance and related revenues increased $12.9 million, or

1.7%, primarily due to our acquisitions, which contributed $60.0 million to the increase in revenues.

This increase was partially offset by a decrease of $46.3 million in organic revenues as well as the unfavorable impact from foreign currency translation of $0.8 million.

Cost of Revenues

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Fiscal 2022 versus Fiscal 2021 .

Our total cost of revenues increased by $126.0 million, or 4.8%, primarily due to an increase in organic costs of $123.6 million and acquisitions, which added $63.8 million in costs, partially offset by the favorable impact from foreign currency translation of $61.4 million.

Organic cost increases are primarily due to personnel costs, including the impact of wage inflation, costs to support organic growth and independent contractors, partially offset by decreases in costs such as amortization and rent expense.

Cost of software-enabled services revenues increased $88.8 million, or 3.8%, primarily due to an increase of $119.0 million in organic costs and acquisitions, which added $22.7 million in costs, partially offset by the favorable impact from foreign currency translation of $52.9 million.

Cost of license, maintenance and related revenues increased $37.2 million, or 11.8%, primarily due to acquisitions, which added $41.1 million in costs and an increase in organic costs of $4.6 million, offset by the favorable impact from foreign currency translation of $8.5 million.

Fiscal 2021 versus Fiscal 2020 .

Our total cost of revenues increased by $67.6 million, or 2.6%, primarily due to acquisitions, which added $40.5 million in costs, as well as the unfavorable impact from foreign currency translation of $34.9 million.

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Cost of license, maintenance and related revenues decreased $1.1 million, or 0.3%, primarily due to a decrease in organic costs of $6.4 million partially offset by the unfavorable impact from foreign currency translation of $4.9 million and acquisitions, which added $0.4 million in costs.

Fiscal 2020 versus Fiscal 2019 .

Our total cost of revenues decreased $37.6 million, or 1.4%, primarily due to a decrease in organic cost of revenues of $87.8 million and the favorable impact from foreign currency translation, which reduced costs by $3.9 million.

Organic cost of revenues such as travel, entertainment, independent contractors, outside services, consulting, out-of-pocket expenses and depreciation and amortization declined.

These decreases were partially offset by increases from our acquisitions, which added $54.1 million in costs.

Cost of software-enabled services revenues decreased $48.4 million, or 2.1%, primarily due to a decrease in organic cost of software-enabled services revenues of $72.1 million and the favorable impact from foreign currency translation, which reduced costs by $3.4 million.

These decreases were partially offset by increases from our acquisitions, which added $27.1 million in costs.

Cost of license, maintenance and related revenues increased $10.8 million, or 3.5%, primarily due to our acquisitions, which added $27.0 million in costs, partially offset by the decrease in organic cost of license, maintenance and related revenues of $15.7 million as well as the favorable impact from foreign currency translation, which reduced costs by $0.5 million.

Operating Expenses

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Fiscal 2022 versus 2021 .

O perating expenses increased $59.0 million, or 5.3%, primarily due to an increase in organic operating expenses of 29.1 million, the unfavorable impact from foreign currency translation of $16.7 million and acquisitions, which added $13.2 million in expenses.

Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to an increase in personnel costs and technology-related expenses, partially offset by a decrease in professional fees.

Operating expenses increased $205.4 million, or 17.6%, primarily due to acquisitions, which added $186.3 million in expenses, and an increase in organic operating expenses of $53.0 million.

These increases were partially offset by the favorable impact from foreign currency translation of $33.9 million.

Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to an increase in personnel costs, travel and entertainment, marketing costs and information technology related expenses.

Fiscal 2021 versus 2020 .

O perating expenses increased $1.2 million, or 0.1%, primarily due to our acquisitions, which added $56.3 million in expenses.

These increases were partially offset by a decrease of $52.4 million in organic operating expenses such as travel, entertainment, consulting, independent contractors, legal settlements, marketing, depreciation as well as lower amortization of intangible assets.

The favorable impact from foreign currency translation reduced costs by $2.7 million.

Operating expenses increased $59.0 million, or 5.3%, primarily due to an increase in organic operating expenses of 29.1 million, the unfavorable impact from foreign currency translation of $16.7 million and acquisitions, which added $13.2 million in expenses.

Comparison of Fiscal 2022, 2021 and 2020 for Interest, Taxes and Other

Interest income .

We had interest income of $4.1 million in 2021 compared to $4.0 million in 2020 and $4.7 million in 2019.

The decrease in interest income in 2020 primarily resulted from lower average interest rates on our cash balances relative to the prior year.

Interest expense .

We had interest expense of $312.2 million in 2022 compared to $205.7 million in 2021 and $249.9 million in 2020.

The decrease in interest expense in both 2021 and 2020 relates primarily to lower average interest rates as well as lower average debt balances.

The increase in interest expense for 2022 as compared to 2021 is due to higher average interest rates on debt and higher average debt balances.

We had an average interest rate of 4.22% and 3.05%, respectively, for the twelve months ended December 31, 2022 and 2021.

Our total debt balance as of December 31, 2022 was higher compared to the prior year due to the Incremental Joinder we entered into in connection with our acquisition of Blue Prism.

The decrease for 2021 as compares to 2020 related primarily to lower average interest rates as well as lower average debt balances.

These facilities are discussed further in “Liquidity and Capital Resources”.

Other (expense) income, net .

We had other expense, net of $18.2 million in 2021 compared to other income, net of $41.6 million in 2020 and $25.7 million in 2019.

Other expense, net for 2021 included an expense of $43.4 million relating to a legal accrual recorded in connection with the DST ERISA litigation discussed in Note 18 –

Other income (expense), net .

We had other income, net of $20.8 million in 2022 compared to other expense, net of $18.2 million in 2021 and other income, net of $41.6 million in 2020.

Other income, net for 2022 included net investment gains of $38.7 million, which includes fair value adjustments to increase the carrying value of our investments and dividend income.

Other income, net for 2022 also included an expense of $8.1 million relating to a legal accrual recorded in connection with the DST ERISA litigation discussed in Note 18 –

Commitments and Contingencies of the Notes to the Consolidated Financial Statements.

Other expense, net for 2021 also included investment gains of $19.0 million and dividend income of $11.1 million.

The remaining portion of other income, net consisted primarily of foreign currency translation gains and losses.

Other expense, net for 2021 included

an expense of $43.4 million relating to the DST ERISA litigation, and investment gains and dividends totaling $30.1 million.

The remaining portion of other expense, net consisted primarily of foreign currency translation gains and losses.

Other income, net for 2020 consisted primarily of foreign currency transaction gains and investment gains.

Other income, net for 2019 consisted primarily of investment gains, partially offset by foreign currency transaction losses.

Equity in earnings of unconsolidated affiliates, net .

We had equity in earnings of unconsolidated affiliates, net of $25.8 million for 2022, $25.4 million for 2021 and $(1.5) million for 2020.

Our equity in earnings of unconsolidated affiliates was a loss in 2020 due to losses incurred by one of our affiliates that operates a hotel and had a significant impact to their operations due to COVID-19.

During 2021, this affiliate sold its primary asset, the hotel, for a gain that resulted in the significant increase in earnings of

unconsolidated affiliates, net.

The amount earned in 2019 is primarily related to our proportionate share of IFDS L.P.’s net income, offset by amortization of basis differences .

Our equity in earnings of unconsolidated affiliates in 2022 is primarily related to a $29.3 million adjustment to increase the carrying value of one of our investments.

During 2021, this affiliate sold its primary asset, the hotel, for a gain that resulted in the significant increase in earnings of unconsolidated affiliates, net.

Loss on extinguishment of debt, net .

We recorded a $10.9 million loss on extinguishment of debt in 2021 relating to the write-off of a portion of the unamortized capitalized financing fees and the unamortized original issue discount associated with additional prepayments on our term loans prior to their scheduled maturity.

We recorded a $4.2 million loss on extinguishment of debt in 2020 primarily related to the amendment of our credit agreement and the write-off of capitalized financing fees and original issue discount associated with prepayments of our term loans.

We recorded a $7.1 million loss on extinguishment of debt in 2019 in connection with the repayment of a portion of our Term Loans with the proceeds from the issuance of our Senior Notes.

The loss on extinguishment of debt includes costs incurred by us which did not meet the criteria for capitalization.

The Senior Notes are discussed further in “Liquidity and Capital Resources.”

We recorded a $5.5 million and $10.9 million loss on extinguishment of debt in 2022 and 2021, respectively, relating to the write-off of a portion of the unamortized capitalized financing fees and the unamortized original issue discount associated with additional prepayments on our term loans prior to their scheduled maturity.

Provision for income taxes.

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Our 2022, 2021 and 2020 effective tax rates differ from the statutory rate primarily due to the effect of our foreign operations and permanent book to tax differences.

Our effective tax rate for 2021 includes benefits related to stock-based awards and recognition of tax expense related to a law change in the U.K.

Our effective tax rate for 2022 includes increases in valuation allowances on deferred tax assets, benefits related to stock-based awards and releases of uncertain tax positions due to statute of limitation expirations.

Our effective tax rate for 2021 included benefits related to stock-based awards and recognition of tax expense related to a law change in the U.K.

Our effective tax rate for 2020 included benefits related to stock-based awards, recognition of a state tax benefit related to a law change and releases of uncertain tax positions due to statute of limitation expirations and closed audits.

Our effective tax rate for 2019 included benefits related to stock-based awards, the utilization of foreign net operating losses against which valuation allowances were previously recorded and releases of uncertain tax positions due to closed audits and statute of limitation expirations.

The increase in the effective tax rate from 2020 to 2021 was primarily related to recognition of tax expense in connection with a law change in the U.K., the increase in valuation allowances, the decrease in relative favorable impacts of stock based compensation and the impact of uncertain tax positions.

In addition, the prior year effective tax rate was favorably impacted by a decrease in state taxes related to a law change.

The increase in the effective tax rate from 2021 to 2022 was primarily related to decreases in relative favorable impacts of stock based compensation in the current year, an increase in valuation allowances on deferred tax assets in the current year and the impact of uncertain tax positions.

In addition, the prior year effective tax rate was unfavorably impacted by tax expense related to a law change in the United Kingdom.

Our effective tax rate includes the effect of operations outside the U.S., which historically have been taxed at rates lower than the U.S.

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While we have income from multiple foreign sources, the majority of our non-U.S.

operations are in India and the U.K., where the statutory rates were approximately 31.0% on a blended basis and 19.0%, respectively, in 2021, 29.1% and 19.0%, respectively, in 2020, and 29.1% and 19.0%, respectively, in 2019.

operations are in India and the U.K., where the statutory rates were approximately 29.0% on a blended basis and 19.0%, respectively, in 2022, approximately 31.0% on a blended basis and 19.0%, respectively, in 2021, and 29.1% and 19.0%, respectively, in 2020.

A future proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.

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We expect our cash on hand, cash flows from operations, and cash available under our Credit Agreement to provide sufficient liquidity to fund our current obligations, projected working capital requirements and capital spending for at least the next twelve months.

Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, at December 31, 2021 were $3,171.4 million, an increase of $1,833.5 million from $1,337.9 million at December 31, 2020.

The increase in cash was primarily due to the increase in cash and cash equivalents associated with funds held on behalf of clients.

Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, at December 31, 2022 were $1,337.6 million, a decrease of $1,833.8 million from $3,171.4 million at December 31, 2021.

The decrease in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients.

See Notes 8, 10 and 11 to our Consolidated Financial Statements for further discussion of acquisitions, debt and equity, respectively.

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Effect of exchange rate changes on cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Fiscal 2022 versus 2021

Operating activities:

Cash provided by operating activities primarily resulted from net income of $800.6 million adjusted for non-cash items of $689.7 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $61.3 million.

The changes in our working capital accounts were primarily driven by increases in our accounts receivable and decreases in deferred revenue, partially offset by a decrease in our prepaid expenses and other assets.

The increase in accounts receivable was due to increases in revenues earned and an increase in days’

sales outstanding.

The decrease in deferred revenue was primarily due to the recognition of revenue associated with a multi-year license agreement where we received payment in 2019.

Cash provided by operating activities during the year ended December 31, 2022 resulted from net income of $649.0 million adjusted for non-cash items of $700.4 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $215.1 million.

The changes in our working capital accounts were primarily driven by decreases in accrued expenses and other liabilities and deferred revenue and an increase in contract assets and accounts receivable.

Cash provided by operating activities was negatively affected by approximately $68.0 million of transaction costs related to the Blue Prism acquisition.

The decrease in accrued expenses was primarily due to the payment of annual employee bonuses in the first quarter of 2022 and the payment of transaction costs related to the Blue Prism acquisition that were recorded as liabilities by Blue Prism at the time of the acquisition.

Investing activities :

We used net cash of $148.2 million primarily related to $85.3 million in capitalized software development costs, $66.0 million in contributions to unconsolidated affiliates, $51.3 million in capital expenditures and $20.1 million in investments in securities, partially offset by proceeds from sales and maturities of investments of $50.9 million, receipts from the collection of other non-current receivables of $11.0 million, $7.3 million in cash paid for business acquisitions, net of cash acquired and proceeds from the sale of property and equipment of $5.3 million.

Cash used in investing activities during the year ended December 31, 2022 totaled $1,757.6 million, which included cash paid for acquisitions (net of cash acquired) of $1,636.2 million, capitalized software development costs of $144.9 million, capital expenditures of $63.4 million and investments in securities of $10.0 million, partially offset by distributions received from unconsolidated affiliates of $66.2 million, proceeds from the sale of property and equipment of $11.4 million, receipts from the collection of other non-current receivables of $9.8 million and proceeds from sales and maturities of investments of $9.5 million.

Financing activities:

Cash provided by financing activities of $556.7 million primarily resulted from the increase in client funds obligations of $1,480.5 million, proceeds of $197.7 million from stock options and proceeds from noncontrolling interests of $67.3 million.

These proceeds were partially offset by the net repayments of debt totaling $519.9 million, $487.9 million in treasury stock repurchases, $174.0 million in quarterly dividends paid and $7.0 million in withholding taxes paid related to equity award net share settlements.

Cash used in financing activities during the year ended December 31, 2022 was $1,184.5 million and resulted from the decrease in client funds obligations of $1,709.0 million, treasury stock repurchases of $476.1 million, quarterly dividends paid of $203.1 million, deferred financing fees paid of $14.7 million and withholding taxes paid related to equity award net share settlements of $0.7 million.

These expenditures were partially offset by net borrowings of debt totaling $1,127.3 million and $91.8 million received from the exercise of stock options.

Fiscal 2021 versus 2020

Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, at December 31, 2020 were $1,337.9 million, a decrease of $451.5 million from $1,789.4 million at December 31, 2019.

The decrease in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients.

The increase in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients.

See Notes 8, 10 and 11 to our Consolidated Financial Statements for further discussion of acquisitions, debt and equity, respectively.

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The changes in our working capital accounts were driven by increases in prepaid expenses and other assets and decreases in deferred revenue, accounts payable and accrued expenses and other liabilities, partially offset by changes in income taxes prepaid and payable and a decrease in accounts receivable.

The increases in prepaid expenses and other assets was primarily due to an incentive payment made in connection with a client contract extension.

The decrease in deferred revenue was primarily due to the recognition of revenue associated with a multi-year license agreement where we received payment in 2019 as well as the revenue associated with annual maintenance fees.

The decrease in accounts payable was primarily due to the timing of payments.

The change in income taxes prepaid and payable is primarily driven by the timing of tax payments.

The decrease in accounts receivable was primarily due to a decrease in days’

The increase in accounts

receivable was due to increases in revenues earned and an increase in days’

sales outstanding.

The decrease in deferred revenue was primarily due to the recognition of revenue associated with a multi-year license agreement where we received payment in 2019.

Investing activities :

We used net cash of $210.5 million primarily related to cash paid for business acquisitions (net of cash acquired) of $116.0 million, $71.6 million in capitalized software development costs, $60.9 million in investments in securities and $34.8 million in capital expenditures, partially offset by proceeds from sales and maturities of investments of $60.3 million, receipts

from the collection of other non-current receivables of $10.3 million and proceeds from the sale of property and equipment of $2.3 million.

Financing activities:

Cash used in financing activities of $1,428.1 million primarily resulted from the net repayments of debt totaling $738.2 million, the net decrease in client funds obligations of $504.9 million, $227.7 million in treasury stock repurchases, $136.1 million in quarterly dividends paid and $10.9 million in withholding taxes paid related to equity award net share settlements.

These payments were partially offset by $189.7 million in cash received from stock option exercises.

We have made a permanent reinvestment determination in certain non-U.S.

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Total contractual obligations

(1) Reflects interest payments on our Credit Agreement at an assumed interest rate of one-month LIBOR of 0.10% plus 1.75% for U.S.

dollar loans on our Term B-3, B-4 and B-5 facilities and 5.5% on our Senior Notes.

(1) Reflects interest payments on our Credit Agreement at an assumed interest rate of one-month LIBOR of 4.38% plus 1.75% on our Term B-3, B-4 and B-5 facilities, one-month SOFR of 4.42% plus 2.25% on our Term B-6 and B-7 facilities and 5.5% on our Senior Notes.

(2) We are obligated under noncancelable operating leases for office space and office equipment.

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(“SS&C”), SS&C European Holdings SARL, an indirect wholly-owned subsidiary of SS&C (“SS&C SARL”) and SS&C Technologies Holdings Europe SARL, an indirect wholly-owned subsidiary of SS&C (“SS&C Tech SARL”) as the borrowers (“Credit Agreement”).

The Credit Agreement includes four tranches of term loans (together the “Initial Term Loans”):

(i) a $518.6 million term B-1 facility for SS&C (“Term B-1 Loan”), which was repaid in full in 2019;

(ii) a $5.9 million term B-2 facility for SS&C SARL (“Term B-2 Loan”), which was repaid in full in 2018;

(iii) a $5.046 billion term B-3 facility, which matures on April 16, 2025 for SS&C (the “Term B-3 Loan”);

and (iv) a $1.8 billion term B-4 facility, which matures on April 16, 2025 for SS&C SARL (the “Term B-4 Loan”).

In addition, the Credit Agreement has a revolving credit facility with a five-year term available for borrowings by SS&C with $250 million in available commitments (“Revolving Credit Facility”), of which $247.3 million was available as of December 31, 2021.

The Revolving Credit Facility also contains a $25 million letter of credit sub-facility, of which $2.7 million was utilized as of December 31, 2021.

The majority of the initial proceeds from the Initial Term Loans was used to fund the acquisition of DST, repay certain amounts outstanding under our then-existing credit agreement (“Prior Credit Agreement”), repay all of the outstanding principal amount of our 5.875% Senior Notes due 2023 (“Prior Senior Notes”) and repay acquired debt associated with DST.

On October 1, 2018, in connection with our acquisition of Eze, we entered into an amendment (the “Commitment Increase Amendment”) to the Credit Agreement.

Pursuant to the Commitment Increase Amendment, a new $875.0 million senior secured term B-5 facility (“Term B-5 Loan”, and together with the Initial Term Loans, the “Term Loans”) was made available to us, the proceeds of which were used to finance, in part, the Eze acquisition.

On November 16, 2018, in connection with our acquisition of Intralinks, we entered into an amendment (the “Incremental Term Loan Amendment”) to the Credit Agreement.

Pursuant to the Incremental Term Loan Amendment, an additional $1.0 billion senior secured term B-5 facility (“Term B-5 Loan”, and together with the Initial Term Loans, the “Term Loans”) was made available to us, the proceeds of which were used to finance, in part, the Intralinks acquisition.

On January 31, 2020, we entered into an amendment (the “Pricing Amendment”) to our Credit Agreement dated April 16, 2018.

Pursuant to the Pricing Amendment, the interest rate margin applicable to Term Loan B was reduced from LIBOR plus 2.25% to LIBOR plus 1.75%.

No changes were made to the financial covenants, outstanding principal amounts or the scheduled amortization.

The Pricing Amendment was evaluated in accordance with FASB Accounting Standards Codification 470-50, Debt-Modifications and Extinguishments , for debt modification and extinguishment accounting.

We accounted for the debt re-pricing as a debt modification with respect to amounts that remained obligations of the same lender in the syndicate with minor changes in cash flows and as a debt extinguishment with respect to amounts that were obligations of lenders that exited the syndicate or remained in the syndicate but experienced a change in cash flows of greater than 10%.

The Term Loans and Revolving Credit Facility bear interest, at the election of the borrowers, at the base rate (as defined in the Credit Agreement) or LIBOR, plus the applicable interest rate margin for the credit facility.

Amounts drawn on the Revolving Credit Facility initially bear interest at either LIBOR plus 2.25% or at the base rate plus 1.25%, and is subject to a step-down at any time our consolidated net secured leverage ratio is less than 4.75 times, to 2.00% in the case of the LIBOR margin and 1.00% in the case of the base rate margin.

The Term B-3 Loan, Term B-4 Loan and Term B-5 Loan initially incurred interest at either LIBOR plus 2.50% or at the base rate plus 1.50%, and were subject to a step-down at any time our consolidated net secured leverage ratio was less than 4.75 times, to 2.25% in the case of the LIBOR margin and 1.25% in the case of the base rate margin.

In January 2020, we entered into the Pricing Amendment, whereby the interest rate margin applicable to the term loans was reduced from LIBOR plus 2.25% to LIBOR plus 1.75%.

As of December 31, 2021, there was $1,244.2 million in principal amount outstanding under the Term B-3 Loan, $1,010.0 million in principal amount outstanding under the Term B-4 Loan and $1,720.2 million in principal amount outstanding under the Term B-5 Loan.

There were no principal amounts outstanding under the Term B-1 Loan and Term B-2 Loan.

SS&C and SS&C SARL are required to make scheduled quarterly payments of 0.25% of the original principal amount of the Term B-3 Loan, Term B-4 Loan and Term B-5 Loan, with the balance due and payable on April 16, 2025.

No amortization is required under the Revolving Credit Facility.

Also in 2018, we entered into amendments to the Credit Agreement in connection with our acquisitions of Eze and Intralinks.

On March 22, 2022, in connection with our acquisition of Blue Prism, we entered into an Incremental Joinder to the Credit Agreement with certain of our subsidiaries.

Pursuant to the Incremental Joinder, a new $650.0 million senior secured incremental term loan B facility (“Term B-6 Loan”) and a new $880.0 million senior secured incremental term

loan B facility (“Term B-7 Loan”

and together with the Term B-6 Loan, the “Incremental Term Loans”) was made available to us, the proceeds of which were used to finance substantially all of the consideration for the acquisition of Blue Prism.

The Credit Agreement had a revolving credit facility with a five-year term available for borrowings by SS&C with $250.0 million in available commitments (“Revolving Credit Facility”).

The Revolving Credit Facility also contained a $25 million letter of credit sub-facility.

On December 28, 2022, we entered into an amendment (the “Revolving Facility Amendment”) to the Credit Agreement with certain of our subsidiaries.

Pursuant to the Revolving Facility Amendment, the Revolving Credit Facility was amended to:

(i) extend the maturity date to December 28, 2027, (ii) amend the interest rate provisions to replace LIBOR with Term SOFR as the interest rate benchmark, (iii) increase the aggregate commitments from $250.0 million to $600.0 million, (iv) increase the letter of credit sub-facility from $25.0 million to $75.0 million and (v) make certain other revisions fully set forth in the Revolving Facility Amendment.

As of December 31, 2022, there was $2.5 million utilized of the letter of credit sub-facility and $597.5 million available of the Revolving Facility Amendment.

The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes:

Amount Outstanding

at December 31, 2022

Scheduled Quarterly

(in millions)

Payments Required

Senior Secured Credit Facilities

Term Loan B-3

April 16, 2025

Variable rate (1)

Term Loan B-4

April 16, 2025

Variable rate (1)

Term Loan B-5

April 16, 2025

Variable rate (1)

Term Loan B-6

March 22, 2029

Variable rate (2)

Term Loan B-7

March 22, 2029

Variable rate (2)

Revolving Credit Facility

December 28, 2027

Variable rate (3)

September 30, 2027

Fixed at 5.5%

(1) Initially incurred interest at either LIBOR plus 2.50% of at the base rate plus 1.50%, and were subject to a step-down at any time our consolidated net secured leverage ratio was less than 4.75 times, to 2.25% in the case of the LIBOR margin and 1.25% in the case of the base rate margin.

In January 2020, we entered into a pricing amendment, whereby the interest rate margin applicable to the term loans was reduced from LIBOR plus 2.25% to LIBOR plus 1.75%.

(2) Bears interest at, at our option, either (a) the Base Rate, plus 1.25% per annum or the (b) Term Secured Overnight Financing Rate (“SOFR”), which is subject to a floor of 0.50%, plus a credit spread adjustment set forth in the Credit Agreement, plus 2.25% per annum.

(3) Bears interest at, at our option, the Base Rate per annum or the Term SOFR.

Loans based on the Base Rate bear interest at a rate between the Base Rate plus 0.25% or 0.50%, depending on our consolidated secured net leverage ratio.

Loans based on Term SOFR bear interest at a rate between Term SOFR plus 1.25% and Term SOFR plus 1.50%, depending on our consolidated secured net leverage ratio.

SS&C’s and SS&C SARL’s obligations under the Term Loans are guaranteed by (i) our existing and future U.S.

wholly-owned restricted subsidiaries, in the case of the Term B-3 Loan, Term B-5 Loan and the Revolving Credit Facility and (ii) our existing and future wholly-owned restricted subsidiaries, in the case of the Term B-4 Loan.

wholly-owned restricted subsidiaries, in the case of the Term B-3 Loan, Term B-5 Loan, Term B-6 Loan and the Revolving Credit Facility and (ii) our existing and future wholly-owned restricted subsidiaries, in the case of the Term B-4 Loan and Term B-7 Loan.

The obligations of the U.S.

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assets (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of our wholly-owned restricted subsidiaries (with customary exceptions and limitations).

The Credit Agreement includes negative covenants that, among other things and subject to certain thresholds and exceptions, limit our ability and the ability of our restricted subsidiaries to incur debt or liens, make investments (including in the form of loans

and acquisitions), merge, liquidate or dissolve, sell property and assets, including capital stock of our subsidiaries, pay dividends on our capital stock or redeem, repurchase or retire our capital stock, alter the business we conduct, amend, prepay, redeem or purchase subordinated debt, or engage in transactions with our affiliates.

The Credit Agreement includes negative covenants that, among other things and subject to certain thresholds and exceptions, limit our ability and the ability of its restricted subsidiaries to incur debt or liens, make investments (including in the form of loans and acquisitions), merge, liquidate or dissolve, sell property and assets, including capital stock of its subsidiaries, pay dividends on its capital stock or redeem, repurchase or retire its capital stock, alter the business we conduct, amend, prepay, redeem or purchase subordinated debt, or engage in transactions with its affiliates.

The Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions.

In addition, the Credit Agreement contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a minimum consolidated net secured leverage ratio.

In addition, the Credit

Agreement contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a minimum consolidated net secured leverage ratio.

In addition, under the Credit Agreement, certain defaults under agreements governing other material indebtedness could result in an event of default under the Credit Agreement, in which case the lenders could elect to accelerate payments under the Credit Agreement and terminate any commitments they have to provide future borrowings.

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Interest on the Senior Notes is payable on March 30 and September 30 of each year.

At any time prior to March 30, 2022, we may, at our option, redeem the Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the Senior Notes, plus an applicable “make-whole”

premium, plus accrued and unpaid interest to the redemption date.

In addition, at any time on or before March 30, 2022, we may to redeem up to 40% of the aggregate principal amount of the Senior Notes at a redemption price equal to 105.5% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of one or more equity offerings.

We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.

At any time on or after March 30, 2022, we may redeem some or all of the Senior Notes, in whole or in part, at the redemption prices set forth in the following table, expressed as a percentage of the principal amount, plus accrued and unpaid interest to the redemption date:

Redemption Year

2025 and thereafter

Redemption Date

On or after March 30, 2022

On or after March 30, 2023

On or after March 30, 2024

March 30, 2025 and thereafter

We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.

The indenture governing the Senior Notes contains a number of covenants that restrict, subject to certain thresholds and exceptions, our ability and the ability of our domestic restricted subsidiaries to incur debt or liens, make certain investments, pay dividends, dispose of certain assets, or enter into transactions with its affiliates.

Any event of default under the Credit Agreement that leads to an acceleration of those amounts due also results in a default under the indenture governing the Senior Notes.

As of December 31, 2021, there was $2.0 billion in principal amount of Senior Notes outstanding.

Covenant Compliance

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Acquired EBITDA and cost savings (1)

Non-cash portion of straight-line rent expense

Loss on extinguishment of debt

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ASC 606 adoption impact

Foreign currency translation losses (gains)

Investment gains

Facilities and workforce restructuring

Acquisition related (3)

Consolidated EBITDA

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

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

(3) Other includes expenses and income that are permitted to be excluded per the terms of our Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance.

These include expenses and income related to foreign currency transactions, investment gains and losses, facilities and workforce restructuring, legal settlements, business combinations and other items.

personnel costs were not adjusted to fair value at the date of the acquisitions, and (c) an adjustment to increase or decrease rent expense by the amount that would have been recognized if lease obligations were not adjusted to fair value at the date of acquisitions.

(3) Acquisition related includes costs related to both current acquisitions and the resolution of pre-acquisition matters.

(4) Other includes additional expenses and income that are permitted to be excluded per the terms of our Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance.

(5) Consolidated EBITDA attributable to noncontrolling interest represents Consolidated EBITDA based on the ownership interest retained by the noncontrolling parties of DomaniRx, our consolidated variable interest entity.

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(1) Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, excluding $134.1 million of cash and cash equivalents held at DomaniRx, to Consolidated EBITDA, as defined by the Credit Agreement, for the period of four consecutive fiscal quarters ended on the measurement date.

Consolidated net secured funded indebtedness

is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

Consolidated net secured funded indebtedness is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

Critical Accounting Estimates

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We recognize our proportionate share of the results of the unconsolidated affiliates and amortization expense related to basis differences in equity in earnings of unconsolidated affiliates, net on our Consolidated Statements of Comprehensive Income.

Our partnership interests in private equity funds, marketable equity securities and seed capital investments, other than those accounted for under the equity method of accounting or those that result in consolidation of the investee, are recorded at fair value, with changes in the fair value recognized in other (expense) income, net on our Consolidated Statements of Comprehensive Income.

Our partnership interests in private equity funds, marketable equity securities and seed capital investments, other than those accounted for under the equity method of accounting or those that result in consolidation of the investee, are recorded at fair value, with changes in the fair value recognized in other income (expense), net on our Consolidated Statements of Comprehensive Income.

Our marketable equity securities and seed capital investments have readily determinable fair values in the market.

We use net asset value as a practical expedient for the fair value of partnership interests in private equity funds that are not accounted for under the equity method of accounting.

We use net asset

value as a practical expedient for the fair value of partnership interests in private equity funds that are not accounted for under the equity method of accounting.

Investments in non-marketable equity securities that do not have readily determinable fair values and do not qualify for the practical expedient to measure the investment using a net asset value per share are recorded using the measurement alternative in Accounting Standards Update (“ASU”) 2016-01.

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Judgement is required in the determination of goodwill reporting units.

On July 1, 2020, our reporting unit structure changed as a result of a change in our management structure.

As of December 31, 2019 and through June 30, 2020, we had two reporting units, one which included the DST business, and one which includes the rest of our operations.

As of July 1, 2020 and through December 31, 2021, we continue to have two reporting units, though one is our health business and the other includes the rest of our operations.

To the extent that we do not achieve our revenue or operating cash flow plans or other measures of fair value decline, including external

valuation assumptions, our current goodwill carrying value could be impaired.

As of December 31, 2022 and 2021, we have two reporting units, one is our health business and the other includes the rest of our operations.

To the extent that we do not achieve our revenue or operating cash flow plans or other measures of fair value decline, including external valuation assumptions, our current goodwill carrying value could be impaired.

Our impairment analysis indicated that the fair values of our reporting units significantly exceeded their carrying values at December 31, 2022.

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significant negative industry or economic trends.

When we determine that the carrying value of intangibles and long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of potential impairment, we assess whether an impairment has occurred based on whether net book value of the assets exceeds related projected undiscounted cash flows from these assets.

When we determine that the carrying value of intangibles and long-lived assets may not be recoverable due to the existence of one or more of the above indicators of potential impairment, we assess whether an impairment has occurred based on whether net book value of the assets exceeds related projected undiscounted cash flows from these assets.

We consider a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles in estimating future cash flows.

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Using the fair value recognition provisions of relevant accounting literature, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the appropriate service period.

Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of our stock price.

Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected

volatility of our stock price.

In addition, for stock-based awards where vesting is dependent upon achieving earnings per share growth targets, we estimate the likelihood of achieving the performance goals.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity