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Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-02-28 · 187 added, 365 removed, 896 unchanged (38% of the section changed)

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Financial statement schedules are not submitted because they are not applicable, not required or the information is included in our Consolidated Financial Statements.

REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of SS&C Technologies Holdings, Inc.

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We believe that our audits provide a reasonable basis for our opinions.

As described in the Report of Management on Internal Control over Financial Reporting, management has excluded Battea-Class Action Services, LLC ("Battea") from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded Battea from our audit of internal control over financial reporting.

Battea is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 1% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

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A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessment – Health Business Reporting Unit

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment Test – Health Business Reporting Unit

As described in Notes 2 and 9 to the consolidated financial statements, the Company’s consolidated goodwill balance was $9,218.1 million as of December 31, 2024, a portion of which relates to the health business reporting unit.

Management tests goodwill annually for impairment as of December 31 and in interim periods if certain events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

Management measures the fair value of the Company’s reporting units utilizing the income method.

Management measures the fair value of the Company’s reporting units utilizing an income approach.

Significant judgment is required to determine appropriate revenue growth rates and to estimate the fair value of the Company’s reporting units.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the health business reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting unit;

The principal considerations for our determination that performing procedures relating to the goodwill impairment test of the health business reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting unit;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumption related to the revenue growth rates;

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s quantitative goodwill impairment assessment, including controls over the valuation of the health business reporting unit.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the health business reporting unit.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the health business reporting unit;

(ii) evaluating the appropriateness of the income method;

(iii) testing the completeness and accuracy of underlying data used in the income method;

(ii) evaluating the appropriateness of the income approach;

(iii) testing the completeness and accuracy of underlying data used in the income approach;

and (iv) evaluating the reasonableness of the significant assumption used by management related to the revenue growth rates.

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and (iii) whether this assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the income method.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the income approach.

Valuation of Customer Relationships Intangible Asset Acquired – Battea Acquisition

As described in Note 8 to the consolidated financial statements, on September 27, 2024, the Company purchased the outstanding shares of Battea for $645.6 million, net of cash acquired, which resulted in a $246.6 million customer relationships intangible asset being recorded.

The preliminary fair value of the customer relationships was determined using the excess earnings method, an income approach.

The significant assumption used in the determination of fair value for customer relationships was projected future revenues.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible asset acquired in the Battea acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships intangible asset acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to the projected future revenues for the customer relationships intangible asset;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships intangible asset and the development of the significant assumption related to the projected future revenues.

These procedures also included, among others, (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the customer relationships intangible asset, (iii) evaluating the appropriateness of the excess earnings method;

(iv) testing the completeness and accuracy of data used in the valuation method;

and (v) evaluating the reasonableness of the significant assumption used by management related to the projected future revenues.

Evaluating the reasonableness of the projected future revenues assumption considered (i) the past performance of the acquired business and (ii) the consistency with external market and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the excess earnings method and the reasonableness of the projected future revenues assumption.

/s/ PricewaterhouseCoopers LLP

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Intangible and other assets, net of accumulated amortization of $ 4,646.6 and $ 4,063.4 , respectively (Note 9)

Liabilities, Redeemable Noncontrolling Interest and Equity

Liabilities and Equity

Current liabilities:

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Commitments and contingencies (Note 18)

Redeemable noncontrolling interest (Note 6)

Stockholders’ equity (Note 11):

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Noncontrolling interest (Note 12)

Total liabilities, redeemable noncontrolling interest and equity

Total liabilities and equity

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Interest expense

Other income (expense), net

Other income, net

Equity in earnings of unconsolidated affiliates, net

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Foreign currency exchange translation adjustment

Total other comprehensive income (loss), net of tax

Total other comprehensive (loss) income, net of tax

Comprehensive income

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Distributions received from unconsolidated affiliates

Gain on bargain purchase

Stock-based compensation expense

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Proceeds from sales / maturities of investments

(Contributions to) distributions received from unconsolidated affiliates

Distributions received from (contributions to) unconsolidated affiliates

Collection of other non-current receivables

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Proceeds from noncontrolling interests

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

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

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Balance, at December 31, 2021

Noncontrolling interest upon consolidation (Note 12)

Foreign exchange translation adjustment

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Foreign exchange translation adjustment

Net change in interest rate swaps (Note 11)

Defined benefit pension adjustment (Note 11)

Stock-based compensation expense

Exercise of options, net of withholding

taxes (Note 14)

Exercise of options (Note 14)

Withholding taxes related to equity award net share settlement (Note 14)

Dividends declared - $ 0.88 per share

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Balance, at December 31, 2023

Proceeds from noncontrolling interest (Note 12)

Foreign exchange translation adjustment

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Under the equity method, we recognize income or losses from our pro-rata share of these unconsolidated affiliates’ net income or loss, which changes the carrying value of the investment of the unconsolidated affiliate.

When recording income or losses related to our investment in Orbit Private Investments L.P., we consistently apply a three-month lag period based on when financial information is received.

We will adjust for any known significant changes from the lag period to our reporting date.

We measure equity investments in marketable securities, seed capital investments and other investments, other than those accounted for under the equity method of accounting or those that result in consolidation of the investee, at fair value, with changes in the fair value recognized in earnings.

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Operating lease liabilities are recognized at the commencement date at the present value of the base minimum rent payments.

As most of our leases do not provide an implicit rate, we use our estimated secured incremental borrowing rate within each of the significant geographic regions in which we operate based on the information available at lease commencement date in determining the present value of lease payments.

As most of our leases do not

provide an implicit rate, we use our estimated secured incremental borrowing rate within each of the significant geographic regions in which we operate based on the information available at lease commencement date in determining the present value of lease payments.

Our lease agreements typically do not contain variable lease payments, residual value guarantees or restrictive covenants.

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payments for common area maintenance, real estate taxes and/or utilities) which are expensed as incurred.

We do have certain lease agreements that contain bundled minimum payments for lease components (e.g.

payments for rent) and non-lease components.

We do have certain lease agreements that contain bundled minimum payments for lease components (e.g., payments for rent) and non-lease components.

In these situations, we have applied the practical expedient available under ASC 842 to not separate the lease and non-lease components for purposes of the right-of-use asset and lease payment obligation calculations.

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Our impairment analysis indicated that the fair value significantly exceeded the carrying value of each of our reporting units as of December 31, 2024 and 2023 .

We measure the fair value of our reporting units utilizing the income method.

We measure the fair value of our reporting units utilizing the income approach.

Significant judgment is required to determine appropriate revenue growth rates and to estimate the fair value of our reporting units.

There were no other indefinite-lived intangible assets as of December 31, 2024 or 2023.

Customer relationships, completed technology and trade names are amortized over lives ranging from six to 17 years .

Completed technology and customer relationships are amortized each year based on the ratio that the projected cash flows for the intangible assets bear to the total of current and expected future cash flows for the intangible asset.

Customer relationships, completed technology and trade names are amortized over lives rangin g from six to 20 years .

Completed technology and customer relationships are amortized each year based on the ratio that the projected cash flo ws for the intangible assets bear to the total of current and expected future cash flows for the intangible asset.

Trade names are amortized on a straight-line basis.

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The resulting translation adjustments are excluded from net earnings and accumulated as a separate component of stockholders’ equity.

Foreign currency transaction gains and losses are included within other income (expense), net in the Consolidated Statements of Comprehensive Income in the periods in which they occur.

Foreign currency transaction gains and losses are included within other income, net in the Consolidated Statements of Comprehensive Income in the periods in which they occur.

Comprehensive Income

Our comprehensive income consists of net income, foreign currency translation adjustments and a defined benefit pension plan, which are presented in the Consolidated Statements of Comprehensive Income, net of tax and reclassifications to earnings.

The accumulated balance of other comprehensive income is reported separately from retained earnings and additional paid-in capital in the stockholders’ equity section of the Consolidated Balance Sheets.

The accumulated balance of other comprehensive income is reported separately from retained earnings and additional paid-in capital in the

stockholders’ equity section of the Consolidated Balance Sheets.

Total comprehensive income consists of net income and other accumulated comprehensive income disclosed in the equity section of the Consolidated Balance Sheets.

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Recently Adopted Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

ASU 2020-04 provides optional expedients and exceptions for applying U.S.

GAAP if certain criteria are met to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued.

In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848):

The update provides additional optional guidance on the transition from LIBOR to include derivative instruments that use an interest rate for margining, discounting or contract price alignment.

The standard will ease, if warranted, the requirements for accounting for the future effects of the rate reform.

Additionally, in December 2022, the FASB issued ASU 2022-06, Reference Rate Reform:

Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024 to align with the amended cessation date of LIBOR.

We have adopted ASU 2020-04 and the adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.

Recent Accounting Pronouncements Not Yet Effective

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

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The standard also requires disclosure of the title and position of the CODM as well as how the CODM uses the reported measures of a segment’s profit or loss to assess segment performance and decide how to allocate resources.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 31, 2024.

Early adoption is permitted.

We are currently evaluating the potential impact the standard will have on our disclosures.

We have adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 19 Segment and Geographic Information in the accompanying notes to the consolidated financial statements for further detail.

Recent Accounting Pronouncements Not Yet Effective

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) .

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We are currently evaluating the potential impact the standard will have on our income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard requires enhanced disclosures specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, on a prospective basis with early adoption permitted.

We are currently evaluating the potential impact the standard will have on our disclosures.

Note 3—Accounts Receivable, net

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We have certain lease agreements with our unconsolidated real estate joint ventures.

We recognized operating lease expense of $ 1.3 m illion, $ 1.3 million and $ 2.1 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to these lease agreements.

We recognized operating lease expense of $ 1.3 m illion in each of the years ended December 31, 2024, 2023 and 2022, related to these lease agreements.

We have certain sublease agreements in place with third parties to lease portions of our office space.

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Realized gains (losses) for equity securities sold during the period

Total gains recognized in other income (expense), net

Total gains recognized in other income, net

Fair Value Measurement

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_____________________________________________________

(1) As of December 31, 2023, included $ 131.7 million of cash and cash equivalents, $ 1.8 million of restricted cash and $ 2,079.1 million of funds receivable and funds held on behalf of clients on the Consolidated Balance Sheet.

As of December 31, 2022, included $ 156.5 million of cash and cash equivalents, $ 2.2 million of restricted cash and $ 515.8 million of funds receivable and funds held on behalf of clients on the Consolidated Balance Sheet.

(1) As of December 31, 2024, included $ 184.2 million of cash and cash equivalents, $ 2.5 million of restricted cash and cash equivalents and $ 2,450.8 million of funds receivable and funds held on behalf of clients on the Consolidated Balance Sheet.

As of December 31, 2023, included $ 131.7 million of cash and cash equivalents, $ 1.8 million of restricted cash and cash equivalents and $ 2,079.1 million of funds receivable and funds held on behalf of clients on the Consolidated Balance Sheet.

(2) Included in investments on the Consolidated Balance Sheet.

(3) Included in other long-term liabilities on the Consolidated Balance Sheet.

During the year ended December 31, 2022, we provided $ 10.0 million in seed capital funding to either mutual funds or exchange-traded funds issued by one of our subsidiaries.

During the years ended December 31, 2024 and 2023, we redeemed $ 3.6 million and $ 5.7 million, respectively, of our seed capital investments.

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Accordingly, SILAC is considered a related party.

During the year ended December 31, 2022, as a result of an observable price change, we recorded a fair value adjustment of $ 39.5 million to increase the carrying value of SILAC.

The fair value adjustment was recorded as an unrealized gain in other income (expense), net on our Consolidated Statements of Comprehensive Income.

In each of the years ended December 31, 2023, 2022 and 2021, we received a preferred stock dividend from SILAC of $ 8.0 million which is recorded in other income (expense), net on our Consolidated Statements of Comprehensive Income.

In each of the years ended December 31, 2024, 2023 and 2022, we received a preferred stock dividend from SILAC of $ 8.0 million which is recorded in other income, net on our Consolidated Statements of Comprehensive Income.

We have partnership interests in various private equity funds that are not included in the table above.

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We add new investment products such as mutual funds and exchange traded funds, through our subsidiary, ALPS Advisors, from time to time by providing the initial cash investments as seed capital.

We consolidate seed capital investments when our ownership percentage exceeds 50%.

Shares in those investments not owned by us are reflected as a redeemable noncontrolling interest on the condensed consolidated balance sheet.

There were no seed capital investments consolidated as of December 31, 2023.

Note 7—Unconsolidated Affiliates

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The difference between the amount at which each of IFDS L.P., PRDC LLC and Broadway Square Partners is carried and the amount of underlying equity in net assets, will be amortized as a component of equity in earnings of unconsolidated affiliates over approximately 15 years, 28 years and 40 years, respectively.

Equity in earnings of other unconsolidated affiliates for the year ended December 31, 2021 includes a $ 23.4 million gain from the Kans as City Downtown Hotel Group, L.L.C unconsolidated affiliate as a result of a sale of its primary asset.

The following tables summarize related party transactions and balances outstanding with our related parties, which is primarily comprised of transactions with our unconsolidated affiliates (in millions):

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Amounts paid to related parties (1)

Distributions received from related parties

Distributions received from related parties, net

Outstanding advances/loans to related parties

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and payments to other unconsolidated real estate joint ventures for rent and other facility costs.

For the year ended December 31, 2023, distributions received include $ 22.5 million return on investment related to our investments in IFDS L.P.

During the year ended December 31, 2024, we received a distribution of $ 26.9 million from our unconsolidated affiliate, Orbit Private Investments L.P.

which reduced our investment in the affiliate.

We recorded the distribution as a $ 2.4 million operating cash inflow and a $ 24.5 million investing cash inflow in our consolidated statements of cash flows due to the nature of the distribution.

For the years ended December 31, 2024 and 2023, distributions received includes $ 10.5 million and $ 22.5 million, respectively, return on investment related to our investments in IFDS L.P.

and the Kansas City Downtown Hotel Group, L.L.C.

During the year ended December 31, 2022, we received a distribution of $ 64.5 million from our unconsolidated affiliate, Pershing Road Development Company, LLC (“PRDC”), which reduced our investment in the affiliate.

For the year ended December 31, 2021, distributions received include $ 10.0 million return on investment and $ 20.0 million return of investment related to our investments in IFDS L.P.

and the Kansas City Downtown Hotel Group, L.L.C., respectively.

Note 8—Acquisitions

2024 Acquisitions

Battea-Class Action Services, LLC

On September 27, 2024, we purchased all of the outstanding stock of Battea-Class Action Services, LLC (“Battea”) for approximately $ 671 million in cash, plus the costs of effecting the transaction.

We financed the acquisition in part by entering into an Incremental Joinder to our existing amended and restated credit agreement, dated as of April 16, 2018 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

Battea is a market-leading provider of securities class action claims and settlement recovery services.

The net assets and results of operations of Battea have been included in our Consolidated Financial Statements from September 27, 2024.

The fair value of the acquired receivables represents the contractual value net of the allowance for potentially uncollectible accounts.

The preliminary fair value of the intangible assets, consisting of customer relationships, completed technologies and trade names, was determined using the income approach.

Specifically, the excess earnings method was utilized for customer relationships and the relief-from-royalty method was utilized for completed technology.

The significant assumption used in the determination of fair value for customer relationships and completed technologies was projected future revenues.

The intangible assets will be amortized each year based on the ratio that the projected cash flows for the intangible assets bear to the total of current and expected future cash flows for the intangible assets.

The customer relationships, completed technologies and trade names are expected to be amortized over approximately thirteen , ten and thirteen years , respectively, in each case the estimated life of the assets.

The remainder of the purchase price was allocated to goodwill, a portion of which is tax deductible.

The Consolidated Statements of Comprehensive Income for the year ended December 31, 2024 includes $ 21.1 million in revenues from Battea’s operations.

2023 Acquisitions

Iress Managed Funds Administration Business

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The net assets and results of operations of the Iress Managed Funds Administration Business have been included in our Consolidated Financial Statements from October 1, 2023.

The preliminary fair value of the intangible assets, consisting of customer relationships and trade names, was determined using the income approach.

Specifically, the excess earnings method was utilized for customer relationships and the relief-from-royalty method was utilized for trade names.

Customer relationships and trade names are expected to be amortized over approximately twelve and ten years, respectively, in each case the estimated life of the assets.

The fair value of the intangible assets, consisting of customer relationships and completed technologies, was determined using the income approach.

Specifically, the excess earnings method was utilized for

customer relationships and the relief-from-royalty method was utilized for completed technology.

Customer relationships and completed technologies are expected to be amortized over approximately twenty and nine years, respectively, in each case the estimated life of the assets.

The remainder of the purchase price was allocated to goodwill and is not tax deductible.

The Consolidated Statements of Comprehensive Income for the year ended December 31, 2023 includes $ 3.6 million in revenues from the Iress Managed Funds Administration Business’s operations.

2022 Acquisitions

On March 16, 2022 , we purchased all of the outstanding stock of Blue Prism Group plc (“Blue Prism”) for approximately $ 1.6 billion in cash, plus the costs of effecting the transaction pursuant to a Scheme of Arrangement entered into under the U.K.

Takeover Code.

We financed the acquisition by entering into an Incremental Joinder (the “Incremental Joinder”) to the amended and restated credit agreement.

Blue Prism is a global leader in enterprise robotics process automation and intelligent automation.

The net assets and results of operations of Blue Prism have been included in our Consolidated Financial Statements from March 16, 2022.

The fair value of the intangible assets, consisting of customer relationships, completed technology and trade names, was determined using the income approach.

Specifically, the relief-from-royalty method was utilized for completed technology and trade names, and the excess earnings method was utilized for customer relationships.

Significant assumptions used in the determination of fair value for completed technology were projected future revenues, royalty rate, obsolescence rate and discount rate.

Significant assumptions used in the determination of fair value for customer relationships were projected future revenues, costs and discount rate.

Customer relationships, completed technology and trade names are expected to be amortized over approximately fifteen, eight and fourteen years, respectively, in each case the estimated life of the assets.

The remainder of the purchase price was allocated to goodwill and is not tax deductible.

The Consolidated Statements of Comprehensive Income for the year ended December 31, 2022 included $ 201.2 million in revenues from Blue Prism’s operations.

Blue Prism generates revenues primarily from software license fees and related maintenance and service fees.

On March 25, 2022 , we purchased all of the outstanding stock of Hubwise Holdings Limited (“Hubwise”) for approximately $ 75.0 million in cash, plus the costs of effecting the transaction.

Hubwise is a regulated business-to-business investment platform serving advisers, discretionary wealth managers and self-directed direct-to-consumer propositions.

The net assets and results of operations of Hubwise have been included in our Consolidated Financial Statements from March 25, 2022.

The fair value of the intangible assets, consisting of customer relationships, completed technology and trade names, was determined using the income approach.

Specifically, the relief-from-royalty method was utilized for completed technology and trade names, and the excess earnings method was utilized for customer relationships.

Customer relationships, completed technology and trade name are expected to be amortized over approximately twelve, eight and fourteen years, respectively, in each case the estimated life of the assets.

The remainder of the purchase price was allocated to goodwill and is not tax deductible.

The Consolidated Statements of Comprehensive Income for the year ended December 31, 2022 included $ 4.1 million in revenues from Hubwise’s operations.

On August 23, 2022 , we purchased the sell-side Tier1 customer relationship management (“CRM”) business (“Tier1”) and related assets from Tier1 Financial Solutions for approximately $ 32.5 million in cash, plus the costs of effecting the transaction.

Tier1 is a leading provider of sell-side CRM solutions targeting capital markets and investment banks.

Tier1 supplies CRM capabilities to sell-side financial services firms, including research, trading, and sales teams within capital markets groups, and provides deal management experience to investment banks.

The net assets and results of operations of Tier1 have been included in our Consolidated Financial Statements from August 23, 2022.

The preliminary fair value of the intangible assets, consisting of customer relationships and completed technology, was determined using the income approach.

Specifically, the relief-from-royalty method was utilized for completed technology, and the excess earnings method was utilized for customer relationships.

Customer relationships and completed technologies are expected to be amortized over approximately fourteen and six years, respectively, in each case the estimated life of the assets.

The remainder of the purchase price was allocated to goodwill and is tax deductible.

The Consolidated Statements of Comprehensive Income for the year ended December 31, 2022 included $ 4.7 million in revenues from Tier1’s operations.

The following summarizes the allocation of the purchase price for the 2023 acquisition of the Iress Managed Funds Administration Business and the 2022 acquisitions of Blue Prism, Hubwise and Tier1 (in millions):

The following summarizes the allocation of the purchase price for the 2024 acquisition of Battea and the 2023 acquisition of the Iress Managed Funds Administration Business (in millions):

Iress Managed Funds Administration Business

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Property, plant and equipment

Funds receivable and funds held on behalf of clients

Operating lease right-of-use assets

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Completed technologies

Accounts payable

Accrued employee compensation and other liabilities

Deferred revenue

Deferred income taxes

Client funds obligations

Consideration paid, net of cash acquired

Additionally, we acquired 5 M’s Minerals Management, LLC (“MineralWare”) in May 2022 for approximately $ 18.0 million and Complete Financial Ops, Inc.

(“CFO”) in December 2022 for approximately $ 5.7 million.

We acquired assets related to O’Shares exchange traded funds (“O’Shares”) in June 2022 for approximately $ 28.3 million.

The goodwill associated with each of the transactions above is a result of expected synergies from combining the operations of businesses acquired with us and intangible assets that do not qualify for separate recognition, such as an assembled workforce.

The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and assume that the acquisition of the Iress Managed Funds Administration Business occurred on January 1, 2022 and the acquisitions of Blue Prism, Hubwise, MineralWare, Tier1 and CFO occurred on January 1, 2021, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and tax effects.

The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and assume that the acquisition of the Battea occurred on January 1, 2023 and the acquisition of Iress Managed Funds Administration Business occurred on January 1, 2022, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and tax effects.

This unaudited pro forma information (in millions) should not be relied upon as being indicative of the historical results that would have been obtained if the acquisitions had actually occurred on those dates, nor of the results that may be obtained in the future.

Year Ended December 31,

We recorded severance expense related to personnel reductions in several of our financial services and healthcare businesses.

The amount of severance expense recognized in our Consolidated Statements of Comprehensive Income was as follows (in millions):

For the Year Ended December 31,

Consolidated Statements of Comprehensive Income Classification

Cost of software-enabled services

Cost of license, maintenance and other related

Total cost of revenues

Selling and marketing

Research and development

General and administrative

Total operating expenses

Total severance expense

Note 9—Goodwill and Intangible Assets

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Net capitalized software costs of $ 390.4 million and $ 325.8 million are included in the December 31, 2024 and 2023 Consolidated Balance Sheets, respectively, under “Intangible and other assets”.

Accumulated amortization related to capitalized software costs totaled $ 422.8 million and $ 307.6 million as of December 31, 2024 and 2023, respectively.

Amortization expense related to capitalized software development costs was $ 124.4 million, $ 91.3 million and $ 78.9 million for each of the years ended December 31, 2024, 2023, and 2022 , respectively.

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5.5 % senior notes due 2027

Other indebtedness

6.5 % senior notes due 2032

Unamortized original issue discount and debt issuance costs

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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)

Term B-8 Loans

Term A-9 Loans

September 27, 2029 (2)

Revolving Credit Facility

December 28, 2027

Variable rate (3)

5.5 % Senior Notes

September 30, 2027

Fixed at 5.5 %

(1) 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 %.

In June 2023, we entered into an amendment, whereby the interest rate provisions were amended to, at our option, either (a) the Base Rate, plus 0.75% per annum or the (b) Adjusted Term SOFR, plus 1.75% per annum.

(2) Bears interest at, at our option, either (a) the Base Rate, plus 1.25 % per annum or the (b) Adjusted Term SOFR, 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.

Senior Secured Credit Facilities

6.5 % Senior Notes

(1) Per the September 2024 Incremental Joinder, scheduled quarterly payments of 0.25 % are required.

We have made prepayments on our Term B-8 Loans and do not have any principal quarterly payments due until March 2030.

(2) The Term A-9 Loans will mature on the earlier to occur of (1) September 27, 2029 or (2) 91 days prior to the maturity of (x) the 5.5 % Senior Notes if more than $ 150.0 million aggregate principal amount remains outstanding on the 91 st day prior to such maturity or (y) the Revolving Credit Facility if more than $ 150.0 million aggregate principal amount of commitments remain outstanding on the 91 st day prior to such maturity, whichever of (x) or (y) comes first.

(3) Scheduled quarterly payment required for the first eight fiscal quarters commencing with the fiscal quarter ending December 31, 2024.

The scheduled quarterly payment will increase to 1.250 % for each quarter thereafter until the maturity date of the Term A-9 Loans.

Senior Secured Credit Facilities and Senior Notes

On April 16, 2018 , in connection with our acquisition of DST, we entered into an amended and restated credit agreement with SS&C Technologies, Inc.

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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.

On March 28, 2019, we issued $ 2.0 billion aggregate principal amount of 5.5 % Senior Notes due 2027 (“5.5% Senior Notes”), the proceeds of which were used to repay a portion of the outstanding Term B-3 Loan under our Credit Agreement.

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”).

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As of December 31, 2024, there was $ 3.7 million utilized of the letter of credit sub-facility and $ 596.3 million available of the Revolving Facility Amendment.

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, 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.

loan parties under the Credit Agreement are secured by substantially all of the assets of such persons (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of the U.S.

On May 9, 2024, we entered into the Incremental Joinder & First Amendment to Credit Agreement (the “Amendment”) which amended our Credit Agreement.

Pursuant to the Amendment, we borrowed $ 3,935.0 million in aggregate principal amount of incremental term B-8 loans (the “Term B-8 Loans”).

The Term B-8 Loans bear interest at, at our option, the Base Rate (as defined in the Amendment), plus 1.00% per annum, or the Term SOFR Rate (as defined in the Amendment), plus 2.00% per annum.

Also on May 9, 2024, we issued $ 750.0 million aggregate principal amount of 6.5 % Senior Notes due 2032 (the “6.5% Senior Notes”).

The 6.5% Senior Notes are senior unsecured obligations and rank equal in right of payment with all of our existing and future senior indebtedness.

The 6.5% Senior Notes are fully and unconditionally guaranteed, jointly and severally, by SS&C Holdings and all of its existing domestic restricted subsidiaries (other than SS&C Technologies) that guarantee our existing senior secured credit facilities and future domestic restricted subsidiaries that guarantee our existing senior secured credit facilities and certain other indebtedness.

Interest on the 6.5% Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024.

The net proceeds of the Term B-8 Loans and from the sale of the 6.5 % Senior Notes were used to repay all amounts owed under the term B-3 loans, the term B-4 loans, the term B-5 loans, the term B-6 loans and the term B-7 loans (together, the “Existing Term Loans”) under the Credit Agreement, as well as to pay related fees and expenses.

On September 27, 2024, in connection with our acquisition of Battea, we entered into an Incremental Joinder to our Credit Agreement (the “September 2024 Incremental Joinder”).

Pursuant to the September 2024 Incremental Joinder, we borrowed $ 800.0 million in aggregate principal amount of incremental term A-9 loans (“Term A-9 Loans”), the net proceeds of which were used to finance in part the acquisition of Battea, the payment of fees and expenses related thereto and for working capital and general corporate purposes.

The Term A-9 Loans bear interest at, at our option, the Base Rate (as defined in the Incremental Joinder), plus 0.50% per annum, or the Term SOFR Rate (as defined in the Incremental Joinder), plus 1.50% per annum, in each case with two leverage-based adjustments that increase the interest rate margin by 0.25 % per annum if our consolidated net secured leverage ratio is greater than 3.50x and 4.25x, respectively, and one leverage-based adjustment that reduces the interest rate margin by 0.125 % per annum if our consolidated net secured leverage ratio is less than or equal to 2.50x.

Our obligations under the Term B-8 Loans and Term A-9 Loans are guaranteed by our existing and future wholly-owned domestic restricted subsidiaries (subject to customary exceptions and limitations).

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

wholly-owned restricted subsidiaries of such persons (with customary exceptions and limitations) and 65 % of the capital stock of certain foreign restricted subsidiaries of such persons (with customary exceptions and limitations).

All obligations of the non-U.S.

loan parties under the Credit Agreement are secured by substantially all of our and the other guarantors’ assets (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of 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 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, 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.

On March 28, 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 Credit Agreement.

The Senior Notes are guaranteed, jointly and severally, by Holdings and all of its existing and future domestic restricted subsidiaries that guarantee our existing senior secured credit facilities or certain other indebtedness.

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

The amended senior secured credit facility also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions.

In addition, the amended senior secured credit facility contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a maximum consolidated net secured leverage ratio.

The amended senior secured credit facility also contains a financial maintenance covenant for the benefit of the Term A-9 Loans that will require us to maintain a separate maximum consolidated net secured leverage ratio.

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

As of December 31, 2024, we were in compliance with all financial and non-financial covenants.

The 5.5 % Senior Notes are guaranteed, jointly and severally, by SS&C Holdings and all of its existing and future domestic restricted subsidiaries that guarantee our existing senior secured credit facilities or certain other indebtedness.

The 5.5 % Senior Notes are unsecured senior obligations that are equal in right of payment to all of our existing and future senior unsecured indebtedness.

Interest on the 5.5 % Senior Notes is payable on March 30 and September 30 of each year.

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:

At any time and from time to time, we may, at our option, redeem some or all of the 5.5% 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 Date

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.

At any time prior to June 1, 2027, we may, at our option, redeem some or all of the 6.5 % Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the 6.5 % Senior Notes, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, the date of redemption.

On and after June 1, 2027, we may, at our option, redeem some or all of the 6.5 % 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:

On or after June 1, 2027

On or after June 1, 2028

June 1, 2029 and thereafter

We may also, from time to time in our sole discretion, purchase, redeem, or retire any outstanding 5.5 % Senior Notes and 6.5 % Senior Notes, through tender offers, in privately negotiated or open market transactions, or otherwise.

The indentures governing the 5.5 % Senior Notes and 6.5 % Senior Notes contain 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 amended senior secured credit facility that leads to an acceleration of those amounts due also results in a default under the indenture governing each of the Senior Notes.

Debt Issuance Costs and Loss on Extinguishment of Debt

We capitalized an aggregate of $ 40.7 million in financing costs during the twelve months ended December 31, 2022 in connection with the Incremental Joinder and Revolving Facility Amendment.

We evaluated the borrowing of our Term B-8 Loans and issuance of 6.5 % Senior Notes and the repayment of our Existing Term Loans in accordance with FASB Accounting Standards Codification 470-50, Debt Modifications and Extinguishments .

We determined that the new debt borrowing and issuance and existing debt repayment were two independent transactions due to the fact that (i) no single investor held a significant concentration of both the old and the new debt, (ii) none of the old investors were included in negotiations with creditors about modifying the old debt, and (iii) all lenders were provided the same opportunity to participate in the new debt regardless of whether they were an existing lender.

Consequently, the refinancing was accounted for as a debt extinguishment.

As a result, the Existing Term Loans borrowing costs of $ 27.7 million were expensed and are included in Loss on extinguishment of debt in the Consolidated Statement of Comprehensive Income during the year ended December 31, 2024.

In connection with the May 2024 and September 2024 debt transactions, we capitalized an aggregate of $ 39.4 million during year ended December 31, 2024 in financing costs, which represent new third-party costs.

We made additional principal payments prior to their scheduled maturity in 2024, 2023 and 2022, which resulted in a loss on extinguishment of debt of $ 3.5 million, $ 2.1 million and $ 5.5 million, respectively, due to the write-off of a portion of the unamortized capitalized financing fees and the unamortized original issue discount.

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5.5 % senior notes due 2027

Other indebtedness

6.5 % senior notes due 2032

The above fair values, which are Level 2 liabilities, were computed based on comparable quoted market prices.

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In 2024 , we paid a quarterly cash dividend of $ 0.24 per share of common stock in March and June and $ 0.25 per share of common stock in September and December, totaling $ 244.9 million.

In 2023 , we paid a quarterly cash dividend of $ 0.20 per share of common stock in March and June and $ 0.24 per share of common stock in September and December, totaling $ 220.9 million.

In 2022 , we paid a quarterly cash dividend of $ 0.20 per share of common stock in March, June, September and December, totaling $ 203.1 million .

In 2021 , we paid a quarterly cash dividend of $ 0.16 per share of common stock in March, June and September and $ 0.20 per share of common stock in December, totaling $ 174.0 million .

Stock Repurchase Program

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Other Comprehensive Loss

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

Interest Rate Swap

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

Foreign Currency Translation

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Balance, December 31, 2023

Net current period other comprehensive income (loss)

Net current period other comprehensive (loss) income

Balance, December 31, 2024

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Unrealized gains (losses) on interest rate swaps

Reclassification of (gains) losses into net earnings on interest rate swaps

Reclassification of gains into net earnings on interest rate swaps

Net change in cash flow hedges

Defined Benefit Pension

Unrealized net (losses) gains on defined benefit pension plan

Unrealized net gains (losses) on defined benefit pension plan

Foreign Currency Translation

Current period translation adjustments

Total other comprehensive income (loss)

Total other comprehensive (loss) income

Note 12—Variable Interest Entity

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Accordingly, we determined that we are the primary beneficiary of DomaniRx and consolidate its results.

During the year ended December 31, 2024, the Board of DomaniRx authorized a mandatory additional capital contribution in accordance with each member’s ownership interest in DomaniRx in the amount of $ 75.0 million.

Our cash capital contribution during the year ended December 31, 2024 was $ 60.2 million.

The carrying value of the assets and liabilities associated with DomaniRx included in the Consolidated Balance Sheets as of December 31, 2024 and 2023, which are limited for use in its operations and do not have recourse against our general credit or our senior secured credit facilities, are as follows:

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Note 13—Revenue

Deferred revenues primarily represents unrecognized fees billed or collected for maintenance and professional services.

Deferred revenues primarily represent unrecognized fees billed or collected for maintenance and professional services.

Deferred revenues are recognized as (or when) we perform under the contract.

Deferred revenues are recorded on a net basis with contract assets at the contract level.

Accordingly, as of December 31, 2023 and 2022 , approximately $ 72.0 mil lion and $ 68.0 million, respectively, of deferred revenue is presented net within contract assets arising from the same co ntracts.

Accordingly, as of December 31, 2024 and 2023 , approximately $ 72.3 mil lion and $ 72.0 million, respectively, of deferred revenue is presented net within contract assets arising from t he same contracts.

The amount of revenues recognized in the period that was included in the opening deferred revenues balance was $ 379.8 million, $ 393.8 million and $ 262.9 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2023, revenue of approximately $ 1,013.8 m illion is expected to be recognized from remaining performance obligations for license, maintenance and related revenues, of which $ 498.0 m illion is expected to be recognized over the next twelve months.

As of December 31, 2022 , revenue of approximately $ 1,000.3 million is expected to be recognized from remaining performance obligations for license, maintenance and related revenues, of which $ 484.8 million is expected to be recognized over the next twelve months.

As of December 31, 2024, revenue of approximately $ 997.3 m illion is expected to be recognized from remaining performance obligations for license, maintenance and related revenues, of which $ 492.1 m illion is e xpected to be recognized over the next twelve months and the remainder is expected to be recognized over a weighted average period of approximately two years .

Revenue Disaggregation

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Note 14—Stock-based Compensation

In April 2024, our Board of Directors adopted the Amended and Restated 2023 Stock Incentive Plan (the “Amended 2023 Plan”), which became effective in May 2024 upon stockholder approval.

The Amended 2023 Plan was adopted to increase the shares available for equity by an additional 2.6 million shares.

In March 2023, our Board of Directors adopted the 2023 Stock Incentive Plan (the “2023 Plan”), which became effective in May 2023 upon stockholder approval and replaced, on a prospective basis, the Second Amended and Restated 2014 Stock Incentive Plan.

The 2023 Plan was adopted to increase the shares available for equity by an additional 11.5 million shares.

In March 2019, our Board of Directors adopted the Second Amended and Restated 2014 Stock Incentive Plan, which amended and restated our Amended and Restated 2014 Stock Incentive Plan (the “Amended 2014 Plan”) (together with the Amended 2014

Plan, the “2014 Plans”), which became effective in May 2019 upon stockholder approval.

The 2014 Stock Option Plan authorized stock options to be granted for up to 6.0 million shares of our common stock.

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The Second Amended and Restated 2014 Stock Incentive Plan was adopted to increase the shares available for equity awards by an additional 34.0 million shares.

Under the terms of the 2023 Plan and 2014 Plans, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on such date.

Under the terms of the 2023 Plans and 2014 Plans, the exercise price of awards is set on the grant date and may not be less than the fair market value per share on such date.

Generally, awards expire ten years from the date of grant.

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During the years ended December 31, 2024, 2023 and 2022 , we granted RSUs which generally vest 1/3rd on the first anniversary of the grant and 1/4th of the remaining balance each six months thereafter for two years .

We did not grant any RSUs during the year ended December 31, 2021.

We determine the fair value of RSUs with a service condition using the value of our common stock on the date of the grant.

At December 31, 2023 , there was approximately $ 114.5 million of unearned non-cash stock-based compensation related to RSUs that we expect to recognize as expense over a remaining period of approximately 2.1 years.

At December 31, 2022 , there was approximately $ 119.9 million of unearned non-cash stock-based compensation related to RSUs that we expect to recognize as expense over a remaining period of approximately 2.9 years.

At December 31, 2024 and 2023 , there was approximately $ 196.2 million and $ 114.5 million, respectively, of unearned non-cash stock-based compensation related to RSUs that we expect to recognize as expense over a remaining period of approximately 1.9 and 2.1 years, respectively.

Performance-based Stock Units

In July 2021 and March 2022, we granted performance-based stock units at a grant date fair value of $ 75.03 per share and $ 71.89 per sh are, respectively, based on the value of our common stock on the date of the grant.

These awards include established annual earnings per share growth targets and will measure performance against the target over the 2 -year performance period.

Performance is measured relative to a 2-year average annual growth rate that is established at the beginning of the cycle and held constant.

Participants will only be entitled to receive any portion of the PSUs that are earned if they remain employed through the final determination of the satisfaction of these performance goals.

The actual number of units that will be issued ranges from zero , if the threshold level of performance is not achieved, to 200 % of the targeted number of units, if the annual growth rate meets or exceeds a specified level.

In July 2021 and March 2022, we granted performance-based stock units at a grant date fair value of $ 75.03 per share and $ 71.89 per share, respectively, based on the value of our common stock on the date of the grant.

During the year ended December 31, 2023, the Compensation Committee determined that the PSUs granted in July 2021 did not meet the threshold level of performance and were cancelled.

As of December 31, 2023, the March 2022 PSUs did not meet the threshold level of performance and will not vest.

During the year ended December 31, 2024, the Compensation Committee determined that the PSUs granted in March 2022 did not meet the threshold level of performance and were cancelled.

During the year ended December 31, 2022, we recorded a true-up to reverse previously recorded stock-based compensation expense relating to the PSUs.

In 2023, we granted performance-based stock units with a market condition at a grant date fair value of $ 63.50 , estimated using a Monte Carlo simulation model as of the date of the grant using an average of implied and historical volatility.

In 2024 and 2023, we granted performance-based stock units with a market condition at a grant date fair value of $ 67.87 and $ 63.50 , respectively, estimated using a Monte Carlo simulation model as of the date of the grant using an average of implied and historical volatility.

These awards include established annual earnings per share growth targets and will measure performance against the target over the 3 -year performance period.

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The ultimate payout of the PSUs is also subject to a relative total shareholder return (“TSR”) performance modifier, with the ultimate payout level adjusted upwards or downwards up to 20% (subject to the maximum 200% payout);

however, no upward modifier will be applied if the Company's absolute TSR is negative for the 3-year performa nce period.

As of December 31, 2023, there was approximately $ 16.2 million of unearned non-cash stock-based compensation related to the 2023 PSUs that we expect to recognize over a remaining period of approximately 2.2 years.

however, no upward modifier will be applied if the Company's absolute TSR is negative for the 3-year performance period.

As of December 31, 2024 and 2023 , there was approximately $ 21.3 million and $ 16.2 million, respectively, of unearned non-cash stock-based compensation related to the 2024 and 2023 PSUs that we expect to recognize over a remaining period of approximately 1.8 years and 2.2 years, respectively.

For the PSUs with a market condition valued using the Monte Carlo simulation model, we used the following weighted-average assumptions:

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Time-based stock options and SARs generally vest 25 % on the first anniversary of the grant date and 1/36 th of the remaining balance each month thereafter for 36 months.

Time-based stock options granted during 2023, 2022 and 2021 have a weighted-average grant date fair valu e of $ 17.54 , $ 15.26 and $ 22.28 per share, respectively, based on the Black-Scholes option pricing model.

Time-based stock options granted during 2024, 2023 and 2022 have a weighted-average grant date fair value of $ 17.11 , $ 17.54 and $ 15.26 per share, respectively, based on the Black-Scholes option pricing model.

Compensation expense is recorded on a straight-line basis over the requisite service period.

The fair value of time-based stock options vested during the years ended December 31, 2023, 2022 and 2021 was appro ximately $ 86.9 million, $ 102.1 million and $ 103.0 million, respectively.

At December 31, 2023 and 2022, there was appr oximately $ 111.7 millio n and $ 201.6 million, respectively, of unearned non-cash stock-based compensation related to time-based stock options that we expect to recognize as expense over a weighted-average remaining period of approxim ately 2.2 years and 2 .7 years, respectively.

The fair value of time-based stock options vested during the years ended December 31, 2024, 2023 and 2022 was approximately $ 61.2 million, $ 86.9 million and $ 102.1 million, respectively.

At December 31, 2024 and 2023 , there was approximately $ 71.4 million and $ 111.7 million, respectively, of unearned non-cash stock-based compensation related to time-based stock options that we expect to recognize as expense over a weighted-average remaining period of approximately 2.3 years and 2.2 years, respectively.

Performance-based Stock Options

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Participants will only be entitled to receive any portion of the PSOs that are earned if they remain employed through the final determination of the satisfaction of these performance goals.

The actual number of options that will be issued ranges from zero , if the threshold level of performance is not achieved, to 200 % of the targeted number of options, if the annual growth rate meets or exceeds a specified level.

PSOs granted during 2021 have a weighted-average grant date fair value of $ 21.88 per share, based on the Black-Scholes options pricing model.

During the year ended December 31, 2023 and 2022, no PSOs have vested.

At December 31, 2023 and 2022, there was approxima tely $ 23.3 million and $ 60.8 mi llion, respectively of unearned non-cash stock-based compensation related to PSOs that we expect to recognize as expense over a remaining period of approximately 1.2 years and 2.1 years, respectively.

If the threshold level of performance is not achieved for the PSOs granted in December 2021, $ 38.5 million of previously recorded stock-based compensation expense may be reversed.

The actual number of options to be issued ranges from zero , if the threshold level of perf ormance is not achieved, to 200 % of the targeted number of options, if the annual growth rate meets or exceeds a specified level.

During the year ended December 31, 2024, 79.2 % of the March 2021 PSOs vested.

During the year ended December 31 2023, no PSOs vested.

At December 31, 2024 and 2023, there was approximatel y $ 3.8 milli on and $ 23.3 mi llion, respectively of unearned non-cash stock-based compensation related to PSOs that we expect to recognize as expense over a remaining period of approximately 0.2 years and 1.2 years, respectively.

For t he stock-options valued using the Black-Scholes option-pricing model, we used the following weighted-average assumptions:

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Year Ended December 31,

Consolidated Statements of Comprehensive

Income Classification

Options, SARs

Consolidated Statements of Comprehensive Income Classification

Cost of software-enabled services

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Common equivalent shares consist of stock options, SARs, RSUs and PSUs using the treasury stock method.

Common equivalent shares are excluded from the computation of diluted earnings per share if the effect of including such common equivalent shares would be anti-dilutive because their total assumed proceeds exceed the average fair value of common stock for the period.

Common equivalent shares are excluded from the computation of diluted earnings per share if the effect of

including such common equivalent shares would be anti-dilutive because their total assumed proceeds exceed the average fair value of common stock for the period.

We have two classes of common stock, each with identical participation rights to earnings and liquidation preferences, and therefore the calculation of EPS as described above is identical to the calculation under the two-class method.

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Tax credit carryforwards

Interest expense carryforwards

Accrued expenses

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A valuation allowance is recorded against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We have recorded valuation allowances of $ 51.4 million and $ 67.0 million at December 31, 2023 and 2022 , respectively, related primarily to certain foreign and state net operating loss carryforwards, tax credit carryforwards and disallowed interest expense carryforwards.

We have recorded valuation allowances of $ 38.4 million and $ 51.4 million at December 31, 2024 and 2023 , respectively, related primarily to certain foreign and state net operating loss carryforwards and tax credit carryforwards.

The valuation allowance at December 31, 2023 also related to disallowed interest expense carryforwards.

Of the $ 38.4 million valuation allowance recorded at December 31, 2024, $ 11.2 million relates to foreign attribute carryforwards that do not expire.

The change in the valuation allowance from 2022 to 2023 is primarily due to the write-off of a valuation allowance on fully reserved interest carryforwards.

The change in the valuation allowance from 2023 to 2024 is primarily due to the write-off of a valuation allowance on fully reserved interest carryforwards, partially offset by an increase in valuation allowance on tax credit carryforwards.

The following table summarizes the activity related to our unrecognized tax benefits for the years ended December 31, 2024 and 2023 (in millions):

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Increases related to current year tax positions

Decreases related to prior tax positions

Increases related to prior tax positions

Lapse in statute of limitation

Foreign exchange translation adjustment

Balance at December 31, 2023

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Increases related to prior tax positions

Decreases related to prior tax positions

Lapse in statute of limitation

Foreign exchange translation adjustment

Balance at December 31, 2024

We accrued $ 3.0 million and recorded a net benefit of $ 3.7 million for potential penalties and interest on the unrecognized tax benefits during 2023 and 2022 , respectively, and have recorded a total liability for potential penalties and interest, including penalties and interest related to unrecognized tax benefits, of $ 32.1 million and $ 28.4 million at December 31, 2023 and 2022, respectively.

We recorded a net benefit of $ 12.9 million and accrued $ 3.0 million for potential penalties and interest on the unrecognized tax benefits during 2024 and 2023 , respectively, and have recorded a total liability for potential penalties and interest, including penalties and interest related to unrecognized tax benefits, of $ 16.1 million and $ 32.1 million at December 31, 2024 and 2023, respectively.

Our unrecognized tax benefits decreased from 2023 to 2024 due to a lapse in the statute of limitations for certain domestic and foreign tax filings, offset partially by an increase in current and prior year tax positions.

Our unrecognized tax benefits increased from 2022 to 2023 due to increases in current and prior year tax positions, offset partially by a decrease due to a lapse in the statute of limitations for certain domestic and foreign tax filings.

Our unrecognized tax benefits decreased from 2021 to 2022 due to a lapse in the statute of limitations for certain domestic and foreign tax filings and decreases in prior year tax positions, offset partially by an increase in current year tax positions.

Our unrecognized tax benefits as of December 31, 2024 relate to domestic and foreign taxing jurisdictions and are recorded in other long-term liabilities on our Consolidated Balance Sheet at December 31, 2024.

We are subject to examination by tax authorities throughout the world, including such major jurisdictions as the U.S., United Kingdom, India, California, Massachusetts, Missouri, New Jersey and New York.

In these major jurisdictions, we are no longer subject to examination by tax authorities prior to tax years ending 2017, 2022, 2013, 2007, 2019, 2020, 2019 and 2015, respectively.

federal income tax returns are currently under audit for the tax periods ended December 31, 2017 through December 31, 2019 .

Our India income tax returns are currently under audit or in appeals for all tax periods ending March 31, 2013 through March 31, 2018 and March 31, 2020 through March 31, 2023 .

Our California income tax returns are currently under audit or in appeals for the tax periods ended December 31, 2007 through 2018 .

Our Massachusetts income tax returns are currently under audit for the tax periods ended December 31, 2019 through 2020.

Our New York income tax returns are currently under audit for the tax periods ended December 31, 2015 through 2018 .

federal income tax returns are currently under audit for tax years 2018 and 2019, while tax years 2021 through 2024 remain subject to examination.

Various tax years from 2012 through 2024 are under, or are subject to, various state and foreign income tax examinations by taxing authorities.

Note 18— Commitments and Contingencies

Legal Proceedings

From time to time, we are subject to legal proceedings and claims.

In our opinion, we are not involved in any litigation or proceedings that would have a material adverse effect on us or our business.

In connection with legal proceedings related to the resolved DST ERISA matters described below, including the settlement agreement which was submitted to the United States District Court for the Southern District of New York for preliminary approval on July 14, 2023, and which was granted final approval on October 25, 2023, we recorded an accrued liability of $ 55.1 million.

Of this amount, $ 3.6 million of expense was recorded in 2023, $ 8.1 million of expense was recorded in 2022 and $ 43.4 million of expense was recorded in 2021.

Expense amounts are included in other income (expense), net on the Consolidated Statements of Comprehensive Income.

As of December 31, 2023, the accrued liability decreased to $ 3.0 million as a result of $ 52.1 million in payments made in 2023.

The remaining $ 3.0 million payment was made in January 2024.

In the fourth quarter of 2023, the actions described herein were all dismissed with prejudice and claims in any way related to these matters were released.

On September 1, 2017, a putative representative action was filed on behalf of the DST 401(k) Profit Sharing Plan (the “Plan”) in the United States District Court for the Southern District of New York, captioned Ferguson, et al v.

Ruane, Cunniff & Goldfarb Inc., et al.

(“Ferguson”), naming as defendants DST, the Compensation Committee of DST’s Board of Directors, the Advisory Committee of the Plan and certain of DST’s present and/or former officers and directors (collectively the “DST Defendants”), alleging breach of fiduciary duties and other violations of the Employee Retirement Income Security Act (“ERISA”).

The DST Defendants answered the operative complaint and asserted crossclaims for contribution and/or indemnification against Ruane, Cunniff & Goldfarb Inc.

On January 9, 2020, Ruane filed an amended answer to the amended complaint and asserted crossclaims for contribution and/or indemnification against DST.

On March 8, 2021, the Court denied without prejudice the plaintiffs’ (the “Ferguson Plaintiffs”) then-pending motions for leave to file a third amended complaint and for class certification, ordering that the parties address the effect, if any, on the Ferguson Plaintiffs’ motions of the March 4, 2021 decision by the United States Court of Appeals for the Second Circuit in Cooper v.

Ruane, Cunniff & Goldfarb Inc.

The Ferguson Plaintiffs renewed their motions for leave to file a third amended complaint and for class certification, which motions were fully briefed on May 10, 2021.

On August 17, 2021, the Court certified a mandatory, non-opt-out class under Federal Rule of Civil Procedure 23(b)(1) that included all plan participants from March 14, 2010 through July 31, 2016 other than 28 plan fiduciaries.

Arbitration Claimants, and the Canfield Plaintiffs and Mendon Plaintiffs, each as defined below, filed petitions under Federal Rule of Civil Procedure 23(f) with the Second Circuit on August 30, 2021 and August 31, 2021, respectively, seeking interlocutory review of the Ferguson class certification order, which the Ferguson Plaintiffs and the DST Defendants opposed.

The Second Circuit denied the Rule 23(f) petitions on May 24, 2022 and May 25, 2022, respectively.

On February 4, 2022, the Ferguson Plaintiffs filed a third amended complaint, which included the class allegations.

On March 7, 2022, the DST Defendants and Ruane each filed answers to the Ferguson Plaintiffs’ third amended complaint and reasserted their respective‌ cross-claims.

On August 23, 2021, the DST Defendants moved for a temporary restraining order and preliminary injunction against other proceedings, including the below-described arbitrations, which arose out of or related to the allegations in Ferguson.

Following briefing, on November 18, 2021, the Court granted the DST Defendants’ motion and entered a preliminary injunction enjoining the Ferguson class members, including Arbitration Claimants, from instituting new actions or litigating in arbitration or other proceedings against the DST Defendants matters arising out of or relating to the facts or transactions alleged in the operative Ferguson complaint.

On November 18, 2021, the Court also ordered the DST Defendants and Arbitration Claimants to submit briefing regarding how the arbitration awards that had been entered against the DST Defendants should be handled in light of the Court’s class certification order and preliminary injunction.

On December 15, 2021, Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs appealed the Court’s preliminary injunction.

On December 23, 2021 and January 26, 2022, the DST Defendants, Arbitration Claimants, and the Ferguson Plaintiffs submitted briefs concerning the treatment of the arbitration awards that had been entered against the DST Defendants.

On December 31, 2021, Arbitration Claimants sought an immediate stay of the preliminary injunction pending their appeal to the Second Circuit.

On January 3, 2022, the Court denied Arbitration Claimants’ motion for an immediate stay and ordered the DST Defendants to show cause as to why the Court should not issue a stay of the preliminary injunction pending appeal.

On February 3, 2022, the Court denied Arbitration Claimants’ motion to stay the preliminary injunction pending appeal.

The Court also held that it would determine the status of the arbitration awards already entered against DST at final judgment in the Ferguson action, either after trial or after settlement.

On February 4, 2022, Arbitration Claimants filed a motion in the Second Circuit to stay the preliminary injunction pending their appeal of the Court’s preliminary injunction.

On June 7, 2022, the Second Circuit denied Arbitration Claimants’ motion to stay the preliminary injunction pending appeal.

On February 8, 2022, Arbitration Claimants and the Canfield Plaintiffs and Mendon

Plaintiffs appealed the Court’s February 3, 2022 order.

The February 8, 2022 appeal was consolidated with the December 15, 2021 appeal of the preliminary injunction.

On May 17, 2022, Arbitration Claimants and the Canfield Plaintiffs and Mendon Plaintiffs filed their opening brief in the consolidated appeals.

The DST Defendants filed their answering brief on September 15, 2022, and the reply was filed on October 20, 2022.

On April 20, 2023, the Second Circuit heard oral argument on the appeals.

On July 18, 2023, the DST Defendants submitted an unopposed motion to stay these appeals pending the Ferguson Court’s consideration of whether to preliminarily and finally approve the settlement that was proposed to that court on July 14, 2023, as discussed below, and on July 19, 2023, the Second Circuit granted the motion.

Following final approval of the settlement, as discussed below, the Second Circuit dismissed these appeals with prejudice on December 4, 2023.

On July 10, 2020, the Ferguson Plaintiffs and the DST Defendants had reached an agreement in principle to settle the class claims for $ 27 million, subject to the occurrence of certain conditions, including:

Court certification of a “non‑opt-out” class in the case that included as class members all participants of the Plan, Court approval of the settlement in accordance with applicable law, and the satisfactory resolution of claims made by certain other litigants.

On September 18, 2020, the parties disclosed to the Court that the Ferguson Plaintiffs and Ruane also had reached a settlement in principle, subject to Court approval.

The Ferguson‌ Plaintiffs and the DST Defendants entered into a settlement agreement dated January 8, 2021 memorializing the terms of their proposed settlement, which was filed by the Ferguson Plaintiffs with the Court on the same date.

On January 12, 2021, the Ferguson Plaintiffs moved for preliminary approval of the settlement with the DST Defendants, as well as preliminary approval of a separate settlement reached between the Ferguson Plaintiffs and Ruane.

Arbitration Claimants and the U.S.

Department of Labor (“DOL”) objected to various aspects of those settlements in filings dated January 15, 2021, January 27, 2021, and February 5, 2021.

On August 17, 2021, the Court denied the Ferguson Plaintiffs’ motion for preliminary approval of the settlement on the terms proposed.

On November 10, 2022, the Ferguson parties filed another notice of settlement and a joint motion to stay the proceedings.

The notice informed the Court that the Ferguson parties had reached a settlement in principle.

On November 18, 2022, the Court stayed the Ferguson action, which stay was extended pending the Court’s consideration of the preliminary and final approval motions, as explained further below.‌

On April 5, 2023, Arbitration Claimants filed a motion to decertify the Rule 23(b)(1) class previously certified by the Court, or, in the alternative, to amend the class definition to remove Arbitration Claimants or permit them to opt out of the class.

The Court held in abeyance the deadline to respond to the motion to allow the parties to conduct settlement discussions.‌

On April 7, 2023, the Ferguson parties filed a joint status report informing the Court that they had been working diligently with the DOL to finalize all necessary papers to document the settlement reached to resolve the Ferguson matter and all other related matters, and that the parties anticipated filing a final executed settlement agreement and supporting exhibits by April 14, 2023.

On April 14, 2023, the DST Defendants informed the Court that, in response to a request from Arbitration Claimants, the United States District Court for the Western District of Missouri had entered an injunction, as discussed below, enjoining DST from entering into or effectuating an agreement that settles, disposes of, interferes with, invalidates, satisfies, sets aside, alters, or otherwise compromises any of the 55 judgments confirming arbitration awards entered by the Western District of Missouri on March 31, 2023.‌

On June 30, 2023, the Ferguson parties submitted a joint status report informing the Court that they, together with the DOL and Arbitration Claimants, had reached an agreement in principle to resolve the Ferguson matter, together with each of the related proceedings, and that the parties were working to prepare a complete written settlement agreement and supporting exhibits.

The parties stated to the Court that the settlement would include a proposed schedule for preliminary approval, notice, and a fairness hearing.

On July 5, 2023, the Court stayed all deadlines pending its consideration of the anticipated preliminary approval motion.

On July 14, 2023, the Ferguson Plaintiffs filed an unopposed motion for preliminary approval of the settlement, together with a settlement agreement and exhibits.

The settlement agreement was signed by the Ferguson Plaintiffs, DST, Ruane, and Ruane’s former Chairman and Chief Executive Officer Robert D.

Goldfarb (“Goldfarb”), and, as to certain provisions, the Secretary of the DOL, counsel for Arbitration Claimants, and counsel for the Canfield Plaintiffs and the Mendon Plaintiffs.

Pursuant to the settlement, DST, Ruane, and Goldfarb paid a total of $ 124,625,000 ;

and all pending matters related to the Plan were dismissed with prejudice and claims relating in any way thereto were released.

On August 3, 2023, the Court preliminarily approved the settlement.

On October 3, 2023, the Ferguson Plaintiffs filed an unopposed motion for final approval of the settlement.

On October 23, 2023, the Court held a fairness hearing, and on October 25, 2023, the Court granted final approval and entered a Final Approval Order, Judgment, and Permanent Injunction, and directed that the case be closed.

DST paid approximately $ 55.1 million to fund its share of the global settlement, and all pending related claims were discharged.

DST made the majority of its settlement payment in the fourth quarter of 2023, and completed the payment in January 2024.

All pending DST ERISA matters described herein have been dismissed with prejudice.

On September 28, 2018, a complaint was filed in the United States District Court for the Southern District of New York captioned Robert Canfield, et al.

SS&C Technologies Holdings, Inc., et al., on behalf of five individual plaintiffs (the “Canfield Plaintiffs”).

On November 5, 2018, a similar complaint was filed in the United States District Court for the Southern District of New York captioned Mark Mendon, et al.

SS&C Technologies Holdings, Inc., et al., on behalf of two individual plaintiffs (the “Mendon Plaintiffs”).

These complaints named as defendants SS&C, the DST Defendants, and Ruane.

The underlying claim in each complaint was the same as in the above-described Ferguson matter, with the exception that these actions purported to be brought as individual actions and not putative class actions.

On July 10, 2020, the Court granted the DST Defendants’ motion to disqualify plaintiffs’ counsel in the Canfield and Mendon actions.

On March 17, 2021, the Court denied the DST Defendants’ motion to disqualify counsel from the arbitrations described below.

On April 12, 2021, the Canfield Plaintiffs and Mendon Plaintiffs filed notices of voluntary dismissal dismissing their claims against Ruane with prejudice, which were entered by the Court on April 13, 2021.

On April 22, 2021, the DST Defendants filed motions to dismiss the Canfield and Mendon actions.

Those motions were fully briefed on May 28, 2021.

On November 19, 2021, the Court dismissed the Canfield and Mendon actions.

On December 17, 2021, the Canfield Plaintiffs and Mendon Plaintiffs appealed to the Second Circuit the Court’s November 19, 2021 orders dismissing their respective actions.

On May 17, 2022, the Canfield Plaintiffs and Mendon Plaintiffs filed their opening briefs in those appeals.

The DST Defendants filed their answering briefs on September 15, 2022.

The Canfield Plaintiffs and Mendon Plaintiffs filed their reply briefs on October 20, 2022.

On April 20, 2023, the Second Circuit heard oral argument on the appeals.

On July 18, 2023, the DST Defendants submitted an unopposed motion to stay these appeals pending the Ferguson Court’s consideration of whether to preliminarily and finally approve the settlement that was proposed to that court on July 14, 2023, as discussed above, and on July 19, 2023, the Second Circuit granted the motion.

Following final approval of the settlement, as discussed above, the Second Circuit dismissed these appeals with prejudice on December 4, 2023.

On October 8, 2019, a substantially similar action to the above-described Ferguson, Canfield, Mendon and below-described arbitration matters captioned Scalia v.

Ruane, Cunniff & Goldfarb Inc.

was filed by the DOL in the United States District Court for the Southern District of New York naming as defendants DST, the Advisory Committee of the Plan, the Compensation Committee of DST’s Board of Directors, and certain of DST’s former officers and directors, and alleging that the DST Defendants breached fiduciary duties in violation of ERISA in connection with the Plan.

The complaint also named as defendants Ruane and Goldfarb.

In the complaint, the DOL sought disgorgement, damages, and any other appropriate injunctive or equitable relief.

The DST Defendants moved to dismiss the complaint on December 4, 2020 on the ground that the DOL’s complaint was time-barred.

Other defendants also filed motions to dismiss on the same and other grounds.

Briefing on the motions to dismiss was completed on February 5, 2021.

On March 28, 2022, the Court denied defendants’ motions to dismiss, and Martin J.

Walsh was substituted for Eugene Scalia as the plaintiff.

On April 11, 2022, the DST Defendants answered the DOL’s complaint.

On May 5, 2023, the Court stayed the action, then captioned Julie A.

Ruane, Cunniff & Goldfarb Inc., et al.

On June 30, 2023, the parties to the DOL action informed the Court that they had reached an agreement in principle to resolve the Su action, together with each of the related proceedings, including the above-described Ferguson matter, and that the parties were working to agree on a complete written stipulation and supporting exhibits.

The parties stated that the settlement would include a proposed schedule for preliminary approval, notice, and a fairness hearing.

On July 5, 2023, the Court stayed all deadlines pending its consideration of the anticipated preliminary approval motion in the above-described Ferguson matter.

On July 14, 2023, the parties filed a Joint Stipulation of Settlement and Release of Claims, together with a settlement agreement and exhibits, as discussed above.

On October 25, 2023, in connection with the final approval of the parties’ settlement, the Court directed that the case be closed.

DST, the Advisory Committee of the Plan, and the Compensation Committee of DST’s Board of Directors were named in 579 substantially similar individual demands for arbitration, by former and current DST employees demanding arbitration under the DST Employee Arbitration Program and Agreement (“Arbitration Claimants”).

The underlying claim in each was the same as in the above-described Ferguson matter, with the exception that the arbitrations purported to be brought as individual actions.

On November 24, 2021, in light of the preliminary injunction entered in Ferguson discussed above, the American Arbitration Association (the “AAA”) ceased administration of the arbitrations brought by members of the Ferguson class, which included all Arbitration Claimants with the exception of certain former Plan fiduciaries.

As of November 24, 2021, 557 demands for arbitration had been submitted to the AAA.

As of the date on which the preliminary injunction was entered, those individual arbitrations were at various stages depending on the particular proceeding.

Certain of those arbitrations had resulted in awards against DST and others had resulted in decisions finding no liability as against DST.

Many of those decisions were subject to further appeal within the AAA.

Certain of the arbitration proceedings had been resolved in whole or in part by settlement.

After November 24, 2021, the AAA administered only those arbitration proceedings associated with claimants who were not members of the Ferguson class, certain of which resulted in awards against DST.‌

Between August 20, 2021 and November 17, 2021, counsel for Arbitration Claimants filed 177 motions to confirm certain of the arbitration awards.

DST filed responses to those motions.

Between October 4, 2021 and December 22, 2021, the Western District of Missouri issued orders confirming those 177 arbitration awards and entering judgments against DST.

DST appealed those judgments

to the United States Court of Appeals for the Eighth Circuit.

On November 20, 2021, DST requested that the Eighth Circuit stay the pending appeals in light of the preliminary injunction entered in the above-described Ferguson matter.

On December 3, 2021, the Eighth Circuit ordered the parties to brief DST’s stay request, and on January 3, 2022, the Eighth Circuit declined to stay the briefing schedule on the pending appeals and consolidated those appeals.

DST filed its opening brief in the Eighth Circuit on March 24, 2022.

Arbitration Claimants filed their opposition brief on April 26, 2022, and DST filed its reply brief on May 18, 2022.

The Eighth Circuit heard oral argument on June 14, 2022.

On November 28, 2022, the Eighth Circuit vacated the judgments confirming the 177 arbitration awards and remanded those actions to the Western District of Missouri to determine whether the district court had subject-matter jurisdiction and whether the district court should transfer the cases to the Southern District of New York.

On December 14, 2022, the parties submitted simultaneous briefing to the Western District of Missouri regarding transfer.‌ On March 31, 2023, the Western District of Missouri issued an order finding that it had subject-matter jurisdiction over 55 of the 177 confirmation actions, and confirmed the 55 arbitration awards in those actions and entered judgments against DST.

The court dismissed the other 122 on the ground that it lacked subject-matter jurisdiction.

The court further denied DST’s motion to transfer any of the 177 confirmation actions to the Southern District of New York.

On April 28, 2023, DST appealed these judgments to the Eighth Circuit.

On July 17, 2023, DST submitted an unopposed motion to stay these appeals pending the Ferguson Court’s consideration of whether to preliminarily and finally approve the settlement that was proposed to that court on July 14, 2023, as discussed above, and on July 18, 2023, the Eighth Circuit granted the motion.‌ Following final approval of the settlement, as discussed above, the Eighth Circuit dismissed these appeals with prejudice on November 28, 2023.

On April 10, 2023, Arbitration Claimants filed in the Western District of Missouri an emergency motion seeking a Temporary Restraining Order and Preliminary Injunction prohibiting DST from settling or attempting to settle through any class or representative action the 55 arbitration awards the court had confirmed in its March 31, 2023 order, or any part thereof, unless such settlement was entered into individually and voluntarily by these 55 individuals.

On April 10, 2023, the Western District of Missouri entered a preliminary injunction against DST in a text-only docket entry, which stated that “[i]n each of the 55 cases in which this Court has subject matter jurisdiction and entered an order on March 31, 2023 confirming an arbitration award, the Court hereby enjoins DST or anyone on behalf of DST from entering into or effectuating an agreement that settles, disposes of, interferes with, invalidates, satisfies, sets aside, alters, or otherwise compromises each such judgment, without the express written consent of each Confirmation Plaintiff in whose favor judgment was entered by this Court.” On April 12, 2023, DST appealed the preliminary injunction to the Eighth Circuit.

On April 27, 2023, DST filed a motion in the Western District of Missouri seeking a stay of its preliminary injunction pending appeal.

On May 5, 2023, the Western District of Missouri denied DST’s motion to stay the injunction.

On July 17, 2023, DST submitted to the Eighth Circuit an unopposed motion to stay the appeals pending the Ferguson Court’s consideration of whether to preliminarily and finally approve the settlement that was proposed to that court on July 14, 2023, as discussed above, and on July 18, 2023, the Eighth Circuit granted the motion.

Following final approval of the settlement, as discussed above, the Eighth Circuit dismissed these appeals with prejudice on November 28, 2023.

On November 9, 2021, Arbitration Claimants’ counsel filed in the Western District of Missouri a petition to compel arbitration captioned Addison v.

DST Systems, Inc.

(the “Addison Petition”) on behalf of 155 Arbitration Claimants, which DST opposed.

On September 15, 2022, the Western District of Missouri dismissed the Addison Petition without prejudice, subject to that action being reopened after the Eighth Circuit’s rulings on DST’s appeals of the 177 orders confirming arbitration awards.

On June 20, 2023, the Western District of Missouri reopened the Addison Petition.

On July 19, 2023, the Western District of Missouri ordered that the Addison Petition be stayed in light of the Ferguson settlement, and on December 20, 2023, the Western District of Missouri dismissed the Addison Petition with prejudice.

On November 11, 2020, DST, the Compensation Committee of DST’s Board of Directors, and the Advisory Committee of the Plan as plaintiffs filed a complaint in the United States District Court for the Southern District of New York against Ruane, certain of its related entities, and certain of its current and former employees.

The complaint asserted claims for contribution, indemnification, and breach of contract arising out of Ruane’s management of the Plan’s investments and claims for actual and constructive fraudulent conveyances.

On May 24, 2021, Defendant Goldfarb filed an answer to the complaint.

On December 17, 2021, the remaining defendants filed a motion to dismiss the DST plaintiffs’ complaint.

On July 27, 2022, the Court denied without prejudice the pending motion to dismiss, and ordered the parties to submit by October 3, 2022 a joint status report with a new briefing schedule on the motion.

On October 3, 2022, the parties filed a joint status report with a new briefing schedule on the motion, which the Court approved on October 4, 2022.

On January 31, 2023, the Court stayed the proceedings.

On July 5, 2023, the Court stayed all deadlines pending its consideration of the anticipated preliminary approval motion in Ferguson.

As described above, on July 14, 2023, the Ferguson Plaintiffs filed an unopposed motion for preliminary approval of the proposed settlement with the Ferguson Court, together with a proposed settlement that, having been approved, resolves this action and all of the actions described above.

On November 28, 2023, the case was dismissed with prejudice.

As stated above, in the fourth quarter of 2023, the actions described herein were all dismissed with prejudice and claims in any way related to these matters were released.

Note 19—Segment and Geographic Information

We operate in one operating segment.

We operate in one operating segment and one reportable segment.

Our CODM is our president and chief operating officer, who reviews financial information presented on a consolidated basis.

Our CODM uses consolidated net income as the sole measure of segment profit or loss and to decide how to make resource allocation decisions.

Significant segment expenses include cost of software-enabled services revenue cost of license, maintenance and related revenues, selling and marketing, research and development, and general and administrative expenses.

For these significant and other segment expenses incurred during the years ended December 31, 2024, 2023, and 2022, refer to our Statements of Comprehensive Income.

Our geographic regions consist of the (a) United States, (b) Europe, Middle East and Africa, (c) Asia Pacific and Japan, (d) Canada and (e) the Americas, excluding the United States and Canada.

6 unchanged sentences

Dividend Declared

On February 15, 2024 , our Board of Directors declared a quarterly cash dividend of $ 0.24 per share of common stock payable on March 15, 2024 to stockholders of record as of the close of business on March 1, 2024 .

On F ebruary 14, 2025 , our Board of Directors declared a quarterly cash dividend of $ 0.25 per share of common stock payable on March 17, 2025 to stockho lders of record as of the close of business on March 3, 2025 .

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data