Edgar Filing: SUNGARD DATA SYSTEMS INC

Form 10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2011

¨	Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file numbers:


SunGard Capital Corp.		000-53653
SunGard Capital Corp. II		000-53654
SunGard Data Systems Inc.		001-12989

SunGard^® Capital Corp.

SunGard^® Capital Corp. II

SunGard^® Data Systems Inc.

(Exact name of registrant as specified in its charter)


Delaware		20-3059890
Delaware		20-3060101
Delaware		51-0267091
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

680 East Swedesford Road, Wayne, Pennsylvania 19087

(Address of principal executive offices, including zip code)

484-582-2000

(Registrants’ telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


SunGard Capital Corp.		Yes x No ¨
SunGard Capital Corp. II		Yes x No ¨
SunGard Data Systems Inc.		Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


SunGard Capital Corp.		Yes x No ¨
SunGard Capital Corp. II		Yes x No ¨


SunGard Data Systems Inc.		Yes x No ¨

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

SunGard Capital Corp. Large accelerated filer ¨. Accelerated filer ¨. Non-accelerated filer x. Smaller reporting company ¨.

SunGard Capital Corp. II Large accelerated filer ¨. Accelerated filer ¨. Non-accelerated filer x. Smaller reporting company ¨.

SunGard Data Systems Inc. Large accelerated filer ¨. Accelerated filer ¨. Non-accelerated filer x. Smaller reporting company ¨.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


SunGard Capital Corp.		Yes ¨ No x
SunGard Capital Corp. II		Yes ¨ No x
SunGard Data Systems Inc.		Yes ¨ No x

The number of shares of the registrants’ common stock outstanding as of September 30, 2011:


SunGard Capital Corp.		256,000,216 shares of Class A common stock and 28,444,390 shares of Class L common stock
SunGard Capital Corp. II		100 shares of common stock
SunGard Data Systems Inc.		100 shares of common stock

SUNGARD CAPITAL CORP.

SUNGARD CAPITAL CORP. II

SUNGARD DATA SYSTEMS INC.

AND SUBSIDIARIES

INDEX


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:

SunGard Capital Corp.

	Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011 (unaudited)		2

	Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2011 (unaudited)		3

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2011 (unaudited)		4

SunGard Capital Corp. II

	Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011 (unaudited)		5

	Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2011 (unaudited)		6

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2011 (unaudited)		7

	SunGard Data Systems Inc.

	Consolidated Balance Sheets as of December 31, 2010 and September 30, 2011 (unaudited)		8

	Consolidated Statements of Operations for the three and nine months ended September 30, 2010 and 2011 (unaudited)		9

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2011 (unaudited)		10

	Notes to Consolidated Financial Statements (unaudited)		11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		42

Item 4T.	Controls and Procedures		42


PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	43

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults upon Senior Securities	43

Item 4.	(Removed and Reserved)	43

Item 5.	Other Information	43

Item 6.	Exhibits	43

SIGNATURES		44

PART I. FINANCIAL INFORMATION

Explanatory Note

This Form 10-Q is a combined quarterly report being filed separately by three registrants: SunGard Capital Corp. (“SCC”), SunGard Capital Corp. II (“SCCII”) and SunGard Data Systems Inc. (“SunGard”). SCC and SCC II are collectively referred to as the “Parent Companies.” Unless the context indicates otherwise, any reference in this report to the “Company,” “we,” “us” and “our” refer to the Parent Companies together with their direct and indirect subsidiaries, including SunGard. Each registrant hereto is filing on its own behalf all of the information contained in this quarterly report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

ITEM 1. FINANCIAL STATEMENTS

SunGard Capital Corp.

Consolidated Balance Sheets

(In millions except share and per-share amounts)

(Unaudited)


	December 31, 2010			September 30, 2011
*Assets*
Current:
Cash and cash equivalents	$	771		$	746
Trade receivables, less allowance for doubtful accounts of $37 and $44		833			689
Earned but unbilled receivables		135			154
Prepaid expenses and other current assets		166			163
Clearing broker assets		230			220
Deferred income taxes		7			8
Assets held for sale		1,339			1,321

Total current assets		3,481			3,301

Property and equipment, less accumulated depreciation of $1,109 and $1,258		892			877
Software products, less accumulated amortization of $1,203 and $1,376		723			586
Customer base, less accumulated amortization of $1,049 and $1,213		1,806			1,639
Other intangible assets, less accumulated amortization of $23 and $22		187			156
Trade name, less accumulated amortization of $7 and $10		1,023			1,020
Goodwill		4,856			4,853

Total Assets	$	12,968		$	12,432


*Liabilities and Equity*
Current:
Short-term and current portion of long-term debt	$	9		$	11
Accounts payable		63			40
Accrued compensation and benefits		284			293
Accrued interest expense		103			103
Other accrued expenses		405			347
Clearing broker liabilities		210			178
Deferred revenue		887			817
Liabilities related to assets held for sale		243			254

Total current liabilities		2,204			2,043

Long-term debt		8,046			7,840
Deferred income taxes		1,114			1,040

Total liabilities		11,364			10,923

Commitments and contingencies
Noncontrolling interest in preferred stock of SCCII subject to a put option		54			31
Class L common stock subject to a put option		87			54
Class A common stock subject to a put option		11			7
Stockholders’ equity:
Class L common stock, convertible, par value $.001 per share; cumulative 13.5% per annum, compounded quarterly; aggregate liquidation preference of $4,699 million and $5,206 million; 50,000,000 shares authorized, 28,670,331 and 28,787,402 shares issued		—			—
Class A common stock, par value $.001 per share; 550,000,000 shares authorized, 258,037,523 and 259,091,380 shares issued		—			—
Capital in excess of par value		2,703			2,753
Treasury stock, 326,329 and 343,012 shares of Class L common stock; and 2,940,981 and 3,091,164 shares of Class A common stock		(34	)		(36	)
Accumulated deficit		(2,970	)		(3,246	)
Accumulated other comprehensive income (loss)		(29	)		(28	)

Total SunGard Capital Corp. stockholders’ equity (deficit)		(330	)		(557	)
Noncontrolling interest in preferred stock of SCCII		1,782			1,974

Total equity		1,452			1,417

Total Liabilities and Equity	$	12,968		$	12,432

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

SunGard Capital Corp.

Consolidated Statements of Operations

(In millions)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2011			2010			2011
Revenue:
Services	$	1,004		$	1,043		$	3,012		$	3,060
License and resale fees		47			50			178			192

Total products and services		1,051			1,093			3,190			3,252
Reimbursed expenses		28			17			91			77

		1,079			1,110			3,281			3,329


Costs and expenses:
Cost of sales and direct operating		500			510			1,549			1,544
Sales, marketing and administration		245			291			753			832
Product development		62			74			194			228
Depreciation and amortization		70			67			209			204
Amortization of acquisition-related intangible assets		115			107			338			334
Goodwill impairment charge		205			—			205			—

		1,197			1,049			3,248			3,142

Operating income (loss)		(118	)		61			33			187
Interest income		—			1			1			3
Interest expense and amortization of deferred financing fees		(160	)		(129	)		(479	)		(396	)
Other income (expense)		(9	)		(1	)		5			(2	)

Income (loss) from continuing operations before income taxes		(287	)		(68	)		(440	)		(208	)
Benefit from (provision for) income taxes		26			27			79			58

Income (loss) from continuing operations		(261	)		(41	)		(361	)		(150	)
Income (loss) from discontinued operations, net of tax		(117	)		27			(92	)		40

Net income (loss)		(378	)		(14	)		(453	)		(110	)
Income attributable to the noncontrolling interest (including $1 million, $-, $4 million and $2 million in temporary equity)		(51	)		(57	)		(147	)		(166	)

Net income (loss) attributable to SunGard Capital Corp.	$	(429	)	$	(71	)	$	(600	)	$	(276	)

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

SunGard Capital Corp.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2010			2011
*Cash flow from operations:*
Net loss	$	(453	)	$	(110	)
Income (loss) from discontinued operations		(92	)		40

Income (loss) from continuing operations		(361	)		(150	)
Reconciliation of income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		548			538
Goodwill impairment charge		205			—
Deferred income tax provision (benefit)		(92	)		(84	)
Stock compensation expense		23			23
Amortization of deferred financing costs and debt discount		33			29
Other noncash items		(1	)		3
Accounts receivable and other current assets		175			134
Accounts payable and accrued expenses		(101	)		(47	)
Clearing broker assets and liabilities, net		(1	)		(22	)
Deferred revenue		(84	)		(70	)

Cash flow from (used in) continuing operations		344			354
Cash flow from (used in) discontinued operations		91			73

Cash flow from (used in) operations		435			427


*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(62	)		(35	)
Cash paid for property and equipment and software		(212	)		(183	)
Other investing activities		6			(2	)

Cash provided by (used in) continuing operations		(268	)		(220	)
Cash provided by (used in) discontinued operations		(10	)		(7	)

Cash provided by (used in) investment activities		(278	)		(227	)

*Financing activities:*
Cash received from issuance of common stock		1			1
Cash received from issuance of preferred stock		—			1
Cash received from borrowings, net of fees		22			1
Cash used to repay debt		(51	)		(218	)
Cash used to purchase treasury stock		(3	)		(3	)
Other financing activities		(1	)		(9	)

Cash provided by (used in) continuing operations		(32	)		(227	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		(32	)		(227	)


Effect of exchange rate changes on cash		(2	)		(2	)


Increase (decrease) in cash and cash equivalents		123			(29	)
Beginning cash and cash equivalents includes cash of discontinued operations: (2010: $26; 2011: $7)		664			778

Ending cash and cash equivalents includes cash of discontinued operations: (2010: $44; 2011: $3)	$	787		$	749

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

SunGard Capital Corp. II

Consolidated Balance Sheets

(In millions except share and per-share amounts)

(Unaudited)


	December 31, 2010			September 30, 2011
*Assets*
Current:
Cash and cash equivalents	$	771		$	746
Trade receivables, less allowance for doubtful accounts of $37 and $44		833			689
Earned but unbilled receivables		135			154
Prepaid expenses and other current assets		166			163
Clearing broker assets		230			220
Deferred income taxes		7			8
Assets held for sale		1,339			1,321

Total current assets		3,481			3,301

Property and equipment, less accumulated depreciation of $1,109 and $1,258		892			877
Software products, less accumulated amortization of $1,203 and $1,376		723			586
Customer base, less accumulated amortization of $1,049 and $1,213		1,806			1,639
Other intangible assets, less accumulated amortization of $23 and $22		187			156
Trade name, less accumulated amortization of $7 and $10		1,023			1,020
Goodwill		4,856			4,853

Total Assets	$	12,968		$	12,432


*Liabilities and Stockholders’ Equity*
Current:
Short-term and current portion of long-term debt	$	9		$	11
Accounts payable		63			40
Accrued compensation and benefits		284			293
Accrued interest expense		103			103
Other accrued expenses		406			347
Clearing broker liabilities		210			178
Deferred revenue		887			817
Liabilities related to assets held for sale		243			254

Total current liabilities		2,205			2,043

Long-term debt		8,046			7,840
Deferred income taxes		1,113			1,040

Total liabilities		11,364			10,923


Commitments and contingencies

Preferred stock subject to a put option		37			24

Stockholders’ equity:
Preferred stock, par value $.001 per share; cumulative 11.5% per annum, compounded quarterly; aggregate liquidation preference of $1,818 million and $1,987 million; 14,999,000 shares authorized, 9,924,392 and 9,964,925 issued		—			—
Common stock, par value $.001 per share; 1,000 shares authorized, 100 shares issued and outstanding		—			—
Capital in excess of par value		3,747			3,775
Treasury stock, 112,987 and 118,762 shares		(14	)		(15	)
Accumulated deficit		(2,137	)		(2,247	)
Accumulated other comprehensive income (loss)		(29	)		(28	)

Total stockholders’ equity		1,567			1,485

Total Liabilities and Stockholders’ Equity	$	12,968		$	12,432

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

SunGard Capital Corp. II

Consolidated Statements of Operations

(In millions)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2011			2010			2011
Revenue:
Services	$	1,004		$	1,043		$	3,012		$	3,060
License and resale fees		47			50			178			192

Total products and services		1,051			1,093			3,190			3,252
Reimbursed expenses		28			17			91			77

		1,079			1,110			3,281			3,329


Costs and expenses:
Cost of sales and direct operating		500			510			1,549			1,544
Sales, marketing and administration		245			291			753			832
Product development		62			74			194			228
Depreciation and amortization		70			67			209			204
Amortization of acquisition-related intangible assets		115			107			338			334
Goodwill impairment charge		205			—			205			—

		1,197			1,049			3,248			3,142

Operating income (loss)		(118	)		61			33			187
Interest income		—			1			1			3
Interest expense and amortization of deferred financing fees		(160	)		(129	)		(479	)		(396	)
Other income (expense)		(9	)		(1	)		5			(2	)

Income (loss) from continuing operations before income taxes		(287	)		(68	)		(440	)		(208	)
Benefit from (provision for) income taxes		26			27			79			58

Income (loss) from continuing operations		(261	)		(41	)		(361	)		(150	)
Income (loss) from discontinued operations, net of tax		(117	)		27			(92	)		40

Net income (loss)	$	(378	)	$	(14	)	$	(453	)	$	(110	)

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

SunGard Capital Corp. II

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2010			2011
*Cash flow from operations:*
Net income (loss)	$	(453	)	$	(110	)
Income (loss) from discontinued operations		(92	)		40

Income (Loss) from continuing operations		(361	)		(150	)
Reconciliation of income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		548			538
Goodwill impairment charge		205			—
Deferred income tax provision (benefit)		(92	)		(85	)
Stock compensation expense		23			23
Amortization of deferred financing costs and debt discount		33			29
Other noncash items		(1	)		3
Accounts receivable and other current assets		175			134
Accounts payable and accrued expenses		(101	)		(46	)
Clearing broker assets and liabilities, net		(1	)		(22	)
Deferred revenue		(84	)		(70	)

Cash flow from (used in) continuing operations		344			354
Cash flow from (used in) discontinued operations		91			73

Cash flow from (used in) operations		435			427


*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(62	)		(35	)
Cash paid for property and equipment and software		(212	)		(183	)
Other investing activities		6			(2	)

Cash provided by (used in) continuing operations		(268	)		(220	)
Cash provided by (used in) discontinued operations		(10	)		(7	)

Cash provided by (used in) investment activities		(278	)		(227	)


*Financing activities:*
Cash received from issuance of preferred stock		—			1
Cash received from borrowings, net of fees		22			1
Cash used to repay debt		(51	)		(218	)
Cash used to purchase treasury stock		(1	)		(1	)
Other financing activities		(2	)		(10	)

Cash provided by (used in) continuing operations		(32	)		(227	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		(32	)		(227	)


Effect of exchange rate changes on cash		(2	)		(2	)


Increase (decrease) in cash and cash equivalents		123			(29	)
Beginning cash and cash equivalents includes cash of discontinued operations: (2010: $26; 2011: $7)		664			778

Ending cash and cash equivalents includes cash of discontinued operations: (2010: $44; 2011: $3)	$	787		$	749

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

SunGard Data Systems Inc.

Consolidated Balance Sheets

(In millions except share and per-share amounts)

(Unaudited)


	December 31, 2010			September 30, 2011
*Assets*
Current:
Cash and cash equivalents	$	771		$	746
Trade receivables, less allowance for doubtful accounts of $37 and $44		833			689
Earned but unbilled receivables		135			154
Prepaid expenses and other current assets		166			163
Clearing broker assets		230			220
Deferred income taxes		7			8
Assets held for sale		1,339			1,321

Total current assets		3,481			3,301

Property and equipment, less accumulated depreciation of $1,109 and $1,258		892			877
Software products, less accumulated amortization of $1,203 and $1,376		723			586
Customer base, less accumulated amortization of $1,049 and $1,213		1,806			1,639
Other intangible assets, less accumulated amortization of $23 and $22		187			156
Trade name, less accumulated amortization of $7 and $10		1,023			1,020
Goodwill		4,856			4,853

Total Assets	$	12,968		$	12,432


*Liabilities and Stockholder’s Equity*
Current:
Short-term and current portion of long-term debt	$	9		$	11
Accounts payable		63			40
Accrued compensation and benefits		284			293
Accrued interest expense		103			103
Other accrued expenses		407			349
Clearing broker liabilities		210			178
Deferred revenue		887			817
Liabilities related to assets held for sale		243			254

Total current liabilities		2,206			2,045

Long-term debt		8,046			7,840
Deferred income taxes		1,109			1,035

Total liabilities		11,361			10,920


Commitments and contingencies

Stockholder’s equity:
Common stock, par value $.01 per share; 100 shares authorized, issued and outstanding		—			—
Capital in excess of par value		3,773			3,787
Accumulated deficit		(2,137	)		(2,247	)
Accumulated other comprehensive income (loss)		(29	)		(28	)

Total stockholder’s equity		1,607			1,512

Total Liabilities and Stockholder’s Equity	$	12,968		$	12,432

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

SunGard Data Systems Inc.

Consolidated Statements of Operations

(In millions)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2011			2010			2011
Revenue:
Services	$	1,004		$	1,043		$	3,012		$	3,060
License and resale fees		47			50			178			192

Total products and services		1,051			1,093			3,190			3,252
Reimbursed expenses		28			17			91			77

		1,079			1,110			3,281			3,329

Costs and expenses:
Cost of sales and direct operating		500			510			1,549			1,544
Sales, marketing and administration		245			291			753			832
Product development		62			74			194			228
Depreciation and amortization		70			67			209			204
Amortization of acquisition-related intangible assets		115			107			338			334
Goodwill impairment charge		205			—			205			—

		1,197			1,049			3,248			3,142

Operating income (loss)		(118	)		61			33			187
Interest income		—			1			1			3
Interest expense and amortization of deferred financing fees		(160	)		(129	)		(479	)		(396	)
Other income (expense)		(9	)		(1	)		5			(2	)

Income (loss) from continuing operations before income taxes		(287	)		(68	)		(440	)		(208	)
Benefit from (provision for) income taxes		26			27			79			58

Income (loss) from continuing operations		(261	)		(41	)		(361	)		(150	)
Income (loss) from discontinued operations, net of tax		(117	)		27			(92	)		40

Net income (loss)	$	(378	)	$	(14	)	$	(453	)	$	(110	)

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

SunGard Data Systems Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Nine Months Ended September 30,
	2010			2011
*Cash flow from operations:*
Net income (loss)	$	(453	)	$	(110	)
Income (loss) from discontinued operations		(92	)		40

Income (loss) from continuing operations		(361	)		(150	)
Reconciliation of income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		548			538
Goodwill impairment charge		205			—
Deferred income tax provision (benefit)		(93	)		(85	)
Stock compensation expense		23			23
Amortization of deferred financing costs and debt discount		33			29
Other noncash items		(1	)		3
Accounts receivable and other current assets		175			134
Accounts payable and accrued expenses		(99	)		(46	)
Clearing broker assets and liabilities, net		(1	)		(22	)
Deferred revenue		(84	)		(70	)

Cash flow from (used in) continuing operations		345			354
Cash flow from (used in) discontinued operations		91			73

Cash flow from (used in) operations		436			427


*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(62	)		(35	)
Cash paid for property and equipment and software		(212	)		(183	)
Other investing activities		6			(2	)

Cash provided by (used in) continuing operations		(268	)		(220	)
Cash provided by (used in) discontinued operations		(10	)		(7	)

Cash provided by (used in) investment activities		(278	)		(227	)


*Financing activities:*
Cash received from borrowings, net of fees		22			1
Cash used to repay debt		(51	)		(218	)
Other financing activities		(4	)		(10	)

Cash provided by (used in) continuing operations		(33	)		(227	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		(33	)		(227	)


Effect of exchange rate changes on cash		(2	)		(2	)


Increase (decrease) in cash and cash equivalents		123			(29	)
Beginning cash and cash equivalents includes cash of discontinued operations: (2010: $26; 2011: $7)		664			778

Ending cash and cash equivalents includes cash of discontinued operations: (2010: $44; 2011: $3)	$	787		$	749

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

SUNGARD CAPITAL CORP.

SUNGARD CAPITAL CORP. II

SUNGARD DATA SYSTEMS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation:

SunGard Data Systems Inc. (“SunGard”) was acquired on August 11, 2005 (the “LBO”) in a leveraged buy-out by a consortium of private equity investment funds associated with Bain Capital Partners, The Blackstone Group, Goldman Sachs & Co., Kohlberg Kravis Roberts & Co., Providence Equity Partners, Silver Lake and TPG (collectively, the “Sponsors”).

SunGard is a wholly owned subsidiary of SunGard Holdco LLC, which is wholly owned by SunGard Holding Corp., which is wholly owned by SunGard Capital Corp. II (“SCCII”), which is a subsidiary of SunGard Capital Corp. (“SCC”). All four of these companies were formed for the purpose of facilitating the LBO and are collectively referred to as the “Holding Companies.” SCC, SCCII and SunGard are separate reporting companies and, together with their direct and indirect subsidiaries, are collectively referred to as the “Company.”

The Company has three reportable segments: Financial Systems (“FS”), Availability Services (“AS”) and Other, which is comprised of K-12 Education (“K-12”) and Public Sector (“PS”). On August 5, 2011, the Company announced an agreement to sell its Higher Education (“HE”) business (excluding K-12). The balances at December 31, 2010 and September 30, 2011 and for the three and nine months ended September 30, 2010 and 2011 have been revised to include HE in discontinued operations. The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.

The accompanying interim consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Interim financial reporting does not include all of the information and footnotes required by GAAP for annual financial statements. The interim financial information is unaudited, but, in the opinion of management, includes all adjustments, consisting only of normal recurring adjustments necessary to provide a fair statement of results for the interim periods presented. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

In May 2011, the Financial Accounting Standard Board (“FASB”) revised the fair value measurement and disclosure requirements so that the requirements under GAAP and International Financial Reporting Standards (“IFRS”) are the same. The guidance clarifies the FASB’s intent about the application of existing fair value measurements and requires enhanced disclosures, most significantly related to unobservable inputs used in a fair value measurement that is categorized within Level 3 of the fair value hierarchy. The guidance is effective prospectively during interim and annual periods beginning after December 15, 2011. The Company does not anticipate that this adoption will have a significant impact on its financial position or results of operations.

In June 2011, the FASB amended guidance relating to the presentation requirements of comprehensive income within an entity’s financial statements. Under the guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in a single continuous statement or in two separate but consecutive statements. The amended guidance eliminates the previously available option of presenting the components of other comprehensive income as part of the statement of changes in equity. In addition, an entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement where the components of net income and the components of other comprehensive income are presented. The amendment is effective for fiscal years beginning after December 15, 2011 and will be applied retrospectively. In October 2011, the FASB decided that the specific requirement to present items that are reclassified from other comprehensive income to net income alongside their respective components of net income and other comprehensive income will be deferred. Therefore, those requirements will not be effective for fiscal years and interim periods within those years beginning after December 31, 2011.

In September 2011, the FASB issued amended guidance that will simplify how entities test goodwill for impairment. After assessment of certain qualitative factors, if it is determined to be more likely than not that the fair value of a reporting unit is less than its carrying amount, entities must perform the quantitative analysis of the goodwill impairment test. Otherwise, the quantitative test(s) become optional. The guidance is effective January 1, 2012 with early adoption permitted. The Company will adopt this guidance for the 2012 goodwill impairment test.

2. Revision:

During the second quarter of 2011, the Company identified a classification error within its consolidated statements of operations. The misclassification resulted in overstating the product development expense line item on the statement of operations. Generally, the offsetting understatement was to cost of sales and direct operating expenses. The error in classification had no impact on total reported expenses for any period and therefore had no impact on operating or net

income. The Company assessed the materiality of this item on previously reported periods and concluded the misclassification error was not material and did not warrant restatement of previously issued financial statements. Accordingly, product development expense for the three- and nine-month periods ended September 30, 2010 has been revised from $85 million to $62 million and from $265 million to $194 million, respectively, to correct the immaterial misclassification. In future filings, any comparative period presentations will be revised when those periods are presented.

3. Acquisitions and Discontinued Operations:

Acquisitions

The Company seeks to acquire businesses that broaden its existing product lines and service offerings by adding complementary products and service offerings and by expanding its geographic reach. During the nine months ended September 30, 2011, the Company completed five acquisitions in its FS segment. Cash paid, net of cash acquired and subject to certain adjustments, was $35 million. The impact of these five acquisitions individually and in the aggregate was not material to the consolidated financial statements.

Discontinued Operations

In December 2010, the Company sold its PS UK business. Also, as previously disclosed, the Company announced that SCC, SunGard, private equity firm Hellman & Friedman Capital Partners VI, L.P. (“Hellman & Friedman”) and certain of their respective affiliates had entered into an Agreement and Plan of Merger dated as of August 4, 2011, and that SunGard, SunGard Higher Education Inc. and certain affiliates of Hellman & Friedman had entered into an Asset Purchase Agreement dated as of August 4, 2011 (together, the “Transaction Agreements”) to sell SunGard’s HE business (excluding K-12). The HE business will be combined under a new holding company with Datatel, an existing Hellman & Friedman portfolio company. SunGard intends to use the transaction proceeds of $1.775 billion, less applicable taxes and fees, to repay a portion of its existing indebtedness. The results for the discontinued operations for the three and nine months ended September 30, 2010 and 2011 were as follows (in millions):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2010			2011		2010			2011
Revenue	$	162		$	116	$	508		$	373

Operating Income (loss)		(100	)		26		(52	)		70
Income (loss) before income taxes		(100	)		26		(52	)		70
Benefit from (provision for) income taxes		(17	)		1		(40	)		(30	)

Income (loss) from discontinued operations, net	($	117	)	$	27	($	92	)	$	40

The Company recorded $123 million of goodwill impairment charges, of which $91 million was related to Public Sector UK, during the three and nine months ended September 30, 2010 that are reflected in income (loss) from discontinued operations, net.

Included in the three months ended September 30, 2010 for HE was revenue of $121 million and an operating loss of $13 million, which includes a goodwill impairment charge of $32 million related to HE managed services. Included in the nine months ended September 30, 2010 for HE was revenue of $372 million and operating income of $32 million, which includes the goodwill impairment charge of $32 million noted above.

Assets held for sale and liabilities related to assets held for sale represents SunGard’s HE business and consists of the following (in millions) at December 31, 2010 and September 30, 2011, respectively:


	December 31, 2010		September 30, 2011
Cash	$	7	$	3
Accounts receivable, less allowance for doubtful accounts of $4 and $7		62		71
Earned but unbilled receivables		32		30
Prepaid expenses and other current assets		11		10
Deferred income taxes		3		2
Property and equipment, less accumulated depreciation of $26 and $27		27		28
Software products, less accumulated amortization of $98 and $110		86		77
Customer base, less accumulated amortization of $110 and $121		193		182
Goodwill		918		918

Assets held for sale	$	1,339	$	1,321


Accounts payable	$	1	$	1
Accrued compensation and benefits		18		15
Other accrued expenses		16		11
Deferred revenue		110		116
Deferred income taxes		98		111

Liabilities related to assets held for sale	$	243	$	254

4. Trade Name and Goodwill:

Trade Name

The trade name intangible asset primarily represents the fair value of the SunGard trade name at August 11, 2005, the date of the LBO, and is an indefinite-lived asset not subject to amortization. The Company performed its annual impairment test of the SunGard trade name in the third quarter and based on the results of this test, the fair value of the trade name exceeded its carrying value, resulting in no impairment of the trade name. As a result of the expected sale of the Higher Education business, future cash flows which drive the value of the trade name were significantly decreased and the estimated fair value of the trade name when compared to its carrying value was lower in the current year impairment test compared to prior years. A one-percent decrease in the assumed royalty rate or a one-percent increase in the discount rate assumption would have resulted in an impairment of the Trade Name asset. To the extent that additional businesses are divested in the future, the cash flows supporting the trade name will continue to decline and impairment charges may result.

Goodwill

Generally accepted accounting principles in the United States require the Company to perform a goodwill impairment test, a two-step test, annually and more frequently when negative conditions or a triggering event arise. The Company completes its annual goodwill impairment test as of July 1 for each of its 13 reporting units. In step one, the estimated fair value of each reporting unit is compared to its carrying value. The Company estimated the fair values of each reporting unit by a combination of (i) estimation of the discounted cash flows of each of the reporting units based on projected earnings in the future (the income approach) and (ii) a comparative analysis of revenue and EBITDA multiples of public companies in similar markets (the market approach). If there is a deficiency (the estimated fair value of a reporting unit is less than its carrying value), a step two test is required. In step two, the amount of any goodwill impairment is measured by comparing the implied fair value of the reporting unit’s goodwill to the carrying value of goodwill, with the resulting impairment reflected in operations. The implied fair value is determined in the same manner as the amount of goodwill recognized in a business combination.

Estimating the fair value of a reporting unit requires various assumptions including projections of future cash flows, perpetual growth rates and discount rates. The assumptions about future cash flows and growth rates are based on management’s assessment of a number of factors including the reporting unit’s recent performance against budget, performance in the market that the reporting unit serves, as well as industry and general economic data from third party sources. Discount rate assumptions reflect an assessment of the risk inherent in those future cash flows. Changes to the underlying businesses could affect the future cash flows, which in turn could affect the fair value of the reporting unit. For the July 1, 2011 impairment test, the discount rates and perpetual growth rates used were between 10% and 12% and 3% and 4%, respectively.

Based on the results of the step one tests, the Company determined that the fair values of each of its reporting units exceeded carrying value and a step two test was not required for any of the 13 reporting units.

The Company has three reporting units, whose goodwill balances in the aggregate total $1.2 billion as of September 30, 2011, where the excess of the estimated fair value over carrying value of the reporting unit was less than 15% of the carrying value. A one percentage point decrease in the perpetual growth rate and a one percentage point increase in the discount rate would cause each of these reporting units to fail the step one test and require a step two analysis, and some or all of this goodwill could be impaired. Furthermore, if any of these units fail to achieve expected performance levels in the next twelve months or experience a downturn in the business below current expectations, goodwill could be impaired.

The Company’s remaining 10 reporting units each had estimated fair values in excess of 20% more than the carrying value of the reporting unit.

The following table summarizes changes in goodwill by reportable segment (in millions):


	Cost												Cumulative Impairment
	FS			AS			Other			Subtotal			AS			Other			Subtotal			Total
Balance at December 31, 2010	$	3,450		$	2,203		$	534		$	6,187		$	(1,126	)	$	(205	)	$	(1,331	)	$	4,856
2011 acquisitions		6			—			—			6			—			—			—			6
Adjustments related to the LBO and prior year acquisitions		(4	)		(2	)		(1	)		(7	)		—			—			—			(7	)
Effect of foreign currency translation		(1	)		(1	)		—			(2	)		—			—			—			(2	)

Balance at September 30, 2011	$	3,451		$	2,200		$	533		$	6,184		$	(1,126	)	$	(205	)	$	(1,331	)	$	4,853

5. Clearing Broker Assets and Liabilities:

Clearing broker assets and liabilities are comprised of the following (in millions):


	December 31, 2010		September 30, 2011
Segregated customer cash and treasury bills	$	57	$	33
Securities borrowed		154		146
Receivables from customers and other		19		41

Clearing broker assets	$	230	$	220


Payables to customers	$	19	$	15
Securities loaned		137		135
Payable to brokers and dealers		54		28

Clearing broker liabilities	$	210	$	178

Segregated customer cash and treasury bills are held by the Company on behalf of customers. Securities borrowed and loaned are collateralized financing transactions which are cash deposits made to or received from other broker/dealers. Receivables from and payables to customers represent amounts due or payable on cash and margin transactions.

6. Debt and Derivatives:

On January 31, 2011, SunGard entered into the First Refinancing Amendment to its Amended and Restated Senior Secured Credit Agreement, dated as of June 9, 2009 (“Credit Agreement”) to, among other things, (a) eliminate the LIBOR and base rate floors and (b) reduce the Eurocurrency rate spread from 3.75% to 3.50% and the base rate spread from 2.75% to 2.50% with no impact on maturity.

On March 11, 2011, SunGard entered into the Second Refinancing and Incremental Amendment to its Credit Agreement to, among other things, obtain new revolving credit commitments in an aggregate amount equal to $300 million that will terminate on May 11, 2013, thereby increasing the Company’s revolving credit commitments by $50 million, to $880 million, all of which now have been extended to (or expire on) May 11, 2013.

The Company uses interest rate swap agreements to manage the amount of its floating rate debt in order to reduce its exposure to variable rate interest payments associated with the senior secured credit facilities. Each of these swap agreements is designated as a cash flow hedge. SunGard pays a stream of fixed interest payments for the term of the swap, and in turn, receives variable interest payments based on LIBOR. The net receipt or payment from the interest rate swap agreements is included in interest expense. The Company does not enter into interest rate swaps for speculative or trading purposes. A summary of the Company’s interest rate swaps follows:


Inception	Maturity	Notional Amount (in millions)		Interest rate paid			Interest rate received (LIBOR)
January/February 2009	February 2012	$	1,200		1.78	%	1-Month
February 2010	May 2013		500		1.99	%	3-Month

Total / Weighted Average interest rate		$	1,700		1.84	%

The fair values of interest rate swaps designated as cash flow hedging instruments, included in other accrued expenses on the consolidated balance sheets, are $38 million and $18 million as of December 31, 2010 and September 30, 2011, respectively.

The table below summarizes the impact of the effective portion of interest rate swaps on the balance sheets and statements of operations for the three and nine months ended September 30, 2010 and 2011 (in millions):


		Three Months Ended September 30,						Nine Months Ended September 30,
	Classification	2010			2011			2010			2011
Gain (loss) recognized in Accumulated Other Comprehensive Loss (OCI)	OCI	$	(16	)	$	(1	)	$	(53	)	$	(8	)
Loss reclassified from accumulated OCI into income	Interest expense and amortization of deferred financing fees		21			7			63			27

The Company has no ineffectiveness related to its swap agreements.

The Company expects to reclassify in the next twelve months approximately $16 million from OCI into earnings related to the Company’s interest rate swaps based on the borrowing rates at September 30, 2011.

7. Fair Value Measurements:

The following table summarizes assets and liabilities measured at fair value on a recurring basis at September 30, 2011 (in millions):


	Fair Value Measures Using						Total
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents - money market funds	$	249	$	—	$	—	$	249


Liabilities
Interest rate swap agreements and other	$	—	$	19	$	—	$	19

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2010 (in millions):


	Fair Value Measures Using						Total
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents - money market funds	$	210	$	—	$	—	$	210
Clearing broker assets - U.S. treasury bills		2		—		—		2

	$	212	$	—	$	—	$	212


Liabilities
Interest rate swap agreements and other	$	—	$	34	$	—	$	34

A Level 1 fair value measure is based upon quoted prices in active markets for identical assets or liabilities. A Level 2 fair value measure is based upon quoted prices for similar assets and liabilities in active markets or inputs that are observable. A Level 3 fair value measure is based upon inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).

Cash and cash equivalents – money market funds and Clearing broker assets – U.S. treasury bills are recognized and measured at fair value in the Company’s financial statements. Clearing broker assets and liabilities – securities owned and customer securities sold short, not yet purchased are recorded at closing exchange-quoted prices. Fair values of the interest rate swap agreements are calculated using a discounted cash flow model using observable applicable market swap rates and assumptions and are compared to market valuations obtained from brokers.

The following table presents the carrying amount and estimated fair value of the Company’s debt, including current portion and excluding the interest rate swaps, as of December 31, 2010 and September 30, 2011 (in millions):


	December 31, 2010				September 30, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Floating rate debt	$	4,707	$	4,644	$	4,497	$	4,356
Fixed rate debt		3,348		3,432		3,354		3,288

The fair value of the Company’s floating rate and fixed rate long-term debt is primarily based on market rates.

8. Comprehensive Income (Loss):

Comprehensive income (loss) consists of net income (loss) adjusted for other increases and decreases affecting stockholder’s equity that are excluded from the determination of net income (loss). The calculation of comprehensive income (loss) follows (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2011			2010			2011
Net income (loss)	$	(378	)	$	(14	)	$	(453	)	$	(110	)
Foreign currency translation gains (losses)		105			(81	)		(34	)		(6	)
Unrealized gains (losses) on derivative instruments		6			2			9			7

Comprehensive income (loss)	$	(267	)	$	(93	)	$	(478	)	$	(109	)

9. Equity:

A rollforward of SCC’s equity for 2011 follows (in millions):


	SunGard Capital Corp. stockholders												Noncontrolling interest
	Class L - temporary equity			Class A - temporary equity			Permanent equity			Total			Temporary equity			Permanent equity			Total
Balance at December 31, 2010	$	87		$	11		$	(330	)	$	(232	)	$	54		$	1,782		$	1,836
Net income (loss)		—			—			(276	)		(276	)		2			164			166
Foreign currency translation		—			—			(6	)		(6	)		—			—			—
Net unrealized gain on derivative instruments		—			—			7			7			—			—			—

Comprehensive income (loss)		—			—			(275	)		(275	)		2			164			166
Stock compensation expense		—			—			23			23			—			—			—
Termination of put options due to employee terminations and other		(39	)		(5	)		45			1			(29	)		28			(1	)
Issuance of common and preferred stock		(1	)		—			4			3			(1	)		1			—
Purchase of treasury stock		—			—			(2	)		(2	)		—			(1	)		(1	)
Transfer intrinsic value of vested restricted stock units		7			1			(13	)		(5	)		5			—			5
Other		—			—			(9	)		(9	)		—			—			—

Balance at September 30, 2011	$	54		$	7		$	(557	)	$	(496	)	$	31		$	1,974		$	2,005

A rollforward of SCC’s equity for 2010 follows (in millions):


	SunGard Capital Corp. stockholders											Noncontrolling interest
	Class L - temporary equity			Class A - temporary equity		Permanent equity			Total			Temporary equity			Permanent equity			Total
Balance at December 31, 2009	$	88		$	11	$	321		$	420		$	51		$	1,593		$	1,644
Net income (loss)		—			—		(600	)		(600	)		4			143			147
Foreign currency translation		—			—		(34	)		(34	)		—			—			—
Net unrealized gain on derivative instruments		—			—		9			9			—			—			—

Comprehensive income (loss)		—			—		(625	)		(625	)		4			143			147
Stock compensation expense		—			—		24			24			—			—			—
Termination of put options due to employee terminations and other		(2	)		—		—			(2	)		(1	)		1			—
Purchase of treasury stock		—			—		(1	)		(1	)		—			(1	)		(1	)
Transfer intrinsic value of vested restricted stock units		6			1		(10	)		(3	)		3			—			3

Balance at September 30, 2010	$	92		$	12	$	(291	)	$	(187	)	$	57		$	1,736		$	1,793

In the case of termination of employment resulting from disability or death, an employee or his/her estate may exercise a put option which would require the Company to repurchase vested shares at the current fair market value. These common or preferred shares must be classified as temporary equity (between liabilities and equity) on the balance sheet of SCC and SCCII. At vesting or exercise, grant-date intrinsic value or exercise value, respectively, is reclassified to temporary equity. On termination of employment, the value included in temporary equity is reclassified to permanent equity.

10. Segment Information:

The Company has three reportable segments: FS, AS and Other (Other includes PS and K-12 which are combined for reporting purposes). The Company evaluates the performance of its segments based on operating results before interest, income taxes, amortization of acquisition-related intangible assets, stock compensation and certain other costs. The operating results apply to each of SCC, SCCII and SunGard unless otherwise noted. The operating results for each segment follow (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2011			2010			2011
Revenue:
Financial systems	$	659		$	695		$	2,021		$	2,081
Availability services		366			364			1,100			1,094
Other		54			51			160			154

	$	1,079		$	1,110		$	3,281		$	3,329

Depreciation and amortization:
Financial systems	$	22		$	20		$	61		$	62
Availability services		46			45			143			136
Other		2			2			5			6

	$	70		$	67		$	209		$	204

Income (loss) from operations:
Financial systems	$	135		$	120		$	394		$	374
Availability services		86			80			240			234
Other		16			15			42			44
Corporate and other items ⁽¹⁾		(344	)		(146	)		(611	)		(436	)
Other costs		(11	)		(8	)		(32	)		(29	)

	$	(118	)	$	61		$	33		$	187

Cash paid for property and equipment and software:
Financial systems	$	26		$	18		$	67		$	62
Availability services		41			34			138			114
Other		2			1			6			4
Corporate administration		—			—			1			3

	$	69		$	53		$	212		$	183

(1)

Includes corporate administrative expenses, stock compensation expense, management fees paid to the Sponsors, other items and amortization of acquisition-related intangible assets of $115 million and $107 million for the three months ended September 30, 2010 and 2011, respectively, and $338 million and $334 million for the nine months ended September 30, 2010 and 2011, respectively.

During the third quarter of 2011, the Company incurred severance charges of approximately $47 million. As of September 30, 2011, the Company had an accrued severance balance of $49 million, most of which is related to the third quarter 2011 actions. The Company expects the majority of the accrued severance will be paid out by the end of the first quarter of 2012.

Amortization of acquisition-related intangible assets by segment follows (in millions):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2010			2011		2010			2011
Amortization of acquisition-related intangible assets:
Financial systems	$	66	⁽¹⁾	$	59	$	193	⁽¹⁾	$	191	⁽¹⁾
Availability services		43			43		128			129
Other		5			5		16			14
Corporate administration		1			—		1			—

	$	115		$	107	$	338		$	334

(1)

Amortization of acquisition-related intangible assets in 2010 includes impairment charges related to customer base and software, respectively, for a subsidiary in the FS segment of approximately $1 million and $2 million. Amortization of acquisition-related intangible assets in 2011 includes impairment charges related to

customer base and software, respectively, for a subsidiary in the FS segment of approximately $3 million and $4 million.

The FS Segment is organized to align with customer-facing business areas. FS revenue by these business areas follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2010		2011		2010		2011
Capital Markets	$	153	$	172	$	472	$	533
Global Trading		150		131		496		430
Asset Management		86		99		257		284
Wealth Management		96		97		283		275
Banking		48		54		139		158
Corporate Liquidity		41		50		128		141
Insurance		43		45		125		126
Other		42		47		121		134

Total Financial Systems	$	659	$	695	$	2,021	$	2,081

11. Related Party Transactions:

In accordance with the Management Agreement between the Company and affiliates of the Sponsors, the Company recorded $4 million of management fees in sales, marketing and administration expenses during each of the three months ended September 30, 2010 and 2011. The Company recorded $11 million and $9 million of management fees in sales, marketing and administration expenses during the nine months ended September 30, 2010 and 2011, respectively. Management fees of $1 million is reported in discontinued operations in each of the nine months ended September 30, 2010 and 2011. At December 31, 2010 and September 30, 2011, $6 million and $4 million, respectively, was included in other accrued expenses.

12. Supplemental Cash Flow Information:

Supplemental cash flow information for the nine months ended September 30, 2010 and 2011 follows (in millions):


	Nine Months ended September 30,
*Supplemental information:*	2010			2011
Acquired businesses:
Property and equipment	$	5		$	1
Software products		16			21
Customer base		23			12
Goodwill		29			6
Other intangible assets		2			—
Deferred income taxes		(3	)		(5	)
Purchase price obligations and debt assumed		(12	)		(1	)
Net current liabilities assumed		2			1

Cash paid for acquired businesses, net of cash acquired of $8 and $4, respectively	$	62		$	35

13. Supplemental Guarantor Condensed Consolidating Financial Statements:

SunGard’s senior unsecured notes are jointly and severally, fully and unconditionally guaranteed on a senior unsecured basis and the senior subordinated notes are jointly and severally, fully and unconditionally guaranteed on an unsecured senior subordinated basis, in each case, subject to certain exceptions, by substantially all wholly owned, domestic subsidiaries of SunGard (collectively, the “Guarantors”). Each of the Guarantors is 100% owned, directly or indirectly, by SunGard. None of the other subsidiaries of SunGard, either direct or indirect, nor any of the Holding

Companies guarantee the senior notes and senior subordinated notes (“Non-Guarantors”). The Guarantors and SunGard Holdco LLC also unconditionally guarantee the senior secured credit facilities. The Guarantors are subject to release under certain circumstances as described below.

The indentures evidencing the guarantees provide for a Guarantor to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including upon the earliest to occur of:

•

The sale, exchange or transfer of the subsidiary’s capital stock or all or substantially all of its assets;

•

Designation of the Guarantor as an “unrestricted subsidiary” for purposes of the indenture covenants;

•

Release or discharge of the Guarantor’s guarantee of certain other indebtedness; or

•

Legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied.

The following tables present the financial position, results of operations and cash flows of SunGard (referred to as “Parent Company” for purposes of this note only), the Guarantor subsidiaries, the Non-Guarantor subsidiaries and Eliminations as of December 31, 2010 and September 30, 2011, and for the three and nine month periods ended September 30, 2010 and 2011 to arrive at the information for SunGard on a consolidated basis. SCC and SCCII are neither parties nor guarantors to the debt issued as described in the notes to consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2010.


	Supplemental Condensed Consolidating Balance Sheet December 31, 2010
	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
(in millions)
Assets
Current:
Cash and cash equivalents	$	179		$	4	$	588	$	—		$	771
Intercompany balances		(6,865	)		6,028		837		—			—
Trade receivables, net		2			617		349		—			968
Prepaid expenses, taxes and other current assets		2,545			71		308		(2,521	)		403
Assets held for sale		—			1,323		19		(3	)		1,339

Total current assets		(4,139	)		8,043		2,101		(2,524	)		3,481
Property and equipment, net		1			576		315		—			892
Intangible assets, net		150			3,050		539		—			3,739
Intercompany balances		(4	)		—		4		—			—
Goodwill		—			3,739		1,117		—			4,856
Investment in subsidiaries		13,561			2,447		—		(16,008	)		—

Total Assets	$	9,569		$	17,855	$	4,076	$	(18,532	)	$	12,968


Liabilities and Stockholder’s Equity
Current:
Short-term and current portion of long-term debt	$	—		$	2	$	7	$	—		$	9
Accounts payable and other current liabilities		204			3,343		928		(2,521	)		1,954
Liabilities related to assets held for sale		—			231		12		—			243

Total current liabilities		204			3,576		947		(2,521	)		2,206
Long-term debt		7,607			2		437		—			8,046
Intercompany debt		(195	)		65		250		(120	)		—
Deferred income taxes		346			651		112		—			1,109

Total liabilities		7,962			4,294		1,746		(2,641	)		11,361

Total stockholder’s equity		1,607			13,561		2,330		(15,891	)		1,607

Total Liabilities and Stockholder’s Equity	$	9,569		$	17,855	$	4,076	$	(18,532	)	$	12,968


	Supplemental Condensed Consolidating Balance Sheet September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
(in millions)
Assets
Current:
Cash and cash equivalents	$	312		$	(6	)	$	440		$	—		$	746
Intercompany balances		(5,960	)		5,252			708			—			—
Trade receivables, net		1			588			254			—			843
Prepaid expenses, taxes and other current assets		1,529			76			415			(1,629	)		391
Assets held for sale		—			1,310			15			(4	)		1,321

Total current assets		(4,118	)		7,220			1,832			(1,633	)		3,301
Property and equipment, net		—			573			304			—			877
Intangible assets, net		129			2,785			487			—			3,401
Intercompany balances		250			5			(255	)		—			—
Goodwill		—			3,733			1,120			—			4,853
Investment in subsidiaries		13,475			2,408			—			(15,883	)		—

Total Assets	$	9,736		$	16,724		$	3,488		$	(17,516	)	$	12,432


Liabilities and Stockholder’s Equity
Current:
Short-term and current portion of long-term debt	$	—		$	3		$	8		$	—		$	11
Accounts payable and other current liabilities		195			2,373			841			(1,629	)		1,780
Liabilities related to assets held for sale		—			242			12			—			254

Total current liabilities		195			2,618			861			(1,629	)		2,045
Long-term debt		7,610			3			227			—			7,840
Intercompany debt		83			23			11			(117	)		—
Deferred income taxes		336			605			94			—			1,035

Total liabilities		8,224			3,249			1,193			(1,746	)		10,920

Total stockholder’s equity		1,512			13,475			2,295			(15,770	)		1,512

Total Liabilities and Stockholder’s Equity	$	9,736		$	16,724		$	3,488		$	(17,516	)	$	12,432


	Supplemental Condensed Consolidating Schedule of Operations Three Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
(in millions)
Total revenue	$	—		$	774		$	348		$	(43	)	$	1,079


Costs and expenses:
Cost of sales and direct operating		—			335			208			(43	)		500
Sales, marketing and administration		26			110			109			—			245
Product development		—			17			45			—			62
Depreciation and amortization		—			48			22			—			70
Amortization of acquisition-related intangible assets		1			93			21			—			115
Goodwill impairment charge		—			205			—			—			205

		27			808			405			(43	)		1,197

Operating income (loss)		(27	)		(34	)		(57	)		—			(118	)
Net interest income (expense)		(147	)		(79	)		66			—			(160	)
Other income (expense)		(304	)		(94	)		(9	)		398			(9	)

Income (loss) from continuing operations before income taxes		(478	)		(207	)		—			398			(287	)
Benefit from (provision for) income taxes		100			(73	)		(1	)		—			26

Income (loss) from continuing operations		(378	)		(280	)		(1	)		398			(261	)
Income (loss) from discontinued operations, net of tax		—			(23	)		(93	)		(1	)		(117	)

Net income (loss)	$	(378	)	$	(303	)	$	(94	)	$	397		$	(378	)


(in millions)	Supplemental Condensed Consolidating Schedule of Operations Three Months Ended September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Total revenue	$	—		$	751		$	359		$	—	$	1,110


Costs and expenses:
Cost of sales and direct operating		—			296			214			—		510
Sales, marketing and administration		40			135			116			—		291
Product development		—			20			54			—		74
Depreciation and amortization		—			45			22			—		67
Amortization of acquisition-related intangible assets		—			87			20			—		107

		40			583			426			—		1,049

Operating income (loss)		(40	)		168			(67	)		—		61
Net interest income (expense)		(89	)		12			(51	)		—		(128	)
Other income (expense)		71			(80	)		—			8		(1	)

Income (loss) from continuing operations before income taxes		(58	)		100			(118	)		8		(68	)
Benefit from (provision for) income taxes		44			(56	)		39			—		27

Income (loss) from continuing operations		(14	)		44			(79	)		8		(41	)
Income (loss) from discontinued operations, net of tax		—			27			(2	)		2		27

Net income (loss)	$	(14	)	$	71		$	(81	)	$	10	$	(14	)


	Supplemental Condensed Consolidating Schedule of Operations Nine Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
(in millions)
Total revenue	$	—		$	2,316		$	1,083		$	(118	)	$	3,281


Costs and expenses:
Cost of sales and direct operating		—			998			669			(118	)		1,549
Sales, marketing and administration		75			360			318			—			753
Product development		—			53			141			—			194
Depreciation and amortization		—			146			63			—			209
Amortization of acquisition-related intangible assets		1			279			58			—			338
Goodwill impairment charge		—			205			—			—			205

		76			2,041			1,249			(118	)		3,248

Operating income (loss)		(76	)		275			(166	)		—			33
Net interest income (expense)		(442	)		(203	)		167			—			(478	)
Other income (expense)		(153	)		(87	)		4			241			5

Income (loss) from continuing operations before income taxes		(671	)		(15	)		5			241			(440	)
Benefit from (provision for) income taxes		218			(138	)		(1	)		—			79

Income (loss) from continuing operations		(453	)		(153	)		4			241			(361	)
Income (loss) from discontinued operations, net of tax		—			—			(91	)		(1	)		(92	)

Net income (loss)	$	(453	)	$	(153	)	$	(87	)	$	240		$	(453	)


(in millions)	Supplemental Condensed Consolidating Schedule of Operations Nine Months Ended September 30, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	2,219		$	1,110		$	—		$	3,329


Costs and expenses:
Cost of sales and direct operating		—			885			659			—			1,544
Sales, marketing and administration		104			387			341			—			832
Product development		—			58			170			—			228
Depreciation and amortization		—			137			67			—			204
Amortization of acquisition-related intangible assets		—			265			69			—			334

		104			1,732			1,306			—			3,142

Operating income (loss)		(104	)		487			(196	)		—			187
Net interest income (expense)		(294	)		(101	)		2			—			(393	)
Other income (expense)		148			(132	)		—			(18	)		(2	)

Income (loss) from continuing operations before income taxes		(250	)		254			(194	)		(18	)		(208	)
Benefit from (provision for) income taxes		140			(144	)		62			—			58

Income (loss) from continuing operations		(110	)		110			(132	)		(18	)		(150	)
Income (loss) from discontinued operations, net of tax		—			40			—			—			40

Net income (loss)	$	(110	)	$	150		$	(132	)	$	(18	)	$	(110	)



	Supplemental Condensed Consolidating Schedule of Cash Flows Nine Months Ended September 30, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
(in millions)
Cash flow from operations:
Net income (loss)	$	(453	)	$	(153	)	$	(87	)	$	240	$	(453	)
Income (loss) from discontinued operations		—&nb

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