Edgar Filing: SUNGARD DATA SYSTEMS INC

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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 March 31, 2012

¨	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.

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.

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).

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).

The number of shares of the registrants’ common stock outstanding as of March 31, 2012:

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, 2011 and March 31, 2012 (unaudited)		2

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2011 and 2012 (unaudited)		3

	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2012 (unaudited)		4

	SunGard Capital Corp. II

	Consolidated Balance Sheets as of December 31, 2011 and March 31, 2012 (unaudited)		5

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2011 and 2012 (unaudited)		6

	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2012 (unaudited)		7

	SunGard Data Systems Inc.

	Consolidated Balance Sheets as of December 31, 2011 and March 31, 2012 (unaudited)		8

	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2011 and 2012 (unaudited)		9

	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2012 (unaudited)		10

	Notes to Consolidated Financial Statements (unaudited)		11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		42

Item 4.	Controls and Procedures		43

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings		43

Item 1A.	Risk Factors.		44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		44

Item 3.	Defaults upon Senior Securities		44

Item 4.	Mine Safety Disclosures		44

Item 5.	Other Information		44

Item 6.	Exhibits		44

SIGNATURES			45

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, 2011			March 31, 2012
	December 31, 2011			March 31, 2012
*Assets*
Current:
Cash and cash equivalents	$	868		$	1,378
Trade receivables, less allowance for doubtful accounts of $38 and $46		802			714
Earned but unbilled receivables		149			146
Prepaid expenses and other current assets		117			144
Clearing broker assets		213			217
Assets held for sale		1,326			—

Total current assets		3,475			2,599

Property and equipment, less accumulated depreciation of $1,296 and $1,361		893			894
Software products, less accumulated amortization of $1,431 and $1,492		554			510
Customer base, less accumulated amortization of $1,269 and $1,331		1,580			1,532
Other intangible assets, less accumulated amortization of $22 and $25		144			127
Trade name, less accumulated amortization of $10 and $1		1,019			1,019
Goodwill		4,885			4,904

Total Assets	$	12,550		$	11,585

*Liabilities and Equity*
Current:
Short-term and current portion of long-term debt	$	10		$	508
Accounts payable		60			35
Accrued compensation and benefits		300			215
Accrued interest expense		92			101
Accrued income taxes		24			434
Other accrued expenses		317			310
Clearing broker liabilities		179			178
Deferred revenue		862			872
Deferred income taxes		76			—
Liabilities related to assets held for sale		230			—

Total current liabilities		2,150			2,653

Long-term debt		7,819			6,101
Deferred income taxes		1,125			1,103

Total liabilities		11,094			9,857

Commitments and contingencies

Noncontrolling interest in preferred stock of SCCII subject to a put option		28			26
Class L common stock subject to a put option		47			43
Class A common stock subject to a put option		6			5
Stockholders’ equity:
Class L common stock, convertible, par value $.001 per share; cumulative 13.5% per annum, compounded quarterly; aggregate liquidation preference of $5,383 million and $5,575 million; 50,000,000 shares authorized, 28,842,773 and 28,923,575 shares issued		—			—
Class A common stock, par value $.001 per share; 550,000,000 shares authorized, 259,589,718 and 260,316,932 shares issued		—			—
Capital in excess of par value		2,768			2,776
Treasury stock, 387,638 and 406,757 shares of Class L common stock; and 3,492,925 and 3,665,008 shares of Class A common stock		(39	)		(41	)
Accumulated deficit		(3,346	)		(3,173	)
Accumulated other comprehensive income (loss)		(46	)		(10	)

Total SunGard Capital Corp. stockholders’ equity (deficit)		(663	)		(448	)
Noncontrolling interest in preferred stock of SCCII		2,038			2,102

Total equity		1,375			1,654

Total Liabilities and Equity	$	12,550		$	11,585

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

SunGard Capital Corp.

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
Revenue:
Services	$	995		$	989
License and resale fees		61			31

Total products and services		1,056			1,020
Reimbursed expenses		30			19

		1,086			1,039

Costs and expenses:
Cost of sales and direct operating		494			469
Sales, marketing and administration		262			258
Product development and maintenance		95			88
Depreciation and amortization		69			71
Amortization of acquisition-related intangible assets		117			102

		1,037			988

Operating income (loss)		49			51
Interest income		1			—
Interest expense and amortization of deferred financing fees		(137	)		(122	)
Loss on extinguishment of debt		(2	)		(15	)
Other income (expense)		—			2

Income (loss) from continuing operations before income taxes		(89	)		(84	)
Benefit from (provision for) income taxes		11			7

Income (loss) from continuing operations		(78	)		(77	)
Income (loss) from discontinued operations, net of tax		55			312

Net income (loss)		(23	)		235
Income attributable to the noncontrolling interest (including $1 million and $- million in temporary equity)		(54	)		(62	)

Net income (loss) attributable to SunGard Capital Corp.		(77	)		173

Other Comprehensive income (loss):
Foreign currency translation		57			33

Foreign currency translation, net		57			33

Unrealized gain (loss) on derivative instruments		(1	)		—
Less: gain (loss) on derivatives reclassified into income		13			4
Less: income tax benefit (expense)		(4	)		(1	)

Net Unrealized gain (loss) on derivative instruments, net of tax		8			3

Comprehensive income (loss) attributable to SunGard Capital Corp.	$	(12	)	$	209

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

SunGard Capital Corp.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
*Cash flow from operations:*
Net income (loss)	$	(23	)	$	235
Income (loss) from discontinued operations		55			312

Income (loss) from continuing operations		(78	)		(77	)
Reconciliation of income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		186			173
Deferred income tax provision (benefit)		(23	)		34
Stock compensation expense		6			11
Amortization of deferred financing costs and debt discount		10			12
Loss on extinguishment of debt		2			15
Other noncash items		1			(2	)
Accounts receivable and other current assets		73			87
Accounts payable and accrued expenses		(109	)		(117	)
Accrued income tax		(2	)		(66	)
Clearing broker assets and liabilities, net		(4	)		(4	)
Deferred revenue		5			1

Cash flow from (used in) continuing operations		67			67
Cash flow from (used in) discontinued operations		(14	)		8

Cash flow from (used in) operations		53			75

*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(19	)		(6	)
Cash paid for property and equipment and software		(61	)		(60	)
Other investing activities		1			3

Cash provided by (used in) continuing operations		(79	)		(63	)
Cash provided by (used in) discontinued operations		(3	)		1,740

Cash provided by (used in) investment activities		(82	)		1,677

*Financing activities:*
Cash received from borrowings, net of fees		14			(19	)
Cash used to repay debt		(1	)		(1,225	)
Cash used to purchase treasury stock		—			(3	)
Other financing activities		(2	)		(7	)

Cash provided by (used in) continuing operations		11			(1,254	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		11			(1,254	)

Effect of exchange rate changes on cash		16			7

Increase (decrease) in cash and cash equivalents		(2	)		505
Beginning cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $5		778			873

Ending cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $-	$	776		$	1,378

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, 2011			March 31, 2012
*Assets*
Current:
Cash and cash equivalents	$	868		$	1,378
Trade receivables, less allowance for doubtful accounts of $38 and $46		802			714
Earned but unbilled receivables		149			146
Prepaid expenses and other current assets		117			144
Clearing broker assets		213			217
Assets held for sale		1,326			—

Total current assets		3,475			2,599
Property and equipment, less accumulated depreciation of $1,296 and $1,361		893			894
Software products, less accumulated amortization of $1,431 and $1,492		554			510
Customer base, less accumulated amortization of $1,269 and $1,331		1,580			1,532
Other intangible assets, less accumulated amortization of $22 and $25		144			127
Trade name, less accumulated amortization of $10 and $1		1,019			1,019
Goodwill		4,885			4,904

Total Assets	$	12,550		$	11,585

*Liabilities and Stockholders’ Equity*
Current:
Short-term and current portion of long-term debt	$	10		$	508
Accounts payable		60			35
Accrued compensation and benefits		300			215
Accrued interest expense		92			101
Accrued income taxes		24			434
Other accrued expenses		318			310
Clearing broker liabilities		179			178
Deferred revenue		862			872
Deferred income taxes		76			—
Liabilities related to assets held for sale		230			—

Total current liabilities		2,151			2,653
Long-term debt		7,819			6,101
Deferred income taxes		1,124			1,103

Total liabilities		11,094			9,857

Commitments and contingencies
Preferred stock subject to a put option		23			21
Stockholders’ equity:
Preferred stock, par value $.001 per share; cumulative 11.5% per annum, compounded quarterly; aggregate liquidation preference of $2,046 million and $2,110 million; 14,999,000 shares authorized, 9,984,091 and 10,012,061 issued		—			—
Common stock, par value $.001 per share; 1,000 shares authorized, 100 shares issued and oustanding		—			—
Capital in excess of par value		3,785			3,790
Treasury stock, 134,215 and 140,834 shares		(18	)		(20	)
Accumulated deficit		(2,288	)		(2,053	)
Accumulated other comprehensive income (loss)		(46	)		(10	)

Total stockholders’ equity		1,433			1,707

Total Liabilities and Stockholders’ Equity	$	12,550		$	11,585

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

SunGard Capital Corp. II

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
Revenue:
Services	$	995		$	989
License and resale fees		61			31

Total products and services		1,056			1,020
Reimbursed expenses		30			19

		1,086			1,039

Costs and expenses:
Cost of sales and direct operating		494			469
Sales, marketing and administration		262			258
Product development and maintenance		95			88
Depreciation and amortization		69			71
Amortization of acquisition-related intangible assets		117			102

		1,037			988

Operating income (loss)		49			51
Interest income		1			—
Interest expense and amortization of deferred financing fees		(137	)		(122	)
Loss on extinguishment of debt		(2	)		(15	)
Other income (expense)		—			2

Income (loss) from continuing operations before income taxes		(89	)		(84	)
Benefit from (provision for) income taxes		11			7

Income (loss) from continuing operations		(78	)		(77	)
Income (loss) from discontinued operations, net of tax		55			312

Net income (loss)		(23	)		235

Other Comprehensive income (loss):
Foreign currency translation		57			33

Foreign currency translation, net		57			33

Unrealized gain (loss) on derivative instruments		(1	)		—
Less: gain (loss) on derivatives reclassified into income		13			4
Less: income tax benefit (expense)		(4	)		(1	)

Net Unrealized gain (loss) on derivative instruments, net of tax		8			3

Comprehensive income (loss)	$	42		$	271

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

SunGard Capital Corp. II

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
*Cash flow from operations:*
Net income (loss)	$	(23	)	$	235
Income (loss) from discontinued operations		55			312

Income (loss) from continuing operations		(78	)		(77	)
Reconciliation of net income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		186			173
Deferred income tax provision (benefit)		(23	)		34
Stock compensation expense		6			11
Amortization of deferred financing costs and debt discount		10			12
Loss on extinguishment of debt		2			15
Other noncash items		1			(2	)
Accounts receivable and other current assets		73			87
Accounts payable and accrued expenses		(109	)		(117	)
Accrued income tax		(2	)		(66	)
Clearing broker assets and liabilities, net		(4	)		(4	)
Deferred revenue		5			1

Cash flow from (used in) continuing operations		67			67
Cash flow from (used in) discontinued operations		(14	)		8

Cash flow from (used in) operations		53			75

*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(19	)		(6	)
Cash paid for property and equipment and software		(61	)		(60	)
Other investing activities		1			3

Cash provided by (used in) continuing operations		(79	)		(63	)
Cash provided by (used in) discontinued operations		(3	)		1,740

Cash provided by (used in) investment activities		(82	)		1,677

*Financing activities:*
Cash received from borrowings, net of fees		14			(19	)
Cash used to repay debt		(1	)		(1,225	)
Cash used to purchase treasury stock		—			(1	)
Other financing activities		(2	)		(9	)

Cash provided by (used in) continuing operations		11			(1,254	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		11			(1,254	)

Effect of exchange rate changes on cash		16			7

Increase (decrease) in cash and cash equivalents		(2	)		505
Beginning cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $5		778			873

Ending cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $-	$	776		$	1,378

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, 2011			March 31, 2012
*Assets*
Current:
Cash and cash equivalents	$	868		$	1,378
Trade receivables, less allowance for doubtful accounts of $38 and $46		802			714
Earned but unbilled receivables		149			146
Prepaid expenses and other current assets		117			144
Clearing broker assets		213			217
Assets held for sale		1,326			—

Total current assets		3,475			2,599
Property and equipment, less accumulated depreciation of $1,296 and $1,361		893			894
Software products, less accumulated amortization of $1,431 and $1,492		554			510
Customer base, less accumulated amortization of $1,269 and $1,331		1,580			1,532
Other intangible assets, less accumulated amortization of $22 and $25		144			127
Trade name, less accumulated amortization of $10 and $1		1,019			1,019
Goodwill		4,885			4,904

Total Assets	$	12,550		$	11,585

*Liabilities and Stockholder’s Equity*
Current:
Short-term and current portion of long-term debt	$	10		$	508
Accounts payable		60			35
Accrued compensation and benefits		300			215
Accrued interest expense		92			101
Accrued income taxes		24			434
Other accrued expenses		318			310
Clearing broker liabilities		179			178
Deferred revenue		862			872
Deferred income taxes		76			—
Liabilities related to assets held for sale		230			—

Total current liabilities		2,151			2,653
Long-term debt		7,819			6,101
Deferred income taxes		1,119			1,098

Total liabilities		11,089			9,852

Commitments and contingencies

Stockholder’s equity:
Common stock, par value $.01 per share; 100 shares authorized, issued and oustanding		—			—
Capital in excess of par value		3,793			3,794
Accumulated deficit		(2,286	)		(2,051	)
Accumulated other comprehensive income (loss)		(46	)		(10	)

Total stockholder’s equity		1,461			1,733

Total Liabilities and Stockholder’s Equity	$	12,550		$	11,585

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

SunGard Data Systems Inc.

Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
Revenue:
Services	$	995		$	989
License and resale fees		61			31

Total products and services		1,056			1,020
Reimbursed expenses		30			19

		1,086			1,039

Costs and expenses:
Cost of sales and direct operating		494			469
Sales, marketing and administration		262			258
Product development and maintenance		95			88
Depreciation and amortization		69			71
Amortization of acquisition-related intangible assets		117			102

		1,037			988

Operating income (loss)		49			51
Interest income		1			—
Interest expense and amortization of deferred financing fees		(137	)		(122	)
Loss on extinguishment of debt		(2	)		(15	)
Other income (expense)		—			2

Income (loss) from continuing operations before income taxes		(89	)		(84	)
Benefit from (provision for) income taxes		11			7

Income (loss) from continuing operations		(78	)		(77	)
Income (loss) from discontinued operations, net of tax		55			312

Net income (loss)		(23	)		235

Other Comprehensive income (loss):
Foreign currency translation		57			33

Foreign currency translation, net		57			33

Unrealized gain (loss) on derivative instruments		(1	)		—
Less: gain (loss) on derivatives reclassified into income		13			4
Less: income tax benefit (expense)		(4	)		(1	)

Net Unrealized gain (loss) on derivative instruments, net of tax		8			3

Comprehensive income (loss)	$	42		$	271

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

SunGard Data Systems Inc.

Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Three Months Ended March 31,
	2011			2012
*Cash flow from operations:*
Net income (loss)	$	(23	)	$	235
Income (loss) from discontinued operations		55			312

Income (loss) from continuing operations		(78	)		(77	)
Reconciliation of net income (loss) from continuing operations to cash flow from (used in) operations:
Depreciation and amortization		186			173
Deferred income tax provision (benefit)		(23	)		34
Stock compensation expense		6			11
Amortization of deferred financing costs and debt discount		10			12
Loss on extinguishment of debt		2			15
Other noncash items		1			(2	)
Accounts receivable and other current assets		73			87
Accounts payable and accrued expenses		(109	)		(119	)
Accrued income tax		(2	)		(64	)
Clearing broker assets and liabilities, net		(4	)		(4	)
Deferred revenue		5			1

Cash flow from (used in) continuing operations		67			67
Cash flow from (used in) discontinued operations		(14	)		8

Cash flow from (used in) operations		53			75

*Investment activities:*
Cash paid for acquired businesses, net of cash acquired		(19	)		(6	)
Cash paid for property and equipment and software		(61	)		(60	)
Other investing activities		1			3

Cash provided by (used in) continuing operations		(79	)		(63	)
Cash provided by (used in) discontinued operations		(3	)		1,740

Cash provided by (used in) investment activities		(82	)		1,677

*Financing activities:*
Cash received from borrowings, net of fees		14			(19	)
Cash used to repay debt		(1	)		(1,225	)
Other financing activities		(2	)		(10	)

Cash provided by (used in) continuing operations		11			(1,254	)
Cash provided by (used in) discontinued operations		—			—

Cash provided by (used in) financing activities		11			(1,254	)

Effect of exchange rate changes on cash		16			7

Increase (decrease) in cash and cash equivalents		(2	)		505
Beginning cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $5		778			873

Ending cash and cash equivalents, includes cash of discontinued operations: 2011, $7; 2012, $-	$	776		$	1,378

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”). 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, 2011. 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, 2012.

The presentation of certain prior year amounts has been revised to conform to the current year presentation.

Recent Accounting Pronouncements

In October 2011, the Financial Accounting Standards Board (“FASB”) announced 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 related to the presentation of comprehensive income have not been adopted by the Company.

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 expects to adopt this guidance for the annual goodwill impairment test performed as of July 1, 2012.

2. 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 three months ended March 31, 2012, the Company completed one acquisition in its FS segment. Cash paid, net of cash acquired and subject to certain adjustments, was $6 million. The impact of this acquisition was not material to the consolidated financial statements.

At March 31, 2012, contingent purchase price obligations that depend on the operating performance of certain acquired businesses were $6 million, of which $3 million is included in other accrued expenses.

Discontinued Operations

In January 2012, the Company sold its Higher Education (“HE”) business and used the net cash proceeds (as defined in its senior secured credit agreement (“Credit Agreement”)) of $1.222 billion, which is the gross transaction value of $1.775 billion less applicable taxes and fees, to repay a pro-rata portion of its outstanding term loans (see note 5). The results for the discontinued operations for the three months ended March 31, June 30, September 30, and December 31, 2011 and March 31, 2012 were as follows (in millions):


	Three Months ended
	March 31, 2011		June 30, 2011			September 30, 2011			December 31, 2011			March 31, 2012
Revenue	$	124	$	133		$	116		$	119		$	23

Operating income (loss), excluding goodwill impairment		14		30			26			28			(2	)
Goodwill impairment charge		—		—			—			(3	)		—

Operating income (loss)		14		30			26			25			(2	)
Gain on sale of business		—		—			—			—			563

Income (loss) before income taxes		14		30			26			25			561
Benefit from (provision for) income taxes		41		(72	)		(132	)		(8	)		(249	)

Income (loss) from discontinued operations	$	55	$	(42	)	$	(106	)	$	17		$	312

Assets held for sale and liabilities related to assets held for sale consisted of the following (in millions) at December 31, 2011 and for the closing balance sheet on January 20, 2012:


	December 31, 2011		January 20, 2012
Cash	$	5	$	7
Accounts receivable, net		88		90
Prepaid expenses and other current assets		13		14
Property and equipment, net		31		31
Software products, net		78		78
Customer base, net		182		182
Goodwill		929		929

Assets held for sale	$	1,326	$	1,331

Accounts payable	$	1	$	5
Accrued compensation and benefits		15		21
Other accrued expenses		12		9
Deferred revenue		106		109
Deferred income taxes		96		96

Liabilities related to assets held for sale	$	230	$	240

3. Goodwill:

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


	Cost											Accumulated Impairment
	FS			AS			Other		Subtotal			AS			Other			Subtotal			Total
Balance at December 31, 2011	$	3,480		$	2,239		$	545	$	6,264		$	(1,162	)	$	(217	)	$	(1,379	)	$	4,885
2012 acquisitions		2			—			—		2			—			—			—			2
Adjustments related to the LBO and prior year acquisitions		(2	)		(2	)		—		(4	)		—			—			—			(4	)
Effect of foreign currency translation		18			3			—		21			—			—			—			21

Balance at March 31, 2012	$	3,498		$	2,240		$	545	$	6,283		$	(1,162	)	$	(217	)	$	(1,379	)	$	4,904

4. Clearing Broker Assets and Liabilities:

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


	December 31, 2011		March 31, 2012
Segregated customer cash	$	23	$	10
Securities borrowed		157		161
Receivables from customers and other		33		46

Clearing broker assets	$	213	$	217

Payables to customers	$	16	$	10
Securities loaned		145		140
Payable to brokers and dealers		18		28

Clearing broker liabilities	$	179	$	178

Segregated customer cash is 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.

5. Debt and Derivatives:

On January 20, 2012, the Company completed the sale of HE and used net cash proceeds (as defined in the Credit Agreement) of $1.22 billion to repay, on a pro-rata basis, outstanding term loans.

On February 21, 2012, SunGard announced its intention to redeem all of its outstanding $500 million 10.625% senior notes due 2015 (“2015 Notes”) under the Indenture dated as of September 29, 2008 among SunGard, the guarantors named therein, and The Bank of New York Mellon, as trustee (as amended or supplemented from time to time, the “2015 Indenture”). On April 2, 2012, SunGard redeemed the 2015 Notes for $527 million plus accrued and unpaid interest to the redemption date, pursuant to Section 3.07(d) of the 2015 Indenture. In connection with the redemption of the 2015 Notes, the Company will write off in the second quarter of 2012 approximately $7 million of unamortized deferred financing costs and the $3 million discount.

On March 2, 2012, SunGard amended its Credit Agreement to, among other things, extend the maturity date of approximately $908 million of tranche A and incremental term loans from February 28, 2014 to February 28, 2017, extend the maturity of $880 million of revolving credit facility commitments from May 11, 2013 to November 29, 2016, and amend certain covenants and other provisions, in order to, among other things, permit the potential spin-off of AS. The tranche B, tranche C and revolving credit facility each have certain springing maturity provisions which are described in the Company’s Credit Agreement as amended and filed with the Company’s Form 8-K dated March 2, 2012.

Debt consisted of the following at December 31, 2011, March 31, 2012 and, on a pro forma basis at March 31, 2012 adjusting for the redemption on April 2, 2012 of the 2015 Notes (in millions):


	December 31, 2011			March 31, 2012			Pro Forma March 31, 2012
Senior Secured Credit Facilities:
Secured revolving credit facility	$	—		$	—		$	—
Tranche A, effective interest rate of 3.33% and 1.99%		1,386			255			255
Tranche B, effective interest rate of 4.32% and 3.98%		2,407			1,719			1,719
Tranche C, effective interest rate of 3.99%		—			908			908
Incremental term loan at 3.78% and 3.74%		479			169			169

Total Senior Secured Credit Facilities		4,272			3,051			3,051
Senior Notes due 2014 at 4.875%, net of discount of $8 and $7		242			243			243
Senior Notes due 2015 at 10.625%, net of discount of $3 and $3		497			497			—
Senior Notes due 2018 at 7.375%		900			900			900
Senior Notes due 2020 at 7.625%		700			700			700
Senior Subordinated Notes due 2015 at 10.25%		1,000			1,000			1,000
Secured accounts receivable facility, at 3.79% and 3.74%		200			200			200
Other, primarily acquisition purchase price and capital lease obligations		18			18			18

Total debt		7,829			6,609			6,112
Short-term borrowings and current portion of long-term debt		(10	)		(508	)		(11	)

Long-term debt	$	7,819		$	6,101		$	6,101

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 Credit Agreement. 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)

February 2010

May 2013

500

1.99

3-Month

The fair values of interest rate swaps designated as cash flow hedging instruments, included in other accrued expenses on the consolidated balance sheets, are $11 million and $8 million as of December 31, 2011 and March 31, 2012, respectively.

The Company has no ineffectiveness related to its swap agreements. The Company expects to reclassify in the next twelve months approximately $7 million from other comprehensive income (loss) into earnings related to the Company’s interest rate swaps based on the borrowing rates at March 31, 2012.

6. Fair Value Measurements:

The following table summarizes assets and liabilities measured at fair value on a recurring basis at March 31, 2012 (in millions):


	Fair Value Measures Using						Total
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents - money market funds	$	824	$	—	$	—	$	824

Liabilities
Interest rate swap agreements and other	$	—	$	9	$	—	$	9

The following table summarizes assets and liabilities measured at fair value on a recurring basis at December 31, 2011 (in millions):


	Fair Value Measures Using						Total
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents - money market funds	$	351	$	—	$	—	$	351

Liabilities
Interest rate swap agreements and other	$	—	$	15	$	—	$	15

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 is recognized and measured at fair value in the Company’s financial statements. 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, 2011 and March 31, 2012 (in millions):

December 31, 2011

March 31, 2012

Carrying

Fair

Carrying

Fair

Value

Value

Floating rate debt

4,472

4,372

3,251

3,252

Fixed rate debt

3,357

3,454

3,358

3,533

The fair value of the Company’s floating rate and fixed rate long-term debt (level 2) is primarily based on market rates.

7. Equity:

A rollforward of SCC’s equity for 2012 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, 2011	$	47		$	6		$	(663	)	$	(610	)	$	28		$	2,038		$	2,066
Net income (loss)		—			—			173			173			—			62			62
Foreign currency translation		—			—			33			33			—			—			—
Net unrealized gain on derivative instruments		—			—			3			3			—			—			—

Comprehensive income (loss)		—			—			209			209			—			62			62
Stock compensation expense		—			—			11			11			—			—			—
Termination of put options due to employee terminations and other		(7	)		(1	)		9			1			(3	)		2			(1	)
Purchase of treasury stock		—			—			(1	)		(1	)		—			(1	)		(1	)
Transfer intrinsic value of vested restricted stock units		3			—			(5	)		(2	)		1			—			1
Other		—			—			(8	)		(8	)		—			1			1

Balance at March 31, 2012	$	43		$	5		$	(448	)	$	(400	)	$	26		$	2,102		$	2,128

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)		—			—			(77	)		(77	)		1			53		54
Foreign currency translation		—			—			57			57			—			—		—
Net unrealized gain on derivative instruments		—			—			8			8			—			—		—

Comprehensive income (loss)		—			—			(12	)		(12	)		1			53		54
Stock compensation expense		—			—			6			6			—			—		—
Termination of put options due to employee terminations and other		(20	)		(2	)		22			—			(8	)		8		—
Transfer intrinsic value of vested restricted stock units		2			—			(3	)		(1	)		1			—		1
Other		—			—			(2	)		(2	)		—			—		—

Balance at March 31, 2011	$	69		$	9		$	(319	)	$	(241	)	$	48		$	1,843	$	1,891

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.

The components of accumulated other comprehensive income (loss) at December 31, 2011 and March 31, 2012 are as follows (in millions):


	December 31, 2011			March 31, 2012
Foreign currency translation	$	(37	)	$	(4	)
Net unrealized gain (loss) on derivative instruments		(9	)		(6	)

Accumulated other comprehensive income (loss)	$	(46	)	$	(10	)

8. Segment Information:

The Company has three reportable segments: FS, AS and Other. 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 March 31,
	2011			2012
Revenue:
Financial Systems	$	672		$	632
Availability Services		364			356
Other		50			51

	$	1,086		$	1,039

Depreciation and amortization:
Financial Systems	$	21		$	21
Availability Services		46			48
Other		2			2

	$	69		$	71

Operating income (loss):
Financial Systems	$	115		$	105
Availability Services		73			63
Other		14			14
Corporate		(19	)		(15	)
Other costs ⁽¹⁾		(134	)		(116	)

	$	49		$	51

Cash paid for property and equipment and software:
Financial Systems	$	23		$	20
Availability Services		35			38
Other		1			2
Corporate		2			—

	$	61		$	60

(1)	Includes stock compensation expense, management fees paid to the Sponsors, other items and amortization of acquisition-related intangible assets of $117 million and $102 million for the three months ended March 31, 2011 and 2012, respectively.

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


	Three Months Ended March 31,
	2011			2012
Amortization of acquisition-related intangible assets:
Financial Systems	$	69	⁽¹⁾	$	55
Availability Services		43			43
Other		5			4

	$	117		$	102

(1)	Includes approximately $7 million of impairment charges related to customer base and software.

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


	Three Months Ended March 31,
	2011		2012
Capital Markets	$	285	$	238
Asset Management		108		113
Wealth Management		86		85
Corporate Liquidity & Energy		61		65
Banking		52		47
Insurance		39		41
Other		41		43

Total Financial Systems	$	672	$	632

9. Related Party Transactions:

In accordance with the Management Agreement between the Company and affiliates of the Sponsors, the Company recorded $3 million and $2 million of management fees in sales, marketing and administration expenses during the three months ended March 31, 2011 and 2012, respectively. At December 31, 2011 and March 31, 2012, $4 million and $2 million, respectively, was included in other accrued expenses.

During the first quarter of 2012, the Company paid to the Sponsors $17.8 million of management fees, which are included in the results of discontinued operations, related to the sale of HE.

10. Supplemental Cash Flow Information:

Supplemental cash flow information for the three months ended March 31, 2011 and 2012 follows (in millions):


	Three Months Ended March 31,
*Supplemental information:*	2011			2012
Interest paid	$	123		$	101

Income taxes paid, net of refunds of $3 million and $3 million, respectively	$	19		$	19

Acquired businesses:
Property and equipment	$	1		$	—
Software products		11			—
Customer base		8			6
Goodwill		4			2
Deferred income taxes		(4	)		—
Purchase price obligations and debt assumed		(1	)		(3	)
Net current liabilities assumed		—			1

Cash paid for acquired businesses, net of cash acquired of $3 and $2 million, respectively	$	19		$	6

11. 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, 2011 and March 31, 2012, and for the three month periods ended March 31, 2011 and 2012 to arrive at the information for SunGard on a consolidated basis. SCC and SCCII are neither parties to nor guarantors of 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, 2011.


	Supplemental Condensed Consolidating Balance Sheet
(in millions)	December 31, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current:
Cash and cash equivalents	$	529		$	(15	)	$	354		$	—		$	868
Intercompany balances		(5,247	)		4,516			731			—			—
Trade receivables, net		2			603			346			—			951
Prepaid expenses, taxes and other current assets		1,461			54			271			(1,456	)		330
Assets held for sale		—			1,315			13			(2	)		1,326

Total current assets		(3,255	)		6,473			1,715			(1,458	)		3,475
Property and equipment, net		—			588			305			—			893
Intangible assets, net		120			2,701			476			—			3,297
Intercompany balances		250			1			(251	)		—			—
Goodwill		—			3,784			1,101			—			4,885
Investment in subsidiaries		12,673			2,253			—			(14,926	)		—

Total Assets	$	9,788		$	15,800		$	3,346		$	(16,384	)	$	12,550

Liabilities and Stockholder’s Equity
Current:
Short-term and current portion of long-term debt	$	—		$	3		$	7		$	—		$	10
Accounts payable and other current liabilities		296			2,170			901			(1,456	)		1,911
Liabilities related to assets held for sale		—			219			11			—			230

Total current liabilities		296			2,392			919			(1,456	)		2,151
Long-term debt		7,612			2			205			—			7,819
Intercompany debt		82			19			16			(117	)		—
Deferred income taxes		337			714			68			—			1,119

Total liabilities		8,327			3,127			1,208			(1,573	)		11,089

Total stockholder’s equity		1,461			12,673			2,138			(14,811	)		1,461

Total Liabilities and Stockholder’s Equity	$	9,788		$	15,800		$	3,346		$	(16,384	)	$	12,550


	Supplemental Condensed Consolidating Balance Sheet
(in millions)	March 31, 2012
	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current:
Cash and cash equivalents	$	1,053		$	(15	)	$	340		$	—		$	1,378
Intercompany balances		(5,358	)		4,624			734			—			—
Trade receivables, net		6			552			302			—			860
Prepaid expenses, taxes and other current assets		986			133			316			(1,074	)		361

Total current assets		(3,313	)		5,294			1,692			(1,074	)		2,599
Property and equipment, net		—			586			308			—			894
Intangible assets, net		105			2,627			456			—			3,188
Intercompany balances		258			—			(258	)		—			—
Goodwill		—			3,833			1,071			—			4,904
Investment in subsidiaries		11,699			2,221			—			(13,920	)		—

Total Assets	$	8,749		$	14,561		$	3,269		$	(14,994	)	$	11,585


Liabilities and Stockholder’s Equity
Current:
Short-term and current portion of long-term debt	$	497		$	3		$	8		$	—		$	508
Accounts payable and other current liabilities		212			2,140			867			(1,074	)		2,145

Total current liabilities		709			2,143			875			(1,074	)		2,653
Long-term debt		5,894			2			205			—			6,101
Intercompany debt		83			17			17			(117	)		—
Deferred income taxes		330			700			68			—			1,098

Total liabilities		7,016			2,862			1,165			(1,191	)		9,852

Total stockholder’s equity		1,733			11,699			2,104			(13,803	)		1,733

Total Liabilities and Stockholder’s Equity	$	8,749		$	14,561		$	3,269		$	(14,994	)	$	11,585


	Supplemental Condensed Consolidating Schedule of Comprehensive Income
(in millions)	Three Months ended March 31, 2011
	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Total revenue	$	—		$	726		$	444		$	(84	)	$	1,086


Costs and expenses:
Cost of sales and administrative expenses		26			521			388			(84	)		851
Depreciation and amortization		—			47			22			—			69
Amortization of acquisition-related intangible assets		—			91			26			—			117

		26			659			436			(84	)		1,037

Operating income (loss)		(26	)		67			8			—			49
Net interest income (expense)		(127	)		(1	)		(8	)		—			(136	)
Other income (expense)		21			—			—			(23	)		(2	)

Income (loss) from continuing operations before income taxes		(132	)		66			—			(23	)		(89	)
Benefit from (provision for) income taxes		54			(43	)		—			—			11

Income (loss) from continuing operations		(78	)		23			—			(23	)		(78	)
Income (loss) from discontinued operations, net of tax		55			55			—			(55	)		55

Net income (loss)	$	(23	)	$	78		$	—		$	(78	)	$	(23	)


Comprehensive income (loss)	$	42		$	134		$	53		$	(187	)	$	42


	Supplemental Condensed Consolidating Schedule of Comprehensive Income
(in millions)	Three Months ended March 31, 2012
	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated

Total revenue	$	—		$	713		$	413		$	(87	)	$	1,039


Costs and expenses:
Cost of sales and administrative expenses		25			534			343			(87	)		815
Depreciation and amortization		—			48			23			—			71
Amortization of acquisition-related intangible assets		—			84			18			—			102

		25			666			384			(87	)		988

Operating income (loss)		(25	)		47			29			—			51
Net interest income (expense)		(114	)		—			(8	)		—			(122	)
Other income (expense)		52			23			2			(90	)		(13	)

Income (loss) from continuing operations before income taxes		(87	)		70			23			(90	)		(84	)
Benefit from (provision for) income taxes		10			(3	)		—			—			7

Income (loss) from continuing operations		(77	)		67			23			(90	)		(77	)
Income (loss) from discontinued operations, net of tax		312			93			4			(97	)		312

Net income (loss)	$	235		$	160		$	27		$	(187	)	$	235


Comprehensive income (loss)	$	271		$	185		$	49		$	(234	)	$	271


	Supplemental Condensed Consolidating Schedule of Cash Flows
(in millions)	Three Months ended March 31, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Cash flow from operations:
Net income (loss)	$	(23	)	$	78		$	—		$	(78	)	$	(23	)
Income (loss) from discontinued operations		55			55			—			(55	)		55

Income (loss) from continuing operations		(78	)		23			—			(23	)		(78	)
Non cash adjustments		(10	)		120			49			23			182
Changes in operating assets and liabilities		54			(79	)		(12	)		—			(37	)

Cash flow from (used in) continuing operations		(34	)		64			37			—			67
Cash flow from (used in) discontinued operations		—			(14	)		—			—			(14	)

Cash flow from (used in) operations		(34	)		50			37			—			53

Investment activities:
Intercompany transactions		86			6			(92	)		—			—
Cash paid for acquired businesses, net of cash acquired		—			(6	)		(13	)		—			(19	)
Cash paid for property and equipment and software		(1	)		(40	)		(20	)		—			(61	)
Other investing activities		—			1			—			—			1

Cash provided by (used in) continuing operations		85			(39	)		(125	)		—			(79	)
Cash provided by (used in) discontinued operations		—			(3	)		—			—			(3	)

Cash provided by (used in) investment activities		85			(42	)		(125	)		—			(82	)

Financing activities:
Net repayments of long-term debt		(5	)		(1	)		19			—			13
Other financing activities		(2	)		—			—			—			(2	)

Cash provided by (used in) continuing operations		(7	)		(1	)		19			—			11
Cash provided by (used in) discontinued operations		—			—			—			—			—

Cash provided by (used in) financing activities		(7	)		(1	)		19			—			11

Effect of exchange rate changes on cash		—			—			16			—			16


Increase (decrease) in cash and cash equivalents		44			7			(53	)		—			(2	)
Beginning cash and cash equivalents		179			1			598			—			778

Ending cash and cash equivalents	$	223		$	8		$	545		$	—		$	776


	Supplemental Condensed Consolidating Schedule of Cash Flows
(in millions)	Three Months ended March 31, 2012
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Cash flow from operations:
Net income (loss)	$	235		$	160		$	27		$	(187	)	$	235
Income (loss) from discontinued operations		312			93			4			(97	)		312

Income (loss) from continuing operations		(77	)		67			23			(90	)		(77	)
Non cash adjustments		18			98			37			90			243
Changes in operating assets and liabilities		7			(68	)		(38	)		—			(99	)

Cash flow from (used in) continuing operations		(52	)		97			22			—			67
Cash flow from (used in) discontinued operations		(2	)		—			10			—			8

Cash flow from (used in) operations		(54	)		97			32			—			75

Investment activities:
Intercompany transactions		1,828			(24	)		(33	)		(1,771	)		—
Cash paid for acquired businesses, net of cash acquired		—			—			(6	)		—			(6	)
Cash paid for property and equipment and software		—			(41	)		(19	)		—			(60	)
Other investing activities		1			—			2			—			3

Cash provided by (used in) continuing operations		1,829			(65	)		(56	)		(1,771	)		(63	)
Cash provided by (used in) discontinued operations		—			1,740			—			—			1,740

Cash provided by (used in) investment activities		1,829			1,675			(56	)		(1,771	)		1,677

Financing activities:
Intercompany dividends of HE sale proceeds		—			(1,771	)		—			1,771			—
Net repayments of long-term debt		(1,241	)		(1	)		(2	)		—			(1,244	)
Other financing activities		(10	)		—			—			—			(10	)

Cash provided by (used in) continuing operations		(1,251	)		(1,772	)		(2	)		1,771			(1,254	)
Cash provided by (used in) discontinued operations		—			—			—			—			—

Cash provided by (used in) financing activities		(1,251	)		(1,772	)		(2	)		1,771			(1,254	)

Effect of exchange rate changes on cash		—			—			7			—			7


Increase (decrease) in cash and cash equivalents		524			—			(19	)		—			505
Beginning cash and cash equivalents		529			(15	)		359			—			873

Ending cash and cash equivalents	$	1,053		$	(15	)	$	340		$	—		$	1,378

During the first quarter of 2012, the Company determined that it had incorrectly accounted for intercompany dividend income and the related eliminations presented in the Supplemental Condensed Consolidating Schedules of Operations in the Company’s Form 10-K for the periods ended December 31, 2009, 2010 and 2011. The Company determined that the incorrect presentation resulted in an understatement of income (or overstatement of loss) from continuing operations and net income (loss) for both the Non-Guarantor subsidiaries and the Guarantor subsidiaries. It was further determined that cash flows from operations and cash flows from investment activities for Parent (SunGard), Guarantor subsidiaries and Non-Guarantor subsidiaries were each affected between operating and investing. The Company also identified a misclassification of expense between Guarantor subsidiaries and Non-Guarantor subsidiaries in 2010 totaling $91 million. In addition, the Company also determined that it had incorrectly recorded intercompany transactions between certain Guarantor and Non-Guarantor subsidiaries as a component of net interest income (expense) resulting in an understatement of operating expenses for the Guarantor subsidiaries and an understatement of revenues for the Non-Guarantor subsidiaries. These errors had no impact on the consolidated financial statements of SunGard or any debt covenants and had no impact on the ability of SunGard’s subsidiaries to dividend cash to SunGard for debt service requirements. The Company assessed the materiality of these items on previously issued annual and interim financial statements in accordance with SEC Staff Accounting Bulletin No. 99, and concluded that the errors were not material to the consolidated financial statements.

The Company will revise the June 30, 2011 and September 30, 2011 financial statements to reflect the revisions discussed above, the next time such financial statements are included in future reports for comparable purposes.

The following is a summary of the impacts of the errors on each of the statements that were included in the Quarterly Report on Form 10-Q for the periods indicated or the Annual Report on Form 10-K for the period ended December 31, 2011 (n/c = no change).

Supplemental Condensed Consolidating Schedule of Operations


	Parent Company						Guarantor Subsidiaries						Non-Guarantor Subsidiaries						Eliminations
(in millions)	As Reported			As Revised			As Reported			As Revised			As Reported			As Revised			As Reported			As Revised
Three Months Ended March 31, 2011
Revenue		n/c			n/c		$	845		$	726	(f)	$	366		$	444	(f)	$	(1	)	$	(84	)(f)
Operating income (loss)		n/c			n/c			165			67	(f)		(76	)		8	(f)		—			—
Other income (loss)	$	49		$	21	(a)		(62	)		—	(a)		n/c			n/c	(a)		11			(23	)(a)
Income (loss) from before income taxes		(64	)		n/a			68			n/a			(90	)		n/a			11			n/a
Income (loss) from continuing operations before income taxes		n/a			(132	)(a)		n/a			66	(a)		n/a			—	(a)		n/a			(23	)(a)
Income (loss) from continuing operations		n/a			(78	)(a)		n/a			23	(a)		n/a			—	(a)		n/a			(23	)(a)
Net income (loss)		n/c			n/c			51			78	(a)		(62	)		—	(a)		11			(78	)(a)

SunGard Capital Corp.

SunGard Capital Corp. II

SunGard Data Systems Inc.