SunGard reports full year results

Source: SunGard

SunGard, a global leader in integrated software and processing solutions and the pioneer and leading provider of information availability services, reported today that adjusted income from operations (defined in Note 1 to the Notes to the Consolidated Condensed Financial Information) for the year 2006 was $994 million, a 7% increase over $933 million for the year 2005.

Reported income from operations for the year 2006 was $532 million compared to $493 million for the year 2005, an increase of 8%. Reported income from operations includes amortization of acquired intangible assets of $399 million and $231 million, respectively; stock-based compensation and purchase accounting adjustments of $59 million in each period; merger costs of $4 million and $139 million, respectively; and, in 2005, a one-time charge of $11 million related to the relocation of an availability services facility. The 2005 purchase accounting adjustments were recorded in connection with the acquisition of the Company on August 11, 2005 and resulted primarily in a reduction in revenue of $21 million ("deferred revenue adjustment").

Adjusted income from operations for the three months ended December 31, 2006 was $299 million compared to $282 million in the same period in 2005, an increase of 6%. Reported income from operations for the three months ended December 31, 2006 was $184 million compared to $151 million in 2005, an increase of 22%.

For the year 2006, adjusted EBITDA (defined in Note 2 to the Notes to the Consolidated Condensed Financial Information) was $1.25 billion compared to $1.19 billion in 2005, an increase of 6%. For the three months ended December 31, 2006, adjusted EBITDA was $373 million compared to $340 million for the three months ended December 31, 2005, an increase of 10%.

Revenue for the year 2006 was $4.32 billion, an increase of 7% over revenue for the year 2005. Revenue for the three months ended December 31, 2006 was $1.19 billion, an increase of 9% over revenue for the same period in 2005. These results exclude the 2005 reduction in revenue related to the deferred revenue adjustment of $21 million for the year and $9 million for the quarter. Reported revenue including this adjustment increased 8% for the year and 10% for the quarter.

Internal revenue (revenue from businesses owned for at least one year and further adjusted for the effects of businesses sold in the previous twelve months and the deferred revenue adjustment in 2005) grew 6% for the year and 9% for the quarter compared to the same periods in 2005.

Cristóbal Conde, president and chief executive officer, commented, "SunGard's performance for the full year was solid. Internal revenue growth in our software and processing businesses was higher than it has been for more than four years. We believe 2007 will be another solid year. The tone of business is either steady or generally improving compared to this time last year. The pipeline continues to be strong and our products and services remain very competitive. Our customers are placing equal emphasis on top line growth and on reducing costs through operational efficiencies. Regulatory issues, risk mitigation and compliance related initiatives are still top priorities for many of our customers. SunGard is well positioned to help our customers achieve their business objectives."

Financial Systems revenue increased 15% to $611 million for the quarter. The deferred revenue adjustment related to Financial Systems in the fourth quarter of 2005 was $4 million. Internal revenue grew approximately 14%. License fees were $80 million for the quarter, an increase of $4 million from the fourth quarter of 2005.

Notable deals in the quarter included the following:
  • One of the largest mortgage companies in the US selected SunGard's BancWare asset and liability management system.
  • A leading institutional sales and market making firm selected SunGard's BRASS as its platform for its securities trading business and a global brokerage services firm selected SunGard's BRASS EnGard as its real-time trading compliance solution.
  • A specialized agency brokerage firm selected SunGard's Phase3 brokerage and clearance solution.


Higher Education & Public Sector Systems revenue increased 9% to $226 million for the quarter. The deferred revenue adjustment related to Higher Education and Public Sector Systems in the fourth quarter of 2005 was $3 million. Internal revenue grew approximately 8%. License fees were $20 million for the quarter, a decrease of $4 million from the fourth quarter of 2005.

Notable deals in the quarter included the following:
  • A Texas public university selected SunGard Higher Education's Banner administrative system to help it implement a unified digital campus.
  • A Big Ten, public, doctoral-granting research university selected SunGard Higher Education's Banner administrative system.
  • A regional government entity in the UK selected SunGard Vivista to manage its information and communications technology infrastructure.


Availability Services revenue increased 1% to $351 million for the quarter. The deferred revenue adjustment related to Availability Services in the fourth quarter of 2005 was $2 million. Internal revenue increased approximately 2%.

Notable deals in the quarter included the following:
  • A provider of on-demand workspaces selected SunGard Availability Services for managed services.
  • A leading provider of insurance and financial services selected SunGard Availability Services for recovery services.
  • A provider of financial, marketing and business communications services selected SunGard Availability Services for recovery services and managed services.


At December 31, 2006, total debt was $7.44 billion, cash balances were $316 million and off-balance sheet debt was $376 million. During 2006 the Company invested $312 million in capital expenditures and $163 million (net of cash acquired) in 10 acquisitions.

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