CRITICAL ACCOUNTING POLICIES

Certain of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our consolidated financial statements. In applying these policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of estimates. Those estimates are based on our historical experience, terms of existing contracts, management's observation of trends in the industry, information provided by our clients and information available from other outside sources, as appropriate. Actual results may differ significantly from the estimates contained in our consolidated financial statements. There have been no material changes to our critical accounting estimates and assumptions or the judgments affecting the application of those estimates and assumptions since the filing of our 2011 Form 10-K, except that the contingent foreign currency derivative contracts we entered into require significant judgment about a significant estimate related to their fair value. Our critical accounting policies are described in the 2011 Form 10-K and include:

• Revenue Recognition

• Long-Lived Assets, Intangible Assets and Goodwill

• Acquisition Accounting

• Income Taxes

Acquisitions of PORTIA Business and GlobeOp

On May 9, 2012, we acquired the assets of Thomson Reuters' PORTIA Business, or the PORTIA Business, for approximately $170 million. The PORTIA Business provides a broad set of middle-to-back office capabilities that allow investment managers to track and manage day-to-day activity in their investment portfolios.

On May 31, 2012, we acquired GlobeOp Financial Services S.A., a Luxembourg sociéte anonyme, or GlobeOp, for £4.85 per share (approximately £572 million in the aggregate). On July 9, 2012, we completed a "squeeze-out" procedure under Luxembourg law, after the completion of which we became the owner of 100% of the issued share capital of GlobeOp. GlobeOp provides independent fund services, specializing in middle and back office services and integrated risk-reporting to hedge funds, asset management firms and other sections of the financial industry.

The discussion in this Part I, Item 2 of this Quarterly Report on Form 10-Q includes the PORTIA Business and the operations of GlobeOp for the respective time periods each were owned by SS&C.

Results of Operations for the Three and Six Months Ended June 30, 2012 and 2011

The following table sets forth revenues (in thousands) and changes in revenues
for the periods indicated:



                                         Three Months Ended                        Six Months Ended
                                              June 30,                %                June 30,                %
                                          2012          2011       Change         2012          2011         Change
Revenues:
Software licenses                      $    5,768     $  4,982          16 %    $   9,578     $  11,555          (17 )%
Maintenance                                22,976       19,418          18 %       42,474        38,865            9 %
Professional services                       7,217        5,860          23 %       13,009        11,127           17 %
Software-enabled services                  84,889       61,543          38 %      149,464       119,263           25 %

Total revenues                         $  120,850     $ 91,803          32 %    $ 214,525     $ 180,810           19 %

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

                                     Three Months Ended           Six Months Ended
                                          June 30,                    June 30,
                                     2012            2011         2012          2011
       Revenues:
       Software licenses                  5 %            5 %           4 %          6 %
       Maintenance                       19 %           21 %          20 %         22 %
       Professional services              6 %            7 %           6 %          6 %
       Software-enabled services         70 %           67 %          70 %         66 %

       Total revenues                   100 %          100 %         100 %        100 %

Revenues

Our revenues consist primarily of software-enabled services and maintenance revenues, and, to a lesser degree, software license and professional services revenues. As a general matter, our software license and professional services revenues fluctuate based on the number of new licensing clients, while fluctuations in our software-enabled services revenues are attributable to the number of new software-enabled services clients as well as the number of outsourced transactions provided to our existing clients and total assets under management in our clients' portfolios. Maintenance revenues vary based on the rate by which we add or lose maintenance clients over time and, to a lesser extent, on the annual increases in maintenance fees, which are generally tied to the consumer price index.

Revenues for the three months ended June 30, 2012 were $120.9 million compared to $91.8 million for the same period in 2011. The revenue increase of $29.1 million, or 32%, was primarily due to revenues from products and services that we acquired through our acquisitions of Ireland Fund Admin in September 2011, Teledata Communications, Inc., or TCI, in December 2011, the PORTIA Business in May 2012 and GlobeOp in May 2012, which added $27.2 million in revenues in the aggregate, and an increase of $2.8 million in revenues for businesses and products that we have owned for at least 12 months, or organic revenues. The increases were partially offset by the unfavorable impact from foreign currency translation of $0.9 million, resulting from the relative strength of the U.S. dollar relative to currencies such as the Canadian dollar, the British pound, the Australian dollar and the euro. Revenues for the six months ended June 30, 2012 were $214.5 million compared to $180.8 million for the same period in 2011. The revenue increase of $33.7 million, or 19%, was primarily due to revenues from products and services that we acquired through our acquisitions of BXML in March 2011, Ireland Fund Admin in September 2011, TCI, in December 2011, the PORTIA Business in May 2012 and GlobeOp in May 2012, which added $29.0 million in revenues in the aggregate, and an increase of $5.8 million in organic revenues. The increases were partially offset by the unfavorable impact from foreign currency translation of $1.1 million, resulting from the relative strength of the U.S. dollar relative to currencies such as the Canadian dollar, the British pound, the Australian dollar and the euro.

Software licenses. Software license revenues were $5.8 million and $5.0 million for the three months ended June 30, 2012 and 2011, respectively. The increase in software license revenues of $0.8 million, or 16%, was due to revenues from acquisitions, which contributed $1.3 million in the aggregate, partially offset by a decrease of $0.5 million in organic software license revenues. Software license revenues were $9.6 million and $11.6 million for the six months ended June 30, 2012 and 2011, respectively. The decrease in software license revenues of $2.0 million, or 17%, was due to a decrease of $3.2 million in organic software license revenues, partially offset by revenues from acquisitions, which contributed $1.3 million in the aggregate. Software license revenues will vary depending on the timing, size and nature of our license transactions. For example, the average size of our software license transactions and the number of large transactions may fluctuate on a period-to-period basis. For the three and six months ended June 30, 2012, revenues from term licenses increased while the average size and number of perpetual license transactions decreased from those for the six months ended June 30, 2011 and increased from those for the three months ended June 30, 2011. Additionally, software license revenues will vary among the various products that we offer, due to differences such as the timing of new releases and variances in economic conditions affecting opportunities in the vertical markets served by such products.

Maintenance. Maintenance revenues were $23.0 million and $19.4 million for the three months ended June 30, 2012 and 2011, respectively. The increase in maintenance revenues of $3.6 million, or 18%, was due to revenues from acquisitions, which contributed $3.8 million in the aggregate, partially offset by the unfavorable impact from foreign currency translation of $0.1 million and a decrease of $0.1 million in organic maintenance revenues. Maintenance revenues were $42.5 million and $38.9 million for the six months ended June 30, 2012 and 2011, respectively. The increase in maintenance revenues of $3.6 million, or 9%, was due to revenues from acquisitions, which contributed $3.9 million in the aggregate, partially offset by the unfavorable impact from foreign currency translation of $0.2 million and a decrease of $0.1 million in organic maintenance revenues. We

typically provide maintenance services under one-year renewable contracts that provide for an annual increase in fees, which are generally tied to the percentage change in the consumer price index. Future maintenance revenue growth is dependent on our ability to retain existing clients, add new license clients and increase average maintenance fees.

Professional services. Professional services revenues were $7.2 million and $5.9 million for the three months ended June 30, 2012 and 2011, respectively. The increase of $1.3 million, or 23%, was primarily due to revenues from acquisitions, which contributed $0.8 million in the aggregate, and an increase of $0.6 million in organic professional services revenues, partially offset by the unfavorable impact from foreign currency translation of $0.1 million. Professional services revenues were $13.0 million and $11.1 million for the six months ended June 30, 2012 and 2011, respectively. The increase of $1.9 million, or 17%, was primarily due to revenues from acquisitions, which contributed $1.0 million in the aggregate, and an increase of $1.0 million in organic professional services revenues, partially offset by the unfavorable impact from foreign currency translation of $0.1 million. Our overall software license revenue levels and market demand for professional services will continue to have an effect on our professional services revenues.

Software-enabled services. Software-enabled services revenues were $84.9 million and $61.5 million for the three months ended June 30, 2012 and 2011, respectively. The increase in software-enabled services revenues of $23.4 million, or 38%, was primarily due to revenues from acquisitions, which contributed $21.2 million in the aggregate, and an increase of $2.8 million in organic software-enabled services revenues, partially offset by the unfavorable impact from foreign currency translation of $0.6 million. Software-enabled services revenues were $149.5 million and $119.3 million for the six months ended June 30, 2012 and 2011, respectively. The increase in software-enabled services revenues of $30.2 million, or 25%, was primarily due to revenues from acquisitions, which contributed $22.8 million in the aggregate, and an increase of $8.2 million in organic software-enabled services revenues, partially offset by the unfavorable impact from foreign currency translation of $0.8 million. Future software-enabled services revenue growth is dependent on our ability to retain existing clients, add new clients and increase average fees.

Cost of Revenues

Total cost of revenues was $63.1 million and $45.6 million for the three months ended June 30, 2012 and 2011, respectively. The gross margin was 48% for the three months ended June 30, 2012 and 50% for the three months ended June 30, 2011. Our costs of revenues increased by $17.5 million, or 38%, primarily as a result of our acquisitions, which added costs of revenues of $12.2 million in the aggregate, an increase in amortization expense of $4.3 million and an increase of $2.0 million in costs to support organic revenue growth, partially offset by a decrease in costs of $0.5 million related to foreign currency translation and a decrease in costs of $0.5 million related to stock-based compensation. Total cost of revenues was $110.0 million and $90.1 million for the six months ended June 30, 2012 and 2011, respectively. The gross margin was 49% for the six months ended June 30, 2012 and 50% for the six months ended June 30, 2011. Our costs of revenues increased by $19.9 million, or 22%, primarily as a result of our acquisitions, which added costs of revenues of $12.9 million in the aggregate, an increase in amortization expense of $4.2 million and an increase of $3.8 million in costs to support organic revenue growth, partially offset by a decrease in costs of $0.6 million related to foreign currency translation and a decrease in costs of $0.4 million related to stock-based compensation.

Cost of software licenses. Cost of software license revenues consists primarily of amortization expense of completed technology, royalties, third-party software, and the costs of product media, packaging and documentation. The cost of software license revenues was $1.5 million and $1.7 million for the three months ended June 30, 2012 and 2011, respectively. The decrease in cost of software licenses was due to a reduction of $0.2 million in amortization expense. Cost of software license revenues as a percentage of such revenues was 27% and 34% for the three-month periods ended June 30, 2012 and 2011, respectively. The cost of software license revenues was $2.8 million and $3.4 million for the six months ended June 30, 2012 and 2011, respectively. The decrease in cost of software licenses was due to a reduction of $0.6 million in amortization expense. Cost of software license revenues as a percentage of such revenues was 30% and 29% for the six-month periods ended June 30, 2012 and 2011, respectively.

Cost of maintenance. Cost of maintenance revenues consists primarily of technical client support, costs associated with the distribution of products and regulatory updates and amortization of intangible assets. The cost of maintenance revenues was $9.8 million and $8.8 million for the three months ended June 30, 2012 and 2011, respectively. The increase in costs of maintenance revenues of $1.0 million, or 11%, was primarily related to an increase in costs of $0.9 million related to amortization expense and our acquisitions, which added costs of maintenance revenues of $0.3 million, partially offset by a reduction in costs of $0.1 million related to foreign currency translation and of $0.1 million to support organic maintenance revenues. Cost of maintenance revenues as a percentage of these revenues was 43% for the three months ended June 30, 2012 compared to 45% for the three months ended June 30, 2011. The cost of maintenance revenues was $18.5 million and $17.5 million for the six months ended June 30, 2012 and 2011, respectively. The increase in costs of maintenance revenues of $1.0 million, or 6%, was primarily related to an increase in costs of $0.9 million related to amortization expense and our acquisitions, which added costs of maintenance revenues of $0.3 million, partially offset by a reduction in costs of $0.1 million related to foreign currency translation and of $0.1 million to support organic maintenance revenues. Cost of maintenance revenues as a percentage of these revenues was 43% for the six months ended June 30, 2012 compared to 45% for the six months ended June 30, 2011.

Cost of professional services. Cost of professional services revenues consists primarily of the cost related to personnel utilized to provide implementation, conversion and training services to our software licensees, as well as system integration, custom programming and actuarial consulting services. The cost of professional services revenues was $4.7 million and $4.0 million for the three months ended June 30, 2012 and 2011, respectively. The increase in costs of professional services revenues of $0.7 million, or 18%, was primarily related to our acquisitions, which added costs of professional services revenues of $0.5 million, an increase in costs of $0.2 million to support organic professional services revenues and an increase in costs of $0.1 million related to amortization expense, partially offset by a reduction in costs of $0.1 million related to foreign currency translation. Cost of professional services revenues as a percentage of these revenues was 65% for the three months ended June 30, 2012 compared to 68% for the three months ended June 30, 2011. The cost of professional services revenues was $8.7 million and $7.6 million for the six months ended June 30, 2012 and 2011, respectively. The increase in costs of professional services revenues of $1.1 million, or 15%, was primarily related to our acquisitions, which added costs of professional services revenues of $0.6 million, an increase in costs of $0.5 million to support organic professional services revenues and an increase in costs of $0.1 million related to amortization expense, partially offset by a reduction of $0.1 million in costs related to foreign currency translation. Cost of professional services revenues as a percentage of these revenues was 67% for the six months ended June 30, 2012 compared to 68% for the six months ended June 30, 2011.

Cost of software-enabled services. Cost of software-enabled services revenues consists primarily of the cost related to personnel utilized in servicing our software-enabled services clients and amortization of intangible assets. The cost of software-enabled services revenues was $47.1 million and $31.2 million for the three months ended June 30, 2012 and 2011, respectively. The increase in costs of software-enabled services revenues of $15.9 million, or 51%, was primarily related to our acquisitions, which added $11.4 million in costs, an increase in costs of $3.5 million related to amortization expense and an increase of $1.8 million in costs to support the growth of organic software-enabled services revenues, partially offset by a reduction in costs of $0.4 million related to stock-based compensation and $0.4 million related to foreign currency translation. Cost of software-enabled services revenues as a percentage of these revenues was 55% for the three months ended June 30, 2012 compared to 51% for the three months ended June 30, 2011. The cost of software-enabled services revenues was $80.0 million and $61.7 million for the six months ended June 30, 2012 and 2011, respectively. The increase in costs of software-enabled services revenues of $18.3 million, or 30%, was primarily related to our acquisitions, which added $12.0 million in costs, an increase in costs of $3.8 million related to amortization expense and an increase of $3.3 million in costs to support the growth of organic software-enabled services revenues, partially offset by a reduction in costs of $0.4 million related to stock-based compensation and $0.4 million related to foreign currency translation. Cost of software-enabled services revenues as a percentage of these revenues was 54% for the six months ended June 30, 2012 compared to 52% for the six months ended June 30, 2011.

Operating Expenses

Total operating expenses were $36.6 million and $23.3 million for the three months ended June 30, 2012 and 2011, respectively. The increase in total operating expenses of $13.3 million, or 57%, was driven by transaction costs of $9.4 million associated with the acquisitions of GlobeOp and the PORTIA Business. The remainder of the increase in costs was primarily due to our acquisitions of GlobeOp, the PORTIA Business, Ireland Fund Admin and TCI, which added $5.2 million in costs, an increase of $0.9 million in costs to support organic revenue growth and an increase in costs of $0.1 million related to amortization expense, partially offset by a decrease in costs of $2.0 million related to stock-based compensation, and a decrease in costs of $0.3 million related to foreign currency translation. Total operating expenses as a percentage of total revenues were 30% for the three months ended June 30, 2012 compared to 25% for the three months ended June 30, 2011. Total operating expenses were $61.4 million and $44.7 million for the six months ended June 30, 2012 and 2011, respectively. The increase in total operating expenses of $16.7 million, or 37%, was driven by transaction costs of $13.6 million associated with the acquisitions of GlobeOp and the PORTIA Business. The remainder of the increase in costs was primarily due to our acquisitions of GlobeOp, the PORTIA Business, BXML, Ireland Fund Admin and TCI, which added $5.4 million in costs, an increase of $0.5 million in costs to support organic revenue growth and an increase in costs of $0.1 million related to amortization expense, partially offset by a decrease in costs of $2.5 million related to stock-based compensation, and a decrease in costs of $0.4 million related to foreign currency translation. Total operating expenses as a percentage of total revenues were 29% for the three months ended June 30, 2012 compared to 25% for the three months ended June 30, 2011.

Selling and marketing. Selling and marketing expenses consist primarily of the personnel costs associated with the selling and marketing of our products, including salaries, commissions and travel and entertainment. Such expenses also include amortization of intangible assets, the cost of branch sales offices, trade shows and marketing and promotional materials. Selling and marketing expenses were $8.3 million and $7.0 million for the three months ended June 30, 2012 and 2011, respectively, representing 7% of total revenues for the three months ended June 30, 2012 compared to 8% for the three months ended June 30, 2011. The increase in selling and marketing expenses of $1.3 million, or 18%, was primarily related to our acquisitions, which added $1.3 million in costs

in the aggregate, an increase in costs of $0.3 million to support organic revenues and an increase in costs of $0.1 million related to amortization expense, partially offset by a decrease in costs $0.3 million related to stock-based compensation and $0.1 million related to foreign currency translation. Selling and marketing expenses were $15.7 million and $13.9 million for the six months ended June 30, 2012 and 2011, respectively, representing 7% of total revenues for the six months ended June 30, 2012 compared to 8% for the six months ended June 30, 2011. The increase in selling and marketing expenses of $1.8 million, or 13%, was primarily related to our acquisitions, which added $1.3 million in costs in the aggregate, an increase in costs of $0.8 million to support organic revenues and an increase in costs of $0.1 million related to amortization expense, partially offset by a decrease in costs $0.3 million related to stock-based compensation and $0.1 million related to foreign currency translation.

Research and development. Research and development expenses consist primarily of personnel costs attributable to the enhancement of existing products and the development of new software products. Research and development expenses were $10.6 million and $9.1 million for the three months ended June 30, 2012 and 2011, respectively, representing 9% of total revenues for the three months ended June 30, 2012 compared to 10% for the three months ended June 30, 2011. The increase in research and development expenses of $1.5 million, or 18%, was primarily related to our acquisitions, which added $1.7 million in costs in the aggregate, and an increase in costs of $0.2 million to support organic revenues, partially offset by a decrease in costs $0.2 million related to stock-based compensation and $0.2 million related to foreign currency translation. Research and development expenses were $19.3 million and $17.0 million for the six months ended June 30, 2012 and 2011, respectively, representing 9% of total revenues in each of those periods. The increase in research and development expenses of $2.3 million, or 13%, was primarily related to our acquisitions, which added $1.8 million in costs in the aggregate, and an increase in costs of $0.9 million to support organic revenues, partially offset by a decrease in costs $0.2 million related to stock-based compensation and $0.2 million related to foreign currency translation.

General and administrative. General and administrative expenses consist primarily of personnel costs related to management, accounting and finance, information management, human resources and administration and associated overhead costs, as well as fees for professional services. General and administrative expenses were $8.3 million and $7.2 million for the three months ended June 30, 2012 and 2011, respectively, representing 7% of total revenues for the three months ended June 30, 2012 compared to 8% for the three months ended June 30, 2011. The increase in general and administrative expenses of $1.1 million, or 15%, was primarily related to our acquisitions, which added $2.2 million in costs in the aggregate, and an increase of $0.4 million in costs to support organic revenues, partially offset by a decrease in costs of $1.5 million related to stock-based compensation. General and administrative expenses were $12.9 million and $13.7 million for the six months ended June 30, 2012 and 2011, respectively, representing 6% of total revenues for the six months ended June 30, 2012 compared to 8% for the six months ended June 30, 2011. The decrease in general and administrative expenses of $0.8 million, or 6%, was primarily related to a decrease in costs of $2.0 million related to stock-based compensation and a decrease of $1.1 million in costs to support organic revenues, partially offset by our acquisitions, which added $2.3 million.

Transaction costs. Transaction costs of $9.4 million and $13.6 million for the three and six months ended June 30, 2012, respectively, consist of professional fees associated with the acquisitions of the PORTIA business and GlobeOp as discussed in the Notes to our Condensed Consolidated Financial Statements and in Liquidity and Capital Resources.

Interest expense, net. Interest expense, net for the three and six months ended June 30, 2012 was $4.5 million and $5.0 million, respectively, primarily related to interest expense on debt outstanding under our credit facilities. Interest expense, net for the three and six months ended June 30, 2011 was $3.5 million and $8.6 million, respectively, primarily related to interest expense on debt outstanding under our prior senior credit facility and 11 3/4% senior subordinated notes due 2013. The increase in interest expense for the three-month period reflects incremental borrowings in connection with our acquisitions of GlobeOp and the PORTIA Business during the second quarter of 2012, which resulted in an overall higher debt balance. The decrease in interest expense for the six-month period reflects the lower average debt balance in the first quarter of 2012 resulting from the repayments and refinancing of our debt during 2011 (discussed further in Liquidity and Capital Resources).

Other (expense) income, net. Other expense, net for the three and six months ended June 30, 2012 consisted of foreign currency losses and a loss recorded on foreign currency contracts associated with the acquisition of GlobeOp, which is discussed further in Note 5 to our Condensed Consolidated Financial Statements and in Liquidity and Capital Resources. Other income (expense), net for the three months and six months ended June 30, 2011 consisted of foreign currency . . .