SS&C Technologies Holdings Inc (SSNC) 2012 Q2 法說會逐字稿

Good afternoon. My name is Kate and I will be your conference operator today. I'd like to welcome everyone to the SS&C Technologies 2012 Second Quarter Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. We will be taking questions in the order we receive them. Please note that this conference is being recorded and will be made available on SS&C's website, www.SSCtech.com. I would now like to turn the call over to Bill C. Stone, Chairman and Chief Executive Officer. Mr. Stone, you may begin your conference.

Thanks, Kate, and welcome, everybody, to our second quarter earnings call. I'm Bill Stone. I'm the Chairman and CEO of SS&C, and I have Norm Boulanger and Patrick Pedonti with me.

Before we get started we need to review the Safe Harbor statement. Various remarks we may make on this conference call about our future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. These are included in SS&C's filings with the Securities and Exchange Commission, in particular the Company's annual report on Form 10K for the year ended December 31, 2011.

I'm going to give you a brief overview of our quarter and then I'm going to turn it over to Norm who will give you some more details and Patrick will walk through the numbers. After that we'll kind of go with a wrap up and then we will take some questions.

Our second quarter revenue grew 31.6% to a record $120.9 million. We think that our continued ability to deliver at these levels shows a very healthy business model and also shows how robust the markets are that we serve. Our software enabled services revenue was up 37.9% in the second quarter to $84.9 million. Revenue from software enabled services represented 70% of second quarter revenue.

Adjusted non-GAAP net income was $27.2 million, up nearly 28% over the second quarter of 2011. Our annual run rate basis of recurring revenue was $107.9 million in Q2, an annual run rate of $431.5 million. This represents an increase of 33.2% from $81 million and $323 million run rate in the same period in 2011, an increase of 28.3% from Q1 2012's $84.1 million and $336 million run rate. We think this is a good indicator of our visibility and these are also GAAP recognized revenue numbers.

Last quarter I spoke about the acquisition of PORTIA from Thomson Reuters and since our last call I'm sure you have heard we were successful in our acquisition of GlobeOp Financial Services. These two companies bring 2,537 people to SS&C and with this additional talent, expertise, and geographical reach, SS&C is poised to dominate in the markets we chose. Together we will focus on delighting our customers. The combined entity will create a top three provider in fund services and will be the largest independent publically traded fund services provider on a global basis. Hans Hufschmid, Founder and CEO of GlobeOp has decided to move on to pursue other opportunities. We wish him all the best and he'll continue in a consultative role with the Company until January of 2013.

The SS&C fund services division and GlobeOp will become SS&C GlobeOp. The business will operate as a single business division under the leadership of Rahul Kanwar, a Senior Vice President and Managing Director. Rahul will report to Norm. Christy Bremner who runs PORTIA, our PORTIA business, will continue to report to Norm.

But PORTIA and global acquisitions and integration have been going well. We have seen a lot of enthusiasm from employees, clients, prospects, and the industry in general. We are extremely well-positioned to serve the alternative asset management industry. We are beginning to showcase technical capabilities and domain knowledge. Yesterday we announced the release of our new corporate logo to reflect the transformation of our Company during these past few months.

We are well-positioned to address increased investor transparency, reporting, and operational risk reporting through our proprietary technology and mobility enabled infrastructure. Our cloud services enabled 24 by 7 access to positions, trades, and P&L. We are publically traded and independent, ensuring proper procedures and controls in the segregation of duties that current investors demand. We are focused on expanding earnings and our adjusted diluted earnings per share were up 26.9% in Q2 from Q2 2011. We are well-positioned for a solid second half. We continue to look at acquisitions but as always we're very disciplined in this process.

Now I'll turn it over to Norm for some highlights.

Thanks, Bill. Our focus in Q2 was to execute, build pipeline, and integrate PORTIA and GlobeOp acquisitions. Combining PORTIA and GlobeOp with SS&C significantly increases our offerings, our customers, our global footprint, people, and our opportunity for growth. SS&C now has more than 4,000 people worldwide. Our teams immediately began working as one Company. This strong start is creating positive momentum and overall positive feedback from our customers, our prospects, and our people. We are seeing broader opportunities worldwide and improved pipeline both domestically and internationally.

The sales and marketing teams of PORTIA and GlobeOp have been integrated into our worldwide sales force. As a result there are many cross-sell opportunities from joint sales efforts going on. In Q2 we improved license sales from Q1 despite continued economic uncertainty, particularly with larger deals. PORTIA had a strong contribution in the second quarter as we were able to quickly execute on the pipeline. We were able to demonstrate to our new customers the significant value of PORTIA and SS&C as the new owner. We are seeing an improved pipeline of LMS Loan Suite product and global wealth platform. Overall demand for SS&C fund services, now rebranded SS&C GlobeOp continues to be a strong market opportunity. We closed a number of fund service deals under the new business division, including our new Form PF offering in the last month of the quarter. We have identified many areas to cross sell including middle office, evaluation, risk, private equity, and tax services. Other areas of integration and potential synergies are well underway and include IT data centers, key software development initiatives like our portal and mobility platform, legal, HR, and accounting.

In key deals for the quarter, a New York-based hedge fund manager converted SS&C from a big bank administrator. They have over $3 billion in fixed income assets. A California-based private equity fund selected SS&C to provide full fund administration services. It's $1.9 billion fund. We saw strong adoption of our Form PF offering with several large hedge fund groups including Lone Pine Capital who selected SS&C GlobeOp services to help them meet their regulatory filing requirement. A US investment advisor and existing CAMRA client purchased Sylvan and Pages. Several Canadian-based investment managers signed deals in the quarter. A leading investment counseling firm and a $3 billion portfolio manager both selected our global wealth platform. LLC Dominion Security selected Pacer for a new 1099 reporting requirement that Canada now has to provide of their US citizens as investors.

A $54 billion investment manager purchased addition Recon licenses. Bombardier went live in May with our front to back office SAS solution. Dominique Paquay who works for Bombardier was quoted, SS&C transformed their operational processes. In Australia we signed a boutique fund manager who replaced their legacy system. They chose SS&C Global Wealth Platform for its sophisticated rebalancing and enhanced reporting and overall scalability. Specialty Investment Management, a Sidney-based firm also signed to use Global Wealth Platform in July. We sold PORTIA to a large [Congo] headquartered asset manager that will use PORTIA as their single accounting solution for the entire organization, migrating all their accounts in their Los Angeles office off a competitor system and onto PORTIA.

We continue to focus on our web portal and mobility platform. In June we previewed our portal for insurance asset managers and pension firms at the ISA IASA conference. In addition, we launched Zoological Learning Solutions as an iPad app, available on iTunes. Anyone can download a free, accredited course to their iPad.

You've also seen our press release last week announcing the release of The Investor, our new web-based document processing and management solution. In early 2012, a major financial institution deployed this solution to automate its investor subscription processing for thousands of their advisors. We just obviously launched that on an official basis to the whole market. We've been receiving lots of interest from clients and prospects and we're building a strong pipeline. And we're really excited about this new offering.

As Bill mentioned, we'll be focusing our people on delighting our customers. Through the acquisitions we've added some great talent and with the right team in place combined with our focused strategy and disciplined approach we feel very optimistic about our future performance.

With that, I'll turn it over to Patrick.

Thanks, Norm. Results for the second quarter were GAAP revenue of $120.9 million and reported GAAP net loss for the period of $5.8 million or a diluted per share of $0.07. Adjusted revenue was $121.2 million, an increase of $29.4 million or 32% over Q2 2011. Excluding acquisition revenue and the negative impact of foreign currency, organic revenues increased 3.4% in the quarter. The acquisitions which include Ireland fund administration, the Teledata Communications business and PORTIA and GlobeOp contributed $27.2 million in the quarter in foreign exchange negatively impacted revenue by $900,000.

Fund services business provided to hedge funds, private equity funds, and fund of funds continued to be the driver of organic growth. Adjusted operating income for the second quarter was $45.9 million, an increase of $10 million or 28% from the second quarter of 2011. Operating margins decreased 37.8% from 39% in Q2 '11 as the GlobeOp acquisition impacted margins unfavorably. Adjusted consolidated EBITDA defined in our note three was $47.9 million or 39.5% of adjusted revenue. This was an improvement of $10.5 million compared to Q2 '11 or 28%.

Net interest for the second quarter was $4.5 million and includes $532,000 of non-cash amortized financing costs and amortized OID. Interest expense increased due to the new $1.1 billion credit facility put in place to finance GlobeOp and PORTIA acquisitions. We recorded a tax benefit in the quarter of $497,000 or 8% of pretax. Our tax provision was impacted in the quarter by several nondeductible costs associated with the acquisition. As a result we expect the GAAP effected tax rate to be approximately 42% for the full year. But on an operating basis, excluding deal costs, we continue to expect our tax rate to be in the mid-30% range.

Adjusted net income defined in note four was $27.2 million and adjusted diluted earnings per share was $0.33. The adjusted net income excludes $13.6 million of amortization of intangible assets, $1.2 million of stock based comp, $4.5 million associated with the write-off of deferred financing fees related to our private credit facility and $28.2 million of extraordinary items related to the acquisition.

The extraordinary items include $18.7 million for an FX hedge loss on the GlobeOp acquisition and $9.5 million of deal costs. The FX loss was offset by a gain of $4.4 million that we recorded in the first quarter so the year to date loss on the FX for the GlobeOp acquisition hedge was $14.3 million. On June 30 we had $135.5 million in cash and $1.15 billion of debt for a net debt position of $1.01 billion. We generated $35.7 million in operating cash flow for the six months ended June 2012 compared to $41.1 million in 2011. But cash flow in 2012 was impacted by one-time deal costs including the $14.3 million FX loss and the $13.6 million transaction costs for PORTIA and GlobeOp.

On the highlights on the cash flow statement, we paid $457.3 million for the PORTIA and GlobeOp acquisitions. Our debt increased by $1.05 billion since December 2011. These funds were used to fund the two major acquisitions. We used $5.1 million for capital expenditures and capitalized software, 2.4% of revenue. We paid $20.8 million of income taxes compared to $15.6 million in the six months of 2011. Our accounts receivable DSO was 46 days as of June 2012, an increase of two days from 44 as of December 2011 and 44 as of June 2011.

In financing activity, we recorded the proceeds from option exercises of $7.5 million and a tax benefit related to those options exercises of $1.6 million. Our LTM consolidated EBITDA used for covenant compliance and includes acquisitions as if owned for a full year was $243.3 million as of June 2012. Based on net debt of $1.01 billion, our leverage ratio was 4.2 at June 2012.

On our outlook for the third quarter and this year, our current expectation for the third quarter is adjusted revenue in the range of $166 million to $170 million, adjusted net income of $30.5 million to $31.5 million and outstanding diluted shares of $84 million to $84.5 million. Our current expectation for the full year is revenue in the range of $554 million to $562.5 million and adjusted net income in the range $112.7 million to $115 million. And outstanding diluted shares for the full year will average approximately $83.3 million to $83.8 million shares. For the full year '12 we expect cash from operating activities to be in the range of $108 million to $112 million and capital expenditures for the full year to be in the range 2.8% to 3.2% of revenues.

And now I'll turn it back over to Bill.

Thanks, Patrick. Q2 was a transformational quarter for us at SS&C. We began the quarter with 1,490 people and we ended with over 4,000. Our people in all of our businesses stayed focused, tended to our customers, and delivered solid results. And with that we'll take any questions that people may have. Kate?

(Operator Instructions) Glenn Fodor, Morgan Stanley.

Hi. Quick question. As you look at towards the integration plan of your recent acquisitions, how should we think about the ramp up of potential revenue and cost synergies. And how much do you think they could be?

I think in the press releases and presentations we've made in the acquisitions, we expected to have $25 million in cost synergies over a three year period. I'm happy to say we're well on our way to do that. We have had some great ideas of our people and we're beginning to implement those as we speak. And from a revenue synergies standpoint, we really didn't forecast much revenue synergy although we're starting to see lots of cross sell. Yesterday we were at a hedge fund of SS&C's and we had a couple of our top people -- Jon Anderson and Marcela Crossman -- doing a demonstration of the middle office process. They did a great job. We have a great opportunity there. That's just one. We bumped them out, showing people our Form PF capabilities. We've been able to show -- get some meetings set up for our tax capabilities. Many of you might know that State Street just bought Goldman's fund services business. We have a whole team of sales people that are presenting what we could offer to the Goldman clients. So, we're very, very optimistic about what the synergies are going to mean.

Great. Thank you. And then of everything you have acquired, is there anything, any part of the business or portfolio that you think you might need to divest over time?

Again, we constantly look at what our products and services are. What we like to have is as many touches to our clients as we can have and what it allows us to do is always have great references in our clients. And whether that real estate asset, that might be put into a REIT or into a hedge fund that focuses on real estate such as our TimeShareWare products or our SKYLINE products. Similar to our municipal bond structuring software DBC which is used by the top ten investment banks. There's a rhyme and reason to why we own these different businesses and it's because we know that large scale data processing organizations, large scale data processing organizations do not like to have a lot of vendors. We don't want to be a point solution. We want to be a complete solution for our customers. That's why we have a portfolio of products that are really world-class across a range of applications.

Great. Thanks very much.

Bryan Keane, Deutsche Bank.

Hi. This is [Ashish Sabacca^] on behalf of Bryan Keane. Thanks for taking my call. I have a quick question around the organic revenue growth. It came in at 3.4%. And in the press release you highlighted some customer attritions. I was wondering if you could highlight or give some more color on those customer losses. And also were there any other softness in the demand environment for the relatively soft organic revenue growth?

I think as we said in the press release we had some attrition -- actually the primary attrition was a Company called OpHedge which used our platform and was acquired by Cisco last year. So, that's the largest one. Overcoming that loss is about $1.5 million, $2 million to us. And then as far as the acquisitions were concerned, obviously we spent $1 billion and --spent $1.1 billion on these acquisitions and we've paid a lot of attention to it.

So, we think management matters. We think we applied our management where it made the most sense. We think we have a very great integration plan. We have a lot of really talented people that are motivated to help us really take advantage of these and I think that you'll start seeing the organic revenue growth pick up. And you're also -- it's going to be very difficult to tell what's organic and what's not, right? We're cross selling different products and services across our entire client base. Whether or not we're selling the Form PF system that was developed by GlobeOp or the Form PF system that was developed by the old SS&C, I don't think it makes a whole lot of difference. It's that one of our clients buys it which is the most important -- whether it's organically calculated by you guys or acquisition related, it seems to me it's revenue and earnings, cash. All good things.

Thanks for the color. Just a quick question on the full year guidance. I believe that was taken down slightly. I was just wondering if that's related -- or if you could provide some more color on the change in guidance?

Again, we acquired 2,400 people. We gave our best guess as guidance when we got involved. Obviously when you have big acquisitions like this, you're going to lose some talented people like Hans. He's a very talented guy. So, as you're going through that transition process, sometimes you're not going to be able to execute as quickly as you would like to. But I think over a longer term I think we have to be able to surprise you positively.

A quick question on the license revenue. There were a few deals pushed out from the first quarter. I was just wondering if you signed them in the second quarter? And on the first quarter you also mentioned some softness on the bank technology, insurance technology. So, basically some softness on the technology front. Have you seen any pickup on those fronts as well? Thanks.

This is Norm. I'll answer that question. We did not close that deal for this quarter but that's also a good example of kind of the large deals that we're trying to close and the unpredictability of them. So, the overall pipeline I think opportunity is really pretty good. The challenge that we're seeing on these larger deals is in this particular example, the reason it didn't get closed this quarter is because they started missing their internal revenue targets for their business and their budgets got pulled. Of course again, and we've been spending the last five weeks restructuring our deal with them so that we could still pick up that business this quarter. And I think we're very close to making that happen. But that's another example of in the old days someone set a budget. They spent it.

So, the certainly that that budget's going to be spent when they go pull the trigger, a couple days away from getting that signed before that occurred and then five weeks, some very, very hard work from our team reeling that deal back in. I'm very confident we're going to get it. That's when I start looking at the softness and uncertainty, that's what I'm seeing in the marketplace. There's a lot more caution, a lot less certainty of whether money will be spent, whether it's budgeted or not. We just have to work our way through that and get more deals in the pipeline to manage that risk. So, we proved the license quarter. We still didn't have a great license quarter. I think that also dragged down our organic growth rate a little bit. I'm very comfortable that we'll close those deals when we close.

Thanks a lot, Norm, for the color. One final question, maybe for Patrick. I wasn't -- I don't know if I missed it but what was the fund administration growth in this quarter? If you could just provide that? Thanks.

The whole alternative asset business grew about 12% in the quarter.

Tim Willi, Wells Fargo Securities.

Thank you. Good afternoon. I wanted to ask a couple questions about the organic growth rate. I was curious if there's a way to think about -- obviously you calculate organic growth by pulling out the acquired revenue which I think is pretty conventional. And I understand. But what would you gage the organic growth of PORTIA and GlobeOp at? Do you have this ability still since you're relatively new to the Company to sort of just give us a feel for how those entities grew on a year over year basis? Because that will become obviously part of the equation as we annualize the acquisitions of them. Is it better than what we've seen from the legacy SS&C? Or generally at the same pace?

I would say GlobeOp had estimates out in marketplace prior to us acquiring them and it tracked around 10% which we would say has been about what we've seen in their revenue growth over last year. We're hoping that picks up. PORTIA had a very good quarter in second quarter. I think the challenge on PORTIA will be more to see the sustainability, that there was a pretty big demand for upgrades in PORTIA. But PORTIA had been on the block for awhile and they were wondering who's going to acquire them and I think that once SS&C was recognized as the acquirer, I think that calmed that client base down and Christy Bremner who's running that business and [Edi Crampton] and the rest of the team was doing a great job and we think that they're going to have several very good quarters in a row and I think that their organic revenue growth will be better than we expected.

So, as we think about going beyond '12 and into '13, I know you don't want to give guidance yet on '13 but something specific about the software enabled services line item where a lot of this falls into, that organic growth rate as you articulated in the Q, you can back in to about 4.5% growth rate year over year which is lower than it's been. But with what you've said about PORTIA and GlobeOp a year from now when you're not backing those out anymore, if their growth rates that they currently have are maintained, we should see an acceleration again in SS&C, correct?

We would. And we would also expect an acceleration in -- we don't normally have -- our clients get acquired, right? We don't usually have to overcome attrition like we have. And so I think we're very optimistic that our business is going to accelerate and I think that as we bring all of this technology together, we're going to be able to offer products and services that are not in the marketplace today. Things like eInvestor which is a very high powered product that a very well-known financial institution is using. I think there's a real opportunity to really change what has been an arcane way for people to invest in alternative assets. It's been highlighted by faxes, manual signatures, all kind of filling out of W9 forms and everything done in a manual basis. And this new product that we brought eliminates a lot of mistakes, eliminates an awful lot of paperwork and we think it's going to be really a great opportunity for us to grow.

Okay. And then I just have one question on I guess the modeling. Patrick, as we think about the debt and paying down from this point, I guess how should we think about debt pay down and interest expense on a go forward basis, not just through the balance of '12 but '13? Are you seeing pretty systematic pay downs here as we model out the interest expense number? Or how should we think about that?

I think excluding any acquired we might do in the future, I would just assume that any operating cash flow going forward would be used to pay interest and pay debt down.

Okay. So, you sort of keep the cash balances generally where they're at and just think about cash flow?

I think we might be able to drop our cash balances a little bit. I mean, we do have some cash that's trapped in foreign jurisdictions due to tax issues. But we probably can drop it a little bit but I would assume that and then all the operating cash flow.

Ross MacMillan, Jefferies.

Thanks a lot. Bill, I just wanted to go back to the slight reduction of the full year guidance relative to what you gave on June 27, I think it was. And just understand maybe what your prior assumption had been and frankly what changed. Was it just that you managed to do more, a deeper dive into the forecasting methodology? I'm just trying to understand the delta in a relatively short space of time. And also (Operator Instructions) would've thought that given that you probably erred on the side of conservatism, so I'm just curious as to what changed?

I think, Ross, the biggest thing that changed is we won a number of mandates and the start dates got pushed out a couple of months, a few months and that really whacks revenue. Right? So, even thought the contracts for three years. If it starts June 1, that's a lot different than if it starts September 1, right? I think that's the biggest issue that we had with the forecast and then the idea of we're still ramping up our sales force and we're also trying to ramp up these cross sell and up sell opportunities. And we're having all these meetings with our sales teams and we're getting stronger and stronger but these meetings means they're not out with their prospects and closing, right? So, there's some overhead that maybe should've been inevitable but has proven to be a little bit more than we had expected. But like I said, we're very optimistic that we pushed it out a quarter or two quarters but I think on an overall basis we're very optimistic.

That's helpful. Good color. Then, Patrick, the software enabled service organic constant currency growth rate I think was about 4.5% this quarter. Can you give us a sense of what your assumption is in your guidance? Are you assuming that run rate prevails for the remainder of the year? Or is there any change in your underlying assumption?

Our assumption is about the same in Q3. And then it picks back up in Q4.

Okay. That's helpful. And then just you mentioned it earlier, I was just curious, Bill, with the Goldman Sachs fund admin business going to State Street, you buying GlobeOp and that happening kind of at the same time, those are two fairly substantial events in the fund admin business. I was just curious as to what you think the repercussions are? We're going to end up with a more concentrated industry. I'm curious as to what your high level view is of what's going on in the industry and how this -- maybe you can benefit from it?

Ross, there's about 300 fund administrators around the world. So, you know, generally if you talk to economists, the most efficient markets have three. No matter what it is, it's just a three person market. You can tell if there's 300 and let's say we're going to get down to 30. We're not going to get to three. That means it's just going to be 270 companies that are going to get merged or taken out. And what's happening is large scale -- it's becoming a large scale institutional business. The cash flows of major pension plans, major insurance companies are being directed towards -- more and more are being directed towards alternative assets. What that means is that you're going to have institutional style due diligence, institutional style demands for information, institutional style SSAE 16, solid modernization initiatives, Basel III.

All the rest of them are going to come crashing down on top of the alternative assets industry. And SS&C is very well positioned to deal with that change. I also think that an awful lot of these fund administrators in the bottom 250 had carved out niches across various tax advantaged jurisdictions, whether that's Malta or that's Jersey or Guernsey or a whole bunch of other ones. But you can see these governments, right? They're all starving for revenue. And they're going to go get it in some way, shape, or form. So, some of the advantage of the tax havens are not going to be nearly as attractive because more and more governments are going to not allow their citizens to claim those deductions.

That makes sense. Are we going to end up with maybe some 30 but maybe two or three really large guys? Is that how you see it playing out?

I do. What I wonder is -- I'm an old auditor. You used to have to do reconciliations independently. So, the fund administrator would reconcile to the custodian. They would be two different people. We were talking to a could of our new clients. They were saying that when it's all under one umbrella, perhaps it's not independent, and then also how much pressure are the large bank CEOs putting on their organizations to cross sell? So, the more cross selling you have and those kind of things, the less independents you have. We think an awful lot our investors, an awful lot of our funds are going to want to have that independent transparent Company doing their accounting and doing it in a way that they're very confident internal control systems start with the basics which is separation of duty. I think that's going to play well for us. I do think it will come down to where there's two, three, four very large fund service providers.

Thanks, Bill.

Eric Lemus, Raymond James.

Hi, guys. Thanks for taking the question. My first question, you talked a little bit about Form PF and the traction you've had in the quarter which is good. But I just wanted to see what your thoughts are as far as the relevant nature of Form PF to revenue in the near-term?

I think to date combined with GlobeOp and SS&C, it's been about $4 million in Form PF revenue, $3.7 million to $4.2 million, something in that range. What's that in the fund administration business? That represents about 1.25%. We think that the middle tier is required by the end of the year to file. I think we'll get another rush of Form PF clients over the next 60, 90 days and then we'll see what happens in 2013. I think most of the people are going to have a very good experience with us. And a not so good experience with other providers.

Great. And then as far as you guys have a large presence in India as far as with GlobeOp, what are your plans on doing there? Do you plan on expanding or contracting there?

We're in the growth mode. So, we will expand in India. We have a great team out there. [Nandini Sinkar] that runs that for us is doing a great job for us. She's got a bunch of very talented people working for her. We have a very tight integration between our New York, London, and Mumbai offices. Mumbai is fully functional across the entire cycle of fund administration and obviously there's some significant cost savings in India. I also think that we'll probably open up a second location in Asia just to have a second place beside Mumbai in which to have a large presence to have our business continuity process stay as robust as we can.

Great. Thanks, guys.

(Operator Instructions) Sterling Auty, JPMorgan.

Hi, guys. It's Jacques here for Sterling. Thanks a lot for taking my questions. First, for Pat, how much did you see in the quarter for PORTIA and GlobeOp revenue? How much can we factor into the FY '12 outlook?

In the quarter I think we said $27.2 million is acquisitions and the fund administration out of that is very small, probably $26.5 million of that is PORTIA and GlobeOp.

For the revised full year outlook, how much should we incorporate from those two acquisitions specifically?

I think that PORTIA runs at about around a $44 million annualized run rate and GlobeOp currently is running at about $240 million, $250 million annualized run rate.

That's helpful. Bill, just another question on the trimmed outlook for the year. What areas of the business did you see some of those contract mandates push out? Was it in the core SS&C business? Or did you see that in GlobeOp or PORTIA?

I think some of the growth assumptions in both PORTIA and GlobeOp were kind of dimmed a little. They're going to through acquisition, it's hard to stay focused. I think that in the last 30 days I personally have made 65 or 70 phone calls to customers and prospects of PORTIA and GlobeOp. If I'm making 65 or 70, I can assure you there's a lot more being made. I think that's my confidence on the ramp up. But the challenge with 2012 is it's eight months gone. Even as we sign these things, they're not going to go live for us until January 1 probably and so we're going to get most of the revenue in 2013. That's really the overall essence of the push out. I just think that when we talk in November about our Q3 that we're confident and I think we'll be confident next February and increasing confident next May.

Got it. And, Bill, as you look at your combined fund admin business, including GlobeOp now, how big should that be on an annual basis? And then can you just remind us of the EBITDA margins between GlobeOp and how they compare to core SS&C fund services?

Sure. The entire business if you look at it on a 2011 basis is about $350 million in fund services revenue. And GlobeOp's margins were about 31% and SS&C's margins were about 40%.

Great. That's it for me. Thanks.

I'm not showing any further questions at this time. I'd like to turn the call back over to management for closing remarks.

Thanks, everybody. We appreciate it. We'll talk to you come November.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.