SS&C Technologies Holdings, Inc. (SSNC) Q4 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the SS&C Technologies' Fourth Quarter and Fiscal Year 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Ms. Justine Stone. Ma'am, you may begin. Justine Stone - SS&C Technologies Holdings, Inc.: Hi, everyone. Welcome and thank you for joining us for our fourth quarter and full year 2016 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. With me today is Bill Stone, Chairman and Chief Executive Officer; Norm Boulanger, President and Chief Operating Officer; Rahul Kanwar, Senior Vice President and Managing Director of Alternative Assets; and Patrick Pedonti, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor statement. Please note that various remarks we make today about future expectations, plans, and prospects, including the financial outlook we provide, constitute forward-looking statements for the 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 and as a result of various important factors including those discussed in the risk factor section of our most recent Annual Report on Form 10-K, which is on file with the SEC and can also be accessed on our website. These forward-looking statements represent our expectations only as of today, February 15, 2017. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call, we'll be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, Justine. And thanks, everyone for being with us for our fourth quarter and 2016 year-end conference call. We're proud to report record adjusted revenue, record adjusted diluted earnings per share and record operating cash flow for the fourth quarter and the full year 2016. We now have over $1.52 billion in adjusted revenue in the year, over $612 million in adjusted consolidated EBITDA and over $418 million in operating cash flow. We earned a $1.64 adjusted diluted earnings per share, up from $1.33 in 2015, a 23.3% increase. We did a lot of things in 2016. We did four acquisitions, including Citi Alternative Investor Services, Salentica, Wells Fargo Global Fund Services, and Conifer Financial Services. We solidified our strength in the Alternatives and RIA market and deepened our expertise in endowments and pensions and expanded our reach in the Asia-Pacific region. We, in fact, now have four talented Singapore offices which we will be able to scale, consolidate and improve the customer experience. The Advent team continues to perform and Advent's revenues, margins and products we have progressed nicely since our acquisition closed in July of 2015. A few weeks ago, we announced our plan to consolidate our New York City metro offices at 4 Times Square. 2.5 floors of the house, nearly a 1,000 current employees and will assist in attracting and retaining talent our most valuable assets. We're looking forward to our move in hosting many of you at our new offices. Lastly, we are having an Investor Day on May 2, at the NASDAQ market site in New York City, which happens to be at 4 Times Square as well and please look out for additional information about this Investor Day in the coming weeks and if you have any questions, please call Justine. Now, I'll turn over to Norm. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Thanks, Bill. SS&C had a strong fourth quarter. We released product upgrades across a number of solutions and one key mandates, including the wins originated through our cross-sell efforts. SS&C Advent has strengthened over the past year. Our investments in their best-in-class technology including Geneva, APX, Moxy, Black Diamond and Tamale continue to attract new clients. The survey we published in Q4, shows that insurers and large asset managers will increase our portfolio allocation across an array of complex assets, including loans, derivatives and alternatives. Processing new securities is the biggest challenge to these firms and we're seeing an interest towards both outsourcing and purchasing of vendor provided solutions. Through our Precision LM and EVOLV: Precision LM is our comprehensive commercial loan origination servicing system and the latest release offers the number of usability, functionality, performance and efficiency benefits. EVOLV, our integrated risk and finance solution is designed to eliminate the manual processes and provide transparency, integration and continuous real-time automation of your loan portfolio. As Bill mentioned, our reach in Asia-Pac has expanded with our recent acquisitions. HiPortfolio and PORTIA are strong in this region, with insurance and traditional asset managers, while Citi Alternative Fund Services and Wells Fargo Global Fund Services increases our presence in the Alternatives market. Over 6% of our revenue is originated in Asia-Pac, more than double on our exposure from just two years ago. Now, I would like to review some key deals for Q4. An existing client chose to host our performance and performance attribution solution Sylvan in our data centers. Two existing clients in Hong Kong, both global banks, license Anova. A large Chinese insurance company renewed and expanded their high portfolio license. Financial service firm in Malaysia expanded their use of PORTIA for their insurance affiliate. A $21 billion global asset manager chose the suite of SS&C Advent on demand solutions. An existing $17 billion SS&C Advent client upgraded their systems to on-demand with our integrated SS&C reconciliation tool. A large South African hedge fund chose Geneva and Moxy solutions. $3 billion advisory firm chose Black Diamond suite for their back-office reporting needs. Existing $4.8 billion asset manager upgraded the Black Diamond. A $100 billion asset manager chose to replace competitor system with SS&C's Precision LM for mortgage processor. National Healthcare Company which operates over 300 urgent care centers across the country chose Precision LM for their expanded commercial loan services for member banks. National Bank and S&P 500 member signed a large professional service contract to implement SS&C EVOLV platform for end-to-end risk and finance processes. This is part of a larger transformation to modernize the bank. And last a global bank's Singapore operations chose MarginMan, our margining engine, because it is more functionally rich and cost effective and build-in internally. Now, I'd like to turn it over to Rahul to discuss the Alternatives business. Rahul Kanwar - SS&C Technologies, Inc.: Thanks, Norm. SS&C's Alternatives business saw 49.3% increase in revenue for the quarter ended December 31, 2016, compared to the same quarter in 2015. Our position in the Alternatives market continues to strengthen as we add talent, capability and functionality both organically and through acquisition. We have assembled some of the leading executives in the industry on our team and are seeing the benefits in our sales process as well as customer satisfaction. The opportunities to displace competitors have increased significantly this past year. We've signed some great clients during the quarter and are closing in on several other mandates. The pipeline remains full with large funds and asset managers across the various asset classes. We closed both Wells Fargo Global Fund Services and Conifer Financial Solutions in December, these two fund administrators added approximately $160 billion in assets under administration and a roster of hedge fund, private equity fund and endowment fund and pension fund clients that we look forward to introducing to our broader-array of products and services. Conifer gives us the stronger processing presence to the West Coast and Wells Fargo has some big clients in the Asia-Pacific region and further increases our footprint and pipeline in APAC. Several new products were brought to market this year. Fund Hub is a tool for our investors for research, perform due diligence and manage investments and alternatives. It allows for managers to publish information to investors, while managing the due diligence process. We have expanded e-investors core functionality of allowing funds to manage prospective and existing investors, while rolling out a completely digital process of document collection and fulfillment. In an effort to address the needs and concerns of the frontal office, we have developed our Tax Optimizer and Inside products. Tax Optimizer gives managers a view of their portfolio from an economic base instead of tax basis, as well as run scenarios on their portfolios to evaluate the impact of trading from a tax perspective. Inside is the performance and analytics system that allows managers to perform detailed analytics of their portfolio, while also being able to create investor grade presentations in one system, each of these products can be sold in combination with our fund administration offering or as a standalone solution. This focus on continued innovation supported by our broad infrastructure including real-time messaging and web and mobility continually differentiates us from our competitors. Now, I will mention some key deals for Q4. A new global macro fund launch chose SS&C GlobeOp as their fund administrator, winning over several of our largest competitors. A global alternative asset management firm consolidated their fund administration with SS&C, terminating a competitor that had previously provided services to a portion of the funds. A $5.5 billion fixed income investment management firm chose SS&C Fund Administration Services for our comprehensive solution and local support capability. A San Francisco based private equity firm chose to outsource their fund administration to SS&C. A Miami based investment manager chose SS&C as their Fund Administrator due to a longstanding relationship with Conifer Financial Services. A new firm specializing in statistical arbitrage chose SS&C as their fund administrator, driven by our trade processing and compression expertise. I will now turn it over to Patrick to run through the financials. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Thanks, Rahul. The results for Q4 2016 were GAAP revenue of $400.9 million, GAAP net income of $57 million, and diluted EPS of $0.28. Adjusted revenue was $404.6 million, excluding the adjustment for the acquired deferred revenue for the recent acquisitions. We had a strong quarter. Adjusted revenue was up 24.2%, adjusted operating income was up 20.3% and adjusted EPS was $0.46, up 27.8% from 2015. The acquisitions of Primatics, Citi Fund Administration, Wells Fund Services, Salentica, and Conifer contributed $65.6 million of revenue in Q4. Foreign exchange had a negative impact of $2.5 million, or 0.8% in the quarter, mostly due to the weakness of the British pound, and that gave us organic revenue growth on a constant currency basis of 4.8% in Q4. Adjusted operating income for the quarter was $160.4 million, an increase of $27.1 million, or 20.3% from the fourth quarter of 2015. Operating margins decreased to 39.6% from 40.9% in Q4 2015. The operating margins were impacted by the 2016 acquisitions, which had a combined operating margin of 32.7% in the quarter. Adjusted consolidated EBITDA, which is defined in Note 3 of our financial statements, was $166.8 million, or 41.2% of adjusted revenue, and increased 19.3% over 2015. Interest expense for the quarter was $30.9 million and includes $2.7 million of non-cash amortized financing costs and OID. The average interest rate for the quarter, including the bonds, was 4.4%. We recorded a GAAP tax provision in the quarter of $10 million, or 15% of pre-tax income, and for the full year, we recorded a tax provision of 19.9%. Adjusted net income for the quarter was $95.2 million, and adjusted EPS was $0.46. The adjusted net income excludes $51.7 million of amortization of intangible assets, $10.2 million of stock-based compensation, $1.8 million of acquisition purchase accounting adjustments, including the deferred revenue adjustment, $2.7 million of non-cash debt issuance costs, and $1.2 million of favorable, unusual and non-recurring items. And the effective tax rate we used for adjusted income was 28% in the quarter. And now to our balance sheet and cash flow: As of December 31, we had $117.6 million of cash and $2,559.7 million of gross debt, for a net debt position of $2,442.1 million. Operating cash flow for the year ended December 2016 was $418.4 million, a $187.8 million, or 81.4% increase from 2015. Cash flow for the year was driven by improved cash earnings and lower cash tax payments and strong working capital management. For the year, we paid down $383.4 million of debt; included in that number is $26 million that we paid down on the revolver in the quarter. Since the Advent acquisition in July 2015, we have paid down $614.4 million of the term debt facility. In the quarter, we drew down $120 million on the revolver to fund the Wells Fund Administration and Conifer acquisition, $94 million remained drawn as of December 31. We used $37.5 million for capital expenditures and capitalized software, mostly for IT and build out for the Citi Fund Administration – Citi Fund Admin infrastructure and facilities expansion. We paid $126.7 million of cash interest in the year compared to $42.2 million in 2015. And for this year – for 2016, we paid $8.8 million of cash taxes, compared to $42.2 million in 2015. In 2016, we had a cash tax benefit of $62 million, related to option exercise. Accounts receivable DSO continues to go down, as of December 2016, it was 52.7 days, an improvement of 1.8 days from September 2016. The Citi Fund Administration receivables have improved from September and we expected further improvement in 2017. And then we paid $457 million in net cash for the acquisition of Citi Fund Admin, Wells Fargo Services, Salentica and the Conifer acquisitions in the year. Out LTM consolidated EBITDA we used for covenants compliance was $622 million and includes $9.1 million of acquired EBITDA and cost savings related to the acquisition. And based on that net debt position, our total leverage ratio at December 31 was 3.9 times. For our outlook for 2017, we're initiating that guidance for the first time. In addition, we'll be adjusting the 2016 revenue to calculate organic growth. The Citi Fund Admin revenue will be adjusted to reflect only the revenue we acquired and paid for in the acquisition. The adjustment in 2016 will be approximately $21.6 million. In addition, we'll adjust the Advent revenue to reflect the Geneva revenue loss related to the acquisitions of Citi, Wells, and Conifer. Those three companies were using Geneva fund administration and that adjustment will approximately be $2.7 million. So for Q1 2017, our current expectation is adjusted revenue in the range of $402.5 million to $408.5 million. Adjusted net income of $89 million to $92.5 million and diluted shares in the range of 207.5 million to 208 million. The midpoint will be adjusted EPS of $0.44. For the full year, we expect revenue in the range of $1.655 billion to $1.685 billion, which represents growth of 8.6% to 10.6%. In adjusted organic growth between 3.4% and 5% for the full year. Adjusted net income will be in the range of $392 million to $409 million, and diluted shares in the range of $208 million to $210 million. And then, we expect cash from operating activities to be in the range of $480 million to $500 million for the full year and capital expenditures to be in the range of 2.5% to 3% of revenues. And the midpoint of the EPS guidance will be a $1.92. And I'll turn it over to Bill for final comments. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, Patrick. Over 11,000 financial services firms have chosen from SS&C's comprehensive solution set for their most complex process and their most sensitive data and trust us with the backbone of their operations. We bring expertise, experience and commitment to our customers, with over 95% retention rates, they have given us their vote, we look forward to serving the greater financial services community, growing our global business and rewarding our shareholders. And now, we'll open it up for questions.

Thank you. And our first question comes from Chris Donat from Sandler O'Neill. Your line is open. Christopher Roy Donat - Sandler O'Neill & Partners LP: Hi. Good afternoon. It's Chris Donat here. Wanted to ask about the real estate consolidation, I guess, not just New York but Singapore and other places, is this something for New York that you expect to see any – either cost benefit or higher expenses 2017 and then thinking out more like 2018, should we see some of the benefit from consolidation as you work through? William C. Stone - SS&C Technologies Holdings, Inc.: I mean we think that we're going to have a pretty nice bump in productivity, because we have all these people together and really only have one telephone system and one data center and one support group and all of that. We're consolidating like five offices into Time Square, so we're pretty excited about all of that productivity increased and we got a pretty good deal and it's really nice space, so we're real optimistic about it. Christopher Roy Donat - Sandler O'Neill & Partners LP: Okay. And then, one question for Rahul with the Citi and Wells and Conifer acquisitions, just because we track that GlobeOp Indexes on a monthly basis, is there a roadmap for including those acquisitions in the Indexes or is that something to be decided? Rahul Kanwar - SS&C Technologies, Inc.: No, That's right. We actually included Citi in the publication that happened in January and we'll – I'm sure we'll have Wells and Conifer in there during the course of this year. Christopher Roy Donat - Sandler O'Neill & Partners LP: Okay. Got it. Thank you.

Thank you. Our next question comes from John DiFucci from Jefferies. Your line is open.

Hey, guys, this is AJ Ljubich on for John. I was hoping you could just talk through the guidance for 1Q in 2017. Could you give us what you are estimating for organic growth for both of those periods, as well as the contributions from acquisitions? And I know Patrick gave some comments on adjustments you're making for Citi and the loss of Geneva revenue, which makes sense, but if you could just sort of walk us back through the puts and takes there, that would be really helpful. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Sure. This is Patrick. So in Q1, we expect – and this is on adjusted basis, we expect organic growth of 3% to 4%. Acquisitions should contribute anywhere between like $53 million, $55 million, $56 million in Q1. For the full year, because of that we expect organic revenue growth of 3.5% to 5%. And the acquisitions, which is pretty much, Wells and Conifer for almost a full year, and Citi only for about 70 days of first quarter. We expect revenue of – somewhere in the range of $108 million to a $115 million from the acquisitions.

Okay. That's great. And then, could you just walk us through again the adjustments you're making to move the organic growth? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yes. So we're taking the 2016 revenue, which is $1.524 billion and in that number, there is $21.6 million of revenue in the Citi Fund Administration business that we got the benefit from last year, but those clients had canceled prior to the acquisition, but kind of remained on our platform through most of 2016 and that's the revenue that we didn't pay for in the acquisition, that's why the price was significantly lowered on the announcement price, what we ended up paying for Citi. So, we're adjusting 2016 by $21.6 million for Citi, loss revenue. And then we're adjusting, for Advent, we're adjusting it for $2.7 million and that's the revenue that Advent generated from Citi, Wells and Conifer in 2016. And that's obviously, they no longer have, but it does not affect the bottom line because we also won't have the cost in the combined businesses, but I think...

Great. Thank you very much. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: ...the adjusted number is somewhere around $1.499 billion for 2016.

Thank you. Our next question comes from Hugh Miller from Macquarie. Your line is open. Hugh M. Miller - Macquarie Capital (USA), Inc.: Hi, there. Thanks for taking my question, just I guess maybe in following-up on that discussion, as you think about the organic growth in that assumption for 2017, if all the 3.5% to 5%, what are you assuming for the Alternative Admin business within that? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I mean I don't have a range, but probably the midpoint is around 5%. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay. So you feel organic growth paced for the Alternative Admin business might be in kind of the 5% area? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Around the 5% area for the full year, yeah. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay. And as we think about your expectations just with regards to the hedge fund industry for AUM flows and for the number of hedge funds outstanding for 2017. How are you thinking about that just in terms of industry dynamics or flows and for – the potential for the growth on a number of funds outstanding? William C. Stone - SS&C Technologies Holdings, Inc.: I think we're encouraged by the fact that the pipeline is pretty full. We're seeing lots of new opportunities; we're starting to see some new launches that had been muted for some period of time. And I think in particular on the private equity, real estate, and closed-end hybrid part of the business were streams – seem pretty strong asset quality. So in general, we feel pretty good about the activity. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay. That's helpful. And then, on the adjusted EBITDA margin, could you just give us the sense of where the Citi Alternative Services franchise kind of ended at year end and where you might expect that to kind of improve too, as we head through the end of 2017? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I think that Citi business was somewhere around the low 30s% EBITDA margin, and then we expect by year-end 2017 to be around 40%. Hugh M. Miller - Macquarie Capital (USA), Inc.: Great. And then last for me just – as we think about Black Diamond and we think about just a little bit more uncertainty around the DOL Fiduciary Standard Rule, are you seeing any influence there just in terms of end-user demand, people signing up for the service and being able to grow that business, or has that not been a factor? Normand A. Boulanger - SS&C Technologies Holdings, Inc.: We're seeing strong demand overall for the Black Diamond solution – this is Norm, by the way. And we're watching that regulation closely, but from our perspective, we're heavily weighted on the Registered Investment Advisors in that space and they're already under the Fiduciary Rule. So, I think in general we think this as a slight tailwind for us. And I think regardless of where they end up on those rules, people have considered taking steps to put them in place and I think some of them are going to follow through with that regardless of whether they have to or not and they probably will start looking to expand some of their offerings, if you are a broker dealer for example. So again, nothing – I wouldn't consider it material, but I think it's a slight headwind – not a headwind, a tailwind for us. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay. Thank you very much. I appreciate it.

Thank you. Our next question comes from Dan Perlin from RBC Capital Markets. Your line is open.

Thanks. Good evening, guys. So, I want to make sure I'm clear on the adjustments. So, included in the fourth quarter organic growth of $4.8 million, are you including the revenue that – basically stayed on the system longer than you'd anticipated at Citi? William C. Stone - SS&C Technologies Holdings, Inc.: No, because that's not organic – that's not organic in Q4, it's acquisition revenue.

Right. Okay. So, when we think about what flows into – but the $21.6 million adjustment is basically, your call on what was revenue that stayed with clients, right, that were on the platform longer – and I do remember that, I mean, it was running – I think last quarter, it was like $53 million at Citi... William C. Stone - SS&C Technologies Holdings, Inc.: Right.

.And it seemed like that was running high. So I just want to make sure I'm understanding what adjustments we're making here. William C. Stone - SS&C Technologies Holdings, Inc.: Yes. So, I mean, let me just kind of back up a little bit. So, I think when we announced the Citi acquisition, we said that we were essentially acquiring about $185 million of run rate revenue – annual run rate revenue, that's what we paid for. Even though the business was probably running at $210 million, right.

Yes. William C. Stone - SS&C Technologies Holdings, Inc.: And so, the difference was the clients that Citi had lost, had nothing to do with the acquisition, had nothing to do with us, plus we didn't pay for that revenue when we calculated the adjusted purchase price with Citi. Those clients ended up being on the platform longer than we expected, through 2016, and are now coming off the platform in Q1...

Right. William C. Stone - SS&C Technologies Holdings, Inc.: ...2017. So, just to do a fair comparison of the real revenue we acquired from Citi, that's why we're adjusting the 2016 revenue by this $21.6 million, so that there's a fair comparison on the real revenue we acquired.

Okay. And, do we have the Citi number in the fourth quarter? I know you gave the total for the group – or for the three, but I didn't know if you had that one in particular? William C. Stone - SS&C Technologies Holdings, Inc.: Citi was $53 million.

Okay. So still running high, okay. William C. Stone - SS&C Technologies Holdings, Inc.: Still running high, but we should see it – we are expecting it to drop off significantly in Q1 and Q2.

Yeah, yeah. Okay. If I could just ask for – you talked briefly in the prepared remarks about the deal pipeline, I don't mean the acquired pipeline, I mean the actual deals you guys have coming in. And I'm wondering if you could elaborate on that commentary a little bit more, specifically, I guess in Alternatives, but if there is other notable areas in particular worth mentioning, I'm all ears. Thanks. William C. Stone - SS&C Technologies Holdings, Inc.: Well, just, Dan, on an overall basis, we're just seeing opportunity all over the world and we're having some pretty good success at closing that business. So there is a number of $5 million to $20 million deals in the Alternatives space, there is a number of $750,000 to $1 million in license revenue in our loan administration space, we have a real full pipeline on Black Diamond, Geneva has a great pipeline that we're going after on licenses. So, the whole business seems to be at an inflection point that if we can get them to close – which is always the key to it, right, we don't record a lot of money on a verbal and we don't record any money on a letter of intent, right? So we have to get a contract, and we have to start delivering services. But I think we are taking advantage of prior successes we had at Russell, for instance. And I believe that the talent that we've grown and acquired makes us stand out. I think we're going to acquire some more talent before the end of the first quarter. I really do think that we're putting together an all-star team of experts and I think that's what's really going to kind of drive it for us. And I think that we're cautiously optimistic going into 2017 and obviously, we got six weeks of proof already.

Yes. So I've heard you talk the kind of $5 million range in the past, I hadn't heard you go as high as $20 million in the Alternative space. Is there a tilt that you started to see as maybe the markets continued to move or is there something that maybe push some of the deal sizes up to the $20 million range, as I said that's little bit higher than what historically I heard you talk about? William C. Stone - SS&C Technologies Holdings, Inc.: If you look at it, right, I mean, you go back to when we bought GlobeOp in 2012 and really prior to that, you were competing against Goldman, Morgan Stanley, JPMorgan, Credit Suisse, UBS on all kinds of deals and now, other than Morgan Stanley, all of them are gone. JPMorgan still in the business and is a good competitor, but they are not taking new clients. So, when these big clients have a place to turn, they're either turning to us, they're turning to State Street, Bank of New York, maybe Northern Trust, maybe SEI, but the competition is not as fierce and the quality of the competitors from a name recognition standpoint is not the same either. And plus, the banking industry for a few years has mostly been in a circular firing squad. And so we've been a recipient of some pretty good mandates because these fixed funds are looking for people to be able to do this with less errors, less mistakes, better technology, more expertise and I think that's just playing into what we've build.

Okay. And then, just two other real quick ones, one is a housekeeping. Patrick, the tax rate I think you guys have it embedded in your guidance is 29%, I think that's a bit up from where we ended this year. So I was just trying to understand why that floats higher? And then secondly, can you just talk about pricing opportunities that you are seeing potentially within the Advent portfolio? Thanks. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yeah. I'll cover the tax rate. So our adjusted tax rate, we've been using for the past several years, it's been 28%. Our current estimate for 2017 is about 29%. And the main reason for the increase is that the acquisitions we've completed recently, Citi and Conifer and Wells, the vast majority of that income is in the U.S., and in the U.S. is where we have the highest tax rate, which probably is running around 39% or 40%, compared to much slower rate overseas. So that factor is kind of driving up our rate a little bit to 29%.

Okay. Then in pricing? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: What's the question on the pricing again?

Oh, just opportunities in pricing around the Advent portfolio. Thanks. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: As far as the Advent portfolio, there are a number of our products that get automatic, escalator-price increases every year. We also have an opportunity when we renew term licenses to negotiate better fees so that's built in. And in addition to that we have some really strong products like Black Diamond and Geneva that I think – and we're actually evaluating right now, but we want to more structured price increase for things like Geneva with such – have such a strong leadership position in the market that's not vacant any of the numbers at the moment.

Great. Thank you.

Thank you. Our next question comes from Peter Heckmann from Avondale. Your line is open.

Good afternoon, everyone. Most of my questions have been answered, but I did want to follow-up and see if you could give us any examples with Advent where you may have generated some revenue synergies either from hosting or cross-selling new solutions either way – either SS&C product into Advent space or an Advent product into SS&C space? William C. Stone - SS&C Technologies Holdings, Inc.: Rahul, you can chip in as well, but I'll take this one to start. There has actually been pretty strong cross-sales across the number of products, so when we bought Advent some of the things they were missing in their portfolio were performance measurement systems, reconciliation tools and reporting tools, so the strongest cross-sales going into the Advent customer base where Advent customers bought services is brought in our reporting system, recon our reconciliation tool, probably the two strongest. And then going the other way, there were number of Advent customers considering outsource and providers and Rahul's team was be able to win those outsourcing businesses that's probably the largest revenue number was people who are previous license clients who switched outsource, and then Syncova is another product offering that has been picked up in our outsourcing business. So those are kind of the primary buckets that they fall into. And trend-wise, I think those will continue and there are some other services, that I think that people will start picking up over the course of this year, that the performance measurement in particular I think it's got a great opportunity in that space that we haven't quite tapped as much as we'd like. And things like our SS&C net business, the affirmation/confirmation process in our fixed network, we have a large opportunity to drive revenue with the marketing customer base.

Got it. That's helpful. And then, are there any large remaining potential cost synergies that are worth calling out at this time, or have we realized most of those? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I mean I think – it's Patrick. I mean I think we've implemented our – the target cost synergies that we said when we bought Advent. So I think Advent is operating now in the high-to-mid – high to – mid-to-high 40% operating margin side. I think we've hit a lot of targets on Advent, might be some additional savings in some areas of data centers and things like that. But I think that the big one probably is as we get Citi and Wells on to our platform in the second half of 2017, we should be able to our generate cost savings there. William C. Stone - SS&C Technologies Holdings, Inc.: On Advent synergy, we're still focused on really driving revenue synergies, but there are obviously – there are world-class synergies that I wouldn't call it a strategic effort to get these cost out, but there's opportunities over the course of the year that we can take and one in particular, we're still trying to improve the professional services margins in that business, they've improved quite a bit, but still lower than most of SS&C's business, so breaking that down, part of it is that the resource allocation is pretty heavy in New York and San Francisco. So, that's part of it, but I think there is an opportunity to improve professional services margin, as the business grows and we look at the expense structure in professional services.

Great. That's helpful.

Thank you. Our next question comes from Rayna Kumar from Evercore ISI. Your line is open.

Good evening. Can you discuss your acquisition pipeline and your capital allocation priorities for 2017? William C. Stone - SS&C Technologies Holdings, Inc.: Well, the acquisition pipeline, there is all kinds of things for sale and nothing is cheap. So, I think it's continuing to come through all the acquisitions and move quickly when we see something that we want. We did just close two of them in December, so it's probably would have been in two months and then there is a lot of things for sale and some big stuff, which I would say big is over a $1 billion in cost, and then there is a bunch of stuff that is tuck-in. And then as far as capital allocation is concerned, I think our guidance for 2017 is $480 million to $500 million in free cash flow. So we'll use a lot of that to pay down debt, and then if we can't find acquisitions, we might decide to figure out how to give some money back to shareholders.

That's really helpful. Can we get the organic revenue growth rate for the Alternative business in the fourth quarter, and could you call out the AUA number as well? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. The AUA number is $1.32 trillion. Patrick? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yeah. In the fourth quarter, I've got organic growth in the Fund Administration business, the Alternative Fund Administration business about 5.4%.

Okay. That's – okay, that's great. Could we also just get a breakout of revenue and EBITDA contributions for 2017 for Citi, Wells and Conifer? That would be very helpful for our models. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: We generally don't provide that level of details.

Okay. Thank you.

Thank you. Our next question comes from Ashish Sabadra from Deutsche Bank. Your line is open.

Hi. My question was a follow-up on the AUA. Looks like the AUA was lower compared to what the trend was in the first three quarters. Is that purely because of Citi? And then the follow-up would be, but the Alternatives business growth definitely accelerated in the quarter compared to roughly 2% over the last two quarters and now it's moved to 5%. So any incremental color on those two fronts? William C. Stone - SS&C Technologies Holdings, Inc.: So I think on assets under administration at the end of last quarter, we were at $1.093 trillion. So, it went up $227 billion in the quarter out of which $160 billion was the acquisitions and the rest was just addition of new clients. I think in terms of the growth, as I mentioned earlier, we are continuing to see strong flows, a little more weighted towards the hybrid funds and the closed-end funds and we have lots of opportunity and we've won some nice deals during the course of the quarter.

That's helpful. And maybe Patrick, just a quick clarification, just so that we understand those adjustments, those would have been like roughly – a good way to think about it would be like a two-point headwind to revenue growth in 2017, is that the right way to think about it? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: How much the adjustment represents?

Yes. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yes, it's about – it's a little under 2%.

Okay. That's helpful. Thanks.

Thank you... Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: That's also all inorganic, right, so it's not, that's not an organic revenue growth inhibitor.

Thank you. And our next question comes from Chris Shutler from William Blair. Your line is open. Andrew Owen Nicholas - William Blair & Co. LLC: Hi. This is Andrew Nicholas, filling in for Chris. Just had a quick question on debt. Given where markets are today, just wondering how you guys are thinking about your current debt structure and the possibility of maybe refinancing to try and reduce exposure to rising rates? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: This is Patrick. William C. Stone - SS&C Technologies Holdings, Inc.: Go ahead, Patrick. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: All right. Thanks. I think there is – I think the market out there for re-pricing term debt is very, very good right now. We're definitely looking at that opportunity to do that. And I think where the market's at right now, is that they've lowered the spreads on the interest rate. So, they're still LIBOR based, but they'll lower the spreads and that will give us some protection against rising interest rates over the next couple of years by having a lower spread. Andrew Owen Nicholas - William Blair & Co. LLC: Okay. Thank you. And then second, I think Norm talked about the SS&C net revenue opportunity a little bit. Just curious, and I apologize if you have already mentioned this and I missed it. But is that still something that you think will hit the P&L in 2017 or you can start to see revenue from in 2017? And then maybe more broadly if there is a way to size up kind of that longer-term opportunity in taking share from some of the other market participants? Thank you. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: I think the best way to think about – first of all, we're doing a lot of the work to get all the connections and work through all the business relationships, just with the participants in the marketplace. But the way we're looking at it is there are two pieces, the number one piece we can control, right, is the settlement services, which include trade matching, the settlement and the allocations. And that's something we're gearing up to start selling at the end of Q1 to our customers, primarily our Moxy and GlobeOp's customers as well as new prospects. And that will start to generate revenue, but it's going to take time to build that revenue. So we have a modest – we have some modest run rate targets for the end of the year for that part of the business. The second half is the interoperability with all the market participants. And that's – we're still negotiating with Omgeo and Bloomberg and working with the SEC to come to some agreement as to how that's going to shake out. So that's going slower than we would like, and that will be a second revenue stream for the confirmation and affirmation process that we do think is going to start generating some revenue, but it will be in the second half of the year. So our goal really is to establish those two services, get some clear run rate revenue at the end of the year for both of those parts of the business. And then the primary growth will start to be more material to our financials, it's hard to be material to be honest with you at $1.6 billion for some of these small businesses, but in terms of opportunity to grow this business something material over the next five years, most of the heavy lifting is going to be this year. And then I think in 2018, we'll start to see a more rapid growth rate, as those services are established and we have focused in 100% on sales rather than all this infrastructure and all this internal negotiations with the market participants and the SEC. Andrew Owen Nicholas - William Blair & Co. LLC: Great. That's really helpful color. Thank you.

Thank you. Our next question comes from Brian Essex from Morgan Stanley. Your line is open. Ivan P. Holman - Morgan Stanley & Co. LLC: Thanks for taking the question. This is Ivan Holman pinch-hitting for Brian Essex. Nice acceleration in organic revenue in the fourth quarter. If we were to try to parse out how much of that was from AUA inflation, excluding Conifer and Wells, how much of that do you think was driven by just broader asset inflation in the market, as there's been a pretty nice rally? Rahul Kanwar - SS&C Technologies, Inc.: Yeah. I think that the majority of it, we did have some – and you can probably see this in our Indexes. We did have some good improvements in the performance index, to a certain extent that was mitigated by the Flows Index, but most of the revenue growth really comes from sales execution, winning new deals and providing current clients with more products and services. Ivan P. Holman - Morgan Stanley & Co. LLC: Understood. Thank you. And a quick follow-up if I could. You did mention, I think; Bill might have mentioned that JPMorgan wasn't taking any more clients. Are there any other competitors out of there where you've seen a, let's call it a significant decline in competitive appetite? Rahul Kanwar - SS&C Technologies, Inc.: I think in general; the large banking type institutions are the ones where we're seeing less appetite than there had been in the past for sure. Ivan P. Holman - Morgan Stanley & Co. LLC: Great. Thank you very much.

Thank you. Our next question comes from Mayank Tandon from Needham & Company. Your line is open. Mayank Tandon - Needham & Co. LLC: Thank you. And most of my questions have been answered. But Patrick on organic growth, what was the number for fiscal 2016, just so we can compare that with your forecast for fiscal 2017, and what was the all-in number organic growth for the fourth quarter as well? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: We did the full-year – the full-year 2016 was a 2.6% and the company was... Rahul Kanwar - SS&C Technologies, Inc.: The fourth quarter was 4.8%, right. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: 4.8% in the fourth quarter, right. Mayank Tandon - Needham & Co. LLC: Got it. Great. And then just one quick question on margins, I know, you don't parse out the breakdown between organic versus inorganic, but where are Citi's margins today relative to last quarter? I know we saw some nice improvement in the last several quarters. And then if you could just give us some sense in terms of – should we be still thinking core margins improved 50 basis points per year and the rest of the improvement to get to, let's say, the midpoint of your guidance would be coming from the synergies from the recent acquisitions, is that a good way to think about it? William C. Stone - SS&C Technologies Holdings, Inc.: As you know Mayank, I think you can – that's one way to look at it. I think if you look at Citi, I think Q2 of 2016, they were at 18.8%; Q3 they were at 24.3%; and Q4 I think what we got to, as Patrick said, low 30s%. And now, we expect – you're not going to quite get 600 basis points, 700 basis points every quarter in 2017, right. Now, it's going to be a little heavier lifting and it's going to be 200 basis points or 300 basis points, right. So hopefully at the end of Q1, they are at 33%, 34%, at the end of Q2, they are at 35%, 36% and at the end of Q3, they are at 37%, 38% and then in the Q4, they are at 39%, 40%, or 41% maybe and, so we just have really talented people. Like Mike Sleightholme, Ken Fullerton, Joe Patellaro, Stephanie Miller, right that are focusing on that business, right and making that business better. When they get access to all of our datacenters, they get access to our contracts with data vendors and everyone else and they are generally quite a bit more favorable, on a cost basis than what they currently have, so Conifer on just one day of the contract, I think say, $400,000 just when they renewed the contract, right. The same data comes at the same way, comes at the same time, it's just we have a better deal, right. So there is a lot of that stuff, that we're going to pick up over the next three quarters or four quarters. And I think that in addition to the 50 basis points of how we just make our business better all the time anyway, right. So I think that's the real value of the SS&C franchise. It's the expertise, it's the experience, it's the focus, the commitment and then being able to reward shareholders. Mayank Tandon - Needham & Co. LLC: Great. It's helpful, Bill. Thank you very much.

Thank you. And I'm showing no further questions from our phone lines. I would now like to turn the conference back over to Bill Stone for any closing remarks. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, everybody, for being on the call and we look forward to talking to you again at end of Q1 and we look forward to seeing you at Investor Day at the NASDAQ market site. Thanks again.

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