Adjusted operating income (as defined in note 1 to the Consolidated Financial Information) was $17.2 million for the three months ended December 31, 2005, compared to $9.4 million in the fourth quarter of the prior year. GAAP operating loss in the fourth quarter of 2005 was $31.5 million and includes amortization of $3.4 million, merger costs of $44.7 million and deferred revenue adjustment and other purchase accounting items of $0.6 million. GAAP operating income in the fourth quarter of 2004 was $8.7 million and includes amortization of $0.7 million. Adjusted operating income for the year 2005 was $54.9 million, compared to $31.8 million for the year 2004. GAAP operating income for 2005 was $0.3 million and includes amortization of $8.2 million, merger costs of $45.8 million and purchase accounting adjustments of $0.6 million.
Consolidated EBITDA (as defined in note 2 of the Consolidated Financial Information) for the fourth quarter of 2005 was $20.0 million, compared to $16.7 million in the fourth quarter of 2004. Consolidated EBITDA was $73.6 million for the year 2005, compared to $60.5 million for the year 2004.
On November 23, 2005, SS&C Technologies, Inc. was acquired by Sunshine Acquisition Corporation, a corporation affiliated with The Carlyle Group, a global private equity firm. Bill Stone, SS&C's Chairman and CEO stated, "Being a privately-held company allows us to channel all of our resources on growing our business and continuing to produce excellent financial results."
Stone, commenting on recent results said, "Throughout 2005 we stayed focused on our business and executed on our strategy. We have extended our market reach, broadened our product offerings and improved our position in the global marketplace. As a result, we had an outstanding year with record revenue numbers quarter after quarter. We are realizing the benefits of many of our acquisitions as they are integrated, which is reflected in our strong fourth quarter numbers. All revenue segments showed significant growth for both Q4 and all of 2005, with outsourcing revenues clearly outperforming every other revenue segment." Stone continued, "In all business lines, we are seeing positive results and, as we integrate our acquisitions, we have been able to capitalize on cross-sell and up-sell opportunities, take advantage of our broader geographic reach, and realize cost-savings from several economy-of-scale initiatives."
"Across the board, license revenues increased," said Stone. "In Q4 2005, license revenues were $5.9 million, a 22% increase over Q4, 2004. Total 2005 license revenues were $23.7 million, a 38% increase over 2004. We had an increase in licenses for CAMRA, LMS, Altair, AdvisorWare and SKYLINE. With the introduction of LMS Loan Suite, LMS license sales have taken hold, and in 2005, showed a 261% increase over 2004 LMS license sales, proving our commitment to R&D and our ability to respond effectively to market needs. Acquisitions also made a healthy contribution to license revenue growth, particularly Pages, Recon, Sylvan, FundRunner, and MarginMan."
"Insurance companies, asset managers and hedge funds all continue to look to outsourcing as a way to implement cost-savings and shift some of their accounting and systems burden to a third party," said Stone. "Our expertise in each of these industries, as well as our technology, specifically designed for these markets, has given us a global, competitive advantage. Outsourcing revenues in 2005 were $75 million, an increase of 143% over 2004. In 2005, outsourcing revenues represented 46% of total revenues. In November, 2005, the Hedge Fund Manager Survey ranked SS&C Fund Services as the tenth largest hedge fund administrator, and the fastest growing fund administrator."
"In 2005, SS&C completed six acquisitions, and we are very focused on the synergies of our merger and acquisition decisions," Stone commented. "We constantly work on improving our integration processes and each acquisition is integrated as quickly as possible. This year we added significant strength in asset management with the acquisition of Financial Models Company Inc. Our financial institutions added breadth with MarginMan and Open Information Systems. Our hedge fund business has added expertise with EisnerFast, and technology with Financial Interactive. Achievement Technologies adds a new dimension to SKYLINE and a new product offering for the real estate market. We expect to continue to pursue acquisitions that are a good fit for SS&C, adding more great people, products and services, clients, and prospects."
On March 6, 2006, SS&C announced the acquisition of Cogent Management Inc. Cogent, located in New Rochelle, New York, provides hedge fund management services, with a particular expertise in U.S.-based hedge funds. Stone commented on the acquisition, "We welcome the Cogent team and Cogent clients to SS&C and look forward to creating new opportunities for everyone."