Constellation Software Inc Q3 2021 Financial Statements

Condensed Consolidated Interim Financial Statements (In U.S. dollars)

CONSTELLATION

SOFTWARE INC.

For the three and nine months ended September 30, 2021 and 2020 Unaudited

CONSTELLATION SOFTWARE INC.

Consolidated Statements of Financial Position

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.) Unaudited

			September 30, 2021		December 31, 2020		September 30, 2020
Assets
Current assets:
	Cash	$	961	$	758	$	565
	Accounts receivable		512		483		420
	Unbilled revenue		144		98		102
	Inventories		32		27		30
	Other assets (note 5)		278		219		217
			1,929		1,585		1,333
Non-current assets:
	Property and equipment		91		86		80
	Right of use assets		252		251		239
	Deferred income taxes		63		52		50
	Other assets (note 5)		94		75		79
	Intangible assets (note 6)		3,006		2,325		2,097
			3,506		2,790		2,546
Total assets	$	5,434	$	4,375	$	3,879
Liabilities and Shareholders' Equity
Current liabilities:
	Debt with recourse to Constellation Software Inc. (note 7)	$	137	$	113	$	104
	Debt without recourse to Constellation Software Inc. (note 8)		54		28		4
	Redeemable preferred securities (note 9)		7		-		-
	Accounts payable and accrued liabilities		720		666		535
	Dividends payable (note 12)		21		21		21
	Deferred revenue		1,168		962		917
	Provisions (note 10)		11		12		11
	Acquisition holdback payables		92		85		71
	Lease obligations		81		74		68
	Income taxes payable (note 11)		86		78		90
			2,377		2,040		1,821
Non-current liabilities:
	Debt with recourse to Constellation Software Inc. (note 7)		550		421		397
	Debt without recourse to Constellation Software Inc. (note 8)		325		199		169
	Deferred income taxes (note 11)		393		285		253
	Acquisition holdback payables		49		37		30
	Lease obligations		195		201		191
	Other liabilities (note 5)		145		146		116
			1,656		1,288		1,155
Total liabilities		4,034		3,328		2,976
Shareholders' equity (note 12):
	Capital stock		99		99		99
	Other equity		(162)		-		-
	Accumulated other comprehensive income (loss)		(69)		(31)		(49)
	Retained earnings		1,103		980		852
	Non-controlling interests (notes 1, 9 and 18)		429		-		-
			1,401		1,048		902
Subsequent events (notes 12 and 19)
Total liabilities and shareholders' equity	$	5,434	$	4,375	$	3,879
See accompanying notes to the condensed consolidated interim financial statements.

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CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Income (loss)

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)
Three and nine months ended September 30, 2021
Unaudited
		Three months ended September 30,		Nine months ended September 30,
		2021		2020		2021		2020
Revenue
License	$	69	$	57	$	206	$	166
Professional services		256		187		747		534
Hardware and other		45		45		127		122
Maintenance and other recurring		929		713		2,643		2,056
		1,299		1,003		3,724		2,878
Expenses
Staff		676		504		1,982		1,493
Hardware		25		25		71		70
Third party license, maintenance and professional services		113		82		317		237
Occupancy		10		9		30		26
Travel, telecommunications, supplies, software and equipment		46		32		129		114
Professional fees		21		15		53		41
Other, net		21		5		41		10
Depreciation		31		26		90		77
Amortization of intangible assets (note 6)		134		103		376		293
		1,077		800		3,087		2,362
Foreign exchange loss (gain)		(5)		1		(3)		5
IRGA/TSS Membership liability revaluation charge (note 7)		25		20		107		55
Finance and other expense (income) (note 13)		(4)		(2)		(9)		(4)
Bargain purchase gain		(1)		(0)		(1)		(0)
Impairment of intangible and other non-financial assets (note 6)		1		3		7		11
Redeemable preferred securities expense (income) (note 9)		-		-		295		-
Finance costs (note 13)		18		13		50		34
		34		34		446		101
Income (loss) before income taxes		188		168		190		414
Current income tax expense (recovery)		70		62		209		177
Deferred income tax expense (recovery)		(4)		(16)		(43)		(50)
Income tax expense (recovery)		67		46		166		127
Net income (loss)		121		122		24		288
Net income (loss) attributable to:
Common shareholders of Constellation Software Inc. (notes 1 and 18)		107		122		186		288
Non-controlling interests (notes 1 and 18)		15		-		(162)		-
Net income (loss)		121		122		24		288
Earnings per common share of Constellation Software Inc.
Basic and diluted (note 14)	$	5.04	$	5.76	$	8.79	$	13.58

See accompanying notes to the condensed consolidated interim financial statements.

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CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Three and nine months ended September 30, 2021

Unaudited

	Three months ended September 30,	Nine months ended September 30,
	2021			2020		2021		2020
Net income (loss)	$	121	$	122	$	24	$	288
Items that are or may be reclassified subsequently to net income (loss):
Foreign currency translation differences from foreign operations and other		(21)		8		(39)		(9)
Other comprehensive income (loss) for the period, net of income tax		(21)		8		(39)		(9)
Total comprehensive income (loss) for the period	$	100	$	130	$	(15)	$	279
Total other comprehensive income (loss) attributable to:
Common shareholders of Constellation Software Inc. (notes 1 and 18)		(13)		8		(19)		(9)
Non-controlling interests (notes 1 and 18)		(8)		-		(19)		-
Total other comprehensive income (loss)	$	(21)	$	8	$	(39)	$	(9)
Total comprehensive income (loss) attributable to:		93		130		167		279
Common shareholders of Constellation Software Inc. (notes 1 and 18)
Non-controlling interests (notes 1 and 18)		7		-		(182)		-
Total comprehensive income (loss)	$	100	$	130	$	(15)	$	279

See accompanying notes to the condensed consolidated interim financial statements.

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CONSTELLATION SOFTWARE INC.

Condensed Consolidated Interim Statement of Changes in Equity

(In millions of U.S. dollars, except per share amounts. Due to rounding, numbers presented may not foot.)

Unaudited

Nine months ended September 30, 2021

				Equity Attributable to Shareholders of CSI			Non-controlling	Total equity
	Capital stock	Other equity		Accumulated		Retained		Total
						other		earnings				interests
					comprehensive
						income (loss)
Balance at January 1, 2021	$	99	$	-	$	(31)	$	980	$	1,048		-	$	1,048
Total comprehensive income (loss) for the period:
Net income (loss)		-		-		-		186		186		(162)		24
Other comprehensive income (loss)
Foreign currency translation differences from
foreign operations and other		-		-		(19)		-		(19)		(19)		(39)
Total other comprehensive income (loss)
for the period		-		-		(19)		-		(19)		(19)		(39)
Total comprehensive income (loss) for the period		-		-		(19)		186		167		(182)		(15)
Transactions with owners, recorded directly in equity
Special dividend of Topicus Subordinate Voting Shares (note 1 and 12)		-		(141)		(16)		-		(157)		157		-
Issuance of Topicus Coop Ordinary Units to non-controlling interests		-		(21)		(2)		-		(23)		23		-
(note 4)
Net acquisition of non-controlling interest associated with acquisitions		-		1		-		1		1		1		3
and other movements
Dividends to shareholders of the Company (note 12)		-				-		(64)		(64)		-		(64)
Reclassification of redeemable preferred securities of Topicus Coop		-		-		-		-		-		434		434
from liabilities to non-controlling interest
Accrued dividends to preference unit holders of Topicus Coop (note 9)		-		-		-		-		-		(5)		(5)
Balance at September 30, 2021	$	99	$	(162)		(69)	$	1,103	$	972	$	429	$	1,401

See accompanying notes to the condensed consolidated interim financial statements.

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