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| 8-K - FORM 8-K - BROADRIDGE FINANCIAL SOLUTIONS, INC. | d8k.htm |
 J.P.
Morgan 2009 SMid Cap Conference Presentation Broadridge Financial Solutions, Inc. December 2009 Richard J. Daly Chief Executive Officer Exhibit 99.1 |
 2 Forward-Looking Statements This presentation and other written or oral statements made from time to time by representatives of
Broadridge may contain “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Statements that are not historical in nature,
such as our fiscal year 2009 financial guidance, and which may be identified by the use of
words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other
words of similar meaning, are forward-looking statements. These statements are based
on management’s expectations and assumptions and are subject to risks and uncertainties
that may cause actual results to differ materially from those expressed. These risks and
uncertainties include those risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2009 (the “2009 Annual Report”), as
they may be updated in any future reports filed with the Securities and Exchange
Commission. Any forward-looking statements are qualified in their entirety by
reference to the factors discussed in the 2009 Annual Report. These risks include: the
success of Broadridge in retaining and selling additional services to its existing clients and
in obtaining new clients; the pricing of Broadridge’s products and services; changes in laws affecting the investor communication services provided by Broadridge; changes in laws regulating
registered securities clearing firms and broker-dealers; declines in trading volume, market
prices, or the liquidity of the securities markets; any material breach of Broadridge security
affecting its clients’ customer information; Broadridge’s ability to continue to
obtain data center services from its former parent company, Automatic Data Processing, Inc.
(“ADP”); any significant slowdown or failure of Broadridge’s systems; Broadridge’s failure to keep pace with changes in technology and demands of its clients; availability of skilled
technical employees; the impact of new acquisitions and divestitures; competitive conditions;
overall market and economic conditions; and any adverse consequences from Broadridge’s
spin-off from ADP. Broadridge disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future events or
otherwise. |
 3 Use of Material Contained Herein The information contained in this presentation is being provided for your convenience and information only. This information is accurate as of the date
of its initial presentation. If you plan to use this information for
any purpose, verification of its continued accuracy is your
responsibility. Broadridge assumes no duty to update or revise the
information contained in this presentation. You may reproduce information contained in this presentation
provided you do not alter, edit, or delete any of the content and provided you
identify the source of the information as Broadridge Financial Solutions,
Inc., which owns the copyright. Broadridge, the Broadridge logo and Aspire are registered trademarks of Broadridge Financial Solutions, Inc. Ridge and Ascendis are trademarks of Broadridge Financial Solutions, Inc. © 2009 Broadridge Financial Solutions, Inc. |
 4 Presentation of Certain Financial Information This presentation may include certain Non-GAAP (generally accepted accounting principles) financial measures in describing Broadridge’s performance. Management believes that such Non-GAAP measures, when presented in conjunction with comparable GAAP measures provide investors a more complete understanding of Broadridge’s underlying operational results.
These Non-GAAP measures are indicators that management uses to provide
additional meaningful comparisons between current results and prior reported
results, and as a basis for planning and forecasting for future periods.
These measures should be considered in addition to and not a substitute for
the measures of financial performance prepared in accordance with GAAP. The
reconciliations of such measures to the comparable GAAP figures are included
in this presentation. Financial information for periods prior to Broadridge’s spin-off from Automatic
Data Processing, Inc. (“ADP”) on March 30, 2007 represent
financial information of the Brokerage Services Group division of ADP.
|
 5 Agenda Broadridge Overview and Summary Business Overview Business Expansion Strategy Overview Financial Overview Conclusion |
 6 Broadridge: Investment Thesis Generate very strong and highly predictable free cash flows Strong core Investor Communications business which generates over 70% of annual revenues and earnings Market leader with high client retention rates driven by product innovation Approximately 80% in recurring annual revenues Dependable mid-single-digit revenue growth business (4.5% CAGR since 2002) Highly experienced management team (averaging 14 years) focused on delivering shareholder return Scalable business model with core business generating margin expansion (>16% margins, averaging ~50bps annual growth last 3 fiscal years) Averaged over $250M per year during the last 3 fiscal years Aim to invest in existing businesses and acquisitions to generate mid to
high-single- digit revenue growth and return cash to shareholders
through dividends and opportunistic share repurchases
|
 7 Broadridge: Free Cash Flow & Capital Allocation Note: Free Cash Flow excludes financing activities in the Clearing and Outsourcing
Solutions segment Dividends •Doubled annual dividend from $0.28 to $0.56 per share for FY10, or approximately 35% payout of FY09 GAAP net earnings Stock Repurchases •Authorized repurchase of up to 10 million shares, or approximately 7% of the shares outstanding Acquisitions •Strategic acquisitions to leverage the Broadridge brand and distribution channels Strong predictable free cash flow allows for flexible capital allocation options
(1) Free cash flow is a Non-GAAP financial measure and is defined
as net cash flow provided by operating activities excluding Ridge Clearing financing activities, less capital expenditures and intangibles. A reconciliation to the nearest GAAP numbers
are provided in the Appendix High: $270 $252 Forecast $290 $251 $248 FY06 FY07 FY08 FY09 FY10 Free Cash Flow (Non- GAAP) (1) ($ in millions) Low: $235 |
 8 Broadridge Mission Partner with Financial Institutions to: Reduce Risk & Cost Increase Performance • Enable the financial services industry to achieve higher levels of performance by allowing firms to focus on their core business • Help manage their regulatory compliance risk by improving clients’ processing, communication accuracy and data security • Deliver cost savings to financial institutions through outsourcing their non-differentiating back- office processes • Develop long lasting relationships with world class companies built on mutual success Our Mission is To Reduce Clients’ Risk While Lowering Their Total Cost of Ownership |
 9 Individual (Retail) and Institutional Clients Broker-Dealers, Banks, Mutual Funds, Corporate Issuers Integrated Solutions Spanning the Investment Lifecycle Investment Decision (Pre-Trade) Trade Processing & Books and Records Asset Servicing (Post-Trade) New Accounts Welcome Kits Proxy Fulfillment Archival Confirms Across the investment lifecycle... ...By partnering with the world’s leading financial institutions... ...And delivering broad and innovative global solutions Investor Communications Proxy management, corporate governance, and stockholder communications
Securities Processing Global trade processing for equities, options, mutual funds, and fixed income securities. Clearing and Outsourcing Solutions (Outsourcing only at the close of
Penson deal) Processing Reporting Statements ...Broadridge touches investors... |
 10 Resilient and Predictable Business Model Business is resilient and largely independent of the stock market being at its highs or
lows……….predictable revenue stream drives predictable free
cash flow Shareholder Positions Images and Pieces Processed Processing Fees (Trades Per Day) Processing Fees and Accounts Interest Rates and Lending Balances Revenue Drivers A Market Leader with High Retention Rates Recurring Revenue Complex Proprietary Processing Platforms High Client Satisfaction and Highly Engaged Associates Investor Communication Solutions Clearing & Outsourcing Solutions Securities Processing Solutions Recurring Revenue (~80%) Event- Driven Revenue (~20%) Indispensable Provider for Mission Critical Processing |
 11 Business is Resilient in Changing Markets Our revenue growth has been resilient through various economic and market cycles Note: Fiscal year is based on June 30 th year end Dow Jones Industrial Average Broadridge Net Revenues Stock Market Rebounds Decimalization of Trades Internet Bubble Impact Financial Crisis $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 |
       12 This is Broadridge •We are a market leader in processing and distributing shareholder communications, and provider of choice for mission-critical securities processing solutions •Over 40 years of experience and a solid customer
base with long standing relationships •Our core business is resilient and largely independent of the stock market being at its highs or lows •Strong and predictable Free Cash Flow of ~$250M in
each of the last 3 fiscal years BR FY09 Business Revenues (1) BR FY09 Business EBIT & Margins Investor Communications $1,531M (71%) Securities Processing Businesses $635M (29%) Investor Communications EBIT $249M Margin 16.3% Securities Processing Businesses EBIT $134M Margin 21.0% Clearing and Outsourcing Innovative industry service provider leverages processing technology platform to retain and add new clients: Correspondent clearing using broker- dealer subsidiary: • Clearing (~12%) • Outsourcing (~4%) Investor Communications (2) Securities Processing Leading global back-office processing service bureau, as 8 of top 10 U.S. broker-dealers use equity and fixed income components of our processing (3) : Hosted applications for self-clearing firms using Broadridge’s service bureau for: •Equity (~71%) •Fixed Income (~13%) World’s largest processor and provider of investor communications with over one billion communications processed annually: Primary business unit is a clear market leader with over 70% of Broadridge revenues and pre-tax earnings Proxy communications and vote processing and interim communications (~65%) Transaction reporting and fulfillment services (~30%) Other (~5%) Securities Processing Businesses (2) Only service provider offering service bureau, operations outsourcing or
correspondent clearing on a single platform (1) Financial information and statistics shown are for the fiscal year
ended June 30, 2009. Segments do not add to total for reported revenue and earnings due to FX and other corporate expense not reflected (2) Percentages represent revenue contribution within each reporting segment
(3) Based on SIFMA’s 2007-2008 Annual Yearbook’s
top member firm list ranked by capital. This top 10 list does not include the impact of the Lehman Brothers (declared bankruptcy), Merrill Lynch (acquired by Bank of America) and Bear
Stearns (acquired by JP Morgan) transactions which occurred in 2008 |
 ICS
Unique Business Systems Processing Model Proxy and Interim processing system
is the “plumbing” supporting the voting process for corporate governance 13 (1) Represents Broadridge’s estimated total number of brokerage firms
and banks in the U.S. and international markets (2) Represents
Broadridge’s estimated total number of positions managed by U.S. brokers and banks (3) Represents Broadridge’s estimated total number of corporate issuers
in the U.S. (4) Represents total number of Fund Sponsors in the
U.S. who manage over 16,000 funds including Mutual Funds, Closed-end Funds, ETFs and UITs, according to the Investment Company Institute’s 2009 Investment
Company Year Book |
 14 Distribution $757M (49%) Other $46M (3%) Fulfillment $110M (7%) Transaction Reporting $132M (9%) Interims $136M (9%) Proxy $350M (23%) ICS FY09 Product Revenues ICS Product and Client Revenue Overview: We have a strong and diverse product offering… ICS is highly resilient due to our deep customer relationships with our Bank/Broker-Dealer clients Primarily Postage Increase in electronic distribution reduces postage revenue and increases profits Bank/Broker- Dealer $1,383M (90%) Mutual Fund $96M (6%) Corporate Issuer $52M (4%) ICS FY09 Client Revenues …and we have deep and longstanding client relationships |
 15 Securities Processing & Outsourcing – Target Market Landscape How Firms Clear Trades Fully-Disclosed Broker-Dealer Firms (Firms that clear their trades through another B/D firm that then clears through
DTC) Self-Clearing Broker-Dealer Firms (Firms that clear trades directly through the DTC) Trade Clearing Method #1 Traditional B/D Firms •Primarily clear
trades for accounts that their firm manages
(e.g., Bank of America) Clearing B/D Firms •Primary business is
clearing trades for other B/D firms (e.g., Penson/Pershing/Fidelity) Firms that need the balance sheet of another firm to operate and clear (Small – Medium Firms) Firms that have the capital to be self- clearing, but need the technology and people expertise of another firm (Medium – Large Firms) Type of Self-Clearing Firms Firm Type #1 Firm Type #2 Trade Clearing Method #2 |
 16 Broadridge - Revenue Summary for Penson Transaction We expect the Outsourcing business to be at scale at the completion of the Penson
conversion Outsourcing Revenue Related to client contracts sold ~$35-40M Broadridge Clearing & Outsourcing After Penson Transaction Penson Existing Outsourcing Revenue ~$25M Acquired Revenue - ~ $75M 100+ Correspondents Total Revenues Before Penson ~100M Total Revenues After Penson ~$90-100M Broadridge Clearing & Outsourcing Before Penson Transaction BR Sells clearing client contracts New Outsourcing Revenue ~$30-35M Clearing Related Revenue ~ $75M Outsourcing processing services for Acquired Client Contracts Outsourcing processing services for Existing Penson Clients Existing Outsourcing Revenue ~$25M Signs 10-Year Outsourcing Contract 12-18 month conversion Starts at deal closing |
 17 Securities Processing Self-Clearing with Service Bureau Outsourcing Self-Clearing with Ops. Outsourcing & Service Bureau Broadridge’s Simplified Securities Processing Model Clearing Fully-Disclosed Clearing Financing Activities and Compliance Technology & Data Center Operational Infrastructure Client Responsibility Client Responsibility Client Responsibility Provided by Broadridge Provided by Broadridge Provided by Broadridge Provided by Clearing Firm (Previously provided by Ridge) Target Large Broker-Dealer Firms Large ~ Medium Broker-Dealer Firms Medium ~ Small Broker-Dealer Firms Outsourced to Broadridge (Previously provided by Ridge) Outsourced to Broadridge (Previously provided by Ridge) Third Party Clearing Clients Outsourcing business has high growth potential and our simplified processing model
continues to allow us to serve the entire investment process
|
 18 Securities Processing Solutions Top 15 Clients Broadridge has faired well during the recent industry consolidations and financial crisis The top 15 SPS clients generate approximately 70% of the SPS segment’s revenues 11 of 15 top clients are under multi-years agreements; contract extensions for additional two clients are in progress Closed contract with Barclays to handle new trade volume as result of Lehman purchase and executed direct contract with Neuberger Berman for processing Closed contract with JP Morgan for Bear Stearns fixed income processing Bank of America/Merrill Lynch transaction resulted in loss of equity processing business and winning of fixed income processing business SPS client relationship are stable in volatile market Alliance Bernstein Bank of America/Merrill Lynch* Barclays Capital Services BMO Nesbitt Burns BNP Paribas CIBC World Markets Deutsche Bank E*Trade Group Edward Jones HSBC Securities J.P. Morgan Chase Jefferies & Company Royal Bank of Canada Scotia Capital UBS Securities Note: The above schedule is an alphabetical listing of the top 15 SPS clients based on
fiscal year 2009 revenues * Bank of America/Merrill Lynch includes loss of
equity processing business as previously disclosed Equity
Processing Fixed Income Processing Retail Institutional Top Clients |
 19 Business Expansion Strategy Foundation Five Pillars Be Indispensable! We enable the financial services industry to achieve superior levels of performance through our passion to deliver extraordinary value to our clients, shareholders, and associates Client Retention Accelerate Sales Offer New Solutions Leverage Industry Position Margin Improvement • Improve world class service scores for every product every year • Zero losses to competition • Be “indispensable” • Increase total sales year-over- year • Increase existing client penetration • Value propositions with “teeth” • Improve margins in all products every year Data center Leverage technology Smart/Off-shoring Strict financial controls Challenge the status quo • Create (build or buy) unique solutions enabled by our heritage Notice and Access Global Clearing/ Outsourcing The Investor Network Electronic delivery solutions Global Proxy Access Data • Add sales from new products every year Virtual Shareholder meeting Ascendis™ workflow Solicitation Compliance Client on boarding Aspire® wealth Enhanced retail SPS • BBI and BBP to launch new initiatives CULTURE Trusting / Engaging / Accountable / Client-Centric / Committed / Caring
/ Passionate/ Ethical “A Great Place to Work”
Vision |
 20 Business Expansion Focus Closed Sales Long-Term Growth Challenges Broadridge is well-positioned and on the high ground as a result of our recurring revenue
base, great value propositions, new initiatives, free cash flow and solid balance
sheet •Strong and growing pipeline with large opportunities in all segments •Winning a meaningful percentage of each year’s
market-driven sales activity •Growth in recurring closed sales >30% in FY09, representing the second consecutive year of record sales •Leverage our core capabilities and unique
communications network •Investments in the business have started to introduce new and exciting opportunities •Meaningful growth opportunities in the mutual fund
area via data hub strategy •Accelerating Outsourcing by leveraging our unique multi-tier capabilities •SPS business, despite retaining its market leadership position, faces challenges of price compression and how to monetize its unique opportunities for growth •Overcoming conversion decision hurdles for large
clients and industry consolidation $104 $148 $133 $125 CAGR = 11% ED = 17% RC = 9% High: $205 Low: $185 $156 Forecast (1) $81 $96 $76 $85 $113 $23 $37 $49 $63 $43 FY05 FY06 FY07 FY08 FY09 FY10 Closed Sales (Fee Only $ in millions) Event-Driven (ED) Recurring (RC) (1) Financial guidance provided in Broadridge’s November 3, 2009 earnings release
|
 21 Financial Performance is Driven by Recurring Revenues Recurring Revenues: 81%
81% 77%
78% 80% Margins: 16.0%
15.7% 16.2% 16.8% 16.4% $1,717 $2,149 $1,726 $1,724 $1,651 $1,565 $1,393 $423 $483 $487 $368 $324 FY09 FY08 FY07 FY06 FY05 Net Revenues $352 $371 $347 $304 $275 FY09 FY08 FY07 FY06 FY05 Earnings Before Interest andTaxes as adjusted (1)(2) ($ in Millions) ` (1) The comparison between the results of operations for fiscal 2006 and prior periods is affected by the
impact of our adoption of SFAS No.123R effective July 1, 2005. See the Selected
Financial Data table in our 2009 Annual Report on Form 10-K for additional information (2)
Earnings before provision for interest and income taxes, as adjusted, is a Non-GAAP financial measure. In fiscal 2009, it excludes a one-time gain of $8.4 million on purchase of senior notes. In fiscal 2008 and fiscal 2007, it excludes $13.7 million and $14.0 million,
respectively, of one-time transition expenses. We believe that his measure is useful
to investors because it excludes the impact of certain transactions or events that we expect to occur infrequently in order to provide meaningful comparisons between current results and previously reported results. Management, therefore, believes
such Non-GAAP measure provides a useful means for evaluating Broadridge's comparative
operating performance |
 22 Financial Guidance $ in millions ( except EPS ) Actual Forecast (1) FY09 FY10 Net Revenues $2,149 $2,271 - $2,317 % growth -3% 6% to 8% Earning Before Interest & Taxes (Non-GAAP) $352 (2) $348 - $371 (3) % margin 16.4% 15.3% to 16.0% Earning Before Interest & Taxes (GAAP) $361 $316 - $339 % margin 16.8% 13.9% to 14.7% Diluted Net Income/EPS (Non-GAAP) $1.51 (4) $1.50 - $1.60 (5) % growth 6% -1% to 6% Diluted Net Income/EPS (GAAP) $1.58 $1.42 - $1.52 % growth 16% -10% to -4% Free Cash Flow (Non-GAAP) (6) $252M $235 - $270 (1) Financial guidance provided in Broadridge’s November 3, 2009 earnings
release (2) Non-GAAP Fiscal Year 2009 EBIT excludes one-time gain of $8
million from purchase of senior notes (3) Non-GAAP Fiscal Year 2010
EBIT guidance excludes one-time item of $32 million loss from Penson transaction (4) Non-GAAP Fiscal Year 2009 EPS excludes one-time gain of $0.04
from purchase of senior notes and $0.03 per share from the state tax credit true-up benefit for prior fiscal year (5) Non-GAAP Fiscal Year 2010 EPS guidance excludes one-time item
of $0.14 per share loss from Penson transaction offset by a foreign tax credit of $0.06 per share (6) Free cash flow is a Non-GAAP financial measure and is defined as net
cash flow provided by operating activities excluding Ridge Clearing financing activities less capital expenditures and intangibles. A reconciliation to the nearest GAAP number is
provided in the Appendix |
 23 Focused on Capital Stewardship and Long-Term Shareholder Value Cash Level on Balance Sheet • We expect to keep approximately $100M of cash on hand Strong Predictable FCF Allows for Flexible Capital Allocation Options • Investing for organic growth • Tuck-in acquisitions to sustain organic growth expand product offering • Continue to grow dividend payout • Pursue stock repurchases to offset any dilution from equity compensation plan and opportunistic repurchases versus scheduled steady repurchases Manage to a Debt to EBITDA Ratio 1:1 Debt • Maintain investment grade rating with rating agencies as this is important to our large clients and prospects Mid-single-digit organic revenue growth in the long-run • Capitalize on fundamentals driving long-term market growth • Invest in and drive new sales of existing solutions • Rollout new solutions to enable client efficiencies and facilitate client growth
• Capture the global securities processing opportunity Improve Margins • Initiatives to sustain and drive continued efficiencies and enhance our scalability
Aim to invest through existing businesses and acquisitions to generate mid to
high single-digit revenue growth and return excess cash to shareholders
|
 24 Summary Broadridge is a dependable mid-single-digit revenue grower with a scalable business model providing opportunity for margin expansion We expect to continue to invest in our existing businesses and execute strategic acquisitions to generate mid to high single-digit average revenue growth We expect to generate strong free cash flows and aim to return cash to shareholders through dividends, repurchasing shares to offset dilution and to opportunistically repurchase shares |
 25 Appendix Appendix |
 26 Cash Flow (Non-GAAP) – 1Q10 and FY10 Forecast and GAAP Reconciliation Unaudited (In millions) Low High Ridge Clearing Core Financing Processing Broadridge Free Cash Flow (Non-GAAP) : Activities Activities (b) Total Earnings (GAAP) - $
26 $
26 $
199 $ 214 $ Depreciation and amortization - 14 14 60 62 Stock-based compensation expense - 6 6 31 33 Other - (1) (1) 13 13 Subtotal - 45 45 303 322 Working capital changes - (14) (14) (15) (10) Securities clearing activities (a) (33) - (33) - - Long-term assets & liabilities changes - 1 1 (2) - Net cash flow provided by (used in) operating activities (33) 32 (1) 286 312 Cash Flows From Investing Activities Capital expenditures & intangibles - (4) (4) (51) (42) $ Free cash flow (33) $
28 $
(5) $
235 $ 270 $ Acquisitions - - - - - Freed-up Ridge Clearing capital (d) 180 200 Long-term debt repayment - - - - - Dividends - (10) (10) (67) (67) Other (4) 6 2 - - Stock repurchases net of options proceeds - (58) (58) (58) (58) Short-term (bank overdrafts) 22 - 22 - - Net change in cash and cash equivalents (15) (34) (49) 290 345 Cash and cash equivalents, at the beginning of year 109 172 281 172 172 Cash and cash equivalents, at the end of quarter 94 $
138 $
232 $ 462 $ 517 $ Three Months Ended FY10 Range (c) September 2009 Core Processing Activities Free Cash Flow $235-270M (a) Cash and securities segregated for regulatory purposes, securities deposited with clearing
organizations and securities receivables and securities payables (b) Core Processing Activities
are Broadridge Total excluding Ridge Clearing Financing Activities (c) Guidance does not
include effect of any future acquisitions, additional debt or share repurchases (d) Assumes third quarter close of Penson transaction Cash Flows From Other Investing and Financing Activities |
 27 Historical Free Cash Flow Non-GAAP to GAAP Reconciliation Reconciliation of Non-GAAP to GAAP Measures Free Cash Flow ($ in millions) (Unaudited) FY06 FY07 FY08 FY09 Actual Actual Actual Actual Net cash flow provided by operating activities (GAAP) 426 $ 161 $ 482 $ 359 $ Securities clearing activities (a) 159 (128) 146 77 Net cash flow provided by operating activities, excluding securities clearing activities 267 289 336 282 Capital expenditures & Intangibles (41) (38) (46) (30) Discontinued Operations (b) 22 - - - Free cash flow (b) 248 $ 251 $ 290 $ 252 $ (a) Cash and securities segregated for regulatory purposes, securities deposited with clearing
organizations and securities receivables and securities payables (b) FY06 excludes loss from
discontinued operations of $14M, net of income taxes and include proceeds from sale of businessess of $8M |
 28 Broadridge FY10 Guidance ($ in millions) FY09 FY10 Range FY09 FY10 Range Actual Low High Actual Low High $1,531 $1,715 $1,737 ICS $249 $292 $309 -3% 12% 13% Growth % / Margin % 16.3% 17.0% 17.8% $534 $504 $515 SPS $143 $107 $118 4% -6% -4% Growth % / Margin % 26.7% 21.2% 22.9% $101 $82 $84 COS ($9) ($19) ($16) 6% -19% -17% Growth % / Margin % -9.0% -22.6% -18.5% $2,166 $2,301 $2,336 Total Segments $382 $380 $412 -1% 6% 8% Growth % / Margin % 17.7% 16.5% 17.6% $1 $0 $0 Other ($28) ($23) ($34) ($18) ($30) ($20) FX * ($2) ($10) ($7) $2,149 $2,271 $2,317 Total EBIT Before 1-Times $352 $348 $371 -3% 6% 8% Growth % / Margin % 16.4% 15.3% 16.0% One-Time Items $8 ($32) ($32) Total EBIT $361 $316 $339 Margin % 16.8% 13.9% 14.7% Interest & Other ($14) ($11) ($10) FY10 Range Total EBT $346 $306 $330 Segments Low High Margin % 16.1% 13.5% 14.2% ICS $115 $125 SPS / COS $70 $80 Income Taxes ($123) ($107) ($116) Total $185 $205 Tax Rate 35.5% 34.9% 35.1% Total Net Earnings $223 $199 $214 Margin % 10.4% 8.8% 9.2% Diluted Shares 142 141 141 Diluted EPS (GAAP) $1.58 $1.42 $1.52 Growth % 16% -10% -4% Diluted EPS Before 1-Times (Non-GAAP) $1.51 $1.50 $1.60 Growth % 6% -1% 6% Diluted EPS Before Penson/MSSB/Share Repurchases $1.54 $1.64 EPS Reconciliation Low High Diluted EPS Before Penson/MSSB/Share Repurchases $1.54 $1.64 Penson/MSSB Operational Losses ($0.07) ($0.07) Share Repurchase Impact $0.03 $0.03 Diluted EPS Before 1-Times (Non-GAAP) $1.50 $1.60 Penson Transaction Loss ($0.14) ($0.14) Tax Restructuring (International) $0.06 $0.06 Diluted EPS (GAAP) - Revised Forecast $1.42 $1.52 Revenue EBIT Closed Sales * includes impact of FX P&L Margin and FX Transaction Activity
|
 29 Closed Sales-To-Revenue General Conversion Time Frames Closed Sales-to-Revenue Conversion General Time Frames Investor Communication Solutions Registered Mutual Fund Sales 1 to 6 Months Registered Equity Sales Issuer's Next Annual Meeting Transaction Reporting (1) and Fulfillment Sales 3 to 9 Months Global Proxy Sales 1 to 6 Months Securities Processing Solutions Small Broker-Dealer Firms 3 to 6 Months Mid-sized Broker-Dealer Firms 6 to 9 Months Large Broker-Dealer Firms 9 to18+ Months Clearing and Outsourcing Solutions Clearing Small Broker-Dealer Firms 3 Months Mid-sized Broker-Dealer Firms 3 to 6 Months Outsourcing Mid-sized Broker-Dealer Firms 6 to 9 Months Large Broker-Dealer Firms 9 to18+ Months (1) Transaction Reporting sales are comprised primarily of production of statements and confirms
Segment Sales Categories Closed Sales-To-Revenue Overview |
 30 (1) These items represent fee revenues only and exclude distribution revenues which are set out separately.
The historical numbers have been adjusted to exclude
distribution revenues (2) Other includes pieces of 18.6M for FY07, 12.6M for FY08 and 14.4M for
FY09 primarily related to corporate actions Management believes that certain
Non-GAAP (generally accepted accounting principles) measures, when presented in conjunction
with comparable GAAP measures provide investors a more complete understanding of Broadridge’s underlying operational results. These Non-GAAP measures are indicators that management uses to provide
additional meaningful comparisons between current results and prior reported results, and as a
basis for planning and forecasting for future periods. These measures should be
considered in addition to and not a substitute for the measures of financial performance
prepared in accordance with GAAP. |
 31 Broadridge SPS Key Statistics RC= Recurring ED= Event-Driven FY07 FY08 FY09 Type Equity Transaction-Based Equity Trades 262.9 $ 261.5 $ 260.4 $ RC Trade Volume (Average Trades per Day in '000) 1,454 1,559 1,648 Non-Transaction Other Equity Services 172.9 $ 177.2 $ 191.7 $ RC Total Equity 435.8 $ 438.7 $ 452.1 $ Fixed Income Transaction-Based Fixed Income Trades 45.2 $ 51.1 $ 52.3 $ RC Trade Volume (Average Trades per Day in ‘000) 195 237 294 Non-Transaction Other Fixed Income Services 22.9 $ 24.6 $ 29.4 $ RC Total Fixed Income 68.1 $ 75.7 $ 81.7 $ Total Net Revenue - Non-GAAP 503.9 $ 514.4 $ 533.8 $ Transfer price adjustment 6.0 - - Total Net Revenue as reported - GAAP 509.9 $ 514.4 $ 533.8 $ (2) As of 2Q09, Equity Trade volume excluded trades per day for Lehman Brothers, Inc. to reflect the loss of the Lehman business and to provide a better historical comparison Management believes that certain Non-GAAP (generally accepted accounting principles)
measures, when presented in conjunction with comparable GAAP measures provide investors a more complete understanding of Broadridge’s underlying operational results. These Non-GAAP measures are indicators that management uses to provide additional
meaningful comparisons between current results and prior reported results,
and as a basis for planning and forecasting for future periods. These measures should be considered in addition to and not a substitute for the measures of financial performance
prepared in accordance with GAAP. (1) As of 1Q09, Equity Trade volume
adjusted to exclude trades processed under fixed priced contracts. Management believes excluding this trade volume presents a stronger correlation between trade volume and
Equity Trade revenue (1) (2) |
 32 Broadridge COS Key Statistics RC= Recurring ED= Event-Driven FY07 FY08 FY09 Type Clearing Net Interest Income (1) 30.9 $ 27.1 $ 13.0 $ RC Average Margin Debits 687.7 $ 898.3 $ 638.0 $ Clearing Fees/Other 39.4 $ 49.6 $ 63.3 $ RC Trade Volume (Average Trades per Day in '000) 33.6 47.5 63.8 Outsourcing Outsourcing 23.5 $ 19.1 $ 25.1 $ RC # of Clients 4 5 6 Total Net Revenue - Non-GAAP 93.8 $ 95.8 $ 101.4 $ Transfer price adjustment - - - Total Net Revenue as reported - GAAP 93.8 $ 95.8 $ 101.4 $ (1) Referred to as "Margin Revenues" in Key Statistics prior to 3Q08 Management believes that certain Non-GAAP (generally accepted accounting
principles) measures, when presented in conjunction with comparable GAAP measures provide investors a more complete understanding of Broadridge’s underlying operational results. These Non-GAAP measures are indicators that management uses to provide additional
meaningful comparisons between current results and prior reported results,
and as a basis for planning and forecasting for future periods. These measures should be considered in addition to and not a substitute for the measures of financial
performance prepared in accordance with GAAP. |
 33 Broadridge ICS Definitions |