©

2010 Broadridge

Financial Solutions, Inc.

Broadridge

and

the

Broadridge

logo

are

registered

trademarks

of

Broadridge

Financial

Solutions,

Inc.

August 12, 2010

Earnings Webcast & Conference Call

Fourth Quarter and

Fiscal Year 2010 

Broadridge

Financial Solutions, Inc.

Exhibit 99.2

1

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 2011 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, 2010 (the “2010 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 2010 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 and regulations affecting the

investor communication services provided by Broadridge; declines in participation and activity in the securities

markets; overall market and economic conditions and their impact on the securities markets; any material

breach of Broadridge security affecting its clients’ customer information; the failure of Broadridge’s outsourced

data center services provider to provide the anticipated levels of service; any significant slowdown or failure of

Broadridge’s systems or error in the performance of Broadridge’s services; Broadridge’s failure to keep pace

with changes in technology and demands of its clients; Broadridge’s ability to attract and retain key personnel;

the impact of new acquisitions and divestitures; and competitive conditions. Broadridge disclaims any

obligation to update any forward-looking statements, whether as a result of new information, future events or

otherwise. 

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.  

2

Today’s Agenda

Opening Remarks and Key Topics

Rich Daly, CEO

Fourth Quarter and Fiscal Year 2010

Dan Sheldon, CFO

Results and Fiscal Year 2011 Guidance

Summary and Closing Comments

Rich Daly, CEO

Q&A

Rich Daly, CEO

Dan Sheldon, CFO

Rick Rodick, VP Investor Relations

Closing Remarks

Rich Daly, CEO

3

Opening Remarks

Key Topics:

Financial performance

Key Accomplishments

Closed sales performance

Regulatory update

4

Financial Performance

Financial

performance

for

the

quarter

and

full

year

in

line

with

expectations

Record full-year closed sales were 26% higher than last year and client

revenue retention rate was 98%

Revenues for the year increased 7%

Increase primarily due to unplanned event-driven mutual fund (MF) proxy

revenues, new sales and revenue gains from acquisitions

Market-driven recurring revenue growth was challenging

•

Trade, equity stock record and statements volumes were all down

Full year Non-GAAP $1.56 and GAAP $1.62 diluted earnings per share from

continuing operations were at the mid-point of our guidance

Improvement compared to fiscal year 2009 primarily due to lower outstanding

shares

Repurchased

13.7M

shares

under

its

stock

repurchase

plans

during

fiscal

2010

Repurchased 7.1M shares in the fourth quarter

Repurchased an additional 2.5M shares since fiscal year end

The Board authorized the repurchase of an additional 10M shares on August 11,

2010

Increased the annual dividend 7% to $0.60 per share, subject to the discretion

of the Board of Directors

5

Key Accomplishments

Exited

the

clearing

business

by

selling

the

business

to

Penson

and

signing an 11-year operations outsourcing agreement with Penson

Freed-up

$240M in capital

Record closed sales of $175M

Does not include the annual $55M 11-year agreement with Penson

Signed a 7-year agreement to provide customer communication

services to Morgan Stanley Smith Barney (MSSB)

Signed information technology services and business alliance

agreements with IBM

Successfully entered the registered stock transfer agency business with

the acquisition of StockTrans, Inc.

Expanded our global product and geographic reach with the acquisition

of City Networks, Ltd

Recognized as being the #1 “Best Large Company to Work For in New

York State”

Ranked

#1

globally

for

brokerage

processing

services

by

Orbys

Black

Book of Outsourcing for the third consecutive year

6

Closed Sales Performance

Sales Performance Overview:

Closed sales of $175M grew 26% for the year,

while recurring fee sales increased 25% and

event-driven revenue sales increased 29%

•

Closed sales in Investor Communication

Solutions increased 37% to $135M due to

strong recurring fee sales activity.  Recurring fee

sales grew 43% to $79M, primarily due to the

MSSB transaction

•

Recurring fee sales in Securities Processing

Solutions were flat at $40M, with outsourcing

closed sales of $14M

The sales pipeline is strong and continues to

have good momentum

•

The sales process for the large deals can take

12-24 months

Fiscal Year 2011 closed sales plan of $160M

to $215M.  Achievement of the higher end of

the range will be dependent on the number of

large deals signed

Forecast

Range

High: $215

Closed Sales

(Fee Only, $ in millions)

Recurring (RC)      Event-Driven (ED)

CAGR* = 9%

RC = 7%

ED = 14%

$175

$145

$125

$112

$139

* CAGR from FY06-10

$92

$63

$82

$95

$119

$33

$49

$63

$43

$56

FY06

FY07

FY08

FY09

FY10

FY11

Low: $160

7

Regulatory Update

The Securities and Exchange Commission (SEC) issued its Concept Release on

the U.S. Proxy System on July 14, 2010

We welcome opportunities to create even greater levels of technology-driven efficiency

and participation in shareholder communications and proxy voting

We are in the process of reviewing the details of the Concept Release and are working

with interested parties in preparing formal comments

It is too early in the process for the Company to make a determination as to

whether there will be any modifications made to the current proxy system, and if

so, what impact, if any, this will have on Broadridge

Broadridge

is committed to implementing the enhancements to the proxy system

discussed in the Concept Release, including:

End-to-end confirmation

Client-directed voting

Investor-to-investor communications

We believe we are uniquely positioned to enable the SEC to effectively

implement

any

modifications

made

to

the

proxy

system

and

believe

there

are

opportunities to use technology to improve the efficiency and effectiveness of

investor communications

8

Broadridge Results and Forecast (Continuing Operations)

Exited Q4 FY10 with market-driven activity (equity trade volumes and stock record positions) flat but improved from earlier

quarters

FY11:  1

st

half expected to be down for revenues, margins and EPS from last year due to implementation of strategic

investments

and

MF proxy grow-overs

(see

below and details in Appendix page 25)

as well as a slow ramp up in trade volume  

and stock record positions

FY11:  2

nd

half expected to have revenue, margin and EPS growth due to increased contributions from closed sales and

market-driven activity as well as less impact from client losses

FY11:  Revenue growth of 1-4%, EBIT down to flat, while EPS (Non-GAAP) flat to up 6% due to repurchasing of shares

Forecast FY11

Forecast FY11

($ in millions, except for EPS)

1st Half

2nd Half

Revenue

EBIT

Revenue

EBIT

Total Strategic

$42

($9)

$33

($5)

(Penson, MSSB, IBM & City Networks)

MF Proxy

($105)

($42)

$0

$0

Grow-overs

($63)

($51)

$33

($5)

Impact on EPS

($0.24)

($0.02)

Revenue/Growth

EBIT/Growth

(Non-GAAP)

Margin/Growth

(Non-GAAP)

EPS

(Non-GAAP)

EPS

(GAAP)

4Q10:

$751M / +5%

$185M / (1)%

24.6% / (140) bps

$0.84

$0.84

FY10:

$2,209M / +7%

$352M / 0%

15.9% / (110) bps

$1.56

$1.62

FY11:

$2,237 to 2,304M/ +1 to +4%

$330 to 350M / (6) to 0%

14.8 to 15.2% / (110) to (70) bps

$1.55-1.65

$1.55-1.65

Total Strategic Impact

FY11 IBM ($5)-(10)M

FY12 IBM ($15)-(20)M offset by Penson & MSSB

FY13 IBM +$40-45M = $25M recurring annual

savings + FY12 one-time expenses

9

Revenue Drivers-

Historical and Forecast FY11 (Continuing Operations) 

Revenue growth FY09 (3%), FY10 7% and FY11 forecast of 1-4%

Event-driven mutual fund proxies contributed 4 points to revenue growth in FY10, but reversing in FY11 due to 2 large

jobs not recurring

Without

2

large

MF proxy jobs

would

have

been

FY10

of

3% and FY11 range of 5-8%

Sales to drive 3-4 points of growth and larger deals, which have longer conversion times, to benefit years beyond

FY11 (see appendix page 23 for more details on sales-to-revenue conversion timing)

Expect client revenue retention rate around 99% in FY11 and to date not aware of any new large client losses

Internal growth and event-driven without mutual fund proxies at low end of range is expected to be flat with some

recovery at high end of range

Margin growth highly dependent upon both internal growth and event-driven heading in same direction

Historical (FY05-FY10)

Actual

Forecast

CAGR

FY10

FY11

6%

Total Revenue Growth

7%

1-4%

4%

Sales

(Recurring)

4%

3-4%

(2)%

Client Losses

(2)%

(1)%

2%

Net New Business

2%

2-3%

3%

Internal Growth

(a)

(2)%

0-1%

1%

Event-Driven

(b)

4%

(4)-(3)%

0%

Distribution

1%

0%

0%

Acq/FX/Other

2%

3%

(a) Internal Growth includes SPS Equity & Fixed Income Trades, ICS Equity & Mutual Fund Stock Record

Growth, Transaction Reporting and Time & Materials

(b) Event-Driven includes ICS Proxy Contest/Specials, Mutual Fund Proxy and Marketing Communications Fulfillment

10

Segment Results & Forecast –

Investor Communication Solutions

FY10:

Revenue

at

the

low

end

of

our

guidance

range

due

to

lower

overall

proxy

related

activity.

Margins

slightly

below

low

end

of range

due

to

product and distribution mix

FY11:

Recurring Fees

Sales

-

3 points

of

growth

from

existing

proxy

and

transaction

reporting

and

new

products

from

the

Access

Data

and

StockTrans

acquisitions

Losses

-

client

retention

rate

remains

high

at

approximately

99%

with

no

significant client

losses

anticipated

Internal

Growth

-

flat

in

FY10

and

expected

to

partially

recover

with

contribution

to

total

revenue

ranging

from

0

to

1

point

Event-Driven Fees

Unprecedented

MF

proxy

activity

is

not

expected

to

repeat

and

will

adversely

impact

total

revenue

(4)

to

(3)

points

Higher

M&A

activity

and

improved

economic

conditions

should

lead

to

some

increase

in

other

event-driven

activities,

such

as

proxy contests and specials

Distribution

-

flat to slightly down due to product mix and additional Notice & Access adoption rates

Margin -

fee and total revenues are basically flat but expect 20 to 60 bps of margin expansion.  First half unfavorable due to lower MF

proxy activity

Revenue/Growth

EBIT/Growth (Non-GAAP)

Margin/Growth (Non-GAAP)

FY10:

$1,670M / +9%

$273M / + 10%

16.3% / 0 bps

FY11:

$1,641 to 1,682M/ (2) to +1%

$271 to 284M / (1) to +4%

16.5 to 16.9% / +20 to +60 bps

11

Segment

Results

&

Forecast

–

Securities

Processing

Solutions

(Continuing

Operations)

Revenue/Growth

EBIT/Growth (Non-GAAP)

Margin/Growth (Non-GAAP)

FY10:

$536M/ (4)%

$99M / (26)%

18.5% / (540) bps

FY11:

$589 to 615M / +10 to +15%

$80 to 96M / (19) to (3)%

13.5 to 15.6% / (500) to (290) bps

The

numbers

on

this

slide

represent

the

segment

results

for

FY10

and

forecast

for

FY11. 

Details of Trade, Non-trade and Operations Outsourcing are in the Key Stats Revenue page

in the Appendix (page 27)

12

12

Business Results & Forecast –

(Previous SPS Segment View)

FY10:

Q4 both revenue and margin were just over the high end of forecast range driven by one-time T&M. Trade volumes for both

equities and fixed income were flat, but improved over prior quarters

FY11:

Sales -

expected to drive 4-5% revenue growth of which 70% closed in FY10 with margins of +50%

Losses -

expected to decrease revenue by 4%, of which just over half is Bank of America Merrill Lynch (BAML) 

Internal Growth

Trade

volumes

–

low

end

of

range

flat

at

1.6M

trades/day.

High

end

+4%

by

year

end   

Price concessions at 2% down from 4% at peak of recession

Acquisition -

City Networks expected to contribute 4% to revenue growth or approximately $21M in new revenue

Margins

-

need

return

of

internal

growth

to

drive

margins

up

given

mix

of

sales

+50%

and

losses

+80%

Revenue/Growth

EBIT/Growth

(Non-GAAP)

Margin/Growth

(Non-GAAP)

FY10:

$511M / (4)%

$110M / (23)%

21.5% / (520) bps

FY11:

$525 to 545M / +3 to +7%

$95 to 110M / (14)% to flat

18.2 to 20.1% / (330) to (140) bps

13

Business Results & Forecast –

Outsourcing & Penson

(Continuing Operations)

Penson

closed in Q4, as expected

Penson

Phase 1 progressing as expected

Penson

Phase 2 and new sales accelerated 

generating >50% margins

On track to exit FY11 with run-rate of approximately $90M annualized revenue and EBIT at break-even

Revenue/Growth

Expenses

EBIT

(Non-GAAP )

FY10:

$25M / 0%

$36M

$(11)M

Penson

Phase 1

+$23M

$39M

$(16)M

Penson

Phase 2 & New Sales

+$17 to +22M

$6 to 9M

$11 to 13M

FY11:

$65 to 70M / +160 to +180%

$81 to 84M

$(16) to (14)M

14

Segment

Results

&

Forecast

–

Other

&

Foreign

Exchange

(FX)

FY11: 

Other Fees:

Primarily related to termination fees

Interest:

Essentially flat from prior year with outstanding debt remaining the same

FX:

Expect same EBT level as FY10.  Generally, if U.S. dollar strengthens or weakens 5%, the impact

will be approximately +/-$15M Revenues with +/-$5M EBT, primarily affected by Canadian dollar

Revenue

EBT

FY10: Other - Fees

$2M

$2M

- Interest Expense

$(10)M

- Corp. Expenses & Investments

$(28)M

FX - P&L

$1M

$4M

- Transaction Activity

$1M

FY11: Other - Fees

$0M

$0M

- Interest Expense

$(11)M

- Corp. Expenses & Investments

$(27) to (34)M

FX - P&L

$7M

$5M

- Transaction Activity

$0M

15

Broadridge -

FY11 Continuing Operations Financial Guidance Summary

Revenue growth in the range of 1-4%

Closed sales forecast for the year at $160-215M

Non-GAAP Earnings before interest and taxes margin of 14.8-15.2%

Diluted Earnings Per Share:

GAAP EPS (continuing operations) in the range of $1.55-1.65

GAAP EPS (including discontinued operations) in the range of $1.53-1.63

Diluted weighted-average outstanding shares in the range of 128-130M

Expected ending cash position of around $450M

Free cash flow in the range of approximately $170-220M

•

Includes increase of investment implementation cost of ~$45M (Penson/IBM)

•

Reversal

of

FY10

$30M

additional

contribution

to

working

capital

in

FY11

Guidance does not include effect of any future acquisitions, additional debt or share

repurchases in excess of repurchases needed to be within our 128-130M weighted-

average outstanding shares guidance

Guidance assumes around $75M in Mutual Fund proxy revenue but could be

significantly higher or lower based on our results of past two years

16

Summary

Revenue and earnings per share from continuing operations in line with expectations

Achieved revenue growth from unplanned event-driven mutual fund proxy activities

Market-driven revenue growth has struggled due to low volumes

Had the best strategic and sales execution since our spin-off from ADP

Signed

numerous

significant

strategic

deals

during

the

year

Some will have a negative impact on fiscal year 2011 earnings; however, we expect strong

upside in fiscal year 2012 and beyond

Strong

client

revenue

retention

rate of 98%

Well positioned to enable the SEC to accelerate the technological evolution of investor

communications

Continued commitment to use our strong cash flow to create shareholder value through:

Strategic acquisitions that create profitable revenue growth,

Opportunistic share repurchases, and

Maintaining a meaningful dividend yield

When

the

market

stabilizes,

as

it

always

has,

we

believe

Broadridge

is

well

positioned

to

sustainably raise its growth rate

17

Q&A

There are no slides during this portion of the

presentation

18

Closing Comments

There are no slides during this portion of the

presentation

19

Appendix

Appendix

20

Broadridge

4Q and FY 2010 from Continuing Operations

Revenue

($ in millions, except EPS)

Earnings

Revenue

($ in millions, except EPS)

Earnings

FY09

FY10

FY09

FY10

FY09

FY10

FY09

FY10

Q4

Q4

Q4

Q4

Full Year

Full Year

Full Year

Full Year

$587

$610

ICS

$173

$171

$1,531

$1,670

ICS

$249

$273

-7%

4%

Growth %  /  Margin % 

29.4%

28.0%

-3%

9%

Growth %  /  Margin % 

16.3%

16.3%

$137

$138

SPS

$28

$26

$559

$536

SPS

$134

$99

-

1%

Growth %  /  Margin % 

20.8%

18.7%

5%

-4%

Growth %  /  Margin % 

23.9%

18.5%

$724

$748

Total Segments

$201

$196

$2,090

$2,205

Total Segments

$383

$372

-

3%

Growth %  /  Margin % 

27.8%

26.2%

-1%

6%

Growth %  /  Margin % 

18.3%

16.9%

$0

$0

Other

($7)

($15)

$1

$2

Other

($29)

($25)

($8)

$2

FX

*

($7)

$4

($18)

$1

FX

*

($2)

$5

$716

$751

Total Broadridge

$186

$185

$2,073

$2,209

Total Broadridge

$352

$352

-

5%

Growth %  /  Margin % 

26.0%

24.6%

-3%

7%

Growth %  /  Margin % 

17.0%

15.9%

Interest & Other

($3)

($2)

(a)

($6)

($10)

Total EBT

$184

$183

Total EBT

$346

$342

Margin %

25.6%

24.3%

Margin %

16.7%

15.5%

Income Taxes

($68)

($66)

Income Taxes

($123)

($117)

Tax Rate

36.9%

36.4%

Tax Rate

(b)

35.5%

34.2%

Total Net Earnings

$116

$116

Total Net Earnings

$223

$225

Margin %

16.2%

15.5%

Margin %

10.8%

10.2%

Diluted Shares

142

138

Diluted Shares

142

139

Diluted EPS (GAAP)

$0.82

$0.84

Diluted EPS (GAAP)

$1.58

$1.62

Diluted EPS Before 1-Times (Non-GAAP)

$0.82

$0.84

Diluted EPS Before 1-Times (Non-GAAP)

(c)

$1.51

$1.56

*

Includes impact of FX P&L Margin and FX Transaction Activity

Interest & Other

(a) FY09 Interest & Other reflects the effect of the one-time gain from the purchase of the 6.125% Senior Notes of approximately $8M.

(b) FY09 Full Year Tax Rate of 35.5% is attributable to the FY08 portion of the approved certification for a state tax credit program of $4M. Excluding the one-time tax credit the FY09 Full Year Tax Rate would 

      be 36.6%.

  FY10 Full Year Tax Rate of 34.2% is attributable to the release of a valuation allowance on a deferred tax asset relating to tax loss  carryforwards of approximately $8M. Excluding the year-to-date benefit 

  the FY10 Full Year Tax Rate would be 36.5%

(c) FY10 Full Year Diluted EPS Before 1-Times (Non-GAAP) excludes the approximately $8M gain on purchase of $125M of Senior Notes (gain reflected in Interest & Other); $0.04 impact to EPS and the fiscal

  year 2008 portion of the approved certification for a state tax credit program gain reflected in Income Taxes); $0.03 impact to EPS FY10 Full Year Diluted EPS Before 1-Times (Non-GAAP)  excludes the

  release of a valuation allowance on a deferred tax asset relating to tax loss carryforwards of approximately $8M (gain reflected in Income Taxes). $0.06 impact to EPS.

21

Broadridge

FY11 Guidance from Continuing Operations

Revenue

($ in millions, except EPS)

Earnings

FY10

FY11 Range

FY10

FY11 Range

Actual

Low

High

Actual

Low

High

$1,670

$1,641

$1,682

ICS

$273

$271

$284

9%

-2%

1%

Growth %  /  Margin % 

16.3%

16.5%

16.9%

$536

$589

$615

SPS

$99

$80

$96

-4%

10%

15%

Growth %  /  Margin % 

18.5%

13.5%

15.6%

$2,205

$2,230

$2,297

Total Segments

$372

$351

$380

6%

1%

4%

Growth %  /  Margin % 

16.9%

15.7%

16.5%

$2

$0

$0

Other

($25)

($27)

($34)

$1

$7

$7

FX 

*

$5

$5

$5

$2,209

$2,237

$2,304

Total Broadridge

$352

$330

$350

7%

1%

4%

Growth %  /  Margin % 

15.9%

14.8%

15.2%

Interest & Other

($10)

($11)

($11)

Total EBT

$342

$319

$339

FY11 Range

Margin %

15.5%

14.3%

14.7%

Segments

Low

High

ICS

$85

$115

Income Taxes

($117)

($118)

($127)

SPS

$75

$100

Tax Rate (a)

34.2%

37.0%

37.5%

Total

$160

$215

Total Net Earnings

$225

$201

$212

Margin %

10.2%

9.0%

9.2%

Diluted Shares

139

130

128

Diluted EPS (GAAP)

$1.62

$1.55

$1.65

Diluted EPS Before 1-Times (Non-GAAP) (b)

$1.56

$1.55

$1.65

* Includes impact of FX P&L Margin and FX Transaction Activity

(a)

FY10

Full

Year

Tax

Rate

of

34.2%

is

attributable

to

the

release

of

a

valuation

allowance

on

a

deferred

tax

asset

relating

to

tax

loss

carryforwards

of

approximately

$8M.

Excluding the year-to-date benefit the FY10 Full Year Tax Rate would be 36.5%

(b) FY10 Full Year Diluted EPS Before 1-Times (Non-GAAP)  excludes the release of a valuation allowance on a deferred tax asset relating to tax loss carryforwards

of

approximately

$8M

(gain

reflected

in

Income

Taxes).

$0.06

impact

to

EPS.

Closed Sales

Note:

Guidance does not include effect of any future acquistions, additional debt or share repurchases in excess of the repurchases needed to be within our 128 million to 130 million

weighted-average

outstanding shares guidance.

22

Cash Flow –

FY10 Results and FY11 Forecast

Unaudited

(In millions)

FY10

Low

High

Free Cash Flow

(Non-GAAP)

:

Net earnings from continuing operations per GAAP

225

$                  

201

$             

212

$             

Depreciation and amortization (includes other LT assets)

57

65

75

Stock-based compensation expense

27

30

30

Other

4

(5)

5

Subtotal

313

291

322

Working capital changes

59

(30)

(25)

Long-term assets & liabilities changes

6

(30)

(20)

Net cash flow provided by continuing operating activities

378

231

277

Cash Flows From Investing Activities

IBM / ITO data center investment  

-

(20)

(15)

Capital expenditures & purchased of intangibles

(53)

(45)

(40)

Free cash flow

325

$                  

166

$             

222

$             

Cash

Flows

From

Other

Investing

and

Financing

Activities

Acquisitions

(35)

-

-

Clearing capital freed-up

75

-

-

Clearing capital to be freed-up

165

-

-

Stock repurchases net of options proceeds

(212)

(71)

(121)

Long-term debt repayment

-

-

-

Dividends paid

(67)

(76)

(76)

Other (FY10 Disc Ops)

(11)

9

9

Net change in cash and cash equivalents

240

28

34

Cash and cash equivalents, at the beginning of year

173

413

413

Cash and cash equivalents, at the end of period

413

$                  

441

$             

447

$             

FY11 Range

(a)

Freed

-up Capital $240M

(a) Guidance does not include effect of any future acquisitions, additional debt or share repurchases in excess of the repurchases needed to be within our 

     128 million to 130 million weighted-average outstanding shares guidance.

23

Closed Sales to Revenue Contribution

Closed Sales Stats:

Recurring

•

Both ICS and SPS trending toward longer

revenue recognition cycle

•

Larger strategic deal could take 12-24 months

to convert

Event-Driven

•

Majority usually recognized during the year the

deal closed

•

Sales are less predictable dependent on size of

the client

Revenue contribution could be +/-5% each year

depending on the complexity of the conversion

($ in millions)

Recurring

ICS

~ Revenue Contribution Year 1-3

SPS

~ Revenue Contribution Year 1-3

Event-Driven

~ Revenue Contribution Year 1-3

Total Closed Sales

~ Revenue Contribution Year 1-3

Forecast

FY09

FY10

FY11

$55

$80

$35-50

55%

35%

10%

50%

40%

10%

35%

40%

25%

$40

$40

$75-100

25%

50%

25%

10%

50%

40%

5%

45%

50%

$45

$55

$50-65

70%

10%

20%

80%

10%

10%

60%

20%

20%

$140

$175

$160-215

50%

30%

20%

50%

30%

20%

30%

40%

30%

24

Reconciliation of Non-GAAP to GAAP Measures

EBIT Reconciliation

4Q09

4Q10

FY09

FY10

FY11 Range (a)

($ in millions)

Actual

Actual

Actual

Actual

Low

High

EBIT (Non-GAAP)*

$186

$185

$352

$352

$330

$350

Margin %

26.0%

24.6%

17.0%

17.0%

14.8%

15.2%

Interest & Other

($3)

($2)

($6)

($0)

($11)

($11)

Total EBT (GAAP)

$184

$183

$346

$342

$319

$339

Margin %

25.6%

24.3%

16.7%

15.5%

16.7%

15.5%

EPS Reconciliation

Low

High

Diluted EPS from continuing operations (GAAP)

$0.82

$0.84

$1.58

$1.62

$1.55

$1.65

One-time recognition of a deferred tax asset

($0.06)

Diluted EPS before One-Times (Non-GAAP)

$0.82

$0.84

$1.51

$1.56

$1.55

$1.65

*   Includes impact of FX Transaction Activity

Free Cash Flow Reconciliation

($ in millions)

FY10

Low

High

Net earnings from continuing operations (GAAP)

225

$                  

201

$             

212

$             

Depreciation and amortization (includes other LT assets)

57

65

75

Stock-based compensation expense

27

30

30

Other

4

(5)

5

Subtotal

313

291

322

Working capital changes

59

(30)

(25)

Long-term assets & liabilities changes

6

(30)

(20)

Net cash flow provided by continuing operating activities

378

231

277

Cash Flows From Investing Activities

IBM / ITO data center investment  

-

(20)

(15)

Capital expenditures & purchased of intangibles

(53)

(45)

(40)

Free cash flow (Non-GAAP)

325

$                  

166

$             

222

$             

FY11 Range

One-times: Bond gain and State tax credit

-

-

($0.07)

-

-

(a) Guidance does not include the effect of any future acquisitions, additional debt or share repurchases in excess of the repurchases needed to be within our  

128 million to 130 million weighted-average outstanding shares guidance.

-

-

-

-

-

-

25

FY11 Grow-over

MSSB and Penson

are expected to be

accretive in FY12 and FY13 driven by

revenue growth and scale in the

business

IBM ITO–

planning on range of $5-

10M

hitting

primarily

in

3

&

4

quarter. Including FY11, there will be

approximately $25M total expense

over two years.  IBM ITO is expected

to result in approximately $25M

annual savings beginning FY13 over

the next 10 years

City Networks Acquisition -

$21M

Revenue and EBIT ($2M) in the first

year due to the amortization of

intangibles

and

1

year

deferred

revenue GAAP accounting.  No

negative impact to cash flow FY11

th

st

($ in millions, except for EPS)

Forecast

FY11

Strategic

Revenue

EBIT

Penson

$35

($6)

~ Forecast Q1/2/3/4 Distribution

$6/9/9/11

$(5)

/

(2)

/

(1)

/2

MSSB

$19

$2

~ Forecast Q1/2/3/4 Distribution

$10/5/3/1

$

(2)/2/2/0

IBM

($8)

~ Forecast Q1/2/3/4 Distribution

$0/

(2)/

(3)/

(3)

City

Networks

$21

($2)

~ Forecast Q1/2/3/4 Distribution

$6/6/5/4

$0/0/

(1)/

(1)

1-time

MF Proxy

($105)

($42)

~ Forecast Q1/2/3/4 Distribution

$(11)/

(94)/0/ 0

$(4)/

(38)/0

/0

BAML*

($13)

($13)

~ Forecast Q1/2/3/4 Distribution

$

(5)/

(3)/

(3)/

(2)

$

(5)/

(3)/

(3)/

(2)

Total Grow-overs

($43)

($69)

~ Forecast Q1/2/3/4 Distribution

$6/

(77)/14/14

$

(16)/

(43)/

(6)

/

(4)

Impact on EPS

($0.33)

~ Forecast Q1/2/3/4 Distribution

$(.08)

/

(.20)

/

(.03)

/

(.02)

* Bank of America Merrill Lynch client loss