EX-99.2 3 dex992.htm EARNINGS WEBCAST & CONFERENCE CALL PRESENTATION DATED MAY 8, 2008. Earnings Webcast & Conference Call Presentation dated May 8, 2008.
May 8, 2008
Earnings Webcast & Conference Call
Presentation
Third Quarter Fiscal Year 2008
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 2008
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, 2007
(the
“2007
Annual
Report”).
Any
forward-looking
statements
are
qualified
in
their
entirety
by
reference
to
the
factors
discussed
in
the
2007
Annual
Report.
These
risks
include:
Broadridge’s
success
in
retaining and selling additional services to its existing clients and 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 clearing agencies and broker-dealers;
declines in trading volume, market prices, liquidity of securities markets or proprietary trading activity;
Broadridge’s ability to continue to obtain data center services from its former parent company,
Automatic Data Processing, Inc. (“ADP”); Broadridge’s debt levels and financing costs, including the
impact of its credit ratings on such costs; the ability of Broadridge to develop brand recognition and its
reputation with its clients and employees following its separation from ADP in March 2007; the
incurrence of additional costs attributable to Broadridge’s operations as a stand-alone public company;
changes in technology; availability of skilled technical employees; the impact of new acquisitions and
divestitures; competitive conditions; and overall market and economic conditions. Broadridge disclaims
any obligation to update any forward-looking statements, whether as a result of new information, future
events or otherwise.


2
Today’s Agenda
Opening Remarks
Rich Daly, CEO
3
rd
Quarter & YTD FY 2008 Results
Dan Sheldon, CFO
Fiscal Year 2008 Guidance Update
Rich Daly, CEO
Summary
Rich Daly, CEO
Q&A
Rich Daly, CEO
Dan Sheldon, CFO
Marvin Sims, VP Investor Relations
Closing Remarks
Rich Daly, CEO
Note:
For a reconciliation of Non-GAAP to GAAP measures used in this presentation, please see the attached Appendix


3
Opening Remarks  –
Outline
Key Topics:
Financial results for the third quarter
Increasing our full year EPS guidance
Revenues and earnings for quarter are directly in line with
expectations
As anticipated year-over-year quarterly earnings and
margins are down as a result of previously announced
large client losses in fiscal year 2007 and investments
Closed
sales
are
ahead
of
fiscal
year
2008
plan
and
last
year
We expect our sales pipeline to remain very strong
Broadridge is not in control of the markets we serve, but we
are definitely in control of our business


4
Opening Remarks  –
Outline
Key Topics:
Investor Communication business overview:
Investor Communication Solutions our largest segment,
historically
responsible
for
over
70%
of
our
annual
revenues and earnings, is growing
Business is extending market leadership position
Grew over previously announced fiscal year 2007 client
loss
The recurring core business is performing well
Event-driven revenue in line with “flat”
expectations
Sales have been very strong this year
Notice and Access providing opportunities


5
Opening Remarks  –
Outline
Key Topics:
Securities Processing business overview:
Business
is
performing
better
than
anticipated
for
the
year
given
1
half trades per day growth
Current market conditions present both opportunities and challenges
Successful
implementation
consolidating
RBC’s
retail
and
institutional securities processing platforms
Clearing and Outsourcing business overview:
Over the next 3 years, we’re expecting Clearing and Outsourcing to
double its size
Operating at expected levels except for impact from interest rate
reduction
Added 3 new outsourcing client sales for a total of 7 year-to-date
st


6
Broadridge  Results –
3Q  & YTD FY 2008
Q3
-
Revenue
1%
to
$499M
(without
distribution
fee
1%)
YTD
-
Revenue
4%
to
$1,415M
(without
distribution
fee
6%)
Q3 Fiscal 2008 revenue growth building blocks:
Sales
contributed
3%
-
(YTD
=
2%)
Losses
reduced
growth
by
5%
-
(YTD
=
5%)
Internal
growth
contributed
2%
-
(YTD
=
4%)
Other/FX
contributed
1%
-
(YTD
=
3%)
Q3
-
Pre-tax
Earnings
15%
to
$60M,
and
Pre-tax
Margin
of
12.0%,
220
bps
-
Non-GAAP
(1)
31%
to
$48M
and
Pre-tax
Margin
of
9.7%,
450
bps
-
GAAP
YTD
-
Pre-tax
Earnings
16%
to
$190M,
and
Pre-tax
Margin
13.4%,
140
bps
-
Non-GAAP
(1)
5%
to
$155M
and
Pre-tax
Margin
of
10.9%
100
bps
-
GAAP
Q3
-
Diluted
Earnings
Per
Share
13%
to
$0.26
Non-GAAP
(1)
30% to $0.21 –
GAAP
Slightly more shares outstanding
YTD
-
Diluted
Earnings
Per
Share
14%
to
$0.82
Non-GAAP
(1)
6% to $0.67 –
GAAP
Note:
(1)
-
Non-GAAP excludes Spin-off expense adjustments for one-time transition expenses & interest on new debt


7
Segments Results –
3Q & YTD FY 2008
Investor Communication Solutions
Fee Revenues
Recurring Fee Revenues
Net new business YTD 
$12M (sales $9M and losses -$21M)
Notice and Access not material impact YTD, positive impact in Q4
Internal Growth
$20M YTD
o
Transaction Reporting (statements/confirms) & Fulfillment up over 10%
o
Mutual Fund Interims stock record growth up 9%
o
Equity
Proxy
stock
record
growth
1%,
forecasted
positive
Q4
Event-driven Fee Revenues positively impacted by Mutual Fund Registered Proxy
offset by shrinkage in Equity Proxy Contest and M&A activity
Q3 Margins of 9.4%
20 bps due to operating leverage
YTD Margins of 9.5%
180 bps, due to operating leverage, a favorable
mix of distribution fees and one-time items -
Non-GAAP
3Q
3Q YTD
($ in millions)
Actual
Actual
Low
High
Revenues
$343
$945
$1,566
$1,594
Growth Rate
1%
1%
1%
3%
Fee Revenues
$157
$446
$751
$766
Growth Rate
1%
2%
3%
5%
Recurring (RC)
3%
2%
5%
5%
Event-driven (ED)
-2%
0%
-2%
0%
Distribution Revenue Growth Rate
1%
0%
-1%
1%
FY08
Range


8
8
Segments Results –
3Q & YTD FY 2008
Securities Processing Solutions
Q3 Revenues
4% to $129M
Net
new
business
contributed
-4%
(Sales
of
3%
offset
by
losses
of
7%
impact
of
previously
announced
fiscal year 2007 client loss)
Internal Growth contributed .4%
Equity Trades Per Day (TPD)
4% to slightly over 2.5M TPD
Fixed income TPD –
20% to 248K TPD
YTD Revenues
2% to $381M -
Non-GAAP
Net new business contributed -4% (Sales of 3% offset by losses of 7%)
Internal Growth contributed 6%
Equity TPD
19%
to 2.5M TPD (Q1
37%, Q2
19%)
Fixed Income TPD
19% to 226K TPD (Q1
21%, Q2
16%)
Q3
Margins
of
27.9%
520
bps
Decline driven by previously announced client loss and higher investments
YTD Margins of 28.8%
40 bps -
Non-GAAP
Revenue growth offset by incremental investments


9
Segments Results –
3Q  & YTD FY 2008
Clearing and Outsourcing Solutions
Q3 Revenues
1% to $23M
Sales contributed 12% to growth
Previously announced client loss reduced growth by 12%
Internal
growth
contributed
1%
(TPD
up
and
net
interest
income
down)
YTD Revenues
6% to $72M, primarily from Sales growth of 13%
Q3 Operating losses at ($0.5M); improvement of $0.6M over prior year
YTD
Operating
losses
reduced
by
35%
from
($6.3M)
to
($4.1M)
Non-GAAP
Other
Q3 Revenues of $0.2M generated from interest
YTD Revenues of $8M offset expenses
Q3 Net Other Expense of $21M is made up of:
Interest expense ($7M) and one-time transition expenses of ($4M)
Investments and Corporate expenses of ($10M)
YTD Net Other Expense of $44M
FX
Q3 Revenues increased $9M and margins increased by $4M due to weakening
of U.S. dollar
YTD Revenues increased $19M and margins increased by $8M


10
Broadridge Cash Flow  –
3Q YTD FY 2008
Broadridge
Financial
Solutions,
Inc.
Calculation of Free Cash Flow
-
Non-GAAP
Unaudited
(In millions)
Clearing &
Outsourcing
All Other
Broadridge
Calculation of Free Cash Flow
Segment
Segments
Total
Earnings
(3)
$                  
*
97
$            
94
$              
Depreciation and amortization
3
35
38
Deferred taxes
-
(15)
(15)
Stock-based compensation expense
-
24
24
Other
-
5
5
Subtotal
-
146
146
Working capital changes
-
66
66
Securities Clearing Activities
251
-
251
Long-term assets & liabilities changes
-
(3)
(3)
Net cash flow provided by operating activities
251
209
460
Less:
Capital expenditures
-
(28)
(28)
Intangibles
-
(4)
(4)
Free cash flow
251
$              
177
$          
428
$            
Additional Information:
Long-term debt payment
-
$                   
(135)
$            
(135)
$              
Dividend
-
$                   
(25)
$             
(25)
$                 
Acquisitions
-
$                   
(6)
$                
(6)
$                  
Short-term borrowings
(94)
$                   
-
$             
(94)
$                 
Net Change in Cash and Cash Equivalents
164
$                  
17
$              
181
$                
Note:
For a reconciliation of Non-GAAP to GAAP measures please see the attached Appendix
* Segment Earnings before income taxes
Nine Months Ended
March 31, 2008
(Non-GAAP):


11
Fiscal Year 2008  Guidance & Summary
Increased our full year EPS guidance range:
EPS
before
one-time
transition
expenses
of
$1.30
-
$1.40
to
a
new
range
of
$1.35
-
$1.45
per share (Non-GAAP)
EPS
after
one-time
transition
expenses
of
$1.25
-
$1.35
to
a
new
range
of
$1.29
-
$1.39
per
share (GAAP)
The fourth quarter historically represents approximately 50% of
our annual net earnings
Q3 results in line with expectations despite the difficult times
in
the markets we serve
Investor Communication Solutions segment continues to
generate recurring revenue growth in core business
Expanded our strategic efforts and resources
Free cash flow remains very strong


12
Q&A
There are no slides during this portion of the
presentation


13
Closing Comments
There are no slides during this portion of the
presentation


14
Appendix
Appendix


15
Broadridge -
Fiscal Year 2008 Financial Guidance
Revenue growth of 2% -
4%
Diluted Earnings Per Share
Before one-time transition expenses of $1.35 -
$1.45 –
Non-GAAP
After one-time transition expenses of $1.29 -
$1.39 –
GAAP
Earnings before interest and taxes margins (excluding one-time
transition
expenses)
of
15.8%
-
16.5%
Interest
expense
of
$32M
-
$35M
Effective Tax Rate of approximately 39%
One-time transition expenses of approximately $14M (after tax $8M)
Strong cash flows with intent to pay down debt, pay dividends,
acquisitions and no contemplated share buybacks in fiscal year 2008
Diluted weighted-average shares of approximately 141 million


16
Segments –
Fiscal Year 2008 Financial Guidance
Investor Communication
:
Revenues
1%
-
3%
Margins 15.5% -
16.4%
Securities Processing
:
Revenues flat to 1%
Margins 25.8%
-
26.8%
Clearing and Outsourcing:
Revenues 3% -
4%
Operating losses at $4M -
$5M


17
GAAP to Non-GAAP Earnings Reconciliation
Note:
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.
Broadridge
Financial Solutions, Inc.
Reconciliation of GAAP to Non-GAAP Measures
Earnings, Margins and Per Share Reconcilation
(In millions except per share and margin data)
(unaudited)
Three months ended March 31, 2008
Three months ended March 31, 2007
Earnings
before
income taxes
Pretax
margins
Net
earnings
Net
earnings
per share
Earnings
before
income taxes
Pretax
margins
Net
earnings
Net
earnings
per share
GAAP basis measures
48.4
$          
9.7%
29.5
$    
0.21
$    
69.9
$          
14.2%
41.9
$    
0.30
$    
Non-GAAP adjustments:
One-time transition expenses
4.2
0.8%
2.5
0.02
-
-
-
-
Interest on new debt & other
7.3
1.5%
4.5
0.03
0.2
-
0.1
-
Total Non-GAAP adjustments
11.5
2.3%
7.0
0.05
0.2
-
0.1
-
Non-GAAP measures
59.9
$          
12.0%
36.5
$    
0.26
$    
70.1
$          
14.2%
42.0
$    
0.30
$    
Nine months ended March 31, 2008
Nine months ended March 31, 2007
Earnings
before
income taxes
Pretax
margins
Net
earnings
Net
earnings
per share
Earnings
before
income taxes
Pretax
margins
Net
earnings
Net
earnings
per share
GAAP basis measures
154.8
$        
10.9%
94.4
$    
0.67
$    
162.3
$        
11.9%
98.4
$    
0.71
$    
Non-GAAP adjustments:
One-time transition expenses
9.8
0.7%
5.9
0.04
-
-
-
-
Interest on new debt & other
25.7
1.8%
15.7
0.11
1.8
0.1%
1.1
0.01
Total Non-GAAP adjustments
35.5
2.5%
21.6
0.15
1.8
0.1%
1.1
0.01
Non-GAAP measures
190.3
$        
13.4%
116.0
$  
0.82
$    
164.1
$        
12.0%
99.5
$    
0.72
$    


18
GAAP to Non-GAAP Free Cash Flow Reconciliation
Note:
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.
Broadridge Financial Solutions, Inc.
Calculation of Free Cash Flow - Non-GAAP
(In millions)
(Unaudited)
Net Cash Flow
Less: Capital
Provided by (Used in)
Expenditures
Free
Operating Activities
and Intangibles
Cash Flow
Nine Months ended March 31, 2008
$460
($32)
$428
Free cash flows is defined as net cash flow provided by (used in) operating activities, less capital
expenditures and intangibles.


19
Intersegment Transfer Pricing Reconciliation
2008
2007
2008
2007
Investor
Communication
Solutions
Net revenue as reported
342.9
$     
339.7
$     
945.2
$     
934.8
$     
Transfer pricing adjustment
-
-
-
(2.0)
Net revenue as Adjusted -
Non-GAAP
342.9
$     
339.7
$     
945.2
$     
932.8
$     
EBIT as reported
32.4
$       
31.3
$       
89.4
$       
72.6
$       
Transfer pricing adjustment
-
-
-
(0.7)
EBIT as Adjusted -
Non-GAAP
32.4
$       
31.3
$       
89.4
$       
71.9
$       
Margin % as reported
9.4%
9.2%
9.5%
7.8%
Margin % as adjusted -
Non-GAAP
9.4%
9.2%
9.5%
7.7%
Securities
Processing
Solutions
Net revenue as reported
129.0
$     
134.8
$     
381.0
$     
379.0
$     
Transfer pricing adjustment
-
-
-
(6.0)
Net revenue as Adjusted -
Non-GAAP
129.0
$     
134.8
$     
381.0
$     
373.0
$     
EBIT as reported
36.0
$       
44.6
$       
109.8
$     
113.2
$     
Transfer pricing adjustment
-
-
-
(4.3)
EBIT as Adjusted -
Non GAAP
36.0
$       
44.6
$       
109.8
$     
108.9
$     
Margin % as reported
27.9%
33.1%
28.8%
29.9%
Margin % as adjusted -
Non-GAAP
27.9%
33.1%
28.8%
29.2%
Clearing
and
Outsourcing
Solutions
Net revenue as reported
22.9
$       
23.2
$       
72.3
$       
68.2
$       
Transfer pricing adjustment
-
-
-
-
Net revenue as Adjusted -
Non-GAAP
22.9
$       
23.2
$       
72.3
$       
68.2
$       
EBIT as reported
(0.5)
$        
(1.1)
$        
(4.1)
$        
(11.3)
$      
Transfer pricing adjustment
-
-
-
5.0
EBIT as Adjusted -
Non-GAAP
(0.5)
$        
(1.1)
$        
(4.1)
$        
(6.3)
$        
Margin % as reported
-2.2%
-4.7%
-5.7%
-16.6%
Margin % as adjusted -
Non-GAAP
-2.2%
-4.7%
-5.7%
-9.2%
Nine months ended
March 31,
Broadridge
Financial
Solutions,
Inc.
Intersegment Transfer Price Reconciliation
($ In millions except margin data)
(Unaudited)
Three months ended
March 31,


20
Use of Materials Contained Herein
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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.