 Broadridge Financial Solutions, Inc. May 2010 Investor Presentation 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 2010 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; the failure of our outsourced data center services provider to provide the anticipated levels of service; 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; 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. 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 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. |
 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 and the Broadridge logo are registered trademarks of Broadridge Financial Solutions, Inc. Ridge is a trademark of Broadridge Financial Solutions, Inc. © 2010 Broadridge Financial Solutions, Inc. |
 4 Agenda Broadridge Overview and Summary Business Overview Business Expansion Strategy Overview Financial Overview Conclusion |
 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 (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 excess cash to shareholders |
 6 $252 Forecast $290 $251 $248 Broadridge: Free Cash Flow & Capital Allocation Note: Free Cash Flow excludes financing activities in the Clearing and Outsourcing Solutions segment •Doubled annual dividend from $0.28 to $0.56 per share for FY10, or approximately 35% payout of FY09 GAAP net earnings •Authorized repurchase of up to 10 million shares, or approximately 7% of the shares outstanding •Strategic acquisitions to leverage the Broadridge brand and distribution channels Strong predictable free cash flow allows for flexible capital allocation options (1) Free cash flow is a Non-GAAP financial measure and is defined as net cash flow provided by operating activities excluding Ridge Clearing financing activities, less capital expenditures and intangibles. A reconciliation to the nearest GAAP numbers are provided in the Appendix. FY06 FY07 FY08 FY09 FY10 Free Cash Flow (Non-GAAP) (1) ($ in millions) High: $270 Low: $235 Dividends Stock Repurchases Acquisitions |
 7 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 clients 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 |
 8 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 and operations outsourcing solutions Processing Reporting Statements ...Broadridge touches investors... |
 9 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 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 Securities Processing Solutions Indispensable Provider for Mission Critical Processing Processing Fees (Trades Per Day) # of Accounts |
 10 Business is Resilient in Changing Markets Our revenue growth has been resilient through various economic and market cycles Stock Market Rebounds Decimalization of Trades Internet Bubble Impact Financial Crisis Note: Fiscal year is based on June 30 year end th |
 11 Revenue Growth Drivers Low double-digit revenue growth in robust markets and flat to slightly negative growth in severe down markets. Historically, growth from Sales is consistent in all markets cycles. Average historical growth of 5%, which included two severe down market cycles (1) In high growth economic cycles revenue growth averages 10- 12% and flat to negative 3% in severe down markets Historical sales growth component consistent in all market cycles ICS sales expected to be driven by market share gains in transaction reporting and registered proxy SPS sales expected to be driven by our unique Operations Outsourcing offering ICS internal growth is driven by stock record growth for equities and mutual funds and SPS is driven by trades per day (TPD), which is somewhat offset by price concessions Event-driven revenue activity declines in severe down markets and rebounds to new highs in robust markets. Last trough to peak cycle had 20% CAGR (FY03-FY07) Mutual Fund Proxy is the most volatile component of event- driven revenue activity FY02 - FY09 (%) Average Revenue Growth From: + Acquisitions 1% = Total Revenue Growth 5% = Net New Business 1% + Internal Growth (2) 2% + Event-Driven 1% Sales 4% - Losses (3%) (1) Average annual growth rate over 7 years, which contemplates up and down economic cycles (2) Internal growth represents “same client” additional market driven growth |
 12 Business Expansion Focus Closed Sales (Fee Only $ in millions) Event-Driven (ED) Recurring (RC) $100 $145 $125 $112 $152 Forecast (1) $77 $88 $63 $82 $109 $23 $37 $49 $63 $43 FY05 FY06 FY07 FY08 FY09 FY10 High: $205 Low: $185 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 Closed Sales Challenges Long-Term Growth •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 Operations 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 CAGR = 11% ED = 17% RC = 9% (1) Financial guidance provided in Broadridge’s February 4, 2010 earnings release |
       13 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 FY10 Forecast Segment Revenues (1) FY10 Forecast Segment Margins Investor Communications $1,671-1,688M (76%) Securities Processing $531-533M (24%) Investor Communications $279-285M Margin: 16.7-16.9% Securities Processing $87-94M Margin: 16.4-17.7% Outsourcing Innovative industry service provider of outsourcing of critical back-office labor functions that are integrated with our processing technology platform: Operations Outsourcing offering - growth opportunity to expand existing relationships and add new clients Outsourcing (~5%) 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 technology processing platform (3) : Hosted applications for self-clearing firms using Broadridge’s service bureau for: •Equity (~80%) •Fixed Income (~15%) 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 (2) Only service provider offering service bureau and operations outsourcing on a single multi-entity and multi-currency platform (1) Based on financial guidance provided during Broadridge’s May 10 2010 earnings release call. Segment financials do not include FX and other corporate expense (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, all of which occurred in 2008 |
 14 ICS Unique Business Systems Processing Model Proxy and Interim processing system is the “plumbing” supporting the voting process for corporate governance PROXY & INTERIMS PROCESSING OVERVIEW "THE PLUMBING" Broker/Bank 1 Issuer 1 / Fund 1 Broker/Bank 2 Issuer 2 / Fund 2 Broker/Bank 3 Issuer 3 / Fund 3 Broker/Bank 4 Issuer 4 / Fund 4 Broker/Bank 5 Issuer 5 / Fund 5 Broker/Bank 6 Issuer 6 / Fund 6 Broker/Bank 7 Issuer 7 / Fund 7 Broker/Bank 8 Issuer 8 / Fund 8 Broker/Bank 9 Issuer 9 / Fund 9 Brokers/Banks 800+ (1) Issuers 10,000+ (3) Funds 700+ (4) ANNUAL CORPORATE ISSUER AND MUTUAL FUND EVENTS Approximately 12,000 Events Per Year (Annual Corporate Issuer Shareholder Meetings and Mutual Fund Proxy Meetings) Proxy Distribution Over 40% of accounts require special processing Vote Processing Managing 350M active positions (2) Majority of all shares are held in street - side Shareholder Preferences Database Shareholder Consent Database Equity and Mutual Fund Shareholders Broadridge manages >1,500 Corporate Issuers Broadridge processes on average 70% of U.S. shares outstanding Electronic or Physical Vote Return Data Hub and Platform Electronic or Physical Delivery Street-side Processing Registered Processing > 50% of Hard Copy Mailings Eliminated via E - Delivery and Suppressions 85% of Shares Voted Electronically BROADRIDGE Proxy Processing System Over 8 million lines of code and approximately 500,000 function points Supported by 150+ dedicated programmers (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 |
 15 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 |
 16 ICS Market Share Overview by Products and Markets Product depth and relationships with Bank/Broker-Dealers provide high client retention with large potential upside We have deep penetration in our core business and clients, yet large potential to grow market share |
 17 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 |
 18 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 |
 19 SPS FY09 Product Revenues High client retention rates (>95%) with growth opportunity coming from firms that perform processing in-house • BR market share represents 51% of firms that outsource back-office processing • In-house processing firms account for 40% of industry total trade volume • In-house processing firms are comprised of small to large brokerage firms Fixed-Income platform is the industry standard • BR processes for 10 of the 18 primary dealers of fixed income • BR’s clients account for approximately 66% of the Fixed- Income trading volume • BR processes on average approximately $3.5 trillion in trades daily BR is the only provider of Operations Outsourcing for self-clearing firms • $1 Billion market potential is based on U.S. self-clearing and fully-disclosed firms • Revenue target of ~$90-100M upon completion of the Penson conversion in FY12 Securities Processing Market Share Overview (2) M A R K E T S H A R E Broadridge is the platform of choice for firms outsourcing their securities processing Equity Processing by # of Firms (191 total) Fixed Income Annual trade volume (226M) Broadridge 53 (28%) Competitors 51 (27%) In-house 87 (45%) Broadridge 150M (66%) Competitors 2M (1%) In-house 74M (33%) Equity (~81%) Transactions, $260M Non-transactions, $192M Fixed Income (~14%) Transactions, $52M Non-transactions, $29M Outsourcing (~5%) $25M We service 8 of the top 10 largest financial institutions with a strong potential to increase market share (1) Broadridge $25M (2%) Untapped Market ~$1 Billion (98%) Outsourcing Market (~$1 Billion total) (1) Based on SIFMA’s 2007-2008 Annual Yearbook ranked by capital. This top 10 list included Lehman Brothers (declared bankruptcy), Merrill Lynch (acquired by Bank of America), and Bear Stearns (acquired by JP Morgan). All transactions mentioned occurred during 2008 (2) All market share information is based on management’s 2008 estimates and is part of much larger market. No attempt has been made to size such market |
 20 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 have multi- years remaining under their existing agreements; contract extensions for additional 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 win of fixed income processing business SPS client relationships 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 FY09 revenues * Bank of America/Merrill Lynch includes loss of equity processing business as previously disclosed Equity Processing Fixed Income Processing Retail Institutional Top Clients |
 21 Business Expansion Strategy Focused on core processing and communication businesses and making investments in business that leverage these strong industry positions Offer New Solutions Leverage Industry Position Margin Improvement Foundation Five Pillars • 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 Global outsourcing Electronic delivery solutions Global proxy Mutual Funds Global Processing Expansion CULTURE Trusting / Engaging / Accountable / Client-Centric / Committed / Caring / Passionate/ Ethical “A Great Place to Work” Vision Be Indispensable! Accelerate Sales • More than 2 dozen new products introduced since spin-off Virtual Shareholder meeting The Investor Network/ Shareholder Forum Know-On-Pay 12b-1/ 22c-2 reporting Compliance Client On-boarding Data aggregation/ analytics Client Retention 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 Successful execution of strategy is expected to accelerate average revenue growth forecast from mid-single digits to high single-digits |
 22 $352 $371 $347 $304 $275 FY09 FY08 FY07 FY06 FY05 Earnings Before Interest andTaxes as adjusted (1)(2) ($ in Millions) ` 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 $324 FY09 FY08 FY07 FY06 FY05 Net Revenues - ($ 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 this 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 Note: Historical financials have not been adjusted for the pending disposition of the clearing services business |
 23 Broadridge FY10 Guidance from Continuing Operations (a) FY09 Actual Interest & Other reflects the effect of the one-time gain from the purchase of the 6.125% Senior Notes of approximately $8M. (b) FY09 Actual 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 36.7%. FY10 Low & High Ranges Tax Rates of 34.6% & 34.7% respectively 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 tax benefit the FY10 Low & High Tax Rate would be 36.7% (c) FY09 Actual 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 FY08 portion of the approved certification for a state tax credit program (gain reflected in Income Taxes); $0.03 impact to EPS. FY10 Low & High Ranges Diluted EPS Before 1-Times (Non-GAAP) of $1.52 & $1.58 respectively 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); $0.06 impact to EPS. Revenue ($ in millions) EBIT FY09 FY10 Range FY09 FY10 Range Actual Low High Actual Low High $1,531 $1,671 $1,688 ICS $249 $279 $285 -3% 9% 10% Growth % / Margin % 16.3% 16.7% 16.9% $559 $531 $533 SPS $134 $87 $94 5% -5% -5% Growth % / Margin % 23.9% 16.4% 17.7% $2,090 $2,202 $2,222 Total Segments $383 $366 $379 -1% 5% 6% Growth % / Margin % 18.3% 16.6% 17.1% $1 $2 $2 Other ($29) ($18) ($23) ($18) $4 $6 FX * ($2) ($0) $4 $2,073 $2,208 $2,230 Total Broadridge $352 $348 $361 -3% 7% 7% Growth % / Margin % 17.0% 15.8% 16.2% Interest & Other (a) ($6) ($11) ($11) Closed Sales Total EBT $346 $337 $350 FY10 Range Margin % 16.7% 15.3% 15.7% Segments Low High ICS $125 $135 Income Taxes ($123) ($116) ($122) SPS $60 $70 Tax Rate (b) 35.5% 34.6% 34.7% Total $185 $205 Total Net Earnings $223 $220 $228 Margin % 10.8% 10.0% 10.3% Diluted Shares 142 139 139 Diluted EPS (GAAP) $1.58 $1.58 $1.64 Diluted EPS Before 1-Times (Non-GAAP) (c) $1.51 $1.52 $1.58 * Includes impact of FX P&L Margin and FX Transaction Activity |
 24 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 Mid-single-digit organic revenue growth • 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 Maintain investment grade rating with rating agencies as this is important to our large clients and prospects |
 25 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 |
 26 Appendix Appendix |
 27 Penson Update Evolution of the Penson Deal FY09 Actual results to Continuing Operations GAAP (1) (2) (3) (4) (5) (6) (7) Pre-Penson Transaction - Discontinued Operations = + Penson Phase 1 = FY10 Proforma + Penson Phase 2 = FY12 Proforma (FY09 Reported) (FY09 GAAP) (A) (Subtotal) Converting FY11 Q3 or Q4 (B) Revenue $100M - = $25M + $30M = $55M + $25M - $35M = $80M-$90M ($75M Clearing Related) $75M Contracts Sold to Penson (Existing Outsourcing) ($25M Existing Outsourcing) ($25M Existing Outsourcing) ($30M Penson Phase #1) Expense $110M - $75M Allocated Expenses = $35M $35M Note: $25M Expenses eliminated $50M Remaining expenses $50M $50M to be re-allocated once Penson live $75M $35M + $50M = $85M + $5M = $90M Operating Losses ($10M) - $0M = ($10M) + ($20M) = ($30M) + $20M-$30M = ($10M) -to- ($0M) Continuing Operations (B) - Phase 2 is related to outsourcing services to support the existing Penson clients once converted onto the Broadridge processing platform. As a result, there are less expenses necessary for Penson Phase 2. Note: $ amounts have been rounded for illustrative purposes only (A) - Phase 1 is related to outsourcing services to support the client contracts acquired by Penson from Broadridge. Revenue amount originally expected to be $40M was reduced due primarily to loss of Neuberger contract. FY09 GAAP Continuing Operations to Fully Converted Penson Phases 1 & 2 |
 28 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 |
 29 Free Cash Flow (Non-GAAP) – YTD and FY10 Forecast Unaudited (In millions) Low High Cash Flow - Continuing Operations Net earnings from continuing operations (GAAP) 109 $ 220 $ 228 $ Depreciation and amortization (includes other LT assets) 43 60 58 Stock-based compensation expense 21 30 28 Other (16) (15) (10) Subtotal 157 295 304 Working capital changes 21 (5) 8 Long-term assets & liabilities changes 3 - 3 Net cash flow provided by continuing operating activities 181 290 315 Cash Flows From Investing Activities Capital expenditures & purchased intangibles (29) (55) (45) Free cash flow (Non-GAAP) 152 $ 235 $ 270 $ Cash Flows From Other Investing and Financing Activities Acquisitions (11) (11) (11) Freed-up Clearing capital (b) 10 210 240 Long-term debt repayment - - - Dividends paid (48) (67) (67) Other 5 5 5 Stock repurchases net of options proceeds (103) (103) (103) Net change in cash and cash equivalents 5 269 334 Cash and cash equivalents, at the beginning of year 173 173 173 Cash and cash equivalents, at the end of period 178 $ 442 $ 507 $ (a) Guidance does not include effect of any future acquisitions, additional debt or share repurchases (b) Assumes Penson transaction will close in Q4 2010 March 2010 Nine Months Ended FY10 Range (a) Free Cash Flow $235-270M |
 30 Historical Free Cash Flow Non-GAAP to GAAP Reconciliation Reconciliation of Non-GAAP to GAAP Measures Free Cash Flow ($ 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 $8M |
 31 Reconciliation of Non-GAAP to GAAP Measures EBIT Reconciliation FY09 FY10 Range ($ in millions) Actual Low High EBIT (Non-GAAP) * $352 $348 $361 Margin % 17.0% 15.8% 16.2% Interest & Other ($6) ($11) ($11) Total EBT (GAAP) $346 $337 $350 Margin % 16.7% 15.3% 15.7% EPS Reconciliation Low High Diluted EPS from continuing operations (GAAP) $1.58 $1.58 $1.64 Tax Restructuring ** ($0.07) ($0.06) ($0.06) Diluted EPS before 1-Times (Non-GAAP) $1.51 $1.52 $1.58 * Includes impact of FX Transaction Activity ** Includes one-time gain on purchase of Senior Notes and one-time state tax credit benefit Free Cash Flow Reconciliation (In millions) Low High Net earnings from continuing operations (GAAP) 109 $ 220 $ 228 $ Depreciation and amortization (includes other LT assets) 43 60 58 Stock-based compensation expense 21 30 28 Other (16) (15) (10) Subtotal 157 295 304 Working capital changes 21 (5) 8 Long-term assets & liabilities changes 3 - 3 Net cash flow provided by continuing operating activities 181 290 315 Cash Flows From Investing Activities Capital expenditures & purchased intangibles (29) (55) (45) Free cash flow (Non-GAAP) 152 $ 235 $ 270 $ March 2010 Nine Months Ended FY10 Range |
 32 Closed Sales-To-Revenue Overview 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 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 |
 33 Broadridge ICS Key Statistics $ in millions RC= Recurring ED= Event-Driven FY07 FY08 FY09 Type Fee Revenues (1) Proxy Equities 227.0 $ 256.0 $ 268.4 $ RC Stock Record Position Growth 0% 2% -2% Pieces 289.9 297.8 288.0 Mutual Funds 78.8 $ 92.1 $ 55.0 $ ED Pieces 127.3 176.6 73.5 Contests/Specials 28.5 $ 19.7 $ 26.9 $ ED Pieces 31.9 21.2 30.8 Total Proxy 334.3 $ 367.8 $ 350.3 $ Total Pieces 449.1 495.6 392.3 Notice and Access Opt-in % NA 28% 50% Suppression % 44% 49% 50% Interims Mutual Funds (Annual/Semi-Annual Reports/Annual Prospectuses) 69.7 $ 73.9 $ 78.1 $ RC Position Growth 9% 9% 4% Pieces 366.3 401.1 440.5 Mutual Funds (Supplemental Prospectuses) & Other 51.2 $ 48.9 $ 58.0 $ ED Pieces 332.8 301.3 349.6 Total Interims 120.9 $ 122.8 $ 136.1 $ Total Pieces 699.1 702.4 790.1 Transaction Transaction Reporting 129.6 $ 124.7 $ 132.0 $ RC Reporting Fulfillment Post-Sale Fulfillment 59.9 $ 70.4 $ 72.9 $ RC Pre-Sale Fulfillment 37.4 $ 37.5 $ 36.6 $ ED Total Fulfillment 97.3 $ 107.9 $ 109.5 $ Other Other (2) 49.9 $ 44.2 $ 46.3 $ ED Communications Total Fee Revenues 732.0 $ 767.4 $ 774.2 $ Total Distribution Revenues 820.2 $ 807.8 $ 756.8 $ Total Revenues (Non-GAAP) 1,552.2 $ 1,575.2 $ 1,531.0 $ Transfer price adjustment 2.0 - - Total Revenues (GAAP) 1,554.2 $ 1,575.2 $ 1,531.0 $ Total RC Fees 486.3 $ 525.0 $ 551.4 $ Total ED Fees 245.7 $ 242.4 $ 222.8 $ (2) Other includes pieces of 18.6M for FY07, 12.6M for FY08 and 14.4M for FY09 primarily related to corporate actions (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 |
 34 Broadridge SPS Key Statistics $ in millions 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)(2) 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 Revenues (Non-GAAP) 503.9 $ 514.4 $ 533.8 $ Transfer price adjustment 6.0 - - Total Revenues (GAAP) 509.9 $ 514.4 $ 533.8 $ Outsourcing Outsourcing 23.5 $ 19.1 $ 25.1 $ RC # of Clients 4 5 6 Combined Revenues with Outsourcing (Non-GAAP) 533.4 $ 533.5 $ 558.9 $ (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 (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 |
 35 Broadridge ICS Definitions Refers to the proxy services we provide in connection with annual stockholder meetings for publicly traded corporate issuers. Annual meetings of public companies include shares held in "street name" (meaning that they are held of record by brokers or banks, which in turn hold the shares on behalf of their clients, the ultimate beneficial owners) and shares held in "registered name" (shares registered directly in the names of their owners). Refers to the proxy services we provide for funds, classes or trusts of an investment company. Open-ended mutual funds are not required to have annual meetings. As a result, mutual fund proxy services provided to open-ended mutual funds are driven by a "triggering event." These triggering events can be a change in directors, fee structures, investment restrictions, or mergers of funds. Refers to the proxy services we provide when a separate agenda is put forth by one or more stockholders that is in opposition to the proposals presented by management of the company which is separately distributed and tabulated from the company’s proxy materials. Refers to the proxy services we provide in connection with stockholder meetings held outside of the normal annual meeting cycle and are primarily drive by special events (e.g., mergers and acquisitions in which the company being acquired is a public company and needs to solicit the approval of its stockholders). Refers to the services we provide investment companies in connection with information they are required by regulation to distribute periodically to their investors. These reports contain pertinent information such as holdings, fund performance, and other required disclosure. Refers primarily to information required to be provided by mutual funds to supplement information previously provided in an annual mutual fund prospectus (e.g., change in portfolio managers, closing funds or class of shares to investors, or restating or clarifying items in the original prospectus). The events could occur at any time throughout the year. Refers to communications provided by corporate issuers and investment companies to investors including newsletters, notices, tax information, marketing materials and other information not required to be distributed by regulation. Refers primarily to the printing and distribution of account statements, trade confirmations and tax reporting documents to account holders, including electronic delivery and archival services. Refers primarily to the distribution of prospectuses, offering documents, and required regulatory disclosure information to investors in connection with purchases of securities. Refers to the distribution of marketing literature, welcome kits, enrollment kits, and investor information to prospective investors, existing stockholders and other targeted recipients on behalf of broker-dealers, mutual fund companies and 401(k) administrators. Refers to the services we provide in connection with the distribution of communications material not included in the above definitions such as non-objecting beneficial owner (NOBO) lists, and corporate actions such as mergers, acquisitions, and tender offer transactions. Proxy Equities – Mutual Funds – Contests – Specials – Mutual Funds (Annual/Semi-Annual Reports/Annual Prospectus) – Interims Mutual Funds (Supplemental Prospectus) – Other – Transaction Reporting Fulfillment Transaction Reporting – Post-Sale Fulfillment – Pre-Sale Fulfillment – Other – Other Communications |