Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BROADRIDGE FINANCIAL SOLUTIONS, INC. | d481601d8k.htm |
| EX-99.1 - EX-99.1 - BROADRIDGE FINANCIAL SOLUTIONS, INC. | d481601dex991.htm |
 ©
2013 Broadridge Financial Solutions, Inc.
Broadridge and the Broadridge logo are registered trademarks of Broadridge
Financial Solutions, Inc. February 7, 2013
Earnings Webcast & Conference Call
Second Quarter 2013
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, 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. In
particular, statements regarding our “Fiscal Year 2013 Financial
Guidance”
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,
2012
(the “2012 Annual Report”), as they may be updated in any future reports
filed with the Securities and Exchange Commission. All forward-
looking statements speak only as of the date of this presentation and are expressly
qualified in their entirety by reference to the factors discussed in the
2012 Annual Report. These risks include: the success of Broadridge in retaining and selling additional services to its
existing clients and in obtaining new clients; Broadridge’s reliance on a
relatively small number of clients, the continued financial health of those
clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms; 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 or revise forward-
looking statements that may be made to reflect events or circumstances that arise
after the date made or to reflect the occurrence of unanticipated events,
other than as required by law. Non-GAAP Financial Measures
In certain circumstances, results have been presented that are not generally
accepted accounting principles measures (“Non-GAAP”) and
should be viewed in addition to, and not as a substitute for, the Company’s
reported results. Net earnings, diluted earnings per share and
pre-tax earnings margins excluding Acquisition Amortization and Other Costs and
Restructuring and Impairment Charges are Non-GAAP measures.
These
measures
are
adjusted
to
exclude
costs
incurred
by
the
Company
in
connection
with
amortization
and
other
charges
associated with the Company’s acquisitions, and the termination of the Penson
outsourcing services agreement, as Broadridge believes this information
helps investors understand the effect of these items on reported results and provides a better representation of our actual
performance. Free cash flow is a Non-GAAP measure and is defined as cash
flow from operating activities, less capital expenditures and purchases of
intangibles. Management believes this Non-GAAP measure provides investors with 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.
Accompanying this presentation is a reconciliation of Non-GAAP measures to the
comparable GAAP measures. 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. |
 2
Today’s Agenda
Opening Remarks and Other
Rich Daly, CEO
Key Topics
Second Quarter and YTD 2013
Dan Sheldon, CFO
Highlights and Segment Results
Summary
Rich Daly, CEO
Q&A
Rich Daly, CEO
Dan Sheldon, CFO
Closing Remarks
Rich Daly, CEO |
 3
Opening Remarks
Key Topics:
Financial Highlights
Closed Sales Performance
Key Activities Update |
 4
Financial Highlights
Recurring revenues for the quarter and YTD were up 3%
Primarily due to net new business (closed sales less client losses)
Event-driven activity was flat for the quarter
Trade volumes challenging, trend is improving for four straight months
Non-GAAP diluted earnings per share (EPS) growing for both the
quarter and YTD
Second quarter Non-GAAP diluted EPS of $0.17 was up 13%
YTD Non-GAAP diluted EPS of $0.35 was up 6%
Primarily due to higher revenues, business mix and cost containment
Reaffirming fiscal year 2013 guidance
4-7% recurring revenue growth (3-4% total revenue growth)
$1.60-1.70 GAAP diluted EPS
$1.76-1.86 Non-GAAP diluted EPS |
 5
Closed Sales Performance
Year-to-date recurring revenue closed sales were down ~45%
Primarily due to longer than anticipated sales cycles for large transactions
No large transactions of >$5M for the first half
Transactions of <$5M:
Pipeline remains very strong
Rolling-out “consultative selling”
approach for large strategic
transactions
Good initial response particularly with C-Suite executives
Reaffirming fiscal year 2013 recurring revenue closed sales
guidance of $110-150M
•
$22M in same period prior year
•
ICS recurring revenue closed sales were $19M vs. $27M
•
SPS recurring revenue closed sales were $15M vs. $14M |
 6
Key Activities Update
Penson/Apex
Penson Canada substantially completed winding down its operations
Questrade, Penson Canada’s largest correspondent, has been converted,
and operating on our Outsourcing platform
Do not expect any material financial impact from Penson bankruptcy
Apex/COR Clearing transaction did not materialize
No material negative impact anticipated to FY13 guidance
Acquisitions
On track to generate ~$250M in revenue with ~$50M in EBITDA in FY13
Enthusiastic about long-term prospects of the portfolio
Focused on recurring revenue products and services of <$5M
Continue to seek tuck-in acquisitions with our strategic fit
requirements |
 7
Revenue Growth Drivers and EBIT Margin
Historical CAGR
2Q
2Q YTD
Actual
Forecast
(FY07-FY12)
FY13
FY13
FY12
FY13
2%
Total Revenue Growth
3%
3%
6%
3-4%
3%
Closed Sales
(Recurring)
3%
3%
3%
4-5%
(2%)
Client Losses
(1%)
(1%)
(1%)
(1)%
1%
Net New Business
2%
2%
2%
3-4%
1%
Internal Growth
(a)
(0%)
(1%)
1%
0%
2%
Acquisitions
0%
1%
3%
0%
4%
Total Recurring
2%
2%
6%
3-4%
(1%)
Event-Driven
(b)
0%
0%
0%
0%
(1%)
Distribution
(c)
1%
1%
0%
0%
0%
FX/Other
0%
0%
0%
0%
EBIT Margin
(Non-GAAP)
6.5%
6.6%
13.9%
14.9 -
15.7%
(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. (c) Distribution includes pass-through fees
from Matrix. |
 Segment Results
& Forecast – Investor Communication Solutions
FY13 revenue and margin guidance remains on track
Recurring fee revenue growth YTD of 7% was driven by net new business
and internal growth
Position growth in-line with expectations as first half activities represent
only ~15% of full year
Client revenue retention levels maintained at 99%
Recurring revenue closed sales range for FY13 remains $50-70M
YTD event-driven fee revenue slightly ahead of previous year. Full year
event-driven fee revenue guidance remains ~$130M Full year margins still expected to increase 230-260 bps with ~100
bps related to MSSB and prior year restructuring
Revenue/Growth
EBIT/Growth
(Non-GAAP)
Margin/Growth
(Non-GAAP)
Q2:
$327M / 3%
$16M / 56%
5.0% / 170 bps
Q2 YTD:
$666M / 6%
$44M / 130%
6.6% / 360 bps
FY13:
$1,695 to 1,707M / 4%
$291 to 299M / 20 to 23%
17.2 to 17.5% / 230 to 260 bps |
 9
Segment Results & Forecast –
Securities Processing Solutions
Net
new
business
is
building
each
quarter
-
~$70M
backlog
Trade volumes improving for four straight months
Penson/Apex agreements and Penson/Questrade negatively impacting
FY13 ~$20M
•
Recurring revenue closed sales range for FY13 remains $60-80M
•
Client revenue retention rate at ~98%
Full year margins are expected to be impacted by revenue mix,
internal trade volumes and planned increase in systems
investments (i.e. TARP development)
High and low guidance range still dependent on trade volumes
FY13
revenue
and
margin
guidance
remains
on
track
-
business
is
growing
Revenue/Growth
EBIT/Growth
(Non-GAAP)
Margin/Growth
(Non-GAAP)
Q2:
$164M / +2%
$20M / (1)%
12.2% / (30) bps
Q2 YTD:
$318M / (1)%
$29M / (39)%
9.3% / (570) bps
FY13:
$658 to 683M / 0 to +4%
$79 to 102M / (13) to +12%
12.0 to 15.0% / (190) to +110 bps |
 10
Summary
Solid operating results year-to-date
Recurring fee revenue continues to grow
Closed sales pipeline is very strong
Clear and executable strategy
ICS is a great business, continues on a very strong value creation path
SPS is a good business, focused on growth opportunities, streamlining
operations and converting ~$70M in closed sales backlog
Managing expenses as if current market environment is the new normal
Strong client revenue retention rate of 99%
Reaffirming fiscal year 2013 guidance
4-7% recurring revenue growth (3-4% total revenue growth)
$1.60-1.70 GAAP diluted EPS
$1.76-1.86 Non-GAAP diluted EPS
Highly engaged associates aligned to service profit chain
Recognized as one of the Best Companies to Work for in New York for the
sixth consecutive year
|
 11
Q&A
There are no slides during this portion of the presentation
|
 12
Closing Comments
There are no slides during this portion of the presentation
|
 13
Appendix |
 14
Segment Results & Forecast –
Other & Foreign Exchange (FX)
Corporate
Expenses:
YTD
results
as
expected
and
in
line
with
full
year
guidance
range
Interest
Expense,
net:
FY13
reflects
higher
average
debt
balance
and
refinancing
of
our
credit facilities
Restructuring and Impairment Charges:
FY13 transition costs related to the termination
of the Penson agreement including shutdown costs
YTD
2Q13
2Q13
Low
High
Corporate Expenses
$(8)M
$(15)M
$(30)M
$(37)M
Interest Expense, net
$(4)M
$(7)M
$(17)M
$(21)M
FX -
P&L -
Revenue
$3M
$5M
$13M
$13M
-
EBIT
$3M
$7M
$14M
$14M
-
Transaction Activity
$(0)M
$(1)M
$(1)M
$(1)M
Restructuring and Impairment Charges
$(4)M
$(4)M
$(10)M
$(10)M
FY13 Range |
     15
Broadridge FY13 Q2 and YTD from Continuing Operations
(a)
ICS
Growth % / Margin %
Growth % / Margin %
Total Segments
Margin %
Other
FX
Total
Broadridge
(Non-GAAP)
(a)
Growth % / Margin %
Interest & Other
Acquisition
Amortization
and
Other
Costs
(c)
Margin %
Income
taxes
(d)
Tax Rate
Total
Net
Earnings
(Non-GAAP)
(d)
Margin %
Acquisition
Amortization
and
Other
Costs
(c)
Restructuring
and
Impairment
Charges
(e)
IBM Migration costs
Non-GAAP Items (Net of Taxes)
Total Net Earnings (GAAP)
Margin %
Diluted Shares
Diluted
EPS
(Non-GAAP)
(d)
Diluted EPS (GAAP)
SPS
(a)
(b)
Total
EBT
(Non-GAAP)
(d)
Revenue
FY12
FY13
FY12
FY13
Q2
Q2
Q2 YTD
Q2 YTD
$317
$327
$630
$666
8%
3%
10%
6%
$161
$164
$319
$318
10%
2%
11%
-1%
$478
$491
$949
$984
9%
3%
10%
4%
$0
$0
$0
$0
$2
$3
$7
$5
$480
$493
$956
$989
8%
3%
11%
3%
FY12
FY13
FY12
FY13
Q2
Q2
Q2 YTD
Q2 YTD
$11
$16
$19
$44
3.3%
5.0%
3.0%
6.6%
$20
$20
$48
$29
12.5%
12.2%
15.0%
9.3%
$31
$37
$67
$73
6.4%
7.4%
7.1%
7.4%
($6)
($8)
($13)
($15)
$3
$3
$5
$6
$28
$32
$59
$65
5.8%
6.5%
6.2%
6.6%
($4)
($4)
($6)
($7)
$6
$6
$13
$11
$30
$34
$66
$69
6.3%
6.9%
6.9%
7.0%
($11)
($12)
($24)
($25)
35.8%
36.0%
36.1%
36.0%
$19
$22
$42
$44
4.0%
4.4%
4.4%
4.5%
($4)
($4)
($8)
($7)
($6)
($2)
($6)
($3)
($2)
$0
($4)
$0
($13)
($6)
($19)
($10)
$7
$16
$24
$34
1.4%
3.2%
2.5%
3.4%
127.2
125.5
126.9
126.3
$0.15
$0.17
$0.33
$0.35
$0.05
$0.13
$0.19
$0.27
Earnings
(a) FY12 Q2 excludes IBM Migration costs of $4M (after tax $2M, or $0.02 EPS impact). FY12 Q2 YTD
excludes IBM Migration costs of $7M (after tax $4M, or $0.03 EPS impact).
FY12 Q2 and FY12 Q2 YTD excludes Restructuring and Impairment Charges of $10M
(after tax $6M, or $0.05 EPS impact). FY13 Q2 excludes Restructuring
and Impairment Charges of $4M (after tax $2M, or $0.01 EPS impact).
FY13 Q2 YTD excludes Restructuring and Impairment Charges of $4M (after tax $3M, or $0.02 EPS impact).
(b) Includes impacts of FX P&L and FX transaction activity.
(c) Represents amortization charges associated with intangible asset values as well as other deal
costs associated with the Company’s acquisitions. (d) FY12 Q2 excludes Acquisition
Amortization and Other Costs of $6M (after tax $4M or $0.03 EPS impact), IBM Migration costs of $4M (after tax $2M, or $0.02 EPS impact)
and Restructuring and Impairment Charges of $10M (after tax $6M, or $0.05 EPS
impact). FY12 Q2 YTD excludes Acquisition Amortization and Other Costs
of $13M (after tax $8M or $0.06 EPS impact), IBM Migration costs of $7M (after tax $4M, or $0.03 EPS impact)
and Restructuring and Impairment Charges of $10M (after tax $6M, or $0.05 EPS
impact). FY13 Q2 excludes Acquisition Amortization and Other Costs of
$6M (after tax $4M or $0.03 EPS impact) and Restructuring and Impairment Charges of $4M (after tax $2M, or $0.01 EPS impact).
FY13 Q2 YTD excludes Acquisition Amortization and Other Costs of $11M (after
tax $7M or $0.06 EPS impact) and Restructuring and Impairment Charges of $4M (after tax $3M, or $0.02 EPS impact).
(e) FY13 Q2 and FY13 Q2 YTD represents transition costs related to termination of the Penson agreement
including shutdown costs. FY12 Q2 and FY12 Q2 YTD represents Penson
OTTI charge. |
 16
Broadridge FY13 Guidance from Continuing Operations
Revenue
Earnings
FY12
FY13 Range
FY12
FY13 Range
Actual
Low
High
($ in millions)
Actual
Low
High
$1,634
$1,695
$1,707
ICS
$243
$291
$299
5%
4%
4%
Growth % / Margin %
14.9%
17.2%
17.5%
$655
$658
$683
SPS
$91
$79
$102
10%
0%
4%
Growth % / Margin %
13.9%
12.0%
15.0%
$2,290
$2,353
$2,390
Total Segments
$334
$370
$401
6%
3%
4%
Margin %
14.6%
15.7%
16.8%
$0
$0
$0
Other
(a)
($28)
($30)
($37)
$13
$13
$13
FX
(b )
$14
$13
$13
$2,304
$2,366
$2,403
Total Broadridge (Non-GAAP)
(a)
$319
$353
$377
6%
3%
4%
Growth % / Margin %
13.9%
14.9%
15.7%
Interest & Other
($13)
($17)
($21)
Acquisition Amortization and Other Costs
(c)
$25
$22
$22
Total EBT (Non-GAAP)
(d)
$331
$358
$378
Margin %
14.4%
15.1%
15.7%
Income taxes
(d)
($118)
($133)
($140)
Recurring Closed Sales
Tax Rate
35.6%
37.0%
37.0%
FY13 Range
Segments
Low
High
Total Net Earnings (Non-GAAP)
(d)
$213
$226
$238
ICS
$50
$70
Margin %
9.3%
9.5%
9.9%
SPS
$60
$80
Total
$110
$150
Acquisition Amortization and Other Costs
(c)
($15)
($14)
($14)
Restructuring and Impairment Charges
(e)
($58)
($6)
($6)
IBM Migration costs
($15)
$0
$0
Non-GAAP Items (Net of Taxes)
($88)
($20)
($20)
Total Net Earnings (GAAP)
$125
$205
$218
Margin %
5.4%
8.7%
9.1%
Diluted Shares
128
128
128
Diluted EPS (Non-GAAP)
(d)
$1.67
$1.76
$1.86
Diluted EPS (GAAP)
$0.98
$1.60
$1.70
(a) FY12 excludes IBM Migration costs of $25M (after tax $15M, or $0.12 EPS impact) and Restructuring
and Impairment Charges of $81M (after tax $58M, or $0.45 EPS impact). FY13 guidance excludes
Restructuring and Impairment Charges of $10M (after tax $6M, or $0.05 EPS impact). (b) Includes
impacts of FX P&L and FX Transaction Activity. (c) Represents amortization charges
associated with intangible asset values as well as other deal costs associated with the Company’s acquisitions.
(d) FY12 excludes Acquisition Amortization and Other Costs of $25M (after tax $15M or $0.12 EPS
impact), IBM Migration costs of $25M (after tax $15M, or $0.12 EPS impact) and Restructuring
and Impairment Charges of $81M (after tax $58M, or $0.45 EPS impact). FY13 guidance excludes Acquisition Amortization and Other Costs of
$22M (after tax $14M or $0.11 EPS impact) and Restructuring and Impairment Charges of $10M (after tax
$6M, or $0.05 EPS impact). (e) FY12 represents Penson deferred client conversion and startup
costs, other than temporary impairment charges, shutdown costs, cancellation of the note receivable, less
the elimination of the obligation to pay or credit Penson fees. FY13 represents transition costs
related to termination of the Penson agreement including shutdown costs. * Guidance does not
take into consideration the effect of any future acquisitions, additional debt and/or share repurchases.
|
 17
Cash Flow –YTD FY13 Results and FY13 Forecast
Six Months Ended
December 2012
Low
High
Free Cash Flow
(Non-GAAP)
:
Round
Net earnings from continuing operations (GAAP)
34.1
34
$
205
$
218
$
Depreciation and amortization (includes other LT assets)
48.3
48
95
105
Stock-based compensation expense
12.9
13
31
31
Other
-5.4
(5)
(5)
5
Subtotal
89.9
90
326
359
Working capital changes
-1.3
(1)
(15)
(15)
Long-term assets & liabilities changes
-15.1
(15)
(60)
(50)
Net cash flow (used in) provided by continuing operating activities
73.5
74
251
294
Cash Flows From Investing Activities
Capital expenditures & software purchases
-19
(19)
(55)
(45)
Free cash flow (
Non-GAAP)
54.5
55
$
196
$
249
$
Cash
Flows
From
Other
Investing
and
Financing
Activities
Acquisitions
0
-
-
-
Stock repurchases net of options proceeds
-75.1
(75)
(75)
(75)
Proceeds from borrowing net of debt repayments
0
-
-
-
Dividends paid
-42.3
(42)
(86)
(86)
Other
1.5
-
(5)
5
Net change in cash and cash equivalents
-61.4
(62)
30
93
Cash and cash equivalents, at the beginning of year
320.5
321
321
321
Cash and cash equivalents, at the end of period
259.1
259
$
351
$
414
$
(a) Guidance does not take into consideration the effect of any future
acquisitions, additional debt and/or share repurchases. FY13 Range
(a)
($ millions)
Unaudited
Free Cash Flow -
Non-GAAP |
    18
Recurring Closed Sales to Revenue Contribution
Recurring Closed Sales to Revenue
($ in millions)
Closed Sales
Revenue Contribution
(a)
Backlog
(b)
Forecast
Forecast
Forecast
FY13
FY13
FY13
ICS
$50-70
~$50-60
~$35-45
~Contribution to revenue growth
~3%
SPS
$60-80
~$40-50
~$85-105
~Contribution to revenue growth
6-8%
Total Recurring Closed Sales
$110-150
~$90-110
~$120-150
~Contribution to revenue growth
4-5%
(a)
Revenue from current year and prior year Closed Sales.
(b)
Closed Sales expected to convert to revenue in future years. |
  19
Revenues and Closed Sales FY07-FY13
($ in millions)
Forecast
Recurring Fee Revenues
FY07
FY08
FY09
FY10
FY11
FY12
CAGR
FY13
ICS
529
$
567
$
594
$
632
$
720
$
798
$
9%
$862-874
Growth
3%
7%
5%
6%
14%
11%
8-10%
SPS
527
$
534
$
559
$
536
$
594
$
655
$
4%
$658-683
Growth
11%
1%
5%
-4%
11%
10%
0-4%
Total Recurring Fee Revenues
1,056
$
1,101
$
1,153
$
1,168
$
1,313
$
1,453
$
7%
$1,520-1,557
Growth
7%
4%
5%
1%
12%
11%
4-7%
Event-Driven
203
$
200
$
180
$
257
$
135
$
132
$
-8%
~$129
Growth
33%
-1%
-10%
43%
-47%
-2%
-2%
Distribution
821
$
808
$
757
$
781
$
704
$
704
$
-3%
~$704
Growth
12%
-2%
-6%
3%
-10%
0%
0%
Other/FX
(12)
$
22
$
(17)
$
4
$
14
$
14
$
~$13
Total Revenues
2,068
$
2,131
$
2,072
$
2,209
$
2,167
$
2,304
$
2%
$2,366-2,403
Growth
12%
3%
-3%
7%
-2%
6%
3-4%
Recurring Closed Sales
63
$
82
$
95
$
119
$
113
$
120
$
14%
$110-150
Growth
-32%
30%
16%
25%
-5%
6%
-8-+25%
($ in millions)
Forecast
Event-Driven Fee Revenues
(a)
FY07
FY08
FY09
FY10
FY11
FY12
CAGR
FY13
Mutual Fund Proxy
79
$
92
$
55
$
150
$
39
$
28
$
-19%
$27
Mutual Fund Supplemental
51
$
49
$
58
$
48
$
44
$
47
$
-2%
$46
Contest/ Specials/ Other Communications
73
$
59
$
67
$
59
$
52
$
57
$
-5%
$56
Total Event-Driven Fee Revenues
203
$
200
$
180
$
257
$
135
$
132
$
-8%
$129
Growth
33%
-1%
-10%
43%
-47%
-2%
-2%
Recurring Distribution Revenues
(b)
593
$
580
$
567
$
564
$
573
$
597
$
0%
~$597
Growth
6%
-2%
-2%
-1%
2%
4%
0%
ED Distribution Revenues
(b)
228
$
228
$
190
$
217
$
131
$
107
$
-14%
~$107
Growth
35%
0%
-17%
14%
-39%
-18%
0%
Total Distribution Revenues
821
$
808
$
757
$
781
$
704
$
704
$
-3%
~$704
Growth
12%
-2%
-6%
3%
-10%
0%
0%
(a) Includes reclassification of Pre-sale Fulfillment from event-driven revenues to
recurring revenues. (b) Includes reclassification of Pre-sale Fulfillment
related distribution revenues and Matrix pass-through administrative services from event-driven revenues to recurring revenues. |
 20
Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of EPS Guidance
2Q12
2Q13
YTD12
YTD13
FY10
FY11
FY12
FY13 Range
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Low
High
Guidance Provided in August 2012 - Diluted EPS (Non-GAAP)
$0.12
$0.14
$0.27
$0.29
$1.56
$1.37
$1.55
$1.65
$1.75
Acquisition Amortization and Other Costs
$0.03
$0.03
$0.06
$0.06
$0.04
$0.10
$0.12
0.11
0.11
Current Guidance - Diluted EPS (Non-GAAP)
$0.15
$0.17
$0.33
$0.35
$1.60
$1.47
$1.67
$1.76
$1.86
Acquisition Amortization and Other Costs
($0.03)
($0.03)
($0.06)
($0.06)
($0.04)
($0.10)
($0.12)
(0.11)
(0.11)
Restructuring and Impairment Charges
($0.05)
($0.01)
($0.05)
($0.02)
$0.00
$0.00
($0.45)
(0.05)
(0.05)
IBM Migration costs
($0.02)
$0.00
($0.03)
$0.00
$0.00
($0.03)
($0.12)
0.00
0.00
One-time recognition of deferred tax assets
$0.00
$0.00
$0.00
$0.00
$0.06
$0.00
$0.00
0.00
0.00
Current Guidance - Diluted EPS (GAAP)
$0.05
$0.13
$0.19
$0.27
$1.62
$1.34
$0.98
$1.60
$1.70
Reconciliation of EBT Guidance
(a)
2Q12
2Q13
YTD12
YTD13
FY10
FY11
FY12
FY13 Range
($ in millions)
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Low
High
Guidance Provided in August 2012 - Total EBT (Non-GAAP)
$24
$28
$53
$58
$342
$276
$306
$336
$356
Margin %
5.0%
5.7%
5.6%
5.8%
15.5%
12.7%
13.3%
14.2%
14.8%
Acquisition Amortization and Other Costs
$6
$6
$13
$11
$8
$19
$25
$22
$22
Current Guidance - Total EBT (Non-GAAP)
$30
$34
$66
$69
$350
$295
$331
$358
$378
Margin %
6.3%
6.9%
6.9%
7.0%
15.9%
13.6%
14.4%
15.1%
15.7%
Acquisition Amortization and Other Costs
($6)
($6)
($13)
($11)
($8)
($19)
($25)
($22)
($22)
Restructuring and Impairment Charges
($10)
($4)
($10)
($4)
$0
$0
($81)
($10)
($10)
IBM Migration costs
($4)
$0
($7)
$0
$0
($6)
($25)
$0
$0
Total EBT (GAAP)
$11
$25
$37
$53
$342
$270
$201
$326
$346
Margin %
2.2%
5.0%
3.8%
5.4%
15.5%
12.4%
8.7%
13.8%
14.4%
(a) Details may not sum to totals due to rounding
Six Months Ended
December 2012
Low
High
Free Cash Flow
(Non-GAAP)
:
Round
Net earnings from continuing operations (GAAP)
34.1
34
$
205
$
218
$
Depreciation and amortization (includes other LT assets)
48.3
48
95
105
Stock-based compensation expense
12.9
13
31
31
Other
-5.4
(5)
(5)
5
Subtotal
89.9
90
326
359
Working capital changes
-1.3
(1)
(15)
(15)
Long-term assets & liabilities changes
-15.1
(15)
(60)
(50)
Net cash flow (used in) provided by continuing operating activities
73.5
74
251
294
Cash Flows From Investing Activities
Capital expenditures & software purchases
-19
(19)
(55)
(45)
Free cash flow (Non-GAAP)
54.5
55
$
196
$
249
$
(a) Guidance does not take into consideration the effect of any future
acquisitions, additional debt and/or share repurchases. Free Cash Flow
- Non-GAAP
FY13 Range
(a)
($ millions)
Unaudited |
 21
ICS Key Segment Revenue Stats
RC= Recurring
ED= Event-Driven
In millions
Fee Revenues
2Q12
2Q13
YTD FY12
YTD FY13
Type
Proxy
Equities
24.8
$
25.3
$
48.4
$
50.9
$
RC
Stock Record Position Growth
-1%
4%
0%
1%
Pieces
21.2
20.8
41.6
41.1
Mutual Funds
8.6
$
9.1
$
13.8
$
15.6
$
ED
Pieces
16.6
15.4
23.0
23.6
Contests/Specials
3.3
$
2.0
$
6.6
$
5.0
$
ED
Pieces
4.0
1.9
7.7
4.6
Total Proxy
36.7
$
36.4
$
68.8
$
71.5
$
Total Pieces
41.8
38.1
72.3
69.3
Notice and Access Opt-in %
73%
75%
63%
61%
Suppression %
56%
59%
55%
57%
Interims
Mutual Funds (Annual/Semi-Annual Reports/Annual Prospectuses)
25.7
$
31.5
$
51.2
$
63.3
$
RC
Position Growth
8%
11%
9%
10%
Pieces
137.4
153.2
269.3
303.9
Mutual Funds (Supplemental Prospectuses) & Other
8.4
$
9.1
$
19.0
$
23.8
$
ED
Pieces
45.1
46.2
104.4
121.6
Total Interims
34.1
$
40.6
$
70.2
$
87.1
$
Total Pieces
182.5
199.4
373.7
425.5
Transaction
Transaction Reporting/Customer Communications
38.8
$
37.9
76.2
$
78.5
$
RC
Reporting
Fulfillment
Fulfillment
31.6
$
31.9
$
63.0
$
65.1
$
RC
Other
Other - Recurring (a)
25.5
$
26.4
$
51.0
$
52.2
$
RC
Communications
Other - Event-Driven (b)
7.3
$
7.5
$
15.6
$
15.6
$
ED
Total Other
32.8
$
33.9
$
66.6
$
67.8
$
Total Fee Revenues
174.0
$
180.7
$
344.8
$
370.0
$
Total Distribution Revenues (c)
142.8
$
146.1
$
285.0
$
296.3
$
Total Revenues as reported - GAAP
316.8
$
326.8
$
629.8
$
666.3
$
FY13 Ranges
Low
High
Total RC Fees
146.4
$
153.0
$
289.8
$
310.0
$
862
$
874
$
% RC Growth
20%
5%
20%
7%
8%
10%
Total ED Fees
27.6
$
27.7
$
55.0
$
60.0
$
129
$
129
$
Low
High
Sales
3%
2%
3%
3%
3%
3%
Losses
-1%
0%
-1%
-1%
-1%
-1%
Key
Net New Business
2%
2%
2%
2%
2%
2%
Revenue
Internal growth
2%
0%
2%
1%
2%
2%
Drivers
Recurring (Excluding Acquisitions)
4%
2%
4%
3%
4%
4%
Acquisitions
4%
0%
5%
0%
0%
0%
Total Recurring
8%
2%
9%
3%
4%
4%
Event-Driven
-1%
0%
-1%
1%
0%
0%
Distribution
1%
1%
2%
2%
0%
0%
TOTAL
8%
3%
10%
6%
4%
4%
(a) Other Recurring fee revenues include revenues from acquisitions.
(b) Other Event-Driven fee revenues include revenues from corporate actions.
(c) Total Distribution Revenues primarily include pass-through revenues related to the physical
mailing of Proxy, Interims, Transaction Reporting, and Fulfillment as well as Matrix administrative services. |
  22
SPS and Outsourcing Key Segment Revenue Stats
RC= Recurring
ED= Event-Driven
In millions
2Q12
2Q13
YTD12
YTD13
Type
Equity
Transaction-Based
Equity Trades
32.8
$
31.1
$
69.3
$
61.1
$
RC
Internal Trade Volume
911
852
963
837
Internal Trade Growth
-2%
-6%
9%
-13%
Trade Volume (Average Trades per Day in '000)
920
860
970
844
Non-Transaction
Other Equity Services
84.4
89.8
164.8
$
171.9
$
RC
Total Equity
117.2
$
120.9
$
234.0
$
233.0
$
Fixed Income
Transaction-Based
Fixed Income Trades (a)
13.0
$
13.6
$
26.5
$
27.5
$
RC
Internal Trade Volume
290
289
291
291
Internal Trade Growth
2%
-1%
7%
0%
Trade Volume (Average Trades per Day in '000)
290
293
291
294
Non-Transaction
Other Fixed Income Services
12.0
$
12.0
$
22.7
$
23.5
$
RC
Total Fixed Income
25.1
$
25.6
$
49.2
$
51.0
$
Outsourcing
Outsourcing
18.8
$
17.3
$
36.2
$
33.7
$
RC
# of Clients
12
17
12
17
Total Net Revenue as reported - GAAP
161.1
$
163.8
$
319.5
$
317.7
$
FY13 Ranges
Low
High
Sales
6%
5%
5%
4%
6%
8%
Losses
-1%
-2%
-1%
-2%
-2%
-2%
Key
Net New Business
5%
3%
4%
2%
4%
6%
Revenue
Transaction & Non-transaction
0%
2%
3%
-2%
-1%
1%
Drivers
Concessions
-2%
-3%
-1%
-3%
-4%
-4%
Internal growth
-2%
-1%
2%
-5%
-5%
-3%
Acquisitions
7%
0%
5%
2%
1%
1%
TOTAL
10%
2%
11%
-1%
0%
4% |
 23
Broadridge ICS Definitions
Proxy
Equities
-
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).
Mutual
Funds
-
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.
Contests
-
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. Specials
-
Refers to the proxy services we provide in connection with stockholder
meetings held outside of the normal annual meeting cycle and are primarily driven 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).
Interims
Mutual
Funds
(Annual/Semi-Annual
Reports/Annual
Prospectuses)
–
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.
Mutual
Funds
(Supplemental
Prospectuses)
–
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.
Other
–
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.
Transaction Reporting
Transaction Reporting
–
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.
Fulfillment
Post-Sale
Fulfillment
–
Refers
primarily
to
the
distribution
of
prospectuses,
offering
documents,
and
required
regulatory
disclosure
information
to
investors
in
connection
with
purchases of securities.
Pre-Sale
Fulfillment
–
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. Other Communications
Other
–
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. |