Broadridge Financial Solutions, Inc.
Condensed Consolidated and Combined Statements of Earnings
(In millions, except per share amounts)
(Unaudited)
Three months ended Nine months ended
March 31, March 31,
--------------------- --------------------
2007 2006 2007 2006
---------- ---------- ---------- ---------
Revenues:
Services revenues $ 477.6 $ 437.1 $ 1,320.5 $ 1,173.0
Other 21.8 17.6 61.9 53.7
---------- ---------- ---------- ---------
Total revenues 499.4 454.7 1,382.4 1,226.7
Interest expense from
securities operations 6.6 4.2 18.2 11.5
---------- ---------- ---------- ---------
Net revenues 492.8 450.5 1,364.2 1,215.2
---------- ---------- ---------- ---------
Cost of net revenues 375.1 348.4 1,050.9 935.3
Selling, general and
administrative expenses 47.6 45.0 149.2 144.1
Other expenses, net 0.2 1.3 1.8 1.9
---------- ---------- ---------- ---------
422.9 394.7 1,201.9 1,081.3
Earnings from continuing
operations before income taxes 69.9 55.8 162.3 133.9
Provision for income taxes 28.0 22.5 63.9 54.0
---------- ---------- ---------- ---------
Net earnings from continuing
operations 41.9 33.3 98.4 79.9
Income (loss) from discontinued
operations, net of provision
(benefit) for income taxes of
$0.2 million and $(8.9)
million for the three and nine
months ended March 31, 2006,
respectively -- 0.3 -- (13.9)
---------- ---------- ---------- ---------
Net earnings $ 41.9 $ 33.6 $ 98.4 $ 66.0
========== ========== ========== =========
Basic and diluted earnings per
share:
Basic and diluted earnings
per share from continuing
operations $ 0.30 $ 0.24 $ 0.71 $ 0.58
Basic and diluted loss per
share from discontinued
operations -- -- -- (0.10)
---------- ---------- ---------- ---------
Basic and diluted earnings
per share $ 0.30 $ 0.24 $ 0.71 $ 0.48
========== ========== ========== =========
Weighted-average shares
outstanding:
Basic and diluted 138.8 138.8 138.8 138.8
Broadridge Financial Solutions, Inc.
Condensed Consolidated and Combined Balance Sheets
(In millions, except per share amounts)
March 31, June 30,
2007 2006
--------- ---------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 43.2 $ 50.1
Cash and securities segregated for regulatory
purposes and securities deposited with clearing
organizations 143.2 40.3
Accounts receivable, net 371.4 404.2
Securities clearing receivables 940.3 836.8
Other current assets 115.5 74.5
--------- ---------
Total current assets 1,613.6 1,405.9
Property, plant and equipment, net 73.5 80.7
Other non-current assets 126.1 111.3
Goodwill 479.8 480.4
Intangible assets, net 33.3 56.4
--------- ---------
Total assets $ 2,326.3 $ 2,134.7
========= =========
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 83.1 $ 78.4
Accrued expenses and other current liabilities 183.7 172.9
Securities clearing payables 732.8 613.6
Deferred revenues 37.0 9.5
Notes payable to affiliated parties -- 115.9
Short-term borrowings 331.0 --
--------- ---------
Total current liabilities 1,367.6 990.3
Long-term debt 440.0 --
Other non-current liabilities 50.3 59.4
Deferred revenues 42.9 41.8
--------- ---------
Total liabilities 1,900.8 1,091.5
--------- ---------
Commitments and contingencies (Note 14)
Stockholders’ equity:
Parent company’s net investment -- 998.0
Preferred stock: Authorized, 25.0 shares; issued and
outstanding, none -- --
Common stock, $.01 par value: Authorized, 650.0
shares; issued and outstanding, 138.8 shares at
March 31, 2007 1.4 --
Additional paid-in capital 402.4 --
Accumulated other comprehensive income 21.7 45.2
--------- ---------
Total stockholders’ equity 425.5 1,043.2
--------- ---------
Total liabilities and stockholders’ equity $ 2,326.3 $ 2,134.7
========= =========
Broadridge Financial Solutions, Inc.
Segment Results
(In millions)
(Unaudited)
Net revenues
------------------------------------------
Three months ended Nine months ended
March 31, March 31,
--------------------- --------------------
2007 2006 2007 2006
---------- --------- --------- ---------
Investor Communication
Solutions $ 337.5 $ 308.0 $ 929.5 $ 820.1
Securities Processing Solutions 131.2 125.4 369.6 349.9
Clearing and Outsourcing
Solutions 23.2 20.6 68.2 58.1
Other 0.1 (4.3) (7.9) (12.6)
Foreign exchange 0.8 0.8 4.8 (0.3)
---------- --------- --------- ---------
Total $ 492.8 $ 450.5 $ 1,364.2 $ 1,215.2
========== ========= ========= =========
Earnings from Continuing
Operations before Income
Taxes
------------------------------------------
Three months ended Nine months ended
March 31, March 31,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Investor Communication
Solutions $ 31.1 $ 22.4 $ 73.3 $ 65.1
Securities Processing Solutions 42.4 40.9 106.6 96.3
Clearing and Outsourcing
Solutions (1.1) (5.0) (11.3) (20.8)
Other (2.6) (2.9) (7.9) (6.7)
Foreign exchange 0.1 0.4 1.6 (0.0)
--------- --------- --------- ---------
Total $ 69.9 $ 55.8 $ 162.3 $ 133.9
========= ========= ========= =========
Broadridge Financial Solutions, Inc.
Intersegment Transfer Price Reconciliation
(Unaudited)
Three months ended
March 31
=====================
($ in millions) FY '07 FY '06
========= =========
Investor Communication Solutions
Net revenue as reported - GAAP 337.5 308.0
Transfer pricing adjustment - (1.3)
--------- ---------
Net revenue as Adjusted - Non-GAAP 337.5 306.7
--------- ---------
EBIT as reported - GAAP 31.1 22.4
Transfer pricing adjustment - (0.7)
--------- ---------
EBIT as Adjusted - Non-GAAP 31.1 21.7
--------- ---------
Margin % as reported - GAAP 9.2% 7.3%
Margin % as adjusted - Non-GAAP 9.2% 7.1%
========= =========
Securities Processing Solutions
Net revenue as reported - GAAP 131.2 125.4
Transfer pricing adjustment - (3.0)
--------- ---------
Net revenue as Adjusted - Non-GAAP 131.2 122.4
--------- ---------
EBIT as reported - GAAP 42.4 40.9
Transfer pricing adjustment - (2.1)
--------- ---------
EBIT as Adjusted - Non-GAAP 42.4 38.8
--------- ---------
Margin % as reported - GAAP 32.3% 32.6%
Margin % as adjusted - Non-GAAP 32.3% 31.7%
========= =========
Clearing and Outsourcing Solutions
Net revenue as reported - GAAP 23.2 20.6
Transfer pricing adjustment - -
--------- ---------
Net revenue as Adjusted - Non-GAAP 23.2 20.6
--------- ---------
EBIT as reported - GAAP (1.1) (5.0)
Transfer pricing adjustment - 2.8
--------- ---------
EBIT as Adjusted - Non-GAAP (1.1) (2.2)
--------- ---------
Margin % as reported - GAAP -4.7% -24.3%
Margin % as adjusted - Non-GAAP -4.7% -10.7%
========= =========
Broadridge Financial Solutions, Inc.
Earnings from Continuing Operations
Excluding Transition Costs
(Unaudited)
MAY 15th EARNINGS CALL GUIDANCE
$ in millions, reflects
continuing operations
------------------------------------------
Actual Forecast Forecast
FY06 FY07E FY08
------ --------------- --------------
Broadridge Net Revenues 1,933 2,070 - 2,100
Growth % 12.6% 7% - 9% 0.0 - 3.0 %
ADP Segments Earnings before
Taxes 309 346 - 361
Margin % 16.0% 16.7% - 17.2%
Adjustments:
Stock Compensation (24) (24)
ADP Royalties/Corporate (35) (35)(4)
ADP Corporate Charges 40 40
Foreign Exchange 7 4
Other 6 (1)
------ ---------------
Total Adjustments (6) (16) -
Broadridge PF Earnings Before
Royalties Add Back,
Public Company Costs, ------ --------------- --------------
Interest and Taxes (1) 303 330 - 345 -
====== =============== ==============
Margin % 15.7% 15.9% - 16.4% 14.5 - 15.0 %
Growth % 10.5% 9.0% - 14.0% (10.0) - (5.0)%
ADP Royalties - - 35
Broadridge PF Earnings Before
Public Company Costs, ------ --------------- --------------
Interest and Taxes 303 330 - 345
====== =============== ==============
Total Public Company Costs(2) (30)
Broadridge PF Earnings Before ------ --------------- --------------
Interest and Taxes 303 330 - 345
====== =============== ==============
Margin % 15.7% 15.9% - 16.4% 14.7% - 15.3 %
Interest on New Debt (10) (38)
Broadridge PF Earnings Before ------ --------------- --------------
Taxes 303 320 - 335
====== =============== ==============
Income Taxes at 40% (122) (128) - (134) 40 %
Broadridge PF Net Income ====== =============== ==============
(before transition costs) 181 192 - 201
====== =============== ==============
After-Tax Margin % 9.4% 9.3% - 9.6%
------ --------------- --------------
Note: One-time transition
costs excluded in the above - 9 5 - 10
------ --------------- --------------
Earnings Per Share before
One-time transition Costs &
Interest (3) $ 1.30 $ 1.42 - $ 1.49
Growth % 9.2% - 14.6%
Earnings Per Share after
One-time transition Costs &
Interest $ 1.30 $ 1.32 - $ 1.38
Growth % 1.5% - 6.2%
Notes:
(1) Combination of ADP reporting segments: Brokerage Services and
Securities Clearing and Outsourcing Services.
FY'07 forecast prepared in accordance with the same accounting policies
as described in the Form 10.
(2) FY'08 normalized to reflect full year effect of corporate departments
and increased benefits and insurance costs.
(3) Total shares outstanding equals 139 million
(4) Estimated $8m in corporate expense for Q407, and $27m in Royalty
Charges
Contact Information: Contact: Broadridge Investor Relations Marvin Sims 212.981.1427