Press Releases

Broadridge Begins Investor Road Show on March 21, 2007 for Upcoming Spin-Off From ADP - Provides Financial Outlook as Standalone Company

NEW YORK, New York -- March 21, 2007 -- Broadridge Financial Solutions, LLC, which immediately prior to the spin-off will convert to a Delaware corporation, Broadridge Financial Solutions, Inc. ("Broadridge"), announced today that it will begin making presentations to the equity investment community in preparation for its planned March 30, 2007 spin-off from Automatic Data Processing, Inc. (NYSE: ADP). The meetings will be led by Richard Daly, Chief Executive Officer and Dan Sheldon, Chief Financial Officer. Other members of the management team, including Executive Chairman Art Weinbach, will also be in attendance at selected group meetings. The company's road show presentation and a video presentation are available on the ADP Investor Relations home page http://www.investquest.com/InvestQuest/a/adp/.

Financial Outlook

Broadridge will provide financial guidance during the presentations. Assuming completion of its separation from ADP on March 30, 2007, Broadridge expects revenue growth for fiscal year ending June 30, 2007 of 7% to 9% from fiscal 2006 revenue of $1.93 billion. For fiscal year ending June 30, 2007, the company expects operating income growth, excluding expenses related to its spin-off from ADP, interest expense on new debt, and public company expenses, of 9% to 14% from fiscal year 2006 operating income of $303 million.

Our directional view for fiscal year 2008, after taking into consideration the two anticipated client losses totaling $84.5 million of revenue in fiscal year 2006 as disclosed in the company's Form 10 filing, and the continuation of current market trends, is for revenue growth in the range of 0% to 3%. In addition, the company expects operating income, excluding expenses related to its spin-off from ADP, interest expense on new debt, and public company expenses, to decrease 5% to 10%.

Broadridge's long-term objective beyond fiscal year 2008 is to deliver revenue growth of 4% to 6%, operating income growth of 6% to 9% and net income growth of 10% to 15%.

Non-GAAP Measures

In certain circumstances, results have been presented that are non-GAAP (generally accepted accounting principles) measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP measures are available in the accompanying schedules to this press release.

Safe Harbor Compliance Statement for Forward-Looking Statements

This document and other written or oral statements made from time to time by Broadridge or ADP 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. 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. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: the impact of Broadridge's separation from ADP on the clients, employees and other aspects of Broadridge's business; Broadridge's cost structure and capital structure as a stand-alone company, including its credit ratings and indebtedness; Broadridge's success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating registered clearing agencies and broker-dealers; overall market and economic conditions; competitive conditions; stock market activity; changes in technology; availability of skilled technical associates and the impact of new acquisitions and divestitures. Broadridge and ADP disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Financial Guidance

------------------

($ in millions)

 

                                                                           Forward

                       FY?06A        FY?07E        FY?08E      Outlook

                       ------        ------        ------      -------

 

Revenue                $1,933    $2,070-$2,100

  % growth               13%          7-9%          0-3%        4-6%

 

 

Operating Profit (1)    $303       $330-$345

  % margin             15.70%      15.9-16.4%    14.5-15.0%    16-17%

  % growth               11%          9-14%      (10)-(5)%      6-9%

 

Net Income/EPS

  % growth                                                     10-15%

 

(1) Q4 FY?07E and FY?08E reflect Operating Profit excluding one-time spin

expenses, interest expense on new debt, and additional public company

expenses.

See Appendix for reconciliation.  FY?06 Operating Profit includes stock

compensation expense of $24 and Depreciation and Amortization expense of

$74.

 

Pro Forma Reconciliation

------------------------

 

 

$ in millions, reflects

 continuing operations               FY'06

                          ----------------------------

                                                Pro

                          Form 10    Client   Forma As

                            Pro      Adjust-  Adjusted

                          Forma(1)   ments(2)    (3)     FY'07E    FY'08E

                          --------  --------- --------  --------  --------

Broadridge Net Revenues      1,849         85    1,933   2,070-

                                                           2,100

 

  Growth %                                        12.6%    7.1-   0.0-3.0%

                                                            8.6%

 

ADP Segment Earnings                               309     346-

 before Taxes                                                361

 

  Margin %                                        16.0%   16.7-

                                                            17.2%

 

  Adjustments:

   Stock Compensation                              (24)      (24)

   ADP Royalties                                   (35)      (35)

   ADP Corporate Charges                            40        40

   Foreign Exchange                                  6         3

   Other                                             6         -

                                              --------  --------

  Total Adjustments                                 (7)      (16)

Broadridge PF Earnings

 Before Royalties Add

 back, Public Company

 Costs, Interest, and     --------  --------- --------  --------

 Taxes (4)                     266         37      303     330-

                                                             345

                          ========  ========= ========  ========

 

  Margin %                                        15.7%   15.9-     14.5-

                                                            16.4%     15.0%

 

  Growth %                                        10.5%    9.0-    (10.0)-

                                                            14.0%    (5.0)%

 

  ADP Royalties                 35                  35        35         35

 

Broadridge PF Earnings

 Before Public Company    --------            --------  --------

 Costs, Interest, and                                      365-

 Taxes                         301                 338       380

                          ========            ========  ========

 

  Total Public Company

   Costs (5)(6)                (30)                (30)      (30)      (30)

                          --------            --------  --------

Broadridge PF Earnings

 Before Interest and           271                 308    335-

 Taxes                                                       350

                          ========            ========  ========

 

  Margin %                                        15.9%  16.2-      14.7-

                                                            16.7%     15.3%

 

  Interest on New Debt         (42)                (42)      (42)      (38)

 

                          --------            --------  --------

Broadridge PF Earnings         229                 266    293-

 Before Taxes                                                308

                          ========            ========  ========

  Income Taxes at 40%                             (106)   (118)-        40%

                                                            (124)

 

                                              ========  ========

Broadridge PF Net                                  160    175-

 Earnings                                                    184

                                              ========  ========

 

  After-Tax Margin %                               8.3%    8.5-

                                                             8.8%

 

 

                          --------  --------- --------  --------  --------

Note:  one-time

 transition costs

 excluded in the above                                   10-15       5-10

 

                          --------  --------- --------  --------  --------

 

Notes:

(1) See Form 10 filing for details on pro forma adjustments.

(2) Reflects client losses made in Form 10 pro forma.

(3) ADP's Press Release announcing Broadridge as a discontinued

    operation discloses revenues of $1,906 and earnings before taxes

    of $344. The revenue adjustments were for foreign exchange and

    intercompany revenue eliminations of $27, while earnings were adjusted

    to exclude ADP overhead allocations of $7 that are not eligible for

    discontinued operations treatment.

(4) 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.

(5) FY'06 and FY'07E normalized to reflect full year effect of corporate

    departments and increased benefits and insurance costs.

(6) Estimated cost for the 4th quarter FY'07E will be $7.5 of the

    annualized $30 estimate shown.

-ends-

About Broadridge

Broadridge Financial Solutions, Inc. (NYSE:BR) is the leading provider of investor communications and technology-driven solutions for broker-dealers, banks, mutual funds and other corporations. Broadridge’s investor and customer communications, securities processing and managed services solutions help clients reduce their capital investments in operations infrastructure, allowing them to increase their focus on core business activities. With over 50 years of experience, Broadridge's infrastructure underpins proxy voting services for over 90% of public companies and mutual funds in North America and processes on average $5 trillion in equity and fixed income trades per day. Broadridge employs approximately 10,000 associates in 14 countries.

For more information about Broadridge, please visit www.broadridge.com.

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