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Article by DailyStocks_admin    (07-30-08 08:56 AM)

The Daily Magic Formula Stock for 07/30/2008 is Broadridge Financial Solutions Inc. According to the Magic Formula Investing Web Site, the ebit yield is 11% and the EBIT ROIC is >100 %.

Dailystocks.com only deals with facts, not biased journalism. What is a better way than to go to the SEC Filings? It's not exciting reading, but it makes you money. We cut and paste the important information from SEC filings for you to get started on your research on a specific company.


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BUSINESS OVERVIEW

Overview

We are a leading global provider of technology-based outsourcing solutions to the financial services industry. Our systems and services include investor communication solutions, securities processing solutions, and securities clearing and operations outsourcing solutions. In short, we provide the infrastructure that helps make the financial services industry work. With more than 40 years of experience, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated systems. Our systems help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities.

We serve a large and diverse client base in the financial services industry, including retail and institutional brokerage firms, global banks, mutual funds, annuity companies, institutional investors, specialty trading firms, and clearing firms. We also provide services to corporate issuers.

We deliver a broad range of solutions that help our clients better serve their retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing. Our securities processing systems enable our clients to process transactions in more than 50 markets. In fiscal 2007, we: (i) distributed over one billion investor communications in either paper or electronic form as requested by the investor, including proxy materials, investor account statements, trade confirmations, tax statements, pre-sale and post-sale prospectuses; (ii) provided components of our securities processing solutions to seven of the top 10 U.S. broker-dealers, as ranked by Securities Industry and Financial Markets Association (“SIFMA”); and (iii) served over 90 correspondents through our securities clearing services. Our operations are classified into three business segments:

Investor Communication Solutions

A large portion of our Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge ® , our innovative electronic proxy delivery and voting solution for institutional investors, helps ensure the participation of many companies’ largest stockholders. We also provide the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help our clients meet their regulatory compliance needs. Our solutions also include financial information distribution and transaction reporting services to both financial institutions and securities issuers. These services include the processing and distribution of account statements and trade confirmations, traditional and personalized document fulfillment and content management services, and imaging, archival and workflow solutions that enable and enhance our clients’ communications with investors. All of these services are delivered through physical and electronic means.

Securities Processing Solutions

We offer a suite of advanced computerized real-time transaction processing services that automate the securities transaction lifecycle, from desktop productivity tools and portfolio management to order capture and execution, trade confirmation, settlement, and accounting. Our services help financial institutions efficiently and cost-effectively consolidate their books and records, focus on their core businesses, and manage risk. With multi-currency capabilities, our Global Processing Solution supports real-time global trading of equity, option, mutual fund and fixed income securities in established and emerging markets.

Clearing and Outsourcing Solutions

Securities clearing and settlement is the process of matching, recording, and processing transaction instructions and then exchanging payment between counterparties. Our securities clearing services enable clients to utilize our broker-dealer business to finance inventory and margin balances. Our operations outsourcing solutions allow brokers of all sizes to outsource certain administrative functions relating to clearing and settlement to us, from order entry to trade matching and settlement, while maintaining their ability to finance and capitalize their business.

History and Development of Our Company

We are the former brokerage services business of Automatic Data Processing, Inc. (“ADP”). On March 30, 2007, we spun off from ADP and began operating as an independent public company. Our company has more than 40 years of history of providing innovative solutions to the financial services industry and publicly-held companies. In 1962, the Brokerage Services division of ADP opened for business with one client, processing an average of 300 trades per night. In 1979, we expanded our U.S.-based securities processing solutions to process Canadian securities.

We made significant additions to our Securities Processing Solutions business through two key acquisitions in the mid-1990s. In 1995, we acquired a London-based provider of multi-currency clearance and settlement services, to become a global supplier of transaction processing services. In 1996, we acquired a provider of institutional fixed income transaction processing systems. In fiscal 2007, we processed on average approximately $2 trillion per day in fixed income trades.

We began offering our proxy services in 1989. The proxy services business, which started what has become our Investor Communication Solutions business, leveraged the information processing systems and infrastructure of our Securities Processing Solutions business. Our proxy services offering attracted 31 major clients in its first year of operations. In 1992, we acquired The Independent Election Corporation of America which further increased our proxy services capabilities. By 1999, we were handling over 90% of the investor communication distributions for all securities held of record by banks and brokers in the United States — from proxy statements to annual reports. During the 1990s, we expanded our proxy services business to serve security owners of Canadian and United Kingdom issuers and we began offering a complete outsourced solution for international proxies.

In 1998, having previously provided print and distribution services as an accommodation to our securities processing and proxy clients, we decided to focus on account statement and reporting services. In 2001, we developed and released PostEdge ® to meet the need for electronic distribution and archiving of all investor communications.

In 2005, we entered the securities clearing business by purchasing Bank of America Corporation’s U.S. Clearing and BrokerDealer Services businesses. The following year we commenced offering our unique business process outsourcing service to self-clearing U.S. broker-dealers.

Broadridge Financial Solutions, Inc. was incorporated in Delaware as a wholly-owned subsidiary of ADP on March 29, 2007 in anticipation of our spin-off from ADP.

The Separation of Broadridge from ADP

The spin-off by ADP of its brokerage services business became effective on March 30, 2007 through a distribution of 100% of the common stock of Broadridge to the holders of record of ADP’s common stock on March 23, 2007 (the “Distribution”). The Distribution was effected pursuant to a separation and distribution agreement by which ADP contributed to Broadridge the subsidiaries that operated its brokerage services business. ADP distributed all of the shares of Broadridge as a dividend on ADP common stock, in the amount of one share of our common stock for every four shares outstanding of ADP common stock to each stockholder on the record date. ADP has received a private letter ruling from the Internal Revenue Services and an opinion from tax counsel indicating that the spin-off was tax free to the stockholders, ADP and Broadridge. Please refer to Item 1A of Part I “Risk Factors” of this Annual Report on Form 10-K for information on the tax risks associated with the spin-off from ADP.

In connection with the spin-off, we made a cash payment to ADP on March 30, 2007 of $690.0 million which was financed through borrowings under $1,190.0 million of credit facilities that were entered into on March 29, 2007. The payment was made to ADP as a dividend. These borrowings consisted of $440.0 million under a five-year term loan facility and $250.0 million under a one-year revolving credit facility. The credit facilities are subject to covenants including financial covenants consisting of a leverage ratio and an interest coverage ratio. In May 2007, we repaid the $250.0 million one-year revolving credit facility with the proceeds of our offering of $250.0 million in aggregate principal amount of senior notes (the “Senior Notes”) and cash. The Senior Notes will mature on June 1, 2017 and bear interest at a rate of 6.125% per annum. Interest on the Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2007. The indenture governing the Senior Notes contains certain restrictive covenants, which, among other things, limit our ability to create or incur liens securing indebtedness for borrowed money and to enter into certain sale-leaseback transactions. The indenture also contains a covenant requiring the repurchase of the Senior Notes upon a change of control triggering event. The Senior Notes are senior unsecured obligations and rank equally with our other senior indebtedness. Broadridge may redeem the Senior Notes in whole or in part at any time prior to their maturity. The one-year revolving credit facility was cancelled upon repayment. On June 29, 2007, we repaid $70.0 million of the five-year term loan facility.

A significant portion of the expenses to effect the separation were incurred by ADP, such as investment banking fees, related outside legal and accounting fees, office move costs, costs to separate information systems and temporary consulting costs. Broadridge incurred separation costs that have a future benefit to Broadridge, including stock compensation expense relating to the Distribution and other items such as relocation expenses associated with filling senior management positions new to Broadridge, and the temporary labor costs incurred to maintain and develop ongoing processes for operating on a stand-alone basis.

The financial statements in this Annual Report on Form 10-K for the periods ended on or after the Distribution are presented on a consolidated basis and include the accounts of Broadridge and its majority-owned subsidiaries. The financial statements for the periods presented prior to the Distribution are presented on a combined basis and represent those entities that were ultimately transferred to Broadridge as part of the spin-off. The assets and liabilities presented have been reflected on a historical basis, as prior to the Distribution such assets and liabilities were owned by ADP. However, the financial statements for the periods presented prior to the Distribution do not include all of the actual expenses that would have been incurred had Broadridge been a stand-alone entity during the periods presented and do not reflect Broadridge’s combined results of operations, financial position and cash flows had Broadridge been a stand-alone company during the periods presented. The results of operations, financial position and cash flows for periods prior to the Distribution are not necessarily indicative of the results that may be expected for any other future period as a result of the presentation described above.

Our Relationship with ADP

General

We entered into agreements with ADP prior to the spin-off to govern the terms of the spin-off and to define our ongoing relationship following the spin-off, allocating responsibility for obligations arising before and after the spin-off, including obligations with respect to liabilities relating to ADP’s business and to Broadridge’s business and obligations with respect to our employees, certain transition services, taxes and the provision of data center services. We entered into these agreements with ADP while we were a wholly-owned subsidiary of ADP. Accordingly, during this time our officers and directors were employees and officers of ADP, and as such had an obligation to serve the interests of ADP. We believe our officers and officers of ADP negotiated these arrangements in good faith taking into account the interests of their respective companies in the separation. With respect to the data center outsourcing services agreement, each of ADP and Broadridge retained separate consultants to advise them on the terms of the agreement. The key terms of the principal agreements that continue to be operative are summarized below.

Separation and Distribution Agreement

The separation and distribution agreement contained the key provisions relating to the separation of our business from that of ADP and the Distribution. The separation and distribution agreement identified the assets to be transferred, liabilities to be assumed and contracts to be assigned to us by ADP and by us to ADP in the separation and described when and how these transfers, assumptions and assignments occurred. In addition, it included procedures by which ADP and we became separate and independent companies.

In general, under the separation and distribution agreement, we will indemnify ADP and its representatives and affiliates against certain liabilities, to the extent relating to, arising out of or resulting from:


•

our failure to pay, perform or otherwise promptly discharge any of our liabilities or any of our contracts or agreements;


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the operation of our business, whether prior to or after the Distribution;


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any breach by us of the separation and distribution agreement; and


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any untrue statement or alleged untrue statement of a material fact or material omission or alleged material omission in the registration statement on Form 10 filed in connection with the spin-off, in each case, other than certain information relating to ADP and the Distribution.

In general, under the separation and distribution agreement, ADP will indemnify us and our representatives and affiliates against certain liabilities to the extent relating to, arising out of or resulting from:


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the failure of ADP to pay, perform or otherwise promptly discharge any liability of ADP or any ADP contract or agreement;


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the operation of its business, whether prior to or after the Distribution;


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any breach by ADP of the separation and distribution agreement; and


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any untrue statement or alleged untrue statement of a material fact or material omission or alleged material omission in the registration statement on Form 10 filed in connection with the spin-off, only for certain information relating to ADP and the Distribution.

Tax Allocation Agreement

The tax allocation agreement governs both our and ADP’s rights and obligations after the Distribution with respect to taxes for both pre- and post-Distribution periods. Under the tax allocation agreement, ADP generally is required to indemnify us for any income taxes attributable to its operations or our operations and for any non-income taxes attributable to its operations, in each case for all pre-Distribution periods as well as any taxes arising from transactions effected to consummate the spin-off, and we generally are required to indemnify ADP for any non-income taxes attributable to our operations for all pre-Distribution periods and for any taxes attributable to our operations for post-Distribution periods.

We are generally required to indemnify ADP against any tax resulting from the Distribution (and against any claims made against ADP in respect of any tax imposed on its stockholders), in each case if that tax results from (i) an issuance of a significant amount of our equity securities, a redemption of a significant amount of our equity securities or our involvement in other significant acquisitions of our equity securities (excluding the Distribution of our stock in the spin-off), (ii) other actions or failures to act by us (such as those described in the following paragraph) or (iii) any of our representations or undertakings referred to in the tax allocation agreement being incorrect or violated. ADP is generally required to indemnify us for any tax resulting from the Distribution if that tax results from (iv) ADP’s issuance of its equity securities, redemption of its equity securities or involvement in other acquisitions of its equity securities, (v) other actions or failures to act by ADP or (vi) any of ADP’s representations or undertakings referred to in the tax allocation agreement being incorrect or violated.

In addition, to preserve the tax-free treatment to ADP of the Distribution, for specified periods of up to 30 months following the Distribution, we are generally prohibited, except in specified circumstances, from:


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issuing, redeeming or being involved in other significant acquisitions of our equity securities (excluding the Distribution of our stock in the spin-off);

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transferring significant amounts of our assets;


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amending our certificate of incorporation or by-laws;


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failing to comply with the Internal Revenue Service requirement for a spin-off that we engage in the active conduct of a trade or business after the spin-off; or


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engaging in other actions or transactions that could jeopardize the tax-free status of the Distribution.

Transition Services Agreement

We entered into a transition services agreement with ADP prior to the Distribution under which ADP, its affiliates or third party service providers will provide us with certain specified services on an interim basis. The agreement will expire and services under it will cease on March 30, 2008 or sooner in the event we no longer require such services. We pay fees to ADP for any services provided, which fees are generally intended to be equal to the applicable allocable cost of ADP’s services to the brokerage services business prior to the Distribution.

Data Center Outsourcing Services Agreement

We entered into an arm’s length data center outsourcing services agreement with ADP prior to the Distribution under which ADP provides us with data center services consistent with the services provided to us immediately prior to the Distribution, provided that the operation of the data center is the sole responsibility of ADP. Among the principal services provided by the data center are information technology services and service delivery network services. The agreement with ADP provides for increasing volumes and the addition of new services over the term. Under the agreement, ADP is responsible for hosting our mainframe, midrange, open systems, and networks. Additionally, systems engineering, network engineering, hardware engineering, network operations, data center operations, application change management, and data center disaster recovery services are managed by ADP. The agreement will expire on June 30, 2012.

Intellectual Property Transfer Agreement

We entered into an intellectual property transfer agreement with ADP and certain of its subsidiaries prior to the Distribution. Under this agreement, the parties assigned to one another a limited number of patents, trademarks, copyrights and other intellectual property: (i) developed by the other party and (ii) of which such other party is the primary or exclusive user as of the date of the agreement or the anticipated primary or exclusive user in the future. Where the development costs have been shared, (i) we entered into royalty-free cross licenses of certain intellectual property rights to ADP and certain of its subsidiaries and (ii) ADP and certain of its subsidiaries entered into royalty-free cross licenses of certain intellectual property rights to us. In addition, the parties granted to each other the option to acquire additional license rights to certain intellectual property at fair market value.

Employee Matters Agreement

We entered into an agreement with ADP prior to the Distribution pursuant to which certain employee benefits matters were addressed, such as the treatment of ADP stock options held by our employees after the separation, and the treatment of the ADP Supplemental Officer Retirement Plan (“ADP SORP”) benefits for our management employees who participated in and have accrued benefits under the ADP SORP who transferred to Broadridge at the time of the spin-off. The agreement also delineated the benefit plans and programs in which our employees will participate following the separation.

Other Transactions with ADP

We have contracted with ADP for the provision of human resources, payroll and benefits administration services of the type provided by ADP in the ordinary course of its business to third parties, on terms and conditions we believe are similar to those we could obtain from other providers of these services. ADP is a client of fulfillment and other services that we provide in the ordinary course of our business to third parties, on terms and conditions we believe are similar to those ADP could obtain from other providers of these services.

Our Products and Services

Our operations are classified into three business segments: Investor Communication Solutions, Securities Processing Solutions and Clearing and Outsourcing Solutions.

Investor Communication Solutions

A majority of publicly traded shares are not registered in companies’ records in the names of their ultimate beneficial owners. Instead, a substantial majority of all public companies’ shares are held in “street name,” meaning that they are held of record by brokers or banks through their depositories. Most street name shares are registered in the name “Cede & Co.,” the name used by The Depository Trust and Clearing Corporation (“DTCC”), which holds shares on behalf of its participant brokers and banks. These participant brokers and banks (which are known as nominees because they hold securities in name only) in turn hold the shares on behalf of their clients, the individual beneficial owners. Nominees, upon request, are required to provide companies with lists of beneficial owners who do not object to having their names, addresses and share holdings supplied to companies, so called “non-objecting beneficial owners” (or “NOBOs”). Objecting beneficial owners (or “OBOs”) may be contacted directly only by the broker or bank, or its agent.

Because DTCC’s role is only that of custodian, a number of mechanisms have been developed in order to pass the legal rights it holds as the record owner (such as the right to vote) to the beneficial owners. The first step in passing voting rights down the chain is the “omnibus proxy,” which DTCC executes to transfer its voting rights to its participant nominees.

Under applicable rules, nominees must deliver proxy materials to beneficial owners and request voting instructions. Nominees are often prohibited by applicable New York Stock Exchange (“NYSE”) or other self-regulatory organization (“SRO”) rules or by express agreements with their customers from voting the securities held in their customers’ accounts in the absence of receiving such customers’ voting instructions.

A large number of nominees have contracted out the administrative processes of distributing proxy materials and tabulating voting instructions to us. Nominees accomplish this by transferring to us via powers of attorney the authority to execute a proxy, which authority they receive from DTCC (via omnibus proxy). We then distribute the proxy materials and voting instruction forms (known as “VIFs”) to beneficial owners.

SEC rules require public companies to reimburse nominees for the expense of distributing stockholder communications to beneficial owners of securities held in street name. The reimbursement rates are set forth in the rules of SROs, including the NYSE. We act as a billing and collection agent for many nominees with respect to this reimbursement. We bill public companies on behalf of the nominees, collect the fee and remit to the nominee any difference between the fee that the nominee is entitled to collect and the amount that the nominee has agreed to pay us for our services.

We also compile NOBO lists on behalf of nominees in response to requests from issuers. The preparation of NOBO lists is subject to reimbursement by the securities issuers requesting such lists to the brokers. The reimbursement rates are based on the number of NOBOs on the list produced pursuant to NYSE or other SRO rules. Such rules also provide for certain fees to be paid to third party intermediaries who compile such NOBO lists. We function as such an intermediary in the NOBO process.

We also provide proxy distribution, vote tabulation and various additional investor communication tools and services to institutional investors, corporate issuers, and investment companies.

The products we provide include:

Bank and Brokerage Offerings . We handle the entire proxy materials distribution and voting process for our bank and broker-dealer clients on-line and in real-time, from coordination with third-party entities to ordering, inventory maintenance, mailing, tracking and vote tabulation. We offer electronic proxy delivery services for the electronic delivery of proxy materials to investors and collection of consents; maintenance of a database that contains the delivery method preferences of our clients’ customers; posting of documents on the Internet; e-mail notification to investors notifying them that proxy materials are available; and proxy voting over the Internet. We also have the ability to combine stockholder communications for multiple stockholders residing at the same address which we accomplish by having ascertained the delivery preferences of holders of approximately 95 million beneficial stockholder accounts. In addition, we provide a complete outsourced solution for the processing of international proxies. We also provide a complete reorganization communications solution to notify investors of reorganizations or corporate action events such as tender offers, mergers and acquisitions, bankruptcies and class action lawsuits.

We also offer our bank and brokerage clients financial information distribution and transaction reporting services to help them meet their regulatory compliance requirements and business needs including: Pre-Sale and Post-Sale Prospectus Fulfillment services; Electronic Prospectus services; Investor Mailbox, our service providing the electronic delivery of investor communications to our clients’ websites; PostEdge ® , our electronic document archival and electronic delivery solution for documents including trade confirmations, tax documents and account statements; Imaging and Workflow solutions; and On-Demand Digital print services.

Institutional Investor Offerings . We provide a suite of services to manage the entire proxy voting process of institutional investors, including fulfilling their fiduciary obligations and meeting their reporting needs such as ProxyEdge ® , our workflow solution that integrates ballots for positions held across multiple custodians and presents them under a single proxy. Voting can be instructed for the entire position, by account vote group or on an individual account basis either manually or automatically based on the recommendations of participating governance research providers. ProxyEdge ® also provides for client reporting and regulatory reporting. ProxyEdge ® can be utilized for meetings of U.S. and Canadian companies and for meetings in many non-North American countries based on the holdings of our global custodian clients.

Corporate Issuer Offerings . We are the largest processor and provider of investor communication solutions to public companies. We offer our corporate issuer clients many tools to facilitate their communications with investors such as Internet and telephone proxy voting, electronic delivery of corporate filings, and householding of communications to stockholders at the same address. One of our opportunities for growth in the Investor Communication Solutions segment involves serving corporate issuer clients in providing communications services to registered stockholders — that is, stockholders who do not hold their shares through a broker in street name. We also offer proxy services to non-North American corporate issuers in connection with their general and special meetings of stockholders. Our corporate issuer services include ShareLink ® , our service for corporate issuers that enables the creation and printing of personalized proxy forms in a variety of formats. ShareLink ® provides complete project management for the beneficial and registered proxy process.

Mutual Fund Offerings . We provide a full range of tools that enable mutual funds to communicate with large audiences of investors efficiently, reliably and often with substantial cost savings. Our solutions allow mutual funds to centralize all investor communications through one resource. We also provide printing and mailing of regulatory reports, prospectuses and proxy materials. In addition, we distribute pre-sale marketing literature and informational materials and create on-demand enrollment materials for mutual fund investors. Our unique position in the industry enables us to manage the entire communication process with both registered and beneficial stockholders.

Securities Processing Solutions

Transactions involving securities and other financial market instruments originate with an investor, who places an order with a broker who in turn routes that order to an appropriate market for execution. At that point, the parties to the transaction coordinate payment and settlement of the transaction through a clearinghouse. The records of the parties involved must then be updated to reflect completion of the transaction. Tax, accounting and record-keeping requirements must be complied with in connection with the transaction and the customer’s account information must correctly reflect the transaction. The accurate processing of trading activity requires effective automation and information flow across multiple systems and functions within the brokerage firm and across the systems of the various parties that participate in the execution of a transaction.

Our securities processing solutions automate the transaction lifecycle of equity, mutual fund, fixed income, and option securities trading operations, from order capture and execution through trade confirmation, settlement, and accounting. Our services facilitate the automation of straight-through-processi ng operations and enable financial institutions efficiently and cost-effectively to consolidate their books and records, focus on their core businesses, and manage risk. With our multi-currency capabilities, we support trading activities on a global basis. Our securities processing solutions include the following:

North American Processing Services . We provide a set of sophisticated, multi-currency systems that support real-time processing of securities transactions in North American equities, options, fixed income securities and mutual funds. Brokerage Processing Services (“BPS”) is our core multi-currency back-office processing system that supports real-time processing of transactions in the U.S. markets. BPS handles everything from order management to clearance and settlement, and assists our clients in meeting their regulatory reporting and other back-office requirements. BPS is provided on a hosted application service provider (“ASP”) basis. We also offer a version of BPS for processing Canadian securities. In addition to our BPS offering, we provide specialized transaction processing tools and services for small to mid-market financial firms in the United States and Canada that are operated on separate Broadridge technology platforms. We also provide state-of-the-art fixed-income transaction processing capabilities and support for front, middle and back office functions, processing on average approximately $2 trillion daily in fixed income trades. Our securities processing services can be integrated with our web-based desktop applications, enterprise workflow, automated inquiry reporting and record-keeping services.

International Processing Services . We provide advanced multi-currency transaction processing solutions for institutional and retail securities operations, corporate actions, and business process outsourcing services such as data cleansing. Our Global Processing Solution is our integrated delivery of multiple securities processing products and services to create a comprehensive system that is capable of processing transactions in equity, option, mutual fund and fixed income securities in established and emerging markets, at any time. Its advanced real-time processes automate the securities transaction lifecycle from order capture and execution through confirmation, settlement, and accounting.

Clearing and Outsourcing Solutions

We provide execution, clearing, and client financing (such as margin lending services), securities borrowing to facilitate client short sales, and operations outsourcing services for a variety of clearing and custody-related functions through our subsidiary Ridge Clearing & Outsourcing Solutions, Inc. (“Ridge”).

Securities clearing is the verification of information between two brokers in a securities transaction and the subsequent settlement of that transaction, either as a book-entry transfer or through physical delivery of certificates, in exchange for payment. Custody services are the safe-keeping and managing of another party’s assets, such as physical securities, as well as customer account maintenance and customized data processing services. Clients for whom we provide securities clearing and custody services are generally referred to as our “correspondents.” In the United States, clearing relationships typically are “fully-disclosed.” This means that the end customer is known to the clearing firm, the clearing firm is known to the end customer and the clearing firm has certain direct responsibilities to the end customer.

Our clients engage in either the retail or institutional brokerage business in the United States. Our clients generally engage us either to act as a full-service clearing firm, whereby our securities clearing and processing In fiscal 2007, we:


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processed approximately 70% of the shares votes in the United States;


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provided investor communication services for more than 800 bank and brokerage clients;


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distributed over one billion investor communications in either paper or electronic form, as requested by the investor;


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provided components of our securities processing solutions to seven of the top 10 U.S. broker-dealers;


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provided six of the top 10 Fortune Global 500 banks with fixed income trade processing services, processing on average approximately $2 trillion daily in fixed income trades; and


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served over 90 correspondents through our securities clearing services.

In fiscal 2007, we derived approximately 24% of our revenues from five clients. Our largest single client accounted for between 5-6% of our revenues.

Competition

We operate in a highly competitive industry. In our Investor Communication Solutions business, we compete with companies that provide investor communication and corporate governance solutions including transfer agents who handle communication services to registered (non-beneficial) securities holders, proxy advisory firms, proxy solicitation firms and other proxy services providers. We also face competition from numerous firms in the compiling and printing of transaction confirmations and account statements. In our Securities Processing Solutions business, we principally compete with brokerage firms that do not outsource their trade processing systems and numerous other outsourcing vendors. In our Clearing and Outsourcing Solutions business, we compete with financial institutions that either clear their own transactions or use another financial institution to clear their transactions. Our back-office support services offered through this segment also compete with very large financial institutions that both clear transactions and manage their own back-office record-keeping operations. In many cases, clients engage us only to perform certain functions, such as back-office processing, and do not outsource certain functions that we would also perform for them, such as clearing transactions.

Technology

We have several information processing systems which serve as the core foundation of our technology platform. We leverage these systems in order to provide our investor communication, securities processing, and securities clearing and operations outsourcing services. We are committed to maintaining extremely high levels of quality service through the use of our technology and people within an environment that seeks continual improvement.

Our mission critical applications are designed to provide high levels of availability, scalability, reliability and flexibility. They operate on industry standard enterprise architecture platforms that provide high degrees of horizontal and vertical scaling. This scalability and redundancy allows us to provide high degrees of system availability. In July 2006, we combined our primary data center with ADP’s data center. Those data center systems and applications are operated and managed by ADP under the data center outsourcing services agreement we entered into with ADP in connection with the spin-off from ADP in March 2007. The data center services are provided to us consistent with the services provided to us immediately prior to the spin-off, provided that the operation of the data center is the sole responsibility of ADP. Under this agreement, ADP is responsible for hosting our mainframe, midrange, open systems and networks. Additionally, systems engineering, network engineering, hardware engineering, network operations, data center operations, application change management, and data center disaster recovery services are managed by ADP. All critical platforms are fully supported under ADP’s disaster recovery program which provides geographic diversity and precise system, application, data and network recovery. The agreement with ADP provides for increasing volumes and the addition of new services over the term. We continue to manage the application development, information technology strategy and system architecture direction and management functions. The data center outsourcing services agreement with ADP will expire on June 30, 2012.

Most of our systems and applications process in Tier IV data centers. Tier IV data centers employ multiple active power and cooling distribution paths, redundant components, and are capable of providing 99.995% availability. Tier IV data centers provide infrastructure capacity and capability to permit any planned activity without disruption to the critical load, and can sustain at least one worst-case, unplanned failure or event with no critical load impact. The geographically dispersed processing centers of ADP and Broadridge also provide disaster recovery and business continuity processing.

To further demonstrate our commitment to maintaining the highest levels of quality service and client satisfaction within an environment that fosters continual improvement, Broadridge’s and ADP’s data centers are ISO 9001:2000 certified.

Product Development . Our products and services are designed with reliability, availability, scalability, and flexibility so that we can fully meet our clients’ processing needs. These applications are built in a manner which allows us to meet the breadth and depth of requirements of our financial services industry clients in a highly efficient manner. We continually upgrade, enhance and expand our existing products and services taking into account input from clients, industry-wide initiatives and regulatory changes affecting our clients.

Intellectual Property . We own registered marks for our trade name and own or have applied for trademark registrations for many of our services and products. We regard our products and services as proprietary and utilize internal security practices and confidentiality restrictions in contracts with employees, clients and others for protection. We believe that we hold all proprietary rights necessary to conduct our business.

Employees

At June 30, 2007, we had approximately 4,241 employees. None of our employees are subject to collective bargaining agreements governing their employment with our company. We believe that our employee relations are good.

CEO BACKGROUND

Leslie A. Brun , age 55, is a member of our Board of Directors. He also serves as a director of Automatic Data Processing, Inc. (“ ADP ”) and Fortune Management, Inc., a private investment company. Following ADP’s Annual Meeting scheduled to be held on November 13, 2007, it is expected that Mr. Brun will serve as Chairman of ADP’s board. He is the Chairman and Chief Executive Officer of SARR Group, LLC, a private equity firm. He is also the founder and Chairman Emeritus of Hamilton Lane, a provider of asset management services for which he served as Chief Executive Officer and Chairman from 1991 until 2005. From 1988 to 1991, he was Managing Director of Fidelity Bank in Philadelphia. Mr. Brun is also a director of The Episcopal Academy in Merion, PA and a trustee of the University at Buffalo Foundation, Inc.

Richard J. Daly , age 54, is our Chief Executive Officer and a member of our Board of Directors. Prior to the Spin-off (as defined in the section entitled “Compensation Discussion and Analysis—Overview—The Broadridge Spin-off from ADP”), Mr. Daly served as Group President of the Brokerage Services Group of ADP, as a member of the Executive Committee and a Corporate Officer of ADP since June 1996. In his role as President, he shared the responsibility of running the Brokerage Services Group with John Hogan and was directly responsible for our Investor Communications Solutions business. Mr. Daly joined ADP in 1989 as Senior Vice President of the Brokerage Services Group.

Richard J. Haviland , age 61, is a member of our Board of Directors. Mr. Haviland served for 20 years in various executive and financial positions at ADP, most recently as its Chief Financial Officer and a member of its Executive Committee, retiring from ADP in 2001. His experience prior to ADP includes 11 years in the auditing and assurance practice of Touche Ross & Co., a predecessor firm of Deloitte & Touche LLP, a public accounting firm.

Alexandra Lebenthal , age 43, is a member of our Board of Directors. She is the President and Chief Executive Officer of Alexandra & James Inc., a provider of financial services and wealth management services. Ms. Lebenthal worked for Lebenthal & Co., Inc., a municipal bond specialist, from 1988 to 2005, serving as the company’s President and Chief Executive Officer from 1995 to 2005. Ms. Lebenthal also serves as a director of CARE Investment Trust and the Securities Industry Financial Markets Association (SIFMA). Ms. Lebenthal is a member of The Committee of 200, a leading organization for female businesswomen. She also serves as a board member of the School of American Ballet and is involved with several other leading New York cultural institutions including The Business Council of The Metropolitan Museum of Art, the Capital Campaign for the Museum of the City of New York, the American Museum of Natural History, and the New York Botanical Garden.

Stuart R. Levine , age 60, is a member of our Board of Directors. He is the founder, Chairman and Chief Executive Officer of Stuart Levine and Associates LLC, an international consulting and leadership development company. Mr. Levine is also Lead Director for Gentiva Health Services, Inc., a provider of home healthcare services, and Lead Director for J. D’Addario & Company, Inc., a manufacturer of musical instrument accessories. From September 1992 to June 1996 he was Chief Executive Officer of Dale Carnegie & Associates, Inc., a provider of leadership, communication and sales skills training. He also serves on the boards of North Shore-Long Island Jewish Health System and The Nature Conservancy. In addition, Mr. Levine is the bestselling author of “The Leader in You” (Simon & Schuster 2004), “The Six Fundamentals of Success” (Doubleday 2004) and “Cut to the Chase” (Doubleday 2007). He is former Chairman of Dowling College as well as a former Member of the New York State Assembly. His prior directorships include European American Bank, The Olsten Corporation and the New York State Excelsior Quality Board.

Thomas E. McInerney , age 65, is a member of our Board of Directors. He is also Chairman of the Board of Centennial Communications Corp., a provider of telecommunications services, and ITC Deltacom, Inc., a provider of communications services, and a director of SAVVIS, Inc., a global IT utility services provider. He is a director of Global Knowledge Corp. and several other private companies. Mr. McInerney is a general partner of Welsh, Carson, Anderson & Stowe (“ WCAS ”), a private equity investment firm. He joined WCAS in 1986 and focuses on investments in the information services and telecommunications industries. Before joining WCAS, he co-founded and served as President and Chief Executive Officer of Momentum Technologies Inc., a provider of computer systems and services, and Dama Telecommunications Corp., a communications services company. Earlier he was President of ADP’s Brokerage Services Division and Group Vice President—Financial Industry Services. Prior to joining ADP, Mr. McInerney was Senior Vice President of Operations and Technology at the American Stock Exchange. He is also Chairman of the Board of Trustees of St. John’s University.

Alan J. Weber , age 58, is a member of our Board of Directors. He is the Chief Executive Officer of Weber Group LLC, a private investment firm. In addition, he serves as a director of Diebold, Inc., a provider of self-service delivery and security systems and services, OnForce, Inc., an IT services company he helped establish, and Keane, Inc., a business process and information technology company. Mr. Weber retired as Chairman and Chief Executive Officer of U.S. Trust Corporation and as a member of the executive committee of the Charles Schwab Corporation in 2005. Previously, he was the Vice Chairman and Chief Financial Officer of Aetna Inc., where he was responsible for capital management, information technology, investor relations, e-business and financial operations. He also held a number of senior level positions at Citibank N.A., where he worked from 1971 to 1998, including Chairman of Citibank International and Executive Vice President of Citibank. During his tenure at Citibank, Mr. Weber oversaw operations in approximately 30 countries, including assignments in Japan, Italy and Latin America.

Arthur F. Weinbach , age 64, is our Executive Chairman and Chairman of our Board of Directors. He served as Chairman of the Board and Chief Executive Officer of ADP from 1998 until August 2006. He continues to serve as Chairman of the Board of ADP; however, he is not standing for re-election to ADP’s board and will no longer serve as a director following ADP’s Annual Meeting which is presently scheduled to be held on November 13, 2007. Mr. Weinbach held a variety of positions of increasing responsibility since joining ADP in 1980. Mr. Weinbach spent two years as the President and Chief Executive Officer of ADP and two years as President and Chief Operating Officer of ADP. Prior to that he was, among other responsibilities, Chief Financial Officer of ADP for almost 10 years. Mr. Weinbach also serves on the board of Schering-Plough Corp. He is also on the board of trustees of New Jersey SEEDS, a charitable organization.

MANAGEMENT DISCUSSION FROM LATEST 10K

DESCRIPTION OF THE COMPANY AND BUSINESS SEGMENTS

We are a leading global provider of investor communication solutions, securities processing solutions, and clearing and outsourcing solutions to the financial services industry. We offer advanced integrated systems and services that are dependable, scalable and cost-efficient. Our systems help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities. Our operations are classified into three business segments: Investor Communication Solutions, Securities Processing Solutions and Clearing and Outsourcing Solutions.

Investor Communication Solutions

A large portion of our Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge ® , our innovative electronic proxy delivery and voting solution for institutional investors, helps ensure the participation of many companies’ largest stockholders. We also provide the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help our clients meet their regulatory compliance needs. Our solutions also include financial information distribution and transaction reporting services to both financial institutions and securities issuers. These services include the processing and distribution of account statements and trade confirmations, traditional and personalized document fulfillment and content management services, and imaging, archival and workflow solutions that enable and enhance our clients’ communications with investors. All of these services are delivered through physical and electronic means.

Securities Processing Solutions

We offer a suite of advanced computerized real-time transaction processing services that automate the securities transaction lifecycle, from desktop productivity tools and portfolio management to order capture and execution, trade confirmation, settlement, and accounting. Our services help financial institutions efficiently and cost-effectively consolidate their books and records, focus on their core businesses, and manage risk. With multi-currency capabilities, our Global Processing Solution supports real-time global trading of equity, option, mutual fund and fixed income securities in established and emerging markets.

Clearing and Outsourcing Solutions

Securities clearing and settlement is the process of matching, recording, and processing transaction instructions and then exchanging payment between counterparties. Our securities clearing services enable clients to utilize our broker-dealer business to finance inventory and margin balances. Our operations outsourcing solutions allow brokers of all sizes to outsource certain administrative functions relating to clearing and settlement to us, from order entry to trade matching and settlement, while maintaining their ability to finance and capitalize their business.

SEPARATION OF BROADRIDGE FROM ADP

The spin-off of Broadridge by ADP became effective on March 30, 2007 through a distribution of 100% of the common stock of the Company to the holders of record of ADP common stock (the “Distribution”). The Distribution was effected pursuant to a separation and distribution agreement by which ADP contributed to the Company the subsidiaries that operated its brokerage services business. ADP distributed all of the shares of Broadridge Financial Solutions, Inc. as a dividend on ADP common stock on March 30, 2007 to all shareholders of record as of March 23, 2007.

In connection with the spin-off, we made a cash payment to ADP on March 30, 2007 of $690.0 million which was financed through borrowings under $1,190.0 million of credit facilities that were entered into on March 29, 2007. The payment is reflected as a dividend to ADP in Stockholders’ Equity.

A significant portion of the expenses to effect the separation were incurred by ADP, such as investment banking fees, related outside legal and accounting fees, office move costs, costs to separate information systems and temporary consulting costs. Broadridge incurred separation costs that have a future benefit to the Company, including stock compensation expense relating to the Distribution and other items such as relocation expenses associated with hiring senior management positions new to the Company, and the temporary labor costs incurred to develop ongoing processes for operating on a stand-alone basis.

FACTORS AFFECTING COMPARABILITY OF FINANCIAL RESULTS

Historical ADP Cost Allocations Compared to Broadridge as a Stand-alone Entity

Our historical Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These financial statements present the consolidated and combined financial position and results of operations of the former brokerage services business of ADP. The Combined Financial Statements for periods prior to the Distribution include allocated costs for facilities, functions and services used by the brokerage services business at shared ADP sites and costs for certain functions and services performed by centralized ADP organizations and directly charged to the brokerage services business based on usage. Our management believes these allocation methods are reasonable. However, it is likely that as a stand-alone entity, our costs for the same services will be higher, for the following reasons:

Size and influence of ADP . We generally benefited from the size of ADP in negotiating many of our overhead costs and were able to leverage the ADP business as a whole, including the Employer Services business from which ADP derives a majority of its total revenues, in obtaining favorable pricing. ADP is a larger company than we are with extensive resources. As a stand-alone company, we no longer have this advantage.

Shared corporate overhead . As the brokerage services business of ADP, our ultimate management was the management of ADP. Moreover, ADP performed all of the public company obligations, including:


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compensation of management and directors;


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corporate investor relations staff, office space and personnel;


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annual meetings of stockholders;


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board of directors and committee meetings;


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Exchange Act annual, quarterly and current report preparation and filing, including reports to stockholders;


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SEC and stock exchange corporate governance compliance, including Sarbanes-Oxley Act of 2002 Section 404 internal control over financial reporting compliance;

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stock exchange listing fees and transfer agent fees; and


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directors and officers insurance.

As an independent public company, we will be responsible for these services and bear all of these expenses directly. The historical allocation of ADP’s expenses to us may be significantly less than the actual costs we will incur as an independent company. For the period from the date of Distribution to June 30, 2007, the Company incurred approximately $8.0 million in public company related expenses.

ACQUISITIONS AND DIVESTITURES

From time to time, we make acquisitions and divestitures for strategic reasons. In fiscal year 2005, we acquired the U.S. Clearing and BrokerDealer Services businesses of Bank of America Corporation for approximately $344.2 million, net of cash acquired. This acquisition resulted in the creation of our Clearing and Outsourcing Solutions segment which enables us to provide trade execution, clearing and settlement services, asset management, customer financing services, including margin lending, securities borrowing to facilitate customer short selling activity and operations outsourcing services for a variety of clearing and custody-related functions.

BORROWINGS

On March 29, 2007, the Company entered into a $1,190.0 million senior unsecured credit facility, consisting of a $440.0 million five-year term loan facility, a $500.0 million five-year revolving credit facility and a $250.0 million one-year revolving credit facility. On March 29, 2007, the Company borrowed $440.0 million under the five-year term loan facility and $250.0 million under the one-year revolving credit facility. The proceeds received in connection with the $690.0 million of borrowings were paid to ADP on March 30, 2007 as a dividend. These credit facilities are subject to covenants, including financial covenants consisting of a leverage ratio and an interest coverage ratio. At June 30, 2007, the Company was in compliance with the financial covenants of this credit facility. On June 29, 2007, the Company repaid $70.0 million of the five-year term loan facility. The one-year revolving credit facility was cancelled upon repayment on May 29, 2007 with the net proceeds from the issuance of unsecured Senior Notes due June 2017 and cash. The Senior Notes are unsecured obligations of Broadridge and rank equally in right of payment with other unsecured and unsubordinated obligations of Broadridge. Please refer to Note 12 “Borrowings” to our Consolidated and Combined Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for a more detailed discussion.

BASIS OF PRESENTATION

The Consolidated and Combined Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These financial statements present the consolidated and combined financial position and results of operation of the Company as a separate, stand-alone entity subsequent to the Distribution, presented along with the historical operations of the brokerage services business on a combined basis which were operated as part of ADP prior to the Distribution. These financial statements include the entities in which the Company directly or indirectly has a controlling financial interest and various entities in which the Company has investments recorded under the cost and equity methods of accounting. The Company’s combined results of operations, financial position and cash flows for periods prior to the Distribution, may not be indicative of its future performance and do not necessarily reflect what its results of operations, financial position and cash flows would have been had the Company operated as a separate, stand-alone entity during the periods presented, including changes in its operations and capitalization as a result of the separation from ADP. In particular, interest expense and corporate overhead costs will be higher than they were in the past. In addition, the Consolidated and Combined Statements of Earnings include a trademark royalty fee charged by ADP to the Company based on revenues for licensing fees associated with the use of the ADP trademark. As of March 30, 2007, such royalties are no longer charged to the Company.

In presenting the Consolidated and Combined Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Estimates, by their nature, are based on judgment and available information. Accordingly, actual results could differ from those estimates. In management’s opinion, the Consolidated and Combined Financial Statements contain all normal recurring adjustments necessary for a fair presentation of results reported. The results of operations reported for the periods presented are not necessarily indicative of the results of operations for subsequent periods.

The Consolidated and Combined Financial Statements for periods prior to the Distribution include costs for facilities, functions and services used by the Company at shared ADP sites and costs for certain functions and services performed by centralized ADP organizations and directly charged to the Company based on usage. Following the separation from ADP, the Company performs these functions using internal resources or purchased services, certain of which are provided by ADP during a transitional period pursuant to the Transition Services Agreement. See Note 18 to the Consolidated and Combined Financial Statements for a detailed description of the Company’s transactions with ADP subsequent to the Distribution. The expenses allocated to the Company for these services are not necessarily indicative of the expenses that would have been incurred if the Company had been a separate, independent entity and had otherwise managed these functions.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare the financial statements. The estimates are based on historical experience and are believed to be reasonable. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed below.

Goodwill . We review the carrying value of all our goodwill in accordance with Financial Accounting Standards Board, (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets ,” by comparing the carrying value of our reporting units to their fair values. We are required to perform this comparison at least annually or more frequently if circumstances indicate possible impairment. When determining fair value, we utilize a discounted future cash flow approach using various assumptions, including projections of revenues based on assumed long-term growth rates, estimated costs and appropriate discount rates based on the particular business’ weighted average cost of capital. The principal factors used in the discounted cash flow analysis requiring judgment are the projected future operating cash flows, the weighted average cost of capital and the terminal value growth rate assumptions. The weighted average cost of capital takes into account the relative weights of each component of our consolidated capital structure (equity and debt). Our estimates of long-term growth and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of our routine, long-range planning process. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods. We had $480.2 million of goodwill as of June 30, 2007. Given the significance of our goodwill, an adverse change to the fair value could result in an impairment charge, which could be material to our earnings. A 10% change in our estimates of projected future operating cash flows, discount rates or terminal value growth rates used in our calculations of the fair values of the reporting units would have no impact on the reported value of our goodwill.

Income Taxes . We account for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes, ” which establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Judgment is required in addressing the future tax consequences of events that have been recognized in our financial statements or tax returns (e.g., realization of deferred tax assets, changes in tax laws or interpretations thereof). In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. A change in the assessment of the outcomes of such matters could materially impact our combined financial statements. As of June 30, 2007, we had estimated foreign net operating loss carryforwards of approximately $25.4 million of which $4.6 million expires in years 2009 through 2014, and $20.8 million which has an indefinite utilization period. In addition, we have estimated U.S. federal net operating loss carryforwards of a U.S. subsidiary which is not included in our consolidated tax return of approximately $0.5 million as of June 30, 2007 and U.S. federal net operating loss carryforwards of approximately $22.9 million which expire in 2023 through 2027. We have recorded valuation allowances of $21.9 million and $19.8 million at June 30, 2007 and 2006, respectively, because we do not believe that it is more likely than not that we will be able to utilize the deferred tax assets attributable to the net operating loss and capital loss carryforwards of certain subsidiaries to offset future taxable earnings.

Share-based Payments . SFAS No. 123R , “Share-Based Payment,” requires the measurement of stock-based compensation expense based on the fair value of the award on the date of grant. We determine the fair value of stock options issued by using a binomial option-pricing model. The binomial option-pricing model considers a range of assumptions related to volatility, dividend yield, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial option-pricing model are based on a combination of implied market volatilities, historical volatility of our stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial option-pricing model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding. Determining these assumptions are subjective and complex, and therefore, a change in the assumptions utilized could impact the calculation of the fair value of our stock options. Prior to July 1, 2005, ADP, our former parent company, followed Accounting Principles Board Opinion 25, “Accounting for Stock Issued to Employees (“APB No. 25”), and related interpretations. Under APB No. 25, stock-based compensation expense was not recognized related to our stock option program and employee stock purchase plan, as all options granted under the stock option program had an exercise price equal to the market value of the underlying common stock on the date of grant and with respect to the employee stock purchase plan, the discount did not exceed fifteen percent. A hypothetical change of five percentage points applied to the volatility assumption used to determine the fair value of the fiscal year 2007 stock option grants would result in approximately a $0.4 million change in total pretax stock-based compensation expense for the fiscal year 2007 grants, which would be amortized over the five year graded vesting period. A hypothetical change of one year in the expected life assumption used to determine the fair value of the fiscal year 2007 stock option grants would result in approximately a $0.3 million change in the total pretax stock-based compensation expense for the fiscal year 2007 grants, which would be amortized over the five year graded vesting period. A hypothetical change of one percentage point in the forfeiture rate assumption used for the fiscal year 2007 stock option grants would result in approximately a $0.1 million change in the total pretax stock-based compensation expense for the fiscal year 2007 grants, which would be amortized over the five year graded vesting period. A hypothetical one-half percentage point change in the dividend yield assumption used to determine the fair value of the fiscal year 2007 stock option grants would result in approximately a $0.2 million change in the total pretax stock-based compensation expense for the fiscal year 2007 grants, which would be amortized over the five year graded vesting period.

RESULTS OF OPERATIONS

The following discussions of Analysis of Consolidated and Combined Operations and Analysis of Reportable Segments refers to the fiscal year ended June 30, 2007 compared to fiscal year ended 2006 and the fiscal year ended June 30, 2006 compared to fiscal year ended 2005. The Analysis of Consolidated and Combined Operations should be read in conjunction with the Analysis of Reportable Segments, which provides more detailed discussions concerning certain components of the Consolidated and Combined Results of Operations.

ANALYSIS OF CONSOLIDATED AND COMBINED OPERATIONS

Fiscal 2007 Compared to Fiscal 2006

The table below presents consolidated and combined statement of operations data for the fiscal years ended June 30 and the dollar and percentage changes between periods:

Total Net Revenues . Our consolidated and combined net revenues for fiscal year 2007 were $2,137.9 million, an increase of $204.6 million or 10.6%, compared to $1,933.3 million for fiscal year 2006. The increase reflects net revenue growth in our three business segments, primarily driven by internal growth and to a lesser degree by net new business. Investor Communication Solutions net revenues increased $154.2 million, or 11.1%, Securities Processing Solutions net revenues increased $20.9 million, or 4.4% and Clearing and Outsourcing Solutions net revenues increased $13.2 million, or 16.4%. The growth in our net revenues was also favorably impacted by $6.5 million due to fluctuations in foreign currency exchange rates.

Total Expenses . Our consolidated and combined total expenses for fiscal year 2007 were $1,817.1 million, an increase of $186.5 million, or 11.4%, compared to $1,630.6 million for fiscal year 2006. The increase in our consolidated and combined total expenses reflects higher revenue generating service activity, as well as incremental public company expenses of $ 8.0 million and one-time transition costs of $14.0 million. Cost of net revenues increased by $155.1 million, or 10.8%, for fiscal year 2007, due to higher net revenues in our three business segments and one-time transition costs of $4.0 million. The increase was primarily attributable to higher cost of net revenues in our Investor Communications Solutions of $125.6 million, or 11.7%, of which $80.6 million represents an increase in distribution costs, Securities Processing Solutions of $8.9 million and in Clearing and Outsourcing Solutions of $0.6 million. Selling, general and administrative expenses increased by $20.8 million, or 10.6%. The increase reflects expenses incurred for the period from the date of Distribution to June 30, 2007 for $ 8.0 million in incremental public company expenses and one-time transition costs of $10.0 million. Other expenses, net increased $10.6 million due to interest expense associated with our borrowings.

Earnings from Continuing Operations before Provision for Income Taxes . Earnings from continuing operations before provision for income taxes for fiscal year 2007 were $320.8 million, an increase of $18.1 million, or 6.0 %, compared to $302.7 million for fiscal year 2006 and are attributable to higher net revenues and expenses, as discussed above. Overall margin decreased from 15.7% to 15.0% for fiscal year 2007 as compared to fiscal year 2006. Excluding one-time transition costs of $14.0 million, fiscal year margin were flat when compared to fiscal year 2006.

Provision for Income Taxes . Our effective tax rate for fiscal year 2007 was 38.6%, compared to 40.4% for fiscal year 2006. The decrease in the effective tax rate is attributable to a favorable mix of income among tax jurisdictions, a lower effective U.S. state income tax rate and the impact of a decrease in the amount of operating losses for which there is no tax benefit for fiscal year 2007 compared to fiscal year 2006.

Net Earnings from Continuing Operations and Basic and Diluted Earnings per Share from Continuing Operations . Net earnings for fiscal year 2007 were $197.1 million, an increase of $16.6 million, or 9.2%, compared to $180.5 million for fiscal year 2006. The higher net earnings from continuing operations reflects increased net revenues, partially offset by increased expenses, and a lower effective tax rate, as described above. Basic and diluted EPS from continuing operations increased 9.2%, to $1.42 for fiscal year 2007.

CONF CALL

Marvin Sims

Thank you, Carol. Good morning, everyone. Good morning everyone, and welcome to the Broadridge quarterly earnings call and webcast for the third quarter of fiscal year 2008. I am Marvin Sims, Vice President of Investor Relations. This morning I am here with Rich Daly, Chief Executive Officer for Broadridge and Dan Sheldon, Chief Financial Officer for Broadridge.

I am sure everyone by now has had the opportunity to review the earnings release we issued earlier this morning. The news release and the slide presentation that will accompany today's earnings call and webcast can be found on the Investor Relations homepage of our website at Broadridge.com.

Before we begin, I would like to remind everyone that during today's conference call, we will discuss some forward-looking statements that involve risk, and these risks are discussed here on Slide 1 and in our periodic filings with the SEC. During the review of our financial results, to provide the appropriate point-to-point comparison between fiscal '08 and fiscal '07, all pretax and net earnings numbers discussed throughout the presentation are non-GAAP, and exclude one-time transition expenses and interest on new debt. The actual GAAP reported numbers in comparison are also listed.

During the review of our segment results, again for the appropriate point-to-point comparison for year-to-date revenues and operating profits, we'll discuss adjusted numbers that reflect a change in the methodology that occurred in the third quarter of fiscal year 2007, with the interest segment allocation between the clearing and outsourcing segment and the other two segments. A reconciliation to the GAAP numbers is available on the presentation appendix as well as in the press release.

Now let’s turn to next slide and review today’s agenda. Rich Daly will start today’s meetings with his opening remarks and provide you with a summary of the financial results for the quarter and a discussion on a few key topics. Dan Sheldon will then review the financial results in further detail for both the quarter and year-to-date. Rich will then return and review the fiscal 2008 guidance, and provide his summary before we head in to Q&A part of the call. After Q&A, Rich will provide his closing comments.

Now please turn to the next slide for Rich’s opening comments, and I will now turn the call over to Rich Daly. Rich?

Rich Daly

Thanks Marvin. Good morning. This morning as part of my opening remarks, I will discuss the following topics. First, the financial results for the quarter, then a business overview for each of the business segments, where I will touch on general performance, and some of the relevant key business drivers of each segment. Then after Dan’s financial update on the quarter, I will discuss the increase in our financial EPS guidance range and the factors behind the improvement.

Let me start by saying that our third quarter financial results are in line with our expectations. Given our strong year-to-date results and clear view of our fourth and largest quarter for both revenues and profit, we are able to raise our full year guidance range even in a difficult time for the market we serve. Our latest EPS guidance range is $1.35 to $1.45, which is up from our previous range of $1.30 to a $1.40. These are non-GAAP numbers, as they exclude one-time transition expenses of $0.06. For the quarter, we had revenue growth of 1%. In the largest segment, Investor Communications Solutions, we are able to grow over the client loss we disclosed last year, and then our Securities Processing Solutions and Clearing segments were able to generate solid new business growth, but not enough to grow over the previously disclosed loss of TD Waterhouse from last fiscal year.

Our net earnings for the quarter, despite being down 13%, were in line with our expectations. Year-to-date net earnings are up 17%, which is ahead of our original plan. Dan will talk more in his financial review about the details, and I will talk more in my segment discussions about how our strategy will drive these key metrics, as we move forward.

Our closed sales were $48 million for the quarter and $116 million for the first three quarters. This more than doubled last year's third quarter amount, and is ahead of last year's year-to-date amount by 43%. The breakout between recurring and non-recurring revenue is 55% and 45% respectively, up 52% for recurring and 48% from non-recurring from last year. There continues to be negative advice on financial markets in terms of assessing the current economic environment. But, by any measure, our industry has slowed.

However, historically, Broadridge has been a lagging indicator and we've yet to see any material negative effects. Our sales pipeline remains very strong, particularly the opportunities and outsourcing. As I always say, we are not in control of the markets, but we are in control of our business.

I will address sales in more detail when I talk about the business segments.

Before I start my business segment review, I'd like to address the recent change to our credit rating by Standard & Poor's. During the last quarter, both S&P and Moody's completed their reviews of Broadridge. Moody's reaffirmed our investment grade credit rating and S&P down rated us to below investment grade with a negative outlook. We are disappointed that S&P downgrade us, and the reason for the downgrade was the appearance of increased risk appetite in our Clearing business.

In early April, we issued a press release describing a $380 million staggered trade transaction, with a counter-party rated A+ by S&P that impacted our second quarter debt levels, and that may have led S&P to believe we are increasing our risk appetite.

Dan will go into more detail on the risk management policies in our Clearing business. However, we have assured both of our rating agencies that we won't do any staggered settlement transactions greater than seven days for more than $20 million in the future. We want to be a low risk broker dealer both in perception and reality.

Now let's move on to business segment review. I will start with our largest segment, Investor Communications Solutions. The ICS segment is over 70% of the revenue and profits of Broadridge. This is a great business. The core business isn't only performing well, but it's extending its market leadership with its capabilities around Notice and Access.

The ICS business year-to-date has been able to grow over 4% revenue loss from the previously disclosed client loss and generate revenue growth of 1%. We continue to drive margin expansion in this segment. Recurring revenue core of our ICS segment, which is 70% of the full year revenue, continues to see very little impact from any market noise around it. And the only significant lagging indicator we see could be event-driven revenue.

So far this year, mutual fund proxy event-driven is higher than our original plan, despite the increased expectations coming into fiscal year 2008. M&A and proxy contest are lower than our original plans, despite the lowered expectations we had coming into the fiscal year. Overall, event-driven revenue is coming in at just about our original plan of flat for the year.

Despite its slight volatility, historically event driven revenue over multiple year periods has grown. We will continue to gain market share and add new products. All of which have given us a CAGR of greater than 15% over the last five years. I am confident that event-driven revenue will grow at a rate higher than our overall communication segment over any multi-year time frame.

When I look into the near future, event-driven revenue is the most challenging piece of the communication segment to forecast. The normal lead time between closing the sale and converting it to revenue can be anywhere from one day to six months, so there is not much pipeline. Remember, this is the story behind event-driven revenue in almost every marker, including rate markets.

ICS sales for the years have been very strong. This quarter, we landed a large mutual fund proxy event sale. We added over 200 new registered proxy issuers and we've added Notice and Access services with an annualized sales value of $14 million. Notice and Access has strengthened our industry leadership position.

Going forward implementation of any other new and evolving corporate governance strengths most likely will require Broadridge's unique format. I will now talk in more detail about Notice and Access. The proxy season pretty much behind us, we have more visibility into our Notice and Access results, and I can provide you with a more meaningful update.

Notice and Access began as a voluntary program effective July 1, 2007. The SEC then made into that availability materials for large accelerated file as mandatory effective January 1, 2008.

Issuers can still choose to distribute proxy materials in hard copy to their shareholders. As first we adapted early, as with the high-tech companies. Now we are seeing a much broader segment of issuers adopting Notice and Access. We are estimating a 25% adoption rate for this fiscal year 2008.

I want to note that both participation by retail shareholders, is down by over 70%. This is slightly higher than what we had originally anticipated. In addition, issuers have taken varied approaches in using Notice and Access. Some issuers are using Notice and Access for all shareholders and others are using a hybrid approach, where for example they may use Notice and Access for shareholders only less than a 1000 shares, but continued to distribute hard copy to larger holders.

Now let's talk about our securities processing solution segment. Overall rest of business has performed better than we anticipated for the year.

In the first half of fiscal '08, trading activity enabled us to grow over the previously disclosed loss of TD Waterhouse as a client. Now trading activity has leveled off, but the second half of our year is still in line with our original expectations. This quarter trading activity provided a modest revenue contribution as trade per day increased by 4%.

In Securities Processing Solutions, fixed income and particularly equity trade processing provide us the best earnings upside from any incremental new client revenue. Contracts with existing clients provide limited upside and downside based on market activity. The current market environment provides new client opportunities and some consolidation challenges. In any event, it will take quite a while before either has any material impact on Broadridge. Some names, Bear J.P. Morgan, Wachovia AG Edwards and CIBC Oppenheimer will all play out over the next months and years.

In every takes with our clients and prospects are emergent like the firms I just mentioned, were just looking for increase control, functionality or efficiencies, Broadridge has a very strong value proposition. That there a lot of leadership change going on this space as well. Never in my 30 year career, can I remember this much change in senior level leadership.

As cost pressures become more of reality on Wall Street, we intend to leverage the current environment and create more opportunities for our processing entities. I do like although in term prospects.

Our optimism is well founded, based on our ability to successfully implement complex new clients, the most recent being Royal Bank of Canada last month. We successful rolled out our enhanced retail processing and new wealth management solutions. They provide a seamless integration of RBC’s global retail and institutional operation onto one consolidated platform.

We now process for RBC in the US, Canada, London, Australia, and Singapore. The consolidation of these operations onto a single platform has been for most entities an elusive goal. There are many retail and institutional firms that merged over a decade ago; they still have no plans to merge these complex platforms. As a result, they still are realizing the material efficiency available to them. We believe our enhanced retail offering along with our strong institutional platform will open-up new market opportunities and will allow us to more effectively compete in this market.

Now, let’s talk about our last segment. Clearing and Outsourcing, which while it is lower, represents just 5% of our revenue despite of the long-term strategy for Securities Processing business. Our Clearing and Outsourcing segment operations are in line with our expectations for the fiscal year except for the financial impact related to interest rate reductions. Over the next three years, we are expecting Clearing and Outsourcing to double its size to new revenue growth for Broadridge.

Now I will spend a few minutes talking about the strategy for clearing business and its importance to us as a financial processor. We are in the clearing business to generate more transaction for our processing segments, particularly for Securities Processing Solutions and Investor Communication Solution as well. Entering the Clearing business, gave us the ability to create a unique processing model. We are the only entity that has live clients for self clearing broker dealers that outsource their clearing functions to us. That’s what we call clearing and outsourcing.

We have four clients live on outsourcing. They are eTrade both at US and Canadian business, CIBC, West LB and a small German Bank, LBBW. We signed two new clients that are in the process of receiving standard regulatory approval. Those clients are our Key Banc and Credit Suisse, Canada. And lastly we have a large fully disclosed clearing client converting to self-clearing outsourcing as they originally intended when they first became our client.

Creating a list of targets including large firms that have expressed an interest in understanding more about outsourcing, we size the market conservatively at $500 million in an annual revenue. Outsourcing is a processing model, and will not create balance sheet activity or have any other risk associated would be in a clearing broker dealer.

However, it can't work unless we have the assets and skill sets from the clearing piece of Ridge. On April 9th, American Bank had published an article noting the large size of the outsourcing opportunity and the high level of complexity required to compete. Also in April the ATA [ph] Group, a consulting firm on IT businesses and regulatory issues in the financial services industry wrote an article that despite another entities push into the self-clearing outsourcing market. This is Ridge clearing's market rules.

That’s the strategy for the business that is today 5% of our revenue and has the potential to double its size and contribute a $100 million in revenue growth to all of Broadridge over the next three years. Let’s now talk briefly about our appetite for acquisitions.

One year ago we said that unless something exceptional came up, we would tuck-ins in the $25 million to $35 million range. Later we signaled that we would extend the $25 million to $35 million tuck-in range to a higher range as we accelerated debt repayment. We saw a market roll-up opportunity in the clearing space. However, in light of the credit rating focus on clearing, and the fact that virtually no one is running a clearing business as conservatively as we are, this is off the table for now. Thus far, we've only done one acquisition of $6 million. Regardless we won’t do a deal simply for the sake of doing a deal.

I will now turn the call over the Dan for his review of the financials for the quarter.

Dan Sheldon

Thanks Rich. I am on Slide 6. First I would like to point out that at the end of Q3 we've recognized approximately 65% of our revenues and approximately 50% of our earnings for the full year. This is typical given the seasonality in our business especially around our equity proxy season in the fourth quarter. Our revenue growth of 1% for the quarter from sales, losses and internal growth was in line with our expectations. And year-to-date we are at 4% revenue growth and we benefited from the internal growth that Rich mentioned in the first half primarily from equity trade per day.

We are expecting a stronger fourth quarter than originally anticipated due to positive growth in the equity proxy stock records, noticed an access and continued growth in the other investor communications revenues. We are forecasting revenue growth for the year to be between 2% and 4%. And I will go in to more detail when reviewing the segments.

With respect to pretax margins for the quarter, they are down 2.2 points. The decrease is primarily related to the two large client losses we previously disclosed, which impact all three segments as well as incremental investments including the expensing a founder grant that our Board approved in lat February. Our pretax margins year-to-date are up 140 basis points to 13.4%, and we expect to end the year between 15.8 to 16.5.

Let’s move to looking at the segments. I am now on Slide 7. I want to draw your attention to the chart we have provided at the top of the page. You can see that year-to-date we've recognized about 60% of our full year revenues and this is typical in any given year as the fourth quarter contribution from equity proxies kicks in. We've also broken out fee revenues from distribution revenue, so that you can see the impact each has on the revenues.

Looking at year-to-date fee revenues, they are 2% and expected to be in the 3% to 5% range. And this after the grow over from the large client loss we've previously discussed, which impacted year-to-date by four percentage point and full year by 2 percentage point. The anniversary date by the way, of this client loss, is at the end of our Q3.

We have broken our fee revenue growth into recurring and event to help you better understand where the total fee revenue growth is coming from, from both year-to-date and for the year. With respect to our recurring fees, they are up year-to-date and will also be up for the full year. We have benefited from internal growth in mutual fund interims, statements, and fulfillment. We are also very happy that the equity proxy stock record growth that was negative in the first half is forecasted to be positive in the fourth quarter. And finally, the $14 million in sales from Notice and Access activity, Rich mentioned, will greatly impact the fourth quarter.

Focusing now on event-driven revenues, we're down for the quarter and are expected to be flat or down in the fourth quarter. Although we had strong mutual fund registered proxy sales this year, the revenue benefit from mutual funds may not be enough to offset the other event-driven revenues, which are in decline in equity proxy contest and M&A.

As Rich described earlier, even-driven revenues can be up or down in any one year, but over any extended period of time, have always grown given our increasing market share in new product.

With respect to distribution revenues, they are flat year-to-date and will be slightly up or down for the year. As we've discussed before, these revenues are very difficult to predict given the large clients can choose different ways to deliver materials and not necessary the same year-over-year.

In this segment our year-to-date margins are up 180 basis points due to the combination of expense controls and distribution fees. Given year-to-date results in Q4 activity, we're forecasting margin improvements for both the fourth quarter and therefore the full year.

Let's move on to slide eight, Securities Processing. Revenues for the quarter are down 4% given the negative net new business, which is heavily impacted by the loss of TD, which was previously disclosed. Net new business has been negative 4% year-to-date, and expected to be the same for the rest of the year, as the TD anniversary date is at the end of our fiscal year. As we forecasted, equity trades per day for the quarter of $2.5 million are up only 4% over the last year and therefore provided very little revenue contribution to the quarter. We are forecasting the fourth quarter trades per day to remain flat at $2.5 million.

We are pleased that fixed income trades per day growth, is at 19% and year-to-date about the same. Our fourth quarter expectations are to see continued growth in the 15% to 25% range. We expect revenues for the year to be flat to 1%, given the strong first half driven by the trades per day and the weaker second half due to the little growth contribution from trades per day and the impact of the TD loss.

With respect to margins, as expected, are down to 28% for the quarter due to the loss of TD and our new product investments. Also, as previously discussed, our Q4 margins will be in the low-20 ranges, given the full impact of the $5 million in R&D expenses, coming back now that the successful RBC conversion has taken place. Margins for the year will be from 26% to 27%.

In FY '07, we had margins in this segment of 28% and we are exiting FY'08 at the low-20. We've made the right new product investments in this segment and expect future periods to show margin expansions, as we add new revenue from new sales.

Let's move to slide nine. With respect to Clearing and Outsourcing, revenues for the quarter are down 1%. We are very pleased with the continued double-digit sales contributions to revenue, and we did sign two new outsourcing deals as well as five new clearing deals.

We expect sale contributions to revenue to remain double digit for Q4. TD is the primary driver behind our loss, and the anniversary date of this loss is the beginning of next year. Besides TD, we have not had any other outsourcing losses since inception, as well our Clearing business has over 90% client retention rate.

Looking at internal growth, it is slightly down. Clearing and Other Fees contribute about 3% to 5% to the overall revenue growth. However, we are negatively impacted by the decline in the fed funds rate, as the change in rates directly impacts our $250 million in net capital in this business. When rates rise, we benefit, when they decline, we don't.

Having said that, we've benefited with less interest expense on our term loan given the declines in LIBOR also during this year. In essence the way I look at it, the negative impact in interest income in our Clearing and Outsourcing has been offset by the positive impact and less interest expense in Other, related to our long-term debt.

Revenue for this segment growth is expected now to be around 3% to 4% for the year. Given $4 million in loss net interest income, operating losses are now forecasted to be around minus $4 million to minus $5 million.

Moving onto the other section, revenues for the quarter are flat, as expected, and year-to-date of $8 million is due to termination fees we benefited from in the first half and we don't expect any additional termination fees for the remainder of the year. FY '08 has been an extraordinary year for termination fees, as we usually only see $1 million to $2 million a year in termination fees.

As previously disclosed, interest and one-time transition expenses are in line with our expectations for the year, and one-time transition expenses are expected to be around $14 million for the year. Corporate expense of $10 million for the quarter, include $4 million for Founder Grants and remainder with the combination of investments and corporate expenses, which are at the levels we have disclosed before. With respect to FX for the quarter, it continues to have a positive impact to our revenues and earnings and year-to-date contributed $19 million in revenue and $8 million in pretax earnings.

Let's move on to slide 10 and talk about our cash flows. As we have done before, we show consolidated Broadridge free cash flow as well as break out our Clearing and Outsourcing and all other segments, as this is how we do look-in manage the business. With respect to Clearing and Outsourcing, you will see the three lines, we show here in the body and additional information to pick how we finance the operations and how they change since June.

You can see that operating activities generated an additional $251 million, which resulted from fewer customer debits to finance, and greater cash available within customer credit accounts to use in financing. As a result, our short-term borrowings are down from June by just over $90 million and cash available for lending is up just over $160 million.

Focusing on the next column, which is labeled all other segments. This is the column that truly to picks our free cash flows from operations and what we have available in cash to invest or finance the business after our CapEx and intangibles. We are very pleased with the $177 million free cash flow after nine months and we look to continue to build cash flows, as we move into Q4 with around 50% of our earnings yet to come.

We expect $50 million to $70 million in additional free cash flow in the fourth quarter. Although, Q4 is a strong earnings generator, our largest cash inflow period is the first quarter given the timing of the collections of the receivables. As we discussed before, we think our sources and uses of cash flow, take as the follows.

Depreciation and amortization will be between $50 million and $60 million this year, and equally, we have invested about $50 million to $60 million in CapEx and intangibles. Stock comp will be approximately $35 million this year including the expensing of $7 million in Founder Grants.

Working capital will normally increase with revenue however in any period or quarter, will fluctuate given the level of accounts receivable collections. So, given the above, our remaining cash flow we use to pay down dividend, investment in business through acquisitions and pay down debt or build our cash position in a short-term

Finally, as Rich mentioned we are disappointed that S&P downgraded us and the reason for the downgrade was an apparent increase in risk appetite in our clearing business given the $380 million staggered trade that Rich discussed.

As disclosed in our press release on April 18, our risk management practices in clearing are excellent. Four points I would make. We restrict the amount of credit extended to both individual and professional investors to announce much lower than permitted by Federal regulation. Second, all loans are fully collateralized by high quality, readily marketable securities, we do not accept at any collateral, any exotic or liquid mortgage-backed derivative instruments.

Third, we do not maintain an inventory of securities to be offered for sales to our client, and none of our capital is exposed to market fluctuation in proprietary trading accounts. And fourth and most important, since the time we acquired the business we have experienced no losses due to errors or credit policies.

We will continue to work with S&P to assure them that we don’t have an increased risk appetite, and that our risk management controls, both in our clearing business and throughout Broadridge have been and will continue to be excellent. As Rich mentioned earlier we have assured both S&P and Moody’s that we won’t do any staggered settlement transactions greater than seven days or for more than $20 million in the future.

I would also point out that none of our bank client have been negatively impacted due to the S&P down break. Rich back to you

Rich Daly

Thanks, Dan. As I mentioned during my opening remarks we have increased both the low-end and high-end of our EPS guidance range by $0.05 to a range of $1.35 to $1.45, from our previous EPS guidance range of $1.30 to $1.40. These are non-GAAP numbers as they exclude one-time transition expenses.

Our fourth quarter is our biggest quarter and makes up approximately 50% of earnings, and we are seeing stronger growth potential in our recurring revenues coming from the core business from our investor communications solutions segment. This view and where we are year-to-date in terms of our financial performance, gives us the confidence to raise our range.

Going into our fourth quarter, the only key variables will be event-driven activities and trading volumes. If you recall, we started our fiscal year 2008, we rolled out an EPS guidance excluding one-time transition expenses in the range of a $1.17 to a $1.25 and now we are at $1.35 to $1.45. This has been a very good year.

Before me summarize before we go into the Q&A part of the call. It’s been one year since Broadridge was spun-off from ADT. During that year we have raised our guidance twice, we expanded our strategic planning efforts and resources. We've also proven the viability of our clearing outsourcing model, which now has several new clients. We generated more cash and paid off more debt more quickly than we originally anticipated, and we still anticipate an additional $50 million to $70 million in free cash flow in the fourth quarter. Our Q3 results are directly in line with our expectations, and we are well-positioned for the rest of the fiscal year to deliver earnings per share within our new higher guidance range.

The biggest piece of our business, the Investor Communications segment is growing with better recurring revenues and is better off today than it was a year ago. We have taken the uncertainty of notice and access, and turned it into a positive for gaining more market share and improving earnings. We were able to achieve our Q3 results, despite the difficult times in the market we serve. And the noise in the general market has not affected us to date. The business for the most part is trending as expected.

We successfully completed the implementation for RBC, and help them consolidate their retail and institutional securities processing onto one platform. Many firms have put retail and institutional together under the investment banking umbrella, but a decade later they still don’t have them working together on a single platform. Due to lot of change going on the market we serve, and despite some delays that these changes are creating, they should create more opportunities when the dust settles. We have achieved all this in a marketing environment that hasn’t been viewed positively by anyone. I want to take this opportunity to thanks our highly engaged associates for Broadridge’s performance during our inaugural year.

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