COMPANY Broadridge Financial Solutions

Most recent report date: Jun-09

Financials as of most recent quarter Years

1
Inputs: Market Value: 2
Stock Price $21.49 Net Cash ($43.2) 3
Diluted Shares 141.00 Market Cap $3,030.1 4
Cash $280.90 Enterprise Value $3,073.3 5
Debt $324.10 6-10
TTM Net Income $223.30 Valuation Multiples: 11-20
TTM Interest (Expense) $10.30 P/E (TTM) 13.6x Terminal
Tax Rate 35.5% P/FCF (TTM) 10.4x
TTM FCF $291.4 EV/FCF, ex int (TTM) 10.8x Discount Rate
TTM FCF, ex interest $284.8 EV/FCF, ex int (Y0) 10.8x
Est. Y0 FCF, ex interest $284.8 Dilution
Purchase price $21.49
Comments: Total per share IV
Consider Buying: $21.30 Multiple to Y0 FCF
Price% of IV
Upside/current
LOW ESTIMATE Upside/purchase
Intrinsic Value:
PV Stage 1 + 2 + 3 +4 FCF = $24.24
+ Cash Per Share -$0.31
= Total Per Share Intrinsic Value $23.94
Multiple to Y0 FCF 11.9x
Upside to current price 11.4%
Upside to purchase price 11.4%
Stage 1

Growth Rate (g) = -5.0% 3.0%

Rate of Sharecount Dilution = 0.3%
Discount Rate (k) = 10.0%
Y0 FCF Per Share = $2.02

1 2
Prior Year Diluted Free Cash Flow $2.02 $1.91
x growth rate 0.950 1.030
Free Cash Flow $1.92 $1.97
/ dilution impact 1.003 1.003
Diluted Free Cash Flow $1.91 $1.97
/ discount factor 1.10 1.21
Discounted Free Cash Flow 1.74 1.63

Sum of PV Stage 1 FCF = $7.56

Stage 2
Growth Rate (g) = 3.0%
Rate of Sharecount Dilution = 0.3%
Discount Rate (k) = 10.0%

6 7
Prior Year Diluted Free Cash Flow $2.05 $2.11
x growth rate 103.00% 103.00%
Free Cash Flow $2.11 $2.17
/ dilution impact 1.003 1.003
Diluted Free Cash Flow $2.11 $2.16
/ discount factor 1.77 1.95
Discounted Free Cash Flow 1.19 1.11

Sum of PV Stage 2 FCF = $5.21

Stage 3

Growth Rate (g) = 3.0%

Rate of Sharecount Dilution = 0.3%
Discount Rate (k) = 10.0%

11 12
Prior Year Diluted Free Cash Flow $2.35 $2.41
x growth rate 1.03 1.03
Free Cash Flow $2.42 $2.48
/ dilution impact 1.003 1.003
Diluted Free Cash Flow $2.41 $2.48
/ discount factor 2.85 3.14
Discounted Free Cash Flow 0.85 0.79

Sum of PV Stage 3 FCF = $6.34

Stage 4

Growth Rate (g) = 1.00%

Discount Rate (k) = 10.00%
Implied P/FCF = 11.1

Diluted FCF in Year 20 $3.08

x growth rate 101.00%
= FCF in Year 21 $3.11
/ Capitalization Rate (k-g) 9.00%
= Value at end of Year 20 $34.53
/ discount factor 6.7275
= PV Stage 4 FCF $5.13

MEDIUM ESTIMATE
Intrinsic Value:
PV Stage 1 + 2 + 3 +4 FCF = $30.73
+ Cash Per Share -$0.31
= Total Per Share Intrinsic Value $30.42
Multiple to Y0 FCF 15.1x
Upside to current price 41.6%
Upside to purchase price 41.6%
Stage 1

Growth Rate (g) = 0.0% 6.0%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%
Y0 FCF Per Share = $2.02

1 2
Prior Year Diluted Free Cash Flow $2.02 $2.02
x growth rate 1.000 1.060
Free Cash Flow $2.02 $2.14
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $2.02 $2.14
/ discount factor 1.10 1.21
Discounted Free Cash Flow 1.84 1.77

Sum of PV Stage 1 FCF = $8.43

Stage 2

Growth Rate (g) = 4.0%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%

6 7
Prior Year Diluted Free Cash Flow $2.45 $2.55
x growth rate 1.04 1.04
Free Cash Flow $2.55 $2.65
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $2.55 $2.65
/ discount factor 1.77 1.95
Discounted Free Cash Flow 1.44 1.36

Sum of PV Stage 2 FCF = $6.46

Stage 3

Growth Rate (g) = 3.5%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%

11 12
Prior Year Diluted Free Cash Flow $2.99 $3.09
x growth rate 1.04 1.04
Free Cash Flow $3.09 $3.20
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $3.09 $3.20
/ discount factor 2.85 3.14
Discounted Free Cash Flow 1.08 1.02

Sum of PV Stage 3 FCF = $8.36

Stage 4 (stable growth):

Growth Rate (g) = 1.50%

Discount Rate (k) = 10.00%
Implied P/FCF = 11.8

Diluted FCF in Year 20 $4.21

x growth rate 101.50%
= FCF in Year 21 $4.28
/ Capitalization Rate (k-g) 8.50%
= Value at end of Year 20 $50.30
/ discount factor 6.7275
= PV Stage 4 FCF $7.48

HIGH ESTIMATE
Intrinsic Value:
PV Stage 1 + 2 + 3 +4 FCF = $40.31
+ Cash Per Share -$0.31
= Total Per Share Intrinsic Value $40.01
Multiple to Y0 FCF 19.8x
Upside to current price 86.2%
Upside to purchase price 86.2%
Stage 1

Growth Rate (g) = 5.0% 12.0%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%
Y0 FCF Per Share = $2.02

1 2
Prior Year Diluted Free Cash Flow $2.02 $2.12
x growth rate 1.050 1.120
Free Cash Flow $2.12 $2.37
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $2.12 $2.37
/ discount factor 1.10 1.21
Discounted Free Cash Flow 1.93 1.96

Sum of PV Stage 1 FCF = $9.73

Stage 2

Growth Rate (g) = 5.0%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%

6 7
Prior Year Diluted Free Cash Flow $3.07 $3.23
x growth rate 1.050 1.050
Free Cash Flow $3.23 $3.39
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $3.23 $3.39
/ discount factor 1.77 1.95
Discounted Free Cash Flow 1.82 1.74

Sum of PV Stage 2 FCF = $8.32

Stage 3

Growth Rate (g) = 4.0%

Rate of Sharecount Dilution = 0.0%
Discount Rate (k) = 10.0%

11 12
Prior Year Diluted Free Cash Flow $3.92 $4.08
x growth rate 1.04 1.04
Free Cash Flow $4.08 $4.24
/ dilution impact 1.000 1.000
Diluted Free Cash Flow $4.08 $4.24
/ discount factor 2.85 3.14
Discounted Free Cash Flow 1.43 1.35

Sum of PV Stage 3 FCF = $11.26

Stage 4

Growth Rate (g) = 2.00%

Discount Rate (k) = 10.00%
Implied P/FCF = 12.5

Diluted FCF in Year 20 $5.81

x growth rate 102.00%
= FCF in Year 21 $5.93
/ Capitalization Rate (k-g) 8.00%
= Value at end of Year 20 $74.07
/ discount factor 6.7275
= PV Stage 4 FCF $11.01
LOW MIDDLE HIGH CA 2003.6
-5.0% 0.0% 5.0% CL 1420.7
3.0% 6.0% 12.0% Net Fixed 75.4
3.0% 5.0% 10.0% EBIT 352
2.0% 5.0% 10.0% ROIC 53.47%
0.0% 4.0% 7.0% Earnings Yield 11.62%
3.0% 4.0% 5.0%
3.0% 3.5% 4.0%
1.0% 1.5% 2.0%

10.0% 10.0% 10.0%

0.3% 0.0% 0.0%

$23.94 $30.42 $40.01

11.9x 15.1x 19.8x
0.9x 0.7x 0.5x
11% 42% 86%
11% 42% 86%
LOW MIDDLE HIGH

3.0% 2.0% 0.0%

Year
3 4 5
$1.97 $2.02 $2.06
1.030 1.020 1.000
$2.03 $2.06 $2.06
1.003 1.003 1.003
$2.02 $2.06 $2.05
1.33 1.46 1.61
1.52 1.40 1.27
Year
8 9 10
$2.16 $2.22 $2.28
103.00% 103.00% 103.00%
$2.23 $2.29 $2.35
1.003 1.003 1.003
$2.22 $2.28 $2.35
2.14 2.36 2.59
1.04 0.97 0.91

Year
13 14 15 16 17 18 19 20
$2.48 $2.55 $2.62 $2.69 $2.76 $2.84 $2.91 $2.99
1.03 1.03 1.03 1.03 1.03 1.03 1.03 1.03
$2.55 $2.62 $2.69 $2.77 $2.84 $2.92 $3.00 $3.08
1.003 1.003 1.003 1.003 1.003 1.003 1.003 1.003
$2.55 $2.62 $2.69 $2.76 $2.84 $2.91 $2.99 $3.08
3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73
0.74 0.69 0.64 0.60 0.56 0.52 0.49 0.46
 5.0% 5.0% 4.0%

Year
3 4 5
$2.14 $2.25 $2.36
1.050 1.050 1.040
$2.25 $2.36 $2.45
1.000 1.000 1.000
$2.25 $2.36 $2.45
1.33 1.46 1.61
1.69 1.61 1.52

Year
8 9 10
$2.65 $2.76 $2.87
1.04 1.04 1.04
$2.76 $2.87 $2.99
1.000 1.000 1.000
$2.76 $2.87 $2.99
2.14 2.36 2.59
1.29 1.22 1.15

Year
13 14 15 16 17 18 19 20
 $3.20 $3.31 $3.43 $3.55 $3.67 $3.80 $3.93 $4.07
1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04
$3.31 $3.43 $3.55 $3.67 $3.80 $3.93 $4.07 $4.21
1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
$3.31 $3.43 $3.55 $3.67 $3.80 $3.93 $4.07 $4.21
3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73
0.96 0.90 0.85 0.80 0.75 0.71 0.67 0.63

10.0% 10.0% 7.0%

Year
3 4 5
$2.37 $2.61 $2.87
1.100 1.100 1.070
$2.61 $2.87 $3.07
1.000 1.000 1.000
$2.61 $2.87 $3.07
1.33 1.46 1.61
1.96 1.96 1.91
Year
8 9 10
$3.39 $3.56 $3.74
1.050 1.050 1.050
$3.56 $3.74 $3.92
1.000 1.000 1.000
$3.56 $3.74 $3.92
2.14 2.36 2.59
1.66 1.59 1.51

Year
13 14 15 16 17 18 19 20
$4.24 $4.41 $4.59 $4.77 $4.97 $5.16 $5.37 $5.59
1.04 1.04 1.04 1.04 1.04 1.04 1.04 1.04
$4.41 $4.59 $4.77 $4.97 $5.16 $5.37 $5.59 $5.81
1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
$4.41 $4.59 $4.77 $4.97 $5.16 $5.37 $5.59 $5.81
3.45 3.80 4.18 4.59 5.05 5.56 6.12 6.73
1.28 1.21 1.14 1.08 1.02 0.97 0.91 0.86