Exhibit 99.1
Dear Automatic Data Processing, Inc. Stockholder:
I am pleased to inform you that the Board of Directors of Automatic Data Processing, Inc. (“ADP”) approved the spin-off of our wholly-owned
subsidiary, Broadridge Financial Solutions, Inc. (“Broadridge”), a leading global provider of technology-based outsourcing solutions to the financial services industry. Broadridge’s integrated systems and services include investor
communication solutions, securities processing solutions, and clearing and outsourcing solutions. Each ADP stockholder will receive one Broadridge share for every four shares of ADP common stock held on the record date, March 23, 2007.
The spin-off, which will separate ADP and Broadridge into two distinct businesses with separate ownership and management, will better
enable both companies to capitalize on significant opportunities for growth. ADP will continue to focus on its Employer Services and Dealer Services businesses. As an independent, publicly-owned company, Broadridge will be able to pursue its growth
strategies and prioritize investment spending as it sees fit, without having to compete for capital or senior management resources with other ADP businesses. This transaction will provide our stockholders with ownership interests in ADP and
Broadridge, two companies that are market leaders, each with management teams focused on the unique needs and opportunities of their respective businesses.
The spin-off will be in the form of a pro rata dividend to holders of ADP common stock. The dividend will represent 100 percent of the common stock of Broadridge at the time of the transaction.
You need not take any action to receive the shares of Broadridge to which you are entitled as a stockholder of ADP. You do not need to pay any
consideration or surrender or exchange your shares of ADP stock.
We expect that the spin-off will be tax-free to stockholders. To that
end, we have requested a ruling regarding the spin-off from the Internal Revenue Service, and intend to complete the spin-off only if we receive a favorable ruling as well as a favorable opinion of counsel confirming the spin-off’s tax-free
status. The spin-off is also subject to other conditions, including necessary regulatory approvals.
I encourage you to read the attached
information statement, which is being provided to all ADP stockholders. It describes the spin-off in detail and contains important business and financial information about Broadridge.
I believe the spin-off is a positive event for our businesses and our stockholders, and I look forward to your continued support as a stockholder of ADP.
We remain committed to working on your behalf to build long-term stockholder value.
Sincerely,
Gary C. Butler
President and Chief Executive Officer
March 16, 2007
Dear Future Broadridge Financial Solutions,
Inc. Stockholder,
On behalf of the entire team at Broadridge, I want to welcome you as a future stockholder. Our company, which will
become independent on March 30, 2007, brings with it a rich history as a leading global provider of technology-based outsourcing solutions to the financial services industry. Our integrated systems and services include investor communication
solutions, securities processing solutions, and clearing and outsourcing solutions. We are in a strong position to meet the demands of our clients and growing marketplace.
We believe there is a significant market opportunity for outsourcing solutions to the financial services industry based upon what we perceive to be
long-term trends in the market such as increasing investor activity, increasing globalization of securities markets, increasing regulatory-driven activity, and increasing acceptance of outsourcing by financial institutions. We are well-positioned to
take advantage of these long-term trends through our state-of-the-art offerings, strong heritage of servicing the financial services industry, and deep client relationships.
As an independent company, our goal is to create greater value for our clients and our stockholders, with a focused and highly motivated management team.
I encourage you to learn more about Broadridge and the strategies we are pursuing by reading the attached information statement.
Sincerely,
Richard J. Daly
Chief Executive Officer
March 16, 2007
Automatic Data Processing, Inc., or ADP, is furnishing this information statement to its stockholders in connection with the distribution by ADP to its stockholders of all of its shares of common stock of its
wholly-owned subsidiary, Broadridge Financial Solutions, LLC (“Broadridge”), which comprises the Brokerage Services business of ADP.
In this distribution, ADP will distribute all of its shares of Broadridge common stock on a pro rata basis to the holders of ADP common stock. Each of you, as a holder of ADP common stock, will receive one share of Broadridge common stock
for every four shares of ADP common stock that you hold at the close of business on March 23, 2007, the record date for the distribution. As discussed more fully in the “Distribution” section of this information statement, if you sell
shares of ADP common stock in the “regular way” market between the record date and March 30, 2007, the distribution date, you will also be selling your right to receive shares of Broadridge common stock in the distribution.
Immediately prior to the distribution, Broadridge will convert to a Delaware corporation, Broadridge Financial Solutions, Inc. Immediately after the distribution is completed, we will be an independent public company.
No vote of ADP stockholders is required for the distribution to occur. No stockholder action is necessary for you to receive the shares of Broadridge
common stock to which you are entitled in the distribution. This means that:
|
|
•
|
|
you do
not
need to pay any consideration to ADP or to us for the shares of Broadridge common stock distributed to you; and
|
|
|
•
|
|
you do
not
need to surrender or exchange any shares of ADP common stock to receive your shares of Broadridge common stock.
|
There is currently no trading market for Broadridge common stock. On March 22, 2007, trading of shares of Broadridge common stock is expected to begin
on a “when issued” basis. Our common stock will be listed on the New York Stock Exchange, or NYSE, under the ticker symbol “BR.”
As you review this information statement, you should carefully consider the matters described in the “
Risk Factors
” section beginning on page 10.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined that this information statement is truthful or complete. Any
representation to the contrary is a criminal offense.
This information statement is not an offer to sell nor does it seek an offer to buy any securities.
The date of this information statement is March 16, 2007.
TABLE OF CONTENTS
|
|
|
|
|
Trademarks
|
|
i
|
|
Industry and Market Data
|
|
i
|
|
Summary
|
|
1
|
|
Risk Factors
|
|
10
|
|
Special Note About Forward-Looking Statements
|
|
26
|
|
Distribution
|
|
27
|
|
Dividend Policy
|
|
33
|
|
Unaudited Pro Forma Combined Financial Statements
|
|
34
|
|
Selected Combined Financial Data
|
|
41
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
42
|
|
Business
|
|
65
|
|
Management
|
|
85
|
|
Our Relationship with ADP
|
|
103
|
|
Principal Stockholders
|
|
108
|
|
Description of Capital Stock, Charter Documents, Transfer Agent and NYSE Listing
|
|
109
|
|
Indemnification of Directors and Officers
|
|
112
|
|
Where You Can Find More Information
|
|
113
|
TRADEMARKS
We have proprietary rights to a number of
trademarks used in this information statement which are important to our business, including ProxyEdge
®
, ProxyDisclosure
®
, PostEdge
®
, ReorgPlus
®
, Global Proxy
®
, ShareLink
®
, ProVisor
®
,
and MBS Expert
®
. We have omitted the “
®
” designation for such trademarks in this
information statement. Nevertheless, all rights to such trademarks named in this information statement are reserved.
INDUSTRY AND MARKET DATA
Certain industry and market data cited in this information statement under the
heading “Business — Market Overview and Opportunity” were obtained from third party sources. This data was not prepared specifically for us and is attributed to several sources including studies by TowerGroup, Celent and Aite Group
and to information published by the U.S. Department of Commerce and the Securities Industry and Financial Markets Association. While we believe that these reports are reliable and appropriately cited in this information statement, we have not
independently verified their results.
i
SUMMARY
This summary highlights selected information from this information statement relating to our
company and our separation from ADP and the distribution of our common stock by ADP. We refer to these transactions in this information statement as the separation and distribution (and, at times, as the separation or as the distribution). For a
more complete understanding of our business and the distribution, you should carefully read the entire information statement, including the risk factors and our combined historical and pro forma financial statements and notes to those statements
appearing elsewhere in this information statement.
The information included in this information statement, including our combined
financial statements, assumes the completion of all the transactions referred to in this information statement as the separation and distribution. Use in this information statement of the terms:
|
|
•
|
|
“Broadridge,” “we,” “us,” “our” and “our company” refer to Broadridge Financial Solutions, LLC, a Delaware
limited liability company which was formed on December 6, 2006 (formerly the Brokerage Services Business of ADP), and, unless the context otherwise requires, its consolidated subsidiaries. Broadridge will be converted to a Delaware corporation
immediately prior to the distribution. “Our shares” refers to the shares of Broadridge Financial Solutions, Inc. outstanding upon and after its conversion to a corporation;
|
|
|
•
|
|
“ADP” refers to Automatic Data Processing, Inc., a Delaware corporation, and, unless the context otherwise requires, its consolidated subsidiaries,
including, prior to the distribution date of our stock to its stockholders, Broadridge and the businesses comprising it; and
|
|
|
•
|
|
“fiscal year” refers to a twelve month period ended June 30.
|
Our Company
We are a leading global provider of technology-based
outsourcing solutions to the financial services industry. Our integrated systems and services include investor communication solutions, securities processing solutions, and clearing and outsourcing solutions. With more than four decades of
experience, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated systems.
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 systems enable our clients to process securities transactions in more than 50 countries. In fiscal 2006, we:
|
|
•
|
|
processed 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, and pre-sale and post-sale prospectuses;
|
|
|
•
|
|
provided components of our securities processing solutions to seven of the top 10 U.S. broker-dealers, as ranked by the Securities Industry and Financial Markets
Association, a securities industry association (“SIFMA”); and
|
|
|
•
|
|
served over 90 correspondents through our securities clearing services.
|
In fiscal 2006, we generated $1.9 billion in total revenues and $180.5 million in net earnings from continuing operations.
1
Our headquarters are located at 2 Journal Square Plaza, Jersey City, New
Jersey 07306, and our telephone number is (201) 714-3000. We anticipate that, commencing in August 2007, our headquarters will be located at 1981 Marcus Avenue, Lake Success, New York 11042. We maintain an Internet site at www.broadridge.com. Our
website and the information contained on that site, or connected to that site, are not incorporated into this information statement or the registration statement of which it is a part.
Our Business
Overview
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
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 provide regulatory reporting, tax reporting and corporate actions/reorganization processing solutions that help our clients meet their regulatory compliance
needs. We also provide 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 describes 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
the administrative functions of trade processing to us, from order entry to trade matching and settlement, while maintaining their ability to finance and capitalize their business.
Our Integrated Solutions
We believe the breadth of our value-added solutions and services is unique.
Our U.S. clients can choose from three levels of trade processing services, all of which utilize the same technology platform. This allows our
2
clients to migrate across these services as they grow or their business needs change without having to undergo the cost and risk of changing their underlying
back-office systems. Our three-tier service offering is as follows:
|
|
•
|
|
financial institutions that choose to run their own clearing operations can utilize our securities transaction processing systems on a hosted, application service
provider (“ASP”) basis;
|
|
|
•
|
|
financial institutions that choose to take advantage of the scale and resources of a large securities clearing firm can receive our securities processing and
securities clearing, settlement and financing services on an integrated, outsourced basis as our correspondents; and
|
|
|
•
|
|
financial institutions that believe the best way to optimize their business is to outsource their staff, systems and securities processing functions while retaining
customer credit and financing activities can utilize our operations outsourcing services.
|
In addition, our clients can integrate our
securities processing and clearing services with our other services including: (i) the processing of trade confirmations and account statements, delivered traditionally or electronically; (ii) pre-sale and post-sale equity and mutual fund
prospectus processing; and (iii) automated workflow tools that help our clients streamline their securities processing and operations activities. Our core systems for processing equity, option and mutual fund transactions in the U.S. markets
can also be combined with our specialized systems for trading in fixed income and international securities. These specialized securities processing services are fully integrated with our correspondent clearing and operations outsourcing services.
Market Opportunity
We
believe there is a significant opportunity for outsourcing solutions to the financial services industry based upon our perceived long-term market trends. These trends include: (i) increasing investor activity; (ii) increasing globalization of
securities markets; (iii) increasing regulatory-driven activity; and (iv) increasing acceptance of outsourcing.
For a more detailed
discussion of these market trends, see “Business — Market Overview and Opportunity,” included elsewhere in this information statement.
Our Competitive Strengths
We enjoy a strong position in the markets in which we participate as a
result of the following unique strengths that differentiate us from our competitors:
|
|
•
|
|
Strong heritage with established position serving the financial services industry.
Over our long history as the Brokerage Services Business of ADP, we
have established ourselves as a leading provider of technology-based outsourcing solutions to the financial services industry. In fiscal 2006, we: (i) processed approximately 70% of all proxy votes in the United States; (ii) distributed over
one billion investor communications; (iii) provided components of our securities processing solutions to seven of the top 10 U.S. broker-dealers; and (iv) provided six of the top 10 Fortune Global 500 banks with fixed income trade
processing services. We are investing in and building on our heritage and client relationships as we establish ourselves as an independent company.
|
|
|
•
|
|
Global products and operations.
Our product set and client base are global in reach. We enable our clients to process transactions in more than 50
countries and have client support, sales presence and distributed operations across the globe. With our global presence, we seek to expand our business as
|
3
|
|
more financial institutions outside the United States outsource their information and transaction processing and clearing functions. In addition, we believe
the globalization of the financial markets and regulatory efforts to reengineer securities settlement practices on a pan-European basis will create a significant opportunity for our unique global securities processing and operations outsourcing
offerings.
|
|
|
•
|
|
Longstanding and deep client relationships.
Our relationships with clients representing a majority of our revenues date back on average 10 or more
years. Our client relationships are based on exceptionally high levels of client service. These long-term, stable relationships with our clients provide a strong vehicle for the distribution of additional value-added products.
|
|
|
•
|
|
Long-term, recurring revenue client contracts.
We typically enter into long-term contracts with clients with revenues based on production volume. Much
of our revenues are therefore recurring in nature.
|
|
|
•
|
|
Flexible, state-of-the-art processing offerings and innovative products and services.
Our innovative investor communication solutions reduce
distribution costs and increase efficiency for our clients. These services include: (i) householding of communications to multiple investors at the same address; (ii) electronic proxy delivery and voting; and (iii) the electronic delivery of various
investor communications. In addition, our integrated securities processing platforms support securities trading on a global basis and are offered as hosted ASP or fully outsourced solutions. We also provide our clients with the ability to receive
our securities processing and clearing and outsourcing services on either an unbundled or fully integrated basis. Our clients can therefore migrate across these offerings as their businesses change without undergoing the cost and risk of changing
their underlying back-office systems.
|
|
|
•
|
|
Proven and experienced management team.
We have an experienced, seasoned management team that is substantially the same team that managed our business
prior to our separation from ADP. Our Chief Executive Officer has been with us for 18 years. Collectively, members of our senior management team have an average of 17 years with us or ADP and have proven their ability to manage our business.
|
Our Strategy
We believe we are well-positioned to take advantage of long-term market trends through our state-of-the-art offerings, strong heritage of servicing the financial services industry, and deep client relationships. While short-term market
fluctuations may impact year-to-year growth comparisons, our goals are to drive revenue growth and margin expansion over the long run through the following:
|
|
•
|
|
Drive new sales of existing solutions.
We deliver solutions that automate securities transaction processing and clearing functions for financial
institutions, as well as value-added solutions that assist our clients in efficiently and economically meeting their regulatory compliance requirements and investor communication and reporting needs. Many of our clients use our services as modular
solutions rather than our full integrated solution set. Therefore, we intend to grow both by selling additional services to our existing clients as well as by selling existing services to new clients.
|
|
|
•
|
|
Deliver new products and services.
To address the changing needs of our clients, we continue to offer new products and services through internal
development, acquisitions or strategic alliances. We strive to offer new products and services that deliver high value to financial institutions at a lower cost than such financial institutions can provide for themselves or receive from other third
parties. In our Investor Communication Solutions business, we recently introduced our Investor Mailbox tool which provides the electronic delivery of investor communications to a centralized location for our clients’ retail customers, a tax
information reporting product for the preparation of IRS Form 1099, and our
|
4
|
|
electronic proxy services to Japanese issuers. Other examples include our entry into the securities clearing services market and the development of our
operations outsourcing solution for self-clearing firms, an offering which is the first of its kind in the market.
|
|
|
•
|
|
Capture the global securities processing, operations outsourcing and securities clearing opportunity.
Financial services firms outside the United
States are increasingly following the practice common in the United States of outsourcing their information and transaction processing and securities clearing functions. Furthermore, global financial services firms are looking to integrate their
U.S. and international securities processing systems and consolidate their back-office operations on a worldwide basis. We intend to leverage our global offerings to achieve a significant global operations outsourcing and securities clearing
presence.
|
|
|
•
|
|
Implement operational cost efficiencies.
We intend to implement cost saving initiatives in order to enhance the efficiency of our operations. An
example is the outsourcing of many of our data center operations to ADP.
|
Risk Factors
In the execution of our business strategy, we have faced and will continue to face significant challenges. Our ability to execute our strategy is subject
to numerous risks as discussed more fully in the section entitled “Risk Factors” immediately following this summary. These risks include:
|
|
•
|
|
future consolidation in the financial services industry could adversely affect our revenues by eliminating some of our existing and potential clients and could make
us more dependent on a more limited number of clients;
|
|
|
•
|
|
the financial services industry has experienced increasing scrutiny by regulatory authorities in recent years, and further changes in legislation or regulations may
affect our ability to conduct our business or may reduce our profitability; in addition, regulatory changes that specifically relate to the services we provide, such as investor communication services, could adversely affect us;
|
|
|
•
|
|
we have not operated as a stand-alone public company, and as a result we will need to (i) develop our name recognition and reputation with our clients and
employees, (ii) incur the additional costs of being a separate public company and (iii) continue to obtain data center services from ADP following the spin-off in addition to services that we will obtain from ADP on a transitional basis for up to
one year;
|
|
|
•
|
|
our combined historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a stand-alone company
because a number of aspects of our operations, including the cost allocations, working capital and financing costs and bargaining power that we experienced as part of ADP, will change after the spin-off is completed; and
|
|
|
•
|
|
our debt load, and related financing expenses, will significantly increase as a result of the $690.0 million of indebtedness we will incur in connection with the
spin-off to fund a cash dividend to ADP.
|
Any of
the above risks could adversely affect our financial condition and results of operations. An investment in our common stock involves risks. You should read and consider the information set forth in “Risk Factors” and all other information
set forth in this information statement.
5
Distribution
The following is a brief summary of the terms of the distribution. For a full discussion, see “Distribution,” included elsewhere in this information statement.
|
Distributing company
|
ADP, which after the distribution will not own any shares of our common stock.
|
|
Distributed company
|
Broadridge Financial Solutions, LLC, which is a wholly-owned subsidiary of ADP. We will convert to a Delaware corporation, Broadridge Financial
Solutions, Inc., immediately prior to the distribution. After the distribution, we will be an independent public company.
|
|
Distributed shares
|
All of the outstanding shares of our common stock will initially be owned by ADP immediately prior to the distribution. The number of shares that
ADP will distribute to its stockholders will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares of our common stock, as described below.
|
|
Distribution ratio
|
One share of our common stock for every four shares of ADP common stock that you hold at the close of business on the record date for the
distribution.
|
|
Fractional shares
|
ADP will not distribute any fractional shares of our common stock to its stockholders. Instead, the transfer agent identified below will aggregate
fractional shares into whole shares and sell them in the open market at prevailing market prices and distribute the proceeds pro rata to each person who otherwise would have been entitled to receive a fractional share in the distribution. You will
not be entitled to any interest on the amount of payment made in lieu of a fractional share.
|
|
Record date
|
March 23, 2007 (5:00 p.m., New York City time).
|
|
Distribution date
|
March 30, 2007.
|
|
Distribution
|
On or about the distribution date, our transfer agent will distribute the shares of our common stock by crediting such shares to book-entry
accounts established by the transfer agent for persons who were stockholders of ADP at the close of business on the record date. You will not be required to make any payment or surrender or exchange your ADP common stock or take any other action to
receive your shares of our common stock. The transfer agent will mail an account statement to each such ADP stockholder stating the number of shares of our common stock credited to such holder’s account. Beneficial stockholders will receive
information from their financial intermediary. If you sell shares of ADP common stock in the “regular way” market between the record date and the distribution date, you will also be selling your right to receive distributed shares of our
common stock in the distribution.
|
6
|
|
Under the separation and distribution agreement, ADP may, without liability, decide not to proceed with the proposed distribution at any time
prior to the time that the distribution is effected. See “Our Relationship with ADP — Agreements with ADP — Separation and Distribution Agreement,” included elsewhere in this information statement.
|
|
Transfer agent
|
American Stock Transfer & Trust Company will act as our transfer agent.
|
|
Stock exchange listing
|
Our shares of common stock will be listed on the New York Stock Exchange under the ticker symbol “BR.” There is currently no
trading market for our common stock. On March 22, 2007, trading of shares of our common stock is expected to begin on a “when issued” basis. See “Distribution — Trading Between the Record Date and Distribution Date,”
included elsewhere in this information statement.
|
|
Incurrence of debt
|
In connection with the separation and distribution, we intend to obtain new financing. We expect to borrow $690.0 million and use the
proceeds to pay a cash dividend to ADP prior to the distribution. For additional information relating to our planned financing arrangements, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Financial Condition, Liquidity and Capital Resources — New Credit Facility,” included elsewhere in this information statement.
|
|
Tax considerations
|
ADP has requested a ruling from the Internal Revenue Service to the effect that, based on certain facts, assumptions, representations and
undertakings set forth in the request, the distribution will qualify as a transaction that is tax-free under Section 355 and other related provisions of the Internal Revenue Code of 1986, as amended. The distribution is conditioned upon the
receipt by ADP of such a favorable ruling. In addition, the distribution is conditioned upon the receipt by ADP of a favorable opinion of counsel confirming the distribution’s tax-free status, which ADP intends to obtain from Paul, Weiss,
Rifkind, Wharton & Garrison LLP, its counsel. See “Distribution — Certain U.S. Federal Income Tax Consequences of the Distribution,” included elsewhere in this information statement, for a more detailed description of the
U.S. federal income tax consequences of the distribution.
|
|
|
In connection with the distribution, we will be subject to restrictions on certain post-distribution actions, including significant transfers of
our stock or assets, that could affect the qualification of the distribution as a tax-free transaction. We will also generally indemnify ADP if the distribution fails to qualify as a tax-free transaction for specified reasons. For additional
information regarding
|
7
|
|
these matters, see “Our Relationship with ADP — Agreements with ADP — Tax Allocation Agreement,” included elsewhere in
this information statement.
|
|
Dividend policy
|
We expect to pay cash dividends on our common stock. The declaration and payment of future dividends to holders of our common stock will be at the
discretion of our Board of Directors, and subject to regulatory and other constraints. See “Dividend Policy,” included elsewhere in this information statement.
|
|
Relationship with ADP
|
Prior to the distribution, we will enter into a separation and distribution agreement and several other agreements with ADP to effect the
separation and distribution and provide a framework for our relationship with ADP after the separation. For a discussion of these arrangements, see “Our Relationship with ADP — Agreements with ADP,” included elsewhere in this
information statement.
|
|
Stockholder inquiries
|
If you have any questions relating to the distribution, you should contact American Stock Transfer & Trust Company at 1-866-703-9065.
|
|
Risk factors
|
The distribution and ownership of our common stock involve various risks. You should carefully read the “Risk Factors” beginning on
page 10 of this information statement.
|
8
Summary Combined Financial Data
The following table sets forth summary combined financial information from our unaudited combined financial statements as of and for the six months ended
December 31, 2006 and 2005 and our audited combined financial statements as of and for the years ended June 30, 2006, 2005 and 2004. The summary combined financial data presented below should be read in conjunction with our combined
financial statements and the accompanying notes included elsewhere in this information statement and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our combined financial information may not be indicative of our future performance and does not necessarily reflect what our financial condition and
results of operations would have been had we operated as a separate, stand-alone entity during the periods presented, including many changes that will occur in the operations and capitalization of our company as a result of our separation from ADP.
Results of operations for the six months ended December 31, 2006 are not necessarily indicative of results for the full fiscal year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended June 30,
|
|
Six Months Ended
December 31,
|
|
|
|
2006
|
|
2005
|
|
2004
|
|
2006
|
|
2005
|
|
|
|
(in millions)
|
|
Net revenues
|
|
$
|
1,933.3
|
|
$
|
1,717.1
|
|
$
|
1,525.8
|
|
$
|
871.4
|
|
$
|
764.7
|
|
Cost of net revenues
|
|
|
1,433.0
|
|
|
1,273.2
|
|
|
1,132.5
|
|
|
675.8
|
|
|
586.9
|
|
Selling, general and administrative expenses
|
|
|
195.9
|
|
|
168.5
|
|
|
142.0
|
|
|
101.6
|
|
|
99.1
|
|
Other expenses, net
|
|
|
1.7
|
|
|
1.5
|
|
|
0.9
|
|
|
1.6
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
1,630.6
|
|
|
1,443.2
|
|
|
1,275.4
|
|
|
779.0
|
|
|
686.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
302.7
|
|
|
273.9
|
|
|
250.4
|
|
|
92.4
|
|
|
78.1
|
|
Provision for income taxes
|
|
|
122.2
|
|
|
107.5
|
|
|
104.2
|
|
|
35.9
|
|
|
31.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
$
|
180.5
|
|
$
|
166.4
|
|
$
|
146.2
|
|
$
|
56.5
|
|
$
|
46.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
|
As of December 31,
|
|
|
|
2006
|
|
2005
|
|
2004
|
|
2006
|
|
2005
|
|
|
|
(in millions)
|
|
Balance Sheet and Other Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
50.1
|
|
$
|
31.6
|
|
$
|
23.6
|
|
$
|
84.8
|
|
$
|
114.8
|
|
Total current assets
|
|
|
1,405.9
|
|
|
1,682.1
|
|
|
429.6
|
|
|
1,440.5
|
|
|
1,557.8
|
|
Property, plant and equipment, net
|
|
|
80.7
|
|