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June 28 Fitch Ratings has affirmed its ratings for Broadridge Financial Solutions, Inc. (Broadridge). The ratings and Outlook are supported by the following considerations: --Broadridge has a leading share in the proxy distribution market, which Fitch views as facing minimal competitive threats and pricing that is largely insulated by SEC regulations; --The company's core Investor Communications and Securities Processing business segments produce steady free cash flow with minimal exposure to economic volatility; --Long-term customer contracts and customer relationships in both core businesses; --Broadridge has a diverse customer base with no customer representing greater than 7% of total revenue, and expectations of achieving greater geographic diversification by capitalizing on growth opportunities in international markets going forward; --The low capital intensity of Broadridge's business model has produced high historical returns on invested capital. Ratings concerns include the following: --Changing regulations could negatively impact Broadridge's business, particularly related to the proxy distribution business; --Broadridge's acquisition growth strategy carries integration and execution risks; --Execution risk related to the company's processing of confidential client information and the risk of security breaches as well as operating risks stemming from the mission-critical nature of the company's securities processing solutions. The ratings reflect the following financial expectations: --Broadridge can organically grow revenue in the low- to mid-single digits with periods of higher growth driven by acquisitions; --EBITDA margins should rebound closer to the historical average of 20% going forward once the migration of processing services to IBM is completed; --Free cash flow to adjusted debt is expected to remain within a range near 20% with adjusted debt to EBITDAR of approximately 2x or less. Fitch currently estimates free cash flow to adjusted debt at 18.2% and adjusted debt to EBITDAR at 2.1x; --Broadridge will utilize excess free cash flow for share repurchases and acquisitions; --Quarterly results will remain volatile depending on the level of event-driven revenues but as Broadridge continues to diversify its business beyond proxy services, year-to-year volatility in results will be reduced. Liquidity as of March 31, 2012 was solid at $719 million, which includes $219 million in cash and $500 million available under the company's $500 million senior unsecured revolving credit facility which matures in September 2016. Fitch expects annual free cash flow to average between $150 million and $200 million. Total debt as of March 31, 2012 was $564 million, with $440 million outstanding under a senior unsecured term loan facility which matures September 2016 and $124 million in senior unsecured notes due June 2017. Fitch affirms Broadridge as follows: --Issuer Default Rating (IDR) at 'BBB+'; --Senior unsecured revolving credit facility at 'BBB+'; --Senior unsecured debt at 'BBB+'.