Good morning. My name is Natalia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Broadridge Second Quarter Fiscal Year 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] Thank you. I will now turn the call over to Mr. Edings Thibault, Head of Investor Relations. You may begin, sir.

Thank you, Natalia. Good morning to everybody on our call, and welcome to Broadridge's second quarter 2018 earnings conference call. Our earnings release and the slide that accompany this call may be found on the Investor Relations section of broadridge.com. Joining me on the call this morning are Rich Daly, our CEO; Tim Gokey, our President and COO; and Jim Young, our CFO. Before I turn the call over to management team, a few standard reminders. During today's conference call, we will be making forward-looking statements regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides. We encourage participants to refer to our SEC filings, including our Annual Report on Form 10-K, for a complete discussion of forward-looking statements and risk factors faced by our business. We will also be referring to several non-GAAP financial measures, including adjusted operating income, adjusted EPS, and free cash flow. We believe these non-GAAP measures provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of our use of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and in the earnings presentation. Let me now turn the call over to Rich Daly.

Thanks, Edings. Good morning, everyone. Having a record quarter, lower taxes and higher guidance, makes it a really exciting time to be at Broadridge. So let’s get into it. I will start this morning with some of the highlights of our second quarter results. Tim will provide an overview of our two segments. And then Jim will review our financials and walk you through our revised 2018 guidance and three year financial objectives. I will then close with some of my thoughts on steps we are taking to further strengthen and grow our governance and capital markets franchises and even better position the company for future growth. Broadridge delivered very strong second quarter results. Total revenues rose 13% to just over $1 billion, driven by $68 million increase in event driven market units and recurring revenue growth of 5%. The growth in event-driven revenues contributed to strong 63% growth and adjusted operating income to $137 million. Adjusted EPS aided by lower tax rate more than doubled to $0.79. Closed sales were $39 million in the second quarter down from $56 million in the second quarter of 2017. On 2017 second quarter numbers, benefited from a large sale to a key client and excluding that sale, closed sales would been up 13%. More important than the sales results of any single quarter are pipeline strong and the quality of our dialogs with key clients around transformational initiatives remains high. We continue to be pleased with the strength of our event driven revenues. During the quarter, Broadridge benefited from both a proxy vote at one of the largest global mutual complexes, as well as activist campaigns at two large equity companies. In all of these cases, corporate issuer and mutual funds rely on Broadridge to communicate with millions of investors and accurately…

Thank you, Rich. Let’s turn to slide five for a brief business update. Both the Broadridge’s segments, investment and communications and global technology and operation, continue to perform very well. ICS total revenues recurring, event driven and distribution, rose 14%. As Rich discussed, event driven activity was very strong across mutual funds for a leading complex under proxy, and also due to continued shareholder activism, that cap to very strong first half of the year. ICS recurring fee revenue growth was 5% in the second quarter, excluding customer communications. A healthy stock market in Q2 helped drive growth across our governance franchise, especially for our recurring equity proxy and mutual fund and ETF interim products. Mutual fund interim volumes rose 10% in the second quarter, reflecting the strong levels of inflows into mutual funds and ETFs over the past 15 months. Equity stock growth was also very strong at 12% that helps drive 6% growth in regulatory communications revenue. Other ICS revenues rose 3% as strong demand for our data and analytics and our wealth management products is partially offset by revenue delays in our tax pipeline. Demand for our data and analytics products remain strong, including a noble new mandate to provide regulatory compliance solution to major financial services firm. Customer communications declined 1%. These revenues continued to be impacted by the expected roll off from our prior customers. These roll off that we have flagged from the beginning of the BRCC acquisition. Before we turn to our GTO segment, I want to circle back to our event driven revenues. As Rich noted, these activities are an integral part for the corporate governance infrastructure that Broadridge provide. At about 9% of our overall fee revenues, in most years the ebbs and flows of these activities have had only a…

Thanks, Tim and good morning, everyone. I'll make a few call-outs to begin and then start by comments with a review of the Tax Cuts and Jobs Act impact to our tax rate. First, we have very strong second quarter. Total revenues were up 13% and strong adjusted EPS was up 103%. Event driven activity power the very strong results in our ICS segment and our GTO business continue to perform very well. Second, taxes. The Tax Acts will generate an approximately 10 percentage point reduction in our effective tax compared to fiscal year 2017 to fiscal 2019, which will be our first full fiscal year at the lower rate. The changes to the tax law also had a notable impact on our reported earnings in the second quarter, driving $0.08 of the $0.40 adjusted EPS growth. Third, free cash flow. Broadridge had a very strong free cash flow quarter, driven in large part by the elevated event driven activity in the first half of the fiscal year in client pre payments. Fourth, guidance. As Rich noted, we're raising our total revenue guidance from 2% to 3%, to 2% to 4% to account for the big event driven activity. We're also raising our adjusted EPS growth guidance to 27% to 31% to reflect the impact of a lower U.S. federal tax rate and the strength of our operating performance. Embedded in our guidance is our expectation for a record year of event driven revenues. We're also raising our free cash flow guidance by $100 million to $500 million to $550 million for the year. Finally, we are updating our objective for a three year compounded annual growth rate for adjusted EPS. We are increasing the range from 9% to 13% to 14% to 18% to reflect the lower tax rate.…

Thanks, Tim. I’m on slide 15 of the presentation. Let’s review again the key points from our core. First, Broadridge reported very strong second quarter results. Total revenue rose 13%, recurring revenues rose 5%, and strong event driven activity contributed to 63% growth in adjusted operating income. That growth and the impact of a lower tax rate drove a 103% growth and adjusted EPS to $0.79. We’re on track to hit our full year sales guidance of $170 million to $210 million. We closed some important sales in the quarter. Our pipeline is strong and I am very encouraged by the quality of our dialogues with key clients around how Broadridge can help them to transform their businesses. After a record first half for event driven revenues and with the cut in corporate taxes, we are raising our guidance for total revenue growth, adjusted EPS growth and free cash flow. And finally, we are raising our three year adjusted EPS growth objectives to reflect the impact of lower U. S. corporate taxes. The theme of our Investor Day, two months ago was, Ready for Next. Ready for Next is a statement of our commitment to clients that Broadridge is well positioned to help them pursue targeted and meaningful opportunities to transform their businesses across governance, capital markets and wealth management. A central tenant in that commitment is our willingness to invest in and grow our core governance and capital market franchises to drive value for our clients and shareholders. At Broadridge, we define a franchise as a business with a truly differentiated value proposition and which creates network value. In order to sustain those value propositions and expand the network value we can deliver, we continue to reinvest for the benefit of our clients and shareholders. To support our governance…

[Operator Instructions] The first question is from the line of Peter Heckmann with Davidson.

I didn’t hear it in the prepared comments. Could you give you an update on the acquisition of Scottrade and the disposition of that relationship with Broadridge?

As you know, that transaction closed in September and we have ongoing dialog with TD on this. There hasn’t really been any change in strategy. I would say the dialogs were very positive. We have a variety of solutions that they may chose from employee going forward. And we would expect to conclude something around this, sometime the next 12 months.

And then just remind me, Scottrade, did go live on Broadridge platform, correct?

It did not go live but contractually TD is paying minimums during the time period.

And then just quick follow up on bookings. I know bookings can lumpy. How do you think about market sentiment in terms of, I mean it sounds like the market continues to move toward the area that you’ve been moving toward in terms of utilities, large outsourcing deals. But how does the large deal pipeline look for potential deals to be signed during the next couple of quarters?

I specifically tried to give you a sense in the call, let me elaborate on that. So overall, the quality of dialogs and the level within the organization we’re having these dialogs, continues to improve. The reality is that with 33 clients on the managed service platform, we’ve crossed from chasm from going from early adaptors into the mass mar. And when you have a proven model and an industry that continues to say they’re looking to neutralize cost, Broadridge’s program was -- we're the only viable model why they are working out there. And everything else is pretty much a theoretical dialog. So we’re in many active dialogues. Now as you know these dialogues are not -- if you want to have a cup a coffee but there, it’s very, very complicated. One of the things I find encouraging to the long-term is that the more successful we become at this, the larger the scope the client wants to have in the dialogue to make it even more transformative than it already is. So I view the long-term position to be very, very good and we remain encouraged about where we are for this year and even looking forward to next year based on the current dialogues. You’re right, it is lumpy. I always say though we’re meeting something in a headline if a deal closes in June versus July given the ongoing climate really doesn’t mean anything to Broadridge and our long-term results. But we will clearly keep you posted, but the pipeline is as healthy as ever and the dialogues are better than they look.

Your next question is from the line of David Togut with Evercore ISI.

I have two questions. First really relates to the rise in activism as we’ve seen in the P&G and ADP proxy fights. And I’m wondering if you’re assuming any continued increase in activism in your long-term growth objectives?

Dave, I’ve been doing as a real long time. And the reality is that activism has become an asset class. And the reality is, is that an activist can create gains for their investments even when they don’t win the contest. So although, it’s very difficult to plan and we’re probably not going to put anything into our numbers until something is announced. And by the way, the announced theme, they actually enter into a contest not threatening and direct to contest. We’re not going to be putting anything into are thinking about the near-term results. With that said, I do expect the activism just based on the trend we’ve seen to continue. And I do think it’s going to be adding to event driven overall over any multiyear period.

As you recall, we gave our multiyear growth objective that assume in the neighborhood of couple of hundred million dollars a year in event driven revenue, which is in line with an historical average. And as Rich said, it doesn’t assume the type of contest activity we’ve seen. But we’re also somewhat optimistic that that’s a real possibility.

And then as a follow up, any update on the timing of conversion of the Tier 1 bank you signed, both the fixed income trade processing and equity trade processing about a year ago?

We have gone live with a major milestone with the European Bank that we talked about. And that is now in multiple markets. We’re continuing to and including their largest market, and now we’re continuing to roll that out to other markets over the next few months. And with respect to the fixed income budget we talked about, that is scheduled go live sometime in this next quarter.

And going back to the sales question earlier, that’s another proof point to the market that the industry is look into neutralize cost Broadridge has the leader tangible and live solution.

Your next question is from the line of Chris Donat with Sandler O'Neill.

Rich, I wanted to ask question on your prepared remarks related to the pipeline and the quality discussions you’re having. I was just curious if with the in six weeks since the Tax Act. Has that changed anything in how clients are looking at the world and thinking about investments, or is it too soon to tell or is it no change?

Chris, it’s a good question. One of the things that you have to look at, and I feel it every day, is that although our industry is doing better it’s not that ROE is at a record levels. In any cases, it’s still not where they wanted to be, where they needed to be. There’s two types of dialogues going on at the execution level on these organizations, the cost pressure on the senior management, keeping the light on every day, is as high as it’s ever been. So it does two things. The willingness for them to look at ways to cut costs is very high and has still continued pricing discussion, which I just consider as okay. As interesting though at the more senior level given the fact that it’s no longer the outliers or the early adapters that have gone to our full scale solutions. At the C-suite level, there is more dialogue about help me understand more how this will work in my organization. So I don’t see tax is having any change in this dialogue one way or the other.

Then just also related to the pipeline curious, because your closed sales for the first half of the year, it only $62 million. The target is $170 million to $210 million. So it seems back end loaded. Is that your confidence in that closed sales, does that reflect the strength in the pipeline or stuff you’ve closed in the last few weeks at one part of the quarter?

Chris, the sales generally tend historically to be back end loaded. We have lots of people who work very hard to make their numbers. And we generally have a pretty strong fourth quarter. Large sales can make the year smoother. And as we noted, we really haven’t had any significant large sales year-to-date versus last year. So I am and looking at this as we expect to be in the range. If we could bring in some large sales that could certainly help us to be even stronger. But as I said earlier, whether sales closes in June or July or August, wherever it is, I am more concerned is it a 12 month implementation or is it a 24 month implementation, candidly then I am if the sale closes a month or two earlier, one way or the other. So all-in-all, let me put it to you this way, because I know you ask me about this all the time. My cardiologist right now doesn’t have any concerns about where we are.

So it’s just a little different cadence from last year and may be last year was more of the exception and this is more of the normal backend loaded?

Chris, if I have the choice of getting things earlier in the year, later in year, you know we’re always going to pick earlier in the year, whether it’d be sales, event driven revenues or be it in plan. With that said, I'm very pleased where Broadridge is, at this point in time.

Your next question is from the line of Puneet Jain with JP Morgan.

Is there any change in your M&A focus given the cash upside from the Tax Act? And which areas you will look for potential targets, acquisition targets?

Our M&A activities, as you know, we take very seriously, we have very disciplined criteria. We need to be a better owner. So why would Broadridge be a better owner. So that means that we need to fit very much within our clear strategy. So we are so confident in the strength of our governance and capital markets franchises that we continue to look very hard at opportunities in there. We're still in a tuck-in buy versus build mode, because they really doesn’t seem to be anything meaningfully that would fit clearly in there. If we could identify something that clearly fit in there, then the other criteria must be in a better order, and a strong IRR capability, we would consider that as well. Let me be clear if anyone ask the next question, there’s no change in anything I just said other than continued confidence and the execution that we’ve already done.

And can you also talk about how this new accounting standard 606 might impact your financials next year?

The answer is really modestly, we anticipate a disclosure here probably in our Q that will tell you that it’s may be a couple of percentage points on revenue and pretty neutral on earnings. Just as you recall, our model is already long-term contracts recognized readably, so really not a material change to what we’re doing.

So no change?

Correct.

At this time, there are no further questions. Are there any closing remarks?

This is Rich. Before Edings tell you about all the things we want you to do and come visit us. I really do want to comment here. I think there is a very, very long time and we’d rather be in a healthy economy than a weak economy, and right now, it still feels pretty healthy to us. And we’re really pleased at the way the pieces have come together. And so I want to thank everyone for their support over the starting of our associates who absolutely exceeded customer expectations and enable us to deliver these strong results. And I also want to thank our shareholders, because I know many of our shareholders are building us for a very long time. And we’re delighted to report these results to you. And again, I want to thank you for your support. Edings?