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Delaware
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33-1151291
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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5 DAKOTA DRIVE
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11042
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LAKE SUCCESS
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New York
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(Address of principal executive offices)
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(Zip code)
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Title of Each Class:
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Trading Symbol
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Name of Each Exchange on Which Registered:
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Common Stock, par value $0.01 per share
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BR
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New York Stock Exchange
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PAGE
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ITEM 1.
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||
ITEM 1A.
|
||
ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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||
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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•
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the success of Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) in retaining and selling additional services to its existing clients and in obtaining new clients;
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•
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Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;
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•
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a material security breach or cybersecurity attack affecting the information of Broadridge’s clients;
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•
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changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;
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•
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declines in participation and activity in the securities markets;
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•
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the failure of our key service providers to provide the anticipated levels of service;
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•
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a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;
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•
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overall market and economic conditions and their impact on the securities markets;
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•
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Broadridge’s failure to keep pace with changes in technology and the demands of its clients;
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•
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the ability to attract and retain key personnel;
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•
|
the impact of new acquisitions and divestitures; and
|
•
|
competitive conditions.
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ITEM 1.
|
Business
|
•
|
Governance. We provide a strong network through our governance platform that links broker-dealers, public companies, mutual funds, shareholders, and regulators. We continue to grow our governance solutions by continuing to transform content and delivery and improve product capabilities to drive higher investor engagement. We aim to be an integral partner to asset managers and retirement service providers by offering data-driven solutions that help them grow revenue, reduce costs and maintain compliance. We are also expanding our capabilities to better serve the needs of issuers and we are driving the next generation of digital communications while optimizing print and mail services through advanced technology.
|
•
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Capital Markets. Global institutions have a strong need to simplify their complex technology environment, and our SaaS-based global, multi-asset class technology platform addresses this need. We are driving global post-trade management to create transformation opportunities to simplify our clients’ operations, improve performance, evolve to global operating models, adopt new technologies, and enable our clients to better manage their data.
|
•
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Wealth Management. Wealth management clients which include capital markets and financial services firms, financial advisors, wealth managers and insurance agents are undergoing unprecedented change and need partners to help them navigate the new technologies that are essential to their business. Market dynamics are driving the need for integrated, data-centric digital wealth solutions and we see the need of investment managers to modernize their technology infrastructure. To address this need, we are integrating a “One Wealth” platform that optimizes advisor productivity, client experience and enterprise operations.
|
•
|
In May 2019, we acquired Rockall Technologies Limited (“Rockall”), a leading provider of securities-based lending (“SBL”) and collateral management solutions for wealth management firms and commercial banks. The acquisition expands our core front- to back-office wealth capabilities, providing innovative SBL and collateral management technology solutions to help firms manage risk and optimize clients’ securities lending and financing needs; and
|
•
|
In June 2019, we acquired RPM Technologies (“RPM”), a leading Canadian provider of enterprise wealth management software solutions and services. The acquisition brings important new capabilities and next-generation technology to our clients. RPM's state-of-the-art technology platforms build on our strong Canadian wealth management business, providing a solution set for the retail banking sector with enhanced mutual fund and deposit manufacturing capabilities.
|
•
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ShareLink® - complete project management for the entire annual meeting process including distribution of proxy materials and vote processing.
|
•
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Virtual Shareholder Meeting™ - electronic annual meetings on the Internet, either on a stand-alone basis, or in conjunction with physical annual meetings including shareholder validation and voting services.
|
•
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Proxy Materials Document Composition and Management - proxy and annual report design and digitization, SEC filing, printing and web hosting services.
|
•
|
Shareholder Data Services - integrate (1) an analytics engine for obtaining a comprehensive view of a company’s full shareholder base, including both registered and beneficial shareholders; (2) custom targeted communications for reaching discrete shareholder segments based on specific criteria; and (3) response reporting for evaluating results of targeted reminder mailings to shareholders. Companies can monitor progress of their proxy voting and capture valuable aggregated voting behavior data as a basis for on-going investor communications initiatives.
|
•
|
Enhanced Packaging of annual meeting materials - our Enhanced Packaging service offers windowed envelope options enabling issuers to engage their shareholders before they even open the envelope through call-to-action messaging, product highlights or simply showcasing the annual report; thereby improving proxy voting participation as well as increasing brand loyalty.
|
•
|
processed approximately 80% of the outstanding shares in the U.S. in the performance of our proxy services;
|
•
|
processed over 6 billion investor and customer communications through print and digital channels;
|
•
|
processed on average over $7 trillion in equity and fixed income trades per day of U.S. and Canadian securities; and
|
•
|
provided fixed income trade processing services to 19 of the 24 primary dealers of fixed income securities in the U.S.
|
ITEM 1A.
|
Risk Factors
|
•
|
computer viruses or undetected errors in internal software programs or computer systems;
|
•
|
direct or indirect hacking or denial of service cybersecurity attacks;
|
•
|
inability to rapidly monitor all system activity;
|
•
|
inability to effectively resolve any errors in internal software programs or computer systems once they are detected;
|
•
|
heavy stress placed on systems during peak times; or
|
•
|
power or telecommunications failure, fire, flood or any other disaster.
|
•
|
economic, political and market conditions;
|
•
|
legislative and regulatory changes;
|
•
|
the availability of short-term and long-term funding and capital;
|
•
|
the level and volatility of interest rates;
|
•
|
currency values and inflation; and
|
•
|
national, state, and local taxation levels affecting securities transactions.
|
•
|
valuation: finding suitable businesses to acquire at affordable valuations or on other acceptable terms; competition for acquisitions from other potential acquirors, and negotiating a fair price for the business based on inherently limited due diligence reviews;
|
•
|
integration: managing the complex process of integrating the acquired company’s people, products, technology, and other assets, and converting their financial, information security, privacy and other systems and controls to meet our standards, so as to realize the projected value of the acquired company and the synergies projected to be realized in connection with the acquisition; and
|
•
|
legacy issues: protecting against actions, claims, regulatory investigations, losses, and other liabilities related to the predecessor business.
|
•
|
finding suitable businesses to acquire at affordable valuations or on other acceptable terms;
|
•
|
competition for acquisitions from other potential acquirors;
|
•
|
incurring unforeseen obligations or liabilities in connection with such acquisitions;
|
•
|
devoting unanticipated financial and management resources to an acquired business;
|
•
|
borrowing money from lenders or selling equity or debt securities to the public to finance future acquisitions on terms that may be adverse to us;
|
•
|
loss of clients of the acquired business;
|
•
|
entering markets where we have minimal prior experience; and
|
•
|
experiencing decreases in earnings as a result of non-cash impairment charges.
|
•
|
geographically separated organizations, systems, and facilities;
|
•
|
integrating personnel with diverse business backgrounds and organizational cultures;
|
•
|
complying with non-U.S. regulatory requirements;
|
•
|
enforcing intellectual property rights in some non-U.S. countries; and
|
•
|
general economic and political conditions.
|
ITEM 1B.
|
Unresolved Staff Comments
|
ITEM 3.
|
Legal Proceedings
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
|
June 30, 2014
|
|
June 30, 2015
|
|
June 30, 2016
|
|
June 30, 2017
|
|
June 30, 2018
|
|
June 30, 2019
|
||||||||||||
Broadridge Financial Solutions. Inc. Common Stock
|
|
$
|
100.00
|
|
|
$
|
122.88
|
|
|
$
|
163.67
|
|
|
$
|
193.32
|
|
|
$
|
299.01
|
|
|
$
|
337.34
|
|
S&P 500 Index
|
|
$
|
100.00
|
|
|
$
|
107.42
|
|
|
$
|
111.69
|
|
|
$
|
131.67
|
|
|
$
|
150.59
|
|
|
$
|
166.26
|
|
S&P 500 Information Technology Index
|
|
$
|
100.00
|
|
|
$
|
111.10
|
|
|
$
|
116.42
|
|
|
$
|
155.87
|
|
|
$
|
204.66
|
|
|
$
|
234.00
|
|
S&P 400 MidCap Index
|
|
$
|
100.00
|
|
|
$
|
106.38
|
|
|
$
|
107.79
|
|
|
$
|
127.79
|
|
|
$
|
145.03
|
|
|
$
|
146.97
|
|
S&P 400 Information Technology Index
|
|
$
|
100.00
|
|
|
$
|
111.12
|
|
|
$
|
107.70
|
|
|
$
|
141.99
|
|
|
$
|
167.25
|
|
|
$
|
190.55
|
|
Period
|
Total Number of
Shares Purchased (1)
|
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans or Programs (2)
|
|
Maximum Number of Shares that May Yet Be Purchased
Under the Plans or Programs (2)
|
|||||
April 1, 2019 – April 30, 2019
|
211,960
|
|
|
|
$
|
105.00
|
|
|
—
|
|
|
6,651,256
|
|
May 1, 2019 – May 31, 2019
|
1,780,784
|
|
|
|
120.46
|
|
|
1,779,049
|
|
|
4,872,207
|
|
|
June 1, 2019 – June 30, 2019
|
320,774
|
|
|
|
127.16
|
|
|
320,685
|
|
|
4,551,522
|
|
|
Total
|
2,313,518
|
|
|
|
$
|
119.97
|
|
|
2,099,734
|
|
|
|
(1)
|
Includes 213,784 shares purchased from employees to pay taxes related to the vesting of restricted stock units.
|
(2)
|
During the fiscal quarter ended June 30, 2019, the Company repurchased 2,099,734 shares of common stock at an average price per share of $121.46 under its share repurchase program. At June 30, 2019, there were 4,551,522 shares remaining available for repurchase under its share repurchase program.
|
ITEM 6.
|
Selected Financial Data
|
|
Years Ended June 30,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(in millions, except for per share amounts)
|
|||||||||||||||||||
Statements of Earnings Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues (a)
|
$
|
4,362.2
|
|
|
$
|
4,329.9
|
|
|
$
|
4,142.6
|
|
|
$
|
2,897.0
|
|
|
$
|
2,694.2
|
|
|
Operating income (a) (b)
|
652.7
|
|
|
598.1
|
|
|
534.0
|
|
|
502.3
|
|
|
467.6
|
|
|
|||||
Earnings before income taxes (a)
|
607.3
|
|
|
561.0
|
|
|
488.1
|
|
|
468.9
|
|
|
438.9
|
|
|
|||||
Net earnings (a)
|
482.1
|
|
|
427.9
|
|
|
326.8
|
|
|
307.5
|
|
|
287.1
|
|
|
|||||
Basic earnings per share (a)
|
$
|
4.16
|
|
|
$
|
3.66
|
|
|
$
|
2.77
|
|
|
$
|
2.60
|
|
|
$
|
2.39
|
|
|
Diluted earnings per share (a)
|
$
|
4.06
|
|
|
$
|
3.56
|
|
|
$
|
2.70
|
|
|
$
|
2.53
|
|
|
$
|
2.32
|
|
|
Basic Weighted-average shares outstanding
|
115.9
|
|
|
116.8
|
|
|
118.0
|
|
|
118.3
|
|
|
119.9
|
|
|
|||||
Diluted Weighted-average shares outstanding
|
118.8
|
|
|
120.4
|
|
|
120.8
|
|
|
121.6
|
|
|
124.0
|
|
|
|||||
Cash dividends declared per common share
|
$
|
1.94
|
|
|
$
|
1.46
|
|
|
$
|
1.32
|
|
|
$
|
1.20
|
|
|
$
|
1.08
|
|
|
|
June 30,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(in millions)
|
|||||||||||||||||||
Balance Sheet Data
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
273.2
|
|
|
$
|
263.9
|
|
|
$
|
271.1
|
|
|
$
|
727.7
|
|
|
$
|
324.1
|
|
|
Total current assets (a)
|
1,042.3
|
|
|
991.1
|
|
|
989.6
|
|
|
1,289.1
|
|
|
861.4
|
|
|
|||||
Property, plant and equipment, net
|
189.0
|
|
|
204.1
|
|
|
198.1
|
|
|
112.2
|
|
|
97.3
|
|
|
|||||
Total assets (a)
|
3,880.7
|
|
|
3,304.7
|
|
|
3,149.8
|
|
|
2,872.7
|
|
|
2,364.8
|
|
|
|||||
Total current liabilities (a)
|
802.6
|
|
|
777.3
|
|
|
744.9
|
|
|
692.9
|
|
|
508.9
|
|
|
|||||
Long-term debt, excluding current portion
|
1,470.4
|
|
|
1,053.4
|
|
|
1,102.1
|
|
|
890.7
|
|
|
686.0
|
|
|
|||||
Total liabilities (a)
|
2,753.2
|
|
|
2,210.4
|
|
|
2,146.0
|
|
|
1,827.3
|
|
|
1,437.0
|
|
|
|||||
Total stockholders’ equity (a)
|
1,127.5
|
|
|
1,094.3
|
|
|
1,003.8
|
|
|
1,045.5
|
|
|
927.8
|
|
|
(a)
|
The Company adopted ASU No. 2014-09 on July 1, 2018, using the modified retrospective transition method with the cumulative effect of initially applying ASU No. 2014-09 recognized at the date of initial application. Accordingly, financial statement periods prior to July 1, 2018 have not been restated for the effects of ASU No. 2014-09. See Note 2, “Summary of Significant Accounting Policies”, and Note 3, “Revenue Recognition” to our Consolidated Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for details of the Company’s adoption of ASU No. 2014-09.
|
(b)
|
Effective in the first quarter of fiscal year 2019, the Company adopted Financial Accounting Standards Board ASU No. 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU No. 2017-07”) whereby the Company revised its presentation in the Consolidated Statements of Earnings to reflect the non-service cost components of net benefit cost as part of Other non-operating income (expenses), net, which were previously recorded as part of Total operating expenses. The Company has applied this guidance on a retrospective basis and accordingly, the Consolidated Statements of Earnings as of June 30, 2018, 2017, 2016 and 2015, respectively, have been updated to reflect this new classification.
|
ITEM 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Rockall
|
|
RPM
|
|
TD Ameritrade
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash payments, net of cash acquired
|
|
$
|
34.9
|
|
|
$
|
258.3
|
|
|
$
|
61.5
|
|
|
$
|
354.7
|
|
Deferred payments, net
|
|
(0.1
|
)
|
|
43.8
|
|
|
—
|
|
|
43.7
|
|
||||
Contingent consideration liability (acquisition date fair value)
|
|
7.1
|
|
|
0.8
|
|
|
—
|
|
|
7.9
|
|
||||
Aggregate purchase price
|
|
$
|
41.9
|
|
|
$
|
302.9
|
|
|
$
|
61.5
|
|
|
$
|
406.4
|
|
|
|
Summit
|
|
ActivePath
|
|
FundAssist
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash payments, net of cash acquired
|
|
$
|
26.4
|
|
|
$
|
21.8
|
|
|
$
|
41.3
|
|
|
$
|
89.5
|
|
Deferred payments, net
|
|
1.4
|
|
|
2.4
|
|
|
—
|
|
|
3.8
|
|
||||
Contingent consideration liability (acquisition date fair value)
|
|
2.7
|
|
|
—
|
|
|
6.4
|
|
|
9.2
|
|
||||
Aggregate purchase price
|
|
$
|
30.6
|
|
|
$
|
24.2
|
|
|
$
|
47.7
|
|
|
$
|
102.5
|
|
•
|
Mutual Fund Proxy: The proxy and related services we provide to mutual funds when certain events occur requiring a shareholder vote including changes in directors, sub-advisors, fee structures, investment restrictions, and mergers of funds.
|
•
|
Mutual Fund Communications: Mutual fund communications services consist primarily of the distribution on behalf of mutual funds of supplemental information required to be provided to the annual mutual fund prospectus as a result of certain triggering events such as a change in portfolio managers. In addition, mutual fund communications consist of notices and marketing materials such as newsletters.
|
•
|
Proxy Contests and Specials, Corporate Actions, and Other: The proxy services we provide in connection with shareholder meetings driven by special events such as proxy contests, mergers and acquisitions, and tender/exchange offers.
|
|
Years Ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||||||
|
($)
|
|
(%)
|
||||||||||||
|
(in millions, except for per share amounts)
|
||||||||||||||
Revenues
|
$
|
4,362.2
|
|
|
$
|
4,329.9
|
|
|
$
|
32.3
|
|
|
1
|
|
|
Cost of revenues
|
3,131.9
|
|
|
3,167.4
|
|
|
(35.4
|
)
|
|
(1
|
)
|
|
|||
Selling, general and administrative expenses
|
577.5
|
|
|
564.5
|
|
|
13.1
|
|
|
2
|
|
|
|||
Total operating expenses
|
3,709.5
|
|
|
3,731.8
|
|
|
(22.3
|
)
|
|
(1
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Operating income
|
652.7
|
|
|
598.1
|
|
|
54.6
|
|
|
9
|
|
|
|||
Margin
|
15.0
|
%
|
|
13.8
|
%
|
|
|
|
1.2
|
|
pts
|
||||
Interest expense, net
|
(41.8
|
)
|
|
(38.6
|
)
|
|
(3.2
|
)
|
|
8
|
|
|
|||
Other non-operating income (expenses), net
|
(3.7
|
)
|
|
1.5
|
|
|
(5.2
|
)
|
|
(347
|
)
|
|
|||
Earnings before income taxes
|
607.3
|
|
|
561.0
|
|
|
46.2
|
|
|
8
|
|
|
|||
Provision for income taxes
|
125.2
|
|
|
133.1
|
|
|
(7.9
|
)
|
|
(6
|
)
|
|
|||
Effective tax rate
|
20.6
|
%
|
|
23.7
|
%
|
|
|
|
(3.1
|
)
|
pts
|
||||
Net earnings
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
54.1
|
|
|
13
|
|
|
Basic earnings per share
|
$
|
4.16
|
|
|
$
|
3.66
|
|
|
$
|
0.50
|
|
|
14
|
|
|
Diluted earnings per share
|
$
|
4.06
|
|
|
$
|
3.56
|
|
|
$
|
0.50
|
|
|
14
|
|
|
|
Years Ended June 30,
|
|||||||||||||
|
2019
|
|
2018
|
|
Change
|
|||||||||
|
$
|
|
%
|
|||||||||||
|
($ in millions)
|
|||||||||||||
Recurring fee revenues
|
$
|
2,759.3
|
|
|
$
|
2,610.4
|
|
|
$
|
148.9
|
|
|
6
|
|
Event-driven fee revenues
|
244.5
|
|
|
283.9
|
|
|
(39.4
|
)
|
|
(14
|
)
|
|||
Distribution revenues
|
1,460.8
|
|
|
1,512.9
|
|
|
(52.1
|
)
|
|
(3
|
)
|
|||
Foreign currency exchange
|
(102.4
|
)
|
|
(77.3
|
)
|
|
(25.1
|
)
|
|
32
|
|
|||
Total
|
$
|
4,362.2
|
|
|
$
|
4,329.9
|
|
|
$
|
32.3
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|||||||
|
Points of Growth
|
|||||||||||||
|
Net New Business
|
|
Internal Growth
|
|
Acquisitions
|
|
Total
|
|||||||
Recurring fee revenue Growth Drivers
|
3pts
|
|
|
1pt
|
|
|
1pt
|
|
|
6
|
%
|
•
|
The impact of the ASC 606 revenue accounting change on recurring fee revenue was negligible.
|
•
|
The lower event-driven fee revenues were primarily the result of lower equity proxy contest and mutual fund proxy activity compared to fiscal year 2018.
|
•
|
Distribution revenues decreased $52.1 million, or 3%, to $1,460.8 million from lower transactional print volumes and the decrease in Event-driven fee revenues.
|
•
|
The strengthening of the U.S. dollar against other currencies negatively impacted revenues by $25.1 million.
|
•
|
Cost of revenues - The decrease of $35.4 million in cost of revenues primarily reflects: lower distribution cost of revenues driven by the decrease in distribution revenues, partially offset by higher operating costs from acquisitions and higher proxy fulfillment expenses. Fluctuations in foreign currency exchange rates decreased cost of revenues by $21.9 million.
|
•
|
Selling, general and administrative expenses - The increase of $13.1 million in selling, general, and administrative expenses primarily reflects: higher labor expenses, including higher performance-based compensation expense, partially offset by lower spending on growth initiatives.
|
•
|
Effective tax rate for the fiscal year ended June 30, 2019 - 20.6%.
|
•
|
Effective tax rate for the fiscal year ended June 30, 2018 - 23.7%.
|
•
|
Recurring fee revenues would have been $0.4 million higher,
|
•
|
Event-driven fee revenues would have been $2.2 million lower, and
|
•
|
Distribution revenues would have been $9.6 million higher.
|
|
Years Ended June 30,
|
||||||||||||
2019
|
|
2018
|
|
Change
|
|||||||||
$
|
|
%
|
|||||||||||
|
($ in millions)
|
||||||||||||
Investor Communication Solutions
|
$
|
3,511.1
|
|
|
$
|
3,495.6
|
|
|
$
|
15.4
|
|
|
—
|
Global Technology and Operations
|
953.5
|
|
|
911.6
|
|
|
42.0
|
|
|
5
|
|||
Foreign currency exchange
|
(102.4
|
)
|
|
(77.3
|
)
|
|
(25.1
|
)
|
|
32
|
|||
Total
|
$
|
4,362.2
|
|
|
$
|
4,329.9
|
|
|
$
|
32.3
|
|
|
1
|
|
Years Ended June 30,
|
|||||||||||||
2019
|
|
2018
|
|
Change
|
||||||||||
$
|
|
%
|
||||||||||||
|
($ in millions)
|
|||||||||||||
Investor Communication Solutions
|
$
|
508.4
|
|
|
$
|
494.6
|
|
|
$
|
13.8
|
|
|
3
|
|
Global Technology and Operations
|
210.3
|
|
|
199.3
|
|
|
11.1
|
|
|
6
|
|
|||
Other
|
(130.9
|
)
|
|
(151.4
|
)
|
|
20.5
|
|
|
(14
|
)
|
|||
Foreign currency exchange
|
19.4
|
|
|
18.6
|
|
|
0.9
|
|
|
4
|
|
|||
Total
|
$
|
607.3
|
|
|
$
|
561.0
|
|
|
$
|
46.2
|
|
|
8
|
|
|
Years Ended June 30,
|
|||||||||||||
2019
|
|
2018
|
|
Change
|
||||||||||
$
|
|
%
|
||||||||||||
|
($ in millions)
|
|||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Recurring fee revenues
|
$
|
1,805.8
|
|
|
$
|
1,698.9
|
|
|
$
|
106.9
|
|
|
6
|
|
Event-driven fee revenues
|
244.5
|
|
|
283.9
|
|
|
(39.4
|
)
|
|
(14
|
)
|
|||
Distribution revenues
|
1,460.8
|
|
|
1,512.9
|
|
|
(52.1
|
)
|
|
(3
|
)
|
|||
Total
|
$
|
3,511.1
|
|
|
$
|
3,495.6
|
|
|
$
|
15.4
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Earnings before income taxes
|
$
|
508.4
|
|
|
$
|
494.6
|
|
|
$
|
13.8
|
|
|
3
|
|
Pre-tax Margin
|
14.5
|
%
|
|
14.1
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
|
Points of Growth
|
|||||||||||||
|
Net New Business
|
|
Internal Growth
|
|
Acquisitions
|
|
Total
|
|||||||
Recurring fee revenue Growth Drivers
|
4pts
|
|
|
1pt
|
|
|
1pt
|
|
|
6
|
%
|
•
|
The impact of the ASC 606 revenue accounting change on recurring fee revenue was negligible.
|
•
|
With respect to recurring fees, position growth compared to the same period in the prior year, which is a component of internal growth, was 6% for annual equity proxy communications and 9% for mutual fund and ETF interims.
|
•
|
Lower event-driven fee revenues were primarily the result of lower equity proxy contest and mutual fund proxy activity compared to fiscal year 2018.
|
•
|
Lower distribution revenues resulted from lower transactional print volumes and the decrease in Event-driven fee revenues.
|
•
|
The earnings increase of $13.8 million was primarily due to higher recurring fee revenues more than offsetting lower event-driven fee revenues.
|
•
|
Pre-tax margins increased by 0.4 percentage points to 14.5% from 14.1%. Considering the impact of the revenue accounting change, pre-tax margins for the year ended June 30, 2018 would have been 14.4%.
|
|
Years Ended June 30,
|
|||||||||||||
2019
|
|
2018
|
|
Change
|
||||||||||
$
|
|
%
|
||||||||||||
|
($ in millions)
|
|||||||||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Recurring fee revenues
|
$
|
953.5
|
|
|
$
|
911.6
|
|
|
$
|
42.0
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings before Income Taxes
|
|
|
|
|
|
|
|
|||||||
Earnings before income taxes
|
$
|
210.3
|
|
|
$
|
199.3
|
|
|
$
|
11.1
|
|
|
6
|
|
Pre-tax Margin
|
22.1
|
%
|
|
21.9
|
%
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||
|
Points of Growth
|
|||||||||||||
|
Net New Business
|
|
Internal Growth
|
|
Acquisitions
|
|
Total
|
|||||||
Recurring fee revenue Growth Drivers
|
3pts
|
|
|
1pt
|
|
|
1pt
|
|
|
5
|
%
|
•
|
The impact of the ASC 606 revenue accounting change on recurring fee revenue was negligible.
|
•
|
The earnings increase was primarily due to higher organic revenues, partially offset by the impact of incremental expenditures to win, implement and support new business as well as ongoing new product development.
|
•
|
Pre-tax margins increased by 0.2 percentage points to 22.1% from 21.9%.
|
•
|
The decreased loss was primarily due to lower spending on growth initiatives and other corporate expenses, partially offset by a decrease in investment gains and higher interest expense compared to the prior year period.
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Operating income (GAAP)
|
|
$
|
652.7
|
|
|
$
|
598.1
|
|
Adjustments:
|
|
|
|
|
||||
Amortization of Acquired Intangibles and Purchased Intellectual Property
|
|
87.4
|
|
|
81.4
|
|
||
Acquisition and Integration Costs
|
|
6.4
|
|
|
8.8
|
|
||
Adjusted Operating income (Non-GAAP)
|
|
$
|
746.5
|
|
|
$
|
688.2
|
|
Operating income margin (GAAP)
|
|
15.0
|
%
|
|
13.8
|
%
|
||
Adjusted Operating income margin (Non-GAAP)
|
|
17.1
|
%
|
|
15.9
|
%
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Net earnings (GAAP)
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
Adjustments:
|
|
|
|
|
||||
Amortization of Acquired Intangibles and Purchased Intellectual Property
|
|
87.4
|
|
|
81.4
|
|
||
Acquisition and Integration Costs
|
|
6.4
|
|
|
8.8
|
|
||
Gain on Sale of Securities
|
|
—
|
|
|
(5.5
|
)
|
||
Taxable adjustments
|
|
93.8
|
|
|
84.7
|
|
||
Tax act items
|
|
—
|
|
|
15.4
|
|
||
Tax impact of adjustments (a)
|
|
(22.3
|
)
|
|
(23.9
|
)
|
||
Adjusted Net earnings (Non-GAAP)
|
|
$
|
553.6
|
|
|
$
|
504.1
|
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
||||||
Diluted earnings per share (GAAP)
|
|
$
|
4.06
|
|
|
$
|
3.56
|
|
Adjustments:
|
|
|
|
|
||||
Amortization of Acquired Intangibles and Purchased Intellectual Property
|
|
0.74
|
|
|
0.68
|
|
||
Acquisition and Integration Costs
|
|
0.05
|
|
|
0.07
|
|
||
Gain on Sale of Securities
|
|
—
|
|
|
(0.05
|
)
|
||
Taxable adjustments
|
|
0.79
|
|
|
0.70
|
|
||
Tax Act Items
|
|
—
|
|
|
0.13
|
|
||
Tax impact of adjustments (a)
|
|
(0.19
|
)
|
|
(0.20
|
)
|
||
Adjusted earnings per share (Non-GAAP)
|
|
$
|
4.66
|
|
|
$
|
4.19
|
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Net cash flows provided by operating activities (GAAP)
|
|
$
|
617.0
|
|
|
$
|
693.6
|
|
Capital expenditures and Software purchases and capitalized internal use software
|
|
(72.6
|
)
|
|
(97.9
|
)
|
||
Free cash flow (Non-GAAP)
|
|
$
|
544.4
|
|
|
$
|
595.7
|
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
|
|
|
|
|
||||
Cash and cash equivalents:
|
|
|
|
|
||||
Domestic cash
|
|
$
|
95.5
|
|
|
$
|
98.2
|
|
Cash held by foreign subsidiaries
|
|
99.8
|
|
|
103.6
|
|
||
Cash held by regulated entities
|
|
77.9
|
|
|
62.0
|
|
||
Total cash and cash equivalents
|
|
$
|
273.2
|
|
|
$
|
263.9
|
|
|
Expiration
Date
|
|
Principal amount outstanding at June 30, 2019
|
|
Carrying value at June 30, 2019
|
|
Carrying value at June 30, 2018
|
|
Unused
Available
Capacity
|
|
Fair Value at June 30, 2019
|
||||||||||
|
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2019 Revolving Credit Facility:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dollar tranche
|
March 2024
|
|
$
|
360.0
|
|
|
$
|
360.0
|
|
|
$
|
160.0
|
|
|
$
|
740.0
|
|
|
$
|
360.0
|
|
Multicurrency tranche
|
March 2024
|
|
215.7
|
|
|
215.7
|
|
|
—
|
|
|
184.3
|
|
|
215.7
|
|
|||||
Total Revolving Credit Facility
|
|
|
$
|
575.7
|
|
|
$
|
575.7
|
|
|
$
|
160.0
|
|
|
$
|
924.3
|
|
|
$
|
575.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2014 Senior Notes
|
September 2020
|
|
400.0
|
|
|
399.2
|
|
|
398.5
|
|
|
—
|
|
|
405.4
|
|
|||||
Fiscal 2016 Senior Notes
|
June 2026
|
|
500.0
|
|
|
495.5
|
|
|
494.8
|
|
|
—
|
|
|
509.8
|
|
|||||
Total debt
|
|
|
$
|
1,475.7
|
|
|
$
|
1,470.4
|
|
|
$
|
1,053.4
|
|
|
$
|
924.3
|
|
|
$
|
1,490.9
|
|
Years ending June 30,
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
(in millions)
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575.7
|
|
|
$
|
500.0
|
|
|
$
|
1,475.7
|
|
|
Years Ended June 30,
|
||||||||||
|
2019
|
|
2018
|
|
$ Change
|
||||||
|
(in millions)
|
||||||||||
|
|
||||||||||
Net cash flows provided by operating activities
|
$
|
617.0
|
|
|
$
|
693.6
|
|
|
$
|
(76.6
|
)
|
|
|
|
|
|
|
||||||
Net cash flows used in investing activities
|
$
|
(433.5
|
)
|
|
$
|
(249.3
|
)
|
|
$
|
(184.3
|
)
|
|
|
|
|
|
|
||||||
Net cash flows used in financing activities
|
$
|
(173.1
|
)
|
|
$
|
(449.9
|
)
|
|
$
|
276.8
|
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Executive Retiree Health Insurance Plan
|
|
$
|
5.2
|
|
|
$
|
5.3
|
|
|
|
Years ended June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
The Gratuity Plan
|
|
$
|
5.8
|
|
|
$
|
5.0
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
Less than 1
Year
|
|
1-3 Years
|
|
4-5 Years
|
|
After 5
Years
|
||||||||||
|
|
|
|
|
|
(in millions)
|
|
|
|
|
||||||||||
Debt(1)
|
|
$
|
1,475.7
|
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
575.7
|
|
|
$
|
500.0
|
|
Interest and facility fee on debt(2)
|
|
234.4
|
|
|
53.2
|
|
|
77.5
|
|
|
69.7
|
|
|
34.0
|
|
|||||
Facility and equipment operating leases(3)
|
|
406.5
|
|
|
46.8
|
|
|
84.7
|
|
|
70.6
|
|
|
204.4
|
|
|||||
Software licensing(4)
|
|
5.9
|
|
|
4.3
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations(5)
|
|
311.1
|
|
|
66.5
|
|
|
127.3
|
|
|
117.3
|
|
|
—
|
|
|||||
Capital commitment to fund investment(6)
|
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition deferred payments(7)
|
|
39.6
|
|
|
39.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Uncertain tax positions(8)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total(9)
|
|
$
|
2,474.8
|
|
|
$
|
212.0
|
|
|
$
|
691.1
|
|
|
$
|
833.3
|
|
|
$
|
738.4
|
|
(1)
|
These amounts represent the principal repayments of Long-term debt and are included on our Consolidated Balance Sheets. See Note 12, “Borrowings” to our Consolidated Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for additional information about our Borrowings and related matters.
|
(2)
|
Includes estimated future interest payments on our long-term debt and interest and facility fee on the revolving credit facility.
|
(3)
|
We enter into operating leases in the normal course of business relating to facilities and equipment. The majority of our lease agreements have fixed payment terms based on the passage of time. Certain facility and equipment leases require payment of maintenance and real estate taxes and contain escalation provisions based on future adjustments in price indices. Our future operating lease obligations could change if we exit certain contracts and if we enter into additional operating lease agreements.
|
(4)
|
We enter into various software licenses agreements in the normal course of business.
|
(5)
|
Purchase obligations relate to payments to IBM related to the IT Services Agreement entered into in March 2010 that expires in June 2024, the EU IT Services Agreement entered into in March 2014 that expires in October 2023, and purchase and maintenance agreements on our software, equipment and other assets.
|
(6)
|
Represents the Company’s funding commitment to an equity method investee. In addition, the Company also has a future commitment to fund $4.3 million to an investee.
|
(7)
|
Deferred payment obligation associated with the Company’s acquisition of RPM.
|
(8)
|
Due to the uncertainty related to the timing of the reversal of uncertain tax positions, only uncertain tax benefits related to certain settlements have been provided in the table above. The Company is unable to make reasonably reliable estimates related to the timing of the remaining gross unrecognized tax benefit liability of $43.8 million (inclusive of interest). See Note 15, “Income Taxes” to our Consolidated Financial Statements under Item 8 of Part II of this Annual Report on Form 10-K for further detail.
|
(9)
|
Certain post-employment benefit obligations reported in our Consolidated Balance Sheets in the amount of $61.9 million as of June 30, 2019 were not included in the table above due to the uncertainty of the timing of these future payments.
|
|
|
IT Services Agreement
|
|
EU IT Services Agreement
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
Capitalized costs, beginning balance
|
|
$
|
62.3
|
|
|
$
|
5.2
|
|
|
$
|
67.5
|
|
Capitalized costs incurred
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impact of foreign currency exchange
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Total capitalized costs, ending balance
|
|
62.3
|
|
|
5.0
|
|
|
67.3
|
|
|||
Total accumulated amortization
|
|
(35.8
|
)
|
|
(2.5
|
)
|
|
(38.3
|
)
|
|||
Net Deferred IBM Costs
|
|
$
|
26.5
|
|
|
$
|
2.5
|
|
|
$
|
29.0
|
|
ITEM 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 8.
|
Financial Statements and Supplementary Data
|
Consolidated Financial Statements
|
|
|
|
Financial Statement Schedule
|
|
Goodwill - Refer to Notes 2 and 9 to the financial statements
|
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determines the fair value of its reporting units using the income approach, which considers a discounted future cash flow analysis using various assumptions, including projections of revenues based on assumed long-term growth rates, estimated costs and appropriate discount rates based on the particular reporting unit’s weighted-average cost of capital. The principal factors used in the discounted cash flow analysis requiring judgment are the projected future operating cash flows based on forecasted EBIT margins, including future revenues, and the selection of the terminal value growth rate and the discount rate assumptions.
The goodwill balance was $1,500 million as of June 30, 2019, which is allocated among various reporting units. During fiscal year 2019, the Company performed the required impairment tests of Goodwill and determined that there was no impairment. The Company also performed a sensitivity analysis under Step 1 of the goodwill impairment test assuming hypothetical reductions in the fair values of the reporting units.
We identified goodwill as a critical audit matter because of the significant estimates and assumptions management makes to estimate the fair value of certain reporting units and the sensitivity of these reporting units’ operations to changes in demand. Auditing the fair value of certain of the reporting units involved a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, as it relates to evaluating whether management’s judgments in determining whether the projected future operating cash flows based on forecasted EBIT margins, including future revenues, and the selection of terminal value growth rate and discount rate were appropriate.
|
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the projected future operating cash flows based on forecasted EBIT margins, including future revenues, and the selection of the terminal value growth rate and discount rate for certain of the reporting units included the following, among others:
•
We tested the effectiveness of controls over goodwill, including those over the projected future operating cash flows based on forecasted EBIT margins, including future revenues, and the selection of the terminal value growth rate and discount rate.
•
We evaluated the reasonableness of management’s projected future operating cash flows based on forecasted EBIT margins, including future revenues by comparing to (1) historical results, (2) internal communications to management and the Board of Directors, and (3) forecasted information included in Company press releases, analyst and industry reports of the Company and companies in its peer group.
•
We considered the impact of changes in the regulatory environment on management’s forecasts.
•
With the assistance of our fair value specialists, we evaluated the selection of the terminal value growth rate and the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations by developing a range of independent estimates and comparing those to the rates selected by management.
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues
|
(Note 3)
|
|
$
|
4,362.2
|
|
|
$
|
4,329.9
|
|
|
$
|
4,142.6
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Cost of revenues
|
|
|
3,131.9
|
|
|
3,167.4
|
|
|
3,107.9
|
|
|||
Selling, general and administrative expenses
|
|
|
577.5
|
|
|
564.5
|
|
|
500.7
|
|
|||
Total operating expenses
|
|
|
3,709.5
|
|
|
3,731.8
|
|
|
3,608.6
|
|
|||
Operating income
|
|
|
652.7
|
|
|
598.1
|
|
|
534.0
|
|
|||
Interest expense, net
|
(Note 5)
|
|
(41.8
|
)
|
|
(38.6
|
)
|
|
(42.7
|
)
|
|||
Other non-operating income (expenses), net
|
|
|
(3.7
|
)
|
|
1.5
|
|
|
(3.2
|
)
|
|||
Earnings before income taxes
|
|
|
607.3
|
|
|
561.0
|
|
|
488.1
|
|
|||
Provision for income taxes
|
(Note 15)
|
|
125.2
|
|
|
133.1
|
|
|
161.4
|
|
|||
Net earnings
|
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
|
$
|
4.16
|
|
|
$
|
3.66
|
|
|
$
|
2.77
|
|
Diluted earnings per share
|
|
|
$
|
4.06
|
|
|
$
|
3.56
|
|
|
$
|
2.70
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||
Basic
|
(Note 4)
|
|
115.9
|
|
|
116.8
|
|
|
118.0
|
|
|||
Diluted
|
(Note 4)
|
|
118.8
|
|
|
120.4
|
|
|
120.8
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net earnings
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(15.0
|
)
|
|
5.7
|
|
|
(17.0
|
)
|
|||
Net gains (losses) on securities, net of taxes of $0.0, $1.2 and ($0.6) for the years ended June 30, 2019, 2018 and 2017, respectively
|
|
—
|
|
|
(2.6
|
)
|
|
1.0
|
|
|||
Pension and post-retirement liability adjustment, net of taxes of $0.9, ($0.4) and $1.0 for the years ended June 30, 2019, 2018 and 2017, respectively
|
|
(2.7
|
)
|
|
0.9
|
|
|
(1.6
|
)
|
|||
Total other comprehensive income (loss), net
|
|
(17.7
|
)
|
|
3.9
|
|
|
(17.6
|
)
|
|||
Comprehensive income
|
|
$
|
464.3
|
|
|
$
|
431.9
|
|
|
$
|
309.2
|
|
|
|
|
June 30,
2019 |
|
June 30,
2018 |
||||
Assets
|
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
|
$
|
273.2
|
|
|
$
|
263.9
|
|
Accounts receivable, net of allowance for doubtful accounts of $2.6 and $2.7, respectively
|
|
|
664.0
|
|
|
615.0
|
|
||
Other current assets
|
|
|
105.2
|
|
|
112.2
|
|
||
Total current assets
|
|
|
1,042.3
|
|
|
991.1
|
|
||
Property, plant and equipment, net
|
(Note 8)
|
|
189.0
|
|
|
204.1
|
|
||
Goodwill
|
(Note 9)
|
|
1,500.0
|
|
|
1,254.9
|
|
||
Intangible assets, net
|
(Note 9)
|
|
556.2
|
|
|
494.1
|
|
||
Other non-current assets
|
(Note 10)
|
|
593.1
|
|
|
360.5
|
|
||
Total assets
|
|
|
$
|
3,880.7
|
|
|
$
|
3,304.7
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||||
Payables and accrued expenses
|
(Note 11)
|
|
$
|
711.7
|
|
|
$
|
671.0
|
|
Contract Liabilities
|
|
|
90.9
|
|
|
106.3
|
|
||
Total current liabilities
|
|
|
802.6
|
|
|
777.3
|
|
||
Long-term debt
|
(Note 12)
|
|
1,470.4
|
|
|
1,053.4
|
|
||
Deferred taxes
|
(Note 15)
|
|
86.7
|
|
|
57.9
|
|
||
Contract Liabilities
|
|
|
160.7
|
|
|
75.2
|
|
||
Other non-current liabilities
|
|
|
232.8
|
|
|
246.5
|
|
||
Total liabilities
|
|
|
2,753.2
|
|
|
2,210.4
|
|
||
Commitments and contingencies
|
(Note 16)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
|
||||
Preferred stock: Authorized, 25.0 shares; issued and outstanding, none
|
|
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value: Authorized, 650.0 shares; issued, 154.5 and 154.5 shares, respectively; outstanding, 114.3 and 116.3 shares, respectively
|
|
|
1.6
|
|
|
1.6
|
|
||
Additional paid-in capital
|
|
|
1,109.3
|
|
|
1,048.5
|
|
||
Retained earnings
|
|
|
2,087.7
|
|
|
1,727.0
|
|
||
Treasury stock, at cost: 40.2 and 38.1 shares, respectively
|
|
|
(1,999.8
|
)
|
|
(1,630.8
|
)
|
||
Accumulated other comprehensive loss
|
(Note 17)
|
|
(71.2
|
)
|
|
(51.9
|
)
|
||
Total stockholders’ equity
|
|
|
1,127.5
|
|
|
1,094.3
|
|
||
Total liabilities and stockholders’ equity
|
|
|
$
|
3,880.7
|
|
|
$
|
3,304.7
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash Flows From Operating Activities
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Adjustments to reconcile Net earnings to Net cash flows provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
85.2
|
|
|
82.1
|
|
|
68.6
|
|
|||
Amortization of acquired intangibles and purchased intellectual property
|
|
87.4
|
|
|
81.4
|
|
|
72.6
|
|
|||
Amortization of other assets
|
|
87.4
|
|
|
48.5
|
|
|
41.0
|
|
|||
Stock-based compensation expense
|
|
58.4
|
|
|
55.1
|
|
|
46.1
|
|
|||
Deferred income taxes
|
|
(3.5
|
)
|
|
(9.3
|
)
|
|
(14.7
|
)
|
|||
Excess tax benefits from stock-based compensation awards
|
|
—
|
|
|
—
|
|
|
(40.6
|
)
|
|||
Other
|
|
(37.6
|
)
|
|
(21.2
|
)
|
|
(8.6
|
)
|
|||
Changes in operating assets and liabilities, net of assets and liabilities acquired:
|
|
|
|
|
|
|
||||||
Current assets and liabilities:
|
|
|
|
|
|
|
||||||
Increase in Accounts receivable, net
|
|
(34.9
|
)
|
|
(18.6
|
)
|
|
(44.4
|
)
|
|||
(Increase) decrease in Other current assets
|
|
(7.3
|
)
|
|
(7.6
|
)
|
|
5.6
|
|
|||
Increase (decrease) in Payables and accrued expenses
|
|
(10.9
|
)
|
|
9.6
|
|
|
135.4
|
|
|||
Increase (decrease) in Contract liabilities
|
|
15.1
|
|
|
20.8
|
|
|
(4.5
|
)
|
|||
Non-current assets and liabilities:
|
|
|
|
|
|
|
||||||
Increase in Other non-current assets
|
|
(188.3
|
)
|
|
(83.5
|
)
|
|
(90.7
|
)
|
|||
Increase in Other non-current liabilities
|
|
83.8
|
|
|
108.3
|
|
|
23.2
|
|
|||
Net cash flows provided by operating activities
|
|
617.0
|
|
|
693.6
|
|
|
515.9
|
|
|||
Cash Flows From Investing Activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(50.6
|
)
|
|
(76.7
|
)
|
|
(85.4
|
)
|
|||
Software purchases and capitalized internal use software
|
|
(22.0
|
)
|
|
(21.2
|
)
|
|
(28.3
|
)
|
|||
Acquisitions, net of cash acquired
|
|
(354.7
|
)
|
|
(108.3
|
)
|
|
(448.7
|
)
|
|||
Purchase of intellectual property
|
|
—
|
|
|
(40.0
|
)
|
|
(90.0
|
)
|
|||
Other investing activities
|
|
(6.3
|
)
|
|
(3.1
|
)
|
|
(6.9
|
)
|
|||
Net cash flows used in investing activities
|
|
(433.5
|
)
|
|
(249.3
|
)
|
|
(659.3
|
)
|
|||
Cash Flows From Financing Activities
|
|
|
|
|
|
|
||||||
Debt proceeds
|
|
803.1
|
|
|
340.0
|
|
|
500.0
|
|
|||
Debt repayments
|
|
(387.4
|
)
|
|
(390.0
|
)
|
|
(415.0
|
)
|
|||
Excess tax benefits from stock-based compensation awards
|
|
—
|
|
|
—
|
|
|
40.6
|
|
|||
Dividends paid
|
|
(211.2
|
)
|
|
(165.8
|
)
|
|
(152.2
|
)
|
|||
Purchases of Treasury stock
|
|
(397.8
|
)
|
|
(277.1
|
)
|
|
(342.8
|
)
|
|||
Proceeds from exercise of stock options
|
|
31.1
|
|
|
52.0
|
|
|
60.9
|
|
|||
Other financing activities
|
|
(10.8
|
)
|
|
(9.0
|
)
|
|
(3.2
|
)
|
|||
Net cash flows used in financing activities
|
|
(173.1
|
)
|
|
(449.9
|
)
|
|
(311.7
|
)
|
|||
Effect of exchange rate changes on Cash and cash equivalents
|
|
(1.1
|
)
|
|
(1.6
|
)
|
|
(1.6
|
)
|
|||
Net change in Cash and cash equivalents
|
|
9.2
|
|
|
(7.2
|
)
|
|
(456.7
|
)
|
|||
Cash and cash equivalents, beginning of fiscal year
|
|
263.9
|
|
|
271.1
|
|
|
727.7
|
|
|||
Cash and cash equivalents, end of fiscal year
|
|
$
|
273.2
|
|
|
$
|
263.9
|
|
|
$
|
271.1
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||||||
Cash payments made for interest
|
|
$
|
43.4
|
|
|
$
|
40.5
|
|
|
$
|
43.1
|
|
Cash payments made for income taxes, net of refunds
|
|
$
|
119.5
|
|
|
$
|
177.6
|
|
|
$
|
113.4
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
||||||
Accrual of unpaid property, plant, equipment and software
|
|
$
|
8.7
|
|
|
$
|
6.2
|
|
|
$
|
17.7
|
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Treasury
Stock
|
|
Accumulated
Other
Comprehensive
Income
(Loss)
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
|
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balances, July 1, 2016
|
|
154.5
|
|
|
$
|
1.6
|
|
|
$
|
901.2
|
|
|
$
|
1,297.8
|
|
|
$
|
(1,116.9
|
)
|
|
$
|
(38.2
|
)
|
|
$
|
1,045.5
|
|
Comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326.8
|
|
|
—
|
|
|
(17.6
|
)
|
|
309.2
|
|
||||||
Stock option exercises and excess tax benefits
|
|
—
|
|
|
—
|
|
|
101.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101.2
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
45.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.9
|
|
||||||
Treasury stock acquired (4.9 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(342.8
|
)
|
|
—
|
|
|
(342.8
|
)
|
||||||
Treasury stock reissued (3.1 shares)
|
|
—
|
|
|
—
|
|
|
(60.7
|
)
|
|
—
|
|
|
60.7
|
|
|
—
|
|
|
—
|
|
||||||
Common stock dividends ($1.32 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(155.2
|
)
|
|
—
|
|
|
—
|
|
|
(155.2
|
)
|
||||||
Balances, June 30, 2017
|
|
154.5
|
|
|
1.6
|
|
|
987.6
|
|
|
1,469.4
|
|
|
(1,398.9
|
)
|
|
(55.8
|
)
|
|
1,003.8
|
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
427.9
|
|
|
—
|
|
|
3.9
|
|
|
431.9
|
|
||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
51.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51.5
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
54.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54.7
|
|
||||||
Treasury stock acquired (2.4 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(277.1
|
)
|
|
—
|
|
|
(277.1
|
)
|
||||||
Treasury stock reissued (2.3 shares)
|
|
—
|
|
|
—
|
|
|
(45.3
|
)
|
|
—
|
|
|
45.3
|
|
|
—
|
|
|
—
|
|
||||||
Common stock dividends ($1.46 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(170.4
|
)
|
|
—
|
|
|
—
|
|
|
(170.4
|
)
|
||||||
Balances, June 30, 2018
|
|
154.5
|
|
|
1.6
|
|
|
1,048.5
|
|
|
1,727.0
|
|
|
(1,630.8
|
)
|
|
(51.9
|
)
|
|
1,094.3
|
|
||||||
Comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
482.1
|
|
|
—
|
|
|
(17.7
|
)
|
|
464.3
|
|
||||||
Cumulative effect of changes in accounting principle (a)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
102.8
|
|
|
—
|
|
|
(1.5
|
)
|
|
101.3
|
|
||||||
Stock option exercises
|
|
—
|
|
|
—
|
|
|
31.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31.3
|
|
||||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
58.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
58.3
|
|
||||||
Treasury stock acquired (3.5 shares)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(397.8
|
)
|
|
—
|
|
|
(397.8
|
)
|
||||||
Treasury stock reissued (1.4 shares)
|
|
—
|
|
|
—
|
|
|
(28.8
|
)
|
|
—
|
|
|
28.8
|
|
|
—
|
|
|
—
|
|
||||||
Common stock dividends ($1.94 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(224.2
|
)
|
|
—
|
|
|
—
|
|
|
(224.2
|
)
|
||||||
Balances, June 30, 2019
|
|
154.5
|
|
|
$
|
1.6
|
|
|
$
|
1,109.3
|
|
|
$
|
2,087.7
|
|
|
$
|
(1,999.8
|
)
|
|
$
|
(71.2
|
)
|
|
$
|
1,127.5
|
|
(a)
|
Reflects the adoption of accounting standards as described in Note 2, “Summary of Significant Accounting Policies.”
|
NOTE 1.
|
BASIS OF PRESENTATION
|
NOTE 2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
•
|
Investor Communication Solutions—Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and that the services are fulfilled in accordance with each Issuer’s and mutual fund’s requirements. Broadridge works directly with the Issuers and mutual funds to resolve any issues that may arise. As such, Issuers and mutual funds are viewed as the customer of the Company’s services. As a result, revenues for distribution services as well as proxy materials fulfillment services are recorded in Revenue on a gross basis with corresponding costs including amounts remitted to the broker-dealers and banks (referred to as “Nominees”) recorded in Cost of revenues. Fees for the Company’s investor communications services arrangements are typically billed and paid on a monthly basis following the delivery of the services. The Company also offers certain hosted service arrangements that can be priced on a fixed and/or variable basis for which revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client on a monthly basis based on the number of transactions processed or units delivered, in the case of variable priced arrangements, or a fixed monthly fee in the case of fixed price arrangements, in each case which coincides with the pattern of value transfer to the client. These services may be billed in a variety of payment frequencies depending on the specific arrangement.
|
•
|
Global Technology and Operations—Revenues are generated primarily from fees for trade processing and related services. Revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client. The Company’s arrangements for processing and related services typically consist of an obligation to provide specific services to its clients on a when and if needed basis (a stand ready obligation) with revenue recognized from the satisfaction of the performance obligations on a monthly basis generally in the amount billable to the client. These services are generally provided under variable priced arrangements based on volume of service and can include minimum monthly usage fees. Client service agreements often include up-front consideration in addition to the recurring fee for trade processing. Up-front implementation fees, as well as certain enhancements to existing technology platforms, are deferred and recognized on a straight-line basis over the service term of the contract which corresponds to the timing of transfer of value to the client that commences after client acceptance when the processing term begins. In addition, revenue is also generated from the fulfillment of professional services engagements which are generally priced on a time and materials or fixed price basis, and are recognized as the services are provided to the client which corresponds to the timing of transfer of value to the client.
|
Equipment
|
|
3 to 5 years
|
Buildings and Building Improvements
|
|
5 to 20 years
|
Furniture and fixtures
|
|
4 to 7 years
|
|
Fiscal Year Ended June 30, 2019
|
||
|
(in millions)
|
||
Investor Communication Solutions
|
|
||
Equity proxy
|
$
|
437.0
|
|
Mutual fund and exchange traded funds (“ETF”) interims
|
265.9
|
|
|
Customer communications and fulfillment
|
736.4
|
|
|
Other ICS
|
366.5
|
|
|
Total ICS Recurring fee revenues
|
1,805.8
|
|
|
|
|
||
Equity and other
|
107.3
|
|
|
Mutual funds
|
137.2
|
|
|
Total ICS Event-driven fee revenues
|
244.5
|
|
|
|
|
||
Distribution revenues
|
1,460.8
|
|
|
|
|
||
Total ICS Revenues
|
$
|
3,511.1
|
|
|
|
||
Global Technology and Operations
|
|
||
Equities and other
|
$
|
788.9
|
|
Fixed income
|
164.6
|
|
|
Total GTO Recurring fee revenues
|
953.5
|
|
|
|
|
||
Foreign currency exchange
|
(102.4
|
)
|
|
|
|
||
Total Revenues
|
$
|
4,362.2
|
|
|
|
||
Revenues by Type
|
|
||
Recurring fee revenues
|
$
|
2,759.3
|
|
Event-driven fee revenues
|
244.5
|
|
|
Distribution revenues
|
1,460.8
|
|
|
Foreign currency exchange
|
(102.4
|
)
|
|
Total Revenues
|
$
|
4,362.2
|
|
|
June 30,
2019 |
|
July 1,
2018 |
||||
|
(in millions)
|
||||||
Contract assets
|
$
|
47.5
|
|
|
$
|
35.5
|
|
Contract liabilities
|
$
|
251.6
|
|
|
$
|
162.8
|
|
•
|
Sales Commissions - The Company previously recognized sales commissions related to contracts with clients as selling expenses when incurred. Under ASU No. 2014-09, the Company capitalizes incremental sales commissions as costs of obtaining a contract and, if expected to be recovered, amortizes such costs using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates.
|
•
|
Deferred Client Conversion and Start-Up Costs - The Company previously capitalized direct and incremental client conversion or start-up costs to set up or convert a client’s systems to function with the Company’s technology that are expected to be recovered. Under ASU No. 2014-09, the Company capitalizes certain additional client conversion or start-up costs that are directly related to the client conversion but that are not considered incremental costs to the Company.
|
•
|
Proxy Revenues - The Company previously recognized proxy revenues following the client’s shareholder meeting, which is typically 30 days after the proxy materials distribution. Under ASU No. 2014-09, the Company recognizes proxy revenues primarily at the time of proxy materials distribution to the client’s shareholders.
|
•
|
Software Term License Revenues - The Company previously recognized revenue from software term licenses that are not hosted by the Company ratably over the contract term. Under ASU No. 2014-09, for software license arrangements that are distinct, the Company recognizes software license revenue upon delivery assuming a contract is deemed to exist. For arrangements with clients that include significant customization, modification or production of software such that the software is not distinct from the associated implementation services, revenue is typically recognized over time based upon efforts expended to measure progress towards completion or in certain cases upon completion of the installation. Software term license revenue is not a significant portion of the Company’s revenues.
|
•
|
Termination Fees - The Company previously recognized client contract termination fees at a point in time upon deconversion or receipt of a non-refundable cash payment. Under ASU No. 2014-09, a contract termination is considered a contract modification and therefore, the Company recognizes contract termination fees over the remaining modified contract term.
|
|
Fiscal Year Ended June 30, 2019
|
||||||||||
|
As reported
|
|
Effects of ASU 2014-09
|
|
Without Effects of ASU No. 2014-09
|
||||||
|
(in millions)
|
||||||||||
Consolidated Statement of Earnings
|
|
|
|
|
|
||||||
Revenues (1)
|
$
|
4,362.2
|
|
|
$
|
101.1
|
|
|
$
|
4,463.3
|
|
Cost of revenues
|
3,131.9
|
|
|
15.8
|
|
|
3,147.8
|
|
|||
Selling, general and administrative expenses
|
577.5
|
|
|
8.0
|
|
|
585.5
|
|
|||
Operating income
|
652.7
|
|
|
77.4
|
|
|
730.0
|
|
|||
Earnings before income taxes
|
607.3
|
|
|
77.4
|
|
|
684.6
|
|
|||
Provision for income taxes
|
125.2
|
|
|
19.1
|
|
|
144.3
|
|
|||
Net earnings
|
$
|
482.1
|
|
|
$
|
58.2
|
|
|
$
|
540.3
|
|
Basic earnings per share
|
$
|
4.16
|
|
|
$
|
0.50
|
|
|
$
|
4.66
|
|
Diluted earnings per share
|
$
|
4.06
|
|
|
$
|
0.49
|
|
|
$
|
4.55
|
|
|
As reported
|
|
Effects of ASU 2014-09
|
|
Without Effects of ASU No. 2014-09
|
||||||
|
(in millions)
|
||||||||||
Consolidated Balance Sheet
|
|
|
|
|
|
||||||
Assets:
|
|
|
|
|
|
||||||
Current assets
|
$
|
1,042.3
|
|
|
$
|
1.2
|
|
|
$
|
1,043.5
|
|
Total assets
|
$
|
3,880.7
|
|
|
$
|
(127.8
|
)
|
|
$
|
3,752.9
|
|
Liabilities:
|
|
|
|
|
|
||||||
Current liabilities
|
$
|
802.6
|
|
|
$
|
(3.4
|
)
|
|
$
|
799.2
|
|
Total liabilities
|
$
|
2,753.2
|
|
|
$
|
(82.6
|
)
|
|
$
|
2,670.6
|
|
Stockholders’ equity:
|
|
|
|
|
|
||||||
Total stockholders’ equity
|
$
|
1,127.5
|
|
|
$
|
(45.2
|
)
|
|
$
|
1,082.3
|
|
NOTE 4.
|
EARNINGS PER SHARE
|
|
|
Years ended June 30,
|
|||||||
|
|
2019
|
|
2018
|
|
2017
|
|||
|
|
(in millions)
|
|||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|||
Basic
|
|
115.9
|
|
|
116.8
|
|
|
118.0
|
|
Common stock equivalents
|
|
2.9
|
|
|
3.5
|
|
|
2.8
|
|
Diluted
|
|
118.8
|
|
|
120.4
|
|
|
120.8
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions, except per share
amounts)
|
||||||||||
Net earnings
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Basic Weighted-average shares outstanding
|
|
115.9
|
|
|
116.8
|
|
|
118.0
|
|
|||
Basic EPS
|
|
$
|
4.16
|
|
|
$
|
3.66
|
|
|
$
|
2.77
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions, except per share
amounts)
|
||||||||||
Net earnings
|
|
$
|
482.1
|
|
|
$
|
427.9
|
|
|
$
|
326.8
|
|
Diluted Weighted-average shares outstanding
|
|
118.8
|
|
|
120.4
|
|
|
120.8
|
|
|||
Diluted EPS
|
|
$
|
4.06
|
|
|
$
|
3.56
|
|
|
$
|
2.70
|
|
NOTE 5.
|
INTEREST EXPENSE, NET
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Interest expense on borrowings
|
|
$
|
(45.9
|
)
|
|
$
|
(42.4
|
)
|
|
$
|
(44.7
|
)
|
Interest income
|
|
4.2
|
|
|
3.8
|
|
|
2.0
|
|
|||
Interest expense, net
|
|
$
|
(41.8
|
)
|
|
$
|
(38.6
|
)
|
|
$
|
(42.7
|
)
|
|
|
Rockall
|
|
RPM
|
|
TD Ameritrade
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash payments, net of cash acquired
|
|
$
|
34.9
|
|
|
$
|
258.3
|
|
|
$
|
61.5
|
|
|
$
|
354.7
|
|
Deferred payments, net
|
|
(0.1
|
)
|
|
43.8
|
|
|
—
|
|
|
43.7
|
|
||||
Contingent consideration liability
|
|
7.1
|
|
|
0.8
|
|
|
—
|
|
|
7.9
|
|
||||
Aggregate purchase price
|
|
$
|
41.9
|
|
|
$
|
302.9
|
|
|
$
|
61.5
|
|
|
$
|
406.4
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net tangible assets acquired / (liabilities assumed)
|
|
$
|
(1.2
|
)
|
|
$
|
9.7
|
|
|
$
|
—
|
|
|
$
|
8.4
|
|
Goodwill
|
|
28.9
|
|
|
191.5
|
|
|
27.3
|
|
|
247.7
|
|
||||
Intangible assets
|
|
14.2
|
|
|
101.7
|
|
|
34.2
|
|
|
150.2
|
|
||||
Aggregate purchase price
|
|
$
|
41.9
|
|
|
$
|
302.9
|
|
|
$
|
61.5
|
|
|
$
|
406.4
|
|
•
|
The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $10.1 million upon the achievement in full of the defined financial targets by the acquired business.
|
•
|
Goodwill is not tax deductible.
|
•
|
Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a four-year life and six-year life, respectively.
|
•
|
The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $3.7 million upon the achievement in full of the defined financial targets by the acquired business.
|
•
|
Goodwill is partially tax deductible.
|
•
|
Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a five-year life and seven-year life, respectively.
|
|
|
Summit
|
|
ActivePath
|
|
FundAssist
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash payments, net of cash acquired
|
|
$
|
26.4
|
|
|
$
|
21.8
|
|
|
$
|
41.3
|
|
|
$
|
89.5
|
|
Deferred payments, net
|
|
1.4
|
|
|
2.4
|
|
|
—
|
|
|
3.8
|
|
||||
Contingent consideration liability (acquisition date fair value)
|
|
2.7
|
|
|
—
|
|
|
6.4
|
|
|
9.2
|
|
||||
Aggregate purchase price
|
|
$
|
30.6
|
|
|
$
|
24.2
|
|
|
$
|
47.7
|
|
|
$
|
102.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net tangible assets acquired / (liabilities assumed)
|
|
$
|
0.2
|
|
|
$
|
(10.0
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(11.7
|
)
|
Goodwill
|
|
18.5
|
|
|
28.7
|
|
|
29.2
|
|
|
76.3
|
|
||||
Intangible assets
|
|
12.0
|
|
|
5.6
|
|
|
20.4
|
|
|
38.0
|
|
||||
Aggregate purchase price
|
|
$
|
30.6
|
|
|
$
|
24.2
|
|
|
$
|
47.7
|
|
|
$
|
102.5
|
|
•
|
The contingent consideration liability is payable over the next three years upon the achievement by the acquired business of certain revenue and earnings targets, and has a maximum potential pay-out of $11.0 million upon the achievement in full of the defined financial targets by the acquired business.
|
•
|
The fair value of the contingent consideration liability at June 30, 2019 is $7.4 million.
|
•
|
Goodwill is primarily tax deductible.
|
•
|
Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a five-year life and seven-year life, respectively.
|
•
|
Goodwill is not tax deductible.
|
•
|
Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a five-year life and two-year life, respectively.
|
•
|
The contingent consideration liability contains a revenue component which will be settled in fiscal year 2021, based on the achievement of a defined revenue target by the acquired business.
|
•
|
The fair value of the contingent consideration liability at June 30, 2019 is $7.0 million.
|
•
|
Goodwill is not tax deductible.
|
•
|
Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a six-year life and five-year life, respectively.
|
|
|
NACC
|
|
M&O
|
|
MAL
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Cash payments, net of cash acquired
|
|
$
|
406.2
|
|
|
$
|
22.4
|
|
|
$
|
20.1
|
|
|
$
|
448.7
|
|
Note payable to sellers
|
|
—
|
|
|
2.5
|
|
|
3.2
|
|
|
5.7
|
|
||||
Contingent consideration liability (acquisition date fair value)
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
||||
Other closing adjustments
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
Aggregate purchase price
|
|
$
|
410.0
|
|
|
$
|
24.9
|
|
|
$
|
24.8
|
|
|
$
|
459.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net tangible assets acquired / (liabilities assumed)
|
|
$
|
52.2
|
|
|
$
|
(3.5
|
)
|
|
$
|
(2.9
|
)
|
|
$
|
45.8
|
|
Goodwill
|
|
135.7
|
|
|
17.2
|
|
|
22.6
|
|
|
175.5
|
|
||||
Intangible assets
|
|
218.3
|
|
|
11.2
|
|
|
14.7
|
|
|
244.1
|
|
||||
Other closing adjustments
|
|
3.8
|
|
|
—
|
|
|
—
|
|
|
3.8
|
|
||||
Fair value of the Company’s pre-existing investment in MAL
|
|
—
|
|
|
—
|
|
|
(9.6
|
)
|
|
(9.6
|
)
|
||||
Aggregate purchase price, net of other closing adjustments
|
|
$
|
410.0
|
|
|
$
|
24.9
|
|
|
$
|
24.8
|
|
|
$
|
459.6
|
|
•
|
The aggregate purchase price was $410.0 million in cash, or $406.2 million net of cash acquired and other closing adjustments.
|
•
|
Goodwill is primarily tax deductible.
|
•
|
Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a ten-year life and seven-year life, respectively.
|
|
NACC
|
||
|
|
||
Accounts receivable, net
|
$
|
89.1
|
|
Other current assets
|
19.5
|
|
|
Property, plant and equipment
|
45.0
|
|
|
Intangible assets
|
218.3
|
|
|
Goodwill
|
135.7
|
|
|
Other non-current assets
|
1.6
|
|
|
Accounts payable
|
(14.3
|
)
|
|
Accrued expenses and other current liabilities
|
(62.9
|
)
|
|
Deferred taxes
|
(21.9
|
)
|
|
Deferred revenue
|
(1.1
|
)
|
|
Other long term liabilities
|
(2.9
|
)
|
|
Consideration paid, net of cash acquired
|
$
|
406.2
|
|
|
Years ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
(in millions, except per share amounts)
|
|
||||||
Revenues
|
$
|
4,142.6
|
|
|
$
|
4,059.3
|
|
Net earnings
|
$
|
335.6
|
|
|
$
|
312.4
|
|
|
|
|
|
||||
Basic earnings per share
|
$
|
2.84
|
|
|
$
|
2.64
|
|
Diluted earnings per share
|
$
|
2.78
|
|
|
$
|
2.57
|
|
•
|
Goodwill is not tax deductible.
|
•
|
Intangible assets acquired consist primarily of customer relationships and acquired software technology, which are being amortized over a seven-year life and six-year life, respectively.
|
•
|
The contingent consideration liability is payable over the next four years upon the achievement by the acquired business of certain revenue and earnings targets.
|
•
|
The contingent consideration liability has a maximum potential pay-out of $2.8 million upon the achievement in full of the defined financial targets by the acquired business.
|
•
|
The fair value of the Company’s 25% pre-existing investment in MAL was determined to be $9.6 million, implied by the aggregate purchase price of the remaining 75% purchased, which resulted in a non-cash, nontaxable gain on investment of $9.3 million (“MAL investment gain”), included as part of Other non-operating income (expenses), net.
|
•
|
Goodwill is not tax deductible.
|
•
|
Intangible assets acquired consist primarily of customer relationships and acquired software technology, which are being amortized over a seven-year life and five-year life, respectively.
|
Level 1
|
|
Quoted market prices in active markets for identical assets and liabilities.
|
|
|
|
Level 2
|
|
Observable market-based inputs other than quoted prices in active markets for identical assets and liabilities.
|
|
|
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
68.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68.1
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities
|
|
81.8
|
|
|
—
|
|
|
—
|
|
|
81.8
|
|
||||
Total assets as of June 30, 2019
|
|
$
|
150.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150.3
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration obligations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.4
|
|
|
$
|
28.4
|
|
Total liabilities as of June 30, 2019
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28.4
|
|
|
$
|
28.4
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
86.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86.8
|
|
Other current assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Other non-current assets:
|
|
|
|
|
|
|
|
|
||||||||
Securities
|
|
66.9
|
|
|
—
|
|
|
—
|
|
|
66.9
|
|
||||
Total assets as of June 30, 2018
|
|
$
|
153.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
153.8
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration obligations
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.6
|
|
|
$
|
18.6
|
|
Total liabilities as of June 30, 2018
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18.6
|
|
|
$
|
18.6
|
|
(1)
|
Money market funds include money market deposit account balances of $30.1 million and $28.4 million as of June 30, 2019 and 2018, respectively.
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Beginning balance
|
|
$
|
18.6
|
|
|
$
|
6.7
|
|
Additional contingent consideration incurred
|
|
7.9
|
|
|
13.5
|
|
||
Net increase (decrease) in contingent consideration liability
|
|
3.6
|
|
|
(1.1
|
)
|
||
Foreign currency impact on contingent consideration liability
|
|
(0.6
|
)
|
|
0.2
|
|
||
Payments
|
|
(1.0
|
)
|
|
(0.7
|
)
|
||
Ending balance
|
|
$
|
28.4
|
|
|
$
|
18.6
|
|
NOTE 8.
|
PROPERTY, PLANT AND EQUIPMENT, NET
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Property, plant and equipment:
|
|
|
|
|
||||
Land and buildings
|
|
$
|
2.6
|
|
|
$
|
2.6
|
|
Equipment
|
|
435.6
|
|
|
432.1
|
|
||
Furniture, leaseholds and other
|
|
174.6
|
|
|
161.5
|
|
||
|
|
612.9
|
|
|
596.3
|
|
||
Less: Accumulated depreciation
|
|
(423.9
|
)
|
|
(392.2
|
)
|
||
Property, plant and equipment, net
|
|
$
|
189.0
|
|
|
$
|
204.1
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Depreciation expense for Property, plant and equipment
|
|
$
|
65.8
|
|
|
$
|
63.4
|
|
|
$
|
53.5
|
|
NOTE 9.
|
GOODWILL AND INTANGIBLE ASSETS, NET
|
|
|
Investor
Communication
Solutions
|
|
Global
Technology and
Operations
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
Goodwill, gross, at July 1, 2017
|
|
$
|
821.0
|
|
|
$
|
338.4
|
|
|
$
|
1,159.3
|
|
Transfers (a)
|
|
(38.7
|
)
|
|
38.7
|
|
|
—
|
|
|||
Additions
|
|
88.2
|
|
|
—
|
|
|
88.2
|
|
|||
Fair value adjustments (b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency translation and other
|
|
13.9
|
|
|
(6.5
|
)
|
|
7.4
|
|
|||
Accumulated impairment losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Goodwill, net, at June 30, 2018
|
|
$
|
884.4
|
|
|
$
|
370.5
|
|
|
$
|
1,254.9
|
|
|
|
|
|
|
|
|
||||||
Goodwill, gross, at June 30, 2018
|
|
$
|
884.4
|
|
|
$
|
370.5
|
|
|
$
|
1,254.9
|
|
Additions
|
|
27.3
|
|
|
220.4
|
|
|
247.7
|
|
|||
Fair value adjustments (b)
|
|
7.4
|
|
|
—
|
|
|
7.4
|
|
|||
Foreign currency translation and other
|
|
(3.2
|
)
|
|
(6.8
|
)
|
|
(10.0
|
)
|
|||
Accumulated impairment losses
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Goodwill, net, at June 30, 2019
|
|
$
|
915.9
|
|
|
$
|
584.2
|
|
|
$
|
1,500.0
|
|
|
|
June 30,
|
||||||||||||||||||||||
|
|
2019
|
|
2018
|
||||||||||||||||||||
|
|
Original
Cost |
|
Accumulated
Amortization |
|
Intangible
Assets, net |
|
Original
Cost |
|
Accumulated
Amortization |
|
Intangible
Assets, net |
||||||||||||
|
|
(in millions)
|
||||||||||||||||||||||
Software licenses
|
|
$
|
125.8
|
|
|
$
|
(101.7
|
)
|
|
$
|
24.1
|
|
|
$
|
117.5
|
|
|
$
|
(87.5
|
)
|
|
$
|
30.0
|
|
Acquired software technology
|
|
164.7
|
|
|
(85.5
|
)
|
|
79.3
|
|
|
117.8
|
|
|
(73.0
|
)
|
|
44.8
|
|
||||||
Customer contracts and lists
|
|
549.6
|
|
|
(207.4
|
)
|
|
342.1
|
|
|
453.8
|
|
|
(162.1
|
)
|
|
291.7
|
|
||||||
Acquired intellectual property
|
|
135.0
|
|
|
(63.8
|
)
|
|
71.2
|
|
|
135.0
|
|
|
(36.9
|
)
|
|
98.1
|
|
||||||
Other intangibles
|
|
63.6
|
|
|
(24.1
|
)
|
|
39.5
|
|
|
47.7
|
|
|
(18.2
|
)
|
|
29.5
|
|
||||||
|
|
$
|
1,038.7
|
|
|
$
|
(482.5
|
)
|
|
$
|
556.2
|
|
|
$
|
871.8
|
|
|
$
|
(377.7
|
)
|
|
$
|
494.1
|
|
|
|
Weighted-Average Remaining Useful Life (Years)
|
Acquired software technology
|
|
4.0
|
Software licenses
|
|
2.4
|
Customer contracts and lists
|
|
6.3
|
Acquired intellectual property
|
|
2.8
|
Other intangibles
|
|
4.3
|
Total weighted-average remaining useful life
|
|
5.2
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Amortization expense for intangible assets
|
|
$
|
106.8
|
|
|
$
|
100.2
|
|
|
$
|
87.7
|
|
Years Ending June 30,
|
|
(in millions)
|
||
2020
|
|
$
|
128.2
|
|
2021
|
|
118.5
|
|
|
2022
|
|
95.1
|
|
|
2023
|
|
76.0
|
|
|
2024
|
|
61.2
|
|
|
Thereafter
|
|
77.2
|
|
NOTE 10.
|
OTHER NON-CURRENT ASSETS
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Deferred client conversion and start-up costs
|
|
$
|
254.7
|
|
|
$
|
169.5
|
|
Deferred sales commissions costs
|
|
95.5
|
|
|
—
|
|
||
Contract assets (a)
|
|
47.5
|
|
|
16.5
|
|
||
Deferred data center costs (b)
|
|
29.0
|
|
|
35.0
|
|
||
Long-term investments
|
|
100.4
|
|
|
80.3
|
|
||
Long-term broker fees
|
|
35.3
|
|
|
28.7
|
|
||
Other
|
|
30.6
|
|
|
30.5
|
|
||
Total
|
|
$
|
593.1
|
|
|
$
|
360.5
|
|
NOTE 11.
|
PAYABLES AND ACCRUED EXPENSES
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Accounts payable
|
|
$
|
133.7
|
|
|
$
|
156.2
|
|
Employee compensation and benefits
|
|
232.2
|
|
|
233.2
|
|
||
Accrued broker fees
|
|
87.0
|
|
|
85.2
|
|
||
Accrued taxes
|
|
68.9
|
|
|
20.3
|
|
||
Accrued dividend payable
|
|
55.4
|
|
|
42.5
|
|
||
Managed services administration fees
|
|
53.1
|
|
|
55.3
|
|
||
Customer deposits
|
|
34.8
|
|
|
39.2
|
|
||
Other
|
|
46.6
|
|
|
39.1
|
|
||
Total
|
|
$
|
711.7
|
|
|
$
|
671.0
|
|
NOTE 12.
|
BORROWINGS
|
|
Expiration
Date
|
|
Principal amount outstanding at June 30, 2019
|
|
Carrying value at June 30, 2019
|
|
Carrying value at June 30, 2018
|
|
Unused
Available
Capacity
|
|
Fair Value at June 30, 2019
|
||||||||||
|
|
|
|
|
(in millions)
|
|
|
||||||||||||||
Long-term debt
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2019 Revolving Credit Facility:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. dollar tranche
|
March 2024
|
|
$
|
360.0
|
|
|
$
|
360.0
|
|
|
$
|
160.0
|
|
|
$
|
740.0
|
|
|
$
|
360.0
|
|
Multicurrency tranche
|
March 2024
|
|
215.7
|
|
|
215.7
|
|
|
—
|
|
|
184.3
|
|
|
215.7
|
|
|||||
Total Revolving Credit Facility
|
|
|
$
|
575.7
|
|
|
$
|
575.7
|
|
|
$
|
160.0
|
|
|
$
|
924.3
|
|
|
$
|
575.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal 2014 Senior Notes
|
September 2020
|
|
400.0
|
|
|
399.2
|
|
|
398.5
|
|
|
—
|
|
|
405.4
|
|
|||||
Fiscal 2016 Senior Notes
|
June 2026
|
|
500.0
|
|
|
495.5
|
|
|
494.8
|
|
|
—
|
|
|
509.8
|
|
|||||
Total debt
|
|
|
$
|
1,475.7
|
|
|
$
|
1,470.4
|
|
|
$
|
1,053.4
|
|
|
$
|
924.3
|
|
|
$
|
1,490.9
|
|
Years ending June 30,
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
(in millions)
|
|
$
|
—
|
|
|
$
|
400.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
575.7
|
|
|
$
|
500.0
|
|
|
$
|
1,475.7
|
|
NOTE 13.
|
STOCK-BASED COMPENSATION
|
|
|
Stock Options
|
|
Time-based
RSUs
|
|
Performance-based
RSUs
|
|||||||||||||||
|
|
Number
of
Options
|
|
Weighted
Average
Exercise
Price
|
|
Number
of
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Number
of
Shares
|
|
Weighted
Average
Grant-Date
Fair Value
|
|||||||||
Balances at July 1, 2016
|
|
7,059,067
|
|
|
$
|
32.57
|
|
|
1,202,896
|
|
|
$
|
44.34
|
|
|
468,516
|
|
|
$
|
47.15
|
|
Granted
|
|
568,465
|
|
|
67.15
|
|
|
531,301
|
|
|
64.38
|
|
|
225,731
|
|
|
64.52
|
|
|||
Exercised (a)
|
|
(2,384,449
|
)
|
|
25.44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vesting of RSUs (b)
|
|
—
|
|
|
—
|
|
|
(586,617
|
)
|
|
40.00
|
|
|
(171,082
|
)
|
|
38.50
|
|
|||
Expired/forfeited
|
|
(105,442
|
)
|
|
36.13
|
|
|
(72,987
|
)
|
|
53.74
|
|
|
(52,303
|
)
|
|
50.38
|
|
|||
Balances at June 30, 2017
|
|
5,137,641
|
|
|
$
|
39.63
|
|
|
1,074,593
|
|
|
$
|
55.98
|
|
|
470,862
|
|
|
$
|
58.26
|
|
Granted
|
|
1,079,442
|
|
|
93.42
|
|
|
456,217
|
|
|
78.86
|
|
|
198,485
|
|
|
76.71
|
|
|||
Exercised (a)
|
|
(1,654,877
|
)
|
|
31.09
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vesting of RSUs (b)
|
|
—
|
|
|
—
|
|
|
(463,561
|
)
|
|
52.86
|
|
|
(150,068
|
)
|
|
52.96
|
|
|||
Expired/forfeited
|
|
(83,918
|
)
|
|
42.89
|
|
|
(84,850
|
)
|
|
60.18
|
|
|
(123,590
|
)
|
|
43.00
|
|
|||
Balances at June 30, 2018
|
|
4,478,288
|
|
|
$
|
55.69
|
|
|
982,399
|
|
|
$
|
67.72
|
|
|
395,689
|
|
|
$
|
74.29
|
|
Granted
|
|
528,978
|
|
|
98.72
|
|
|
360,147
|
|
|
121.11
|
|
|
133,213
|
|
|
116.53
|
|
|||
Exercised (a)
|
|
(784,372
|
)
|
|
39.94
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Vesting of RSUs (b)
|
|
—
|
|
|
—
|
|
|
(430,270
|
)
|
|
63.97
|
|
|
(198,420
|
)
|
|
64.50
|
|
|||
Expired/forfeited
|
|
(21,280
|
)
|
|
94.14
|
|
|
(92,977
|
)
|
|
76.57
|
|
|
(4,705
|
)
|
|
80.57
|
|
|||
Balances at June 30, 2019 (c)
|
|
4,201,614
|
|
|
$
|
63.85
|
|
|
819,299
|
|
|
$
|
92.15
|
|
|
325,777
|
|
|
$
|
97.43
|
|
(a)
|
Stock options exercised during the fiscal years ended June 30, 2019, 2018 and 2017 had intrinsic values of $65.8 million, $116.3 million and $104.7 million, respectively.
|
(b)
|
Time-based RSUs that vested during the fiscal years ended June 30, 2019, 2018 and 2017 had a total fair value of $45.4 million, $50.6 million and $39.8 million, respectively. Performance-based RSUs that vested during the fiscal years ended June 30, 2019, 2018 and 2017 had a total fair value of $21.7 million, $19.1 million and $11.6 million, respectively.
|
(c)
|
As of June 30, 2019, the Company’s outstanding stock options using the fiscal year-end share price of $127.68 had an aggregate intrinsic value of $268.2 million. As of June 30, 2019, the Company’s outstanding “in the money” vested stock options using the fiscal year-end share price of $127.68 had an aggregate intrinsic value of $195.8 million. As of June 30, 2019, time-based RSUs and performance-based RSUs expected to vest using the fiscal year-end share price of $127.68 (approximately 0.8 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $100.1 million and $39.8 million, respectively. Performance-based RSUs granted in the table above represent initial target awards, and performance adjustments for (i) change in shares issued based upon attainment of performance goals determined in the period, and (ii) estimated change in shares issued resulting from attainment of performance goals to be determined at the end of the prospective performance period.
|
|
|
Outstanding Options
|
|||||||||||
|
|
Options
Outstanding
|
|
Weighted
Average Remaining Contractual Term (in years) |
|
Weighted
Average Exercise Price Per Share |
|
Aggregate Intrinsic Value (in millions) (a)
|
|||||
Range of Exercise Prices
|
|
||||||||||||
$0.01 to $35.00
|
|
607,688
|
|
|
2.90
|
|
$
|
23.08
|
|
|
|
||
$35.01 to $50.00
|
|
580,519
|
|
|
4.51
|
|
$
|
37.56
|
|
|
|
||
$50.01 to $65.00
|
|
952,544
|
|
|
6.09
|
|
$
|
52.40
|
|
|
|
||
$65.01 to $80.00
|
|
488,967
|
|
|
7.54
|
|
$
|
67.32
|
|
|
|
||
$80.01 to $95.00
|
|
1,044,179
|
|
|
8.52
|
|
$
|
93.40
|
|
|
|
||
$95.01 to $110.00
|
|
527,717
|
|
|
9.59
|
|
$
|
98.72
|
|
|
|
||
|
|
4,201,614
|
|
|
6.62
|
|
$
|
63.85
|
|
|
$
|
268.2
|
|
|
|
Exercisable Options
|
|||||||||||
Range of Exercise Prices
|
|
Options
Exercisable
|
|
Weighted
Average Remaining Contractual Term (in years) |
|
Weighted
Average Exercise Price Per Share |
|
Aggregate Intrinsic Value
(in millions) (a)
|
|||||
$0.01 to $35.00
|
|
607,688
|
|
|
2.90
|
|
$
|
23.08
|
|
|
|
||
$35.01 to $50.00
|
|
580,519
|
|
|
4.51
|
|
$
|
37.56
|
|
|
|
||
$50.01 to $65.00
|
|
808,864
|
|
|
6.01
|
|
$
|
52.48
|
|
|
|
||
$65.01 to $80.00
|
|
225,463
|
|
|
7.53
|
|
$
|
67.32
|
|
|
|
||
$80.01 to $95.00
|
|
141,699
|
|
|
8.33
|
|
$
|
92.46
|
|
|
|
||
$95.01 to $110.00
|
|
23,447
|
|
|
9.37
|
|
$
|
107.52
|
|
|
|
||
|
|
2,387,680
|
|
|
5.17
|
|
$
|
45.68
|
|
|
$
|
195.8
|
|
|
|
Fiscal Year Ended
June 30, 2019 |
|
Fiscal Year Ended
June 30, 2018 |
|
Fiscal Year Ended
June 30, 2017 |
||||||
Graded Vesting
|
|
|
|
|
|
|
||||||
Risk-free interest rate
|
|
2.5
|
%
|
|
2.7
|
%
|
|
2.1
|
%
|
|||
Dividend yield
|
|
2.0
|
%
|
|
1.6
|
%
|
|
2.0
|
%
|
|||
Weighted-average volatility factor
|
|
26.0
|
%
|
|
23.8
|
%
|
|
23.1
|
%
|
|||
Weighted-average expected life (in years)
|
|
5.9
|
|
|
6.5
|
|
|
6.5
|
|
|||
Weighted-average fair value (in dollars)
|
|
$
|
22.12
|
|
|
$
|
22.16
|
|
|
$
|
13.74
|
|
|
|
Fiscal Year Ended
June 30, 2018 |
||
Cliff Vesting
|
|
|
||
Risk-free interest rate
|
|
2.7
|
%
|
|
Dividend yield
|
|
1.6
|
%
|
|
Weighted-average volatility factor
|
|
23.8
|
%
|
|
Weighted-average expected life (in years)
|
|
6.0
|
|
|
Weighted-average fair value (in dollars)
|
|
$
|
21.65
|
|
NOTE 14.
|
EMPLOYEE BENEFIT PLANS
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
401(k) savings plan
|
|
$
|
35.5
|
|
|
$
|
34.4
|
|
|
$
|
35.2
|
|
ERSP
|
|
2.3
|
|
|
1.9
|
|
|
1.8
|
|
|||
Total
|
|
$
|
37.8
|
|
|
$
|
36.3
|
|
|
$
|
37.0
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
SORP
|
|
$
|
3.9
|
|
|
$
|
4.3
|
|
|
$
|
3.6
|
|
SERP
|
|
0.5
|
|
|
0.6
|
|
|
0.7
|
|
|||
Total
|
|
$
|
4.4
|
|
|
$
|
4.9
|
|
|
$
|
4.3
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
SORP
|
|
$
|
45.5
|
|
|
$
|
38.3
|
|
|
$
|
35.4
|
|
SERP
|
|
5.4
|
|
|
4.5
|
|
|
4.3
|
|
|||
Total
|
|
$
|
50.8
|
|
|
$
|
42.8
|
|
|
$
|
39.7
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Executive Retiree Health Insurance Plan
|
|
$
|
0.5
|
|
|
$
|
0.4
|
|
|
$
|
0.3
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Executive Retiree Health Insurance Plan
|
|
$
|
5.2
|
|
|
$
|
5.3
|
|
|
$
|
4.9
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
The Gratuity Plan
|
|
$
|
5.8
|
|
|
$
|
5.0
|
|
|
$
|
4.1
|
|
NOTE 15.
|
INCOME TAXES
|
|
|
Years Ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Earnings before income taxes:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
526.4
|
|
|
$
|
450.0
|
|
|
$
|
398.6
|
|
Foreign
|
|
80.8
|
|
|
111.1
|
|
|
89.5
|
|
|||
Total
|
|
$
|
607.3
|
|
|
$
|
561.0
|
|
|
$
|
488.1
|
|
|
|
Years Ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
U.S. Domestic
|
|
$
|
88.8
|
|
|
$
|
89.4
|
|
|
$
|
138.2
|
|
Foreign
|
|
24.7
|
|
|
43.4
|
|
|
24.8
|
|
|||
State
|
|
15.1
|
|
|
9.6
|
|
|
13.0
|
|
|||
Total current
|
|
128.7
|
|
|
142.4
|
|
|
176.0
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
U.S. Domestic
|
|
2.2
|
|
|
(13.6
|
)
|
|
(7.9
|
)
|
|||
Foreign
|
|
(2.8
|
)
|
|
4.9
|
|
|
(4.2
|
)
|
|||
State
|
|
(2.9
|
)
|
|
(0.6
|
)
|
|
(2.5
|
)
|
|||
Total deferred
|
|
(3.5
|
)
|
|
(9.3
|
)
|
|
(14.7
|
)
|
|||
Total Provision for income taxes
|
|
$
|
125.2
|
|
|
$
|
133.1
|
|
|
$
|
161.4
|
|
|
|
Years Ended June 30,
|
|||||||||||||||||||
|
|
2019
|
|
%
|
|
2018
|
|
%
|
|
2017
|
|
%
|
|||||||||
|
|
(in millions)
|
|||||||||||||||||||
Provision for income taxes at U.S. statutory rate
|
|
$
|
127.5
|
|
|
21.0
|
|
|
$
|
157.4
|
|
|
28.1
|
|
|
$
|
170.8
|
|
|
35.0
|
|
Increase (decrease) in Provision for income taxes from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
State taxes, net of federal tax
|
|
12.0
|
|
|
2.0
|
|
|
9.4
|
|
|
1.7
|
|
|
6.7
|
|
|
1.4
|
|
|||
Foreign tax differential
|
|
3.8
|
|
|
0.6
|
|
|
(2.4
|
)
|
|
(0.4
|
)
|
|
(6.9
|
)
|
|
(1.4
|
)
|
|||
Valuation allowances
|
|
0.4
|
|
|
0.1
|
|
|
(5.0
|
)
|
|
(0.9
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|||
Non-taxable investment gain
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
(0.7
|
)
|
|||
Stock-based compensation - ETB
|
|
(19.3
|
)
|
|
(3.2
|
)
|
|
(40.9
|
)
|
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|||
Tax Act Items
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
15.4
|
|
|
2.7
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
1.3
|
|
|
0.2
|
|
|
(0.8
|
)
|
|
(0.1
|
)
|
|
(5.3
|
)
|
|
(1.1
|
)
|
|||
Total Provision for income taxes
|
|
$
|
125.2
|
|
|
20.6
|
|
|
$
|
133.1
|
|
|
23.7
|
|
|
$
|
161.4
|
|
|
33.1
|
|
|
|
June 30,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||
Classification:
|
|
|
|
|
||||
Long-term deferred tax assets (included in Other non-current assets)
|
|
5.5
|
|
|
9.2
|
|
||
Long-term deferred tax liabilities
|
|
(86.7
|
)
|
|
(57.9
|
)
|
||
Net deferred tax liabilities
|
|
$
|
(81.3
|
)
|
|
$
|
(48.8
|
)
|
Components:
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Accrued expenses not currently deductible
|
|
$
|
3.2
|
|
|
$
|
3.5
|
|
Depreciation
|
|
—
|
|
|
2.2
|
|
||
Compensation and benefits not currently deductible
|
|
57.6
|
|
|
51.7
|
|
||
Net operating and capital losses
|
|
11.1
|
|
|
12.1
|
|
||
Tax credits
|
|
7.5
|
|
|
5.2
|
|
||
Other
|
|
6.1
|
|
|
6.6
|
|
||
Total deferred tax assets
|
|
85.6
|
|
|
81.3
|
|
||
Less: Valuation allowances
|
|
(3.3
|
)
|
|
(3.8
|
)
|
||
Deferred tax assets, net
|
|
82.2
|
|
|
77.6
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Goodwill and identifiable intangibles
|
|
100.9
|
|
|
93.4
|
|
||
Depreciation
|
|
10.1
|
|
|
—
|
|
||
Net deferred expenses
|
|
33.6
|
|
|
15.5
|
|
||
Unremitted earnings
|
|
12.2
|
|
|
11.1
|
|
||
Other
|
|
6.8
|
|
|
6.2
|
|
||
Deferred tax liabilities
|
|
163.5
|
|
|
126.3
|
|
||
Net deferred tax liabilities
|
|
$
|
(81.3
|
)
|
|
$
|
(48.8
|
)
|
|
|
Fiscal Year Ended
June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Beginning balance
|
|
$
|
22.8
|
|
|
$
|
18.7
|
|
|
$
|
18.2
|
|
Gross increase related to prior period tax positions
|
|
17.3
|
|
|
3.5
|
|
|
0.6
|
|
|||
Gross increase related to current period tax positions
|
|
2.8
|
|
|
3.0
|
|
|
2.7
|
|
|||
Gross decrease related to prior period tax positions
|
|
(2.6
|
)
|
|
(2.4
|
)
|
|
(2.8
|
)
|
|||
Ending balance
|
|
$
|
40.2
|
|
|
$
|
22.8
|
|
|
$
|
18.7
|
|
NOTE 16.
|
CONTRACTUAL COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ARRANGEMENTS
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
IT Services Agreement
|
|
$
|
100.0
|
|
|
$
|
101.2
|
|
|
$
|
99.3
|
|
EU IT Services Agreement
|
|
6.1
|
|
|
6.3
|
|
|
5.5
|
|
|||
Total expenses
|
|
$
|
106.1
|
|
|
$
|
107.5
|
|
|
$
|
104.8
|
|
|
|
IT Services Agreement
|
|
EU IT Services Agreement
|
|
Total
|
||||||
|
|
(in millions)
|
||||||||||
Capitalized costs, beginning balance
|
|
$
|
62.3
|
|
|
$
|
5.2
|
|
|
$
|
67.5
|
|
Capitalized costs incurred
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impact of foreign currency exchange
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|||
Total capitalized costs, ending balance
|
|
62.3
|
|
|
5.0
|
|
|
67.3
|
|
|||
Total accumulated amortization
|
|
(35.8
|
)
|
|
(2.5
|
)
|
|
(38.3
|
)
|
|||
Net Deferred IBM Costs
|
|
$
|
26.5
|
|
|
$
|
2.5
|
|
|
$
|
29.0
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
IT Services Agreement
|
|
$
|
5.3
|
|
|
$
|
5.3
|
|
|
$
|
4.6
|
|
EU IT Services Agreement
|
|
0.5
|
|
|
0.5
|
|
|
0.4
|
|
|||
Total expenses
|
|
$
|
5.8
|
|
|
$
|
5.8
|
|
|
$
|
5.0
|
|
|
|
Years ended June 30,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
(in millions)
|
||||||||||
Data center expenses
|
|
$
|
106.1
|
|
|
$
|
107.5
|
|
|
$
|
104.8
|
|
Facilities and equipment leases
|
|
49.0
|
|
|
50.4
|
|
|
50.3
|
|
|||
Software license agreements
|
|
37.3
|
|
|
33.7
|
|
|
32.0
|
|
|||
Software/hardware maintenance agreements
|
|
65.0
|
|
|
63.5
|
|
|
63.2
|
|
|||
Total expenses
|
|
$
|
257.4
|
|
|
$
|
255.0
|
|
|
$
|
250.3
|
|
Years Ending June 30,
|
|
(in millions)
|
||
2020
|
|
$
|
117.6
|
|
2021
|
|
111.1
|
|
|
2022
|
|
102.5
|
|
|
2023
|
|
96.4
|
|
|
2024
|
|
91.4
|
|
|
Thereafter
|
|
204.4
|
|
|
Total
|
|
$
|
723.5
|
|
|
|
Foreign
Currency
Translation
|
|
Securities
|
|
Pension
and Post-
Retirement
Liabilities
|
|
Total
|
||||||||
|
|
(in millions)
|
||||||||||||||
Balances at July 1, 2016
|
|
$
|
(31.9
|
)
|
|
$
|
1.3
|
|
|
$
|
(7.6
|
)
|
|
$
|
(38.2
|
)
|
Other comprehensive income/(loss) before reclassifications
|
|
(17.0
|
)
|
|
1.0
|
|
|
(2.2
|
)
|
|
(18.2
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
||||
Balances at June 30, 2017
|
|
$
|
(48.9
|
)
|
|
$
|
2.3
|
|
|
$
|
(9.2
|
)
|
|
$
|
(55.8
|
)
|
Other comprehensive income/(loss) before reclassifications
|
|
5.7
|
|
|
1.1
|
|
|
(0.1
|
)
|
|
6.7
|
|
||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
—
|
|
|
(3.7
|
)
|
|
1.0
|
|
|
(2.7
|
)
|
||||
Balances at June 30, 2018
|
|
$
|
(43.2
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
(8.3
|
)
|
|
$
|
(51.9
|
)
|
Cumulative effect of changes in accounting principle (a)
|
|
—
|
|
|
0.4
|
|
|
(1.9
|
)
|
|
(1.5
|
)
|
||||
Other comprehensive income/(loss) before reclassifications
|
|
(15.0
|
)
|
|
—
|
|
|
(3.6
|
)
|
|
(18.7
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income/(loss)
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.9
|
|
||||
Balances at June 30, 2019
|
|
$
|
(58.3
|
)
|
|
$
|
—
|
|
|
$
|
(12.9
|
)
|
|
$
|
(71.2
|
)
|
(a)
|
Reflects the adoption of accounting standards as described in Note 2, “Summary of Significant Accounting Policies.”
|
NOTE 18.
|
FINANCIAL DATA BY SEGMENT
|
|
|
Investor
Communication
Solutions
|
|
Global
Technology and
Operations
|
|
Other
|
|
Foreign Currency
Exchange
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Year ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,511.1
|
|
|
$
|
953.5
|
|
|
$
|
—
|
|
|
$
|
(102.4
|
)
|
|
$
|
4,362.2
|
|
Earnings (loss) before income taxes
|
|
508.4
|
|
|
210.3
|
|
|
(130.9
|
)
|
|
19.4
|
|
|
607.3
|
|
|||||
Assets
|
|
2,169.5
|
|
|
1,409.6
|
|
|
301.6
|
|
|
—
|
|
|
3,880.7
|
|
|||||
Capital expenditures
|
|
34.9
|
|
|
6.1
|
|
|
9.6
|
|
|
—
|
|
|
50.6
|
|
|||||
Depreciation and amortization
|
|
54.9
|
|
|
11.3
|
|
|
19.0
|
|
|
—
|
|
|
85.2
|
|
|||||
Amortization of acquired intangibles
|
|
73.5
|
|
|
13.4
|
|
|
0.5
|
|
|
—
|
|
|
87.4
|
|
|||||
Amortization of other assets
|
|
37.1
|
|
|
45.0
|
|
|
5.3
|
|
|
—
|
|
|
87.4
|
|
|||||
Year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,495.6
|
|
|
$
|
911.6
|
|
|
$
|
—
|
|
|
$
|
(77.3
|
)
|
|
$
|
4,329.9
|
|
Earnings (loss) before income taxes
|
|
494.6
|
|
|
199.3
|
|
|
(151.4
|
)
|
|
18.6
|
|
|
561.0
|
|
|||||
Assets
|
|
2,089.0
|
|
|
908.3
|
|
|
307.4
|
|
|
—
|
|
|
3,304.7
|
|
|||||
Capital expenditures
|
|
39.2
|
|
|
28.6
|
|
|
8.8
|
|
|
—
|
|
|
76.7
|
|
|||||
Depreciation and amortization
|
|
52.2
|
|
|
10.8
|
|
|
19.1
|
|
|
—
|
|
|
82.1
|
|
|||||
Amortization of acquired intangibles
|
|
67.8
|
|
|
13.6
|
|
|
—
|
|
|
—
|
|
|
81.4
|
|
|||||
Amortization of other assets
|
|
12.6
|
|
|
30.6
|
|
|
5.3
|
|
|
—
|
|
|
48.5
|
|
|||||
Year ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,398.6
|
|
|
$
|
825.5
|
|
|
$
|
—
|
|
|
$
|
(81.5
|
)
|
|
$
|
4,142.6
|
|
Earnings (loss) before income taxes
|
|
428.2
|
|
|
162.5
|
|
|
(110.5
|
)
|
|
8.1
|
|
|
488.1
|
|
|||||
Assets
|
|
1,931.2
|
|
|
886.2
|
|
|
332.4
|
|
|
—
|
|
|
3,149.8
|
|
|||||
Capital expenditures
|
|
33.7
|
|
|
11.1
|
|
|
40.5
|
|
|
—
|
|
|
85.4
|
|
|||||
Depreciation and amortization
|
|
47.5
|
|
|
9.9
|
|
|
11.1
|
|
|
—
|
|
|
68.6
|
|
|||||
Amortization of acquired intangibles
|
|
60.8
|
|
|
11.8
|
|
|
—
|
|
|
—
|
|
|
72.6
|
|
|||||
Amortization of other assets
|
|
12.4
|
|
|
23.9
|
|
|
4.6
|
|
|
—
|
|
|
41.0
|
|
|
|
United
States
|
|
Canada
|
|
United
Kingdom
|
|
Other
|
|
Total
|
||||||||||
|
|
(in millions)
|
||||||||||||||||||
Year ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,913.8
|
|
|
$
|
279.5
|
|
|
$
|
127.5
|
|
|
$
|
41.4
|
|
|
$
|
4,362.2
|
|
Assets
|
|
$
|
2,870.2
|
|
|
$
|
504.8
|
|
|
$
|
277.0
|
|
|
$
|
228.7
|
|
|
$
|
3,880.7
|
|
Year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,907.2
|
|
|
$
|
273.6
|
|
|
$
|
118.7
|
|
|
$
|
30.4
|
|
|
$
|
4,329.9
|
|
Assets
|
|
$
|
2,661.9
|
|
|
$
|
216.7
|
|
|
$
|
257.8
|
|
|
$
|
168.3
|
|
|
$
|
3,304.7
|
|
Year ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
3,771.9
|
|
|
$
|
251.4
|
|
|
$
|
92.1
|
|
|
$
|
27.3
|
|
|
$
|
4,142.6
|
|
Assets
|
|
$
|
2,579.1
|
|
|
$
|
237.9
|
|
|
$
|
238.1
|
|
|
$
|
94.7
|
|
|
$
|
3,149.8
|
|
NOTE 19.
|
QUARTERLY FINANCIAL RESULTS (UNAUDITED)
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Fiscal Year Total
|
||||||||||
|
|
(in millions, except per share amounts)
|
||||||||||||||||||
Year ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
972.8
|
|
|
$
|
953.4
|
|
|
$
|
1,224.8
|
|
|
$
|
1,211.2
|
|
|
$
|
4,362.2
|
|
Gross profit
|
|
233.8
|
|
|
219.4
|
|
|
377.5
|
|
|
399.6
|
|
|
1,230.2
|
|
|||||
Operating income
|
|
100.1
|
|
|
78.2
|
|
|
233.6
|
|
|
240.8
|
|
|
652.7
|
|
|||||
Earnings before income taxes
|
|
89.3
|
|
|
64.3
|
|
|
223.6
|
|
|
230.0
|
|
|
607.3
|
|
|||||
Net earnings
|
|
76.7
|
|
|
49.9
|
|
|
172.2
|
|
|
183.2
|
|
|
482.1
|
|
|||||
Basic EPS
|
|
$
|
0.66
|
|
|
$
|
0.43
|
|
|
$
|
1.49
|
|
|
$
|
1.59
|
|
|
$
|
4.16
|
|
Diluted EPS
|
|
$
|
0.64
|
|
|
$
|
0.42
|
|
|
$
|
1.45
|
|
|
$
|
1.55
|
|
|
$
|
4.06
|
|
Year ended June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
924.8
|
|
|
$
|
1,012.8
|
|
|
$
|
1,071.9
|
|
|
$
|
1,320.4
|
|
|
$
|
4,329.9
|
|
Gross profit
|
|
198.8
|
|
|
243.5
|
|
|
269.3
|
|
|
450.9
|
|
|
1,162.5
|
|
|||||
Operating income
|
|
85.2
|
|
|
115.9
|
|
|
130.8
|
|
|
266.2
|
|
|
598.1
|
|
|||||
Earnings before income taxes
|
|
74.3
|
|
|
103.5
|
|
|
125.2
|
|
|
258.0
|
|
|
561.0
|
|
|||||
Net earnings
|
|
49.9
|
|
|
62.1
|
|
|
109.1
|
|
|
206.9
|
|
|
427.9
|
|
|||||
Basic EPS
|
|
$
|
0.43
|
|
|
$
|
0.53
|
|
|
$
|
0.93
|
|
|
$
|
1.76
|
|
|
$
|
3.66
|
|
Diluted EPS
|
|
$
|
0.42
|
|
|
$
|
0.52
|
|
|
$
|
0.90
|
|
|
$
|
1.72
|
|
|
$
|
3.56
|
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
|
|
Balance at
beginning
of period
|
|
Additions
charged
to costs
and
expenses
|
|
Deductions
|
|
Balance
at end of
period
|
||||||||
Fiscal year ended June 30, 2019:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
2.7
|
|
|
$
|
1.1
|
|
|
$
|
(1.2
|
)
|
|
$
|
2.6
|
|
Deferred tax valuation allowance
|
|
$
|
3.8
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
3.3
|
|
Fiscal year ended June 30, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
3.7
|
|
|
$
|
1.4
|
|
|
$
|
(2.4
|
)
|
|
$
|
2.7
|
|
Deferred tax valuation allowance
|
|
$
|
9.3
|
|
|
$
|
—
|
|
|
$
|
(5.5
|
)
|
|
$
|
3.8
|
|
Fiscal year ended June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
2.3
|
|
|
$
|
2.3
|
|
|
$
|
(0.9
|
)
|
|
$
|
3.7
|
|
Deferred tax valuation allowance
|
|
$
|
9.8
|
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
$
|
9.3
|
|
ITEM 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9A.
|
Controls and Procedures
|
|
|
/s/ TIMOTHY C. GOKEY
|
|
|
Timothy C. Gokey
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
/s/ JAMES M. YOUNG
|
|
|
James M. Young
|
|
|
Vice President, Chief Financial Officer
|
ITEM 9B.
|
Other Information
|
ITEM 10.
|
Directors, Executive Officers and Corporate Governance
|
ITEM 11.
|
Executive Compensation
|
ITEM 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
ITEM 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14.
|
Principal Accounting Fees and Services
|
ITEM 15.
|
Exhibits, Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this Annual Report on Form 10-K:
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedule.
|
3.
|
Exhibits.
|
|
BROADRIDGE FINANCIAL SOLUTIONS, INC.
|
||
|
|
|
|
|
By:
|
/s/ TIMOTHY C. GOKEY
|
|
|
Name:
|
Timothy C. Gokey
|
|
|
Title:
|
President and Chief Executive Officer
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ TIMOTHY C. GOKEY
|
|
President, Chief Executive Officer and Director
(Principal Executive Officer)
|
August 6, 2019
|
Timothy C. Gokey
|
|
|
|
|
|
|
|
/s/ JAMES M. YOUNG
|
|
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
August 6, 2019
|
James M. Young
|
|
|
|
|
|
|
|
/s/ RICHARD J. DALY
|
|
Executive Chairman of the Board of Directors
|
August 6, 2019
|
Richard J. Daly
|
|
|
|
|
|
|
|
/S/ LESLIE A. BRUN
|
|
Lead Independent Director
|
August 6, 2019
|
Leslie A. Brun
|
|
|
|
|
|
|
|
/S/ PAMELA L. CARTER
|
|
Director
|
August 6, 2019
|
Pamela L. Carter
|
|
|
|
|
|
|
|
/S/ ROBERT N. DUELKS
|
|
Director
|
August 6, 2019
|
Robert N. Duelks
|
|
|
|
|
|
|
|
/S/ BRETT A. KELLER
|
|
Director
|
August 6, 2019
|
Brett A. Keller
|
|
|
|
|
|
|
|
/S/ STUART R. LEVINE
|
|
Director
|
August 6, 2019
|
Stuart R. Levine
|
|
|
|
|
|
|
|
/S/ MAURA A. MARKUS
|
|
Director
|
August 6, 2019
|
Maura A. Markus
|
|
|
|
|
|
|
|
/S/ THOMAS J. PERNA
|
|
Director
|
August 6, 2019
|
Thomas J. Perna
|
|
|
|
|
|
|
|
/S/ ALAN J. WEBER
|
|
Director
|
August 6, 2019
|
Alan J. Weber
|
|
|
|
|
|
|
|
/S/ AMIT ZAVERY
|
|
Director
|
August 6, 2019
|
Amit Zavery
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibit (1)
|
|
|
|
|
Certificate of Incorporation of Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 3.1 to Form 8-K filed on April 2, 2007).
|
|
|
|
|
|
||
|
|
|
|
Indenture, dated as of May 29, 2007, by and between Broadridge Financial Solutions, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to Form 8-K filed on May 30, 2007).
|
|
|
|
|
|
Second Supplemental Indenture dated as of August 21, 2013, by and between Broadridge Financial Solutions, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 to Form 8-K filed on August 21, 2013).
|
|
|
|
|
|
Form of Broadridge Financial Solutions, Inc. 3.950% Senior Note due 2020 (included in Exhibit 4.2 to Form 8-K filed on August 21, 2013 and incorporated by reference).
|
|
|
|
|
|
Third Supplemental Indenture dated June 27, 2016 by and among Broadridge Financial Solutions, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Form 8-K filed on June 27, 2016).
|
|
|
|
|
|
Form of Broadridge Financial Solutions, Inc. 3.400% Senior Note due 2026 (incorporated by reference to Exhibit 4.2 to Form 8-K filed on June 27, 2016).
|
|
|
|
|
|
||
|
|
|
|
Broadridge Financial Solutions, Inc. Change in Control Severance Plan for Corporate Officers (incorporated by reference to Exhibit 10.6 to Form 8-K filed on April 2, 2007).
|
|
|
|
|
|
Amendment No. 1 to the Broadridge Financial Solutions, Inc. Change in Control Severance Plan for Corporate Officers (incorporated by reference to Exhibit 10.26 to Form 10-K/A filed on October 27, 2010).
|
|
|
|
|
|
Change in Control Enhancement Agreement for Richard J. Daly (incorporated by reference to Exhibit 10.8 to Form 8-K filed on April 2, 2007).
|
|
|
|
|
|
Amendment No. 1 to Change in Control Enhancement Agreement for Richard J. Daly (incorporated by reference to Exhibit 10.28 to Form 10-K/A filed on October 27, 2010).
|
|
|
|
|
|
Amendment No. 2, dated September 19, 2013, to the Change in Control Enhancement Agreement, dated as of March 29, 2007 and amended effective December 31, 2008, between Broadridge Financial Solutions, Inc. and Richard J. Daly (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 20, 2013).
|
|
|
|
|
|
Officer Severance Plan dated September 16, 2011 (incorporated by reference to Exhibit 10.1 to Form 8-K filed on September 20, 2011).
|
|
|
|
|
|
Amended and Restated Supplemental Officers Retirement Plan (“SORP”) (incorporated by reference to Exhibit 10.27 to Form 10-K/A filed on October 27, 2010).
|
|
|
|
|
|
Amendment to the Broadridge Financial Solutions, Inc. SORP, effective February 2, 2017 (incorporated by reference to Exhibit 10.3 to Form 10-Q filed on May 10, 2017).
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. Director Deferred Compensation Plan (Amended and Restated Effective January 1, 2019) (incorporated by reference to Exhibit 10.2 to Form 8-K filed on November 14, 2018).
|
|
|
|
|
|
Information Technology Services Agreement, dated as of March 31, 2010, by and between International Business Machines Corporation and Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on May 10, 2010). (2)
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibit (1)
|
|
Amendment No. 1 to the Information Technology Services Agreement, dated as of June 25, 2010, by and between International Business Machines Corporation and Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 10.24 to Form 10-K filed on August 12, 2010). (2)
|
|
|
|
|
|
Amendment No. 3 to the Information Technology Services Agreement, dated as of April 15, 2011, by and between International Business Machines Corporation and Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 10.33 to Form 10-K filed on August 12, 2011).
|
|
|
|
|
|
Amendment No. 5 to the Information Technology Services Agreement, dated as of June 11, 2011, by and between International Business Machines Corporation and Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 10.34 to Form 10-K filed on August 12, 2011). (2)
|
|
|
|
|
|
Amendment No. 7 to the Information Technology Services Agreement, dated October 10, 2011, by and between International Business Machines Corporation and Broadridge Financial Solutions, Inc. (incorporated by reference to Exhibit 10.1 to Form 10-Q filed February 7, 2012). (2)
|
|
|
|
|
|
Amendment No. 12 to the Information Technology Services Agreement, dated as of March 31, 2015, by and between International Business Machines Corporation and Broadridge Financial Solutions Inc. (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on May 8, 2015).
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. Executive Deferred Compensation Plan (“EDCP”) (Amended and Restated effective June 15, 2011) (incorporated by reference to Exhibit 10.32 to Form 10-K filed on August 12, 2011).
|
|
|
|
|
|
Amendment to the Broadridge EDCP, adopted August 1, 2014, effective December 31, 2014 (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on November 6, 2014).
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. Supplemental Executive Retirement Plan (“SERP”) (incorporated by reference to Exhibit 10.31 to Form 10-K/A filed on October 27, 2010).
|
|
|
|
|
|
Amendment to the Broadridge Financial Solutions, Inc. SERP, effective February 2, 2017 (incorporated by reference to Exhibit 10.2 to Form 10-Q filed on May 10, 2017).
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan, Amended and Restated effective November 14, 2013 (incorporated by reference to Exhibit 4.1 to Form 8-K filed on November 15, 2013).
|
|
|
|
|
|
Amendment to the Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan (Amended and Restated effective November 14, 2013), effective February 6, 2018 (incorporated by reference to Exhibit 10.1 to Form 10-Q filed on May 8, 2018).
|
|
|
|
|
|
Broadridge Financial Solutions, Inc. 2018 Omnibus Award Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed on November 13, 2018).
|
|
|
|
|
|
Executive Officer Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Form
8-K filed on November 14, 2018).
|
|
|
|
|
|
Amended and Restated Credit Agreement, dated as of March 18, 2019, among Broadridge Financial Solutions, Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Form 8-K filed on March 18, 2019).
|
|
|
|
|
|
||
|
|
|
|
Code of Ethics for the Company’s Principal Executive Officer and Senior Financial Officers (incorporated by reference to Exhibit 99.1 to Form 8-K filed on August 8, 2007).
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
Exhibit
Number
|
|
Description of Exhibit (1)
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
The following financial statements from the Broadridge Financial Solutions, Inc. Annual Report on Form 10-K for the fiscal year ended June 30, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated statements of earnings for the fiscal years ended June 30, 2019, 2018 and 2017, (ii) consolidated statements of comprehensive income for the fiscal years ended June 30, 2019, 2018 and 2017, (iii) consolidated balance sheets as of June 30, 2019 and 2018, (iv) consolidated statements of cash flows for the fiscal years ended June 30, 2019, 2018 and 2017, (v) consolidated statements of stockholders’ equity for the fiscal years ended June 30, 2019, 2018 and 2017, and (vi) the notes to the Consolidated Financial Statements.
|
(1)
|
The SEC File No. for the Company’s Form 8-K Reports referenced is 001-33220.
|
(2)
|
Certain confidential information contained in this Exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk. This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
|
•
|
acquisition of the Company by means of a tender offer,
|
•
|
acquisition of the Company by means of a proxy contest or otherwise, or
|
•
|
removal of the Company’s incumbent officers and directors.
|
•
|
3.950% Senior Notes due 2020 (the “2020 Notes”), issued pursuant to the registration statement on Form S-3 filed with the SEC on August 8, 2013 (Filed No. 333-190470); and
|
•
|
3.400% Senior Notes due 2026 (the “2026 Notes” and together with the 2020 Notes, the “Notes”), issued pursuant to the Current Registration Statement.
|
•
|
liens existing on the date of the creation of the debt securities of such series;
|
•
|
liens on assets or property of a person at the time it becomes a subsidiary securing only indebtedness of such person; provided such indebtedness was not incurred in connection
|
•
|
liens existing on assets created at the time of, or within 18 months after, the acquisition, purchase, lease, improvement or development of such assets to secure all or a portion of the purchase price or lease for, or the costs of improvement or development of, such assets;
|
•
|
liens to secure any extension, renewal, refinancing or refunding (or successive extensions, renewals, refinancings or refundings), in whole or in part, of any indebtedness secured by liens referred to above or liens created in connection with any amendment, consent or waiver relating to such indebtedness, so long as such lien is limited to all or part of substantially the same property which secured the lien extended, renewed or replaced, the amount of indebtedness secured is not increased (other than by the amount equal to any costs and expenses (including any premiums, fees or penalties) incurred in connection with any extension, renewal, refinancing or refunding) and the indebtedness so secured does not exceed the fair market value (as determined by the Board) of the assets subject to such liens at the time of such extension, renewal, refinancing or refunding, or such amendment, consent or waiver, as the case may be;
|
•
|
liens on property incurred in permitted sale and leaseback transactions (except in the case of the Notes);
|
•
|
liens in favor of only Broadridge or one or more subsidiaries granted by Broadridge or a subsidiary to secure any obligations owed to Broadridge or a subsidiary of Broadridge;
|
•
|
liens on assets of any subsidiary of Broadridge registered as a “broker” or a “dealer” as such terms are defined in Sections 3(a)(4) and (5) of the Exchange Act of 1934 (the “Exchange Act”) created or otherwise arising in the ordinary course of such subsidiary’s business;
|
•
|
liens on securities deemed to exist under repurchase agreements and reverse repurchase agreements entered into by Broadridge or any Significant Subsidiary in the ordinary course of business;
|
•
|
liens in favor of the trustee granted in accordance with the indenture; and
|
•
|
liens otherwise prohibited by this covenant, securing indebtedness which, together with the value of attributable debt incurred in sale and leaseback transactions permitted under “—Limitation on Sale and Leaseback Transactions” below, do not exceed the greater of (i) 15% of Consolidated Net Tangible Assets measured at the date of incurrence of the lien and (ii) $50 million (or in the case of the Notes, $100 million).
|
•
|
temporary leases for a term, including renewals at the option of the lessee, of not more than three years;
|
•
|
leases between only Broadridge and a subsidiary of Broadridge or only between subsidiaries of Broadridge;
|
•
|
leases where the proceeds are at least equal to the fair market value (as determined by the Board) of the property and Broadridge applies within 180 days after the sale of an amount equal to the greater of the net proceeds of the sale or the attributable debt associated with the property to the retirement of long-term secured indebtedness; and
|
•
|
leases of property executed by the time of, or within 12 months after the latest of, the acquisition, the completion of construction or improvement, or the commencement of commercial operation of the property.
|
•
|
(1) Broadridge is the surviving or continuing corporation or (2) the successor entity, if other than Broadridge, is a U.S. corporation, partnership, limited liability company or trust and expressly assumes by supplemental indenture all of Broadridge’s obligations under the debt securities of all series and the indenture;
|
•
|
immediately after giving effect to the transaction, no event of default (as defined below), and no event that, after notice or lapse of time or both, would become an event of default, has occurred and is continuing; and
|
•
|
if, as a result of any consolidation, merger, sale or lease, conveyance or transfer described in this covenant, properties or assets of Broadridge would become subject to any lien which would not be permitted by the asset lien restriction described above without
|
(1)
|
a failure to pay principal of or premium, if any, on the debt securities of such series when due at its stated maturity date, upon optional redemption or otherwise;
|
(2)
|
in the case of the Notes, a failure by Broadridge to repurchase the applicable Notes tendered for repurchase following the occurrence of a change of control repurchase event in conformity with the covenant set forth below under “The Notes—Purchase of Notes Upon a Change of Control Repurchase Event”;
|
(3)
|
a default in the payment of interest on the debt securities of such series when due, continued for 30 days;
|
(4)
|
certain events of bankruptcy, insolvency or reorganization involving Broadridge;
|
(5)
|
a default in the performance, or breach, of Broadridge's obligations under the “—Limitation on Consolidation, Merger and Sale of Assets” covenant described above;
|
(6)
|
a default in the performance, or breach, of any other covenant, warranty or agreement in the indenture (other than a default or breach pursuant to clause (5) immediately above or any other covenant or warranty a default in which is elsewhere dealt with in the indenture) for 60 days after a Notice of Default (as defined below) is given to Broadridge; and
|
(7)
|
(a) a failure to make any payment at maturity, including any applicable grace period, on any indebtedness of Broadridge (other than indebtedness of Broadridge owing to any of its subsidiaries) outstanding in an amount in excess of $75 million or its foreign currency equivalent at the time and continuance of this failure to pay or (b) a default on any indebtedness of Broadridge (other than indebtedness owing to any of its subsidiaries),
|
(a)
|
such holder has previously given to the trustee written notice of a continuing event of default,
|
(b)
|
the registered holders of at least 25% in aggregate principal amount of the debt securities of such series then outstanding have made written request and offered reasonable indemnity to the trustee to institute such proceeding as trustee, and
|
(c)
|
the trustee shall not have received from the registered holders of a majority in aggregate principal amount of the debt securities of such series then outstanding a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days.
|
•
|
to evidence the succession of another person to Broadridge and the assumption by any such successor of the covenants of Broadridge under the indenture and the debt securities;
|
•
|
to add to the covenants of Broadridge for the benefit of holders of the debt securities or to surrender any right or power conferred upon Broadridge;
|
•
|
to add any additional events of default for the benefit of holders of the debt securities;
|
•
|
to add to or change any of the provisions of the indenture as necessary to permit or facilitate the issuance of debt securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of debt securities in uncertificated form;
|
•
|
to secure the debt securities;
|
•
|
to add or appoint a successor or separate trustee;
|
•
|
to cure any ambiguity, defect or inconsistency;
|
•
|
to supplement any of the provisions of the indenture as necessary to permit or facilitate the defeasance and discharge of any series of debt securities, provided that the interests of the holders of such debt securities are not adversely affected in any material respect;
|
•
|
to make any other change that would not adversely affect the holders of the debt securities of such series;
|
•
|
to make any change necessary to comply with any requirement of the SEC in connection with the qualification of the Base Indenture or any supplemental indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”);
|
•
|
to conform the Base Indenture to the Description of Debt Securities included in the applicable registration statement filed by the Company with the SEC; and
|
•
|
to reflect the issuance of additional debt securities of a particular series as permitted by the indenture.
|
•
|
make any change to the percentage of principal amount of debt securities the holders of which must consent to an amendment, modification, supplement or waiver;
|
•
|
reduce the rate of or extend the time of payment for interest on any debt securities;
|
•
|
reduce the principal amount or extend the stated maturity of any debt securities;
|
•
|
reduce the redemption or repurchase price of any series of debt securities, change the date on which any series of debt securities is subject to redemption or repurchase or add redemption provisions to the debt securities;
|
•
|
make any debt securities payable in money other than that stated in the indenture or the debt securities;
|
•
|
impair the right to institute suit for the enforcement of any payment on or with respect to the debt securities; or
|
•
|
make any change in the ranking or priority of any debt securities that would adversely affect the holder of such debt securities.
|
(a)
|
Broadridge irrevocably deposits in trust with the trustee money or U.S. government securities or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms, will provide money in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay principal and interest when due on all the debt securities being defeased to maturity;
|
(b)
|
no default or event of default with respect to the debt securities of such series has occurred and is continuing on the date of such deposit, or, with respect to an event of default involving bankruptcy, at any time in the period ending on the 91st day after the date of deposit;
|
(c)
|
in the case of the legal defeasance option, Broadridge delivers to the trustee an opinion of counsel stating that:
|
(1)
|
Broadridge has received from the Internal Revenue Service a ruling, or
|
(2)
|
since the date of the indenture there has been a change in the applicable U.S. federal income tax law, to the effect, in either case, that and based thereon such opinion of counsel shall confirm that the holders of the debt securities of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such defeasance has not occurred;
|
(d)
|
in the case of the covenant defeasance option, Broadridge delivers to the trustee an opinion of counsel to the effect that the holders of the debt securities of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and
|
(e)
|
Broadridge delivers to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent to the defeasance and discharge of the debt securities of any series have been complied with as required by the indenture.
|
•
|
the Notes are senior unsecured obligations of Broadridge and rank equally in right of payment with all other existing and future unsecured and unsubordinated debt obligations of Broadridge;
|
•
|
the Notes are obligations exclusively of Broadridge and are not guaranteed by any of its subsidiaries;
|
•
|
the 2020 Notes are initially limited to $400.0 million aggregate principal amount and the 2026 Notes are initially limited to $500.0 million aggregate principal amount (each series is subject to the rights of Broadridge to issue additional Notes as described under “—Further Issuances” below);
|
•
|
the 2020 Notes accrue interest at a rate of 3.950% per year and the 2026 Notes accrue interest at a rate of 3.400% per year;
|
•
|
interest accrues on the 2020 Notes from the most recent interest payment date to or for which interest has been paid or duly provided for (or if no interest has been paid or duly provided for, from the issue date of the 2020 Notes), payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2014;
|
•
|
interest accrues on the 2026 Notes from the most recent interest payment date to or for which interest has been paid or duly provided for (or if no interest has been paid or duly provided for, from the issue date of the 2026 Notes), payable semiannually in arrears on June 27 and December 27 of each year, beginning on December 27, 2016;
|
•
|
the 2020 Notes will mature on September 1, 2020 and 2026 Notes will mature on June 27, 2026, unless, in each case, redeemed or repurchased prior to the applicable maturity date;
|
•
|
Broadridge may redeem the Notes, in whole or in part, at any time at its option as described under “—Optional Redemption” below;
|
•
|
Broadridge may be required to repurchase the Notes in whole or in part at the option of the applicable holders in connection with the occurrence of a “change of control repurchase event” as described under “—Purchase of Notes Upon a Change of Control Repurchase Event” below;
|
•
|
the Notes are issued in registered form in denominations of $2,000 and integral multiples of $1,000 in excess thereof;
|
•
|
the Notes are represented by one or more global notes registered in the name of a nominee of DTC (as defined below), but in certain circumstances may be represented by Notes in definitive form (see “—Book-entry; Delivery and Form; Global Notes” below); and
|
•
|
the Notes are exchangeable and transferable at the office or agency of Broadridge maintained for such purposes (which initially will be the corporate trust office of the trustee).
|
•
|
100% of the aggregate principal amount of the applicable Notes to be redeemed on the redemption date; or
|
•
|
the sum of the present values of the Remaining Scheduled Payments.
|
•
|
the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published
|
•
|
if that release, or any successor release, is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date.
|
(1)
|
accept for payment all the applicable Notes or portions of applicable Notes properly tendered pursuant to its offer;
|
(2)
|
deposit with the paying agent an amount equal to the aggregate purchase price in respect of all the applicable Notes or portions of applicable Notes properly tendered; and
|
(3)
|
deliver or cause to be delivered to the trustee Notes properly accepted, together with an officers’ certificate stating the aggregate principal amount of Notes being purchased by Broadridge.
|
(a)
|
Broadridge irrevocably deposits in trust with the trustee money or U.S. government securities or a combination thereof, which through the payment of interest thereon and principal thereof in accordance with their terms, will provide money in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay principal and interest when due on all the debt securities being defeased to maturity,
|
(b)
|
no default or event of default with respect to applicable Notes has occurred and is continuing on the date of such deposit, or, with respect to an event of default involving bankruptcy, at any time in the period ending on the 91st day after the date of deposit,
|
(c)
|
in the case of the Notes legal defeasance option, Broadridge delivers to the trustee an opinion of counsel stating that:
|
(1)
|
Broadridge has received from the Internal Revenue Service a ruling, or
|
(2)
|
since the date of the indenture there has been a change in the applicable U.S. federal income tax law, to the effect, in either case, that and based thereon such opinion of counsel shall confirm that the holders of the debt securities of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such defeasance has not occurred,
|
(d)
|
in the case of the Notes covenant defeasance option, Broadridge delivers to the trustee an opinion of counsel to the effect that the holders of the applicable Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred, and
|
(e)
|
Broadridge delivers to the trustee an officer’s certificate and an opinion of counsel, each stating that all conditions precedent to the defeasance and discharge of the applicable Notes have been complied with as required by the applicable Notes Indenture.
|
Eligible Compensation
|
|
$300,000
|
|
Annual Deferral Amount
|
|
$50,000
|
|
Compensation under 401(k) Plan
|
|
$250,000
|
|
Limitation under Section 401(a)(17)
|
|
$280,000
|
|
Matching Employer Contribution Percentage
|
70
|
%
|
Eligible Compensation
|
|
$300,000
|
|
Annual Deferral Amount
|
|
$50,000
|
|
Compensation under 401(k) Plan
|
|
$250,000
|
|
Limitation under Section 401(a)(17)
|
|
$280,000
|
|
Employer Non-Elective Contribution Percentage
|
2.50
|
%
|
Name:
|
|
State or other Jurisdiction of Incorporation:
|
Access Data Corp.
|
|
Delaware
|
ActivePath Solutions Ltd.
|
|
Israel
|
Bonaire Software Solutions, LLC
|
|
Massachusetts
|
Broadridge Analytics Solutions Limited
|
|
United Kingdom
|
Broadridge Asia Pacific Limited
|
|
Hong Kong
|
Broadridge (Australia) Pty. Ltd.
|
|
Australia
|
Broadridge Business Process Outsourcing, LLC
|
|
Delaware
|
Broadridge Business Process Outsourcing (Canada), Inc.
|
|
Canada
|
Broadridge City Networks (UK) Limited
|
|
United Kingdom
|
Broadridge Corporate Issuer Solutions, Inc.
|
|
Pennsylvania
|
Broadridge Customer Communications Canada, ULC
|
|
British Columbia
|
Broadridge Czech Republic s.r.o.
|
|
Czech Republic
|
Broadridge (Deutschland) GmbH
|
|
Germany
|
Broadridge Financial Solutions International, Ltd.
|
|
United Kingdom
|
Broadridge Financial Solutions (India) Private Limited
|
|
India
|
Broadridge Financial Solutions Ltd.
|
|
United Kingdom
|
Broadridge Financial Solutions (Canada) Corp.
|
|
Canada
|
Broadridge Fixed Income Liquidity Solutions, LLC (1)
|
|
Delaware
|
Broadridge Fluent Solutions, LLC
|
|
Delaware
|
Broadridge France SAS
|
|
France
|
Broadridge FX and Liquidity Solutions, LLC
|
|
Delaware
|
Broadridge Holdings, LLC
|
|
Delaware
|
Broadridge Investor Communications Corporation
|
|
Canada
|
Broadridge Investor Communication Solutions, Inc.
|
|
Delaware
|
Broadridge (Japan) Ltd.
|
|
Japan
|
Broadridge Mail, LLC
|
|
Delaware
|
Broadridge Managed Solutions, Inc.
|
|
Delaware
|
Broadridge Nederland I B.V.
|
|
Netherlands
|
Broadridge Nederland II B.V.
|
|
Netherlands
|
Broadridge Nederland III B.V.
|
|
Netherlands
|
Broadridge Output Solutions, Inc.
|
|
Delaware
|
Broadridge Poland sp. z o.o.
|
|
Poland
|
Broadridge Rus LLC
|
|
Russia
|
Broadridge Securities Processing Solutions, LLC
|
|
Delaware
|
Broadridge (Singapore) Private Limited
|
|
Singapore
|
Broadridge Software Limited
|
|
Canada
|
Broadridge SPS, LLC
|
|
Delaware
|
Broadridge (Suisse) S.A.
|
|
Switzerland
|
Broadridge Trading Trf. Corp.
|
|
Delaware
|
BR REC, LLC
|
|
New York
|
BR NYC Solutions, Inc.
|
|
Delaware
|
BR ICS (Canada) ULC
|
|
Nova Scotia
|
Name:
|
|
State or other Jurisdiction of Incorporation:
|
BR (Canada) Holdings Inc.
|
|
Ontario
|
FundAssist Limited
|
|
Ireland
|
Fund Buyer Focus Limited
|
|
United Kingdom
|
Fund Radar Limited
|
|
United Kingdom
|
ICJ Inc. (1)
|
|
Japan
|
Investigo Corporation
|
|
Minnesota
|
Inlet LLC (1)
|
|
Delaware
|
Message Automation Ltd
|
|
England, Wales
|
Matrix Trust Company
|
|
Colorado
|
Matrix Settlement & Clearance Services, LLC
|
|
New York
|
Matrix Financial Solutions, Inc.
|
|
Delaware
|
MWB Ventures Limited
|
|
United Kingdom
|
Paladyne Asia Limited
|
|
Hong Kong
|
Paladyne Systems Cayman
|
|
Cayman
|
Paladyne Systems Europe Ltd.
|
|
United Kingdom
|
QED Financial Systems, Inc.
|
|
New Jersey
|
Rockall Technologies Limited
|
|
Ireland
|
4sight Financial Software Limited
|
|
Scotland, UK
|
4Sight Financial Software (Australia) Pty. Ltd.
|
|
Australia
|
4sight IT Services Limited
|
|
Scotland and Wales
|
|
|
|
|
(1)
|
Less than 100% owned
|
1.
|
I have reviewed this Annual Report on Form 10-K of Broadridge Financial Solutions, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ TIMOTHY C. GOKEY
|
|
Timothy C. Gokey
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Broadridge Financial Solutions, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ JAMES M. YOUNG
|
|
James M. Young
|
|
Vice President, Chief Financial Officer
|
(a)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.
|
|
/s/ TIMOTHY C. GOKEY
|
|
Timothy C. Gokey
|
|
President and Chief Executive Officer
|
(a)
|
the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(b)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein.
|
|
/s/ JAMES M. YOUNG
|
|
James M. Young
|
|
Vice President, Chief Financial Officer
|