What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-08-12 compared with 2021-08-12 · 118 added, 215 removed, 1275 unchanged (21% of the section changed)

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Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Deloitte & Touche LLP Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Statements of Earnings for the Fiscal Years Ended June 30, 202 2 , 202 1 , and 20 20

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and the Stockholders of

Broadridge Financial Solutions, Inc.

5 Dakota Drive

Lake Success, NY 11042

To the Stockholders and the Board of Directors of Broadridge Financial Solutions, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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We also have audited the Company’s internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting of Itiviti Holding AB (“Itiviti”), which was acquired on May 12, 2021 and whose financial statements constitute 37% of total assets, and 1% of revenues of the consolidated financial statement amounts as of and for the year ended June 30, 2021.

Accordingly, our audit did not include the internal control over financial reporting at Itiviti.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Changes in Accounting Principle

As discussed in Note 2 to the financial statements, the Company changed its method of accounting for leases as of July 1, 2019 due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842).

Basis for Opinions

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A company’s internal control over financial reporting is a process designed 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.

A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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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 projections of revenues, and the selection of the terminal value growth rate and the discount rate assumptions.

The goodwill balance was $3.720 billion as of June 30, 2021, which is allocated among various reporting units.

The goodwill balance was $3,484.9 million as of June 30, 2022, which is allocated among various reporting units.

During fiscal year 2022, the Company performed the required impairment tests of Goodwill and determined that there was no impairment.

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• We tested the effectiveness of controls over goodwill, including those over the projected future operating cash flows and the selection of the discount, and terminal value growth rates.

• We performed a sensitivity analysis on the future cash flows to determine what revenue and EBIT growth rate is needed to cause an impairment for each reporting unit.

• We performed a sensitivity analysis on the projected future operating cash flows to determine what revenue and EBIT growth rate is needed to cause an impairment for each reporting unit.

• We evaluated the reasonableness of management’s projected future operating cash flows based on forecasted EBIT margins, including projections of revenues by comparing to (1) historical results for significant reporting units, (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.

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Foreign currency translation adjustments ( 247.0 ) 117.6 ( 26.4 )

Pension and post-retirement liability adjustment, net of taxes of $( 0.1 ), $ 0.9 and $ 0.9 for the years ended June 30, 2021, 2020 and 2019, respectively

Pension and post-retirement liability adjustment, net of tax (provision) benefit of $( 3.4 ), $( 0.1 ) and $ 0.9 for the years ended June 30, 2022, 2021 and 2020, respectively

10.6 0.3 ( 2.8 )

Fair market value loss on cash flow hedge, net of tax benefit of $ 2.6 , — , and — for the years ended June 30, 2021, 2020 and 2019, respectively.

Fair market value loss on cash flow hedge, net of tax (provision) benefit of $( 0.2 ), $ 2.6 , and $ — for the years ended June 30, 2022, 2021 and 2020, respectively

0.8 ( 8.2 ) —

Total other comprehensive income (loss), net ( 235.6 ) 109.7 ( 29.2 )

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Intangible assets, net (Note 10) 1,077.1 1,425.0

Deferred client conversion and start-up costs 1,232.3 773.7

Other non-current assets (Note 11) 895.3 762.5

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Current liabilities:

Current portion of long-term debt (Note 13) $ — $ 399.9

Payables and accrued expenses (Note 12) $ 1,114.9 $ 1,102.7

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Increase in Accounts receivable, net ( 85.4 ) ( 42.4 ) ( 33.5 )

Increase in Other current assets ( 29.6 ) ( 17.9 ) ( 7.3 )

(Increase) decrease in Other current assets 12.2 ( 29.6 ) ( 17.9 )

Increase (decrease) in Payables and accrued expenses ( 26.7 ) 144.3 58.6

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Comprehensive income (loss) — — — 462.5 — ( 29.2 ) 433.3

Cumulative effect of changes in accounting principle (a) — — — 102.8 — ( 1.5 ) 101.3

Cumulative effect of changes in accounting principle — — — 0.2 — — 0.2

Stock option exercises — — 42.1 — — — 42.1

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Comprehensive income (loss) — — — 547.5 — 109.7 657.2

Cumulative effect of changes in accounting principle (b) — — — 0.2 — — 0.2

Stock option exercises — — 35.0 — — — 35.0

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Balances, June 30, 2022 154.5 $ 1.6 $ 1,344.7 $ 2,824.0 $ ( 2,024.8 ) $ ( 226.3 ) $ 1,919.1

(a) Primarily reflects the adoption of accounting standards as described in Note 3, “Revenue Recognition.”

(b) Reflects the adoption of accounting standards as described in Note 2, “Summary of Significant Accounting Policies.”

Amounts may not sum due to rounding.

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Broadridge Financial Solutions, Inc.

(“Broadridge” or the “Company”), a Delaware corporation and a part of the S&P 500 ® Index (“S&P”), is a global financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, asset and wealth managers and corporate issuers.

The Company operates in two reportable segments:

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(“Matrix”), Broadridge provides mutual fund trade processing services for retirement service providers, third-party administrators, financial advisors, banks and wealth management professionals.

In addition, Broadridge provides public corporations and mutual funds with a full suite of solutions to help manage their annual meeting process, including registered and beneficial proxy materials distribution, proxy processing and tabulation services, digital voting solutions, proxy and shareholder report document management solutions, virtual shareholder meeting services and shareholder data services.

Broadridge also offers financial reporting document composition and management solutions, SEC disclosure and filing services, and registrar, stock transfer and record-keeping services through Broadridge Corporate Issuer Solutions.

In addition, Broadridge provides public corporations and mutual funds with a full suite of solutions to help manage their annual meeting process, including a full suite of annual meeting and shareholder engagement solutions such as registered and beneficial proxy materials distribution, proxy processing and tabulation services, digital voting solutions, proxy and shareholder report document management solutions, virtual shareholder meeting services and environmental, social and governance solutions.

Broadridge also offers disclosure solutions, including annual SEC filing services and capital markets transaction services.

We also provide registrar, stock transfer and record-keeping services through our transfer agency services.

We provide omni-channel customer communications solutions which include print and digital solutions to modernize technology infrastructures, simplify communications processes, accelerate digital adoption and improve the customer experience.

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The platform includes data-driven composition tools, identity and preference management, omni-channel optimization and digital communication experience, archive and information management, digital and print delivery, and analytics and reporting tools.

• Global Technology and Operations - Broadridge is a leading global provider of business solutions for capital markets, and wealth and investment management firms.

Broadridge offers advanced solutions that automate firms’ transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, margin, cash management, clearance and settlement, asset servicing, reference data management, reconciliations, securities financing and collateral optimization, compliance and regulatory reporting, and portfolio accounting and custody-related services.

In addition, Broadridge provides business process outsourcing services that support the entire trade lifecycle operations of its buy- and sell-side clients’ businesses through a combination of its technology and operations expertise.

For capital markets firms, Broadridge helps its clients lower their costs and improve the effectiveness of their businesses across the front, middle and back office.

Broadridge’s core post-trade services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management and manage risk, thereby enabling them to focus on their core business activities.

Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange-traded derivatives.

• Global Technology and Operations - Broadridge’s Global Technology and Operations business provides solutions that automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, from order capture and execution through trade confirmation, margin, cash management, clearing and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting and custody-related services.

Broadridge’s solutions provide automated straight through processing and enable buy- and sell-side financial institutions to efficiently and cost-effectively consolidate their books and records, gather and service assets under management, focus on their core businesses, and manage risk.

With Broadridge’s multi-market, multi-asset class, multi-entity and multi-currency capabilities, Broadridge provides front-to-back processing on a global basis.

In addition, Broadridge provides business process outsourcing services for its buy- and sell-side clients’ businesses.

These services combine Broadridge’s technology with its operations expertise to support the entire trade lifecycle, including securities clearing and settlement, reconciliations, record-keeping, wealth management asset servicing, and custody-related functions.

For capital markets firms, Broadridge provides a set of multi-asset, multi-entity and multi-currency post-trade and trading and connectivity solutions that support processing of securities transactions in equities, options, fixed income securities, foreign exchange, exchange-traded derivatives and mutual funds.

Provided on a software as a service (“SaaS”) basis within large user communities, Broadridge’s technology is a global solution, processing clearance and settlement in over 100 countries.

Broadridge’s solutions enable global capital markets firms to access market liquidity, drive more effective market making and efficient front-to-back trade processing.

With the 2021 acquisition of Itiviti Holding AB (“Itiviti”) (now doing business as Broadridge Trading and Connectivity Solutions), Broadridge offers a set of global front-office trade order and execution management systems, connectivity and network offerings.

Broadridge’s comprehensive wealth management platform offers capabilities across the entire wealth management lifecycle and streamlines all aspects of wealth management services, including account management, fee management and client on-boarding.

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Broadridge’s advisor solutions help advisors optimize their practice management through customer and account data aggregation and reporting.

With the recent acquisition of Itiviti Holding AB (“Itiviti”), Broadridge has strengthened its capabilities with a set of front-office trade order and execution management solutions, connectivity and network offerings which will integrate with its existing middle and back-office solutions.

Broadridge also offers buy-side technology solutions for the global investment management industry, including portfolio management, compliance and operational workflow solutions for hedge funds, family offices, alternative asset managers, traditional asset managers and the providers that service this space.

Broadridge services the global investment management industry with a range of buy-side technology solutions such as portfolio management, compliance and fee billing and operational support solutions for hedge funds, family offices, alternative asset managers, traditional asset managers and the providers that service this space including prime brokers, fund administrators and custodians.

Consolidation and Basis of Presentation .

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Amounts presented may not sum due to rounding.

Certain prior period amounts have been reclassified to conform to the current year presentation where applicable, except as it relates to Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) No.

2016-02 “Leases”, as amended (“ASU No.

Effective July 1, 2019, the Company adopted ASU No.

2016-02, as amended, by recognizing a right-of-use (“ROU”) asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption.

Under this method of adoption, the Company has not restated the prior period Consolidated Financial Statements presented to the current period presentation.

Additional information about the impact of the Company’s adoption of ASU No.

2016-02, as amended, is included in Note 2, “Summary of Significant Accounting Policies” and Note 8, “Leases”.

Certain prior period amounts have been reclassified to conform to the current year presentation where applicable.

Beginning with the first quarter of fiscal year 2022, the Company revised the foreign exchange rates used to present segment revenues and segment earnings (loss) before income taxes to further allocate the foreign exchange impact to the individual segment revenue and profit metrics.

The presentation of segment revenues and earnings (loss) before income taxes for the prior periods provided in this Form 10-K has been changed to conform to the current period presentation.

Total consolidated revenues and earnings before income taxes were not impacted.

Please refer to Note 3, “Revenue Recognition” and Note 20, “Financial Data by Segment.”

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Refer to Note 13, “Borrowings,” for a further description of the Company’s long-term fixed-rate senior notes as well as Note 7, “Fair Value of Financial Instruments” for additional details on the fair value of the Company’s financial instruments.

In addition, refer to Note 18, “Contractual Commitments, Contingencies, and Off-Balance Sheet Arrangements” for details on the Company’s cross-currency swap derivative contracts which are carried at fair value.

Property, Plant and Equipment.

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Deferred Client Conversion and Start-Up Costs.

Direct costs incurred to set up or convert a client’s systems to function with the Company’s technology, that are expected to be recovered, are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences after client acceptance when the processing term begins.

The Company evaluates the carrying value of deferred client conversion and start-up costs for impairment on the basis of whether these costs are fully recoverable from the expected future undiscounted net operating cash flows of the client to which the deferred costs relate.

These deferred costs are reflected in Other non-current assets in the Consolidated Balance Sheets at June 30, 2021 and June 30, 2020, respectively.

Refer to Note 11, “Other Non-Current Assets” for a further description of the Company’s Deferred client conversion and start-up costs.

Direct costs incurred to set up or convert a client’s systems to function with the Company’s technology, and are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences when the client goes live with the Company’s services.

The key judgment for determining the amount of costs to be deferred relates to the extent to which such costs are recoverable.

This estimate includes (i) projected future client revenues, including variable revenues, offset by an estimate of conversion costs including an estimate of onboarding costs as well as ongoing operational costs, and (ii) an estimate of the expected client life.

This is also the basis for which the Company assesses such costs for impairment.

The two main categories of assets comprising Deferred client conversion and start-up costs of $ 1,232.3 million as of June 30, 2022 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $ 1,224.7 million, as well as other start-up costs of $ 7.7 million.

Deferred client conversion and start-up costs of $ 773.7 million as of June 30, 2021 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $ 761.7 million, as well as other start-up costs of $ 12.0 million.

Deferred Sales Commission Costs.

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The estimates of long-term growth and costs are based on historical data, various internal estimates and a variety of external sources, and are developed as part of the Company’s routine, long-range planning process.

If the carrying amount of the reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess not to exceed the total amount of goodwill allocated to that reporting unit.

If the carrying amount of the reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to

that excess not to exceed the total amount of goodwill allocated to that reporting unit.

Refer to Note 10, “Goodwill and Intangible Assets, Net” for a further description on the Company’s accounting for goodwill.

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Refer to Note 17, “Income Taxes” for a further description of the Company’s income taxes.

Advertising Costs.

Advertising cos ts are expensed at the time the advertising takes place.

Total advertising costs were $ 9.8 million, $ 6.8 million and $ 4.1 million for the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

Concentration of Risk.

The majority of our clients operate in the financial services industry.

Our largest single client in each of our fiscal years 2021, 2020 and 2019 accounted for approximately 6 % of our consolidated revenues.

Our largest single client in each of our fiscal years 2022, 2021 and 2020 accounted for approximately 7 %, 6 %, and 6 % of our consolidated revenues.

New Accounting Pronouncements.

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2016-13 did not have a material impact on the Company's Consolidated Financial Statements.

In February 2016, the FASB issued ASU No.

2016-02, as subsequently amended by ASU No.

2018-10, “Codification Improvements to Topic 842, Leases,” ASU No.

2018-11, “Leases (Topic 842):

Targeted Improvements,” and ASU No.

2018-20, “Leases (Topic 842):

Narrow Scope Improvements for Lessors" (collectively referred to herein as “ASU No.

2016-02, as amended”).

Under ASU No.

2016-02, as amended, all lease arrangements, with certain limited exceptions, exceeding a twelve-month term must now be recognized as assets and liabilities on the balance sheet of the lessee by recording a ROU asset and corresponding lease obligation generally equal to the present value of the future lease payments over the lease term.

Further, the income statement will reflect lease expense for leases classified as operating and amortization/interest expense for leases classified as financing, determined using classification criteria substantially similar to the current lease guidance for distinguishing between an operating and capital lease.

2016-02, as amended, also contains certain additional qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments.

2016-02, as amended, was effective for the Company in the first quarter of fiscal year 2020 and could have been adopted using either a modified retrospective basis which required adjustment to all comparative periods presented in the consolidated financial statements, or by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of initial application.

Accordingly, in the first quarter of fiscal year 2020, the Company adopted ASU No.

2016-02, as amended, by recognizing a ROU asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption.

Under this method of adoption, the Company has not restated the prior period Consolidated Financial Statements presented to the current period presentation.

The Company elected the transition package of three practical expedients permitted under the transition guidance in ASU No.

2016-02, as amended, to not reassess prior conclusions related to whether (i) a contract contains a lease, (ii) the classification of an existing lease, and (iii) the accounting for initial direct costs.

The Company also elected accounting policies to (i) not separate the non-lease components of a contract from the lease component to which they relate, and (ii) not recognize assets or liabilities for leases with a term of twelve months or less and no purchase option that the Company is reasonably certain of exercising.

On the Consolidated Balance Sheet as of July 1, 2019, the adoption of ASU No.

2016-02, as amended, resulted in the recognition of lease liabilities of $ 252.0 million and ROU assets of $ 235.4 million, which include the impact of existing deferred rents and tenant improvement allowances for operating leases, as well as a cumulative-effect adjustment to the opening balance of retained earnings of $ 0.2 million.

The adoption of ASU No.

2016-02, as amended, did not have a material impact on the Consolidated Statements of Earnings, the Consolidated Statements of Comprehensive Income, the Consolidated Statements of Cash Flows, or the Consolidated Statements of Stockholders’ Equity.

Subsequent Events.

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Event-driven activity is impacted by financial market conditions and changes in regulatory compliance requirements, resulting in fluctuations in the timing and levels of event-driven fee revenues.

Distribution revenues primarily include revenues related to the physical mailing of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Matrix administrative services.

In the second quarter of fiscal year 2021, the Company changed its presentation of disaggregated revenue by product line disclosures to reflect internal realignment of the Company’s revenue reporting, specifically as it relates to recurring fee revenues.

Presentation of disaggregated revenue by product line disclosures in prior periods have been changed to conform to the current period presentation.

Distribution revenues primarily include revenues related to the physical mailing and distribution of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Matrix administrative services.

Years ended June 30,

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Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

During the fiscal year ended June 30, 2022, contract assets increased primarily due to an increase in software term license revenues recognized but not yet invoiced and contract liabilities increased primarily due to growth in revenues and the timing of client payments.

During the fiscal year ended June 30, 2021, contract liabilities increased primarily due to a combination of recent acquisitions, growth in revenues and the timing of client payments.

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The Company recognized $ 158.7 million of revenue during the fiscal year ended June 30, 2021 that was included in the contract liability balance as of June 30, 2020.

The Company recognized $ 96.4 million of revenue during fiscal year ended June 30, 2019 that was included in the contract liability balance as of July 1, 2018.

The Company recognized $ 141.2 million of revenue during fiscal year ended June 30, 2020 that was included in the contract liability balance as of June 30, 2019.

WEIGHTED-AVERAGE SHARES OUTSTANDING

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Assets acquired and liabilities assumed in business combinations are recorded on the Company’s Consolidated Balance Sheets as of the respective acquisition date based upon the estimated fair values at such date.

The results of operations of the businesses acquired by the Company are included in the Company’s Consolidated Statements of Earnings beginning on the respective dates of acquisition.

The results of operations of the businesses acquired by the Company are included in the Company’s Consolidated Statements of Earnings since the respective dates of acquisition.

The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed is allocated to Goodwill.

The Company is providing unaudited pro forma supplemental information for the Itiviti Acquisition as the Company deemed this acquisition to be material to the Company’s operating results.

During the fiscal year ended June 30, 2022, there were no material acquisitions.

The Company is providing unaudited pro forma supplemental information for the acquisition of Itiviti as the acquisition was material to the Company’s operating results.

Unaudited pro forma supplemental financial information for all acquisitions, excluding Itiviti, is not provided as the impact of these acquisitions on the Company’s operating results, financial position or cash flows was not material for any acquisition individually.

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In May 2021, the Company acquired Itiviti, a leading provider of trading and connectivity technology to the capital markets industry.

The acquisition of Itiviti extends the Company’s market-leading back office capabilities into the front office and deepens its multi-asset class solutions, better enabling the Company to help its clients adapt to a rapidly evolving marketplace.

The acquisition of Itiviti extends the Company’s back-office capabilities into the front office and deepens its multi-asset class solutions, better enabling the Company to help its clients adapt to a rapidly evolving marketplace.

Itiviti is included in the Company’s GTO reportable segment.

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• Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and five-year life, respectively.

The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities.

The following summarizes the allocation of purchase price for the Itiviti acquisition (in millions):

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AdvisorStream is included in the Company’s GTO reportable segment.

• The contingent consideration liability is payable through fiscal year 2024 upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $ 12.0 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, 2022 is $ 8.0 million.

• Goodwill is not tax deductible.

• Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a five-year life and five-year life, respectively.

The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities.

The following represents the fiscal year 2020 acquisitions:

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• Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and three-year life, respectively.

The following represents the fiscal year 2019 acquisitions:

Fiscal Year 2019 Acquisitions:

BUSINESS COMBINATIONS

Financial information on each transaction is as follows:

Rockall RPM TD Ameritrade* Total

(in millions)

Cash payments, net of cash acquired $ 34.9 $ 258.3 $ 61.5 $ 354.7

Deferred payments, net

0.5 40.9 — 41.4

Contingent consideration liability

7.0 0.8 — 7.9

Aggregate purchase price

$ 42.4 $ 300.1 $ 61.5 $ 404.0

Net tangible assets acquired / (liabilities assumed)

$ ( 2.9 ) $ 6.8 $ — $ 3.9

31.1 181.6 27.1 239.8

Intangible assets

14.2 111.7 34.4 160.3

Aggregate purchase price

$ 42.4 $ 300.1 $ 61.5 $ 404.0

* Broadridge acquired the retirement plan custody and trust assets from TD Ameritrade Trust Company.

Rockall Technologies Limited (“Rockall”)

In May 2019, the Company completed the acquisition of Rockall, a provider of securities-based lending (“SBL”) and collateral management solutions for wealth management firms and commercial banks.

The acquisition expanded Broadridge's core front-to-back office wealth capabilities, providing innovative SBL and collateral management technology solutions to help commercial banks manage risk and optimize clients' securities lending and financing needs.

Rockall is included in our GTO reportable segment.

• 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.

• The fair value of the contingent consideration liability at June 30, 2021 is $ 5.9 million.

• 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.

• In fiscal year 2020, the Company settled deferred payment obligations totaling $ 0.5 million.

RPM Technologies (“RPM”)

In June 2019, Broadridge acquired RPM, a provider of enterprise wealth management software solutions and services.

The addition of RPM’s state-of-the-art technology platforms builds upon our Canadian wealth management business, providing a solution set for the retail banking sector with enhanced mutual fund and deposit manufacturing capabilities.

RPM is included in our GTO reportable segment.

• 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.

• In fiscal year 2020, the Company settled deferred payment obligations totaling $ 40.9 million.

Retirement Plan Custody and Trust Assets from TD Ameritrade

In June 2019, Broadridge acquired the retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Company.

The acquisition expands Broadridge's suite of solutions for the growing qualified and non-qualified retirement plan services market and the support it provides for third-party administrators, financial advisors, record-keepers, banks, and brokers.

This acquisition is included in our ICS reportable segment.

• Goodwill is tax deductible.

• Intangible assets acquired consist of customer relationships, which are being amortized over a seven-year life.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

The fair value of the contingent consideration obligations are based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria.

The fair values of the contingent consideration obligations are based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria.

The measurement is based on significant inputs that are not observable in the market, therefore, the Company classifies this liability as Level 3 in the table below.

The following tables set forth the Company’s financial assets and liabilities at June 30, 2021 and 2020, respectively, which are measured at fair value on a recurring basis during the period, segregated by level within the fair value hierarchy:

The following tables set forth the Company’s financial assets and liabilities at June 30, 2022 and 2021, respectively, that are recorded at fair value, segregated by level within the fair value hierarchy:

Level 1 Level 2 Level 3 Total

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Securities 118.0 — — 118.0

Derivative asset — 101.4 — 101.4

Total assets as of June 30, 2022 $ 118.7 $ 101.4 $ — $ 220.1

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Total liabilities as of June 30, 2021 $ — $ — $ 23.2 $ 23.2

(a) Money market funds include money market deposit account balances of $ 0.0 million and $ 150.1 million as of June 30, 2021 and 2020, respectively.

(a) Money market funds include money market deposit account balances of $ 0.0 million and less than $ 0.1 million as of June 30, 2022 and 2021, respectively.

In addition, the Company has non-marketable securities with a carrying amount of $ 53.4 million as of June 30, 2022 and $ 37.5 million as of June 30, 2021 that are classified as Level 2 financial assets and included as part of Other non-current assets.

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Total Operating lease liabilities $ 273.2 $ 303.3

(a) Operating lease assets are included within Other non-current assets , and operating lease liabilities are included within Payables and accrued expenses (current portion) and Other non-current liabilities (non-current portion) in the Company’s Consolidated Balance Sheets as of June 30, 2021.

Components of Lease Cost (a)

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(a) Lease cost is included within Cost of revenues and Selling, general and administrative expenses, dependent upon the nature and use of the ROU asset, in the Company’s Consolidated Statements of Earnings.

Rent expense for all operating leases was $ 49.0 million during the year ended June 30, 2019 (under Accounting Standards Codification (“ASC”) 840 (Leases)).

Supplemental Cash Flow Information

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(in millions)

Goodwill, gross, at July 1, 2019 $ 913.1 $ 586.9 $ 1,500.0

Goodwill, gross, at June 30, 2020 $ 1,039.5 $ 635.0 $ 1,674.5

Additions — 1,958.2 1,958.2

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(a) Fair value adjustments includes adjustments to goodwill as part of finalization of the purchase price allocations.

Additions for the fiscal year ended June 30, 2021 include $ 1,932.4 million and $ 25.8 million, for the acquisition of Itiviti and AdvisorStream, respectively.

Additions for the fiscal year ended June 30, 2020 include $ 17.6 million, $ 84.4 million, $ 44.2 million and $ 39.2 million for the acquisitions of Shadow Financial, Fi360, ClearStructure and FundsLibrary, respectively.

Additions for the fiscal year ended June 30, 2021 relates to the acquisitions of Itiviti and AdvisorStream.

During fiscal years 2022, 2021 and 2020, the Company performed the required impairment tests of Goodwill and determined that there was no impairment.

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(in millions)

Deferred client conversion and start-up costs $ 773.7 $ 433.8

ROU assets (a) $ 222.8 $ 262.0

Long-term investments 221.6 194.0

Deferred sales commissions costs 108.6 104.4

Contract assets (b) 118.5 89.8

Deferred sales commissions costs 114.2 108.6

Long-term broker fees 45.1 48.7

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Total $ 895.3 $ 762.5

(a) ROU assets represent the Company’s right to an underlying asset for the lease term.

(a) ROU assets represent the Company’s right to use an underlying asset for the lease term.

Please refer to Note 8, “Leases” for a further discussion.

(b) Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts to be collected under software term licenses and certain other client contracts.

(c) Represents deferred data center costs associated with the Company’s information technology services agreements with International Business Machines Corporation (“IBM”).

Please refer to Note 18, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.

9 unchanged sentences

Customer deposits 58.7 55.5

Accrued taxes 42.6 38.5

Operating lease liabilities 45.4 40.2

Accrued taxes 40.9 42.6

Other 82.2 102.9

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(in millions)

Current portion of long-term debt

Fiscal 2014 Senior Notes September 2020 $ — $ — $ 399.9 $ — $ —

Total $ — $ — $ 399.9 $ — $ —

Long-term debt, excluding current portion

Long-term debt

Fiscal 2021 Revolving Credit Facility:

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Total Senior Notes $ 2,250.0 $ 2,232.3 $ 2,229.8 $ — $ 1,979.8

Total long-term debt $ 3,914.4 $ 3,887.6 $ 1,387.6 $ 1,385.6 $ 4,025.9

Total debt $ 3,815.0 $ 3,793.0 $ 3,887.6 $ 1,475.0 $ 3,544.8

3 unchanged sentences

Fiscal 2021 Revolving Credit Facility:

In April 2021, the Company entered into an amended and restated $ 1.5 billion five-year revolving credit facility (the “Fiscal 2021 Revolving Credit Facility”), which replaced the $ 1.5 billion five-year revolving credit facility entered into during March 2019 (the “Fiscal 2019 Revolving Credit Facility”) (together the “Revolving Credit Facilities”).

In April 2021, the Company entered into an amended and restated $ 1.5 billion five-year revolving credit facility, as further amended on December 23, 2021, (the “Fiscal 2021 Revolving Credit Facility”), which replaced the $ 1.5 billion five-year revolving credit facility entered into during March 2019 (the “Fiscal 2019 Revolving Credit Facility”) (together the “Revolving Credit Facilities”).

The Fiscal 2021 Revolving Credit Facility is comprised of a $ 1.1 billion U.S.

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The Company may voluntarily prepay, in whole or in part and without premium or penalty, borrowings under the Fiscal 2021 Revolving Credit Facility in accordance with individual drawn loan maturities.

The Fiscal 2021 Revolving Credit Facility is subject to certain

covenants, including a leverage ratio.

The Fiscal 2021 Revolving Credit Facility is subject to certain covenants, including a leverage ratio.

At June 30, 2022, the Company is in compliance with all covenants of the Fiscal 2021 Revolving Credit Facility.

Fiscal 2021 Term Loans:

In March 2021, the Company entered into a term credit agreement (“Term Credit Agreement”) providing for term loan commitments in an aggregate principal amount of $ 2.55 billion, comprised of a $ 1.0 billion tranche (“Tranche 1”) and a $ 1.55 billion tranche (“Tranche 2,” together with Tranche 1, the “Fiscal 2021 Term Loans”).

In March 2021, the Company entered into a term credit agreement, as amended on December 23, 2021, (“Term Credit Agreement”) providing for term loan commitments in an aggregate principal amount of $ 2.55 billion, comprised of a $ 1.0 billion tranche (“Tranche 1”) and a $ 1.55 billion tranche (“Tranche 2,” together with Tranche 1, the “Fiscal 2021 Term Loans”).

The Company borrowed the Fiscal 2021 Term Loans in May 2021 in order to finance the Itiviti acquisition.

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Fiscal 2016 Senior Notes:

In August 2013, the Company completed an offering of $ 400.0 million in aggregate principal amount of senior notes (the “Fiscal 2014 Senior Notes”), which bore interest at a rate of 3.95 % per annum.

On September 1, 2020 the Company repaid in full the $ 400.0 million in Fiscal 2014 Senior Notes that were outstanding at their maturity date.

Fiscal 2016 Senior Notes:

In June 2016, the Company completed an offering of $ 500.0 million in aggregate principal amount of senior notes (the “Fiscal 2016 Senior Notes”).

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The Company may redeem the Fiscal 2021 Senior Notes in whole or in part at any time before their maturity.

The fair value of the fixed-rate Fiscal 2021 Senior Notes at June 30, 2021 was $ 1.02 billion, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

The fair value of the fixed-rate Fiscal 2021 Senior Notes at June 30, 2022 and June 30, 2021 was $ 837.5 million and $ 1.02 billion, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

The Fiscal 2021 Revolving Credit Facility, Fiscal 2021 Term Loans, Fiscal 2016 Senior Notes, Fiscal 2020 Senior Notes and Fiscal 2021 Senior Notes are senior unsecured obligations of the Company and are ranked equally in right of payment.

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From time to time, the Company may repurchase shares of its common stock under its authorized share repurchase programs.

The Company did not repurchase shares in fiscal year 2021 under our share repurchase program as compared to 0.4 million shares repurchased in fiscal year 2020, which excludes shares withheld by the Company to cover payroll taxes on the vesting of RSU awards, which are also accounted for as treasury stock.

The Company did no t repurchase shares in fiscal years 2022 or 2021 under our share repurchase program, which excludes shares withheld by the Company to cover payroll taxes on the vesting of RSU awards, which are also accounted for as treasury stock.

The Company considers several factors in determining when to execute share repurchases, including, among other things, actual and potential acquisition activity, cash balances and cash flows, issuances due to employee benefit plan activity, and market conditions.

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Other Post-employment Benefit Obligations.

The Company sponsors certain non-US benefits-related plans covering certain eligible international employees who are eligible under the terms of their employment in their respective countries.

The Company sponsors certain non-U.S.

benefits-related plans covering certain eligible international employees who are eligible under the terms of their employment in their respective countries.

These plans are generally unfunded.

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Stock-based compensation - excess tax benefits (“ETB”) ( 18.1 ) ( 2.7 ) ( 16.9 ) ( 2.4 ) ( 15.6 ) ( 2.7 )

Tax Act Items — — — — ( 0.5 ) ( 0.1 )

Tax Credits and Foreign-Derived Intangible Income Deduction (“FDII”) ( 16.6 ) ( 2.5 ) ( 8.8 ) ( 1.3 ) ( 9.2 ) ( 1.6 )

Other 3.9 0.6 7.2 1.0 3.3 0.6

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The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2022 were $ 133.1 million and 19.8 %, compared to $ 148.7 million and 21.4 %, for the fiscal year ended June 30, 2021, respectively.

The increase in the effective tax rate for the fiscal year ended June 30, 2021 compared to the fiscal year ended June 30, 2020 was primarily driven by lower discrete benefits, partially offset by higher ETB of $ 16.9 million for the fiscal year ended June 30, 2021 compared to $ 15.6 million for the fiscal year ended June 30, 2020.

The decrease in the effective tax rate for the fiscal year ended June 30, 2022 compared to the fiscal year ended June 30, 2021 was primarily driven by higher total discrete benefits, in addition to higher ETB of $ 18.1 million for the fiscal year ended June 30, 2022 compared to $ 16.9 million for the fiscal year ended June 30, 2021.

The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2021 were $ 148.7 million and 21.4 %, compared to $ 117.0 million and 20.2 %, for the fiscal year ended June 30, 2020, respectively.

The decrease in the effective tax rate for the fiscal year ended June 30, 2020 compared to the fiscal year ended June 30, 2019 was primarily driven by higher discrete benefits, partially offset by lower ETB of $ 15.6 million for the fiscal year ended June 30, 2020 compared to $ 19.3 million for the fiscal year ended June 30, 2019.

As of June 30, 2022, the Company had approximately $ 735.7 million of accumulated earnings and profits attributable to foreign subsidiaries.

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Unremitted earnings 14.7 16.3

Cross Currency Swap and Treasury-Locks 22.4 —

Other 16.7 10.9

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The $ 9.7 million, $ 2.9 million, and $ 9.5 million gross decreases in fiscal years 2022, 2021 and 2020, respectively, for prior period tax positions related to certain tax audit settlements and certain state, federal and foreign statute of limitation expirations.

During the fiscal year ended June 30, 2021, the Company adjusted accrued interest by approximately less than $ 0.1 million and recognized a total liability for interest on unrecognized tax positions of $ 3.6 million;

During the fiscal year ended June 30, 2022, the Company adjusted accrued interest by $ 0.2 million and recognized a total liability for interest on unrecognized tax positions of $ 3.8 million;

in the fiscal year ended June 30, 2021, the Company adjusted accrued interest by less than $ 0.1 million and recognized a total liability for interest on unrecognized tax positions of $ 3.6 million;

in the fiscal year ended June 30, 2019, the Company adjusted accrued interest by approximately $( 0.1 ) million and recognized a total liability for interest on unrecognized tax positions of $ 3.6 million.

in the fiscal year ended June 30, 2020, the Company adjusted accrued interest by less than $ 0.1 million and recognized a total liability for interest on unrecognized tax positions of $ 3.6 million.

The Company is regularly subject to examination of its income tax returns by U.S.

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The Company may renew the term of the Amended IT Services Agreement for up to one additional 12 -month period.

On July 28, 2021, the Company entered into a novation agreement with IBM (the “U.S.

Novation Agreement”) pursuant to which IBM novated the Amended IT Services Agreement to Kyndryl, Inc., an entity formed in connection with IBM’s spin-off of its managed infrastructure services business (“Kyndryl”), effective September 1, 2021.

Fixed minimum commitments remaining under the Amended IT Services Agreement at June 30, 2022 are $ 145.8 million through fiscal year 2027, the final year of the Amended IT Services Agreement.

In December 2019, the Company and IBM entered into an information technology agreement for private cloud services (the “IBM Private Cloud Agreement”) under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks.

The IBM Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030.

As a result of the IBM Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and such transferred employees are expected to continue providing services to the Company on behalf of IBM under the IBM Private Cloud Agreement.

Pursuant to the IBM Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM.

As of June 30, 2020, the Hardware was classified as assets held for sale with a carrying amount of $ 18.0 million and was included in the Company’s Other current assets line item on the Consolidated Balance Sheets.

In December 2019, the Company and IBM entered into an information technology agreement for private cloud services (the “Private Cloud Agreement”) under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks.

The Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030.

As a result of the Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and such transferred employees are expected to continue providing services to the Company on behalf of IBM under the Private Cloud Agreement.

Pursuant to the Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM.

The transfer of the Hardware and Maintenance Contracts to IBM closed on September 30, 2020 for a selling price of $ 18.0 million.

Fixed minimum commitments remaining under the IBM Private Cloud Agreement at June 30, 2021 are $ 207.0 million through March 31, 2030, the final year of the contract.

On July 28, 2021, IBM novated the Private Cloud Agreement to Kyndryl, effective September 1, 2021, pursuant to the U.S.

Novation Agreement.

Fixed minimum commitments remaining under the Private Cloud Agreement at June 30, 2022 are $ 175.2 million through March 31, 2030, the final year of the contract.

In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia.

The EU IT Services Agreement would have expired in October 2023.

In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premise solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”).

In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premises solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”).

The Company has the right to renew the term of the Amended EU IT Services Agreement for up to one additional 12 -month period or one additional 24 -month period.

On August 19, 2021, the Company entered into a novation agreement with IBM UK pursuant to which IBM UK novated the EU IT Services Agreement to Kyndryl UK Limited, effective September 1, 2021.

Fixed minimum commitments remaining under the Amended EU IT Services Agreement at June 30, 2022 are $ 26.0 million through fiscal year 2029, the final year of the contract.

The total annual expenses related to these IBM agreements and certain other data center arrangements was $ 176.7 million, $ 118.7 million, and $ 106.1 million, for the fiscal years ended June 30, 2021, 2020 and 2019, respectively.

The total annual expenses related to these Kyndryl agreements and certain other data center arrangements was $ 198.3 million, $ 176.7 million, and $ 118.7 million, for the fiscal years ended June 30, 2022, 2021, and 2020, respectively.

The following table summarizes the capitalized costs related to data center agreements as of June 30, 2022:

6 unchanged sentences

Total accumulated amortization ( 46.6 ) ( 5.4 ) ( 52.0 )

Net Deferred IBM Costs $ 19.4 $ 3.5 $ 23.0

The following table summarizes the respective total annual amortization expense of capitalized costs related to data center agreements:

Years ended June 30,

2021 2020 2019

(in millions)

Amended IT Services Agreement $ 3.2 $ 4.2 $ 5.3

Amended EU IT Services Agreement 1.2 1.8 0.5

Total expenses $ 4.5 $ 6.1 $ 5.8

The Company has an equity method investment that is a variable interest in a variable interest entity, the Company is not the primary beneficiary and therefore does not consolidate the investee.

The Company’s potential maximum loss exposure related to this unconsolidated investment totaled $ 25.3 million as of June 30, 2021, which represents the carrying value of the Company's investment and is recorded in Other non-current assets in the Company’s Consolidated Balance Sheets.

In addition, as of June 30, 2021, the Company has a future commitment to fund this investee for up to an additional $ 7.0 million if certain future funding milestones are met.

Additional funding provided by the Company to the investee as a result of meeting the future funding milestones would increase the Company’s corresponding potential maximum loss exposure by that amount.

Net Deferred Kyndryl Costs $ 16.4 $ 2.3 $ 18.7

Cloud Services Resale Agreement

On December 31, 2021, the Company and Presidio Networked Solutions LLC (“Presidio”), a reseller of services of Amazon Web Services, Inc.

and its affiliates (collectively, “AWS”), entered into an Order Form and AWS Private Pricing Addendum, dated December 31, 2021 (the “Order Form”), to the Cloud Services Resale Agreement, dated December 15, 2017, as amended (together with the Order Form, the “AWS Cloud Agreement”), whereby Presidio will resell to the Company certain public cloud infrastructure and related services provided by AWS for the operation, management and support of the Company’s cloud global distributed platforms and products.

The AWS Cloud Agreement expires on December 31, 2026.

Fixed minimums remaining under the AWS Cloud Agreement at June 30, 2022 are $ 226.8 million in the aggregate through December 31, 2026.

The Company has an equity method investment that is a variable interest in a variable interest entity.

The Company is not the primary beneficiary and therefore does not consolidate the investee.

The Company’s potential maximum loss exposure related to its unconsolidated investment in this variable interest entity totaled $ 42.7 million as of June 30, 2022, which represents the carrying value of the Company's investment.

In addition, as of June 30, 2022, the Company also has a future commitment to fund $ 0.9 million to one of the Company’s other investees.

Contractual Obligations

The Company has obligations under the Amended IT Services Agreement, the Amended EU IT Services Agreement, the IBM Private Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements.

The Company has obligations under the Amended IT Services Agreement, the Amended EU IT Services Agreement, the Private Cloud Agreement, the AWS Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements.

The following table summarizes the total expenses related to these agreements:

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Total expenses $ 407.1 $ 345.4 $ 247.9

The future minimum commitments at June 30, 2021 for the aforementioned Amended IT Services Agreement, the Amended EU IT Services Agreement, the IBM Private Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements are as follows:

The future minimum commitments at June 30, 2022 for the aforementioned Amended IT Services Agreement, the Amended EU IT Services Agreement, the Private Cloud Agreement, the AWS Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements are as follows:

Years Ending June 30, (in millions)

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The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments.

The Company was not a party to any outstanding derivative financial instruments at June 30, 2021 or June 30, 2020.

In January 2022, the Company entered into a series of cross-currency swap transactions which were designated as a new investment hedge against a portion of the Company’s net investment in its Euro functional subsidiaries.

The Company was not a party to any outstanding derivative financial instruments at June 30, 2021.

In January 2022, the Company executed a series of cross-currency swap derivative contracts with an aggregate notional amount of EUR 880 million which are designated as net investment hedges to hedge a portion of its net investment in its subsidiaries whose functional currency is the Euro.

The cross-currency swap derivative contracts are agreements to pay fixed-rate interest in Euros and receive fixed-rate interest in U.S.

Dollars, thereby effectively converting a portion of the Company’s U.S.

Dollar denominated fixed-rate debt into Euro denominated fixed-rate debt.

The cross-currency swaps mature in May 2031 to coincide with the maturity of the Fiscal 2021 Senior Notes.

Accordingly, foreign currency transaction gains or losses on the qualifying net investment hedge instruments are recorded as foreign currency translation within other comprehensive income (loss), net in the Consolidated Statements of Comprehensive Income and will remain in Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets until the sale or complete liquidation of the underlying foreign subsidiary.

At June 30, 2022, the Company’s position on the cross-currency swaps was an asset of $ 101.4 million, and is recorded as part of Other non-current assets on the Consolidated Balance Sheets with the offsetting amount recorded as part of Accumulated other comprehensive income (loss), net of tax.

The Company has elected the spot method of accounting whereby the net interest savings from the cross-currency swaps is recognized as a reduction in interest expense in the Company’s Consolidated Statements of Earnings.

In connection with the acquisition of Itiviti in March 2021 the Company entered into two derivative instruments designed to mitigate the Company’s exposure to the impact of (i) changes in foreign exchange rates on the acquisition of Itiviti purchase consideration, and (ii) changes in interest rates on the Fiscal 2021 Senior Notes.

The Company executed a forward foreign exchange derivative instrument (“Forward”) with an aggregate notional amount of EUR 1.955 billion.

In March 2021, the Company executed a forward foreign exchange derivative instrument (“Forward”) with an aggregate notional amount of EUR 1.955 billion.

The Forward acted as an economic hedge against the impact of changes in the Euro on the Company’s purchase consideration for the acquisition of Itiviti.

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In May 2021, the Company settled the Forward derivative for a cumulative pre-tax gain of $ 66.7 million.

Also, the Company executed a forward treasury lock agreement (“Treasury Lock”), designated as a cash flow hedge, in the aggregate notional amount of $ 1.0 billion to manage exposure to fluctuations in the benchmark interest rate associated with the Fiscal 2021 Senior Notes, which were used to pay down a portion of the Term Credit Agreement associated with the Itiviti acquisition.

In March 2021, the Company also executed a forward treasury lock agreement (“Treasury Lock”), designated as a cash flow hedge, in the aggregate notional amount of $ 1.0 billion to manage exposure to fluctuations in the benchmark interest rate associated with the Fiscal 2021 Senior Notes, which were used to pay down a portion of the Term Credit Agreement associated with the Itiviti acquisition.

Accordingly, changes in the fair value of the Treasury Lock were recorded as part of Other comprehensive income (loss), net each period up to when the Treasury Lock was settled.

In May 2021, the Treasury Lock was settled for a pre-tax loss of $ 11.0 million, after which the final settlement loss will be reclassified into Interest expense, net ratably over the ten year term of the Fiscal 2021 Senior Notes.

The expected amount of the existing loss that would be reclassified into earnings before income taxes within the next twelve months is approximately $ 1.1 million.

In May 2021, the Treasury Lock was settled for a pre-tax loss of $ 11.0 million, after which the final settlement loss will be amortized into Interest expense, net ratably over the ten year term of the Fiscal 2021 Senior Notes.

The expected amount of the existing loss that will be amortized into earnings before income taxes within the next twelve months is approximately $ 1.1 million.

In the normal course of business, the Company is subject to various claims and litigation.

While the outcome of any claim or litigation is inherently unpredictable, the Company believes that the ultimate resolution of these matters will not, individually or in the aggregate, result in a material impact on its financial condition, results of operations or cash flows.

In the normal course of business, the Company also enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services.

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At June 30, 2022, BBPO was in compliance with this net capital requirement.

In addition, Matrix Trust Company (“Matrix Trust”) , a subsidiary of the Company, is a Colorado State non-depository trust company and National Securities Clearing Corporation trust member, whose primary business is to provide cash agent, custodial and directed trustee services to institutional customers, and investment management services to collective investment trust funds.

As a result, Matrix Trust is subject to various regulatory capital requirements administered by the Colorado Division of Banking and the Arizona Department of Financial Institutions, as well as the National Securities Clearing Corporation.

In addition, Matrix Trust Company , a subsidiary of the Company, is a Colorado State non-depository trust company and National Securities Clearing Corporation trust member, whose primary business is to provide cash agent, custodial and directed trustee services to institutional customers, and investment management services to collective investment trust funds.

As a result, Matrix Trust Company is subject to various regulatory capital requirements administered by the Colorado Division of Banking and the Arizona Department of Financial Institutions, as well as the National Securities Clearing Corporation.

Specific capital requirements that involve quantitative measures of assets, liabilities, and certain off-balance sheet items, when applicable, must be met.

At June 30, 2021, Matrix Trust was in compliance with its capital requirements.

At June 30, 2022, Matrix Trust Company was in compliance with its capital requirements.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT

The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income/(loss):

Securities Pension

Translation Pension

Liabilities Cash Flow Hedge Total

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Balances at June 30, 2019 $ ( 58.3 ) $ ( 12.9 ) $ — $ ( 71.2 )

Cumulative effect of changes in accounting principle (a) — 0.4 ( 1.9 ) — ( 1.5 )

Other comprehensive income (loss) before reclassifications ( 26.4 ) ( 4.2 ) — ( 30.7 )

Amounts reclassified from accumulated other comprehensive income/(loss)

— — 0.9 — 0.9

Balances at June 30, 2020 $ ( 84.7 ) $ ( 15.7 ) $ — $ ( 100.4 )

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Balances at June 30, 2022 $ ( 214.1 ) $ ( 4.8 ) $ ( 7.4 ) $ ( 226.3 )

(a) Reflects the adoption of accounting standards as described in Note 2, “Summary of Significant Accounting Policies.”

FINANCIAL DATA BY SEGMENT

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Because the Company compensates the management of its various businesses on, among other factors, segment profit, the Company may elect to record certain segment-related operating and non-operating expense items in Other rather than reflect such items in segment profit.

In connection with an organizational change made in the first quarter of fiscal year 2020, in order to further align our portfolio of services, the results for the Company's wealth management Advisor Solutions services that were previously reported in our Investor Communication Solutions reportable segment are now reported within the Global Technology and Operations reportable segment.

As a result, our prior period segment results have been revised to reflect this change, which resulted in transferring $ 42.8 million of revenues and $ 2.2 million of earnings before income taxes between reportable segments for the year ended June 30, 2019.

Communication

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Assets $ 3,783.2 $ 479.2 $ 500.6 $ 126.7 $ 4,889.8

QUARTERLY FINANCIAL RESULTS (UNAUDITED)

Summarized quarterly results of operations for the fiscal years ended June 30, 2021 and 2020 are as follows:

Quarter Second

Quarter Third

Quarter Fourth

Quarter Fiscal Year Total

(in millions, except per share amounts)

Year ended June 30, 2021

Revenues $ 1,017.4 $ 1,054.9 $ 1,389.8 $ 1,531.6 $ 4,993.7

Gross profit 230.3 248.5 429.2 514.9 1,423.0

Operating income 78.6 79.5 239.2 281.4 678.7

Earnings before income taxes 73.6 69.4 216.9 336.4 696.2

Net earnings 65.8 56.3 165.0 260.4 547.5

Basic EPS $ 0.57 $ 0.49 $ 1.42 $ 2.24 $ 4.73

Diluted EPS $ 0.56 $ 0.48 $ 1.40 $ 2.20 $ 4.65

Year ended June 30, 2020

Revenues $ 948.6 $ 968.7 $ 1,249.9 $ 1,361.9 $ 4,529.0

Gross profit 221.1 187.7 377.4 477.7 1,263.9

Operating income 73.1 26.8 226.3 298.8 624.9

Earnings before income taxes 63.8 10.5 210.5 294.8 579.5

Net earnings 55.9 10.1 166.8 229.7 462.5

Basic EPS $ 0.49 $ 0.09 $ 1.46 $ 2.00 $ 4.03

Diluted EPS $ 0.48 $ 0.09 $ 1.43 $ 1.97 $ 3.95

SUBSEQUENT EVENTS

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Deferred tax valuation allowance $ 3.3 $ 3.4 $ — $ — $ 6.7

Other receivables $ — $ 1.0 $ — $ — $ 1.0

Amounts may not sum due to rounding.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data