What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-08-08 compared with 2022-08-12 · 190 added, 190 removed, 1203 unchanged (24% of the section changed)

45 unchanged sentences

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 and projections of earnings before income tax (“EBIT”), 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 projections of revenues, and the selection of the terminal value growth rate and the discount rate assumptions.

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 and projections of earnings before interest and taxes, 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 earnings before interest and taxes, including projections of revenues, and the selection of the terminal value growth rate and discount rate assumptions.

The goodwill balance was $3,461.6 million as of June 30, 2023, which is allocated among various reporting units.

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A 10% change in their estimates of projected future operating cash flows, discount rates, or terminal value growth rates used in their calculations of the fair values of the reporting units would not result in an impairment of their goodwill.

Auditing the fair value of certain of the reporting units involved a high degree of subjectivity, 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 projections of revenues, selection of terminal growth and the weighted-average cost of capital (used to determine the 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 projections of 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 and the selection of the discount, and terminal value growth rates.

• 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.

Auditing the fair value of certain of the reporting units involved a high degree of subjectivity, 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 earnings before interest and taxes, including projections of revenues, selection of terminal value growth rates and the weighted-average cost of capital used to determine the discount rates were appropriate.

How this Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues, selection of the terminal value growth rates and weighted-average cost of capital used to determine the discount rates 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 earnings before interest and taxes, including projections of revenues, and the selection of the terminal value growth rates and weighted-average cost of capital used to determine the discount rates.

• We performed a sensitivity analysis on the projected future operating cash flows to determine what revenue and earnings before interest and taxes growth rates are needed to cause an impairment for certain of the reporting units.

• We evaluated the reasonableness of management’s projected future operating cash flows based on forecasted earnings before interest and taxes, including projections of revenues by comparing to (1) historical results for certain of the 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.

• We considered the impact of changes in the regulatory environment, uncertainty in the market, and economic conditions on management’s forecasts.

• With the assistance of our fair value specialists, we evaluated the discount rates, and terminal value growth rates, 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.

• With the assistance of our fair value specialists, we evaluated the discount rate and terminal value growth rate for certain of the reporting units, 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 discount and terminal value growth rates selected by management.

/s/ D ELOITTE & T OUCHE LLP

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Pension and post-retirement liability adjustment, net of tax (provision) benefit of $( 0.1 ), $( 3.4 ) and $( 0.1 ) for the years ended June 30, 2023, 2022 and 2021, respectively

10.6 0.3 ( 2.8 )

Fair market value loss on cash flow hedge, net of tax (provision) benefit of $( 0.3 ), $( 0.2 ), and $ 2.6 for the years ended June 30, 2023, 2022 and 2021, respectively

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Intangible assets, net (Note 10) 1,467.2 1,077.1

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

Deferred client conversion and start-up costs (Note 11) 937.0 1,232.3

Other non-current assets (Note 12) 829.2 895.3

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Current liabilities:

Current portion of long-term debt (Note 14) $ 1,178.5 $ —

Payables and accrued expenses (Note 13) 1,019.5 1,114.9

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Current assets and liabilities:

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

(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

Increase in Contract liabilities 30.2 12.4 12.2

Accounts receivable, net 19.6 ( 85.4 ) ( 42.4 )

Other current assets ( 10.0 ) 12.2 ( 29.6 )

Payables and accrued expenses ( 104.5 ) ( 26.7 ) 144.3

Contract liabilities ( 3.2 ) 30.2 12.4

Non-current assets and liabilities:

Increase in Other non-current assets ( 696.9 ) ( 454.5 ) ( 352.7 )

Increase in Other non-current liabilities 66.2 84.0 76.4

Other non-current assets ( 472.4 ) ( 696.9 ) ( 454.5 )

Other non-current liabilities 340.9 66.2 84.0

Net cash flows provided by operating activities 823.3 443.5 640.1

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

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

Stock option exercises — — 35.0 — — — 35.0

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Broadridge’s data and analytics solutions provide investment product distribution data, analytical tools, insights, and research to enable asset managers to optimize product distribution across retail and institutional channels globally.

Through Matrix Financial Solutions, Inc.

(“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 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.

Through our Retirement and Workplace Trade processing business, Broadridge provides automated mutual fund and exchange-traded funds trade processing services for financial institutions who submit trades on behalf of their clients such as qualified and non-qualified retirement plans and individual wealth accounts.

In addition, Broadridge provides fiduciary-focused learning and development, software and technology, and data and analytics services to advisors, institutions and asset managers across the retirement and wealth ecosystem.

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, shareholder engagement and environmental, social and governance solutions.

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

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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’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.

• Global Technology and Operations - Broadridge’s Global Technology and Operations business provides the non-differentiating yet mission-critical infrastructure to the global financial markets.

As a leading software as a service (“SaaS”) provider, Broadridge offers capital markets, wealth and investment management firms modern technology to enable growth, simplify their technology stacks and mutualize costs.

Broadridge’s highly scalable, resilient, component-based solutions 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 Wealth Management business provides solutions for advisors and investors and also streamlines back- and middle-office operations for broker-dealers by providing systems for critical post-trade activities, including books and records, transaction processing, clearance and settlement, and reporting.

Broadridge’s Investment Management business provides portfolio and order management solutions for traditional and alternative asset managers, which bring insights into trading, portfolio construction, risk and analytics.

Broadridge’s solutions connect asset managers to a global network of broker-dealers for trade execution and post-trade matching and confirmation.

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.

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

Provided on a 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.

The wealth management platform enables full-service, regional and independent broker-dealers and investment advisors to better engage with customers through digital marketing and customer communications tools.

Broadridge also integrates data, content and technology to drive new customer acquisition, support holistic and personalized advice and cross-sell opportunities through the creation of sales and educational content, including seminars as well as customizable advisor websites, search engine marketing and electronic and print newsletters.

Through Broadridge Trading and Connectivity Solutions, Broadridge offers a set of global front-office trade order and execution management systems and connectivity solutions that enable market participants to connect and trade.

The combination of the front-office solutions from the 2021 acquisition of Itiviti Holding AB (“Itiviti”) and Broadridge’s post-trade product suite and other capital markets capabilities enables clients to streamline their front-to-back technology platforms and operations and increase straight-through-processing efficiencies, across equities, fixed income, exchange-traded derivatives, and other asset classes .

Broadridge’s Wealth Management business delivers offers technology solutions and other capabilities across the entire wealth management lifecycle and streamlines all aspects of wealth management services, including account management, fee management and client on-boarding.

The wealth technology solutions enable full-service, regional and independent broker-dealers and investment advisors to better engage with customers through digital marketing and customer communications tools.

Broadridge also integrates data, content and technology to drive new customer acquisition, support holistic and personalized advice and cross-sell opportunities.

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

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.

Broadridge’s Investment Management business 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.

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.

Beginning with the first quarter of fiscal year 2023, the Company changed reporting for segment revenues, segment earnings (loss) before income taxes, and segment amortization of acquired intangibles and purchased intellectual property to reflect the impact of actual foreign exchange rates applicable to the individual periods presented.

The presentation of these metrics 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.

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Revenue Recognition.

2014-09 outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers.

ASC 606 “Revenue from Contracts with Customers” outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers.

The core principle is that an entity recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

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As described above, our most significant performance obligations involve variable consideration which constitutes the majority of our revenue streams.

The Company’s variable consideration components meet the criteria in ASU No.

2014-09 for exclusion from disclosure of the remaining transaction price allocated to unsatisfied performance obligations as does any contracts with clients with an original duration of one year or less.

The Company’s variable consideration components meet the criteria in ASC 606 for exclusion from disclosure of the remaining transaction price allocated to unsatisfied performance obligations as does any contracts with clients with an original duration of one year or less.

The Company has contracts with clients that vary in length depending on the nature of the services and contractual terms negotiated with the client, and they generally extend over a multi-year period.

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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, 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.

Deferred client conversion and start-up costs include 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.

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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.

Refer to Note 11, “Deferred Client Conversion and Start-up Costs” for a further description of the Company’s Deferred client conversion and start-up costs.

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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If the carrying amount of an asset (or asset group) exceeds its expected estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset (or asset group) exceeds its fair value.

Intangible assets with finite lives are amortized primarily on a straight-line basis over their estimated useful lives and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Refer to Note 9, “Property, Plant and Equipment, Net” for a further description of the Company’s Property, plant and equipment, net.

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Distribution Cost of Revenues.

Distribution cost of revenues consists primarily of postage related expenses incurred in connection with the Company’s Investor Communication Solutions segment, as well as Matrix Financial Solutions, Inc.

administrative services expenses.

Distribution cost of revenues consists primarily of postage related expenses incurred in connection with the Company’s Investor Communication Solutions segment, as well as Broadridge Retirement and Workplace administrative services expenses.

These costs are reflected in Cost of revenues in the Consolidated Statements of Earnings.

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Internal Use Software.

Expenditures for major software purchases and software developed or obtained for internal use are capitalized and amortized generally over a three - to five-year period on a straight-line basis.

Expenditures for major software purchases and software developed or obtained for internal use are capitalized and amortized on a straight-line basis generally over a three - to five-year period or another period deemed appropriate based on the specific characteristics of the software, considering the potential impact of obsolescence, speed of technology changes, competition, and other economic factors.

For software developed or obtained for internal use, the Company’s accounting policy provides for the capitalization of external direct costs of materials and services associated with developing or obtaining internal use computer software.

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

Subsequent Events.

In preparing the accompanying Consolidated Financial Statements, the Company has reviewed events that have occurred after June 30, 2022 through the date of issuance of the Consolidated Financial Statements.

Refer to Note 21, “Subsequent Events” for a description of the Company’s subsequent events.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU No.

2021-08, “Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU No.

2021-08”), which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers.

2021-08 is effective for the Company in the first quarter of fiscal year 2024.

Early adoption of the amendments is permitted, including adoption in an interim period.

The Company is currently assessing the impact that the adoption of ASU No.

2021-08 will have on its Consolidated Financial Statements.

REVENUE RECOGNITION

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The Company has presented below its revenue disaggregated by product line and by revenue type within each of its Investor Communication Solutions and Global Technology and Operations reportable segments.

Fee revenues in the Investor Communication Solutions segment are derived from both recurring and event-driven activity.

Revenues in the Investor Communication Solutions segment are derived from both recurring and event-driven activity.

In addition, the level of recurring and event-driven activity the Company processes directly impacts Distribution revenues.

While event-driven activity is highly repeatable, it may not recur on an annual basis.

Event-driven fee revenues are based on the number of special events and corporate transactions the Company processes.

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 and distribution of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Matrix administrative services.

Event-driven revenues are based on the number of special events and corporate transactions the Company processes.

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 revenues.

Years ended June 30,

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Customer communications 673.1 615.4 568.3

Total ICS Recurring fee revenues 2,275.0 2,042.1 1,838.7

Total ICS Recurring revenues 2,461.4 2,270.3 2,036.9

Equity and other 116.5 115.0 123.0

Mutual funds 94.5 154.4 112.1

Total ICS Event-driven fee revenues 269.6 235.5 176.3

Total ICS Event-driven revenues 211.0 269.4 235.0

Distribution revenues 1,863.1 1,717.0 1,548.3

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Wealth and investment management 560.1 549.7 517.5

Total GTO Recurring fee revenues 1,474.4 1,186.2 1,107.4

Foreign currency exchange ( 27.4 ) ( 19.5 ) ( 39.4 )

Total GTO Recurring revenues 1,525.2 1,452.4 1,173.5

Total Revenues $ 6,060.9 $ 5,709.1 $ 4,993.7

Revenues by Type

Recurring fee revenues $ 3,749.3 $ 3,228.3 $ 2,946.1

Event-driven fee revenues 269.6 235.5 176.3

Recurring revenues $ 3,986.7 $ 3,722.7 $ 3,210.4

Event-driven revenues 211.0 269.4 235.0

Distribution revenues 1,863.1 1,717.0 1,548.3

Foreign currency exchange ( 27.4 ) ( 19.5 ) ( 39.4 )

Total Revenues $ 6,060.9 $ 5,709.1 $ 4,993.7

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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, 2023, contract assets decreased primarily due to an decrease in software term license revenues and contract liabilities increased primarily due to the timing of client payments.

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.

The Company recognized $ 236.5 million of revenue during the fiscal year ended June 30, 2023 that was included in the contract liability balance as of June 30, 2022.

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

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

During the fiscal years ended June 30, 2023 and 2022, there were no material acquisitions.

The following section provides details for the fiscal year 2021 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.

The following represents the fiscal year 2021 acquisitions:

BUSINESS COMBINATIONS

FISCAL YEAR 2021 BUSINESS COMBINATIONS

Financial information on each transaction is as follows:

Itiviti Advisor-Stream Total

Itiviti AdvisorStream Total

(in millions)

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For purposes of this pro forma presentation, the acquisition of Itiviti is assumed to have occurred on July 1, 2019.

The pro forma financial information for all periods presented also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets, interest expense from recent debt financing, the proceeds of which were used to fund the acquisition, and certain other integration related impacts.

The pro forma financial information also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets, interest expense from recent debt financing, the proceeds of which were used to fund the acquisition, and certain other integration related impacts.

This unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on July 1, 2019, nor of the results of operations that may be obtained in the future.

Years ended June 30,

Year ended June 30,

(in millions)

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• 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 following represents the fiscal year 2020 acquisitions:

Fiscal Year 2020 Acquisitions:

BUSINESS COMBINATIONS

Financial information on each transaction is as follows:

Shadow Financial Fi360 Clear-Structure Funds-Library Other Acquisitions Total

(in millions)

Cash payments, net of cash acquired $ 35.6 $ 116.0 $ 59.1 $ 69.9 $ 17.3 $ 298.0

Deferred payments, net 3.0 3.5 2.1 — 1.7 10.4

Contingent consideration liability — — 7.0 — — 7.0

Aggregate purchase price $ 38.6 $ 119.5 $ 68.3 $ 69.9 $ 19.1 $ 315.4

Net tangible assets acquired / (liabilities assumed) $ ( 0.1 ) $ ( 7.9 ) $ 0.2 $ ( 3.1 ) $ ( 2.2 ) $ ( 13.1 )

Goodwill 17.6 84.4 44.2 39.2 13.5 198.9

Intangible assets 21.1 43.1 23.9 33.8 7.8 129.6

Aggregate purchase price $ 38.6 $ 119.5 $ 68.3 $ 69.9 $ 19.1 $ 315.4

Shadow Financial Systems, Inc.

(“Shadow Financial”)

In October 2019, the Company acquired Shadow Financial, a provider of multi-asset class post-trade solutions for the capital markets industry.

The acquisition builds upon Broadridge ’ s post-trade processing capabilities by adding a market-ready solution for exchanges, inter-dealer brokers and proprietary trading firms.

In addition, the acquisition adds capabilities across exchange-traded derivatives and cryptocurrency.

Shadow Financial is included in our GTO reportable segment.

• Goodwill is tax deductible.

• 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.

• In fiscal year 2021, the Company settled deferred payment obligations totaling $ 3.0 million.

In November 2019, the Company acquired Fi360, a provider of fiduciary and Regulation Best Interest solutions for the wealth and retirement industry, including the accreditation and continuing education for the Accredited Investment Fiduciary ® Designation, the leading designation focused on fiduciary responsibility.

The acquisition enhances Broadridge’s retirement solutions by providing wealth and retirement advisors with fiduciary tools that complement its Matrix trust and trading platform.

The acquisition also further strengthens Broadridge’s data and analytics tools and solutions suite that enable asset managers to grow their businesses by providing greater transparency into the retirement market.

Fi360 is included in our ICS reportable segment.

• Goodwill is not tax deductible.

• 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.

• In fiscal year 2021, the Company settled deferred payment obligations totaling $ 3.5 million.

ClearStructure Financial Technology, LLC (“ClearStructure”)

In November 2019, the Company acquired ClearStructure, a global provider of portfolio management solutions for the private debt markets.

ClearStructure’s component services enhances Broadridge’s existing multi-asset class, front-to-back office asset management technology suite, providing Broadridge clients with a capability to access the public and private markets.

ClearStructure is included in our GTO reportable segment.

• The contingent consideration liability is payable through fiscal year 2023 upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $ 12.5 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 $ 4.8 million.

• Goodwill is primarily tax deductible.

• 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.

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

• In fiscal year 2023, the Company settled deferred payment obligations totaling $ 2.6 million.

FundsLibrary Limited (“FundsLibrary”)

In February 2020, the Company acquired FundsLibrary, a provider of fund document and data dissemination in the European market.

FundsLibrary's solutions enable fund managers to increase distribution opportunities and help them comply with regulations such as Solvency II and MiFID II.

The business was combined with FundAssist Limited (“FundAssist”) , Broadridge's existing European funds regulatory communications business.

The combination of FundsLibrary's data platform and technology with Broadridge's existing fund calculation, document creation and translation capabilities, creates an end-to-end solution for fund managers and distributors, enabling them to respond to demanding regulatory requirements across multiple jurisdictions.

FundsLibrary is included in our ICS reportable segment.

• Goodwill is not tax deductible.

• 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.

FAIR VALUE OF FINANCIAL INSTRUMENTS

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(in millions)

Cash and cash equivalents:

Money market funds (a) $ — $ — $ — $ —

Other current assets:

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Other non-current assets:

Securities 118.0 — — 118.0

Securities (a) 141.3 — — 141.3

Derivative asset — 66.7 — 66.7

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(in millions)

Cash and cash equivalents:

Money market funds (a) $ — $ — $ — $ —

Other current assets:

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Other non-current assets:

Securities 120.6 — — 120.6

Securities (a) 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, 2022 $ — $ — $ 12.9 $ 12.9

(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.

(a) Includes investments related to the Company’s Defined Benefit Pension Plans and Executive Retirement and Savings Plan (the “ERSP”).

In addition, the Company has non-marketable securities with a carrying amount of $ 55.6 million as of June 30, 2023 and $ 53.4 million as of June 30, 2022 that are classified as Level 2 financial assets and included as part of Other non-current assets.

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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 relates to the acquisitions of Itiviti and AdvisorStream.

During fiscal years 2023, 2022 and 2021, the Company performed the required impairment tests of Goodwill and determined that there was no impairment.

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Acquired intellectual property 136.6 ( 136.6 ) — 136.6 ( 131.9 ) 4.7

Internal use software 762.9 ( 44.8 ) 718.1 131.2 ( 45.4 ) 85.8

Other intangibles 23.7 ( 23.3 ) 0.4 23.1 ( 22.6 ) 0.4

$ 2,550.2 $ ( 1,082.9 ) $ 1,467.2 $ 2,160.7 $ ( 1,083.6 ) $ 1,077.1

Other intangibles consist primarily of capitalized internal use software.

All of the intangible assets have finite lives and as such, are subject to amortization.

During the fourth quarter of fiscal year 2023, the Company executed a non-exclusive amended services contract and substantially completed the development of the related software platform customized for our client.

In connection with the substantial completion of the platform and execution of the amended services agreement, the Company also developed a substantive plan to market the platform to other prospective clients as a service.

As a result, $622.3 million of Deferred client conversion and start-up costs were reclassified to Internal use software within Intangible assets, net on the Company’s Consolidated Balance Sheet, which contributed to the increase in Internal use software as of June 30, 2023.

Refer to Note 11, “Deferred Client Conversion and Start-Up Costs” for a further discussion regarding the Company’s Intangible assets.

The weighted-average remaining useful life of the intangible assets is as follows:

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Customer contracts and lists 4.3

Acquired intellectual property 0.9

Internal use software 17.9

Other intangibles 1.2

Total weighted-average remaining useful life 10.8

Amortization of intangibles for the years ended June 30, 2023, 2022 and 2021 was as follows:

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Thereafter 466.7

Total $ 1,467.2

DEFERRED CLIENT CONVERSION AND START-UP COSTS

Deferred client conversion and start-up costs consisted of the following:

(in millions)

Deferred client conversion and start-up costs $ 925.4 $ 1,224.7

Other start-up costs 11.5 7.7

Total $ 937.0 $ 1,232.3

Deferred Client Conversion and Start-up Costs

Deferred client conversion and start-up costs of $ 937.0 million as of June 30, 2023 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $ 925.4 million, as well as other start-up costs of $ 11.5 million.

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.

As a result, $622.3 million of Deferred client conversion and start-up costs were reclassified to Internal use software within Intangible assets, net on the Company’s Consolidated Balance Sheet, which contributed to the decrease in Deferred Client Conversion and Start-up Costs as of June 30, 2023.

Refer to Note 10, “Goodwill and Intangible Assets, Net” for a further discussion regarding the Company’s Intangible assets.

The total amount of deferred client conversion and start-up costs and deferred sales commission costs amortized in Operating expenses for the fiscal year ended June 30, 2023 and 2022 was $ 94.9 million and $ 99.0 million, respectively.

OTHER NON-CURRENT ASSETS

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(in millions)

ROU assets (a) $ 222.8 $ 262.0

Long-term investments $ 241.9 $ 221.6

Contract assets (b) 118.5 89.8

ROU assets (a) 198.3 222.8

Deferred sales commissions costs 114.1 114.2

Contract assets (b) 109.1 118.5

Long-term broker fees 32.0 45.1

Deferred data center costs (c) 15.4 19.0

Other 154.1 35.0

Other (d) 118.3 154.1

Total $ 829.2 $ 895.3

4 unchanged sentences

Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.

The total amount of deferred client conversion and start-up costs and deferred sales commission costs amortized in Operating expenses for the fiscal year ended June 30, 2022 and 2021 was $ 99.0 million and $ 82.0 million, respectively.

(d) Includes $ 66.7 million and $ 101.4 million derivative assets as of June 30, 2023 and June 30, 2022, respectively, related to the Company’s cross-currency swap derivative contracts.

Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.

PAYABLES AND ACCRUED EXPENSES

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Accrued dividend payable 85.6 75.0

Business process outsourcing administration fees 65.5 66.1

Accrued taxes 69.7 40.9

Customer deposits 65.6 58.7

Business process outsourcing administration fees 61.7 65.5

Operating lease liabilities 40.9 45.4

Accrued taxes 40.9 42.6

Other 55.1 82.2

Total $ 1,019.5 $ 1,114.9

Restructuring Charges

Employee compensation and benefits within the table above includes a restructuring liability of $ 19.5 million and $ 12.3 million as of June 30, 2023 and 2022, respectively.

During the fourth quarter of fiscal year 2023, Broadridge has undergone a corporate restructuring initiative to streamline our management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas.

This restructuring resulted in total charges of $ 20.4 million of severance costs recorded in Operating expenses .

The total estimated pre-tax costs for actions identified as part of the restructuring initiative are approximately $ 35.0 million to $ 50.0 million, of which $ 20.4 million were incurred to date.

We expect to incur the remaining charges for the initiative in the third quarter of fiscal year 2024.

Restructuring charges are not reflected in segment profit and are recorded within the Other segment.

Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows:

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(in millions)

Long-term debt

Current portion of long-term debt

Fiscal 2021 Term Loans (a) May 2024 $ 1,180.0 $ 1,178.5 $ — $ — $ 1,180.0

Total $ 1,180.0 $ 1,178.5 $ — $ — $ 1,180.0

Long-term debt, excluding current portion

Fiscal 2021 Revolving Credit Facility:

2 unchanged sentences

Total Revolving Credit Facility $ — $ — $ 25.0 $ 1,500.0 $ —

Fiscal 2021 Term Loans May 2024 $ 1,540.0 $ 1,535.8 $ 1,543.4 $ — $ 1,540.0

Fiscal 2021 Term Loans (a) May 2024 $ — $ — $ 1,535.8 $ — $ —

Fiscal 2016 Senior Notes June 2026 $ 500.0 $ 498.0 $ 497.4 $ — $ 471.4

2 unchanged sentences

Total Senior Notes $ 2,250.0 $ 2,234.7 $ 2,232.3 $ — $ 1,929.8

Total long-term debt $ 2,250.0 $ 2,234.7 $ 3,793.0 $ 1,500.0 $ 1,929.8

Total debt $ 3,430.0 $ 3,413.3 $ 3,793.0 $ 1,500.0 $ 3,109.8

(a) The Fiscal 2021 Term Loans were reclassified from Long-term debt to Current portion of long-term debt in May 2023 to reflect the remaining maturity of less than a year.

Future principal payments on the Company’s outstanding debt are as follows (in millions):

2 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, 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”).

In April 2021, the Company entered into an amended and restated $ 1.5 billion five-year revolving credit facility (as amended on December 23, 2021 and May 23, 2023, the “Fiscal 2021 Revolving Credit Facility”), which replaced the $ 1.5 billion five-year revolving credit facility entered during March 2019 (the “Fiscal 2019 Revolving Credit Facility” and together with the Fiscal 2021 Revolving Credit Facility, the “Revolving Credit Facilities”).

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

dollar tranche and a $ 400.0 million multicurrency tranche.

On May 23, 2023, we amended the interest rate index from LIBOR to Adjusted SOFR.

All other terms remained unchanged.

The weighted-average interest rate on the Revolving Credit Facilities was 4.95 %, 1.30 % and 1.20 % for the fiscal years ended June 30, 2023, 2022 and 2021, respectively.

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Under the Fiscal 2021 Revolving Credit Facility, revolving loans denominated in U.S.

Dollars, Canadian Dollars, Euro, Yen, and Swedish Kronor initially bear interest at LIBOR, CDOR, EURIBOR, TIBOR and STIBOR, respectively, plus 1.015 % per annum (subject to step-ups to 1.175 % and step-downs to 0.805 % based on ratings) and revolving loans denominated in Sterling initially bear interest at SONIA plus 1.0476 % per annum (subject to step-ups to 1.2076 % and step-downs to 0.8376 % based on ratings).

The Fiscal 2021 Revolving Credit Facility also has an annual facility fee equal to 11.0 basis points on the entire facility (subject to step-ups to 20.0 basis points and step-downs to 7.0 basis points based on ratings).

Dollars, Canadian Dollars, Euro, Swedish Kronor and Yen bears interest at Adjusted Term SOFR, CDOR, EURIBOR, TIBOR and STIBOR, respectively, plus 1.200 % (subject to step-ups to 1.275 % and step-downs to 0.905 % based on public debt ratings) and revolving loans denominated in Sterling bears interest at SONIA plus 1.1326 % per annum (subject to step-ups to 1.2076 % and step-downs to 0.8376 % based on ratings).

The Fiscal 2021 Revolving Credit Facility also has an annual facility fee equal to 15.0 basis points

on the entire facility (subject to step-ups to 20.0 basis points and step-downs to 7.0 basis points based on ratings).

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.

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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”).

In March 2021, the Company entered into a term credit agreement (as amended on December 23, 2021 and May 23, 2023, “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.

Once borrowed, amounts repaid or prepaid in respect of such Fiscal 2021 Term Loans may not be reborrowed.

The Tranche 1 Loans was to mature on the date that is 18 months after the date on which the Fiscal 2021 Term Loans are borrowed (the “Funding Date”), but was repaid in full in May 2021 with proceeds from the Fiscal 2021 Senior Notes (as discussed further below).

The Tranche 1 Loan was to mature on the date that is 18 months after the date on which the Fiscal 2021 Term Loans were borrowed (the “Funding Date”), but was repaid in full in May 2021 with proceeds from the Fiscal 2021 Senior Notes (as discussed further below).

The Tranche 2 Loan will mature in May 2024 on the third anniversary of the Funding Date.

The proceeds of the Fiscal 2021 Term Loans were used by the Company to solely finance the acquisition of Itiviti and pay certain fees and expenses in connection therewith.

The Tranche 2 Loan bears interest at LIBOR plus 0.875 % per annum (subject to step-ups to LIBOR plus 1.250 % or a step-down to LIBOR plus 0.750 % based on ratings).

The Company may voluntarily prepay, in whole or in part and without premium or penalty.

The Tranche 2 Loan bears interest at Adjusted Term SOFR plus 1.100 % per annum (subject to step-ups to Adjusted Term SOFR plus 1.350 % or a step-down to SOFR plus 0.850 % based on ratings).

On May 23, 2023, we amended the interest rate index from LIBOR to Adjusted SOFR.

All other terms remained unchanged.

The Company may voluntarily prepay the Tranche 2 Loan in whole or in part and without premium or penalty.

In the event of receipt of cash proceeds by the Company or its subsidiaries from certain incurrences of indebtedness, certain equity issuances, and certain sales, transfers or other dispositions of assets, the Company will be required to prepay outstanding Loans, subject to certain limitations and qualifications as set forth in the Term Credit Agreement.

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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, 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 fair value of the fixed-rate Fiscal 2021 Senior Notes at June 30, 2023 and June 30, 2022 was $ 817.4 million and $ 837.5 million, 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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1,253,845 8.81 $ 145.64

$ 155.01 to $ 173.00

22,038 8.39 $ 173.00

2,696,805 6.63 $ 116.46 $ 132.7

Exercisable Options

20 unchanged sentences

264,114 7.96 $ 146.74

$ 155.01 to $ 173.00

22,038 8.39 $ 173.00

1,614,349 5.15 $ 98.71 $ 108.2

(a) Calculated using the closing stock price on the last trading day of fiscal year 2023 of $ 165.63 , less the option exercise price, multiplied by the number of instruments.

1 unchanged sentence

As of June 30, 2023, the total remaining unrecognized compensation cost related to non-vested stock options and RSU awards amounted to $ 20.0 million and $ 56.9 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.0 years and 1.5 years, respectively.

In April 2013, the Company began reissuing treasury stock to satisfy stock option exercises and issuances under the Company’s RSU awards.

The Company may reissue treasury stock to satisfy stock option exercises and issuances under the Company’s RSU awards.

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

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This plan provides a base contribution plus Company matching contributions on a portion of employee contributions.

An Executive Retirement and Savings Plan (the “ERSP”) was adopted effective January 1, 2015 for those executives who are not participants in the Broadridge SORP or Broadridge SERP (defined below).

The ERSP was adopted effective January 1, 2015 for those executives who are not participants in the Broadridge SORP or Broadridge SERP (defined below).

The ERSP is a defined contribution plan that allows eligible full-time U.S.

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(in millions)

Domestic $ 25.4 $ 51.2 $ 46.7

Federal $ 143.2 $ 25.4 $ 51.2

Foreign 45.4 45.4 34.9

1 unchanged sentence

Total current 215.1 82.4 96.7

Domestic 65.8 55.3 33.1

Federal ( 23.7 ) 65.8 55.3

Foreign ( 29.3 ) ( 31.7 ) ( 9.5 )

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State taxes, net of federal tax 23.7 3.0 23.9 3.6 15.2 2.2

Foreign tax differential ( 1.5 ) ( 0.2 ) 4.8 0.7 3.2 0.6

Foreign rate differential 2.7 0.3 ( 1.5 ) ( 0.2 ) 4.8 0.7

Valuation allowances ( 0.3 ) — 0.3 — 1.0 0.1

4 unchanged sentences

The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2023 were $ 164.3 million and 20.7 %, compared to $ 133.1 million and 19.8 %, for the fiscal year ended June 30, 2022, respectively.

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 increase in the effective tax rate for the fiscal year ended June 30, 2023 compared to the fiscal year ended June 30, 2022 was driven by lower total discrete benefits, primarily attributable to an ETB of $ 10.4 million for the fiscal year ended June 30, 2023 compared to $ 18.1 million for the fiscal year ended June 30, 2022.

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.

As of June 30, 2023, the Company had approximately $ 769.2 million of accumulated earnings and profits attributable to foreign subsidiaries.

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Compensation and benefits not currently deductible 75.8 68.0

Net operating and capital losses 29.8 33.6

Net operating losses 26.3 29.8

Tax credits 11.5 13.1

Research and development expenses 90.6 —

Other 24.1 27.6

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Beginning balance $ 57.6 $ 50.7 $ 37.1

Gross increase related to prior period tax positions 8.3 12.2 0.5

Gross increase related to current period tax positions 8.3 4.3 5.9

Gross decrease related to prior period tax positions ( 9.7 ) ( 2.9 ) ( 9.5 )

Gross increases related to prior period tax positions 13.2 8.3 12.2

Gross decreases related to prior period tax positions ( 3.3 ) ( 0.5 ) —

Gross increases related to current period tax positions 6.9 8.3 4.3

Gross decreases related to settlements ( 0.3 ) ( 4.2 ) ( 0.2 )

Gross decreases due to lapse of the statute of limitations ( 5.4 ) ( 5.0 ) ( 2.7 )

Ending balance $ 68.8 $ 57.6 $ 50.7

As of June 30, 2023, 2022 and 2021, the net reserve for unrecognized tax positions recorded by the Company that is included in the preceding table of gross unrecognized tax positions was $ 62.0 million, $ 51.6 million, and $ 47.5 million, respectively, and if reversed in full, would favorably affect the effective tax rate by these amounts, respectively.

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, 2023, the Company adjusted accrued interest by $ 0.3 million and recognized a total liability for interest on unrecognized tax positions of $ 4.1 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, 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.

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Data Center Agreements

In March 2010, the Company and IBM entered into an Information Technology Services Agreement (the “IT Services Agreement”), under which IBM provided certain aspects of the Company’s information technology infrastructure.

Under the IT Services Agreement, IBM provided a broad range of technology services to the Company including supporting its mainframe, midrange, network and data center operations, as well as providing disaster recovery services.

The migration of data center processing to IBM was completed in August 2012.

The IT Services Agreement would have expired on June 30, 2022, but a two-year extension was signed in March 2015, amending the expiration date to June 30, 2024.

In December 2019, the Company and IBM amended and restated the IT Services Agreement (the “Amended IT Services Agreement”), which now expires on June 30, 2027.

The Company has the option of incorporating additional services into the Amended IT Services Agreement over time.

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 “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.

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

Novation Agreement.

The Company is a party to an Amended and Restated IT Services Agreement with Kyndryl, Inc.

(“Kyndryl”), an entity formed by IBM’s spin-off of its managed infrastructure services business, under which Kyndryl provides certain aspects of the Company’s information technology infrastructure, including supporting its mainframe, midrange, network and data center operations, as well as providing disaster recovery services.

The Amended and Restated IT Services Agreement expires on June 30, 2027, however the Company may renew the agreement for up to one additional 12-month period.

Fixed minimum commitments remaining under the Amended and Restated IT Services Agreement at June 30, 2023 are $ 151.2 million through June 30, 2027, the final year of the Amended and Restated IT Services Agreement.

The Company is a party to an information technology agreement for private cloud services (the “Private Cloud Agreement”) under which Kyndryl operates, manages and supports the Company’s private cloud global distributed platforms and products, and operates and manages certain Company networks.

The Private Cloud Agreement expires on March 31, 2030.

Fixed minimum commitments remaining under the Private Cloud Agreement at June 30, 2023 are $ 154.6 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-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 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, 2023:

Amended IT Services Agreement Amended EU IT Services Agreement Total

Amended IT Services Agreement Other Total

(in millions)

4 unchanged sentences

Total accumulated amortization ( 49.9 ) ( 5.8 ) ( 55.7 )

Net Deferred Kyndryl Costs $ 16.4 $ 2.3 $ 18.7

Net Deferred Costs $ 13.1 $ 1.9 $ 15.0

Cloud Services Resale Agreement

2 unchanged sentences

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.

Fixed minimum commitments remaining under the AWS Cloud Agreement at June 30, 2023 are $ 186.5 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.

3 unchanged sentences

Contractual Obligations

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 Company has obligations under the Amended 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:

6 unchanged sentences

Total expenses $ 399.5 $ 407.1 $ 345.4

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:

The future minimum commitments at June 30, 2023 for the aforementioned Amended 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)

1 unchanged sentence

Total $ 550.9

The future minimum commitments table excludes $ 14.0 million of other liabilities recorded on the Company’s Consolidated Balance Sheet as of June 30, 2023.

Broadridge or its subsidiaries are subject to various claims and legal matters that arise in the normal course of business (referred to as “Litigation”).

The Company establishes reserves for Litigation and other loss contingencies when it is both probable that a loss will occur, and the amount of such loss can reasonably be estimated.

For certain Litigation matters for which the Company does not believe it probable that a loss will occur at this time, the Company is able to estimate a range of reasonably possible losses in excess of established reserves.

Management currently estimates an aggregate range of reasonably possible losses for such matters of up to $ 30 million in excess of any established reserves.

The Litigation matters underlying the estimated range will change from time to time, and it is reasonably possible that the actual results may vary significantly from this estimate.

The Company’s management currently believes that resolution of any outstanding legal matters will not have a material adverse effect on the Company’s financial position or results of operations.

However, legal matters are subject to inherent uncertainties and there exists the possibility that the ultimate resolution of these matters could have a material adverse impact on the Company’s financial position and results of operations in the period in which any such effects are recorded.

Plan Management Corp.

Paramount Financial Communications, Inc.

d/b/a Plan Management Corp.

(“Plan Management”) and Jonathan Miller filed a complaint on January 28, 2015 in the United States District Court for the Eastern District of Pennsylvania.

Plan Management claimed that Broadridge Investor Communication Solutions, Inc.

(“BRICS”) breached a marketing agreement between BRICS and Plan Management (the “Marketing Agreement”) and Mr.

Miller asserted a fraud claim.

The case went to trial in the second fiscal quarter of the Company’s fiscal year 2023.

The court dismissed Mr.

Miller’s fraud claim and Plan Management’s breach of contract claim went to the jury.

On December 7, 2022, the jury found that BRICS breached the Marketing Agreement and acted with gross negligence and willful misconduct.

Plan Management filed a motion for post-judgment interest, and Mr.

Miller has filed a motion for a new trial on his fraud claim.

BRICS filed post-trial motions to vacate or reduce the verdict.

On July 26, 2023, the trial court vacated the damages award but not the liability finding.

A new trial on damages will be scheduled.

Miller’s motion for a new trial on the fraud claim was denied.

Plan Management’s motion to award post-judgment interest was denied as moot.

In light of these post-trial rulings and the facts and circumstances of the case at this time, the Company does not believe that a material loss is probable in this matter.

It is not the Company’s business practice to enter into off-balance sheet arrangements.

1 unchanged sentence

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.

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

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.

23 unchanged sentences

At June 30, 2023, BBPO was in compliance with this net capital requirement.

BBPO, as a “Managing Clearing Member” of the Options Clearing Corporation (the “OCC”), is also subject to OCC Rule 309(b) with respect to the business process outsourcing services that it provides to other OCC “Managed Clearing Member” broker-dealers.

OCC Rule 309(b) requires BBPO to maintain a minimum net capital amount.

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

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.

10 unchanged sentences

Amounts reclassified from accumulated other comprehensive income/(loss)

— 2.4 0.1 2.5

Balances at June 30, 2021 $ 32.9 $ ( 15.4 ) $ ( 8.2 ) $ 9.2

10 unchanged sentences

The primary components of “Other” are certain gains, losses, corporate overhead expenses and non-operating expenses that have not been allocated to the reportable segments, such as interest expense.

Foreign currency exchange is a reconciling item between the actual foreign currency exchange rates and the constant foreign currency exchange rates used for internal management reporting.

Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts in a reasonable manner.

3 unchanged sentences

Technology and

Operations Other Foreign Currency

Exchange Total

Operations Other Total

(in millions)

60 unchanged sentences

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