通过我们的基金沟通解决方案业务，我们为基金经理提供一个单一、一体化的服务提供商，以管理数据、进行计算、撰写文档、管理合规性，并在多个辖区内传播信息。我们的解决方案帮助基金经理增加分销机会，遵守英国和欧盟的法规，例如偿付能力 II 和 MiFID II，并使投资者能够以数字格式轻松获取信息。我们还支持基金经理在欧洲市场上的文档和数据传播。这使得分销商和投资者能够接收到完整、准确和及时的信息，以支持基金销售。
此外，我们的业务流程外包、共同基金处理和转账代理解决方案，以及提供这些服务的实体，均受到监管监督。我们的业务流程外包和共同基金处理服务由经纪自营商Broadridge Business Process Outsourcing, LLC（“BBPO”）执行。BBPO已在SEC注册，是FINRA的成员，并需要参与证券投资者保护公司（“SIPC”）。尽管BBPO的FINRA会员协议允许其从事清算以及除共同基金零售外的公司证券零售业务，但BBPO不清算客户交易，不处理任何零售业务，也不持有客户账户。BBPO必须遵守与其业务的许多方面相关的法规，包括交易惯例、资本要求、记录保存、防止洗钱、保护客户资金和客户证券，以及对董事、官员和员工行为的监督。不遵守任何这些法律、规则或法规可能会导致谴责、罚款、发出停止令或撤销SEC或FINRA授权以允许其业务运作，或者使其董事、官员或员工失去资格。证券行业，包括公司外包业务或职能，持续受到监管审查。这种监督可能导致未来实施更严格的有关业务流程外包的法律或规则。作为注册经纪商和FINRA成员，BBPO受1934年证券交易法第15c3-1号统一净资本规则的约束，该规则要求BBPO保持最低净资本金额。截至2024年6月30日，BBPO已符合这一资本要求。
B. 合并和演示基础。合并财务报表是根据美国公认的会计原则（“GAAP”）和美国证券交易委员会对10-k表年度报告的要求编制的。这些财务报表列报了公司的合并状况，包括公司直接或间接拥有控股财务权益的实体、公司按权益会计法记录投资的实体以及某些有价和不可有价证券。公司间余额和交易已被清除。由于四舍五入，所列金额的总和可能不一致。某些前期金额已酌情重新分类，以符合本年度的列报方式。
A. 估算值的使用。 按照公认会计原则编制这些财务报表要求管理层做出影响合并财务报表及其附注中报告的金额的估算和假设。这些估计是基于管理层对时事、历史经验、公司未来可能采取的行动的最佳了解，以及在这种情况下被认为合理的其他各种假设和判断。因此，实际结果可能不同于这些估计。合并财务报表附注中酌情进一步描述了在特定会计政策中使用估计值的情况。
B. 收入确认。 ASC 606 “与客户签订合同的收入” 概述了一种用于核算与客户签订合同产生的收入的单一综合模型。核心原则是，实体确认收入以反映向客户转让承诺的商品或服务，其金额应反映该实体为换取这些商品或服务而预计有权获得的对价。
C. 现金和现金等价物。 原始到期日为 90 天数或更短的天数被视为现金等价物。由于其短期性质，公司现金及现金等价物的公允价值近似于账面价值。
D. 金融工具。 除长期债务外，公司几乎所有金融工具均按公允价值记账，或者由于工具的到期日短，账面金额接近公允价值。公司长期固定利率优先票据的账面价值代表扣除未摊销折扣和扣除相关的未摊销债务发行成本后的长期固定利率优先票据的面值。公司长期固定利率优先票据的公允价值基于市场报价。 有关公司长期固定利率优先票据的进一步描述，请参阅附注14 “借款”；有关公司金融工具公允价值的更多详情，请参阅附注7 “金融工具的公允价值”。此外，有关公司按公允价值结算的跨货币互换衍生品合约的详细信息，请参阅附注19 “合同承诺、意外开支和资产负债表外安排”。
E. 财产、厂房和设备。 不动产、厂房和设备最初按成本入账，并使用直线法在资产的估计使用寿命内折旧。租赁权益改善将在较短的租赁期限或改善措施的预计使用寿命内摊销。 资产的估计使用寿命如下：
装备
3到7 年份
建筑物和建筑物改善
5 到 20 年份
家具和固定装置
4到7 年份
有关公司财产、厂房和设备的进一步描述，请参阅附注9 “不动产、厂房和设备，净额”。
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F. 证券。 证券是反映在合并资产负债表中的其他非流动资产中的非衍生品，除非管理层打算在报告期结束后的十二个月内处置投资，在这种情况下，它们反映在合并资产负债表中的其他流动资产中。这些投资是针对公司没有控制权、共同控制权或重大影响力的实体进行的。公允价值易于确定的证券按公允价值记账。没有易于确定的公允价值的证券最初按成本确认，然后按成本减去减值（如果有）加上或减去因同一发行人的相同或相似投资的交易中可观察到的价格变化（例如随后的筹资交易）而产生的减值进行记账。有或没有易于确定的公允价值的证券价值的变化都记录在合并收益表中。在确定没有易于确定的公允价值的证券是否受到减值时，管理层会考虑定性因素来确定减值，包括发行人的财务状况和短期前景。有关公司证券公允价值的更多详细信息，请参阅附注7 “金融工具的公允价值”。
G. 库存。 库存按成本（按先入先出的原则确定）或市场中较低者列报。 库存余额为 $30.5 百万和美元34.1 百万美元，由用于向客户邮寄代理和其他材料的表格和信封组成，分别反映在2024年6月30日和2023年6月30日的合并资产负债表中的其他流动资产中。
H. 延迟的客户转换和启动成本。 延期客户转换和启动成本包括建立或转换客户系统以使用公司技术所产生的直接成本，通常在成本所涉安排的服务期限内按直线方式进行延期和确认，该服务期从客户启用公司的服务时开始。确定递延费用金额的关键判断与此类费用在多大程度上可收回有关。该估计包括（i）预计的未来客户收入，包括可变收入，由转换成本估计（包括入职成本和持续运营成本的估计）抵消，以及（ii）对预期客户寿命的估计。这也是公司评估此类减值成本的依据。有关公司延期客户转换和启动成本的进一步描述，请参阅附注11 “延期客户转换和启动成本”。
I. 递延销售佣金成本。 只有在合同执行后，公司才会推迟增量成本，以获得预期可收回的客户合同，其中包括产生的销售佣金。递延销售佣金成本使用与资产相关的商品或服务的转移模式相一致的投资组合方法按直线摊销，该方法还考虑了预期的客户寿命。作为一种实际的权宜之计，如果该实体本应确认的销售佣金资产的摊还期为一年或更短，则公司将销售佣金视为发生时的支出。公司对递延销售佣金成本的账面价值进行减值评估，其依据是这些成本是否可以从与递延销售佣金成本相关的客户投资组合的预期未贴现净运营现金流中完全收回。有关公司递延销售佣金成本的更多信息，请参阅附注12 “其他非流动资产”。
J. 延期数据中心成本。 数据中心成本与我们的主要数据中心系统和应用程序相关的转换成本有关。与使数据中心可用于其预期用途所需的活动直接相关的成本将从数据中心实现全部功能之日起在合同有效期内按直线方式摊销。这些递延成本分别反映在2024年6月30日和2023年6月30日的合并资产负债表中的其他非流动资产中。有关公司递延数据中心成本的进一步描述，请参阅附注12 “其他非流动资产”。
K. 善意。 公司不摊销商誉，而是至少每年在申报单位层面对商誉进行减值测试，如果情况表明可能出现减值，则更频繁地进行商誉减值测试。公司使用3月31日的财务报表余额每年测试本财年第四季度的商誉减值。公司对商誉减值的评估包括将每个申报单位的公允价值与其账面价值进行比较。公司使用收益法确定其申报单位的公允价值，该方法使用各种假设来考虑对未来现金流进行贴现分析，包括根据假设的长期增长率、估计成本和基于特定报告单位的加权平均资本成本的适当贴现率对收入进行预测。贴现现金流分析中使用的需要判断的主要因素是基于利息和税前预测收益的预计未来运营现金流，以及终值增长率和贴现率假设的选择。加权平均资本成本考虑了我们合并资本结构中每个组成部分（股权和长期债务）的相对权重。对长期增长和成本的估算基于历史数据、各种内部估计和各种外部来源，是公司常规长期规划过程的一部分制定的。如果申报单位的账面金额超过其公允价值，则减值损失的确认金额应等于该超出部分，但不得超过分配给该申报单位的商誉总额。 有关公司商誉会计的进一步说明，请参阅附注10 “商誉和无形资产，净额”。
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L. 长期资产减值。 每当事件或情况变化表明某项资产（或资产组）的账面金额可能无法收回时，对长期资产进行减值审查。持有和使用的资产的可收回性是通过将资产（或资产组）的账面金额与该资产（或资产组）预计产生的未贴现未来现金流进行比较来衡量的。如果一项资产（或资产组）的账面金额超过其预期的未来预计现金流量，则根据该资产（或资产组）的账面金额超过其公允价值的金额确认减值费用。寿命有限的无形资产在其估计的使用寿命内按直线分期摊销，每当事件或情况变化表明账面金额可能无法收回时，还要进行减值审查。 有关公司财产、厂房和设备的进一步描述，请参阅附注9 “不动产、厂房和设备，净额”。有关公司无形资产净额的进一步描述，请参阅附注6 “收购” 和附注10 “商誉和无形资产，净额”。
M. 权益法投资.当公司维持行使重大影响力的能力时，公司产生20％至50％所有权权益的投资使用权益会计法进行核算。公司在权益法投资净收益或亏损中所占的份额包含在其他非营业外收益（支出）净额中。权益法投资包含在其他非流动资产中。对权益法投资进行减值审查，方法是评估投资的市值下降是否是暂时性的，这会考虑保留投资的意图和能力、市值低于成本的时间和程度以及被投资者的财务状况。
N. 外币折算和交易。 公司外国子公司的资产和负债根据每个期末的有效汇率折算成美元。收入和支出按该期间的平均汇率折算。货币交易收益或亏损包含在非营业收入（支出）中，净额。资产负债表折算的收益或损失包含在累计其他综合收益（亏损）中。
O. 收入分配成本。 收入分销成本主要包括与公司投资者传播解决方案部门相关的邮资相关费用，以及Broadridge退休和工作场所管理服务费用。这些成本反映在合并收益表中的收入成本中。
P. 基于股票的薪酬。 公司根据授予当日奖励的公允价值，在合并收益表中确认股票薪酬支出的衡量标准，从而对股票薪酬进行核算。对于发行的股票期权，每种股票期权的公允价值是在授予之日使用二项式期权定价模型估算的。二项式模型考虑了一系列与波动率、股息收益率、无风险利率和员工运动行为相关的假设。二项式模型中使用的预期波动率基于隐含的市场波动率、公司股价的历史波动率和其他因素的组合。同样，股息收益率基于历史经验和预期的未来变化。无风险利率源自授予时有效的美国国债收益率曲线。二项式模型还纳入了基于历史数据分析的行使和没收假设。股票期权授予的预期寿命来自二项式模型的输出，代表授予的期权预计到期的到期时间。对于限制性股票单位，奖励的公允价值基于公司股票在授予之日的当前公允价值减去按授予时有效的美国国债收益率曲线得出的无风险利率折现的未来预期股息的现值。 有关公司股票薪酬的进一步描述，请参阅附注16 “股票薪酬”。
R. 所得税。 公司根据资产负债法核算所得税，该法为所得税的影响制定了财务会计和报告标准。所得税会计的目标是确认本年度应付或可退还的税款金额，以及公司合并财务报表或纳税申报表中确认的事件的未来税收后果的递延所得税负债和资产。递延所得税资产和负债是根据合并财务报表账面金额与资产和负债税基之间的临时差异进行确认的，使用的是暂时差异预计会逆转的年份的现行税率。
The Company evaluates each lease and service arrangement at inception to determine if the arrangement is, or contains, a lease. A lease exists if the Company obtains substantially all of the economic benefits of and has the right to control the use of an asset for a period of time. The lease term begins on the commencement date, which is the date the Company takes possession of the leased property and also classifies the lease as either operating or finance, and may include options to extend or terminate the lease if exercise of the option to extend or terminate the lease is considered to be reasonably certain. The Company’s options to extend or terminate a lease generally do not exceed five years. The lease term is used both to determine lease classification as an operating or finance lease and to calculate straight-line lease expense for operating leases. The weighted average remaining operating lease term as of June 30, 2024 was 6.9 years.
ROU assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of fixed lease payments over the lease term. ROU assets also include prepaid lease payments and exclude lease incentives received. Certain leases require the Company to pay taxes, insurance, maintenance, and/or other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature (e.g. based on actual costs incurred). These variable lease costs are recognized as a variable lease expense when incurred. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate to measure the lease liability and the associated ROU asset at commencement date. The incremental borrowing rate was determined based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. The Company uses the unsecured borrowing rate and risk-adjusts that rate to approximate a collateralized rate. The weighted average discount rate used in measurement of the Company’s operating lease liabilities as of June 30, 2024 was 3.0%.
Supplemental Balance Sheet Information
June 30,
2024
2023
(in millions)
Assets:
Operating lease ROU assets (a)
$
186.2
$
198.3
Liabilities:
Operating lease liabilities (a) - Current
$
38.0
$
40.9
Operating lease liabilities (a) - Non-current
183.8
198.5
Total Operating lease liabilities
$
221.9
$
239.4
_________
(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, 2024 and 2023, respectively.
Components of Lease Cost (a)
Years ended June 30,
2024
2023
(in millions)
Operating lease cost
$
39.9
$
41.0
Variable lease cost
$
29.0
$
26.0
_________
(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.
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Supplemental Cash Flow Information
Years ended June 30,
2024
2023
(in millions)
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases
$
35.9
$
36.3
ROU assets obtained in exchange for operating lease liabilities
$
21.8
$
6.4
Maturity of Lease Liabilities under ASC 842 (Leases)
Future rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2024:
Operating Leases
Years Ending June 30,
(in millions)
2025
$
45.2
2026
40.7
2027
38.7
2028
34.3
2029
28.0
Thereafter
71.0
Total lease payments
258.0
Less: Discount Amount
36.1
Present value of operating lease liabilities
$
221.9
NOTE 9. PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment at cost and Accumulated depreciation at June 30, 2024 and 2023 are as follows:
June 30,
2024
2023
(in millions)
Property, plant and equipment:
Land and buildings
$
2.5
$
2.5
Equipment
383.4
350.8
Furniture, leaseholds and other
220.7
200.6
606.6
553.9
Less: Accumulated depreciation
(444.4)
(408.2)
Property, plant and equipment, net
$
162.2
$
145.7
In fiscal years 2024 and 2023, Property, plant and equipment and Accumulated depreciation were each reduced by $3.7 million and $4.3 million, respectively, for asset retirements related to fully depreciated property, plant and equipment no longer in use.
Depreciation expense for Property, plant and equipment for the years ended June 30, 2024, 2023 and 2022 was as follows:
Years ended June 30,
2024
2023
2022
(in millions)
Depreciation expense for Property, plant and equipment
$
40.6
$
41.2
$
43.3
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NOTE 10. GOODWILL AND INTANGIBLE ASSETS, NET
Changes in Goodwill for the fiscal years ended June 30, 2024 and 2023 are as follows:
Investor Communication Solutions
Global Technology and Operations
Total
(in millions)
Goodwill, gross, at June 30, 2022
$
1,043.7
$
2,441.2
$
3,484.9
Additions
—
—
—
Foreign currency translation and other
(0.9)
(22.4)
(23.3)
Fair value adjustments (a)
—
—
—
Accumulated impairment losses
—
—
—
Goodwill, net, at June 30, 2023
$
1,042.8
$
2,418.8
$
3,461.6
Goodwill, gross, at June 30, 2023
$
1,042.8
$
2,418.8
$
3,461.6
Additions
41.8
—
41.8
Foreign currency translation and other
(0.3)
(33.7)
(34.0)
Fair value adjustments (a)
—
—
—
Accumulated impairment losses
—
—
—
Goodwill, net, at June 30, 2024
$
1,084.3
$
2,385.1
$
3,469.4
_________
(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, 2024 include $41.8 million for the acquisition of AdvisorTarget.
During fiscal years 2024, 2023 and 2022, the Company performed the required impairment tests of Goodwill and determined that there was no impairment. The Company also performs a sensitivity analysis under Step 1 of the goodwill impairment test assuming hypothetical reductions in the fair values of the reporting units. A 10% change in our estimates of projected future operating cash flows, discount rates, or terminal value growth rates, which are the most significant estimates used in our calculations of the fair values of the reporting units, would not result in an impairment of our goodwill.
Intangible assets at cost and accumulated amortization at June 30, 2024 and 2023 are as follows:
June 30,
2024
2023
Original Cost
Accumulated Amortization
Intangible Assets, net
Original Cost
Accumulated Amortization
Intangible Assets, net
(in millions)
Software licenses
$
233.9
$
(168.5)
$
65.3
$
183.7
$
(154.2)
$
29.5
Acquired software technology
295.0
(215.3)
79.7
292.4
(165.5)
126.9
Customer contracts and lists
1,140.4
(698.0)
442.4
1,150.8
(558.5)
592.4
Acquired intellectual property
136.6
(136.6)
—
136.6
(136.6)
—
Internal use software
823.1
(103.3)
719.8
762.9
(44.8)
718.1
Other intangibles
20.2
(20.2)
0.1
23.7
(23.3)
0.4
$
2,649.2
$
(1,342.0)
$
1,307.2
$
2,550.2
$
(1,082.9)
$
1,467.2
All of the intangible assets have finite lives and as such, are subject to amortization.
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The weighted-average remaining useful life of the intangible assets is as follows:
Weighted-Average Remaining Useful Life (Years)
Acquired software technology
2.0
Software licenses
2.7
Customer contracts and lists
3.4
Internal use software
16.0
Other intangibles
0.2
Total weighted-average remaining useful life
10.2
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.
Amortization of intangibles for the years ended June 30, 2024, 2023 and 2022 was as follows:
Years ended June 30,
2024
2023
2022
(in millions)
Amortization expense for intangible assets
$
279.5
$
257.6
$
289.3
Estimated remaining amortization expenses of the Company’s existing intangible assets for the next five fiscal years and thereafter are as follows:
Years Ending June 30,
(in millions)
2025
$
276.0
2026
253.5
2027
164.1
2028
125.1
2029
45.2
Thereafter
443.2
Total
$
1,307.2
NOTE 11. DEFERRED CLIENT CONVERSION AND START-UP COSTS
Deferred client conversion and start-up costs consisted of the following:
June 30,
2024
2023
(in millions)
Deferred client conversion and start-up costs
$
884.5
$
925.4
Other start-up costs
7.6
11.5
Total
$
892.1
$
937.0
Deferred Client Conversion and Start-up Costs
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. 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 how the Company assesses such costs for impairment.
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Deferred client conversion and start-up costs of $892.1 million as of June 30, 2024 consist of costs incurred to set-up or convert a client’s systems to function with the Company’s technology of $884.5 million, as well as other start-up costs of $7.6 million. 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.
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, 2024 and 2023 was $132.9 million and $94.9 million, respectively.
NOTE 12. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
June 30,
2024
2023
(in millions)
Long-term investments
$
271.1
$
241.9
ROU assets (a)
186.2
198.3
Deferred sales commissions costs
131.2
114.1
Contract assets (b)
125.3
109.1
Long-term broker fees
34.9
32.0
Deferred data center costs (c)
11.8
15.4
Other (d)
110.1
118.3
Total
$
870.6
$
829.2
_________
(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. Please refer to Note 19, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion.
(d) Includes $59.9 million and $66.7 million derivative assets as of June 30, 2024 and June 30, 2023, 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.
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NOTE 13. PAYABLES AND ACCRUED EXPENSES
Payables and accrued expenses consisted of the following:
June 30,
2024
2023
(in millions)
Accounts payable
$
314.0
$
157.3
Employee compensation and benefits
354.4
335.6
Accrued broker fees
126.3
148.0
Accrued taxes
112.5
69.7
Accrued dividend payable
93.4
85.6
Business process outsourcing administration fees
59.9
61.7
Customer deposits
52.7
65.6
Operating lease liabilities
38.0
40.9
Other
43.3
55.1
Total
$
1,194.4
$
1,019.5
Restructuring Charges
The total Employee compensation and benefits liability within the table above of $354.4 million and $335.6 million, respectively, includes a restructuring liability of $38.9 million and $19.5 million as of June 30, 2024 and 2023, respectively.
During the fourth quarter of fiscal year 2024, Broadridge completed a corporate restructuring initiative to exit and realign some of its businesses, streamline the Company’s management structure, reallocate work to lower cost locations, and reduce headcount in deprioritized areas (the “Corporate Restructuring Initiative”), which was initiated in the fourth quarter of fiscal year 2023. For fiscal years 2024 and 2023, this restructuring resulted in total severance costs of $45.2 million and $20.4 million, respectively recorded in Operating expenses. These costs were not reflected in segment profit and are recorded within the Other segment.
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NOTE 14. BORROWINGS
Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows:
Expiration Date
Principal amount outstanding at June 30, 2024
Carrying value at June 30, 2024
Carrying value at June 30, 2023
Unused Available Capacity
Fair Value at June 30, 2024
(in millions)
Current portion of long-term debt
Fiscal 2021 Term Loans (a)
May 2024
$
—
$
—
$
1,178.5
$
—
$
—
Total
$
—
$
—
$
1,178.5
$
—
$
—
Long-term debt, excluding current portion
Fiscal 2021 Revolving Credit Facility:
U.S. dollar tranche
April 2026
$
—
$
—
$
—
$
1,100.0
$
—
Multicurrency tranche
April 2026
—
—
—
400.0
—
Total Revolving Credit Facility
$
—
$
—
$
—
$
1,500.0
$
—
Fiscal 2024 Amended Term Loan (a)
August 2026
$
1,120.0
$
1,117.9
$
—
$
—
$
1,120.0
Fiscal 2016 Senior Notes
June 2026
$
500.0
$
498.7
$
498.0
$
—
$
480.4
Fiscal 2020 Senior Notes
December 2029
750.0
745.1
744.3
—
667.7
Fiscal 2021 Senior Notes
May 2031
1,000.0
993.4
992.5
—
843.5
Total Senior Notes
$
2,250.0
$
2,237.2
$
2,234.7
$
—
$
1,991.6
Total long-term debt
$
3,370.0
$
3,355.1
$
2,234.7
$
1,500.0
$
3,111.6
Total debt
$
3,370.0
$
3,355.1
$
3,413.3
$
1,500.0
$
3,111.6
_________
(a) The Fiscal 2021 Term Loans were reclassified from Current portion of long-term debt to Long-term debt in the first quarter of fiscal year 2024 upon amendment of the loan, to reflect the remaining maturity of more than one year.
Future principal payments on the Company’s outstanding debt are as follows (in millions):
2025
2026
2027
2028
2029
Thereafter
Total
Years ending June 30,
$
—
$
500.0
$
1,120.0
$
—
$
—
$
1,750.0
$
3,370.0
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 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 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 Term SOFR. All other terms remained unchanged.
The weighted-average interest rate on the Fiscal 2021 Revolving Credit Facility was 6.50%, 4.95% and 1.30% for the fiscal years ended June 30, 2024, 2023 and 2022, respectively. The fair value of the variable-rate Fiscal 2021 Revolving Credit Facility borrowings at June 30, 2024 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
79
Under the Fiscal 2021 Revolving Credit Facility, revolving loans denominated in U.S. Dollars, Canadian Dollars, Euro, Swedish Kronor and Yen bears interest at Adjusted Term SOFR, CDOR, EURIBOR, TIBOR and STIBOR, respectively, plus 1.100% (subject to step-ups to 1.175% and step-downs to 0.805% 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. The Fiscal 2021 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At June 30, 2024, 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 an amended and restated 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 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. Once borrowed, amounts repaid or prepaid in respect of such Fiscal 2021 Term Loans may not be reborrowed. 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 was to mature in May 2024. The Tranche 2 Loan bore interest at Adjusted Term SOFR plus 1.000% per annum (subject to step-ups to Adjusted Term SOFR plus 1.250% or a step-down to SOFR plus 0.750% based on ratings). On May 23, 2023, we amended the interest rate index from LIBOR to Adjusted Term SOFR. All other terms remained unchanged.
Fiscal 2024 Amended Term Loan: On August 17, 2023, the Company amended and restated the Term Credit Agreement (the “Amended and Restated Term Credit Agreement”), providing for term loan commitment in an aggregate principal amount of $1.3 billion, replacing the Tranche 2 Loan of the Fiscal 2021 Term Loans (the “Fiscal 2024 Amended Term Loan”). The Fiscal 2024 Amended Term Loan will mature in August 2026 on the third anniversary of the amended Funding Date of August 17, 2023. The Fiscal 2024 Term Loan bears interest at Adjusted Term SOFR plus 1.250% per annum (subject to a step-up to Adjusted Term SOFR plus 1.375% or step-downs to Adjusted Term SOFR plus 1.125% and Adjusted Term SOFR plus 1.000% in each case, based on ratings).
The Company may voluntarily prepay the Fiscal 2024 Amended Term 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 the Fiscal 2024 Term Loan, subject to certain limitations and qualifications as set forth in the Amended and Restated Term Credit Agreement. The Amended and Restated Term Credit Agreement is subject to certain covenants, including a leverage ratio. At June 30, 2024, the Company is in compliance with all covenants of the Fiscal 2024 Amended Term Loan.
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”). The Fiscal 2016 Senior Notes will mature on June 27, 2026 and bear interest at a rate of 3.40% per annum. Interest on the Fiscal 2016 Senior Notes is payable semi-annually in arrears on June 27 and December 27 of each year. The Fiscal 2016 Senior Notes were issued at a price of 99.589% (effective yield to maturity of 3.449%). The indenture governing the Fiscal 2016 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2024, the Company is in compliance with the covenants of the indenture governing the Fiscal 2016 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2016 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2016 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2016 Senior Notes at June 30, 2024 and June 30, 2023 was $480.4 million and $471.4 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”).
Fiscal 2020 Senior Notes: In December 2019, the Company completed an offering of $750.0 million in aggregate principal amount of senior notes (the “Fiscal 2020 Senior Notes”). The Fiscal 2020 Senior Notes will mature on December 1, 2029 and bear interest at a rate of 2.90% per annum. Interest on the Fiscal 2020 Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Fiscal 2020 Senior Notes were issued at a price of 99.717% (effective yield to maturity of 2.933%). The indenture governing the Fiscal 2020 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2024, the Company is in compliance with the covenants of the indenture governing the Fiscal 2020 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2020 Senior Notes
80
upon a change of control triggering event. The Company may redeem the Fiscal 2020 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2020 Senior Notes at June 30, 2024 and June 30, 2023 was $667.7 million and $641.0 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”).
Fiscal 2021 Senior Notes: In May 2021, the Company completed an offering of $1.0 billion in aggregate principal amount of senior notes (the “Fiscal 2021 Senior Notes”). The Fiscal 2021 Senior Notes will mature on May 1, 2031 and bear interest at a rate of 2.60% per annum. Interest on the Fiscal 2021 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year. The Fiscal 2021 Senior Notes were issued at a price of 99.957% (effective yield to maturity of 2.605%). The indenture governing the Fiscal 2021 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At June 30, 2024, the Company is in compliance with the covenants of the indenture governing the Fiscal 2021 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2021 Senior Notes upon a change of control triggering event. 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, 2024 and June 30, 2023 was $843.5 million and $817.4 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 2024 Amended Term Loan, 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.
In addition, certain of the Company’s subsidiaries established unsecured, uncommitted lines of credit with banks. As of June 30, 2024 and 2023, respectively, there were no outstanding borrowings under these lines of credit.
NOTE 15. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following:
June 30,
2024
2023
(in millions)
Operating lease liabilities
$
183.8
$
198.5
Post-employment retirement obligations
214.8
182.2
Non-current income taxes
59.0
52.4
Acquisition related contingencies
15.0
7.7
Other
78.3
35.2
Total
$
550.9
$
476.0
The Company sponsors a Supplemental Officer Retirement Plan (the “Broadridge SORP”). The Broadridge SORP is a non-qualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers’ years of service and compensation. The Broadridge SORP was closed to new participants beginning in fiscal year 2015. The Company also sponsors a Supplemental Executive Retirement Plan (the “Broadridge SERP”). The Broadridge SERP is also a non-qualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key executives upon retirement based upon the executives’ years of service and compensation. The Broadridge SERP was closed to new participants beginning in fiscal year 2015.
The SORP and SERP are effectively funded with assets held in a Rabbi Trust. The assets invested in the Rabbi Trust are to be used in part to fund benefit payments to participants under the terms of the plans. The Rabbi Trust is irrevocable and no portion of the trust funds may be used for any purpose other than the delivery of those assets to the participants, except that assets held in the Rabbi Trust would be subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency of the Company. The Broadridge SORP and SERP are non-qualified plans for federal tax purposes and for purposes of Title I of ERISA. The Rabbi Trust assets had a value of $61.8 million at June 30, 2024 and $57.8 million at June 30, 2023 and are included in Other non-current assets in the accompanying Consolidated Balance Sheets.The SORP and the SERP had a total benefit obligation of $61.6 million at June 30, 2024 and $58.6 million at June 30, 2023 and are included in Other non-current liabilities in the accompanying Consolidated Balance Sheets.
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NOTE 16. STOCK-BASED COMPENSATION
Incentive Equity Awards. The Broadridge Financial Solutions, Inc. 2007 Omnibus Award Plan (the “2007 Plan”) and 2018 Omnibus Award Plan (the “2018 Plan”) provide for the granting of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock awards, stock bonuses and performance compensation awards to employees, non-employee directors, and other key individuals who perform services for the Company. The 2018 Plan was approved by shareholders in November 2018 and replaced the 2007 Plan. The accounting for stock-based compensation requires the measurement of stock-based compensation expense to be recognized in the Consolidated Statements of Earnings based on the fair value of the award on the date of grant. In accordance with the 2007 Plan and 2018 Plan, the Company’s stock-based compensation consists of the following:
Stock Options: Stock options are granted to employees at exercise prices equal to the fair market value of the Company’s common stock on the dates of grant. Stock options are generally issued under a graded vesting schedule, meaning that they vest ratably over four years, and have a term of 10 years. A portion of the stock options granted in fiscal year 2018 have a cliff vesting schedule meaning that they fully vest in four years from the grant date and have a term of 10 years. Compensation expense for stock options under a graded vesting schedule is recognized over the requisite service period for each separately vesting portion of the stock option award. Compensation expense for stock options under a cliff vesting schedule is recognized equally over the vesting period of four years with 25 percent of the cost recognized over each 12 months period net of estimated forfeitures.
Time-based Restricted Stock Units: The Company has a time-based restricted stock unit (“RSU”) program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU granted. Time-based RSUs typically vest two and one-half years from the date of grant. The Company records stock compensation expense for time-based RSUs net of estimated forfeitures on a straight-line basis over the vesting period.
Performance-based Restricted Stock Units: The Company has a performance-based RSU program under which RSUs representing the right to receive one share of the Company’s common stock for each vested RSU granted. RSUs vest upon the achievement by the Company of specific performance metrics. The Company records stock compensation expense for performance-based RSUs net of estimated forfeitures on a straight-line basis over the performance period, plus a subsequent vesting period, which typically totals approximately two and one-half years from the date of grant.
82
The activity related to the Company’s incentive equity awards for the fiscal years ended June 30, 2024, 2023 and 2022 consisted of the following:
Stock Options
Time-based RSUs
Performance-based RSUs
Number of Options
Weighted Average Exercise Price
Number of Shares
Weighted Average Grant-Date Fair Value
Number of Shares
Weighted Average Grant-Date Fair Value
Balances at June 30, 2021
3,203,682
$
88.33
761,337
$
117.07
247,580
$
126.29
Granted
436,913
146.26
396,667
159.57
103,084
157.88
Exercised (a)
(850,514)
70.94
—
—
—
—
Vesting of RSUs (b)
—
—
(318,693)
117.62
(91,246)
119.65
Expired/forfeited
(83,396)
114.58
(88,459)
145.53
(49,137)
109.45
Balances at June 30, 2022
2,706,685
$
102.34
750,852
$
135.94
210,281
$
148.59
Granted
577,046
144.34
393,541
139.36
110,624
139.00
Exercised (a)
(565,470)
76.38
—
—
—
—
Vesting of RSUs (b)
—
—
(333,625)
134.02
(108,475)
130.18
Expired/forfeited
(21,456)
141.35
(79,441)
144.18
(10,725)
144.91
Balances at June 30, 2023
2,696,805
$
116.46
731,327
$
137.76
201,705
$
153.42
Granted
338,301
197.04
299,368
173.18
92,905
168.95
Exercised (a)
(732,491)
98.34
—
—
—
—
Vesting of RSUs (b)
—
—
(294,088)
152.47
(85,914)
158.22
Expired/forfeited
(121,994)
158.93
(53,923)
152.23
(46,891)
145.22
Balances at June 30, 2024 (c)
2,180,621
$
132.68
682,684
$
146.05
161,805
$
152.21
_________
(a)Stock options exercised during the fiscal years ended June 30, 2024, 2023 and 2022 had intrinsic values of $66.7 million, $51.2 million and $79.6 million, respectively.
(b)Time-based RSUs that vested during the fiscal years ended June 30, 2024, 2023 and 2022 had a total fair value of $59.0 million, $49.6 million and $50.5 million, respectively. Performance-based RSUs that vested during the fiscal years ended June 30, 2024, 2023 and 2022 had a total fair value of $17.2 million, $15.9 million and $14.3 million, respectively.
(c)As of June 30, 2024, the Company’s outstanding stock options using the fiscal year-end share price of $197.00 had an aggregate intrinsic value of $140.8 million. As of June 30, 2024, the Company’s outstanding “in the money” vested stock options using the fiscal year-end share price of $197.00 had an aggregate intrinsic value of $112.0 million. As of June 30, 2024, time-based RSUs and performance-based RSUs expected to vest using the fiscal year-end share price of $197.00 had an aggregate intrinsic value of $127.1 million and $29.8 million, respectively. Performance-based RSUs granted in the table above represent initial target awards, and performance adjustments for (i) change in shares issued based upon attainment of performance goals determined in the period, and (ii) estimated change in shares issued resulting from attainment of performance goals to be determined at the end of the prospective performance period.
83
The tables below summarize information regarding the Company’s outstanding and exercisable stock options as of June 30, 2024:
Outstanding Options
Options Outstanding
Weighted Average Remaining Contractual Term (in years)
Weighted Average Exercise Price Per Share
Aggregate Intrinsic Value (in millions) (a)
Range of Exercise Prices
$0.01 to $50.00
15,914
0.37
$
45.09
$50.01 to $65.00
125,568
1.67
$
55.01
$65.01 to $80.00
78,362
2.61
$
67.32
$80.01 to $95.00
221,186
3.50
$
93.36
$95.01 to $110.00
146,194
4.52
$
99.43
$110.01 to $125.00
241,407
5.32
$
117.50
$125.01 to $155.00
1,023,915
7.39
$
145.32
$155.01 to $197.00
47,515
8.18
$
174.78
$197.01 to $204.03
280,560
9.45
$
198.77
2,180,621
6.30
$
132.68
$
140.8
Exercisable Options
Range of Exercise Prices
Options Exercisable
Weighted Average Remaining Contractual Term (in years)
Weighted Average Exercise Price Per Share
Aggregate Intrinsic Value (in millions) (a)
$0.01 to $50.00
15,914
0.37
$
45.09
$50.01 to $65.00
125,568
1.67
$
55.01
$65.01 to $80.00
78,362
2.61
$
67.32
$80.01 to $95.00
221,186
3.50
$
93.36
$95.01 to $110.00
146,194
4.52
$
99.43
$110.01 to $125.00
241,407
5.32
$
117.50
$125.01 to $155.00
469,337
6.62
$
145.40
$155.01 to $197.00
43,003
8.07
$
174.55
$197.01 to $204.03
4,438
0.88
$
198.30
1,345,409
4.90
$
113.78
$
112.0
_________
(a) Calculated using the closing stock price on the last trading day of fiscal year 2024 of $197.00, less the option exercise price, multiplied by the number of instruments.
Stock-based compensation expense of $70.6 million, $73.1 million, and $68.4 million was recognized in the Consolidated Statements of Earnings for the fiscal years ended June 30, 2024, 2023 and 2022, respectively, as well as related tax benefits of $13.7 million, $13.1 million, and $15.7 million, respectively.
As of June 30, 2024, the total remaining unrecognized compensation cost related to non-vested stock options and RSU awards amounted to $17.2 million and $55.9 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.8 years and 1.8 years, respectively.
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. The Company repurchased 2.3 million shares in fiscal year 2024 under our share repurchase program as compared to no shares repurchased in fiscal year 2023 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.
84
The following table presents the assumptions used to determine the fair values of the stock option grants using the Binomial options pricing model during the fiscal years ended June 30, 2024, 2023 and 2022:
Years ended June 30,
2024
2023
2022
Graded Vesting
Risk-free interest rate
4.3
%
4.0
%
1.9
%
Dividend yield
1.7
%
2.0
%
1.8
%
Weighted-average volatility factor
23.7
%
25.8
%
27.8
%
Weighted-average expected life (in years)
5.5
5.5
5.6
Weighted-average fair value (in dollars)
$
49.31
$
35.43
$
33.29
NOTE 17. EMPLOYEE BENEFIT PLANS
A. Defined Contribution Savings Plans. The Company sponsors a 401(k) savings plan covering eligible U.S. employees of the Company. This plan provides a base contribution plus Company matching contributions on a portion of employee contributions.
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. employees to defer compensation until a later date and the Company will match a portion of the deferred compensation above the qualified defined contribution compensation and deferral limitations.
The costs recorded by the Company for these plans were:
Years ended June 30,
2024
2023
2022
(in millions)
401(k) savings plan
$
47.2
$
54.0
$
47.5
ERSP
3.7
4.1
3.6
Total
$
50.9
$
58.1
$
51.1
B. Defined Benefit Pension Plans. The Company sponsors a Supplemental Officer Retirement Plan (the “SORP”). The SORP is a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers’ years of service and compensation. The SORP was closed to new participants beginning in fiscal year 2015. The Company also sponsors a Supplemental Executive Retirement Plan (the “SERP”). The SERP is also a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key executives upon retirement based upon the executives’ years of service and compensation. The SERP was closed to new participants beginning in fiscal year 2015.
The SORP and SERP are effectively funded with assets held in a Rabbi Trust. The assets invested in the Rabbi Trust are to be used in part to fund benefit payments to participants under the terms of the plans. The Rabbi Trust is irrevocable and no portion of the trust funds may be used for any purpose other than the delivery of those assets to the participants, except that assets held in the Rabbi Trust would be subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency of the Company. The SORP and SERP are nonqualified plans for federal tax purposes and for purposes of Title I of ERISA. The Rabbi Trust assets had a value of $61.8 million at June 30, 2024 and $57.8 million at June 30, 2023 and are included in Other non-current assets in the accompanying Consolidated Balance Sheets.
85
The amounts charged to expense by the Company for these plans were:
Years ended June 30,
2024
2023
2022
(in millions)
SORP
$
3.5
$
3.4
$
5.7
SERP
0.3
0.4
0.5
Total
$
3.7
$
3.8
$
6.2
The benefit obligation to the Company under these plans at June 30, 2024, 2023 and 2022 was:
Years ended June 30,
2024
2023
2022
(in millions)
SORP
$
56.4
$
53.4
$
51.6
SERP
5.2
5.2
5.4
Total
$
61.6
$
58.6
$
57.0
C. Other Post-retirement Benefit Plan. The Company sponsors an Executive Retiree Health Insurance Plan. It is a post-retirement benefit plan pursuant to which the Company helps defray the health care costs of certain eligible key executive retirees and qualifying dependents, based upon the retirees’ age and years of service, until they reach the age of 65. The plan is currently unfunded.
The amounts charged to expense by the Company for this plan were:
Years ended June 30,
2024
2023
2022
(in millions)
Executive Retiree Health Insurance Plan
$
0.6
$
0.3
$
0.1
The benefit obligation to the Company under this plan at June 30, 2024, 2023 and 2022 was:
Years ended June 30,
2024
2023
2022
(in millions)
Executive Retiree Health Insurance Plan
$
5.4
$
4.7
$
4.0
D. Other Post-employment Benefit Obligations. 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.
The amounts charged to expense by the Company for these plans were in fiscal years 2024, 2023 and 2022 was:
Years ended June 30,
2024
2023
2022
(in millions)
Other Non-U.S. Benefits-Related Plans
$
2.8
$
1.8
$
2.0
86
The benefit obligation to the Company under these plans at June 30, 2024, 2023 and 2022 was:
Years ended June 30,
2024
2023
2022
(in millions)
Other Non-U.S. Benefits-Related Plans
$
12.4
$
10.4
$
9.8
NOTE 18. INCOME TAXES
Earnings before income taxes shown below are based on the geographic location to which such earnings are attributable.
Years Ended June 30,
2024
2023
2022
(in millions)
Earnings before income taxes:
U.S.
$
716.1
$
710.6
$
609.9
Foreign
161.3
84.2
62.3
Total
$
877.4
$
794.9
$
672.2
The Provision for income taxes consists of the following components:
Years Ended June 30,
2024
2023
2022
(in millions)
Current:
U.S. Federal
$
205.8
$
143.2
$
25.4
Foreign
63.9
45.4
45.4
U.S. State
29.4
26.5
11.7
Total current
299.0
215.1
82.4
Deferred:
U.S. Federal
(89.4)
(23.7)
65.8
Foreign
(25.6)
(29.3)
(31.7)
U.S. State
(4.7)
2.2
16.6
Total deferred
(119.7)
(50.8)
50.7
Total Provision for income taxes
$
179.3
$
164.3
$
133.1
Years Ended June 30,
2024
%
2023
%
2022
%
(in millions)
Provision for income taxes at U.S. statutory rate
$
184.2
21.0
$
166.9
21.0
$
141.2
21.0
Increase (decrease) in Provision for income taxes from:
Tax Credits and Foreign-Derived Intangible Income Deduction (“FDII”)
(21.2)
(2.4)
(20.2)
(2.5)
(16.6)
(2.5)
Other
2.2
0.3
1.9
0.2
3.9
0.6
Total Provision for income taxes
$
179.3
20.4
$
164.3
20.7
$
133.1
19.8
87
The Provision for income taxes and effective tax rates for the fiscal year ended June 30, 2024 were $179.3 million and 20.4%, compared to $164.3 million and 20.7%, for the fiscal year ended June 30, 2023, respectively. The decrease in the effective tax rate for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023 was driven by an increase in discrete tax benefits relative to pre-tax income, primarily attributable to an ETB of $12.9 million for the fiscal year ended June 30, 2024 compared to $10.4 million for the fiscal year ended June 30, 2023.
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 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.
As of June 30, 2024, the Company had approximately $853.9 million of accumulated earnings and profits attributable to foreign subsidiaries. The Company considers $668.5 million of accumulated earnings attributable to foreign subsidiaries to be permanently reinvested outside the U.S. and has not determined the cost to repatriate such earnings since it is not practicable to calculate the amount of income taxes payable in the event all such foreign earnings are repatriated. The Company does not consider the remaining $185.4 million of accumulated earnings to be permanently reinvested outside the U.S. The Company has accrued approximately $10.4 million of foreign income and withholding taxes, state income taxes, and tax on exchange gain attributable to such earnings.
In December 2021, the OECD adopted model rules for a global framework to impose a 15% global minimum tax referred to as Pillar Two effective for tax years beginning after January 1, 2024. The OECD continues to issue additional guidance on the operation of the model rules. While the United States has not enacted Pillar Two, certain countries in which we operate have adopted their own version of the Pillar Two model rules. Management continues to monitor additional guidance from the OECD and countries which are implementing Pillar Two. Based on current guidance, we believe that our net income, cash flows, or financial condition will not be materially impacted by Pillar Two.
88
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company’s deferred tax assets and liabilities at June 30, 2024 and 2023 were as follows:
June 30,
2024
2023
(in millions)
Classification:
Long-term deferred tax assets (included in Other non-current assets)
$
23.8
$
14.5
Long-term deferred tax liabilities
(277.3)
(391.3)
Net deferred tax liabilities
$
(253.5)
$
(376.8)
Components:
Deferred tax assets:
Accrued expenses not currently deductible
$
21.4
$
8.2
Compensation and benefits not currently deductible
86.5
75.8
Net operating losses
23.1
26.3
Tax credits
6.0
11.5
Research and development expenses
162.1
90.6
Deferred revenue
85.6
29.7
Other
4.3
24.1
Total deferred tax assets
388.9
266.2
Less: Valuation allowances
(10.8)
(10.3)
Deferred tax assets, net
378.1
255.9
Deferred tax liabilities:
Goodwill and identifiable intangibles
186.4
215.9
Depreciation
11.9
14.5
Deferred expenses
390.6
359.1
Unremitted earnings
10.4
11.5
Cross Currency Swap and Treasury-Locks
13.1
14.4
Other
19.1
17.3
Deferred tax liabilities
631.6
632.6
Net deferred tax liabilities
$
(253.5)
$
(376.8)
The Company has estimated foreign net operating loss carryforwards of approximately $46.2 million as of June 30, 2024 of which $7.3 million are subject to expiration in the June 30, 2026 through June 30, 2043 period, and of which $38.8 million has an indefinite utilization period. In addition, the Company has estimated U.S. federal net operating loss carryforwards of approximately $30.1 million of which $12.4 million are subject to expiration in the June 30, 2025 through June 30, 2037 period with the balance of $17.6 million having an indefinite utilization period.
Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that the Company will not be able to utilize the deferred tax assets of certain subsidiaries to offset future taxable earnings. The Company has recorded valuation allowances of $10.8 million and $10.3 million at June 30, 2024 and 2023, respectively. The determination as to whether a deferred tax asset will be recognized is made on a jurisdictional basis and is based on the evaluation of historical taxable income or loss, projected future taxable income, carryforward periods, scheduled reversals of deferred tax liabilities and tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The assumptions used to project future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying businesses.
In the next twelve months, the Company does not expect a material change to its net reserve balance for unrecognized tax benefits.
89
The following table summarizes the activity related to the Company’s gross unrecognized tax positions:
Fiscal Year Ended June 30,
2024
2023
2022
(in millions)
Beginning balance
$
68.8
$
57.6
$
50.7
Gross increases related to prior period tax positions
8.0
13.2
8.3
Gross decreases related to prior period tax positions
(2.0)
(3.3)
(0.5)
Gross increases related to current period tax positions
7.5
6.9
8.3
Gross decreases related to settlements
(0.4)
(0.3)
(4.2)
Gross decreases due to lapse of the statute of limitations
(7.2)
(5.4)
(5.0)
Ending balance
$
74.7
$
68.8
$
57.6
As of June 30, 2024, 2023 and 2022, the net reserve for unrecognized tax positions recorded by the Company that is included in the preceding table of gross unrecognized tax positions was $67.3 million, $62.0 million, and $51.6 million, respectively, and if reversed in full, would favorablyaffect the effective tax rate by these amounts, respectively.
During the fiscal year ended June 30, 2024, the Company adjusted accrued interest by $0.1 million and recognized a total liability for interest on unrecognized tax positions of $4.2 million; in 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, 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.
The Company is regularly subject to examination of its income tax returns by U.S. Federal, state and foreign income tax authorities. The tax years that are currently open and could be subject to income tax audits for U.S. federal and most state and local jurisdictions are fiscal years ending June 30, 2021 through June 30, 2024, and for Canadian operations that could be subject to audit in Canada, fiscal years ending June 30, 2020 through June 30, 2024. A change in the assessment of the outcomes of such matters could materially impact our Consolidated Financial Statements.
NOTE 19. CONTRACTUAL COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ARRANGEMENTS
Data Center Agreements
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, 2024 are $113.4 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, 2024 are $106.3 million through March 31, 2030, the final year of the contract.
90
The following table summarizes the capitalized costs related to data center agreements as of June 30, 2024:
Amended and Restated IT Services Agreement
Other
Total
(in millions)
Capitalized costs, beginning balance
$
63.0
$
7.7
$
70.7
Capitalized costs incurred
—
—
—
Impact of foreign currency exchange
—
—
—
Total capitalized costs, ending balance
63.0
7.7
70.7
Total accumulated amortization
(53.2)
(6.1)
(59.3)
Net Deferred Costs
$
9.8
$
1.6
$
11.4
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 minimum commitments remaining under the AWS Cloud Agreement at June 30, 2024 are $136.1 million through December 31, 2026.
Investments
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 $34.3 million as of June 30, 2024, which represents the carrying value of the Company's investment.
In addition, as of June 30, 2024, the Company also has a future commitment to fund $0.4 million to one of the Company’s other investees.
Contractual Obligations
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:
Years ended June 30,
2024
2023
2022
(in millions)
Data center expenses
$
223.7
$
235.1
$
248.0
Software license agreements
101.5
90.6
81.9
Software/hardware maintenance agreements
72.4
73.8
77.3
Total expenses
$
397.5
$
399.5
$
407.1
91
The future minimum commitments at June 30, 2024 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)
2025
$
180.0
2026
162.7
2027
117.2
2028
34.2
2029
17.6
Thereafter
11.1
Total
$
522.8
The future minimum commitments table excludes $53.0 million of other liabilities recorded on the Company’s Consolidated Balance Sheet as of June 30, 2024.
Litigation
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 $5.0 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. Claim
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. On July 26, 2023, the trial court vacated the damages award but not the liability finding. A new trial on damages was scheduled. In July 2024, Broadridge agreed to settle the matter for $11.0 million and provided an incremental accrual of $10.3 million in the fourth quarter of the 2024 fiscal year. The settlement is subject to final documentation.
A law firm representing a machine operator currently employed by BRCC, a business within the ICS segment in Edgewood, New York sought compensation under the Fair Labor Standards Act and New York Labor Law on behalf of the machine operator and a proposed class of machine operators. During the third quarter of 2024, Broadridge agreed to settle the matter for $9.9 million and provided an incremental accrual of $8.2 million. The settlement is subject to final documentation and court approval.
Other
It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations, and cash flows. 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.
92
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, 2024, the Company’s position on the cross-currency swaps was an asset of $59.9 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 May 2021, the Company settled a forward treasury lock agreement that was designated as a cash flow hedge, for a pre-tax loss of $11.0 million, after which the final settlement loss is being amortized into Interest expense, net ratably over the 10-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 enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. The Company does not expect any material losses related to such representations and warranties, or collateral arrangements.
The Company’s business process outsourcing and mutual fund processing services are performed by Broadridge Business Process Outsourcing, LLC (“BBPO”), an indirect subsidiary, which is a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Although BBPO’s FINRA membership agreement allows it to engage in clearing and the retailing of corporate securities in addition to mutual fund retailing on a wire order basis, BBPO does not clear customer transactions, process any retail business or carry customer accounts. As a registered broker-dealer and member of FINRA, BBPO is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended, which requires BBPO to maintain a minimum net capital amount. At June 30, 2024, 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. 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, 2024, Matrix Trust Company was in compliance with its capital requirements.
93
NOTE 20. 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):
Foreign Currency Translation
Pension and Post- Retirement Liabilities
Cash Flow Hedge
Total
(in millions)
Balances at June 30, 2021
$
32.9
$
(15.4)
$
(8.2)
$
9.2
Other comprehensive income (loss) before reclassifications
(247.0)
8.6
—
(238.5)
Amounts reclassified from accumulated other comprehensive income/(loss)
—
2.0
0.8
2.8
Balances at June 30, 2022
$
(214.1)
$
(4.8)
$
(7.4)
$
(226.3)
Other comprehensive income (loss) before reclassifications
(59.4)
0.1
—
(59.3)
Amounts reclassified from accumulated other comprehensive income/(loss)
—
0.1
0.8
0.9
Balances at June 30, 2023
$
(273.6)
$
(4.6)
$
(6.5)
$
(284.7)
Other comprehensive income (loss) before reclassifications
(46.8)
(1.3)
—
(48.0)
Amounts reclassified from accumulated other comprehensive income/(loss)
—
0.2
0.8
1.1
Balances at June 30, 2024
$
(320.3)
$
(5.7)
$
(5.7)
$
(331.7)
NOTE 21. FINANCIAL DATA BY SEGMENT
The Company operates in two reportable segments: Investor Communication Solutions and Global Technology and Operations. See Note 1, “Basis of Presentation” for a further description of the Company’s reportable segments.
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.
Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts in a reasonable manner. 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.
94
Investor Communication Solutions
Global Technology and Operations
Other
Total
(in millions)
Year ended June 30, 2024
Revenues
$
4,857.9
$
1,648.9
$
—
$
6,506.8
Earnings (loss) before income taxes
950.4
173.3
(246.3)
877.4
Assets
2,522.3
5,124.9
595.2
8,242.4
Capital expenditures
39.1
13.2
5.0
57.4
Depreciation and amortization
40.1
49.4
30.3
119.8
Amortization of acquired intangibles
45.4
154.9
—
200.3
Amortization of other assets
38.5
102.6
16.7
157.8
Year ended June 30, 2023
Revenues
$
4,535.6
$
1,525.2
$
—
$
6,060.9
Earnings (loss) before income taxes
811.4
183.9
(200.5)
794.9
Assets
2,433.3
5,313.9
486.0
8,233.2
Capital expenditures
28.4
3.8
6.1
38.4
Depreciation and amortization
37.9
18.3
28.3
84.4
Amortization of acquired intangibles
55.5
158.9
—
214.4
Amortization of other assets
41.1
68.3
16.9
126.2
Year ended June 30, 2022
Revenues
$
4,256.6
$
1,452.4
$
—
$
5,709.1
Earnings (loss) before income taxes
724.7
139.4
(191.9)
672.2
Assets
2,505.3
5,149.1
514.4
8,168.8
Capital expenditures
15.9
7.0
6.1
29.0
Depreciation and amortization
38.0
19.4
25.1
82.4
Amortization of acquired intangibles
68.7
181.5
—
250.2
Amortization of other assets
39.5
75.4
16.5
131.4
Revenues and assets by geographic area are as follows:
United States
Canada
Europe
Other
Total
(in millions)
Year ended June 30, 2024
Revenues
$
5,620.1
$
393.9
$
445.9
$
46.8
$
6,506.8
Assets
$
5,620.1
$
457.2
$
1,926.7
$
238.4
$
8,242.4
Year ended June 30, 2023
Revenues
$
5,260.0
$
367.4
$
392.2
$
41.3
$
6,060.9
Assets
$
5,514.3
$
448.4
$
2,024.3
$
246.2
$
8,233.2
Year ended June 30, 2022
Revenues
$
4,880.1
$
398.1
$
386.0
$
44.8
$
5,709.1
Assets
$
5,282.3
$
495.4
$
2,152.1
$
239.0
$
8,168.8
95
NOTE 22. SUBSEQUENT EVENTS
On August 5, 2024, the Company’s Board of Directors increased the Company’s quarterly cash dividend by $0.08 per share to $0.88 per share, an increase in the expected annual dividend amount from $3.20 to $3.52 per share. The declaration and payment of future dividends to holders of the Company’s common stock will be at the discretion of the Company’s Board of Directors, and will depend upon many factors, including the Company’s financial condition, earnings, capital requirements of its businesses, legal requirements, regulatory constraints, industry practice, and other factors that the Board of Directors deems relevant.
* * * * * * *
96
Broadridge Financial Solutions, Inc.
Schedule II—Valuation and Qualifying Accounts
(in millions)
Column A
Column B
Column C
Column D
Column E
Additions
Balance at beginning of period
(1) Charged to costs and expenses
(2) Charged to other accounts
Deductions
Balance at end of period
Fiscal year ended June 30, 2024:
Allowance for doubtful accounts
$
7.2
$
7.5
$
—
$
(5.1)
$
9.7
Deferred tax valuation allowance
$
10.3
$
0.5
$
—
$
—
$
10.8
Other receivables
$
3.6
$
—
$
—
$
—
$
3.6
Fiscal year ended June 30, 2023:
Allowance for doubtful accounts
$
6.8
$
2.4
$
—
$
(1.9)
$
7.2
Deferred tax valuation allowance
$
10.7
$
—
$
—
$
(0.4)
$
10.3
Other receivables
$
1.7
$
1.7
$
0.5
$
(0.2)
$
3.6
Fiscal year ended June 30, 2022:
Allowance for doubtful accounts
$
9.3
$
—
$
—
$
(2.5)
$
6.8
Deferred tax valuation allowance
$
10.5
$
—
$
0.2
$
—
$
10.7
Other receivables
$
1.0
$
0.7
$
—
$
—
$
1.7
Amounts may not sum due to rounding.
97
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Management Report
Attached as Exhibits 31.1 and 31.2 to this Form 10-K are certifications of Broadridge’s Chief Executive Officer and Interim Chief Financial Officer, which are required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This “Controls and Procedures” section should be read in conjunction with the Deloitte & Touche LLP audit and attestation of the Company’s internal control over financial reporting that appears in Item 8 “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K and is hereby incorporated herein by reference.
Management’s Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Interim Chief Financial Officer as of June 30, 2024, evaluated the effectiveness of our disclosure controls as defined in Rule 13a-15(e) under the Exchange Act. The Chief Executive Officer and Interim Chief Financial Officer concluded that our disclosure controls and procedures as of June 30, 2024 were effective to ensure that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.
Management’s Report on Internal Control over Financial Reporting
It is the responsibility of Broadridge’s management to establish and maintain effective internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over financial reporting is designed to provide reasonable assurance to Broadridge’s management and board of directors regarding the preparation of reliable financial statements for external purposes in accordance with generally accepted accounting principles.
Broadridge’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Broadridge; (ii) 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 Broadridge are being made only in accordance with authorizations of management and directors of Broadridge; and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of Broadridge’s assets that could have a material effect on the financial statements of Broadridge.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Management has performed an assessment of the effectiveness of Broadridge’s internal control over financial reporting as of June 30, 2024 based upon criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that Broadridge’s internal control over financial reporting was effective as of June 30, 2024.
Deloitte & Touche LLP, the Company’s independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting and has expressed an unqualified opinion in their report on the effectiveness of the Company’s internal control over financial reporting, which appears in Item 8 “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
/s/ TIMOTHY C. GOKEY
Timothy C. Gokey
Chief Executive Officer
/s/ ASHIMA GHEI
Ashima Ghei
Vice President, Interim Chief Financial Officer
Lake Success, New York
August 6, 2024
98
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. Other Information
On May 15, 2024, the Company’s President, Christopher Perry, adopted a Rule 10b5-1 trading arrangement (the “Perry 10b5-1 Plan”) for the sale of securities of the Company. The Perry 10b5-1 Plan allows for the contemporaneous exercise of options and sale of up to 42,045 underlying shares of the Company’s common stock received upon exercise, subject to the satisfaction of the Company’s stock retention and holding period requirements. The Perry 10b5-1 Plan will expire on May 31, 2025.
On May 17, 2024, the Company’s Chief Executive Officer, Timothy C. Gokey, adopted a Rule 10b5-1 trading arrangement (the “Gokey 10b5-1 Plan”) for the sale of securities of the Company. The Gokey 10b5-1 Plan allows for the contemporaneous exercise of options and sale of up to 61,349 underlying shares of the Company’s common stock received upon exercise, subject to the satisfaction of the Company’s stock retention and holding period requirements. The Gokey 10b5-1 Plan will expire on November 17, 2024.
Each of the Perry 10b5-1 Plan and Gokey 10b5-1 Plan is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended.
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
99
PART III.
ITEM 10. Directors, Executive Officers and Corporate Governance
We incorporate by reference the information responsive to this Item appearing in our definitive proxy statement to be filed within 120 days after the fiscal year ended June 30, 2024 (the “Proxy Statement”).
ITEM 11. Executive Compensation
We incorporate by reference the information responsive to this Item appearing in our Proxy Statement.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
We incorporate by reference the information responsive to this Item appearing in our Proxy Statement.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
We incorporate by reference the information responsive to this Item appearing in our Proxy Statement.
ITEM 14. Principal Accounting Fees and Services
We incorporate by reference the information responsive to this Item appearing in our Proxy Statement.
100
PART IV.
ITEM 15. Exhibits, Financial Statement Schedules
(a)The following documents are filed as part of this Annual Report on Form 10-K:
1.Financial Statements
The Consolidated Financial Statements are listed under Item 8 of this Annual Report on Form 10-K. See Index to Financial Statements and Financial Statement Schedule.
2.Financial Statement Schedule.
Schedule II—Valuation and Qualifying Accounts is listed under Item 8 of this Annual Report on Form 10-K. See Index to Financial Statements and Financial Statement Schedule.
3.Exhibits.
The Exhibits filed as part of this Annual Report on Form 10-K are listed on the Exhibit Index, which Exhibit Index is incorporated by reference in this Annual Report on Form 10-K.
ITEM 16. Form 10-K Summary
Not Applicable.
101
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 6, 2024
BROADRIDGE FINANCIAL SOLUTIONS, INC.
By:
/s/ TIMOTHY C. GOKEY
Name:
Timothy C. Gokey
Title:
Chief Executive Officer
SIGNATURES AND POWERS OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Timothy C. Gokey and Ashima Ghei, and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power of substitution and resubstitution, for and in the name, place and stead of the undersigned, to sign in any and all capacities (including, without limitation, the capacities listed below), any and all amendments to the Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and anything necessary to be done to comply with the provisions of the Securities Exchange Act of 1934, as amended, and all the requirements of the Securities and Exchange Commission, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitute, or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
102
Signature
Title
Date
/s/ TIMOTHY C. GOKEY
Chief Executive Officer and Director (Principal Executive Officer)
August 6, 2024
Timothy C. Gokey
/s/ ASHIMA GHEI
Vice President, Interim Chief Financial Officer (Interim Principal Financial and Accounting Officer)
The following financial statements from the Broadridge Financial Solutions, Inc. Annual Report on Form 10-K for the fiscal year ended June 30, 2024, formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated statements of earnings for the fiscal years ended June 30, 2024, 2023 and 2022, (ii) consolidated statements of comprehensive income for the fiscal years ended June 30, 2024, 2023 and 2022, (iii) consolidated balance sheets as of June 30, 2024 and 2023, (iv) consolidated statements of cash flows for the fiscal years ended June 30, 2024, 2023 and 2022, (v) consolidated statements of stockholders’ equity for the fiscal years ended June 30, 2024, 2023 and 2022, and (vi) the notes to the Consolidated Financial Statements.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
_________________
(1)The SEC File No. for the Company’s Form 8-K Reports referenced is 001-33220.
*Certain confidential information contained in this Exhibit was omitted by means of redacting a portion of the text and replacing it with an asterisk.
