Cover Page
Cover Page - shares | 3 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33220 | |
Entity Registrant Name | BROADRIDGE FINANCIAL SOLUTIONS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-1151291 | |
Entity Address, Address Line One | 5 Dakota Drive | |
Entity Address, City or Town | Lake Success | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11042 | |
City Area Code | 516 | |
Local Phone Number | 472-5400 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | BR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 114,646,129 | |
Amendment Fag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001383312 | |
Current Fiscal Year End Date | --06-30 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 948.6 | $ 972.8 |
Operating expenses: | ||
Cost of revenues | 727.5 | 739 |
Selling, general and administrative expenses | 148 | 133.7 |
Total operating expenses | 875.4 | 872.7 |
Operating income | 73.1 | 100.1 |
Interest expense, net | (13.1) | (9.6) |
Other non-operating income (expenses), net | 3.8 | (1.2) |
Earnings before income taxes | 63.8 | 89.3 |
Provision for income taxes | 7.9 | 12.6 |
Net earnings | $ 55.9 | $ 76.7 |
Basic earnings per share (in dollars per share) | $ 0.49 | $ 0.66 |
Diluted earnings per share (in dollars per share) | $ 0.48 | $ 0.64 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 114.4 | 116.4 |
Diluted (in shares) | 117.1 | 119.7 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 55.9 | $ 76.7 |
Other comprehensive income (loss), net: | ||
Foreign currency translation adjustments | (8.7) | (10.1) |
Pension and post-retirement liability adjustment, net of taxes of $(0.1) and $(0.0) for the three months ended September 30, 2019 and 2018, respectively | 0.4 | 0 |
Total other comprehensive income (loss), net | (8.3) | (10.1) |
Comprehensive income | $ 47.6 | $ 66.7 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Pension and post-retirement liability adjustments, tax | $ (0.1) | $ 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 358.3 | $ 273.2 |
Accounts receivable, net of allowance for doubtful accounts of $2.1 and $2.6, respectively | 600.7 | 664 |
Other current assets | 136.2 | 105.2 |
Total current assets | 1,095.1 | 1,042.3 |
Property, plant and equipment, net | 186.2 | 189 |
Goodwill | 1,495.1 | 1,500 |
Intangible assets, net | 546.8 | 556.2 |
Other non-current assets | 896.9 | 593.1 |
Total assets | 4,220.1 | 3,880.7 |
Current liabilities: | ||
Current portion of long-term debt | 399.4 | 0 |
Payables and accrued expenses | 547.9 | 711.7 |
Contract liabilities | 93.5 | 90.9 |
Total current liabilities | 1,040.9 | 802.6 |
Long-term debt, excluding current portion | 1,368.8 | 1,470.4 |
Deferred taxes | 96 | 86.7 |
Contract liabilities | 154.7 | 160.7 |
Other non-current liabilities | 416.3 | 232.8 |
Total liabilities | 3,076.6 | 2,753.2 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock: Authorized, 25.0 shares; issued and outstanding, none | 0 | 0 |
Common stock, $0.01 par value: 650.0 shares authorized; 154.5 and 154.5 shares issued, respectively; and 114.6 and 114.3 shares outstanding, respectively | 1.6 | 1.6 |
Additional paid-in capital | 1,131.1 | 1,109.3 |
Retained earnings | 2,082 | 2,087.7 |
Treasury stock, at cost: 39.8 and 40.2 shares, respectively | (1,991.6) | (1,999.8) |
Accumulated other comprehensive loss | (79.5) | (71.2) |
Total stockholders’ equity | 1,143.4 | 1,127.5 |
Total liabilities and stockholders’ equity | $ 4,220.1 | $ 3,880.7 |
Common stock, shares outstanding (in shares) | 114.6 | 114.3 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 2.1 | $ 2.6 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 650,000,000 | 650,000,000 |
Common stock, shares issued (in shares) | 154,500,000 | 154,500,000 |
Common stock, shares outstanding (in shares) | 114,600,000 | 114,300,000 |
Treasury stock, shares (in shares) | 39,800,000 | 40,200,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Cash Flows From Operating Activities | |||
Net earnings | $ 55.9 | $ 76.7 | |
Adjustments to reconcile net earnings to net cash flows used in operating activities: | |||
Depreciation and amortization | 20.5 | 21.2 | |
Amortization of acquired intangibles and purchased intellectual property | 28.1 | 21.9 | |
Amortization of other assets | 22.8 | 21.6 | |
Stock-based compensation expense | 11.8 | 10.7 | |
Deferred income taxes | 7.5 | (1.4) | |
Other | (11) | (5.4) | |
Current assets and liabilities: | |||
Decrease (increase) in Accounts receivable, net | 63.8 | (1) | |
Increase in Other current assets | (33.4) | (4.6) | |
Decrease in Payables and accrued expenses | (190.5) | (199.3) | |
Increase (decrease) in Contract liabilities | 3.1 | (4) | |
Non-current assets and liabilities: | |||
Increase in Other non-current assets | (74.4) | (45.6) | |
Increase in Other non-current liabilities | 9.4 | 13.6 | |
Net cash flows used in operating activities | (86.4) | (95.5) | |
Cash Flows From Investing Activities | |||
Capital expenditures | (14.1) | (8.7) | |
Software purchases and capitalized internal use software | (6.2) | (6.8) | |
Acquisitions, net of cash acquired | (48.1) | 0 | |
Other investing activities | (17.9) | (0.8) | |
Net cash flows used in investing activities | (86.3) | (16.3) | |
Cash Flows From Financing Activities | |||
Debt proceeds | 337.5 | 120 | |
Debt repayments | (40) | (30) | |
Dividends paid | (55.4) | (42.5) | |
Purchases of Treasury stock | (1.1) | ||
Proceeds from exercise of stock options | 18.5 | 7.6 | |
Other financing activities | (2.5) | 0.1 | |
Net cash flows provided by financing activities | 258.1 | 54.2 | |
Effect of exchange rate changes on Cash and cash equivalents | (0.2) | (1.6) | |
Net change in Cash and cash equivalents | 85.1 | (59.3) | |
Cash and cash equivalents, beginning of period | 273.2 | 263.9 | $ 263.9 |
Cash and cash equivalents, end of period | 358.3 | 204.7 | $ 273.2 |
Supplemental disclosure of cash flow information: | |||
Cash payments made for interest | 13.6 | 9.5 | |
Cash payments made for income taxes, net of refunds | 41.5 | 30.2 | |
Non-cash investing and financing activities: | |||
Accrual of unpaid property, plant and equipment and software | $ 8.7 | $ 1.9 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Jun. 30, 2018 | 154.5 | |||||
Balance at Jun. 30, 2018 | $ 1,094.3 | $ 1.6 | $ 1,048.5 | $ 1,727 | $ (1,630.8) | $ (51.9) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income (loss) | 66.7 | 76.7 | (10.1) | |||
Stock option exercises | 18.6 | 18.6 | ||||
Stock-based compensation | 10.7 | 10.7 | ||||
Treasury stock acquired | (1.1) | (1.1) | ||||
Treasury stock reissued | 0 | (8.6) | 8.6 | |||
Common stock dividends | (56.5) | (56.5) | ||||
Balance (in shares) at Sep. 30, 2018 | 154.5 | |||||
Balance at Sep. 30, 2018 | $ 1,234 | $ 1.6 | 1,069.1 | 1,850 | (1,623.2) | (63.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock acquired (less than) (in shares) | 0.1 | |||||
Treasury stock reissued (in shares) | 0.4 | |||||
Common stock dividends (in dollars per share) | $ 0.485 | |||||
Balance (in shares) at Jun. 30, 2019 | 154.5 | 154.5 | ||||
Balance at Jun. 30, 2019 | $ 1,127.5 | $ 1.6 | 1,109.3 | 2,087.7 | (1,999.8) | (71.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Comprehensive income (loss) | 47.6 | 55.9 | (8.3) | |||
Stock option exercises | 18.2 | 18.2 | ||||
Stock-based compensation | 11.7 | 11.7 | ||||
Treasury stock acquired | 0 | 0 | ||||
Treasury stock reissued | 0 | (8.2) | 8.2 | |||
Common stock dividends | $ (61.8) | (61.8) | ||||
Balance (in shares) at Sep. 30, 2019 | 154.5 | 154.5 | ||||
Balance at Sep. 30, 2019 | $ 1,143.4 | $ 1.6 | $ 1,131.1 | $ 2,082 | $ (1,991.6) | $ (79.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury stock acquired (less than) (in shares) | 0.1 | |||||
Treasury stock reissued (in shares) | 0.4 | |||||
Common stock dividends (in dollars per share) | $ 0.54 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Stockholders’ Equity (Parenthetical) - $ / shares shares in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Treasury stock acquired (less than) (in shares) | 0.1 | 0.1 |
Treasury stock reissued (in shares) | 0.4 | 0.4 |
Common stock dividends (in dollars per share) | $ 0.54 | $ 0.485 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION A. Description of Business . Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”), a Delaware corporation and a part of the S&P 500 ® Index, is a global financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, asset and wealth managers and corporate issuers. Broadridge’s services include investor communications, securities processing, data and analytics, and customer communications solutions. Broadridge serves a large and diverse client base across four client groups: banks/broker-dealers, asset management firms/mutual funds, wealth management firms and corporate issuers. For capital markets firms, Broadridge helps clients lower costs and improve the effectiveness of their trade and account processing operations with support for their front-, middle- and back-office operations, and their administration, finance, risk and compliance requirements. Broadridge serves asset management firms by meeting their critical needs for shareholder communications and by providing investment operations technology to support their investment decisions. For wealth management clients, Broadridge provides an integrated platform with tools that create a better investor experience, while also delivering a more streamlined, efficient, and effective advisory servicing process. For Broadridge’s corporate issuer clients, Broadridge helps manage every aspect of their shareholder communications, including registered and beneficial proxy processing, annual meeting support, transfer agency services and financial disclosure document creation, management and United States of America (“U.S.”) Securities and Exchange Commission (the “SEC”) filing services. The Company operates in two reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and Operations (“GTO”). • Investor Communication Solutions —Broadridge provides governance and communications solutions through its Investor Communication Solutions business segment to the following financial services clients: banks/broker-dealers, asset management firms/mutual funds, wealth management firms and corporate issuers. In addition to financial services firms, Broadridge’s Customer Communications business also serves companies in the healthcare, insurance, consumer finance, telecommunications, utilities, and other service industries. A large portion of Broadridge’s Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge ® (“ProxyEdge”) is Broadridge’s innovative electronic proxy delivery and voting solution for institutional investors and financial advisors that helps ensure the voting participation of the largest stockholders of many companies. Broadridge also provides the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help its clients meet their regulatory compliance needs. Broadridge also provides asset managers and retirement service providers with data-driven solutions that help clients grow revenue, operate efficiently, and maintain compliance. Broadridge offers an end-to-end platform for content management, composition, and multi-channel distribution of regulatory, marketing, and transactional information. 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. Broadridge also provides mutual fund trade processing services for retirement providers, third-party administrators, financial advisors, banks and wealth management professionals through Matrix Financial Solutions, Inc. (“Matrix”). In addition, Broadridge provides public corporations with a full suite of solutions to help corporations manage their annual meeting process, including registered proxy distribution and processing services, proxy and annual report document management solutions, and solutions to gain insight into their shareholder base through Broadridge’s shareholder data services. Broadridge also provides financial reporting document composition and management, SEC disclosure and filing services, and registrar, stock transfer and record-keeping services through Broadridge Corporate Issuer Solutions. Broadridge’s wealth management solutions enable firms, financial advisors, wealth managers, and insurance agents to better engage with customers through digital marketing and customer communications tools. Broadridge integrates data, content and technology to drive new customer acquisition 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. Broadridge also provides customer communications solutions which include print and digital solutions, content management, postal optimization, and fulfillment services. The Broadridge Communications Cloud SM (the “Communications Cloud”) provides multi-channel communications delivery, communications management, information management and control and administration capabilities that enable and enhance its clients’ communications with their customers. In addition, Broadridge provides its clients with capabilities to enhance the consumer experience associated with essential communications such as consumer statements, bills and regulatory communications. • Global Technology and Operations —Broadridge is a leading global provider of securities processing solutions for capital markets, wealth management, and asset management firms. Broadridge offers advanced solutions that automate the securities transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, margin, cash management, clearance and settlement, asset servicing, reference data management, reconciliations, securities financing and collateral optimization, compliance and regulatory reporting, and accounting. Broadridge’s services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management and manage risk, thereby enabling them to focus on their core business activities. Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded derivatives. In addition, Broadridge provides a comprehensive wealth management platform that 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. Through Broadridge’s Managed Services, it provides business process outsourcing services that support the operations of its buy- and sell-side clients’ businesses and combine its technology with its operations expertise to support the entire trade lifecycle and provide front-, middle- and back-office solutions. Broadridge also provides buy-side technology solutions for the global investment management industry through its asset management solutions, including front-, middle- and back-office solutions for hedge funds, family offices, investment managers and the providers that service this space. B. Consolidation and Basis of Presentation . The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and in accordance with SEC requirements for Quarterly Reports on Form 10-Q. These financial statements present the condensed consolidated position of the Company and include the entities in which the Company directly or indirectly has a controlling financial interest as well as various entities in which the Company has investments recorded under the equity method of accounting as well as certain marketable and non-marketable securities. Intercompany balances and transactions have been eliminated. Amounts presented may not sum due to rounding. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019 filed on August 6, 2019 with the SEC. These Condensed Consolidated Financial Statements include all normal and recurring adjustments necessary for a fair presentation in accordance with GAAP of the Company’s financial position at September 30, 2019 and June 30, 2019, the results of its operations for the three months ended September 30, 2019 and 2018, its cash flows for the three months ended September 30, 2019 and 2018, and its changes in stockholders’ equity for the three months ended September 30, 2019 and 2018. Certain prior period amounts have been reclassified to conform to the current year presentation where applicable, except as it relates to Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-02 “Leases” (“ASU No. 2016-02”) and its related amendments, as described further below. Effective July 1, 2019, the Company adopted ASU No. 2016-02, as amended by recognizing a right-of-use (“ROU”) asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption. Under this method of adoption, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. Additional information about the impact of the Company's adoption of ASU No. 2016-02, as amended, is included in Note 2, “New Accounting Pronouncements” and Note 8, “Leases.” C. Securities . Securities are non-derivatives that are reflected in Other non-current assets in the Condensed Consolidated Balance Sheets, unless management intends to dispose of the investment within twelve months of the end of the reporting period, in which case they are reflected in Other current assets in the Condensed Consolidated Balance Sheets. These investments are in entities over which the Company does not have control, joint control, or significant influence. Securities that have a readily determinable fair value are carried at fair value. Securities without a readily determinable fair value are initially recognized at cost and subsequently carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in transactions for an identical or similar investment of the same issuer, such as subsequent capital raising transactions. Changes in the value of securities with or without a readily determinable fair value are recorded in the Condensed Consolidated Statements of Earnings. In determining whether a security without a readily determinable fair value is impaired, management considers qualitative factors to identify an impairment including the financial condition and near-term prospects of the issuer. D. Use of Estimates . The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes thereto. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions and judgment that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from those estimates. The use of estimates in specific accounting policies is described further in the notes to the Condensed Consolidated Financial Statements, as appropriate. E. Subsequent Events . Refer to Note 18, “Subsequent Events” for a description of the Company’s subsequent events. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | NEW ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, as subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” and ASU No. 2018-20, “Leases (Topic 842): Narrow Scope Improvements for Lessors" (collectively referred to herein as "ASU No. 2016-02, as amended"). Under ASU No. 2016-02, as amended, all lease arrangements, with certain limited exceptions, exceeding a twelve-month term must now be recognized as assets and liabilities on the balance sheet of the lessee by recording a ROU asset and corresponding lease obligation generally equal to the present value of the future lease payments over the lease term. Further, the income statement will reflect lease expense for leases classified as operating and amortization/interest expense for leases classified as financing, determined using classification criteria substantially similar to the current lease guidance for distinguishing between an operating and capital lease. ASU No. 2016-02, as amended, also contains certain additional qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. ASU No. 2016-02, as amended, is effective for the Company in the first quarter of fiscal year 2020 and can be adopted using either a modified retrospective basis which requires adjustment to all comparative periods presented in the consolidated financial statements, or by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of initial application. Accordingly, in the first quarter of fiscal year 2020, the Company adopted ASU No. 2016-02, as amended, by recognizing a ROU asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption. Under this method of adoption, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. The Company elected the transition package of three practical expedients permitted under the transition guidance in ASU No. 2016-02, as amended, to not reassess prior conclusions related to whether (i) a contract contains a lease, (ii) the classification of an existing lease, and (iii) the accounting for initial direct costs. The Company also elected accounting policies to (i) not separate the non-lease components of a contract from the lease component to which they relate, and (ii) not recognize assets or liabilities for leases with a term of twelve months or less and no purchase option that the Company is reasonably certain of exercising. On the Condensed Consolidated Balance Sheet as of July 1, 2019, the adoption of ASU No. 2016-02, as amended, resulted in the recognition of lease liabilities of $252.0 million and ROU assets of $235.4 million, which include the impact of existing deferred rents and tenant improvement allowances for operating leases, as well as a cumulative-effect adjustment to the opening balance of retained earnings of $0.2 million. The adoption of ASU No. 2016-02, as amended, did not have a material impact on the Condensed Consolidated Statements of Earnings, the Condensed Consolidated Statements of Comprehensive Income, the Condensed Consolidated Statements of Cash Flows, or the Condensed Consolidated Statements of Stockholders’ Equity. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU No. 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements under GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 will be effective for the Company beginning in the first quarter of fiscal year 2021. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company is currently evaluating the impact of the pending adoption and associated option method of ASU No. 2018-15 on the Company’s Condensed Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”) 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. The Company’s revenues from clients are primarily generated from fees for providing investor communications and technology-enabled services and solutions. Revenues are recognized for the two reportable segments as follows: • Investor Communication Solutions —Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing and tabulation. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and that the services are fulfilled in accordance with each Issuer’s and mutual fund’s requirements. Broadridge works directly with the Issuers and mutual funds to resolve any issues that may arise. As such, Issuers and mutual funds are viewed as the customer of the Company’s services. As a result, revenues for distribution services as well as proxy materials fulfillment services are recorded in Revenue on a gross basis with corresponding costs including amounts remitted to the broker-dealers and banks (referred to as “Nominees”) recorded in Cost of revenues. Fees for the Company’s investor communications services arrangements are typically billed and paid on a monthly basis following the delivery of the services. The Company also offers certain hosted service arrangements that can be priced on a fixed and/or variable basis for which revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client on a monthly basis based on the number of transactions processed or units delivered, in the case of variable priced arrangements, or a fixed monthly fee in the case of fixed price arrangements, in each case which coincides with the pattern of value transfer to the client. These services may be billed in a variety of payment frequencies depending on the specific arrangement. • Global Technology and Operations —Revenues are generated primarily from fees for trade processing and related services. Revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client. The Company’s arrangements for processing and related services typically consist of an obligation to provide specific services to its clients on a when and if needed basis (a stand ready obligation) with revenue recognized from the satisfaction of the performance obligations on a monthly basis generally in the amount billable to the client. These services are generally provided under variable priced arrangements based on volume of service and can include minimum monthly usage fees. Client service agreements often include up-front consideration in addition to the recurring fee for trade processing. Up-front implementation fees, as well as certain enhancements to existing technology platforms, are deferred and recognized on a straight-line basis over the service term of the contract which corresponds to the timing of transfer of value to the client that commences after client acceptance when the processing term begins. In addition, revenue is also generated from the fulfillment of professional services engagements which are generally priced on a time and materials or fixed price basis, and are recognized as the services are provided to the client which corresponds to the timing of transfer of value to the client. Finally, the Company recognizes license revenues from software term licenses installed on clients’ premises upon delivery and acceptance of the software license, assuming a contract is deemed to exist. Software term license revenue is not a significant portion of the Company’s revenues. The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize: Transaction Price The Company allocates transaction price to the individual performance obligations within a contract. If the contracted prices reflect the relative standalone selling prices for the individual performance obligations, no allocations are made. Otherwise, the Company uses the relative selling price method to allocate the transaction price, obtained from sources such as the observable price of a good or service when the Company sells that good or service separately in similar circumstances and to similar clients. If such evidence is unavailable, the Company uses the best estimate of the selling price, which includes various internal factors such as pricing strategy and market factors. A significant portion of the Company’s performance obligations are generated from transactions with volume based fees and includes services that are delivered at the same time. The Company recognizes revenue related to these arrangements over time as the services are provided to the client. While many of the Company’s contracts contain some component of variable consideration, the Company only recognizes variable consideration that is not expected to reverse. The Company allocates variable payments to distinct services in an overall contract when the variable payment relates specifically to that particular service and for which the variable payment reflects what the Company expects to receive in exchange for that particular service. As a result, the Company generally allocates and recognizes variable consideration in the period it has the contractual right to invoice the client. 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 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. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a client, are excluded from revenue. Distribution revenues associated with shipping and handling activities are accounted for as a fulfillment activity and recognized as the related services or products are transferred to the client. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between client payment and the transfer of goods or services is expected to be one year or less. Disaggregation of Revenue 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. 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. Three Months Ended 2019 2018 (In millions) Investor Communication Solutions Equity proxy $ 29.8 $ 31.0 Mutual fund and exchange traded funds (“ETF”) interims 65.3 57.8 Customer communications and fulfillment 170.9 174.9 Other ICS 83.2 73.4 Total ICS Recurring fee revenues 349.2 337.1 Equity and other 17.5 24.1 Mutual funds 22.6 52.8 Total ICS Event-driven fee revenues 40.1 76.9 Distribution revenues 313.3 341.0 Total ICS Revenues $ 702.6 $ 755.0 Global Technology and Operations Equities and other $ 230.9 $ 198.4 Fixed income 43.1 40.0 Total GTO Recurring fee revenues 273.9 238.4 Foreign currency exchange (28.0) (20.7) Total Revenues $ 948.6 $ 972.8 Revenues by Type Recurring fee revenues $ 623.2 $ 575.5 Event-driven fee revenues 40.1 76.9 Distribution revenues 313.3 341.0 Foreign currency exchange (28.0) (20.7) Total Revenues $ 948.6 $ 972.8 Contract Balances The following table provides information about contract assets and liabilities: September 30, June 30, 2019 (In millions) Contract assets $ 60.5 $ 47.5 Contract liabilities $ 248.2 $ 251.6 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. Contract liabilities represent consideration received or receivable from clients before the transfer of control occurs (deferred revenue). 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. |
Weighted-Average Shares Outstan
Weighted-Average Shares Outstanding | 3 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares Outstanding | WEIGHTED-AVERAGE SHARES OUTSTANDING Basic earnings per share (“EPS”) is calculated by dividing the Company’s Net earnings by the basic Weighted-average shares outstanding for the periods presented. The Company calculates diluted EPS using the treasury stock method, which reflects the potential dilution that could occur if outstanding stock options at the presented date are exercised and restricted stock unit awards have vested. For both the three months ended September 30, 2019 and 2018, respectively, there were no options to purchase Broadridge common stock that would have been anti-dilutive to exclude from the computation of diluted EPS. The following table sets forth the denominators of the basic and diluted EPS computations (In millions): Three Months Ended 2019 2018 Weighted-average shares outstanding: Basic 114.4 116.4 Common stock equivalents 2.7 3.3 Diluted 117.1 119.7 |
Interest Expense, Net
Interest Expense, Net | 3 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Interest Expense, Net | INTEREST EXPENSE, NET Interest expense, net consisted of the following: Three Months Ended 2019 2018 (In millions) Interest expense on borrowings $ (14.2) $ (10.2) Interest income 1.0 0.6 Interest expense, net $ (13.1) $ (9.6) |
Acquisitions
Acquisitions | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Assets acquired and liabilities assumed in business combinations are recorded on the Company’s Condensed Consolidated Balance Sheets as of the respective acquisition date based upon the estimated fair values at such date. The results of operations of the business acquired by the Company are included in the Company’s Condensed Consolidated Statements of Earnings since the respective date of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed is allocated to Goodwill. Pro forma supplemental financial information for all acquisitions is not provided as the impact of these acquisitions on the Company’s operating results was not material for any acquisition individually or in the aggregate. During the three months ended September 30, 2019, there were no material acquisitions. The following represents the fiscal year 2019 acquisitions: Fiscal Year 2019 Acquisitions: BUSINESS COMBINATIONS Financial information on each transaction is as follows: Rockall RPM TD Ameritrade Total (In millions) Cash payments, net of cash acquired $ 34.9 $ 258.3 $ 61.5 $ 354.7 Deferred payments, net 0.5 45.0 — 45.5 Contingent consideration liability 7.0 0.8 — 7.9 Aggregate purchase price $ 42.4 $ 304.1 $ 61.5 $ 408.0 Net tangible assets acquired / (liabilities assumed) $ (2.5) $ 10.8 $ — $ 8.3 Goodwill 30.7 181.6 27.1 239.4 Intangible assets 14.2 111.7 34.4 160.3 Aggregate purchase price $ 42.4 $ 304.1 $ 61.5 $ 408.0 Rockall Technologies Limited ( “ Rockall ” ) In May 2019, the Company completed the acquisition of Rockall, a leading provider of securities-based lending (“SBL”) and collateral management solutions for wealth management firms and commercial banks. The acquisition expands Broadridge’s core front-to-back office wealth capabilities, providing innovative SBL and collateral management technology solutions to help firms manage risk and optimize clients’ securities lending and financing needs. • The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $10.1 million upon the achievement in full of the defined financial targets by the acquired business. • Goodwill is not tax deductible. • Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a four six • In the first quarter of fiscal year 2020, the Company settled deferred payment obligations totaling $0.5 million. RPM Technologies ( “ RPM ” ) In June 2019, Broadridge acquired RPM, a leading Canadian provider of enterprise wealth management software solutions and services. The acquisition brings new capabilities and next-generation technology to clients of both RPM and Broadridge. • The contingent consideration liability is payable over the next two years upon the achievement by the acquired business of certain revenue targets, and has a maximum potential pay-out of $3.7 million upon the achievement in full of the defined financial targets by the acquired business. • Goodwill is partially tax deductible. • Intangible assets acquired consist primarily of software technology and customer relationships, which are being amortized over a five seven • In the first quarter of fiscal year 2020, the Company settled deferred payment obligations totaling $40.9 million with a remaining expected payment obligation of approximately $4.0 million. The allocation of the purchase price is still subject to a working capital adjustment. TD Ameritrade In June 2019, Broadridge acquired the retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Company. The acquisition expands Broadridge’s suite of solutions for the growing qualified and non-qualified retirement plan services market and the support it provides for third-party administrators, financial advisors, record-keepers, banks, and brokers. • Goodwill is tax deductible. seven |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories: Level 1 Quoted market prices in active markets for identical assets and liabilities. Level 2 Observable market-based inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments, as applicable, based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and its counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period. The fair values of the contingent consideration obligations are based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria. The measurement is based on significant inputs that are not observable in the market, therefore, the Company classifies this liability as Level 3 in the table below. The following tables set forth the Company’s financial assets and liabilities at September 30, 2019 and June 30, 2019, respectively, that are recorded at fair value, segregated by level within the fair value hierarchy: Level 1 Level 2 Level 3 Total (In millions) Assets: Cash and cash equivalents: Money market funds (1) $ 122.9 $ — $ — $ 122.9 Other current assets: Securities 0.3 — — 0.3 Other non-current assets: Securities 95.8 — — 95.8 Total assets as of September 30, 2019 $ 219.0 $ — $ — $ 219.0 Liabilities: Contingent consideration obligations — — 26.5 26.5 Total liabilities as of September 30, 2019 $ — $ — $ 26.5 $ 26.5 Level 1 Level 2 Level 3 Total (In millions) Assets: Cash and cash equivalents: Money market funds (1) $ 68.1 $ — $ — $ 68.1 Other current assets: Securities 0.4 — — 0.4 Other non-current assets: Securities 81.8 — — 81.8 Total assets as of June 30, 2019 $ 150.3 $ — $ — $ 150.3 Liabilities: Contingent consideration obligations — — 28.4 28.4 Total liabilities as of June 30, 2019 $ — $ — $ 28.4 $ 28.4 _________ (1) Money market funds include money market deposit account balances of $82.3 million and $30.1 million as of September 30, 2019 and June 30, 2019, respectively. In addition, the Company has non-marketable securities with a carrying amount of $32.1 million and $12.9 million as of September 30, 2019 and June 30, 2019, respectively, that are classified as Level 2 financial assets and included as part of Other non-current assets. The following table sets forth an analysis of changes during the three months ended September 30, 2019 and 2018, respectively, in Level 3 financial liabilities of the Company: Three Months Ended September 30, 2019 2018 (In millions) Beginning balance $ 28.4 $ 18.6 Additional contingent consideration incurred — — Net increase (decrease) in contingent consideration liability — — Foreign currency impact on contingent consideration liability (0.4) (0.4) Payments (1.5) (0.2) Ending balance $ 26.5 $ 18.1 |
Leases
Leases | 3 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company’s leases consist primarily of real estate leases for office space in locations where the Company maintains operations, and are classified as operating leases. 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 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 September 30, 2019 was 3.1%. Supplemental Balance Sheet Information September 30, (In millions) Assets: Operating lease ROU assets (1) $ 228.1 Liabilities: Operating lease liabilities (1) - Current $ 29.9 Operating lease liabilities (1) - Non-current 214.9 Total Operating lease liabilities $ 244.8 _________ (1) 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 Condensed Consolidated Balance Sheets as of September 30, 2019. Components of Lease Cost (1) Three Months Ended September 30, 2019 (In millions) Operating lease cost $ 8.2 Variable lease cost $ 6.1 _________ (1) 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 Condensed Consolidated Statements of Earnings. Supplemental Cash Flow Information Three Months Ended September 30, 2019 (In millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 6.7 Right-of-use assets obtained in exchange for operating lease liabilities $ — Maturity of Lease Liabilities under Accounting Standards Codification (“ASC”) 842 (Leases) Future rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at September 30, 2019: Operating Leases (1) Years Ending June 30, (In millions) 2020 $ 27.8 2021 35.7 2022 32.0 2023 29.7 2024 28.1 Thereafter 130.7 Total lease payments 284.0 Less: Discount Amount 39.2 Present value of operating lease liabilities $ 244.8 _________ (1) Operating lease payments exclude $103.4 million of legally binding lease payments for real estate leases signed but not yet commenced. Operating leases that have been signed but not yet commenced are expected to commence in the third quarter of fiscal 2020, with a lease term of 15 years. Maturity of Lease Liabilities under ASC 840 (Leases) Future minimum rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2019: Years Ending June 30, (In millions) 2020 $ 46.8 2021 45.2 2022 39.5 2023 35.9 2024 34.7 Thereafter 204.4 Total lease payments $ 406.5 Rent expense for all operating leases was $49.0 million and $50.4 million during the year ended June 30, 2019 and 2018, respectively. |
Other Non-Current Assets
Other Non-Current Assets | 3 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Non-Current Assets | OTHER NON-CURRENT ASSETS Other non-current assets consisted of the following: September 30, 2019 June 30, 2019 (In millions) Deferred client conversion and start-up costs $ 291.4 $ 254.7 ROU assets (a) 228.1 — Long-term investments 133.2 100.4 Deferred sales commissions costs 93.4 95.5 Contract assets 60.5 47.5 Deferred data center costs (b) 27.4 29.0 Long-term broker fees 34.4 35.3 Other 28.4 30.6 Total $ 896.9 $ 593.1 (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) Represents deferred data center costs associated with the Company’s information technology services agreements with International Business Machines Corporation (“IBM”). Please refer to Note 15, “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 during the three months ended September 30, 2019 and 2018, were $17.3 million and $15.7 million, respectively. |
Payables and Accrued Expenses
Payables and Accrued Expenses | 3 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Payables and Accrued Expenses | PAYABLES AND ACCRUED EXPENSES Payables and accrued expenses consisted of the following: September 30, 2019 June 30, 2019 (In millions) Accounts payable $ 89.6 $ 133.7 Employee compensation and benefits 141.2 232.2 Accrued broker fees 48.7 87.0 Accrued taxes 22.3 68.9 Accrued dividend payable 61.8 55.4 Managed services administration fees 55.2 53.1 Customer deposits 38.1 34.8 Operating lease liabilities 29.9 — Other 61.1 46.6 Total $ 547.9 $ 711.7 |
Borrowings
Borrowings | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows: Expiration Principal amount outstanding at September 30, 2019 Carrying value at September 30, 2019 Carrying value at June 30, 2019 Unused Fair Value at September 30, 2019 (In millions) Current portion of long-term debt Fiscal 2014 Senior Notes(a) September 2020 $ 400.0 $ 399.4 $ — $ — $ 406.3 Total $ 400.0 $ 399.4 $ — $ — $ 406.3 Long-term debt, excluding current portion Fiscal 2019 Revolving Credit Facility: U.S. dollar tranche March 2024 $ 630.0 $ 630.0 $ 360.0 $ 470.0 $ 630.0 Multicurrency tranche March 2024 243.2 243.2 215.7 156.8 243.2 Total Revolving Credit Facility 873.2 873.2 575.7 626.8 873.2 Fiscal 2014 Senior Notes(a) September 2020 — — 399.2 — — Fiscal 2016 Senior Notes June 2026 500.0 495.6 495.5 — 519.0 Total Senior Notes 500.0 495.6 894.7 — 519.0 Total long-term debt $ 1,373.2 $ 1,368.8 $ 1,470.4 $ 626.8 $ 1,392.2 Total debt $ 1,773.2 $ 1,768.2 $ 1,470.4 $ 626.8 $ 1,798.5 _________ (a) The Fiscal 2014 Senior Notes were reclassified from Long-term debt to Current portion of long-term debt in September 2019 to reflect the remaining maturity of less than a year. Future principal payments on the Company’s outstanding debt are as follows: Years ending June 30, 2020 2021 2022 2023 2024 Thereafter Total (in millions) $ — $ 400.0 $ — $ — $ 873.2 $ 500.0 $ 1,773.2 Fiscal 2019 Revolving Credit Facility: On March 18, 2019, the Company entered into an amended and restated $1.5 billion five five The weighted-average interest rate on the Revolving Credit Facilities was 3.12% for the three months ended September 30, 2019 and 2.97% for the three months ended September 30, 2018. The fair value of the variable-rate Fiscal 2019 Revolving Credit Facility borrowings at September 30, 2019 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”). Borrowings under the Fiscal 2019 Revolving Credit Facility can be made in tranches up to 360 days and bear interest at LIBOR plus 101.5 basis points. In addition, the Fiscal 2019 Revolving Credit Facility has an annual facility fee equal to 11.0 basis points on the entire facility, compared to 12.5 basis points on the Fiscal 2017 Revolving Credit Facility. The Company incurred $2.3 million in costs to establish the Fiscal 2019 Revolving Credit Facility. As of September 30, 2019, $3.4 million of the aggregate costs related to the Company’s Revolving Credit Facility remain to be amortized. Such costs are capitalized in Other non-current assets in the Condensed Consolidated Balance Sheets and are being amortized to Interest expense, net on a straight-line basis, which approximates the effective interest method, over the term of the Fiscal 2019 Revolving Credit Facility. The Company may voluntarily prepay, in whole or in part and without premium or penalty, borrowings under the Fiscal 2019 Revolving Credit Facility in accordance with individual drawn loan maturities. The Fiscal 2019 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At September 30, 2019, the Company is in compliance with all covenants of the Fiscal 2019 Revolving Credit Facility. Fiscal 2014 Senior Notes : In August 2013, the Company completed an offering of $400.0 million in aggregate principal amount of senior notes (the “Fiscal 2014 Senior Notes”). The Fiscal 2014 Senior Notes will mature on September 1, 2020 and bear interest at a rate of 3.95% per annum. Interest on the Fiscal 2014 Senior Notes is payable semi-annually in arrears on March 1st and September 1st each year. The Fiscal 2014 Senior Notes were issued at a price of 99.871% (effective yield to maturity of 3.971%). The indenture governing the Fiscal 2014 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money and to enter into certain sale-leaseback transactions. At September 30, 2019, the Company is in compliance with the covenants of the indenture governing the Fiscal 2014 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2014 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2014 Senior Notes in whole or in part at any time before their maturity. The Company incurred $4.3 million in debt issuance costs to establish the Fiscal 2014 Senior Notes. These costs have been capitalized and are being amortized to Interest expense, net on a straight-line basis, which approximates the effective interest method, over the seven 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, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At September 30, 2019, 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 Company incurred $4.5 million in debt issuance costs to establish the Fiscal 2016 Senior Notes. These costs have been capitalized and are being amortized to Interest expense, net on a straight-line basis, which approximates the effective interest method, over the ten The fair value of the fixed-rate Fiscal 2016 Senior Notes at September 30, 2019 and June 30, 2019 was $519.0 million and $509.8 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 2019 Revolving Credit Facility, Fiscal 2014 Senior Notes, and Fiscal 2016 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 September 30, 2019 and June 30, 2019, there were no outstanding borrowings under these lines of credit. |
Other Non-Current Liabilities
Other Non-Current Liabilities | 3 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Non-Current Liabilities | OTHER NON-CURRENT LIABILITIES Other non-current liabilities consisted of the following: September 30, 2019 June 30, 2019 (In millions) Operating lease liabilities $ 214.9 $ — Post-employment retirement obligations 136.0 130.8 Non-current income taxes 40.6 40.5 Acquisition related contingencies 8.7 26.3 Other 16.1 35.3 Total $ 416.3 $ 232.8 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION The activity related to the Company’s incentive equity awards for the three months ended September 30, 2019 consisted of the following: Stock Options Time-based Performance-based Number of Weighted- Number Weighted- Number Weighted- Balances at July 1, 2019 4,201,614 $ 63.85 819,299 $ 92.15 325,777 $ 97.43 Granted — — 4,120 120.00 — — Exercise of stock options (a) (364,973) 49.91 — — — — Vesting of restricted stock units — — (412) 95.78 — — Expired/forfeited (5,017) 62.54 (8,405) 120.98 (5,318) 68.24 Balances at September 30, 2019 (b),(c) 3,831,624 $ 65.18 814,602 $ 91.99 320,459 $ 97.91 ____________ (a) Stock options exercised during the period of July 1, 2019 through September 30, 2019 had an aggregate intrinsic value of $28.1 million. (b) As of September 30, 2019, the Company’s outstanding vested and currently exercisable stock options using the September 30, 2019 closing stock price of $124.43 (approximately 2.0 million shares) had an aggregate intrinsic value of $160.6 million with a weighted-average exercise price of $44.93 and a weighted-average remaining contractual life of 4.8 years. The total of all stock options outstanding as of September 30, 2019 have a weighted-average remaining contractual life of 6.4 years. (c) As of September 30, 2019, time-based restricted stock units and performance-based restricted stock units expected to vest using the September 30, 2019 closing stock price of $124.43 (approximately 0.8 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $97.3 million and $39.1 million, respectively. Performance-based restricted stock units 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. The Company has stock-based compensation plans under which the Company annually grants stock option and restricted stock unit awards. 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, with the measurement of stock-based compensation expense recognized in Net earnings based on the fair value of the award on the date of grant. Stock-based compensation expense of $11.8 million and $10.7 million, as well as related expected tax benefits of $2.6 million and $2.4 million were recognized for the three months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, the total remaining unrecognized compensation cost related to non-vested stock options and restricted stock unit awards amounted to $14.7 million and $39.7 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.6 years and 1.4 years, respectively. For stock options granted, the fair value of each stock option was estimated on the date of grant using a binomial option pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical volatility of the Company’s stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXESThe provision for income taxes for the three months ended September 30, 2019 was $7.9 million compared to $12.6 million for the three months ended September 30, 2018. The effective tax rate for the three months ended September 30, 2019 was 12.4% compared to 14.1% for the three months ended September 30, 2018. The decrease in the effective tax rate for the three months ended September 30, 2019 was primarily driven by the impact of discrete tax items relative to pre-tax income, including excess tax benefits of $5.7 million for the three months ended September 30, 2019 compared to $7.0 million for the three months ended September 30, 2018. |
Contractual Commitments, Contin
Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements | 3 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements | CONTRACTUAL COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS Data Center Agreements In March 2010, the Company and IBM entered into an Information Technology Services Agreement (the “IT Services Agreement”), under which IBM provides certain aspects of the Company’s information technology infrastructure. Under the IT Services Agreement, IBM provides a broad range of technology services to the Company including supporting its mainframe, midrange, open systems, network and data center operations, as well as providing disaster recovery services. The Company has the option of incorporating additional services into the agreement over time. The migration of data center processing to IBM was completed in August 2012. The IT Services Agreement would have expired on June 30, 2022. In March 2015, the Company signed a two 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 expires in October 2023. The Company has the right to renew the initial term of the EU IT Services Agreement for up to one additional 12-month term or one additional 24-month term. Commitments remaining under this agreement at September 30, 2019 are $19.4 million through fiscal year 2024, the final year of the contract. Investments The Company contributed $0.8 million to an equity method investment during the three months ended September 30, 2019, and has a remaining commitment of $0.8 million to fund this investment at September 30, 2019. At September 30, 2019, the Company also has a future commitment to fund $3.9 million to one of the Company’s investees. Other In the normal course of business, the Company is subject to various claims and litigation. While the outcome of any claim or litigation is inherently unpredictable, the Company believes that the ultimate resolution of these matters will not, individually or in the aggregate, result in a material impact on its financial condition, results of operations or cash flows. 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. The Company may use derivative financial instruments as risk management tools and not for trading purposes. The Company was not a party to any derivative financial instruments at September 30, 2019 or at June 30, 2019. In the normal course of business, the Company also enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. 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 wholly-owned subsidiary, which is a broker-dealer registered with the SEC 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 September 30, 2019, 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 September 30, 2019, 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 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 September 30, 2019, Matrix Trust Company was in compliance with its capital requirements. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income/(Loss) by Component | 3 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income/(Loss) by Component | 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) for the three months ended September 30, 2019, and 2018, respectively: Foreign Pension Total (In millions) Balances at July 1, 2019 $ (58.3) $ (12.9) $ (71.2) Other comprehensive income/(loss) before reclassifications (8.7) — (8.7) Amounts reclassified from accumulated other comprehensive income/(loss) — 0.4 0.4 Balances at September 30, 2019 $ (66.9) $ (12.6) $ (79.5) Foreign Pension Total (In millions) Balances at July 1, 2018 $ (43.2) $ (10.2) $ (53.5) Other comprehensive income/(loss) before reclassifications (10.1) — (10.1) Amounts reclassified from accumulated other comprehensive income/(loss) — — — Balances at September 30, 2018 $ (53.3) $ (10.2) $ (63.5) |
Interim Financial Data by Segme
Interim Financial Data by Segment | 3 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Interim Financial Data by Segment | INTERIM 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. 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. Because the Company compensates the management of its various businesses on, among other factors, segment profit, the Company may elect to record certain segment-related operating and non-operating expense items in Other rather than reflect such items in segment profit. In connection with an organizational change made in the first quarter of fiscal year 2020, in order to further align our portfolio of services, the results for the Company's wealth management Advisor Solutions services that were previously reported in our Investor Communication Solutions reportable segment are now reported within the Global Technology and Operations reportable segment. As a result, our prior period segment results for the three months ended September 30, 2018 have been revised to reflect this change, which resulted in transferring $10.7 million of revenues and $0.2 million of earnings before income taxes between reportable segments. Segment results: Revenues Three Months Ended 2019 2018 (In millions) Investor Communication Solutions $ 702.6 $ 755.0 Global Technology and Operations 273.9 238.4 Foreign currency exchange (28.0) (20.7) Total $ 948.6 $ 972.8 Earnings (Loss) before Income Three Months Ended 2019 2018 (In millions) Investor Communication Solutions $ 23.0 $ 58.8 Global Technology and Operations 56.4 46.5 Other (21.1) (23.2) Foreign currency exchange 5.6 7.1 Total $ 63.8 $ 89.3 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENTS On October 1, 2019, the Company acquired Shadow Financial Systems, Inc., 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. The purchase price was approximately $39.0 million subject to normal closing adjustments. On November 1, 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 will enhance Broadridge’s existing retirement solutions by providing wealth and retirement advisors with fiduciary tools that will complement its Matrix trust and trading platform. The acquisition also is expected to further strengthen 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. The purchase price was approximately $120.0 million subject to normal closing adjustments. ****************** |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Segments | The Company operates in two reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and Operations (“GTO”). • Investor Communication Solutions —Broadridge provides governance and communications solutions through its Investor Communication Solutions business segment to the following financial services clients: banks/broker-dealers, asset management firms/mutual funds, wealth management firms and corporate issuers. In addition to financial services firms, Broadridge’s Customer Communications business also serves companies in the healthcare, insurance, consumer finance, telecommunications, utilities, and other service industries. A large portion of Broadridge’s Investor Communication Solutions business involves the processing and distribution of proxy materials to investors in equity securities and mutual funds, as well as the facilitation of related vote processing. ProxyEdge ® (“ProxyEdge”) is Broadridge’s innovative electronic proxy delivery and voting solution for institutional investors and financial advisors that helps ensure the voting participation of the largest stockholders of many companies. Broadridge also provides the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help its clients meet their regulatory compliance needs. Broadridge also provides asset managers and retirement service providers with data-driven solutions that help clients grow revenue, operate efficiently, and maintain compliance. Broadridge offers an end-to-end platform for content management, composition, and multi-channel distribution of regulatory, marketing, and transactional information. 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. Broadridge also provides mutual fund trade processing services for retirement providers, third-party administrators, financial advisors, banks and wealth management professionals through Matrix Financial Solutions, Inc. (“Matrix”). In addition, Broadridge provides public corporations with a full suite of solutions to help corporations manage their annual meeting process, including registered proxy distribution and processing services, proxy and annual report document management solutions, and solutions to gain insight into their shareholder base through Broadridge’s shareholder data services. Broadridge also provides financial reporting document composition and management, SEC disclosure and filing services, and registrar, stock transfer and record-keeping services through Broadridge Corporate Issuer Solutions. Broadridge’s wealth management solutions enable firms, financial advisors, wealth managers, and insurance agents to better engage with customers through digital marketing and customer communications tools. Broadridge integrates data, content and technology to drive new customer acquisition 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. Broadridge also provides customer communications solutions which include print and digital solutions, content management, postal optimization, and fulfillment services. The Broadridge Communications Cloud SM (the “Communications Cloud”) provides multi-channel communications delivery, communications management, information management and control and administration capabilities that enable and enhance its clients’ communications with their customers. In addition, Broadridge provides its clients with capabilities to enhance the consumer experience associated with essential communications such as consumer statements, bills and regulatory communications. • Global Technology and Operations —Broadridge is a leading global provider of securities processing solutions for capital markets, wealth management, and asset management firms. Broadridge offers advanced solutions that automate the securities transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, margin, cash management, clearance and settlement, asset servicing, reference data management, reconciliations, securities financing and collateral optimization, compliance and regulatory reporting, and accounting. Broadridge’s services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management and manage risk, thereby enabling them to focus on their core business activities. Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded derivatives. In addition, Broadridge provides a comprehensive wealth management platform that 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. Through Broadridge’s Managed Services, it provides business process outsourcing services that support the operations of its buy- and sell-side clients’ businesses and combine its technology with its operations expertise to support the entire trade lifecycle and provide front-, middle- and back-office solutions. Broadridge also provides buy-side technology solutions for the global investment management industry through its asset management solutions, including front-, middle- and back-office solutions for hedge funds, family offices, investment managers and the providers that service this space. |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and in accordance with SEC requirements for Quarterly Reports on Form 10-Q. These financial statements present the condensed consolidated position of the Company and include the entities in which the Company directly or indirectly has a controlling financial interest as well as various entities in which the Company has investments recorded under the equity method of accounting as well as certain marketable and non-marketable securities. Intercompany balances and transactions have been eliminated. |
Securities | Securities. Securities are non-derivatives that are reflected in Other non-current assets in the Condensed Consolidated Balance Sheets, unless management intends to dispose of the investment within twelve months of the end of the reporting period, in which case they are reflected in Other current assets in the Condensed Consolidated Balance Sheets. These investments are in entities over which the Company does not have control, joint control, or significant influence. Securities that have a readily determinable fair value are carried at fair value. Securities without a readily determinable fair value are initially recognized at cost and subsequently carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in transactions for an identical or similar investment of the same issuer, such as subsequent capital raising transactions. Changes in the value of securities with or without a readily determinable fair value are recorded in the Condensed Consolidated Statements of Earnings. In determining whether a security without a readily determinable fair value is impaired, management considers qualitative factors to identify an impairment including the financial condition and near-term prospects of the issuer. |
Use of Estimates | Use of Estimates. The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes thereto. These estimates are based on management’s best knowledge of current events, historical experience, actions that the Company may undertake in the future and on various other assumptions and judgment that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from those estimates. The use of estimates in specific accounting policies is described further in the notes to the Condensed Consolidated Financial Statements, as appropriate. |
New Accounting Pronouncements | In February 2016, the FASB issued ASU No. 2016-02, as subsequently amended by ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements,” and ASU No. 2018-20, “Leases (Topic 842): Narrow Scope Improvements for Lessors" (collectively referred to herein as "ASU No. 2016-02, as amended"). Under ASU No. 2016-02, as amended, all lease arrangements, with certain limited exceptions, exceeding a twelve-month term must now be recognized as assets and liabilities on the balance sheet of the lessee by recording a ROU asset and corresponding lease obligation generally equal to the present value of the future lease payments over the lease term. Further, the income statement will reflect lease expense for leases classified as operating and amortization/interest expense for leases classified as financing, determined using classification criteria substantially similar to the current lease guidance for distinguishing between an operating and capital lease. ASU No. 2016-02, as amended, also contains certain additional qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. ASU No. 2016-02, as amended, is effective for the Company in the first quarter of fiscal year 2020 and can be adopted using either a modified retrospective basis which requires adjustment to all comparative periods presented in the consolidated financial statements, or by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of initial application. Accordingly, in the first quarter of fiscal year 2020, the Company adopted ASU No. 2016-02, as amended, by recognizing a ROU asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption. Under this method of adoption, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. The Company elected the transition package of three practical expedients permitted under the transition guidance in ASU No. 2016-02, as amended, to not reassess prior conclusions related to whether (i) a contract contains a lease, (ii) the classification of an existing lease, and (iii) the accounting for initial direct costs. The Company also elected accounting policies to (i) not separate the non-lease components of a contract from the lease component to which they relate, and (ii) not recognize assets or liabilities for leases with a term of twelve months or less and no purchase option that the Company is reasonably certain of exercising. On the Condensed Consolidated Balance Sheet as of July 1, 2019, the adoption of ASU No. 2016-02, as amended, resulted in the recognition of lease liabilities of $252.0 million and ROU assets of $235.4 million, which include the impact of existing deferred rents and tenant improvement allowances for operating leases, as well as a cumulative-effect adjustment to the opening balance of retained earnings of $0.2 million. The adoption of ASU No. 2016-02, as amended, did not have a material impact on the Condensed Consolidated Statements of Earnings, the Condensed Consolidated Statements of Comprehensive Income, the Condensed Consolidated Statements of Cash Flows, or the Condensed Consolidated Statements of Stockholders’ Equity. Recently Issued Accounting Pronouncements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU No. 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements under GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 will be effective for the Company beginning in the first quarter of fiscal year 2021. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance. The Company is currently evaluating the impact of the pending adoption and associated option method of ASU No. 2018-15 on the Company’s Condensed Consolidated Financial Statements. |
Business Combinations | Assets acquired and liabilities assumed in business combinations are recorded on the Company’s Condensed Consolidated Balance Sheets as of the respective acquisition date based upon the estimated fair values at such date. The results of operations of the business acquired by the Company are included in the Company’s Condensed Consolidated Statements of Earnings since the respective date of acquisition. The excess of the purchase price over the estimated fair values of the underlying assets acquired and liabilities assumed is allocated to Goodwill. |
Revenue Recognition | ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”) 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. The Company’s revenues from clients are primarily generated from fees for providing investor communications and technology-enabled services and solutions. Revenues are recognized for the two reportable segments as follows: • Investor Communication Solutions —Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing and tabulation. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and that the services are fulfilled in accordance with each Issuer’s and mutual fund’s requirements. Broadridge works directly with the Issuers and mutual funds to resolve any issues that may arise. As such, Issuers and mutual funds are viewed as the customer of the Company’s services. As a result, revenues for distribution services as well as proxy materials fulfillment services are recorded in Revenue on a gross basis with corresponding costs including amounts remitted to the broker-dealers and banks (referred to as “Nominees”) recorded in Cost of revenues. Fees for the Company’s investor communications services arrangements are typically billed and paid on a monthly basis following the delivery of the services. The Company also offers certain hosted service arrangements that can be priced on a fixed and/or variable basis for which revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client on a monthly basis based on the number of transactions processed or units delivered, in the case of variable priced arrangements, or a fixed monthly fee in the case of fixed price arrangements, in each case which coincides with the pattern of value transfer to the client. These services may be billed in a variety of payment frequencies depending on the specific arrangement. • Global Technology and Operations —Revenues are generated primarily from fees for trade processing and related services. Revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client. The Company’s arrangements for processing and related services typically consist of an obligation to provide specific services to its clients on a when and if needed basis (a stand ready obligation) with revenue recognized from the satisfaction of the performance obligations on a monthly basis generally in the amount billable to the client. These services are generally provided under variable priced arrangements based on volume of service and can include minimum monthly usage fees. Client service agreements often include up-front consideration in addition to the recurring fee for trade processing. Up-front implementation fees, as well as certain enhancements to existing technology platforms, are deferred and recognized on a straight-line basis over the service term of the contract which corresponds to the timing of transfer of value to the client that commences after client acceptance when the processing term begins. In addition, revenue is also generated from the fulfillment of professional services engagements which are generally priced on a time and materials or fixed price basis, and are recognized as the services are provided to the client which corresponds to the timing of transfer of value to the client. Finally, the Company recognizes license revenues from software term licenses installed on clients’ premises upon delivery and acceptance of the software license, assuming a contract is deemed to exist. Software term license revenue is not a significant portion of the Company’s revenues. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | 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. 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. Three Months Ended 2019 2018 (In millions) Investor Communication Solutions Equity proxy $ 29.8 $ 31.0 Mutual fund and exchange traded funds (“ETF”) interims 65.3 57.8 Customer communications and fulfillment 170.9 174.9 Other ICS 83.2 73.4 Total ICS Recurring fee revenues 349.2 337.1 Equity and other 17.5 24.1 Mutual funds 22.6 52.8 Total ICS Event-driven fee revenues 40.1 76.9 Distribution revenues 313.3 341.0 Total ICS Revenues $ 702.6 $ 755.0 Global Technology and Operations Equities and other $ 230.9 $ 198.4 Fixed income 43.1 40.0 Total GTO Recurring fee revenues 273.9 238.4 Foreign currency exchange (28.0) (20.7) Total Revenues $ 948.6 $ 972.8 Revenues by Type Recurring fee revenues $ 623.2 $ 575.5 Event-driven fee revenues 40.1 76.9 Distribution revenues 313.3 341.0 Foreign currency exchange (28.0) (20.7) Total Revenues $ 948.6 $ 972.8 |
Contract Assets and Liabilities | The following table provides information about contract assets and liabilities: September 30, June 30, 2019 (In millions) Contract assets $ 60.5 $ 47.5 Contract liabilities $ 248.2 $ 251.6 |
Weighted-Average Shares Outst_2
Weighted-Average Shares Outstanding (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Denominators of Basic and Diluted EPS Computations | The following table sets forth the denominators of the basic and diluted EPS computations (In millions): Three Months Ended 2019 2018 Weighted-average shares outstanding: Basic 114.4 116.4 Common stock equivalents 2.7 3.3 Diluted 117.1 119.7 |
Interest Expense, Net (Tables)
Interest Expense, Net (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of Interest Expense, Net | Interest expense, net consisted of the following: Three Months Ended 2019 2018 (In millions) Interest expense on borrowings $ (14.2) $ (10.2) Interest income 1.0 0.6 Interest expense, net $ (13.1) $ (9.6) |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | Financial information on each transaction is as follows: Rockall RPM TD Ameritrade Total (In millions) Cash payments, net of cash acquired $ 34.9 $ 258.3 $ 61.5 $ 354.7 Deferred payments, net 0.5 45.0 — 45.5 Contingent consideration liability 7.0 0.8 — 7.9 Aggregate purchase price $ 42.4 $ 304.1 $ 61.5 $ 408.0 Net tangible assets acquired / (liabilities assumed) $ (2.5) $ 10.8 $ — $ 8.3 Goodwill 30.7 181.6 27.1 239.4 Intangible assets 14.2 111.7 34.4 160.3 Aggregate purchase price $ 42.4 $ 304.1 $ 61.5 $ 408.0 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables set forth the Company’s financial assets and liabilities at September 30, 2019 and June 30, 2019, respectively, that are recorded at fair value, segregated by level within the fair value hierarchy: Level 1 Level 2 Level 3 Total (In millions) Assets: Cash and cash equivalents: Money market funds (1) $ 122.9 $ — $ — $ 122.9 Other current assets: Securities 0.3 — — 0.3 Other non-current assets: Securities 95.8 — — 95.8 Total assets as of September 30, 2019 $ 219.0 $ — $ — $ 219.0 Liabilities: Contingent consideration obligations — — 26.5 26.5 Total liabilities as of September 30, 2019 $ — $ — $ 26.5 $ 26.5 Level 1 Level 2 Level 3 Total (In millions) Assets: Cash and cash equivalents: Money market funds (1) $ 68.1 $ — $ — $ 68.1 Other current assets: Securities 0.4 — — 0.4 Other non-current assets: Securities 81.8 — — 81.8 Total assets as of June 30, 2019 $ 150.3 $ — $ — $ 150.3 Liabilities: Contingent consideration obligations — — 28.4 28.4 Total liabilities as of June 30, 2019 $ — $ — $ 28.4 $ 28.4 _________ (1) Money market funds include money market deposit account balances of $82.3 million and $30.1 million as of September 30, 2019 and June 30, 2019, respectively. |
Schedule of Changes in Level 3 Financial Liabilities | The following table sets forth an analysis of changes during the three months ended September 30, 2019 and 2018, respectively, in Level 3 financial liabilities of the Company: Three Months Ended September 30, 2019 2018 (In millions) Beginning balance $ 28.4 $ 18.6 Additional contingent consideration incurred — — Net increase (decrease) in contingent consideration liability — — Foreign currency impact on contingent consideration liability (0.4) (0.4) Payments (1.5) (0.2) Ending balance $ 26.5 $ 18.1 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information September 30, (In millions) Assets: Operating lease ROU assets (1) $ 228.1 Liabilities: Operating lease liabilities (1) - Current $ 29.9 Operating lease liabilities (1) - Non-current 214.9 Total Operating lease liabilities $ 244.8 _________ (1) 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 Condensed Consolidated Balance Sheets as of September 30, 2019. |
Components of Lease Cost | Components of Lease Cost (1) Three Months Ended September 30, 2019 (In millions) Operating lease cost $ 8.2 Variable lease cost $ 6.1 _________ (1) 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 Condensed Consolidated Statements of Earnings. |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Three Months Ended September 30, 2019 (In millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 6.7 Right-of-use assets obtained in exchange for operating lease liabilities $ — |
Maturity of Lease Liabilities Under ASC 842 | Future rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at September 30, 2019: Operating Leases (1) Years Ending June 30, (In millions) 2020 $ 27.8 2021 35.7 2022 32.0 2023 29.7 2024 28.1 Thereafter 130.7 Total lease payments 284.0 Less: Discount Amount 39.2 Present value of operating lease liabilities $ 244.8 _________ (1) Operating lease payments exclude $103.4 million of legally binding lease payments for real estate leases signed but not yet commenced. Operating leases that have been signed but not yet commenced are expected to commence in the third quarter of fiscal 2020, with a lease term of 15 years. |
Maturities of Lease Liabilities Under ASC 840 | Future minimum rental payments on leases with initial non-cancellable lease terms in excess of one year were due as follows at June 30, 2019: Years Ending June 30, (In millions) 2020 $ 46.8 2021 45.2 2022 39.5 2023 35.9 2024 34.7 Thereafter 204.4 Total lease payments $ 406.5 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Non-Current Assets | Other non-current assets consisted of the following: September 30, 2019 June 30, 2019 (In millions) Deferred client conversion and start-up costs $ 291.4 $ 254.7 ROU assets (a) 228.1 — Long-term investments 133.2 100.4 Deferred sales commissions costs 93.4 95.5 Contract assets 60.5 47.5 Deferred data center costs (b) 27.4 29.0 Long-term broker fees 34.4 35.3 Other 28.4 30.6 Total $ 896.9 $ 593.1 (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) Represents deferred data center costs associated with the Company’s information technology services agreements with International Business Machines Corporation (“IBM”). Please refer to Note 15, “Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements” for a further discussion. |
Payables and Accrued Expenses (
Payables and Accrued Expenses (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Payables and accrued expenses consisted of the following: September 30, 2019 June 30, 2019 (In millions) Accounts payable $ 89.6 $ 133.7 Employee compensation and benefits 141.2 232.2 Accrued broker fees 48.7 87.0 Accrued taxes 22.3 68.9 Accrued dividend payable 61.8 55.4 Managed services administration fees 55.2 53.1 Customer deposits 38.1 34.8 Operating lease liabilities 29.9 — Other 61.1 46.6 Total $ 547.9 $ 711.7 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Borrowings | Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows: Expiration Principal amount outstanding at September 30, 2019 Carrying value at September 30, 2019 Carrying value at June 30, 2019 Unused Fair Value at September 30, 2019 (In millions) Current portion of long-term debt Fiscal 2014 Senior Notes(a) September 2020 $ 400.0 $ 399.4 $ — $ — $ 406.3 Total $ 400.0 $ 399.4 $ — $ — $ 406.3 Long-term debt, excluding current portion Fiscal 2019 Revolving Credit Facility: U.S. dollar tranche March 2024 $ 630.0 $ 630.0 $ 360.0 $ 470.0 $ 630.0 Multicurrency tranche March 2024 243.2 243.2 215.7 156.8 243.2 Total Revolving Credit Facility 873.2 873.2 575.7 626.8 873.2 Fiscal 2014 Senior Notes(a) September 2020 — — 399.2 — — Fiscal 2016 Senior Notes June 2026 500.0 495.6 495.5 — 519.0 Total Senior Notes 500.0 495.6 894.7 — 519.0 Total long-term debt $ 1,373.2 $ 1,368.8 $ 1,470.4 $ 626.8 $ 1,392.2 Total debt $ 1,773.2 $ 1,768.2 $ 1,470.4 $ 626.8 $ 1,798.5 _________ (a) The Fiscal 2014 Senior Notes were reclassified from Long-term debt to Current portion of long-term debt in September 2019 to reflect the remaining maturity of less than a year. |
Schedule of Future Principal Payments on Outstanding Debt | Future principal payments on the Company’s outstanding debt are as follows: Years ending June 30, 2020 2021 2022 2023 2024 Thereafter Total (in millions) $ — $ 400.0 $ — $ — $ 873.2 $ 500.0 $ 1,773.2 |
Other Non-Current Liabilities (
Other Non-Current Liabilities (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Noncurrent Liabilities | Other non-current liabilities consisted of the following: September 30, 2019 June 30, 2019 (In millions) Operating lease liabilities $ 214.9 $ — Post-employment retirement obligations 136.0 130.8 Non-current income taxes 40.6 40.5 Acquisition related contingencies 8.7 26.3 Other 16.1 35.3 Total $ 416.3 $ 232.8 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Incentive Equity Awards | The activity related to the Company’s incentive equity awards for the three months ended September 30, 2019 consisted of the following: Stock Options Time-based Performance-based Number of Weighted- Number Weighted- Number Weighted- Balances at July 1, 2019 4,201,614 $ 63.85 819,299 $ 92.15 325,777 $ 97.43 Granted — — 4,120 120.00 — — Exercise of stock options (a) (364,973) 49.91 — — — — Vesting of restricted stock units — — (412) 95.78 — — Expired/forfeited (5,017) 62.54 (8,405) 120.98 (5,318) 68.24 Balances at September 30, 2019 (b),(c) 3,831,624 $ 65.18 814,602 $ 91.99 320,459 $ 97.91 ____________ (a) Stock options exercised during the period of July 1, 2019 through September 30, 2019 had an aggregate intrinsic value of $28.1 million. (b) As of September 30, 2019, the Company’s outstanding vested and currently exercisable stock options using the September 30, 2019 closing stock price of $124.43 (approximately 2.0 million shares) had an aggregate intrinsic value of $160.6 million with a weighted-average exercise price of $44.93 and a weighted-average remaining contractual life of 4.8 years. The total of all stock options outstanding as of September 30, 2019 have a weighted-average remaining contractual life of 6.4 years. (c) As of September 30, 2019, time-based restricted stock units and performance-based restricted stock units expected to vest using the September 30, 2019 closing stock price of $124.43 (approximately 0.8 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $97.3 million and $39.1 million, respectively. Performance-based restricted stock units 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. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income/(Loss) by Component (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of Changes in Accumulated Balances for Each Component of Accumulated Other Comprehensive Income/(Loss) | The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income/(loss) for the three months ended September 30, 2019, and 2018, respectively: Foreign Pension Total (In millions) Balances at July 1, 2019 $ (58.3) $ (12.9) $ (71.2) Other comprehensive income/(loss) before reclassifications (8.7) — (8.7) Amounts reclassified from accumulated other comprehensive income/(loss) — 0.4 0.4 Balances at September 30, 2019 $ (66.9) $ (12.6) $ (79.5) Foreign Pension Total (In millions) Balances at July 1, 2018 $ (43.2) $ (10.2) $ (53.5) Other comprehensive income/(loss) before reclassifications (10.1) — (10.1) Amounts reclassified from accumulated other comprehensive income/(loss) — — — Balances at September 30, 2018 $ (53.3) $ (10.2) $ (63.5) |
Interim Financial Data by Seg_2
Interim Financial Data by Segment (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Results | Segment results: Revenues Three Months Ended 2019 2018 (In millions) Investor Communication Solutions $ 702.6 $ 755.0 Global Technology and Operations 273.9 238.4 Foreign currency exchange (28.0) (20.7) Total $ 948.6 $ 972.8 Earnings (Loss) before Income Three Months Ended 2019 2018 (In millions) Investor Communication Solutions $ 23.0 $ 58.8 Global Technology and Operations 56.4 46.5 Other (21.1) (23.2) Foreign currency exchange 5.6 7.1 Total $ 63.8 $ 89.3 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | 3 Months Ended |
Sep. 30, 2019Segment | |
Accounting Policies [Abstract] | |
Number of client groups | 4 |
Number of reportable segments | 2 |
New Accounting Pronouncements (
New Accounting Pronouncements (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jul. 01, 2019 | Jul. 01, 2018 | [2] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease liability recognized upon adoption | $ 244.8 | $ 252 | |||
Operating lease right-of-use assets recognized upon adoption | $ 228.1 | ||||
Impact of revenue recognition adjustments | 0.2 | [1] | $ 101.3 | ||
Retained Earnings | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Impact of revenue recognition adjustments | 0.2 | [1] | $ 102.8 | ||
2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Operating lease right-of-use assets recognized upon adoption | 235.4 | ||||
2016-02 | Retained Earnings | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Impact of revenue recognition adjustments | $ 0.2 | ||||
[1] | Reflects the adoption of accounting standards as described in Note 2, “Summary of Significant Accounting Policies.” | ||||
[2] | Primarily reflects the adoption of accounting standards as described in Note 3, “Revenue Recognition.” |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($)Segment | |
Revenue from Contract with Customer [Abstract] | |
Number of reportable segments | Segment | 2 |
Amount of revenue recognized | $ | $ 71.6 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 948.6 | $ 972.8 |
Distribution revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 313.3 | 341 |
Foreign currency exchange | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 28 | 20.7 |
Recurring fee revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 623.2 | 575.5 |
Event-driven fee revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 40.1 | 76.9 |
Investor Communication Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 702.6 | 755 |
Investor Communication Solutions | Total ICS Recurring fee revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 349.2 | 337.1 |
Investor Communication Solutions | Equity proxy | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 29.8 | 31 |
Investor Communication Solutions | Mutual fund and exchange traded funds (“ETF”) interims | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 65.3 | 57.8 |
Investor Communication Solutions | Customer communications and fulfillment | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 170.9 | 174.9 |
Investor Communication Solutions | Other ICS | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 83.2 | 73.4 |
Investor Communication Solutions | Total ICS Event-driven fee revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 40.1 | 76.9 |
Investor Communication Solutions | Equity and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 17.5 | 24.1 |
Investor Communication Solutions | Mutual funds | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22.6 | 52.8 |
Investor Communication Solutions | Distribution revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 313.3 | 341 |
Global Technology and Operations | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 948.6 | 972.8 |
Global Technology and Operations | Total GTO Recurring fee revenues | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 273.9 | 238.4 |
Global Technology and Operations | Equities and other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 230.9 | 198.4 |
Global Technology and Operations | Fixed income | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 43.1 | 40 |
Global Technology and Operations | Foreign currency exchange | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 28 | $ 20.7 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 60.5 | $ 47.5 |
Contract liabilities | $ 248.2 | $ 251.6 |
Weighted-Average Shares Outst_3
Weighted-Average Shares Outstanding - Additional Information (Details) - shares | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted options related to the purchase of common stock (in shares) | 0 | 0 |
Weighted-Average Shares Outst_4
Weighted-Average Shares Outstanding - Denominators of Basic and Diluted EPS Computations (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Weighted-average shares outstanding: | ||
Basic (in shares) | 114.4 | 116.4 |
Common stock equivalents (in shares) | 2.7 | 3.3 |
Diluted (in shares) | 117.1 | 119.7 |
Interest Expense, Net - Compone
Interest Expense, Net - Components of Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | ||
Interest expense on borrowings | $ (14.2) | $ (10.2) |
Interest income | 1 | 0.6 |
Interest expense, net | $ (13.1) | $ (9.6) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jun. 30, 2019USD ($) | May 31, 2019USD ($) | Sep. 30, 2019USD ($)business | |
Business Acquisition [Line Items] | |||
Number of businesses acquired | business | 0 | ||
Remaining expected payment obligation | $ 232.8 | $ 416.3 | |
Rockall Technologies Limited | |||
Business Acquisition [Line Items] | |||
Potential maximum pay-out | $ 10.1 | ||
Payments for previous acquisition | 0.5 | ||
RPM | |||
Business Acquisition [Line Items] | |||
Potential maximum pay-out | $ 3.7 | ||
Payments for previous acquisition | 40.9 | ||
Remaining expected payment obligation | $ 4 | ||
Software Technology | Rockall Technologies Limited | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets acquired | 4 years | ||
Software Technology | RPM | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets acquired | 5 years | ||
Customer Relationships | Rockall Technologies Limited | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets acquired | 6 years | ||
Customer Relationships | RPM | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets acquired | 7 years | ||
Customer Relationships | TD Ameritrade Trust Company | |||
Business Acquisition [Line Items] | |||
Useful life of intangible assets acquired | 7 years |
Acquisitions - Schedule of Busi
Acquisitions - Schedule of Business Combinations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | |||
Cash payments, net of cash acquired | $ 48.1 | $ 0 | |
Goodwill | $ 1,495.1 | $ 1,500 | |
Fiscal 2019 Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash payments, net of cash acquired | 354.7 | ||
Deferred payments, net | 45.5 | ||
Contingent consideration liability | 7.9 | ||
Aggregate purchase price | 408 | ||
Net tangible assets acquired / (liabilities assumed) | 8.3 | ||
Goodwill | 239.4 | ||
Intangible assets | 160.3 | ||
Rockall Technologies Limited | |||
Business Acquisition [Line Items] | |||
Cash payments, net of cash acquired | 34.9 | ||
Deferred payments, net | 0.5 | ||
Contingent consideration liability | 7 | ||
Aggregate purchase price | 42.4 | ||
Net tangible assets acquired / (liabilities assumed) | (2.5) | ||
Goodwill | 30.7 | ||
Intangible assets | 14.2 | ||
RPM | |||
Business Acquisition [Line Items] | |||
Cash payments, net of cash acquired | 258.3 | ||
Deferred payments, net | 45 | ||
Contingent consideration liability | 0.8 | ||
Aggregate purchase price | 304.1 | ||
Net tangible assets acquired / (liabilities assumed) | 10.8 | ||
Goodwill | 181.6 | ||
Intangible assets | 111.7 | ||
TD Ameritrade Trust Company | |||
Business Acquisition [Line Items] | |||
Cash payments, net of cash acquired | 61.5 | ||
Deferred payments, net | 0 | ||
Contingent consideration liability | 0 | ||
Aggregate purchase price | 61.5 | ||
Net tangible assets acquired / (liabilities assumed) | 0 | ||
Goodwill | 27.1 | ||
Intangible assets | $ 34.4 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Cash and cash equivalents: | ||
Money market funds | $ 122.9 | $ 68.1 |
Other current assets: | ||
Securities | 0.3 | 0.4 |
Other non-current assets: | ||
Securities | 95.8 | 81.8 |
Total assets as of period end | 219 | 150.3 |
Liabilities: | ||
Contingent consideration obligations | 26.5 | 28.4 |
Total liabilities as of period end | 26.5 | 28.4 |
Money market deposit account | 82.3 | 30.1 |
Level 1 | ||
Cash and cash equivalents: | ||
Money market funds | 122.9 | 68.1 |
Other current assets: | ||
Securities | 0.3 | 0.4 |
Other non-current assets: | ||
Securities | 95.8 | 81.8 |
Total assets as of period end | 219 | 150.3 |
Liabilities: | ||
Contingent consideration obligations | 0 | 0 |
Total liabilities as of period end | 0 | 0 |
Level 2 | ||
Cash and cash equivalents: | ||
Money market funds | 0 | 0 |
Other current assets: | ||
Securities | 0 | 0 |
Other non-current assets: | ||
Securities | 0 | 0 |
Total assets as of period end | 0 | 0 |
Liabilities: | ||
Contingent consideration obligations | 0 | 0 |
Total liabilities as of period end | 0 | 0 |
Level 3 | ||
Cash and cash equivalents: | ||
Money market funds | 0 | 0 |
Other current assets: | ||
Securities | 0 | 0 |
Other non-current assets: | ||
Securities | 0 | 0 |
Total assets as of period end | 0 | 0 |
Liabilities: | ||
Contingent consideration obligations | 26.5 | 28.4 |
Total liabilities as of period end | $ 26.5 | $ 28.4 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Fair Value Disclosures [Abstract] | ||
Non-marketable securities | $ 32.1 | $ 12.9 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Changes in Level 3 Financial Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 28.4 | $ 18.6 |
Additional contingent consideration incurred | 0 | 0 |
Net increase (decrease) in contingent consideration liability | 0 | 0 |
Foreign currency impact on contingent consideration liability | (0.4) | (0.4) |
Payments | (1.5) | (0.2) |
Ending balance | $ 26.5 | $ 18.1 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2019 | |
Leases [Abstract] | |||
Operating lease option to extend, in years | 5 years | ||
Weighted average remaining lease term | 9 years 1 month 6 days | ||
Weighted average discount rate on operating leases | 3.10% | ||
Operating lease expense | $ 49 | $ 50.4 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jul. 01, 2019 |
Assets: | ||
Operating lease ROU assets | $ 228.1 | |
Liabilities: | ||
Operating lease liabilities - Current | 29.9 | |
Operating lease liabilities - Non-current | 214.9 | |
Total Operating lease liabilities | $ 244.8 | $ 252 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 8.2 |
Variable lease cost | $ 6.1 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash outflows from operating leases | $ 6.7 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 0 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities Under ASC 842 (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jul. 01, 2019 |
Leases [Abstract] | ||
2020 | $ 27.8 | |
2021 | 35.7 | |
2022 | 32 | |
2023 | 29.7 | |
2024 | 28.1 | |
Thereafter | 130.7 | |
Total lease payments | 284 | |
Less: Discount Amount | 39.2 | |
Present value of operating lease liabilities | 244.8 | $ 252 |
Leases not yet commenced | $ 103.4 | |
Term of leases not yet commenced | 15 years |
Leases - Maturity of Lease Li_2
Leases - Maturity of Lease Liabilities Under ASC 840 (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 46.8 |
2021 | 45.2 |
2022 | 39.5 |
2023 | 35.9 |
2024 | 34.7 |
Thereafter | 204.4 |
Total lease payments | $ 406.5 |
Other Non-Current Assets - Sche
Other Non-Current Assets - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Deferred client conversion and start-up costs | $ 291.4 | $ 254.7 | |
ROU Assets | 228.1 | ||
Long-term investments | 133.2 | 100.4 | |
Deferred sales commissions costs | 93.4 | 95.5 | |
Contract assets | 60.5 | 47.5 | |
Deferred data center costs | 27.4 | 29 | |
Long-term broker fees | 34.4 | 35.3 | |
Other | 28.4 | 30.6 | |
Total | 896.9 | $ 593.1 | |
Amortization of deferred sales commissions and set-up costs | $ 17.3 | $ 15.7 |
Payables and Accrued Expensess
Payables and Accrued Expensess - Components of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 89.6 | $ 133.7 |
Employee compensation and benefits | 141.2 | 232.2 |
Accrued broker fees | 48.7 | 87 |
Accrued taxes | 22.3 | 68.9 |
Accrued dividend payable | 61.8 | 55.4 |
Managed services administration fees | 55.2 | 53.1 |
Customer deposits | 38.1 | 34.8 |
Operating lease liabilities | 29.9 | |
Other | 61.1 | 46.6 |
Total | $ 547.9 | $ 711.7 |
Borrowings - Schedule of Outsta
Borrowings - Schedule of Outstanding Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2016 | Aug. 31, 2013 |
Debt Instrument [Line Items] | ||||
Principal amount | $ 1,773.2 | |||
Current portion of long-term debt | 399.4 | $ 0 | ||
Long-term debt, excluding current portion | 1,368.8 | 1,470.4 | ||
Fair Value at September 30, 2019 | 1,798.5 | |||
Total debt | 1,768.2 | |||
Long-term debt, excluding current portion | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 1,373.2 | |||
Long-term debt, excluding current portion | 1,368.8 | 1,470.4 | ||
Fair Value at September 30, 2019 | 1,392.2 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 500 | |||
Long-term debt, excluding current portion | 495.6 | |||
Senior Notes | Long-term debt, excluding current portion | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, excluding current portion | 894.7 | |||
Fair Value at September 30, 2019 | 519 | |||
Fiscal 2019 Revolving Credit Facility: | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 873.2 | |||
Long-term debt, excluding current portion | 873.2 | 575.7 | ||
Unused Available Capacity | 626.8 | |||
Fair Value at September 30, 2019 | 873.2 | |||
Fiscal 2019 Revolving Credit Facility, U.S. Dollar Tranche | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 630 | |||
Long-term debt, excluding current portion | 630 | 360 | ||
Unused Available Capacity | 470 | |||
Fair Value at September 30, 2019 | 630 | |||
Fiscal 2019 Revolving Credit Facility, Multicurrency Tranche | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 243.2 | |||
Long-term debt, excluding current portion | 243.2 | 215.7 | ||
Unused Available Capacity | 156.8 | |||
Fair Value at September 30, 2019 | 243.2 | |||
Fiscal 2014 Senior Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | 400 | $ 400 | ||
Current portion of long-term debt | 399.4 | |||
Fair Value at September 30, 2019 | 406.3 | |||
Fiscal 2014 Senior Notes | Senior Notes | Long-term debt, excluding current portion | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, excluding current portion | 399.2 | |||
Fiscal 2016 Senior Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 500 | |||
Fiscal 2016 Senior Notes | Senior Notes | Long-term debt, excluding current portion | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, excluding current portion | $ 495.5 | |||
Fair Value at September 30, 2019 | $ 519 |
Borrowings - Future Principal P
Borrowings - Future Principal Payments on the Company’s Outstanding Debt (Details) $ in Millions | Sep. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 0 |
2021 | 400 |
2022 | 0 |
2023 | 0 |
2024 | 873.2 |
Thereafter | 500 |
Total | $ 1,773.2 |
Borrowings - Additional Informa
Borrowings - Additional Information (Details) - USD ($) | Mar. 18, 2019 | Feb. 06, 2017 | Jun. 30, 2016 | Aug. 31, 2013 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 |
Debt Instrument [Line Items] | |||||||
Principal amount | $ 1,773,200,000 | ||||||
Fair value, senior notes | 1,798,500,000 | ||||||
Outstanding amount of line of credit | 0 | $ 0 | |||||
Long-term debt, excluding current portion | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 1,373,200,000 | ||||||
Fair value, senior notes | 1,392,200,000 | ||||||
Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | 500,000,000 | ||||||
Senior Notes | Long-term debt, excluding current portion | |||||||
Debt Instrument [Line Items] | |||||||
Fair value, senior notes | 519,000,000 | ||||||
Fiscal 2019 Revolving Credit Facility: | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility maximum borrowing capacity | $ 1,500,000,000 | ||||||
Term | 5 years | ||||||
Tranche borrowing period | 360 days | ||||||
Annual facility fee (as basis points) | 0.11% | ||||||
Debt issuance costs, total incurred | $ 2,300,000 | ||||||
Debt issuance costs remaining to be amortized, revolving credit facilities | 3,400,000 | ||||||
Principal amount | 873,200,000 | ||||||
Fair value, senior notes | 873,200,000 | ||||||
Fiscal 2019 Revolving Credit Facility, U.S. Dollar Tranche | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility maximum borrowing capacity | 1,100,000,000 | ||||||
Principal amount | 630,000,000 | ||||||
Fair value, senior notes | 630,000,000 | ||||||
Fiscal 2019 Revolving Credit Facility, Multicurrency Tranche | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility maximum borrowing capacity | $ 400,000,000 | ||||||
Principal amount | 243,200,000 | ||||||
Fair value, senior notes | $ 243,200,000 | ||||||
Fiscal 2017 Revolving Credit Facility | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility maximum borrowing capacity | $ 1,000,000,000 | ||||||
Term | 5 years | ||||||
Annual facility fee (as basis points) | 0.125% | ||||||
Revolving Credit Facilities | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Weighted-average interest rate of revolving credit facilities | 3.12% | 2.97% | |||||
Fiscal 2014 Senior Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 400,000,000 | $ 400,000,000 | |||||
Interest rate, senior notes | 3.95% | ||||||
Percentage of principal amount | 99.871% | ||||||
Effective interest rate, senior notes | 3.971% | ||||||
Debt issuance costs incurred, senior notes | $ 4,300,000 | ||||||
Debt issuance cost, amortization period, senior notes | 7 years | ||||||
Debt issuance costs remaining to be amortized, senior notes | 500,000 | 700,000 | |||||
Fair value, senior notes | 406,300,000 | ||||||
Fiscal 2014 Senior Notes | Senior Notes | Level 1 | |||||||
Debt Instrument [Line Items] | |||||||
Fair value, senior notes | 406,300,000 | 405,400,000 | |||||
Fiscal 2016 Senior Notes | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount | $ 500,000,000 | ||||||
Interest rate, senior notes | 3.40% | ||||||
Percentage of principal amount | 99.589% | ||||||
Effective interest rate, senior notes | 3.449% | ||||||
Debt issuance costs incurred, senior notes | $ 4,500,000 | ||||||
Debt issuance cost, amortization period, senior notes | 10 years | ||||||
Debt issuance costs remaining to be amortized, senior notes | 2,900,000 | 3,000,000 | |||||
Fiscal 2016 Senior Notes | Senior Notes | Level 1 | |||||||
Debt Instrument [Line Items] | |||||||
Fair value, senior notes | $ 509,800,000 | ||||||
Fiscal 2016 Senior Notes | Senior Notes | Long-term debt, excluding current portion | |||||||
Debt Instrument [Line Items] | |||||||
Fair value, senior notes | $ 519,000,000 | ||||||
London Interbank Offered Rate (LIBOR) | Fiscal 2019 Revolving Credit Facility: | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate | 1.015% |
Other Non-Current Liabilities_2
Other Non-Current Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 |
Payables and Accruals [Abstract] | ||
Operating lease liabilities | $ 214.9 | |
Post-employment retirement obligations | 136 | $ 130.8 |
Non-current income taxes | 40.6 | 40.5 |
Acquisition related contingencies | 8.7 | 26.3 |
Other | 16.1 | 35.3 |
Total | $ 416.3 | $ 232.8 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Incentive Equity Awards (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Weighted-Average Grant Date Fair Value | |
Stock options exercised during period, aggregate intrinsic value | $ | $ 28.1 |
Closing stock price (in dollars per share) | $ / shares | $ 124.43 |
Outstanding vested and currently exercisable stock options (in shares) | 2,000,000 |
Exercisable stock options, aggregate intrinsic value | $ | $ 160.6 |
Exercisable stock options, weighted average exercise price | $ / shares | $ 44.93 |
Exercisable stock options, weighted average remaining contractual life | 4 years 9 months 18 days |
Stock options outstanding, weighted-average remaining contractual life | 6 years 4 months 24 days |
Stock Options | |
Number of Options | |
Number of Options, Beginning balance (in shares) | 4,201,614 |
Number of Options, Granted (in shares) | 0 |
Number of Options, Exercise of stock options (in shares) | (364,973) |
Number of Options, Expired/forfeited (in shares) | (5,017) |
Number of Options, Ending balance (in shares) | 3,831,624 |
Weighted-Average Exercise Price | |
Weighted-Average Exercise Price, Beginning balance (in dollars per share) | $ / shares | $ 63.85 |
Weighted-Average Exercise Price, Granted (in dollars per share) | $ / shares | 0 |
Weighted-Average Exercise Price, Exercise of stock options (in dollars per share) | $ / shares | 49.91 |
Weighted-Average Exercise Price, Expired/forfeited (in dollars per share) | $ / shares | 62.54 |
Weighted-Average Exercise Price, Ending balance (in dollars per share) | $ / shares | $ 65.18 |
Time-based Restricted Stock Units | |
Number of Options | |
Number of Options, Beginning balance (in shares) | 819,299 |
Number of Options, Granted (in shares) | 4,120 |
Number of Shares, Vesting of restricted stock units (in shares) | (412) |
Number of Options, Expired/forfeited (in shares) | (8,405) |
Number of Options, Ending balance (in shares) | 814,602 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 92.15 |
Weighted-Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 120 |
Weighted-Average Grant Date Fair Value, Vesting of Restricted Stock Units (in dollars per share) | $ / shares | 95.78 |
Weighted-Average Grant Date Fair Value, Expired/forfeited (in dollars per share) | $ / shares | 120.98 |
Weighted-Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 91.99 |
Restricted stock units expected to vest (in shares) | 800,000 |
Restricted stock units, aggregate intrinsic value | $ | $ 97.3 |
Performance-based Restricted Stock Units | |
Number of Options | |
Number of Options, Beginning balance (in shares) | 325,777 |
Number of Options, Expired/forfeited (in shares) | (5,318) |
Number of Options, Ending balance (in shares) | 320,459 |
Weighted-Average Grant Date Fair Value | |
Weighted-Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 97.43 |
Weighted-Average Grant Date Fair Value, Expired/forfeited (in dollars per share) | $ / shares | 68.24 |
Weighted-Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 97.91 |
Restricted stock units expected to vest (in shares) | 300,000 |
Restricted stock units, aggregate intrinsic value | $ | $ 39.1 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Stock-based compensation expense | $ 11.8 | $ 10.7 |
Related tax benefits | 2.6 | $ 2.4 |
Unrecognized compensation cost related to non-vested stock options | 14.7 | |
Unrecognized compensation cost related to restricted stock unit awards | $ 39.7 | |
Amortization period of unrecognized compensation cost for non-vested stock options | 2 years 7 months 6 days | |
Amortization period of unrecognized compensation cost for restricted stock awards | 1 year 4 months 24 days |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 7.9 | $ 12.6 |
Effective income tax rate | 12.40% | 14.10% |
Excess tax benefit | $ 5.7 | $ 7 |
Contractual Commitments, Cont_2
Contractual Commitments, Contingencies and Off-Balance Sheet Arrangements - Additional Information (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2015term | Mar. 31, 2014term | Sep. 30, 2019USD ($) | |
Contractual Commitments Contingencies And Off- Balance Sheet Arrangements [Line Items] | |||
Payment to acquire equity method investment | $ 0.8 | ||
Remaining capital commitment | 0.8 | ||
Future capital commitment | 3.9 | ||
IT Services Agreement | |||
Contractual Commitments Contingencies And Off- Balance Sheet Arrangements [Line Items] | |||
IT service agreement extension term | 2 years | ||
Number of renewal terms option one | term | 1 | ||
Renewal term option one (in months) | 12 months | ||
Remaining commitment amount | 277.8 | ||
EU IT Services Agreement | |||
Contractual Commitments Contingencies And Off- Balance Sheet Arrangements [Line Items] | |||
Number of renewal terms option one | term | 1 | ||
Renewal term option one (in months) | 12 months | ||
Remaining commitment amount | $ 19.4 | ||
Number of renewal terms option two | term | 1 | ||
Renewal term option two (in months) | 24 months |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income/(Loss) by Component - Summary of Changes in Accumulated Balances for Each Component of Accumulated Other Comprehensive Income/(Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Changes In Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance | $ 1,127.5 | $ 1,094.3 |
Other comprehensive income/(loss) before reclassifications | (8.7) | (10.1) |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0.4 | 0 |
Balance | 1,143.4 | 1,234 |
Foreign Currency Translation | ||
Changes In Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive income/(loss) before reclassifications | (8.7) | (10.1) |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0 | 0 |
Balance | (66.9) | (53.3) |
Pension and Post- Retirement Liabilities | ||
Changes In Accumulated Other Comprehensive Income [Roll Forward] | ||
Other comprehensive income/(loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income/(loss) | 0.4 | 0 |
Balance | (12.6) | (10.2) |
Accumulated Other Comprehensive Income (Loss) | ||
Changes In Accumulated Other Comprehensive Income [Roll Forward] | ||
Balance | (71.2) | (51.9) |
Balance | $ (79.5) | $ (63.5) |
Interim Financial Data by Seg_3
Interim Financial Data by Segment - Additional Information (Details) $ in Millions | 3 Months Ended | |
Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Segment | 2 | |
Revenues | $ 948.6 | $ 972.8 |
Earnings (Loss) before Income Taxes | 63.8 | 89.3 |
Global Technology and Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 948.6 | 972.8 |
Investor Communication Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 702.6 | 755 |
Operating Segments | Global Technology and Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 273.9 | 238.4 |
Earnings (Loss) before Income Taxes | 56.4 | 46.5 |
Operating Segments | Investor Communication Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 702.6 | 755 |
Earnings (Loss) before Income Taxes | $ 23 | 58.8 |
Operating Segments | Restatement adjustment | Global Technology and Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 10.7 | |
Earnings (Loss) before Income Taxes | 0.2 | |
Operating Segments | Restatement adjustment | Investor Communication Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | (10.7) | |
Earnings (Loss) before Income Taxes | $ (0.2) |
Interim Financial Data by Seg_4
Interim Financial Data by Segment - Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 948.6 | $ 972.8 |
Earnings (Loss) before Income Taxes | 63.8 | 89.3 |
Investor Communication Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 702.6 | 755 |
Global Technology and Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 948.6 | 972.8 |
Operating Segments | Investor Communication Solutions | ||
Segment Reporting Information [Line Items] | ||
Revenues | 702.6 | 755 |
Earnings (Loss) before Income Taxes | 23 | 58.8 |
Operating Segments | Global Technology and Operations | ||
Segment Reporting Information [Line Items] | ||
Revenues | 273.9 | 238.4 |
Earnings (Loss) before Income Taxes | 56.4 | 46.5 |
Other | ||
Segment Reporting Information [Line Items] | ||
Earnings (Loss) before Income Taxes | (21.1) | (23.2) |
Foreign currency exchange | ||
Segment Reporting Information [Line Items] | ||
Revenues | (28) | (20.7) |
Earnings (Loss) before Income Taxes | $ 5.6 | $ 7.1 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Subsequent Event - USD ($) $ in Millions | Nov. 01, 2019 | Oct. 01, 2019 |
Shadow Financial Services, Inc. | ||
Subsequent Event [Line Items] | ||
Purchase price | $ 39 | |
Fi360 | ||
Subsequent Event [Line Items] | ||
Purchase price | $ 120 |
Uncategorized Items - br-201909
Label | Element | Value | |
AOCI Attributable to Parent [Member] | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 0 | |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,500,000) | [1] |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (71,200,000) | |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (53,500,000) | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (58,300,000) | |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (43,200,000) | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | |||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (10,200,000) | |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (12,900,000) | |
[1] | Primarily reflects the adoption of accounting standards as described in Note 3, “Revenue Recognition.” |