UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2017~~2019



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33220

BROADRIDGE FINANCIAL SOLUTIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)



Delaware	33-1151291
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

5 Dakota Drive Lake Success, NY	11042
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area ~~code~~code: (516) 472-5400

Former name, former address and former fiscal year, if changed since last report:N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer” “accelerated ~~filer”~~filer,” “smaller reporting company” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filerx	x	Accelerated filer	¨

Non-accelerated filer¨	~~(Do not check if a smaller reporting company)~~¨	Smaller reporting company	¨

Emerging Growth Company¨	If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨		¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class:	Trading Symbol	Name of Each Exchange on Which Registered:
Common Stock, par value $0.01 per share	BR	New York Stock Exchange

The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of ~~January 31, 2018,~~April 30, 2019, was ~~116,654,180~~116,138,903 shares.

TABLE OF CONTENTS



ITEM		PAGE
PART I.	FINANCIAL INFORMATION	3
Item 1.	FINANCIAL STATEMENTS	3
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2130
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	3747
Item 4.	CONTROLS AND PROCEDURES	3747
PART II.	OTHER INFORMATION	3848
Item 1.	LEGAL PROCEEDINGS	3848
Item 1A.	RISK FACTORS	3848
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	3848
Item 3.	DEFAULTS UPON SENIOR SECURITIES	3848
Item 4.	MINE SAFETY DISCLOSURES	3848
Item 5.	OTHER INFORMATION	3848
Item 6.	EXHIBITS	3949

PART I. FINANCIAL INFORMATION


Item 1.	FINANCIAL STATEMENTS

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Earnings

(In millions, except per share amounts)

(Unaudited)


		Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended March 31,					Nine Months Ended March 31,
		2017		2016		2017		2016			2019		2018			2019		2018
Revenues		$	1,012.8	$	892.6	$	1,937.6	$	1,787.9	(Note 3)	$	1,224.8	$	1,071.9		$	3,151.0	$	3,009.5
Operating expenses:
Cost of revenues		769.8		707.8		1,496.4		1,425.7			847.3		802.5			2,320.3		2,297.8
Selling, general and administrative expenses		127.9		126.0		241.7		237.3			143.9		138.6			418.7		379.8
Total operating expenses		897.7		833.8		1,738.1		1,663.1			991.2		941.1			2,739.1		2,677.6
Operating income		115.1		58.8		199.5		124.9			233.6		130.8			411.9		331.9
Interest expense, net	(Note 4)	10.2		10.6		19.6		21.0		(Note 5)	10.0		9.0			30.4		28.6
Other non-operating (income) expenses, net	(Note 5)	1.4		2.5		2.1		6.7		(Note 6)	—		(3.4		)	4.3		0.3
Earnings before income taxes		103.5		45.7		177.8		97.2			223.6		125.2			377.2		303.0
Provision for income taxes	(Note 12)	41.4		15.6		65.8		33.4		(Note 13)	51.4		16.2			78.4		81.9
Net earnings		$	62.1	$	30.1	$	112.0	$	63.8		$	172.2	$	109.1		$	298.8	$	221.1

Basic earnings per share		$	0.53	$	0.25	$	0.96	$	0.54		$	1.49	$	0.93		$	2.57	$	1.89
Diluted earnings per share		$	0.52	$	0.25	$	0.93	$	0.52		$	1.45	$	0.90		$	2.51	$	1.84

Weighted-average shares outstanding:
Basic	(Note 3)	116.6		118.7		116.5		118.6		(Note 4)	115.7		116.9			116.1		116.7
Diluted	(Note 3)	120.3		121.5		120.1		121.5		(Note 4)	118.5		120.9			119.1		120.3
Dividends declared per common share		$	0.365	$	0.33	$	0.73	$	0.66

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Comprehensive Income

(In millions)

(Unaudited)


	Three Months Ended December 31,						Six Months Ended December 31,					Three Months Ended March 31,					Nine Months Ended March 31,
	2017			2016			2017		2016			2019		2018			2019			2018
Net earnings	$	62.1		$	30.1		$	112.0	$	63.8		$	172.2	$	109.1		$	298.8		$	221.1
Other comprehensive income (loss), net:
Foreign currency translation adjustments	(2.4		)	(12.0		)	15.9		(23.2		)	4.9		7.4			(11.2		)	23.3
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $(0.3) and $0.1 for the three months ended December 31, 2017 and 2016, respectively; and $(0.5) and $(0.1) for the six months ended December 31, 2017 and 2016, respectively	0.8			(0.2		)	1.1		0.2
Pension and post-retirement liability adjustment, net of taxes of $(0.1) and $(0.1) for the three months ended December 31, 2017 and 2016, respectively; and $(0.2) and $(0.2) for the six months ended December 31, 2017 and 2016, respectively	0.2			0.1			0.4		0.3
Net unrealized gains (losses) on available-for-sale securities, net of taxes of $(0.0) and $1.7 for the three months ended March 31, 2019 and 2018, respectively; and $(0.0) and $1.2 for the nine months ended March 31, 2019 and 2018, respectively												—		(3.7		)	—			(2.7		)
Pension and post-retirement liability adjustment, net of taxes of $(0.1) and $(0.1) for the three months ended March 31, 2019 and 2018, respectively; and $(0.2) and $(0.3) for the nine months ended March 31, 2019 and 2018, respectively												0.2		0.2			0.6			0.7
Total other comprehensive income (loss), net	(1.4		)	(12.0		)	17.4		(22.7		)	5.1		3.8			(10.7		)	21.3
Comprehensive income	$	60.7		$	18.1		$	129.4	$	41.1		$	177.2	$	112.9		$	288.1		$	242.3

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Condensed Consolidated Balance Sheets

(In millions, except per share amounts)

(Unaudited)


		December 31, 2017			June 30, 2017				March 31, 2019			June 30, 2018
Assets
Current assets:
Cash and cash equivalents		$	366.5		$	271.1			$	292.1		$	263.9
Accounts receivable, net of allowance for doubtful accounts of $5.0 and $3.7, respectively		575.1			589.5
Accounts receivable, net of allowance for doubtful accounts of $2.0 and $2.7, respectively									792.8			615.0
Other current assets		109.6			129.0				110.5			112.2
Total current assets		1,051.2			989.6				1,195.4			991.1
Property, plant and equipment, net		202.5			198.1				183.4			204.1
Goodwill		1,193.1			1,159.3				1,256.6			1,254.9
Intangible assets, net		464.1			486.4				427.1			494.1
Other non-current assets	(Note 8)	339.1			316.4			(Note 9)	539.6			360.5
Total assets		$	3,249.9		$	3,149.8			$	3,602.1		$	3,304.7
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	134.3		$	167.2
Accrued expenses and other current liabilities	(Note 9)	372.5			495.3
Deferred revenues		79.2			82.4
Payables and accrued expenses								(Note 10)	$	610.5		$	671.0
Contract liabilities									94.7			106.3
Total current liabilities		586.0			744.9				705.2			777.3
Long-term debt	(Note 10)	1,222.7			1,102.1			(Note 11)	1,174.4			1,053.4
Deferred taxes		52.5			82.0				100.9			57.9
Deferred revenues		83.4			74.3
Contract liabilities									158.6			75.2
Other non-current liabilities		231.2			142.7				197.4			246.5
Total liabilities		2,175.9			2,146.0				2,336.5			2,210.4
Commitments and contingencies	(Note 13)							(Note 14)
Stockholders’ equity:
Preferred stock: Authorized, 25.0 shares; issued and outstanding, none		—			—				—			—
Common stock, $0.01 par value: 650.0 shares authorized; 154.5 and 154.5 shares issued, respectively; and 116.6 and 116.5 shares outstanding, respectively		1.6			1.6
Common stock, $0.01 par value: 650.0 shares authorized; 154.5 and 154.5 shares issued, respectively; and 115.8 and 116.3 shares outstanding, respectively									1.6			1.6
Additional paid-in capital		1,012.6			987.6				1,107.6			1,048.5
Retained earnings		1,496.3			1,469.4				1,959.9			1,727.0
Treasury stock, at cost: 37.8 and 38.0 shares, respectively		(1,398.0		)	(1,398.9		)
Treasury stock, at cost: 38.7 and 38.1 shares, respectively									(1,739.2		)	(1,630.8		)
Accumulated other comprehensive loss	(Note 14)	(38.4		)	(55.8		)	(Note 15)	(64.1		)	(51.9		)
Total stockholders’ equity		1,074.0			1,003.8				1,265.6			1,094.3
Total liabilities and stockholders’ equity		$	3,249.9		$	3,149.8			$	3,602.1		$	3,304.7

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Six Months Ended December 31,						Nine Months Ended March 31,
	2017			2016			2019			2018
Cash Flows From Operating Activities
Net earnings	$	112.0		$	63.8		$	298.8		$	221.1
Adjustments to reconcile Net earnings to Net cash flows provided by operating activities:
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
Depreciation and amortization	40.0			34.5			63.7			60.7
Amortization of acquired intangibles and purchased intellectual property	39.2			33.1			64.3			59.4
Amortization of other assets	22.9			19.6			66.8			35.5
Stock-based compensation expense	24.7			22.8			46.8			39.2
Deferred income taxes	(11.2		)	(8.9		)	17.4			(21.5		)
Excess tax benefits from stock-based compensation awards	—			(22.0		)
Other	(1.7		)	0.8			(27.2		)	(15.2		)
Changes in operating assets and liabilities, net of assets and liabilities acquired:
Current assets and liabilities:
Decrease in Accounts receivable, net	18.0			29.3
Increase in Accounts receivable, net							(174.0		)	(121.3		)
Increase in Other current assets	(6.2		)	(22.8		)	(13.3		)	(33.3		)
Decrease in Accounts payable	(9.3		)	(1.9		)
Decrease in Accrued expenses and other current liabilities	(138.2		)	(100.2		)
Decrease in Deferred revenues	(5.5		)	(5.5		)
Decrease in Payables and accrued expenses							(55.1		)	(77.2		)
Increase in Contract liabilities							18.6			99.8
Non-current assets and liabilities:
Increase in Other non-current assets	(37.9		)	(57.4		)	(140.9		)	(69.2		)
Increase in Other non-current liabilities	95.1			9.3			51.9			96.7
Net cash flows provided by (used in) operating activities	141.8			(5.5		)
Net cash flows provided by operating activities							217.9			274.8
Cash Flows From Investing Activities
Capital expenditures	(42.1		)	(19.9		)	(30.9		)	(54.8		)
Software purchases and capitalized internal use software	(10.4		)	(12.1		)	(15.5		)	(15.9		)
Acquisitions, net of cash acquired	(30.2		)	(428.4		)	—			(63.0		)
Purchase of intellectual property	—			(90.0		)	—			(40.0		)
Equity method investments	(2.8		)	(3.0		)
Other investing activities							(2.8		)	(4.0		)
Net cash flows used in investing activities	(85.4		)	(553.4		)	(49.1		)	(177.6		)
Cash Flows From Financing Activities
Proceeds from Long-term debt	190.0			230.0
Repayments on Long-term debt	(70.0		)	(40.0		)
Excess tax benefits from stock-based compensation awards	—			22.0
Debt proceeds							370.0			260.0
Debt repayments							(250.0		)	(160.0		)
Dividends paid	(80.4		)	(74.0		)	(155.1		)	(123.0		)
Purchases of Treasury stock	(3.0		)	(101.2		)	(120.3		)	(29.8		)
Proceeds from exercise of stock options	4.4			34.0			23.6			38.1
Costs related to issuance of bonds	—			(0.7		)
Other financing activities	(5.5		)	—			(7.1		)	(5.5		)
Net cash flows provided by financing activities	35.4			70.2
Net cash flows used in financing activities							(138.8		)	(20.2		)
Effect of exchange rate changes on Cash and cash equivalents	3.6			(3.3		)	(1.9		)	4.1
Net change in Cash and cash equivalents	95.4			(492.0		)	28.2			81.0
Cash and cash equivalents, beginning of period	271.1			727.7			263.9			271.1
Cash and cash equivalents, end of period	$	366.5		$	235.7		$	292.1		$	352.1
Supplemental disclosure of cash flow information:
Cash payments made for interest	$	19.9		$	20.8		$	31.2		$	29.6
Cash payments made for income taxes, net of refunds	$	124.9		$	74.9		$	82.6		$	152.3
Non-cash investing and financing activities:
Accrual of unpaid property, plant and equipment and software	$	1.7		$	0.6		$	4.4		$	2.2
Increase in acquisition related obligations	$	6.4		$	2.5
Obligations related to the purchase of intellectual property	$	—		$	5.0

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In millions, except per share amounts)

(Unaudited)



	Three Months Ended March 31, 2019
	Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances, December 31, 2018	154.5	$	1.6	$	1,087.8		$	1,843.8		$	(1,741.4	)	$	(69.2	)	$	1,122.6
Comprehensive income (loss)	—	—		—			172.2			—			5.1			177.2
Stock option exercises	—	—		4.6			—			—			—			4.6
Stock-based compensation	—	—		17.3			—			—			—			17.3
Treasury stock acquired (less than 0.1 shares)	—	—		—			—			—			—			—
Treasury stock reissued (0.1 shares)	—	—		(2.2		)	—			2.2			—			—
Common stock dividends ($0.485 per share)	—	—		—			(56.1		)	—			—			(56.1		)
Balances, March 31, 2019	154.5	$	1.6	$	1,107.6		$	1,959.9		$	(1,739.2	)	$	(64.1	)	$	1,265.6



	Nine Months Ended March 31, 2019
	Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances, June 30, 2018	154.5	$	1.6	$	1,048.5		$	1,727.0		$	(1,630.8	)	$	(51.9	)	$	1,094.3
Comprehensive income (loss)	—	—		—			298.8			—			(10.7		)	288.1
Cumulative effect of changes in accounting principle (a)	—	—		—			102.8			—			(1.5		)	101.3
Stock option exercises	—	—		24.2			—			—			—			24.2
Stock-based compensation	—	—		46.8			—			—			—			46.8
Treasury stock acquired (1.1 shares)	—	—		—			—			(120.3		)	—			(120.3		)
Treasury stock reissued (0.6 shares)	—	—		(11.8		)	—			11.8			—			—
Common stock dividends ($1.455 per share)	—	—		—			(168.7		)	—			—			(168.7		)
Balances, March 31, 2019	154.5	$	1.6	$	1,107.6		$	1,959.9		$	(1,739.2	)	$	(64.1	)	$	1,265.6

____________


(a)	Reflects the adoption of accounting standards as described in Note 2.

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In millions, except per share amounts)

(Unaudited)



	Three Months Ended March 31, 2018
	Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances, December 31, 2017	154.5	$	1.6	$	1,012.6		$	1,496.3		$	(1,398.0	)	$	(38.4	)	$	1,074.0
Comprehensive income (loss)	—	—		—			109.1			—			3.8			112.9
Stock option exercises	—	—		30.1			—			—			—			30.1
Stock-based compensation	—	—		14.4			—			—			—			14.4
Treasury stock acquired (0.3 shares)	—	—		—			—			(26.8		)	—			(26.8		)
Treasury stock reissued (0.9 shares)	—	—		(18.2		)	—			18.2			—			—
Common stock dividends ($0.365 per share)	—	—		—			(42.8		)	—			—			(42.8		)
Balances, March 31, 2018	154.5	$	1.6	$	1,038.9		$	1,562.6		$	(1,406.6	)	$	(34.6	)	$	1,161.8



	Nine Months Ended March 31, 2018
	Common Stock			Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balances, June 30, 2017	154.5	$	1.6	$	987.6		$	1,469.4		$	(1,398.9	)	$	(55.8	)	$	1,003.8
Comprehensive income (loss)	—	—		—			221.1			—			21.3			242.3
Stock option exercises	—	—		34.5			—			—			—			34.5
Stock-based compensation	—	—		38.9			—			—			—			38.9
Treasury stock acquired (0.3 shares)	—	—		—			—			(29.8		)	—			(29.8		)
Treasury stock reissued (1.1 shares)	—	—		(22.1		)	—			22.1			—			—
Common stock dividends ($1.095 per share)	—	—		—			(127.9		)	—			—			(127.9		)
Balances, March 31, 2018	154.5	$	1.6	$	1,038.9		$	1,562.6		$	(1,406.6	)	$	(34.6	)	$	1,161.8

Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

Broadridge Financial Solutions, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. 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 ~~fintech~~financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, ~~mutual funds~~asset managers and corporate issuers. ~~Our~~Broadridge’s services include investor and customer communications, securities processing, and data and analytics solutions. In short, ~~we provide the~~Broadridge provides important infrastructure that ~~helps~~powers the financial services ~~industry operate.~~industry. With over 50 years of experience, including over 10 years as an independent public company, ~~we provide~~Broadridge provides financial services firms with advanced, dependable, scalable and cost-effective integrated ~~systems. Our systems~~solutions. Broadridge’s solutions help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities. We deliver a broad range of solutions that help our clients better serve their retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing functionality.

The Company operates in two reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and ~~Operations.~~Operations (“GTO”). Broadridge serves a large and diverse client base across four client groups: capital markets, asset management, wealth management and corporations.

•

Investor Communication Solutions—Broadridge offers Bank/Broker-Dealer Investor Communication Solutions, Customer Communication Solutions, Corporate Issuer Solutions, Advisor Solutions and Mutual Fund and Retirement Solutions in this segment. 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^®, Broadridge’s innovative electronic proxy delivery and voting solution for institutional investors and financial advisors, helps ensure the participation of the largest stockholders of many companies. In addition, Broadridge provides corporations with registered proxy services as well as registrar, stock transfer and record-keeping services. Broadridge also provides the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help our clients meet their regulatory compliance needs.

Broadridge provides customer communication solutions to companies in the financial services, healthcare, insurance, consumer finance, telecommunications, utilities, retail banking and other service industries. The Broadridge Communications Cloud^SM~~, launched in 2016,~~ provides multi-channel communications delivery, communications management, information management and control and administration capabilities that enable and enhance our clients’ communications with their customers. Broadridge processes and distributes ~~our~~its clients’ essential communications including transactional (e.g., bills and statements), regulatory (e.g., explanations of benefits, notices, and trade confirmations) and marketing (e.g., direct mail) communications through print and digital channels.

Broadridge’s advisor solutions enable firms, financial advisors, wealth managers, and insurance agents to better engage with customers through cloud-based marketing and customer communication tools. Broadridge’s marketing ecosystem integrates data, content and technology to drive new client acquisition and cross-sell opportunities through the creation of sales and educational content, including seminars and a library of financial planning topics as well as customizable advisor websites, search engine marketing and electronic and print newsletters. Broadridge’s advisor solutions also help advisors optimize their practice management through customer and account data aggregation and reporting.

~~Broadridge’s mutual fund~~Broadridge provides asset managers and retirement service providers with data-driven solutions ~~are a full range~~that help its clients grow revenue, operate efficiently, and maintain compliance. Broadridge’s communications solutions provide an end-to-end platform for content management, composition, and multi-channel distribution of ~~tools for mutual funds, exchange traded fund (“ETF”) providers, and asset management firms. They include data-driven technology solutions for data management, analytics, investment accounting,~~regulatory, marketing, and ~~customer communications. In addition,~~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 its subsidiary, Matrix Financial Solutions, Inc. (“Matrix”).

In October 2017, Broadridge acquired Summit Financial Disclosure, LLC (“Summit”). Summit is a full service financial document management solutions provider, including document composition and regulatory filing services.

Global Technology and Operations—Broadridge is a leading global provider of middle- and back-office securities processing solutions for capital markets, wealth management, and asset management firms. Broadridge offers ~~a suite of~~ advanced ~~computerized real-time transaction processing services~~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 ~~and investment managers~~ 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. Provided on a software as a service (“SaaS”) basis within large user communities, Broadridge’s technology is a global solution. Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global ~~trading~~trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded ~~derivative securities~~derivatives in established and emerging markets. ~~In addition, Broadridge’s~~

Broadridge also provides business process outsourcing services known as Managed Services ~~solution supports~~that support the operations of ~~our~~its buy- and sell-side clients’ ~~businesses~~businesses. These services combine Broadridge’s technology with its operations expertise to support the entire trade lifecycle, including ~~their~~ securities clearing and settlement, reconciliations, record-keeping, asset servicing, reference data management, regulatory and ~~custody-related functions.~~

performance reporting, tax and cost basis services, revenue and trade expense management and portfolio accounting.

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 United States of America (“U.S.”) and in accordance with the U.S. Securities and Exchange Commission ~~(“SEC”~~(the “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 ~~either~~ the ~~cost or~~ equity ~~methods~~method of ~~accounting.~~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, ~~2017~~2018 (the ~~“2017~~“2018 Annual Report”) filed on August ~~10, 2017~~7, 2018 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 ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017,~~2018, the results of its operations for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016, and~~2018, its cash flows for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016.~~2018, and its changes in stockholders’ equity for the three and nine months ended March 31, 2019 and 2018. Certain prior period amounts have been reclassified to conform to the current year presentation, except as it relates to (i) Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts with Customers” and its related amendments (collectively “ASU No. 2014-09”), (ii) ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU No. 2016-01”), and (iii) ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU No. 2018-02”), as described further below.

Effective July 1, 2018, the Company adopted ASU No. 2014-09 using the modified retrospective transition approach applied to all contracts. Under this transition approach, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. However, the Company has provided additional disclosures related to the amount by which each relevant fiscal 2019 financial statement line item was affected by the adoption of ASU No. 2014-09 along with explanations for significant changes. Additional information about the Company’s revenue recognition policies and the related impact of the adoption of ASU No. 2014-09 is included in Note 2, “New Accounting Pronouncements” and Note 3, “Revenue Recognition.”

Effective July 1, 2018, the Company adopted ASU No. 2016-01, which requires changes in the fair value of publicly traded equity securities for which the Company does not have significant influence to be recorded as part of Net earnings rather than as Other comprehensive income (loss), net. In addition, equity investments that do not have a readily determinable fair value will be recorded at cost less impairment as further adjusted for observable price changes in orderly transactions for identical or similar investments of the issuer. The Company adopted ASU No. 2016-01 using the modified-retrospective transition approach by recording the cumulative effect of previously unrecognized gains or losses on publicly traded equity securities to retained earnings as of July 1, 2018. The provisions of ASU No. 2016-01 relative to equity investments that do not have a readily determinable fair value have been applied prospectively. The Condensed Consolidated Financial Statements have not been revised for periods prior to July 1, 2018. The impact of adopting ASU No. 2016-01 resulted in a reclassification of less than $0.1 million in unrealized gains, net from accumulated other comprehensive loss to retained earnings as of July 1, 2018.

Effective in the first quarter of fiscal year ~~2018,~~2019, the Company adopted ASU No. ~~2016-09, “Improvements to Employee Share-Based Payment Accounting”~~2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU No. ~~2016-09”~~2017-07”) whereby the Company revised its presentation in the Condensed Consolidated Statements of Earnings to reflect the non-service cost components of net benefit cost as part of Other non-operating (income) expenses, net, which were previously recorded as part of Total operating expenses. All prior period information has been conformed to the current period presentation.

C. Securities. ~~Please refer~~Securities are non-derivatives that are reflected in Other non-current assets in the Condensed Consolidated Balance Sheets, unless management intends to ~~Note 2, “New Accounting Pronouncements,” for a discussion~~dispose of the ~~impact~~investment within twelve months of ~~ASU No. 2016-09.~~

In the ~~first quarter~~end of ~~fiscal year 2018,~~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 ~~adopted ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” (“ASU No. 2015-17”). Please refer to Note 2, “New Accounting Pronouncements,”~~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 ~~a discussion~~an identical or similar investment of the ~~impact~~same issuer, such as subsequent capital raising transactions. Changes in the value of ~~ASU No. 2015-17.~~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.

C.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.

D.E. Subsequent Events. In preparing the accompanying Condensed Consolidated Financial Statements, the Company has reviewed events that have occurred after ~~December~~March 31, ~~2017~~2019 through the date of issuance of the Condensed Consolidated Financial Statements. ~~During this period,~~Refer to Note 17, “Subsequent Events” for a description of the ~~Company did not have any~~Company’s subsequent ~~events for disclosure.~~events.

NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

In ~~the first quarter of fiscal year~~February 2018, the ~~Company adopted~~FASB issued ASU No. ~~2016-09. ASU No. 2016-09 identifies areas~~2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for ~~simplification involving several aspects of accounting for share-based payment transactions, including presenting the excess~~stranded tax benefit or deficit from the exercise or vesting of share-based payments in the income statement, classifying the excess tax benefit or deficit as an operating activity in the Condensed Consolidated Statements of Cash Flows rather than as a financing activity, a revision to the criteria for classifying an award as equity or liability and an option to recognize gross stock-based compensation expenseeffects associated with actual forfeitures recognized as they occur. In addition, ASU No. 2016-09 eliminates the excess tax benefit from the assumed proceeds calculation under the treasury stock method for purposes of calculating diluted shares.

As a result of this adoption, the Company recorded excess tax benefits related to stock-based compensation awards of $1.5 million and $3.0 million during the three and six months ended December 31, 2017 in the income tax provision on a prospective basis, whereas such benefits were previously recognized in equity. The Company also excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share for the

~~three and six months ended December 31, 2017. The Company has not adjusted prior periods presented for~~ the change in ~~accounting~~the U.S. federal corporate tax rate resulting from the U.S. Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017. ASU 2018-02 is effective for ~~excess tax benefits in the Condensed Consolidated Financial Statements.~~fiscal years, including interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company ~~also elected to apply~~early adopted ASU 2018-02 as of July 1, 2018, and the ~~change in presentation~~adoption of excess tax benefits in the Condensed Consolidated Statement of Cash Flows prospectively, and as a result, excess tax benefits are classified as operating activities when realized through reductions to subsequent tax payments. This adoptionthis guidance resulted in an increase to ~~net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities~~retained earnings of $3.0 million for the six months ended December 31, 2017. The Company has not adjusted prior periods presented for the change in classification of excess tax benefits on the Condensed Consolidated Statement of Cash Flows. The Company also elected to continue its current practice of estimating expected forfeitures as permitted by ASU No. 2016-09.

In the first quarter of fiscal year 2018, the Company adopted ASU No. 2015-17 on a prospective basis to all deferred tax liabilities and assets. The amendments in ASU No. 2015-17 require entities that present a classified balance sheet to classify all deferred tax liabilities and assets as a noncurrent amount. The Company’s fiscal year 2017 Condensed Consolidated Balance Sheet has not been retrospectively adjusted for the adoption of ASU No. 2015-17.

In January 2017, the FASB issued ASU No. 2017-04, “Simplifying the Accounting for Goodwill Impairment” (“ASU No. 2017-04”). ASU No. 2017-04 removes Step 2 of the current goodwill impairment test, which currently requires a hypothetical purchase price allocation if the fair value of a reporting unit were to be less than its book value, for purposes of determining the amount of goodwill impaired. Under ASU No. 2017-04, the Company would now recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds the fair value of the reporting unit; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. ASU No. 2017-04 will be effective for the Company beginning in the first quarter of fiscal 2021, to be applied on a prospective basis. The pending adoption of this guidance is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.$1.5 million.

In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business” (“ASU No. 2017-01”). ASU No. 2017-01 narrows the definition of a business, in part by concluding that an integrated set of assets and activities (referred to as a “set”) is not a business when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets. ASU No. 2017-01 isbecame effective for the Company beginning in the first quarter of fiscal year 2019, ~~to be~~and was applied on a prospective basis. The ~~pending~~ adoption of this guidance isdid not ~~expected to~~ have a material impact on the Company’s Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“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 right-of-use 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 ~~will~~can be adopted onusing either a modified retrospective basis which ~~will require~~requires adjustment to all comparative periods presented in the consolidated financial ~~statements.~~statements, or by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at the date of initial application. The Company has elected to adopt ASU No. 2016-02, as amended, by recognizing a cumulative-effect adjustment to the opening balance of retained earnings at

the date of initial application. The Company is currently evaluating the impact of the pending adoption of ASU No. 2016-02, as amended, on the Company’s Condensed Consolidated Financial Statements.

~~In January 2016,~~Effective July 1, 2018, the ~~FASB issued~~Company adopted ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU No. 2016-01”), which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. Under ASU No. 2016-01, changes in the fair value of publicly traded equity securities for which the Company does not have significant influence would be recorded as part of Net earnings rather than as Other comprehensive income (loss), net. In addition, equity investments that do not have a readily determinable fair value will be recorded at cost less impairment as further adjusted for observable price changes in orderly transactions for identical or similar investments of the issuer. ASU No. 2016-01 is effective for the Company beginning in the first quarter of fiscal year 2019. The guidance in ASU No. 2016-01 related to changes in fair value of publicly traded equity securities will be adopted by means of a cumulative-effect adjustment to the balance sheet as of the beginning of fiscal year 2019, while the guidance related to equity securities without readily determinable fair values will be adopted prospectively to equity investments that exist as of the beginning of fiscal year 2019. The pending adoption of ASU No. 2016-01 is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements.

~~In May 2014, the FASB issued~~2014-09. ASU No. 2014-09 ~~“Revenue~~outlines a single comprehensive model for entities to use in accounting for revenue arising from ~~Contracts~~contracts with ~~Customers” (“ASU No. 2014-09”), to supersede nearly all existing~~customers and supersedes most prior revenue recognition guidance, ~~under U.S. GAAP.~~including industry specific requirements. It also includes guidance on accounting for the incremental costs of obtaining and costs incurred to fulfill a contract with a customer. The core principle of ~~ASU No. 2014-09~~the revenue model is

to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration ~~that is expected~~to which the entity expects to be ~~received~~entitled in exchange for those goods or services. ~~ASU No. 2014-09 defines~~As a ~~five-step process to achieve this core principle and, in doing so,~~result, it is possible more judgment and estimates may be required within the revenue recognition process ~~than are required under existing U.S. GAAP~~ including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 also requires certain enhanced disclosures, including disclosures on the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. ~~In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers - Deferral of the Effective Date,” which defers the effective date~~

The Company identified certain impacts of ASU No. 2014-09 by one year, with an option that would permit companies to adopt the standard as early as the original effective date. As a result, ASU No. 2014-09 will be effective for the Company as of the first quarter of fiscal year 2019 for which the Company plans to adopt ASU No. 2014-09 using the modified retrospective transition method with the cumulative effect of initially applying ASU No. 2014-09 recognized at the date of initial application along with providing certain additional disclosures as defined per ASU No. 2014-09.

In March 2016, the FASB issued ASU No. 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU No. 2016-08”), which provides clarifying implementation guidance to the principal versus agent provisions of ASU No. 2014-09.

In April 2016, the FASB issued ASU No. 2016-10 “Identifying Performance Obligations and Licensing” (“ASU No. 2016-10”), which provides clarifying implementation guidance for applying ASU No. 2014-09 with respect to identifying performance obligations and the accounting for licensing arrangements.

In May 2016, the FASB issued ASU No. 2016-12 “Narrow-Scope Improvements and Practical Expedients” (“ASU No. 2016-12”), which provides certain clarifying guidance for ASU No. 2014-09 relative to treatment of sales taxes, noncash consideration, collectibility and certain aspects of transitional guidance.

In December 2016, the FASB issued ASU No. 2016-20 “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” which provides certain technical corrections for ASU No. 2014-09 including the impairment testing of capitalized contract costs, disclosure of remaining performance obligations, and certain other matters.

Each of ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12 and ASU No. 2016-20 have the same effective date as ASU No. 2014-09. While the Company is still in the process of evaluating the full impact of the pending adoption of ASU No. 2014-09 and related amendments on its Condensed Consolidated Financial Statements and related disclosures, including assessing the need for process changes or enhancements, the Company has identified certain expected impacts of the new standard on its Condensed Consolidated Financial Statements. Specifically, under ASU No. 2014-09, the Company ~~expects to capitalize~~now capitalizes certain sales commissions, ~~as well as capitalize~~and it capitalizes certain additional costs that are part of setting up or converting a client’s systems to function with the Company’s technology, both of which ~~are currently~~were previously expensed. Additionally, the Company ~~expects to recognize~~now recognizes proxy revenue ~~predominantly~~primarily at the time of proxy materials distribution to the client’s shareholders rather than on the date of the client’s shareholder meeting, which is typically 30 days after the proxy materials distribution. Other ~~expected~~ changes to the timing of revenue recognition include deferral of revenue from certain transaction processing platform enhancements as well as acceleration of revenue from certain multi-year software license arrangements that are currently recognized over the term of the software subscription. ~~While~~

The Company adopted ASU No. 2014-09 using the ~~annual~~modified retrospective transition method applied to all contracts, which resulted in a cumulative-effect increase in the opening balance of retained earnings of $101.3 million, most notably related to the deferral of incremental sales commissions incurred in obtaining contracts in prior periods. Under this transition approach, the Company has not restated the prior period Condensed Consolidated Financial Statements presented. However, the Company has provided additional disclosures related to the amount by which each relevant fiscal 2019 financial statement line item was affected by the adoption of ASU No. 2014-09 and explanations for significant changes. See Note 3, “Revenue Recognition” for additional information about the Company’s revenue recognition policies and the related impact of the ~~new~~Company’s adoption of ASU No. 2014-09.

NOTE 3. REVENUE RECOGNITION

ASU No. 2014-09 outlines a single comprehensive model to use in accounting for revenue ~~guidance~~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 ~~Company’s income statement could vary year~~client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ~~year,~~ensure that the ~~annual income statement impact of the new revenue guidance is estimated to be less than 1%~~account holders of the Company’s ~~fiscal year 2017 revenues~~bank and ~~approximately 2%~~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 ~~fiscal year 2017 earnings before income taxes. Also,~~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 ~~currently estimates~~satisfies its performance obligation by delivering services to the ~~cumulative~~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.

The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize:

Identification of Performance Obligations

For revenue arrangements containing multiple goods or services, the Company accounts for the individual goods or services as a separate performance obligation if they are distinct, the good or service is separately identifiable from other items in the arrangement, and if a client can benefit from it on its own or with other resources that are readily available to the client. If these criteria are not met, the promised goods or services are accounted for as a combined performance obligation.

Transaction Price

Once separate performance obligations are determined, the transaction price is allocated to the individual performance obligations. If the contracted prices reflect the relative standalone selling pricesfor 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.

Contract Costs

Direct costs incurred to set up or convert a client’s systems to function with the Company’s technology, that are expected to be recovered, are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences after client acceptance when the processing term begins. The Company evaluates the carrying value of deferred client conversion and start-up costs for impairment on the basis of whether these costs are fully recoverable from the expected future undiscounted net operating cash flows of the client to which the deferred costs relate. These deferred costs are reflected in Other non-current assets in the Condensed Consolidated Balance Sheets at March 31, 2019 and June 30, 2018, respectively. Refer to Note 9, “Other Non-Current Assets” for a further description of the Company’s Deferred client conversion and start-up costs.

The Company defers incremental costs to obtain a client contract that it expects to recover, which consists of sales commissions incurred, only if the contract is executed. Deferred sales commission costs are amortized on a straight-line basis using a portfolio approach consistent with the pattern of transfer of the goods or services to which the asset relates, which also considers expected customer lives. As a practical expedient, the Company recognizes the sales commissions as an expense when incurred if the amortization period of the sales commission asset that the entity otherwise would have recognized is one year or less. The Company evaluates the carrying value of deferred sales commission costs for impairment on the basis of whether these costs are fully recoverable from the expected future undiscounted net operating cash flows of the portfolio of clients to which the deferred sales commission costs relate. Refer to Note 9, “Other Non-Current Assets” for a further description of the Company’s Deferred sales commission costs.

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 March 31,			Nine Months Ended March 31,

	2019			2019
	(in millions)
Investor Communication Solutions
Equity proxy	$	152.9		$	225.6
Mutual fund and exchange traded funds (“ETF”) interims	82.1			200.6
Customer communications and fulfillment	201.1			558.6
Other ICS	94.4			260.3
Total ICS Recurring fee revenues	530.5			1,245.1

Equity and other	35.4			79.0
Mutual funds	33.1			114.5
Total ICS Event-driven fee revenues	68.4			193.5

Distribution revenues	418.2			1,082.5

Total ICS Revenues	$	1,017.1		$	2,521.0

Global Technology and Operations
Equities and other	$	195.5		$	579.7
Fixed income	41.1			121.2
Total GTO Recurring fee revenues	236.6			700.9

Foreign currency exchange	(28.9		)	(70.9		)

Total Revenues	$	1,224.8		$	3,151.0

Revenues by Type
Recurring fee revenues	$	767.0		$	1,946.0
Event-driven fee revenues	68.4			193.5
Distribution revenues	418.2			1,082.5
Foreign currency exchange	(28.9		)	(70.9		)
Total Revenues	$	1,224.8		$	3,151.0

Contract Balances

The following table provides information about contract assets and liabilities:



	March 31, 2019		July 1, 2018
	(in millions)
Contract assets	$	37.5	$	35.5
Contract liabilities	$	253.3	$	162.8

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.

During the nine months ended March 31, 2019, contract liabilities increased primarily due to the impact of client contract terminations. The Company recognized $89.5 million of revenue during the nine months ended March 31, 2019 that was included in the contract liability balance as of July 1, 2018.

Changes in Accounting Policy

Except for the changes below, the Company has consistently applied its revenue and cost accounting policies to ~~opening retained earnings~~all periods presented in its Condensed Consolidated Financial Statements. The details of ~~adopting~~ the ~~new~~significant changes are disclosed below.

Sales Commissions - The Company previously recognized sales commissions related to contracts with clients as selling expenses when incurred. Under ASU No. 2014-09, the Company capitalizes incremental sales commissions as costs of obtaining a contract and, if expected to be recovered, amortizes such costs using a portfolio approach consistent with the pattern of transfer of the good or service to which the asset relates.

Deferred Client Conversion and Start-Up Costs - The Company previously capitalized direct and incremental client conversion or start-up costs to set up or convert a client’s systems to function with the Company’s technology that are expected to be recovered. Under ASU No. 2014-09, the Company will capitalize certain additional client conversion or start-up costs that are directly related to the client conversion but that are not considered incremental costs to the Company.

Proxy Revenues - The Company previously recognized proxy revenues following the client’s shareholder meeting, which is typically 30 days after the proxy materials distribution. Under ASU No. 2014-09, the Company will recognize proxy revenues primarily at the time of proxy materials distribution to the client’s shareholders.

Software Term License Revenues - The Company previously recognized revenue ~~guidance will be less than $100 million, driven primarily~~from software term licenses that are not hosted by ~~an increase~~the Company ratably over the contract term. Under ASU No. 2014-09, for software license arrangements that are distinct, the Company recognizes software license revenue upon delivery assuming a contract is deemed to exist. For arrangements with clients that include significant customization, modification or production of software such that the software is not distinct from the associated implementation services, revenue is typically recognized over time based upon efforts expended to measure progress towards completion or in ~~capitalized costs.~~certain cases upon completion of the installation. Software term license revenue is not a significant portion of the Company’s revenues.

Termination Fees - The Company previously recognized client contract termination fees at a point in time upon deconversion or receipt of a non-refundable cash payment. Under ASU No. 2014-09, a contract termination is considered a contract modification and therefore, the Company recognizes contract termination fees over the remaining modified contract term.

Quantitative Impact on Financial Statements

The following tables summarize the impact of ASU No. 2014-09 adoption on the Company’s Condensed Consolidated Statement of Earnings for the three and nine months ended March 31, 2019, respectively.



	Three Months Ended March 31, 2019							Nine Months Ended March 31, 2019
	As reported		Effects of ASU 2014-09			Without Effects of ASU No. 2014-09		As reported		Effects of ASU 2014-09			Without Effects of ASU No. 2014-09
	(in millions)							(in millions)
Consolidated Statement of Earnings
Revenues	$	1,224.8	$	(169.8	)	$	1,055.0	$	3,151.0	$	(51.0	)	$	3,100.0
Cost of revenues	847.3		(58.7		)	788.6		2,320.3		(45.4		)	2,275.0
Selling, general and administrative expenses	143.9		2.2			146.1		418.7		(0.3		)	418.4
Operating income	233.6		(113.4		)	120.3		411.9		(5.3		)	406.7
Earnings before income taxes	223.6		(113.4		)	110.3		377.2		(5.3		)	372.0
Provision for income taxes	51.4		(27.8		)	23.6		78.4		(1.3		)	77.1
Net earnings	$	172.2	$	(85.5	)	$	86.6	$	298.8	$	(4.0	)	$	294.8
Basic earnings per share	$	1.49	$	(0.74	)	$	0.75	$	2.57	$	(0.03	)	$	2.54
Diluted earnings per share	$	1.45	$	(0.72	)	$	0.73	$	2.51	$	(0.03	)	$	2.48

The following table summarizes the impact of ASU No. 2014-09 adoption on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2019.



	As reported		Effects of ASU 2014-09			Without Effects of ASU No. 2014-09
	(in millions)
Consolidated Balance Sheet
Assets:
Current assets	$	1,195.4	$	(46.0	)	$	1,149.4
Total assets	$	3,602.1	$	(169.8	)	$	3,432.3
Liabilities:
Current liabilities	$	705.2	$	49.8		$	755.0
Total liabilities	$	2,336.5	$	(59.8	)	$	2,276.7
Stockholders’ equity:
Total stockholders’ equity	$	1,265.6	$	(110.0	)	$	1,155.7

The adoption of ASU No. 2014-09 did not change the net cash provided by or used in operating activities, investing activities or financing activities on the Condensed Consolidated Statements of Cash Flows, nor the amount of Other comprehensive income (loss) on the Condensed Consolidated Statements of Comprehensive Income.

NOTE ~~3. EARNINGS PER SHARE~~4. 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.

The computation of diluted EPS excluded 1.4 million options ~~of 0.1 million~~ to purchase Broadridge common stock for the three months ended ~~December~~March 31, ~~2017,~~2019, and 0.4 million options ~~of 0.1 million~~ to purchase Broadridge common stock for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, as the effect of their inclusion would have been anti-dilutive.

The computation of diluted EPS excluded 1.0 million options ~~of less than 0.1 million~~ to purchase Broadridge common stock for the three months ended ~~December~~March 31, ~~2016,~~2018, and 1.1 million options ~~of less than 0.1 million~~ to purchase Broadridge common stock for the ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, as the effect of their inclusion would have been anti-dilutive.

The following table sets forth the denominators of the basic and diluted EPS computations (in millions):

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
Weighted-average shares outstanding:
Basic 116.6
118.7
116.5
118.6
Common stock equivalents 3.8
2.8
3.5
3.0
Diluted (1) 120.3
121.5
120.1
121.5

~~(1) On July 1, 2017, the Company adopted ASU No. 2016-09. See Note 2, “New Accounting Pronouncements,” for additional information related to adoption of this standard.~~



	Three Months Ended March 31,		Nine Months Ended March 31,
	2019	2018	2019	2018
Weighted-average shares outstanding:
Basic	115.7	116.9	116.1	116.7
Common stock equivalents	2.7	3.9	3.0	3.7
Diluted	118.5	120.9	119.1	120.3

NOTE 4.5. INTEREST EXPENSE, NET

Interest expense, net consisted of the following:


	Three Months Ended December 31,						Six Months Ended December 31,						Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016			2019			2018			2019			2018
	(in millions)												(in millions)
Interest expense on borrowings	$	10.8		$	11.0		$	20.8		$	21.7		$	11.7		$	10.5		$	33.3		$	31.3
Interest income	(0.6		)	(0.3		)	(1.2		)	(0.7		)	(1.7		)	(1.5		)	(2.9		)	(2.7		)
Interest expense, net	$	10.2		$	10.6		$	19.6		$	21.0		$	10.0		$	9.0		$	30.4		$	28.6

NOTE 5.6. OTHER NON-OPERATING (INCOME) EXPENSES, NET

Other non-operating ~~(income)~~ expenses, net consisted of the following:


	Three Months Ended December 31,				Six Months Ended December 31,					Three Months Ended March 31,						Nine Months Ended March 31,
	2017		2016		2017			2016		2019			2018			2019		2018
	(in millions)									(in millions)
Losses from equity method investments	$	1.5	$	1.9	$	2.4		$	3.8
Investment losses, net										$	1.1		$	1.1		$	4.1	$	3.5
Other (gains) losses, net										(1.6		)	(4.7		)	0.2		(3.1		)
Foreign currency exchange (gain) loss	—		0.6		(0.3		)	2.9		0.4			0.2			0.1		(0.1		)
Other non-operating (income) expenses, net	$	1.4	$	2.5	$	2.1		$	6.7	$	—		$	(3.4	)	$	4.3	$	0.3

NOTE 6.7. ACQUISITIONS

~~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. ~~Certain of our~~

Pro forma supplemental financial information for all acquisitions ~~may contain contingent consideration liabilities based upon~~is not provided as the achievement of certain individually defined financial targets of the acquired business. These contingent consideration liabilities are measured at fair value based upon management’s expectations of future achievement by the acquired businessimpact of these ~~individual~~acquisitions on the Company’s operating results, financial ~~targets.~~

position or cash flows was not material for any acquisition individually or in the aggregate.

During the ~~second quarter of~~three and nine months ended March 31, 2019, there were no business combinations or asset acquisitions.

The following represents the fiscal year 2018 ~~the Company acquired one business in the Investor Communication Solutions segment:~~acquisitions:

~~Summit~~BUSINESS COMBINATIONS

Summit

In October 2017, the Company completed the acquisition of Summit Financial Disclosure, LLC (“Summit”), a full service financial document management solutions provider, including document composition and regulatory filing services. The aggregate purchase price was $30.6 million, ~~in cash,~~ consisting of $26.4 million in cash payments net of cash acquired, a $1.4 million note payable to the sellers that ~~will be~~was settled in the ~~future,~~fiscal quarter ended December 31, 2018, and a contingent consideration liability with an acquisition date fair value of $2.7 million. The contingent consideration liability is payable over the next three years upon the achievement by the acquired business of certain revenue and earnings targets. The contingent consideration liability has a maximum potential pay-out of $11.0 million upon the achievement in full of the defined financial targets by the acquired business. Net tangible assets acquired in the transaction were ~~$0.6~~$0.2 million. This acquisition resulted in ~~$18.1~~$18.5 million of Goodwill, which is primarily tax deductible. Intangible assets acquired, which totaled $12.0 million, consist primarily of software technology and customer relationships which are being amortized over a five-year life and seven-year life, respectively.

ActivePath

In March 2018, the Company completed the acquisition of ActivePath Solutions Ltd (“ActivePath”), a digital technology company with technology that enhances the consumer experience associated with consumer statements, bills and regulatory communications. The aggregate purchase price was $24.2 million, consisting of $21.8 million in cash payments net of cash acquired, and a $2.4 million note payable that was paid in March 2019. Net tangible liabilities assumed in the transaction were $10.0 million. This acquisition resulted in $28.7 million of Goodwill, which is not tax deductible. Intangible assets acquired, which totaled $5.6 million, consist primarily of software technology and customer relationships, which are being amortized over a five-year life and two-year life, respectively.

FundAssist

In May 2018, the Company completed the acquisition of FundAssist Limited (“FundAssist”), a regulatory, marketing and sales solutions service provider to the global investments industry. The aggregate purchase price was $47.7 million, consisting of $41.3 million in cash payments net of cash acquired, and a contingent consideration liability with an acquisition date fair value of $6.4 million. The contingent consideration liability contains a revenue component which will be settled in fiscal year 2021, based on the achievement of a defined revenue target by the acquired business. Net tangible liabilities assumed in the transaction were $1.9 million. This acquisition resulted in $29.2 million of Goodwill, which is not tax deductible. Intangible assets acquired, which totaled $20.4 million, consist primarily of customer relationships and software technology, which are being amortized over a six-year life and five-year life, respectively.

The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and ~~liabilities, which is still subject to a working capital adjustment.~~liabilities.

ASSET ACQUISITIONS

Purchase of Intellectual Property

In September 2016, the Company’s Investor Communication Solutions segment acquired intellectual property assets from Inveshare, Inc. (“Inveshare”) and concurrently entered into a development agreement with an affiliate of Inveshare to use these assets to develop blockchain technology applications for Broadridge’s proxy business. The purchase price was $95.0 million, which consisted of a $90.0 million cash payment upon closing of the acquisition and a $5.0 million obligation whichFebruary 2018, the Company paid ~~during the three months ended September 30, 2017.~~

~~The Company also expects to pay a deferred payment of~~ $40.0 million to an affiliate of Inveshare, ~~upon~~Inc. (“Inveshare”) for delivery of ~~the new~~ blockchain technology applications, as contemplated as part of the Company’s acquisition of intellectual property assets from Inveshare in ~~February 2018.~~September 2016.

NOTE 7.8. 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 Company holds available-for-sale securities issued by a non-public entity for which the lowest level of significant inputs is unobservable. On a recurring basis, the Company uses pricing models and similar techniques for which the determination of fair value requires significant judgment by management. Accordingly, the Company classifies the available-for-sale securities as Level 3 in the table below.

~~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 ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017,~~2018, respectively, that are ~~measured~~recorded at fair value, ~~on a recurring basis during the period,~~ segregated by level within the fair value hierarchy:


	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)								(in millions)
Assets:
Cash and cash equivalents:
Money market funds (1)	$	158.6	$	—	$	—	$	158.6	$	94.7	$	—	$	—	$	94.7
Other current assets:
Available-for-sale securities	0.1		—		—		0.1
Securities									0.4		—		—		0.4
Other non-current assets:
Available-for-sale securities	63.1		—		1.1		64.2
Total assets as of December 31, 2017	$	221.9	$	—	$	1.1	$	223.0
Securities									78.7		—		—		78.7
Total assets as of March 31, 2019									$	173.7	$	—	$	—	$	173.7
Liabilities:
Contingent consideration obligations:	—		—		11.3		11.3
Total liabilities as of December 31, 2017	$	—	$	—	$	11.3	$	11.3
Contingent consideration obligations									—		—		17.1		17.1
Total liabilities as of March 31, 2019									$	—	$	—	$	17.1	$	17.1


	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)								(in millions)
Assets:
Cash and cash equivalents:
Money market funds (1)	$	37.9	$	—	$	—	$	37.9	$	86.8	$	—	$	—	$	86.8
Other current assets:
Available-for-sale securities	0.1		—		—		0.1
Securities									0.1		—		—		0.1
Other non-current assets:
Available-for-sale securities	50.6		—		1.1		51.7
Total assets as of June 30, 2017	$	88.6	$	—	$	1.1	$	89.8
Securities									66.9		—		—		66.9
Total assets as of June 30, 2018									$	153.8	$	—	$	—	$	153.8
Liabilities:
Contingent consideration obligations:	—		—		6.7		6.7
Total liabilities as of June 30, 2017	$	—	$	—	$	6.7	$	6.7
Contingent consideration obligations									—		—		18.6		18.6
Total liabilities as of June 30, 2018									$	—	$	—	$	18.6	$	18.6

_____________


(1)	Money market funds include money market deposit account balances of ~~$100.0~~$0.1 million and ~~less than $0.1~~$28.4 million as of ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017,~~2018, respectively.

In addition, the company has non-marketable securities with a carrying amount of $10.2 million as of March 31, 2019 that are classified as part of Other non-current assets.

The following table sets forth an analysis of changes during the ~~six~~three and nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, in Level 3 financial liabilities of the Company:


						Three Months Ended March 31,					Nine Months Ended March 31,
	December 31, 2017		December 31, 2016			2019			2018		2019			2018
	(in millions)					(in millions)
Beginning balance	$	6.7	$	5.5		$	17.4		$	11.3	$	18.6		$	6.7
Additional contingent consideration incurred	4.5		0.9			—			0.1		—			4.6
Increase in contingent consideration liability	—		(0.4		)
Increase (decrease) in contingent consideration liability						(0.1		)	—		(0.1		)	(0.1		)
Foreign currency impact on contingent consideration liability	0.2		(0.2		)	0.2			0.2		(0.4		)	0.4
Payments	—		—			(0.4		)	—		(1.0		)	—
Ending balance	$	11.3	$	5.9		$	17.1		$	11.5	$	17.1		$	11.5

~~The Company did not incur any Level 3 fair value asset impairments during the six months ended December 31, 2017 and 2016.~~ Changes in economic conditions or model based valuation techniques may require the transfer of financial instruments between levels. The Company’s policy is to record transfers between levels if any, as of the beginning of the fiscal year.

NOTE 8.9. OTHER NON-CURRENT ASSETS

Other non-current assets consisted of the following:


	December 31, 2017		June 30, 2017		March 31, 2019		June 30, 2018
	(in millions)				(in millions)
Deferred client conversion and start-up costs	$	174.4	$	162.4	$	223.1	$	169.5
Deferred data center costs (a)	37.9		40.1
Deferred sales commissions costs					87.2		—
Contract assets (a)					37.5		16.5
Deferred data center costs (b)					30.5		35.0
Long-term investments	76.0		63.4		93.7		80.3
Long-term broker fees	23.6		24.2		37.4		28.7
Other	27.1		26.4		30.2		30.5
Total	$	339.1	$	316.4	$	539.6	$	360.5

(a) 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.

(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 ~~13,~~14, “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 and nine months ended March 31, 2019 were $16.3 million and $48.9 million, respectively.

NOTE 9.10. PAYABLES AND ACCRUED EXPENSES ~~AND OTHER CURRENT LIABILITIES~~

~~Accrued~~Payables and accrued expenses ~~and other current liabilities~~ consisted of the following:


	December 31, 2017		June 30, 2017		March 31, 2019		June 30, 2018
	(in millions)				(in millions)
Accounts payable					$	151.9	$	191.8
Employee compensation and benefits	$	152.2	$	221.2	189.8		233.2
Accrued broker fees	50.7		79.5		79.1		85.2
Accrued taxes	39.5		80.2		23.8		25.3
Accrued dividend payable	42.6		37.9		56.1		42.5
Customer deposits	45.1		39.5		51.4		39.2
Other	42.3		37.1		58.4		53.9
Total	$	372.5	$	495.3	$	610.5	$	671.0

NOTE ~~10.~~11. BORROWINGS

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


	Expiration Date	Principal amount outstanding at December 31, 2017		Carrying value at December 31, 2017		Carrying value at June 30, 2017		Unused Available Capacity		Fair Value at December 31, 2017
				(in millions)								Expiration Date	Principal amount outstanding at March 31, 2019		Carrying value at March 31, 2019		Carrying value at June 30, 2018		Unused Available Capacity		Fair Value at March 31, 2019
															(in millions)
Long-term debt
Fiscal 2017 Revolving Credit Facility	February 2022	$	330.0	$	330.0	$	210.0	$	670.0	$	330.0
Fiscal 2019 Revolving Credit Facility												March 2024	$	280.0	$	280.0	$	160.0	$	1,220.0	$	280.0
Fiscal 2014 Senior Notes	September 2020	400.0		398.2		397.9		—		414.2		September 2020	400.0		399.1		398.5		—		405.6
Fiscal 2016 Senior Notes	June 2026	500.0		494.5		494.1		—		496.1		June 2026	500.0		495.3		494.8		—		486.9
Total debt		$	1,230.0	$	1,222.7	$	1,102.1	$	670.0	$	1,240.2		$	1,180.0	$	1,174.4	$	1,053.4	$	1,220.0	$	1,172.5

Future principal payments on the Company’s outstanding debt are as follows:


Years ending June 30,	2018		2019		2020		2021		2022		Thereafter		Total		2019		2020		2021		2022		2023		Thereafter		Total
(in millions)	$	—	$	—	$	—	$	400.0	$	330.0	$	500.0	$	1,230.0	$	—	$	—	$	400.0	$	—	$	—	$	780.0	$	1,180.0

Fiscal ~~2017~~2019 Revolving Credit Facility: On ~~February 6, 2017,~~March 18, 2019, the Company entered into an amended and restated ~~$1.0~~$1.5 billion five-year revolving credit facility (the “Fiscal ~~2017~~2019 Revolving Credit Facility”), which replaced the ~~$750.0 million~~$1.0 billion five-year revolving credit facility entered into during ~~August 2014~~February 2017 (the “Fiscal ~~2015~~2017 Revolving Credit Facility”) (together the “Revolving Credit Facilities”). The Fiscal ~~2017~~2019 Revolving Credit Facility is comprised of a ~~$900.0~~$1,100.0 million U.S. dollar tranche and a ~~$100.0~~$400.0 million multicurrency tranche. At ~~December~~March 31, ~~2017,~~2019, the Company had ~~$330.0~~$280.0 million in outstanding borrowings and had unused available capacity of ~~$670.0~~$1,220.0 million under the Fiscal ~~2017~~2019 Revolving Credit Facility.

The weighted-average interest rate on the Revolving Credit Facilities was ~~2.25%~~3.41% and ~~2.23%~~3.24% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, respectively, and ~~1.52%~~2.50% and ~~1.51%~~2.31% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, respectively. The fair value of the variable-rate Fiscal ~~2017~~2019 Revolving Credit Facility borrowings at ~~December~~March 31, ~~2017~~2019 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7,8, “Fair Value of Financial Instruments”).

Borrowings under the Fiscal ~~2017~~2019 Revolving Credit Facility can be made in tranches up to 360 days and bear interest at LIBOR plus 101.5 basis points. The Fiscal 2017 Revolving Credit Facility bore interest at LIBOR plus 100 basis points. In addition, the Fiscal ~~2017~~2019 Revolving Credit Facility has an annual facility fee equal to ~~12.5~~11.0 basis points on the entire facility, ~~similar~~compared to 12.5 basis points on the ~~previous~~ Fiscal ~~2015~~2017 Revolving Credit Facility. The annual facility fees for the Revolving Credit Facilities totaled $0.3 million and ~~$0.6~~$1.0 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, respectively, and ~~$0.2~~$0.3 million and ~~$0.5~~$1.0 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, respectively. The Company incurred ~~$1.8~~$2.3 million in costs to establish the Fiscal ~~2017~~2019 Revolving Credit Facility. As of ~~December~~March 31, ~~2017, $2.4~~2019, $3.7 million of ~~these~~the aggregate costs related to the Company’s Revolving Credit Facility remain to be ~~amortized (including $0.2 million and $0.7 million of issuance costs from the Fiscal 2012 Revolving Credit Facility and Fiscal 2015 Revolving Credit Facility, respectively).~~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 ~~this facility.~~

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 ~~2017~~2019 Revolving Credit Facility in accordance with individual drawn loan maturities. The Fiscal ~~2017~~2019 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At ~~December~~March 31, ~~2017,~~2019, the Company is in compliance with all covenants of the Fiscal ~~2017~~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 ~~December~~March 31, ~~2017,~~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-year term. As of ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017, $1.6~~2018, $0.8 million and ~~$1.9~~$1.3 million, respectively, of debt issuance costs remain to be amortized and have been presented as a direct deduction from the carrying value of the Fiscal 2014 Senior Notes. The fair value of the fixed-rate Fiscal 2014 Senior Notes at ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017~~2018 was ~~$414.2~~$405.6 million and ~~$419.1~~$405.8 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7,8, “Fair Value of Financial Instruments”).

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 ~~December~~March 31, ~~2017,~~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 Fiscal 2016 Senior Notes are senior unsecured obligations of the Company and rank equally with the Company’s other senior indebtedness.~~ 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-year term. As of ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017, $3.7~~2018, $3.1 million and ~~$4.0~~$3.5 million, respectively, of debt issuance costs remain to be amortized and have been presented as a direct deduction from the carrying value of the Fiscal 2016 Senior Notes. The fair value of the fixed-rate Fiscal 2016 Senior Notes at ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017~~2018 was ~~$496.1~~$486.9 million and ~~$494.6~~$474.4 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7,8, “Fair Value of Financial Instruments”).

The Fiscal ~~2017~~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 ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017,~~2018, there were no outstanding borrowings under these lines of credit.

NOTE ~~11.~~12. STOCK-BASED COMPENSATION

The activity related to the Company’s incentive equity awards for the three months ended ~~December~~March 31, ~~2017~~2019 consisted of the following:


	Stock Options				Time-based Restricted Stock Units				Performance-based Restricted Stock Units				Stock Options				Time-based Restricted Stock Units				Performance-based Restricted Stock Units
	Number of Options		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Options		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value
Balances at October 1, 2017	4,978,391		$	39.97	1,040,265		$	56.30	402,966		$	61.52
Balances at January 1, 2019													4,043,012		$	57.27	1,205,587		$	81.48	496,155		$	85.23
Granted	62,028		85.80		432,235		78.01		174,669		77.14		505,531		98.31		31,754		95.10		—		—
Exercise of stock options (a)	(97,529	)	26.19		—		—		—		—		(109,354	)	41.82		—		—		—		—
Vesting of restricted stock units	—		—		(2,680	)	53.83		—		—		—		—		(263	)	64.32		—		—
Expired/forfeited	—		—		(8,673	)	64.41		(2,988	)	62.36		(5,769	)	94.85		(12,448	)	89.81		(848	)	104.91
Balances at December 31, 2017 (b), (c)	4,942,890		$	40.82	1,461,147		$	62.68	574,647		$	66.27
Balances at March 31, 2019 (b),(c)													4,433,420		$	62.28	1,224,630		$	81.75	495,307		$	85.20

____________


(a)	Stock options exercised during the period of ~~October~~January 1, ~~2017~~2019 through ~~December~~March 31, ~~2017~~2019 had an aggregate intrinsic value of ~~$6.1~~$6.5 million.

(b)

As of ~~December~~March 31, ~~2017~~2019, the Company’s outstanding vested and currently exercisable stock options using the ~~December 31, 2017~~March 29, 2019 closing stock price of ~~$90.58~~$103.69 (approximately 2.6 million shares) had an aggregate intrinsic value of ~~$151.2~~$154.7 million with a weighted-average exercise price of ~~$32.67~~$44.47 and a weighted-average remaining contractual life of ~~5.2~~5.3 years. The total of all stock options outstanding as of ~~December~~March 31, ~~2017~~2019 have a weighted-average remaining contractual life of ~~6.2~~6.7 years.

(c)

As of ~~December~~March 31, ~~2017~~2019, time-based restricted stock units and performance-based restricted stock units expected to vest using the ~~December 31, 2017~~March 29, 2019 closing stock price of ~~$90.58~~$103.69 (approximately ~~1.4~~1.2 million and ~~0.6~~0.5 million shares, respectively) had an aggregate intrinsic value of ~~$124.8~~$122.1 million and ~~$49.9~~$50.2 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 activity related to the Company’s incentive equity awards for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 consisted of the following:


	Stock Options				Time-based Restricted Stock Units				Performance-based Restricted Stock Units				Stock Options				Time-based Restricted Stock Units				Performance-based Restricted Stock Units
	Number of Options		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Options		Weighted- Average Exercise Price		Number of Shares		Weighted- Average Grant Date Fair Value		Number of Shares		Weighted- Average Grant Date Fair Value
Balances at July 1, 2017	5,137,641		$	39.63	1,074,593		$	55.98	470,862		$	58.26
Balances at July 1, 2018													4,478,288		$	55.69	982,399		$	67.72	395,689		$	74.29
Granted	62,028		85.80		440,699		77.92		174,669		77.14		528,978		98.72		324,700		120.93		123,187		115.92
Exercise of stock options (a)	(184,137	)	24.04		—		—		—		—		(559,512	)	43.17		—		—		—		—
Vesting of restricted stock units	—		—		(3,518	)	53.51		(15,033	)	54.36		—		—		(17,426	)	42.18		(19,077	)	58.97
Expired/forfeited	(72,642	)	37.65		(50,627	)	53.89		(55,851	)	35.99		(14,334	)	94.27		(65,043	)	76.01		(4,492	)	78.44
Balances at December 31, 2017	4,942,890		$	40.82	1,461,147		$	62.68	574,647		$	66.27
Balances at March 31, 2019													4,433,420		$	62.28	1,224,630		$	81.75	495,307		$	85.20

____________


(a)	Stock options exercised during the period of July 1, ~~2017~~2018 through ~~December~~March 31, ~~2017~~2019 had an aggregate intrinsic value of ~~$10.9~~$45.2 million.

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 ~~$16.2~~$17.4 million and ~~$14.0~~$14.6 million, as well as related expected tax benefits of ~~$4.4~~$4.1 million and ~~$4.9~~$4.3 million were recognized for the three months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, respectively. Stock-based compensation expense of ~~$24.7~~$46.8 million and ~~$22.8~~$39.2 million, as well as related expected tax benefits of ~~$7.3~~$10.7 million and ~~$8.1~~$11.6 million were recognized for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, respectively.

As of ~~December~~March 31, ~~2017,~~2019, the total remaining unrecognized compensation cost related to non-vested stock options and restricted stock unit awards amounted to ~~$5.6~~$19.6 million and ~~$63.5~~$53.9 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of ~~2.1~~3.0 years and ~~1.8~~1.7 years, respectively.

For stock options issued, 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.

NOTE ~~12.~~13. INCOME TAXES

The provision for income taxes for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 was ~~$41.4~~$51.4 million and ~~$65.8~~$78.4 million compared to ~~$15.6~~$16.2 million and ~~$33.4~~$81.9 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016, respectively.~~2018.

The effective tax rate for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 was ~~40.0%~~23.0% and ~~37.0%~~20.8% compared to ~~34.1%~~12.9% and ~~34.4%~~27.0% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016.~~ 2018.

The increase in the effective tax rate for the three ~~and six~~

months ended ~~December~~March 31, ~~2017,~~2019, compared to the comparable prior year period is primarily attributable to the recognition of $1.3 million in excess tax benefits (the “ETB”) attributable to stock-based compensation compared to a $15.6 million ETB in the comparable prior year period.

The decrease in the effective tax rate for the nine months ended March 31, 2019, compared to the comparable prior year period is primarily attributable to the U.S. federal income tax change from 35% to 21% under the Tax ~~Cuts and Jobs~~ Act, ~~(the “Tax Act”),~~ which was enacted into law on December 22, ~~2017.~~

~~One of the primary provisions~~2017 and which resulted in ~~the Tax Act is~~ a ~~reduction of the~~blended U.S. federal corporate statutory income tax rate from 35.0% to 21.0%. With a fiscal year ending June 30, 2018, the Company’s federal corporate statutory income tax rate will be subject to a full year blended tax rate of 28.1%. Beginning July 1, 2018, the Company will be subject to a U.S. federal corporate statutory income tax rate of ~~21.0%.~~28.1% for the prior year and a 21% rate for the current year, partially offset by the recognition of $9.2 million in ETB attributable to stock-based compensation, compared to a $18.6 million ETB in the comparable prior year period.

In addition, the ~~Tax Act requires companies~~Company accrued in the comparable prior year period a one-time net expense of approximately $16.1 million to ~~pay~~reflect a one-time transition tax on earnings of certain foreign subsidiaries at December 31, 2017. The Company has estimated this tax obligation to be $11.4 million and is payable over an eight-year period. In connection with this U.S. federal transition tax on repatriated foreign earnings, the Company has also accrued $20.8 million of foreign jurisdiction withholding taxes with respect to the earnings deemed repatriated for U.S. tax purposes. Partially offsetting the $32.2 million of aggregate expense related to foreign earnings is2017 partially offset by a ~~$16.1 million~~ benefit related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities. ~~These amounts are provisional and represent~~The net $16.1 million one-time expense was adjusted to $15.4 million in the ~~Company’s best estimates~~fourth quarter of the ~~expected impacts~~prior fiscal year. In the second quarter of this fiscal year, the ~~Tax Act. The~~Company reported that the ultimate one-time prior year net tax impact from the enactment of the Tax Act may differ from the Company’s estimates due to changes in interpretations and assumptions made by the Company, additional regulatory guidance that may be issued, as well as the amount of our fiscal year 2018 earnings before income taxes.was approximately $14.9 million.

NOTE ~~13.~~14. 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-year extension to the IT Services Agreement which expires on June 30, 2024. The Company has the right to renew the term of the IT Services Agreement for up to one additional 12-month term. Commitments remaining under this agreement at ~~December~~March 31, ~~2017~~2019 are ~~$361.8~~$306.6 million through fiscal year 2024, the final year of the contract.

In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia. The EU IT Services Agreement 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 ~~December~~March 31, ~~2017~~2019 are ~~$29.0~~$23.0 million through fiscal year 2024, the final year of the contract.

Equity Method Investment

The Company contributed $2.8 million to an equity method investment during the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, and has a remaining commitment of ~~$2.5~~$0.8 million to fund this investment at ~~December~~March 31, ~~2017.~~

~~Purchase of Intellectual Property~~

~~As discussed in Note 6, “Acquisitions,” the Company expects to pay $40.0 million to an affiliate of Inveshare in February 2018 upon delivery of certain new blockchain technology applications.~~

2019.

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.

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.

Our ~~business process~~ outsourcing and mutual fund processing services are performed by Broadridge Business Process Outsourcing, LLC (“BBPO”), a wholly-owned indirect subsidiary, which is a broker-dealer registered with the ~~Securities and Exchange Commission~~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 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 (“Rule 15c3-1”), which requires BBPO to maintain a minimum amount of net capital. At ~~December~~March 31, ~~2017,~~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 that BBPO maintain a minimum amount of net capital. At ~~December~~March 31, ~~2017,~~2019, BBPO was in compliance with this net capital requirement.

In addition, Matrix Trust Company, a wholly-owned indirect subsidiary, 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 or non-discretionary trust services to institutional customers. 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 ~~December~~March 31, ~~2017,~~2019, Matrix Trust Company was in compliance with its capital requirements.

NOTE ~~14.~~15. 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 and ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, and ~~2016,~~2018, respectively:


	Foreign Currency Translation			Available- for-Sale Securities		Pension and Post- Retirement Liabilities			Total			Foreign Currency Translation			Available- for-Sale Securities		Pension and Post- Retirement Liabilities			Total
	(in millions)											(in millions)
Balances at October 1, 2017	$	(30.6	)	$	2.6	$	(9.0	)	$	(37.1	)
Balances at January 1, 2019												$	(59.3	)	$	—	$	(9.8	)	$	(69.2	)
Other comprehensive income/(loss) before reclassifications	(2.4		)	0.8		—			(1.6		)	4.9			—		0.2			5.1
Amounts reclassified from accumulated other comprehensive income/(loss)	—			—		0.2			0.2			—			—		—			—
Balances at December 31, 2017	$	(33.0	)	$	3.3	$	(8.8	)	$	(38.4	)
Balances at March 31, 2019												$	(54.5	)	$	—	$	(9.7	)	$	(64.1	)



	Foreign Currency Translation			Available- for-Sale Securities			Pension and Post- Retirement Liabilities			Total
	(in millions)
Balances at January 1, 2018	$	(33.0	)	$	3.3		$	(8.8	)	$	(38.4	)
Other comprehensive income/(loss) before reclassifications	7.4			—			—			7.4
Amounts reclassified from accumulated other comprehensive income/(loss)	—			(3.7		)	0.2			(3.5		)
Balances at March 31, 2018	$	(25.6	)	$	(0.4	)	$	(8.6	)	$	(34.6	)



	Foreign Currency Translation			Available- for-Sale Securities		Pension and Post- Retirement Liabilities			Total
	(in millions)
Balances at July 1, 2018 (a)	$	(43.2	)	$	—	$	(10.2	)	$	(53.5	)
Other comprehensive income/(loss) before reclassifications	(11.2		)	—		0.6			(10.7		)
Amounts reclassified from accumulated other comprehensive income/(loss)	—			—		—			—
Balances at March 31, 2019	$	(54.5	)	$	—	$	(9.7	)	$	(64.1	)


	Foreign Currency Translation			Available- for-Sale Securities			Pension and Post- Retirement Liabilities			Total			Foreign Currency Translation			Available- for-Sale Securities			Pension and Post- Retirement Liabilities			Total
	(in millions)												(in millions)
Balances at October 1, 2016	$	(43.2	)	$	1.7		$	(7.5	)	$	(48.9	)
Balances at July 1, 2017													$	(48.9	)	$	2.3		$	(9.2	)	$	(55.8	)
Other comprehensive income/(loss) before reclassifications	(12.0		)	(0.2		)	—			(12.2		)	23.3			1.1			—			24.4
Amounts reclassified from accumulated other comprehensive income/(loss)	—			—			0.1			0.1			—			(3.7		)	0.7			(3.1		)
Balances at December 31, 2016	$	(55.1	)	$	1.5		$	(7.3	)	$	(60.9	)
Balances at March 31, 2018													$	(25.6	)	$	(0.4	)	$	(8.6	)	$	(34.6	)

____________

Foreign
Currency
Translation

Available-
for-Sale
Securities

Pension
and Post-
Retirement
Liabilities
Total
(in millions)
Balances at July 1, 2017 $ (48.9 ) $ 2.3
$ (9.2 ) $ (55.8 )
Other comprehensive income/(loss) before reclassifications 15.9
1.1
—
17.0
Amounts reclassified from accumulated other comprehensive income/(loss) —
—
0.4
0.4
Balances at December 31, 2017 $ (33.0 ) $ 3.3
$ (8.8 ) $ (38.4 )

Foreign
Currency
Translation

Available-
for-Sale
Securities

Pension
and Post-
Retirement
Liabilities
Total
(in millions)
Balances at July 1, 2016 $ (31.9 ) $ 1.3
$ (7.6 ) $ (38.2 )
Other comprehensive income/(loss) before reclassifications (23.2 ) 0.2
—
(23.0 )
Amounts reclassified from accumulated other comprehensive income/(loss) —
—
0.3
0.3
Balances at December 31, 2016 $ (55.1 ) $ 1.5
$ (7.3 ) $ (60.9 )


(a)	Reflects the adoption of accounting standards as described in Note 2.

NOTE ~~15.~~16. 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 second quarter of fiscal year 2018, in order to further align and enhance our portfolio of services, certain discrete services that were previously reported in our Investor Communication Solutions reportable segment are now reported within the Global Technology and Operations reportable segment. As a result, our prior period segment results have been revised to reflect this change in reporting segments.

Segment results:


	Revenues												Revenues
	Three Months Ended December 31,						Six Months Ended December 31,						Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016			2019			2018			2019			2018
	(in millions)												(in millions)
Investor Communication Solutions	$	802.2		$	704.4		$	1,528.6		$	1,422.4		$	1,017.1		$	855.3		$	2,521.0		$	2,384.0
Global Technology and Operations	228.0			207.0			442.9			400.2			236.6			235.2			700.9			678.1
Foreign currency exchange	(17.4		)	(18.8		)	(33.9		)	(34.6		)	(28.9		)	(18.6		)	(70.9		)	(52.5		)
Total	$	1,012.8		$	892.6		$	1,937.6		$	1,787.9		$	1,224.8		$	1,071.9		$	3,151.0		$	3,009.5



	Earnings (Loss) before Income Taxes
	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018			2019			2018
	(in millions)
Investor Communication Solutions	$	193.8		$	93.0		$	289.8		$	211.0
Global Technology and Operations	52.5			57.3			146.1			152.9
Other	(25.2		)	(29.0		)	(76.3		)	(77.0		)
Foreign currency exchange	2.5			3.9			17.5			16.1
Total	$	223.6		$	125.2		$	377.2		$	303.0

Earnings (Loss) before Income
Taxes

Three Months Ended
December 31, Six Months Ended
December 31,

2017
2016 2017 2016

(in millions)
Investor Communication Solutions $ 72.4

$ 20.4
$ 118.0
$ 55.1
Global Technology and Operations 50.6

44.2
95.7
80.6
Other (26.5 )
(20.8 ) (48.0 ) (43.6 )
Foreign currency exchange 7.0

2.0
12.1
5.2
Total $ 103.5

$ 45.7
$ 177.8
$ 97.2

NOTE 17. SUBSEQUENT EVENTS

On April 17, 2019, the Company announced that it entered into a purchase agreement to acquire the retirement plan custody and trust assets from TD Ameritrade Trust Company, a subsidiary of TD Ameritrade Holding Company. The acquisition is expected to expand 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. The purchase price is expected to be approximately $61.5 million. The transaction is expected to be completed in the Company’s fiscal fourth quarter, subject to customary closing conditions and regulatory approvals.

On May 1, 2019, the Company announced that it has acquired Rockall Technologies Limited, a market 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 purchase price was approximately $37.0 million net of cash acquired plus an additional contingent consideration liability.

******************


~~Item 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein.

Forward-Looking Statements

This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words such as “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other words of similar meaning, are forward-looking statements. In particular, information appearing under “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includes forward-looking statements. These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include:

the success of Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) in retaining and selling additional services to its existing clients and in obtaining new clients;

Broadridge’s reliance on a relatively small number of clients, the continued financial health of those clients, and the continued use by such clients of Broadridge’s services with favorable pricing terms;

~~any~~a material security breach or cybersecurity attack affecting the information of ~~Broadridge security affecting its clients’ customer information;~~Broadridge’s clients;

changes in laws and regulations affecting Broadridge’s clients or the services provided by Broadridge;

declines in participation and activity in the securities markets;

the failure of ~~our outsourced data center services provider~~Broadridge’s key service providers to provide the anticipated levels of service;

a disaster or other significant slowdown or failure of Broadridge’s systems or error in the performance of Broadridge’s services;

overall market and economic conditions and their impact on the securities markets;

Broadridge’s failure to keep pace with changes in technology and demands of its clients;

the ability to attract and retain key personnel;

the impact of new acquisitions and divestitures; and

competitive conditions.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements. Our actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. You should carefully read the factors described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017~~2018 (the ~~“2017~~“2018 Annual Report”) for a description of certain risks that could, among other things, cause our actual results to differ from these forward-looking statements.

All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q and the ~~2017~~2018 Annual Report. We disclaim any obligation to update or revise forward-looking statements that may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.

Overview

Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”), a Delaware corporation and a part of the S&P 500 Index, is a global ~~fintech~~financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, ~~mutual funds~~asset managers and corporate issuers. Our services include investor and customer communications, securities processing, and data and analytics solutions. In short, we provide ~~the~~important infrastructure that ~~helps~~powers the financial services ~~industry operate.~~industry. With over 50 years of experience, including over 10 years as an independent public company, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated ~~systems.~~solutions. Our ~~systems~~solutions help reduce the need for clients to make significant capital investments in operations infrastructure, thereby allowing them to increase their focus on core business activities. ~~We deliver a broad range of solutions that help our clients better serve their~~

~~retail and institutional customers across the entire investment lifecycle, including pre-trade, trade, and post-trade processing functionality.~~

Our businesses operate in two reportable segments: Investor Communication Solutions and Global Technology and Operations. We serve a large and diverse client base across four client groups: capital markets, asset management, wealth management and corporations.

For capital markets firms, we help our clients lower costs and improve the effectiveness of their trade and account processing operations with support for middle- and back-office operations, administration, finance, and risk and compliance. ~~For~~We serve asset management firms weby meeting their critical needs for communicating with shareholders and by providing investment operations technology to support ~~cross-asset, multi-currency investing across a range of brokers and executing venues from a single technology and operating solution.~~their investment decisions. For wealth management firms, we provide advisors with tools to create a better investor experience, while also delivering ~~them~~ a more streamlined, efficient, and effective process. We help corporations manage every aspect of their shareholder communications-from registered and beneficial proxy processing, to annual meeting support and transfer agency services. Our customer communication solutions help companies transform their essential communications such as bills and statements into engaging, personalized experiences.

Investor Communication Solutions

We offer the following governance and communications solutions through this segment: Bank/Broker-Dealer Investor Communication Solutions, Customer Communication Solutions, Corporate Issuer Solutions, Advisor Solutionsand Mutual Fund and Retirement ~~Solutions through this segment.~~ Solutions.

A large portion of our 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, our innovative electronic proxy delivery and voting solution for institutional investors and financial advisors, helps ensure the participation of the largest stockholders of many companies. In addition, we provide corporations with registered proxy services as well as registrar, stock transfer and record-keeping services. We also provide the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help our clients meet their regulatory compliance needs.

We provide customer communications solutions to companies in the financial services, healthcare, insurance, consumer finance, telecommunications, utilities, retail banking and other service industries. The Broadridge Communications Cloud ~~launched in 2016,~~ provides multi-channel communications delivery, communications management, information management and control and administration capabilities that enable and enhance our clients’ communications with their customers. We process and distribute our clients’ essential communications including transactional (e.g., bills and statements), regulatory (e.g., explanations of benefits, notices, and trade confirmations) and marketing (e.g., direct mail) communications through print and digital channels.

In July 2016, the Company’s Investor Communication Solutions segment acquired the net assets of the North American Customer Communications (“NACC”) business of DST Systems, Inc., a leading provider of customer communication services including print and digital communication solutions, content management, postal optimization, and fulfillment. The NACC business is part of our customer communications business and is known as Broadridge Customer Communications.

Our advisor solutions enable firms, financial advisors, wealth managers, and insurance agents to better engage with customers through cloud-based marketing and customer communication tools. Our marketing ecosystem integrates data, content and technology to drive new client acquisition and cross-sell opportunities through the creation of sales and educational content, including seminars and a library of financial planning topics as well as customizable advisor websites, search engine marketing and electronic and print newsletters. Our advisor solutions also help advisors optimize their practice management through customer and account data aggregation and reporting.

~~Our mutual fund~~We provide asset managers and retirement service providers with data-driven solutions ~~are a full range~~that help our clients grow revenue, operate efficiently, and maintain compliance. Our communications solutions provide an end-to-end platform for content management, composition, and multi-channel distribution of ~~tools for mutual funds, exchange traded fund (“ETF”) providers, and asset management firms. They include data-driven technology solutions for data management, analytics, investment accounting,~~regulatory, marketing, and ~~customer communications. In addition, we~~transactional information. Our 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. We also provide mutual fund trade processing services for retirement providers, third party administrators, financial advisors, banks and wealth management professionals through our subsidiary, Matrix Financial Solutions, Inc. (“Matrix”).

Global Technology and Operations

We are ~~the~~a leading global provider of middle- and back-office securities processing ~~platform~~solutions for ~~North American~~capital markets, wealth management, and ~~global broker-dealers.~~asset management firms. We offer ~~a suite of~~ advanced ~~computerized real-time transaction processing services~~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.

Our services help financial institutions ~~and investment managers~~ 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. Provided on a software as a service (“SaaS”) basis within large user communities, our ~~platform~~technology is a global ~~market solution, clearing~~solution. Our multi-asset, multi-market, multi-entity and ~~settling in over 80 countries. Our~~ multi-currency solutions support real-time global ~~trading~~trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded ~~derivative securities~~derivatives in established and emerging markets.

We also provide business process outsourcing services ~~that are~~ known as ~~our~~ Managed Services ~~solution. These services~~that support the operations of our buy- and sell-side clients’ ~~businesses~~businesses. These services combine our technology with our operations expertise to support the entire trade lifecycle, including ~~their~~ securities clearing and settlement, reconciliations, record-keeping, asset servicing, reference data management, regulatory and ~~custody-related functions. Our clients execute~~performance reporting, tax and ~~clear their securities transactions~~cost basis services, revenue and ~~engage us to perform a number of related administrative back-office functions, such as record-keeping~~trade expense management and ~~reconciliations. In this capacity, we are not the broker-dealer of record.~~portfolio accounting.

Consolidation and Basis of Presentation

The Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America (“U.S.”). These Condensed Consolidated 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 ~~either~~ the ~~cost or~~ equity ~~methods~~method of ~~accounting.~~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 for the fiscal year ended June 30, ~~2017~~2018 in the ~~2017~~2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August ~~10, 2017.~~7, 2018.

~~In the first quarter of fiscal year~~Effective July 1, 2018, the Company adopted Financial Accounting Standards Board ~~(”FASB”~~(the “FASB”) Accounting Standards Update (“ASU”) No. ~~2016-09, “Improvements~~2014-09 “Revenue from Contracts with Customers” and its related amendments (collectively “ASU No. 2014-09”) using the modified retrospective transition approach applied to ~~Employee Share-Based Payment Accounting”. Please refer~~all contracts. Under this transition approach, the Company has not restated the prior period Condensed Consolidated Financial Statements presented. However, the Company has provided additional disclosures related to the amount by which each relevant fiscal 2019 financial statement line item was affected by the adoption of ASU No. 2014-09 and explanations for significant changes, referred to herein as the “ASC 606 revenue accounting change.” Where noted, the discussion of changes in revenues are calculated assuming that the ASC 606 revenue accounting change had been applied to prior year results. Additional information about the Company’s revenue recognition policies and the related impact of the adoption of ASU No. 2014-09 is included in Note 2, “New Accounting Pronouncements” ~~to our Financial Statements~~and Note 3, “Revenue Recognition” under Item 1.1 of Part I of this ~~Quarterly Report on~~ Form ~~10-Q, for a discussion of the impact of new accounting pronouncements.~~10-Q.

Effective in the ~~beginning~~first quarter of fiscal year ~~2018,~~2019, the Company adopted ASU ~~No 2015-17, “Balance Sheet Classification~~No. 2016-01, “Recognition and Measurement of ~~Deferred Taxes.” Please refer~~Financial Assets and Financial Liabilities” (“ASU No. 2016-01”), which requires changes in the fair value of publicly traded equity securities for which the Company does not have significant influence to ~~Note 2, “New Accounting Pronouncements”~~be recorded as part of Net earnings rather than as Other comprehensive income (loss), net. In addition, equity investments that do not have a readily determinable fair value will be recorded at cost less impairment as further adjusted for observable price changes in orderly transactions for identical or similar investments of the issuer. The Company adopted ASU No. 2016-01 using the modified-retrospective transition approach by recording the cumulative effect of previously unrecognized gains or losses on publicly traded equity securities to ~~our~~retained earnings as of July 1, 2018. The provisions of ASU No. 2016-01 relative to equity investments that do not have a readily determinable fair value have been applied prospectively. The Condensed Consolidated Financial Statements ~~under Item 1.~~have not been revised for periods prior to July 1, 2018.

Effective in the first quarter of ~~Part I~~fiscal year 2019, the Company adopted ASU No. 2017-07, “Improving the Presentation of ~~this Quarterly Report on Form 10-Q, for a discussion~~Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (“ASU No. 2017-07”) whereby the Company revised its presentation in the Condensed Consolidated Statements of Earnings to reflect the ~~impact~~non-service cost components of ~~new accounting pronouncements.~~net benefit cost as part of Other non-operating (income) expense, net, which were previously recorded as part of Total operating expenses. All prior period information has been conformed to the current period presentation.

Critical Accounting Policies

In presenting the Condensed Consolidated Financial Statements, management makes estimates and assumptions that affect the amounts reported and related disclosures. Management continually evaluates the accounting policies and estimates used to prepare the Condensed Consolidated Financial Statements. The estimates, by their nature, are based on judgment, available information, and historical experience and are believed to be reasonable. However, actual amounts and results could differ from these estimates made by management. In management’s opinion, the Condensed Consolidated Financial Statements contain all normal recurring adjustments necessary for a fair presentation of results reported. The results of operations reported for the periods presented are not necessarily indicative of the results of operations for subsequent periods. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in the “Critical Accounting Policies” section of Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the ~~2017~~2018 Annual Report on Form 10-K.

Results of Operations

The following discussions of Analysis of Condensed Consolidated Statements of Earnings and Analysis of Reportable Segments refer to the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 compared to the three and ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The Analysis of Condensed Consolidated Statements of Earnings should be read in conjunction with the Analysis of Reportable Segments, which provides a more detailed discussion concerning certain components of the Condensed Consolidated Statements of Earnings.

The following references are utilized in the discussions of Analysis of Condensed Consolidated Statements of Earnings and Analysis of Reportable Segments:

“Amortization of Acquired Intangibles and Purchased Intellectual Property” and “Acquisition and Integration Costs” represent certain non-cash amortization expenses associated with acquired intangible assets and purchased intellectual property assets, as well as certain transaction and integration costs associated with the Company’s acquisition activities, respectively.

“Gain on Sale of Securities” represents a non-operating gain on the sale of securities associated with our retirement plan obligations.

“Tax Act items” represent the net impact of a U.S. federal transition tax on earnings of certain foreign subsidiaries, foreign jurisdiction withholding taxes with respect to the earnings deemed repatriated for U.S. tax purposes, and certain benefits related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities attributable to the recording of the impact from the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted into law on December 22, 2017.

“Net New Business” refers to recurring revenue from ~~closed~~Closed sales less recurring revenue from client losses.

The following definitions describe the Company’s Revenues:

Mutual Fund Proxy: The proxy and related services we provide to mutual funds when certain events occur requiring a shareholder vote including changes in directors, sub-advisors, fee structures, investment restrictions, and mergers of funds.

Mutual Fund Communications: Mutual fund communications services consist primarily of the distribution on behalf of mutual funds of supplemental information required to be provided to the annual mutual fund prospectus as a result of certain triggering events such as a change in portfolio managers. In addition, mutual fund communications consist of notices and marketing materials such as newsletters.

Equity Proxy Contests and Specials, Corporate Actions, and Other: The proxy services we provide in connection with shareholder meetings driven by special events such as proxy contests, mergers and acquisitions, and tender/exchange offers.

Event-driven fee revenues are based on the number of special events and corporate transactions we process. 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. As such, the timing and level of event-driven activity and its potential impact on revenues and earnings are difficult to forecast. During the three months ended December 31, 2018 we were initially able to separate certain annually recurring mutual fund related communications that were previously included in event-driven fee revenues. These activities were presented within recurring fee revenues commencing in the three months

ended December 31, 2018. We were not able to reliably estimate the portion of event-driven fee revenues attributable to these activities in prior periods. We estimate the impact of this reclassification added approximately $4 million to recurring fee revenues for the three months ended March 31, 2019 and will add approximately $12 million to recurring fee revenues for the year ended June 30, 2019, and will be captured within recurring fee revenues internal growth.

Generally, mutual fund proxy activity has been subject to a greater level of volatility than the other components of event-driven activity. For the ~~six~~nine months ended ~~December~~March 31, 2019, mutual fund proxy fee revenues were 12% lower compared to the nine months ended March 31, 2018. During the full fiscal years 2018 and 2017, mutual fund proxy fee revenues were ~~489% higher compared to the six months ended December 31, 2016. During fiscal years 2017 and 2016, mutual fund proxy fee revenues were 19%~~28% higher and ~~22%~~19% higher than the prior fiscal year, respectively. Although it is difficult to forecast the levels of event-driven activity, we expect that the portion of fee revenues derived from mutual fund proxy activity may continue to experience volatility in the future.

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

Distribution cost of revenues consists primarily of postage-related expenses incurred in connection with our Investor Communication Solutions segment, as well as Matrix administrative services expenses. These costs are reflected in Cost of revenues.

Closed sales represent an estimate of the expected annual recurring fee revenue for new client contracts that were signed by Broadridge in the current reporting period. Closed sales does not include event-driven or distribution activity. We consider contract terms, expected client volumes or activity, knowledge of the marketplace and experience with our clients, among other factors, when determining the estimate. Management uses Closed sales to measure the effectiveness of our sales and marketing programs, as an indicator of expected future revenues and as a performance metric in determining incentive compensation.

Closed sales is not a measure of financial performance under GAAP, and should not be considered in isolation or as a substitute for revenue or other income statement data prepared in accordance with GAAP. Closed sales is a useful metric for investors in understanding how management measures and evaluates our ongoing operational performance.

The inherent variability of transaction volumes and activity levels can result in some variability of amounts reported as actual achieved Closed sales. Larger Closed sales can take up to 12 to 24 months or longer to convert to revenues, particularly for the services provided by our Global Technology and Operations segment. Beginning in the fiscal year ended June 30, 2017, we reported Closed sales net of a 3.5% allowance adjustment, in lieu of our previous practice of adjusting for actual performance in subsequent periods. For fiscal ~~year~~years 2018 and 2019, we are reporting Closed sales net of a 4.0% allowance adjustment. Consequently, our reported Closed sales amounts will not be adjusted for actual revenues achieved because these adjustments are estimated in the period the sale is reported. The allowance adjustment was determined by reviewing the reported Closed sales amounts for the prior five fiscal years based on estimated revenues at signing and comparing those amounts to the revenues achieved one year after the clients went live on the services. We assess this allowance amount at the end of each fiscal year to establish the appropriate allowance for the subsequent year using the trailing five years data referenced earlier as the starting point, normalized for outlying factors, if any, to enhance the accuracy of the allowance.

Closed Sales

Closed sales for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$38.7~~$36.9 million, a decrease of ~~$16.9~~$1.3 million or ~~31%~~3%, compared to ~~$55.7~~$38.2 million for the three months ended ~~December~~March 31, ~~2016.~~2018. Closed sales for the three months ended ~~December~~March 31, ~~2017 is~~2019 are net of an allowance adjustment of ~~$1.6~~$1.5 million.

Closed sales for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$61.6~~$161.2 million ~~a decrease~~an increase of ~~$15.7~~$61.5 million or ~~20%~~62%, compared to ~~$77.3~~$99.8 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. Closed sales for the ~~six~~nine months ended ~~December~~March 31, ~~2017 is~~2019 are net of an allowance adjustment of ~~$2.6~~$6.7 million.

Analysis of Condensed Consolidated Statements of Earnings

Three Months Ended ~~December~~March 31, ~~2017~~2019 versus Three Months Ended ~~December~~March 31, ~~2016~~2018

The table below presents Condensed Consolidated Statements of Earnings data for the three months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, and the dollar and percentage changes between periods:


	Three Months Ended December 31,											Three Months Ended March 31,
							Change											Change
	2017			2016			$			%		2019			2018			$		%
	(in millions, except per share amounts)											(in millions, except per share amounts)
Revenues	$	1,012.8		$	892.6		$	120.2		13		$	1,224.8		$	1,071.9		$	152.9	14
Cost of revenues	769.8			707.8			62.0			9		847.3			802.5			44.8		6
Selling, general and administrative expenses	127.9			126.0			1.9			2		143.9			138.6			5.3		4
Total operating expenses	897.7			833.8			63.9			8		991.2			941.1			50.1		5

Operating income	115.1			58.8			56.2			96		233.6			130.8			102.8		79
Margin	11.4		%	6.6		%						19.1		%	12.2		%
Interest expense, net	10.2			10.6			(0.5		)	(4	)	10.0			9.0			1.1		11
Other non-operating expenses, net	1.4			2.5			(1.1		)	(44	)
Other non-operating (income) expenses, net												—			(3.4		)	3.4		(100	)
Earnings before income taxes	103.5			45.7			57.8			126		223.6			125.2			98.4		79
Provision for income taxes	41.4			15.6			25.8			165		51.4			16.2			35.3		217
Effective tax rate	40.0		%	34.1		%						23.0		%	12.9		%
Net earnings	$	62.1		$	30.1		$	32.0		106		$	172.2		$	109.1		$	63.1	58
Basic earnings per share	$	0.53		$	0.25		$	0.28		112		$	1.49		$	0.93		$	0.56	60
Diluted earnings per share	$	0.52		$	0.25		$	0.27		108		$	1.45		$	0.90		$	0.55	61

Three Months Ended ~~December~~March 31, ~~2017~~2019 versus Three Months Ended ~~December~~March 31, ~~2016~~2018

Revenues. Revenues for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$1,012.8~~$1,224.8 million, an increase of ~~$120.2~~$152.9 million, or ~~13%~~14%, compared to ~~$892.6~~$1,071.9 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The ~~$120.2~~$152.9 million increase was driven by (i) higher recurring fee revenues of $128.4 million, or 20%, (ii) higher distribution revenues of $32.9 million, or 9%, and (iii) higher event-driven fee revenues of ~~$67.6~~$1.9 million, or ~~227%, higher recurring fee revenues of $26.3 million, or 5%, and higher distribution revenues of $24.9 million, or 7%~~3%.

The higher recurring fee revenues of ~~$26.3~~$128.4 million reflected: (i) impact of the ASC 606 revenue accounting change (16pts), (ii) gains from Net New Business ~~(3pts),~~(4pts) and (iii) contributions from our recent acquisitions ~~(1pt) and internal growth~~ (1pt). The higher event-driven fee revenues were ~~primarily from~~the result of increased mutual fund proxy ~~activity and~~revenues partially offset by decreased equity proxy contests. Fluctuations in foreign currency exchange rates ~~positively~~negatively impacted revenues by ~~$1.4~~$10.3 million.

Total Operating expenses. Total operating expenses for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$897.7~~$991.2 million, an increase of ~~$63.9~~$50.1 million, or 8%5%, compared to ~~$833.8~~$941.1 million for the three months ended ~~December~~March 31, ~~2016.~~2018. Cost of revenues increased by ~~$62.0~~$44.8 million, or 9%6%, and Selling, general and administrative expenses increased by ~~$1.9~~$5.3 million, or 2%4%.

Cost of revenues for the three months ended March 31, 2019 were $847.3 million, an increase of $44.8 million, or 6%, compared to $802.5 million for the three months ended March 31, 2018. The increase primarily reflects higher proxy fulfillment expenses driven by the impact of the ASC 606 revenue accounting change. Fluctuations in ~~operating expenses was primarily attributable to higher distribution~~foreign currency exchange rates decreased cost of revenues by $7.8 million.

Selling, general and administrative expenses for the three months ended March 31, 2019 were $143.9 million, an increase of ~~$21.0~~$5.3 million, ~~driven~~or 4%, compared to $138.6 million for the three months ended March 31, 2018. The increase was primarily due to higher labor expenses, including higher performance-based compensation expense, and the impact of acquisitions, partially offset by the increase in distribution revenues, higher operating costs related to acquisitions of $10.1 million, and higher variable expenses driven in part by the increase in event-driven and recurring fee revenues.lower spending on growth initiatives.

Operating income. Operating income for the three months ended ~~December~~March 31, ~~2017~~2019 was ~~$115.1~~$233.6 million, an increase of ~~$56.2~~$102.8 million, or ~~96%~~79%, compared to ~~$58.8~~$130.8 million for the three months ended ~~December~~March 31, ~~2016. The increase is due to higher event-driven fee revenues and recurring fee revenues, partially offset by higher operating expenses as discussed above.~~2018. Operating income margins increased to ~~11.4%~~19.1% for the three months ended ~~December~~March 31, ~~2017,~~2019, compared to ~~6.6%~~12.2% for the three months ended ~~December~~March 31, ~~2016,~~2018. The increase in Operating income margin is primarily due to (i) the increase in ~~event-driven~~recurring fee revenues ~~and recurring fee~~driven by the ASC 606 revenue accounting change, which more than offset (ii) higher cost of revenues from the increase in revenues.

Interest expense, net. Interest expense, net for the three months ended ~~December~~March 31, ~~2017~~2019 was ~~$10.2~~$10.0 million, ~~a decrease~~an increase of ~~$0.5~~$1.1 million, or 4%11%, compared to ~~$10.6~~$9.0 million for the three months ended ~~December~~March 31, ~~2016.~~2018, primarily due to an increase in higher borrowing costs.

Other non-operating income, net. Other non-operating income, net for the three months ended March 31, 2019 was $0.0 million, compared to $3.4 million for the three months ended March 31, 2018. The decrease was primarily due to ~~a decrease~~higher investment gains in ~~interest expense of $0.2 million due to a more favorable mix of interest rates on outstanding borrowings.~~

~~Other non-operating expenses, net.~~ ~~Other non-operating expenses, net for~~ the three months ended December 31, 2017 were $1.4 million, a decrease of $1.1 million, or 44%, compared to $2.5 million for the three months ended December 31, 2016. The decrease was primarily due to lower expense of $0.6 million related to fluctuations in foreign currency exchange rates and lower losses related to equity method investments of $0.4 million.prior period.

Earnings before income taxes. Earnings before income taxes for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$103.5~~$223.6 million, an increase of ~~$57.8~~$98.4 million, or ~~126%~~79%, compared to ~~$45.7~~$125.2 million for the three months ended ~~December~~March 31, ~~2016.~~2018.

Provision for income taxes. The Provision for income taxes and effective tax rate for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$41.4~~$51.4 million and ~~40.0%~~23.0%, compared to ~~$15.6~~$16.2 million and ~~34.1%~~12.9% for the three months ended ~~December~~March 31, ~~2016.~~2018. The increase in the effective tax rate for the three months ended ~~December~~March 31, ~~2017~~2019 compared to the three months ended ~~December~~March 31, ~~2016~~2018 is primarily attributable to the ~~enactment~~recognition of ~~the Tax Act. With~~ a ~~fiscal year ending June 30, 2018, the Company’s federal corporate statutory income~~$1.3 million excess tax ~~rate will be subject~~benefit attributable to stock-based compensation compared to a ~~full year blended~~$15.6 million excess tax ~~rate of 28.1%. Notwithstanding the reduction~~benefit in the federal corporate statutory income tax rate, the Tax Act requires companies to pay a transition tax on earnings of certain foreign subsidiaries at December 31, 2017, which the Company has estimated to be $11.4 million. The Company also accrued $20.8 million of foreign jurisdiction withholding taxes with respect to the earnings deemed repatriated for U.S. tax purposes. Partially offsetting the $32.2 million of aggregate expense related to foreign earnings is a $16.1 million benefit related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities. Beginning July 1, 2018, the Company will be subject to a U.S. federal corporate statutory income tax rate of 21.0%.comparable prior period.

Net Earnings and Basic and Diluted earnings per share. Net earnings for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$62.1~~$172.2 million, an increase of ~~$32.0~~$63.1 million, or ~~106%~~58%, compared to ~~$30.1~~$109.1 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The increase in Net earnings is primarily due to an increase in operating income primarily from the increase in ~~event-driven fee and~~ recurring fee ~~revenues.~~revenues, partially offset by the decrease in the excess tax benefit attributable to stock-based compensation.

Basic and Diluted earnings per share for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$0.53~~$1.49 and ~~$0.52,~~$1.45, respectively, compared to ~~$0.25~~$0.93 and ~~$0.25~~$0.90 for the three months ended ~~December~~March 31, ~~2016,~~2018, respectively.

ASC 606 Revenue Accounting Change. For the three months ended March 31, 2018 (i) recurring fee revenues would have been $97.8 million higher, (ii) event-driven fee revenues would have been $2.1 million higher, and (iii) distribution revenues would have been $36.4 million higher if the prior year basis of revenue accounting followed the current year basis of revenue accounting.

For the three months ended March 31, 2019 (i) recurring fee revenues would have increased by $30.6 million, or 4%, (ii) event-driven fee revenues would have decreased by $0.2 million, or 0%, and (iii) distribution revenues would have decreased by $3.6 million, or 1%, compared to the same period in the prior year, if the prior year basis of revenue accounting followed the current year basis of revenue accounting.

~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2019 versus ~~Six~~Nine Months Ended ~~December~~March 31, ~~2016~~2018

The table below presents Condensed Consolidated Statements of Earnings data for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, and the dollar and percentage changes between periods:


	Six Months Ended December 31,											Nine Months Ended March 31,
							Change											Change
	2017			2016			$			%		2019			2018			$			%
	(in millions, except per share amounts)											(in millions, except per share amounts)
Revenues	$	1,937.6		$	1,787.9		$	149.7		8		$	3,151.0		$	3,009.5		$	141.5		5
Cost of revenues	1,496.4			1,425.7			70.7			5		2,320.3			2,297.8			22.5			1
Selling, general and administrative expenses	241.7			237.3			4.3			2		418.7			379.8			39.0			10
Total operating expenses	1,738.1			1,663.1			75.0			5		2,739.1			2,677.6			61.5			2

Operating income	199.5			124.9			74.7			60		411.9			331.9			80.0			24
Margin	10.3		%	7.0		%						13.1		%	11.0		%
Interest expense, net	19.6			21.0			(1.4		)	(7	)	30.4			28.6			1.8			6
Other non-operating expenses, net	2.1			6.7			(4.5		)	(69	)	4.3			0.3			4.0			NM
Earnings before income taxes	177.8			97.2			80.6			83		377.2			303.0			74.2			24
Provision for income taxes	65.8			33.4			32.4			97		78.4			81.9			(3.5		)	(4	)
Effective tax rate	37.0		%	34.4		%						20.8		%	27.0		%
Net earnings	$	112.0		$	63.8		$	48.2		76		$	298.8		$	221.1		$	77.7		35
Basic earnings per share	$	0.96		$	0.54		$	0.42		78		$	2.57		$	1.89		$	0.68		36
Diluted earnings per share	$	0.93		$	0.52		$	0.41		79		$	2.51		$	1.84		$	0.67		36

NM - Not meaningful

~~Six~~Nine Months Ended ~~December~~March 31, ~~2017~~2019 versus ~~Six~~Nine Months Ended ~~December~~March 31, ~~2016~~2018

Revenues. Revenues for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$1,937.6~~$3,151.0 million, an increase of ~~$149.7~~$141.5 million, or 8%5%, compared to ~~$1,787.9~~$3,009.5 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The ~~$149.7~~$141.5 million increase was driven by ~~higher event-driven fee revenues of $89.3 million, or 133%, and~~(i) higher recurring fee revenues of ~~$57.2~~$197.1 million, or 5%11%, partially offset by (ii) lower event-driven fee revenues of $29.6 million, or 13%, and (iii) lower distribution revenues of $7.6 million, or 1%.

The higher recurring fee revenues of ~~$57.2~~$197.1 million reflected: (i) the impact of the ASC 606 revenue accounting change (6pts), (ii) gains from Net New Business ~~(3pts)~~(4pts), (iii) contributions from our recent acquisitions (1pt), and (iv) internal growth (1pt). The ~~higher~~lower event-driven fee revenues were primarily from ~~increased~~decreased equity proxy contest revenues and mutual fund proxy ~~activity and equity proxy contests.~~activity. Fluctuations in foreign currency exchange rates ~~positively~~negatively impacted revenues by ~~$0.8~~$18.4 million.

Total Operating expenses. Total operating expenses for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$1,738.1~~$2,739.1 million, an increase of ~~$75.0~~$61.5 million, or 5%2%, compared to ~~$1,663.1~~$2,677.6 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. Cost of revenues increased by ~~$70.7~~$22.5 million, or 5%1%, and Selling, general and administrative expenses increased by ~~$4.3~~$39.0 million, or 2%10%.

Cost of revenues for the nine months ended March 31, 2019 were $2,320.3 million, an increase of $22.5 million, or 1%, compared to $2,297.8 million for the nine months ended March 31, 2018. The increase primarily reflects higher proxy fulfillment expenses driven by the impact of the ASC 606 revenue accounting change, higher labor costs driven in ~~operating~~part by the impact of acquisitions, partially offset by lower distribution cost of revenues driven by the decrease in distribution revenues. Fluctuations in foreign currency exchange rates decreased cost of revenues by $17.9 million.

Selling, general and administrative expenses for the nine months ended March 31, 2019 were $418.7 million, an increase of $39.0 million, or 10%, compared to $379.8 million for the nine months ended March 31, 2018. The increase was primarily ~~attributable~~due to higher ~~variable~~labor expenses, driven in part by higher performance-based compensation expense, increased spending on technology initiatives, and the ~~increase in event-driven fee revenues and recurring fee revenues and higher operating costs related to acquisitions~~impact of ~~$16.9 million.~~acquisitions.

Operating income. Operating income for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 was ~~$199.5~~$411.9 million, an increase of ~~$74.7~~$80.0 million, or ~~60%~~24%, compared to ~~$124.9~~$331.9 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016. The increase is due to higher event-driven fee and recurring fee revenues, partially offset by higher operating expenses.~~2018. Operating income margins increased to ~~10.3%~~13.1% for the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, compared to ~~7.0%~~11.0% for the ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018. The increase in Operating income margin is primarily due to (i) the increase in recurring fee revenues driven by the ASC 606 revenue accounting change, which more than offset (ii) the decrease in higher-margin event-driven fee revenues, (iii) higher cost of revenues from the increase in revenues, and ~~recurring fee revenues.~~(iv) higher selling, general and administrative expenses.

Interest expense, net. Interest expense, net for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 was ~~$19.6~~$30.4 million ~~a decrease~~an increase of ~~$1.4~~$1.8 million, or 7%6%, compared to ~~$21.0~~$28.6 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016. The decrease was~~2018, primarily due to ~~a decrease in interest expense of $0.9 million due to a more favorable mix of interest rates on outstanding borrowings.~~higher borrowing costs.

Other non-operating expenses, net. Other non-operating expenses, net for the ~~six~~nine months ended ~~December~~March 31, ~~2017 were $2.1~~2019 was $4.3 million, ~~a decrease~~an increase of ~~$4.5~~$4.0 million, ~~or 69%,~~ compared to ~~$6.7~~$0.3 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The ~~decrease~~increase was primarily due to ~~lower expense of $3.2 million related to fluctuations~~higher investment gains in ~~foreign currency exchange rates and lower losses related to equity method investments of $1.3 million.~~the prior period.

Earnings before income taxes. Earnings before income taxes for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$177.8~~$377.2 million, an increase of ~~$80.6~~$74.2 million, or ~~83%~~24%, compared to ~~$97.2~~$303.0 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018.

Provision for income taxes. The Provision for income taxes and effective tax rate for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$65.8~~$78.4 million and ~~37.0%~~20.8%, compared to ~~$33.4~~$81.9 million and ~~34.4%~~27.0% for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The ~~increase~~decrease in the effective tax rate for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 compared to the ~~six~~nine months ended ~~December~~March 31, ~~2016~~2018 is primarily ~~attributable~~due to the ~~enactment of the Tax Act. With a fiscal year ending June 30, 2018, the Company’s~~U.S. federal corporate ~~statutory~~ income tax rate ~~will be subject~~change from 35% to 21% under the Tax Act, which resulted in a ~~full year~~ blended U.S. federal corporate income tax rate of 28.1%~~. Notwithstanding~~ for the ~~reduction~~prior year and a 21% tax rate for the current year, partially offset by the recognition of $9.2 million in ETB attributable to stock-based compensation compared to a $18.6 million ETB in the ~~federal corporate statutory income tax rate,~~comparable prior year period.

Net Earnings and Basic and Diluted earnings per share. Net earnings for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$112.0~~$298.8 million, an increase of ~~$48.2~~$77.7 million or ~~76%~~35%, compared to ~~$63.8~~$221.1 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The increase in Net earnings is primarily ~~reflects higher event-driven~~due to an increase in operating income primarily from the increase in recurring fee revenues and ~~recurring fee revenues.~~the decrease in the effective tax rate attributable to the Tax Act.

Basic and Diluted earnings per share for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$0.96~~$2.57 and ~~$0.93,~~$2.51, respectively, compared to ~~$0.54~~$1.89 and ~~$0.52~~$1.84 for the ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, respectively.

ASC 606 Revenue Accounting Change. For the nine months ended March 31, 2018 (i) recurring fee revenues would have been $97.9 million higher, (ii) event-driven fee revenues would have been $1.2 million lower, and (iii) distribution revenues would have been $33.5 million higher if the prior year basis of revenue accounting followed the current year basis of revenue accounting.

For the nine months ended March 31, 2019 (i) recurring fee revenues would have increased by $99.2 million, or 5%, (ii) event-driven fee revenues would have decreased by $28.4 million, or 13%, and (iii) distribution revenues would have decreased by $41.1 million, or 4%, compared to the same period in the prior year, if the prior year basis of revenue accounting followed the current year basis of revenue accounting.

Analysis of Reportable Segments

The Company classifies its operations into the following two reportable segments: (1) Investor Communication Solutions and (2) Global Technology and Operations.

The primary component 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 expense items in Other rather than reflect such items in segment profit.

Revenues


	Three Months Ended December 31,										Six Months Ended December 31,										Three Months Ended March 31,										Nine Months Ended March 31,
							Change										Change										Change										Change
	2017			2016			$		%		2017			2016			$		%		2019			2018			$			%	2019			2018			$			%
	(in millions)																				(in millions)
Investor Communication Solutions	$	802.2		$	704.4		$	97.8	14		$	1,528.6		$	1,422.4		$	106.2	7		$	1,017.1		$	855.3		$	161.8		19	$	2,521.0		$	2,384.0		$	137.1		6
Global Technology and Operations	228.0			207.0			20.9		10		442.9			400.2			42.7		11		236.6			235.2			1.4			1	700.9			678.1			22.8			3
Foreign currency exchange	(17.4		)	(18.8		)	1.4		(7	)	(33.9		)	(34.6		)	0.8		(2	)	(28.9		)	(18.6		)	(10.3		)	55	(70.9		)	(52.5		)	(18.4		)	35
Total	$	1,012.8		$	892.6		$	120.2	13		$	1,937.6		$	1,787.9		$	149.7	8		$	1,224.8		$	1,071.9		$	152.9		14	$	3,151.0		$	3,009.5		$	141.5		5

Earnings Before Income Taxes


	Three Months Ended December 31,										Six Months Ended December 31,										Three Months Ended March 31,											Nine Months Ended March 31,
							Change										Change										Change											Change
	2017			2016			$			%	2017			2016			$			%	2019			2018			$			%		2019			2018			$			%
	(in millions)																				(in millions)
Investor Communication Solutions	$	72.4		$	20.4		$	52.0		255	$	118.0		$	55.1		$	62.9		114	$	193.8		$	93.0		$	100.8		108		$	289.8		$	211.0		$	78.8		37
Global Technology and Operations	50.6			44.2			6.5			14	95.7			80.6			15.1			19	52.5			57.3			(4.8		)	(8	)	146.1			152.9			(6.8		)	(4	)
Other	(26.5		)	(20.8		)	(5.7		)	27	(48.0		)	(43.6		)	(4.4		)	10	(25.2		)	(29.0		)	3.8			(13	)	(76.3		)	(77.0		)	0.7			(1	)
Foreign currency exchange	7.0			2.0			5.0			250	12.1			5.2			7.0			133	2.5			3.9			(1.4		)	(36	)	17.5			16.1			1.5			9
Total	$	103.5		$	45.7		$	57.8		126	$	177.8		$	97.2		$	80.6		83	$	223.6		$	125.2		$	98.4		79		$	377.2		$	303.0		$	74.2		24

Investor Communication Solutions


	Three Months Ended December 31,							Six Months Ended December 31,							Three Months Ended March 31,							Nine Months Ended March 31,
					Change							Change							Change							Change
	2017		2016		$		%	2017		2016		$		%	2019		2018		$		%	2019		2018		$			%
	(in millions)														(in millions)
Recurring fee revenues	$	334.4	$	329.1	$	5.4	2	$	667.4	$	652.8	$	14.5	2	$	530.5	$	403.5	$	127.0	31	$	1,245.1	$	1,070.8	$	174.3		16
Event-driven fee revenues	97.3		29.8		67.6		227	156.6		67.3		89.3		133	68.4		66.5		1.9		3	193.5		223.1		(29.6		)	(13	)
Distribution revenues	370.4		345.6		24.9		7	704.7		702.3		2.4		—	418.2		385.4		32.9		9	1,082.5		1,090.0		(7.6		)	(1	)
Total	$	802.2	$	704.4	$	97.8	14	$	1,528.6	$	1,422.4	$	106.2	7	$	1,017.1	$	855.3	$	161.8	19	$	2,521.0	$	2,384.0	$	137.1		6

Revenues. Investor Communication Solutions segment’s Revenues for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$802.2~~$1,017.1 million, an increase of ~~$97.8~~$161.8 million, or ~~14%~~19%, compared to ~~$704.4~~$855.3 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The ~~$97.8~~$161.8 million increase was driven by: (i) higher ~~event-driven~~recurring fee revenues of ~~$67.6~~$127.0 million, or ~~227%~~31%, (ii) an increase in distribution revenues of ~~$24.9~~$32.9 million, or 7%9%, and (iii) higher event-driven fee revenues of $1.9 million, or 3%.

Higher recurring fee revenues of ~~$5.4 million, or 2%.~~

~~Higher event-driven fee revenues~~31% were attributable to: (i) the ~~result~~impact of ~~increased mutual fund proxy activity and equity proxy contests. Higher recurring fee revenues were primarily driven by~~the ASC 606 revenue accounting change (25pts), (ii) Net New Business from increases in revenues from Closed sales ~~and~~(4pts), (iii) revenues from ~~acquisitions. Position~~acquisitions (1pt), and (iv) higher internal growth (1pt). Record growth compared to the same period in the prior year, which is a component of internal growth, was ~~10%~~6% for mutual fund and ~~exchange traded funds (“ETF”) interims.~~

~~Investor Communication Solutions segment’s Revenues~~ETF interim communications and 3% for the six months ended December 31, 2017 were $1,528.6 million, an increase of $106.2 million, or 7%, compared to $1,422.4 million for the six months ended December 31, 2016. The $106.2 million increase was driven by: (i) higher event-driven fee revenues of $89.3 million, or 133%, (ii) higher recurring fee revenues of $14.5 million, or 2% and (iii) an increase in distribution revenues of $2.4 million.annual equity proxy communications.

Higher event-driven fee revenues were the result of increased mutual fund proxy ~~activity and~~revenues partially offset by decreased equity proxy contests.

Investor Communication Solutions segment’s Revenues for the nine months ended March 31, 2019 were $2,521.0 million, an increase of $137.1 million, or 6%, compared to $2,384.0 million for the nine months ended March 31, 2018. The $137.1 million increase was driven by: (i) higher recurring fee revenues of $174.3 million, or 16%, partially offset by (ii) lower event-driven fee revenues of $29.6 million, or 13%, and (iii) a decrease in distribution revenues of $7.6 million, or 1%.

Higher recurring fee revenues of 16% were ~~primarily driven by~~attributable to: (i) impact of the ASC 606 revenue accounting change (10pts), (ii) Net New Business from increases in revenues from Closed sales ~~and~~(4pts), (iii) revenues from ~~acquisitions. Position~~acquisitions (1pt), and (iv) higher internal growth (1pt). Record growth compared to the same period in the prior year, which is a component of internal growth, was ~~10%~~11% for mutual fund and ETF ~~interims.~~interim communications and 6% for annual equity proxy communications.

Lower event-driven fee revenues were the result of decreased equity proxy contests and mutual fund proxy activity.

Earnings before Income Taxes. Earnings before income taxes for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$72.4~~$193.8 million, an increase of ~~$52.0~~$100.8 million, or ~~255%~~108%, compared to ~~$20.4~~$93.0 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The earnings increase was primarily due to higher ~~event-driven~~recurring fee revenues ~~and recurring fee revenues.~~driven by the ASC 606 revenue accounting change. Pre-tax margins increased by ~~6.1~~8.2 percentage points to ~~9.0%~~19.1% from ~~2.9%~~10.9%.

Earnings before income taxes for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$118.0~~$289.8 million, an increase of ~~$62.9~~$78.8 million, or ~~114%~~37%, compared to ~~$55.1~~$211.0 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The earnings increase was primarily due to higher ~~event-driven~~recurring fee revenues ~~and recurring~~driven by the ASC 606 revenue accounting change more than offsetting lower event-driven fee revenues. Pre-tax margins increased by ~~3.8~~2.6 percentage points to ~~7.7%~~11.5% from ~~3.9%~~8.9%.

ASC 606 Revenue Accounting Change. For the three months ended March 31, 2018 (i) recurring fee revenues would have been $96.9 million higher, (ii) event-driven fee revenues would have been $2.1 million higher, and (iii) distribution revenues would have been $36.4 million higher if the prior year basis of revenue accounting followed the current year basis of revenue accounting. Consequently, for the three months ended March 31, 2019 (i) recurring fee revenues would have increased by $30.1 million, or 6%, (ii) event-driven fee revenues would have decreased by $0.2 million, or 0%, and (iii) distribution revenues would have decreased by $3.6 million, or 1%, compared to the same period in the prior year.

For the nine months ended March 31, 2018 (i) recurring fee revenues would have been $99.0 million higher, (ii) event-driven fee revenues would have been $1.2 million lower, and (iii) distribution revenues would have been $33.5 million higher if the prior year basis of revenue accounting followed the current year basis of revenue accounting. Consequently, for the nine months ended March 31, 2019 (i) recurring fee revenues would have increased by $75.3 million, or 6%, (ii) event-driven fee revenues would have decreased by $28.4 million, or 13%, and (iii) distribution revenues would have decreased by $41.1 million, or 4%, compared to the same period in the prior year.

Global Technology and Operations

Revenues. Global Technology and Operations segment’s Revenues for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$228.0~~$236.6 million an increase of ~~$20.9~~$1.4 million, or ~~10%~~1%, compared to ~~$207.0~~$235.2 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The ~~10%~~1% increase was attributable to: (i) higher Net New Business from Closed sales ~~(5pts)~~(3pts), partially offset by (ii) lower internal growth ~~from higher trade and non-trade activity levels~~ (3pts) ~~and (iii)~~. The impact of the ASC 606 revenue ~~from recent acquisitions (2pts).~~accounting change was less than 1pt.

Global Technology and Operations segment’s Revenues for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$442.9~~$700.9 million an increase of ~~$42.7~~$22.8 million, or ~~11%~~3%, compared to ~~$400.2~~$678.1 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The ~~11%~~3% increase was attributable to: (i) higher Net New Business from Closed sales ~~(5pts),~~(3pts) and (ii) higher internal growth ~~from higher trade and non-trade activity levels (3pts) and (iii)~~(1pt). The impact of the ASC 606 revenue ~~from recent acquisitions (3pts).~~accounting change was less than 1pt.

Earnings before Income Taxes. Earnings before income taxes for the three months ended ~~December~~March 31, ~~2017~~2019 were ~~$50.6~~$52.5 million, ~~an increase~~a decrease of ~~$6.5~~$4.8 million, or ~~14%~~8%, compared to ~~$44.2~~$57.3 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The earnings ~~increase~~decrease was primarily due to ~~higher organic~~the impact of incremental expenditures to drive new business, ongoing new product development expenses and increased conversion costs related to client go-lives, partially offset by increased revenues. Pre-tax margins ~~increased~~decreased by ~~0.8~~2.2 percentage points to 22.2% from ~~21.4%~~24.4%.

Earnings before income taxes for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 were ~~$95.7~~$146.1 million, ~~an increase~~a decrease of ~~$15.1~~$6.8 million, or ~~19%~~4%, compared to ~~$80.6~~$152.9 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The earnings ~~increase~~decrease was primarily due to ~~higher organic~~the impact of incremental expenditures to drive new business, ongoing new product development expenses and increased conversion costs related to client go-lives, partially offset by increased revenues. Pre-tax margins ~~increased~~decreased by ~~1.5~~1.7 percentage points to ~~21.6%~~20.8% from ~~20.1%~~22.5%.

ASC 606 Revenue Accounting Change. Considering the impact of the ASC 606 revenue accounting change, recurring fee revenues for the three months ended March 31, 2018 would have been $0.8 million higher. Consequently, for the three months ended March 31, 2019, recurring fee revenues would have increased by $0.5 million, or 0%, compared to the same period in the prior year.

Considering the impact of the ASC 606 revenue accounting change, recurring fee revenues for the nine months ended March 31, 2018 would have been $1.0 million lower. Consequently, for the nine months ended March 31, 2019, recurring fee revenues would have increased by $23.9 million, or 4%, compared to the same period in the prior year.

Other

Loss before Income Taxes. Loss before income taxes was ~~$26.5~~$25.2 million for the three months ended ~~December~~March 31, ~~2017, an increase~~2019, a decrease of ~~$5.7~~$3.8 million, or 13%, compared to ~~$20.8~~$29.0 million for the three months ended ~~December~~March 31, ~~2016.~~2018. The ~~increased~~decreased loss was primarily due to ~~higher expense related~~lower spending on growth initiatives and other corporate expenses, partially offset by a decrease in unrealized investment gains compared to ~~corporate charges, including efficiency initiatives.~~the prior year period.

Loss before income taxes was ~~$48.0~~$76.3 million for the ~~six~~nine months ended ~~December~~March 31, ~~2017, an increase~~2019, a decrease of ~~$4.4~~$0.7 million, or 1%, compared to ~~$43.6~~$77.0 million for the ~~six~~nine months ended ~~December~~March 31, ~~2016.~~2018. The ~~increased~~decreased loss was primarily due to ~~higher expense related to~~lower corporate ~~charges, including efficiency initiatives.~~expenses.

Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures

The Company’s results in this Quarterly Report on Form 10-Q are presented in accordance with U.S. GAAP except where otherwise noted. In certain circumstances, results have been presented that are not generally accepted accounting principles measures (“Non-GAAP”). These Non-GAAP measures are Adjusted Operating income, Adjusted Operating income margin, Adjusted Net earnings, Adjusted earnings per share, and Free cash flow. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results.

The Company believes our Non-GAAP financial measures help investors understand how management plans, measures and evaluates the Company’s business performance. Management believes that Non-GAAP measures provide consistency in its financial reporting and facilitates investors’ understanding of the Company’s operating results and trends by providing an additional basis for comparison. Management uses these Non-GAAP financial measures to, among other things, evaluate our ongoing operations, for internal planning and forecasting purposes and in the calculation of performance-based compensation. In addition, and as a consequence of the importance of these Non-GAAP financial measures in managing our business, the Company’s Compensation Committee of the Board of Directors incorporates Non-GAAP financial measures in the evaluation process for determining management compensation.

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted Net Earnings and Adjusted Earnings Per Share

These Non-GAAP measures reflect Operating income, Operating income margin, Net earnings, and Diluted earnings per share, as adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items that management believes are not indicative of our ongoing operating performance. These adjusted measures exclude the impact ofof: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, ~~and~~(iii) Tax Act ~~items.~~items and (iv) the Gain on Sale of Securities. Amortization of Acquired Intangibles and Purchased Intellectual Property represents non-cash amortization expenses associated with the Company's acquisition activities. Acquisition and Integration Costs represent certain transaction and integration costs associated with the Company’s acquisition activities. Tax Act items represent the net impact of a U.S. federal transition tax on earnings of certain foreign subsidiaries, foreign jurisdiction withholding taxes and certain benefits

related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities attributable to the Tax Act.

The Gain on Sale of Securities represents a non-operating gain on the sale of securities associated with the Company’s retirement plan obligations.

We exclude Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, ~~and~~ Tax Act items, and the Gain on Sale of Securities from ~~these~~our earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and these items do not reflect ordinary operations or earnings. Management believes these adjusted measures may be useful to an investor in evaluating the underlying operating performance of our business.

Free Cash Flow

In addition to the Non-GAAP financial measures discussed above, we provide Free cash flow information because we consider Free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated that could be used for dividends, share repurchases, strategic acquisitions, other investments, as well as debt servicing. Free cash flow is a Non-GAAP financial measure and is defined by the Company as Net cash flows provided by operating activities less Capital expenditures as well as Software purchases and capitalized internal use software.

Set forth below is a reconciliation of such Non-GAAP measures to the most directly comparable GAAP measures (unaudited):

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
(in millions)
Operating income (GAAP) $ 115.1
$ 58.8
$ 199.5
$ 124.9
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property 19.7
20.4
39.2
33.1
Acquisition and Integration Costs 2.6
5.0
4.7
7.8
Adjusted Operating income (Non-GAAP) $ 137.5
$ 84.2
$ 243.4
$ 165.8

Three Months Ended
December 31, Six Months Ended
December 31,
2017 2016 2017 2016
(in millions)
Net earnings (GAAP) $ 62.1
$ 30.1
$ 112.0
$ 63.8
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property 19.7
20.4
39.2
33.1
Acquisition and Integration Costs 2.6
5.0
4.7
7.8
Taxable adjustments 22.4
25.3
43.8
40.9
Tax Act items 16.1
—
16.1
—
Tax impact of adjustments (a) (5.9 ) (8.7 ) (13.0 ) (14.1 )
Adjusted Net earnings (Non-GAAP) $ 94.7
$ 46.8
$ 158.9
$ 90.7



	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018			2019			2018
	(in millions)
Operating income (GAAP)	$	233.6		$	130.8		$	411.9		$	331.9
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property	21.2			20.2			64.3			59.4
Acquisition and Integration Costs	0.9			1.3			3.1			6.0
Adjusted Operating income (Non-GAAP)	$	255.7		$	152.3		$	479.4		$	397.2
Operating income margin (GAAP)	19.1		%	12.2		%	13.1		%	11.0		%
Adjusted Operating income margin (Non-GAAP)	20.9		%	14.2		%	15.2		%	13.2		%


	Three Months Ended December 31,						Six Months Ended December 31,						Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016			2019			2018			2019			2018
Diluted earnings per share (GAAP)	$	0.52		$	0.25		$	0.93		$	0.52
													(in millions)
Net earnings (GAAP)													$	172.2		$	109.1		$	298.8		$	221.1
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property	0.16			0.17			0.33			0.27			21.2			20.2			64.3			59.4
Acquisition and Integration Costs	0.02			0.04			0.04			0.06			0.9			1.3			3.1			6.0
Gain on Sale of Securities													—			(5.5		)	—			(5.5		)
Taxable adjustments	0.19			0.21			0.37			0.34			22.1			16.1			67.5			59.9
Tax Act items	0.13			—			0.13			—			—			—			—			16.1
Tax impact of adjustments (a)	(0.05		)	(0.07		)	(0.11		)	(0.12		)	(5.4		)	(3.7		)	(15.7		)	(16.7		)
Adjusted earnings per share (Non-GAAP)	$	0.79		$	0.39		$	1.32		$	0.75
Adjusted Net earnings (Non-GAAP)													$	188.9		$	121.4		$	350.6		$	280.4



	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018			2019			2018
Diluted earnings per share (GAAP)	$	1.45		$	0.90		$	2.51		$	1.84
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property	0.18			0.17			0.54			0.49
Acquisition and Integration Costs	0.01			0.01			0.03			0.05
Gain on Sale of Securities	—			(0.05		)	—			(0.05		)
Taxable adjustments	0.19			0.13			0.57			0.50
Tax Act items	—			—			—			0.13
Tax impact of adjustments (a)	(0.05		)	(0.03		)	(0.13		)	(0.14		)
Adjusted earnings per share (Non-GAAP)	$	1.59		$	1.00		$	2.94		$	2.33

(a) Calculated using the GAAP effective tax rate, adjusted to exclude ~~the net $16.1 million charges associated with the Tax Act, as well as $1.5~~$1.3 million and ~~$3.0~~$9.2 million of excess tax benefits associated with stock-based compensation for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017.~~2019, and $15.6 million and $18.6 million of excess tax benefits associated with stock-based compensation for the three and nine months ended March 31, 2018, as well as the net $16.1 million charges associated with the Tax Act for the nine months ended March 31, 2018. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis.


	Six Months Ended December 31,						Nine Months Ended March 31,
	2017			2016			2019			2018
	(in millions)						(in millions)
Net cash flows provided by (used in) operating activities (GAAP)	$	141.8		$	(5.5	)
Net cash flows provided by operating activities (GAAP)							$	217.9		$	274.8
Capital expenditures and Software purchases and capitalized internal use software	(52.5		)	(32.0		)	(46.3		)	(70.6		)
Free cash flow (Non-GAAP)	$	89.3		$	(37.5	)	$	171.6		$	204.2

Financial Condition, Liquidity and Capital Resources

Cash and cash equivalents consisted of the following:


	December 31, 2017		June 30, 2017		March 31, 2019		June 30, 2018
	(in millions)				(in millions)
Cash and cash equivalents:
Domestic cash	$	175.0	$	86.8	$	105.5	$	98.2
Cash held by foreign subsidiaries	134.5		126.2		120.0		103.6
Cash held by regulated entities	57.0		58.1		66.6		62.0
Total cash and cash equivalents	$	366.5	$	271.1	$	292.1	$	263.9

At ~~December~~March 31, ~~2017,~~2019, Cash and cash equivalents were ~~$366.5~~$292.1 million and Total stockholders’ equity was ~~$1,074.0~~$1,265.6 million. At ~~December~~March 31, ~~2017,~~2019, net working capital was ~~$465.1~~$490.2 million compared to ~~$244.6~~$213.8 million at June 30, ~~2017.~~2018. At the current time, and in future periods, we expect cash generated by our operations, together with existing cash, cash equivalents, and borrowings from the capital markets, to be sufficient to cover cash needs for working capital, capital expenditures, strategic acquisitions, dividends and common stock repurchases.

At ~~December~~March 31, ~~2017, $134.5~~2019, $120.0 million of the ~~$366.5~~$292.1 million of Cash and cash equivalents were held by our foreign subsidiaries, and ~~$57.0~~$66.6 million of Cash and cash equivalents were held by regulated entities. We expect existing domestic cash, cash equivalents, and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as regular quarterly dividends, debt repayment schedules, and material capital expenditures, for at least the next 12 months and thereafter for the foreseeable future. In addition, we expect existing foreign cash, cash equivalents, ~~and~~ cash flows from operations and borrowing capacity to continue to be sufficient to fund our foreign operating activities and cash commitments for investing activities, such as material capital expenditures, for at least the next 12 months

and thereafter for the foreseeable future. If these funds are needed for our operations in the U.S., we ~~would~~may be required to pay foreign taxes to repatriate these funds. Under the Tax Act, as a result of the U.S. federal transition tax and the withholding tax on certain foreign subsidiary earnings at December 31, 2017, certain historical foreign earnings will be available to be repatriated back to the U.S at a future date for general corporate purposes. However, while we may do so at a future date, the Company does not need to repatriate future foreign earnings to fund U.S. operations.

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


	Expiration Date	Principal amount outstanding at December 31, 2017		Carrying value at December 31, 2017		Carrying value at June 30, 2017		Unused Available Capacity		Fair Value at December 31, 2017
				(in millions)								Expiration Date	Principal amount outstanding at March 31, 2019		Carrying value at March 31, 2019		Carrying value at June 30, 2018		Unused Available Capacity		Fair Value at March 31, 2019
															(in millions)
Long-term debt
Fiscal 2017 Revolving Credit Facility	February 2022	$	330.0	$	330.0	$	210.0	$	670.0	$	330.0
Fiscal 2019 Revolving Credit Facility												March 2024	$	280.0	$	280.0	$	160.0	$	1,220.0	$	280.0
Fiscal 2014 Senior Notes	September 2020	400.0		398.2		397.9		—		414.2		September 2020	400.0		399.1		398.5		—		405.6
Fiscal 2016 Senior Notes	June 2026	500.0		494.5		494.1		—		496.1		June 2026	500.0		495.3		494.8		—		486.9
Total debt		$	1,230.0	$	1,222.7	$	1,102.1	$	670.0	$	1,240.2		$	1,180.0	$	1,174.4	$	1,053.4	$	1,220.0	$	1,172.5

Future principal payments on the Company’s outstanding debt are as follows:


Years ending June 30,	2018		2019		2020		2021		2022		Thereafter		Total		2019		2020		2021		2022		2023		Thereafter		Total
(in millions)	$	—	$	—	$	—	$	400.0	$	330.0	$	500.0	$	1,230.0	$	—	$	—	$	400.0	$	—	$	—	$	780.0	$	1,180.0

The Company has a ~~$1.0~~$1.5 billion five-year revolving credit facility (the “Fiscal ~~2017~~2019 Revolving Credit Facility”), which is comprised of a ~~$900.0~~$1,100.0 million U.S. dollar tranche and ~~a $100.0~~$400.0 million multicurrency tranche. Borrowings under the Fiscal ~~2017~~2019 Revolving Credit Facility bear interest at LIBOR plus ~~100~~101.5 basis points. In addition, the Fiscal ~~2017~~2019 Revolving Credit Facility has an annual facility fee equal to ~~12.5~~11.0 basis points on the entire facility, which totaled $0.3 million and ~~$0.6~~$1.0 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019, respectively, and ~~$0.2~~$0.3 million and ~~$0.5~~$1.0 million for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, respectively. At ~~December~~March 31, ~~2017,~~2019, the Company had ~~$330.0~~$280.0 million in outstanding borrowings and had unused available capacity of ~~$670.0~~$1,220.0 million under the Fiscal ~~2017~~2019 Revolving Credit Facility. The facility is scheduled to expire in ~~February 2022.~~March 2024.

At December 31, 2017, the carrying value of the Company’s outstanding Long-term debt was $1,222.7 million, consisting of: (i) borrowings on the Fiscal 2017 Revolving Credit Facility of $330.0 million, (ii) senior notes of $398.2 million ($400.0 million principal amount less $0.2 million bond discount and $1.6 million of unamortized debt issuance costs) due September 2020 and (iii) senior notes of $494.5 million ($500.0 million principal amount less $1.8 million bond discount and $3.7 million of unamortized debt issuance costs) due June 2026. The Fiscal ~~2017~~2019 Revolving Credit Facility and the senior notes are senior unsecured obligations of the Company and are ranked equally in right of payment. Interest on the senior notes due 2020 is payable semiannually on March 1st and September 1st each year based on a fixed per annum rate equal to 3.95%. Interest on the senior notes due 2026 is payable semiannually on June 27th and December 27th each year based on a fixed per annum rate equal to 3.40%.

Our liquidity position may be negatively affected by changes in general economic conditions, regulatory requirements and access to the capital markets, which may be limited if we were to fail to renew any of the credit facilities on their renewal dates or if we were to fail to meet certain ratios.

Cash Flows


	Six Months Ended December 31,									Nine Months Ended March 31,
							Change									Change
	2017			2016			$			2019			2018			$
	(in millions)									(in millions)
Net cash flows provided by (used in) operating activities	$	141.8		$	(5.5	)	$	147.3
Net cash flows provided by operating activities										$	217.9		$	274.8		$	(56.8	)
Net cash flows used in investing activities	$	(85.4	)	$	(553.4	)	$	468.0		$	(49.1	)	$	(177.6	)	$	128.5
Net cash flows provided by financing activities	$	35.4		$	70.2		$	(34.7	)
Net cash flows used in financing activities										$	(138.8	)	$	(20.2	)	$	(118.5	)

Free cash flow:
Net cash flows provided by (used in) operating activities (GAAP)	$	141.8		$	(5.5	)	$	147.3
Net cash flows provided by operating activities (GAAP)										$	217.9		$	274.8		$	(56.8	)
Capital expenditures and Software purchases and capitalized internal use software	(52.5		)	(32.0		)	(20.5		)	(46.3		)	(70.6		)	24.3
Free cash flow (Non-GAAP)	$	89.3		$	(37.5	)	$	126.8		$	171.6		$	204.2		$	(32.5	)

The ~~increase~~decrease in cash provided by operating activities of ~~$147.3~~$56.8 million in the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, as compared to the ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, was primarily due ~~to: (i)~~to an increase in cash ~~provided by advanced~~used in client ~~payments on existing contracts of $73.1 million, (ii) higher cash generated from our operations primarily due to higher event-driven activity partially offset by increased cash used~~implementations and related client contract payments. The increase in net earnings and the associated change in working capital ~~and (iii)~~were primarily driven by the ~~classification of excess tax benefits associated with stock-based compensation awards as part of operating activities in fiscal year 2018, for~~ASC 606 revenue accounting change which ~~$22.0 million of excess tax benefits were classified in financing activities in fiscal year 2017 rather than~~did not impact cash flows from operating activities.

The decrease in cash used in investing activities of ~~$468.0~~$128.5 million in the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, as compared to the ~~six~~nine months ended ~~December~~March 31, ~~2016,~~2018, primarily reflects ~~decreased~~ (i) ~~acquisitions of $398.3~~a $63.0 million ~~largely driven by the~~decrease in acquisition ~~of NACC in fiscal year 2017 and~~spend, (ii) ~~$90.0~~a $40.0 million decrease in purchased intellectual property, ~~partially offset by~~and (iii) ~~increased Capital expenditures and Software purchases and capitalized internal use software of $20.5 million.~~a $23.9 million decrease in capital expenditures.

The ~~decreased~~increase in cash ~~provided by~~used in financing activities of ~~$34.7~~$118.5 million in the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 as compared to the ~~six~~nine months ended ~~December~~March 31, ~~2016~~2018 primarily ~~reflects:~~reflects (i) a ~~decrease~~$90.5 million increase in ~~net proceeds from borrowings~~the repurchase of ~~$70.0 million,~~common stock, (ii) a ~~$29.7~~$32.1 million increase in dividends paid, and (iii) a $14.4 million decrease in the proceeds from the exercise of stock options, (iii) a $22.0 million decrease in excess tax benefits from the issuance of stock-based compensation awards that are no longer classified as cash flows from financing activities, and (iv) a $6.4 million increase in dividends paid,

partially offset by ~~(v) $98.2~~(iv) a $20.0 million ~~decrease~~net increase in debt proceeds, net of debt repayments compared to the ~~repurchase of common stock.~~prior fiscal year.

Seasonality

Processing and distributing proxy materials and annual reports to investors in equity securities and mutual funds comprises a large portion of our Investor Communication Solutions business. We process and distribute the greatest number of proxy materials and annual reports during our third and fourth fiscal ~~quarter (the second quarter of the calendar year).~~quarters. The recurring periodic activity of this business is linked to significant filing deadlines imposed by law on public reporting ~~companies and mutual funds.~~companies. Historically, this has caused our revenues, operating income, net earnings, and cash flows from operating activities to be higher in our fourth fiscal quarter than in any other quarter. ~~The~~Beginning on July 1, 2018, the Company adopted ASU No. 2014-09, resulting in the majority of our revenues from equity proxy services being recognized in the third and fourth quarters. Notwithstanding the impact of ASU No. 2014-09, the seasonality of our revenues makes it difficult to estimate future operating results based on the results of any specific fiscal quarter and could affect an investor’s ability to compare our financial condition, results of operations, and cash flows on a fiscal quarter-by-quarter basis.

Income Taxes

Our effective tax rate for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 was ~~40.0%~~23.0% and ~~37.0%~~20.8%, compared to ~~34.1%~~12.9% and ~~34.4%~~27.0% for the three and ~~six~~nine months ended ~~December~~March 31, ~~2016.~~ 2018.

The ~~increase~~decrease in the effective tax rate for the ~~three and six~~nine months ended ~~December~~March 31, ~~2017,~~2019 compared to the prior year period is primarily due to the U.S. federal corporate income tax rate change from 35% to 21% under the Tax Act, which resulted in a blended U.S. federal corporate income tax rate of 28.1% for the prior year and a 21% tax rate for the current year. In addition, the Company accrued in the comparable prior year period ~~is primarily attributable~~a one-time net expense of approximately $16.1 million to ~~the enactment of the Tax Act on December 22, 2017. With~~reflect a ~~fiscal year ending June 30, 2018, the Company’s federal corporate statutory income~~

~~tax rate will be subject to a full year blended tax rate of 28.1%. Notwithstanding the reduction in the federal corporate statutory income tax rate, the Tax Act requires companies to pay a~~one-time transition tax on earnings of certain foreign subsidiaries at December 31, 2017 which the Company has estimated to be $11.4 million. The Company also accrued $20.8 million of foreign jurisdiction withholding taxes with respect to the earnings deemed repatriated for U.S. tax purposes. Partially offsetting the $32.2 million of aggregate expense related to foreign earnings ispartially offset by a ~~$16.1 million~~ benefit related to the remeasurement of the Company’s net U.S. federal and state deferred tax liabilities. ~~Beginning July 1, 2018,~~The net $16.1 million one-time expense was adjusted to $15.4 million in the fourth quarter of the prior fiscal year. In the second quarter of this fiscal year, the Company ~~will be subject to a U.S. federal corporate statutory income~~reported that the ultimate one-time prior year net tax ~~rate~~impact from the enactment of ~~21.0%.~~the Tax Act was approximately $14.9 million.

Contractual Obligations

In March 2010, the Company and International Business Machines Corporation (“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-year extension to the IT Services Agreement which expires on June 30, 2024. The Company has the right to renew the term of the IT Services Agreement for up to one additional 12-month term. Commitments remaining under this agreement at ~~December~~March 31, ~~2017~~2019 are ~~$361.8~~$306.6 million through fiscal year 2024, the final year of the contract.

The Company ~~expects to pay $40.0 million to an affiliate of Inveshare in February 2018 upon delivery of certain new blockchain technology applications.~~

~~The Company~~ contributed $2.8 million to an equity method investment during the ~~six~~nine months ended ~~December~~March 31, ~~2017,~~2019, and has a remaining commitment of ~~$2.5~~$0.8 million to fund this investment at ~~December~~March 31, ~~2017.~~

2019.

Other Commercial Agreements

~~At December 31, 2017, the Company had $330.0 million of outstanding borrowings and unused available capacity of $670.0 million under the Fiscal 2017 Revolving Credit Facility.~~

Certain of the Company’s subsidiaries established unsecured, uncommitted lines of credit with banks. There were no outstanding borrowings under these lines of credit at ~~December~~March 31, ~~2017.~~2019.

Off-balance Sheet Arrangements

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 ~~uses derivative financial instruments as risk management tools and not for trading purposes. The Company~~ was not a party to any derivative financial instruments at ~~December~~March 31, ~~2017~~2019 or at June 30, ~~2017.~~2018. 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.

Recently-issued Accounting Pronouncements

Please refer to Note 2, “New Accounting Pronouncements” and Note 3, “Revenue Recognition” to our Condensed Consolidated Financial Statements under Item 1. of Part I of this Quarterly Report on Form 10-Q, for a discussion on the impact of new accounting ~~pronouncements.~~pronouncements, including the impact of ASU No. 2014-09.


Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes related to market risk from the disclosures in the Company’s Annual Report on Form 10-K for the year ended June 30, ~~2017.~~2018.


Item 4.	CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer, and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~December~~March 31, ~~2017.~~2019. The President and Chief Executive Officer, and the Chief Financial Officer, concluded that our disclosure controls and procedures as of ~~December~~March 31, ~~2017~~2019 were effective to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and Chief Executive Officer, and our Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended ~~December~~March 31, ~~2017~~2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.	LEGAL PROCEEDINGS

In the normal course of business, the Company is subject to 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.


Item 1A.	RISK FACTORS

In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the “Risk Factors” disclosed under Item 1A. to Part I in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017,~~2018, filed on August ~~10, 2017.~~7, 2018. You should be aware that these risk factors and other information may not describe every risk facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. There have been no material changes to the risk factors we have disclosed in the “Risk Factors” section of our ~~2017~~2018 Annual Report on Form 10-K.


Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table contains information about our purchases of our equity securities for each of the three months during our ~~second~~third fiscal quarter ended ~~December~~March 31, ~~2017:~~2019:

Period Total Number of Shares Purchased (1)
Average Price
Paid per Share

Total Number of Shares
Purchased as Part of
Publicly Announced Plans or Programs (2)
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1, 2017 - October 31, 2017 —
$ —
—
9,962,536
November 1, 2017 - November 30, 2017 910
88.45
—
9,962,536
December 1, 2017 - December 31, 2017 6,820
89.11
6,732
9,955,804
Total 7,730
$ 89.03
6,732



Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1, 2019 - January 31, 2019	105	$	101.31	—	6,651,256
February 1, 2019 - February 28, 2019	—	—		—	6,651,256
March 1, 2019 - March 31, 2019	—	—		—	6,651,256
Total	105	$	101.31	—

_____________

(1) ~~Includes 998~~Represents shares purchased from employees to pay taxes related to the vesting of restricted stock units.

(2) During the fiscal quarter ended ~~December~~March 31, ~~2017,~~2019, the Company ~~repurchased 6,732~~did not repurchase shares of common stock ~~at an average price of $89.12 per share.~~under its share repurchase program. At ~~December~~March 31, ~~2017,~~2019, the Company had ~~9,955,804~~6,651,256 shares available for repurchase under its share repurchase program. The share repurchases will be made in the open market or privately negotiated transactions in compliance with applicable legal requirements and other factors.


Item 3.	DEFAULTS UPON SENIOR SECURITIES

None.


Item 4.	MINE SAFETY DISCLOSURES

Not applicable.


Item 5.	OTHER INFORMATION

Disclosure of Certain Activities under Section 13(r) of the Securities Exchange Act of 1934

None.


Item 6.	EXHIBITS

The following exhibits are being filed as part of this Quarterly Report on Form 10-Q:




10.1			Amended and Restated Credit Agreement dated March 18, 2019, among Broadridge Financial Solutions, Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 10.1 to Form 8-K filed on March 18, 2019).

31.1			Certification of the President and Chief Executive Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of the Chief Financial Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			The following financial statements from the Broadridge Financial Solutions, Inc. Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2017,~~2019, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed consolidated statements of earnings for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, (ii) condensed consolidated statements of comprehensive income for the three and ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, (iii) condensed consolidated balance sheets as of ~~December~~March 31, ~~2017~~2019 and June 30, ~~2017,~~2018, (iv) condensed consolidated statements of cash flows for the ~~six~~nine months ended ~~December~~March 31, ~~2017~~2019 and ~~2016,~~2018, (v) condensed consolidated statements of stockholders’ equity for the three and ~~(v)~~nine months ended March 31, 2019 and 2018, and (vi) the notes to the condensed consolidated financial statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned hereunto duly authorized.



	BROADRIDGE FINANCIAL SOLUTIONS, INC.

Date: ~~February 8, 2018~~May 7, 2019	By:	/s/ James M. Young
		James M. Young
		Vice President, Chief Financial Officer
		(Principal Financial and Accounting Officer)

~~INDEX TO EXHIBITS~~



~~Exhibit~~ ~~Number~~			~~Description of Exhibit~~


~~31.1~~			Certification of the Chief Executive Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2~~			Certification of the Chief Financial Officer of Broadridge Financial Solutions, Inc., pursuant to Rule 13a-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1~~			~~Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~32.2~~			~~Certification of the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101~~			The following financial statements from the Broadridge Financial Solutions, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed consolidated statements of earnings for the three and six months ended December 31, 2017 and 2016, (ii) condensed consolidated statements of comprehensive income for the three and six months ended December 31, 2017 and 2016, (iii) condensed consolidated balance sheets as of December 31, 2017 and June 30, 2017, (iv) condensed consolidated statements of cash flows for the six months ended December 31, 2017 and 2016, and (v) the notes to the condensed consolidated financial statements.