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 31, 20172020
OR
¨

☐
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)

Delaware33-1151291
(State or Other Jurisdiction of Incorporation or Organization)(I.R.S. Employer Identification No.)
Delaware33-1151291
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
5 Dakota Drive
Lake Success, NY
11042
Lake Success
New York
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area codecode: (516) 472-5400
Former name, former address and former fiscal year, if changed since last report:N/A
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:Trading SymbolName of Each Exchange on Which Registered:
Common Stock, par value $0.01 per shareBRNew York Stock Exchange

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”filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated filer¨
Large accelerated filer 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

The number of shares outstanding of the registrant’s common stock, $0.01 par value, as of January 31, 2018,26, 2021, was 116,654,180115,798,817 shares.

TABLE OF CONTENTS
ITEM


Table of Contents
TABLE OF CONTENTS
PAGE
ITEMPAGE
3
PART I.
34
Item 1.
34
Item 2.
2129
Item 3.
3748
Item 4.
3748
PART II.
3849
Item 1.
3849
Item 1A.
3849
Item 2.
3849
Item 3.6.
3850
Item 4.
MINE SAFETY DISCLOSURES
38
Item 5.
OTHER INFORMATION
38
Item 6.
EXHIBITS
39


2
Table of Contents
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”) 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 potential impact and effects of the Covid-19 pandemic (“Covid-19”) on the business of Broadridge, Broadridge’s results of operations and financial performance, any measures Broadridge has and may take in response to Covid-19 and any expectations Broadridge may have with respect thereto;
•the success of Broadridge 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;
•a material security breach or cybersecurity attack affecting the information of 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 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;
•Broadridge’s 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 this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 which was filed with the United States of America (“U.S.”) Securities and Exchange Commission (the “SEC”) on August 11, 2020 (the “2020 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 2020 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.
3
Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.FINANCIAL STATEMENTS
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,
2020201920202019
Revenues(Note 3)$1,054.9 $968.7 $2,072.3 $1,917.2 
Operating expenses:
      Cost of revenues806.5 780.9 1,593.5 1,508.4 
      Selling, general and administrative expenses169.0 161.0 320.7 309.0 
         Total operating expenses975.5 941.9 1,914.3 1,817.3 
Operating income79.5 26.8 158.1 99.9 
Interest expense, net(Note 5)(11.1)(13.9)(25.6)(27.0)
Other non-operating income (expenses), net1.0 (2.4)10.5 1.4 
Earnings before income taxes69.4 10.5 143.0 74.3 
Provision for income taxes(Note 13)13.1 0.4 20.9 8.3 
Net earnings$56.3 $10.1 $122.1 $66.0 
Basic earnings per share$0.49 $0.09 $1.06 $0.58 
Diluted earnings per share$0.48 $0.09 $1.04 $0.56 
Weighted-average shares outstanding:
      Basic(Note 4)115.7 114.7 115.5 114.5 
      Diluted(Note 4)117.8 117.2 117.6 117.1 

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

  2017
2016 2017 2016
Revenues  $1,012.8

$892.6
 $1,937.6
 $1,787.9
Operating expenses:  




    
      Cost of revenues  769.8

707.8
 1,496.4
 1,425.7
      Selling, general and administrative expenses  127.9

126.0
 241.7
 237.3
      Total operating expenses  897.7

833.8
 1,738.1
 1,663.1
Operating income  115.1

58.8
 199.5
 124.9
Interest expense, net(Note 4) 10.2
 10.6
 19.6
 21.0
Other non-operating (income) expenses, net(Note 5) 1.4
 2.5
 2.1
 6.7
Earnings before income taxes  103.5

45.7
 177.8
 97.2
Provision for income taxes(Note 12) 41.4

15.6
 65.8
 33.4
Net earnings  $62.1

$30.1
 $112.0
 $63.8
          
Basic earnings per share  $0.53

$0.25
 $0.96
 $0.54
Diluted earnings per share  $0.52

$0.25
 $0.93
 $0.52
          
Weighted-average shares outstanding:  


    
      Basic(Note 3) 116.6

118.7
 116.5
 118.6
      Diluted(Note 3) 120.3

121.5
 120.1
 121.5
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.

4

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,
2020201920202019
Net earnings$56.3 $10.1 $122.1 $66.0 
Other comprehensive income (loss), net:
Foreign currency translation adjustments5.2 11.4 42.1 2.8 
Pension and post-retirement liability adjustment, net of taxes of $(0.2) and $(0.1) for the three months ended December 31, 2020 and 2019, respectively; and $(0.4) and $(0.2) for the six months ended December 31, 2020 and 2019, respectively0.6 0.4 1.2 0.7 
Total other comprehensive income (loss), net5.7 11.8 43.3 3.5 
Comprehensive income$62.0 $21.9 $165.4 $69.5 
 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
 2017 2016 2017 2016
Net earnings$62.1
 $30.1
 $112.0
 $63.8
Other comprehensive income (loss), net:       
Foreign currency translation adjustments(2.4) (12.0) 15.9
 (23.2)
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, respectively0.8
 (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, respectively0.2
 0.1
 0.4
 0.3
Total other comprehensive income (loss), net(1.4) (12.0) 17.4
 (22.7)
Comprehensive income$60.7
 $18.1
 $129.4
 $41.1


Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.
5
Table of Contents
Broadridge Financial Solutions, Inc.
Condensed Consolidated Balance Sheets
(In millions, except per share amounts)
(Unaudited)
December 31, 2020June 30, 2020
Assets
Current assets:
       Cash and cash equivalents$365.6 $476.6 
Accounts receivable, net of allowance for doubtful accounts of $7.1 and $9.8, respectively625.0 711.3 
       Other current assets157.9 140.1 
              Total current assets1,148.5 1,328.0 
Property, plant and equipment, net167.1 161.6 
Goodwill1,705.6 1,674.5 
Intangible assets, net543.0 583.8 
Other non-current assets(Note 8)1,294.1 1,141.9 
                        Total assets$4,858.3 $4,889.8 
Liabilities and Stockholders’ Equity
Current liabilities:
       Current portion of long-term debt(Note 10)$0 $399.9 
       Payables and accrued expenses(Note 9)719.0 829.9 
       Contract liabilities118.9 111.2 
              Total current liabilities837.9 1,341.0 
Long-term debt(Note 10)1,770.6 1,387.6 
Deferred taxes140.7 126.8 
Contract liabilities176.0 175.4 
Other non-current liabilities(Note 11)499.1 512.4 
                        Total liabilities3,424.3 3,543.2 
Commitments and contingencies(Note 14)00
Stockholders’ equity:
       Preferred stock: Authorized, 25.0 shares; issued and outstanding, NaN0 0 
Common stock, $0.01 par value: 650.0 shares authorized; 154.5 and 154.5 shares issued, respectively; and 115.8 and 115.1 shares outstanding, respectively1.6 1.6 
       Additional paid-in capital1,219.6 1,178.5 
       Retained earnings2,291.8 2,302.6 
       Treasury stock, at cost: 38.7 and 39.3 shares, respectively(2,021.8)(2,035.7)
       Accumulated other comprehensive loss(Note 15)(57.1)(100.4)
              Total stockholders’ equity1,434.0 1,346.5 
                         Total liabilities and stockholders’ equity$4,858.3 $4,889.8 

  December 31,
2017
June 30,
2017
Assets     
Current assets:     
Cash and cash equivalents  $366.5
 $271.1
Accounts receivable, net of allowance for doubtful accounts of $5.0 and $3.7, respectively  575.1
 589.5
Other current assets  109.6
 129.0
Total current assets  1,051.2
 989.6
Property, plant and equipment, net  202.5
 198.1
Goodwill  1,193.1
 1,159.3
Intangible assets, net  464.1
 486.4
Other non-current assets(Note 8) 339.1
 316.4
Total assets  $3,249.9
 $3,149.8
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
Total current liabilities  586.0
 744.9
Long-term debt(Note 10) 1,222.7
 1,102.1
Deferred taxes  52.5
 82.0
Deferred revenues  83.4
 74.3
Other non-current liabilities  231.2
 142.7
Total liabilities  2,175.9
 2,146.0
Commitments and contingencies(Note 13) 
 
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
Additional paid-in capital  1,012.6
 987.6
Retained earnings  1,496.3
 1,469.4
Treasury stock, at cost: 37.8 and 38.0 shares, respectively  (1,398.0) (1,398.9)
Accumulated other comprehensive loss(Note 14) (38.4) (55.8)
Total stockholders’ equity  1,074.0
 1,003.8
Total liabilities and stockholders’ equity  $3,249.9
 $3,149.8


Amounts may not sum due to rounding.

See Notes to Condensed Consolidated Financial Statements.
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Table of Contents
Broadridge Financial Solutions, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
Six Months Ended 
 December 31,		Six Months Ended 
 December 31,
2017 201620202019
Cash Flows From Operating Activities   Cash Flows From Operating Activities
Net earnings$112.0
 $63.8
Net earnings122.1 $66.0 
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:Adjustments to reconcile net earnings to net cash flows provided by operating activities:
Depreciation and amortization40.0
 34.5
 Depreciation and amortization31.3 41.4 
Amortization of acquired intangibles and purchased intellectual property39.2
 33.1
 Amortization of acquired intangibles and purchased intellectual property64.9 58.4 
Amortization of other assets22.9
 19.6
 Amortization of other assets52.9 49.7 
Write-down of long-lived assets and related charges Write-down of long-lived assets and related charges33.6 31.8 
Stock-based compensation expense24.7
 22.8
 Stock-based compensation expense28.7 30.3 
Deferred income taxes(11.2) (8.9) Deferred income taxes10.9 (0.8)
Excess tax benefits from stock-based compensation awards—
 (22.0)
Other(1.7) 0.8
 Other(29.0)(12.9)
Changes in operating assets and liabilities, net of assets and liabilities acquired:   Changes in operating assets and liabilities, net of assets and liabilities acquired:
Current assets and liabilities:   Current assets and liabilities:
Decrease in Accounts receivable, net18.0
 29.3
 Decrease in Accounts receivable, net100.3 53.2 
Increase in Other current assets(6.2) (22.8) Increase in Other current assets(35.7)(38.5)
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 Decrease in Payables and accrued expenses(140.2)(155.0)
Increase in Contract liabilities Increase in Contract liabilities5.9 11.5 
Non-current assets and liabilities:    Non-current assets and liabilities:
Increase in Other non-current assets(37.9) (57.4) Increase in Other non-current assets(211.2)(167.7)
Increase in Other non-current liabilities95.1
 9.3
 Increase in Other non-current liabilities48.8 44.0 
Net cash flows provided by (used in) operating activities141.8
 (5.5)
Net cash flows provided by operating activitiesNet cash flows provided by operating activities83.3 11.5 
Cash Flows From Investing Activities   Cash Flows From Investing Activities
Capital expenditures(42.1) (19.9)Capital expenditures(30.1)(31.6)
Software purchases and capitalized internal use software(10.4) (12.1)Software purchases and capitalized internal use software(20.7)(11.4)
Proceeds from asset salesProceeds from asset sales18.0 0 
Acquisitions, net of cash acquired(30.2) (428.4)Acquisitions, net of cash acquired0 (269.6)
Purchase of intellectual property—
 (90.0)
Equity method investments(2.8) (3.0)
Other investing activitiesOther investing activities(11.0)(18.7)
Net cash flows used in investing activities(85.4) (553.4)Net cash flows used in investing activities(43.9)(331.2)
Cash Flows From Financing Activities   Cash Flows From Financing Activities
Proceeds from Long-term debt190.0
 230.0
Repayments on Long-term debt(70.0) (40.0)
Excess tax benefits from stock-based compensation awards—
 22.0
Debt proceedsDebt proceeds660.0 1,226.1 
Debt repaymentsDebt repayments(687.8)(841.8)
Dividends paid(80.4) (74.0)Dividends paid(128.5)(117.2)
Purchases of Treasury stock(3.0) (101.2)Purchases of Treasury stock(0.8)0 
Proceeds from exercise of stock options4.4
 34.0
Proceeds from exercise of stock options27.6 21.6 
Costs related to issuance of bonds—
 (0.7)
Other financing activities(5.5) —
Other financing activities(27.2)(8.3)
Net cash flows provided by financing activities35.4
 70.2
Net cash flows provided by (used in) financing activitiesNet cash flows provided by (used in) financing activities(156.6)280.5 
Effect of exchange rate changes on Cash and cash equivalents3.6
 (3.3)Effect of exchange rate changes on Cash and cash equivalents6.2 0 
Net change in Cash and cash equivalents95.4
 (492.0)Net change in Cash and cash equivalents(111.0)(39.2)
Cash and cash equivalents, beginning of period271.1
 727.7
Cash and cash equivalents, beginning of period476.6 273.2 
Cash and cash equivalents, end of period$366.5
 $235.7
Cash and cash equivalents, end of period$365.6 $234.0 
Supplemental disclosure of cash flow information:   Supplemental disclosure of cash flow information:
Cash payments made for interest$19.9
 $20.8
 Cash payments made for interest$31.2 $27.5 
Cash payments made for income taxes, net of refunds$124.9
 $74.9
 Cash payments made for income taxes, net of refunds$60.0 $60.6 
Non-cash investing and financing activities:   Non-cash investing and financing activities:
Accrual of unpaid property, plant and equipment and software$1.7
 $0.6
 Accrual of unpaid property, plant and equipment and software$13.9 $10.6 
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.
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Table of Contents
Broadridge Financial Solutions, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(In millions, except per share amounts)
(Unaudited)

Three Months Ended December 31, 2020
 
 
Common Stock
Additional
Paid-In
Capital		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Income
(Loss)		Total
Stockholders’
Equity
 SharesAmount
Balances, September 30, 2020154.5 $1.6 $1,198.5 $2,302.1 $(2,025.5)$(62.9)$1,413.8 
Comprehensive income (loss)— — — 56.3 — 5.7 62.0 
Stock option exercises— — 6.5 — — — 6.5 
Stock-based compensation— — 18.2 — — — 18.2 
Treasury stock acquired (0.0 shares)— — — — 0 — 0 
Treasury stock reissued (0.2 shares)— — (3.6)— 3.6 — 0 
Common stock dividends ($0.575 per share)— — — (66.5)— — (66.5)
Balances, December 31, 2020154.5 $1.6 $1,219.6 $2,291.8 $(2,021.8)$(57.1)$1,434.0 

Six Months Ended December 31, 2020
 
 
Common Stock
Additional
Paid-In
Capital		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Income
(Loss)		Total
Stockholders’
Equity
 SharesAmount
Balances, June 30, 2020154.5 $1.6 $1,178.5 $2,302.6 $(2,035.7)$(100.4)$1,346.5 
Comprehensive income (loss)— — — 122.1 — 43.3 165.4 
Stock option exercises— — 27.3 — — — 27.3 
Stock-based compensation— — 28.5 — — — 28.5 
Treasury stock acquired (less than 0.1 shares)— — — — (0.8)— (0.8)
Treasury stock reissued (0.6 shares)— — (14.6)— 14.6 — 0 
Common stock dividends ($1.15 per share)— — — (132.9)— — (132.9)
Balances, December 31, 2020154.5 $1.6 $1,219.6 $2,291.8 $(2,021.8)$(57.1)$1,434.0 

See Notes to Condensed Consolidated Financial Statements.
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Table of Contents
Three Months Ended December 31, 2019
 
 
Common Stock
Additional
Paid-In
Capital		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Income
(Loss)		Total
Stockholders’
Equity
 SharesAmount
Balances, September 30, 2019154.5 $1.6 $1,131.1 $2,082.0 $(1,991.6)$(79.5)$1,143.4 
Comprehensive income (loss)— — — 10.1 — 11.8 21.9 
Stock option exercises— — 3.7 — — — 3.7 
Stock-based compensation— — 18.4 — — — 18.4 
Treasury stock acquired (0.0 shares)— — — — 0 — 0 
Treasury stock reissued (0.1 shares)— — (2.9)— 2.9 — 0 
Common stock dividends ($0.54 per share)— — — (62.0)— — (62.0)
Balances, December 31, 2019154.5 $1.6 $1,150.1 $2,030.1 $(1,988.7)$(67.7)$1,125.4 


Six Months Ended December 31, 2019
 
 
Common Stock
Additional
Paid-In
Capital		Retained
Earnings		Treasury
Stock		Accumulated
Other
Comprehensive
Income
(Loss)		Total
Stockholders’
Equity
 SharesAmount
Balances, June 30, 2019154.5 $1.6 $1,109.3 $2,087.7 $(1,999.8)$(71.2)$1,127.5 
Comprehensive income (loss)— — — 66.0 — 3.5 69.5 
Cumulative effect of changes in accounting principles (a)— — — 0.2 — — 0.2 
Stock option exercises— — 21.9 — — — 21.9 
Stock-based compensation— — 30.1 — — — 30.1 
Treasury stock acquired (less than 0.1 shares)— — — — 0 — 0 
Treasury stock reissued (0.5 shares)— — (11.1)— 11.1 — 0 
Common stock dividends ($1.08 per share)— — — (123.8)— — (123.8)
Balances, December 31, 2019154.5 $1.6 $1,150.1 $2,030.1 $(1,988.7)$(67.7)$1,125.4 
____________
(a)Primarily reflects the adoption of accounting standards as described in Note 2, “New Accounting Pronouncements.”
Amounts may not sum due to rounding.
See Notes to Condensed Consolidated Financial Statements.
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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 fintechfinancial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, mutual fundsasset and wealth managers and corporate issuers. OurBroadridge’s services include investor communications, securities processing, data and analytics, and customer communications securities processing, and data and analytics solutions. In short, we provide the infrastructure that helps the financial services industry operate. With over 50 years of experience, including 10 years as an independent public company, we provide financial services firms with advanced, dependable, scalable and cost-effective integrated systems. Our systems 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 and Global Technology and Operations. Broadridge serves a large and diverse client base across four4 client groups: banks/broker-dealers, asset management firms/mutual funds, wealth management firms, and corporate issuers. For capital markets firms, Broadridge helps clients lower costs and improve the effectiveness of their trade and account processing operations with support for their operational technologies, and their administration, finance, risk and compliance requirements. Broadridge serves asset management firms by meeting their critical needs for shareholder communications and by providing investment operations technology to support their investment decisions. For wealth management 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 communicationan integrated platform with tools that optimize advisor productivity, enhance client experience and digitize enterprise operations. For corporate issuer clients, Broadridge helps manage every aspect of their shareholder communications, including registered and beneficial proxy processing, annual meeting support, transfer agency services and financial disclosure document creation, management and United States of America (“U.S.”) Securities and Exchange Commission (the “SEC”) filing services.
The Company operates in 2 reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and Operations (“GTO”).
•Investor Communication Solutions—Broadridge provides governance and communications solutions through its Investor Communication Solutions business segment to the following financial services clients: banks/broker-dealers, asset management firms/mutual funds, wealth management firms and corporate issuers. In addition to financial services firms, Broadridge’s Customer Communications business also serves companies in the financial services, healthcare, insurance, consumer finance, telecommunications, utilities, retail banking and other service industries. The Broadridge Communications CloudSM, launched
A large portion of Broadridge’s ICS business involves the processing and distribution of proxy materials to investors in 2016, provides multi-channel communications delivery, communications management, information managementequity securities and control and administration capabilities that enable and enhance our clients’ communications with their customers. Broadridge processes and distributes 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.

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 topicsmutual funds, as well as customizable advisor websites, search enginethe facilitation of related vote processing. ProxyEdge® is Broadridge’s innovative electronic proxy delivery and voting solution for institutional investors and financial advisors that helps ensure the voting participation of the largest stockholders of many companies. Broadridge also provides the distribution of regulatory reports and corporate action/reorganization event information, as well as tax reporting solutions that help its clients meet their regulatory compliance needs.

For asset managers and retirement service providers, Broadridge offers data-driven solutions and an end-to-end platform for content management, composition, and multi-channel distribution of regulatory, marketing, and electronictransactional information. Broadridge’s data and print newsletters. Broadridge’s advisoranalytics solutions also help advisorsprovide investment product distribution data, analytical tools, insights, and research to enable asset managers to optimize their practice management through customerproduct distribution across retail and account data aggregation and reporting.

Broadridge’s mutual fund and retirement solutions are a full range of tools for mutual funds, exchange traded fundinstitutional channels globally. Through Matrix Financial Solutions, Inc. (“ETF”Matrix”) providers, and asset management firms. They include data-driven technology solutions for data management, analytics, investment accounting, marketing and customer communications. In addition,, Broadridge provides mutual fund trade processing services for retirement service providers, third partythird-party administrators, financial advisors, banks and wealth management professionals through its subsidiary, Matrix Financial Solutions, Inc. (“Matrix”).professionals.


In October 2017,addition, Broadridge acquired Summit Financial Disclosure, LLC (“Summit”). Summit isprovides public corporations and mutual funds with a full service financialsuite of solutions to help manage their annual meeting process, including registered and beneficial proxy distribution and processing services, proxy and annual report document management solutions, provider, includingvirtual shareholder meeting services and solutions that help them gain insight into their shareholder base through Broadridge’s shareholder data services. Broadridge also offers financial reporting document composition and regulatorymanagement solutions, SEC disclosure and filing services.services, and registrar, stock transfer and record-keeping services through Broadridge Corporate Issuer Solutions.




We provide customer communications solutions which include print and digital solutions, content management, postal optimization, and fulfillment services. These services include customer communications management capabilities through the Broadridge Communications CloudSM platform (the “Communications Cloud”). Through one point of integration, the Communications Cloud helps companies create, deliver, and manage multi-channel communications and customer engagement. The platform includes data-driven composition tools, identity and preference management, multi-channel optimization and digital communication experience, archive and information management, digital and print delivery, and analytics and reporting tools.
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•Global Technology and Operations—Broadridge is a leading global provider of securities processing solutions for capital markets, wealth management, and asset management firms. Broadridge offers a suite of advanced computerized real-time transaction processing servicessolutions 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 accounting. collateral optimization, compliance and regulatory reporting, and portfolio accounting and custody-related services.

Broadridge’s core post-trade 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. Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global tradingtrade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded derivative securities in establishedderivatives.

Broadridge’s comprehensive wealth management platform offers capabilities across the entire wealth management lifecycle and emerging markets. In addition,streamlines all aspects of wealth management services, including account management, fee management and client on-boarding. The wealth management platform enables full-service, regional and independent broker-dealers and investment advisors to better engage with customers through digital marketing and customer communications tools. Broadridge also integrates data, content and technology to drive new customer acquisition, support holistic advice and cross-sell opportunities through the creation of sales and educational content, including seminars as well as customizable advisor websites, search engine marketing and electronic and print newsletters.Broadridge’s advisor solutions help advisors optimize their practice management through customer and account data aggregation and reporting.

Broadridge offers buy-side technology solutions for the global investment management industry, including portfolio management, compliance and operational workflow solutions for hedge funds, family offices, investment managers and the providers that service this space.Through Broadridge’s Managed Services, solution supportsBroadridge provides business process outsourcing services that support the entire trade lifecycle operations of ourits buy- and sell-side clients’ businesses including their securities clearing, record-keeping,through a combination of its technology and custody-related functions.
operations expertise. Broadridge also provides support for advisor, investor and compliance workflow.
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”)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 methodsmethod 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 (the “2017 Annual Report”)2020 filed on August 10, 201711, 2020 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 31, 20172020 and June 30, 2017,2020, the results of its operations for the three and six months ended December 31, 20172020 and 2016, and2019, its cash flows for the six months ended December 31, 20172020 and 2016.2019, and its changes in stockholders’ equity for the three and six months ended December 31, 2020 and 2019. Certain prior period amounts have been reclassified to conform to the current year presentation where applicable.
InC. Securities. Securities are non-derivatives that are reflected in Other non-current assets in the first quarterCondensed Consolidated Balance Sheets, unless management intends to dispose of fiscal year 2018,the investment within twelve months of the end of the reporting period, in which case they are reflected in Other current assets in the Condensed Consolidated Balance Sheets. These investments are in entities over which the Company adopted ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting” (“ASU No. 2016-09”). 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 discussionan identical or similar investment of the impactsame issuer, such as subsequent capital raising transactions. Changes in the value of ASU No. 2016-09.
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 first quarter of fiscal year 2018, 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,” for a discussionfinancial condition and near-term prospects of the impactissuer.
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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. Subsequent Events. In preparing The use of estimates in specific accounting policies is described further in the accompanyingnotes to the Condensed Consolidated Financial Statements, the Company has reviewed events that have occurred after December 31, 2017 through the date of issuance of the Condensed Consolidated Financial Statements. During this period, the Company did not have any subsequent events for disclosure.as appropriate.
NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS

In the first quarter of fiscal year 2018, the Company adopted ASU No. 2016-09. ASU No. 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including presenting the excess 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 expense 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 for excess tax benefits in the Condensed Consolidated Financial Statements. The Company also elected to apply the change in presentation 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 adoption resulted in an increase to net cash provided by operating activities and a corresponding decrease to net cash provided by financing activities 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 theRecently Adopted 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.
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 is effective for the Company beginning in the first quarter of fiscal year 2019, 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.Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, “Leases” (“as subsequently amended by ASU No. 2016-02”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 (“ROU”) asset and corresponding lease obligation generally equal to the present value of the future lease payments over the lease term. Further, the income statement will reflect lease expense for leases classified as operating and amortization/interest expense for leases classified as financing, determined using classification criteria substantially similar to the current lease guidance for distinguishing between an operating and capital lease. ASU No. 2016-02, as amended, also contains certain additional qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand more about the nature of an entity’s leasing activities, including significant judgments and changes in judgments. ASU No. 2016-02, isas amended, was effective for the Company in the first quarter of fiscal year 2020 and will becould have been adopted onusing either a modified retrospective basis which will requirerequired 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.
Accordingly, in the first quarter of fiscal year 2020, the Company adopted ASU No. 2016-02, as amended, by recognizing a ROU asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption. Under this method of adoption, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. The Company elected the transition package of three practical expedients permitted under the transition guidance in ASU No. 2016-02, as amended, to not reassess prior conclusions related to whether (i) a contract contains a lease, (ii) the classification of an existing lease, and (iii) the accounting for initial direct costs. The Company also elected accounting policies to (i) not separate the non-lease components of a contract from the lease component to which they relate, and (ii) not recognize assets or liabilities for leases with a term of twelve months or less and no purchase option that the Company is currently evaluatingreasonably certain of exercising.
On the impactCondensed Consolidated Balance Sheet as of July 1, 2019, the pending adoption of ASU No. 2016-02, as amended, resulted in the recognition of lease liabilities of $252.0 million and ROU assets of $235.4 million, which include the impact of existing deferred rents and tenant improvement allowances for operating leases, as well as a cumulative-effect adjustment to the opening balance of retained earnings of $0.2 million. The adoption of ASU No. 2016-02, as amended, did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Statements of Earnings, the Condensed Consolidated Statements of Comprehensive Income, the Condensed Consolidated Statements of Cash Flows, or the Condensed Consolidated Statements of Stockholders’ Equity.
In January 2016,August 2018, the FASB issued ASU No. 2016-01, “Recognition2018-15, “Intangibles - Goodwill and Measurement of Financial Assets and Financial Liabilities”Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU No. 2016-01”2018-15”), which provides guidancealigns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the recognition, measurement, presentation, and disclosure of financial assets and liabilities. Underrequirements under GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software. 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 is2018-15 became effective for the Company beginning in the first quarter of fiscal year 2019. The2021. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance, infor which the Company elected to adopt ASU No. 2016-01 related to changes in fair value of publicly traded equity securities will be adopted by means of2018-15 on 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.prospective basis. The pending adoption of ASU No. 2016-01 is2018-15 did not expected to have a material impact on the Company’sCompany's Condensed Consolidated Financial Statements.

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In May 2014,June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses” (“ASU No. 2016-13”), which prescribes an impairment model for most financial instruments based on expected losses rather than incurred losses. Under this model, an estimate of expected credit losses over the contractual life of the instrument is to be recorded as of the end of a reporting period as an allowance to offset the amortized cost basis, resulting in a net presentation of the amount expected to be collected on the financial instrument. The expected credit loss model incorporates historical collection experience and other factors, including those related to current market conditions and events. The Company monitors trade receivable balances and other related assets, and estimates the allowance for lifetime expected credit losses. ASU No. 2016-13 became effective for the Company in the first quarter of fiscal year 2021. For most instruments, entities must apply the standard using a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of ASU No. 2016-13 did not have a material impact on the Company's Condensed Consolidated Financial Statements.
NOTE 3. REVENUE RECOGNITION
ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”), outlines a single comprehensive model to supersede nearly all existinguse in accounting for revenue recognition guidance under U.S. GAAP.arising from contracts with customers. The core principle of ASU No. 2014-09 is

that an entity recognizes revenue to recognize revenues whenreflect the transfer of promised goods or services are transferred 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 2 reportable segments as follows:
•Investor Communication Solutions—Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing and tabulation. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and the services are fulfilled in accordance with each Issuer’s and mutual fund’s requirements. Broadridge works directly with the Issuers and mutual funds to resolve any issues that may arise. As such, Issuers and mutual funds are viewed as the customer of the Company’s services. As a result, revenues for distribution services as well as proxy materials fulfillment services are recorded in Revenue on a gross basis with corresponding costs including amounts remitted to the broker-dealers and banks (referred to as “Nominees”) recorded in Cost of revenues. Fees for the Company’s investor communications services arrangements are typically billed and paid on a monthly basis following the delivery of the services. The Company also offers certain hosted service arrangements that can be priced on a fixed and/or variable basis for which revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client on a monthly basis based on the number of transactions processed or units delivered, in the case of variable priced arrangements, or a fixed monthly fee in the case of fixed price arrangements, in each case which coincides with the pattern of value transfer to the client. These services may be billed in a variety of payment frequencies depending on the specific arrangement.
•Global Technology and Operations—Revenues are generated primarily from fees for trade processing and related services. Revenue is recognized over time as the Company satisfies its performance obligation by delivering services to the client. The Company’s arrangements for processing and related services typically consist of an obligation to provide specific services to its clients on a when and if needed basis (a stand ready obligation) with revenue recognized from the satisfaction of the performance obligations on a monthly basis generally in the amount billable to the client. These services are generally provided under variable priced arrangements based on volume of service and can include minimum monthly usage fees. Client service agreements often include up-front consideration in addition to the recurring fee for trade processing. Up-front implementation fees, as well as certain enhancements to existing technology platforms, are deferred and recognized on a straight-line basis over the service term of the contract which corresponds to the timing of transfer of value to the client that commences after client acceptance when the processing term begins. In addition, revenue is also generated from the fulfillment of professional services engagements which are generally priced on a time and materials or fixed price basis, and are recognized as the services are provided to the client which corresponds to the timing of transfer of value to the client. Finally, the Company generally recognizes license revenues from software term licenses installed on clients’ premises upon delivery and acceptance of the software license, assuming a contract is deemed to exist. Software term license revenue is not a significant portion of the Company’s revenues.
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The Company uses the following methods, inputs, and assumptions in determining amounts of revenue to recognize:
Transaction Price
The Company allocates transaction price to the individual performance obligations within a contract. If the contracted prices reflect the relative standalone selling 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 received for those goodsone year or services. ASU No. 2014-09 defines a five-step process to achieve this core principleless.
Disaggregation of Revenue
The Company has presented below its revenue disaggregated by product line and in doing so, it is possible more judgmentby revenue type within each of its Investor Communication Solutions and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP including identifying performance obligationsGlobal Technology and Operations reportable segments.
Fee revenues in the contract, estimatingInvestor Communication Solutions segment are derived from both recurring and event-driven activity. In addition, the amountlevel of variable consideration to includerecurring 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 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 uncertaintylevels of event-driven fee revenues. Distribution revenues primarily include revenues related to the physical mailing and cash flows from contracts with customers. distribution of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Matrix administrative services.
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 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 firstsecond quarter of fiscal year 2019 for which2021, the Company planschanged its presentation of disaggregated revenue by product line disclosures to adopt ASU No. 2014-09 usingreflect internal realignment of the modified retrospective transition method with the cumulative effectCompany’s revenue reporting, specifically as it relates to recurring fee revenues. Presentation of initially applying ASU No. 2014-09 recognized at the date of initial application along with providing certain additionaldisaggregated revenue by product line 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 guidancein prior periods have been changed to conform to the principal versus agent provisionscurrent period presentation.
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Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)(In millions)
Investor Communication Solutions
Regulatory$146.9 $130.4 $283.3 $250.7 
Data-driven fund solutions89.4 81.8 171.6 160.4 
Issuer20.8 18.3 38.6 33.5 
Customer communications136.9 137.1 275.7 272.1 
       Total ICS Recurring fee revenues393.9 367.5 769.1 716.7 
Equity and other20.8 15.3 39.1 32.8 
Mutual funds24.4 15.7 51.6 38.3 
       Total ICS Event-driven fee revenues45.2 31.0 90.7 71.1 
Distribution revenues344.8 317.0 676.9 630.3 
       Total ICS Revenues$783.9 $715.6 $1,536.7 $1,418.2 
Global Technology and Operations
Capital markets$167.5 $162.1 $332.1 $310.3 
Wealth and investment management134.8 118.8 266.3 244.6 
       Total GTO Recurring fee revenues302.3 280.9 598.4 554.8 
Foreign currency exchange(31.2)(27.8)(62.7)(55.8)
       Total Revenues$1,054.9 $968.7 $2,072.3 $1,917.2 
Revenues by Type
Recurring fee revenues$696.2 $648.4 $1,367.5 $1,271.6 
Event-driven fee revenues45.2 31.0 90.7 71.1 
Distribution revenues344.8 317.0 676.9 630.3 
Foreign currency exchange(31.2)(27.8)(62.7)(55.8)
       Total Revenues$1,054.9 $968.7 $2,072.3 $1,917.2 
In April 2016, the FASB issued ASU No. 2016-10 “Identifying Performance ObligationsContract Balances
The following table provides information about contract assets and Licensing” (“ASU No. 2016-10”), which provides clarifying implementation guidance for applying ASU No. 2014-09 with respectliabilities:
December 31, 2020June 30, 2020
(In millions)
Contract assets$86.3 $81.9 
Contract liabilities$294.9 $286.6 

Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts 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,be collected under software term licenses and certain other matters.

Eachclient contracts. Contract liabilities represent consideration received or receivable from clients before the transfer 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 stillcontrol occurs (deferred revenue). Contract balances are reported in the process of evaluating the full impact of the pending adoption of ASU No. 2014-09 and related amendmentsa net contract asset or liability position 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, the Company expects to capitalize certain sales commissions, as well as capitalize 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 expensed. Additionally, the Company expects to recognize proxy revenue predominantlycontract-by-contract basis at the timeend of proxy distribution toeach reporting period.

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During the client’s shareholders rather than on the date of the client’s shareholder meeting, which is typically 30 days after the proxy distribution. Other expected changessix months ended December 31, 2020, contract liabilities increased due to the timing of revenue recognition include deferralclient payments vis-a-vis the timing of revenue from certain transaction processing platform enhancements as well as accelerationrecognized. The Company recognized $118.7 million of revenue from certain multi-year software license arrangementsduring the six months ended December 31, 2020 that are currently recognized overwas included in the termcontract liability balance as of the software subscription. While the annual impact of the new revenue guidance to the Company’s income statement could vary year to year, the annual income statement impact of the new revenue guidance is estimated to be less than 1% of the Company’s fiscal year 2017 revenues and approximately 2% of the Company’s fiscal year 2017 earnings before income taxes. Also, the Company currently estimates the cumulative impact to opening retained earnings of adopting the new revenue guidance will be less than $100 million, driven primarily by an increase in capitalized costs.June 30, 2020.

NOTE 3. EARNINGS PER SHARE4. 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 options ofless than 0.1 million options to purchase Broadridge common stock for the three months ended December 31, 2017,2020, and options of less than 0.1 million to purchase Broadridge common stock for the six months ended December 31, 2017,2020, as the effect of their inclusion would have been anti-dilutive.

The computation of diluted EPS excluded options of less than 0.1 million to purchase Broadridge common stock for the three months ended December 31, 2016,2019, and options of less than 0.1 million to purchase Broadridge common stock for the six months ended December 31, 2016,2019, 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,
2020201920202019
Weighted-average shares outstanding:
       Basic115.7 114.7 115.5 114.5 
       Common stock equivalents2.1 2.5 2.1 2.6 
       Diluted117.8 117.2 117.6 117.1 

 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
 2017 2016 2017 2016
Weighted-average shares outstanding:       
Basic116.6
 118.7
 116.5
 118.6
Common stock equivalents3.8
 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.
NOTE 4.5. INTEREST EXPENSE, NET
Interest expense, net consisted of the following:
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)
Interest expense on borrowings$(12.1)$(15.5)$(27.2)$(29.7)
Interest income1.0 1.6 1.6 2.7 
Interest expense, net$(11.1)$(13.9)$(25.6)$(27.0)
 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
 2017 2016 2017 2016
 (in millions)
Interest expense on borrowings$10.8
 $11.0
 $20.8
 $21.7
Interest income(0.6) (0.3) (1.2) (0.7)
Interest expense, net$10.2
 $10.6
 $19.6
 $21.0


NOTE 5. 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,
 2017 2016 2017 2016
 (in millions)
Losses from equity method investments$1.5
 $1.9
 $2.4
 $3.8
Foreign currency exchange (gain) loss—
 0.6
 (0.3) 2.9
Other non-operating (income) expenses, net$1.4
 $2.5
 $2.1
 $6.7


NOTE 6. 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 uponis 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 financial targets.


acquisitions on the Company’s operating results was not material for any acquisition individually or in the aggregate.
During the second quartersix months ended December 31, 2020, there were no acquisitions.
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Fiscal Year 2020 Acquisitions:

BUSINESS COMBINATIONS

Financial information on each transaction is as follows:


Shadow FinancialFi360Clear-StructureFunds-LibraryTotal
(In millions)
Cash payments, net of cash acquired$35.6 $116.0 $59.1 $69.6 $280.3 
Deferred payments, net3.0 3.5 2.1 0 8.6 
Contingent consideration liability0 0 7.0 0 7.0 
Aggregate purchase price$38.6 $119.5 $68.3 $69.6 $296.0 
Net tangible assets acquired / (liabilities assumed)$(0.1)$(7.9)$0.2 $(3.2)$(11.0)
Goodwill17.6 84.4 44.2 39.0 185.2 
Intangible assets21.1 43.1 23.9 33.8 121.8 
Aggregate purchase price$38.6 $119.5 $68.3 $69.6 $296.0 

Shadow Financial Systems, Inc. (“Shadow Financial”)
In October 2019, the Company acquired one businessShadow Financial, a provider of multi-asset class post-trade solutions for the capital markets industry. The acquisition built upon Broadridge’s post-trade processing capabilities by adding a market-ready solution for exchanges, inter-dealer brokers and proprietary trading firms. In addition, the acquisition has added capabilities across exchange traded derivatives and cryptocurrency. Shadow Financial is included in our GTO reportable segment.
•Goodwill is tax deductible.
•Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and five-year life, respectively.

Fi360, Inc. (“Fi360”)
In November 2019, the Investor Communication Solutions segment:Company acquired Fi360, a provider of fiduciary and Regulation Best Interest solutions for the wealth and retirement industry, including the accreditation and continuing education for the Accredited Investment Fiduciary® Designation, the leading designation focused on fiduciary responsibility. The acquisition has enhanced Broadridge’s retirement solutions by providing wealth and retirement advisors with fiduciary tools that complement its Matrix trust and trading platform. The acquisition has also further strengthened Broadridge’s data and analytics tools and solutions suite that enable asset managers to grow their businesses by providing greater transparency into the retirement market. Fi360 is included in our ICS reportable segment.

•Goodwill is not tax deductible.
Summit•Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and five-year life, respectively.


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ClearStructure Financial Technology, LLC (“ClearStructure”)
In October 2017,November 2019, the Company completed the acquisitionacquired ClearStructure, a global provider of Summit, a full service financial documentportfolio management solutions provider, including document compositionfor the private debt markets. ClearStructure’s component services has enhanced Broadridge’s existing multi-asset class, front-to-back office asset management technology suite, providing Broadridge clients with a capability to access the public and regulatory filing services. The aggregate purchase price was $30.6 millionprivate markets. ClearStructure is included 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 settled in the future, and a contingent consideration liability with an acquisition date fair value of $2.7 million. our GTO reportable segment.
•The contingent consideration liability is payable over the next three yearsthrough fiscal year 2023 upon the achievement by the acquired business of certain revenue targets, and earnings targets. The contingent consideration liability has a maximum potential pay-out of $11.0$12.5 million upon the achievement in full of the defined financial targets by the acquired business. Net tangible assets acquired in
•The fair value of the transaction were $0.6contingent consideration liability at December 31, 2020 is $7.0 million. This acquisition resulted in $18.1 million of
•Goodwill which is primarily tax deductible.
•Intangible assets acquired which totaled $12.0 million, consist primarily of customer relationships and software technology, and customer relationships, which are being amortized over a five-yearseven-year life and seven-yearfive-year life, respectively.

FundsLibrary Limited (“FundsLibrary”)
In February 2020, the Company acquired FundsLibrary, a provider of fund document and data dissemination in the European market. FundsLibrary's solutions enable fund managers to increase distribution opportunities and help them comply with regulations such as Solvency II and MiFID II. The business was combined with FundAssist, Broadridge's existing European funds regulatory communications business. The combination of FundsLibrary's data platform and technology with Broadridge's existing fund calculation, document creation and translation capabilities, creates an end-to-end solution for fund managers and distributors, enabling them to respond to demanding regulatory requirements across multiple jurisdictions. FundsLibrary is included in our ICS reportable segment.
•Goodwill is not tax deductible.
•Intangible assets acquired consist primarily of customer relationships and software technology, which are being amortized over a seven-year life and three-year life, respectively.
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, whichand is still subject to a working capital adjustment.
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 which 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 delivery of the new blockchain technology applications in February 2018.
NOTE 7. 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 1Quoted market prices in active markets for identical assets and liabilities.
Level 2Observable market-based inputs other than quoted prices in active markets for identical assets and liabilities.
Level 3
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.
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The following tables set forth the Company’s financial assets and liabilities at December 31, 20172020 and June 30, 2017,2020, respectively, that are measuredrecorded at fair value, on a recurring basis during the period, segregated by level within the fair value hierarchy:
December 31, 2020
Level 1Level 2Level 3Total
(In millions)
Assets:
Cash and cash equivalents:
       Money market funds (a)$75.0 $0 $0 $75.0 
Other current assets:
       Securities0.6 0 0 0.6 
Other non-current assets:
       Securities114.5 0 0 114.5 
Total assets as of December 31, 2020$190.1 $0 $0 $190.1 
Liabilities:
       Contingent consideration obligations0 0 17.8 17.8 
Total liabilities as of December 31, 2020$0 $0 $17.8 $17.8 

June 30, 2020
Level 1Level 2Level 3Total
(In millions)
Assets:
Cash and cash equivalents:
       Money market funds (a)$150.1 $0 $0 $150.1 
Other current assets:
       Securities0.5 0 0 0.5 
Other non-current assets:
       Securities102.0 0 0 102.0 
Total assets as of June 30, 2020$252.7 $0 $0 $252.7 
Liabilities:
       Contingent consideration obligations0 0 33.1 33.1 
Total liabilities as of June 30, 2020$0 $0 $33.1 $33.1 
_________
(a)Money market funds include money market deposit account balances of $75.0 million and $150.1 million as of December 31, 2020 and June 30, 2020, respectively.
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 Level 1 Level 2 Level 3 Total
 (in millions)
Assets:       
Cash and cash equivalents:       
Money market funds (1)$158.6
 $—
 $—
 $158.6
Other current assets:       
Available-for-sale securities0.1
 —
 —
 0.1
Other non-current assets:       
Available-for-sale securities63.1
 —
 1.1
 64.2
Total assets as of December 31, 2017$221.9
 $—
 $1.1
 $223.0
Liabilities:       
Contingent consideration obligations:—
 —
 11.3
 11.3
Total liabilities as of December 31, 2017$—
 $—
 $11.3
 $11.3
In addition, the Company has non-marketable securities with a carrying amount of $53.1 million and $33.3 million as of December 31, 2020 and June 30, 2020, respectively, that are classified as Level 2 financial assets and included as part of Other non-current assets on the Condensed Consolidated Balance Sheets.


 Level 1 Level 2 Level 3 Total
 (in millions)
Assets:       
Cash and cash equivalents:       
Money market funds (1)$37.9
 $—
 $—
 $37.9
Other current assets:       
Available-for-sale securities0.1
 —
 —
 0.1
Other non-current assets:       
Available-for-sale securities50.6
 —
 1.1
 51.7
Total assets as of June 30, 2017$88.6
 $—
 $1.1
 $89.8
Liabilities:       
Contingent consideration obligations:—
 —
 6.7
 6.7
Total liabilities as of June 30, 2017$—
 $—
 $6.7
 $6.7
_____________
(1)Money market funds include money market deposit account balances of $100.0 million and less than $0.1 million as of December 31, 2017 and June 30, 2017, respectively.
The following table sets forth an analysis of changes during the three and six months ended December 31, 20172020 and 2016,2019, respectively, in Level 3 financial liabilities of the Company:
Three Months Ended December 31,Six Months Ended December 31,
2020201920202019
 (In millions)
Beginning balance$23.7 $26.5 $33.1 $28.4 
Additional contingent consideration incurred0 7.0 — 7.0 
Net increase (decrease) in contingent consideration liability0 0 0 0 
Foreign currency impact on contingent consideration liability0 0.1 1.4 (0.3)
Payments(6.0)(0.6)(16.7)(2.1)
Ending balance$17.8 $33.0 $17.8 $33.0 
 December 31,
2017		 December 31,
2016
 (in millions)
Beginning balance$6.7
 $5.5
Additional contingent consideration incurred4.5
 0.9
Increase in contingent consideration liability—
 (0.4)
Foreign currency impact on contingent consideration liability0.2
 (0.2)
Payments—
 —
Ending balance$11.3
 $5.9

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 basedmodel-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. OTHER NON-CURRENT ASSETS
Other non-current assets consisted of the following:
December 31, 2020June 30, 2020
(In millions)
Deferred client conversion and start-up costs$572.6 $433.8 
ROU assets (a)255.9 292.6 
Long-term investments173.4 141.6 
Deferred sales commissions costs99.0 104.4 
Contract assets (b)86.3 81.9 
Long-term broker fees55.1 32.8 
Deferred data center costs (c)25.0 24.5 
Other26.7 30.2 
       Total$1,294.1 $1,141.9 
 December 31,
2017		 June 30,
2017
 (in millions)
Deferred client conversion and start-up costs$174.4
 $162.4
Deferred data center costs (a)37.9
 40.1
Long-term investments76.0
 63.4
Long-term broker fees23.6
 24.2
Other27.1
 26.4
Total$339.1
 $316.4
_________
(a) ROU assets represent the Company’s right to use an underlying asset for the lease term.
(b) Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts to be collected under software term licenses and certain other client contracts.
(c) Represents deferred data center costs associated with the Company’s information technology services agreements with International Business Machines Corporation (“IBM”). Please refer to Note 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 months ended December 31, 2020 and 2019, were $21.0 million and $18.9 million, respectively.
The total amount of deferred client conversion and start-up costs and deferred sales commission costs amortized in Operating expenses during the six months ended December 31, 2020 and 2019, were $39.7 million and $36.2 million, respectively.
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NOTE 9. PAYABLES AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
AccruedPayables and accrued expenses and other current liabilities consisted of the following:
December 31, 2020June 30, 2020
(In millions)
Accounts payable$131.6 $151.8 
Employee compensation and benefits231.4 260.4 
Accrued dividend payable66.5 62.2 
Managed services administration fees63.1 59.4 
Accrued broker fees57.4 109.5 
Customer deposits49.3 44.5 
Operating lease liabilities40.2 35.3 
Accrued taxes22.3 38.5 
Other57.2 68.6 
     Total$719.0 $829.9 
 December 31,
2017		 June 30,
2017
 (in millions)
Employee compensation and benefits$152.2
 $221.2
Accrued broker fees50.7
 79.5
Accrued taxes39.5
 80.2
Accrued dividend payable42.6
 37.9
Customer deposits45.1
 39.5
Other42.3
 37.1
Total$372.5
 $495.3



NOTE 10. BORROWINGS
Outstanding borrowings and available capacity under the Company’s borrowing arrangements were as follows:
Expiration
Date		Principal amount outstanding at December 31, 2020Carrying value at December 31, 2020Carrying value at June 30, 2020Unused
Available
Capacity		Fair Value at December 31, 2020
(In millions)
Current portion of long-term debt
       Fiscal 2014 Senior Notes (a)September 2020$0 $0 $399.9 $— $0 
            Total$0 $0 $399.9 $— $0 
Long-term debt, excluding current portion
Fiscal 2019 Revolving Credit Facility:
       U.S. dollar trancheMarch 2024$395.0 $395.0 $0 $705.0 $395.0 
       Multicurrency trancheMarch 2024137.1 137.1 149.8 262.9 137.1 
             Total Revolving Credit Facility532.1 532.1 149.8 967.9 532.1 
Fiscal 2016 Senior NotesJune 2026500.0 496.4 496.1 — 564.3 
Fiscal 2020 Senior NotesDecember 2029750.0 742.1 741.7 — 826.8 
             Total Senior Notes1,250.0 1,238.5 1,237.8 — 1,391.1 
             Total long-term debt$1,782.1 $1,770.6 $1,387.6 $967.9 $1,923.2 
             Total debt$1,782.1 $1,770.6 $1,787.5 $967.9 $1,923.2 
 
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)  
            
Long-term debt           
Fiscal 2017 Revolving Credit FacilityFebruary 2022 $330.0
 $330.0
 $210.0
 $670.0
 $330.0
Fiscal 2014 Senior NotesSeptember 2020 400.0
 398.2
 397.9
 —
 414.2
Fiscal 2016 Senior NotesJune 2026 500.0
 494.5
 494.1
 —
 496.1
Total debt  $1,230.0
 $1,222.7
 $1,102.1
 $670.0
 $1,240.2
_________
(a) On September 1, 2020, the Company repaid in full the $400.0 million in Fiscal 2014 Senior Notes that were outstanding at their maturity date.
Future principal payments on the Company’s outstanding debt are as follows:
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Years ending June 30, 2018 2019 2020 2021 2022 Thereafter TotalYears ending June 30,20212022202320242025ThereafterTotal
(in millions) $—
 $—
 $—
 $400.0
 $330.0
 $500.0
 $1,230.0
(In millions)(In millions)$0 $0 $0 $532.1 $0 $1,250.0 $1,782.1 


Fiscal 20172019 Revolving Credit Facility: On February 6, 2017,March 18, 2019, the Company entered into an amended and restated $1.0$1.5 billion five-yearfive-year revolving credit facility (the “Fiscal 20172019 Revolving Credit Facility”), which replaced the $750.0 million five-year$1.0 billion five-year revolving credit facility entered into during August 2014February 2017 (the “Fiscal 20152017 Revolving Credit Facility”) (together the “Revolving Credit Facilities”). The Fiscal 20172019 Revolving Credit Facility is comprised of a $900.0 million$1.1 billion U.S. dollar tranche and a $100.0$400.0 million multicurrency tranche. At December 31, 2017, the Company had $330.0 million in outstanding borrowings and had unused available capacity of $670.0 million under the Fiscal 2017 Revolving Credit Facility.

The weighted-average interest rate on the Revolving Credit Facilities was 2.25%1.21% and 2.23%1.22% for the three and six months ended December 31, 2017,2020, respectively, and 1.52%2.80% and 1.51%2.95% for the three and six months ended December 31, 2016,2019, respectively. The fair value of the variable-rate Fiscal 20172019 Revolving Credit Facility borrowings at December 31, 20172020 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

Borrowings under the Fiscal 20172019 Revolving Credit Facility can be made in tranches up to 360 days and bear interest at LIBOR plus 100101.5 basis points. In addition, the Fiscal 20172019 Revolving Credit Facility has an annual facility fee equal to 12.511.0 basis points on the entire facility, similar to the previous Fiscal 2015 Revolving Credit Facility. The annual facility fees for the Revolving Credit Facilities totaled $0.3 million and $0.6 million for the three and six months ended December 31, 2017, respectively, and $0.2 million and $0.5 million for the three and six months ended December 31, 2016, respectively. The Company incurred $1.8 million in costs to establish the Fiscal 2017 Revolving Credit Facility. As of December 31, 2017, $2.4 million of these costs 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). 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 Company may voluntarily prepay, in whole or in part and without premium or penalty, borrowings under the Fiscal 20172019 Revolving Credit Facility in accordance with individual drawn loan maturities. The Fiscal 20172019 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At December 31, 2017,2020, the Company is in compliance with all covenants of the Fiscal 20172019 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”). TheOn September 1, 2020, the Company repaid in full the $400.0 million in Fiscal 2014 Senior Notes will mature on September 1, 2020 and bear interestthat were outstanding 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 totheir 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 31, 2017, the Company is in compliance with the covenants of the indenturedate.

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 31, 2017 and June 30, 2017, $1.6 million and $1.9 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 31, 2017 and June 30, 2017 was $414.2 million and $419.1 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
Fiscal 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 31, 2017,2020, 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 31, 2017 and June 30, 2017, $3.7 million and $4.0 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 31, 20172020 and June 30, 20172020 was $496.1$564.3 million and $494.6$554.3 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
Fiscal 2020 Senior Notes: In December 2019, the Company completed an offering of $750.0 million in aggregate principal amount of senior notes (the “Fiscal 2020 Senior Notes”). The Fiscal 2020 Senior Notes will mature on December 1, 2029 and bear interest at a rate of 2.90% per annum. Interest on the Fiscal 2020 Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Fiscal 2020 Senior Notes were issued at a price of 99.717% (effective yield to maturity of 2.933%). The indenture governing the Fiscal 2020 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At December 31, 2020, the Company is in compliance with the covenants of the indenture governing the Fiscal 2020 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2020 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2020 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2020 Senior Notes at December 31, 2020 and June 30, 2020 was $826.8 million and $803.6 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).
The Fiscal 20172019 Revolving Credit Facility, Fiscal 20142016 Senior Notes and Fiscal 20162020 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 31, 20172020 and June 30, 2017,2020, there were no0 outstanding borrowings under these lines of credit.
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Table of Contents
NOTE 11. OTHER NON-CURRENT LIABILITIES
Other non-current liabilities consisted of the following:
December 31, 2020June 30, 2020
(In millions)
Operating lease liabilities$257.9 $288.3 
Post-employment retirement obligations155.8 144.3 
Non-current income taxes38.9 37.4 
Acquisition related contingencies11.9 17.6 
Other34.6 24.8 
       Total$499.1 $512.4 

The Company sponsors a Supplemental Officer Retirement Plan (the “Broadridge SORP”). The Broadridge SORP is a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key officers upon retirement based upon the officers’ years of service and compensation. The Broadridge SORP was closed to new participants beginning in fiscal year 2015. The Company also sponsors a Supplemental Executive Retirement Plan (the “Broadridge SERP”). The Broadridge SERP is also a nonqualified ERISA defined benefit plan pursuant to which the Company will pay supplemental pension benefits to certain key executives upon retirement based upon the executives’ years of service and compensation. The Broadridge SERP was closed to new participants beginning in fiscal year 2015.
The SORP and SERP are effectively funded with assets held in a Rabbi Trust. The assets invested in the Rabbi Trust are to be used in part to fund benefit payments to participants under the terms of the plans. The Rabbi Trust is irrevocable and no portion of the trust funds may be used for any purpose other than the delivery of those assets to the participants, except that assets held in the Rabbi Trust would be subject to the claims of the Company’s general creditors in the event of bankruptcy or insolvency of the Company. The Broadridge SORP and SERP are nonqualified plans for federal tax purposes and for purposes of Title I of ERISA. The Rabbi Trust assets had a value of $60.0 million at December 31, 2020 and $54.5 million at June 30, 2020 and are included in Other non-current assets in the accompanying Condensed Consolidated Balance Sheets.The SORP and the SERP had a total benefit obligation of $61.2 million at December 31, 2020 and $59.8 million at June 30, 2020 and are included in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.
NOTE 11.12. STOCK-BASED COMPENSATION
The activity related to the Company’s incentive equity awards for the three months ended December 31, 20172020 consisted of the following:
Stock OptionsTime-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, 20174,978,391
 $39.97
 1,040,265
 $56.30
 402,966
 $61.52
Balances at September 30, 2020Balances at September 30, 20203,189,557 $78.73 728,944 $112.56 246,345 $124.24 
Granted62,028
 85.80
 432,235
 78.01
 174,669
 77.14
Granted24,501 146.60 304,988 129.79 83,731 128.32 
Exercise of stock options (a)(97,529) 26.19
 —
 —
 —
 —
Exercise of stock options (a)(157,196)41.56 — — — — 
Vesting of restricted stock units—
 —
 (2,680) 53.83
 —
 —
Vesting of restricted stock units— — (1,604)124.08 — — 
Expired/forfeited—
 —
 (8,673) 64.41
 (2,988) 62.36
Expired/forfeited(15,791)104.96 (11,324)119.83 (649)119.61 
Balances at December 31, 2017 (b), (c)4,942,890
 $40.82
 1,461,147
 $62.68
 574,647
 $66.27
Balances at December 31, 2020 (b),(c)Balances at December 31, 2020 (b),(c)3,041,071 $81.06 1,021,004 $117.61 329,427 $125.29 
____________
(a)Stock options exercised during the period of October 1, 2017 through December 31, 2017 had an aggregate intrinsic value of $6.1 million.

(a)Stock options exercised during the period of October 1, 2020 through December 31, 2020 had an aggregate intrinsic value of $16.5 million.

(b)As of December 31, 2020, the Company’s outstanding vested and currently exercisable stock options using the December 31, 2020 closing stock price of $153.20 (approximately 1.4 million shares) had an aggregate intrinsic value of $131.3 million with a weighted-average exercise price of $60.70 and a weighted-average remaining contractual life of 4.9 years.
(b)
As of December 31, 2017, the Company’s outstanding vested and currently exercisable stock options using the December 31, 2017 closing stock price of $90.58 (approximately 2.6 million shares) had an aggregate intrinsic value of $151.2 million with a weighted-average exercise price of $32.67 and a weighted-average remaining contractual life of 5.2 years. The total of all stock options outstanding as of December 31, 2017 have a weighted-average remaining contractual life of 6.2 years.
23
The total of all stock options outstanding as of December 31, 2020 have a weighted-average remaining contractual life of 6.4 years.
(c)As of December 31, 2020, time-based restricted stock units and performance-based restricted stock units expected to vest using the December 31, 2020 closing stock price of $153.20 (approximately 1.0 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $148.0 million and $47.7 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.

(c)
As of December 31, 2017, time-based restricted stock units and performance-based restricted stock units expected to vest using the December 31, 2017 closing stock price of $90.58 (approximately 1.4 million and 0.6 million shares, respectively) had an aggregate intrinsic value of $124.8 million and $49.9 million, respectively.
The activity related to the Company’s incentive equity awards for the six months ended December 31, 20172020 consisted of the following:
Stock OptionsTime-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, 20175,137,641
 $39.63
 1,074,593
 $55.98
 470,862
 $58.26
Balances at June 30, 2020Balances at June 30, 20203,770,787 $74.97 699,998 $111.37 251,596 $122.11 
Granted62,028
 85.80
 440,699
 77.92
 174,669
 77.14
Granted24,501 146.60 350,091 130.27 107,695 126.82 
Exercise of stock options (a)(184,137) 24.04
 —
 —
 —
 —
Exercise of stock options (a)(631,552)43.16 — — — — 
Vesting of restricted stock units—
 —
 (3,518) 53.51
 (15,033) 54.36
Vesting of restricted stock units— — (2,507)123.63 (11,837)75.82 
Expired/forfeited(72,642) 37.65
 (50,627) 53.89
 (55,851) 35.99
Expired/forfeited(122,665)102.13 (26,578)119.59 (18,027)122.53 
Balances at December 31, 20174,942,890
 $40.82
 1,461,147
 $62.68
 574,647
 $66.27
Balances at December 31, 2020 (b),(c)Balances at December 31, 2020 (b),(c)3,041,071 $81.06 1,021,004 $117.61 329,427 $125.29 
____________
(a)Stock options exercised during the period of July 1, 2017 through December 31, 2017 had an aggregate intrinsic value of $10.9 million.

(a)Stock options exercised during the period of July 1, 2020 through December 31, 2020 had an aggregate intrinsic value of $59.7 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$18.3 million and $14.0$18.5 million, as well as related expected tax benefits of $4.4$4.1 million and $4.9$4.0 million were recognized for the three months ended December 31, 20172020 and 2016,2019, respectively. Stock-based compensation expense of $24.7$28.7 million and $22.8$30.3 million, as well as related expected tax benefits of $7.3$6.3 million and $8.1$6.6 million were recognized for the six months ended December 31, 20172020 and 2016,2019, respectively.
As of December 31, 2017,2020, the total remaining unrecognized compensation cost related to non-vested stock options and restricted stock unit awards amounted to $5.6$8.6 million and $63.5$72.5 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 2.11.6 years and 1.8 years, respectively.
For stock options issued,granted, the fair value of each stock option was estimated on the date of grant using a binomial option pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical volatility of the Company’s stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.
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Table of Contents
NOTE 12.13. INCOME TAXES
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)
Provision for income taxes$13.1 $0.4 $20.9 $8.3 
Effective tax rate18.9 %3.8 %14.6 %11.2 %
Excess tax benefits$3.6 $2.2 $12.8 $7.9 

The provision for income taxes forincrease in the three and six months ended December 31, 2017 was $41.4 million and $65.8 million compared to $15.6 million and $33.4 million for the three and six months ended December 31, 2016, respectively.
The effective tax rate for the three and six months ended December 31, 20172020 was 40.0% and 37.0% compareddriven by the reduced impact of discrete tax items relative to 34.1% and 34.4% for the three and six months ended December 31, 2016. The increasepre-tax income in the effective tax rate for the three and six

months ended December 31, 2017,current year period compared to the comparable prior year period is primarily attributable to the Tax Cuts and Jobs Act (the “Tax Act”), which was enacted into law on December 22, 2017.period.

One of the primary provisions in the Tax Act is a reduction of the 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%.
In addition, the Tax Act requires companies to pay a 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 is 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 Company’s best estimates of the expected impacts of the Tax Act. The ultimate impact 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.
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 providesprovided certain aspects of the Company’s information technology infrastructure. Under the IT Services Agreement, IBM providesprovided 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. In2022, but a two-year extension was signed in March 2015, amending the expiration date to June 30, 2024. In December 2019, the Company signed a two-year extension toand IBM amended and restated the IT Services Agreement (the “Amended IT Services Agreement”), which now expires on June 30, 2024.2027. The Company has the right tooption of incorporating additional services into the Amended IT Services Agreement over time. The Company may renew the term of the Amended IT Services Agreement for up to one1 additional 12-month term. Commitmentsperiod. Fixed minimum commitments remaining under this agreementthe Amended IT Services Agreement at December 31, 20172020 are $361.8$219.8 million through fiscal year 2024,2027, the final year of the Amended IT Services Agreement.
In December 2019, the Company and IBM entered into an information technology agreement for private cloud services (the “IBM Private Cloud Agreement”) under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks. The IBM Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030. As a result of the IBM Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and that such transferred employees are expected to continue providing services to the Company on behalf of IBM under the IBM Private Cloud Agreement. Pursuant to the IBM Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM. The transfer of the Hardware to IBM closed on September 30, 2020 for a selling price of $18.0 million. Fixed minimum commitments remaining under the IBM Private Cloud Agreement at December 31, 2020 are $220.9 million through March 31, 2030, the final year of the contract.
In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia. The EU IT Services Agreement expireswould have expired in October 2023. In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premise solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”). The Company has the right to renew the initial term of the Amended EU IT Services Agreement for up to one1 additional 12-month termperiod or one1 additional 24-month term. Commitmentsperiod. Fixed minimum commitments remaining under this agreementthe Amended EU IT Services Agreement at December 31, 20172020 are $29.0$27.2 million through fiscal year 2024,2029, the final year of the contract.

25
Table of Contents
Equity Method Investment

Investments
The Company contributed $2.8 million tohas an equity method investment duringthat is a variable interest in a variable interest entity, the six months endedCompany is not the primary beneficiary and therefore does not consolidate the investee. The Company’s potential maximum loss exposure related to this unconsolidated investment totaled $19.7 million as of December 31, 2017,2020, which represents the carrying value of the Company's investment and is recorded in Other non-current assets in the Company’s Condensed Consolidated Balance Sheets. In addition, as of December 31, 2020, the Company has a remainingfuture commitment of $2.5 million to fund this investment atinvestee for up to an additional $14.0 million if certain future funding milestones are met. Additional funding provided by the Company to the investee as a result of meeting the future funding milestones would increase the Company’s corresponding potential maximum loss exposure by that amount.
In addition, as of December 31, 2017.

Purchase of Intellectual Property

As discussed in Note 6, “Acquisitions,”2020, the Company expectsalso has a future commitment to pay $40.0fund $2.7 million to an affiliateone of Inveshare in February 2018 upon delivery of certain new blockchain technology applications.the Company’s other investees.
Software License Agreements
The Company has incurred the following expenses under software license agreements:

Three Months Ended
December 31,		Six Months Ended
December 31,
2020201920202019
(In millions)
Software License Agreements$20.1 $11.3 $38.3 $22.2 

Other
In the normal course of business, the Company is subject to various claims and litigation. While the outcome of any claim or litigation is inherently unpredictable, the Company believes that the ultimate resolution of these matters will not, individually or in the aggregate, result in a material impact on its financial condition, results of operations or cash flows.

It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations, and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company may use derivative financial instruments as risk management tools and not for trading purposes. The Company was not a party to any derivative financial instruments at December 31, 20172020 or at June 30, 2017.2020.
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.

OurThe Company’s business process outsourcing and mutual fund processing services are performed by Broadridge Business Process Outsourcing, LLC (“BBPO”), a wholly-ownedan indirect subsidiary, which is a broker-dealer registered with the Securities and Exchange CommissionSEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Although BBPO’s FINRA membership agreement allows it to engage in clearing and the retailing of corporate securities in addition to mutual fund retailing on a wire order basis, BBPO does not clear customer transactions, process any retail business or carry customer accounts. As a registered broker-dealer and member of FINRA, BBPO is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended, (“Rule 15c3-1”), which requires BBPO to maintain a minimum amount of net capital.capital amount. At December 31, 2017,2020, 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 to maintain a minimum amount of net capital.capital amount. At December 31, 2017,2020, BBPO was in compliance with this net capital requirement.

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Table of Contents
In addition, Matrix Trust Company, a wholly-owned indirect subsidiary of the Company, is a Colorado State non-depository trust company and National Securities Clearing Corporation trust member, whose primary business is to provide cash agent, custodial and directed or non-discretionary trusttrustee services to institutional customers.customers, and investment management services to collective trust funds. As a result, Matrix Trust Company is subject to various regulatory capital requirements administered by the Colorado Division of Banking and the Arizona Department of Financial Institutions, as well as the National Securities Clearing Corporation. Specific capital requirements that involve quantitative measures of assets, liabilities, and certain off-balance sheet items, when applicable, must be met. At December 31, 2017,2020, 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 months ended December 31, 2017,2020, and 2016,2019, respectively:

Foreign
Currency
Translation		Pension
and Post-
Retirement
Liabilities		Total
(In millions)
Balances at September 30, 2020$(47.7)$(15.1)$(62.9)
Other comprehensive income/(loss) before reclassifications5.2 0 5.2 
Amounts reclassified from accumulated other comprehensive income/(loss)0 0.6 0.6 
Balances at December 31, 2020$(42.6)$(14.5)$(57.1)

Foreign
Currency
Translation		Pension
and Post-
Retirement
Liabilities		Total
(In millions)
Balances at September 30, 2019$(66.9)$(12.6)$(79.5)
Other comprehensive income/(loss) before reclassifications11.4 0 11.4 
Amounts reclassified from accumulated other comprehensive income/(loss)0 0.4 0.4 
Balances at December 31, 2019$(55.5)$(12.2)$(67.7)


Foreign
Currency
Translation		Pension
and Post-
Retirement
Liabilities		Total
(In millions)
Balances at June 30, 2020$(84.7)$(15.7)$(100.4)
Other comprehensive income/(loss) before reclassifications42.1 0 42.1 
Amounts reclassified from accumulated other comprehensive income/(loss)0 1.2 1.2 
Balances at December 31, 2020$(42.6)$(14.5)$(57.1)

Foreign
Currency
Translation		Pension
and Post-
Retirement
Liabilities		Total
(In millions)
Balances at June 30, 2019$(58.3)$(12.9)$(71.2)
Other comprehensive income/(loss) before reclassifications2.8 0 2.8 
Amounts reclassified from accumulated other comprehensive income/(loss)0 0.7 0.7 
Balances at December 31, 2019$(55.5)$(12.2)$(67.7)

27
 
Foreign
Currency
Translation
 
Available-
for-Sale
Securities
 
Pension
and Post-
Retirement
Liabilities
 Total
 (in millions)
Balances at October 1, 2017$(30.6) $2.6
 $(9.0) $(37.1)
Other comprehensive income/(loss) before reclassifications(2.4) 0.8
 —
 (1.6)
Amounts reclassified from accumulated other comprehensive income/(loss)—
 —
 0.2
 0.2
Balances at December 31, 2017$(33.0) $3.3
 $(8.8) $(38.4)


Table of Contents
 
Foreign
Currency
Translation
 
Available-
for-Sale
Securities
 
Pension
and Post-
Retirement
Liabilities
 Total
 (in millions)
Balances at October 1, 2016$(43.2) $1.7
 $(7.5) $(48.9)
Other comprehensive income/(loss) before reclassifications(12.0) (0.2) —
 (12.2)
Amounts reclassified from accumulated other comprehensive income/(loss)—
 —
 0.1
 0.1
Balances at December 31, 2016$(55.1) $1.5
 $(7.3) $(60.9)

 
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) $(55.8)
Other comprehensive income/(loss) before reclassifications15.9
 1.1
 —
 17.0
Amounts reclassified from accumulated other comprehensive income/(loss)—
 —
 0.4
 0.4
Balances at December 31, 2017$(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)

NOTE 15.16. INTERIM FINANCIAL DATA BY SEGMENT
The Company operates in two2 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
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)
Investor Communication Solutions$783.9 $715.6 $1,536.7 $1,418.2 
Global Technology and Operations302.3 280.9 598.4 554.8 
Foreign currency exchange(31.2)(27.8)(62.7)(55.8)
       Total$1,054.9 $968.7 $2,072.3 $1,917.2 

Earnings (Loss) before Income
Taxes
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)
Investor Communication Solutions$42.2 $22.1 $95.0 $45.1 
Global Technology and Operations55.0 49.0 130.3 105.5 
Other(31.9)(68.1)(92.4)(89.3)
Foreign currency exchange4.1 7.5 10.0 13.0 
       Total$69.4 $10.5 $143.0 $74.3 

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Revenues

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

2017
2016 2017 2016

(in millions)
Investor Communication Solutions$802.2

$704.4
 $1,528.6
 $1,422.4
Global Technology and Operations228.0

207.0
 442.9
 400.2
Foreign currency exchange(17.4)
(18.8) (33.9) (34.6)
Total$1,012.8

$892.6
 $1,937.6
 $1,787.9

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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 Operations50.6

44.2
 95.7
 80.6
Other(26.5)
(20.8) (48.0) (43.6)
Foreign currency exchange7.0

2.0
 12.1
 5.2
Total$103.5

$45.7
 $177.8
 $97.2



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 StatementsOverview
This Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaningBroadridge, a Delaware corporation and a part 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 material breach of Broadridge security affecting its clients’ customer information;
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 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 (the “2017 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 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
BroadridgeS&P 500® Index, is a global fintechfinancial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, mutual fundsasset and wealth managers and corporate issuers. Our services include investor and customer communications, securities processing, and data and analytics solutions. In short, we provide the infrastructure that helps the financial services industry operate. 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 and an important infrastructure that powers the financial services industry. Our systemssolutions enable better financial lives by powering investing, governance and communications and help reduce the need for our 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 Solutionsservices include investor communications, securities processing, data and Global Technologyanalytics, and Operations.customer communications solutions. We serve a large and diverse client base across four client groups: capital markets,banks/broker-dealers, asset management firms/mutual funds, wealth management firms, and corporations.
corporate issuers. 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-their operational technologies, and back-office operations,their administration, finance, risk and compliance. Forcompliance requirements. We serve asset management firms weby meeting their critical needs for shareholder communications 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,clients, we provide advisorsan integrated platform with tools to create a better investorthat optimize advisor productivity, enhance client experience, while also delivering them a more streamlined, efficient, and effective process. Wedigitize enterprise operations. For our corporate issuer clients, we help corporations manage every aspect of their shareholder communications-fromcommunications, including 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 billsservices and statements into engaging, personalized experiences.financial disclosure document creation, management and SEC filing services.
We operate our business in two reportable segments: Investor Communication Solutions and Global Technology and Operations.

Investor Communication Solutions
We offer Bank/Broker-Dealerprovide governance and communications solutions through our Investor Communication Solutions business segment to the following financial services clients: banks/broker-dealers, asset management firms/mutual funds, wealth management firms and corporate issuers. In addition to financial services firms, our Customer Communication Solutions, Corporate Issuer Solutions, Advisor SolutionsCommunications business also serves companies in the healthcare, insurance, consumer finance, telecommunications, utilities and Mutual Fund and Retirement Solutions through this segment. other service industries.
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® is our innovative electronic proxy delivery and voting solution for institutional investors and financial advisors that helps ensure the voting participation of the largest stockholders of many companies. 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 communicationsFor asset managers and retirement service providers, we offer data-driven 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,an end-to-end platform for content management, postal optimization,composition, and fulfillment. The NACC business is partmulti-channel distribution 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-basedregulatory, marketing, and customer communication tools.transactional information. Our marketing ecosystem integrates data content and technologyanalytics solutions provide investment product distribution data, analytical tools, insights, and research to drive new client acquisitionenable asset managers to optimize product distribution across retail 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 and retirement solutions are a full range of tools for mutual funds, exchange traded fundinstitutional channels globally. Through Matrix Financial Solutions, Inc. (“ETF”Matrix”) providers, and asset management firms. They include data-driven technology solutions for data management, analytics, investment accounting, marketing and customer communications. In addition,, we provide mutual fund trade processing services for retirement service providers, third partythird-party administrators, financial advisors, banks and wealth management professionalsprofessionals.
In addition, we provide public corporations and mutual funds with a full suite of solutions to help manage their annual meeting process, including registered and beneficial proxy distribution and processing services, proxy and annual report document management solutions, virtual shareholder meeting services, and solutions that help them gain insight into their shareholder base through our subsidiary, Matrix Financial Solutions, Inc. (“Matrix”shareholder data services. We also offer financial reporting document composition and management solutions, SEC disclosure and filing services, and registrar, stock transfer and record-keeping services through Broadridge Corporate Issuer Solutions.
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We provide customer communications solutions which include print and digital solutions, content management, postal optimization, and fulfillment services. These services include customer communications management capabilities through the Broadridge Communications CloudSM platform (the “Communications Cloud”). Through one point of integration, the Communications Cloud helps companies create, deliver, and manage multi-channel communications and customer engagement. The platform includes data-driven composition tools, identity and preference management, multi-channel optimization and digital communication experience, archive and information management, digital and print delivery, and analytics and reporting tools.



Global Technology and Operations
We are thea leading middle- and back-officeglobal provider of securities processing platformsolutions for North Americancapital markets, wealth management, and global broker-dealers.asset management firms. We offer a suite of advanced computerized real-time transaction processing servicessolutions 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 accounting. collateral optimization, compliance and regulatory reporting, and portfolio accounting and custody-related services.
Our core post-trade 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, our platform is a global market solution, clearingOur multi-asset, multi-market, multi-entity and settling in over 80 countries. Our multi-currency solutions support real-time global tradingtrade processing of equity, fixed income, mutual fund, foreign exchange, and exchange traded derivative securities in establishedderivatives.
Our comprehensive wealth management platform offers capabilities across the entire wealth management lifecycle and emerging markets.
streamlines all aspects of wealth management services, including account management, fee management and client on-boarding. The wealth management platform enables full-service, regional and independent broker-dealers and investment advisors to better engage with customers through digital marketing and customer communications tools. We also integrate data, content and technology to drive new customer acquisition, support holistic advice and cross-sell opportunities through the creation of sales and educational content, including seminars as well as customizable advisor websites, search engine marketing and electronic and print newsletters. Our advisor solutions help advisors optimize their practice management through customer and account data aggregation and reporting.
We offer buy-side technology solutions for the global investment management industry, including portfolio management, compliance and operational workflow solutions for hedge funds, family offices, investment managers and the providers that service this space. Through our Managed Services, we provide business process outsourcing services that are known as our Managed Services solution. These services support the entire trade lifecycle operations of our buy- and sell-side clients’ businesses including their securities clearing, record-keeping,through a combination of our technology and custody-related functions. Our clients executeour operations expertise. We also provide support for advisor, investor and clear their securities transactions and engage us to perform a number of related administrative back-office functions, such as record-keeping and reconciliations. In this capacity, we are not the broker-dealer of record.compliance workflow.

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 methodsmethod 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, 20172020 in the 20172020 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2017.Report.
In the first quarter of fiscal year 2018,Effective July 1, 2019, the Company adopted Financial Accounting Standards Board (”FASB”(the “FASB”) Accounting Standards Update (“ASU”) No. 2016-09, “Improvements2016-02, “Leases” and its related amendments (collectively referred to Employee Share-Based Payment Accounting”. Please referas “ASU 2016-02, as amended”) by recognizing a right-of-use (“ROU”) asset and corresponding lease liability, along with a cumulative-effect adjustment to the opening balance of retained earnings, in the period of adoption. Under this method of adoption, the Company has not restated the prior period Condensed Consolidated Financial Statements presented to the current period presentation. Additional information about the impact of the Company's adoption of ASU No. 2016-02, as amended is included in Note 2, “New Accounting Pronouncements” to ourthe Condensed Consolidated Financial Statements under Item 1.Statements.
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Table of Part I of this Quarterly Report on Form 10-Q, for a discussion of the impact of new accounting pronouncements.Contents
Effective the beginning of fiscal year 2018, the Company adopted ASU No 2015-17, “Balance Sheet Classification of Deferred Taxes.” Please refer to Note 2, “New Accounting Pronouncements” to our Financial Statements under Item 1. of Part I of this Quarterly Report on Form 10-Q, for a discussion of the impact of new accounting pronouncements.
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 20172020 Annual ReportReport.
KEY PERFORMANCE INDICATORS
Management focuses on a variety of key indicators to plan, measure and evaluate the Company’s business and financial performance. These performance indicators include Revenue and Recurring fee revenue as well as not generally accepted accounting principles measures (“Non-GAAP”) of Adjusted Operating income, Adjusted Net earnings, Adjusted earnings per share, Free Cash flow, and Closed sales. In addition, management focuses on select operating metrics specific to Broadridge of Record Growth and Internal Trade Growth, as defined below.
Refer to the section “Explanation and Reconciliation of the Company’s Use of Non-GAAP Financial Measures” for a reconciliation of Adjusted Operating income, Adjusted Net earnings, Adjusted earnings per share, and Free Cash flow to the most directly comparable GAAP measures, and an explanation for why these Non-GAAP metrics provide useful information to investors and how management uses these Non-GAAP metrics for operational and financial decision-making. Refer to the section “Results of Operations” for a description of Closed sales and an explanation of why Closed sales is a useful performance metric for management and investors.
Revenues
Revenues are primarily generated from fees for processing and distributing investor communications and fees for technology-enabled services and solutions. The Company monitors revenue in each of our two reportable segments as a key measure of success in addressing our clients’ needs. Fee revenues are derived from both recurring and event-driven activity. 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 of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services as well as Matrix administrative services.
Recurring fee revenue growth represents the Company’s total annual fee revenue growth, less growth from event-driven fee revenues. We distinguish recurring fee revenue growth between organic and acquired:

•Organic – We define organic revenue as the recurring fee revenue generated from Net New Business and internal growth.
•Acquired – We define acquired revenue as the recurring fee revenue generated from acquired services in the first twelve months following the date of acquisition. This type of growth comes as a result of our strategy to purchase, integrate, and leverage the value of assets we acquire.

Revenues and Recurring fee revenue are useful metrics for investors in understanding how management measures and evaluates the Company’s ongoing operational performance. See “Results of Operations” as well as Note 3, “Revenue Recognition” to our Condensed Consolidated Financial Statements in this Form 10-K.10-Q.
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Record Growth and Internal Trade Growth
The Company uses select operating metrics specific to Broadridge of Record Growth and Internal Trade Growth in evaluating its business results and identifying trends affecting its business. Record Growth is defined as stock record growth and interim record growth which measure the estimated annual change in total positions eligible for equity proxy materials and mutual fund and exchange traded fund interim communications, respectively, for equities and mutual fund position data reported to Broadridge in both the current and prior year periods. Internal Trade Growth represents the estimated change in trade volumes for Broadridge securities processing clients whose contracts are linked to trade volumes and who were on Broadridge’s trading platforms in both the current and prior year periods. Record Growth and Internal Trade Growth are useful non-financial metrics for investors in understanding how management measures and evaluates Broadridge’s ongoing operational performance within its Investor Communication Solutions and Global Technology and Operations reportable segments, respectively.
The key performance indicators for the three and six months ended December 31, 2020, and 2019, are as follows:

Select Operating Metrics
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
Record Growth
   Equity proxy24 %11 %20 %10 %
   Mutual fund interims5 %6 %8 %4 %
Internal Trade Growth24 %(11)%17 %(6)%

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 months ended December 31, 20172020 compared to the three and six months ended December 31, 2016.2019. 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.
“Tax Act items”IBM Private Cloud Charges” represent a U.S. federal transition taxcharge on earnings of certain foreign subsidiaries, foreign jurisdiction withholding taxes with respectthe hardware assets transferred to the earnings deemed repatriated for U.S. tax purposes,International Business Machines Corporation (“IBM”) and certain benefitsother charges related to the remeasurement ofinformation technology agreement for private cloud services (the “IBM Private Cloud Agreement”) between the Company’s net U.S. federalCompany and state deferred tax liabilities attributableIBM.
“Real Estate Realignment and Covid-19 Related Expenses” represent costs associated with the Company's real estate realignment initiative, including lease exit and impairment charges and other facility exit costs, as well as certain expenses associated with the Covid-19 pandemic.
“Investment Gain” represents a non-operating, non-cash gain on a privately held investment.
“Software Charge” represents a charge related 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.    an internal use software product that is no longer expected to be used.
“Net New Business” refers to recurring revenue from closedClosed sales less recurring revenue from client losses.
The following definitions describe the Company’s Revenues:
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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 we process directly impacts distribution revenues. While event-driven activity is highly repeatable, it may not recur on an annual basis. The types of services we provide that comprise event-driven activity are:

•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.

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 months ended December 31, 2017,2020, mutual fund proxy fee revenues were 489% higher25% greater compared to the six months ended December 31, 2016.2019. During fiscal years 2017 and 2016,year 2020, mutual fund proxy fee revenues were 19% higher and 22% higher35% lower than the prior fiscal year, respectively.year. 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 inFor the fiscal year ended June 30, 2017,2021, we reportedare reporting Closed sales net of a 3.5%5.0% allowance adjustment, in lieu of our previous practice of adjusting for actual performance in subsequent periods.adjustment. For the fiscal year 2018,ended June 30, 2020, we are reportingreported 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 actual data referenced earlier as the starting point, normalized for outlying factors, if any, to enhance the accuracy of the allowance.
Closed Sales
sales for the three months ended December 31, 2020 were $46.0 million, an increase of $0.9 million or 2%, compared to $45.1 million for the three months ended December 31, 2019. Closed sales for the three months ended December 31, 2017 were $38.7 million, a decrease of $16.9 million, or 31%, compared to $55.7 million for the three months ended December 31, 2016. Closed sales for the three months ended December 31, 2017 is2020 are net of an allowance adjustment of $1.6$2.4 million.
Closed sales for the six months ended December 31, 20172020 were $61.6$78.8 million, a decrease of $15.7$3.9 million or 20%5%, compared to $77.3$82.7 million for the six months ended December 31, 2016.2019. Closed sales for the six months ended December 31, 2017 is2020 are net of an allowance adjustment of $2.6$4.1 million.

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Recent Developments
In March 2020, the World Health Organization declared the outbreak of Covid-19 as a pandemic, which continues to persist throughout the world including the U.S., India, Canada, Europe and other locations where we operate. To date, the Covid-19 pandemic has negatively impacted the global economy, created significant financial market volatility, disrupted global supply chains, and resulted in a significant number of deaths and infections worldwide. In response, several countries worldwide have enacted fiscal stimulus packages while central banks have increased monetary stimulus, both designed to help mitigate the negative macroeconomic effects of Covid-19. In addition, several national, state and local governments have placed restrictions on people from gathering in groups or interacting within a certain physical distance (i.e. social distancing) and in certain cases, have ordered businesses to close, limit operations or mandate that people stay at home.
The Company’s operations, both our Investor Communication Solutions and Global Technology and Operations segments, are critical components of the overall financial markets infrastructure in the U.S. and globally. As a result, we have been permitted to continue operating in all jurisdictions in which we conduct business (in most cases remotely), including in jurisdictions that have mandated the closure of certain businesses. Accordingly, the Company has taken several measures designed to protect the health of our employees and to minimize our operational disruption and resulting provision of services to our clients from the Covid-19 pandemic, including adopting strict social distancing and cleaning measures in our production facilities, taking the temperature of production-related employees in affected areas on a daily basis as a prerequisite to entering our facilities, load balancing of client jobs between various facilities, and instituting work from home protocols for employees not involved in production operations, amongst other measures.
In fiscal year 2021 to date, there has not been a material impact as a result of Covid-19 on our consolidated revenues and pre-tax income. In addition, all of our production-related facilities remain operational and are continuing to provide ongoing services to our clients. Further, we have not experienced any significant supply-chain issues as our critical vendors have also remained operational and continue to meet their on-going service level requirements. We continue to engage with our clients to assist with their service demands, including our clients’ needs for any supplemental operational services and/or changes to existing service requirements in response to the Covid-19 pandemic.
Notwithstanding the foregoing, we are unable to precisely predict the impact that Covid-19 will have in the future due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, actions that may be taken by governmental authorities, the impact to the business of our clients, and other factors identified in Part I, Item 1A. “Risk Factors” in our 2020 Annual Report. Given these uncertainties, Covid-19 could disrupt the business of certain of our clients, decrease our clients’ demand for our services, impact our business operations and our ability to execute on our associated business strategies and initiatives, and adversely impact our consolidated results of operations and/or our financial condition in the future. We will continue to closely monitor and evaluate the nature and extent of the impact of Covid-19 to our business, consolidated results of operations, and financial condition.
On August 5, 2020, the SEC proposed modifications to the mutual fund and exchange-traded fund disclosure framework (the “Proposal”). The Proposal calls for streamlined annual and semi-annual shareholder reports which would be the primary source of fund disclosure for existing investors. The Proposal also provides an optional method that would replace the requirement for funds to distribute an annual prospectus to existing shareholders and instead requires timely communication of material changes via supplemental communications. Adoption and implementation of the Proposal as proposed could have an impact on our services, business and financial results. We will closely monitor and evaluate the progress of the Proposal and its potential impact on our business. Please see our “Risk Factors” in Part I, Item 1A. of our 2020 Annual Report for more information.
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Analysis of Condensed Consolidated Statements of Earnings
Three Months Ended December 31, 20172020 versus Three Months Ended December 31, 20162019
The table below presents Condensed Consolidated Statements of Earnings data for the three months ended December 31, 20172020 and 2016,2019, and the dollar and percentage changes between periods:
Three Months Ended 
 December 31,
Change
20202019$%
(In millions, except per share amounts)
Revenues$1,054.9 $968.7 $86.3 9 
  Cost of revenues806.5 780.9 25.5 3 
  Selling, general and administrative expenses169.0 161.0 8.0 5 
       Total operating expenses975.5 941.9 33.6 4 
Operating income79.5 26.8 52.7 197 
Margin7.5 %2.8 %
Interest expense, net(11.1)(13.9)2.7 (20)
Other non-operating income (expenses), net1.0 (2.4)3.4 (142)
Earnings before income taxes69.4 10.5 58.9 NM
Provision for income taxes13.1 0.4 12.7 NM
Effective tax rate18.9 %3.8 %
Net earnings$56.3 $10.1 $46.2 NM
Basic earnings per share$0.49 $0.09 $0.40 NM
Diluted earnings per share$0.48 $0.09 $0.39 NM
Weighted average shares outstanding:
    Basic115.7 114.7 
    Diluted117.8 117.2 
NM - Not Meaningful

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 Three Months Ended 
 December 31,		 
     Change 
 2017 2016 $ % 
 (in millions, except per share amounts) 
Revenues$1,012.8
 $892.6
 $120.2
 13
 
 Cost of revenues769.8
 707.8
 62.0
 9
 
 Selling, general and administrative expenses127.9
 126.0
 1.9
 2
 
Total operating expenses897.7
 833.8
 63.9
 8
 
         
Operating income115.1
 58.8
 56.2
 96
 
Margin11.4% 6.6%   

 
Interest expense, net10.2
 10.6
 (0.5) (4) 
Other non-operating expenses, net1.4
 2.5
 (1.1) (44) 
Earnings before income taxes103.5
 45.7
 57.8
 126
 
Provision for income taxes41.4
 15.6
 25.8
 165
 
Effective tax rate40.0% 34.1%   

 
Net earnings$62.1
 $30.1
 $32.0
 106
 
Basic earnings per share$0.53
 $0.25
 $0.28
 112
 
Diluted earnings per share$0.52
 $0.25
 $0.27
 108
 
Revenues

Three Months Ended December 31, 2017 versus Three Months Ended December 31, 2016
Revenues. RevenuesThe table below presents Condensed Consolidated Statements of Earnings data for the three months ended December 31, 2017 were $1,012.82020 and 2019, and the dollar and percentage changes between periods:

Three Months Ended 
 December 31,
Change
20202019$%
(In millions)
Recurring fee revenues$696.2 $648.4 $47.8 7 
Event-driven fee revenues45.2 31.0 14.2 46 
Distribution revenues344.8 317.0 27.7 9 
Foreign currency exchange(31.2)(27.8)(3.4)12 
       Total$1,054.9 $968.7 $86.3 9 
Points of Growth
Net New BusinessInternal GrowthAcquisitionsTotal
Recurring fee revenue Growth Drivers4pts2pts1pt7 %

Revenues increased $86.3 million, or 9%, to $1,054.9 million from $968.7 million.
•Recurring fee revenues increased $47.8 million primarily due to growth from onboarding of new business, internal growth, and the impact of acquisitions. Internal growth of 2pts was driven by GTO, primarily due to higher equity trade volumes as compared to the prior year period.
•Event-driven fee revenues increased $14.2 million due to increased mutual fund proxy and other communications.
•Distribution revenues increased $27.7 million primarily due to the increase in volume of regulatory and event-driven communications.
•Currencies negatively impacted revenues by $3.4 million due to a combination of foreign acquisitions and continued international revenue growth.
Total operating expenses. Operating expenses increased $33.6 million, or 4%, to $975.5 million from $941.9 million as a result of an increase in both cost of $120.2revenues and selling, general and administrative expenses:
•Cost of revenues - The increase of $25.5 million or 13%,in cost of revenues primarily reflects (i) higher distribution cost of revenues, (ii) higher proxy fulfillment expenses, (iii) operating costs from acquisitions and related amortization expense, and (iv) accelerated spend on growth initiatives, partially offset by (v) lower charges associated with the IBM Private Cloud Agreement compared to $892.6the prior year period.
•Selling, general and administrative expenses - The increase of $8.0 million in selling, general, and administrative expenses primarily reflects accelerated spend on growth initiatives and the impact of acquisitions.
Interest expense, net. Interest expense, net was $11.1 million, a decrease of $2.7 million, from $13.9 million for the three months ended December 31, 2016.2019. The $120.2 million increase was driven by higher event-driven fee revenues of $67.6 million, or 227%, higher recurring fee revenues of $26.3 million, or 5%, and higher distribution revenues of $24.9 million, or 7%. The higher recurring fee revenues of $26.3 million reflected: gains from Net New Business (3pts), contributions from our recent acquisitions (1pt) and internal growth (1pt). The higher event-driven fee revenues were primarily from increased mutual fund proxy activity and equity proxy contests. Fluctuations in foreign currency exchange rates positively impacted revenues by $1.4 million.
Total Operating expenses. Total operating expenses for the three months ended December 31, 2017 were $897.7 million, an increase of $63.9 million, or 8%, compared to $833.8 million for the three months ended December 31, 2016. Cost of revenues increased by $62.0 million, or 9%, and Selling, general and administrative expenses increased by $1.9 million, or 2%. The increase in operating expenses was primarily attributable to higher distribution cost of revenues of $21.0 million driven 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.
Operating income.Operating income for the three months ended December 31, 2017 was $115.1 million, an increase of $56.2 million, or 96%, compared to $58.8 million for the three months ended December 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. Operating income margins increased to 11.4% for the three months ended December 31, 2017, compared to 6.6% for the three months ended December 31, 2016, primarily due to the increase in event-driven fee revenues and recurring fee revenues.
Interest expense, net. Interest expense, net for the three months ended December 31, 2017 was $10.2 million, a decrease of $0.5$2.7 million or 4%, compared to $10.6 million for the three months ended December 31, 2016. The decrease was primarily due to a decrease in interest expense of $0.2 million due to a more favorable mix offrom lower average interest rates on outstanding borrowings.
Other non-operating expenses,income (expenses), net. Other non-operating expenses,income, net for the three months ended December 31, 2017 were $1.42020 was $1.0 million, a decrease of $1.1 million, or 44%, compared to $2.5other non-operating expenses, net of $2.4 million for the three months ended December 31, 2016.2019. The decreaseincrease of $3.4 million was primarily due to lower expense of $0.6 million related to fluctuationshigher gains on investments in foreign currency exchange rates and lower losses related to equity method investments of $0.4 million.the current period.
Earnings before income taxes. Earnings before income taxes for the three months ended December 31, 2017 were $103.5 million, an increase of $57.8 million, or 126%, compared to $45.7 million for the three months ended December 31, 2016.
Provision for income taxes. The Provision for income taxes and effective
•Effective tax rate for the three months ended December 31, 2017 were $41.4 million and 40.0%, compared to $15.6 million and 34.1%2020: 18.9%
•Effective tax rate for the three months ended December 31, 2016. 2019: 3.8%

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The increase in the effective tax rate for the three months ended December 31, 20172020 was driven by the reduced impact of discrete tax items relative to pre-tax income in the current year period compared to the three months ended December 31, 2016 is primarily attributable to the enactment of the Tax Act. With a fiscalprior 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 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%.period.
Net Earnings and Basic and Diluted earnings per share. Net earnings for the three months ended December 31, 2017 were $62.1 million, an increase of $32.0 million, or 106%, compared to $30.1 million for the three months ended December 31, 2016. The increase in Net earnings is primarily due to the increase in event-driven fee and recurring fee revenues.
Basic and Diluted earnings per share for the three months ended December 31, 2017 were $0.53 and $0.52, respectively, compared to $0.25 and $0.25 for the three months ended December 31, 2016, respectively.

Six Months Ended December 31, 20172020 versus Six Months Ended December 31, 20162019
The table below presents Condensed Consolidated Statements of Earnings data for the six months ended December 31, 20172020 and 2016,2019, and the dollar and percentage changes between periods:
Six Months Ended 
 December 31,
Change
20202019$%
(In millions, except per share amounts)
Revenues$2,072.3 $1,917.2 $155.1 8 
  Cost of revenues1,593.5 1,508.4 85.1 6 
  Selling, general and administrative expenses320.7 309.0 11.8 4 
       Total operating expenses1,914.3 1,817.3 96.9 5 
Operating income158.1 99.9 58.2 58 
Margin7.6 %5.2 %
Interest expense, net(25.6)(27.0)1.4 (5)
Other non-operating income (expenses), net10.5 1.4 9.0 NM
Earnings before income taxes143.0 74.3 68.7 92 
Provision for income taxes20.9 8.3 12.5 152 
Effective tax rate14.6 %11.2 %
Net earnings$122.1 $66.0 $56.1 85 
Basic earnings per share$1.06 $0.58 $0.48 83 
Diluted earnings per share$1.04 $0.56 $0.48 86 
Weighted average shares outstanding:
    Basic115.5 114.5 
    Diluted117.6 117.1 
NM - Not Meaningful

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Table of Contents
 Six Months Ended 
 December 31,		 
     Change 
 2017 2016 $ % 
 (in millions, except per share amounts) 
Revenues$1,937.6
 $1,787.9
 $149.7
 8
 
 Cost of revenues1,496.4
 1,425.7
 70.7
 5
 
 Selling, general and administrative expenses241.7
 237.3
 4.3
 2
 
Total operating expenses1,738.1
 1,663.1
 75.0
 5
 
         
Operating income199.5
 124.9
 74.7
 60
 
Margin10.3% 7.0%     
Interest expense, net19.6
 21.0
 (1.4) (7) 
Other non-operating expenses, net2.1
 6.7
 (4.5) (69) 
Earnings before income taxes177.8
 97.2
 80.6
 83
 
Provision for income taxes65.8
 33.4
 32.4
 97
 
Effective tax rate37.0% 34.4%     
Net earnings$112.0
 $63.8
 $48.2
 76
 
Basic earnings per share$0.96
 $0.54
 $0.42
 78
 
Diluted earnings per share$0.93
 $0.52
 $0.41
 79
 
Revenues
Six Months Ended December 31, 2017 versus Six Months Ended December 31, 2016
Revenues. RevenuesThe table below presents Condensed Consolidated Statements of Earnings data for the six months ended December 31, 2017 were $1,937.6 million an increase of $149.72020 and 2019, and the dollar and percentage changes between periods:

Six Months Ended 
 December 31,
Change
20202019$%
(In millions)
Recurring fee revenues$1,367.5 $1,271.6 $95.9 8 
Event-driven fee revenues90.7 71.1 19.5 28 
Distribution revenues676.9 630.3 46.6 7 
Foreign currency exchange(62.7)(55.8)(6.9)12 
       Total$2,072.3 $1,917.2 $155.1 8 
Points of Growth
Net New BusinessInternal GrowthAcquisitionsTotal
Recurring fee revenue Growth Drivers5pts1pt2pts8 %

Revenues increased $155.1 million, or 8%, to $2,072.3 million from $1,917.2 million.
•Recurring fee revenues increased $95.9 million primarily due to growth from onboarding of new business and the impact of acquisitions. Internal growth of 1pt was driven by (i) GTO, primarily higher equity trade volumes, and (ii) higher ICS volume of equity proxy, mutual fund, and exchange traded fund communications, partially offset by (iii) lower interest rates on cash balances we hold for retirement accounts and lower customer communication volumes.
•Event-driven fee revenues increased $19.5 million due to increased mutual fund proxy and other communications.
•Distribution revenues increased $46.6 million primarily due to the increase in the volume of regulatory and event-driven communications.
•Currencies negatively impacted revenues by $6.9 million due to a combination of foreign acquisitions and continued international revenue growth.
Total operating expenses. Operating expenses increased $96.9 million, or 5%, to $1,914.3 million from $1,817.3 million as a result of an increase in both cost of revenues and selling, general and administrative expenses:
•Cost of revenues - The increase of $85.1 million in cost of revenues primarily reflects (i) higher distribution costs of revenues driven by an increase in distribution revenues, (ii) costs associated with the Company's real estate realignment initiative, including lease exit and impairment charges and other facility exit costs, (iii) higher operating costs from acquisitions and related amortization expense, and (iv) accelerated spend on growth initiatives, partially offset by (v) lower charges associated with the IBM Private Cloud Agreement compared to $1,787.9the prior year period.
•Selling, general and administrative expenses - The increase of $11.8 million in selling, general, and administrative expenses primarily reflects accelerated spend on growth initiatives and the impact of acquisitions.
Interest expense, net. Interest expense, net was $25.6 million, a decrease of $1.4 million, from $27.0 million for the six months ended December 31, 2016.2019. The $149.7 million increase was driven by higher event-driven fee revenues of $89.3 million, or 133%, and higher recurring fee revenues of $57.2 million, or 5%. The higher recurring fee revenues of $57.2 million reflected: gains from Net New Business (3pts), contributions from our recent acquisitions (1pt) and internal growth (1pt). The higher event-driven fee revenues were primarily from increased mutual fund proxy activity and equity proxy contests. Fluctuations in foreign currency exchange rates positively impacted revenues by $0.8 million.
Total Operating expenses. Total operating expenses for the six months ended December 31, 2017 were $1,738.1 million, an increase of $75.0 million, or 5%, compared to $1,663.1 million for the six months ended December 31, 2016. Cost of revenues increased by $70.7 million, or 5%, and Selling, general and administrative expenses increased by $4.3 million, or 2%. The increase in operating expenses was primarily attributable to higher variable expenses driven in part by the increase in event-driven fee revenues and recurring fee revenues and higher operating costs related to acquisitions of $16.9 million.
Operating income.Operating income for the six months ended December 31, 2017 was $199.5 million, an increase of $74.7 million, or 60%, compared to $124.9 million for the six months ended December 31, 2016. The increase is due to higher event-driven fee and recurring fee revenues, partially offset by higher operating expenses. Operating income margins increased to 10.3% for the six months ended December 31, 2017, compared to 7.0% for the six months ended December 31, 2016, primarily due to the increase in event-driven fee revenues and recurring fee revenues.
Interest expense, net. Interest expense, net for the six months ended December 31, 2017 was $19.6 million, a decrease of $1.4 million or 7%, compared to $21.0 million for the six months ended December 31, 2016. The decrease was primarily due to a decrease in interest expense of $0.9 million due to a more favorable mix offrom lower average interest rates on outstanding borrowings.
Other non-operating expenses,income (expenses), net. Other non-operating expenses,income, net for the six months ended December 31, 2017 were $2.12020 was $10.5 million, a decrease of $4.5 million, or 69%, compared to $6.7other non-operating income, net of $1.4 million for the six months ended December 31, 2016.2019. The decreaseincrease of $9.0 million was primarily due to lower expense of $3.2 million related to fluctuations in foreign currency exchange rates and lower losses related to equity methodhigher gains on investments of $1.3 million.

Earnings before income taxes. Earnings before income taxes for the six months ended December 31, 2017 were $177.8 million, an increase of $80.6 million, or 83%,year-to-date as compared to $97.2 million for the six months ended December 31, 2016.prior year period.
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Provision for income taxes. The Provision for income taxes and effective
•Effective tax rate for the six months ended December 31, 2017 were $65.8 million and 37.0%, compared to $33.4 million and 34.4%2020: 14.6%
•Effective tax rate for the six months ended December 31, 2016. 2019: 11.2%

The increase in the effective tax rate for the six months ended December 31, 20172020 was driven by the reduced impact of discrete tax items relative to pre-tax income in the current year period compared to the six months ended December 31, 2016 is primarily attributable to the enactment of the Tax Act. With a fiscalprior 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 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%.period.
Net Earnings and Basic and Diluted earnings per share. Net earnings for the six months ended December 31, 2017 were $112.0 million, an increase of $48.2 million, or 76%, compared to $63.8 million for the six months ended December 31, 2016. The increase in Net earnings primarily reflects higher event-driven fee revenues and recurring fee revenues.
Basic and Diluted earnings per share for the six months ended December 31, 2017 were $0.96 and $0.93, respectively, compared to $0.54 and $0.52 for the six months ended December 31, 2016, respectively.
Analysis of Reportable Segments
The Company classifies its operations into the followingBroadridge has two reportable segments: (1) Investor Communication Solutions and (2) Global Technology and Operations.
The primary component of “Other” are certain gains, losses, corporate overhead expenses and non-operating expenses that have not been allocated to the reportable segments, such as interest expense. Foreign currency exchange is a reconciling item between the actual foreign currency exchange rates and the constant foreign currency exchange rates used for internal management reporting.
Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts in a reasonable manner. Because the Company compensates the management of its various businesses on, among other factors, segment profit, the Company may elect to record certain segment-related operating and non-operating expense items in Other rather than reflect such items in segment profit.
In connection with an organizational change made in the second quarter of fiscal year 2018, in order to further align and enhance our portfolio of services, certain discrete services that were previously reported in our Investor Communication Solutions reportable segment are now reported within the Global Technology and Operations reportable segment. As a result, our prior period segment results have been revised to reflect this change in reporting segments.
Revenues
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
ChangeChange
20202019$%20202019$%
(In millions)
Investor Communication Solutions$783.9 $715.6 $68.3 10 $1,536.7 $1,418.2 $118.5 8 
Global Technology and Operations302.3 280.9 21.4 8 598.4 554.8 43.5 8 
Foreign currency exchange(31.2)(27.8)(3.4)12 (62.7)(55.8)(6.9)12 
       Total$1,054.9 $968.7 $86.3 9 $2,072.3 $1,917.2 $155.1 8 
 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
     Change     Change
 2017 2016 $ % 2017 2016 $ %
 (in millions)
Investor Communication Solutions$802.2
 $704.4
 $97.8
 14
 $1,528.6
 $1,422.4
 $106.2
 7
Global Technology and Operations228.0
 207.0
 20.9
 10
 442.9
 400.2
 42.7
 11
Foreign currency exchange(17.4) (18.8) 1.4
 (7) (33.9) (34.6) 0.8
 (2)
Total$1,012.8
 $892.6
 $120.2
 13
 $1,937.6
 $1,787.9
 $149.7
 8



Earnings Before Income Taxes
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
ChangeChange
20202019$%20202019$%
(In millions)
Investor Communication Solutions$42.2 $22.1 $20.1 91 $95.0 $45.1 $50.0 111 
Global Technology and Operations55.0 49.0 6.0 12 130.3 105.5 24.8 24 
Other(31.9)(68.1)36.2 (53)(92.4)(89.3)(3.1)3 
Foreign currency exchange4.1 7.5 (3.4)(45)10.0 13.0 (3.0)(23)
       Total$69.4 $10.5 $58.9 NM$143.0 $74.3 $68.7 92 
NM - Not Meaningful
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Table of Contents
 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
     Change     Change
 2017 2016 $ % 2017 2016 $ %
 (in millions)
Investor Communication Solutions$72.4
 $20.4
 $52.0
 255 $118.0
 $55.1
 $62.9
 114
Global Technology and Operations50.6
 44.2
 6.5
 14 95.7
 80.6
 15.1
 19
Other(26.5) (20.8) (5.7) 27 (48.0) (43.6) (4.4) 10
Foreign currency exchange7.0
 2.0
 5.0
 250 12.1
 5.2
 7.0
 133
Total$103.5
 $45.7
 $57.8
 126 $177.8
 $97.2
 $80.6
 83

Investor Communication Solutions
 Three Months Ended 
 December 31,		 Six Months Ended 
 December 31,
     Change     Change
 2017 2016 $ % 2017 2016 $ %
 (in millions)
Recurring fee revenues$334.4
 $329.1
 $5.4
 2 $667.4
 $652.8
 $14.5
 2
Event-driven fee revenues97.3
 29.8
 67.6
 227 156.6
 67.3
 89.3
 133
Distribution revenues370.4
 345.6
 24.9
 7 704.7
 702.3
 2.4
 —
Total$802.2
 $704.4
 $97.8
 14 $1,528.6
 $1,422.4
 $106.2
 7
Revenues. Investor Communication Solutions segment’s Revenues for the three months ended December 31, 2017 were $802.22020 increased $68.3 million anto $783.9 million from $715.6 million, and earnings before income taxes increased $20.1 million to $42.2 million from $22.1 million.
Revenues for the six months ended December 31, 2020 increased $118.5 million to $1,536.7 million from $1,418.2 million, and earnings before income taxes increased $50.0 million to $95.0 million from $45.1 million.
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
ChangeChange
20202019$%20202019$%
(In millions)
Revenues
Recurring fee revenues$393.9$367.5$26.4 7 $769.1$716.7$52.4 7 
Event-driven fee revenues45.231.014.2 46 90.771.119.5 28 
Distribution revenues344.8317.027.7 9 676.9630.346.6 7 
       Total$783.9$715.6$68.3 10 $1,536.7$1,418.2$118.5 8 
Earnings Before Income Taxes
Earnings before income taxes$42.2$22.1$20.1 91 $95.0$45.1$50.0 111 
Pre-tax Margin5.4 %3.1 %6.2 %3.2 %
Points of GrowthPoints of Growth
Net New BusinessInternal GrowthAcquisitionsTotalNet New BusinessInternal GrowthAcquisitionsTotal
Recurring fee revenue Growth Drivers5pts(0)pt2pts7 %5pts(1)pt3pts7 %
For the three months ended December 31, 2020:
•Recurring fee revenues grew 7% driven by Net New Business and the impact of acquisitions. Internal growth had a neutral impact as the benefit of higher volume of equity proxy, mutual fund, and exchange traded fund communications was offset by lower customer communication volumes and lower interest rates on cash balances we hold for retirement accounts.
•Event-driven fee revenues grew 46% due to increased mutual fund proxy and other communications.
•Higher distribution revenues resulted primarily from the increase in the volume of $97.8regulatory and event-driven communications.
•The earnings increase was primarily due to the increase in recurring and event-driven fee revenues and prudent expense management.
•Pre-tax margins increased by 2.3 percentage points to 5.4% from 3.1%.
For the six months ended December 31, 2020:
•Recurring fee revenues grew 7% driven by Net New Business and the impact of acquisitions. Internal growth was negatively impacted by lower interest rates on cash balances we hold for retirement accounts and lower customer communication volumes, which more than offset the benefit of higher volume of equity proxy, mutual fund, and exchange traded fund communications.
•Event-driven fee revenues grew 28% due to increased mutual fund proxy and other communications.
•Higher distribution revenues resulted primarily from the increase in the volume of regulatory and event-driven communications.
•The earnings increase was primarily due to the increase in recurring and event-driven fee revenues and prudent expense management.
•Pre-tax margins increased by 3.0 percentage points to 6.2% from 3.2%.
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Global Technology and Operations
Revenues for the three months ended December 31, 2020 increased $21.4 million or 14%, compared to $704.4$302.3 million from $280.9 million, and earnings before income taxes increased $6.0 million to $55.0 million from $49.0 million.
Revenues for the six months ended December 31, 2020 increased $43.5 million to $598.4 million from $554.8 million, and earnings before income taxes increased $24.8 million to $130.3 million from $105.5 million.
Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
ChangeChange
20202019$%20202019$%
(In millions)
Revenues
Recurring fee revenues$302.3$280.9$21.4 8 $598.4$554.8$43.5 8 
Earnings Before Income Taxes
Earnings before income taxes$55.0$49.0$6.0 12 $130.3$105.5$24.8 24 
Pre-tax Margin18.2 %17.4 %21.8 %19.0 %
Points of GrowthPoints of Growth
Net New BusinessInternal GrowthAcquisitionsTotalNet New BusinessInternal GrowthAcquisitionsTotal
Recurring fee revenue Growth Drivers3pts4pts1pt8 %4pts2pts1pt8 %
For the three months ended December 31, 2020:
•Recurring fee revenues grew 8% driven primarily by the benefit of higher equity trading volumes and onboarding of new clients. Acquisitions contributed 1 point to growth.
•The earnings increase was driven by higher organic revenues. Expense growth during the quarter was driven by (i) accelerated spend on growth initiatives, (ii) onboarding of new business, and (iii) the impact of recent acquisitions. Pre-tax margins increased by 0.8 percentage points to 18.2% from 17.4%.
For the six months ended December 31, 2020:
•Recurring fee revenues grew 8% driven primarily by onboarding of new clients and the benefit of higher equity trading volumes. Acquisitions contributed 1 point to growth.
•The earnings increase was driven by higher organic revenues and expense reduction initiatives. Expense growth was driven by (i) accelerated spend on growth initiatives, (ii) onboarding of new business, and (iii) the impact of recent acquisitions. Pre-tax margins increased by 2.8 percentage points to 21.8% from 19.0%.
Other
Loss before income taxes was $31.9 million for the three months ended December 31, 2016. The $97.8 million increase was driven by: (i) higher event-driven fee revenues2020, a decrease of $67.6$36.2 million, or 227%53%, (ii) an increase in distribution revenues of $24.9 million, or 7% and (iii) higher recurring fee revenues of $5.4 million, or 2%.
Higher event-driven fee revenues were the result of increased mutual fund proxy activity and equity proxy contests. Higher recurring fee revenues were primarily driven by Net New Business from increases in revenues from Closed sales and revenues from acquisitions. Position growth compared to $68.1 million for the same periodthree months ended December 31, 2019.
•The decreased loss before income taxes was primarily due to charges associated with the IBM Private Cloud Agreement of $33.4 million that occurred in the prior year which is a component of internal growth,period.
Loss before income taxes was 10% for mutual fund and exchange traded funds (“ETF”) interims.
Investor Communication Solutions segment’s Revenues 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$92.4 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.
Higher event-driven fee revenues were the result of increased mutual fund proxy activity and equity proxy contests. Higher recurring fee revenues were primarily driven by Net New Business from increases in revenues from Closed sales and revenues from acquisitions. Position growth compared to the same period in the prior year, which is a component of internal growth, was 10% for mutual fund and ETF interims.
Earnings before Income Taxes. Earnings before income taxes for the three months ended December 31, 2017 were $72.4 million,2020, an increase of $52.0$3.1 million, or 255%3%, compared to $20.4 million for the three months ended December 31, 2016. The earnings increase was primarily due to higher event-driven fee revenues and recurring fee revenues. Pre-tax margins increased by 6.1 percentage points to 9.0% from 2.9%.
Earnings before income taxes for the six months ended December 31, 2017 were $118.0 million, an increase of $62.9 million, or 114%, compared to $55.1$89.3 million for the six months ended December 31, 2016. 2019.
•The earnings increaseincreased loss before income taxes was primarily due to higher event-driven fee revenuescosts associated with the Company's real estate realignment initiative, including lease exit and recurring fee revenues. Pre-tax margins increasedimpairment charges and other facility exit costs of $31.7 million, as well as certain expenses associated with the Covid-19 pandemic, partially offset by 3.8 percentage points to 7.7% from 3.9%.charges associated with the IBM Private Cloud Agreement of $33.4 million that occurred in the prior year period.

Global Technology and Operations
Revenues. Global Technology and Operations segment’s Revenues for the three months ended December 31, 2017 were $228.0 million, an increase
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Table of $20.9 million, or 10%, compared to $207.0 million for the three months ended December 31, 2016. The 10% increase was attributable to: (i) higher Net New Business from Closed sales (5pts), (ii) internal growth from higher trade and non-trade activity levels (3pts) and (iii) revenue from recent acquisitions (2pts).Contents
Global Technology and Operations segment’s Revenues for the six months ended December 31, 2017 were $442.9 million, an increase of $42.7 million, or 11%, compared to $400.2 million for the six months ended December 31, 2016. The 11% increase was attributable to: (i) higher Net New Business from Closed sales (5pts), (ii) internal growth from higher trade and non-trade activity levels (3pts) and (iii) revenue from recent acquisitions (3pts).
Earnings before Income Taxes. Earnings before income taxes for the three months ended December 31, 2017 were $50.6 million, an increase of $6.5 million, or 14%, compared to $44.2 million for the three months ended December 31, 2016. The earnings increase was primarily due to higher organic revenues. Pre-tax margins increased by 0.8 percentage points to 22.2% from 21.4%.
Earnings before income taxes for the six months ended December 31, 2017 were $95.7 million, an increase of $15.1 million, or 19%, compared to $80.6 million for the six months ended December 31, 2016. The earnings increase was primarily due to higher organic revenues. Pre-tax margins increased by 1.5 percentage points to 21.6% from 20.1%.
Other
Loss before Income Taxes. Loss before income taxes was $26.5 million for the three months ended December 31, 2017, an increase of $5.7 million, compared to $20.8 million for the three months ended December 31, 2016. The increased loss was primarily due to higher expense related to corporate charges, including efficiency initiatives.
Loss before income taxes was $48.0 million for the six months ended December 31, 2017, an increase of $4.4 million, compared to $43.6 million for the six months ended December 31, 2016. The increased loss was primarily due to higher expense related to corporate charges, including efficiency initiatives.
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, Non-GAAP results have been presented that are not generally accepted accounting principles measures (“Non-GAAP”).presented. 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, and for internal planning and forecasting purposes and in the calculation of performance-based compensation.purposes. 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, each as adjusted to exclude the impact of certain costs, expenses, gains and losses and other specified items thatthe exclusion of which management believes are not indicative ofprovides insight regarding our ongoing operating performance. TheseDepending on the period presented, these adjusted measures exclude the impact of certain of the following items: (i) Amortization of Acquired Intangibles and Purchased Intellectual Property, (ii) Acquisition and Integration Costs, (iii) IBM Private Cloud Charges, (iv) Real Estate Realignment and Tax Act items.Covid-19 Related Expenses, (v) Investment Gain, and (vi) Software Charge. 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 itemsIBM Private Cloud Charges represent a U.S. federal transition taxcharge on earnings of certain foreign subsidiaries, foreign jurisdiction withholding taxesthe hardware assets transferred to IBM and certain benefits

other charges related to the remeasurement ofIBM Private Cloud Agreement. Real Estate Realignment and Covid-19 Related Expenses represent costs associated with the Company’s net U.S. federalreal estate realignment initiative, including lease exit and state deferred tax liabilities attributableimpairment charges and other facility exit costs, as well as certain expenses associated with the Covid-19 pandemic. The Covid-19 Related Expenses are direct expenses incurred by the Company to protect the Tax Act.    

health and safety of Broadridge associates, including the cost of personal protective equipment, enhanced cleaning measures in our facilities and other related expenses. Investment Gain represents a non-operating, non-cash gain on a privately held investment. Software Charge represents a charge related to an internal use software product that is no longer expected to be used.
We exclude Amortization of Acquired Intangibles and Purchased Intellectual Property, Acquisition and Integration Costs, IBM Private Cloud Charges, Real Estate Realignment and Tax Act itemsCovid-19 Related Expenses, the Investment Gain, and the Software Charge from theseour Adjusted Operating income (as applicable) and other adjusted earnings measures because excluding such information provides us with an understanding of the results from the primary operations of our business and enhances comparability across fiscal reporting periods, as these items are not reflective of our underlying operations or performance. We also exclude the impact of Amortization of Acquired Intangibles and Purchased Intellectual Property, as these non-cash amounts are significantly impacted by the timing and size of individual acquisitions and do not reflect ordinary operationsfactor into the Company's capital allocation decisions, management compensation metrics or earnings. Managementmulti-year objectives. Furthermore, management believes these measures may be useful to an investor in evaluating the underlying operating performancethat this adjustment enables better comparison of our business.

results as Amortization of Acquired Intangibles and Purchased Intellectual Property will not recur in future periods once such intangible assets have been fully amortized. Although we exclude Amortization of Acquired Intangibles and Purchased Intellectual Property from our adjusted earnings measures, our management believes that it is important for investors to understand that these intangible assets contribute to revenue generation. Amortization of intangible assets that relate to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Any future acquisitions may result in the amortization of additional intangible assets.
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 plus Proceeds from asset sales, less Capital expenditures as well as Software purchases and capitalized internal use software.
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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,
2020201920202019
(In millions)
Operating income (GAAP)$79.5 $26.8 $158.1 $99.9 
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property32.6 30.3 64.9 58.4 
       Acquisition and Integration Costs0.7 3.4 2.4 5.9 
       IBM Private Cloud Charges— 33.4 — 33.4 
       Real Estate Realignment and Covid-19 Related Expenses5.8 — 37.8 — 
       Software Charge— — 6.0 — 
Adjusted Operating income (Non-GAAP)$118.6 $93.9 $269.1 $197.5 
Operating income margin (GAAP)7.5 %2.8 %7.6 %5.2 %
Adjusted Operating income margin (Non-GAAP)11.2 %9.7 %13.0 %10.3 %

Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2020201920202019
(In millions)
Net earnings (GAAP)$56.3 $10.1 $122.1 $66.0 
Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property32.6 30.3 64.9 58.4 
       Acquisition and Integration Costs0.7 3.4 2.4 5.9 
       IBM Private Cloud Charges— 33.4 — 33.4 
       Real Estate Realignment and Covid-19 Related Expenses5.8 — 37.8 — 
       Investment Gain— — (8.7)— 
       Software Charge— — 6.0 — 
            Taxable adjustments39.1 67.1 102.3 97.7 
       Tax impact of adjustments (a)(9.5)(14.8)(24.1)(21.3)
Adjusted Net earnings (Non-GAAP)$85.9 $62.4 $200.3 $142.3 

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 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 Property19.7
 20.4
 39.2
 33.1
       Acquisition and Integration Costs2.6
 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 Property19.7
 20.4
 39.2
 33.1
Acquisition and Integration Costs2.6
 5.0
 4.7
 7.8
     Taxable adjustments22.4
 25.3
 43.8
 40.9
Tax Act items16.1
 —
 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 
 December 31,		 Six Months Ended 
 December 31,		Three Months Ended 
 December 31,		Six Months Ended 
 December 31,
2017 2016 2017 20162020201920202019
Diluted earnings per share (GAAP)$0.52
 $0.25
 $0.93
 $0.52
Diluted earnings per share (GAAP)$0.48 $0.09 $1.04 $0.56 
Adjustments:       Adjustments:
Amortization of Acquired Intangibles and Purchased Intellectual Property0.16
 0.17
 0.33
 0.27
Amortization of Acquired Intangibles and Purchased Intellectual Property0.28 0.26 0.55 0.50 
Acquisition and Integration Costs0.02
 0.04
 0.04
 0.06
 Acquisition and Integration Costs0.01 0.03 0.02 0.05 
IBM Private Cloud Charges IBM Private Cloud Charges— 0.28 — 0.28 
Real Estate Realignment and Covid-19 Related Expenses Real Estate Realignment and Covid-19 Related Expenses0.05 — 0.32 — 
Investment Gain Investment Gain— — (0.07)— 
Software Charge Software Charge— — 0.05 — 
Taxable adjustments0.19
 0.21
 0.37
 0.34
 Taxable adjustments0.33 0.57 0.87 0.83 
Tax Act items0.13
 —
 0.13
 —
Tax impact of adjustments (a)(0.05) (0.07) (0.11) (0.12) Tax impact of adjustments (a)(0.08)(0.13)(0.21)(0.18)
Adjusted earnings per share (Non-GAAP)$0.79
 $0.39
 $1.32
 $0.75
Adjusted earnings per share (Non-GAAP)$0.73 $0.53 $1.70 $1.22 
(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$3.6 million and $3.0$12.8 million of excess tax benefits associated with stock-based compensation for the three and six months ended December 31, 2017.2020, respectively, and $2.2 million and $7.9 million of excess tax benefits associated with stock-based compensation for the three and six months ended December 31, 2019, respectively. For purposes of calculating the Adjusted earnings per share, the same adjustments were made on a per share basis.


Six Months Ended 
 December 31,
20202019
(In millions)
Net cash flows provided by operating activities (GAAP)$83.3 $11.5 
Capital expenditures and Software purchases and capitalized internal use software(50.8)(43.0)
Proceeds from asset sales18.0 — 
     Free cash flow (Non-GAAP)$50.5 $(31.5)
 Six Months Ended 
 December 31,
 2017 2016
 (in millions)
Net cash flows provided by (used in) operating activities (GAAP)$141.8
 $(5.5)
Capital expenditures and Software purchases and capitalized internal use software(52.5) (32.0)
Free cash flow (Non-GAAP)$89.3
 $(37.5)


Financial Condition, Liquidity and Capital Resources

Cash and cash equivalents consisted of the following:
December 31, 2020June 30, 2020
(In millions)
Cash and cash equivalents:
Domestic cash$169.2 $291.2 
Cash held by foreign subsidiaries130.3 118.6 
Cash held by regulated entities66.1 66.8 
     Total cash and cash equivalents$365.6 $476.6 
 December 31,
2017		 June 30,
2017
 (in millions)
Cash and cash equivalents:   
Domestic cash$175.0
 $86.8
Cash held by foreign subsidiaries134.5
 126.2
Cash held by regulated entities57.0
 58.1
Total cash and cash equivalents$366.5
 $271.1

At December 31, 2017,2020, Cash and cash equivalents were $366.5$365.6 million and Total stockholders’ equity was $1,074.0$1,434.0 million. At December 31, 2017, net working capital was $465.1 million, compared to $244.6 million at June 30, 2017. 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 31, 2017, $134.5 million Given the volatility in the rapidly changing market and economic conditions related to the Covid-19 pandemic, we will continue to evaluate the nature and extent of the $366.5 millionimpact of Cashthe Covid-19 pandemic on our business and cash equivalents were held by our foreign subsidiaries, and $57.0 millionfinancial position.
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Table of Cash and cash equivalents were held by regulated entities. Contents
We expect existing domestic cash, cash equivalents, and cash flows from operations and borrowing capacity 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 wouldmay be required to pay additional 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, 2020Carrying value at December 31, 2020Carrying value at June 30, 2020Unused
Available
Capacity		Fair Value at December 31, 2020
(In millions)
Current portion of long-term debt
       Fiscal 2014 Senior Notes (a)September 2020$— $— $399.9 $— $— 
            Total$— $— $399.9 $— $— 
Long-term debt, excluding current portion
Fiscal 2019 Revolving Credit Facility:
       U.S. dollar trancheMarch 2024$395.0 $395.0 $— $705.0 $395.0 
       Multicurrency trancheMarch 2024137.1 137.1 149.8 262.9 137.1 
             Total Revolving Credit Facility532.1 532.1 149.8 967.9 532.1 
Fiscal 2016 Senior NotesJune 2026500.0 496.4 496.1 — 564.3 
Fiscal 2020 Senior NotesDecember 2029750.0 742.1 741.7 — 826.8 
             Total Senior Notes1,250.0 1,238.5 1,237.8 — 1,391.1 
             Total long-term debt$1,782.1 $1,770.6 $1,387.6 $967.9 $1,923.2 
             Total debt$1,782.1 $1,770.6 $1,787.5 $967.9 $1,923.2 
 
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)  
            
Long-term debt           
Fiscal 2017 Revolving Credit FacilityFebruary 2022 $330.0
 $330.0
 $210.0
 $670.0
 $330.0
Fiscal 2014 Senior NotesSeptember 2020 400.0
 398.2
 397.9
 —
 414.2
Fiscal 2016 Senior NotesJune 2026 500.0
 494.5
 494.1
 —
 496.1
Total debt  $1,230.0
 $1,222.7
 $1,102.1
 $670.0
 $1,240.2
_________
(a) On September 1, 2020, the Company repaid in full the $400.0 million in Fiscal 2014 Senior Notes that were outstanding at their maturity date.
Future principal payments on the Company’s outstanding debt are as follows:
Years ending June 30, 2018 2019 2020 2021 2022 Thereafter TotalYears ending June 30,20212022202320242025ThereafterTotal
(in millions) $—
 $—
 $—
 $400.0
 $330.0
 $500.0
 $1,230.0
(In millions)(In millions)$— $— $— $532.1 $— $1,250.0 $1,782.1 

The Company has a $1.0$1.5 billion five-year revolving credit facility (the “Fiscal 20172019 Revolving Credit Facility”), which is comprised of a $900.0 million$1.1 billion U.S. dollar tranche and a $100.0$400.0 million multicurrency tranche. Borrowings under the Fiscal 20172019 Revolving Credit Facility bear interest at LIBOR plus 100101.5 basis points. In addition, the Fiscal 20172019 Revolving Credit Facility has an annual facility fee equal to 12.511.0 basis points on the entire facility, which totaled $0.3 million and $0.6 million for the three and six months ended December 31, 2017 respectively, and $0.2 million and $0.5 million for the three and six months ended December 31, 2016, respectively. At December 31, 2017, the Company had $330.0 million in outstanding borrowings and had unused available capacity of $670.0 million under the Fiscal 2017 Revolving Credit Facility. The facility is scheduled to expire in February 2022.facility.
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 20172019 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 27th27th and December 27th27th each year based on a fixed per annum rate equal to 3.40%. Interest on the senior notes due 2029 is payable semiannually on June 1st and December 1st each year based on a fixed per annum rate equal to 2.90%.
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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,
Change
20202019$
(In millions)
Net cash flows provided by operating activities$83.3 $11.5 $71.9 
Net cash flows used in investing activities$(43.9)$(331.2)$287.3 
Net cash flows provided by (used in) financing activities$(156.6)$280.5 $(437.1)
Free cash flow:
Net cash flows provided by operating activities (GAAP)$83.3 $11.5 $71.9 
Capital expenditures and Software purchases and capitalized internal use software(50.8)(43.0)(7.9)
Proceeds from asset sales18.0 — 18.0 
     Free cash flow (Non-GAAP)$50.5 $(31.5)$82.0 
 Six Months Ended 
 December 31,
     Change
 2017 2016 $
 (in millions)
Net cash flows provided by (used in) operating activities$141.8
 $(5.5) $147.3
Net cash flows used in investing activities$(85.4) $(553.4) $468.0
Net cash flows provided by financing activities$35.4
 $70.2
 $(34.7)
      
Free cash flow:     
Net cash flows provided by (used in) operating activities (GAAP)$141.8
 $(5.5) $147.3
Capital expenditures and Software purchases and capitalized internal use software(52.5) (32.0) (20.5)
Free cash flow (Non-GAAP)$89.3
 $(37.5) $126.8


The increase in cash provided by operating activities of $147.3$71.9 million in the six months ended December 31, 2017,2020, as compared to the six months ended December 31, 2016,2019, was primarily due to: (i) an increase in cash provided by advanced 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 increasednet earnings and lower cash used in working capital, partially offset by increased scaling of client-related platform implementation and (iii)development as compared to the classification of excess tax benefits associated with stock-based compensation awards as part of operating activities in fiscalprior year 2018, for which $22.0 million of excess tax benefits were classified in financing activities in fiscal year 2017 rather than operating activities.period.
The decrease in cash used in investing activities of $468.0$287.3 million in the six months ended December 31, 2017,2020, as compared to the six months ended December 31, 2016,2019, primarily reflects decreased (i) acquisitions of $398.3 million largely driven byno acquisition activity in the acquisition of NACCcurrent year period compared to the prior year period, as well as proceeds from asset sales in fiscalthe current period that did not occur in the prior year 2017 and (ii) $90.0 million in purchased intellectual property, partially offset by (iii) increased Capital expenditures and Software purchases and capitalized internal use software of $20.5 million.period.
The decreasedincrease in cash provided byused in financing activities of $34.7$437.1 million in the six months ended December 31, 20172020, as compared to the six months ended December 31, 20162019, primarily reflects: (i) a decrease inreflects higher borrowings net proceeds from borrowings of $70.0 million, (ii) a $29.7 million decreaserepayments 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 million decrease in the repurchase of common stock.prior year period.
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. Historically, thiscompanies. This has caused our revenues, operating income, net earnings, and cash flows from operating activities to be higher in our third and fourth fiscal quarter than in any other quarter. Thequarters. Notwithstanding, 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 months ended December 31, 2017 was 40.0% and 37.0% compared to 34.1% and 34.4% for the three and six months ended December 31, 2016. The increase in the effective tax rate for the three and six months ended December 31, 2017, compared to the comparable prior year period is primarily attributable to the enactment of the Tax Act on December 22, 2017. 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%. Notwithstanding the reduction 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%.
Contractual Obligations
In March 2010, the Company and International Business Machines Corporation (“IBM”)IBM entered into an Information Technology Services Agreement (the “IT Services Agreement”), under which IBM providesprovided certain aspects of the Company’s information technology infrastructure. Under the IT Services Agreement, IBM providesprovided 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 signed2022, but a two-year extension was signed in March 2015, amending the expiration date to June 30, 2024. In December 2019, the Company and IBM amended and restated the IT Services Agreement (the “Amended IT Services Agreement”), which now expires on June 30, 2024.2027. The Company has the right tooption of incorporating additional services into the Amended IT Services Agreement over time. The Company may renew the term of the Amended IT Services Agreement for up to one additional 12-month term. Commitmentsperiod. Fixed minimum commitments remaining under this agreementthe Amended IT Services Agreement at December 31, 20172020 are $361.8$219.8 million through fiscal year 2024,2027, the final year of the Amended IT Services Agreement.
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In December 2019, the Company entered into the IBM Private Cloud Agreement under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks. The IBM Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030. As a result of the IBM Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and that such transferred employees are expected to continue providing services to the Company on behalf of IBM under the IBM Private Cloud Agreement. Pursuant to the IBM Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM. The transfer of the Hardware to IBM closed on September 30, 2020 for a selling price of $18.0 million. Fixed minimum commitments remaining under the IBM Private Cloud Agreement at December 31, 2020 are $220.9 million through March 31, 2030, the final year of the contract.
In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia. The EU IT Services Agreement expireswould have expired in October 2023. In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premise solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”). The Company has the right to renew the initial term of the Amended EU IT Services Agreement for up to one additional 12-month termperiod or one additional 24-month term. Commitmentsperiod. Fixed minimum commitments remaining under this agreementthe Amended EU IT Services Agreement at December 31, 20172020 are $29.0$27.2 million through fiscal year 2024,2029, 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 tohas an equity method investment duringthat is a variable interest in a variable interest entity, the six months endedCompany is not the primary beneficiary and therefore does not consolidate the investee. The Company’s potential maximum loss exposure related to this unconsolidated investment totaled $19.7 million as of December 31, 2017,2020, which represents the carrying value of our investment and is recorded in Other non-current assets in the Company’s Condensed Consolidated Balance Sheets. In addition, as of December 31, 2020, the Company has a remainingfuture commitment of $2.5 million to fund this investment atinvestee for up to an additional $14.0 million if certain future funding milestones are met. Additional funding provided by the Company to the investee as a result of meeting the future funding milestones would increase the Company’s corresponding potential maximum loss exposure by that amount.
In addition, as of December 31, 2017.2020, the Company also has a future commitment to fund $2.7 million to one of the Company’s other investees.

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 31, 2017.2020.
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 31, 20172020 or at June 30, 2017.2020. 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” 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.

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Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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’s2020 Annual Report on Form 10-K for the year ended June 30, 2017.Report.
Item 4.CONTROLS AND PROCEDURES
Item 4.    CONTROLS AND PROCEDURES
Management’s Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2017.2020. The Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 20172020 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 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 31, 20172020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION
Item 1.LEGAL PROCEEDINGS
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
Item 1A. RISK FACTORS

In addition to the risk set forth below and 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 2020 Annual Report on Form 10-K for the fiscal year ended June 30, 2017, filed on August 10, 2017.Report. 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 20172020 Annual Report on Form 10-K.Report.
Item 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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 fiscal quarter ended December 31, 2017:2020:
PeriodTotal 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, 2017910
 88.45
 —
 9,962,536
December 1, 2017 - December 31, 20176,820
 89.11
 6,732
 9,955,804
Total7,730
 $89.03
 6,732
  
PeriodTotal 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, 2020 - October 31, 2020— $— — 9,586,545 
November 1, 2020 - November 30, 2020— — — 9,586,545 
December 1, 2020 - December 31, 2020— — — 9,586,545 
Total— $— — 
_____________
(1) Includes 998Represents shares purchased from employees to pay taxes related to the vesting of restricted stock units.
(2)During the fiscal quarter ended December 31, 2017,2020, the Company repurchased 6,732did not repurchase shares of common stock at an average price of $89.12 per share.under its share repurchase program. At December 31, 2017,2020, the Company had 9,955,8049.6 million shares available for repurchase under its share repurchase program. TheAny share repurchases will be made in the open market or privately negotiated transactions in compliance with applicable legal requirements and other factors.


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Item 3.DEFAULTS UPON SENIOR SECURITIES
None.
Item 4.MINE SAFETY DISCLOSURES
Not applicable.
Item 5.OTHER INFORMATION
DisclosureTable of Certain Activities under Section 13(r) of the Securities Exchange Act of 1934Contents
None.

Item 6.EXHIBITS
Item 6.    EXHIBITS
The following exhibits are being filed as part of this Quarterly Report on Form 10-Q:
10.1
31.1

31.2

32.1

32.2

101
The following financial statements from the Broadridge Financial Solutions, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2017,2020, formatted in eXtensible Business Reporting Language (XBRL): (i) condensed consolidated statements of earnings for the three and six months ended December 31, 20172020 and 2016,2019, (ii) condensed consolidated statements of comprehensive income for the three and six months ended December 31, 20172020 and 2016,2019, (iii) condensed consolidated balance sheets as of December 31, 20172020 and June 30, 2017,2020, (iv) condensed consolidated statements of cash flows for the six months ended December 31, 20172020 and 2016,2019, (v) condensed consolidated statements of stockholders’ equity for the three and (v)six months ended December 31, 2020 and 2019, and (vi) the notes to the condensed consolidated financial statements. XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104 Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)



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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 2, 2021BROADRIDGE FINANCIAL SOLUTIONS, INC.By:/s/ Edmund Reese
Edmund Reese
Date: February 8, 2018By:/s/ James M. Young
James M. Young
Corporate Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)


INDEX TO EXHIBITS
51
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.

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