Published: 2022-02-01 00:00:00 ET

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A. Description of Business. Broadridge Financial Solutions, Inc. (“Broadridge” or the “Company”), a Delaware corporation and a part of the S&P 500® Index, is a global financial technology leader providing investor communications and technology-driven solutions to banks, broker-dealers, asset and wealth managers and corporate issuers.

The Company operates in two reportable segments: Investor Communication Solutions (“ICS”) and Global Technology and Operations (“GTO”).

•Investor Communication Solutions—Broadridge provides the following governance and communications solutions through its Investor Communication Solutions business segment: Regulatory Solutions, Data-Driven Fund Solutions, Corporate Issuer Solutions, and Customer Communications Solutions.

A large portion of Broadridge’s ICS 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 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 has implemented digital applications to make voting easier for retail investors. Broadridge also provides the distribution of regulatory reports, class action 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 omni-channel distribution of regulatory, marketing, and transactional information. Broadridge’s data and analytics solutions provide investment product distribution data, analytical tools, insights, and research to enable asset managers to optimize product distribution across retail and institutional channels globally. Through Matrix Financial Solutions, Inc. (“Matrix”), Broadridge provides mutual fund trade processing services for retirement service providers, third-party administrators, financial advisors, banks and wealth management professionals.

In addition, Broadridge provides public corporations and mutual funds with a full suite of solutions to help manage their annual meeting process, including registered and beneficial proxy materials distribution, proxy processing and tabulation services, digital voting solutions, proxy and shareholder report document management solutions, virtual shareholder meeting services and shareholder data services. Broadridge also offers 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.

We provide omni-channel customer communications solutions, which include print and digital solutions, to modernize technology infrastructures, simplify communications processes, accelerate digital adoption and improve the customer experience. Through one point of integration, the Broadridge Communications CloudSM platform (the “Communications Cloud”) helps companies create, deliver, and manage their communications and customer engagement. The platform includes data-driven composition tools, identity and preference management, omni-channel optimization and digital communication experience, archive and information management, digital and print delivery, and analytics and reporting tools.

•Global Technology and Operations — Broadridge is a leading global provider of business solutions for capital markets, and wealth and investment management firms. Broadridge offers advanced solutions that automate firms’ transaction lifecycle, from desktop productivity tools, data aggregation, performance reporting, and portfolio management to order capture and execution, trade confirmation, margin, cash management, clearance and settlement, asset servicing, reference data management, reconciliations, securities financing and collateral optimization, compliance and regulatory reporting, and portfolio accounting and custody-related services. In addition, Broadridge provides business process outsourcing services that support the entire trade lifecycle operations of its buy- and sell-side clients’ businesses through a combination of its technology and operations expertise.

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For capital markets firms, Broadridge helps its clients lower their costs and improve the effectiveness of their businesses across the front, middle and back office. Broadridge’s core post-trade services help financial institutions efficiently and cost-effectively consolidate their books and records, gather and service assets under management and manage risk, thereby enabling them to focus on their core business activities. Provided on a software as a service (“SaaS”) basis within large user communities, Broadridge’s technology is a global solution, processing clearance and settlement in over 100 countries. Broadridge’s multi-asset, multi-market, multi-entity and multi-currency solutions support real-time global trade processing of equity, fixed income, mutual fund, foreign exchange, and exchange-traded derivatives. With the recent acquisition of Itiviti Holding AB (“Itiviti”), Broadridge has strengthened its capabilities with a set of front-office trade order and execution management solutions, connectivity and network offerings which will integrate with its existing middle and back-office solutions.

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

Broadridge also offers buy-side technology solutions for the global investment management industry, including portfolio management, compliance and operational workflow solutions for hedge funds, family offices, alternative asset managers, traditional asset managers and the providers that service this space.

B. Consolidation and Basis of Presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. and in accordance with SEC requirements for Quarterly Reports on Form 10-Q. These financial statements present the condensed consolidated position of the Company and include the entities in which the Company directly or indirectly has a controlling financial interest as well as various entities in which the Company has investments recorded under the equity method of accounting as well as certain marketable and non-marketable securities. Intercompany balances and transactions have been eliminated. Amounts presented may not sum due to rounding. The results of operations reported for interim periods are not necessarily indicative of the results of operations for the entire year or any subsequent interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021 filed on August 12, 2021 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, 2021 and June 30, 2021, the results of its operations for the three and six months ended December 31, 2021 and 2020, its cash flows for the six months ended December 31, 2021 and 2020, and its changes in stockholders’ equity for the three and six months ended December 31, 2021 and 2020. Certain prior period amounts have been reclassified to conform to the current year presentation where applicable.

Beginning with the first quarter of fiscal year 2022, the Company revised the foreign exchange rates used to present segment revenues and segment earnings (loss) before income taxes to further allocate the foreign exchange impact to the individual segment revenue and profit metrics. The presentation of segment revenues and earnings (loss) before income taxes for the prior periods provided in this Form 10-Q has been changed to conform to the current period presentation. Total consolidated revenues and earnings before income taxes were not impacted. Please refer to Note 3, “Revenue Recognition” and Note 16, “Interim Financial Data by Segment.”

C. Securities. Securities are non-derivatives that are reflected in Other non-current assets in the Condensed Consolidated Balance Sheets, unless management intends to dispose of the investment within twelve months of the end of the reporting period, in which case they are reflected in Other current assets in the Condensed Consolidated Balance Sheets. These investments are in entities over which the Company does not have control, joint control, or significant influence. Securities that have a readily determinable fair value are carried at fair value. Securities without a readily determinable fair value are initially recognized at cost and subsequently carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in transactions for an identical or similar investment of the same issuer, such as subsequent capital raising transactions. Changes in the value of securities with or without a readily determinable fair value are recorded in the Condensed Consolidated Statements of Earnings. In determining whether a security without a readily determinable fair value is impaired, management considers qualitative factors to identify an impairment including the financial condition and near-term prospects of the issuer.

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Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” (“ASU No. 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a cloud computing hosting arrangement that is a service contract with the requirements under GAAP for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 became effective for the Company beginning in the first quarter of fiscal year 2021. Entities are permitted to apply either a retrospective or prospective transition approach to adopt the guidance, for which the Company elected to adopt ASU No. 2018-15 on a prospective basis. The adoption of ASU No. 2018-15 did not have a material impact on the Company's Condensed Consolidated Financial Statements.

In 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.

Recently Issued Accounting Pronouncements

In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations: Accounting for Contract Assets and Contract liabilities from Contracts with Customers” (“ASU No. 2021-08”), which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. ASU No. 2021-08 is effective for the Company in the first quarter of fiscal year 2024. Early adoption of the amendments is permitted, including adoption in an interim period. The Company is currently assessing the impact that the adoption of ASU No. 2021-08 will have on its Condensed Consolidated Financial Statements.

ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU No. 2014-09”) outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. The core principle is that an entity recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company’s revenues from clients are primarily generated from fees for providing investor communications and technology-enabled services and solutions. Revenues are recognized for the two reportable segments as follows:

•Investor Communication Solutions—Revenues are generated primarily from processing and distributing investor communications and other related services as well as vote processing and tabulation. The Company typically enters into agreements with clients to provide services on a fee for service basis. Fees received for processing and distributing investor communications are generally variably priced and recognized as revenue over time as the Company provides the services to clients based on the number of units processed, which coincides with the pattern of value transfer to the client. Broadridge works directly with corporate issuers (“Issuers”) and mutual funds to ensure that the account holders of the Company’s bank and broker clients, who are also the shareholders of Issuers and mutual funds, receive the appropriate investor communications materials and 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”)

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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.

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

Transaction Price

The Company allocates transaction price to the individual performance obligations within a contract. If the contracted prices reflect the relative standalone selling prices for the individual performance obligations, no allocations are made. Otherwise, the Company uses the relative selling price method to allocate the transaction price, obtained from sources such as the observable price of a good or service when the Company sells that good or service separately in similar circumstances and to similar clients. If such evidence is unavailable, the Company uses the best estimate of the selling price, which includes various internal factors such as pricing strategy and market factors. A significant portion of the Company’s performance obligations are generated from transactions with volume based fees and includes services that are delivered at the same time. The Company recognizes revenue related to these arrangements over time as the services are provided to the client. While many of the Company’s contracts contain some component of variable consideration, the Company only recognizes variable consideration that is not expected to reverse. The Company allocates variable payments to distinct services in an overall contract when the variable payment relates specifically to that particular service and for which the variable payment reflects what the Company expects to receive in exchange for that particular service. As a result, the Company generally allocates and recognizes variable consideration in the period it has the contractual right to invoice the client.

As described above, our most significant performance obligations involve variable consideration which constitutes the majority of our revenue streams. The Company’s variable consideration components meet the criteria in ASU No. 2014-09 for exclusion from disclosure of the remaining transaction price allocated to unsatisfied performance obligations as does any contracts with clients with an original duration of one year or less. The Company has contracts with clients that vary in length depending on the nature of the services and contractual terms negotiated with the client, and they generally extend over a multi-year period.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a client, are excluded from revenue. Distribution revenues associated with shipping and handling activities are accounted for as a fulfillment activity and recognized as the related services or products are transferred to the client. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between client payment and the transfer of goods or services is expected to be one year or less.

Disaggregation of Revenue

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

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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 the Company processes directly impacts distribution revenues. While event-driven activity is highly repeatable, it may not recur on an annual basis. Event-driven fee revenues are based on the number of special events and corporate transactions the Company processes. Event-driven activity is impacted by financial market conditions and changes in regulatory compliance requirements, resulting in fluctuations in the timing and levels of event-driven fee revenues. Distribution revenues primarily include revenues related to the physical mailing and distribution of proxy materials, interim communications, transaction reporting, customer communications and fulfillment services, as well as Matrix administrative services.

			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Investor Communication Solutions
Regulatory			$	166.4					$	144.7					$	331.8					$	279.5
Data-driven fund solutions			88.8						86.1						172.1						165.1
Issuer			23.7						20.8						44.2						38.5
Customer communications			148.2						135.8						289.1						273.4
Total ICS Recurring fee revenues			427.1						387.3						837.3						756.5
Equity and other			24.6						20.6						52.2						38.7
Mutual funds			40.1						24.3						88.9						51.4
Total ICS Event-driven fee revenues			64.7						44.9						141.1						90.0
Distribution revenues			401.5						343.8						768.4						675.0
Total ICS Revenues			$	893.3					$	776.0					$	1,746.8					$	1,521.5
Global Technology and Operations
Capital markets			$	224.1					$	158.4					$	433.5					$	314.7
Wealth and investment management			146.4						126.9						277.7						251.0
Total GTO Recurring fee revenues			370.6						285.3						711.2						565.7
Foreign currency exchange			(4.3)						(6.4)						(5.5)						(14.9)
Total Revenues			$	1,259.6					$	1,054.9					$	2,452.5					$	2,072.3
Revenues by Type
Recurring fee revenues			$	797.6					$	672.6					$	1,548.5					$	1,322.2
Event-driven fee revenues			64.7						44.9						141.1						90.0
Distribution revenues			401.5						343.8						768.4						675.0
Foreign currency exchange			(4.3)						(6.4)						(5.5)						(14.9)
Total Revenues			$	1,259.6					$	1,054.9					$	2,452.5					$	2,072.3

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Contract Balances

The following table provides information about contract assets and liabilities:

			December 31, 2021						June 30, 2021
			(in millions)
Contract assets			$	96.7					$	89.8
Contract liabilities			$	409.3					$	382.5

Contract assets result from revenue already recognized but not yet invoiced, including certain future amounts to be collected under software term licenses and certain other client contracts. Contract liabilities represent consideration received or receivable from clients before the transfer of control occurs (deferred revenue). Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

During the six months ended December 31, 2021, contract liabilities increased due to the timing of client invoices in relation to the timing of revenue recognized. The Company recognized $174.4 million of revenue during the six months ended December 31, 2021 that was included in the contract liability balance as of June 30, 2021.

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 less than 0.1 million options to purchase Broadridge common stock for the three months ended December 31, 2021, and less than 0.1 million options to purchase Broadridge common stock for the six months ended December 31, 2021, as the effect of their inclusion would have been anti-dilutive.

The computation of diluted EPS excluded less than 0.1 million options to purchase Broadridge common stock for the three months ended December 31, 2020, and less than 0.1 million options to purchase Broadridge common stock for the six months ended December 31, 2020, 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:

			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Weighted-average shares outstanding:
Basic			116.6						115.7						116.4						115.5
Common stock equivalents			2.0						2.1						2.1						2.1
Diluted			118.7						117.8						118.5						117.6

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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.

During the six months ended December 31, 2021, there were no material acquisitions.

The Company is providing unaudited pro forma supplemental information for the acquisition of Itiviti as the acquisition was material to the Company’s operating results. Unaudited pro forma supplemental financial information for all acquisitions, excluding Itiviti, is not provided as the impact of these acquisitions on the Company’s operating results, financial position or cash flows was not material for any acquisition individually.

Fiscal Year 2021 Acquisitions:

BUSINESS COMBINATIONS

Financial information on each transaction is as follows:

						Itiviti						Advisor-Stream						Total
						(in millions)
Cash payments, net of cash acquired						$	2,580.4					$	23.2					$	2,603.6
Deferred payments, net						—						2.9						2.9
Contingent consideration liability						—						8.5						8.5
Aggregate purchase price						$	2,580.4					$	34.5					$	2,615.0
Net tangible assets acquired / (liabilities assumed)						$	(246.5)					$	(3.3)					$	(249.8)
Goodwill						1,945.7						27.3						1,973.0
Intangible assets						881.3						10.5						891.8
Aggregate purchase price						$	2,580.4					$	34.5					$	2,615.0

Itiviti

In May 2021, the Company acquired Itiviti, a leading provider of trading and connectivity technology to the capital markets industry. The acquisition of Itiviti extends the Company’s back-office capabilities into the front-office and deepens its multi-asset class solutions, better enabling the Company to help its clients adapt to a rapidly evolving marketplace. Itiviti is included in the Company’s GTO reportable segment.

•Goodwill is not tax deductible.

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

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.

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The following summarizes the allocation of purchase price for the Itiviti acquisition (in millions):

						Itiviti
Accounts receivable						$	39.6
Other current assets						14.1
Property, plant and equipment						9.4
Intangible assets						881.3
Goodwill						1,945.7
Other non-current assets						28.7
Payables and accrued expenses						(45.9)
Current contract liabilities						(58.8)
Deferred taxes						(199.6)
Other long term liabilities						(34.0)
Consideration paid, net of cash acquired						$	2,580.4

Unaudited Pro Forma Financial Information

The unaudited pro forma condensed consolidated results of operations in the table below are provided for illustrative purposes only and summarize the combined results of operations of Broadridge and Itiviti. For purposes of this pro forma presentation, the acquisition of Itiviti is assumed to have occurred on July 1, 2019. The pro forma financial information for all periods presented also includes the estimated business combination accounting effects resulting from this acquisition, notably amortization expense from the acquired intangible assets, interest expense from recent debt financing, the proceeds of which were used to fund the acquisition, and certain other integration related impacts.

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

						Years ended June 30,
						2021						2020
						(in millions)
Revenues						$	5,221.7					$	4,723.4
Net earnings						$	514.9					$	367.5
Basic earnings per share						$	4.45					$	3.21
Diluted earnings per share						$	4.37					$	3.14

AdvisorStream

In June 2021, the Company acquired AdvisorStream, a leading provider of digital engagement and marketing solutions for the global wealth and insurance industries. AdvisorStream's advisor marketing platform enables advisors to drive revenue and growth by providing personalized and consistent client communications. AdvisorStream is included in the Company’s GTO reportable segment.

•Goodwill is not tax deductible.

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

The allocation of the purchase price will be finalized upon completion of the analysis of the fair values of the acquired business’ assets and liabilities.

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Accounting guidance on fair value measurements for certain financial assets and liabilities requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1     Quoted market prices in active markets for identical assets and liabilities.

Level 2     Observable market-based inputs other than quoted prices in active markets for identical assets and liabilities.

Level 3     Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculates the fair value of its Level 1 and Level 2 instruments, as applicable, based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and its counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets and liabilities during the period.

The fair values of the contingent consideration obligations are based on a probability weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria. The measurement is based on significant inputs that are not observable in the market, therefore, the Company classifies this liability as Level 3 in the table below.

The following tables set forth the Company’s financial assets and liabilities at December 31, 2021 and June 30, 2021, respectively, that are recorded at fair value, segregated by level within the fair value hierarchy:

			December 31, 2021
			Level 1						Level 2						Level 3						Total
			(in millions)
Assets:
Cash and cash equivalents:
Money market funds (a)			$	—					$	—					$	—					$	—
Other current assets:
Securities			0.7						—						—						0.7
Other non-current assets:
Securities			132.9						—						—						132.9
Total assets as of December 31, 2021			$	133.6					$	—					$	—					$	133.6
Liabilities:
Contingent consideration obligations			—						—						18.8						18.8
Total liabilities as of December 31, 2021			$	—					$	—					$	18.8					$	18.8

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			June 30, 2021
			Level 1						Level 2						Level 3						Total
			(in millions)
Assets:
Cash and cash equivalents:
Money market funds (a)			$	—					$	—					$	—					$	—
Other current assets:
Securities			0.7						—						—						0.7
Other non-current assets:
Securities			120.6						—						—						120.6
Total assets as of June 30, 2021			$	121.2					$	—					$	—					$	121.2
Liabilities:
Contingent consideration obligations			—						—						23.2						23.2
Total liabilities as of June 30, 2021			$	—					$	—					$	23.2					$	23.2

_________

(a)Money market funds include money market deposit account balances of less than $0.1 million as of December 31, 2021 and June 30, 2021, respectively.

In addition, the Company has non-marketable securities with a carrying amount of $46.0 million and $37.5 million as of December 31, 2021 and June 30, 2021, respectively, that are classified as Level 2 financial assets and included as part of Other non-current assets on the Condensed Consolidated Balance Sheets.

The following table sets forth an analysis of changes during the three and six months ended December 31, 2021 and 2020, respectively, in Level 3 financial liabilities of the Company:

			Three Months Ended December 31,												Six Months Ended December 31,
			2021						2020						2021						2020
			(in millions)
Beginning balance			$	19.0					$	23.7					$	23.2					$	33.1
Net increase in contingent consideration liability			—						—						1.1						—
Foreign currency impact on contingent consideration liability			(0.2)						—						(0.6)						1.4
Payments			—						(6.0)						(4.9)						(16.7)
Ending balance			$	18.8					$	17.8					$	18.8					$	17.8

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Other non-current assets consisted of the following:

			December 31, 2021						June 30, 2021
			(in millions)
ROU assets (a)			$	244.4					$	262.0
Long-term investments			215.0						194.0
Deferred sales commissions costs			105.8						108.6
Contract assets (b)			96.7						89.8
Long-term broker fees			43.2						48.7
Deferred data center costs (c)			21.1						24.3
Other			41.8						35.0
Total			$	768.1					$	762.5

_________

(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, please refer to Note 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, 2021 and 2020, were $27.3 million and $21.0 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, 2021 and 2020, were $50.6 million and $39.7 million, respectively.

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

			Expiration Date						Principal amount outstanding at December 31, 2021						Carrying value at December 31, 2021						Carrying value at June 30, 2021						Unused Available Capacity						Fair Value at December 31, 2021
															(in millions)
Long-term debt
Fiscal 2021 Revolving Credit Facility:
U.S. dollar tranche			April 2026						$	305.0					$	305.0					$	20.0					$	795.0					$	305.0
Multicurrency tranche			April 2026						76.0						76.0						94.4						324.0						76.0
Total Revolving Credit Facility									381.0						381.0						114.4						1,119.0						381.0
Fiscal 2021 Term Loans			May 2024						1,550.0						1,544.6						1,543.4						—						1,550.0
Fiscal 2016 Senior Notes			June 2026						500.0						497.0						496.7						—						534.2
Fiscal 2020 Senior Notes			December 2029						750.0						743.0						742.5						—						775.6
Fiscal 2021 Senior Notes			May 2031						1,000.0						991.1						990.6						—						1,007.9
Total Senior Notes									2,250.0						2,231.1						2,229.8						—						2,317.7
Total debt									$	4,181.0					$	4,156.6					$	3,887.6					$	1,119.0					$	4,248.7

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

Years ending June 30,						2022						2023						2024						2025						2026						Thereafter						Total
(in millions)						$	—					$	—					$	1,550.0					$	—					$	881.0					$	1,750.0					$	4,181.0

Fiscal 2021 Revolving Credit Facility: In April 2021, the Company entered into an amended and restated $1.5 billion five-year revolving credit facility, as further amended on December 23, 2021, (the “Fiscal 2021 Revolving Credit Facility”), which replaced the $1.5 billion five-year revolving credit facility entered into during March 2019 (the “Fiscal 2019 Revolving Credit Facility”) (together the “Revolving Credit Facilities”). The Fiscal 2021 Revolving Credit Facility is comprised of a $1.1 billion U.S. dollar tranche and a $400.0 million multicurrency tranche.

The weighted-average interest rate on the Revolving Credit Facilities was 1.16% and 1.17% for the three and six months ended December 31, 2021, respectively, and 1.21% and 1.22% for the three and six months ended December 31, 2020, respectively. The fair value of the variable-rate Fiscal 2021 Revolving Credit Facility borrowings at December 31, 2021 approximates carrying value and has been classified as a Level 2 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

Under the Fiscal 2021 Revolving Credit Facility, revolving loans denominated in U.S. Dollars, Canadian Dollars, Euro, Yen, and Swedish Kronor initially bear interest at LIBOR, CDOR, EURIBOR, TIBOR and STIBOR, respectively, plus 1.015% per annum (subject to step-ups to 1.175% and step-downs to 0.805% based on ratings) and revolving loans denominated in Sterling initially bear interest at SONIA plus 1.0476% per annum (subject to step-ups to 1.2076% and step-downs to 0.8376% based on ratings). The Fiscal 2021 Revolving Credit Facility also has an annual facility fee equal to 11.0 basis points on the entire facility (subject to step-ups to 20.0 basis points and step-downs to 7.0 basis points based on ratings). The Company may voluntarily prepay, in whole or in part and without premium or penalty, borrowings under the Fiscal 2021 Revolving Credit Facility in accordance with individual drawn loan maturities. The Fiscal 2021 Revolving Credit Facility is subject to certain covenants, including a leverage ratio. At December 31, 2021, the Company is in compliance with all covenants of the Fiscal 2021 Revolving Credit Facility.

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Fiscal 2021 Term Loans: In March 2021, the Company entered into a term credit agreement, as amended on December 23, 2021, (“Term Credit Agreement”) providing for term loan commitments in an aggregate principal amount of $2.55 billion, comprised of a $1.0 billion tranche (“Tranche 1”) and a $1.55 billion tranche (“Tranche 2,” together with Tranche 1, the “Fiscal 2021 Term Loans”). The Company borrowed the Fiscal 2021 Term Loans in May 2021 in order to finance the Itiviti acquisition. Once borrowed, amounts repaid or prepaid in respect of such Fiscal 2021 Term Loans may not be reborrowed. The Tranche 1 Loans was to mature on the date that is 18 months after the date on which the Fiscal 2021 Term Loans are borrowed (the “Funding Date”), but was repaid in full in May 2021 with proceeds from the Fiscal 2021 Senior Notes (as discussed further below). The Tranche 2 Loan will mature in May 2024 on the third anniversary of the Funding Date. The proceeds of the Fiscal 2021 Term Loans were used by the Company to solely finance the acquisition of Itiviti and pay certain fees and expenses in connection therewith. The Tranche 2 Loan bears interest at LIBOR plus 0.875% per annum (subject to step-ups to LIBOR plus 1.250% or a step-down to LIBOR plus 0.750% based on ratings).

The Company may voluntarily prepay, in whole or in part and without premium or penalty. In the event of receipt of cash proceeds by the Company or its subsidiaries from certain incurrences of indebtedness, certain equity issuances, and certain sales, transfers or other dispositions of assets, the Company will be required to prepay outstanding Loans, subject to certain limitations and qualifications as set forth in the Term Credit Agreement. The Term Credit Agreement is subject to certain covenants, including a leverage ratio. At December 31, 2021, the Company is in compliance with all covenants of the Fiscal 2021 Term Loans.

Fiscal 2016 Senior Notes: In June 2016, the Company completed an offering of $500.0 million in aggregate principal amount of senior notes (the “Fiscal 2016 Senior Notes”). The Fiscal 2016 Senior Notes will mature on June 27, 2026 and bear interest at a rate of 3.40% per annum. Interest on the Fiscal 2016 Senior Notes is payable semi-annually in arrears on June 27 and December 27 of each year. The Fiscal 2016 Senior Notes were issued at a price of 99.589% (effective yield to maturity of 3.449%). The indenture governing the Fiscal 2016 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At December 31, 2021, the Company is in compliance with the covenants of the indenture governing the Fiscal 2016 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2016 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2016 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2016 Senior Notes at December 31, 2021 and June 30, 2021 was $534.2 million and $549.0 million, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

Fiscal 2020 Senior Notes: In December 2019, the Company completed an offering of $750.0 million in aggregate principal amount of senior notes (the “Fiscal 2020 Senior Notes”). The Fiscal 2020 Senior Notes will mature on December 1, 2029 and bear interest at a rate of 2.90% per annum. Interest on the Fiscal 2020 Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Fiscal 2020 Senior Notes were issued at a price of 99.717% (effective yield to maturity of 2.933%). The indenture governing the Fiscal 2020 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At December 31, 2021, 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, 2021 and June 30, 2021 was $775.6 million and $791.3 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 2021 Senior Notes: In May 2021, the Company completed an offering of $1.0 billion in aggregate principal amount of senior notes (the “Fiscal 2021 Senior Notes”). The Fiscal 2021 Senior Notes will mature on May 1, 2031 and bear interest at a rate of 2.60% per annum. Interest on the Fiscal 2021 Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year. The Fiscal 2021 Senior Notes were issued at a price of 99.957% (effective yield to maturity of 2.605%). The indenture governing the Fiscal 2021 Senior Notes contains certain covenants including covenants restricting the Company’s ability to create or incur liens securing indebtedness for borrowed money, to enter into certain sale-leaseback transactions, certain subsidiary indebtedness, and to engage in mergers or consolidations and transfer or lease all or substantially all of our assets. At December 31, 2021, the Company is in compliance with the covenants of the indenture governing the Fiscal 2021 Senior Notes. The indenture also contains covenants regarding the purchase of the Fiscal 2021 Senior Notes upon a change of control triggering event. The Company may redeem the Fiscal 2021 Senior Notes in whole or in part at any time before their maturity. The fair value of the fixed-rate Fiscal 2021 Senior Notes at December 31, 2021 and June 30, 2021 was $1.01 billion and $1.02 billion, respectively, based on quoted market prices and has been classified as a Level 1 financial liability (as defined in Note 7, “Fair Value of Financial Instruments”).

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The Fiscal 2021 Revolving Credit Facility, Fiscal 2021 Term Loans, Fiscal 2016 Senior Notes, Fiscal 2020 Senior Notes and Fiscal 2021 Senior Notes are senior unsecured obligations of the Company and are ranked equally in right of payment.

In addition, certain of the Company’s subsidiaries established unsecured, uncommitted lines of credit with banks. As of December 31, 2021 and June 30, 2021, respectively, there were no outstanding borrowings under these lines of credit.

Other non-current liabilities consisted of the following:

			December 31, 2021						June 30, 2021
			(in millions)
Operating lease liabilities			$	248.8					$	263.1
Post-employment retirement obligations			178.8						162.8
Non-current income taxes			49.1						48.2
Acquisition related contingencies			15.9						15.1
Other			31.7						48.0
Total			$	524.2					$	537.2

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 $63.7 million at December 31, 2021 and $62.6 million at June 30, 2021 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 $67.5 million at December 31, 2021 and $65.9 million at June 30, 2021 and are included in Other non-current liabilities in the accompanying Condensed Consolidated Balance Sheets.

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(a)Stock options exercised during the period of October 1, 2021 through December 31, 2021 had an aggregate intrinsic value of $38.0 million.

(b)As of December 31, 2021, the Company’s outstanding vested and currently exercisable stock options using the December 31, 2021 closing stock price of $182.82 (approximately 1.2 million shares) had an aggregate intrinsic value of $135.1 million with a weighted-average exercise price of $70.72 and a weighted-average remaining contractual life of 4.7 years. The total of all stock options outstanding as of December 31, 2021 have a weighted-average remaining contractual life of 6.1 years.

(c)As of December 31, 2021, time-based restricted stock units and performance-based restricted stock units expected to vest using the December 31, 2021 closing stock price of $182.82 (approximately 1.0 million and 0.3 million shares, respectively) had an aggregate intrinsic value of $178.1 million and $55.6 million, respectively. Performance-based restricted stock units granted in the table above represent initial target awards, and performance adjustments for (i) change in shares issued based upon attainment of performance goals determined in the period, and (ii) estimated change in shares issued resulting from attainment of performance goals to be determined at the end of the prospective performance period.

The activity related to the Company’s incentive equity awards for the six months ended December 31, 2021 consisted of the following:

			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
Balances at June 30, 2021			3,203,682						$	88.33					761,337						$	117.07					247,580						$	126.29
Granted			22,038						173.00						337,845						163.02						100,862						158.28
Exercise of stock options (a)			(579,823)						69.99						—						—						—						—
Vesting of restricted stock units			—						—						(39,756)						99.96						—						—
Expired/forfeited			(34,535)						104.51						(31,270)						135.11						(27,172)						85.30
Balances at December 31, 2021			2,611,362						$	92.91					1,028,156						$	132.28					321,270						$	139.80

(a)Stock options exercised during the period of July 1, 2021 through December 31, 2021 had an aggregate intrinsic value of $58.3 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 $22.7 million and $18.3 million, as well as related expected tax benefits of $5.1 million and $4.1 million were recognized for the three months ended December 31, 2021 and 2020, respectively. Stock-based compensation expense of $36.2 million and $28.7 million, as well as related expected tax benefits of $8.2 million and $6.3 million were recognized for the six months ended December 31, 2021 and 2020, respectively.

As of December 31, 2021, the total remaining unrecognized compensation cost related to non-vested stock options and restricted stock unit awards amounted to $7.2 million and $86.4 million, respectively, which will be amortized over the weighted-average remaining requisite service periods of 1.8 years and 1.8 years, respectively.

For stock options granted, the fair value of each stock option was estimated on the date of grant using a binomial option pricing model. The binomial model considers a range of assumptions related to volatility, risk-free interest rate and employee exercise behavior. Expected volatilities utilized in the binomial model are based on a combination of implied market volatilities, historical volatility of the Company’s stock price and other factors. Similarly, the dividend yield is based on historical experience and expected future changes. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of grant. The binomial model also incorporates exercise and forfeiture assumptions based on an analysis of historical data. The expected life of the stock option grants is derived from the output of the binomial model and represents the period of time that options granted are expected to be outstanding.

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			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Provision for income taxes			$	4.7					$	13.1					$	15.7					$	20.9
Effective tax rate			9.1		%				18.9		%				12.1		%				14.6		%
Excess tax benefits			$	7.1					$	3.6					$	11.5					$	12.8

The decrease in the effective tax rate for the three and six months ended December 31, 2021 was driven by higher total discrete tax items, inclusive of the excess tax benefits related to equity compensation, compared to the prior year period.

Data Center Agreements

In March 2010, the Company and International Business Machines Corporation (“IBM”) entered into an Information Technology Services Agreement (the “IT Services Agreement”), under which IBM provided certain aspects of the Company’s information technology infrastructure. Under the IT Services Agreement, IBM provided a broad range of technology services to the Company including supporting its mainframe, midrange, network and data center operations, as well as providing disaster recovery services. The migration of data center processing to IBM was completed in August 2012. The IT Services Agreement would have expired on June 30, 2022, but a two-year extension was signed in March 2015, amending the expiration date to June 30, 2024. In December 2019, the Company and IBM amended and restated the IT Services Agreement (the “Amended IT Services Agreement”), which now expires on June 30, 2027. The Company has the option of incorporating additional services into the Amended IT Services Agreement over time. The Company may renew the term of the Amended IT Services Agreement for up to one additional 12-month period. On July 28, 2021, the Company entered into a novation agreement with IBM (the “U.S. Novation Agreement”) pursuant to which IBM novated the Amended IT Services Agreement to Kyndryl, Inc., an entity formed in connection with IBM’s spin-off of its managed infrastructure services business (“Kyndryl”), effective September 1, 2021. Fixed minimum commitments remaining under the Amended IT Services Agreement at December 31, 2021 are $169.7 million through fiscal year 2027, the final year of the Amended IT Services Agreement.

In December 2019, the Company and IBM entered into an information technology agreement for private cloud services (the “Private Cloud Agreement”) under which IBM will operate, manage and support the Company’s private cloud global distributed platforms and products, and operate and manage certain Company networks. The Private Cloud Agreement has an initial term of approximately 10 years and three months, expiring on March 31, 2030. As a result of the Private Cloud Agreement, the Company transferred certain of its employees in April 2020 to IBM and its affiliates, and such transferred employees are expected to continue providing services to the Company on behalf of IBM under the Private Cloud Agreement. Pursuant to the Private Cloud Agreement, the Company agreed to transfer the ownership of certain Company-owned hardware (the “Hardware”) located at Company facilities worldwide to IBM. The transfer of the Hardware and Maintenance Contracts to IBM closed on September 30, 2020 for a selling price of $18.0 million. On July 28, 2021, IBM novated the Private Cloud Agreement to Kyndryl, effective September 1, 2021, pursuant to the U.S. Novation Agreement. Fixed minimum commitments remaining under the Private Cloud Agreement at December 31, 2021 are $191.0 million through March 31, 2030, the final year of the contract.

In March 2014, the Company and IBM United Kingdom Limited (“IBM UK”) entered into an Information Technology Services Agreement (the “EU IT Services Agreement”), under which IBM UK provides data center services supporting the Company’s technology outsourcing services for certain clients in Europe and Asia. The EU IT Services Agreement would have expired in October 2023. In December 2019, the Company amended the existing EU IT Services Agreement whereby the Company will migrate from the existing dedicated on-premises solution to a managed Broadridge private cloud environment provided by IBM, as well as extended the term of the EU IT Services Agreement to June 2029 (the “Amended EU IT Services Agreement”). The Company has the right to renew the term of the Amended EU IT Services Agreement for up to one additional 12-month period or one additional 24-month period. On August 19, 2021, the Company entered into a novation agreement with IBM UK pursuant to which IBM UK novated the EU IT Services Agreement to Kyndryl UK Limited, effective September 1, 2021. Fixed minimum commitments remaining under the Amended EU IT Services Agreement at December 31, 2021 are $30.5 million through fiscal year 2029, the final year of the contract.

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Cloud Services Resale Agreement

On December 31, 2021, the Company and Presidio Networked Solutions LLC (“Presidio”), a reseller of services of Amazon Web Services, Inc. and its affiliates (collectively, “AWS”), entered into an Order Form and AWS Private Pricing Addendum, dated December 31, 2021 (the “Order Form”), to the Cloud Services Resale Agreement, dated December 15, 2017, as amended (together with the Order Form, the “AWS Cloud Agreement”), whereby Presidio will resell to the Company certain public cloud infrastructure and related services provided by AWS for the operation, management and support of the Company’s cloud global distributed platforms and products. The AWS Cloud Agreement expires on December 31, 2026. Fixed minimums remaining under the AWS Cloud Agreement at December 31, 2021 are $250.0 million through December 31, 2026.

Investments

The Company has an equity method investment that is a variable interest in a variable interest entity, the Company is not the primary beneficiary and therefore does not consolidate the investee. The Company’s potential maximum loss exposure related to its unconsolidated investments in this variable interest entity totaled $33.5 million as of December 31, 2021, which represents the carrying value of the Company's investments.

In addition, as of December 31, 2021, the Company also has a future commitment to fund $1.5 million to one of 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,
			2021						2020						2021						2020
			(in millions)
Software License Agreements			$	35.9					$	20.1					$	67.8					$	38.3

Fixed Operating Lease Cost

The Company has incurred the following fixed operating lease costs:

			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Fixed Operating Lease Cost			$	12.3					$	10.5					$	23.6					$	34.9

Other

It is not the Company’s business practice to enter into off-balance sheet arrangements. However, the Company is exposed to market risk from changes in foreign currency exchange rates that could impact its financial position, results of operations, and cash flows. The Company manages its exposure to these market risks through its regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. The Company was not a party to any outstanding derivative financial instruments at December 31, 2021 and June 30, 2021. In March 2021, the Company entered into a derivative instrument designed to mitigate the Company’s exposure to the impact of changes in interest rates on the Fiscal 2021 Senior Notes.

The Company executed a forward treasury lock agreement (“Treasury Lock”), designated as a cash flow hedge, in the aggregate notional amount of $1.0 billion to manage exposure to fluctuations in the benchmark interest rate associated with the Fiscal 2021 Senior Notes, which were used to pay down a portion of the Term Credit Agreement associated with the Itiviti acquisition. Accordingly, changes in the fair value of the Treasury Lock were recorded as part of Other comprehensive income (loss), net each period up to when the Treasury Lock was settled. In May 2021, the Treasury Lock was settled for a pre-tax loss of $11.0 million, after which the final settlement loss will be amortized into Interest expense, net ratably over the ten year term of the Fiscal 2021 Senior Notes. The expected amount of the existing loss that will be amortized into earnings before income taxes within the next twelve months is approximately $1.1 million.

In the normal course of business, the Company 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.

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In the normal course of business, the Company also enters into contracts in which it makes representations and warranties that relate to the performance of the Company’s products and services. The Company does not expect any material losses related to such representations and warranties, or collateral arrangements.

The Company’s business process outsourcing and mutual fund processing services are performed by Broadridge Business Process Outsourcing, LLC (“BBPO”), an indirect subsidiary, which is a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Although BBPO’s FINRA membership agreement allows it to engage in clearing and the retailing of corporate securities in addition to mutual fund retailing on a wire order basis, BBPO does not clear customer transactions, process any retail business or carry customer accounts. As a registered broker-dealer and member of FINRA, BBPO is subject to the Uniform Net Capital Rule 15c3-1 of the Securities Exchange Act of 1934, as amended, which requires BBPO to maintain a minimum net capital amount. At December 31, 2021, BBPO was in compliance with this net capital requirement.

BBPO, as a “Managing Clearing Member” of the Options Clearing Corporation (the “OCC”), is also subject to OCC Rule 309(b) with respect to the business process outsourcing services that it provides to other OCC “Managed Clearing Member” broker-dealers. OCC Rule 309(b) requires BBPO to maintain a minimum net capital amount. At December 31, 2021, BBPO was in compliance with this net capital requirement.

In addition, Matrix Trust Company, a subsidiary of the Company, is a Colorado State non-depository trust company and National Securities Clearing Corporation trust member, whose primary business is to provide cash agent, custodial and directed trustee services to institutional customers, and investment management services to collective investment trust funds. As a result, Matrix Trust Company is subject to various regulatory capital requirements administered by the Colorado Division of Banking and the Arizona Department of Financial Institutions, as well as the National Securities Clearing Corporation. Specific capital requirements that involve quantitative measures of assets, liabilities, and certain off-balance sheet items, when applicable, must be met. At December 31, 2021, Matrix Trust Company was in compliance with its capital requirements.

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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, 2021, and 2020, respectively:

			Foreign Currency Translation						Pension and Post- Retirement Liabilities						Cash Flow Hedge						Total
			(in millions)
Balances at September 30, 2021			$	(37.9)					$	(14.9)					$	(8.1)					$	(60.9)
Other comprehensive income/(loss) before reclassifications			(31.8)						—						—						(31.8)
Amounts reclassified from accumulated other comprehensive income/(loss)			—						0.5						0.2						0.7
Balances at December 31, 2021			$	(69.7)					$	(14.4)					$	(7.8)					$	(91.9)

			Foreign Currency Translation						Pension and Post- Retirement Liabilities						Cash Flow Hedge						Total
			(in millions)
Balances at June 30, 2021			$	32.9					$	(15.4)					$	(8.2)					$	9.2
Other comprehensive income/(loss) before reclassifications			(102.6)						—						—						(102.6)
Amounts reclassified from accumulated other comprehensive income/(loss)			—						1.0						0.4						1.4
Balances at December 31, 2021			$	(69.7)					$	(14.4)					$	(7.8)					$	(91.9)

			Foreign Currency Translation						Pension and Post- Retirement Liabilities						Cash Flow Hedge						Total
			(in millions)
Balances at September 30, 2020			$	(47.7)					$	(15.1)					$	—					$	(62.9)
Other comprehensive income/(loss) before reclassifications			5.2						—						—						5.2
Amounts reclassified from accumulated other comprehensive income/(loss)			—						0.6						—						0.6
Balances at December 31, 2020			$	(42.6)					$	(14.5)					$	—					$	(57.1)

			Foreign Currency Translation						Pension and Post- Retirement Liabilities						Cash Flow Hedge						Total
			(in millions)
Balances at June 30, 2020			$	(84.7)					$	(15.7)					$	—					$	(100.4)
Other comprehensive income/(loss) before reclassifications			42.1						—						—						42.1
Amounts reclassified from accumulated other comprehensive income/(loss)			—						1.2						—						1.2
Balances at December 31, 2020			$	(42.6)					$	(14.5)					$	—					$	(57.1)

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The Company operates in two reportable segments: Investor Communication Solutions and Global Technology and Operations. See Note 1, “Basis of Presentation” for a further description of the Company’s reportable segments.

The primary components of “Other” are certain gains, losses, corporate overhead expenses and non-operating expenses that have not been allocated to the reportable segments, such as interest expense. Foreign currency exchange is a reconciling item between the actual foreign currency exchange rates and the constant foreign currency exchange rates used for internal management reporting.

Certain corporate expenses, as well as certain centrally managed expenses, are allocated based upon budgeted amounts in a reasonable manner. Because the Company compensates the management of its various businesses on, among other factors, segment profit, the Company may elect to record certain segment-related operating and non-operating expense items in Other rather than reflect such items in segment profit.

Segment results:

			Revenues
			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Investor Communication Solutions			$	893.3					$	776.0					$	1,746.8					$	1,521.5
Global Technology and Operations			370.6						285.3						711.2						565.7
Foreign currency exchange			(4.3)						(6.4)						(5.5)						(14.9)
Total			$	1,259.6					$	1,054.9					$	2,452.5					$	2,072.3

			Earnings (Loss) before Income Taxes
			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Investor Communication Solutions			$	58.8					$	40.9					$	141.2					$	93.3
Global Technology and Operations			34.4						48.6						53.1						118.5
Other			(39.7)						(17.3)						(61.2)						(63.2)
Foreign currency exchange			(1.7)						(2.9)						(3.1)						(5.7)
Total			$	51.9					$	69.4					$	130.1					$	143.0

The amount of amortization of acquired intangibles and purchased intellectual property by segment is as follows:

			Three Months Ended   December 31,												Six Months Ended   December 31,
			2021						2020						2021						2020
			(in millions)
Investor Communication Solutions			$	16.2					$	22.2					$	37.1					$	44.5
Global Technology and Operations			47.6						10.7						96.0						21.4
Other			—						0.4						—						0.7
Foreign currency exchange			(1.3)						(0.7)						(1.9)						(1.7)
Total			$	62.5					$	32.6					$	131.2					$	64.9

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