Business Context and Reporting Period
This Form 8-K, filed on September 24, 2018, by Broadridge Financial Solutions, Inc., discloses the release of the Company's fiscal year 2018 Annual Report to Stockholders. The report covers the fiscal year ended June 30, 2018. The filing includes a reconciliation of Non-GAAP financial measures to GAAP measures, which management uses to evaluate ongoing operations and internal planning.
Key Financial Metrics (Fiscal Year Ended June 30, 2018)
| Metric | GAAP Value | Non-GAAP Adjusted Value |
|---|---|---|
| Operating Income | $595 million | $685 million |
| Operating Income Margin | 13.7% | 15.8% |
| Net Earnings | $428 million | $504 million |
| Diluted Earnings Per Share | $3.56 | $4.19 |
| Free Cash Flow | N/A | $596 million |
| Operating Cash Flow | $694 million | N/A |
The filing does not provide specific data on total revenue, total debt, or liquidity ratios beyond the cash flow figures presented.
Material Changes Versus Prior Period
Comparing fiscal year 2018 to fiscal year 2017:
- Operating Income: GAAP operating income increased from $532 million to $595 million. Adjusted operating income rose from $623 million to $685 million.
- Net Earnings: GAAP net earnings grew from $327 million to $428 million. Adjusted net earnings increased from $378 million to $504 million.
- Earnings Per Share: GAAP diluted EPS increased from $2.70 to $3.56. Adjusted EPS rose from $3.13 to $4.19.
- Free Cash Flow: Increased significantly from $402 million in 2017 to $596 million in 2018.
- Margins: GAAP operating margin improved from 12.8% to 13.7%, while Adjusted operating margin increased from 15.0% to 15.8%.
Management Commentary, Adjustments, and Risks
Management utilizes Non-GAAP measures to exclude items not indicative of ongoing operating performance. Key adjustments for fiscal 2018 included:
- Amortization of Acquired Intangibles: $81 million added back.
- Acquisition and Integration Costs: $9 million added back.
- Tax Act Items: $15 million added back, related to the U.S. Tax Cuts and Jobs Act.
- Gain on Sale of Securities: $5 million excluded (non-operating gain).
Free cash flow is defined as net cash flows from operating activities less capital expenditures and software purchases. The filing notes that the information furnished is not deemed "filed" for purposes of Section 18 of the Exchange Act and is not incorporated by reference into other filings.
Investor Verification Checklist
- Verify the full text of the "Letter to Stockholders" (Exhibit 99.1) for qualitative management commentary not captured in the financial tables.
- Confirm total revenue figures, as they are not explicitly stated in this 8-K summary table.
- Review the detailed breakdown of "Tax Act items" to understand the specific impact of the U.S. Tax Cuts and Jobs Act on deferred tax liabilities.
- Assess the sustainability of the $194 million increase in Free Cash Flow by reviewing capital expenditure trends in the full Annual Report.
- Check for any subsequent material events or updates to the fiscal 2018 results in later filings.