Good morning, and welcome to the Broadridge Fourth Quarter and Fiscal Year 2019 Earnings Call. [Operator Instructions]. Please note, today's event is being recorded.I would now like to turn the conference over to Edings Thibault, Head of Investor Relations. Please go ahead, sir.

Thank you, Rocko. Good morning, everyone, and welcome to Broadridge's Fourth Quarter and Fiscal Year 2019 Earnings Conference Call. Our earnings release and the slides that accompany this release may be found on the Investor Relations section of broadridge.com. Joining me on the call this morning are Tim Gokey, our CEO and President; and our CFO, Jim Young.Before I turn the call over to Tim, a few standard reminders. We will be making forward-looking statements on today's call regarding Broadridge that involve risks. A summary of these risks can be found on the second page of the slides and a more complete description on our annual report on Form 10-K. We'll also be referring to several non-GAAP measures, which we believe provide investors with a more complete understanding of Broadridge's underlying operating results. An explanation of these non-GAAP measures and reconciliations to their comparable GAAP measures can be found in the earnings release and presentation.Let me now turn the call over to Tim Gokey.

Thank you, Edings, and good morning, everyone. Broadridge delivered strong fourth quarter and fiscal year 2019 results. Our outlook for fiscal year '20 calls for yet another strong year, including high single-digit growth in recurring revenue and 8% to 12% adjusted EPS growth. This morning, I will provide a brief review of our 2019 results, including the strong close to another record sales year and then talk about the acquisition of RPM Technologies, which we've announced after our last earnings call.Finally, I'll give an update on our progress against the priorities I laid out in my first earnings call as CEO earlier this year. Jim will then provide a closer look at our financial results, and give you more details regarding our 2020 guidance. We'll close with your questions. Let's get started. I'm really pleased with both our strong fiscal year 2019 results, and how well we are positioned to deliver sustained growth in fiscal '20. FY '19 recurring fee revenues rose 6% to $2.8 billion, more than offsetting the decline in low to no margin distribution revenue and lower event-driven revenues.In all, total revenues rose 1% to $4.4 billion. Adjusted operating income rose 8%, thanks to strong margin expansion, and adjusted EPS rose 11%. After a strong fourth quarter and the landmark UBS Wealth Management deal, full year Closed sales rose 9% to $233 million, marking another record sales year. Just as importantly, we hit those marks while continuing to fund investments in new products and technologies. We also made three tuck-in acquisitions that will strengthen and grow our business, especially in Wealth Management. 6% recurring fee growth, double-digit earnings growth, record sales, continued investment, that's why we feel so strongly about 2019.Based on these results, we're announcing an 11% increase in our annual dividend to $2.16. Broadridge has…

Thanks, Tim, and good morning, everyone. I'll begin my comments with a few call-outs. First, Closed sales and backlog, another record Closed sales performance pushed our recurring revenue backlog up to $330 million at the end of fiscal '19 from $295 million at the end of fiscal '18. Second, Q4 revenue growth under ASC 606. Once again, we are providing in today's presentation revenue growth rates on both an as-reported basis in fiscal '18 adjusted for ASC 606 to provide a more meaningful view of our top line performance.So on an ASC 606 adjusted basis, recurring fee revenue grew a healthy 6% in the fourth quarter, full year recurring fee growth was also 6%, right in line with our guidance. Importantly, while the ASC 606 change did have a big impact on our quarterly recurring revenue recognition, especially in our third and fourth quarters, it had virtually no impact on full year result comparisons.Third, capital deployment. Acquisitions. We invested approximately $400 million,including deferred payments in the fourth quarter for three acquisitions that will strengthen our growth profile and broaden our product lineup, especially in wealth management. We expect these acquisitions to contribute approximately 3 points of recurring fee revenue growth in fiscal '20. The earnings contribution in fiscal '20 is expected to be modest after accounting for the financing costs.Share repurchase. We also deployed $270 million in the quarter to repurchase shares for a total of $367 million in fiscal 2019. As a result of this capital deployment, we exited the year just below our long-term target leverage ratio.Fourth and final, guidance. Our fiscal '20 guidance calls for organic recurring fee growth of 5% to 7% plus 3 points of growth from M&A for a total of 8% to 10% recurring revenue growth. We expect this to result an 8%…

[Operator Instructions]. Today's first question comes from David Togut of Evercore ISI.

Good to see the strong finish on Closed sale. Just to dig in to the 2020 Closed sales target of $190 million to $230 million, could you drill down a little bit on what you expect to be the main drivers of that Closed sales target? More ICS, more GTO, any thoughts by product?

Yes, Dave, it's Tim. Thank you very much for the commentary. And we are really excited about the continued momentum that we see in the business and as reflected in sales and as reflected in our pipeline. And the -- in 2019, we obviously had the very large wealth win. And so when we think about '20, this target that we're putting out represents a nice growth above where we were in '19, when you exclude that big wealth win. So I think that's just a sign of the confidence and momentum that we see in the business. It's really across the board, and if I were to try to focus in on any one area, there's not some giant big deal that is baked in here. We continue to see really good momentum in our various ICS solutions that fit all around the regulatory communications business. We continue to see really good underlying momentum in the GTO areas, both in capital markets and in wealth and investment management.We don't see another UBS-type thing in this next calendar year. It -- that is something that will take longer to develop, but we have lot of other wealth solutions that have a good head of steam on them. And we're having really good results in the areas serving mutual funds as well with a good head of stream there around our data and analytics products. So we're really seeing very balanced growth across all of our product lines. We are -- and this growth we think will carry us to a very good result in '20, without any specific large deal driving that. And frankly, we are planning in terms of how we believe that we can continue to grow sales in the years beyond because we see a lot of demand for what we're doing. And let me just take a minute on this because over the past seven months, I have met more than 20 CEOs of our clients. In my -- as I'm introducing myself and really talking to them about what are the issues driving them and the themes that we've been talking about, and I'll come back to this as we go through other questions, but are really resonating. And so we see good demand across each of the growth themes that we're pursuing.

Appreciate that. Just as a quick follow-up. Jim, what are your assumptions on share repurchase for 2020? I don't think you called out any share repurchase in your 2020 EPS guide?

No. We don't really have any explicit assumptions for '20. As you know, most of the -- like all of the share count implications are coming from our FY '19 activities. So we were happy that we were able to deploy almost $370 million, again, share repurchases. No really additional contributions in '20.

And our next question today comes from Darrin Peller of Wolfe Research.

Look, we're happy to see the recent rate hitting GTO in the quarter. If you could just help us understand, I mean, I know you've had a few large clients that you've been working towards. Are you starting to see the final -- the actual revenue roll onto that now? I think you were alluding to a couple in your prepared remarks. And then perhaps, just think about the cadence for GTO, as we look forward to 2020 -- into the fiscal '20 year?

Sure. Darrin, it's Tim. And as you know, these are -- these large projects are complex. And some of them coming right on time, some of them take longer and sometimes that's due to us and sometimes that is due to them. And so the acceleration that you -- that we saw in GTO in this last quarter, it was not the result of any major client onboarding, and that's something that is still to come. And we like the fact that we're seeing acceleration, even though some of the stuff is taking a little bit longer than we'd like. But it definitely will be one of the things driving us as the year goes on. So that 8% to 10% that we're seeing in recurring revenue for the company is, it takes all this into account. And it is -- we feel so very good about it.

And Darrin, this is Jim. On the cadence for GTO, obviously, as we said, we're pretty excited about midteens growth that we're targeting for GTO. At the moment, it looks pretty even in terms of the growth across the quarters. What you'll get is a bit of a mix between the organic and the acquisitions over the quarters. Acquisitions obviously will be a bit heavier in the early quarters as we annualize, and then organic, we would expect to start more modestly and then ramp over the year as we start working through the big backlog and get the onboardings going.

Okay. All right. Guys, I mean your business performed well pretty broad base. I'd be curious to hear more about the newer -- we'll kind of not new anymore, but one of the areas you've been growing in on wealth. First of all, you've done deals there. Now M&A has been more pronounced there. Can you just help us understand the split, first of all, between GTO and ICS? And then more importantly, what's the -- what do you expect the growth profile of that overall -- of wealth management could be? And is that something worth splitting out as a separate business or almost a separate line item for modeling purposes?

Yes. Darrin, thanks for asking that question. And just as a reminder for everyone listening, the opportunity here is that firms are having to really evolve their business model due to commoditization, asset management, all the other trends in wealth management. And there's no real skilled technology player serving wealth management firms. They have to either build it themselves or they have to buy a platter of point solutions and try to integrate them together. And we think that's a big opportunity. And one of the things that I've been talking to the CEOs, that I just mentioned, as we talk about our vision for creating something that, you buy part of rewards but the more you buy the better it is. That vision is really resonating with them.And so that's just I think the big picture. We do see this as something that is going to be an ongoing growth engine for us. It is -- and recognizing that regulatory communications has a lot to do with wealth management, that's really in part because of regulatory communications business that we do serve 20 of -- the top 20 wealth managers today. I -- some of this growth though is probably more on the GTO side than the ICS side. We do have some good products in ICS, like adviser websites, data aggregation and some other offers. But it's a bit more on the GTO side. And this is something that in the -- in this near future you're going to see the impact from the M&A that we've done. And just as a reminder, Rockall is a really good securities-based lending platform, previously we did adviser compensation. With RPM, we're really bringing on the ability to integrate the banking side with wealth management in Canada now and maybe more than that eventually. The -- all the digital communications conversations we're having really resonate well with wealth managers. So there's a lot there. But we'll see, I think, initially the impacts on the M&A. We'll see the impact from our existing point solutions, and then probably not in 2020 but beyond 2020, we'll begin to see the impact from some of these larger transformative deals.

And on the reporting side, Darrin, obviously, we'll be excited to showcase our results in the area. And we'll give that some thought as to when the best time to break down out is. But obviously, we're really excited about the progress in wealth.

And our next question today comes from Peter Heckmann of D.A. Davidson & Co.

This is Alexis Huseby on for Pete. Could you just remind us the annual revenue contribution of the three recent acquisitions?

Yes. We talked about the business in Canada RPM, which in U.S. dollars is $40 million to $50 million. The Rockall business, based in Ireland, is about $10 million to $15 million. And the TD assets, represent a business that's approaching about $20 million in fee revenues. So good contribution. That's where we get the 3 points of growth next year from acquisitions.

Great. And then are you aware of the timing of any proposed rule changes on mutual fund interim distribution? Or any other regulatory changes pending that we should be monitoring?

Yes. Let me grab that one. So really two areas on regulatory. There is the implementation of 30e-3. And is there -- and what is the next generation of that client experience for fund companies. And as context there, over the past 10 years, we've reduced the overall cost per transaction by 40%, saving the industry $400 million. So we feel really good about the impact that we made here. And we're pleased that more than 130 funds are adopting our solution for implementing 30e-3. We think that, that is -- that -- there is a future opportunity to make those notices that will be sent even more valuable by having enhanced content on them. And that's something that we continue to discuss with players in the industry. And the implementation of this, which is in 2021, as we said before, is a modest positive for us. That is -- for us we really see it as more of an investment in the ecosystem. So that's a 30e-3 piece. There is ongoing, I'd say, research by the SEC in terms of how to further enhance the client experience.And we're certainly giving input into that, which we think can help the investors disclosure be at even a higher level, and I think both ourselves and the investment company institute have talked about the idea of summary documents and making these documents much more legible and easier to read for investors. And then the other big area is proxy plumbing, and the discussions there that have followed from the roundtable last fall. And there's good momentum there, really around the notion of end-to-end confirmation. And that is something we wrote a letter along with the Council of Institutional Investors, Society of Corporate Secretaries and SIFMA this past winter, all supporting the idea of end-to-end confirmation. We are -- we currently tabulate for about half of the industry, and we're going to introduce end-to-end confirmation for the part where we can make it happen, beginning next year. And there is an industry working group around how to bring that to the other half of the industry. And again, we think this is something that will just continue to increase investor's confidence in the current system and allow through end-to-end confirmation to eliminate any possibility of things like omnibus proxies that don't transfer and things like that. There's some sort of edge cases that will be surfaced through end-to-end confirmation that will really improve the integrity of the entire process.

And your next question today comes from Oscar Turner of SunTrust.

So first question is on customer communications. Just wondering if you can give some color on the pipeline in that segment? And I think Tim discussed a couple recent wins, but are those any things that you think would move the needle?

Oscar, it's Tim. I think the thing on customer communications is -- so preferably -- I'm going to come back to sales but I do want to just -- one thing, we always talk about the revenue, but I also want to take us back to our thesis and the strong synergies. And we have achieved 2x on the synergies. So we are -- well, we've had declining revenues, that has not been affecting earnings, I think that's just something to have out there. We right now are seeing a loss of small and medium sales, and we have a nice backlog of business to onboard. That amount of business to onboard is probably not enough to sort of significantly accelerate the growth. And this is enough to sort of move it to what we're talking about for next year, which is sort of roughly flat. The -- we have been moving through this large client that has been off-boarding.And it's an interesting one because the fact that, that is off-boarding more slowly than expected has -- mean we've been talking about this decline for a lot longer than expected. If we personally own this business, we'd be happy. The longer it stays the better it is. But as a public company, it means you're talking about it a lot longer. So we do expect to be finally done with that sort of at the end of the calendar year. And at that time we would expect the rate of sales that we have to sort of get us to even balance. And beyond that, then it's really looking forward to other larger conversations that could make a bigger difference. We do think things like that are out there. There are large players, but those are long complex conversations. You can't really tell what the timing of those, but they would be meaningful when they occurred. And of course, in the longer run, that is the whole digital idea. And definitely in the conversations that I have with CEOs of wealth management firms, when we talk about what the future of communications is and how this all needs to be delivered through mobile experience with abilities to drill down and to take action. That is a vision that people really see as what the future is. And so our thought is really about how do we focus all of this in terms of helping our clients’ transition to that future timing, which is indeterminate but importance.

Okay. And then second question, just on M&A. Seen a pickup in the deal pace recently with the tuck-ins that you mentioned. Just wondering how we should think about your appetite for a larger transformational deal in any of those spaces you mentioned. So I think you talked about governance, capital markets and wealth management.

Absolutely. So first of all, just thinking of tuck-in M&A, in fintech is an evergreen strategy. It is -- there's -- there are always new solutions, there are always management teams getting things for a certain size, wanting to take it to the next level and wanting to partner with someone like us. And we have a strong track record of doing that really for growth and making growth accretive, and it's something that's just we view as an ongoing piece of our business. And we worked very active in the last quarter. I'd say, our approach hasn’t changed. We continue to have the same criteria that we always have in terms of good returns that we're the very best owner. And we do have a very -- we've been active in the fourth quarter and we have a very active pipeline right now because there are a lot of properties for sale because it's a good time to be a seller, which also means that you have to be careful as a buyer. And so our criteria around -- are we really the best owner in the deadline with our strategic theme.When we think about larger transactions, it is -- there's a version of that that's an extension of what I just talked about, where it's still sort of tuck-in, the bigger tuck-in. And we would have definitely appetite for the right thing that met all those criteria around strategic fit and around the ability to have a good financial return over time. And then when one thinks about something that is even more transformative than that, I think it becomes pretty opportunistic in terms of, are there any situations that make sense. And we -- it's just -- it's not something you can really analyze ahead of time. And we just are already focused on what we can control and -- which is study pipeline of things that are very visible at looking 100 deals a year. And we think we can be very repeatable for the long term.

And our next question of today comes from Chris Donat of Sandler O'Neill.

Just wanted to follow up on that last one as it relates to your share repurchase activity in fiscal '19. Because -- is it fair to say that when you're more active on the share repurchase side, that's like your last alternative to investing in the business and M&A? Is that the right way to think about your priorities?

Chris, it's Jim. Look, we continue to be very focused on the balance capital allocation. And so we look over a long period of time and not necessarily formulaically but we certainly arrive at a pretty good balance between M&A and share repurchase. In a given year, clearly, we'll keep an eye on what our M&A pipeline looks like. And obviously, we also look opportunistically at our share price. And clearly, there's some opportunities here to jump in and get some shares that had good prices. And obviously, it helps when it's towards the end of the year, we've got better visibility in the high free cash flow quarter for us, it helps us align that, so -- and still finishing the year just below our target leverage ratio. So this is going to continue to be part of our MO. And we're pleased with sort of what we accomplished with good M&A goals as well as sort of meaningful share repurchase in the year. And as Tim said, the pipeline in M&A remains strong, timing is always a fool's errand to figure out exactly the timing.

Okay. And then one question about your guidance for event-driven revenue. And I recognize that it's event-driven so it's hard to predict. But first, just do you have at this point -- being August 1, pretty good visibility into your fiscal first quarter? And then second, what are the big swing factors for the full year on the difference between down 5% or down 15%, is it mostly on the mutual fund side, or is it more contest specials? Like just, what would you expect you would do more likely to move the needle?

Yes, Chris, as a reminder for others, remember this is about 5% of our revenue, but clearly, we like it when it's there. I would just highlight before I get to your question, I think one of the things that we're very pleased with is, look we had a -- we had some good event years and we had chances to reinvest significantly on a year like this. So events down and it wasn't much of a ripple, even on our guidance we're expecting to be down again and still teeing up similar earnings growth targets. So obviously, we always keep an eye on it. There's not a lot to management with it. But our goals to sort of manage through that, whether it's up or down. So as we look at the given year.Yes, we have decent visibilities, we've always said, as we look out 98-plus days, we always feel pretty good about what we could see. We've got 1 decent-sized fund in the queue for the year. As you go down to the second half of the year, much harder to determine where it's going to come from. That said, we've been at this for a while. And so we have pretty good analytics on understanding some base level of event to recognizing the forecasting challenges in this area. And so we feel pretty good. Funds, I'd say, more chance for upside coming from equity contest and specials. And on the fund side, and as you know, those are certainly hard to handicap. And we don't have any heroic assumptions in there on that. And obviously, we get a lot of little contributions across a lot of small deals and occasionally, some larger deals. So we feel good. I mean we're focused on delivering on the things we've got, plans to deliver and some good visibility on a good base level of event fees.

And our final question today comes from Patrick O'Shaughnessy of Raymond James.

So normally I think as we look at your deals you guys pay maybe around 3x revenue for the company that you're buying. I think you paid around 6.5x for RPM. What were the characteristics that you saw with RPM that justify that price in your view?

Yes. Patrick, it is -- it's Tim. And RPM has a really strong growth trajectory and is a really good strategic fit, and it is -- has good profitability. So when we look at -- we model all this out, obviously, like everyone does in terms of what do we expect is going to happen over time in terms of its future revenues, how those are going to translate into contribution for us, and what's the return we're going to get. And so the revenue multiple can definitely vary on those. But this is one that -- is something that is -- we think is going to be a really nice pick for us, really help us grow our wealth management business in Canada, but also give us some optionality over time because it has a really nice technology architecture that can do some other things for us too.

This concludes our question-and-answer session. I'd like to turn the conference back over to the management team for any final remarks.

Great. I just wanted to thank everyone for participating in the call, and just want to reiterate that really the significant opportunity that we see ahead and how well positioned we think Broadridge is to really help make a difference for the industry, and just look forward to talking to you next quarter when we have more progress to report. Thank you.

And thank you, sir. Today's conference has now concluded. And we thank you, all, for attending today's presentation. You may now disconnect your lines, and have a wonderful day.