{
  "docId": "019dd923-622c-750b-8b99-4706c419301b",
  "docSlug": "a2803989ab19",
  "documentTitle": "Broadridge Financial Solutions, Inc. (BR)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-09-28 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 39,
  "pageCount": 81,
  "prevPage": 38,
  "nextPage": 40,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 6,
  "notes": "The slide uses a red flag icon to signal an accounting concern and contrasts text from 2022 and 2021 10-K filings.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-4706c419301b/39",
  "deckHref": "/decks/019dd923-622c-750b-8b99-4706c419301b",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-4706c419301b.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-4706c419301b#slide-39",
  "components": [
    {
      "bbox": {
        "h": 0.11,
        "w": 0.86,
        "x": 0.07,
        "y": 0.17
      },
      "kind": "callout",
      "text": "We believe the SEC has been wisely questioning BR's deferred client conversion costs. BR recently agreed to expand its discussion of judgment and estimates that go into its presentation. Based on our analysis of the project economics underlying the UBS Wealth Management partnership, we believe the project should be impaired and that BR's earnings are vastly overstated.",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ff5d0ca8-ec74-48eb-8bd7-3c4844a932b9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "Based on our analysis of the project economics underlying the UBS Wealth Management partnership, we believe the project should be impaired and that BR’s earnings are vastly overstated.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-2040-777a-854e-2921f60d78a6",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.8,
        "x": 0.13,
        "y": 0.65
      },
      "kind": "paragraph",
      "text": "H. Deferred Client Conversion and Start-Up Costs. Direct costs incurred to set up or convert a client's systems to function with the Company's technology, that are expected to be recovered, are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences after client acceptance when the processing term begins. The Company evaluates the carrying value of deferred client conversion and start-up costs for impairment on the basis of whether these costs are fully recoverable from the expected future undiscounted net operating cash flows of the client to which the deferred costs relate. These deferred costs are reflected in Other non-current assets in the Consolidated Balance Sheets at June 30, 2021 and June 30, 2020, respectively. Refer to Note 11, “Other Non-Current Assets” for a further description of the Company's Deferred client conversion and start-up costs.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "275b559b-499b-4984-a928-d89f5dacf8d8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.8,
        "x": 0.13,
        "y": 0.345
      },
      "kind": "paragraph",
      "text": "H. Deferred Client Conversion and Start-Up Costs. Direct costs incurred to set up or convert a client's systems to function with the Company's technology, and are generally deferred and recognized on a straight-line basis over the service term of the arrangement to which the costs relate, which commences when the client goes live with the Company's services. The key judgment for determining the amount of costs to be deferred relates to the extent to which such costs are recoverable. This estimate includes (i) projected future client revenues, including variable revenues, offset by an estimate of conversion costs including an estimate of onboarding costs as well as ongoing operational costs, and (ii) an estimate of the expected client life. This is also the basis for which the Company assesses such costs for impairment. The two main categories of assets comprising Deferred client conversion and start-up costs of $1,232.3 million as of June 30, 2022 consist of costs incurred to set-up or convert a client's systems to function with the Company's technology of $1,224.7 million, as well as other start-up costs of $7.7 million. Deferred client conversion and start-up costs of $773.7 million as of June 30, 2021 consist of costs incurred to set-up or convert a client's systems to function with the Company's technology of $761.7 million, as well as other start-up costs of $12.0 million.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "27aada1b-21d1-4b0e-a430-7af21803aa03",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.1,
        "x": 0.13,
        "y": 0.61
      },
      "kind": "source-note",
      "text": "Source: FY 2022 10-K",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7f34c338-103b-42bf-be3a-d30745737243",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.1,
        "x": 0.13,
        "y": 0.84
      },
      "kind": "source-note",
      "text": "Source: FY 2021 10-K",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f2187f3a-2b26-4554-a502-bf65ce51d5c9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.65,
        "x": 0.31,
        "y": 0.04
      },
      "kind": "title",
      "text": "SEC Questions Deferred Client Conversion Costs",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a8c0092a-e588-4b8e-b2ed-e693c059db0b",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "759a40ae-184b-4d67-8963-69d918770784",
      "evidence": "Highlighting accounting discrepancies and SEC questioning to suggest earnings overstatement.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}