Franklin Templeton (BEN) 10-K risk factor changes: FY2022 vs FY2021

The COVID-19 pandemic [removed: has] resulted in a widespread global public health crisis.

[removed: Our business operations are complex and conducted in numerous countries around the globe, and in] [added: In] order to remain competitive, we must continue to perform our asset management and related business responsibilities for our clients and investors properly and [removed: effectively throughout the course of the COVID-19 pandemic,] [added: effectively,] which, among other matters, is dependent on the health and safety of our personnel, the ability of our personnel to work remotely successfully, and our ability to [added: continue to] have our personnel return to work at our offices safely and effectively in compliance with applicable requirements.

Further, we, like many [removed: others during this time,] [added: others,] have been subject to increased phishing and other social engineering attempts by malicious actors to manipulate individuals into [removed: divulging confidential or personal information.]

If our cybersecurity diligence and efforts to offset the increased risks associated with greater reliance on mobile, collaborative and remote technologies [removed: during this pandemic] are not effective or successful, we will be at increased risk for cybersecurity or data privacy incidents.

[removed: As of the time of this filing, as the COVID-19 pandemic continues to evolve, it] [added: It] is not possible to predict the full extent to which the pandemic may [added: continue to evolve and/or] adversely impact our business, liquidity, capital resources, financial results and operations, which impacts will depend on numerous developing factors that remain uncertain and subject to change.

[removed: In addition to investment management, our] [added: Related] services include fund administration, sales and distribution, and shareholder servicing.

Further, financial markets have [added: currently] and [added: in the past experienced and] may continue, from time to time, to experience volatility and disruption worldwide.

Declines in global economic conditions have [added: currently and] in the past [removed: resulted] [added: resulted, and may continue to result,] in significant decreases in our AUM, revenues and income, and future declines may further negatively impact our financial results.

Any decrease in the value or amount of our AUM because of market volatility or other factors, such as asset outflows or a decline in the price of stocks, [added: in particular market segments or in the securities market generally, negatively impacts our revenues and income.]

[removed: Changing market conditions may cause a shift in our asset mix] between international and U.S. products, potentially resulting in a decline in our revenues and income depending upon the nature of our AUM and the level of fees we earn on that AUM.

These include financial risks arising from [removed: potential] changes in the valuation of financial instruments linked to benchmark indices, pricing and operational risks, and legal implementation and revised documentation risks.

[removed: Accordingly, the] [added: The ongoing] withdrawal and replacement of LIBOR may pose financial risks and uncertainties to our business.

Poor investment [removed: performance] [added: performance,] as [added: currently experienced by certain of our products, as] compared to third-party benchmarks or competitive [removed: products] [added: products,] has led, and could in the future lead, to a decrease in sales of our products and stimulate redemptions from existing products, generally lowering the overall level of AUM and reducing the management fees we earn.

If our brands or reputation are harmed, existing clients may reduce amounts held in, or withdraw entirely from, our products, or our clients and products may terminate their management agreements with us, [added: which could reduce the amount of our AUM and cause us to suffer a corresponding loss in our revenues and income.]

Many of our operations are complex and dependent on our [added: ability, and the] ability [added: of our third-party providers,] to process and monitor a large number of transactions effectively, which may occur across numerous markets and currencies at high volumes and frequencies.

Our investment management fees, which represent [removed: the majority] [added: a significant portion] of our revenues, are dependent on fees earned under investment management agreements that we have with our products and clients.

We are subject to the risk that our personnel, contractors, vendors and other third parties may deliberately or recklessly circumvent or violate our controls to commit fraud against our business, products and/or client accounts, pay or solicit bribes, or [removed: otherwise act in ways inconsistent with our controls, policies, workplace culture and business principles.]

We may review and pursue strategic transactions that could pose risks to our [removed: business.][added: business and global operations.]

As part of our [added: global] business strategy, we regularly consider, and have discussions with respect to, potential strategic transactions, including acquisitions, dispositions, consolidations, joint ventures or similar transactions, some of which may be deemed material.

The asset management industry is facing transformative pressures and trends from a variety of different sources including increased fee pressure; a continued shift away from actively managed core equities and fixed income strategies towards alternative, passive and smart beta strategies; increased demands from clients and distributors for client engagement and services; a trend towards institutions developing fewer relationships and partners and reducing the number of investment managers they work with; increased regulatory activity and scrutiny of many aspects of the asset management industry, including ESG practices and related matters, transparency/unbundling of fees, inducements, conflicts of interest, capital, liquidity, solvency, leverage, operational risk management, controls and compensation; addressing the key emerging markets in the world, such as China and India, which often have populations with different needs, preferences and horizons than the more developed U.S. and European markets; and advances in technology and [added: digital wealth and distribution tools and] increasing client interest in interacting digitally with their investment portfolios.

[added: Our ability to] attract and retain AUM is also dependent on the relative investment performance of our products, offering a mix of products and strategies that meets investor demands, and our ability to maintain our investment management fees and pricing structure at competitive levels.

We currently, and may in the future, depend on a number of third-party providers to support various operational, [removed: technology,] administrative, [added: technology, transfer agency,] market data, distribution, and other business needs of our company.

[removed: In addition,] [added: Further,] we outsource [removed: certain administration] [added: various administration, technology, transfer agency] and other services for our funds to third-party providers.

The introduction of new technologies presents new challenges to [removed: us.]

In addition, technology is subject to rapid advancements and changes and our competitors may, from time to time, implement newer technologies or more advanced platforms for their services and products, including digital [removed: advisers] [added: advisers, digital wealth] and [added: distribution tools and] other advanced electronic systems, which could adversely affect our business if we are unable to remain competitive.

We use technology on a daily basis in our business to, among other things, support our business continuity and operations, process and transmit confidential communications, store and maintain data, obtain securities pricing information, process client transactions, and provide reports and other [removed: customer] services to our clients.

Potential system disruptions, failures or breaches of the technology we use or the security infrastructure we rely upon, including the third-party applications we use, could result in: (i) material financial loss or costs, (ii) delays in clients’ ability to access account information or in our ability to process transactions, (iii) the unauthorized disclosure or modification of sensitive or confidential client and business information, (iv) loss of valuable information, (v) breach of [added: client and vendor contracts, (vi) liability for stolen assets, information or identity, (vii) remediation costs to repair damage caused by the failure or breach, (viii) additional security and organizational costs to mitigate against future incidents, (ix) reputational harm, (x) loss of confidence in our business and products, (xi) liability for failure to review and disclose applicable incidents or provide relevant updated disclosure properly and timely, (xii) regulatory investigations or actions, and/or (xiii) legal claims, litigation, and liability costs, any one or more of which may be material.]

We expect that the regulatory requirements and developments applicable to us will cause us to continue to incur [added: additional compliance and administrative burdens and costs.]

For example, a failure to comply with GDPR could result in fines up to [removed: 20 million Euros or] 4% of our annual global [removed: revenues, whichever is higher.][added: revenues.]

Tax authorities may disagree with certain positions we have taken [added: and assess additional taxes.]

We operate in a highly regulated industry and routinely receive and respond to regulatory and governmental requests for documents or other information, subpoenas, examinations and, in some instances, investigations in connection with our [removed: business activities.]

For a discussion of certain legal proceedings and regulatory matters in which we are involved, see the “Legal Proceedings” section in Note [removed: 16] [added: 15] - Commitments and Contingencies in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report.

divulging confidential or personal information.

For example, the Russian invasion of Ukraine, and the threat that Russia’s military aggression may expand beyond Ukraine, has significantly impacted the global economy and financial markets, which has had, and may continue to have, an adverse effect on our investment performance and flows in certain products.

Changing market conditions may cause a shift in our asset mix

The global transition away from LIBOR is continuing to progress, with LIBOR being replaced by the Secured Overnight Financing Rate and other alternatives as of June 30, 2023, subject to LIBOR’s ongoing phase-out.

Further, we outsource various administration, technology, transfer agency and other services for our funds to third-party providers who may serve as a sub-agent or delegate.

otherwise act in ways inconsistent with our controls, policies, workplace culture and business principles.

Such financial intermediaries may recommend competing products.

us.

business activities.

The COVID-19 pandemic has adversely affected global economies and markets, and has resulted in disruptions in commerce that will continue to evolve, including with respect to financial and other economic activities, services, travel and supply chains.

Global health concerns and uncertainty regarding the impact of COVID-19 could lead to further and/or increased volatility in global capital and credit markets, adversely affect our key executives and other personnel, clients, investors, providers, suppliers, lessees, and other third parties, and negatively impact our AUM, revenues, income, business and operations.

Our business has been and may continue to be negatively impacted by the current COVID-19 pandemic, including by the potential reoccurrence of periods of increased spread of COVID-19 and/or COVID-19 variants, and ensuing economic downturn in global financial markets.

The global spread of COVID-19, and the various governmental actions and economic effects related to the pandemic, have had, and may continue to have, negative impacts on our business and operations, including volatility in asset values, reduced demand for our products and services, concerns for and restrictions on our personnel (including health concerns, quarantines, shelter-in-place orders and restrictions on travel), and increased privacy and cybersecurity risks.

Past economic downturns, including in connection with COVID-19, have caused, and future economic downturns may cause, periods of significant volatility in our stock price; fluctuations in our AUM, revenues and income; increased liquidity risks and redemptions from our funds and other products; difficulties obtaining cash to settle redemptions; fund closures; poor investment performance of our products and corporate investments; and reputational harm, legal claims and other factors that may arise or develop.

Increased liquidity risks and redemptions in our funds and other products have required, and may at times require, increased cash in the form of loans or other lines of credit for them to draw on to help settle redemptions and for other related purposes.

We have in some cases voluntarily determined to, and without obligation could in the future, extend such loans to our products.

In addition, such increased liquidity risks and redemptions have caused, and could continue to cause, fund closures and related regulatory and governmental reviews or investigations and legal claims or actions, subjecting us to legal and regulatory risks and potential financial exposure.

We have implemented our business continuity plans globally to manage our business during this pandemic, including broad and extended work-from-home capabilities for our personnel where feasible and, as governmental health orders may allow in various jurisdictions based on applicable conditions, we have implemented and are continuing to implement measures for the return of personnel to our offices.

We can provide no assurance that our efforts and planning for either environment will be sufficient to protect the health and safety of our personnel and maintain the success of our business.

Further, we depend on a number of third-party providers to support our operations, and any failure of our

providers to fulfill their obligations could adversely impact our business.

Additionally, multiple regions in which we operate have had, and as conditions change may again have or continue to have, movement restrictions on our personnel and third-party vendors and service providers that may impact our ability to satisfy or respond timely to potential technology issues or needs impacting our business and operations.

Any inability to recover successfully following the COVID-19 pandemic with respect to the economic, investment or operational impacts to our company or industry could further negatively impact our business and operations.

The impacts and risks described herein relating to COVID-19 augment the discussion of overlapping risks in our risk factors below, which may be heightened by COVID-19.

in particular market segments or in the securities market generally, negatively impacts our revenues and income.

In March 2021, the FCA in the U.K., which regulates LIBOR, announced that LIBOR will no longer be provided for various currency settings after 2021, including all sterling, euro and certain U.S. dollar settings.

Although the Secured Overnight Financing Rate (“SOFR”) has been identified as a recommended alternative reference rate to LIBOR, the selection of SOFR presents certain market concerns because a term structure for SOFR has not yet developed and there is not yet a generally accepted methodology for adjusting SOFR.

which could reduce the amount of our AUM and cause us to suffer a corresponding loss in our revenues and income.

Our completed acquisition of Legg Mason, Inc. remains subject to integration risks.

On July 31, 2020, we completed our acquisition of Legg Mason, Inc. pursuant to the terms and conditions of an agreement and plan of merger, and Legg Mason became a wholly-owned subsidiary of Franklin.

Important ongoing integration-related risks related to our completed acquisition of Legg Mason include the risks that the anticipated benefits of the transaction, including the realization of revenue, tax benefits, financial benefits or returns and expense and other synergies, may not be fully realized, or may take longer to realize than expected, and that the integration may cost more than expected.

In addition, the COVID-19 pandemic-related risks may result in unanticipated regulatory, planning and/or operational delays that may adversely impact the anticipated timeline and achievement of our ongoing integration goals.

The ongoing integration of Legg Mason is a time-consuming and expensive process that, without adequate planning and effective and timely implementation, could significantly disrupt our business.

Our failure to meet the challenges involved in continuing to integrate the operations of Legg Mason or to otherwise realize any of the anticipated benefits of the acquisition could adversely impair our business and operations as noted above.

Our ability to

client and vendor contracts, (vi) liability for stolen assets, information or identity, (vii) remediation costs to repair damage caused by the failure or breach, (viii) additional security and organizational costs to mitigate against future incidents, (ix) reputational harm, (x) loss of confidence in our business and products, (xi) liability for failure to review and disclose applicable incidents or provide relevant updated disclosure properly and timely, (xii) regulatory investigations or actions, and/or (xiii) legal claims, litigation, and liability costs, any one or more of which may be material.

See “Pandemic-Related Risks” above for risks relating to COVID-19.

additional compliance and administrative burdens and costs.

and assess additional taxes.

[removed: In addition to investment management, our] [added: Related] services include fund administration, sales and distribution, and shareholder servicing.

We offer our services and products under our various distinct brand names, including, but not limited to, Franklin®, Templeton®, Legg Mason®, [added: Alcentra®,] Benefit Street Partners®, Brandywine Global Investment Management®, Clarion Partners®, ClearBridge Investments®, Fiduciary Trust International™, Franklin Bissett®, Franklin Mutual Series®, K2®, [removed: LibertyShares®,] [added: Lexington Partners®,] Martin Currie®, [added: O’Shaughnessy® Asset Management,] Royce® Investment Partners and Western Asset Management Company®.

We offer a broad product mix of fixed income, equity, [added: alternative,] multi-asset, [removed: alternative] and cash management asset classes and solutions that meet a wide variety of specific investment goals and needs for individual and institutional investors.

The S&P 500 Index and MSCI World Index [removed: increased 30.0%] [added: decreased 15.5%] and [removed: 29.4%] [added: 19.3%] for the fiscal year.

The global bond markets [added: also] declined as the Bloomberg Barclays Global Aggregate Index decreased [removed: 0.9%] [added: 20.4%] for the fiscal [removed: year.][added: year driven by the interest rate increases.]

[removed: Our total] AUM [removed: was $1,530.1] [added: increased $111.2] billion [removed: at September 30, 2021, which was] [added: or] 8% [removed: higher than at September 30, 2020 driven by] [added: during fiscal year 2021 due to the positive impact of] $148.0 billion [removed: from] [added: of] net market change, distributions and other, and $3.5 billion from an acquisition, partially offset by $25.2 billion of long-term net outflows and $15.1 billion of cash management net outflows.

| *(in millions, except per share data)* | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| for the fiscal years ended September 30, | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | | | |

| Operating revenues | | | | | | $ | [removed: 8,425.5] [added: 8,275.3] | | | | | $ | [removed: 5,566.5] [added: 8,425.5] | | | | | $ | [removed: 5,669.4] [added: 5,566.5] | | | | | [removed: 51] [added: (2] | | [removed: %] [added: %)] | | | | [removed: (2] [added: 51] | | [removed: %)] [added: %] |

| Operating income | | | | | | [removed: 1,875.0] [added: 1,773.9] | | | | | | [removed: 1,048.9] [added: 1,875.0] | | | | | | [removed: 1,466.9] [added: 1,048.9] | | | | | | [removed: 79] [added: (5] | | [removed: %] [added: %)] | | | | [removed: (28] [added: 79] | | [removed: %)] [added: %] |

| Operating margin1 | | | | | | [removed: 22.3] [added: 21.4] | | % | | | | [removed: 18.8] [added: 22.3] | | % | | | | [removed: 25.9] [added: 18.8] | | % | | | | | | | | | | | | |

| Net income attributable to Franklin Resources, Inc. | | | | | | $ | [removed: 1,831.2] [added: 1,291.9] | | | | | $ | [removed: 798.9] [added: 1,831.2] | | | | | $ | [removed: 1,195.7] [added: 798.9] | | | | | [removed: 129] [added: (29] | | [removed: %] [added: %)] | | | | [removed: (33] [added: 129] | | [removed: %)] [added: %] |

| Diluted earnings per share | | | | | | $ | [removed: 3.57] [added: 2.53] | | | | | $ | [removed: 1.59] [added: 3.57] | | | | | $ | [removed: 2.35] [added: 1.59] | | | | | [removed: 125] [added: (29] | | [removed: %] [added: %)] | | | | [removed: (32] [added: 125] | | [removed: %)] [added: %] |

| Adjusted operating income | | | | | | $ | [removed: 2,379.3] [added: 2,323.5] | | | | | $ | [removed: 1,491.1] [added: 2,379.3] | | | | | $ | [removed: 1,654.2] [added: 1,491.1] | | | | | [removed: 60] [added: (2] | | [removed: %] [added: %)] | | | | [removed: (10] [added: 60] | | [removed: %)] [added: %] |

| Adjusted operating margin | | | | | | [removed: 37.7] [added: 35.9] | | % | | | | [removed: 38.5] [added: 37.7] | | % | | | | [removed: 42.6] [added: 38.5] | | % | | | | | | | | | | | | |

| Adjusted net income | | | | | | $ | [removed: 1,915.2] [added: 1,855.6] | | | | | $ | [removed: 1,311.0] [added: 1,915.2] | | | | | $ | [removed: 1,331.3] [added: 1,311.0] | | | | | [removed: 46] [added: (3] | | [removed: %] [added: %)] | | | | [removed: (2] [added: 46] | | [removed: %)] [added: %] |

| Adjusted diluted earnings per share | | | | | | $ | [removed: 3.74] [added: 3.63] | | | | | $ | [removed: 2.61] [added: 3.74] | | | | | $ | [removed: 2.62] [added: 2.61] | | | | | [removed: 43] [added: (3] | | [removed: %] [added: %)] | | | | [removed: 0] [added: 43] | | % |

| *(in billions)* | | | | | | | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| as of September 30, | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | | | | | | | | | |

| Fixed Income | | | | | | $ | [removed: 650.3] [added: 490.9] | | | | | $ | [removed: 656.9] [added: 650.3] | | | | | $ | [removed: 250.6] [added: 656.9] | | | | | [removed: (1] [added: (25] | | %) | | | | [removed: 162] [added: (1] | | [removed: %] [added: %)] |

| Equity | | | | | | [removed: 523.6] [added: 392.3] | | | | | | [removed: 438.1] [added: 523.6] | | | | | | [removed: 263.9] [added: 438.1] | | | | | | [removed: 20] [added: (25] | | [removed: %] [added: %)] | | | | [removed: 66] [added: 20] | | % |

| Multi-Asset | | | | | | [removed: 152.4] [added: 131.5] | | | | | | [removed: 129.4] [added: 152.4] | | | | | | [removed: 123.6] [added: 129.4] | | | | | | [removed: 18] [added: (14] | | [removed: %] [added: %)] | | | | [removed: 5] [added: 18] | | % |

| Alternative | | | | | | [removed: 145.2] [added: 225.1] | | | | | | [removed: 122.1] [added: 145.2] | | | | | | [removed: 45.0] [added: 122.1] | | | | | | [removed: 19] [added: 55] | | % | | | | [removed: 171] [added: 19] | | % |

| Cash Management | | | | | | [removed: 58.6] [added: 57.6] | | | | | | [removed: 72.4] [added: 58.6] | | | | | | [removed: 9.5] [added: 72.4] | | | | | | [removed: (19] [added: (2] | | %) | | | | [removed: 662] [added: (19] | | [removed: %] [added: %)] |

| [removed: Total] [added: Beginning AUM] | | | | | | [removed: $] [added: $] | [removed: 1,530.1] [added: 1,530.1] | | | | | [removed: $] [added: $] | [removed: 1,418.9] [added: 1,418.9] | | | | | [removed: $] [added: $] | [removed: 692.6] [added: 692.6] | | | | | [removed: 8] [added: 8] | | [removed: %] [added: %] | | | | [removed: 105] [added: 105] | | [removed: %] [added: %] |

| *(in billions)* | | | | | | Average AUM | | | | | | | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | |

| Fixed Income | | | | | | $ | [removed: 657.5] [added: 586.5] | | | | | $ | [removed: 330.5] [added: 657.5] | | | | | $ | [removed: 256.1] [added: 330.5] | | | | | [removed: 99] [added: (11] | | [removed: %] [added: %)] | | | | [removed: 29] [added: 99] | | % |

| Equity | | | | | | [removed: 502.9] [added: 491.3] | | | | | | [removed: 290.8] [added: 502.9] | | | | | | [removed: 275.5] [added: 290.8] | | | | | | [removed: 73] [added: (2] | | [removed: %] [added: %)] | | | | [removed: 6] [added: 73] | | % |

| Multi-Asset | | | | | | [removed: 146.4] [added: 146.1] | | | | | | [removed: 122.7] [added: 146.4] | | | | | | [removed: 122.2] [added: 122.7] | | | | | | [removed: 19] [added: 0] | | % | | | | [removed: 0] [added: 19] | | % |

| Alternative | | | | | | [removed: 132.6] [added: 185.1] | | | | | | [removed: 63.7] [added: 132.6] | | | | | | [removed: 33.7] [added: 63.7] | | | | | | [removed: 108] [added: 40] | | % | | | | [removed: 89] [added: 108] | | % |

| Cash Management | | | | | | [removed: 64.7] [added: 60.2] | | | | | | [removed: 25.2] [added: 64.7] | | | | | | [removed: 9.5] [added: 25.2] | | | | | | [removed: 157] [added: (7] | | [removed: %] [added: %)] | | | | [removed: 165] [added: 157] | | % |

| Total | | | | | | $ | [removed: 1,504.1] [added: 1,469.2] | | | | | $ | [removed: 832.9] [added: 1,504.1] | | | | | $ | [removed: 697.0] [added: 832.9] | | | | | [removed: 81] [added: (2] | | [removed: %] [added: %)] | | | | [removed: 19] [added: 81] | | % |

| for the fiscal years ended September 30, | | | | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | | | | | [removed: 2019] | | | [added: | | | | | |]

| Fixed Income | | | | | | [removed: 44] [added: 40] | | % | | | | [removed: 39] [added: 44] | | % | | | | [removed: 37] [added: 39] | | % |

| Equity | | | | | | 33 | | % | | | | [removed: 35] [added: 33] | | % | | | | [removed: 40] [added: 35] | | % |

| Multi-Asset | | | | | | 10 | | % | | | | [removed: 15] [added: 10] | | % | | | | [removed: 17] [added: 15] | | % |

| Alternative | | | | | | [removed: 9] [added: 13] | | % | | | | [removed: 8] [added: 9] | | % | | | | [removed: 5] [added: 8] | | % |

| Cash Management | | | | | | 4 | | % | | | | [removed: 3] [added: 4] | | % | | | | [removed: 1] [added: 3] | | % |

| Long-term inflows | | | | | | [removed: 364.7] [added: 320.4] | | | | | | [removed: 182.4] [added: 364.7] | | | | | | [removed: 175.0] [added: 182.4] | | | | | | [removed: 100] [added: (12] | | [removed: %] [added: %)] | | | | [removed: 4] [added: 100] | | % |

| Long-term outflows | | | | | | [removed: (389.9)] [added: (348.2)] | | | | | | [removed: (244.0)] [added: (389.9)] | | | | | | [removed: (206.8)] [added: (244.0)] | | | | | | [removed: 60] [added: (11] | | [removed: %] [added: %)] | | | | [removed: 18] [added: 60] | | % |

During the fiscal year ended September 30, 2022 (“fiscal year 2022”), global equity markets experienced significant declines driven by the economic impacts of inflationary pressures, interest rate increases by the Federal Reserve and other developed market central banks in an effort to combat inflation, central banks’ tightened monetary policies, the Russian invasion of Ukraine, and concerns about the risk of recession.

Our total AUM was $1,297.4 billion at September 30, 2022, which was 15% lower than at September 30, 2021 driven by the negative impact of $269.0 billion of net market change, distributions and other, $27.8 billion of long-term net outflows and $0.8 billion of cash management net outflows, partially offset by $64.9 billion from acquisitions.

Simple monthly average AUM (“average AUM”) decreased 2% during fiscal year 2022.

On April 1, 2022, we acquired all of the outstanding ownership interests in Lexington Partners L.P. (“Lexington”), a leading global manager of secondary private equity and co-investment funds, for cash consideration of $1.0 billion and additional payments totaling $750.0 million to be paid in cash over the next three years.

In connection with the acquisition, we granted a 25% ownership stake in Lexington and performance-based cash retention awards to certain employees that vest over approximately five years.

| Total | | | | | | $ | 1,297.4 | | | | | $ | 1,530.1 | | | | | $ | 1,418.9 | | | | | (15 | | %) | | | | 8 | | % |

| for the fiscal years ended September 30, | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| *(in billions)* | | | | | | | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

| for the fiscal years ended September 30, | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | | | | | | | | | |

| AUM at October 1, 2021 | | | | | | $ | 650.3 | | | | | $ | 523.6 | | | | | $ | 145.2 | | | | | $ | 152.4 | | | | | $ | 58.6 | | | | | $ | 1,530.1 | |

| Long-term inflows | | | | | | 138.4 | | | | | | 123.0 | | | | | | 22.4 | | | | | | 36.6 | | | | | | — | | | | | | 320.4 | | |

| Long-term outflows | | | | | | (168.6) | | | | | | (131.6) | | | | | | (16.1) | | | | | | (31.9) | | | | | | — | | | | | | (348.2) | | |

| Long-term net flows | | | | | | (30.2) | | | | | | (8.6) | | | | | | 6.3 | | | | | | 4.7 | | | | | | — | | | | | | (27.8) | | |

| Total net flows | | | | | | (30.2) | | | | | | (8.6) | | | | | | 6.3 | | | | | | 4.7 | | | | | | (0.8) | | | | | | (28.6) | | |

| Acquisitions | | | | | | — | | | | | | 4.6 | | | | | | 58.0 | | | | | | 2.3 | | | | | | — | | | | | | 64.9 | | |

| Net market change, distributions and other | | | | | | (129.2) | | | | | | (127.3) | | | | | | 15.6 | | | | | | (27.9) | | | | | | (0.2) | | | | | | (269.0) | | |

| AUM at September 30, 2022 | | | | | | $ | 490.9 | | | | | $ | 392.3 | | | | | $ | 225.1 | | | | | $ | 131.5 | | | | | $ | 57.6 | | | | | $ | 1,297.4 | |

The market depreciation occurred in all asset classes with the exception of the alternative asset class.

Foreign exchange revaluation from AUM in products that are not U.S. dollar denominated was primarily due to a stronger U.S. dollar compared to the Japanese Yen, Euro, Pound Sterling and Australian dollar.

Long-term inflows decreased 12% to $320.4 billion, as compared to the prior year, driven by lower inflows in fixed income institutional separate accounts, open-end funds, and retail separately managed accounts, as well as equity open-end funds, partially offset by higher alternative inflows for private funds.

Long-term outflows decreased 11% to $348.2 billion due to lower outflows in fixed income institutional separate accounts, equity and multi-asset open-end funds, and equity sub-advised mutual funds, partially offset by higher equity outflows in retail separately managed accounts and multi-asset sub-advised mutual funds.

| Acquisitions | | | | | | 3.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3.5 | | |

Long-term net outflows included outflows of $35.7 billion from sixteen institutional products, including two fixed income redemptions of $5.9 billion and $2.0 billion and two equity redemptions of $3.7 billion and

| *(in billions)* | | | | | | | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

| Americas, excl. U.S. | | | | | | 81.1 | | | | | | 80.4 | | | | | | 84.5 | | | | | | 1 | | % | | | | (5 | | %) |

| Total | | | | | | $ | 1,297.4 | | | | | $ | 1,530.1 | | | | | $ | 1,418.9 | | | | | (15 | | %) | | | | 8 | | % |

| for the fiscal years ended September 30, | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | | | | | | | | | |

Investment management fees increased $75.2 million in fiscal year 2022 primarily due to higher performance fees, partially offset by a 2% decrease in average AUM.

The rate decrease in fiscal year 2022 was primarily due to a shift in assets from higher-fee products to lower-fee products in the fixed income and equity asset classes.

The increase in fiscal year 2022 was primarily due to strong performance by our alternative specialist investment managers, while the increase in fiscal year 2021 was primarily due to the acquisition of Legg Mason as well as strong performance.

We

| for the fiscal years ended September 30, | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | | | | | | | | | |

Asset-based distribution fees decreased $152.1 million in fiscal year 2022 primarily due to a 12% decrease in the related average AUM.

Sales-based fees decreased $63.5 million in fiscal year 2022 primarily due to a 20% decrease in commissionable sales.

| *(in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

| *(in millions)* | | | | | | | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | 2021 vs. 2020 | | |

| for the fiscal years ended September 30, | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | | | | | | | | | |

| Incentive compensation | | | | | | 1,500.5 | | | | | | 1,303.9 | | | | | | 550.0 | | | | | | 15 | | % | | | | 137 | | % |

| Other1 | | | | | | (4.3) | | | | | | 75.1 | | | | | | 65.4 | | | | | | NM | | | | | | 15 | | % |

_______________

As further noted in the “Risk Factors” section, the outbreak and spread of contagious diseases such as the coronavirus disease 2019 (“COVID-19”), a highly transmissible and pathogenic disease, has adversely affected, and may continue to adversely affect, our business, financial condition and results of operations.

Ongoing global health concerns, and uncertainty regarding the impact of COVID-19, could lead to further and/or increased volatility in global capital and credit markets, adversely affect our key executives and other personnel, clients, investors, providers, suppliers, lessees, and other third parties, and negatively impact our AUM, revenues, income, business and operations.

As of the time of this filing, as the COVID-19 pandemic continues to evolve, it is not possible to predict the full extent to which the pandemic may adversely impact our business, liquidity, capital resources, financial results and operations, which impacts will depend on numerous developing factors that remain uncertain and subject to change.

During the fiscal year ended September 30, 2021 (“fiscal year 2021”), the global equity markets continued to provide strong positive returns, reflecting among other things, an accelerated rollout of COVID-19 vaccines in most developed economies, government stimulus and other support in many countries, and a decline in U.S. 10-year treasury yields.

Simple monthly average AUM (“average AUM”) increased 81% during fiscal year 2021, reflecting a full year of AUM from the acquisition of Legg Mason.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Operating income increased $826.1 million in fiscal year 2021 as a 51% increase in operating revenues was partially offset by a 45% increase in operating expenses.

The increase in operating revenues and operating expenses was primarily due to the acquisition of Legg Mason.

Net income attributable to Franklin Resources, Inc. increased $1,032.3 million due to the increase in operating income and higher other income, net, less the portion attributable to noncontrolling interests, partially offset by higher taxes on income.

The Company acquired Legg Mason effective July 31, 2020, and the results of operations for the fiscal year ended September 30, 2020 (“fiscal year 2020”) include two months of Legg Mason’s results.

Operating income decreased $418.0 million in fiscal year 2020 due to a 2% decrease in operating revenues and a 7% increase in operating expenses which reflected higher levels of compensation and benefits expense, including acquisition-related retention costs, other acquisition-related expenses, and amortization and impairments of intangible assets and goodwill.

Net income attributable to Franklin Resources, Inc. decreased $396.8 million primarily due to the decrease in operating income, as the impact of declines in market valuations amid global concerns about the COVID-19 pandemic resulted in net investment and other losses of $38.4 million, as compared to net gains of $141.4 million in the prior year, less the portion attributable to noncontrolling interests, which was largely offset by lower taxes on income.

Diluted earnings per share increased in fiscal year 2021 and decreased in fiscal year 2020, consistent with the changes in net income attributable to Franklin Resources, Inc.

Adjusted operating income increased $888.2 million in fiscal year 2021 primarily due to a 66% increase in investment management fees, partially offset by a 69% increase in compensation and benefits expense.

The increase in investment management fees and compensation and benefits expenses was primarily due to the acquisition of Legg Mason.

Adjusted net income increased $604.2 million primarily due to the increase in adjusted operating income, partially offset by lower other income, net, less the portion attributable to noncontrolling interests.

Adjusted operating income decreased $163.1 million in fiscal year 2020 primarily due to a 10% increase in compensation and benefits expense, excluding non-GAAP adjustments.

Adjusted net income decreased $20.3 million primarily due to the decrease in adjusted operating income substantially offset by lower taxes on income, excluding the net income tax expense of non-GAAP adjustments.

Adjusted diluted earnings per share increased in fiscal year 2021 and decreased in fiscal year 2020, consistent with the changes in adjusted net income.

| Average for the Year | | | | | | $ | 1,504.1 | | | | | $ | 832.9 | | | | | $ | 697.0 | | | | | 81 | | % | | | | 19 | | % |

In the first quarter of the fiscal year 2021, we revised our presentation of AUM to reflect changes in asset class of certain legacy Legg Mason AUM as part of our post-acquisition onboarding process.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Beginning AUM | | | | | | $ | 1,418.9 | | | | | $ | 692.6 | | | | | $ | 717.1 | | | | | 105 | | % | | | | (3 | | %) |

| Acquisition | | | | | | 3.5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3.5 | | |

AUM increased $726.3 billion or 105% during fiscal year 2020 as $806.5 billion from acquisitions was partially offset by $61.6 billion of long-term net outflows, $9.9 billion of cash management net outflows and $8.7 billion of net market change, distributions and other.

Acquisitions included $797.4 billion from the acquisition of Legg Mason and $9.1 billion from other acquisitions.

Long-term inflows increased 4% to $182.4 billion due to higher inflows in all the long-term asset classes except multi-asset.

Long-term outflows increased 18% to $244.0 billion due to higher outflows in all long-term asset classes except multi-asset, most significantly in fixed income products.

Long-term net outflows included outflows of $27.6 billion from six fixed income funds, $7.3 billion from seven institutional products, $6.2 billion from three equity funds, and $3.6 billion from a multi-asset fund, partially offset by inflows of $6.0 billion in two equity funds, $4.0 billion in three fixed income funds, $2.0 billion in two institutional products and $1.3 billion in a private open-end product.

The market appreciation occurred primarily in the equity asset class and reflected positive returns in global equity markets.

| AUM at October 1, 2018 | | | | | | $ | 258.5 | | | | | $ | 304.6 | | | | | $ | 126.7 | | | | | $ | 18.0 | | | | | $ | 9.3 | | | | | $ | 717.1 | |

| Long-term inflows | | | | | | 75.6 | | | | | | 58.5 | | | | | | 34.8 | | | | | | 6.1 | | | | | | — | | | | | | 175.0 | | |

| Long-term outflows | | | | | | (81.9) | | | | | | (83.5) | | | | | | (35.9) | | | | | | (5.5) | | | | | | — | | | | | | (206.8) | | |

| Long-term net flows | | | | | | (6.3) | | | | | | (25.0) | | | | | | (1.1) | | | | | | 0.6 | | | | | | — | | | | | | (31.8) | | |

| Total net flows | | | | | | (6.3) | | | | | | (25.0) | | | | | | (1.1) | | | | | | 0.6 | | | | | | 0.9 | | | | | | (30.9) | | |

| Acquisition | | | | | | — | | | | | | — | | | | | | — | | | | | | 26.4 | | | | | | — | | | | | | 26.4 | | |

| Net market change, distributions and other | | | | | | (1.6) | | | | | | (15.7) | | | | | | (2.0) | | | | | | — | | | | | | (0.7) | | | | | | (20.0) | | |

| AUM at September 30, 2019 | | | | | | $ | 250.6 | | | | | $ | 263.9 | | | | | $ | 123.6 | | | | | $ | 45.0 | | | | | $ | 9.5 | | | | | $ | 692.6 | |

Changes in [removed: equity] market prices, interest rates, credit spreads, foreign exchange rates, or a combination of these factors could cause the value of AUM to decline, which would result in lower investment management and distribution fees.

Such a change for the fiscal year ended September 30, [removed: 2021] [added: 2022] would have resulted in an increase or decrease in operating revenues of [removed: $758.5] [added: $726.9] million.

We are exposed to changes in interest rates primarily through our investments in funds that invest in debt securities, which were [removed: $1,606.0] [added: $1,918.3] million at September 30, [removed: 2021.][added: 2022.]

We had [removed: no] [added: minimal] exposure to changes in interest rates from debt obligations at September 30, [removed: 2021] [added: 2022] as [added: substantially] all of our outstanding debt was issued at fixed rates.

As of September 30, [removed: 2021,] [added: 2022,] we have considered the potential impact of a 100 basis point movement in market interest rates on our investments in funds that invest in debt securities.

The exposure to foreign currency exchange risk in our consolidated balance sheet mostly relates to cash and cash equivalents and investments that are denominated in foreign currencies, primarily in the Euro, [removed: Pound Sterling,] Indian Rupee, [removed: Canadian dollar] [added: Pound Sterling] and Australian dollar.

These assets accounted for [removed: 22%] [added: 19%] of the total cash and cash equivalents and investments at September 30, [removed: 2021.][added: 2022.]

Such a weakening as of September 30, [removed: 2021] [added: 2022] would result in a [removed: $93.4] [added: $109.1] million [removed: increase] [added: decrease] in accumulated other comprehensive [removed: income] [added: loss] and a [removed: $29.7] [added: $19.9] million decrease in pre-tax earnings.

The following is a summary of the effect of a 10% increase or decrease in the carrying values of our financial instruments subject to market valuation risks at September 30, [removed: 2021.][added: 2022.]

If such a 10% increase or decrease in carrying values were to occur, the changes from investments measured at fair value and direct investments in CIPs would result in a [removed: $163.1] [added: $158.1] million increase or decrease in our pre-tax earnings.

| Investments, at fair value | | | | | | $ | 613.5 | | | | | $ | 674.9 | | | | | $ | 552.1 | |

| Direct investments in CIPs | | | | | | 967.2 | | | | | | 1,063.9 | | | | | | 870.5 | | |

| Total | | | | | | $ | 1,580.7 | | | | | $ | 1,738.8 | | | | | $ | 1,422.6 | |

| Investments, at fair value | | | | | | $ | 588.3 | | | | | $ | 647.1 | | | | | $ | 529.5 | |

| Direct investments in CIPs | | | | | | 1,042.8 | | | | | | 1,147.1 | | | | | | 938.5 | | |

| Total | | | | | | $ | 1,631.1 | | | | | $ | 1,794.2 | | | | | $ | 1,468.0 | |

We offer our services and products under our various distinct brand names, including, but not limited to, Franklin®, Templeton®, Legg Mason®, [added: Alcentra®,] Benefit Street Partners®, Brandywine Global Investment Management®, Clarion Partners®, ClearBridge Investments®, Fiduciary Trust International™, Franklin Bissett®, Franklin Mutual Series®, K2®, [removed: LibertyShares®,] [added: Lexington Partners®,] Martin Currie®, [added: O’Shaughnessy® Asset Management,] Royce® Investment Partners and Western Asset Management Company®.

We are a global investment management organization with [removed: $1,530.1] [added: $1,297.4] billion in assets under management (“AUM”) as of September 30, [removed: 2021.][added: 2022.]

Through our specialist investment managers, we [removed: bring] [added: offer investment specialization bringing] extensive capabilities [removed: in] [added: across our] fixed income, equity, [removed: multi-asset solutions] [added: alternative] and [removed: alternatives.][added: multi-asset products.]

For [removed: more than 70] [added: 75] years, we have been committed to providing clients with exceptional investment management services and have developed a globally diversified business, including through strategic acquisitions.

[removed: In addition to investment management, our] [added: Related] services include fund administration, sales and distribution, and shareholder servicing.

We are committed to delivering strong investment performance for our [removed: clients by] [added: clients, and to] offering a broad range of strategies and drawing on [removed: the extensive experience] [added: our diverse experiences] and [removed: perspective] [added: perspectives] gained through our long history in the investment management business.

We continue to focus on the long-term investment performance of our investment products and on providing high quality [removed: customer] service to our clients.

Incorporated herein by reference is certain financial information about our segment and geographic areas contained in Note [removed: 19] [added: 18] – Segment and Geographic Information in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report.

We have added, among others: (i) the Templeton investment firm, known for its global investing strategies and value style of investing, in 1992, (ii) the Franklin Mutual Series investment firm, known for its value-oriented equity funds, in 1996, (iii) the Franklin Bissett investment firm, known for its Canadian fixed income funds and growth-oriented equity funds, in 2000, (iv) the Fiduciary Trust International investment, trust and fiduciary services firm, in 2001, (v) the [removed: K2 Advisors hedge funds solutions firm, in 2012, (vi) the] Benefit Street Partners U.S. alternative credit manager firm, in 2019, [removed: (vii)] [added: (vi)] the Athena Capital Advisors investment and wealth management firm, in March 2020, [removed: (viii)] [added: (vii)] The Pennsylvania Trust Company investment, trust and fiduciary services firm, in May 2020, [removed: and (ix)] [added: (viii)] the Legg Mason global investment firm, including certain specialist investment managers, [removed: on] [added: in] July [removed: 31, 2020.][added: 2020, (ix) the O’Shaughnessy Asset Management quantitative asset management firm, in December 2021, and (x) the Lexington Partners global investment firm, known for its alternative asset capabilities, in April 2022.]

Our investment management fees, which represent [removed: the majority] [added: a significant portion] of our revenues, depend to a large extent on the level and relative mix of our AUM and the types of services provided, which are subject to change.

[removed: Most of our funds are] [added: Our] registered open-end funds, or mutual funds, [removed: that] continuously offer their shares to investors.

[removed: We also offer or manage] [added: Our] registered [removed: or listed] closed-end funds [removed: that] issue a set number of shares to investors in a public offering which [removed: shares] are [removed: then] traded on a public stock exchange.

Our [removed: specialist] investment managers manage a fund’s portfolio of securities in accordance with the fund’s stated objectives.

We outsource [removed: certain administration] [added: various administration, technology, transfer agency] and other services for our funds to third-party providers.

We offer a broad product mix under our fixed income, equity, [removed: multi-asset, alternative] [added: alternative, multi-asset] and cash management asset [removed: classes and solutions.][added: classes.]

Our multi-asset [removed: solutions] capabilities include income, real return, balanced/hybrid, total return, target data/risk, absolute return, tactical asset allocation and managed volatility investments.

| *(in billions)* as of September 30, [removed: 2021] [added: 2022] | | | | | | U.S. Funds | | | | | | Non-U.S. Funds | | | | | | Institutional Separate Accounts | | | | | | Retail Separately Managed Accounts | | | | | | Other | | | | | | Total | | | | | | Percentage of Total AUM | | |

[removed: Broadly speaking, other than changes in] AUM [added: changes] due to [removed: acquisitions or dispositions by us,] [added: acquisitions,] changes in our AUM depend primarily upon two factors: (i) the increase or decrease in the market value of the securities and instruments held in the portfolio of investments, and (ii) the level of [removed: inflows as compared to the level of outflows.][added: net flows.]

Our specialist investment managers include: Benefit Street Partners, Brandywine Global, Clarion Partners, ClearBridge Investments, Fiduciary Trust International, Franklin [added: Equity Group, Franklin Mutual Series, Franklin] Templeton [added: Emerging Markets] Equity, Franklin Templeton Fixed Income, Franklin Templeton [added: Global Private Equity, Franklin Templeton] Investment Solutions, [added: K2 Advisors, Lexington Partners,] Martin Currie, [added: O’Shaughnessy Asset Management,] Royce Investment Partners, Templeton Global [removed: Macro,] [added: Equity Group, Templeton Global Macro] and Western Asset Management.

Through our specialist investment managers, we offer a broad range of services and capabilities under our fixed income, equity, [removed: multi-asset, alternative] [added: alternative, multi-asset] and cash management asset classes.

Our products and capabilities are designed to accommodate a variety of investment goals and preferences, from capital appreciation to capital preservation, as well as [removed: certain] [added: sustainable investing and other] environmental, social and governance (“ESG”) preferences.

[added: A few of] our subsidiaries also serve as direct marketing broker-dealers for institutional investors for certain of our private funds, and some of our private funds may utilize third-party placement agents.

[removed: These] [added: Certain of our specialist investment managers manage alternative investment] strategies [added: which] provide our clients with alternatives to traditional equity and fixed income products and services.

Through our [removed: subsidiary] Fiduciary Trust [removed: Company] International [removed: (“Fiduciary Trust International”),] [added: group,] including its trust company and investment adviser subsidiaries, and through certain other of our subsidiaries, we provide investment management and related services to, among others, high-net-worth individuals and families, family offices, foundations and institutional clients.

Substantially all shareholder servicing fees are earned from our funds for providing transfer agency services, which include providing shareholder statements, transaction processing, [removed: customer] [added: client] service and tax reporting.

Due to our international presence and varied product mix, it is difficult to assess our market position relative to other investment managers on a worldwide basis, but we believe that we are one of the more widely diversified investment managers based in the U.S. We believe that our fixed income, equity, [removed: multi-asset and] alternative [added: and multi-asset] asset mix, coupled with our global presence, will serve our competitive needs well over the long term.

[removed: Breaches of applicable laws and rules could result in regulatory] enforcement, civil liability, criminal liability and/or the imposition of a range of sanctions or orders against us, including, as applicable, monetary damages, injunctions, disgorgements, fines, penalties, cease and desist orders, censures, reprimands, and the revocation, cancellation, suspension or restriction of licenses, registration status or approvals held by us or our business in a jurisdiction or market.

We are also subject to various other U.S. federal and state laws, including those affecting corporate governance and disclosure, such as the Securities Act of 1933, the Securities Exchange Act of 1934 (“Exchange Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of [removed: 2010 (“Dodd-Frank”),] [added: 2010,] the Sarbanes-Oxley Act of 2002 and the USA PATRIOT Act of 2001.

*Systemically Important Financial Institutions.* [removed: Dodd-Frank authorized the establishment] [added: The mandate] of the Financial Stability Oversight Council [removed: (“FSOC”), the mandate of which] [added: (“FSOC”)] is to identify and respond to threats to U.S. financial stability.

The FSB may designate certain non-bank financial companies as global systemically important financial institutions [removed: (“G-SIFIs”); the additional regulatory requirements triggered by any such designation are not yet established.][added: (“G-SIFIs”).]

To the extent that we or any of our funds are designated as a SIFI or G-SIFI, such designations [added: would] add additional [removed: supervision] [added: supervision, review, monitoring] and/or [removed: regulation, which could include requirements related to risk-based capital, leverage, liquidity, credit exposure, stress testing, resolution plans, early remediation,] [added: regulation resulting in increased scrutiny] and [removed: certain risk management requirements,] [added: oversight] that could impact our business.

[added: *Derivatives and Other Financial Products.*] Regulators continue to review practices and regulations relating to the use of futures, swaps and other derivatives, which could result in further restrictions and limitations on the use of such products.

[removed: Subject to its] [added: As of] August [removed: 2022 compliance date,] [added: 2022,] key aspects of the new framework [removed: will] include, among other things, value at risk limits on a fund entering into derivatives transactions, required risk management program, and further fund board oversight, reporting and compliance requirements.

[removed: In 2016, the] [added: The] regulatory structure governing U.S. money market funds was [added: previously] reformed to address perceived systemic risks of money market funds relating to fund stability and investor risks, including allowing certain funds to impose liquidity fees and redemption gates under certain circumstances.

In addition, [removed: following market liquidity issues in March 2020 related to the COVID-19 pandemic,] regulatory authorities remain focused on whether to implement further reform measures to improve the resiliency of money market funds and the broader short-term funding markets, which, if adopted, could significantly impact the money market fund industry.

*Privacy and Data Protection.* There [removed: also] has been increased regulation with respect to the protection of customer privacy and data, and the need to secure sensitive customer, personnel and others’ information.

A majority of the jurisdictions where we operate are covered, or we expect will be [removed: soon] covered, by privacy and data protection laws and regulations.

[added: In addition to the EU’s GDPR data protection rules, we also are or may become subject to or affected by additional country,] federal and state laws, regulations and guidance impacting consumer privacy, such as the California Consumer Privacy Act (“CCPA”) that provides for enhanced consumer protections for California residents, enforcement authority by the California Attorney General [added: and/or the California Privacy Protection Agency] for CCPA violations, and the potential for private litigation, including statutory damages for data security breaches.

Since June [removed: 30,] 2020, such rules, among other things: (i) require broker-dealers to act in the best interest of their retail customers when recommending securities and account types, (ii) raise the broker-dealer standard of conduct beyond existing suitability obligations, and (iii) require broker-dealers and registered investment advisers to provide their retail clients with a new relationship summary disclosure document to inform such clients of the nature of their relationships with the clients’ investment professionals, including a description of services offered, the legal standards of conduct that apply to such services, the fees a client might pay, and conflicts of interest that may exist.

The EU’s Sustainable Finance Disclosure Regulation (“SFDR”) [removed: came into effect in March 2021, imposing] [added: imposes] mandatory ESG disclosure obligations on asset managers and other financial markets participants.

Recent Acquisition

On November 1, 2022, we acquired BNY Alcentra Group Holdings, Inc. (together with its subsidiaries, “Alcentra”) from The Bank of New York Mellon Corporation.

Alcentra is a leading European credit and private debt manager, with global expertise in senior secured loans, high yield bonds, private credit, structured credit, special situations and multi-strategy credit strategies.

We expect this acquisition to expand our alternative credit capabilities and presence in Europe, and continue to strengthen the breadth and scale of our alternative asset strategies.

| Fixed Income | | | | | | $ | 146.9 | | | | | $ | 35.6 | | | | | $ | 238.2 | | | | | $ | 28.0 | | | | | $ | 42.2 | | | | | $ | 490.9 | | | | | 38 | | % |

| Equity | | | | | | 188.9 | | | | | | 68.1 | | | | | | 35.5 | | | | | | 66.7 | | | | | | 33.1 | | | | | | 392.3 | | | | | | 30 | | % |

| Alternative | | | | | | 5.7 | | | | | | 6.0 | | | | | | 32.1 | | | | | | — | | | | | | 181.3 | | | | | | 225.1 | | | | | | 17 | | % |

| Multi-Asset | | | | | | 82.2 | | | | | | 7.5 | | | | | | 6.8 | | | | | | 5.4 | | | | | | 29.6 | | | | | | 131.5 | | | | | | 10 | | % |

| Cash Management | | | | | | 28.6 | | | | | | 27.9 | | | | | | 1.1 | | | | | | — | | | | | | — | | | | | | 57.6 | | | | | | 5 | | % |

| Total | | | | | | $ | 452.3 | | | | | $ | 145.1 | | | | | $ | 313.7 | | | | | $ | 100.1 | | | | | $ | 286.2 | | | | | $ | 1,297.4 | | | | | 100 | | % |

Broadly speaking, other than

We outsource various transfer agency and other services for our funds to third-party providers who serve as a sub-agent or delegate, depending on the jurisdiction.

We primarily derive our fund sales through third-party broker-dealers, banks, investment advisers and other financial intermediaries.

Because we rely on third-party distribution and sales channels to sell our products, we do not control the ultimate investment recommendations given by them to clients.

Such financial intermediaries may recommend competing products.

Breaches of applicable laws and rules could result in regulatory

*Sustainable Investing and ESG*.

Sustainable investing and ESG have been the focus of increased regulatory scrutiny across jurisdictions.

Globally, the International Sustainability Standards Board and applicable disclosure standards impact how national regulators approach these topics.

In the U.S., the SEC has proposed rules to require public issuers to provide enhanced disclosure regarding climate-related information in annual reports and registration statements.

Also, the SEC has increased its focus on disclosure and compliance related to ESG strategies of investment advisers and funds.

Recent Developments

As previously announced, on November 1, 2021, we entered into a definitive agreement to acquire Lexington Partners L.P. (“Lexington”), a leading global manager of secondary private equity and co-investment funds.

We expect this acquisition to bolster our alternative asset capabilities, complementing our existing strengths in real estate, private credit, and hedge fund strategies.

The transaction is structured to provide continuity for Lexington’s experienced team and continued alignment with investors.

The transaction is subject to customary closing conditions and is expected to close by the end of the second fiscal quarter of 2022.

On September 30, 2021, we also announced that we will acquire O’Shaughnessy Asset Management, LLC (“OSAM”), a leading quantitative asset management firm.

Through this acquisition, we expect to add to our offerings in the separately managed account industry.

OSAM’s capabilities are expected to serve as an important expansion and enhancement of our existing strengths in separately managed account and custom solutions capabilities.

The transaction is subject to customary closing conditions and is expected to close in the first quarter of fiscal year 2022.

| Fixed Income | | | | | | $ | 206.3 | | | | | $ | 55.5 | | | | | $ | 338.6 | | | | | $ | 34.3 | | | | | $ | 15.6 | | | | | $ | 650.3 | | | | | 43 | | % |

| Equity | | | | | | 260.1 | | | | | | 87.3 | | | | | | 66.3 | | | | | | 87.8 | | | | | | 22.1 | | | | | | 523.6 | | | | | | 34 | | % |

| Multi-Asset | | | | | | 96.5 | | | | | | 8.7 | | | | | | 4.3 | | | | | | 2.9 | | | | | | 40.0 | | | | | | 152.4 | | | | | | 10 | | % |

| Alternative | | | | | | 7.4 | | | | | | 10.8 | | | | | | 34.2 | | | | | | — | | | | | | 92.8 | | | | | | 145.2 | | | | | | 9 | | % |

| Cash Management | | | | | | 34.9 | | | | | | 22.9 | | | | | | 0.8 | | | | | | — | | | | | | — | | | | | | 58.6 | | | | | | 4 | | % |

| Total | | | | | | $ | 605.2 | | | | | $ | 185.2 | | | | | $ | 444.2 | | | | | $ | 125.0 | | | | | $ | 170.5 | | | | | $ | 1,530.1 | | | | | 100 | | % |

A few of

Certain of our specialist investment managers manage alternative investment strategies.

In addition, through our subsidiary Fiduciary Trust Company of Canada (“FTCC”), we provide investment management, wealth planning, and trust and estate services, and offer products to high-net-worth individuals and families and institutional clients in Canada.

*Derivatives and Other Financial Products.* Dodd-Frank, as well as other legislation and regulations, impose restrictions and limitations on us related to our financial services and products, resulting in increased scrutiny and oversight.

SEC rules have changed the structure and operation for certain types of money market funds, and certain U.S.-registered funds are required to adopt liquidity management programs.

In addition to the EU’s GDPR data protection rules, we also are or may become subject to or affected by additional country,

The regulation allows UCITS providers, who are already required to produce the UCITS Key Investor Information Document, a transitional period until July 2022, during which period they will be exempt from its terms.

In December 2019, rule amendments to implement the client focused reforms initiative of the Canadian Securities Administrators (“CSA”), the umbrella organization of provincial and territorial securities regulatory authorities, became effective, with reforms phased in during a two-year transition period.

These rule amendments, among other things, enhance current registrant requirements in the areas of know your client, know your product, suitability, conflicts of interest and relationship disclosure information.

In addition, the CSA has published final rule amendments to become effective in June 2022 in connection with its mutual fund fee reform project.

The final amendments prohibit: (i) all forms of deferred sales charges in connection with the purchase of mutual fund securities, and (ii) the payment of trailing commissions to discount brokers in respect of their distribution of mutual fund securities.

Reports on Form 10‑Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Incorporated herein by reference is information regarding certain legal proceedings and regulatory matters in which we are involved as set forth under “Legal Proceedings” contained in Note [removed: 16] [added: 15] – Commitments and Contingencies in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report.

For the fiscal year ended September 30, [removed: 2021][added: 2022]

The aggregate market value of the voting common equity (“common stock”) held by non-affiliates of the registrant, as of March 31, [removed: 2021] [added: 2022] (the last business day of registrant’s second quarter of fiscal year [removed: 2021),] [added: 2022),] was [removed: $8.5] [added: $7.9] billion based upon the last sale price reported for such date on the New York Stock Exchange.

Number of shares of the registrant’s common stock outstanding at October 31, [removed: 2021: 501,795,099.][added: 2022: 499,558,579.]

Certain portions of the registrant’s definitive proxy statement for its annual meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after September 30, [removed: 2021,] [added: 2022,] are incorporated by reference into Part III of this report.

| | | | ITEM 1. | | | [removed: [BUSINESS](#i346fd55fe425424da9c47e366c278670_16)] [added: [BUSINESS](#ib41e0c076c1444488914345b87dbd97c_16)] | | | [removed: [3](#i346fd55fe425424da9c47e366c278670_13)] [added: [3](#ib41e0c076c1444488914345b87dbd97c_13)] | | |

| | | | ITEM 1A. | | | [RISK [removed: FACTORS](#i346fd55fe425424da9c47e366c278670_43)] [added: FACTORS](#ib41e0c076c1444488914345b87dbd97c_43)] | | | [removed: [16](#i346fd55fe425424da9c47e366c278670_43)] [added: [15](#ib41e0c076c1444488914345b87dbd97c_43)] | | |

| | | | ITEM 1B. | | | [UNRESOLVED STAFF [removed: COMMENTS](#i346fd55fe425424da9c47e366c278670_46)] [added: COMMENTS](#ib41e0c076c1444488914345b87dbd97c_46)] | | | [removed: [27](#i346fd55fe425424da9c47e366c278670_46)] [added: [26](#ib41e0c076c1444488914345b87dbd97c_46)] | | |

| | | | ITEM 2. | | | [removed: [PROPERTIES](#i346fd55fe425424da9c47e366c278670_49)] [added: [PROPERTIES](#ib41e0c076c1444488914345b87dbd97c_49)] | | | [removed: [28](#i346fd55fe425424da9c47e366c278670_49)] [added: [27](#ib41e0c076c1444488914345b87dbd97c_49)] | | |

| | | | ITEM 3. | | | [LEGAL [removed: PROCEEDINGS](#i346fd55fe425424da9c47e366c278670_52)] [added: PROCEEDINGS](#ib41e0c076c1444488914345b87dbd97c_52)] | | | [removed: [28](#i346fd55fe425424da9c47e366c278670_52)] [added: [27](#ib41e0c076c1444488914345b87dbd97c_52)] | | |

| | | | ITEM 4. | | | [MINE SAFETY [removed: DISCLOSURES](#i346fd55fe425424da9c47e366c278670_55)] [added: DISCLOSURES](#ib41e0c076c1444488914345b87dbd97c_55)] | | | [removed: [28](#i346fd55fe425424da9c47e366c278670_55)] [added: [27](#ib41e0c076c1444488914345b87dbd97c_55)] | | |

| | | | [INFORMATION ABOUT OUR EXECUTIVE [removed: OFFICERS](#i346fd55fe425424da9c47e366c278670_58)] [added: OFFICERS](#ib41e0c076c1444488914345b87dbd97c_58)] | | | | | | [removed: [29](#i346fd55fe425424da9c47e366c278670_58)] [added: [28](#ib41e0c076c1444488914345b87dbd97c_58)] | | |

| | | | ITEM 5. | | | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i346fd55fe425424da9c47e366c278670_64)] [added: SECURITIES](#ib41e0c076c1444488914345b87dbd97c_64)] | | | [removed: [31](#i346fd55fe425424da9c47e366c278670_64)] [added: [30](#ib41e0c076c1444488914345b87dbd97c_64)] | | |

| | | | ITEM 6. | | | [removed: [\[RESERVED\]](#i346fd55fe425424da9c47e366c278670_2849)] [added: [\[RESERVED\]](#ib41e0c076c1444488914345b87dbd97c_67)] | | | [removed: [31](#i346fd55fe425424da9c47e366c278670_2849)] [added: [30](#ib41e0c076c1444488914345b87dbd97c_67)] | | |

| | | | ITEM 7. | | | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#i346fd55fe425424da9c47e366c278670_70)] [added: OPERATIONS](#ib41e0c076c1444488914345b87dbd97c_73)] | | | [removed: [31](#i346fd55fe425424da9c47e366c278670_70)] [added: [30](#ib41e0c076c1444488914345b87dbd97c_73)] | | |

| | | | ITEM 7A. | | | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i346fd55fe425424da9c47e366c278670_136)] [added: RISK](#ib41e0c076c1444488914345b87dbd97c_145)] | | | [removed: [57](#i346fd55fe425424da9c47e366c278670_136)] [added: [55](#ib41e0c076c1444488914345b87dbd97c_145)] | | |

| | | | ITEM 8. | | | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i346fd55fe425424da9c47e366c278670_139)] [added: DATA](#ib41e0c076c1444488914345b87dbd97c_148)] | | | [removed: [59](#i346fd55fe425424da9c47e366c278670_139)] [added: [57](#ib41e0c076c1444488914345b87dbd97c_148)] | | |

| | | | ITEM 9. | | | [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE](#i346fd55fe425424da9c47e366c278670_265)] [added: DISCLOSURE](#ib41e0c076c1444488914345b87dbd97c_271)] | | | [removed: [100](#i346fd55fe425424da9c47e366c278670_265)] [added: [96](#ib41e0c076c1444488914345b87dbd97c_271)] | | |

| | | | ITEM 9A. | | | [CONTROLS AND [removed: PROCEDURES](#i346fd55fe425424da9c47e366c278670_268)] [added: PROCEDURES](#ib41e0c076c1444488914345b87dbd97c_274)] | | | [removed: [100](#i346fd55fe425424da9c47e366c278670_268)] [added: [96](#ib41e0c076c1444488914345b87dbd97c_274)] | | |

| | | | ITEM 9B. | | | [OTHER [removed: INFORMATION](#i346fd55fe425424da9c47e366c278670_271)] [added: INFORMATION](#ib41e0c076c1444488914345b87dbd97c_277)] | | | [removed: [100](#i346fd55fe425424da9c47e366c278670_271)] [added: [96](#ib41e0c076c1444488914345b87dbd97c_277)] | | |

| | | | ITEM 9C. | | | [DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT [removed: INSPECTIONS](#i346fd55fe425424da9c47e366c278670_2867)] [added: INSPECTIONS](#ib41e0c076c1444488914345b87dbd97c_280)] | | | [removed: [100](#i346fd55fe425424da9c47e366c278670_2867)] [added: [96](#ib41e0c076c1444488914345b87dbd97c_280)] | | |

| | | | ITEM 10. | | | [DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE [removed: GOVERNANCE](#i346fd55fe425424da9c47e366c278670_277)] [added: GOVERNANCE](#ib41e0c076c1444488914345b87dbd97c_286)] | | | [removed: [101](#i346fd55fe425424da9c47e366c278670_277)] [added: [97](#ib41e0c076c1444488914345b87dbd97c_286)] | | |

| | | | ITEM 11. | | | [EXECUTIVE [removed: COMPENSATION](#i346fd55fe425424da9c47e366c278670_280)] [added: COMPENSATION](#ib41e0c076c1444488914345b87dbd97c_289)] | | | [removed: [101](#i346fd55fe425424da9c47e366c278670_280)] [added: [97](#ib41e0c076c1444488914345b87dbd97c_289)] | | |

| | | | ITEM 12. | | | [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER [removed: MATTERS](#i346fd55fe425424da9c47e366c278670_283)] [added: MATTERS](#ib41e0c076c1444488914345b87dbd97c_292)] | | | [removed: [101](#i346fd55fe425424da9c47e366c278670_283)] [added: [97](#ib41e0c076c1444488914345b87dbd97c_292)] | | |

| | | | ITEM 13. | | | [CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR [removed: INDEPENDENCE](#i346fd55fe425424da9c47e366c278670_286)] [added: INDEPENDENCE](#ib41e0c076c1444488914345b87dbd97c_295)] | | | [removed: [101](#i346fd55fe425424da9c47e366c278670_286)] [added: [97](#ib41e0c076c1444488914345b87dbd97c_295)] | | |

| | | | ITEM 14. | | | [PRINCIPAL ACCOUNTANT FEES AND [removed: SERVICES](#i346fd55fe425424da9c47e366c278670_289)] [added: SERVICES](#ib41e0c076c1444488914345b87dbd97c_298)] | | | [removed: [101](#i346fd55fe425424da9c47e366c278670_289)] [added: [97](#ib41e0c076c1444488914345b87dbd97c_298)] | | |

| | | | ITEM 15. | | | [EXHIBITS AND FINANCIAL STATEMENT [removed: SCHEDULES](#i346fd55fe425424da9c47e366c278670_295)] [added: SCHEDULES](#ib41e0c076c1444488914345b87dbd97c_304)] | | | [removed: [102](#i346fd55fe425424da9c47e366c278670_295)] [added: [98](#ib41e0c076c1444488914345b87dbd97c_304)] | | |

| | | | ITEM 16. | | | [FORM 10-K [removed: SUMMARY](#i346fd55fe425424da9c47e366c278670_298)] [added: SUMMARY](#ib41e0c076c1444488914345b87dbd97c_307)] | | | [removed: [102](#i346fd55fe425424da9c47e366c278670_298)] [added: [98](#ib41e0c076c1444488914345b87dbd97c_307)] | | |

| [PART I](#ib41e0c076c1444488914345b87dbd97c_10) | | | | | | | | | | | |

| [PART II](#ib41e0c076c1444488914345b87dbd97c_61) | | | | | | | | | | | |

| [PART III](#ib41e0c076c1444488914345b87dbd97c_283) | | | | | | | | | | | |

| [PART IV](#ib41e0c076c1444488914345b87dbd97c_301) | | | | | | | | | | | |

| [EXHIBIT INDEX](#ib41e0c076c1444488914345b87dbd97c_310) | | | | | | | | | [98](#ib41e0c076c1444488914345b87dbd97c_310) | | |

| [SIGNATURES](#ib41e0c076c1444488914345b87dbd97c_313) | | | | | | | | | [101](#ib41e0c076c1444488914345b87dbd97c_313) | | |

| [PART I](#i346fd55fe425424da9c47e366c278670_10) | | | | | | | | | | | |

| [PART II](#i346fd55fe425424da9c47e366c278670_61) | | | | | | | | | | | |

| [PART III](#i346fd55fe425424da9c47e366c278670_274) | | | | | | | | | | | |

| [PART IV](#i346fd55fe425424da9c47e366c278670_292) | | | | | | | | | | | |

| [EXHIBIT INDEX](#i346fd55fe425424da9c47e366c278670_301) | | | | | | | | | [102](#i346fd55fe425424da9c47e366c278670_301) | | |

| [SIGNATURES](#i346fd55fe425424da9c47e366c278670_304) | | | | | | | | | [105](#i346fd55fe425424da9c47e366c278670_304) | | |

We lease excess owned space to third parties under leases with terms through [removed: 2030.][added: 2033.]

| San Mateo, California | | | | | | 743,793 | | | | | | [removed: 357,383] [added: 477,757] | | |

| St. Petersburg, Florida | | | | | | 560,948 | | | | | | [removed: 320,477] [added: 363,187] | | |

| Rancho Cordova, California | | | | | | 445,023 | | | | | | [removed: 26,962] [added: 47,676] | | |

| Hyderabad, India | | | | | | 379,052 | | | | | | [removed: —] [added: 23,088] | | |

| Poznan, Poland | | | | | | 284,436 | | | | | | [removed: —] [added: 43,890] | | |

| Total | | | | | | 2,680,905 | | | | | | [removed: 761,020] [added: 1,011,796] | | |

We lease office space in [removed: 15] [added: 16] states in the U.S. and Washington, D.C., and internationally, including Australia, Brazil, Canada, the People’s Republic of China (including Hong Kong), Germany, India, Japan, Luxembourg, Mexico, [removed: Poland,] Singapore, South Korea, United Arab Emirates and the U.K. As of September 30, [removed: 2021,] [added: 2022,] we leased and occupied approximately [removed: 2,029,000] [added: 1,971,000] square feet of office space worldwide, and subleased to third parties approximately [removed: 460,000] [added: 420,000] square feet of excess leased space.

In addition, we entered into a lease agreement for office space in New York City with occupancy expected to begin in early fiscal year 2024.

[removed: Each] [added: Generally, each] executive officer is appointed by our board of directors and holds his or her office until the earlier of his or her death, resignation, retirement, disqualification or removal.

Age [removed: 57][added: 58]

President of Franklin since December 2016, and Chief Executive Officer and director of Franklin since February 2020; formerly, Chief Operating Officer of Franklin from February 2017 to February 2020, Co-President of Franklin from October 2015 to December 2016, Executive Vice President and Chief Operating Officer of Franklin from March 2010 to September 2015, Executive Vice [removed: President–Operations] [added: President – Operations] and Technology of Franklin from December 2005 to March 2010, and Senior Vice President and Chief Information Officer of Franklin from May 2003 to December 2005; officer and/or director of certain subsidiaries of Franklin; officer, director and/or trustee of certain funds registered as investment companies managed or advised by subsidiaries of Franklin.

Age [removed: 60][added: 82]

Age [removed: 81][added: 54]

Age [removed: 49][added: 55]

Executive Vice President and Chief Financial Officer of Franklin since May [removed: 2019;] [added: 2019 and Chief Operating Officer since April 2022;] officer and/or director of certain subsidiaries of Franklin.

Executive Vice President, Technology and Operations, of Franklin since October [removed: 18,] 2021; officer and/or director of various investment adviser, operations, and technology related subsidiaries of Franklin for more than the past five years, including as Senior Vice President of Franklin Advisers, Inc., Franklin Templeton Institutional, LLC and Templeton Investment Counsel, LLC since July 2014, Vice President of FASA, LLC since June 2014, and Vice President of Franklin Templeton Companies, LLC since June 2010.

Age [removed: 59][added: 61]

Age [removed: 53][added: 54]

Thomas C.

Merchant

Executive Vice President and General Counsel of Franklin since May 2022 and Corporate Secretary since July 2021, and oversaw global regulatory compliance of Franklin as Deputy General Counsel from August 2020 to May 2022; officer and/or director of certain subsidiaries of Franklin.

Formerly, General Counsel and Executive Vice President of Legg Mason, Inc. from 2013 and Secretary from 2008, until its acquisition by Franklin Templeton in July 2020; joined Legg Mason as Associate General Counsel in 1998, serving as Corporate General Counsel and Deputy General Counsel.

Formerly, served as a Corporate Associate at Shearman & Sterling, a law firm, in New York from 1993 to 1998.

Terrence J.

Murphy

Executive officer of Franklin since October 2022; Chairman since 2014 and Chief Executive Officer and President since 2012 of ClearBridge Investments, LLC, a subsidiary of Franklin; officer and/or director of certain other subsidiaries of Franklin.

Formerly, Chief Operating Officer and Chief Financial Officer of ClearBridge from 2006 to 2011, Chief Financial Officer of Citigroup Asset Management (a financial services firm) from 2005 to 2006 and Director of Planning from 2000 to 2005; and business Controller for various product lines at Citigroup’s Corporate and Investment Bank from 1997 to 2000.

Jed A.

Plafker

Executive Vice President of Franklin since April 2019, formerly, Senior Vice President from June 2018 to April 2019; officer and/or director of certain subsidiaries of Franklin, including as Manager of Brandywine Global Investment Management, LLC and Director of Clarion Partners Holdings LLC, ClearBridge Investments, LLC and Western Asset Management Company, LLC since August 2020; as well as Executive Vice President of Franklin Templeton Institutional, LLC since April 2009, President and director of Templeton Institutional, Inc. since September 2009, and President since February 2017 and director since December 2016 of Templeton Worldwide, Inc.

Craig S.

Tyle

Executive Vice President and General Counsel of Franklin since August 2005; formerly, a partner at Shearman & Sterling LLP (a law firm) from March 2004 to July 2005 and General Counsel for the Investment Company Institute (a trade group for the U.S. fund industry) from September 1997 through March 2004; officer and/or director of certain subsidiaries of Franklin; officer of certain funds registered as investment companies managed or advised by subsidiaries of Franklin.

Our common stock is traded on the NYSE under the ticker symbol “BEN.” At October 31, [removed: 2021,] [added: 2022,] there were [removed: 2,645] [added: 2,588] stockholders of record of our common stock.

The following table provides information with respect to the shares of our common stock that we repurchased during the three months ended September 30, [removed: 2021.][added: 2022.]

| July 2022 | | | | | | 93,803 | | | | | | $ | 27.33 | | | | | 93,803 | | | | | | 25,335,850 | | |

| August 2022 | | | | | | 948,637 | | | | | | 26.07 | | | | | | 948,637 | | | | | | 24,387,213 | | |

| September 2022 | | | | | | 1,362 | | | | | | 21.57 | | | | | | 1,362 | | | | | | 24,385,851 | | |

| Total | | | | | | 1,043,802 | | | | | | | | | | | | 1,043,802 | | | | | | | | |

| July 2021 | | | | | | 181,621 | | | | | | $ | 29.55 | | | | | 181,621 | | | | | | 32,899,416 | | |

| August 2021 | | | | | | 1,431,110 | | | | | | 32.25 | | | | | | 1,431,110 | | | | | | 31,468,306 | | |

| September 2021 | | | | | | 600,434 | | | | | | 31.35 | | | | | | 600,434 | | | | | | 30,867,872 | | |

| Total | | | | | | 2,213,165 | | | | | | | | | | | | 2,213,165 | | | | | | | | |

Index of Consolidated Financial Statements for the fiscal years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019.][added: 2020.]

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i346fd55fe425424da9c47e366c278670_145)] [added: Reporting](#ib41e0c076c1444488914345b87dbd97c_154)] | | | | | | [removed: [60](#i346fd55fe425424da9c47e366c278670_145)] [added: [58](#ib41e0c076c1444488914345b87dbd97c_154)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i346fd55fe425424da9c47e366c278670_148)] [added: Firm](#ib41e0c076c1444488914345b87dbd97c_157) (PCAOB ID 238)] | | | | | | [removed: [61](#i346fd55fe425424da9c47e366c278670_148)] [added: [59](#ib41e0c076c1444488914345b87dbd97c_157)] | | |

| [removed: [Consolidated Statements of Income for] [added: for] the fiscal years ended September [removed: 30,](#i346fd55fe425424da9c47e366c278670_151) [2021](#i346fd55fe425424da9c47e366c278670_151)[,](#i346fd55fe425424da9c47e366c278670_151) [2020](#i346fd55fe425424da9c47e366c278670_151) [](#i346fd55fe425424da9c47e366c278670_151)[an](#i346fd55fe425424da9c47e366c278670_151)[d](#i346fd55fe425424da9c47e366c278670_151) [](#i346fd55fe425424da9c47e366c278670_151)[2019](#i346fd55fe425424da9c47e366c278670_151)] [added: 30,] | | | | | | [removed: [63](#i346fd55fe425424da9c47e366c278670_151)] [added: 2022] | | | [added: | | | 2021 | | | | | | 2020 | | |]

| [Consolidated Statements of Comprehensive Income for the fiscal years ended September [removed: 30, 2021, 2020 and 2019](#i346fd55fe425424da9c47e366c278670_154)] [added: 30,](#ib41e0c076c1444488914345b87dbd97c_163) [2022](#ib41e0c076c1444488914345b87dbd97c_163)[,](#ib41e0c076c1444488914345b87dbd97c_163) [2021](#ib41e0c076c1444488914345b87dbd97c_163) [and](#ib41e0c076c1444488914345b87dbd97c_163) [202](#ib41e0c076c1444488914345b87dbd97c_163)[0](#ib41e0c076c1444488914345b87dbd97c_163)] | | | | | | [removed: [64](#i346fd55fe425424da9c47e366c278670_154)] [added: [63](#ib41e0c076c1444488914345b87dbd97c_163)] | | |

| [Consolidated Balance Sheets as of September [removed: 30,](#i346fd55fe425424da9c47e366c278670_157) [2021](#i346fd55fe425424da9c47e366c278670_157) [and](#i346fd55fe425424da9c47e366c278670_157) [20](#i346fd55fe425424da9c47e366c278670_157)[20](#i346fd55fe425424da9c47e366c278670_157)] [added: 30,](#ib41e0c076c1444488914345b87dbd97c_166) [2022](#ib41e0c076c1444488914345b87dbd97c_166) [and](#ib41e0c076c1444488914345b87dbd97c_166) [2](#ib41e0c076c1444488914345b87dbd97c_166)[021](#ib41e0c076c1444488914345b87dbd97c_166)] | | | | | | [removed: [65](#i346fd55fe425424da9c47e366c278670_157)] [added: [64](#ib41e0c076c1444488914345b87dbd97c_166)] | | |

| [Consolidated Statements of Stockholders’ Equity as of and for the fiscal years ended September [removed: 30, 2021, 2020 and 2019](#i346fd55fe425424da9c47e366c278670_163)] [added: 30,](#ib41e0c076c1444488914345b87dbd97c_172) [2022](#ib41e0c076c1444488914345b87dbd97c_172)[,](#ib41e0c076c1444488914345b87dbd97c_172) [2021](#ib41e0c076c1444488914345b87dbd97c_172) [and](#ib41e0c076c1444488914345b87dbd97c_172) [2](#ib41e0c076c1444488914345b87dbd97c_172)[020](#ib41e0c076c1444488914345b87dbd97c_172)] | | | | | | [removed: [66](#i346fd55fe425424da9c47e366c278670_163)] [added: [65](#ib41e0c076c1444488914345b87dbd97c_172)] | | |

| [Consolidated Statements of Cash Flows for the fiscal years ended September [removed: 30, 2021, 2020 and 2019](#i346fd55fe425424da9c47e366c278670_169)] [added: 30,](#ib41e0c076c1444488914345b87dbd97c_178) [2022](#ib41e0c076c1444488914345b87dbd97c_178)[,](#ib41e0c076c1444488914345b87dbd97c_178) [2021](#ib41e0c076c1444488914345b87dbd97c_178) [and](#ib41e0c076c1444488914345b87dbd97c_178) [2](#ib41e0c076c1444488914345b87dbd97c_178)[020](#ib41e0c076c1444488914345b87dbd97c_178)] | | | | | | [removed: [67](#i346fd55fe425424da9c47e366c278670_169)] [added: [66](#ib41e0c076c1444488914345b87dbd97c_178)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i346fd55fe425424da9c47e366c278670_172)] [added: Statements](#ib41e0c076c1444488914345b87dbd97c_181)] | | | | | | [removed: [69](#i346fd55fe425424da9c47e366c278670_172)] [added: [68](#ib41e0c076c1444488914345b87dbd97c_181)] | | |

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013).

Based on that assessment, management concluded that, as of September 30, [removed: 2021,] [added: 2022,] the Company’s internal control over financial reporting was effective.

The effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021] [added: 2022] has been audited by PricewaterhouseCoopers LLP, the independent registered public accounting firm that audits the Company’s consolidated financial statements, as stated in their report immediately following this report, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021.][added: 2022.]

We have audited the accompanying consolidated balance sheets of Franklin Resources, Inc. and its subsidiaries (the “Company”) as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the related consolidated statements of income, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of [added: management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.]

As described in Note [removed: 14] [added: 13] to the consolidated financial statements, the Company had gross deferred tax assets of [removed: $1,169.8] [added: $1,014.7] million as of September 30, [removed: 2021,] [added: 2022,] reduced by a [removed: $319.3] [added: $258.3] million valuation allowance.

| for the fiscal years ended September 30, | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Investment management fees | | | | | | $ | [removed: 6,541.6] [added: 6,616.8] | | | | | $ | [removed: 3,981.7] [added: 6,541.6] | | | | | $ | [removed: 3,985.2] [added: 3,981.7] | |

| Sales and distribution fees | | | | | | [removed: 1,635.5] [added: 1,415.0] | | | | | | [removed: 1,362.0] [added: 1,635.5] | | | | | | [removed: 1,444.6] [added: 1,362.0] | | |

| Shareholder servicing fees | | | | | | [removed: 211.2] [added: 193.0] | | | | | | [removed: 195.1] [added: 211.2] | | | | | | [removed: 216.3] [added: 195.1] | | |

| Other | | | | | | [removed: 37.2] [added: 50.5] | | | | | | [removed: 27.7] [added: 37.2] | | | | | | [removed: 23.3] [added: 27.7] | | |

| Total operating revenues | | | | | | [removed: 8,425.5] [added: 8,275.3] | | | | | | [removed: 5,566.5] [added: 8,425.5] | | | | | | [removed: 5,669.4] [added: 5,566.5] | | |

| Compensation and benefits | | | | | | [removed: 2,971.3] [added: 3,089.8] | | | | | | [removed: 1,873.9] [added: 2,971.3] | | | | | | [removed: 1,584.7] [added: 1,873.9] | | |

| Sales, distribution and marketing | | | | | | [removed: 2,105.8] [added: 1,845.6] | | | | | | [removed: 1,703.1] [added: 2,105.8] | | | | | | [removed: 1,819.6] [added: 1,703.1] | | |

| Information systems and technology | | | | | | [removed: 486.1] [added: 500.2] | | | | | | [removed: 288.4] [added: 486.1] | | | | | | [removed: 258.5] [added: 288.4] | | |

| Occupancy | | | | | | [removed: 218.1] [added: 218.9] | | | | | | [removed: 147.9] [added: 218.1] | | | | | | [removed: 133.6] [added: 147.9] | | |

| Amortization of intangible assets | | | | | | [removed: 232.0] [added: 282.0] | | | | | | [removed: 54.0] [added: 232.0] | | | | | | [removed: 14.7] [added: 54.0] | | |

| General, administrative and other | | | | | | [removed: 537.2] [added: 564.9] | | | | | | [removed: 450.3] [added: 537.2] | | | | | | [removed: 391.4] [added: 450.3] | | |

| Total operating expenses | | | | | | [removed: 6,550.5] [added: 6,501.4] | | | | | | [removed: 4,517.6] [added: 6,550.5] | | | | | | [removed: 4,202.5] [added: 4,517.6] | | |

| Operating Income | | | | | | [removed: 1,875.0] [added: 1,773.9] | | | | | | [removed: 1,048.9] [added: 1,875.0] | | | | | | [removed: 1,466.9] [added: 1,048.9] | | |

| Investment and other income (losses), net | | | | | | [removed: 264.7] [added: 91.1] | | | | | | [removed: (38.4)] [added: 264.7] | | | | | | [removed: 141.4] [added: (38.4)] | | |

| Interest expense | | | | | | [removed: (85.4)] [added: (98.2)] | | | | | | [removed: (33.4)] [added: (85.4)] | | | | | | [removed: (22.4)] [added: (33.4)] | | |

| Investment and other income [added: (losses)] of consolidated investment products, net | | | | | | [removed: 421.1] [added: (17.7)] | | | | | | [removed: 70.2] [added: 421.1] | | | | | | [removed: 78.8] [added: 70.2] | | |

| Expenses of consolidated investment products | | | | | | [removed: (31.2)] [added: (19.7)] | | | | | | [removed: (29.4)] [added: (31.2)] | | | | | | [removed: (16.9)] [added: (29.4)] | | |

| Other income (expenses), net | | | | | | [removed: 569.2] [added: (44.5)] | | | | | | [removed: (31.0)] [added: 569.2] | | | | | | [removed: 180.9] [added: (31.0)] | | |

| Income before taxes | | | | | | [removed: 2,444.2] [added: 1,729.4] | | | | | | [removed: 1,017.9] [added: 2,444.2] | | | | | | [removed: 1,647.8] [added: 1,017.9] | | |

| Taxes on income | | | | | | [removed: 349.6] [added: 396.2] | | | | | | [removed: 230.8] [added: 349.6] | | | | | | [removed: 442.3] [added: 230.8] | | |

| Net income | | | | | | [removed: 2,094.6] [added: 1,333.2] | | | | | | [removed: 787.1] [added: 2,094.6] | | | | | | [removed: 1,205.5] [added: 787.1] | | |

| [Consolidated Statements of Income for the fiscal years ended September 30,](#ib41e0c076c1444488914345b87dbd97c_160) [2022](#ib41e0c076c1444488914345b87dbd97c_160)[,](#ib41e0c076c1444488914345b87dbd97c_160) [2021](#ib41e0c076c1444488914345b87dbd97c_160) [and](#ib41e0c076c1444488914345b87dbd97c_160) [2](#ib41e0c076c1444488914345b87dbd97c_160)[020](#ib41e0c076c1444488914345b87dbd97c_160) | | | | | | [62](#ib41e0c076c1444488914345b87dbd97c_160) | | |

On April 1, 2022, Franklin Resources, Inc. completed the acquisition of Lexington Partners L.P. (“Lexington”).

Consistent with guidance issued by the SEC that an assessment of a recently acquired business may be omitted from management’s report on internal control over financial reporting for one year following the acquisition, management excluded an assessment of the effectiveness of the Company’s internal control over financial reporting related to Lexington.

Lexington represents approximately 2% of the Company’s consolidated total operating revenues and approximately 1% of the Company’s consolidated total assets, excluding associated goodwill and intangible assets, as of and for the fiscal year ended September 30, 2022.

The recognition of goodwill and intangible assets, however, is covered by our internal controls over business combinations, which were included in management's assessment of the effectiveness of the Company's internal control over financial reporting as of September 30, 2022.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Lexington Partners L.P. from its assessment of internal control over financial reporting as of September 30, 2022 because Lexington Partners L.P. was acquired by the Company in a purchase business combination during 2022.

We have also excluded Lexington Partners L.P. from our audit of internal control over financial reporting.

Lexington Partners L.P. is a subsidiary whose total assets and total operating revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 1% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2022.

November 14, 2022

| Nonredeemable noncontrolling interests | | | | | | 88.2 | | | | | | 169.3 | | | | | | (60.4) | | |

| Other | | | | | | 1,425.0 | | | | | | 614.1 | | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | 1,291.9 | | | | | | | | | | | | 1,291.9 | | | | | | 88.2 | | | | | | 1,380.1 | | |

| Repurchase of common stock | | | | | | (6.5) | | | | | | (0.6) | | | | | | (231.4) | | | | | | 51.2 | | | | | | | | | | | | (180.8) | | | | | | | | | | | | (180.8) | | |

| Issuance of common stock | | | | | | 4.3 | | | | | | 0.4 | | | | | | 171.4 | | | | | | | | | | | | | | | | | | 171.8 | | | | | | | | | | | | 171.8 | | |

| Acquisition | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 149.9 | | | | | | 149.9 | | |

| Adjustment to fair value of redeemable noncontrolling interests | | | | | | | | | | | | | | | | | | | | | | | | (263.1) | | | | | | | | | | | | (263.1) | | | | | | | | | | | | (263.1) | | |

| Balance at September 30, 2022 | | | | | | 499.6 | | | | | | $ | 50.0 | | | | | $ | — | | | | | $ | 12,045.6 | | | | | $ | (621.0) | | | | | $ | 11,474.6 | | | | | $ | 824.3 | | | | | $ | 12,298.9 | |

| Amortization of intangible assets | | | | | | 282.0 | | | | | | 232.0 | | | | | | 54.0 | | |

The management contract

The fair values of fund products are determined based on their published NAV or estimated using NAV as a practical expedient.

The fair value of cash-settled phantom stock

Lexington Partners L.P.

The consideration paid at close was funded from existing cash and the deferred consideration is included in other liabilities in the consolidated balance sheets.

In connection with the acquisition, the Company granted a 25% profits interest in Lexington and performance-based cash retention awards to certain employees that vest over approximately five years.

The acquisition bolsters the Company’s alternative asset capabilities, complementing its existing strengths in real estate, private credit, and hedge fund strategies.

| as of April 1, 2022 | | | | | | | | | | | | | | | | | | | | |

| Goodwill | | | | | | $ | 1,105.3 | | | | | $ | (9.3) | | | | | $ | 1,096.0 | |

| Investments | | | | | | 163.0 | | | | | | | | | | | | 163.0 | | |

| Operating lease right-of-use assets | | | | | | 84.4 | | | | | | | | | | | | 84.4 | | |

| Other assets and liabilities, net | | | | | | 28.1 | | | | | | 9.3 | | | | | | 37.4 | | |

Amortization expense related to the definite-lived intangible assets was $42.6 million for the fiscal year ended September 30, 2022.

Lexington contributed $184.5 million of revenue and did not have a material impact to net income attributable to Franklin Resources, Inc. for the fiscal year ended September 30, 2022.

Consequently, the Company has not presented pro forma combined results of operations for this acquisition.

O’Shaughnessy Asset Management, LLC

The acquisition resulted in $262.3 million of goodwill attributable to expected growth opportunities and synergies from the combined operations and is deductible for tax purposes.

| Basic | | | | | | $ | 2.53 | | | | | $ | 3.58 | | | | | $ | 1.59 | |

| Diluted | | | | | | 2.53 | | | | | | 3.57 | | | | | | 1.59 | | |

| Investment management fees | | | | | | $ | 4,926.6 | | | | | $ | 901.1 | | | | | $ | 309.6 | | | | | $ | 246.5 | | | | | $ | 233.0 | | | | | $ | 6,616.8 | |

| Sales and distribution fees | | | | | | 997.7 | | | | | | 341.8 | | | | | | 25.5 | | | | | | 50.0 | | | | | | — | | | | | | 1,415.0 | | |

| Shareholder servicing fees | | | | | | 153.8 | | | | | | 36.0 | | | | | | 1.4 | | | | | | 0.2 | | | | | | 1.6 | | | | | | 193.0 | | |

management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

November 19, 2021

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Commissions | | | | | | 259.8 | | | | | | 268.0 | | |

| Other | | | | | | 354.3 | | | | | | 456.1 | | |

| Balance at October 1, 2018 | | | | | | 519.1 | | | | | | $ | 51.9 | | | | | $ | — | | | | | $ | 10,217.9 | | | | | $ | (370.6) | | | | | $ | 9,899.2 | | | | | $ | 308.7 | | | | | $ | 10,207.9 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | 1,195.7 | | | | | | | | | | | | 1,195.7 | | | | | | 3.6 | | | | | | 1,199.3 | | |

| Repurchase of common stock | | | | | | (24.6) | | | | | | (2.5) | | | | | | (133.8) | | | | | | (620.0) | | | | | | | | | | | | (756.3) | | | | | | | | | | | | (756.3) | | |

| Issuance of common stock | | | | | | 4.8 | | | | | | 0.5 | | | | | | 129.8 | | | | | | | | | | | | | | | | | | 130.3 | | | | | | | | | | | | 130.3 | | |

| Acquisition | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 194.8 | | | | | | 194.8 | | |

| Decrease in commissions payable | | | | | | (8.2) | | | | | | (33.8) | | | | | | (43.9) | | |

[Table](#i346fd55fe425424da9c47e366c278670_7) [of Contents](#i346fd55fe425424da9c47e366c278670_7)

During the quarter ended June 30, 2021, the Company identified an error related to the accounting of its indirect interests in certain collateralized loan obligations (“CLOs”) held through a limited partnership and the Company’s conclusion to consolidate that limited partnership.

In accordance with U.S. GAAP, the Company should have consolidated the CLOs as the Company is the primary beneficiary of these entities and should not have consolidated the limited partnership.

The error resulted in the misstatement of previously reported assets and liabilities and resulting cash flows.

The consolidation of the CLOs results in increases to total assets and liabilities partially offset by the deconsolidation of the limited partnership which results in a reduction to total assets and stockholders’ equity.

The error had no impact to net income attributable to the Company, earnings per share, retained earnings, or total Franklin Resources, Inc. stockholders’ equity.

The Company determined that the error did not result in a material misstatement to its previously issued consolidated financial statements.

Nonetheless, for comparability, the Company has revised the comparative prior period amounts included in the consolidated balance sheets, consolidated statements of cash flows, and related footnote disclosures.

The impact of the error on the consolidated balance sheet as of September 30, 2020 is as follows:

| *(in millions)* | | | | | | As Reported | | | | | | Adjustments | | | | | | As Revised | | |

| Receivables | | | | | | $ | 1,200.6 | | | | | $ | 32.5 | | | | | $ | 1,233.1 | |

| Investments | | | | | | 1,270.5 | | | | | | 34.0 | | | | | | 1,304.5 | | |

| Cash and cash equivalents | | | | | | 930.7 | | | | | | 32.3 | | | | | | 963.0 | | |

| Investments, at fair value | | | | | | 2,709.2 | | | | | | 1,364.8 | | | | | | 4,074.0 | | |

| Total Assets | | | | | | 20,220.9 | | | | | | 1,463.6 | | | | | | 21,684.5 | | |

| Liabilities of consolidated investment products | | | | | | | | | | | | | | | | | | | | |

| Debt | | | | | | 1,333.4 | | | | | | 1,467.2 | | | | | | 2,800.6 | | |

| Total Liabilities | | | | | | 8,705.2 | | | | | | 1,568.3 | | | | | | 10,273.5 | | |

The impact of the error on the consolidated statements of cash flows for the fiscal year ended September 30, 2020 and September 30, 2019 is as follows:

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | As Reported | | | | | | Adjustments | | | | | | As Revised | | | | | | As Reported | | | | | | Adjustments | | | | | | As Revised | | | | | |

| Net cash provided by operating activities | | | | | | $ | 1,021.4 | | | | | $ | 61.9 | | | | | $ | 1,083.3 | | | | | $ | 201.6 | | | | | $ | 66.9 | | | | | $ | 268.5 | |

| Net cash used in investing activities | | | | | | (3,243.1) | | | | | | (818.8) | | | | | | (4,061.9) | | | | | | (1,077.1) | | | | | | (198.3) | | | | | | (1,275.4) | | |

| Net cash provided by (used in) financing activities | | | | | | 194.2 | | | | | | 540.2 | | | | | | 734.4 | | | | | | (40.5) | | | | | | 380.4 | | | | | | 339.9 | | |

Costs of obtaining a contract with a customer include internal and external sales commissions paid upon inception of a contract.

The cost to obtain a contract is capitalized if it is incremental and would not have been incurred if the contract had not been obtained.

Capitalized contract costs are amortized based on average investor tenure, which range from five to 10 years.

The Company’s management evaluated, with the participation of the Company’s principal executive and principal financial officers, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, [removed: 2021.][added: 2022.]

Based on their evaluation, the Company’s principal executive and principal financial officers concluded that the Company’s disclosure controls and procedures as of September 30, [removed: 2021] [added: 2022] were designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms, and (ii) accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate, to allow timely decisions regarding disclosure.

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s fiscal quarter ended September 30, [removed: 2021,] [added: 2022,] that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021] [added: 2022] has been audited by PricewaterhouseCoopers LLP, the independent registered public accounting firm that audits the Company’s consolidated financial statements, as stated in their report which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of September 30, [removed: 2021.][added: 2022.]

On April 1, 2022, Franklin Resources, Inc. completed the acquisition of Lexington Partners L.P. (“Lexington”).

Consistent with guidance issued by the SEC that an assessment of a recently acquired business may be omitted from management’s report on internal control over financial reporting for one year following the acquisition, management excluded an assessment of the effectiveness of the Company’s internal control over financial reporting related to Lexington.

Lexington represents approximately 2% of the Company’s consolidated total operating revenues and approximately 1% of the Company’s consolidated total assets, excluding associated goodwill and intangible assets, as of and for the fiscal year ended September 30, 2022.

The recognition of goodwill and intangible assets, however, is covered by our internal controls over business combinations, which were included in management's assessment of the effectiveness of the Company's internal control over financial reporting as of September 30, 2022.

[Table](#i346fd55fe425424da9c47e366c278670_7) [of Contents](#i346fd55fe425424da9c47e366c278670_7)

The other information required by this Item 10 is incorporated by reference from the information to be provided under the sections titled “Proposal No. [removed: 1] [added: 1:] Election of [removed: Directors–Nominees”] [added: Directors”] and “Information about the Board and its [removed: Committees–The] [added: Committees – The] Audit Committee” from Franklin’s definitive proxy statement for its annual meeting of stockholders to be filed with the SEC within 120 days after September 30, [removed: 2021 (“2022] [added: 2022 (“2023] Proxy Statement”).

The information required by this Item 11 is incorporated by reference from the information to be provided under the sections of our [removed: 2022] [added: 2023] Proxy Statement titled “Director Fees,” “Compensation Discussion and Analysis” and “Executive Compensation.”

The information required by this Item 12 is incorporated by reference from the information to be provided under the sections of our [removed: 2022] [added: 2023] Proxy Statement titled “Stock Ownership of Certain Beneficial Owners,” “Stock Ownership and Stock-Based Holdings of Directors and Executive Officers” and “Executive [removed: Compensation–Equity] Compensation [added: – Equity Compensation] Plan Information.”

The information required by this Item 13 is incorporated by reference from the information to be provided under the sections of our [removed: 2022] [added: 2023] Proxy Statement titled “Proposal No. [removed: 1] [added: 1:] Election of [removed: Directors–General,”] [added: Directors – General,”] “Corporate [removed: Governance–Director] [added: Governance – Director] Independence Standards” and “Certain Relationships and Related Transactions.”

The information required by this Item 14 is incorporated by reference from the information to be provided under the section of our [removed: 2022] [added: 2023] Proxy Statement titled “Fees Paid to Independent Registered Public Accounting Firm.”

[Table](#i346fd55fe425424da9c47e366c278670_7) [of Contents](#i346fd55fe425424da9c47e366c278670_7)

| 3.6 | | | | | | [Amended and Restated Bylaws of Registrant (as adopted and [removed: effective](https://www.sec.gov/Archives/edgar/data/0000038777/000003877721000127/exhibit317121.htm) [June] [added: effective June] 29, [removed: 2021](https://www.sec.gov/Archives/edgar/data/0000038777/000003877721000127/exhibit317121.htm)[),] [added: 2021),] incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K filed [removed: on](https://www.sec.gov/Archives/edgar/data/0000038777/000003877721000127/exhibit317121.htm) [July] [added: on July] 1, [removed: 2021](https://www.sec.gov/Archives/edgar/data/0000038777/000003877721000127/exhibit317121.htm) [(File] [added: 2021 (File] No. 001-09318)](https://www.sec.gov/Archives/edgar/data/0000038777/000003877721000127/exhibit317121.htm) | | |

| 4.4 | | | | | | [removed: [Third] [added: [Fourth] Supplemental Indenture, dated [removed: September 24, 2012] [added: March 30, 2015] (inclusive of the form of note of Registrant’s [removed: 2.800%] [added: 2.850%] Notes due [removed: 2022),] [added: 2025),] between Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.1 to our Current Report on Form 8‑K filed on [removed: September 24, 2012] [added: March 30, 2015] (File No. [removed: 001-09318)](http://www.sec.gov/Archives/edgar/data/38777/000119312512401161/d414734dex41.htm)] [added: 001-09318)](http://www.sec.gov/Archives/edgar/data/38777/000119312515110928/d899710dex41.htm)] | | |

| [removed: 4.5] [added: 4.11] | | | | | | [Fourth Supplemental Indenture, dated [added: as of] March [removed: 30, 2015] [added: 22, 2016] (inclusive of the form of note of [removed: Registrant’s 2.850%] [added: Legg Mason’s 4.750% Senior] Notes due [removed: 2025),] [added: 2026),] between [removed: Registrant] [added: Legg Mason, Inc.] and The Bank [removed: of] New York [removed: Mellon Trust Company, N.A.,] [added: Mellon,] as trustee, incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to [removed: our] [added: Legg Mason’s] Current Report on Form [removed: 8‑K] [added: 8-K] filed on March [removed: 30, 2015] [added: 22, 2016] (File No. [removed: 001-09318)](http://www.sec.gov/Archives/edgar/data/38777/000119312515110928/d899710dex41.htm)] [added: 001-08529)](http://www.sec.gov/Archives/edgar/data/704051/000119312516512754/d128515dex42.htm)] | | |

| [removed: 4.6] [added: 4.5] | | | | | | [Indenture, dated as of October 6, 2020, between Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee, incorporated by reference to Exhibit 4.3 to our Registration Statement on Form S-3ASR filed on October 6, 2020 (File No. 033-249350)](http://www.sec.gov/Archives/edgar/data/38777/000003877720000174/exhibit43formofindenture.htm) | | |

| [removed: 4.7] [added: 4.6] | | | | | | [Officer’s Certificate, dated October 19, 2020 (inclusive of the form of note of Registrant’s 1.600% Notes due 2030), incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on October 19, 2020 (File No. 011-09318)](http://www.sec.gov/Archives/edgar/data/38777/000119312520272049/d113058dex42.htm) | | |

| [removed: 4.8] [added: 4.7] | | | | | | [Base Indenture, dated as of January 22, 2014, for Senior Notes between Legg Mason, Inc. and The Bank of New York Mellon, as trustee, incorporated by reference to Exhibit 4.1 to Legg Mason’s Registration Statement on Form S-3ASR filed on February 19, 2016 (File No. 333-209616)](http://www.sec.gov/Archives/edgar/data/704051/000119312516470125/d147062dex41.htm) | | |

| [removed: 4.9] [added: 4.8] | | | | | | [First Supplemental Indenture, dated as of January 22, 2014 (inclusive of the form of note of Legg Mason’s 5.625% Senior Notes due 2044), between Legg Mason, Inc. and The Bank of New York Mellon, as trustee, incorporated by reference to Exhibit 4.2 to Legg Mason’s Current Report on Form 8-K filed on January 22, 2014 (File No. 001-08529)](http://www.sec.gov/Archives/edgar/data/704051/000119312514017402/d660517dex42.htm) | | |

| [removed: 4.10] [added: 4.9] | | | | | | [Second Supplemental Indenture, dated as of June 26, 2014, between Legg Mason, Inc. and The Bank of New York Mellon, as trustee, incorporated by reference to Exhibit 4.1 to Legg Mason’s Current Report on Form 8-K filed on June 26, 2014 (File No. 001-08529)](http://www.sec.gov/Archives/edgar/data/704051/000119312514251362/d746864dex41.htm) | | |

| [removed: 4.11] [added: 4.10] | | | | | | [Third Supplemental Indenture, dated as of June 26, 2014 (inclusive of the form of note of Legg Mason’s 3.950% Senior Notes due 2024), between Legg Mason, Inc. and The Bank of New York Mellon, as trustee, incorporated by reference to Exhibit 4.2 to Legg Mason’s Current Report on Form 8-K filed on June 26, 2014 (File No. 001-08529)](http://www.sec.gov/Archives/edgar/data/704051/000119312514251362/d746864dex42.htm) | | |

| [removed: 4.14] [added: 4.12] | | | | | | [Registrant Parent Guarantee dated August 2, 2021, incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the period ended June 30, 2021 (File No. 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000137/exhibit41parentguarantee.htm) | | |

| [removed: 4.15] [added: 4.13] | | | | | | [Officer’s Certificate, dated August 12, 2021 (inclusive of the form of additional note of Registrant’s 1.600% Notes due 2030 and form of note of Registrant’s 2.950% Notes due 2051), incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed on August 12, [removed: 2021](https://www.sec.gov/Archives/edgar/data/38777/000119312521244829/d215747dex43.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000119312521244829/d215747dex43.htm)[(File] [added: 2021 (File] No. 011-09318)](https://www.sec.gov/Archives/edgar/data/38777/000119312521244829/d215747dex43.htm) | | |

| [removed: 4.16] [added: 4.14] | | | | | | [Description of Registrant’s [removed: Securities](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm)[,](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm)[incorporated] [added: Securities, incorporated] by reference to Exhibit 4.16 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2020 (File No. [removed: 001-0](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm)[9318)](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm)] [added: 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit41693020.htm)] | | |

| [removed: 10.1] [added: 10.3] | | | | | | [Representative Form of Amended and Restated Indemnification Agreement with directors of Registrant, incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the period ended March 31, 2006 (File No. 001-09318)*](http://www.sec.gov/Archives/edgar/data/38777/000119312506106160/dex105.htm) | | |

| [removed: 10.2] [added: 10.4] | | | | | | [2006 Directors Deferred Compensation [removed: Plan](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[(](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[as] [added: Plan (as] amended and restated effective November 5, [removed: 2020](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[)](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[,] [added: 2020),] incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the fiscal year [removed: ended](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm) [Se](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[ptember] [added: ended September] 30, [removed: 2020](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[(](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[File] [added: 2020 (File] No. [removed: 001-09318](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)[)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10493020.htm)] | | |

| [removed: 10.3] [added: 10.6] | | | | | | [removed: [1998 Employee] [added: [2002 Universal] Stock [removed: Investment] [added: Incentive] Plan (as amended and restated effective [removed: December 10, 2019),] [added: February 9, 2021),] incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on February [removed: 12, 2020] [added: 10, 2021] (File No. [removed: 001-09318)*](http://www.sec.gov/Archives/edgar/data/38777/000003877720000070/exhibit10121220.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm)] | | |

| [removed: 10.4] [added: 10.9] | | | | | | [removed: [2002 Universal Stock Incentive] [added: [Deferred Compensation Fund] Plan [removed: (as amended and restated effective](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [February 9, 2021),](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [incorporated] [added: (effective November 16, 2021), incorporated] by reference to [removed: Exhibit](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm)[10.1](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [to our](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [Current](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [Report] [added: Exhibit 10.1 to our Current Report] on [removed: Form](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [8-K] [added: Form 8-K] filed on [removed: February 10, 2021](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [(File No.](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm) [001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000074/exhibit10121021.htm)] [added: November 16, 2021 (File No. 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000199/ex101111621.htm)] | | |

| [removed: 10.5] [added: 10.7] | | | | | | [Amended and Restated Annual Incentive Compensation Plan (as amended and restated effective December 10, 2019), incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the period ended December 31, 2019 (File No. 001-09318)*](http://www.sec.gov/Archives/edgar/data/38777/000003877720000011/exhibit101q1fy20.htm) | | |

| [removed: 10.7] [added: 10.8] | | | | | | [Amended and Restated 2017 Equity Incentive Plan, incorporated by reference to Exhibit 99.1 to our Registration Statement on Form S-8 filed on October 6, 2020 (File No. 333-249336)*](http://www.sec.gov/Archives/edgar/data/38777/000003877720000169/exhibit991.htm) | | |

| [removed: 10.8] [added: 10.5] | | | | | | [removed: [Deferred Compensation Fund] [added: [1998 Employee Stock Investment] Plan [removed: (effective November 16, 2021),] [added: (as amended and restated effective June 21, 2022),] incorporated by reference to Exhibit 10.1 to our [removed: Current] [added: Quarterly] Report on Form [removed: 8-K filed on November 16, 2021] [added: 10-Q for the period ended June 30, 2022] (File No. [removed: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000199/ex101111621.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877722000138/exhibit101q3fy22.htm)] | | |

| [removed: 10.9] [added: 10.10] | | | | | | [Non-Employee Director Compensation as of February 11, 2020, incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the period ended March 31, 2020 (File No. 001-09318)*](http://www.sec.gov/Archives/edgar/data/38777/000003877720000106/exhibit103q2fy20.htm) | | |

| [removed: 10.10] [added: 10.11] | | | | | | [Named Executive [removed: Officer] [added: Of](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[ficer] Compensation [removed: as of October] [added: as](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [of January] 1, [removed: 2020](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm)[,] [added: 2022](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[,] incorporated by reference to Exhibit [removed: 10.11 to our An](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm)[nual Report] [added: 10](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[.](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[2](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [to our](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [Quarterly](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [Report] on Form [removed: 10-K for the fiscal year ended September 30, 2020](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm) [(](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm)[File] [added: 10](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[\-Q](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [for the](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [period](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [ended](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [December 31,](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[2021](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm) [(](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[F](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)[ile] No. [removed: 001-09318](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm)[)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit101193020.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877722000013/exhibit102123121.htm)] | | |

| [removed: 10.11] [added: 10.14] | | | | | | [Representative Forms of Notice of Restricted Stock Award and Restricted Stock Award Agreement (RSA) under our 2002 Universal Stock Incentive Plan for certain time-based awards to executive officers of Registrant, incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K for the fiscal year ended September 30, [removed: 2019] [added: 2020] (File No. [removed: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877719000186/exhibit10293019.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10293020.htm)] | | |

| [removed: 10.12] [added: 10.15] | | | | | | [Representative Forms of Notice of Restricted Stock Unit Award and Restricted Stock Unit Award Agreement (RSU) under our 2002 Universal Stock Incentive Plan for certain performance-based awards to executive officers of Registrant, incorporated by reference to Exhibit 10.3 to our Annual Report on Form 10-K for the fiscal year ended September 30, [removed: 2019] [added: 2020] (File No. [removed: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877719000186/exhibit10393019.htm)] [added: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10393020.htm)] | | |

| [removed: 10.13] [added: 10.16] | | | | | | [Representative Forms of Notice of Restricted Stock [added: Unit] Award and Restricted Stock [added: Unit] Award Agreement [removed: (RSA)] [added: (RSU)] under our 2002 Universal Stock Incentive Plan for certain time-based awards to executive officers of [removed: Registrant, incorporated] [added: Registrant](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[,](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm) [incorporated] by [removed: reference] [added: re](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[fere](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[nce] to Exhibit [removed: 10.2] [added: 10.15] to our Annual Report on Form 10-K for the fiscal year ended September 30, [removed: 2020 (File] [added: 202](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[1 (](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[File] No. [removed: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10293020.htm)] [added: 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)[*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)] | | |

| [removed: 10.14] [added: 10.17] | | | | | | [Representative Forms of Notice of Restricted Stock Unit Award and Restricted Stock Unit Award Agreement (RSU) under our 2002 Universal Stock Incentive Plan for certain performance-based awards to executive officers of [removed: Registrant,] [added: Registrant](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[,] incorporated by reference to Exhibit [removed: 10.3 to our Annual] [added: 10.16](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm) [t](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[o ou](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[r An](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[nual] Report on Form [removed: 10-K] [added: 10-](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[K] for the fiscal year ended [removed: September] [added: Se](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[ptember] 30, [removed: 2020] [added: 2021] (File No. [removed: 001-09318)*](https://www.sec.gov/Archives/edgar/data/38777/000003877720000203/exhibit10393020.htm)] [added: 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)[*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)] | | |

| [removed: 10.15] [added: 10.12] | | | | | | [Representative Forms of Notice of Restricted Stock Unit Award and Restricted Stock Unit Award Agreement (RSU) under our 2002 Universal Stock Incentive Plan for certain time-based awards to executive officers of Registrant [removed: (filed herewith)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101593021.htm)] [added: (](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101293022.htm)[filed herewith](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101293022.htm)[)*](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101293022.htm)] | | |

| [removed: 10.16] [added: 10.13] | | | | | | [Representative Forms of Notice of Restricted Stock Unit Award and Restricted Stock Unit Award Agreement (RSU) under our 2002 Universal Stock Incentive Plan for certain performance-based awards to executive officers of Registrant [removed: (filed herewith)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101693021.htm)] [added: (](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101393022.htm)[filed herewith](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101393022.htm)[)*](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit101393022.htm)] | | |

| [removed: 10.17] [added: 10.18] | | | | | | [Notice of Restricted Stock [removed: Award](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [and](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [Restricted] [added: Award and Restricted] Stock Award Agreement [removed: (](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[dated] [added: (dated] September 2, [removed: 2020](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[) under](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [our](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [2002] [added: 2020) under our 2002] Universal Stock Incentive [removed: Plan](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [for](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [performance-based] [added: Plan for performance-based] award to Adam B. [removed: Spector (filed herewith)*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)] [added: Spector](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[, incorporated by reference to Exhibit 10.17 to our](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [Annual R](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[eport on Fo](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[rm 1](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[0-K for](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm) [the fiscal year ended September 30, 2021 (File No. 001-](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)[*](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit101793021.htm)] | | |

| 21 | | | | | | [List of Subsidiaries (filed [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit2193021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit2193022.htm)] | | |

| 23 | | | | | | [Consent of Independent Registered Public Accounting Firm (filed [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit2393021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit2393022.htm)] | | |

| 31.1 | | | | | | [Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit31193021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit31193022.htm)] | | |

| 31.2 | | | | | | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit31293021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit31293022.htm)] | | |

| 32.1 | | | | | | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit32193021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit32193022.htm)] | | |

| 32.2 | | | | | | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished [removed: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877721000205/exhibit32293021.htm)] [added: herewith)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000198/exhibit32293022.htm)] | | |

| 101 | | | | | | The following materials from Registrant’s Annual Report on Form 10‑K for the fiscal year ended September 30, [removed: 2021,] [added: 2022,] formatted in Inline Extensible Business Reporting Language (iXBRL), include: (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) related notes (filed herewith) | | |

| Date: | | | November [removed: 19, 2021] [added: 14, 2022] | | | By: | | | /s/ Matthew Nicholls | | |

| | | | | | | | | | Matthew Nicholls, Executive Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Chief Operating Officer] | | |

| Date: | | | November [removed: 19, 2021] [added: 14, 2022] | | | By: | | | /s/ Gwen L. Shaneyfelt | | |

| Date: | | | November [removed: 19, 2021] [added: 14, 2022] | | | By: | | | /s/ Jennifer M. Johnson | | |

| | | | | | | | | | Matthew Nicholls, Executive Vice [removed: President and] [added: President,] Chief Financial Officer [added: and Chief Operating Officer] (Principal Financial Officer) | | |

| 10.1 | | | | | | [Amended and Restated](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm) [Credit Agreement, dated as of](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm) [September](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm) [8](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm)[, 2022, between Registrant, as borrower, the financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent, incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm) [September 13](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm)[, 2022 (File No. 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit101amendedandrest.htm) | | |

| 10.2 | | | | | | [Term Loan Agreement, dated as of September 8, 2022, between Registrant, as borrower, the financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent, incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on September 13, 2022 (File No. 001-09318)](https://www.sec.gov/Archives/edgar/data/38777/000003877722000165/exhibit102termloancredit.htm) | | |

| | | | | | | | | |

| Date: | | | November 14, 2022 | | | By: | | | /s/ Matthew Nicholls | | |

| Date: | | | November 14, 2022 | | | By: | | | /s/ Gwen L. Shaneyfelt | | |

[Table](#i346fd55fe425424da9c47e366c278670_7) [of Contents](#i346fd55fe425424da9c47e366c278670_7)

| 4.12 | | | | | | [Fourth Supplemental Indenture, dated as of March 22, 2016 (inclusive of the form of note of Legg Mason’s 4.750% Senior Notes due 2026), between Legg Mason, Inc. and The Bank New York Mellon, as trustee, incorporated by reference to Exhibit 4.2 to Legg Mason’s Current Report on Form 8-K filed on March 22, 2016 (File No. 001-08529)](http://www.sec.gov/Archives/edgar/data/704051/000119312516512754/d128515dex42.htm) | | |

| 4.13 | | | | | | [Form of Indenture for Junior Subordinated Notes between Legg Mason, Inc. and The Bank of New York Mellon, as trustee, incorporated by reference to Exhibit 4.2 to Legg Mason’s Registration Statement on Form S-3ASR filed on February 19, 2016 (File No. 333-209616)](http://www.sec.gov/Archives/edgar/data/704051/000119312516470125/d147062dex42.htm) | | |

| 10.6 | | | | | | [2014 Key Executive Incentive Compensation Plan (as adopted and effective December 10, 2013), incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 13, 2014 (File No. 001-09318)*](http://www.sec.gov/Archives/edgar/data/38777/000119312514097824/d695267dex101.htm) | | |