Item 8. Financial Statements and Supplementary Data.

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Item 8. Financial Statements and Supplementary Data.

Index of Consolidated Financial Statements for the fiscal years ended September 30, 2025, 2024 and 2023.


CONTENTS						Page
Management’s Report on Internal Control Over Financial Reporting						59
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)						60
Consolidated Financial Statements of Franklin Resources, Inc. and its consolidated subsidiaries:
Consolidated Statements of Income for the fiscal years ended September 30, 2025 , 2024 and 2023						63
Consolidated Statements of Comprehensive Income for the fiscal years ended September 30, 2025 , 2024 and 2023						64
Consolidated Balance Sheets as of September 30, 2025 and 2024						65
Consolidated Statements of Stockholders’ Equity as of and for the fiscal years ended September 30, 2025 , 2024 and 2023						66
Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2025 , 2024 and 2023						67
Notes to Consolidated Financial Statements						69

All schedules have been omitted as the information is provided in the financial statements or in related notes thereto or is not required to be filed, as the information is not applicable.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Franklin Resources, Inc. and its consolidated subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The 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 accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of 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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2025, 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, 2025, 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, 2025 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, 2025.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

and Stockholders of Franklin Resources, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Franklin Resources, Inc. and its subsidiaries (the “Company”) as of September 30, 2025 and 2024, 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, 2025, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2025 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, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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

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.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Realizability of Deferred Tax Assets

As described in Notes 1 and 13 to the consolidated financial statements, the Company had gross deferred tax assets of $1,097.2 million as of September 30, 2025, reduced by a $297.1 million valuation allowance. Management recorded a valuation allowance to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. In assessing whether a valuation allowance should be established against a deferred income tax asset, management considers all positive and negative evidence, which includes timing of expiration, projected sources of taxable income, limitations on utilization under the statute, and effectiveness of prudent and feasible tax planning strategies.

The principal considerations for our determination that performing procedures relating to the realizability of deferred tax assets is a critical audit matter are (i) the significant judgment by management when assessing the realizability of deferred tax assets and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s assessment of the realizability of deferred tax assets and management’s assessment of the timing of expiration, projected sources of taxable income, limitations on utilization under the statute, and effectiveness of prudent and feasible tax planning strategies.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the realizability of deferred tax assets, including controls over the completeness and accuracy of data relevant to the analysis, determination of projected sources of taxable income and expected utilization of deferred tax assets. These procedures also included, among others, (i) evaluating management’s assessment of the realizability of deferred tax assets and the need for a valuation allowance, (ii) evaluating the positive and negative evidence to support the prudence and feasibility of the implementation of available tax planning strategies related to timing of expiration, projected sources of taxable income, limitations on utilization under the statute and effectiveness of prudent and feasible tax planning strategies, and (iii) testing the completeness and accuracy of the underlying data used in management’s assessment of the realizability of deferred tax assets.

Valuation of the Indefinite-Lived Intangible Asset Associated with the Management Contracts Managed by Western Asset Management

As described in Notes 1 and 8 to the consolidated financial statements, the carrying value of the indefinite-lived intangible asset associated with the management contracts managed by Western Asset Management (WAM) was $450.0 million, net of an impairment of $200.0 million recognized during 2025. Indefinite-lived intangible assets are tested for impairment annually and when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible asset below its carrying value. The fair value of the indefinite-lived intangible asset was based on the net present value (NPV) of estimated future cash flows attributable to the management contracts, which include significant assumptions about the assets under management (AUM) growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate.

The principal considerations for our determination that performing procedures relating to the valuation of the indefinite-lived intangible asset associated with the management contracts managed by WAM is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible asset associated with the management contracts managed by WAM; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the AUM growth rate, pre-tax profit margin, and discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the valuation of the indefinite-lived intangible asset associated with the management contracts managed by WAM, including controls over development of the AUM growth rate, pre-tax profit margin, and discount rate assumptions. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the indefinite-lived intangible asset associated with the management contracts managed by WAM, (ii) testing the completeness, accuracy, relevance and reliability of certain underlying data used in the NPV method, and (iii) evaluating the reasonableness of management’s significant assumption related to the AUM growth rate and pre-tax profit margin by considering industry knowledge and data, current and past performance of the management contracts managed by WAM, and consistency with evidence obtained in other areas of the audit; and (iv) involving professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the NPV method and the reasonableness of the discount rate assumption.

/s/ PricewaterhouseCoopers LLP

San Francisco, California

November 10, 2025

We have served as the Company’s auditor since 1974.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF INCOME


(in millions, except per share data)
for the fiscal years ended September 30,	2025		2024		2023
Operating Revenues
Investment management fees	$	6,981.8	$	6,822.2	$	6,452.9
Sales and distribution fees	1,474.7		1,381.0		1,203.7
Shareholder servicing fees	264.5		229.3		152.7
Other	49.7		45.5		40.1
Total operating revenues	8,770.7		8,478.0		7,849.4
Operating Expenses
Compensation and benefits	3,818.2		3,831.1		3,494.0
Sales, distribution and marketing	2,010.9		1,863.1		1,613.1
Information systems and technology	643.6		620.1		505.0
Occupancy	286.3		325.4		228.9
Amortization of intangible assets	406.5		338.2		341.1
Impairment of intangible assets	226.6		389.2		—
General, administrative and other	774.5		703.3		565.0
Total operating expenses	8,166.6		8,070.4		6,747.1
Operating Income	604.1		407.6		1,102.3
Other Income (Expenses)
Investment and other income, net	212.8		395.5		262.3
Interest expense	(94.9)		(97.2)		(123.7)
Investment and other income of consolidated investment products, net	108.4		149.9		115.8
Expenses of consolidated investment products	(43.6)		(32.6)		(18.7)
Other income, net	182.7		415.6		235.7
Income before taxes	786.8		823.2		1,338.0
Taxes on income	237.9		215.3		312.3
Net income	548.9		607.9		1,025.7
Less: net income (loss) attributable to
Redeemable noncontrolling interests	(52.7)		127.9		135.5
Nonredeemable noncontrolling interests	76.7		15.2		7.4
Net Income Attributable to Franklin Resources, Inc.	$	524.9	$	464.8	$	882.8

Earnings per Share
Basic	$	0.91	$	0.85	$	1.72
Diluted	0.91		0.85		1.72

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Net Income	$	548.9	$	607.9	$	1,025.7
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax	(18.4)		89.8		112.8
Net unrealized gains (losses) on defined benefit plans, net of tax	(9.3)		0.1		(1.3)
Net unrealized gains (losses) on investments, net of tax	0.1		(0.1)		0.2
Total other comprehensive income (loss)	(27.6)		89.8		111.7
Total comprehensive income	521.3		697.7		1,137.4
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests	(52.7)		127.9		135.5
Nonredeemable noncontrolling interests	76.7		15.2		7.4
Comprehensive Income Attributable to Franklin Resources, Inc.	$	497.3	$	554.6	$	994.5

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS


(in millions, except share and per share data)
as of September 30,	2025		2024
Assets
Cash and cash equivalents	$	3,088.1	$	3,309.5
Receivables	1,541.7		1,479.1
Investments (including $1,179.5 and $838.0 at fair value at September 30, 2025 and 2024)	2,374.0		2,338.4
Assets of consolidated investment products
Cash and cash equivalents	485.8		1,099.4
Investments, at fair value	12,278.8		11,034.9
Property and equipment, net	949.1		946.4
Goodwill	6,206.0		6,211.4
Intangible assets, net	4,166.0		4,802.1
Operating lease right-of-use assets	764.3		823.3
Other	514.5		420.0
Total Assets	$	32,368.3	$	32,464.5

Liabilities
Compensation and benefits	$	1,760.3	$	1,801.3
Accounts payable and accrued expenses	615.4		551.5
Income taxes	207.5		406.4
Debt	2,362.0		2,780.3
Liabilities of consolidated investment products
Accounts payable and accrued expenses	1,063.0		861.3
Debt	9,937.3		9,341.5
Deferred tax liabilities	261.6		284.9
Operating lease liabilities	1,000.6		965.1
Other	971.8		907.4
Total liabilities	18,179.5		17,899.7
Commitments and Contingencies (Note 15)
Redeemable Noncontrolling Interests	1,182.0		1,321.8
Stockholders’ Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued	—		—
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 520,951,796 and 523,596,548 shares issued and outstanding at September 30, 2025 and 2024	52.1		52.4
Capital in excess of par	956.8		947.6
Retained earnings	11,516.0		11,927.6
Accumulated other comprehensive loss	(447.1)		(419.5)
Total Franklin Resources, Inc. stockholders’ equity	12,077.8		12,508.1
Nonredeemable noncontrolling interests	929.0		734.9
Total stockholders’ equity	13,006.8		13,243.0
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	32,368.3	$	32,464.5

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


		Franklin Resources, Inc.																Non- redeemable Non- controlling Interests		Total Stockholders’ Equity
	Common Stock					Capital in Excess of Par Value			Retained Earnings			Accum- ulated Other Compre- hensive Loss			Stockholders’ Equity
(in millions)
as of and for the fiscal years ended September 30, 2025, 2024 and 2023	Shares		Amount
Balance at October 1, 2022		499.6		$	50.0		$	—		$	12,045.6		$	(621.0)		$	11,474.6	$	824.3	$	12,298.9

Net income										882.8						882.8		7.4		890.2
Other comprehensive income													111.7			111.7				111.7
Dividends declared on common stock ($1.20 per share)										(611.4)						(611.4)				(611.4)
Repurchase of common stock		(9.6)		(1.0)			(205.5)			(49.8)						(256.3)				(256.3)
Issuance of common stock		5.9		0.6			214.5									215.1				215.1
Stock-based compensation							(9.0)									(9.0)				(9.0)
Net subscriptions and other										—						—		159.8		159.8
Net deconsolidation of investment products																		(360.6)		(360.6)


Adjustment to fair value of redeemable noncontrolling interests										109.4						109.4				109.4
Balance at September 30, 2023		495.9		$	49.6		$	—		$	12,376.6		$	(509.3)		$	11,916.9	$	630.9	$	12,547.8

Net income										464.8						464.8		15.2		480.0
Other comprehensive income													89.8			89.8				89.8
Dividends declared on common stock ($1.24 per share)										(670.1)						(670.1)				(670.1)
Repurchase of common stock		(12.0)		(1.2)			(281.2)			8.0						(274.4)				(274.4)
Issuance of common stock		8.1		0.8			230.8									231.6				231.6
Stock-based compensation							61.1									61.1				61.1
Acquisition		31.6		3.2			936.9									940.1		25.8		965.9
Net subscriptions and other										—						—		108.7		108.7
Net deconsolidation of investment products																		(45.7)		(45.7)
Adjustment to fair value of redeemable noncontrolling interests										(251.7)						(251.7)				(251.7)
Balance at September 30, 2024		523.6		$	52.4		$	947.6		$	11,927.6		$	(419.5)		$	12,508.1	$	734.9	$	13,243.0
Net income										524.9						524.9		76.7		601.6
Other comprehensive loss													(27.6)			(27.6)				(27.6)
Dividends declared on common stock ($1.28 per share)										(688.4)						(688.4)				(688.4)
Repurchase of common stock		(10.7)		(1.1)			(239.2)			—						(240.3)				(240.3)
Issuance of common stock		8.1		0.8			242.0									242.8				242.8
Stock-based compensation							6.4									6.4				6.4
Net subscriptions and other										—						—		99.4		99.4
Net consolidation of investment products																		18.0		18.0
Adjustment to fair value of redeemable noncontrolling interests										(248.1)						(248.1)				(248.1)
Balance at September 30, 2025		521.0		$	52.1		$	956.8		$	11,516.0		$	(447.1)		$	12,077.8	$	929.0	$	13,006.8

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Net Income	$	548.9	$	607.9	$	1,025.7
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	214.8		246.1		182.6
Amortization of deferred sales commissions	79.8		62.0		50.0
Depreciation and other amortization	125.3		116.5		104.3
Amortization of intangible assets	406.5		338.2		341.1
Impairment of intangible asset	226.6		389.2		—
Net losses (gains) on investments	37.6		(57.6)		(39.5)
Income from investments in equity method investees	(78.0)		(137.5)		(45.4)
Net (gains) losses on investments of consolidated investment products	(4.1)		24.9		120.4
Net purchase of investments by consolidated investment products	(369.4)		(520.2)		(829.4)
Deferred income taxes	(47.2)		(124.6)		41.5
Other	174.4		172.2		73.2
Changes in operating assets and liabilities:
Increase in receivables and other assets	(128.7)		(111.8)		(63.2)
Decrease in investments, net	19.0		9.4		2.8
Increase (decrease) in accrued compensation and benefits	(32.9)		86.5		128.9

Decrease in income taxes payable	(181.5)		(93.4)		(1.1)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	90.0		3.9		(4.5)
Increase (decrease) in accounts payable and accrued expenses of consolidated investment products	(15.0)		(40.4)		1.8
Net cash provided by operating activities	1,066.1		971.3		1,089.2
Purchase of investments	(1,037.2)		(1,127.7)		(757.8)
Liquidation of investments	776.2		1,406.8		608.6
Purchase of investments by consolidated collateralized loan obligations	(6,538.9)		(6,310.0)		(4,364.1)
Liquidation of investments by consolidated collateralized loan obligations	4,918.6		4,250.7		1,834.1

Additions of property and equipment, net	(154.5)		(177.1)		(148.8)
Acquisitions, net of cash acquired (including $281.4 in cash and cash equivalents of consolidated investment products in fiscal year 2024)	—		175.1		(500.5)
Payments of contingent consideration asset	—		—		9.8
Payments of deferred consideration liability	(90.5)		(534.9)		(241.8)
Net deconsolidation of investment products	(216.4)		(106.6)		(49.8)
Net cash used in investing activities	(2,342.7)		(2,423.7)		(3,610.3)

[Table continued on next page]

See Notes to Consolidated Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

[Table continued from previous page]


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Issuance of common stock	$	24.1	$	20.8	$	23.3
Dividends paid on common stock	(683.7)		(656.4)		(607.3)
Repurchase of common stock	(240.3)		(274.4)		(256.3)
Proceeds from repurchase agreement	144.7		5.3		174.8
Payments on repurchase agreement	(61.8)		(81.1)		—
Proceeds from debt	300.0		—		—

Payments on debt	(700.0)		(250.0)		(300.0)


Proceeds from debt of consolidated investment products	6,029.7		4,346.7		3,539.9
Payments on debt by consolidated investment products	(4,800.6)		(1,912.9)		(1,105.0)
Payments on contingent consideration liabilities	(6.8)		(22.8)		(7.6)
Noncontrolling interests	447.1		240.4		644.9
Net cash provided by financing activities	452.4		1,415.6		2,106.7
Effect of exchange rate changes on cash and cash equivalents	(10.8)		43.3		34.3
Increase (decrease) in cash and cash equivalents	(835.0)		6.5		(380.1)
Cash and cash equivalents, beginning of year	4,408.9		4,402.4		4,782.5
Cash and Cash Equivalents, End of Year	$	3,573.9	$	4,408.9	$	4,402.4

Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	465.4	$	435.7	$	233.2
Cash paid for interest	106.6		113.4		121.9
Cash paid for interest by consolidated investment products	753.2		694.2		379.2
Non-cash purchase of investments	68.4		—		—

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Significant Accounting Policies

Business. Franklin is a holding company with subsidiaries operating under its Franklin Templeton and/or subsidiary brand names. The Company provides investment management and related services to investors in jurisdictions worldwide through investment products which include sponsored funds, as well as institutional and high-net-worth separate accounts, retail separately managed account programs, sub-advised products, and other investment vehicles. The Company’s related services include fund administration, sales and distribution, and shareholder servicing.

Basis of Presentation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Management believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates.

Consolidation. The consolidated financial statements include the accounts of Franklin and its subsidiaries and consolidated investment products (“CIPs”) in which it has a controlling financial interest. The Company has a controlling financial interest when it owns a majority of the voting interest in a voting interest entity (“VOE”) or is the primary beneficiary of a variable interest entity (“VIE”). Intercompany accounts and transactions have been eliminated.

A VIE is an entity in which the equity investment holders have not contributed sufficient capital to finance its activities or do not have defined rights and obligations normally associated with an equity investment. The Company’s VIEs are primarily investment products, and its variable interests consist of its equity ownership interests in and investment management fees earned from these products.

The Company is the primary beneficiary of a VIE if it has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or right to receive benefits from the VIE that could potentially be significant to the VIE. Investment management fees earned from VIEs are excluded from the primary beneficiary determination if they are deemed to be at market and commensurate with service.

Related Parties include sponsored funds and equity method investees. A substantial amount of the Company’s operating revenues and receivables are from related parties.

Earnings per Share. Basic and diluted earnings per share are computed using the two-class method, which considers participating securities as a separate class of shares. The Company’s participating securities consist of its nonvested stock and stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents. Basic earnings per share is computed by dividing net income available to the Company’s common stockholders, adjusted to exclude earnings allocated to participating securities, by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period.

Business combinations are accounted for by recognizing the acquired assets, including separately identifiable intangible assets, and assumed liabilities at their acquisition-date estimated fair values. Any excess of the purchase consideration over the acquisition-date fair values of these identifiable assets and liabilities is recognized as goodwill. During the measurement period, which is not to exceed one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed due to new information about facts that existed as of the acquisition date, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in earnings.

Intangible assets acquired in business combinations consist primarily of investment management contracts and trade names. The fair values of the acquired management contracts are based on the net present value of estimated future cash flows attributable to the contracts, which include significant assumptions about forecasts of the AUM growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate. The fair value of trade names is determined using the relief from royalty method based on net present value of estimated future cash flows, which include significant assumptions about royalty rate, revenue growth rate, discount rate and effective tax rate. The management contract intangible assets are amortized over their estimated useful lives, which range from three to 16 years, using the straight-line method, unless the asset is determined to have an indefinite useful life. Indefinite-lived intangible assets represent contracts

to manage investment assets for which there is no foreseeable limit on the contract period. Trade names intangible assets are amortized over their estimated useful lives which range from five to twenty years using the straight-line method.

Goodwill and indefinite-lived intangible assets are tested for impairment annually as of August 1 and when an event occurs or circumstances change that more likely than not reduce the fair value of the related reporting unit or indefinite-lived intangible asset below its carrying value. The Company has one reporting unit, investment management and related services, consistent with its single operating segment, to which all goodwill has been assigned.

Goodwill and indefinite-lived intangible assets may first be assessed for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. The qualitative analysis considers entity-specific and macroeconomic factors and their potential impact on the key assumptions used in the determination of the fair value of the reporting unit or indefinite-lived intangible asset. A quantitative impairment test is performed if the results of the qualitative assessment indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value or an indefinite-lived intangible asset is impaired, or if a qualitative assessment is not performed.

The fair values of the reporting unit and indefinite-lived intangible assets are based on the net present value of estimated future cash flows, which include assumptions about the AUM growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate.

If a quantitative goodwill impairment test indicates that the carrying value of the reporting unit exceeds its fair value, impairment is recognized in the amount of the difference in values not to exceed the total amount of goodwill allocated to the reporting unit.

If a quantitative indefinite-lived intangible assets impairment test indicates that the carrying value of the asset exceeds the fair value, impairment is recognized in the amount of the difference in values.

Definite-lived intangible assets are tested for impairment quarterly. Impairment is indicated when the carrying value of an asset is not recoverable and exceeds its fair value. Recoverability is evaluated based on estimated undiscounted future cash flows using assumptions about the AUM growth rate, pre-tax profit margin, average effective fee rate and expected useful lives as well as royalty rate for trade names intangible assets. If the carrying value of an asset is not recoverable through undiscounted cash flows, impairment is recognized in the amount by which the carrying value exceeds the asset’s fair value, as determined by discounted cash flows or other methods as appropriate for the asset type.

Fair Value Measurements. The Company uses a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on whether the inputs to those valuation techniques are observable or unobservable. The three levels of fair value hierarchy are set forth below. The assessment of the hierarchy level of the assets or liabilities measured at fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety.


Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities, which may include published net asset values (“NAV”) for fund products.

Level 2			Observable inputs other than Level 1 quoted prices, such as non-binding quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or model-based valuation methodologies that utilize significant assumptions that are observable or corroborated by observable market data.

Level 3			Unobservable inputs that are supported by little or no market activity. These inputs require significant management judgment and reflect the Company’s estimation of assumptions that market participants would use in pricing the asset or liability.

Quoted market prices may be adjusted if events occur, such as global market fluctuations, issuer specific news, economic and geopolitical events, natural disasters, and governmental actions. A pricing vendor is engaged to provide a valuation factor, which represents an estimate as to how much a specific investment value would have changed between the time that the investment stopped trading in its local market and the time that the fund’s NAV was determined. The price adjustments are primarily determined based on third-party factors derived from model-based valuation techniques for which the significant assumptions are observable in the market.

The Company’s investments are primarily recorded at fair value or amounts that approximate fair value on a recurring basis. Investments in fund products for which fair value is estimated using NAV as a practical expedient (when

the NAV is available to the Company as an investor but is not publicly available) are not classified in the fair value hierarchy. Fair values are estimated for disclosure purposes for financial instruments that are not measured at fair value.

Cash and Cash Equivalents primarily consist of nonconsolidated sponsored money market funds and deposits with financial institutions and are carried at cost. Due to the short-term nature and liquidity of these financial instruments, their carrying values approximate fair value.

The Company maintains cash and cash equivalents with financial institutions in various countries, limits the amount of credit exposure with any given financial institution and conducts ongoing evaluations of the creditworthiness of the financial institutions with which it does business.

Receivables consist primarily of fees receivable from investment products and are carried at invoiced amounts. Due to the short-term nature and liquidity of the receivables, their carrying values approximate fair value.

Investments consist of investments in sponsored funds and separate accounts, investments related to long-term incentive plans, other equity and debt securities, investments in equity method investees and other investments.

Investments in sponsored funds and separate accounts consist primarily of nonconsolidated sponsored funds and to a lesser extent, separate accounts. Sponsored funds and separate accounts are carried at fair value with changes in the fair value recognized as gains and losses in earnings. The fair values of fund products are determined based on their published NAV or estimated using NAV as a practical expedient. The fair values of the underlying investments of the separate accounts are determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available.

Investments related to long-term incentive plans consist primarily of investments in sponsored funds related to certain compensation plans that have vesting provision and are carried at fair value. Changes in fair value are recognized as gains and losses in earnings. The fair values of the investments are determined based on the sponsored funds’ published NAV or estimated using NAV as a practical expedient.

Other equity and debt investments consist of equity and debt securities carried at fair value. Changes in the fair value of equity securities other than fund products are recognized as gains and losses in earnings. The fair values of equity and debt securities are determined using independent third-party broker or dealer price quotes or based on either a market-based or income-based approach using significant unobservable inputs. The fair values of fund products are determined based on their published NAV or estimated using NAV as a practical expedient.

Investments in Equity Method Investees consist of equity investments in entities, including sponsored funds, over which the Company is able to exercise significant influence, but not control. Significant influence is generally considered to exist when the Company’s ownership interest in the investee is between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Investments in limited partnerships and limited liability companies are accounted for using the equity method when the Company’s investment is more than minor or when the Company is the general partner. Under the equity method of accounting, the investments are initially carried at cost and subsequently adjusted by the Company’s proportionate share of the entities’ net income, which is recognized in earnings.

Other Investments consist of equity investments in entities over which the Company is unable to exercise significant influence and do not have a readily determinable fair value, and time deposits with maturities greater than three months from the date of purchase. The equity investments are measured at cost adjusted for observable price changes and impairment, if any, which are recognized in earnings. The fair value of the entities is generally estimated using significant unobservable inputs in either a market-based or income-based approach. The time deposits are carried at cost which approximates fair value due to their short-term nature and liquidity.

Impairment of Investments. Investments in equity method investees and equity investments that do not have a readily determinable fair value are evaluated for impairment on a quarterly basis. The evaluation of equity investments considers qualitative factors, including the financial condition and specific events related to an investee that may indicate the fair value of the investment is less than its carrying value. Impairment of equity securities is recognized in earnings.

Cash and Cash Equivalents of CIPs consist of highly liquid investments, including money market funds, which are readily convertible into cash, and deposits with financial institutions, and are carried at cost. Due to the short-term nature and liquidity of these financial instruments, their carrying values approximate fair value.

Receivables of CIPs consist of investment and share transaction related receivables and are carried at transacted amounts. Due to the short-term nature and liquidity of the receivables, their carrying values approximate fair value.

Investments of CIPs consist of marketable debt and equity securities and other investments that are not generally traded in active markets, and are carried at fair value. Changes in the fair value of the investments are recognized as gains and losses in earnings. The fair values of marketable securities are determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available.

The investments that are not generally traded in active markets consist of equity and debt securities of entities in emerging markets, fund products, other equity and debt instruments, and loans. The fair values are determined using significant unobservable inputs in either a market-based or income-based approach, except for fund products, for which fair values are estimated using NAV as a practical expedient.

Property and Equipment, net are recorded at cost and depreciated using the straight-line method over their estimated useful lives which range from three to 35 years. Expenditures for repairs and maintenance are charged to expense when incurred. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the lease term, whichever is shorter.

Internal and external costs incurred in connection with developing or obtaining software for internal use are capitalized and amortized over the shorter of the estimated useful lives of the software or the license terms, beginning when the software project is complete and the application is put into production.

Property and equipment are tested for impairment when there is an indication that the carrying value of an asset may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined to not be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value. Fair value is determined by discounted future cash flows models, appraisals or other applicable methods.

Leases consist primarily of operating leases relating to real estate. At the inception of a contract, the Company determines whether it is or contains a lease, which includes consideration of whether there are identified assets in the contract and if the Company has control over such assets. Right-of-use (“ROU”) assets and lease liabilities are recognized for all arrangements that qualify as a lease, except for those with original lease terms of twelve months or less.

ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments using an incremental borrowing rate estimated on a collateralized basis with similar terms for the specific interest rate environment. Leases with fixed payments are expensed on a straight-line basis over the lease term. Variable lease payments based on usage, changes in an index or market rate are expensed as incurred. The lease terms include options to extend or terminate the lease when it is reasonably certain they will be exercised.

Lease and nonlease payment components are accounted for separately. ROU assets are tested for impairment when there is an indication that the carrying value of an asset may not be recoverable.

Debt consists of senior notes which are carried at amortized cost. The fair value is estimated using quoted market prices, independent third-party broker or dealer price quotes, or prices of publicly traded debt with similar maturities, credit risk and interest rates. Amortization of debt premium and discount are recognized over the terms of the notes in interest expense.

Debt of CIPs is carried at amortized cost. The fair value is estimated using a discounted cash flow model that considers current interest rate levels, the quality of the underlying collateral and current economic conditions. Debt of CIPs also included debt of consolidated collateralized loan obligations (“CLOs”) which is measured primarily based on the fair value of the assets of the CLOs less the fair value of the Company’s own economic interests in the CLOs.

Noncontrolling Interests consist of third-party equity interests in CIPs and minority interests in certain subsidiaries. Noncontrolling interests that are redeemable or convertible for cash or other assets at the option of the holder are classified as temporary equity at the higher of fair value on reporting date or issuance-date fair value. Changes in fair value of redeemable noncontrolling interest is recognized as an adjustment to retained earnings. Nonredeemable noncontrolling interests are classified as a component of equity. Net income (loss) attributable to third-party investors is reflected as net income (loss) attributable to nonredeemable and redeemable noncontrolling interests in the consolidated statements of income. Subscriptions and redemptions of shares of CIPs by third-party investors are a component of the change in noncontrolling interests included in financing activities in the consolidated statements of cash flows.

The fair values of third-party equity interests in CIPs are determined based on the published NAV or estimated using NAV a practical expedient. The fair values of redeemable noncontrolling interests related to minority interest in certain subsidiaries are determined using discounted cash flows and guideline public company methods, which include significant assumptions about forecasts of the AUM growth rate, pre-tax profit margin, discount rate and public company earnings multiples.

Revenues. The Company earns revenue primarily from providing investment management and related services to its customers, which are generally investment products or investors in separate accounts. Related services include fund administration, sales and distribution, and shareholder servicing. Revenues are recognized when the Company’s obligations related to the services are satisfied and it is probable that a significant reversal of the revenue amount would not occur in future periods. The obligations are satisfied over time as the services are rendered, except for the sales and distribution obligations for the sale of shares of sponsored funds which are satisfied on trade date. Multiple services included in customer contracts are accounted for separately when the obligations are determined to be distinct.

Fees from providing investment management and fund administration services (“investment management fees”), other than performance-based investment management fees, are determined based on a percentage of AUM, primarily on a monthly basis using daily average AUM, and are recognized as the services are performed over time. Performance-based investment management fees are generally generated when investment products’ performance exceeds targets established in customer contracts. These fees are recognized when the amount is no longer probable of significant reversal and may relate to investment management services that were provided in prior periods.

Sales and distribution fees primarily consist of upfront sales commissions and ongoing distribution fees. Sales commissions are based on contractual rates for sales of certain classes of sponsored funds and are recognized on trade date. Distribution service fees are determined based on a percentage of AUM, primarily on a monthly basis using daily average AUM. As the fee amounts are uncertain on trade date, they are recognized over time as the amounts become known and may relate to sales and distribution services provided in prior periods.

Shareholder servicing fees are primarily determined based on a contractual margin, or a percentage of AUM on a monthly basis using daily average AUM and either the number of transactions in shareholder accounts or the number of shareholder accounts, while fees from certain investment products are based only on AUM. The fees are recognized as the services are performed over time.

AUM is generally based on the fair value of the underlying securities held by investment products and is calculated using fair value methods derived primarily from unadjusted quoted market prices, unadjusted independent third-party broker or dealer price quotes in active markets, or market prices or price quotes adjusted for observable price movements after the close of the primary market in accordance with the Company’s global valuation and pricing policy. The fair values of securities for which market prices are not readily available are valued internally using various methodologies which incorporate significant unobservable inputs as appropriate for each security type and represent an insignificant percentage of total AUM.

Revenue is recorded gross of payments made to third-party providers in the Company’s role as principal as it controls the delegated services provided to customers.

Stock-Based Compensation. The fair value of stock-based payment awards is estimated on the date of grant based on the market price of the underlying shares of the Company’s common stock and is amortized to compensation expense on a straight-line basis over the related vesting period, which is generally three years. Expense relating to awards subject to performance conditions is recognized if it is probable that the conditions will be achieved. The probability of achievement is assessed on a quarterly basis. Forfeitures are accounted for as they occur. The fair value of cash-settled phantom stock

awards is amortized to compensation expense on a straight-line basis over the related vesting period, which is generally four years, and the related liability is carried at fair value.

Postretirement Benefits. Defined contribution plan costs are expensed as incurred.

Income Taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is expected to be recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. In assessing whether a valuation allowance should be established against a deferred tax asset, the Company considers all positive and negative evidence, which includes timing of expiration, projected sources of taxable income, limitations on utilization under the statute and the effectiveness of prudent and feasible tax planning strategies among other factors. For each tax position taken or expected to be taken in a tax return, the Company utilizes significant judgment related to the range of possible favorable or unfavorable outcomes to determine whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Interest on tax matters is recognized in interest expense. Penalties are recognized in other operating expenses.

The Company operates in numerous countries, states and other taxing jurisdictions. The income tax laws are complex and subject to different interpretations by the taxpayer and the relevant taxing authorities. Significant judgment is required in the determination of the Company’s annual income tax provisions, which includes the assessment of deferred tax assets and uncertain tax positions, as well as the interpretation and application of existing and newly enacted tax laws, regulation changes, and new judicial rulings. The Company repatriates foreign earnings that are in excess of regulatory, capital or operational requirements of all of its non-U.S. subsidiaries.

Foreign Currency Translation and Transactions. Assets and liabilities of non-U.S. subsidiaries for which the local currency is the functional currency are translated at current exchange rates as of the end of the reporting period. The related revenues and expenses are translated at average exchange rates in effect during the period. Net exchange gains and losses resulting from translation are excluded from income and are recorded as part of accumulated other comprehensive income (loss). Transactions denominated in a foreign currency are revalued at the current exchange rate at the transaction date and any related gains and losses are recognized in earnings.

Note 2 – New Accounting Guidance

Recently Adopted Accounting Guidance

On October 1, 2024, the Company adopted the amendment issued by the Financial Accounting Standards Board (“FASB”) for segment reporting. The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance. The adoption of this amendment resulted in additional disclosures. See Note 18 – Segment and Geographic Information.

Accounting Guidance Not Yet Adopted

In December 2023, the FASB issued an amendment to the existing income taxes guidance. The amendment requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendment allows for either a prospective or retrospective approach on adoption and is effective for the Company on October 1, 2025. The Company will elect the prospective approach and include the relevant disclosures in its Annual Report on Form 10-K for the fiscal year ending September 30, 2026.

In December 2023, the FASB issued an amendment to the existing intangible assets guidance. The amendment requires eligible crypto assets to be measured at fair value, with changes recognized in net income, along with expanded disclosures. The amendment is effective for the Company on October 1, 2025, and requires a modified-retrospective transition approach. The Company will recognize a cumulative effective adjustment of approximately $26 million through retained earnings at adoption.

In November 2024, the FASB issued new guidance requiring disclosures of additional information and disaggregation of certain expenses included in the income statement. The guidance is effective for the Company on October 1, 2027, and allows for either a prospective or retrospective approach on adoption. The Company is currently evaluating the impact that the adoption will have on its financial statements and has not yet determined its transition approach.

In September 2025, the FASB issued an amendment to the existing internal-use software guidance. The amendment eliminates the project stage model and clarifies that capitalization of internal-use software costs commences when management has authorized and committed funding for the project and it is probable that software will be completed and used for its intended function. The amendment allows for varying transition approaches and is effective for the Company on October 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting the guidance and has not yet determined its transition approach.

Note 3 – Earnings per Share

The components of basic and diluted earnings per share were as follows:


(in millions, except per share data)
for the fiscal years ended September 30,	2025		2024		2023
Net income attributable to Franklin Resources, Inc.	$	524.9	$	464.8	$	882.8
Less: allocation of earnings to participating nonvested stock and stock unit awards	53.2		32.6		37.7
Net Income Available to Common Stockholders	$	471.7	$	432.2	$	845.1

Weighted-average shares outstanding – basic	516.7		509.5		490.0
Dilutive effect of nonparticipating nonvested stock unit awards	0.7		0.8		0.8
Weighted-Average Shares Outstanding – Diluted	517.4		510.3		490.8

Earnings per Share
Basic	$	0.91	$	0.85	$	1.72
Diluted	0.91		0.85		1.72

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were not significant for the fiscal year ended September 30, 2025 (“fiscal year 2025”), the fiscal year ended September 30, 2024 (“fiscal year 2024”) and fiscal year 2023.

Note 4 – Revenues

Operating revenues by geographic area were as follows:


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2025
Investment management fees	$	5,292.3	$	894.4	$	302.3	$	214.8	$	278.0	$	6,981.8
Sales and distribution fees	1,042.2		370.0		22.7		38.9		0.9		1,474.7
Shareholder servicing fees	231.3		31.2		1.7		0.3		—		264.5
Other	48.4		0.1		1.1		—		0.1		49.7
Total	$	6,614.2	$	1,295.7	$	327.8	$	254.0	$	279.0	$	8,770.7


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2024
Investment management fees	$	5,142.8	$	862.3	$	283.8	$	228.1	$	305.2	$	6,822.2
Sales and distribution fees	979.2		342.8		19.2		39.8		—		1,381.0
Shareholder servicing fees	195.3		31.7		2.2		0.1		—		229.3
Other	40.5		0.7		3.7		—		0.6		45.5
Total	$	6,357.8	$	1,237.5	$	308.9	$	268.0	$	305.8	$	8,478.0


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2023
Investment management fees	$	4,877.1	$	803.9	$	285.6	$	216.2	$	270.1	$	6,452.9
Sales and distribution fees	847.3		296.0		19.8		40.6		—		1,203.7
Shareholder servicing fees	118.7		31.5		2.2		0.3		—		152.7
Other	37.7		0.8		1.2		—		0.4		40.1
Total	$	5,880.8	$	1,132.2	$	308.8	$	257.1	$	270.5	$	7,849.4

Operating revenues are attributed to geographic areas based on the jurisdiction of the subsidiaries that provide the services, which may differ from the regions in which the related investment products are sold and domicile of the fund vehicle or client.

Revenues earned from sponsored funds were 84%, 82% and 82% of the Company’s total operating revenues for the fiscal years 2025, 2024 and 2023.

Note 5 – Investments

The disclosures below include details of the Company’s investments, excluding those of CIPs. See Note 10 – Consolidated Investment Products for information related to the investments held by these entities.

Investments consisted of the following:


(in millions)
as of September 30,	2025		2024
Investments, at fair value
Sponsored funds and separate accounts	$	809.6	$	509.1
Investments related to long-term incentive plans	288.1		271.6
Other equity and debt investments	81.8		57.3
Total investments, at fair value	1,179.5		838.0
Investments in equity method investees	893.9		1,219.7
Other investments	300.6		280.7
Total	$	2,374.0	$	2,338.4

The Company has entered into repurchase agreements with a third-party financing company for certain investments held by the Company. As of September 30, 2025 and 2024, other liabilities includes repurchase agreements of $200.5 million and $111.4 million with investments of $206.4 million and $121.7 million in carrying value pledged as collateral. The repurchase agreements have contractual maturity dates ranging between 2030 to 2039.

Note 6 – Fair Value Measurements

The disclosures below include details of the Company’s fair value measurements, excluding those of CIPs. See Note 10 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities.

The assets and liabilities measured at fair value on a recurring basis were as follows:


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2025
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	463.9	$	305.2	$	2.2	$	38.3	$	809.6
Investments related to long-term incentive plans	253.4		3.3		—		31.4		288.1
Other equity and debt investments	12.4		9.4		1.8		29.2		52.8

Total Assets Measured at Fair Value	$	729.7	$	317.9	$	4.0	$	98.9	$	1,150.5

Liabilities
Securities sold short	$	193.7	$	—	$	—	$	—	$	193.7
Contingent consideration liabilities	—		—		20.4		—		20.4
Total Liabilities Measured at Fair Value	$	193.7	$	—	$	20.4	$	—	$	214.1

As of September 30, 2025, there were $29.0 million of other investments which were adjusted to fair value on a nonrecurring basis and excluded from the table above.


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2024
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	306.3	$	157.4	$	5.2	$	40.2	$	509.1
Investments related to long-term incentive plans	242.5		—		—		29.1		271.6
Other equity and debt investments	4.1		11.1		2.6		39.5		57.3

Total Assets Measured at Fair Value	$	552.9	$	168.5	$	7.8	$	108.8	$	838.0

Liabilities
Securities sold short	$	178.1	$	—	$	—	$	—	$	178.1
Contingent consideration liabilities	—		—		28.2		—		28.2
Total Liabilities Measured at Fair Value	$	178.1	$	—	$	28.2	$	—	$	206.3

Investments for which fair value was estimated using reported NAV as a practical expedient primarily consist of nonredeemable private equity, debt and infrastructure funds, and redeemable alternative credit, global equity, private real estate funds and alternatives. These investments were as follows:


(in millions)
as of September 30,	2025		2024
Nonredeemable investments1
Investments with known liquidation periods	$	19.7	$	32.4
Investments with unknown liquidation periods	15.2		16.1

Redeemable investments2	64.0		60.3

Unfunded commitments	13.3		14.0

1The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. Investments with known liquidation periods have an expected weighted-average life of 2.2 years and 1.9 years at September 30, 2025 and 2024.

2Investments are redeemable on a semi-monthly, monthly and quarterly basis.

Financial instruments that were not measured at fair value were as follows:


		Fair Value Level		2025				2024
(in millions)	Carrying Value		Estimated Fair Value	Carrying Value		Estimated Fair Value
as of September 30,
Financial Assets
Cash and cash equivalents		1		$	3,088.1	$	3,088.1	$	3,309.5	$	3,309.5
Other investments
Time deposits		2		9.2		9.2		9.8		9.8
Equity securities		3		291.4		291.4		270.9		270.9

Financial Liability
Debt		2		$	2,362.0	$	1,970.9	$	2,780.3	$	2,387.0

Note 7 – Property and Equipment

Property and equipment, net consisted of the following:


(in millions)					Useful Lives In Years
as of September 30,	2025		2024
Buildings and leasehold improvements	$	1,096.4	$	1,064.3	5-35
Software	419.9		426.6		3-10
Equipment and furniture	297.6		337.9		3-10
Land	80.0		79.3		N/A
Total cost	1,893.9		1,908.1
Less: accumulated depreciation and amortization	(944.8)		(961.7)
Property and Equipment, Net	$	949.1	$	946.4

Depreciation and amortization expense related to property and equipment was $141.4 million, $129.9 million and $108.2 million in fiscal years 2025, 2024 and 2023. The Company recognized no impairment of property and equipment in fiscal years 2025, 2024 and 2023.

Note 8 – Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net consisted of the following:


(in millions)
as of September 30,	2025		2024
Goodwill	$	6,206.0	$	6,211.4
Indefinite-lived intangible assets	3,400.3		3,851.5
Definite-lived intangible assets, net	765.7		950.6
Goodwill and Other Intangible Assets, Net	$	10,372.0	$	11,013.5

Changes in the carrying value of goodwill were as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024
Balance at beginning of year	$	6,211.4	$	6,003.8
Acquisitions	—		189.8
Purchase price allocation adjustment	—		4.7
Foreign exchange revaluation	(5.4)		13.1
Balance at End of Year	$	6,206.0	$	6,211.4

During fiscal years 2025 and 2024, no impairment of goodwill was recognized.

The Company recognized an impairment of an indefinite-lived intangible asset of $200.0 million during fiscal year 2025 related to certain contracts managed by Western Asset Management Company (“WAM”) primarily due to a decline in expected future growth rates and profit margins in the related AUM based on a shift to lower fee products resulting in lower discounted future cash flows generated from these management contracts. The impairment reduced the carrying value of this asset to $450.0 million. The Company also recognized impairment charges of $24.4 million related to certain other indefinite-lived intangible assets related to management contracts during fiscal year 2025. The Company recognized an impairment of $389.2 million of an indefinite-lived intangible asset related to WAM management contracts during fiscal year 2024.

During fiscal year 2025, the Company reclassified $223.9 million of certain indefinite-lived intangible assets related to management contracts to definite lived intangible assets, including $125.0 million related to WAM management contracts, and shortened the useful lives of certain trade name definite-lived intangible assets, primarily due to the planned retirement of the related brand names, lower expected future growth rates, and ongoing integration initiatives. Prior to the reclassifications, the Company tested the indefinite-lived intangible assets for impairment and concluded that the carrying value of these assets was not less than the estimated fair value.

Definite-lived intangible assets were as follows:


	2025						2024
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
as of September 30,
Management contracts	$	1,255.3	$	(709.3)	$	546.0	$	1,758.8	$	(1,061.8)	$	697.0
Trade names	286.2		(66.5)		219.7		367.8		(115.9)		251.9
Developed software	—		—		—		14.4		(12.7)		1.7
Total	$	1,541.5	$	(775.8)	$	765.7	$	2,141.0	$	(1,190.4)	$	950.6

The Company recognized an insignificant impairment of a definite-lived intangible asset during fiscal year 2025. No impairment of definite-lived intangible assets was recognized during fiscal year 2024.

Definite-lived intangible assets had a weighted-average remaining useful life of 8.6 years at September 30, 2025, with estimated remaining amortization expense as follows:


(in millions)
for the fiscal years ending September 30,	Amount
2026	$	189.4
2027	136.8
2028	85.5
2029	42.1
2030	41.5
Thereafter	270.4
Total	$	765.7

Note 9 – Debt

The disclosures below include details of the Company’s debt, excluding that of CIPs. See Note 10 – Consolidated Investment Products for information related to the debt of these entities.

Debt consisted of the following:


(in millions)	2025		Effective Interest Rate		2024		Effective Interest Rate
as of September 30,
Debt of Franklin Resources, Inc.
$400 million 2.850% senior notes due March 2025	$	—	N/A		$	400.0	2.97	%
$850 million 1.600% senior notes due October 2030	847.9		1.74	%	847.5		1.74	%
$350 million 2.950% senior notes due August 2051	348.1		3.00	%	348.0		3.00	%

Total debt of Franklin Resources, Inc.	1,196.0				1,595.5
Debt of Legg Mason (a subsidiary of Franklin)

$450 million 4.750% senior notes due March 2026	456.1		1.80	%	469.5		1.80	%
$550 million 5.625% senior notes due January 2044	717.4		3.38	%	723.9		3.38	%
Total debt of Legg Mason	1,173.5				1,193.4
Debt issuance costs	(7.5)				(8.6)
Total	$	2,362.0			$	2,780.3

On March 31, 2025, the Company repaid all of the outstanding $400.0 million 2.850% senior notes due March 2025 issued by Franklin Resources, Inc. at the principal amount plus accrued and unpaid interest of $5.7 million.

On April 30, 2025, the Company entered into an Amended and Restated Revolving Credit Agreement (the “Amended and Restated Credit Agreement”) with a five-year term and $1.1 billion of aggregate available borrowings. As of April 30, 2025, the $300.0 million of borrowings outstanding under the Company’s prior credit facility were transferred to the Amended and Restated Credit Agreement. On September 5, 2025, the Company repaid all of the outstanding $300.0 million borrowings at the principal amount plus accrued interest of $5.5 million.

At September 30, 2025, the Company had $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program which has been inactive since 2012.

At September 30, 2025, Franklin’s outstanding senior unsecured unsubordinated notes had an aggregate principal amount due of $1,200.0 million. The notes have fixed interest rates with interest payable semi-annually.

At September 30, 2025, Legg Mason’s outstanding senior unsecured unsubordinated notes had an aggregate principal amount due of $1,000.0 million. The notes have fixed interest rates with interest payable semi-annually. Franklin unconditionally and irrevocably guarantees all of the outstanding notes issued by Legg Mason.

The Franklin and Legg Mason senior notes contain an optional redemption feature that allows the Company to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price. The indentures governing the senior notes contain limitations on the Company’s ability and the ability of its subsidiaries to pledge voting stock or profit participating equity interests in its subsidiaries to secure other debt without similarly securing the notes equally and ratably. In addition, the indentures include requirements that must be met if the Company consolidates or merges with, or sells all or substantially all of its assets to another entity. The Amended and Restated Credit Agreement contains a financial performance covenant requiring that the Company maintain a consolidated net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 3.25 to 1.00. The Company was in compliance with all covenants at September 30, 2025.

Note 10 – Consolidated Investment Products

CIPs consist of mutual and other investment funds, limited partnerships and similar structures, and CLOs, all of which are sponsored by the Company, and include both VOEs and VIEs.

The balances related to CIPs included in the Company’s consolidated balance sheets were as follows:


(in millions)
as of September 30,	2025		2024
Assets
Cash and cash equivalents	$	485.8	$	1,099.4
Receivables	313.1		217.5
Investments, at fair value	12,278.8		11,034.9
Total Assets	$	13,077.7	$	12,351.8

Liabilities
Accounts payable and accrued expenses	$	1,063.0	$	861.3
Debt	9,937.3		9,341.5
Other liabilities	17.5		39.9
Total liabilities	11,017.8		10,242.7
Redeemable Noncontrolling Interests	289.6		687.8
Stockholders’ Equity
Franklin Resources, Inc.’s interests	1,220.6		1,080.9
Nonredeemable noncontrolling interests	549.7		340.4
Total stockholders’ equity	1,770.3		1,421.3
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	13,077.7	$	12,351.8

The consolidation of CIPs did not have a significant impact on net income attributable to the Company in fiscal years 2025, 2024 and 2023.

The Company has no right to the CIPs’ assets, other than its direct equity investments in them and investment management and other fees earned from them. The debt holders of the CIPs have no recourse to the Company’s assets beyond the level of its direct investment, therefore the Company bears no other risks associated with the CIPs’ liabilities.

Fair Value Measurements

Assets of CIPs measured at fair value on a recurring basis were as follows:


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2025
Assets
Cash and cash equivalents of CLOs	$	472.1	$	—	$	—	$	—	$	472.1
Receivables of CLOs	—		113.0		—		—		113.0
Investments
Equity and debt securities	393.2		731.5		601.0		189.1		1,914.8
Loans	—		10,354.1		9.9		—		10,364.0

Total Assets Measured at Fair Value	$	865.3	$	11,198.6	$	610.9	$	189.1	$	12,863.9


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2024
Assets
Cash and cash equivalents of CLOs	$	764.3	$	—	$	—	$	—	$	764.3
Receivables of CLOs	—		149.6		—		—		149.6
Investments
Equity and debt securities	229.7		889.4		550.1		187.1		1,856.3
Loans	—		9,178.1		0.5		—		9,178.6

Total Assets Measured at Fair Value	$	994.0	$	10,217.1	$	550.6	$	187.1	$	11,948.8

Investments for which fair value was estimated using reported NAV as a practical expedient consist of nonredeemable private debt and equity funds, a redeemable global hedge fund and a redeemable U.S. equity fund. These investments were as follows:


(in millions)
as of September 30,	2025		2024
Nonredeemable investments1

Investments with unknown liquidation periods	$	114.7	$	49.0

Redeemable investments2	74.4		138.1

Unfunded commitments3	14.0		42.8

1The investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets.

2Investments are redeemable on a monthly basis and liquidation periods are unknown.

3Of the total unfunded commitments, the Company was contractually obligated to fund $5.3 million and $9.9 million based on its ownership percentage in the CIPs, at September 30, 2025 and 2024.

Changes in Level 3 assets of equity and debt securities were as follows:


(in millions)
as of September 30,	2025			2024
Balance at beginning of year		$	550.1		$	584.9
Acquisition		—			29.6
Gains (losses) included in investment and other income of consolidated investment products, net		50.5			(80.4)
Purchases		60.9			57.2
Sales		(33.6)			(29.8)
Net consolidations (deconsolidations)		12.2			(12.5)
Transfers into Level 3		0.2			1.1
Transfers out of Level 3		(39.3)			—
Balance at End of Year		$	601.0		$	550.1
Change in unrealized gains (losses) included in net income relating to assets held at end of year		$	23.0		$	(50.9)

Valuation techniques and significant unobservable inputs used in Level 3 fair value measurements were as follows:


(in millions)
as of September 30, 2025	Fair Value	Valuation Technique		Significant Unobservable Inputs	Range (Weighted Average1)
Equity and debt securities		$	302.0		Market pricing	Private sale pricing	$0.27–$2,120.00 ($176.53) per share
						Discount for lack of marketability	5.0%–75.0% (23.9%)
		225.9			Market comparable companies	Enterprise value/ Revenue multiple	1.4–21.0 (9.5)
						Discount for lack of marketability	6.0%–11.0% (8.5%)
		54.4			Discounted cash flow	Discount rate	6.5%–13.0% (6.8%)
		18.7			Option pricing model	Volatility	34.0%–60.9% (38.2%)
						Discount for lack of marketability	9.1%–13.5% (9.4%)


(in millions)
as of September 30, 2024	Fair Value	Valuation Technique		Significant Unobservable Inputs	Range (Weighted Average1)
Equity and debt securities		$	291.6		Market comparable companies	Enterprise value/ Revenue multiple	1.2–22.8 (10.9)
						Discount for lack of marketability	0.1%–10.4% (8.1%)
		214.5			Market pricing	Private sale pricing	$0.01–$1,000.00 ($73.04) per share
						Discount for lack of marketability	9.8%–17.5% (11.5%)
		44.0			Discounted cash flow	Discount rate	6.8%

1Based on the relative fair value of the instruments.

If the relevant significant inputs used in the market-based valuations, other than discount for lack of marketability, were independently higher (lower), the resulting fair value of the assets would be higher (lower). If the relevant significant inputs used in the discounted cash flow, as well as the discount for lack of marketability used in the market-based valuations, were independently higher (lower), the resulting fair value of the assets would be lower (higher).

Financial instruments of CIPs that were not measured at fair value were as follows:


(in millions)	Fair Value Level		2025					2024
Carrying Value	Estimated Fair Value	Carrying Value			Estimated Fair Value
as of September 30,
Financial Asset
Cash and cash equivalents	1		$	13.7		$	13.7	$	335.1	$	335.1

Financial Liabilities
Debt of CLOs1	2 or 3		9,937.3			9,786.0		9,341.5		9,167.3

1Substantially all was Level 2.

Debt

Debt of CLOs totaled $9,937.3 million and $9,341.5 million at September 30, 2025 and September 30, 2024. The debt had fixed and floating interest rates ranging from 2.39% to 12.26% with a weighted-average effective interest rate of 6.00% at September 30, 2025, and from 2.39% to 13.73% with a weighted-average effective interest rate of 7.36% at September 30, 2024. The floating rates were based on the Secured Overnight Financing Rate and Euro Interbank Offered Rate.

The contractual maturities for debt of CLOs at September 30, 2025 were as follows:


(in millions)
for the fiscal years ending September 30,	Amount
2026		$	476.1
2027		83.8
2028		—
2029		—
2030		—
Thereafter		9,377.4
Total		$	9,937.3

Collateralized Loan Obligations

The unpaid principal balance and fair value of the investments of CLOs were as follows:


(in millions)
as of September 30,	2025		2024
Unpaid principal balance	$	10,641.0	$	9,371.9
Difference between unpaid principal balance and fair value	(43.3)		(19.8)
Fair Value	$	10,597.7	$	9,352.1

Investments 90 days or more past due were immaterial at September 30, 2025 and September 30, 2024.

During fiscal years 2025 and 2024, the Company recognized $48.6 million and $59.7 million of net gains related to its own economic interests in the CLOs. The aggregate principal related to the debt of CLOs was $9,958.6 million and $9,282.8 million at September 30, 2025 and 2024.

Note 11 – Redeemable Noncontrolling Interests

Changes in redeemable noncontrolling interests were as follows:


(in millions) for the fiscal years ended September 30, 2025, 2024 and 2023	CIPs		Minority Interests		Total

Balance at October 1, 2022	$	942.2	$	583.6	$	1,525.8


Net income	77.4		58.1		135.5
Net subscriptions (distributions) and other	605.5		(86.3)		519.2
Net deconsolidations	(1,045.0)		—		(1,045.0)
Adjustment to fair value	—		(109.4)		(109.4)
Balance at September 30, 2023	$	580.1	$	446.0	$	1,026.1
Net income	80.2		47.7		127.9
Net subscriptions (distributions) and other	213.4		(111.4)		102.0
Net deconsolidations	(206.1)		—		(206.1)
Acquisition	20.2		—		20.2
Adjustment to fair value	—		251.7		251.7
Balance at September 30, 2024	$	687.8	$	634.0	$	1,321.8
Net income (loss)	(94.9)		42.2		(52.7)
Net subscriptions (distributions) and other	317.5		(31.9)		285.6
Net deconsolidations	(620.8)		—		(620.8)

Adjustment to fair value	—		248.1		248.1
Balance at September 30, 2025	$	289.6	$	892.4	$	1,182.0

Note 12 – Nonconsolidated Variable Interest Entities

VIEs for which the Company is not the primary beneficiary consist of sponsored funds and other investment products in which the Company has an equity ownership interest. The Company’s maximum exposure to loss from these VIEs consists of equity investments, investment management and other fee receivables as follows:


(in millions)
as of September 30,	2025		2024
Investments	$	1,274.5	$	1,074.4
Receivables	225.1		226.0

Total	$	1,499.6	$	1,300.4

While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. As it has done in the past, the Company also may voluntarily elect to provide its sponsored funds with additional direct or indirect financial support based on its business objectives. The Company did not provide financial or other support to its sponsored funds assessed as VIEs during fiscal years 2025 and 2024.

Note 13 – Taxes on Income

Taxes on income were as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Current expense
Federal	$	140.6	$	212.0	$	148.1
State	51.5		54.0		55.6
Non-U.S.	93.0		73.9		67.1
Deferred (benefit) expense	(47.2)		(124.6)		41.5
Total	$	237.9	$	215.3	$	312.3

Income before taxes consisted of the following:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
U.S.	$	538.2	$	286.3	$	819.2
Non-U.S. and other1	248.6		536.9		518.8
Total	$	786.8	$	823.2	$	1,338.0

1 Other includes income (loss) from consolidated investment products and amounts not subject to tax.

The significant components of deferred tax assets and deferred tax liabilities were as follows:


(in millions)
as of September 30,	2025		2024
Deferred Tax Assets
Capitalized mixed service costs	$	127.5	$	162.6
Net operating loss and state credit carry-forwards	328.3		325.8
Deferred compensation and benefits	209.3		210.5
Foreign tax credit carry-forwards	70.4		81.6
Operating lease liability	199.1		186.4
Debt premium	43.7		48.6
Other	118.9		116.1
Total deferred tax assets	1,097.2		1,131.6
Valuation allowance	(297.1)		(290.5)
Deferred tax assets, net of valuation allowance	800.1		841.1
Deferred Tax Liabilities
Goodwill and other purchased intangibles	697.7		800.8
Right of use asset	151.0		160.3
Other	129.7		88.8
Total deferred tax liabilities	978.4		1,049.9
Net Deferred Tax Liability	$	178.3	$	208.8

Deferred income tax assets and liabilities that relate to the same tax jurisdiction are presented net on the consolidated balance sheets. The components of the net deferred tax liability were classified in the consolidated balance sheets as follows:


(in millions)
as of September 30,	2025		2024
Other assets	$	83.3	$	76.1
Deferred tax liabilities	261.6		284.9
Net Deferred Tax Liability	$	178.3	$	208.8

Included in the Company’s net deferred tax liability were the deferred tax effects associated with the fair value of assets acquired and liabilities assumed from the acquisition of Legg Mason and acquired attributes that carry over to post-acquisition tax periods, including U.S. state and foreign net operating losses and foreign tax credits. Utilization of the U.S. state net operating losses and federal credit carry-forwards may be subject to annual limitations due to ownership change provisions under Section 382 of the Internal Revenue Code. Foreign tax credits can only be used to offset tax attributable to foreign source income.

At September 30, 2025, there were $121.4 million of non-U.S. tax effected net operating loss and capital loss carry-forwards which expire between fiscal years 2026 and 2045. In addition, there were $118.3 million in tax effected state net operating loss carry-forwards that expire between fiscal years 2026 and 2044, with some having an indefinite carry-forward period. The Company also has federal net operating losses of $9.5 million, the majority of which will carry-forward indefinitely and $70.4 million of foreign tax credit carry-forwards that expire between fiscal years 2026 and 2029.

The valuation allowance increased $6.6 million in fiscal year 2025, primarily related to non-U.S. net operating loss utilization. At September 30, 2025, the valuation allowance of $297.1 million was related to $172.3 million for federal, state, and foreign net operating loss carry-forwards, $52.3 million due to uncertainty of realizing the benefit of foreign tax credits, $45.0 million for capital losses, and $27.5 million for other state deferred taxes.

A reconciliation of the amount of tax expense at the federal statutory rate and taxes on income as reflected in the consolidated statements of income is as follows:


(in millions)
for the fiscal years ended September 30,	2025				2024				2023
Federal taxes at statutory rate	$	165.2	21.0	%	$	172.9	21.0	%	$	281.0	21.0	%

State taxes, net of federal tax effect	25.5		3.2	%	42.8		5.2	%	71.3		5.3	%
Tax reserve (release) for audit settlements, net of valuation allowance	(4.8)		(0.6	%)	0.5		0.1	%	(11.4)		(0.9	%)
Effect of net income attributable to noncontrolling interests	(5.0)		(0.6	%)	(29.7)		(3.6	%)	(22.0)		(1.6	%)
Effect of non-U.S. operations	44.5		5.7	%	4.0		0.5	%	(14.7)		(1.1	%)
Capital loss on investments, net of valuation allowance	7.5		1.0	%	7.4		0.9	%	(8.8)		(0.7	%)
Foreign tax credit valuation allowance release	(12.6)		(1.6)	%	5.1		0.6	%	7.2		0.5	%
Other	17.6		2.2	%	12.3		1.5	%	9.7		0.8	%
Tax Provision	$	237.9	30.2	%	$	215.3	26.2	%	$	312.3	23.3	%

A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Balance at beginning of year	$	133.5	$	138.8	$	168.7

Additions for tax positions of prior years	2.5		1.2		6.1
Reductions for tax positions of prior years	(1.2)		(4.9)		(14.9)
Tax positions related to the current year	11.1		12.1		13.3
Settlements with taxing authorities	(17.5)		(6.6)		(19.9)
Expirations of statute of limitations	(16.5)		(7.1)		(14.5)
Balance at End of Year	$	111.9	$	133.5	$	138.8

If recognized, $111.2 million for 2025, $132.8 million for 2024 and $132.2 million for 2023 would favorably affect the Company’s effective income tax rate in future periods.

The Company accrues interest and penalties related to unrecognized tax benefits in interest expense and general, administrative and other expenses. Accrued interest on uncertain tax positions at September 30, 2025 and 2024 was $25.8 million and $23.7 million, and is not presented in the unrecognized tax benefits table above. Accrued penalties at September 30, 2025 and 2024 were $1.7 million and $1.6 million.

The Company files a consolidated U.S. federal income tax return, multiple U.S. state and local income tax returns, and income tax returns in multiple non-U.S. jurisdictions. The Company is subject to examination by the taxing authorities in these jurisdictions. The Company’s major tax jurisdictions and the tax years for which the statutes of limitations have not expired are as follows: India 2003 to 2025; Brazil 2020 to 2025; Luxembourg 2019 to 2025; U.K. 2021 to 2025; U.S. federal 2020 and 2022 to 2025; the City of New York 2019 to 2025; and States of California, Florida, Massachusetts and New York 2020 to 2025.

The Company has ongoing litigation and examinations in various stages, including in the States of California and City of New York, and in Brazil, India and Italy. Examination outcomes and the timing of settlements are subject to significant uncertainty. Such settlements may involve some or all of the following: the payment of additional taxes, the adjustment of deferred taxes and/or the recognition of unrecognized tax benefits. The Company has recognized a tax benefit only for those positions that meet the more-likely-than-not recognition threshold. It is reasonably possible that the total unrecognized tax benefit as of September 30, 2025 could decrease by an estimated $12.0 million within the next twelve months as a result of the expiration of statutes of limitations in the U.S. federal and certain U.S. state and local and non-U.S. tax jurisdictions, and potential settlements with U.S. states and non-U.S. taxing authorities.

The Tax Cuts and Jobs Act which was enacted into law in the U.S. in December 2017, includes various changes to the tax law, including a permanent reduction in the corporate income tax rate and assessment of a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiaries’ earnings. The remaining payment for the Company’s federal portion of the transition tax liability of $231.6 million will be made in fiscal year 2026.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law. While the Company is in the process of evaluating the impact of the Act on its consolidated financial statements, it does not expect there to be any material impact thereon.

Note 14 – Leases

Lessee Arrangements

Lease expense was as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Operating lease cost	$	137.3	$	188.3	$	124.1
Variable lease cost	11.2		10.3		5.8
Finance lease cost	1.0		0.8		0.6
Less: sublease income	(4.3)		(13.1)		(25.0)
Total lease expense	$	145.2	$	186.3	$	105.5

Supplemental cash flow information related to leases was as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Operating cash flows from operating leases included in the measurement of operating lease liabilities	$	45.1	$	109.6	$	125.6
ROU assets obtained in exchange for new/modified operating lease liabilities	31.2		448.9		45.4

The weighted-average remaining lease term and weighted-average discount rate for operating lease liabilities were as follows:


(in millions)
as of September 30,	2025		2024
Weighted-average remaining lease term	11.1 years		11.4 years
Weighted-average discount rate	5.2	%	5.0	%

The maturities of the liabilities were as follows:


(in millions)	Amount
for the fiscal years ending September 30,
2026	$	143.1
2027	137.0
2028	125.3
2029	117.6
2030	108.7
Thereafter	723.7
Total lease payments	1,355.4
Less: interest	(354.8)
Operating lease liabilities	$	1,000.6

Lessor Arrangements

The Company leases excess owned space in its San Mateo, California corporate headquarters and other office buildings, primarily in the U.S., to third parties, and generally include one or more options to renew. The Company subleases excess leased office spaces to various firms, primarily in the U.S., and generally include options to renew or terminate within a specified period.

The maturities of lease payments due to the Company as of September 30, 2025 were as follows:


(in millions)	Subleases		Leases
for the fiscal years ending September 30,
2026	$	6.6	$	50.5
2027	10.5		44.1
2028	10.3		31.0
2029	10.2		31.4
2030	10.3		30.0
Thereafter	15.6		35.8
Total	$	63.5	$	222.8

Note 15 – Commitments and Contingencies

Legal Proceedings

India Credit Fund Closure Matters. Effective April 24, 2020, Franklin Templeton Trustee Services Private Limited (“FTTS”), a subsidiary of Franklin, announced its decision to wind up six fixed income mutual fund schemes of the Franklin Templeton Mutual Fund in India (referred to herein as the “Funds”), closing the Funds to redemptions. At the time, the Funds had collective AUM of INR 25,648.3 crore (approximately $3.4 billion). In connection with the wind-up decision, FTTS sought to convene unitholder meetings for the Funds to approve the appointment of a liquidator, and the asset management company to the Funds, Franklin Templeton Asset Management (India) Private Limited (“FTAMI”), ceased earning investment management fees on the Funds.

In May and June 2020, certain Fund unitholders and others challenged the wind-up decision by filing legal petitions in India against a number of respondents, including Franklin, its subsidiaries FTTS, FTAMI, and Templeton International, Inc., as sponsor of the Franklin Templeton Mutual Fund, and related individuals (collectively, the “Company Respondents”), the Securities and Exchange Board of India (“SEBI”), and other governmental entities. The petitioners alleged that the Company Respondents violated various SEBI regulations, mismanaged the Funds, misrepresented or omitted certain information relating to the Funds, and/or engaged in other alleged misconduct. The petitioners requested a wide range of relief, including, among other items, an order quashing the winding up notices and blocking the unitholder votes, initiating investigations into the Company Respondents, and allowing the unitholder petitioners to redeem their investments with interest. An interim injunction order staying the operation and implementation of the unitholder voting process was issued and the petitions were transferred to the High Court of Karnataka for further consolidated proceedings. The court upheld the decision taken by FTTS to wind up the Funds while finding that unitholder approval was required to implement the decision. Cross appeals from the judgment were then filed in the Supreme Court of India. In the interim, FTTS proceeded to obtain approval from the majority of the voting unitholders for winding up the six Funds and in February 2021, the Supreme Court confirmed the results and appointed a third-party asset manager to serve as the liquidator and begin cash distributions to unitholders. The additional issues on appeal remain pending.

By September 2023, all performing securities across the Funds were liquidated and an aggregate of INR 27,508.1 crore (approximately $3.3 billion) was distributed to Fund unitholders, exceeding the aggregate value of the Funds’ AUM at the date of the wind-up announcement, reported above.

Separately, following the completion of a forensic audit/inspection, in late November and early December 2020, SEBI initiated regulatory proceedings by issuing show cause notices against FTAMI, FTTS and certain FTAMI employees (including in their officer or director capacities), alleging certain deficiencies and areas of non-compliance in the management of the Funds. In June 2021, SEBI issued orders against FTAMI, FTTS, and the FTAMI employee respondents, finding violations of certain regulatory provisions, including with respect to similarity in investment strategies

among the Funds, calculation of duration and valuation of portfolio securities, deficiencies in documentation relating to investment diligence and investment terms, and portfolio risk management. SEBI’s orders include, as applicable, aggregate monetary penalties of INR 20.0 crore (approximately $2.4 million); disgorgement of investment management and advisory fees, together with interest through the date of SEBI’s order, totaling INR 512.5 crore (approximately $61.7 million), with continuing accrual of 12% interest until paid; and a prohibition on FTAMI from launching new fixed income funds in India for a two-year period. The respondents filed appeals, as well as applications to stay enforcement of SEBI’s orders pending resolution of the appeals, with the Securities Appellate Tribunal (the “SAT”) in India, which stay applications were granted in June and July 2021, subject to respondents’ deposit in escrow of a portion of the ordered penalties for an aggregate deposit made of INR 257.5 crore (approximately $34.7 million). The SAT appeals remain pending and in the interim, SEBI has approved FTAMI’s launch of certain new fixed income funds.

The Company has also responded to related inquiries and investigations commenced by certain governmental agencies in India that remain pending, including a “first information report” (the preliminary step in an investigation) registered by the Economic Offences Wing of the Chennai police department in or around September 2020 against certain of the Company Respondents in connection with a complaint by certain Fund unitholders, as well as a related investigation by India’s Enforcement Directorate commenced in or around April 2021.

The Company strongly believes that the decision taken by FTTS to wind up the Funds was in the best interests of unitholders and allowed for the orderly liquidation and distribution of Fund assets as described above. The Company further believes that it has meritorious defenses to the outstanding claims in the pending proceedings and intends to continue vigorously defending against the claims. The Company cannot at this time predict the eventual outcome of the matters described above or reasonably estimate the possible loss or range of loss that may arise from any final outcome of such matters, including due to the complexities and uncertainty involved in the appeals and the various questions of law and fact at issue.

Western Asset Management Investigations and Litigation. As previously disclosed, the Company launched an internal investigation into certain trade allocations of treasury derivatives in select WAM managed accounts. WAM received notification of parallel investigations by the SEC and the U.S. Department of Justice (“DOJ”). WAM also received notice of an investigation into these trading activities by the CFTC. On June 30, 2025, the CFTC informed WAM that it closed its investigation. The SEC and DOJ investigations remain ongoing. The Company and WAM have fully cooperated, and will continue to fully cooperate with the SEC and DOJ investigations. Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024, and was placed on administrative leave at that time. Mr. Leech retired and is no longer with the Company, as previously disclosed. On November 25, 2024, the SEC filed a complaint in the United States District Court for the Southern District of New York against Mr. Leech alleging violations of certain laws related to trade allocations. Concurrently, the DOJ filed an indictment with the United States District Court for the Southern District of New York against Mr. Leech for similar allegations and for false statements made to the SEC.

On July 3, 2025, Franklin, WAM and Ken Leech were named as defendants in a lawsuit filed by the Western PA Electrical Employees Insurance Trust Fund in the U.S. District Court for the Western District of Pennsylvania seeking class certification on behalf of shareholders of two funds managed by WAM for the period January 1, 2021 through October 31, 2023. The plaintiff is pursuing claims under the Securities Exchange Act of 1934 against all defendants in connection with trade allocations made by Mr. Leech in that period that are also the subject of the investigations reported above. The plaintiff is seeking, among other things, damages, interest, and costs and expenses, including attorneys’ fees.

Franklin Templeton 401(k) Retirement Plan Litigation. On July 22, 2025, Franklin and the Franklin Templeton 401(k) Retirement Plan Committee were named as defendants in a lawsuit filed by certain former employees in the U.S. District Court for the Northern District of California. The plaintiffs seek to represent a class of participants and beneficiaries of the Franklin Templeton 401(k) Retirement Plan (the “Plan”) who were invested in funds managed by the Company at any time on or after July 22, 2019. The plaintiffs are pursuing claims under the Employee Retirement Income Security Act of 1974 for alleged breaches of fiduciary duties and failure to monitor the Plan fiduciaries in connection with the Plan’s inclusion of certain proprietary funds as investment options. The plaintiffs are seeking, among other things, damages, disgorgement, removal of certain investments from the Plan, removal and replacement of the Plan’s fiduciaries, attorneys’ fees and costs, and pre-judgment interest.

The lawsuits reported above against the Company are in their preliminary stages. Management believes the claims made in the lawsuits are without merit and the Company intends to defend against them vigorously. The Company cannot predict the outcome of these lawsuits or estimate any reasonably possible loss or range of loss that may arise from any negative outcome.

Other Litigation and Regulatory Matters. The Company is from time to time involved in other litigation relating to claims arising in the normal course of business. Management is of the opinion that the ultimate resolution of such claims will not materially affect the Company’s business, financial position, results of operations or liquidity. In management’s opinion, an adequate accrual has been made as of September 30, 2025 to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.

Indemnifications and Guarantees

In the ordinary course of business or in connection with certain acquisition agreements, the Company enters into contracts that provide for indemnifications by the Company in certain circumstances. In addition, certain Company entities guarantee certain financial and performance-related obligations of various Franklin subsidiaries. The Company is also subject to certain legal requirements and agreements providing for indemnifications of directors, officers and personnel against liabilities and expenses they may incur under certain circumstances in connection with their service. The terms of these indemnities and guarantees vary pursuant to applicable facts and circumstances, and from agreement to agreement. Future payments for claims against the Company under these indemnities or guarantees could negatively impact the Company’s financial condition. In management’s opinion, no material loss was deemed probable or reasonably possible pursuant to such indemnification agreements and/or guarantees as of September 30, 2025.

Other Commitments and Contingencies

While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. At September 30, 2025, the Company had $520.8 million of committed capital contributions which relate to discretionary commitments to invest in sponsored funds and other investment products and entities, including CIPs. These unfunded commitments are not recorded in the Company’s consolidated balance sheet.

Note 16 – Stock-Based Compensation

The Company’s stock-based compensation plans consist of the Amended and Restated Annual Incentive Compensation Plan (the “AIP”), the 2002 Universal Stock Incentive Plan, as amended and restated (the “USIP”), the amended and restated Franklin Resources, Inc. 1998 Employee Stock Investment Plan (the “ESIP”), and the Amended and Restated Franklin Resources, Inc. 2017 Equity Incentive Plan (the “EIP”).

Stock-based compensation expenses were as follows:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Stock and stock unit awards	$	207.9	$	240.3	$	174.7
Phantom unit awards	11.8		13.8		33.2
Employee stock investment plan	6.9		5.8		7.9
Total	$	226.6	$	259.9	$	215.8

Stock and Stock Unit Awards

Under the terms of the AIP, eligible employees may receive cash, equity awards and/or mutual fund unit awards generally based on the performance of the Company and/or its funds, and the individual employee. The USIP and EIP provide for the issuance of the Company’s common stock for various stock-related awards to officers, directors and employees. In February 2024, the Company’s stockholders approved an amendment and restatement of the USIP increasing the number of shares authorized by 25.0 million shares to a total of 165.0 million shares. There are 23.0 million shares authorized under the EIP. At September 30, 2025, 17.6 million shares and 16.9 million shares were available for grant under the USIP and EIP.

Stock awards entitle holders to the right to sell the underlying shares of the Company’s common stock once the awards vest. Stock unit awards entitle holders to receive the underlying shares of common stock once the awards vest. Awards vest based on the passage of time or the achievement of predetermined Company financial performance goals.

Stock and stock unit award activity was as follows:


(shares in thousands)	Time-Based Shares	Performance- Based Shares	Total Shares	Weighted-Average Grant-Date Fair Value
for the fiscal year ended September 30, 2025
Nonvested balance at beginning of year	16,594	3,314	19,908	$	24.03
Granted	8,553	169	8,722	20.97
Vested	(9,491)	(166)	(9,657)	23.74
Forfeited/canceled	(697)	(2,964)	(3,661)	22.60
Nonvested Balance at End of Year	14,959	353	15,312	$	22.81

Total unrecognized compensation expense related to nonvested stock unit awards was $176.2 million at September 30, 2025. This expense is expected to be recognized over a remaining weighted-average vesting period of 1.6 years. The weighted-average grant-date fair values of stock and stock unit awards granted during fiscal years 2025, 2024 and 2023 were $20.97, $25.60 and $22.74 per share. The total fair value of stock and stock unit awards vested during the same periods was $234.3 million, $180.4 million and $210.4 million.

The Company may repurchase shares in connection with vesting of stock and stock unit awards. Also, in order to pay taxes due in connection with the vesting of employee and executive officer stock and stock unit awards, shares are repurchased using a net stock issuance method.

Employee Stock Investment Plan

The ESIP allows eligible participants to buy shares of the Company’s common stock at a discount of its market value on defined dates. A total of 1.4 million shares were issued under the ESIP during fiscal year 2025, and 0.3 million shares were reserved for future issuance at September 30, 2025.

Note 17 – Defined Contribution Plans

The Company sponsors a 401(k) plan which covers substantially all U.S. employees meeting certain employment requirements. Participants may contribute up to 50% of their eligible salary and up to 100% of the cash portion of their year-end bonus, as defined by the plan and subject to Internal Revenue Code limitations, each year to the plan. The Company makes a matching contribution equal to 85% of eligible compensation contributed by participants. Certain of the Company’s non-U.S. subsidiaries also sponsor defined contribution plans primarily for the purpose of providing deferred compensation incentives for employees and to comply with local regulatory requirements. The total expenses recognized for defined contribution plans were $104.7 million, $102.3 million and $93.0 million for fiscal years 2025, 2024 and 2023.

Note 18 – Segment and Geographic Information

The Company has one operating segment, which provides investment management and related services.

The chief operating decision maker (“CODM”), identified as the Company’s Chief Executive Officer, assesses the performance of the business and allocates resources primarily based on consolidated net income attributable to Franklin Resources, Inc. This measure is used to support decision making activities and assess the performance of the operating segment.

The CODM regularly reviews the significant segment expenses categories that are presented on the Company’s consolidated statements of income. Total assets on the consolidated balance sheets is the measure of segment assets.

See Note 4 – Revenues for total operating revenues disaggregated by geographic location.

See below for the long-lived assets disaggregated by geographic location.


(in millions)
as of September 30,	2025		2024
Property and Equipment, Net
United States	$	764.1	$	758.4
Europe, Middle East and Africa	150.6		149.2
Asia-Pacific	29.4		33.5
Americas excluding United States	5.0		5.3
Total	$	949.1	$	946.4

Note 19 – Investment and Other Income, Net

Investment and other income, net consisted of the following:


(in millions)
for the fiscal years ended September 30,	2025		2024		2023
Dividend and interest income	$	141.4	$	176.9	$	159.9

Gains (losses) on investments, net	(37.6)		57.6		39.5
Income from investments in equity method investees	78.0		137.5		45.4
Gains (losses) on derivatives, net	(7.8)		(16.2)		(15.1)
Rental income	44.1		43.7		46.3
Foreign currency exchange losses, net	(11.6)		(19.9)		(26.7)
Other, net	6.3		15.9		13.0
Investment and Other Income, Net	$	212.8	$	395.5	$	262.3

Substantially all dividend income was generated by investments in nonconsolidated sponsored funds. Gains (losses) on investments, net consists primarily of realized and unrealized gains (losses) on equity securities measured at fair value.

Net gains (losses) recognized on equity securities measured at fair value and trading debt securities that were held by the Company at September 30, 2025, 2024 and 2023 were $5.4 million, $108.1 million, and $66.1 million.

Note 20 – Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component were as follows:


(in millions)	Currency Translation Adjustments		Unrealized Losses on Defined Benefit Plans		Unrealized Gains on Investments		Total
as of and for the fiscal years ended September 30, 2025, 2024 and 2023
Balance at October 1, 2022	$	(615.1)	$	(6.3)	$	0.4	$	(621.0)

Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications, net of tax	108.5		(0.6)		0.2		108.1
Reclassifications to compensation and benefits expense, net of tax	—		(0.7)		—		(0.7)
Reclassifications to net investment and other income, net of tax	4.3		—		—		4.3
Total other comprehensive income (loss)	112.8		(1.3)		0.2		111.7
Balance at September 30, 2023	$	(502.3)	$	(7.6)	$	0.6	$	(509.3)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications, net of tax	89.8		(0.3)		(0.1)		89.4
Reclassifications to compensation and benefits expense, net of tax	—		0.4		—		0.4

Total other comprehensive income (loss)	89.8		0.1		(0.1)		89.8
Balance at September 30, 2024	$	(412.5)	$	(7.5)	$	0.5	$	(419.5)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications, net of tax	(21.3)		(11.3)		0.1		(32.5)
Reclassifications to compensation and benefits expense, net of tax	—		2.0		—		2.0
Reclassifications to net investment and other income, net of tax	2.9		—		—		2.9
Total other comprehensive income (loss)	(18.4)		(9.3)		0.1		(27.6)
Balance at September 30, 2025	$	(430.9)	$	(16.8)	$	0.6	$	(447.1)

Note 21 – Subsequent Event

On October 1, 2025, the Company acquired Apera Asset Management for cash consideration of €65.2 million net of closing adjustments. In addition, the Company will pay up to €125.0 million in cash through the fifth anniversary of the closing date based on achieving revenue targets.

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