What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-11-14 compared with 2022-11-14 · 149 added, 191 removed, 1098 unchanged (24% of the section changed)

23 unchanged sentences

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.

On April 1, 2022, Franklin Resources, Inc.

completed the acquisition of Lexington Partners L.P.

(“Lexington”).

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

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

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

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2023, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013).

15 unchanged sentences

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.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

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.

5 unchanged sentences

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Lexington Partners L.P.

from its assessment of internal control over financial reporting as of September 30, 2022 because Lexington Partners L.P.

was acquired by the Company in a purchase business combination during 2022.

We have also excluded Lexington Partners L.P.

from our audit of internal control over financial reporting.

Lexington Partners L.P.

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

Definition and Limitations of Internal Control over Financial Reporting

1 unchanged sentence

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;

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.

37 unchanged sentences

Other Income (Expenses)

Investment and other income (losses), net 91.1 264.7 ( 38.4 )

Investment and other income, net 340.0 91.1 264.7

Interest expense ( 123.7 ) ( 98.2 ) ( 85.4 )

87 unchanged sentences

Balance at October 1, 2020 495.1 $ 49.5 $ — $ 10,472.6 $ ( 407.6 ) $ 10,114.5 $ 754.6 $ 10,869.1

Net income (loss) 798.9 798.9 ( 60.4 ) 738.5

Adoption of new accounting guidance ( 3.3 ) ( 3.3 ) ( 3.3 )

Net income 1,831.2 1,831.2 169.3 2,000.5

Other comprehensive income 30.0 30.0 30.0

8 unchanged sentences

Net subscriptions and other ( 2.1 ) ( 2.1 ) 215.7 213.6

Net deconsolidation of investment product ( 6.8 ) ( 6.8 )

Acquisitions 39.1 39.1

Wind-down of a subsidiary ( 16.7 ) ( 16.7 )

Net deconsolidation of investment products ( 552.4 ) ( 552.4 )

Adjustment to fair value of redeemable noncontrolling interests ( 159.2 ) ( 159.2 ) ( 159.2 )

Balance at September 30, 2021 501.8 $ 50.2 $ — $ 11,550.8 $ ( 377.6 ) $ 11,223.4 $ 587.2 $ 11,810.6

Adoption of new accounting guidance ( 3.3 ) ( 3.3 ) ( 3.3 )

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

Other comprehensive income 30.0 30.0 30.0

Other comprehensive loss ( 243.4 ) ( 243.4 ) ( 243.4 )

Dividends declared on common stock ($ 1.16 per share)

8 unchanged sentences

Net deconsolidation of investment products ( 25.7 ) ( 25.7 )

Acquisition 149.9 149.9

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

1 unchanged sentence

Net income 882.8 882.8 85.1 967.9

Other comprehensive loss ( 243.4 ) ( 243.4 ) ( 243.4 )

Other comprehensive income 111.7 111.7 111.7

Dividends declared on common stock ($ 1.20 per share)

8 unchanged sentences

Net deconsolidation of investment products ( 360.6 ) ( 360.6 )

Acquisition 149.9 149.9

Adjustment to fair value of redeemable noncontrolling interests 109.4 109.4 109.4

11 unchanged sentences

Amortization of intangible assets 341.1 282.0 232.0

Impairments of intangible assets and goodwill — — 55.4

Net losses (gains) on investments 75.4 ( 75.5 ) 15.5

Losses (income) from investments in equity method investees ( 36.2 ) ( 154.3 ) 98.1

Net (gains) losses on investments ( 39.5 ) 75.4 ( 75.5 )

Income from investments in equity method investees ( 123.1 ) ( 36.2 ) ( 154.3 )

Net losses (gains) on investments of consolidated investment products 120.4 95.1 ( 316.4 )

3 unchanged sentences

Changes in operating assets and liabilities:

Decrease (increase) in receivables and other assets ( 86.7 ) ( 182.5 ) 134.7

Increase in receivables and other assets ( 63.2 ) ( 86.7 ) ( 182.5 )

Decrease (increase) in investments, net 2.8 ( 3.7 ) 12.8

Increase (decrease) in accrued compensation and benefits 281.7 114.8 ( 10.5 )

Increase in accrued compensation and benefits 128.9 281.7 114.8

Decrease in income taxes payable ( 1.1 ) ( 180.1 ) ( 12.5 )

9 unchanged sentences

1,834.1 1,948.8 1,624.2

Decrease (increase) in loan receivables, net — 42.7 ( 40.6 )

Decrease in loan receivables, net — — 42.7

Additions of property and equipment, net

3 unchanged sentences

Payments of contingent consideration asset 9.8 19.9 20.3

Net consolidation (deconsolidation) of investment products 38.8 ( 383.7 ) 587.2

Payments of deferred consideration liability ( 241.8 ) — —

Net (deconsolidation) consolidation of investment products ( 49.8 ) 38.8 ( 383.7 )

Net cash used in investing activities ( 3,582.1 ) ( 3,329.2 ) ( 2,615.9 )

11 unchanged sentences

( 256.3 ) ( 180.8 ) ( 208.2 )

Proceeds from repurchase agreement 174.8 — —

Proceeds from issuance of debt — — 1,193.9

3 unchanged sentences

Proceeds from loan

Payments on loan

Proceeds from debt of consolidated investment products

31 unchanged sentences

however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates.

Certain comparative amounts for prior fiscal years have been reclassified to conform to the financial statement presentation as of and for the fiscal year ended September 30, 2022 (“fiscal year 2022”).

Consolidation.

6 unchanged sentences

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.

The key assumption used in the analysis includes the amount of assets under management (“AUM”).

Related Parties include sponsored funds and equity method investees.

12 unchanged sentences

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.

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.

Amortization and impairment are recognized in general, administrative and other expense.

Amortization and impairment are recognized in general, administrative and other expenses.

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.

22 unchanged sentences

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.

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.

5 unchanged sentences

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.

Sponsored funds and separate accounts consist primarily of nonconsolidated sponsored funds and to a lesser extent, separate accounts.

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.

4 unchanged sentences

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 securities consist of equity investment securities and debt securities carried at fair value.

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.

20 unchanged sentences

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, real estate and loans.

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.

36 unchanged sentences

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 generated when investment products’ performance exceeds targets established in customer contracts.

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.

36 unchanged sentences

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 – Acquisitions

Lexington Partners L.P.

On April 1, 2022, the Company acquired all of the outstanding ownership interests in Lexington Partners L.P.

(“Lexington”), a leading global manager of secondary private equity and co-investment funds, for cash consideration of $ 984.7 million paid at the time of close and deferred consideration of $ 750.0 million that has an acquisition-date fair value of $ 706.4 million.

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

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

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

The initial and revised estimated fair values of the assets acquired and liabilities and noncontrolling interests assumed was as follows:

Note 2 – Acquisition

BNY Alcentra Group Holdings, Inc.

On November 1, 2022, the Company acquired all of the outstanding ownership interests in BNY Alcentra Group Holdings, Inc.

(together with its subsidiaries “Alcentra”) from The Bank of New York Mellon Corporation.

Total purchase price consisted of cash consideration of $ 594.1 million, which includes $ 188.3 million for certain securities held in Alcentra’s collateralized loan obligations (“CLOs”);

deferred consideration of $ 62.0 million which was paid on November 1, 2023;

and contingent consideration to be paid upon the achievement of certain performance thresholds over the next four years of up to $ 350.0 million that has an acquisition-date fair value of $ 24.6 million.

The consideration paid was funded from existing cash.

During the quarter ended March 31, 2023, cash consideration increased by $ 6.8 million due to a net working capital adjustment and deferred consideration increased by $ 1.6 million.

The following table summarizes the initial and revised estimated fair value amounts recognized for the assets acquired and liabilities assumed and resulting goodwill as of the acquisition date:

(in millions) Initial Estimated Fair Value Adjustments Revised Estimated Fair Value

as of April 1, 2022

as of November 1, 2022

Cash and cash equivalents $ 93.6 $ — $ 93.6

Receivables 57.2 ( 8.8 ) 48.4

Investments 285.3 1.6 286.9

Goodwill 152.6 52.7 205.3

Indefinite-lived intangible assets 89.9 — 89.9

Definite-lived intangible assets 55.7 — 55.7

Investments 163.0 163.0

Operating lease right-of-use assets 84.4 84.4

Other assets and liabilities, net 28.1 9.3 37.4

Operating lease liabilities ( 91.8 ) ( 91.8 )

Nonredeemable noncontrolling interests ( 149.9 ) — ( 149.9 )

Other assets 9.0 3.1 12.1

Deferred tax liabilities — ( 36.7 ) ( 36.7 )

Compensation and benefits and other liabilities ( 71.0 ) ( 3.5 ) ( 74.5 )

Total Identifiable Net Assets $ 672.3 $ 8.4 $ 680.7

The adjustments to the initial estimated fair values are a result of new information obtained about facts that existed as of the acquisition date.

The goodwill is primarily attributable to expected growth opportunities from the combined operations and is expected to be deductible for tax purposes.

The adjustments to the initial estimated fair values are a result of new information obtained about the facts that existed as of the acquisition date.

The purchase price allocation is preliminary and subject to change during the measurement period, which is not to exceed one year from the acquisition date.

At this time, the Company does not expect material changes to the assets acquired or liabilities assumed.

The goodwill is primarily attributable to expected growth opportunities from the combined operations and is not deductible for tax purposes.

The definite-lived intangible assets relate to acquired investment management contracts and trade names, which are amortized over their estimated useful lives ranging from 3.0 years to 10.0 years.

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

Amortization expense related to the definite-lived intangible assets was $ 12.8 million for the fiscal year ended September 30, 2023 (“fiscal year 2023”).

Costs incurred in connection with the acquisition were $ 14.1 million for the fiscal year ended September 30, 2023.

Lexington contributed $ 184.5 million of revenue and did not have a material impact to net income attributable to Franklin Resources, Inc.

Alcentra contributed $ 158.0 million of operating revenue and did not have a material impact to net income attributable to Franklin Resources, Inc.

for the fiscal year ended September 30, 2023.

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

O’Shaughnessy Asset Management, LLC

On December 31, 2021, the Company acquired all of the outstanding ownership interests in O’Shaughnessy Asset Management, LLC (“OSAM”), a leading quantitative asset management firm, for cash consideration paid of approximately $ 300.0 million, excluding future payments to be made subject to the attainment of certain performance measures.

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

In connection with the acquisition, the Company on December 15, 2022 entered into repurchase agreements with a third-party financing company for certain securities held by the Company in Alcentra’s CLOs.

As of September 30, 2023, other liabilities includes repurchase agreements of $ 164.2 million with maturity values of € 132.3 million and $ 42.4 million in local currency.

The Company has pledged Alcentra investments with a carrying value of $ 171.3 million as collateral as of September 30, 2023.

The repurchase agreements have contractual maturity dates ranging between 2029 to 2034.

Note 3 – Earnings per Share

14 unchanged sentences

Diluted 1.72 2.53 3.57

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were insignificant for fiscal year 2022 and 0.5 million for the fiscal year ended September 30, 2020 (“fiscal year 2020”).

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were insignificant for fiscal year 2023 and the fiscal year ended September 30, 2022 (“fiscal year 2022”).

No nonparticipating nonvested stock unit awards were excluded for the fiscal year ended September 30, 2021 (“fiscal year 2021”).

59 unchanged sentences

Total $ 2,222.0 $ 1,651.3

The Company recognized other-than-temporary impairments of $ 29.9 million during fiscal year 2022, and insignificant amounts during fiscal years 2021 and 2020.

Note 6 – Fair Value Measurements

11 unchanged sentences

Other equity and debt investments 3.4 11.3 3.3 32.7 50.7

Contingent consideration asset — — 9.8 — 9.8

Total Assets Measured at Fair Value $ 528.1 $ 223.2 $ 21.8 $ 99.7 $ 872.8

Securities sold short $ 158.3 $ — $ — $ — $ 158.3

Contingent consideration liabilities — — 55.0 — 55.0

Total Liabilities Measured at Fair Value $ 158.3 $ — $ 55.0 $ — $ 213.3

(in millions) Level 1 Level 2 Level 3 NAV as a

11 unchanged sentences

Contingent consideration liabilities $ — $ — $ 31.6 $ — $ 31.6

Investments for which fair value was estimated using reported NAV as a practical expedient primarily consist of nonredeemable private debt, equity and infrastructure funds, and redeemable global equity and private real estate funds.

These investments were as follows:

9 unchanged sentences

Investments with known liquidation periods have an expected weighted-average life of 2.9 years and 3.4 years at September 30, 2023 and 2022.

2 Investments are redeemable on a monthly and quarterly basis.

Changes in the Level 3 contingent consideration liabilities were as follows:

(in millions)

for the fiscal years ended September 30, 2022 2021

Balance at beginning of year

$ ( 42.4 ) $ ( 25.3 )

( 24.5 ) ( 13.0 )

Total realized and unrealized gains (losses) included in general, administrative and other expense 9.4 ( 4.1 )

Balance at End of Year $ ( 31.6 ) $ ( 42.4 )

Change in unrealized gains included in net income relating to assets and liabilities held at end of year $ 6.7 $ ( 4.1 )

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

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

24 unchanged sentences

Depreciation and amortization expense related to property and equipment was $ 108.2 million, $ 108.1 million and $ 124.4 million in fiscal years 2023, 2022 and 2021.

The Company recognized no impairment of property and equipment in fiscal years 2022, 2021 and 2020.

The Company recognized no impairment of property and equipment in

fiscal years 2023, 2022 and 2021.

Note 8 – Goodwill and Other Intangible Assets

15 unchanged sentences

During fiscal years 2023 and 2022, no impairment of goodwill was recognized.

The Company recognized impairments of indefinite-lived intangible assets of $ 3.2 million during fiscal year 2022 due to declines in market prices of crypto assets.

No impairment of indefinite-lived intangible assets was recognized during fiscal year 2021.

The Company recognized insignificant impairments of indefinite-lived intangible assets during fiscal years 2023 and 2022 due to declines in market prices of crypto assets.

Definite-lived intangible assets were as follows:

24 unchanged sentences

Debt of Franklin Resources, Inc.

$ 300 million 2.800 % senior notes due September 2022

$ — N/A $ 299.9 2.93 %

$ 400 million 2.850 % senior notes due March 2025

18 unchanged sentences

Total $ 3,052.8 $ 3,376.4

On September 15, 2022, the Company repaid all of the outstanding $ 300.0 million 2.800 % senior notes due in September 2022 issued by Franklin Resources, Inc.

at the principal amount plus accrued and unpaid interest of $ 4.2 million.

On September 8, 2022, the Company entered into a term loan credit agreement with several financial institutions to establish a 3-year term loan with an aggregate commitment of $ 300.0 million.

On January 10, 2022, the Company entered into a bi-lateral credit agreement with Bank of America, N.A.

to establish a 364-day revolving credit facility with an aggregate commitment of $ 500.0 million.

On September 8, 2022, the Company amended and restated the credit facility to, among other things, extend its maturity to September 7, 2023.

As of September 30, 2022, there were no amounts outstanding.

On July 25, 2023, the Company terminated its 364-day $ 500.0 million revolving credit facility and its 3-year $ 300.0 million term loan.

On the date of termination, the 364-day revolving credit facility had no amounts outstanding and all amounts outstanding under the term loan were repaid with existing cash.

Concurrently, the Company entered into a 5-year $ 800.0 million revolving credit facility.

As of the time of this filing, there were no borrowings outstanding under the 5-year credit facility.

At September 30, 2023, 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.

3 unchanged sentences

The notes have fixed interest rates with interest payable semi-annually.

Effective August 2, 2021, Franklin agreed to unconditionally and irrevocably guarantee all of the outstanding notes issued by Legg Mason.

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.

1 unchanged sentence

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 364-day revolving credit facility and term loan credit agreement contain a financial performance covenant requiring that the Company maintains a consolidated net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00.

The new revolving credit facility 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, 2023.

31 unchanged sentences

Loans — 8,044.8 — — 8,044.8

Real Estate — — 268.6 — 268.6

Total Assets Measured at Fair Value $ 563.2 $ 8,804.1 $ 584.9 $ 154.0 $ 10,106.2

20 unchanged sentences

1 The 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 have an expected weighted-average life of 0.3 years and 1.3 years at September 30, 2022 and 2021.

As of September 30, 2023, there were no investments with known liquidation periods.

Investments with known liquidation periods have an expected weighted-average life of 0.3 years at September 30, 2022.

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

3 Of the total unfunded commitments, the Company was contractually obligated to fund $ 0.1 million and $ 0.2 million based on its ownership percentage in the CIPs, at September 30, 2022 and 2021.

3 As of September 30, 2023, there were no investments with unfunded commitments.

Of the total unfunded commitments, the Company was contractually obligated to fund $ 0.1 million based on its ownership percentage in the CIPs, at September 30, 2022.

Changes in Level 3 assets were as follows:

3 unchanged sentences

Balance at beginning of year $ 555.8 $ 268.6 $ 239.4 $ 1,063.8

Realized and unrealized gains included in investment and other income (losses) of consolidated investment products, net 106.0 29.2 0.1 135.3

Gains (losses) included in investment and other income (losses) of consolidated investment products, net ( 47.6 ) ( 9.0 ) 0.2 ( 56.4 )

Purchases 91.9 86.1 58.4 236.4

Sales ( 25.3 ) — ( 3.3 ) ( 28.6 )

Consolidations (deconsolidations) ( 52.1 ) — 200.4 148.3

Net consolidations (deconsolidations) 10.4 ( 345.7 ) ( 293.0 ) ( 628.3 )

Transfers into Level 3 — — 3.6 3.6

2 unchanged sentences

$ 584.9 $ — $ — $ 584.9

Change in unrealized gains included in net income relating to assets held at end of year $ 101.1 $ 29.2 $ — $ 130.3

Change in unrealized losses included in net income relating to assets held at end of year $ ( 46.3 ) $ — $ — $ ( 46.3 )

(in millions) Equity and Debt

2 unchanged sentences

Balance at beginning of year $ 453.3 $ 89.4 $ 20.5 $ 563.2

Realized and unrealized gains included in investment and other income (losses) of consolidated investment products, net 122.8 8.3 0.3 131.4

Gains included in investment and other income (losses) of consolidated investment products, net 106.0 29.2 0.1 135.3

Purchases 177.5 150.0 14.0 341.5

Sales ( 119.7 ) — ( 1.3 ) ( 121.0 )

Deconsolidations ( 36.2 ) ( 448.8 ) — ( 485.0 )

Net consolidations (deconsolidations) ( 52.1 ) — 200.4 148.3

Transfers into Level 3 0.1 — 5.7 5.8

Transfers out of Level 3 ( 9.3 ) — — ( 9.3 )

Foreign exchange revaluation 0.7 10.5 — 11.2

Balance at End of Year

4 unchanged sentences

as of September 30, 2023 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )

Equity and debt securities $ 238.9 Market comparable companies Enterprise value/ Revenue multiple 11.4 – 13.5 ( 12.1 )

Discount for lack of marketability 11.2 %– 13.6 % ( 12.2 %)

346.0 Market pricing Private sale pricing $ 0.01 –$ 1,000.00 ($ 23.88 ) per share

Discount for lack of marketability

(in millions)

as of September 30, 2022 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )

Equity and debt securities $ 555.8 Market pricing Private sale pricing $ 0.01 –$ 558.45 ($ 33.31 ) per share

Discount for lack of liquidity 23.5 %– 25.1 % ( 24.9 %)

Discount for lack of marketability

23.5 %– 25.1 % ( 24.9 %)

Real estate 268.6 Discounted cash flow Discount rate 4.5 %– 6.3 % ( 5.1 %)

4 unchanged sentences

Loan-to-value ratio 79.1 %– 88.1 % ( 83.1 %)

(in millions)

as of September 30, 2021 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )

Equity and debt securities $ 301.1 Market pricing Private sale pricing $ 0.39 –$ 100.00 ($ 19.34 ) per share

102.3 Market comparable companies Enterprise value/

EBITDA multiple 6.0 – 20.6 ( 13.7 )

Discount for lack of marketability 6.0 %– 25.5 % ( 17.6 %)

Enterprise value/

Revenue multiple 0.6 – 7.2 ( 5.1 )

Price-to-book value ratio 0.7 – 1.8 ( 1.4 )

Control Premium 20.0 %

Price-to-earnings ratio 28.8

49.9 Discounted cash flow Discount rate 3.3 %– 6.3 % ( 4.3 %)

Real estate 89.4 Discounted cash flow Discount rate 5.8 %– 6.0 % ( 5.9 %)

Exit capitalization rate 5.0 %– 5.3 % ( 5.1 %)

__________________

25 unchanged sentences

$ 8,231.8 $ 5,457.7

The debt of CLOs had fixed and floating interest rates ranging from 1.42 % to 8.51 % at September 30, 2022 and from 1.00 % to 8.22 % at September 30, 2021.

The other debt had floating interest rates ranging from 4.79 % to 6.00 % at September 30, 2022, and fixed and floating rates from 1.63 % to 2.42 % at September 30, 2021.

The floating rates were primarily based on LIBOR.

The debt of CIPs had fixed and floating interest rates ranging from 2.39 % to 15.49 % at September 30, 2023, and from 1.42 % to 8.51 % at September 30, 2022.

The floating rates were based on the London Interbank Offered Rate (“LIBOR”) and Secured Overnight Financing Rate (“SOFR”).

As a result of the phase-out of LIBOR, effective July 1, 2023, our reference rates are transitioning to SOFR.

The contractual maturities for debt of CIPs at September 30, 2023 were as follows:

10 unchanged sentences

Fair Value $ 8,196.8 $ 5,762.3

Investments 90 days or more past due were immaterial at September 30, 2022.

There were no investments were 90 days or more past due at September 30, 2021.

During fiscal years 2022 and 2021, the Company recognized $ 22.6 million of net gains and $ 15.4 million of net gains related to its own economic interests in the CLOs.

Investments 90 days or more past due were immaterial at September 30, 2023 and September 30, 2022.

During fiscal years 2023 and 2022, the Company recognized $ 19.0 million and $ 22.6 million of net gains related to its own economic interests in the CLOs.

The aggregate principal amount due of the debt of CLOs was $ 8,281.5 million and $ 5,781.3 million at September 30, 2023 and 2022.

5 unchanged sentences

Balance at October 1, 2020 $ 397.3 $ 144.6 $ 541.9

Acquisition 22.1 164.3 186.4

Business divestiture — ( 21.3 ) ( 21.3 )

Net income (loss) 45.0 3.6 48.6

Net income 63.8 30.3 94.1

Net subscriptions (distributions) and other 531.4 ( 23.6 ) 507.8

Net consolidations (deconsolidations) ( 663.6 ) — ( 663.6 )

Net deconsolidations ( 370.0 ) — ( 370.0 )

Adjustment to fair value — 159.2 159.2

Balance at September 30, 2021 $ 622.5 $ 310.5 $ 933.0

1 unchanged sentence

Net subscriptions (distributions) and other 244.5 ( 49.2 ) 195.3

Net consolidations (deconsolidations) ( 370.0 ) — ( 370.0 )

Net consolidations 181.3 — 181.3

Adjustment to fair value — 263.1 263.1

Balance at September 30, 2022 $ 942.2 $ 583.6 $ 1,525.8

Net income (loss) ( 106.1 ) 59.2 ( 46.9 )

Net income 77.4 58.1 135.5

Net subscriptions (distributions) and other 605.5 ( 86.3 ) 519.2

Net consolidations (deconsolidations) 181.3 — 181.3

Net deconsolidations ( 1,045.0 ) — ( 1,045.0 )

Adjustment to fair value — ( 109.4 ) ( 109.4 )

2 unchanged sentences

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, and loans and related interest receivable as follows:

The Company’s maximum exposure to loss from these VIEs consists of equity investments, investment management and other fee receivables as follows:

(in millions)

5 unchanged sentences

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, except for loans to certain sponsored funds in India which were fully repaid during the second quarter of fiscal year 2021.

The Company did not provide financial or other support to its sponsored funds during fiscal years 2023 and 2022.

Note 13 – Taxes on Income

6 unchanged sentences

67.1 78.6 68.9

Deferred expense (benefit) 98.0 3.7 ( 7.1 )

Deferred expense 41.5 98.0 3.7

Total $ 312.3 $ 396.2 $ 349.6

36 unchanged sentences

At September 30, 2023, there were $ 121.3 million of non-U.S.

tax effected net operating loss carry-forwards which expires between fiscal years 2022 and 2041.

tax effected net operating loss carry-forwards which expire between fiscal years 2024 and 2042.

In addition, there were $ 151.8 million in tax effected state net operating loss carry-forwards that expire between fiscal years 2024 and 2043, with some having an indefinite carry-forward period.

The Company also has federal net operating losses of $ 9.7 million, the majority of which will carry-forward indefinitely and $ 99.0 million of foreign tax credit carry-forwards that expire between fiscal years 2024 and 2030.

The valuation allowance increased $ 34.6 million in fiscal year 2023, primarily related to non-US net operating loss utilization.

The valuation allowance decreased $ 61.0 million in fiscal year 2022 primarily related to state and non-US net operating loss utilization and US foreign tax credit utilization.

The valuation allowance decreased $ 1.3 million in fiscal year 2021 primarily related to carry-forward assets recognized in connection with the acquisition of Legg Mason.

At September 30, 2022, the valuation allowance of $ 258.3 million was related to $ 147.9 million for federal, state, and foreign net operating loss carry-forwards, $ 63.6 million due to uncertainty of realizing the benefit of foreign tax credits, $ 37.8 million for capital losses, and $ 9.0 million for other foreign deferred taxes.

At September 30, 2023, the valuation allowance of $ 292.9 million was related to $ 177.6 million for federal, state, and foreign net operating loss carry-forwards, $ 70.8 million due to uncertainty of realizing the benefit of foreign tax credits, $ 24.3 million for capital losses, $ 11.2 million for other state deferred taxes and $ 9.0 million for other foreign 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:

6 unchanged sentences

( 11.4 ) ( 0.8 %) ( 5.3 ) ( 0.3 %) ( 126.8 ) ( 5.2 %)

Effect of net income (loss) attributable to noncontrolling interests ( 8.6 ) ( 0.5 %) ( 55.3 ) ( 2.3 %) 2.5 0.2 %

Effect of net income attributable to noncontrolling interests ( 38.3 ) ( 2.7 %) ( 8.6 ) ( 0.5 %) ( 55.3 ) ( 2.3 %)

Effect of non-U.S.

13.0 0.8 % ( 30.4 ) ( 1.2 %) 6.9 0.7 %

operations ( 14.7 ) ( 1.0 %) 13.0 0.8 % ( 30.4 ) ( 1.2 %)

Capital loss on investments, net of valuation allowance 2

7 unchanged sentences

1 The Company released a tax reserve in fiscal year 2021 following the close of an IRS audit of the transition tax for fiscal year 2018.

2 The Company recognized a tax benefit in fiscal years 2021 and 2020 for capital losses that were realized from sales of investments.

During fiscal year 2020, the sale of investments were subsequent to the change in corporate tax structure of a foreign holding company to a U.S.

2 The Company recognized a tax benefit in fiscal year 2021 for capital losses that were realized from sales of investments.

These capital losses can be carried forward, for which the Company has assessed for realizability.

4 unchanged sentences

Balance at beginning of year $ 168.7 $ 184.3 $ 342.9

Additions from business combinations — — 141.8

Additions for tax positions of prior years 6.1 2.5 4.2

15 unchanged sentences

India 2003 to 2023;

Brazil 2008 to 2022, Canada 2011 to 2014 and 2017 to 2022;

Brazil 2008 to 2023, Canada 2018 to 2023;

Australia 2019 to 2023, Hong Kong 2017 to 2023;

4 unchanged sentences

the City of New York 2016 to 2023;

the States of California, New Jersey, and New York 2018 to 2022;

and State of Maryland 2019 to 2022.

The Company has ongoing litigation and examinations in various stages, in the States of California and New York, and City of New York, and in Brazil, Canada, India, Japan and Malaysia.

the State of New York 2018 to 2023;

the State of New Jersey 2019 to 2023;

and the States of California and Florida 2020 to 2023.

The Company has ongoing litigation and examinations in various stages, U.S.

federal for the fiscal year ended September 30, 2020, in the States of California and New York, and City of New York, and in Brazil, Canada and India.

Examination outcomes and the timing of settlements are subject to significant uncertainty.

26 unchanged sentences

Total lease expense $ 105.5 $ 109.7 $ 138.4

__________________

1 Substantially all operating lease cost is included in occupancy expense.

Supplemental cash flow information related to leases was as follows:

26 unchanged sentences

2027 0.3 38.9

2027 0.1 38.1

Thereafter — 76.9

4 unchanged sentences

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 assets under management of INR 25,648.3 crore (approximately $ 3.4 billion).

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 commenced multiple writ petition actions in different courts 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 challenged the decision to wind up the Funds and 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.

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.

One of the petitioners obtained an interim injunction order staying the operation and implementation of the unitholder voting process.

Following appeals to the Supreme Court of India, the petitions were transferred to the High Court of Karnataka for further consolidated proceedings.

In October 2020, the High Court of Karnataka issued its judgment, in which it upheld the decision taken by FTTS to wind up the Funds and held that there was “nothing wrong with the decision making process,” but determined that, under applicable regulations, unitholder approval is required to implement the decision.

Certain Company Respondents and other parties filed cross-appeals to the Supreme Court of India, and certain intervenors filed applications, challenging aspects of the High Court’s judgment.

In December 2020, with the approval of the Supreme Court, and without prejudice to its arguments on appeal that unitholder approval of the wind-up decision is not required, FTTS proceeded to obtain approval from the majority of the voting unitholders for winding up the six Funds.

In February 2021, the Supreme Court issued a decision confirming the results of the unitholder votes and appointed a third-party asset manager to serve as the liquidator and begin cash distributions to unitholders.

In July 2021, the Supreme Court issued a ruling interpreting applicable regulations to require unitholder consent to effect a trustee’s decision to wind up a fund, while finding that, upon the trustee’s publication of its decision to unitholders under applicable regulations, fund business activities, including redemptions, are suspended pending the results of the unitholder vote.

The Supreme Court further found that FTTS’ April 2020 publication to unitholders of its wind-up decision complied with applicable regulations, effectively freezing redemptions.

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.

FTAMI continues to cooperate with the court-appointed liquidator in its work to liquidate the Funds’ remaining investments and distribute proceeds to unitholders.

As of September 2022, an aggregate of INR 26,783.2 crore (approximately $ 3.3 billion) has been distributed to Fund unitholders.

As of September 2023, all performing securities across the Funds have been liquidated and an aggregate of INR 27,508.1 crore (approximately $ 3.3 billion) has been 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.

2 unchanged sentences

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).

and a prohibition on FTAMI from launching new fixed income funds in India for a two-year period, which has since concluded.

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.

The Company also responded to related inquiries and investigations commenced by certain governmental agencies in India, including the previously-reported “first information report” (the preliminary step in an investigation) registered by the Economic Offences Wing of the Chennai police department against certain of the Company Respondents in connection with a complaint by two 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.

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.

23 unchanged sentences

Stock and stock unit awards $ 174.7 $ 200.8 $ 165.2

Employee stock investment plan 7.4 6.7 5.2

Phantom unit awards 33.2 13.5 30.4

Employee stock investment plan 7.9 7.4 6.7

Total $ 215.8 $ 221.7 $ 202.3

2 unchanged sentences

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 2021, the Company’s stockholders approved an amendment and restatement of the USIP increasing the number of shares authorized by 20.0 million shares to a total of 140.0 million shares.

There are 23.0 million shares authorized under the EIP.

There are 140.0 million and 23.0 million shares authorized under the USIP and EIP.

At September 30, 2023, 12.2 million shares and 14.7 million shares were available for grant under the USIP and EIP.

8 unchanged sentences

for the fiscal year ended September 30, 2023

Nonvested balance at September 30, 2021 14,176 3,658 17,834 $ 22.27

Nonvested balance at beginning of year

13,492 3,401 16,893 $ 24.04

Granted 7,024 271 7,295 22.74

1 unchanged sentence

Forfeited/canceled ( 400 ) ( 238 ) ( 638 ) 25.10

Nonvested balance at September 30, 2022 13,492 3,401 16,893 $ 24.04

Nonvested Balance at End of Year

12,782 3,099 15,881 $ 23.09

Total unrecognized compensation expense related to nonvested stock and stock unit awards was $ 160.5 million at September 30, 2023.

2 unchanged sentences

The total fair value of stock and stock unit awards vested during the same periods was $ 210.4 million, $ 147.8 million and $ 121.2 million.

The Company generally does not repurchase shares upon vesting of stock and stock unit awards.

However, 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.

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

20 unchanged sentences

Total $ 800.1 $ 743.3

Note 19 – Investment and Other Income (Losses), Net

Investment and other income (losses), net consisted of the following:

Note 19 – Investment and Other Income, Net

Investment and other income, net consisted of the following:

(in millions)

2 unchanged sentences

Gains (losses) on investments, net 39.5 ( 75.4 ) 90.9

Income (losses) from investments in equity method investees 36.2 154.3 ( 98.1 )

Income from investments in equity method investees 123.1 36.2 154.3

Gains (losses) on derivatives, net ( 15.1 ) 20.9 ( 23.2 )

Rental income 46.3 37.9 28.8

Foreign currency exchange gains (losses), net 40.6 ( 11.9 ) ( 22.3 )

Foreign currency exchange (losses) gains, net ( 26.7 ) 40.6 ( 11.9 )

Other, net 13.0 ( 7.0 ) 8.2

Investment and Other Income (Losses), Net $ 91.1 $ 264.7 $ ( 38.4 )

Investment and Other Income, Net

$ 340.0 $ 91.1 $ 264.7

Substantially all dividend income was generated by investments in nonconsolidated sponsored funds.

11 unchanged sentences

Balance at October 1, 2020 $ ( 399.6 ) $ ( 8.0 ) $ — $ ( 407.6 )

Adoption of new accounting guidance — — — —

Other comprehensive income (loss)

Other comprehensive income (loss) before reclassifications, net of tax 23.8 ( 2.1 ) ( 1.3 ) 20.4

Reclassifications to compensation and benefits expense, net of tax — 0.3 — 0.3

Reclassifications to net investment and other income (losses), net of tax 2.0 — 1.3 3.3

Total other comprehensive income (loss) 25.8 ( 1.8 ) — 24.0

Balance at September 30, 2020 $ ( 399.6 ) $ ( 8.0 ) $ — $ ( 407.6 )

Other comprehensive income

1 unchanged sentence

Reclassifications to compensation and benefits expense, net of tax — ( 0.7 ) — ( 0.7 )

Reclassifications to net investment and other income (losses), net of tax 2.0 — — 2.0

Reclassifications to net investment and other income, net of tax 2.0 — — 2.0

Total other comprehensive income 29.1 0.9 — 30.0

3 unchanged sentences

Reclassifications to compensation and benefits expense, net of tax — ( 1.5 ) — ( 1.5 )

Reclassifications to net investment and other income (losses), net of tax 2.2 — — 2.2

Reclassifications to net investment and other income, net of tax 2.2 — — 2.2

Total other comprehensive income (loss) ( 244.6 ) 0.8 0.4 ( 243.4 )

Balance at September 30, 2022 $ ( 615.1 ) $ ( 6.3 ) $ 0.4 $ ( 621.0 )

Note 21 – Subsequent Events

On November 1, 2022, the Company acquired all of the outstanding ownership interests in BNY Alcentra Group Holdings, Inc.

from The Bank of New York Mellon Corporation for cash consideration of approximately $ 587.3 million paid at closing, including $ 188.3 million related to investments, and up to $ 350.0 million in contingent consideration to be paid upon on the achievement of certain performance thresholds over the next four years.

On November 1, 2022, the Company announced a voluntary buyout for certain U.S.

employees who meet specific criteria related to age and years of service.

The impact of this voluntary termination plan is unknown, but is expected to result in increased compensation and benefits expense during the fiscal year ending September 30, 2023.

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 )

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data