What changed in this filing

/stocks — the workspaceLOADING

Item 5. Market for Registrant’s Common Equity

2025-11-10 compared with 2024-11-12 · 142 added, 136 removed, 584 unchanged (32% of the section changed)

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In order to pay taxes due in connection with the vesting of employee and executive officer stock and stock unit awards, we may repurchase shares under our program using a net stock issuance method.

In December 2023, our Board of Directors authorized the repurchase of up to an additional 27.2 million shares of our common stock in either open market or private transactions, for a total of up to 40.0 million shares available for repurchase under the stock repurchase program.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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We deliver our investment capabilities through a variety of investment products, which include our sponsored funds, as well as institutional and high-net-worth separate accounts, retail separately managed account programs, sub-advised products and other investment vehicles.

Related services include fund administration, sales and distribution, and shareholder servicing.

We may perform services directly or through third parties.

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

Related services include fund administration, sales and distribution, and shareholder servicing, which we may perform directly or outsource to third parties.

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

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

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These arrangements could change in the future.

During the fiscal year ended September 30, 2024 (“fiscal year 2024”), global equity markets provided positive returns reflecting, among other things, easing of monetary policy and resilient economic activity.

Despite periods of volatility driven by uncertainty regarding U.S.

economic and trade policies, during the fiscal year ended September 30, 2025 (“fiscal year 2025”), U.S.

and global equity markets provided positive returns, due in part to strong corporate earnings and easing of monetary policy.

The S&P 500 Index and MSCI World Index increased 14.8% and 17.8% for the fiscal year.

The global bond markets were also positive as the Bloomberg Barclays Global Aggregate Index increased 7.9% for the fiscal year.

Our total AUM was $1,678.6 billion at September 30, 2024, which was 22% higher than at September 30, 2023 driven by the positive impact of $186.0 billion of net market change, distributions and other, $148.3 billion from the acquisition of Putnam Investments (“Putnam”), and $2.7 billion of cash management net inflows, partially offset by $32.6 billion of long-term net outflows.

Our total AUM was $1,661.2 billion at September 30, 2025, 1% lower than at September 30, 2024.

Simple monthly average AUM (“average AUM”) increased 3% during fiscal year 2025.

On January 1, 2024, we acquired Putnam, a global asset management firm, from Great-West Lifeco Inc.

(“Great-West”).

The business and regulatory environments in which we operate globally remain complex, uncertain and subject to change.

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Average AUM and the mix of average AUM by asset class are shown below.

(in billions) Average AUM 2024 vs.

(in billions) Average AUM 1

2024 2024 vs.

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Total $ 1,606.7 $ 1,565.8 $ 1,400.4 3 % 12 %

_______________

1 Average AUM is calculated as the average of the month-end AUM for the trailing thirteen months.

Mix of Average AUM

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Net market change, distributions and other includes appreciation (depreciation), distributions to investors that represent return on investments and return of capital, and foreign exchange revaluation.

(in billions) 2024 vs.

2023 2023 vs.

(in billions)

for the fiscal years ended September 30, 2025 1

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Long-term net flows (97.4) (32.6) (21.3)

Cash management net flows 2.7 4.3 (0.8) (37 %) NM

Cash management net flows 12.6 2.7 4.3

Total net flows (84.8) (29.9) (17.0)

Acquisitions 148.3 34.9 64.9 325 % (46 %)

Net market change, distributions and other 186.0 58.9 (269.0) 216 % NM

Acquisitions (Disposition)

(0.2) 148.3 34.9

Net market change, distributions and other 67.6 186.0 58.9

Ending AUM $ 1,661.2 $ 1,678.6 $ 1,374.2

_______________

1 On March 31, 2025, cash management AUM and net flows were updated to include $6.3 billion of AUM and $3.7 billion of net inflows related to two money market mutual fund share classes previously closed to third-party investors.

Components of the change in AUM by asset class were as follows:

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AUM at September 30, 2025 $ 686.2 $ 438.7 $ 263.9 $ 193.9 $ 78.5 $ 1,661.2

AUM increased $304.4 billion or 22% during fiscal year 2024 due to the positive impact of $186.0 billion of net market change, distributions and other, $148.3 billion from the acquisition of Putnam, and $2.7 billion of cash management net inflows, partially offset by $32.6 billion of long-term net outflows, inclusive of $48.6 billion of long-term net outflows at Western Asset Management (“WAM”), and $20.7 billion of long-term reinvested distributions.

Net market change, distributions and other primarily consists of $224.2 billion of market appreciation, and a $7.2 billion increase from foreign exchange revaluation, partially offset by $45.4 billion of long-term distributions.

The market appreciation occurred in all asset classes with the exception of the alternative asset class, most significantly in the equity asset class and reflected positive returns in the global equity markets.

AUM decreased $17.4 billion or 1% during fiscal year 2025 primarily due to $97.4 billion of long-term net outflows, inclusive of $141.9 billion of long-term net outflows at Western Asset Management (“WAM”), partially offset by the positive impact of $67.6 billion of net market change, distributions and other, and $12.6 billion of cash management net inflows.

Long-term net outflows include $30.4 billion of long-term reinvested distributions.

Net market change, distributions and other primarily consists of $125.8 billion of market appreciation partially offset by $57.7 billion of long-term distributions, primarily from the equity and alternative asset classes, and a $0.5 billion decrease from foreign exchange revaluation,.

The market appreciation occurred in all asset classes, most significantly in the equity asset class, and reflected positive returns in the global equity and fixed income markets.

Foreign exchange revaluation from AUM in products that are not U.S.

dollar denominated was primarily due to a weaker U.S.

dollar compared to the Euro, Australian dollar and British Pound.

Long-term inflows increased 25% to $319.0 billion, as compared to the prior year, driven by higher inflows across multiple equity and fixed income vehicles, most significantly in open-end and sub-advised mutual funds.

dollar denominated was primarily due to a stronger U.S.

dollar compared to the Australian dollar, Canadian dollar, Indian Rupee, and Japanese Yen, partially offset by a weaker U.S.

dollar compared to the Euro.

Long-term inflows increased 8% to $343.9 billion, as compared to the prior year, driven by higher inflows across equity, fixed income, and alternative strategies, particularly in open-end funds, retail separately managed accounts, private funds, and sub-advised mutual funds.

This growth was partially offset by declines in fixed income inflows at WAM, primarily within institutional separate accounts, open-end funds, and sub-advised mutual funds.

Long-term outflows increased 26% to $441.3 billion, driven by higher outflows across multiple fixed income vehicles, primarily at WAM, and from equity open-end and sub-advised mutual funds.

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(6.0) (38.8) 4.2 8.0 2.7 (29.9)

Acquisitions — — 34.9 — — 34.9

81.3 59.3 0.7 5.8 1.2 148.3

Net market change, distributions and other

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AUM at September 30, 2024 $ 632.1 $ 556.4 $ 249.9 $ 176.2 $ 64.0 $ 1,678.6

AUM increased $76.8 billion or 6% during fiscal year 2023 due to the positive impact of $58.9 billion of net market change, distributions and other, $34.9 billion from an acquisition, and $4.3 billion of cash management net inflows, partially offset by $21.3 billion of long-term net outflows, which include $20.6 billion of long-term reinvested distributions.

Net market change, distributions and other primarily consists of $94.4 billion of market appreciation, and a $4.6 billion increase from foreign exchange revaluation, partially offset by $40.1 billion of long-term distributions.

Foreign exchange revaluation from AUM in products that are not U.S.

dollar denominated was primarily due to a weaker U.S.

dollar compared to the Euro, British Pound and Brazilian Real.

AUM by sales region was as follows:

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Total $ 1,661.2 $ 1,678.6 $ 1,374.2 (1 %) 22 %

__________________

1 Effective October 1, 2023, India region is included in Europe, Middle East and Africa.

The region in which investment products are sold may differ from the geographic area in which we provide investment management and related services to the products.

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Total mutual fund AUM measured for the 1-, 3-, 5- and 10-year periods represents 40%, 39%, 39% and 36% of our total AUM as of September 30, 2025.

Excludes funds scheduled to be closed.

2 Strategy composite performance measures the percent of composite AUM beating its benchmark.

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are generally higher than for U.S.

Investment management fees increased $369.3 million in fiscal year 2024 primarily due to a 12% increase in average AUM, partially offset by a decrease in performance fees, certain transaction-related fees received in the prior year, and lower catch-up fees recognized at the closing of fundraising rounds in a secondary private equity fund, which ended in January 2024.

The increases in average AUM primarily occurred in the equity, fixed income and multi-asset asset classes, driven by net market appreciation and the acquisition of Putnam.

Investment management fees increased $159.6 million in fiscal year 2025 primarily due to one additional quarter of revenue earned by Putnam, which was acquired on January 1, 2024, an increase in average equity AUM, and an increase in performance fees, partially offset by the impact of WAM outflows and catch-up fees recognized in the prior year at the closing of fundraising rounds in a secondary private equity fund.

Our effective investment management fee rate excluding performance fees (investment management fees excluding performance fees divided by average AUM) was 40.5 and 41.1 basis points for fiscal years 2025 and 2024.

The rate decrease was primarily due to increased AUM in lower fee products, including those from the acquisition of Putnam, certain transaction-related fees received in the prior year, and lower catch-up fees recognized at the closing of fundraising rounds in a secondary private equity fund, which ended in January 2024.

The rate decrease was primarily due to higher average AUM in lower-fee equity products and catch-up fees recognized in the prior year at the closing of fundraising rounds in a secondary private equity fund, partially offset by the impact of outflows in lower-fee products at WAM.

Performance fees were $474.0 million and $390.7 million for fiscal years 2025 and 2024.

The decrease was primarily due to lower performance fees earned by certain of our alternative specialist investment managers, and a decrease of $72.2 million in performance fees earned by Lexington Partners L.P.

(“Lexington”), which were passed through as compensation expense per the terms of the acquisition agreement.

The increase was primarily due to changes in the amount of performance fees earned by our alternative specialist investment managers.

Our product offerings and global operations are diverse.

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Sales and Distribution Fees $ 1,474.7 $ 1,381.0 $ 1,203.7 7 % 15 %

Asset-based distribution fees increased $137.1 million in fiscal year 2024 primarily due to revenue earned from Putnam products subsequent to the acquisition and an increase of 4% in the related average AUM, excluding the impact of Putnam.

Sales-based fees increased $40.2 million in fiscal year 2024 primarily due to an increase of 12% in commissionable sales and sales-based revenue earned from Putnam products subsequent to the acquisition.

Asset-based distribution fees increased $84.4 million in fiscal year 2025 primarily due to an increase of 4% in the related average AUM, one additional quarter of asset-based revenue related to Putnam products and a higher mix of non-U.S.

equity and multi-asset funds, which generate higher fees.

Sales-based fees increased $9.3 million in fiscal year 2025 primarily due to one additional quarter of sales-based revenue related to Putnam products and a higher mix of equity and multi-asset funds, which generate higher sales fees.

Shareholder Servicing Fees

Shareholder servicing fees are earned from our sponsored funds for providing transfer agency services, which include providing shareholder statements, transaction processing, client service and tax reporting.

Shareholder servicing fees are primarily determined based on a contractual margin, or a percentage of AUM and either the number of transactions in shareholder accounts or the number of shareholder accounts.

Shareholder servicing fees are determined based on a contractual margin, or a percentage of AUM and either the number of transactions in shareholder accounts or the number of shareholder accounts.

Shareholder servicing fees also include fund reimbursements of expenses incurred while providing transfer agency services.

Shareholder servicing fees increased $76.6 million in fiscal year 2024, primarily due to fees earned by Putnam subsequent to the acquisition, partially offset by the impact of a change in fee structure for certain U.S.

sponsored funds.

Shareholder servicing fees increased $35.2 million in fiscal year 2025, primarily due to one additional quarter of fees earned by Putnam and higher levels of related AUM, partially offset by lower fees determined on a contractual margin.

OPERATING EXPENSES

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Total Operating Expenses $ 8,166.6 $ 8,070.4 $ 6,747.1 1 % 20 %

The Putnam acquisition had a significant impact on operating expenses for the fiscal year ended September 30, 2024;

The acquisition of Putnam on January 1, 2024 had a significant impact on operating expenses for the fiscal years ended September 30, 2025;

however, due to the ongoing integration of the combined businesses, it is not practicable to separately quantify the impact of the legacy Putnam business.

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Acquisition-related performance fee pass through 1

97.5 169.7 4.2 (43 %) NM

169.7 127.8 (8.5) 33 % NM

106.7 97.5 169.7 9 % (43 %)

148.5 169.7 127.8 (12 %) 33 %

Compensation and Benefits Expenses $ 3,818.2 $ 3,831.1 $ 3,494.0 0 % 10 %

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and special termination benefits.

Salaries, wages and benefits increased $187.1 million in fiscal year 2024 primarily due to higher headcount as a result of the acquisition of Putnam and annual salary increases, partially offset by the impact of other headcount reductions.

Incentive compensation increased $81.6 million in fiscal year 2024, primarily due to the acquisition of Putnam and an increase in expense for deferred compensation awards, partially offset by lower incentive compensation at certain specialist investment managers.

Acquisition-related retention expenses increased $98.7 million in fiscal year 2024, primarily due to higher costs associated with recent acquisitions.

Acquisition-related performance fee pass through expenses decreased $72.2 million in fiscal year 2024, due to lower pass through performance fees earned by Lexington.

Other compensation and benefits increased $41.9 million in fiscal year 2024, primarily due to higher net market gains on investments related to our deferred compensation plans and an increase in special termination benefits.

Special termination benefits increased $12.6 million primarily due to the acquisition of Putnam, partially offset by costs associated with workforce optimization initiatives in the prior year.

We expect to incur acquisition-related retention expenses of approximately $190 million during the fiscal year ending September 30, 2025 (“fiscal year 2025”), and decreasing over the following two fiscal years by approximately $20 million and $80 million.

At September 30, 2024, our global workforce had increased to approximately 10,200 employees from approximately 9,200 at September 30, 2023, primarily due to the acquisition of Putnam.

Salaries, wages and benefits increased $37.4 million in fiscal year 2025 primarily due to annual salary increases and one additional quarter of expenses related to Putnam, partially offset by the impact of headcount reductions resulting from costs savings initiatives.

Incentive compensation increased $62.9 million in fiscal year 2025, primarily due to higher bonus expense based on our annual performance, higher performance fee compensation, one additional quarter of expenses related to Putnam, higher annual acceleration of deferred compensation expense related to retirement-eligible employees and higher sales related commissions, partially offset by lower incentive compensation at certain specialist investment managers.

Acquisition-related retention expenses decreased $101.2 million in fiscal year 2025, primarily due to lower costs associated with recent acquisitions.

Other compensation and benefits decreased $21.2 million in fiscal year 2025, primarily due to lower net market gains on investments related to our deferred compensation plans and a decrease in special termination benefits, partially offset by an increase in compensation related to minority interests.

Special termination benefits decreased $6.1 million primarily due to higher costs associated with workforce optimization initiatives in the prior year.

At September 30, 2025, our global workforce decreased to approximately 9,800 employees from approximately 10,200 at September 30, 2024.

We continue to place a high emphasis on our pay for performance philosophy.

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Marketing support expenses are based on AUM, sales or a combination thereof.

Also included is the amortization of deferred sales commissions related to upfront commissions on shares sold without a front-

end sales charge.

Also included is the amortization of deferred sales commissions related to upfront commissions on shares sold without a front-end sales charge.

The deferred sales commissions are amortized over the periods in which commissions are generally recovered from related revenues.

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Sales, Distribution and Marketing $ 2,010.9 $ 1,863.1 $ 1,613.1 8 % 15 %

Asset-based expenses increased $201.5 million in fiscal year 2024 primarily due to expenses related to Putnam products subsequent to the acquisition, an increase of 4% in the related average AUM, excluding the impact of Putnam, and higher marketing support fees.

Asset-based expenses increased $115.7 million in fiscal year 2025 primarily due to one additional quarter of expenses related to Putnam products, an increase of 3% in the related average AUM and higher marketing support fees.

Distribution expenses are generally not directly correlated with distribution fee revenues due to certain fee structures that do not provide full recovery of distribution costs.

Sales-based expenses increased $36.5 million in fiscal year 2024 primarily due to an increase of 12% in commissionable sales and sales-based expenses related to Putnam products subsequent to the acquisition.

Sales-based expenses increased $14.3 million in fiscal year 2025 primarily due to one additional quarter of expenses related to Putnam products and higher marketing support fees.

Amortization of deferred sales commissions increased $17.8 million in fiscal year 2025 primarily due to higher sales.

Information Systems and Technology

Information systems and technology expenses increased $115.1 million in fiscal year 2024, primarily due to expenses incurred by Putnam subsequent to the acquisition, and higher costs for software and market data services.

Occupancy expenses increased $96.5 million in fiscal year 2024, driven by new leased office space located at One Madison Avenue and impairment of the right-of-use asset related to vacated office space, primarily associated with an initiative to consolidate our office space in New York City, and expenses incurred by Putnam subsequent to the acquisition.

Information systems and technology expenses increased $23.5 million in fiscal year 2025, primarily due to one additional quarter of expenses incurred by Putnam, higher spending related to strategic initiatives, and higher costs for software and external data services, partially offset by lower costs for hardware maintenance and purchases.

Occupancy expenses decreased $39.1 million in fiscal year 2025.

The prior year included the impairment of the right of use asset related to office space vacated in connection with the consolidation of our office space in New York City, and the current year reflects lower costs due to the office space consolidation.

The decrease was partially offset by one additional quarter of expenses incurred by Putnam.

Amortization of intangible assets

Amortization of intangible assets decreased $2.9 million in fiscal year 2024, primarily due to the net effect of intangible assets which became fully amortized during the fiscal year, partially offset by the amortization of intangible assets recognized as part of the acquisitions of Putnam and Alcentra.

Amortization of intangible assets increased $68.3 million in fiscal year 2025, primarily due to a reduction in the remaining useful life of definite-lived intangible assets related to WAM, partially offset by the effect of intangible assets which became fully amortized during the fiscal year.

Impairment of intangible assets

In fiscal year 2024, we impaired our indefinite-lived intangible asset related to certain mutual fund contracts managed by WAM by $389.2 million.

Impairment of intangible assets was $ 226.6 million in fiscal year 2025 and $ 389.2 million in fiscal year 2024.

In fiscal year 2025, we impaired our indefinite-lived intangible asset related to certain contracts managed by WAM by $200.0 million, as compared to $389.2 million in fiscal year 2024.

During fiscal year 2025, we also recognized impairment charges of $26.6 million related to certain other indefinite-lived intangible assets related to management contracts.

See Critical Accounting Policies and Note 8 - Goodwill and Other Intangible Assets in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report for additional information.

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General, administrative and other expenses primarily consist of professional fees, fund-related service fees, advertising and promotion, travel and entertainment, and other miscellaneous expenses.

General, administrative and other operating expenses increased $138.3 million in fiscal year 2024, primarily due to the acquisition of Putnam, an increase of $45.9 million in legal and other professional fees, and an increase of $14.0 million in travel and entertainment expenses due to higher activity levels.

These increases were partially offset by a decrease of $14.4 million in fund-related expenses.

For certain vehicles, we may agree to compensate third parties for services provided by sharing a portion of the performance fees we earn.

These payments are classified as sub-advisory expenses.

General, administrative and other operating expenses increased $71.2 million in fiscal year 2025, primarily due to one additional quarter of expenses incurred by Putnam, and increases of $21.2 million in sub-advisory expenses, primarily due to higher payments to third-parties related to performance fees, $17.7 million in transfer agency expenses, $16.0 million in advertising and promotion costs, and $2.9 million in legal and other professional fees, inclusive of $65.6 million of insurance recoveries.

These increases were partially offset by an $18.5 million decrease in acquisition-related costs, primarily related to the acquisition of Putnam.

OTHER INCOME (EXPENSES)

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Income from investments in equity method investees 78.0 137.5 45.4 (43 %) 203 %

Gains (losses) on derivatives, net (16.2) (15.1) 20.9 7 % NM

Losses on derivatives, net (7.8) (16.2) (15.1) (52 %) 7 %

Rental income

44.1 43.7 46.3 1 % (6 %)

Foreign currency exchange (losses) gains, net (19.9) (26.7) 40.6 (25 %) NM

15.9 13.0 (7.0) 22 % NM

Foreign currency exchange losses, net (11.6) (19.9) (26.7) (42 %) (25 %)

6.3 15.9 13.0 (60 %) 22 %

Investment and other income, net 212.8 395.5 262.3 (46 %) 51 %

Interest expense (94.9) (97.2) (123.7) (2 %) (21 %)

Investment and other income (losses) of consolidated investment products, net 149.9 115.8 (17.7) 29 % NM

Investment and other income of consolidated investment products, net 108.4 149.9 115.8 (28 %) 29 %

Expenses of consolidated investment products (43.6) (32.6) (18.7) 34 % 74 %

Other income (expenses), net $ 415.6 $ 235.7 $ (44.5) 76 % NM

Other income, net $ 182.7 $ 415.6 $ 235.7 (56 %) 76 %

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.

Dividend and interest income increased $17.0 million in fiscal year 2024, primarily due to higher yields.

Investments held by the Company generated net gains of $57.6 million, as compared to net gains of $39.5 million in the prior year, primarily from assets invested for deferred compensation plans and investments in nonconsolidated funds and separate accounts, partially offset by net losses from investments measured at cost adjusted for observable price changes.

Equity method investees generated income of $137.5 million in fiscal year 2024 and $45.4 million in fiscal year 2023.

The current year income was largely related to various global alternative and equity funds, while the prior year income was largely related to various global alternative funds.

Dividend and interest income decreased $35.5 million in fiscal year 2025, primarily due to lower yields and lower average balances.

Investments held by the Company generated net losses of $37.6 million, as compared to net gains of $57.6 million in the prior year.

Net losses in the current year were primarily from investments measured at cost adjusted for observable price changes and investments in nonconsolidated funds and separate accounts, partially offset by gains on assets invested for deferred compensation plans.

The net gains in the prior year were primarily from assets invested for deferred compensation plans and investments in nonconsolidated funds and separate accounts, partially offset by losses on investments measured at cost adjusted for observable price changes.

Equity method investees generated income of $78.0 million in fiscal year 2025 and $137.5 million in fiscal year 2024, largely related to various global alternative and equity funds.

Net foreign currency exchange losses decreased $8.3 million in fiscal year 2025, primarily due to the U.S.

dollar weakening less in the current fiscal year against the Euro, which resulted in lower foreign exchange losses on cash and cash equivalents denominated in U.S.

dollars held by our European subsidiaries.

Interest expense decreased $26.5 million in fiscal year 2024 primarily due to interest expense recognized in the prior year on our term loan that was terminated on July 25, 2023 and lower accretion on Lexington deferred purchase consideration.

dollar weakening less in the current fiscal year against the British Pound, which resulted in lower foreign exchange losses on cash and cash equivalents denominated in U.S.

dollars held by certain of our European subsidiaries.

Interest expense decreased $2.3 million in fiscal year 2025 primarily due to lower accretion on Lexington deferred purchase consideration, partially offset by an increase in interest recognized on tax reserves.

Investment and other income (loss) of consolidated investment products, net consists of investment gains (losses) on investments held by consolidated investment products (“CIPs”) and dividend and interest income.

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Significant portions of the investment and other income of consolidated investment products, net and expenses of consolidated investment products are offset in noncontrolling interests in our consolidated statements of income.

Investments held by CIPs generated investment and other income of $149.9 million in fiscal year 2024, as compared to investment and other income of $115.8 million in fiscal year 2023, largely related to net investment gains (losses) on holdings of various equity, fixed income funds, and in the current year period, multi-asset funds.

Investments held by CIPs generated investment and other income of $108.4 million in fiscal year 2025, as compared to investment and other income of $149.9 million in fiscal year 2024.

The current year income was largely related to various global alternative, fixed income and multi-asset funds, partially offset by losses on global equity funds, while the prior year income was largely related to various equity, fixed income and multi-asset funds.

Expenses of consolidated investment products increased $11.0 million in fiscal year 2025, due to activity of the funds.

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The market conditions that impact our AUM similarly affect the investment income earned or losses incurred on our investments in sponsored funds.

Our cash, cash equivalents and investments portfolio by asset class and accounting classification at September 30, 2024, excluding third-party assets of CIPs, was as follows:

Accounting Classification 1

(in millions) Cash and Cash Equivalents Investments,

Fair Value Equity Method Investments Other

Investments Direct Investments

Cash and Cash Equivalents $ 3,309.5 $ — $ — $ — $ — $ 3,309.5

Alternative — 223.8 944.2 90.9 529.3 1,788.2

Equity — 410.2 197.0 153.3 163.7 924.2

Fixed Income — 153.9 74.5 36.5 235.2 500.1

Multi-Asset — 50.1 4.0 — 152.6 206.7

Total investments — 838.0 1,219.7 280.7 1,080.8 3,419.2

Total Cash and Cash Equivalents and Investments 2, 3

$ 3,309.5 $ 838.0 $ 1,219.7 $ 280.7 $ 1,080.8 $ 6,728.7

______________

1 See Note 1 – Significant Accounting Policies and Note 6 – Investments in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report for information on investment accounting classifications.

2 Total cash and cash equivalents and investments includes $4,261.5 million maintained for operational activities, including investments in sponsored funds and other products, and $453.3 million necessary to comply with regulatory requirements.

3 Total cash and cash equivalents and investments includes approximately $355 million attributable to employee-owned and other third-party investments made through partnerships which are offset in nonredeemable noncontrolling interests, approximately $289 million of investments that are subject to long-term repurchase agreements and other net financing arrangements, and approximately $441 million of cash and investments related to deferred compensation plans.

TAXES ON INCOME

Our effective income tax rate for fiscal year 2025 was 30.2% as compared to 26.2% in fiscal year 2024.

The rate increase in fiscal year 2024 was primarily due to the net impact of valuation allowances for capital losses, an increase in foreign earnings, and benefits in the prior year related to the release of tax reserves, partially offset by activity of CIPs for which there is no related tax impact.

The rate increase in fiscal year 2025 was primarily due to a reduction in foreign rate benefits and activity of CIPs for which there is no related tax impact, partially offset by the release of valuation allowances for foreign tax credits and higher federal and state provision to return adjustments in the current year.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law.

While we are in the process of evaluating the impact of the Act on our consolidated financial statements, we do not expect there to be any material impact thereon.

Our effective income tax rate reflects the relative contributions of earnings in the jurisdictions in which we operate, which have varying tax rates.

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◦ Impairment of intangible assets and goodwill, if any.

• Special termination benefits related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

• Special termination benefits and other expenses related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

• Impact on compensation and benefits expense from gains and losses on investments related to deferred compensation plans, which is offset in investment and other income (losses), net.

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◦ Impairment of intangible assets and goodwill, if any.

◦ Write off of noncontrolling interests related to the wind down of an acquired business.

◦ Interest expense for amortization of Legg Mason debt premium from acquisition-date fair value adjustment.

• Special termination benefits related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

◦ Interest expense for amortization of debt premium from acquisition-date fair value adjustment.

• Special termination benefits and other expenses related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

• Net gains or losses on investments related to deferred compensation plans which are not offset by compensation and benefits expense.

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162.4 263.6 164.9

Compensation and benefits expense from gains (losses) on deferred compensation, net 50.5 20.3 (36.7)

Compensation and benefits expense from gains on deferred compensation, net 23.4 50.5 20.3

Other acquisition-related expenses 41.4 97.4 50.2

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Impairment of intangible assets

226.6 389.2 —

Special termination benefits

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Impairment of intangible assets

226.6 389.2 —

Special termination benefits

69.7 75.8 63.2

Net losses (gains) on deferred compensation plan investments not offset by compensation and benefits expense (13.9) (15.5) 9.0

Unrealized investment losses (gains) (51.5) (2.6) 191.9

Net gains on deferred compensation plan investments not offset by compensation and benefits expense (3.3) (13.9) (15.5)

Unrealized investment gains (57.7) (51.5) (2.6)

Interest expense for amortization of debt premium

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Financing cash flows 452.4 1,415.6 2,106.7

Net cash provided by operating activities decreased in fiscal year 2024 primarily due to lower net income adjusted for non-cash items, partially offset by lower net purchases of investments by CIPs.

Net cash used in investing activities decreased as compared to the prior year primarily due to lower cash paid for acquisitions in the current year, lower net purchases of investments by collateralized loan obligations (“CLOs”) and net liquidations of our investments as compared to net purchases in the prior year, partially offset by higher payments of deferred consideration liabilities in the current year.

Net cash provided by financing activities decreased as compared to the prior year primarily due to net payments on repurchase agreements in the current year as compared to net proceeds in the prior year and lower net subscriptions in CIPs by noncontrolling interest.

Net cash provided by operating activities increased in fiscal year 2025 primarily due to higher net income adjusted for non-cash items and an increase in accounts payable and accrued expenses, partially offset by higher payments for incentive compensation and income taxes.

Net cash used in investing activities decreased as compared to the prior year primarily due to lower net purchases of investments by collateralized loan obligations (“CLOs”) and lower payments of deferred consideration liabilities in the current year offset by net purchases of our investments as compared to net liquidations in the prior year and net impact of an acquisition in the prior year.

Net cash provided by financing activities decreased as compared to the prior year primarily due to lower net proceeds on debt of CIPs and net repayment of debt, partially offset by net proceeds from repurchase agreements.

The assets and liabilities of CIPs attributable to third-party investors do not impact our liquidity and capital resources.

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The notes have fixed interest rates from 4.750% to 5.625% with interest paid semi-annually and have an aggregate carrying value, inclusive of unamortized premium, of $1,173.5 million.

On July 15, 2024, we repaid all of the outstanding $250.0 million 3.950% senior notes due July 2024 issued by Legg Mason at the principal amount plus accrued and unpaid interest of $4.9 million.

The $400.0 million 2.850% senior notes due March 2025 were repaid on March 31, 2025 using existing cash and borrowings from our revolving credit facility.

The senior notes contain an optional redemption feature that allows us to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price.

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In addition, the indentures include requirements that must be met if we consolidate or merge with, or sell all of our assets to, another entity.

We maintain an $800.0 million 5-year revolving credit facility that 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.

This facility remains undrawn as of the time of this filing.

On April 30, 2025, we 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 our prior credit facility were transferred to the Amended and Restated Credit Agreement.

Interest is payable semi-annually on any outstanding amounts and is based on the Term Secured Overnight Financing Rate (“Term SOFR”) plus a credit spread of 87.5 basis points and a Term SOFR adjustment of 10 basis points.

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.

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.

We were in compliance with all debt covenants at September 30, 2025.

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During fiscal years 2025 and 2024, we repurchased 10.7 million and 12.0 million shares of our common stock at a cost of $240.3 million and $274.4 million.

At September 30, 2024, 29.9 million shares remained available for repurchase under the authorization approved by our Board of Directors.

At September 30, 2025, 19.2 million shares remained available for repurchase under this authorization.

On October 1, 2025, we completed the acquisition of Apera Asset Management for cash consideration of €65.2 million net of closing adjustments funded from existing cash.

In addition, we will pay up to €125.0 million in cash through the fifth anniversary of the closing date based on achieving revenue targets.

We will pay up to $375.0 million related to our acquisition of Putnam between the third and seventh anniversaries of the closing date related to revenue growth targets from the strategic partnership with Great-West Lifeco, Inc.

which will be recognized in operating income.

The final deferred cash payment related to our acquisition of Lexington of $100.0 million was paid on April 1, 2025 using existing cash and borrowings from our revolving credit facility.

While we have no legal or contractual obligation to do so, we routinely make cash investments in the course of launching sponsored funds.

At September 30, 2024, we had $227.0 million of committed capital contributions which relate to commitments to invest in sponsored funds and other investment products and entities, including CIPs.

These unfunded commitments are not recorded in the consolidated balance sheet.

On January 1, 2024, we acquired Putnam from Great-West for 31.6 million shares of our common stock, cash consideration paid at closing of $221.7 million for investments and other purchase-related amounts, and deferred cash consideration of $100.0 million paid on July 1, 2024.

The cash consideration paid at closing and the deferred consideration payment was funded from existing cash.

In addition, the Company will pay up to $375.0 million between the third and seventh anniversaries of the closing date related to revenue growth targets from the strategic partnership with Great-West and its affiliates which will be recognized in operating income.

On November 1, 2023, we paid $60.8 million in deferred cash consideration related to our acquisition of Alcentra from existing cash.

On April 1, 2024, we paid $400.0 million in deferred cash consideration related to our acquisition of Lexington from existing cash.

We expect to make an additional deferred cash payment related to our acquisition of Lexington of $100.0 million during the third quarter of fiscal year 2025 from existing cash and sources of liquidity.

The funds that we manage have their own resources available for purposes of providing liquidity to meet shareholder redemptions, including securities that can be sold or provided to investors as in-kind redemptions, and lines of credit.

Increased liquidity risks and redemptions have required, and may continue to require, increased cash in the form of loans or other lines of credit to help settle redemptions and for other related purposes.

While we have no legal or contractual obligation to do so, we have in certain instances voluntarily elected to provide the funds with direct or indirect financial support based on our business objectives.

We did not provide financial or other support to our sponsored funds during fiscal year 2024 or 2023.

CRITICAL ACCOUNTING POLICIES

We have in certain instances voluntarily elected to provide the funds with direct or indirect financial support based on our business objectives.

We did not provide significant financial or other support to our sponsored funds during fiscal year 2025 or 2024.

At September 30, 2025, we had $520.8 million of committed capital contributions which relate to commitments to invest in sponsored funds and other investment products and entities, including CIPs.

These unfunded commitments are not recorded in the consolidated balance sheet.

Our cash, cash equivalents and investments portfolio by asset class and accounting classification at September 30, 2025, excluding third-party assets of CIPs, was as follows:

Accounting Classification 1

(in millions) Cash and Cash Equivalents Investments,

Fair Value Equity Method Investments Other

Investments Direct Investments

Cash and Cash Equivalents $ 3,088.1 $ — $ — $ — $ — $ 3,088.1

Alternative — 538.9 711.1 97.3 681.3 2,028.6

Equity — 358.0 150.7 167.6 272.7 949.0

Fixed Income — 229.0 20.8 35.7 137.7 423.2

Multi-Asset — 53.6 11.3 — 128.9 193.8

Total investments — 1,179.5 893.9 300.6 1,220.6 3,594.6

Total Cash and Cash Equivalents and Investments 2, 3

$ 3,088.1 $ 1,179.5 $ 893.9 $ 300.6 $ 1,220.6 $ 6,682.7

______________

1 See Note 1 – Significant Accounting Policies and Note 5 – Investments in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report for information on investment accounting classifications.

2 Total cash and cash equivalents and investments includes $4,591.8 million maintained for operational activities, including investments in sponsored funds and other products and $458.5 million necessary to comply with regulatory requirements.

3 Total cash and cash equivalents and investments includes approximately $350 million attributable to employee-owned and other third-party investments made through partnerships which are offset in noncontrolling interests, approximately $394 million of investments that are subject to long-term repurchase agreements and other net financing arrangements, and approximately $455 million of cash and investments related to deferred compensation plans.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our consolidated financial statements and accompanying notes 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.

17 unchanged sentences

There is judgment involved in assessing whether we have the power to direct the activities that most significantly impact VIEs’ economic performance and the obligation to absorb losses of or right to receive benefits from VIEs that could potentially be significant to the VIEs.

As of September 30, 2024, we were the primary beneficiary of 68 investment product VIEs.

Business Combinations

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The most relevant of these assumptions to the determination of estimated fair value are the AUM growth rate, pre-tax profit margin and the discount rate.

We performed a qualitative annual impairment test for goodwill and all indefinite-lived intangible assets as of August 1, 2024 and concluded it was more likely than not that the fair values of the reporting unit and the indefinite-lived intangible assets exceed their carrying values.

We subsequently monitored market conditions and their potential impact on the assumptions used in the annual assessment to determine whether circumstances had changed that would more likely than not reduce the fair value of the reporting unit below its carrying value, or indicate that the other indefinite-lived intangible assets might be impaired.

We considered, among other things, changes in our AUM and weighted-average cost of capital by assessing whether these changes would impact the reasonableness of our impairment assessment as of August 1, 2024.

We also monitored fluctuations of our common stock per share price to evaluate our market capitalization relative to the reporting unit as a whole.

On August 21, 2024, the Company and WAM announced developments in ongoing investigations into certain past trading activity at WAM by the SEC and U.S.

Department of Justice, after which we experienced accelerated net outflows from certain WAM managed mutual funds.

Following these developments and as part of our ongoing year-end review of intangible assets, we determined it no longer was more likely than not that the fair value exceeded the carrying value of indefinite-lived intangible asset related to certain mutual fund contracts managed by WAM.

On September 30, 2024, we performed a quantitative impairment test for this intangible asset and recognized a $389.2 million impairment primarily due to decreased AUM resulting from current and projected net client outflows and lower discounted future cash flows generated from these management contracts.

The most relevant assumptions used in the test are the AUM growth rates and the discount rate.

The AUM growth rates used in the analysis ranged from (19%) to 4% over the forecast period and the discount rate used was 13.0%.

During fiscal year 2025, we identified indicators that the fair value of certain indefinite-lived intangible assets were below their carrying value related to acquired mutual fund investment management contracts triggered by decreased AUM in related products and recognized an impairment of $24.4 million.

We performed our annual impairment tests for goodwill and indefinite-lived intangible assets as of August 1, 2025.

We performed a qualitative assessment of the valuation of goodwill and the majority of our indefinite-lived intangible assets in which we concluded it was more likely than not that the fair values of the reporting unit and the specific indefinite-lived intangible assets exceed their carrying values.

We performed a quantitative test for the indefinite-lived intangible asset related to certain contracts managed by Western Asset and recognized a $200.0 million impairment, 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 most relevant assumptions used in the test were the AUM growth rates and the pre-tax profit margins associated with these management contracts.

The AUM growth rates used in the analysis ranged from 2.5% to 3.1% over the forecasted period and pre-tax profit margins were between 21.3% and 34.0%.

The impairment does not impact our liquidity or capital resources.

We performed a sensitivity analysis over the critical assumptions used in the impairment test.

An increase or decrease in the AUM growth rate of 100 basis points would result in a change in the impairment charge of approximately $(40) million or $50 million.

An increase or a decrease of 50 basis points in the discount rate would result in a change of approximately $40 million or $(30) million in the impairment amount.

Subsequent to August 1, 2024, there were no impairments of goodwill or indefinite-lived assets, other than the identified impairment above, as no events occurred or circumstances changed that would indicate these assets might be impaired.

A decrease in the AUM growth rate of 50 basis points would result in an increase in the impairment charge of approximately $21 million.

A decrease in the terminal pre-tax profit margin to 30% would increase the impairment charge by approximately $34 million.

We also monitored fluctuations of our common stock per share price to evaluate our market capitalization relative to the reporting unit as a whole.

Subsequent to August 1, 2025, there were no impairments of goodwill or indefinite-lived assets as no events occurred or circumstances changed that would indicate these assets were more likely than not impaired.

We test definite-lived intangible assets for impairment quarterly.

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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.

Due to accelerated net outflows in certain WAM managed accounts, the Company revised the remaining useful life of the related definite-lived intangible asset, resulting in a cumulative weighted-average remaining useful life of 5.8 years for all definite-lived intangible assets as of September 30, 2024.

There were no impairments of definite-lived intangible assets during fiscal year 2024.

Due to accelerated net outflows in certain Brandywine, Martin Currie, and WAM managed accounts, the Company revised the remaining useful life of the related definite-lived intangible asset, resulting in a cumulative weighted-average remaining useful life of 8.6 years for all definite-lived intangible assets as of September 30, 2025.

During fiscal year 2025, the Company also reclassified certain indefinite-lived intangible assets to definite lived intangible assets and shortened the useful lives of certain definite-lived intangible assets related to trade names, primarily due to the planned retirement of the related brand names and ongoing integration initiatives.

The affected assets were evaluated for impairment immediately prior to reclassification and are being amortized prospectively over their revised estimated remaining useful lives.

There were no significant impairments of definite-lived intangible assets during fiscal year 2025.

While we believe that the assumptions used to estimate fair value in our impairment tests are reasonable and appropriate, future changes in the assumptions or occurrence of future events could result in recognition of additional impairment.

6 unchanged sentences

As of September 30, 2025, Level 3 assets represented 4% of total assets measured at fair value, substantially all of which related to CIPs ’ investments in equity and debt securities.

There were insignificant transfers into and out of Level 3 during fiscal year 2024.

There were insignificant transfers into and $39.3 million transfers out of Level 3 during fiscal year 2025.

The following are descriptions of the significant assets measured at fair value and their fair value methodologies.

40 unchanged sentences

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 income tax asset, we consider 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.

In assessing whether a valuation allowance should be established against a deferred tax asset, we consider 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, we utilize 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.

12 unchanged sentences

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 5. Market for Registrant’s Common Equity