What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-11-10 compared with 2024-11-12 · 153 added, 246 removed, 1102 unchanged (27% 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 January 1, 2024, Franklin Resources, Inc.

completed the acquisition of Putnam Investments (“Putnam”).

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 Putnam.

Putnam represents approximately 8% of the Company’s consolidated total operating revenues for the fiscal year ended September 30, 2024.

Putnam assets, excluding associated goodwill and intangible assets, represent approximately 4% of the Company’s consolidated total assets, as of September 30, 2024.

The recognition of goodwill and intangible assets 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, 2024.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2025, based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated Framework (2013).

23 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 Putnam Investments from its assessment of internal control over financial reporting as of September 30, 2024 because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded Putnam Investments from our audit of internal control over financial reporting.

Putnam Investments total operating revenues and total assets excluded from management’s assessment and our audit of internal control over financial reporting represent 8 percent and 4 percent, respectively, of the related consolidated financial statement amounts as of and for the year ended September 2024.

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.

8 unchanged sentences

In assessing whether a valuation allowance should be established against a deferred income tax asset, management considers all positive and negative evidence, which includes timing of expiration, projected sources of taxable income, limitations on utilization under the statute, and effectiveness of prudent and feasible tax planning strategies.

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

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

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the realizability of deferred tax assets, including controls over the completeness and accuracy of data relevant to the analysis, determination of projected sources of taxable income and expected utilization of deferred tax assets.

These procedures also included, among others (i) evaluating management’s assessment of the realizability of deferred tax assets and the need for a valuation allowance, (ii) evaluating the reasonableness of management’s significant assumptions related to timing of expiration, projected sources of taxable income, limitations on utilization under the statute and effectiveness of prudent and feasible tax planning strategies, (iii) evaluating the prudence and feasibility of the implementation of available tax planning strategies, and (iv) testing the completeness and accuracy of the underlying data used in management’s assessment of the realizability of deferred tax assets.

Valuation of the Investment Management Contracts Classified as Indefinite-Lived Intangible Assets in the Putnam Acquisition

As described in Notes 1 and 3 to the consolidated financial statements, on January 1, 2024, the Company acquired Putnam Investments.

The estimated fair value amounts recognized for the indefinite-lived intangible assets acquired amounted to $557.2 million.

Intangible assets acquired in business combinations consist primarily of investment management contracts and trade names.

Fair value of the acquired management contracts are based on the net present value (NPV) of estimated future cash flows attributable to the contracts, which includes significant assumptions about the assets under management (AUM) growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate.

The principal considerations for our determination that performing procedures relating to the valuation of the investment management contracts classified as indefinite-lived intangible assets in the Putnam acquisition is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible assets acquired;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the AUM growth rate and discount rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of the investment management contracts classified as indefinite-lived intangible assets in the Putnam acquisition, including controls over development of the AUM growth rate and discount rate assumptions.

These procedures also included, among others, (i) reading the purchase agreement and evaluating management’s identification of the indefinite-lived intangible assets, (ii) testing management’s process for identifying and developing the fair value estimate of the indefinite-lived intangible assets acquired;

(iii) evaluating the appropriateness of the NPV method, (iv) testing the completeness, accuracy, relevance and reliability of underlying data used in the NPV method, (v) evaluating the reasonableness of management’s significant assumption related to the AUM growth rate, which involved considering industry knowledge and data, current and past performance of the contracts, and consistency with evidence obtained in other areas of the audit, and;

(vi) involving professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the discount rate assumption.

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

As described in Notes 1 and 9 to the consolidated financial statements, the carrying value of the indefinite-lived intangible related to the mutual fund contracts managed by Western Asset Management (WAM) was $650.0 million as of September 30, 2024, net of an impairment of $ 389.2 million recognized during 2024.

These indefinite-lived intangible assets are tested for impairment annually and when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible asset below its carrying value.

The fair value of the indefinite-lived intangible asset was based on the NPV of estimated future cash flows attributable to the contracts, which include significant assumptions about the AUM growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate.

The principal considerations for our determination that performing procedures relating to the valuation of the indefinite-lived intangible asset associated with the mutual fund contracts managed by WAM is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the mutual fund contracts managed by WAM;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the AUM growth rate and discount rate;

These procedures also included, among others, (i) evaluating management’s assessment of the realizability of deferred tax assets and the need for a valuation allowance, (ii) evaluating the positive and negative evidence to support the prudence and feasibility of the implementation of available tax planning strategies related to timing of expiration, projected sources of taxable income, limitations on utilization under the statute and effectiveness of prudent and feasible tax planning strategies, and (iii) testing the completeness and accuracy of the underlying data used in management’s assessment of the realizability of deferred tax assets.

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

As described in Notes 1 and 8 to the consolidated financial statements, the carrying value of the indefinite-lived intangible asset associated with the management contracts managed by Western Asset Management (WAM) was $ 450.0 million, net of an impairment of $ 200.0 million recognized during 2025.

Indefinite-lived intangible assets are tested for impairment annually and when an event occurs or circumstances change that more likely than not reduce the fair value of the indefinite-lived intangible asset below its carrying value.

The fair value of the indefinite-lived intangible asset was based on the net present value (NPV) of estimated future cash flows attributable to the management contracts, which include significant assumptions about the assets under management (AUM) growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate.

The principal considerations for our determination that performing procedures relating to the valuation of the indefinite-lived intangible asset associated with the management contracts managed by WAM is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible asset associated with the management contracts managed by WAM;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the AUM growth rate, pre-tax profit margin, and discount rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of the indefinite-lived intangible asset associated with the mutual fund contracts managed by WAM, including controls over development of the AUM growth rate and discount rate assumptions.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the mutual fund contracts managed by WAM, (ii) evaluating the appropriateness of the NPV method, (iii) testing the completeness, accuracy, relevance and reliability of underlying data used in the NPV method, and (iv) evaluating the reasonableness of management’s significant assumption related to the AUM growth rate by considering industry knowledge and data, current and past performance of the mutual fund contracts managed by WAM, and consistency with evidence obtained in other areas of the audit;

and (v) involving professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the discount rate assumption.

These procedures included testing the effectiveness of controls relating to the valuation of the indefinite-lived intangible asset associated with the management contracts managed by WAM, including controls over development of the AUM growth rate, pre-tax profit margin, and discount rate assumptions.

These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the indefinite-lived intangible asset associated with the management contracts managed by WAM, (ii) testing the completeness, accuracy, relevance and reliability of certain underlying data used in the NPV method, and (iii) evaluating the reasonableness of management’s significant assumption related to the AUM growth rate and pre-tax profit margin by considering industry knowledge and data, current and past performance of the management contracts managed by WAM, and consistency with evidence obtained in other areas of the audit;

and (iv) involving professionals with specialized skill and knowledge to assist in evaluating the appropriateness of the NPV method and the reasonableness of the discount rate assumption.

/s/ PricewaterhouseCoopers LLP

19 unchanged sentences

Impairment of intangible assets

226.6 389.2 —

General, administrative and other 774.5 703.3 565.0

4 unchanged sentences

Interest expense ( 94.9 ) ( 97.2 ) ( 123.7 )

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

Investment and other income of consolidated investment products, net 108.4 149.9 115.8

Expenses of consolidated investment products ( 43.6 ) ( 32.6 ) ( 18.7 )

Other income (expenses), net 415.6 235.7 ( 44.5 )

Other income, net 182.7 415.6 235.7

Income before taxes 786.8 823.2 1,338.0

85 unchanged sentences

Net income 882.8 882.8 7.4 890.2

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 )

Acquisitions 149.9 149.9

Adjustment to fair value of redeemable noncontrolling interests 109.4 109.4 109.4

10 unchanged sentences

61.1 61.1 61.1

31.6 3.2 936.9 940.1 25.8 965.9

Net subscriptions and other — — 108.7 108.7

3 unchanged sentences

Net income 524.9 524.9 76.7 601.6

Other comprehensive income 89.8 89.8 89.8

Other comprehensive loss ( 27.6 ) ( 27.6 ) ( 27.6 )

Dividends declared on common stock ($ 1.28 per share)

5 unchanged sentences

Stock-based compensation

61.1 61.1 61.1

Acquisition 31.6 3.2 936.9 940.1 25.8 965.9

Net subscriptions and other — — 99.4 99.4

Net deconsolidation of investment products ( 45.7 ) ( 45.7 )

Net consolidation of investment products 18.0 18.0

Adjustment to fair value of redeemable noncontrolling interests ( 248.1 ) ( 248.1 ) ( 248.1 )

12 unchanged sentences

Impairment of intangible asset

Net (gains) losses on investments ( 57.6 ) ( 39.5 ) 75.4

226.6 389.2 —

Net losses (gains) on investments 37.6 ( 57.6 ) ( 39.5 )

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

Net losses on investments of consolidated investment products 24.9 120.4 95.1

Net (gains) losses on investments of consolidated investment products ( 4.1 ) 24.9 120.4

Net purchase of investments by consolidated investment products ( 369.4 ) ( 520.2 ) ( 829.4 )

3 unchanged sentences

Increase in receivables and other assets ( 128.7 ) ( 111.8 ) ( 63.2 )

Decrease (increase) in investments, net 9.4 2.8 ( 3.7 )

Increase in accrued compensation and benefits 86.5 128.9 281.7

Decrease in investments, net 19.0 9.4 2.8

Increase (decrease) in accrued compensation and benefits ( 32.9 ) 86.5 128.9

Decrease in income taxes payable ( 181.5 ) ( 93.4 ) ( 1.1 )

15 unchanged sentences

Payments of deferred consideration liability ( 90.5 ) ( 534.9 ) ( 241.8 )

Net (deconsolidation) consolidation of investment products ( 106.6 ) ( 49.8 ) 38.8

Net deconsolidation of investment products ( 216.4 ) ( 106.6 ) ( 49.8 )

Net cash used in investing activities ( 2,342.7 ) ( 2,423.7 ) ( 3,610.3 )

13 unchanged sentences

Payments on repurchase agreement

( 61.8 ) ( 81.1 ) —

Proceeds from debt

Payments on debt

( 700.0 ) ( 250.0 ) ( 300.0 )

Proceeds from loan

Proceeds from debt of consolidated investment products

21 unchanged sentences

753.2 694.2 379.2

Non-cash purchase of investments

See Notes to Consolidated Financial Statements.

8 unchanged sentences

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

During the quarter ended March 31, 2024, the Company identified that it did not eliminate the investment income from certain consolidated limited partnerships for the fiscal year ended September 30, 2023 (“fiscal year 2023”) resulting in offsetting adjustments to investment and other income, net and net income attributable to nonredeemable noncontrolling interest.

The Company is not entitled to the economic returns associated with the underlying investments held by these limited partnerships.

There is no impact on operating income, net income attributable to Franklin Resources, Inc., earnings per share, total assets, total liabilities, retained earnings or total shareholders’ equity.

There is no impact on the financial results attributable to the Company’s shareholders.

The Company has determined this did not result in a material misstatement to its previously issued consolidated financial statements.

For comparability, the Company has revised the comparative prior period amounts included in the consolidated statements of income, consolidated statements of stockholders’ equity, consolidated statements of cash flows, and related footnote disclosures.

The impact on the consolidated statements of income for the fiscal year ended September 30, 2023 is as follows:

(in millions)

Operating Income $ 1,102.3 $ — $ 1,102.3

Other income, net

Investment and other income, net

340.0 ( 77.7 ) 262.3

Other income, net

313.4 ( 77.7 ) 235.7

Income before taxes

1,415.7 ( 77.7 ) 1,338.0

1,103.4 ( 77.7 ) 1,025.7

net income (loss) attributable to nonredeemable noncontrolling interest

85.1 ( 77.7 ) 7.4

Net Income Attributable to Franklin Resources, Inc.

882.8 — 882.8

The impact on the consolidated statement of cash flows for the fiscal year ended September 30, 2023 is as follows:

(in millions)

Net cash provided by (used in) operating activities

$ 1,138.7 $ ( 49.5 ) $ 1,089.2

Net cash used in investing activities

( 3,582.1 ) ( 28.2 ) ( 3,610.3 )

Net cash provided by financing activities 2,029.0 77.7 2,106.7

Decrease in cash and cash equivalents

( 380.1 ) — ( 380.1 )

Consolidation.

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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.

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 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.

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A quantitative impairment test is performed if the results of the qualitative assessment indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value or an indefinite-lived intangible asset is impaired, or if a qualitative assessment is not performed.

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

average effective fee rate and effective tax rate.

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

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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.

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Property and Equipment, net are recorded at cost and depreciated using the straight-line method over their estimated useful lives which range from three to 35 years.

Expenditures for repairs and maintenance are charged to expense when

Expenditures for repairs and maintenance are charged to expense when incurred.

Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the lease term, whichever is shorter.

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Revenues are recognized when the Company’s obligations related to the services are satisfied and it is probable that a significant reversal of the revenue amount would not occur in future periods.

The obligations are satisfied over time as the services are rendered, except for the sales and distribution

obligations for the sale of shares of sponsored funds which are satisfied on trade date.

The obligations are satisfied over time as the services are rendered, except for the sales and distribution obligations for the sale of shares of sponsored funds which are satisfied on trade date.

Multiple services included in customer contracts are accounted for separately when the obligations are determined to be distinct.

16 unchanged sentences

Forfeitures are accounted for as they occur.

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

The fair value of cash-settled phantom stock

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

Postretirement Benefits .

4 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, the Company considers all positive and negative evidence, which includes timing of expiration, projected sources of taxable income, limitations on utilization under the statute and the effectiveness of prudent and feasible tax planning strategies among other factors.

In assessing whether a valuation allowance should be established against a deferred tax asset, the Company considers all positive and negative evidence, which includes timing of expiration, projected sources of taxable income, limitations on utilization under the statute and the effectiveness of prudent and feasible tax planning strategies among other factors.

For each tax position taken or expected to be taken in a tax return, the Company utilizes significant judgment related to the range of possible favorable or unfavorable outcomes to determine whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation.

A tax position that meets the more likely than not recognition threshold is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement.

Interest on tax matters is recognized in interest expense and penalties in other operating expenses.

Interest on tax matters is recognized in interest expense.

Penalties are recognized in other operating expenses.

The Company operates in numerous countries, states and other taxing jurisdictions.

10 unchanged sentences

Note 2 – New Accounting Guidance

Accounting Guidance Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued an amendment to the existing segment reporting guidance.

Recently Adopted Accounting Guidance

On October 1, 2024, the Company adopted the amendment issued by the Financial Accounting Standards Board (“FASB”) for segment reporting.

The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance.

The amendment is effective for the Company on October 1, 2024, and is retrospectively applicable to all prior periods presented in its consolidated financial statements.

The Company does not expect the additional disclosure requirements will have a material impact on its consolidated financial statements.

The adoption of this amendment resulted in additional disclosures.

See Note 18 – Segment and Geographic Information.

Accounting Guidance Not Yet Adopted

In December 2023, the FASB issued an amendment to the existing income taxes guidance.

2 unchanged sentences

The amendment allows for either a prospective or retrospective approach on adoption and is effective for the Company on October 1, 2025.

The Company is currently evaluating the impact that the adoption will have on its consolidated financial statements and has not yet determined its transition approach.

The Company will elect the prospective approach and include the relevant disclosures in its Annual Report on Form 10-K for the fiscal year ending September 30, 2026.

In December 2023, the FASB issued an amendment to the existing intangible assets guidance.

The amendment requires eligible crypto assets to be measured at fair value, with changes recognized in net income, along with expanded disclosures.

The amendment is effective for the Company on October 1, 2025, and requires a modified-retrospective transition approach.

The Company will recognize a cumulative effective adjustment of approximately $ 26 million through retained earnings at adoption.

In November 2024, the FASB issued new guidance requiring disclosures of additional information and disaggregation of certain expenses included in the income statement.

1 unchanged sentence

The Company is currently evaluating the impact that the adoption will have on its financial statements and has not yet determined its transition approach.

Note 3 – Acquisition

Putnam Investments

On January 1, 2024, the Company acquired Putnam Investments (“Putnam”) from Great-West Lifeco Inc.

(“Great-West”) for 31.6 million 1 shares of its 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 cash consideration were funded from existing cash.

See below for a summary of the total purchase consideration transferred at closing:

(in millions) Total

Equity consideration 1, 2

Cash consideration 221.7

Deferred cash consideration 100.0

Other adjustments 3

Total Purchase Consideration $ 1,234.4

1 Excludes shares granted under a deferred compensation program.

2 Market price on closing date of $ 29.79 .

3 Primarily relates to payments treated as future compensation expense.

Great-West became a long-term shareholder of the Company with an approximate 6.0 % stake in the common stock of the Company as of the acquisition date.

Shares representing 4.9 % of the Company’s outstanding Common Stock at closing are subject to a five -year lock-up.

The remaining shares were subject to a 180-day lock-up following the date of closing, which has expired.

The acquisition of Putnam accelerates the Company’s growth in the retirement sector by increasing the amount of the Company’s defined contribution AUM.

Additionally, the acquisition expands the Company’s insurance assets, further strengthening its presence in these key market segments to better serve clients.

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.

The issuance of common stock consideration represents a non-cash financing activity related to the statement of cash flows.

(in millions) Initial Estimated Fair Value

Revised Estimated Fair Value

as of January 1, 2024

Cash and cash equivalents

$ 101.1 $ — $ 101.1

Receivables 118.9 — 118.9

Investments 111.2 ( 4.3 ) 106.9

Assets of consolidated investment products

Cash and cash equivalents 281.4 — 281.4

Investments, at fair value 849.5 — 849.5

Property and equipment

87.1 ( 5.7 ) 81.4

189.8 4.7 194.5

Indefinite-lived intangible assets

542.5 14.7 557.2

Definite-lived intangible asset

52.9 4.8 57.7

Operating lease right-of-use assets

109.2 — 109.2

Other assets 20.4 — 20.4

Compensation and benefits

( 57.8 ) — ( 57.8 )

Accounts payable and accrued expenses

( 40.9 ) ( 11.4 ) ( 52.3 )

Liabilities of consolidated investment products

Accounts payable and accrued expenses ( 259.6 ) — ( 259.6 )

Debt ( 706.8 ) — ( 706.8 )

Operating lease liabilities

( 109.2 ) — ( 109.2 )

Other liabilities

( 12.1 ) — ( 12.1 )

Redeemable noncontrolling interests

( 20.2 ) — ( 20.2 )

Nonredeemable noncontrolling interests

( 25.8 ) — ( 25.8 )

Total Identifiable Net Assets $ 1,231.6 $ 2.8 $ 1,234.4

The adjustments to the initial estimated fair values are primarily a result of new information obtained about 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 expected to be deductible for tax purposes.

The definite-lived intangible asset relates to a trade name, which is amortized over its estimated useful life of 10.0 years.

Amortization expense related to the trade name was $ 4.3 million for the fiscal year ended September 30, 2024 (“fiscal year 2024”).

Transaction costs incurred in connection with the acquisition were $ 19.3 million for fiscal year 2024.

These costs are primarily comprised of professional fees, recorded in general, administrative and other expenses.

The Company also incurred $ 152.9 million of acquisition-related compensation and benefits expense during the period, primarily related to the acceleration of expense for historical Putnam compensation arrangements, retention bonuses and termination benefits.

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.

Operating revenues of the acquired business from January 1, 2024 through September 30, 2024 were approximately $ 640 million.

Net income is not available to be separately reported due to the ongoing integration of the combined businesses.

In September 2025, the FASB issued an amendment to the existing internal-use software guidance.

The amendment eliminates the project stage model and clarifies that capitalization of internal-use software costs commences when management has authorized and committed funding for the project and it is probable that software will be completed and used for its intended function.

The amendment allows for varying transition approaches and is effective for the Company on October 1, 2028, with early adoption permitted.

The Company is currently evaluating the impact of adopting the guidance and has not yet determined its transition approach.

Note 3 – Earnings per Share

14 unchanged sentences

Diluted 0.91 0.85 1.72

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were insignificant for fiscal year 2024, fiscal year 2023 and the fiscal year ended September 30, 2022 (“fiscal year 2022”).

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

Note 4 – Revenues

42 unchanged sentences

$ 5,880.8 $ 1,132.2 $ 308.8 $ 257.1 $ 270.5 $ 7,849.4

Operating revenues are attributed to geographic areas based on the locations of the subsidiaries that provide the services, which may differ from the regions in which the related investment products are sold.

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

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

14 unchanged sentences

The Company has entered into repurchase agreements with a third-party financing company for certain investments held by the Company.

As of September 30, 2024, other liabilities includes repurchase agreements of $ 111.4 million with investments of $ 121.7 million in carrying value pledged as collateral.

As of September 30, 2025 and 2024, other liabilities includes repurchase agreements of $ 200.5 million and $ 111.4 million with investments of $ 206.4 million and $ 121.7 million in carrying value pledged as collateral.

The repurchase agreements have contractual maturity dates ranging between 2030 to 2039.

16 unchanged sentences

Total Liabilities Measured at Fair Value $ 193.7 $ — $ 20.4 $ — $ 214.1

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

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

70 unchanged sentences

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

The Company recognized an impairment of an indefinite-lived intangible asset of $ 389.2 million during fiscal year 2024 related to Western Asset Management Company (“WAM”) management contracts primarily due to accelerated net outflows from WAM managed funds.

The impairment reduced the carrying value of these assets to $ 650.0 million as of September 30, 2024.

The Company recognized insignificant impairments of indefinite-lived intangible assets during fiscal year 2024 and 2023 due to declines in market prices of crypto assets.

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

The impairment reduced the carrying value of this asset to $ 450.0 million.

The Company also recognized impairment charges of $ 24.4 million related to certain other indefinite-lived intangible assets related to management contracts during fiscal year 2025.

The Company recognized an impairment of $ 389.2 million of an indefinite-lived intangible asset related to WAM management contracts during fiscal year 2024.

During fiscal year 2025, the Company reclassified $ 223.9 million of certain indefinite-lived intangible assets related to management contracts to definite lived intangible assets, including $ 125.0 million related to WAM management contracts, and shortened the useful lives of certain trade name definite-lived intangible assets, primarily due to the planned retirement of the related brand names, lower expected future growth rates, and ongoing integration initiatives.

Prior to the reclassifications, the Company tested the indefinite-lived intangible assets for impairment and concluded that the carrying value of these assets was not less than the estimated fair value.

Definite-lived intangible assets were as follows:

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Total $ 1,541.5 $ ( 775.8 ) $ 765.7 $ 2,141.0 $ ( 1,190.4 ) $ 950.6

No impairment of definite-lived intangible assets was recognized during fiscal years 2024 and 2023.

The Company recognized an insignificant impairment of a definite-lived intangible asset during fiscal year 2025.

No impairment of definite-lived intangible assets was recognized during fiscal year 2024.

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

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$ 400 million 2.850 % senior notes due March 2025

$ 400.0 2.97 % $ 399.9 2.97 %

$ — N/A $ 400.0 2.97 %

$ 850 million 1.600 % senior notes due October 2030

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Debt of Legg Mason (a subsidiary of Franklin)

$ 250 million 3.950 % senior notes due July 2024

— N/A 254.7 1.53 %

$ 450 million 4.750 % senior notes due March 2026

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Total $ 2,362.0 $ 2,780.3

On July 15, 2024, the Company 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.

At September 30, 2024, the Company had $ 800.0 million revolving credit available under a 5-year credit facility scheduled to mature on July 25, 2028.

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

On March 31, 2025, the Company repaid all of the outstanding $ 400.0 million 2.850 % senior notes due March 2025 issued by Franklin Resources, Inc.

at the principal amount plus accrued and unpaid interest of $ 5.7 million.

On April 30, 2025, the Company entered into an Amended and Restated Revolving Credit Agreement (the “Amended and Restated Credit Agreement”) with a five-year term and $ 1.1 billion of aggregate available borrowings.

As of April 30, 2025, the $ 300.0 million of borrowings outstanding under the Company’s prior credit facility were transferred to the Amended and Restated Credit Agreement.

On September 5, 2025, the Company repaid all of the outstanding $ 300.0 million borrowings at the principal amount plus accrued interest of $ 5.5 million.

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

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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 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 Amended and Restated Credit Agreement contains a financial performance covenant requiring that the Company maintain a consolidated net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 3.25 to 1.00.

The Company was in compliance with all covenants at September 30, 2025.

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

The Company had 77 CIPs, including 22 CLOs, as of September 30, 2024 and 70 CIPs, including 20 CLOs, as of September 30, 2023.

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

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Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity $ 13,077.7 $ 12,351.8

The CIPs did not have a significant impact on net income attributable to the Company in fiscal years 2024, 2023 and 2022.

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

The Company has no right to the CIPs’ assets, other than its direct equity investments in them and investment management and other fees earned from them.

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

Investments for which fair value was estimated using reported NAV as a practical expedient consist of a redeemable U.S.

equity fund, a redeemable global hedge fund and nonredeemable private debt funds.

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

These investments were as follows:

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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 $ 9.9 million based on its ownership percentage in the CIPs, at September 30, 2024.

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

Changes in Level 3 assets were as follows:

(in millions) Equity and Debt

for the fiscal year ended September 30, 2024

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

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

(in millions)

as of September 30, 2025 2024

Balance at beginning of year $ 550.1 $ 584.9

Acquisition — 29.6

Losses included in investment and other income (losses) of consolidated investment products, net ( 80.4 )

Purchases 57.2

Sales ( 29.8 )

Net deconsolidations ( 12.5 )

Transfers into Level 3 1.1

Balance at End of Year

Change in unrealized gains (losses) included in net income relating to assets held at end of year $ ( 50.9 )

(in millions) Equity and Debt

Securities Real Estate Loans Total

for the fiscal year ended September 30, 2023

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

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

Gains (losses) included in investment and other income of consolidated investment products, net 50.5 ( 80.4 )

Purchases 60.9 57.2

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$ 601.0 $ 550.1

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

Change in unrealized gains (losses) included in net income relating to assets held at end of year $ 23.0 $ ( 50.9 )

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

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as of September 30, 2025 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average 1 )

Equity and debt securities $ 291.6 Market comparable companies Enterprise value/ Revenue multiple 1.2 – 22.8 ( 10.9 )

Equity and debt securities $ 302.0 Market pricing Private sale pricing $ 0.27 –$ 2,120.00 ($ 176.53 ) per share

Discount for lack of marketability 5.0 %– 75.0 % ( 23.9 %)

214.5 Market pricing Private sale pricing $ 0.01 –$ 1,000.00 ($ 73.04 ) per share

225.9 Market comparable companies Enterprise value/ Revenue multiple 1.4 – 21.0 ( 9.5 )

Discount for lack of marketability 6.0 %– 11.0 % ( 8.5 %)

54.4 Discounted cash flow Discount rate 6.5 %– 13.0 % ( 6.8 %)

18.7 Option pricing model Volatility 34.0 %– 60.9 % ( 38.2 %)

Discount for lack of marketability 9.1 %– 13.5 % ( 9.4 %)

(in millions)

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Equity and debt securities

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

Discount for lack of marketability 21.9 %

$ 291.6 Market comparable companies Enterprise value/ Revenue multiple 1.2 – 22.8 ( 10.9 )

Discount for lack of marketability 0.1 %– 10.4 % ( 8.1 %)

214.5 Market pricing Private sale pricing $ 0.01 –$ 1,000.00 ($ 73.04 ) per share

Discount for lack of marketability 9.8 %– 17.5 % ( 11.5 %)

44.0 Discounted cash flow Discount rate 6.8 %

__________________

1 Based on the relative fair value of the instruments.

If the relevant significant inputs used in the market-based valuations, other than discount for lack of marketability, were independently higher (lower) as of September 30, 2024, the resulting fair value of the assets would be higher (lower).

If the relevant significant inputs used in the discounted cash flow, as well as the discount for lack of marketability used in the market-based valuations, were independently higher (lower) as of September 30, 2024, the resulting fair value of the assets would be lower (higher).

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

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

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

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2 or 3 9,937.3 9,786.0 9,341.5 9,167.3

Other debt 3 — — 21.8 8.6

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1 Substantially all was Level 2.

Debt of CIPs consisted of the following:

(in millions)

as of September 30,

Amount Weighted-

Rate Amount Weighted-

$ 9,341.5 7.36 % $ 8,210.0 7.12 %

— N/A 21.8 6.00 %

$ 9,341.5 $ 8,231.8

The debt of CIPs had fixed and floating interest rates ranging from 2.39 % to 13.73 % at September 30, 2024, and from 2.39 % to 15.49 % at September 30, 2023.

The floating rates were based on the Secured Overnight Financing Rate.

The contractual maturities for debt of CIPs at September 30, 2024 were as follows:

Debt of CLOs totaled $ 9,937.3 million and $ 9,341.5 million at September 30, 2025 and September 30, 2024.

The debt had fixed and floating interest rates ranging from 2.39 % to 12.26 % with a weighted-average effective interest rate of 6.00 % at September 30, 2025, and from 2.39 % to 13.73 % with a weighted-average effective interest rate of 7.36 % at September 30, 2024.

The floating rates were based on the Secured Overnight Financing Rate and Euro Interbank Offered Rate.

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

(in millions)

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During fiscal years 2025 and 2024, the Company recognized $ 48.6 million and $ 59.7 million of net gains related to its own economic interests in the CLOs.

The aggregate principal amount due of the debt of CLOs was $ 9,282.8 million and $ 8,281.5 million at September 30, 2024 and 2023.

The aggregate principal related to the debt of CLOs was $ 9,958.6 million and $ 9,282.8 million at September 30, 2025 and 2024.

Note 11 – Redeemable Noncontrolling Interests

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Balance at October 1, 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 181.3 — 181.3

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

Adjustment to fair value — ( 109.4 ) ( 109.4 )

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Net deconsolidations ( 206.1 ) — ( 206.1 )

Acquisition 20.2 — 20.2

Adjustment to fair value — 251.7 251.7

Balance at September 30, 2024 $ 687.8 $ 634.0 $ 1,321.8

Net income 80.2 47.7 127.9

Net income (loss) ( 94.9 ) 42.2 ( 52.7 )

Net subscriptions (distributions) and other 317.5 ( 31.9 ) 285.6

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Total $ 786.8 $ 823.2 $ 1,338.0

_______________

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

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

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The Company also has federal net operating losses of $ 9.5 million, the majority of which will carry-forward indefinitely and $ 70.4 million of foreign tax credit carry-forwards that expire between fiscal years 2026 and 2029.

The valuation allowance decreased $ 2.4 million in fiscal year 2024 and increased $ 34.6 million in fiscal year 2023, primarily related to non-US net operating loss utilization.

The valuation allowance increased $ 6.6 million in fiscal year 2025, primarily related to non-U.S.

net operating loss utilization.

At September 30, 2025, the valuation allowance of $ 297.1 million was related to $ 172.3 million for federal, state, and foreign net operating loss carry-forwards, $ 52.3 million due to uncertainty of realizing the benefit of foreign tax credits, $ 45.0 million for capital losses, and $ 27.5 million for other state deferred taxes.

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$ 237.9 30.2 % $ 215.3 26.2 % $ 312.3 23.3 %

______________

1 The Company released a valuation allowance on foreign tax credit in fiscal year 2022 due to additional foreign source income from foreign investments.

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

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2021 to 2025;

federal 2020 to 2024;

federal 2020 and 2022 to 2025;

the City of New York 2019 to 2025;

and States of California, Florida, Massachusetts and New York 2020 to 2025.

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

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

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

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

Such settlements may involve some or all of the following:

the payment of additional taxes, the adjustment of deferred taxes and/or the recognition of unrecognized tax

the payment of additional taxes, the adjustment of deferred taxes and/or the recognition of unrecognized tax benefits.

The Company has recognized a tax benefit only for those positions that meet the more-likely-than-not recognition threshold.

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in December 2017, includes various changes to the tax law, including a permanent reduction in the corporate income tax rate and assessment of a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiaries’ earnings.

The payment for the Company’s remaining federal portion of the transition tax liability were as follows:

(in millions) Amount

for the fiscal years ending September 30,

Total $ 416.8

The remaining payment for the Company’s federal portion of the transition tax liability of $ 231.6 million will be made in fiscal year 2026.

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

While the Company is in the process of evaluating the impact of the Act on its consolidated financial statements, it does not expect there to be any material impact thereon.

Note 14 – Leases

Lessee Arrangements

The Company’s leases generally include one or more options to renew.

Lease expense was as follows:

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The petitioners alleged that the Company Respondents violated various SEBI regulations, mismanaged the Funds, misrepresented or omitted certain information relating to the Funds, and/or engaged in other alleged misconduct.

The petitioners requested a wide range of relief, including, among other items, an order quashing the winding up notices and blocking the unitholder votes, initiating investigations into the Company Respondents, and allowing the unitholder petitioners to redeem their

investments with interest.

An interim injunction order staying the operation and implementation of the unitholder voting process was issued and the petitions were transferred to the High Court of Karnataka for further consolidated proceedings.

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Separately, following the completion of a forensic audit/inspection, in late November and early December 2020, SEBI initiated regulatory proceedings by issuing show cause notices against FTAMI, FTTS and certain FTAMI employees (including in their officer or director capacities), alleging certain deficiencies and areas of non-compliance in the management of the Funds.

In June 2021, SEBI issued orders against FTAMI, FTTS, and the FTAMI employee respondents, finding violations of certain regulatory provisions, including with respect to similarity in investment strategies among the Funds, calculation of duration and valuation of portfolio securities, deficiencies in documentation relating to investment diligence and investment terms, and portfolio risk management.

among the Funds, calculation of duration and valuation of portfolio securities, deficiencies in documentation relating to investment diligence and investment terms, and portfolio risk management.

SEBI’s orders include, as applicable, aggregate monetary penalties of INR 20.0 crore (approximately $ 2.4 million);

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The Company cannot at this time predict the eventual outcome of the matters described above or reasonably estimate the possible loss or range of loss that may arise from any final outcome of such matters, including due to the complexities and uncertainty involved in the appeals and the various questions of law and fact at issue.

Western Asset Management Investigations.

Following the launch of an internal investigation focusing on certain trade allocations of treasury derivatives in select Western Asset Management (“WAM”) managed accounts, WAM received notification of parallel investigations by the SEC and the DOJ.

Western Asset Management Investigations and Litigation.

As previously disclosed, the Company launched an internal investigation into certain trade allocations of treasury derivatives in select WAM managed accounts.

WAM received notification of parallel investigations by the SEC and the U.S.

Department of Justice (“DOJ”).

WAM also received notice of an investigation into these trading activities by the CFTC.

As previously disclosed, Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024 and is now on administrative leave.

The Company and WAM are cooperating fully with the government investigations.

On June 30, 2025, the CFTC informed WAM that it closed its investigation.

The SEC and DOJ investigations remain ongoing.

The Company and WAM have fully cooperated, and will continue to fully cooperate with the SEC and DOJ investigations.

Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024, and was placed on administrative leave at that time.

Leech retired and is no longer with the Company, as previously disclosed.

On November 25, 2024, the SEC filed a complaint in the United States District Court for the Southern District of New York against Mr.

Leech alleging violations of certain laws related to trade allocations.

Concurrently, the DOJ filed an indictment with the United States District Court for the Southern District of New York against Mr.

Leech for similar allegations and for false statements made to the SEC.

On July 3, 2025, Franklin, WAM and Ken Leech were named as defendants in a lawsuit filed by the Western PA Electrical Employees Insurance Trust Fund in the U.S.

District Court for the Western District of Pennsylvania seeking class certification on behalf of shareholders of two funds managed by WAM for the period January 1, 2021 through October 31, 2023.

The plaintiff is pursuing claims under the Securities Exchange Act of 1934 against all defendants in connection with trade allocations made by Mr.

Leech in that period that are also the subject of the investigations reported above.

The plaintiff is seeking, among other things, damages, interest, and costs and expenses, including attorneys’ fees.

Franklin Templeton 401(k) Retirement Plan Litigation .

On July 22, 2025, Franklin and the Franklin Templeton 401(k) Retirement Plan Committee were named as defendants in a lawsuit filed by certain former employees in the U.S.

District Court for the Northern District of California.

The plaintiffs seek to represent a class of participants and beneficiaries of the Franklin Templeton 401(k) Retirement Plan (the “Plan”) who were invested in funds managed by the Company at any time on or after July 22, 2019.

The plaintiffs are pursuing claims under the Employee Retirement Income Security Act of 1974 for alleged breaches of fiduciary duties and failure to monitor the Plan fiduciaries in connection with the Plan’s inclusion of certain proprietary funds as investment options.

The plaintiffs are seeking, among other things, damages, disgorgement, removal of certain investments from the Plan, removal and replacement of the Plan’s fiduciaries, attorneys’ fees and costs, and pre-judgment interest.

The lawsuits reported above against the Company are in their preliminary stages.

Management believes the claims made in the lawsuits are without merit and the Company intends to defend against them vigorously.

The Company cannot predict the outcome of these lawsuits or estimate any reasonably possible loss or range of loss that may arise from any negative outcome.

Other Litigation and Regulatory Matters.

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14,959 353 15,312 $ 22.81

Total unrecognized compensation expense related to nonvested stock and stock unit awards was $ 213.7 million at September 30, 2024.

Total unrecognized compensation expense related to nonvested stock unit awards was $ 176.2 million at September 30, 2025.

This expense is expected to be recognized over a remaining weighted-average vesting period of 1.6 years.

The weighted-average grant-date fair values of stock awards and stock unit awards granted during fiscal years 2024, 2023 and 2022 were $ 25.60 , $ 22.74 and $ 34.20 per share.

The weighted-average grant-date fair values of stock and stock unit awards granted during fiscal years 2025, 2024 and 2023 were $ 20.97 , $ 25.60 and $ 22.74 per share.

The total fair value of stock and stock unit awards vested during the same periods was $ 234.3 million, $ 180.4 million and $ 210.4 million.

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Note 18 – Segment and Geographic Information

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

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

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

This measure is used to support decision making activities and assess the performance of the operating segment.

The CODM regularly reviews the significant segment expenses categories that are presented on the Company’s consolidated statements of income.

Total assets on the consolidated balance sheets is the measure of segment assets.

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

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

(in millions)

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Rental income 44.1 43.7 46.3

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

Foreign currency exchange losses, net ( 11.6 ) ( 19.9 ) ( 26.7 )

Other, net 6.3 15.9 13.0

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Reclassifications to compensation and benefits expense, net of tax — 0.4 — 0.4

Reclassifications to net investment and other income, net of tax 4.3 — — 4.3

Total other comprehensive income (loss) 89.8 0.1 ( 0.1 ) 89.8

3 unchanged sentences

Reclassifications to compensation and benefits expense, net of tax — 2.0 — 2.0

Reclassifications to net investment and other income, net of tax 2.9 — — 2.9

Total other comprehensive income (loss) ( 18.4 ) ( 9.3 ) 0.1 ( 27.6 )

Balance at September 30, 2025 $ ( 430.9 ) $ ( 16.8 ) $ 0.6 $ ( 447.1 )

Note 21 – Subsequent Event

On October 1, 2025, the Company acquired Apera Asset Management for cash consideration of € 65.2 million net of closing adjustments.

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

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