Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Sep. 30, 2020	Oct. 31, 2020	Mar. 31, 2020
Document And Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-09318
Entity Registrant Name	FRANKLIN RESOURCES, INC.
Entity Central Index Key	0000038777
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-2670991
Entity Address, Address Line One	One Franklin Parkway
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94403
City Area Code	650
Local Phone Number	312-2000
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	BEN
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 4.6
Entity Common Stock, Shares Outstanding		504,591,594
Documents Incorporated by Reference [Text Block]	Certain portions of the registrant’s definitive proxy statement for its annual meeting of stockholders, to be filed with the Securities and Exchange Commission within 120 days after September 30, 2020, are incorporated by reference into Part III of this report.

Consolidated Statements of Income - USD ($) $ in Millions	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Millions	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Operating Revenues
Operating revenues	$ 5,566.5	$ 5,669.4	$ 6,204.5
Operating Expenses
Compensation and benefits	1,873.9	1,584.7	1,390.6
Sales, distribution and marketing	1,703.1	1,819.6	2,039.7
Information systems and technology	288.4	258.5	243.9
Occupancy	147.9	133.6	128.6
Amortization of intangible assets	54.0	14.7	1.8
General, administrative and other	450.3	391.4	371.7
Total operating expenses	4,517.6	4,202.5	4,176.3
Operating Income	1,048.9	1,466.9	2,028.2
Other Income (Expenses)
Investment and other income (losses), net	(38.4)	141.4	200.3
Interest expense	(33.4)	(22.4)	(46.3)
Other income (expenses), net	(31.0)	180.9	187.0
Income before taxes	1,017.9	1,647.8	2,215.2
Taxes on income	230.8	442.3	1,472.5
Net income	787.1	1,205.5	742.7
Less: net income (loss) attributable to
Redeemable noncontrolling interests	48.6	6.2	(12.8)
Nonredeemable noncontrolling interests	(60.4)	3.6	(8.9)
Net Income Attributable to Franklin Resources, Inc.	$ 798.9	$ 1,195.7	$ 764.4
Earnings per Share
Basic	$ 1.59	$ 2.35	$ 1.39
Diluted	$ 1.59	$ 2.35	$ 1.39
Investment management fees [Member]
Operating Revenues
Operating revenues	$ 3,981.7	$ 3,985.2	$ 4,367.5
Sales and distribution fees [Member]
Operating Revenues
Operating revenues	1,362.0	1,444.6	1,599.8
Shareholder servicing fees [Member]
Operating Revenues
Operating revenues	195.1	216.3	221.9
Other [Member]
Operating Revenues
Operating revenues	27.7	23.3	15.3
Consolidated Investment Products [Member]
Other Income (Expenses)
Investment and other income (losses), net	70.2	78.8	59.6
Expenses of consolidated investment products	29.4	$ 16.9	$ 26.6
Less: net income (loss) attributable to
Redeemable noncontrolling interests	$ 45.0

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net Income	$ 787.1	$ 1,205.5	$ 742.7
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax	25.8	(52.5)	(91.9)
Net unrealized gains (losses) on defined benefit plans, net of tax	(1.8)	(2.0)	1.9
Net unrealized gains on investments, net of tax	0.0	1.5	4.3
Total other comprehensive income (loss)	24.0	(53.0)	(85.7)
Total comprehensive income	811.1	1,152.5	657.0
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests	48.6	6.2	(12.8)
Nonredeemable noncontrolling interests	(60.4)	3.6	(8.9)
Comprehensive Income Attributable to Franklin Resources, Inc.	$ 822.9	$ 1,142.7	$ 678.7

Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2020	Sep. 30, 2019
Assets
Cash and cash equivalents	$ 3,957.5	$ 5,957.6
Receivables	1,114.8	740.0
Investments	1,270.5	1,555.8
Investments, at fair value	504.8	589.7
Property and equipment, net	813.8	683.7
Goodwill	4,500.8	2,130.3
Intangible assets, net	4,914.2	864.2
Operating lease right-of-use assets	534.8	0.0
Other	319.5	197.7
Total Assets	20,220.9	14,532.2
Liabilities
Compensation and benefits	1,064.0	502.4
Accounts payable and accrued expenses	283.7	222.9
Dividends	143.2	137.4
Commissions	268.0	254.0
Income taxes	703.3	824.7
Debt	3,017.1	696.9
Deferred tax liabilities	305.3	120.1
Operating lease liabilities	621.0	0.0
Other	456.1	270.6
Total liabilities	8,705.2	3,161.3
Commitments and Contingencies (Note 16)
Redeemable Noncontrolling Interests	541.9	746.7
Stockholders’ Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued	0.0	0.0
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 495,116,677 and 499,303,269 shares issued and outstanding at September 30, 2020 and 2019	49.5	49.9
Retained earnings	10,472.6	10,288.2
Accumulated other comprehensive loss	(407.6)	(431.6)
Total Franklin Resources, Inc. stockholders’ equity	10,114.5	9,906.5
Nonredeemable noncontrolling interests	859.3	717.7
Total stockholders’ equity	10,973.8	10,624.2
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	20,220.9	14,532.2
Consolidated Investment Products [Member]
Assets
Cash and cash equivalents	930.7	154.2
Receivables	85.8	99.0
Investments, at fair value	2,709.2	2,303.9
Total Assets	3,725.7	2,557.1
Liabilities
Accounts payable and accrued expenses	510.1	81.5
Debt	1,333.4	50.8
Other	12.1	0.0
Total liabilities	1,855.6	132.3
Redeemable Noncontrolling Interests	397.3	746.7
Stockholders’ Equity
Total Franklin Resources, Inc. stockholders’ equity	788.4	1,129.6
Nonredeemable noncontrolling interests	684.4	548.5
Total stockholders’ equity	1,472.8	1,678.1
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	3,725.7	2,557.1
Franklin Resources, Inc. [Member]
Assets
Cash and cash equivalents	$ 3,026.8	$ 5,803.4

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2020	Sep. 30, 2019
Statement of Financial Position [Abstract]
Investments, at fair value	$ 504.8	$ 589.7
Preferred stock, par value	$ 1	$ 1
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.1	$ 0.1
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	495,116,677	499,303,269
Common stock, shares outstanding	495,116,677	499,303,269

Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Stockholders' Equity [Member]	Nonredeemable Noncontrolling Interests [Member]
Stockholders' Equity [Roll Forward]
Adoption of new accounting guidance \| ASU 2016-09 [Member]	$ 0.4		$ 2.1	$ (1.6)	$ (0.1)	$ 0.4
Beginning balance - Shares at Sep. 30, 2017		554.9
Beginning balance at Sep. 30, 2017		$ 55.5	0.0	12,849.3	(284.8)	12,620.0
Beginning balance at Sep. 30, 2017							$ 315.8
Beginning balance at Sep. 30, 2017	12,935.8
Stockholders' Equity [Roll Forward]
Net income (loss)	764.4			764.4		764.4
Nonredeemable noncontrolling interests	(8.9)						(8.9)
Net income (loss)	755.5
Other comprehensive income (loss)	(85.7)				(85.7)	(85.7)
Dividends declared on common stock	(2,131.3)			(2,131.3)		(2,131.3)
Repurchase of common stock - Shares		(39.9)
Repurchase of common stock - Amount	(1,426.7)	$ (4.0)	(170.4)	(1,252.3)		(1,426.7)
Issuance of common stock - Shares		3.3
Issuance of common stock - Amount	131.1	$ 0.3	130.8			131.1
Stock-based compensation	10.6		10.6			10.6
Net subscriptions (distributions) and other	(6.0)						(6.0)
Consolidation (deconsolidation) of investment products	2.4						2.4
Acquisition - Shares		0.8
Acquisition - Amount	27.0	$ 0.1	26.9			27.0
Redemption or purchase of noncontrolling interest	(5.2)			(10.6)		(10.6)	5.4
Ending balance - Shares at Sep. 30, 2018		519.1
Ending balance at Sep. 30, 2018		$ 51.9	0.0	10,217.9	(370.6)	9,899.2
Ending balance at Sep. 30, 2018							308.7
Ending balance at Sep. 30, 2018	10,207.9
Stockholders' Equity [Roll Forward]
Adoption of new accounting guidance \| ASU 2014-09 and 2016-01 [Member]	14.9			22.9	(8.0)	14.9
Net income (loss)	1,195.7			1,195.7		1,195.7
Nonredeemable noncontrolling interests	3.6						3.6
Net income (loss)	1,199.3
Other comprehensive income (loss)	(53.0)				(53.0)	(53.0)
Dividends declared on common stock	(528.3)			(528.3)		(528.3)
Repurchase of common stock - Shares		(24.6)
Repurchase of common stock - Amount	(756.3)	$ (2.5)	(133.8)	(620.0)		(756.3)
Issuance of common stock - Shares		4.8
Issuance of common stock - Amount	130.3	$ 0.5	129.8			130.3
Stock-based compensation	4.0		4.0			4.0
Net subscriptions (distributions) and other	165.0						165.0
Consolidation (deconsolidation) of investment products	24.3						24.3
Acquisitions	216.1						216.1
Ending balance - Shares at Sep. 30, 2019		499.3
Ending balance at Sep. 30, 2019	9,906.5	$ 49.9	0.0	10,288.2	(431.6)	9,906.5
Ending balance at Sep. 30, 2019	717.7						717.7
Ending balance at Sep. 30, 2019	10,624.2
Stockholders' Equity [Roll Forward]
Net income (loss)	798.9			798.9		798.9
Nonredeemable noncontrolling interests	(60.4)						(60.4)
Net income (loss)	738.5
Other comprehensive income (loss)	24.0				24.0	24.0
Dividends declared on common stock	(539.0)			(539.0)		(539.0)
Repurchase of common stock - Shares		(9.0)
Repurchase of common stock - Amount	(219.4)	$ (0.9)	(143.0)	(75.5)		(219.4)
Issuance of common stock - Shares		4.8
Issuance of common stock - Amount	127.2	$ 0.5	126.7			127.2
Stock-based compensation	16.3		16.3			16.3
Net subscriptions (distributions) and other	186.4						186.4
Consolidation (deconsolidation) of investment products	(6.8)						(6.8)
Acquisitions	39.1						39.1
Redemption or purchase of noncontrolling interest	(16.7)						(16.7)
Ending balance - Shares at Sep. 30, 2020		495.1
Ending balance at Sep. 30, 2020	10,114.5	$ 49.5	$ 0.0	$ 10,472.6	$ (407.6)	$ 10,114.5
Ending balance at Sep. 30, 2020	859.3						$ 859.3
Ending balance at Sep. 30, 2020	$ 10,973.8

Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Statement of Stockholders' Equity [Abstract]
Dividends declared per share	$ 1.08	$ 1.04	$ 3.92

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2018
Net cash provided by operating activities
Net Income	$ 787.1	$ 1,205.5	$ 742.7
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	122.3	111.5	117.8
Amortization of deferred sales commissions	80.3	85.8	80.7
Depreciation and other amortization	74.5	78.7	74.6
Amortization of intangible assets	54.0	14.7	1.8
Impairments of intangible assets and goodwill	55.4	13.3	5.7
Losses (income) from investments in equity method investees	98.1	10.4	(44.4)
Net losses on investments of consolidated investment products	36.8	26.3	55.0
Net (purchase) liquidation of investments by consolidated investment products	(746.9)	(1,497.6)	365.7
Deferred income taxes	(7.1)	(1.3)	(50.6)
Other	(26.1)	11.8	28.0
Changes in operating assets and liabilities:
Decrease (increase) in receivables and other assets	135.7	(34.2)	(90.1)
Decrease (increase) in receivables of consolidated investment products	(4.2)	(34.3)	68.5
Decrease (increase) in investments, net	554.7	142.5	(39.2)
Decrease in operating lease right-of-use assets	38.2	0.0	0.0
Increase (decrease) in accrued compensation and benefits	(10.5)	89.4	(19.1)
Decrease in commissions payable	(33.8)	(43.9)	(15.4)
Increase (decrease) in income taxes payable	(123.0)	(210.1)	965.2
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(97.4)	126.0	(23.0)
Increase in accounts payable and accrued expenses of consolidated investment products	70.6	107.1	5.8
Decrease in operating lease liabilities	(37.3)	0.0	0.0
Net cash provided by operating activities	1,021.4	201.6	2,229.7
Net cash used in investing activities
Purchase of investments	(467.4)	(393.9)	(358.2)
Liquidation of investments	880.0	343.2	286.2
Purchase of investments by consolidated collateralized loan obligations	(369.2)	0.0	0.0
Liquidation of investments by consolidated collateralized loan obligations	92.0	0.0	0.0
Purchase of investments by consolidated investment products	0.0	0.0	(73.8)
Liquidation of investments by consolidated investment products	0.0	0.0	73.3
Issuance of loans receivable, net	(40.6)	0.0	0.0
Additions of property and equipment, net	(103.7)	(233.7)	(106.5)
Acquisitions, net of cash acquired	(3,821.4)	(684.2)	(86.8)
Net consolidation (deconsolidation) of investment products	587.2	(108.5)	(24.6)
Net cash used in investing activities	(3,243.1)	(1,077.1)	(290.4)
Net cash provided by (used in) financing activities
Issuance of common stock	20.6	23.3	24.8
Dividends paid on common stock	(533.2)	(518.6)	(2,116.9)
Repurchase of common stock	(218.2)	(754.5)	(1,424.8)
Payments on debt	0.0	0.0	(361.9)
Proceeds from loan	0.2	1.7	0.0
Payments on loan	(0.4)	(1.5)	0.0
Proceeds from debt of consolidated investment products	635.2	19.9	0.0
Payments on debt by consolidated investment products	(140.9)	(2.0)	(21.0)
Payments on contingent consideration liabilities	(0.6)	(20.4)	(21.6)
Noncontrolling interests	431.5	1,211.6	159.7
Net cash provided by (used in) financing activities	194.2	(40.5)	(3,761.7)
Effect of exchange rate changes on cash and cash equivalents	27.4	(37.0)	(16.7)
Decrease in cash and cash equivalents	(2,000.1)	(953.0)	(1,839.1)
Cash and cash equivalents, beginning of year	5,957.6	6,910.6	8,749.7
Cash and Cash Equivalents, End of Year	3,957.5	5,957.6	6,910.6
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	359.4	520.8	523.5
Cash paid for interest	18.9	27.4	38.6
Cash paid for interest by consolidated investment products	$ 9.9	$ 2.3	$ 2.6

Significant Accounting Policies

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Significant Accounting Policies

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

Basis of Presentation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Management believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates. Certain comparative amounts for prior fiscal years have been reclassified to conform to the financial statement presentation as of and for the fiscal year ended September 30, 2020 (“fiscal year 2020”).

In the quarter ended September 30, 2020, the Company changed the presentation of its consolidated statements of income to include dividend and investment income and expenses of consolidated investment products in other income, net. Amounts for the comparative prior fiscal year periods have been reclassified to conform to the current year presentation. These reclassifications had no impact on previously reported net income or financial position. Management believes the revised presentation is more useful to readers of its financial statements and more accurately portrays the nature of the consolidated investment products (“CIP”) revenue and expenses as the operations of CIPs are not related to the Company’s core business.

The following table presents the effects of the change in the presentation of operating revenues, operating expenses and other income, net to the Company’s previously reported consolidated statements of income:



	2019									2018
(in millions) for the fiscal years ended September	As Reported			Adjustments			As Amended			As Reported			Adjustments			As Amended
Operating Revenues
Other	$	128.4		$	(105.1	)	$	23.3		$	129.9		$	(114.6	)	$	15.3

Operating Expenses
General, administrative and other¹	420.7			(14.6		)	406.1			397.7			(24.2		)	373.5

Other Income (Expenses)
Investment and other income (losses), net	115.1			26.3			141.4			145.3			55.0			200.3
Interest expense	(24.7		)	2.3			(22.4		)	(48.7		)	2.4			(46.3		)
Investment and other income of consolidated investment products, net	—			78.8			78.8			—			59.6			59.6
Expenses of consolidated investment products	—			(16.9		)	(16.9		)	—			(26.6		)	(26.6		)
Other income (expenses), net	$	90.4		$	90.5		$	180.9		$	96.6		$	90.4		$	187.0

^{______________}


¹	General, administrative and other includes amortization of intangible assets.

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

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

The Company is the primary beneficiary of a VIE if it has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or right to receive benefits from the VIE that could potentially be significant to the VIE. Investment management fees earned from VIEs are excluded from the primary beneficiary determination if they are deemed to be at market and commensurate with service. The key estimates and assumptions used in the analyses include the amount of assets under management (“AUM”) and the life of the investment product.

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

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

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

Intangible assets acquired in business combinations consist primarily of investment management contracts and trade names. The fair values of the acquired management contracts are based on the net present value of estimated future cash flows attributable to the contracts, which include significant assumptions about forecasts of the AUM growth rate, pre-tax profit margin, discount rate, average effective fee rate and effective tax rate. The fair value of trade names is determined using the relief from royalty method based on net present value of estimated future cash flows, which include significant assumptions about royalty rate, revenue growth rate, discount rate and effective tax rate. The management contract intangible assets are amortized over their estimated useful lives, which range from three to 15 years, using the straight-line method, unless the asset is determined to have an indefinite useful life. Indefinite-lived intangible assets represent contracts to manage investment assets for which there is no foreseeable limit on the contract period. Trade names intangible assets are amortized over their estimated useful lives which range from five to twenty years using the straight-line method.

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

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

If a quantitative goodwill impairment test indicates that the carrying value of the goodwill exceeds the fair value of the reporting unit, impairment is recognized in the amount of the excess of the carrying value over the implied fair value of the goodwill, which considers the fair value assigned to all other assets and liabilities of the reporting unit.

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

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.

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

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



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

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

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

Quoted market prices may be adjusted if events occur, such as significant price changes in proxies traded in relevant markets after the close of corresponding markets, trade halts or suspensions, or unscheduled market closures. These proxies consist of correlated country-specific exchange-traded securities, such as futures, American Depositary Receipts indices or exchange-traded funds. The price adjustments are primarily determined based on third-party factors derived from model-based valuation techniques for which the significant assumptions are observable in the market.

A substantial amount of the Company’s investments is recorded at fair value or amounts that approximate fair value on a recurring basis. Investments in fund products for which fair value is estimated using NAV as a practical expedient (when the NAV is available to the Company as an investor but is not publicly available) are not classified in the fair value hierarchy. Fair values are estimated for disclosure purposes for financial instruments that are not measured at fair value.

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

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

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

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

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

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

Other equity and debt securities consist of equity investment securities and debt securities classified as trading or available-for-sale and are carried at fair value. Changes in the fair value of trading securities are recognized as gains and losses in earnings. Unrealized gains and losses on available-for-sale securities are recorded net of tax as part of accumulated other comprehensive income (loss) until realized, at which time they are recognized in earnings using the average cost method. The fair values of equity securities are determined using independent third-party broker or dealer price quotes or based on discounted cash flows using significant unobservable inputs. The fair values of debt securities are determined using independent third-party broker or dealer price quotes or based on discounted cash flows using significant unobservable inputs.

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

Other Investments consist of equity investments in entities over which the Company is unable to exercise significant influence and do not have a readily determinable fair value, and time deposits with maturities greater than three months from the date of purchase. The equity investments are measured at cost adjusted for observable price changes and impairment, if any, which are recognized in earnings. The fair value of the entities is generally estimated using significant unobservable inputs in either a market-based or income-based approach. The time deposits are carried at cost, which approximates fair value due to their short-term nature and liquidity. Life settlement contracts, which were disposed during fiscal year 2020, were carried at fair value, determined based on discounted cash flows using significant unobservable inputs.

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

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

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

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

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

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

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

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

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

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

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

Deferred Sales Commissions consist of upfront commissions paid to financial advisers and broker-dealers on shares of sponsored funds sold without a front-end sales charge, and are amortized over the periods in which they are generally recovered from related revenues, which range from 18 months to seven years. Deferred sales commissions are included in other assets in the consolidated balance sheet.

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

Debt of CIPs is carried at amortized cost. The fair value is estimated using a discounted cash flow model that considers current interest rate levels, the quality of the underlying collateral and current economic conditions. At September 30, 2020, debt of CIPs also included debt of consolidated collateralized loan obligations (“CLOs”) which was measured primarily based on the fair value of the assets of the CLOs less the fair value of the Company’s own economic interests in the CLOs.

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

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

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

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

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

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

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

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

Costs of obtaining a contract with a customer include internal and external sales commissions paid upon inception of a contract. The cost to obtain a contract is capitalized if it is incremental and would not have been incurred if the contract had not been obtained. Capitalized contract costs are amortized based on average investor tenure, which range from five to 10 years.

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

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

Income Taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is expected to be recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. For each tax position taken or expected to be taken in a tax return, the Company determines 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.

As a multinational corporation, the Company operates in various locations outside the U.S. and generates earnings worldwide. The Company repatriates its foreign earnings that are in excess of regulatory, capital or operational requirements of all of its non-U.S. subsidiaries.

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

New Accounting Guidance	12 Months Ended
New Accounting Guidance	Sep. 30, 2020
Accounting Changes and Error Corrections [Abstract]
New Accounting Guidance	New Accounting Guidance Recently Adopted Accounting Guidance On October 1, 2019, the Company adopted new guidance issued by the Financial Accounting Standards Board (“FASB”) for leases. The new guidance requires lessees to recognize assets and liabilities arising from substantially all leases. The guidance also requires an evaluation at the inception of a contract to determine whether the contract is or contains a lease. The Company adopted the new guidance using the modified retrospective approach and recognized right-of-use assets of $274.5 million and lease liabilities of $315.2 million, substantially all of which relate to real estate leases. The right-of-use assets recognized as of October 1, 2019 were net of $40.7 million of deferred rent previously included in other liabilities on the consolidated balance sheet. See Note 15 – Leases for additional disclosures. Accounting Guidance Not Yet Adopted The FASB issued new guidance for the accounting for credit losses in June 2016. The new guidance requires the application of a current expected credit loss model for financial assets measured at amortized cost, including receivables, and an allowance for credit loss model for available-for-sale debt securities. The Company will adopt the guidance on October 1, 2020 and expects to recognize a cumulative effect adjustment to retained earnings of approximately $6 million.

Acquisitions

12 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Acquisition

Acquisitions

Legg Mason, Inc.

On July 31, 2020, the Company acquired all outstanding shares of Legg Mason, Inc. (“Legg Mason”) common stock for a purchase consideration of $4.5 billion in cash and $0.2 billion related to the settlement of historical compensation arrangements. Legg Mason has outstanding debt with an aggregate principal amount due of $2.0 billion. The acquisition of Legg Mason, a global investment management organization, establishes the Company as of one of the world’s largest independent, specialized global investment managers, significantly deepens the Company’s presence in key geographies and creates an expansive investment platform that is well balanced between institutional and retail client AUM. The EnTrust business was acquired by its management concurrent with the closing of the acquisition.

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 with the exception of deferred tax assets and liabilities which were valued using preliminary assumptions.

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



(in millions)	Estimated Fair Value
as of July 31, 2020	Estimated Fair Value
Cash and cash equivalents	$	681.1
Cash and cash equivalents of consolidated investment products	253.4
Investments	471.8
Investments of consolidated investment products	402.9
Receivables	525.7
Indefinite-lived intangible assets	2,727.8
Definite-lived intangible assets¹	1,353.8
Goodwill	2,325.0
Deferred tax assets	148.4
Other assets	530.7
Debt	(2,324.4		)
Debt of consolidated investment products	(330.8		)
Compensation and benefits	(579.9		)
Deferred tax liabilities	(315.4		)
Other liabilities	(926.4		)
Redeemable noncontrolling interests	(186.4		)
Nonredeemable noncontrolling interests	(20.1		)
Total Identifiable Net Assets	$	4,737.2

^{______________}


¹	Includes $1,123.2 million related to management contracts and $230.6 million related to trade names.

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

The intangible assets relate to acquired investment management contracts and trade names. Indefinite-lived intangible assets represent contracts for which there is no foreseeable limit on the contract period. Definite-lived intangible assets are amortized over their estimated useful lives, which range from 5.0 years to 7.0 years for those related to the contracts and 5.0 years to 20.0 years for those related to trade names. The definite-lived intangible assets related to the contracts and trade names have estimated weighted-average useful lives of 5.9 years and 14.5 years, respectively.

The Legg Mason debt is recorded at fair value on acquisition-date and includes a premium of $324.4 million.

Transaction costs incurred in connection with the acquisition were $57.4 million in fiscal year 2020. These costs were primarily comprised of professional fees, recorded in general, administrative and other expenses. The Company also incurred $119.6 million of acquisition-related compensation and benefits expense in fiscal year 2020, primarily related to the acceleration of expense for historical Legg Mason compensation arrangements and retention bonuses.

Revenue and net loss of Legg Mason included in total operating revenues and net income attributable to Franklin Resources, Inc. in the accompanying consolidated statements of income from the acquisition date through September 30, 2020 were $475.7 million and $28.7 million, respectively.

The following unaudited pro forma summary presents combined results of operations of the Company as if the Legg Mason acquisition and concurrent divestiture of EnTrust business had occurred on October 1, 2018. The pro forma adjustments include acquisition-related costs, adjustments to intangible amortization expense, and interest expense related to debt assumed. These pro forma results are not indicative of future results of operations that would have been achieved nor are they indicative of future results of operations of the combined entity.



(in millions)
for the fiscal year ended September 30,	2020		2019
Revenues	$	7,862.0	$	8,436.0
Net Income Attributable to Franklin Resources, Inc.	967.5		886.6

Benefit Street Partners L.L.C.

On February 1, 2019, the Company acquired all of the outstanding ownership interests in Benefit Street Partners L.L.C. (“BSP”), a U.S. alternative credit manager, for a purchase consideration of $720.1 million in cash, of which $135.0 million was used to retire debt. The acquisition provides the Company private credit capabilities that complement its alternative and fixed income strategies available to clients.

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



(in millions)	Estimated Fair Value
as of February 1, 2019	Estimated Fair Value
Cash	$	33.2
Investments	138.8
Investments of consolidated investment products	84.9
Indefinite-lived intangible assets	280.1
Definite-lived intangible assets	75.8
Goodwill	345.7
Other assets	35.2
Other liabilities	(57.5		)
Nonredeemable noncontrolling interests	(216.1		)
Total Identifiable Net Assets	$	720.1

The goodwill is primarily attributable to expected growth from the private credit asset class. The amount of goodwill expected to be deductible for tax purposes is $453.2 million, which includes deferred payments that are recognized as compensation expense for accounting purposes.

Costs incurred in connection with the acquisition were $6.8 million in the fiscal year ended September 30, 2019 (“fiscal year 2019”).

The Company has not presented pro forma combined results of operations for the acquisition of BSP, because the results of operations as reported in the accompanying consolidated statements of income would not have been materially different.

Earnings per Share

12 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings per Share

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



(in millions, except per share data)
for the fiscal years ended September 30,	2020		2019		2018
Net income attributable to Franklin Resources, Inc.	$	798.9	$	1,195.7	$	764.4
Less: allocation of earnings to participating nonvested stock and stock unit awards	15.3		10.9		17.6
Net Income Available to Common Stockholders	$	783.6	$	1,184.8	$	746.8

Weighted-average shares outstanding – basic	491.9		503.6		537.4
Dilutive effect of nonparticipating nonvested stock unit awards	0.5		0.7		0.6
Weighted-Average Shares Outstanding – Diluted	492.4		504.3		538.0

Earnings per Share
Basic	$	1.59	$	2.35	$	1.39
Diluted	1.59		2.35		1.39

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were 0.5 million for fiscal year 2020, 0.2 million for fiscal year 2019, and 0.3 million for the fiscal year ended September 30, 2018 (“fiscal year 2018”).

Revenues

12 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenues

Operating revenues by geographic area were as follows:



(in millions)	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2020	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
Investment management fees	$	2,482.5	$	910.1	$	269.2	$	217.6	$	102.3	$	3,981.7
Sales and distribution fees	928.8		366.1		51.9		13.6		1.6		1,362.0
Shareholder servicing fees	158.6		25.5		0.3		8.4		2.3		195.1
Other	24.9		1.2		—		0.6		1.0		27.7
Total	$	3,594.8	$	1,302.9	$	321.4	$	240.2	$	107.2	$	5,566.5



(in millions)	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2019	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
Investment management fees	$	2,260.6	$	1,064.7	$	325.4	$	241.8	$	92.7	$	3,985.2
Sales and distribution fees	941.3		437.2		63.3		1.3		1.5		1,444.6
Shareholder servicing fees	175.7		30.1		0.1		10.4		—		216.3
Other	18.6		1.5		—		1.0		2.2		23.3
Total	$	3,396.2	$	1,533.5	$	388.8	$	254.5	$	96.4	$	5,669.4



(in millions)	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the fiscal year ended September 30, 2018	United States		Luxembourg		Americas Excluding United States		Asia- Pacific		Europe, Middle East and Africa, Excluding Luxembourg		Total
Investment management fees	$	2,309.5	1,213.5		$	463.8	$	283.3	$	97.4	$	4,367.5
Sales and distribution fees	1,108.2		482.2		6.4		2.9		0.1		1,599.8
Shareholder servicing fees	177.2		33.7		0.2		10.8		—		221.9
Other	12.6		2.3		—		0.4		—		15.3
Total	$	3,607.5	$	1,731.7	$	470.4	$	297.4	$	97.5	$	6,204.5

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.

Investments

12 Months Ended

Sep. 30, 2020

Investments [Abstract]

Investments

The disclosures below include details of the Company’s investments, excluding those of CIPs. See Note 11 – Consolidated Investment Products for information related to the investments held by these entities.

Investments consisted of the following:



(in millions)
as of September 30,	2020		2019
Investments, at fair value
Sponsored funds and separate accounts	$	303.4	$	533.6
Investments related to long-term incentive plans	146.6		—
Other equity and debt investments	54.8		44.6
Life settlement contracts	—		11.5
Total investments, at fair value	504.8		589.7
Investments in equity method investees	682.2		933.4
Other investments	83.5		32.7
Total	$	1,270.5	$	1,555.8

The Company recognized other-than-temporary impairment of $9.7 million during fiscal year 2020, and $10.5 million and $1.7 million during fiscal years 2019 and 2018.

Fair Value Measurements

12 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

The disclosures below include details of the Company’s fair value measurements, excluding those of CIPs. See Note 11 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities.

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



(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2020	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	176.3	$	40.9	$	17.4	$	68.8	$	303.4
Investments related to long-term incentive plans	145.5		—		—		1.1		146.6
Other equity and debt investments	2.1		1.5		—		51.2		54.8
Contingent consideration asset	—		—		39.7		—		39.7
Total Assets Measured at Fair Value	$	323.9	$	42.4	$	57.1	$	121.1	$	544.5

Liabilities
Contingent consideration liabilities	$	—	$	—	$	25.3	$	—	$	25.3



(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2019	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	417.4	$	26.2	$	20.6	$	69.4	$	533.6
Other equity and debt investments	2.2		5.4		—		37.0		44.6
Life settlement contracts	—		—		11.5		—		11.5
Total Assets Measured at Fair Value	$	419.6	$	31.6	$	32.1	$	106.4	$	589.7

Investments for which fair value was estimated using reported NAV as a practical expedient primarily consist of nonredeemable private debt, equity and infrastructure funds, and redeemable global equity funds and investments related to long-term incentive plans. The investments in nonredeemable funds are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets. Investments with known liquidation periods were $51.2 million with an expected weighted-average life of 1.9 years at September 30, 2020, and $46.9 million with an expected weighted-average life of 1.3 years at September 30, 2019. The liquidation period for an investment in a private debt fund of $40.2 million and $48.6 million at September 30, 2020 and 2019 is unknown. The Company’s unfunded commitments to the funds totaled $9.5 million and $4.7 million at September 30, 2020 and 2019. The redeemable global equity funds investment of $25.3 million and $10.1 million at September 30, 2020 and 2019 can be redeemed monthly, and investments related to long-term incentive plans of $1.1 million at September 30, 2020 can be redeemed semi-monthly.

Changes in the Level 3 assets and liabilities were as follows:



	2020								2019
(in millions)	Investments			Contingent Consideration Asset		Contingent Consideration Liabilities			Investments			Contingent Consideration Liability
for the fiscal years ended September 30,	Investments			Contingent Consideration Asset		Contingent Consideration Liabilities			Investments			Contingent Consideration Liability
Balance at beginning of year	$	32.1		$	—	$	—		$	32.6		$	(38.7	)
Acquisitions	—			39.7		(27.9		)	—			—
Total realized and unrealized gains (losses)
Included in investment and other income (losses), net	—			—		—			7.0			—
Included in general, administrative and other expense	—			—		2.0			—			(2.0		)
Purchases	22.6			—		—			10.7			—
Sales	(19.0		)	—		—			(6.5		)	—
Settlements	(8.4		)	—		0.6			(4.6		)	40.7
Consolidation of investment product	(10.0		)	—		—			—			—
Transfers into Level 3	0.1			—		—			—			—
Transfers out of Level 3	—			—		—			(7.1		)	—
Balance at End of Year	$	17.4		$	39.7	$	(25.3	)	$	32.1		$	—
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at end of year	$	(1.4	)	$	—	$	—		$	3.4		$	—

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



	Fair Value Level	2020				2019
(in millions)		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
as of September 30,		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents	1	$	3,026.8	$	3,026.8	$	5,803.4	$	5,803.4
Other investments
Time deposits	2	19.2		19.2		15.4		15.4
Equity securities	3	64.3		67.3		17.3		19.2
Loans receivable	3	42.4		42.4		—		—

Financial Liability
Debt	2	$	3,017.1	$	3,086.5	$	696.9	$	718.7

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment

12 Months Ended

Sep. 30, 2020

Property, Plant and Equipment, Net [Abstract]

Property and Equipment

Property and equipment, net consisted of the following:



(in millions)							Useful Lives In Years
as of September 30,	2020			2019			Useful Lives In Years
Buildings and leasehold improvements	$	877.4		$	789.2		5 – 35
Software	576.2			522.4			3 - 10
Equipment and furniture	374.0			324.3			3 - 10
Land	83.0			80.1			N/A
Total cost	1,910.6			1,716.0
Less: accumulated depreciation and amortization	(1,096.8		)	(1,032.3		)
Property and Equipment, Net	$	813.8		$	683.7

Depreciation and amortization expense related to property and equipment was $95.2 million, $83.2 million and $78.9 million in fiscal years 2020, 2019 and 2018. The Company recognized $6.6 million of equipment impairment during fiscal year 2018, and insignificant impairment amounts during fiscal year 2019. No impairment of equipment was recorded in fiscal year 2020.

Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

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



(in millions)
as of September 30,	2020		2019
Goodwill	$	4,500.8	$	2,130.3
Indefinite-lived intangible assets	3,500.8		799.4
Definite-lived intangible assets, net	1,413.4		64.8
Goodwill and Other Intangible Assets, Net	$	9,415.0	$	2,994.5

Changes in the carrying value of goodwill were as follows:



(in millions)
for the fiscal years ended September 30,	2020			2019
Balance at beginning of year	$	2,130.3		$	1,794.8
Acquisitions	2,389.1			345.7
Impairment	(23.7		)	—
Foreign exchange revaluation	5.1			(10.2		)
Balance at End of Year	$	4,500.8		$	2,130.3

During the fiscal year 2020, a $23.7 million impairment of goodwill was recognized due to the decision to wind-down operations of Onsa Inc. (formally known as TokenVault, Inc.) which was acquired in fiscal year 2020. During fiscal years 2019 and 2018, no impairment of goodwill was recognized.

The Company recognized impairments of indefinite-lived intangible assets of $30.0 million and $9.3 million during fiscal years 2020 and 2019. The impairment in fiscal year 2020 was primarily attributable to a BSP related management contract due to declines in revenue growth rates. The impairment in fiscal year 2019 was related to Canadian management contracts due to revised estimates of future pre-tax profit margins and AUM growth rates for the associated fund products. No impairment of indefinite-lived intangible assets was recognized during fiscal year 2018.

Definite-lived intangible assets were as follows:



	2020							2019
(in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
as of September 30,	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Management contracts	$	1,283.2	$	(109.6	)	$	1,173.6	$	125.4	$	(60.6	)	$	64.8
Trade names	230.6		(4.0		)	226.6		—		—			—
Developed software	14.4		(1.2		)	13.2		—		—			—
Total	$	1,528.2	$	(114.8	)	$	1,413.4	$	125.4	$	(60.6	)	$	64.8

The Company recognized impairment of definite-lived intangible assets of $1.7 million, $4.0 million and $5.7 million during fiscal years 2020, 2019 and 2018, primarily due to investor redemptions.

Definite-lived intangible assets had a weighted-average remaining useful life of 7.5 years at September 30, 2020, with estimated remaining amortization expense as follows:



(in millions)
for the fiscal years ending September 30,	Amount
2021	$	231.4
2022	231.4
2023	231.4
2024	224.5
2025	212.4
Thereafter	282.3
Total	$	1,413.4

Debt

12 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

The disclosures below include details of the Company’s debt, excluding that of CIPs. See Note 11 – Consolidated Investment Products for information related to the debt of these entities.

Debt consisted of the following:



(in millions)	2020			Effective Interest Rate		2019			Effective Interest Rate
as of September 30,	2020			Effective Interest Rate		2019			Effective Interest Rate
Notes issued by Franklin Resources, Inc.
$300 million 2.800% senior notes due September 2022	$	299.8		2.93	%	$	299.8		2.93	%
$400 million 2.850% senior notes due March 2025	399.7			2.97	%	399.6			2.97	%
Total notes issued by Franklin Resources, Inc.	699.5					699.4
Notes issued by Legg Mason (a subsidiary of Franklin)
$250 million 3.950% senior notes due July 2024	272.4			1.53	%	—			N/A
$450 million 4.750% senior notes due March 2026	523.0			1.80	%	—			N/A
$550 million 5.625% senior notes due January 2044	747.5			3.38	%	—			N/A
$250 million 6.375% junior notes due March 2056	260.7			6.08	%	—			N/A
$500 million 5.450% junior notes due September 2056	516.1			5.25	%	—			N/A
Total notes issued by Legg Mason	2,319.7					—
Other
Loan due December 2019	—			N/A		0.2			9.30	%
Debt issuance costs	(2.1		)			(2.7		)
Total	$	3,017.1				$	696.9

At September 30, 2020, Franklin’s outstanding senior unsecured unsubordinated notes had an aggregate principal amount due of $700.0 million. The notes have fixed interest rates with interest payable semi-annually.

At September 30, 2020, Legg Mason’s outstanding senior and junior unsecured unsubordinated notes had an aggregate principal amount due of $2,000.0 million. The notes have fixed interest rates with interest payable semi-annually for senior notes and quarterly for junior notes.

The senior notes contain an optional redemption feature that allows the Company to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price. The junior notes due March 2056 and September 2056 may only be redeemed in whole prior to March 2021 and September 2021, respectively. The indentures governing the senior notes contain limitations on the Company’s ability and the ability of its subsidiaries to pledge voting stock or profit participating equity interests in its subsidiaries to secure other debt without similarly securing the notes equally and ratably. In addition, the indentures include requirements that must be met if the Company consolidates or merges with, or sells all or substantially all of its assets to, another entity. The Company was in compliance with all debt covenants at September 30, 2020.

At September 30, 2020, 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.

On October 19, 2020, the Company completed its offering and sale of the 1.600% Notes due 2030 with a principal amount of $750.0 million. See Note 22 – Subsequent Event for additional information.

Consolidated Investment Products

12 Months Ended

Sep. 30, 2020

Consolidated Investment Products [Abstract]

Consolidated Investment Products

CIPs consist of mutual and other investment funds, limited partnerships and similar structures, and CLOs, all of which are sponsored by the Company, and include both VOEs and VIEs. CLOs are asset-backed financing entities collateralized by a pool of corporate loans. The Company had 72 CIPs, including four CLOs, as of September 30, 2020 and 60 CIPs, none of which were CLOs, as of September 30, 2019.

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



(in millions)
as of September 30,	2020		2019
Assets
Cash and cash equivalents	$	930.7	$	154.2
Receivables	85.8		99.0
Investments, at fair value	2,709.2		2,303.9
Total Assets	$	3,725.7	$	2,557.1

Liabilities
Accounts payable and accrued expenses	$	510.1	$	81.5
Debt	1,333.4		50.8
Other liabilities	12.1		—
Total liabilities	1,855.6		132.3
Redeemable Noncontrolling Interests	397.3		746.7
Stockholders’ Equity
Franklin Resources, Inc.’s interests	788.4		1,129.6
Nonredeemable noncontrolling interests	684.4		548.5
Total stockholders’ equity	1,472.8		1,678.1
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	3,725.7	$	2,557.1

The CIPs did not have a significant impact on net income attributable to the Company in fiscal years 2020, 2019 and 2018.

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

Fair Value Measurements

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



(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2020	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
Assets
Cash and cash equivalents of CLOs	$	488.8	$	—	$	—	$	—	$	488.8
Receivables of CLOs	—		21.2		—		—		21.2
Investments
Equity and debt securities	177.6		285.7		469.7		261.1		1,194.1
Loans	—		1,151.0		24.9		—		1,175.9
Real Estate	—		—		339.2		—		339.2
Total Assets Measured at Fair Value	$	666.4	$	1,457.9	$	833.8	$	261.1	$	3,219.2



(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of September 30, 2019	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
Assets
Investments
Equity and debt securities	$	195.2	$	1,307.5	$	427.8	$	204.1	$	2,134.6
Real estate	—		—		152.7		—		152.7
Loans	—		—		16.6		—		16.6
Total Assets Measured at Fair Value	$	195.2	$	1,307.5	$	597.1	$	204.1	$	2,303.9

Investments for which fair value was estimated using reported NAV as a practical expedient consist of nonredeemable real estate and private equity funds. These investments are expected to be returned through distributions over the life of the funds as a result of liquidations of the funds’ underlying assets over a weighted-average period of 4.2 years and 4.4 years at September 30, 2020 and 2019. The CIPs’ unfunded commitments to these funds totaled $94.0 million and $168.7 million, of which the Company was contractually obligated to fund $11.4 million and $20.6 million based on its ownership percentage in the CIPs, at September 30, 2020 and 2019.

Changes in Level 3 assets were as follows:



(in millions)	Equity and Debt Securities			Real Estate			Loans			Total Level 3 Assets
for the fiscal year ended September 30, 2020	Equity and Debt Securities			Real Estate			Loans			Total Level 3 Assets
Balance at beginning of year	$	427.8		$	152.7		$	16.6		$	597.1
Acquisition	—			20.3			17.6			37.9
Realized and unrealized losses included in investment and other income of consolidated investment products, net	(57.9		)	(5.2		)	(1.8		)	(64.9		)
Purchases	200.5			154.9			—			355.4
Sales and settlements	(57.4		)	—			(7.5		)	(64.9		)
Deconsolidations	(47.8		)	—			—			(47.8		)
Transfers into Level 3	2.2			—			—			2.2
Transfers out of Level 3	(1.1		)	—			—			(1.1		)
Foreign exchange revaluation	3.4			16.5			—			19.9
Balance at End of Year	$	469.7		$	339.2		$	24.9		833.8
Change in unrealized losses included in net income relating to assets held at end of year	$	(57.9	)	$	(5.2	)	$	(0.7	)	$	(63.8	)



(in millions)	Equity and Debt Securities			Real Estate		Loans			Total Level 3 Assets
for the fiscal year ended September 30, 2019	Equity and Debt Securities			Real Estate		Loans			Total Level 3 Assets
Balance at beginning of year	$	317.7		$	—	$	32.3		$	350.0
Acquisition	84.9			—		—			84.9
Realized and unrealized gains (losses) included in investment and other income of consolidated investment products, net	(5.9		)	5.0		(3.3		)	(4.2		)
Purchases	167.5			147.0		9.2			323.7
Sales and settlements	(101.6		)	—		(21.6		)	(123.2		)
Transfers into Level 3	0.5			—		—			0.5
Transfers out of Level 3	(29.0		)	—		—			(29.0		)
Foreign exchange revaluation	(6.3		)	0.7		—			(5.6		)
Balance at End of Year	$	427.8		$	152.7	$	16.6		$	597.1
Change in unrealized gains (losses) included in net income relating to assets held at end of year	$	(12.0	)	$	5.0	$	(0.6	)	$	(7.6	)

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



(in millions)
as of September 30, 2020	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average¹)
Equity and debt securities	$	244.9	Discounted cash flow	Discount rate	4.0%–23.0% (11.5%)
				Discount for lack of marketability	17.0%
				Risk premium	9.7%–19.3% (16.7%)
	116.3		Market pricing	Private sale pricing	$0.02–$100.00 ($13.01) per share
	108.5		Market comparable companies	Enterprise value/ EBITDA multiple	7.0–19.1 (10.8)
				Discount for lack of marketability	20.0%–25.2% (21.9%)
				Risk premium	55.0%
				Enterprise value/ Revenue multiple	7.5
				Price-to-earnings ratio	9.4–10.0 (9.7)

Real estate	231.8		Discounted cash flow	Discount rate	4.5%–6.5% (5.2%)
				Exit capitalization rate	6.0%
	107.4		Yield capitalization	Equivalent yield	4.3%–6.1% (5.2%)



(in millions)
as of September 30, 2019	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average¹)
Equity and debt securities	$	212.7	Discounted cash flow	Discount rate	4.8%–17.4% (10.0%)
	$	212.7	Discounted cash flow	Discount for lack of marketability	17.0%–24.7% (20.0%)
	192.8		Market comparable companies	Enterprise value/ EBITDA multiple	4.5–21.9 (10.8)
				Discount for lack of marketability	15.0%–30.0% (23.1%)
				Risk premium	18.9%
				Enterprise value/ Revenue multiple	3.7
	22.3		Market pricing	Private sale pricing	$0.25–$20.13 ($2.06) per share

Real estate	84.7		Discounted cash flow	Discount rate	6.4%–7.4% (7.1%)
	68.0		Yield capitalization	Equivalent yield	4.3%–6.1% (5.4%)

^{__________________}


¹	Based on the relative fair value of the instruments.

If the relevant significant inputs used in the market-based valuations, other than the discount for lack of marketability and risk premium, 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 or yield capitalization valuations, as well as the discount for lack of marketability and risk premium in the market-based valuations, were independently higher (lower) as of September 30, 2020, the resulting fair value of the assets would be lower (higher).

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



(in millions)	Fair Value Level	2020				2019
(in millions)		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
as of September 30,		Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Asset
Cash and cash equivalents	1	$	441.9	$	441.9	$	154.2	$	154.2
Financial Liabilities
Debt of CLOs	2	1,179.7		1,225.0		—		—
Other debt	3	153.7		155.2		50.8		51.0

Debt

Debt of CIPs consisted of the following:



(in millions)	2020			2019
as of September 30,	Amount		Weighted- Average Effective Interest Rate	Amount		Weighted- Average Effective Interest Rate
Debt of CLOs	$	1,179.7	2.85%	$	—	N/A
Other debt	153.7		2.97%	50.8		5.09%
Total	$	1,333.4		$	50.8

The debt of CLOs had floating interest rates based on LIBOR ranging from 1.48% to 8.19% at September 30, 2020. The other debt had fixed and floating interest rates primarily based on LIBOR ranging from 1.00% to 5.81% at September 30, 2020, and from 2.08% to 7.94% at September 30, 2019.

The contractual maturities for debt of CIPs at September 30, 2020 were as follows:



(in millions)
for the fiscal years ending September 30,	Amount
2021	$	76.4
2022	—
2023	—
2024	35.1
2025	39.3
Thereafter	1,182.6
Total	$	1,333.4

Collateralized Loan Obligations

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



(in millions)
as of September 30,	2020
Unpaid principal balance	$	1,196.5
Difference between unpaid principal balance and fair value	(45.5		)
Fair Value	$	1,151.0

Investments 90 days or more past due were $3.9 million at September 30, 2020.

The Company recognized $1.3 million of net losses during fiscal year 2020 related to its own economic interests in the CLOs.

The aggregate principal amount due of the debt of CLOs was $1,235.8 million at September 30, 2020.

Redeemable Noncontrolling Interests

12 Months Ended

Sep. 30, 2020

Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure [Text Block]

Redeemable Noncontrolling Interests

Changes in redeemable noncontrolling interests were as follows:



(in millions) for the fiscal years ended September 30,	2020									2019¹			2018¹
(in millions) for the fiscal years ended September 30,	CIPs			Minority Interests			Total			2019¹			2018¹
Balance at beginning of year	$	746.7		$	—		$	746.7		$	1,043.6		$	1,941.9
Acquisition	22.1			164.3			186.4			—			—
Business divestiture	—			(21.3		)	(21.3		)	—			—
Net income (loss)	45.0			3.6			48.6			6.2			(12.8		)
Net subscriptions (distributions) and other	247.1			(2.0		)	245.1			1,046.6			170.9
Net deconsolidations	(663.6		)	—			(663.6		)	(1,349.7		)	(1,056.4		)
Balance at End of Year	$	397.3		$	144.6		$	541.9		$	746.7		$	1,043.6

^{______________}

¹

Represents redeemable noncontrolling interests of CIPs.

Nonconsolidated Variable Interest Entities

12 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nonconsolidated Variable Interest Entities

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



(in millions)
as of September 30,	2020		2019
Investments	$	439.2	$	458.1
Receivables	168.0		149.5
Loans receivable	42.4		—
Total	$	649.6	$	607.6

While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. As it has done in the past, the Company also may voluntarily elect to provide its sponsored funds with additional direct or indirect financial support based on its business objectives. In April 2020, the Company authorized loans aggregating up to 5.0 billion Indian Rupees (approximately $66.2 million) to certain sponsored funds in India that had experienced increased liquidity risks and redemptions. The funds are subject to the decision of the funds’ trustee to wind up the funds. See Note 16 – Commitments and Contingencies for further information. The loans have a fixed interest rate of 8.0% per annum, are secured by the funds’ assets and are due upon demand. At September 30, 2020, the loans have an aggregate outstanding balance of $42.4 million, and the remaining authorization available is approximately $4.9 million. The Company did not provide financial or other support to its sponsored funds during fiscal year 2019.

Taxes on Income

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Taxes on Income

The Tax Cuts and Jobs Act (“the Tax Act”), which was enacted into law in the U.S. in December 2017, includes various changes to the tax law, including a permanent reduction in the corporate income tax rate and assessment of a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiaries’ earnings. The estimated related changes in the Company’s deferred tax assets and deferred tax liabilities resulted in a $35.6 million decrease in deferred tax assets, an $88.9 million decrease in deferred tax liabilities and a $53.3 million net tax benefit in fiscal year 2018. The Company also reclassified $0.1 million from accumulated other comprehensive loss to retained earnings related to stranded tax effects resulting from the change in tax rate during fiscal year 2018.

The Company completed its analysis of the Tax Act impact during the first quarter of fiscal year 2019 with no significant adjustment to the provisional amounts previously recorded. The estimated transition tax expense recognized in fiscal year 2018 of $983.2 million was net of an $87.6 million tax benefit related to U.S. taxation of deemed foreign dividends. This benefit was reversed during fiscal year 2019 upon issuance of final regulations by the U.S. Department of Treasury, resulting in increased income tax expense and gross unrecognized tax benefits.

The remaining federal portion of the transition tax liability was $757.2 million at September 30, 2020, and will be paid over the next six years, with 8% of the original liability payable in each of the next three years, 15% in year four, 20% in year five and 25% in year six.

The Tax Act reduced the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The Company’s federal statutory rate for fiscal year 2018 was a blended rate of 24.5%, based on the pre- and post-Tax Act rates.

Prior to the Tax Act, the Company had not provided for U.S. income taxes on undistributed earnings and other outside basis differences of its non-U.S. subsidiaries as it was the Company’s intention for these tax basis differences to remain indefinitely reinvested. Following the Company’s change in policy effective April 1, 2020 to repatriate earnings of all non-U.S. subsidiaries, other outside basis differences, which arose primarily from purchase accounting adjustments, undistributed earnings that are considered indefinitely reinvested and foreign earnings that are restricted by operational and regulatory requirements, remain indefinitely reinvested. These basis differences could reverse through sales of the subsidiaries or the receipt of dividends from the subsidiaries, as well as various other events, none of which are considered probable as of September 30, 2020. The Company has made no provision for U.S. income taxes on these outside basis differences, and determination of the amount of unrecognized deferred tax liability related to such basis differences is not practicable.

The Coronavirus Aid, Relief, and Economic Security Act, which includes several corporate tax provisions and was signed into law on March 27, 2020, did not have a material impact on the Company’s income taxes.

Taxes on income were as follows:



(in millions)
for the fiscal years ended September 30,	2020			2019			2018
Current expense
Federal	$	154.9		$	343.4		$	1,343.7
State	28.8			37.0			38.0
Non-U.S.	54.2			66.8			141.1
Deferred benefit	(7.1		)	(4.9		)	(50.3		)
Total	$	230.8		$	442.3		$	1,472.5

Income before taxes consisted of the following:



(in millions)
for the fiscal years ended September 30,	2020		2019		2018
U.S.	$	771.7	$	1,151.1	$	1,458.1
Non-U.S.	246.2		496.7		757.1
Total	$	1,017.9	$	1,647.8	$	2,215.2

The Company’s income in certain countries is subject to reduced tax rates due to tax rulings and incentives. The impact of the reduced rates on income tax expense was $2.7 million or $0.01 per diluted share for fiscal year 2020, $4.1 million or $0.01 per diluted share for fiscal year 2019, and $31.3 million or $0.06 per diluted share for fiscal year 2018. One tax incentive remained in effect at September 30, 2020 which will expire in December 2023.

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



(in millions)
as of September 30,	2020			2019
Deferred Tax Assets
Capitalized mixed service costs	$	326.1		$	—
Net operating loss and state credit carry-forwards	317.0			31.9
Deferred compensation and benefits	160.6			39.7
Foreign tax credit carry-forwards	103.0			—
Debt premium	81.9			—
Stock-based compensation	26.6			19.6
Unrealized foreign exchange losses	1.2			11.0
Other	120.9			30.4
Total deferred tax assets	1,137.3			132.6
Valuation allowance	(320.6		)	(26.9		)
Deferred tax assets, net of valuation allowance	816.7			105.7
Deferred Tax Liabilities
Goodwill and other purchased intangibles	1,009.4			159.5
Depreciation on property and equipment	23.6			22.5
Other	44.9			23.0
Total deferred tax liabilities	1,077.9			205.0
Net Deferred Tax Liability	$	261.2		$	99.3

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



(in millions)
as of September 30,	2020		2019
Other assets	$	44.1	$	20.8
Deferred tax liabilities	305.3		120.1
Net Deferred Tax Liability	$	261.2	$	99.3

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

At September 30, 2020, there were $107.3 million of non-U.S. tax effected net operating loss carry-forwards which expire between fiscal years 2021 and 2040. In addition, there were $199.4 million in tax effected state net operating loss carry-forwards that expire between fiscal years 2021 and 2041, with some having an indefinite carry-forward period. The Company also has federal net operating losses of $9.3 million, the majority of which will carry-forward indefinitely and $103.0 million of foreign tax credit carry-forwards that expire between fiscal years 2021 and 2028.

The Company recognizes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized based on timing of expiration, nature, projected sources of income and limitations on utilization under the statute. The valuation allowance increased $293.7 million in fiscal year 2020 primarily related to carry-forward assets recognized in connection with the acquisition of Legg Mason, and decreased $0.6 million in fiscal year 2019. At September 30, 2020, a valuation allowance of $320.6 million was recorded for the following items: $202.2 million for federal, state, and foreign net operating loss carry-forwards, $45.0 million due to uncertainty of realizing the benefit of foreign tax credits, $38.4 million for other foreign deferred taxes including carried forward U.K. interest deductions, and $35.0 million for capital losses.

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



(in millions)
for the fiscal years ended September 30,	2020					2019					2018
Federal taxes at statutory rate	$	213.8		21.0	%	$	346.0		21.0	%	$	542.7		24.5	%
Transition tax on deemed repatriation of undistributed foreign earnings	—			—		86.0			5.2	%	983.2			44.4	%
Revaluation of net deferred tax liabilities	—			—		—			—		(53.3		)	(2.4	%)
Other Tax Act impacts	—			—		0.4			—		38.9			1.8	%
State taxes, net of federal tax effect	28.2			2.8	%	29.7			1.8	%	16.6			0.7	%
Capital loss on investments, net of valuation allowance	(27.0		)	(2.7	%)	—			—		—			—
Effect of non-U.S. operations	6.9			0.7	%	(21.3		)	(1.3	%)	(61.9		)	(2.8	%)
Effect of net loss (income) attributable to noncontrolling interests	2.5			0.2	%	(2.1		)	(0.1	%)	5.3			0.2	%
Other	6.4			0.7	%	3.6			0.2	%	1.0			0.1	%
Tax Provision	$	230.8		22.7	%	$	442.3		26.8	%	$	1,472.5		66.5	%

Other Tax Act impacts consist primarily of foreign dividend distribution taxes and tax withholdings.

The Company recognized a tax benefit in fiscal year 2020 for capital losses that were realized from sales of investments subsequent to the change in corporate tax structure of a foreign holding company to a U.S. branch. The benefit reflects the Company’s ability to carryback losses for the last three tax years at historical Federal statutory tax rates. The remaining capital losses can be carried forward, which the Company assessed for realizability.

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



(in millions)
for the fiscal years ended September 30,	2020			2019			2018
Balance at beginning of year	$	202.6		$	77.5		$	81.1
Additions from business combinations	141.8			—			—
Additions for tax positions of prior years	0.9			131.8			3.6
Reductions for tax positions of prior years	(0.6		)	(2.9		)	(6.6		)
Tax positions related to the current year	12.2			10.7			11.6
Settlements with taxing authorities	(0.3		)	(2.2		)	—
Expirations of statute of limitations	(13.7		)	(12.3		)	(12.2		)
Balance at End of Year	$	342.9		$	202.6		$	77.5

If recognized, $303.1 million for 2020 and the balance for 2019 and 2018, net of any deferred tax benefits, would favorably affect the Company’s effective income tax rate in future periods.

The Company accrues interest and penalties related to unrecognized tax benefits in general, administrative and other expenses. Accrued interest on uncertain tax positions at September 30, 2020 and 2019 was $21.7 million and $11.9 million, and is not presented in the unrecognized tax benefits table above. Accrued penalties at September 30, 2020 was $2.9 million and insignificant in 2019.

The Company files a consolidated U.S. federal income tax return, multiple U.S. state and local income tax returns, and income tax returns in multiple non-U.S. jurisdictions. The Company is subject to examination by the taxing authorities in these jurisdictions. The Company’s major tax jurisdictions and the tax years for which the statutes of limitations have not expired are as follows: India 2003 to 2020; Brazil 2008 to 2020, Canada 2011 to 2020; Hong Kong 2014 to 2020; Singapore 2015 to 2020; Luxembourg and the U.K. 2019 to 2020; U.S. federal 2017 to 2020; the City of New York 2012 to 2020; and the States of California, and Minnesota 2016 to 2020; and the States of Florida, Maryland, Massachusetts, New York, and Pennsylvania 2017 to 2020.

The Company has ongoing examinations in various stages of completion in the State of Illinois, City of New York, and in Canada, France, Germany and India. Examination outcomes and the timing of settlements are subject to significant uncertainty. Such settlements may involve some or all of the following: the payment of additional taxes, the adjustment of deferred taxes and/or the recognition of unrecognized tax benefits. The Company has recognized a tax benefit only for those positions that meet the more-likely-than-not recognition threshold. It is reasonably possible that the total unrecognized tax benefit as of September 30, 2020 could decrease by an estimated $35.4 million within the next twelve months as a result of the expiration of statutes of limitations in the U.S. federal and certain U.S. state and local and non-U.S. tax jurisdictions, and potential settlements with U.S. states and non-U.S. taxing authorities.

Leases

12 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Lessee Arrangements

The leases had a weighted-average remaining lease term of 6.5 years as of September 30, 2020, and generally include one or more options to renew.

Lease expense was as follows:



(in millions)
for the fiscal year ended September 30, 2020	Amount
Operating lease cost¹	$	72.5
Finance lease cost	0.5
Variable lease cost	6.0
Less: sublease income	(4.2		)
Total lease expense	$	74.8

^{__________________}


¹	Substantially all is included in occupancy expense.

Supplemental cash flow information related to leases was as follows:



(in millions)	Amount
for the fiscal year ended September 30, 2020	Amount
Operating cash flows from operating leases included in the measurement of operating lease liabilities	$	65.1
ROU assets obtained in exchange for new/modified operating lease liabilities	13.7

The weighted-average discount rate for the operating lease liabilities as of September 30, 2020 was 3.5%. The maturities of the liabilities were as follows:



(in millions)	Amount
for the fiscal years ending September 30,	Amount
2021	$	134.8
2022	131.5
2023	125.4
2024	89.0
2025	50.2
Thereafter	153.5
Total lease payments	684.4
Less: interest	(63.4		)
Operating lease liabilities	$	621.0

As of September 30, 2019, future minimum lease payments under long-term non-cancelable operating leases were as follows:



(in millions)
for the fiscal years ending September 30,	Amount
2020	$	49.5
2021	45.3
2022	40.9
2023	39.1
2024	36.7
Thereafter	149.1
Total Minimum Lease Payments	$	360.6

Lessor Arrangements

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

The maturities of lease payments due to the Company and weighted-average remaining lease term as of September 30, 2020 were as follows:



(in millions)	Subleases		Leases
for the fiscal years ending September 30,	Subleases		Leases
2021	$	19.0	$	31.2
2022	19.2		28.0
2023	18.7		28.8
2024	8.5		29.8
2025	0.2		29.9
Thereafter	0.1		70.7
Total	$	65.7	$	218.4
Weighted-average remaining lease term	3.4 years		7.2 years

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Proceedings India Credit Fund Closure Matters. Effective April 24, 2020, a subsidiary of Franklin, Franklin Templeton Trustee Services Private Limited (“FTTS”), announced its decision to wind-up six fixed income mutual fund schemes of the Franklin Templeton Mutual Fund in India (referred to herein as the “Funds” or the “India Fixed Income Funds”), which at the time had collective assets under management of approximately USD $3.4 billion. FTTS took action to convene unitholder meetings for the Funds to approve the appointment of liquidators, and the asset management company to the Funds, Franklin Templeton Asset Management (India) Private Limited (“FTAMI”), ceased earning investment management fees on the Funds. Certain Fund unitholders and others subsequently commenced multiple writ petition actions in India (some of which were promptly voluntarily dismissed), challenging the decision to wind up the Funds and alleging that the Company Respondents (as defined below) violated various regulations of the Securities and Exchange Board of India (“SEBI”), mismanaged the Funds, misrepresented or omitted certain information relating to the Funds, and/or engaged in other alleged misconduct. The petitions were filed in May 2020 and June 2020 in the High Court of Gujarat, the High Court of Madras, and the High Court of Delhi, and named as respondents one or more of Franklin, its subsidiaries Templeton International, Inc., FTTS, FTAMI, and certain individual directors, officers, and employees of FTAMI (collectively, the “Company Respondents”), as well as SEBI and other governmental authorities. The petitioners sought a wide range of relief, including, among other items, an order quashing the wind-up notice and blocking the unitholder vote, initiating various investigations into the Company Respondents, and allowing the unitholder petitioners to redeem their investments with interest. On June 3, 2020, the High Court of Gujarat granted an ex parte interim injunction order, staying the operation and implementation of the unitholder voting process. On June 19, 2020, the petitions were transferred to the High Court of Karnataka for hearing and resolution. In the course of the hearings, on September 24, 2020, the Company learned that a “first information report” or “FIR” had been registered by the Economic Offenses Wing of the Chennai police department against certain of the Company Respondents in connection with a complaint made by one of the petitioners. In light of the registration of the FIR, which is the preliminary step in an investigation, the court disposed of the petition that had sought an order for such an investigation. On October 24, 2020, the High Court of Karnataka issued its judgment, in which it upheld the decision taken by FTTS to wind up the Funds and held that there was “nothing wrong with the decision making process,” but determined that consent of the unitholders is required to implement the decision. The court did not grant the other relief sought by the petitioners. The court stayed the operation of its judgment for a period of six weeks, during which time the court held that there will not be any redemptions from the Funds. The deadline for any party to file an appeal is 90 days from the date of the judgment. Certain Company Respondents intend to appeal parts of the judgment. Separately, on May 27, 2020, SEBI initiated a forensic audit/inspection of Franklin Templeton Mutual Fund, FTAMI, and FTTS and appointed an outside auditor to conduct the review. The auditor submitted a confidential report to SEBI containing certain preliminary observations, to which SEBI sought responses from FTAMI and FTTS, and such responses were provided in September 2020. The matter is currently under review by SEBI. As part of the judgment issued by the High Court of Karnataka, the court directed SEBI to decide whether or not to take action within six weeks from the date it receives a final report by the forensic auditor. The Company strongly believes that the decision by FTTS to wind up the India Fixed Income Funds was taken in the best interests of investors and fully pursuant to applicable SEBI regulations. Nonetheless, to implement the decision, FTTS ultimately may be required, or may determine, to obtain unitholder consent. If that effort is unsuccessful and/or if unitholder redemptions from the Funds are not suspended until the process for seeking such consent is complete, the Funds could experience significant redemption pressures. In the event that the Funds are unable to meet investor redemption requests in an orderly fashion, including if redemptions require the Funds to undertake distressed sales of assets resulting in the reduction of the net asset values of the Funds, additional litigation and/or regulatory or governmental investigations and proceedings could be initiated. In addition, if SEBI were to commence a regulatory proceeding in connection with the forensic audit, and ultimately conclude that the respondents violated applicable regulations, it is possible that certain Franklin subsidiaries and related individuals could be subject to the imposition of regulatory sanctions. While the Company believes that it would have meritorious defenses to any such actions, such matters could involve the risk of significant financial penalties and other liabilities, reputational harm, and restrictions on the Company’s asset management activities in India, all of which could adversely impact the Company’s financial results. 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 negative outcome of such matters, including due to the current stage of these matters. Other Litigation Matters. The Company is from time to time involved in other litigation relating to claims arising in the normal course of business. Management is of the opinion that the ultimate resolution of such claims will not materially affect the Company’s business, financial position, results of operations or liquidity. In management’s opinion, an adequate accrual has been made as of September 30, 2020 to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount. Indemnifications and Guarantees In the ordinary course of business or in connection with certain acquisition agreements, the Company enters into contracts that provide for indemnifications by the Company in certain circumstances. In addition, certain Company entities guarantee certain financial and performance-related obligations of various Franklin subsidiaries. The Company is also subject to certain legal requirements and agreements providing for indemnifications of directors, officers and personnel against liabilities and expenses they may incur under certain circumstances in connection with their service in those positions. The terms of these indemnities and guarantees vary pursuant to applicable facts and circumstances, and from agreement to agreement. Future payments for claims against the Company under these indemnities or guarantees could negatively impact the Company’s financial condition. In management’s opinion, no material loss was deemed probable or reasonably possible pursuant to such indemnification agreements and/or guarantees as of September 30, 2020. Other Commitments and Contingencies While the Company has no legal or contractual obligation to do so, it routinely makes cash investments in the course of launching sponsored funds. At September 30, 2020, the Company had $335.6 million of committed capital contributions which relate to discretionary commitments to invest in sponsored funds and other investment products and entities, including CIPs. These unfunded commitments are not recorded in the Company’s consolidated balance sheet.

Stock-Based Compensation

12 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Stock-Based Compensation

The Company’s stock-based compensation plans consist of the Amended and Restated Annual Incentive Compensation Plan (the “AIP”), the 2002 Universal Stock Incentive Plan, as amended and restated (the “USIP”) and the amended and restated Franklin Resources, Inc. 1998 Employee Stock Investment Plan (the “ESIP”). In connection with the acquisition of Legg Mason, the Company assumed the Legg Mason 2017 Equity Incentive Plan, which was amended and restated as the Amended and Restated Franklin Resources, Inc. 2017 Equity Incentive Plan (the “EIP”). The Compensation Committee of the Board of Directors determines the terms and conditions of awards under the AIP, the USIP, the ESIP and the EIP.

Stock-based compensation expenses were as follows:



(in millions)
for the fiscal years ended September 30,	2020		2019		2018
Stock and stock unit awards	$	117.1	$	105.7	$	111.6
Employee stock investment plan	5.2		5.8		6.2
Total	$	122.3	$	111.5	$	117.8

Stock and Stock Unit Awards

Under the terms of the AIP, eligible employees may receive cash, equity awards and/or mutual fund unit awards generally based on the performance of the Company and/or its funds, and the individual employee. The USIP and EIP provide for the issuance of the Company’s common stock for various stock-related awards to officers, directors and employees. There are 120.0 million shares authorized under the USIP and 23.0 million shares authorized under the EIP, of which 4.5 million shares and 18.3 million shares were available for grant at September 30, 2020.

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

Stock and stock unit award activity was as follows:



(shares in thousands)	Time-Based Shares		Performance- Based Shares		Total Shares		Weighted-Average Grant-Date Fair Value
for the fiscal year ended September 30, 2020	Time-Based Shares		Performance- Based Shares		Total Shares		Weighted-Average Grant-Date Fair Value
Nonvested balance at September 30, 2019	3,778		1,854		5,632		$	34.06
Granted	11,540		3,891		15,431		23.05
Vested	(2,798	)	(374	)	(3,172	)	32.89
Forfeited/canceled	(379	)	(563	)	(942	)	33.26
Nonvested balance at September 30, 2020	12,141		4,808		16,949		$	24.30

Total unrecognized compensation expense related to nonvested stock and stock unit awards was $338.2 million at September 30, 2020. This expense is expected to be recognized over a remaining weighted-average vesting period of 3.1 years. The weighted-average grant-date fair values of stock awards and stock unit awards granted during fiscal years 2020, 2019 and 2018 were $23.05, $30.75 and $42.63 per share. The total fair value of stock and stock unit awards vested during the same periods was $72.2 million, $84.2 million and $91.5 million.

The Company generally does not repurchase shares upon vesting of stock and stock unit awards. However, in order to pay taxes due in connection with the vesting of employee and executive officer stock and stock unit awards, shares are repurchased using a net stock issuance method.

Employee Stock Investment Plan

The ESIP allows eligible participants to buy shares of the Company’s common stock at a discount of its market value on defined dates. A total of 1.0 million shares were issued under the ESIP during fiscal year 2020, and 5.9 million shares were reserved for future issuance at September 30, 2020.

Defined Contribution Plans	12 Months Ended
Defined Contribution Plans	Sep. 30, 2020
Retirement Benefits [Abstract]
Defined Contribution Plans	Defined Contribution Plans The Company sponsors a 401(k) plan which covers substantially all U.S. employees meeting certain employment requirements. Participants may contribute up to 50% of their eligible salary and up to 100% of the cash portion of their year-end bonus, as defined by the plan and subject to Internal Revenue Code limitations, each year to the plan. The Company increased its matching contribution rate from 75% to 85% for a period of three years beginning January 1, 2020. Certain of the Company’s non-U.S. subsidiaries also sponsor defined contribution plans primarily for the purpose of providing deferred compensation incentives for employees and to comply with local regulatory requirements. The total expenses recognized for defined contribution plans were $59.2 million, $52.2 million and $49.8 million for fiscal years 2020, 2019 and 2018.

Segment and Geographic Information

12 Months Ended

Sep. 30, 2020

Segment Reporting, Measurement Disclosures [Abstract]

Segment and Geographic Information

The Company has one operating segment, investment management and related services. See Note 5 – Revenues for total operating revenues disaggregated by geographic location.



(in millions)
as of September 30,	2020		2019
Property and Equipment, Net
United States	$	634.4	$	542.8
Europe, Middle East and Africa	133.0		90.0
Asia-Pacific	37.7		40.7
Americas excluding United States	8.7		10.2
Total	$	813.8	$	683.7

Investment and Other Income (Losses), Net

12 Months Ended

Sep. 30, 2020

Other Income and Expenses [Abstract]

Investment and Other Income (Losses), Net

Other Income (Losses), Net

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



(in millions)
for the fiscal years ended September 30,	2020			2019			2018
Dividend income	$	48.9		$	97.0		$	51.1
Interest income	14.3			31.0			76.5
Gains (losses) on investments, net	(16.8		)	(9.7		)	6.0
Income (losses) from investments in equity method investees	(98.1		)	(10.4		)	44.4
Rental income	30.0			19.8			15.9
Foreign currency exchange (losses) gains, net	(22.3		)	13.1			0.6
Other, net	5.6			0.6			5.8
Investment and Other Income (Losses), Net	$	(38.4	)	$	141.4		$	200.3

Substantially all dividend income was generated by investments in nonconsolidated sponsored funds. Interest income was primarily generated by cash equivalents, debt securities of U.S. states and political subdivisions. Gains (losses) on investments, net consists primarily of realized and unrealized gains (losses) on equity securities measured at fair value and other-than-temporary impairment of investments.

Proceeds from the sale of available-for-sale securities were $1.6 million and $85.5 million in fiscal years 2020 and 2018. There were no sales of available-for-sale securities in fiscal year 2019.

Net losses recognized on equity securities measured at fair value and trading debt securities that were held by the Company at September 30, 2020 and 2019 were $2.6 million and $0.1 million, and the net loss recognized on trading investment securities that were held by the Company at September 30, 2018 was $1.7 million.

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Sep. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

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



(in millions)	Currency Translation Adjustments			Unrealized Losses on Defined Benefit Plans			Unrealized Gains on Investments			Total
as of and for the fiscal years ended September 30, 2020, 2019 and 2018	Currency Translation Adjustments			Unrealized Losses on Defined Benefit Plans			Unrealized Gains on Investments			Total
Balance at October 1, 2017	$	(281.0	)	$	(6.0	)	$	2.2		$	(284.8	)
Adoption of new accounting guidance	—			(0.1		)	—			(0.1		)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications, net of tax	(85.5		)	1.5			7.3			(76.7		)
Reclassifications to compensation and benefits expense, net of tax	—			0.4			—			0.4
Reclassifications to net investment and other income (losses), net of tax	(6.4		)	—			(3.0		)	(9.4		)
Total other comprehensive income (loss)	(91.9		)	1.9			4.3			(85.7		)
Balance at September 30, 2018	$	(372.9	)	$	(4.2	)	$	6.5		$	(370.6	)
Adoption of new accounting guidance	—			—			(8.0		)	(8.0		)
Other comprehensive income (loss)
Other comprehensive loss before reclassifications, net of tax	(53.9		)	(2.4		)	(5.4		)	(61.7		)
Reclassifications to compensation and benefits expense, net of tax	—			0.4			—			0.4
Reclassifications to net investment and other income (losses), net of tax	1.4			—			6.9			8.3
Total other comprehensive income (loss)	(52.5		)	(2.0		)	1.5			(53.0		)
Balance at September 30, 2019	$	(425.4	)	$	(6.2	)	$	—		$	(431.6	)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications, net of tax	23.8			(2.1		)	(1.3		)	20.4
Reclassifications to compensation and benefits expense, net of tax	—			0.3			—			0.3
Reclassifications to net investment and other income (losses), net of tax	2.0			—			1.3			3.3
Total other comprehensive income (loss)	25.8			(1.8		)	—			24.0
Balance at September 30, 2020	$	(399.6	)	$	(8.0	)	$	—		$	(407.6	)

Subsequent Event Subsequent Event (Notes)	12 Months Ended
Subsequent Event Subsequent Event (Notes)	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events [Text Block]	Subsequent Event On October 19, 2020, the Company completed its offering and sale of the 1.600% Notes due 2030 with a principal amount of $750.0 million. Interest on the notes will be payable semi-annually on April 30 and October 30 of each year, beginning on April 30, 2021. The notes contain an optional redemption feature that allows the Company to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price.

Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Business

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

Basis of Presentation

Basis of Presentation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Management believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates. Certain comparative amounts for prior fiscal years have been reclassified to conform to the financial statement presentation as of and for the fiscal year ended September 30, 2020 (“fiscal year 2020”).

In the quarter ended September 30, 2020, the Company changed the presentation of its consolidated statements of income to include dividend and investment income and expenses of consolidated investment products in other income, net. Amounts for the comparative prior fiscal year periods have been reclassified to conform to the current year presentation. These reclassifications had no impact on previously reported net income or financial position. Management believes the revised presentation is more useful to readers of its financial statements and more accurately portrays the nature of the consolidated investment products (“CIP”) revenue and expenses as the operations of CIPs are not related to the Company’s core business.

The following table presents the effects of the change in the presentation of operating revenues, operating expenses and other income, net to the Company’s previously reported consolidated statements of income:



	2019									2018
(in millions) for the fiscal years ended September	As Reported			Adjustments			As Amended			As Reported			Adjustments			As Amended
Operating Revenues
Other	$	128.4		$	(105.1	)	$	23.3		$	129.9		$	(114.6	)	$	15.3

Operating Expenses
General, administrative and other¹	420.7			(14.6		)	406.1			397.7			(24.2		)	373.5

Other Income (Expenses)
Investment and other income (losses), net	115.1			26.3			141.4			145.3			55.0			200.3
Interest expense	(24.7		)	2.3			(22.4		)	(48.7		)	2.4			(46.3		)
Investment and other income of consolidated investment products, net	—			78.8			78.8			—			59.6			59.6
Expenses of consolidated investment products	—			(16.9		)	(16.9		)	—			(26.6		)	(26.6		)
Other income (expenses), net	$	90.4		$	90.5		$	180.9		$	96.6		$	90.4		$	187.0

^{______________}


¹	General, administrative and other includes amortization of intangible assets.

Consolidation

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

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

The Company is the primary beneficiary of a VIE if it has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or right to receive benefits from the VIE that could potentially be significant to the VIE. Investment management fees earned from VIEs are excluded from the primary beneficiary determination if they are deemed to be at market and commensurate with service. The key estimates and assumptions used in the analyses include the amount of assets under management (“AUM”) and the life of the investment product.

Related Parties

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

Earnings per Share

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

Business combinations