10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 001-09318

FRANKLIN RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-2670991
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Franklin Parkway, San Mateo, CA	94403
(Address of principal executive offices)	(Zip Code)

(650) 312-2000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  YES    o  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  YES    o  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer     x	Accelerated filer     o
Non-accelerated filer  o  (Do not check if a smaller reporting company)	Smaller reporting company    o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    o  YES    x  NO

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Outstanding: 212,609,362 shares of common stock, par value $0.10 per share, of Franklin Resources, Inc. as of April 23, 2013.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

FRANKLIN RESOURCES, INC.

Condensed Consolidated Statements of Income

Unaudited

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions, except per share data)	2013			2012			2013			2012
Operating Revenues
Investment management fees	$	1,267.5		$	1,126.4		$	2,467.4		$	2,201.5
Sales and distribution fees	642.7			585.9			1,246.8			1,110.2
Shareholder servicing fees	76.6			76.7			151.0			152.1
Other, net	26.8			10.3			50.2			37.4
Total operating revenues	2,013.6			1,799.3			3,915.4			3,501.2
Operating Expenses
Sales, distribution and marketing	780.8			715.5			1,511.7			1,346.1
Compensation and benefits	355.1			323.0			690.2			623.4
Information systems and technology	44.8			43.3			88.4			84.7
Occupancy	31.9			31.9			65.3			63.7
General, administrative and other	71.6			68.5			145.3			133.8
Total operating expenses	1,284.2			1,182.2			2,500.9			2,251.7
Operating Income	729.4			617.1			1,414.5			1,249.5
Other Income (Expenses)
Investment and other income, net	96.5			82.4			142.0			153.6
Interest expense	(10.9		)	(9.6		)	(25.4		)	(18.2		)
Other income, net	85.6			72.8			116.6			135.4
Income before taxes	815.0			689.9			1,531.1			1,384.9
Taxes on income	221.6			202.1			433.0			403.4
Net income	593.4			487.8			1,098.1			981.5
Less: Net income (loss) attributable to
Nonredeemable noncontrolling interests	17.8			(15.9		)	5.1			(5.8		)
Redeemable noncontrolling interests	2.8			0.5			4.1			3.3
Net Income Attributable to Franklin Resources, Inc.	$	572.8		$	503.2		$	1,088.9		$	984.0
Earnings per Share
Basic	$	2.69		$	2.33		$	5.12		$	4.54
Diluted	2.69			2.32			5.11			4.53
Dividends per Share	$	0.29		$	0.27		$	3.58		$	2.54

See Notes to Condensed Consolidated Financial Statements.

2

FRANKLIN RESOURCES, INC.

Condensed Consolidated Statements of Comprehensive Income

Unaudited

(in millions)	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
Net Income	$	593.4		$	487.8		$	1,098.1		$	981.5
Other Comprehensive Income (Loss)
Net unrealized gains (losses) on investments, net of tax	(16.9		)	22.5			(19.0		)	17.7
Currency translation adjustments	(38.9		)	40.9			(35.0		)	18.4
Net unrealized gains (losses) on defined benefit plans, net of tax	0.7			—			0.7			(0.2		)
Total comprehensive income	538.3			551.2			1,044.8			1,017.4
Less: Comprehensive income (loss) attributable to
Nonredeemable noncontrolling interests	17.8			(15.9		)	5.1			(5.8		)
Redeemable noncontrolling interests	2.8			0.5			4.1			3.3
Comprehensive Income Attributable to Franklin Resources, Inc.	$	517.7		$	566.6		$	1,035.6		$	1,019.9

See Notes to Condensed Consolidated Financial Statements.

3

FRANKLIN RESOURCES, INC.

Condensed Consolidated Balance Sheets

Unaudited

(in millions)	March 31, 2013		September 30, 2012
Assets
Cash and cash equivalents	$	5,411.3	$	5,784.3
Receivables	994.6		850.2
Investments (including $1,943.1 and $2,012.7 at fair value at March 31, 2013 and September 30, 2012)	2,555.7		2,583.8
Loans receivable, net	238.3		254.4
Assets of consolidated sponsored investment products
Cash and cash equivalents	44.3		42.8
Investments, at fair value	1,228.8		1,046.6
Assets of consolidated variable interest entities
Cash and cash equivalents	100.2		224.3
Investments, at fair value	1,012.9		984.1
Deferred taxes	100.3		94.9
Property and equipment, net	573.9		582.7
Goodwill and other intangible assets, net	2,380.9		2,141.9
Other	169.0		161.5
Total Assets	$	14,810.2	$	14,751.5
Liabilities
Compensation and benefits	$	312.9	$	400.5
Accounts payable and accrued expenses	246.6		241.6
Commissions	422.8		383.9
Deposits	674.2		671.7
Debt	1,263.4		1,566.1
Debt of consolidated sponsored investment products	86.4		110.2
Liabilities of consolidated variable interest entities
Debt, at fair value	1,073.2		1,100.9
Other, at fair value	45.5		61.9
Deferred taxes	281.2		276.3
Other	245.6		151.2
Total liabilities	4,651.8		4,964.3
Commitments and Contingencies (Note 11)
Redeemable Noncontrolling Interests	80.5		26.7
Stockholders’ Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued	—		—
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 212,595,884 and 212,208,957 shares issued and outstanding at March 31, 2013 and September 30, 2012	21.3		21.2
Retained earnings	9,384.5		9,084.4
Appropriated retained earnings of consolidated variable interest entities	5.5		33.7
Accumulated other comprehensive income	8.7		62.0
Total Franklin Resources, Inc. stockholders’ equity	9,420.0		9,201.3
Nonredeemable noncontrolling interests	657.9		559.2
Total stockholders’ equity	10,077.9		9,760.5
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	14,810.2	$	14,751.5

See Notes to Condensed Consolidated Financial Statements.

4

FRANKLIN RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows

Unaudited

	Six Months Ended March 31,
(in millions)	2013			2012
Net Income	$	1,098.1		$	981.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	114.6			108.4
Stock-based compensation	57.1			50.3
Excess tax benefit from stock-based compensation	(11.7		)	(17.6		)
Gains on sale of assets	(27.8		)	(21.4		)
Income from investments in equity method investees	(42.2		)	(61.6		)
Net (gains) losses on other investments of consolidated sponsored investment products	(46.0		)	27.4
Net (gains) losses of consolidated variable interest entities	26.5			(17.7		)
Other	3.9			21.0
Changes in operating assets and liabilities:
Increase in receivables, prepaid expenses and other	(201.7		)	(98.7		)
Increase in trading securities, net	(83.9		)	(240.4		)
Increase in trading securities of consolidated sponsored investment products, net	(69.3		)	(81.1		)
Decrease in accrued compensation and benefits	(89.2		)	(101.5		)
Increase in commissions payable	38.9			11.3
Increase (decrease) in income taxes payable	16.6			(55.8		)
Decrease in other liabilities	(12.1		)	(25.8		)
Net cash provided by operating activities	771.8			478.3
Purchase of investments	(137.4		)	(107.3		)
Liquidation of investments	321.3			556.7
Purchase of investments by consolidated sponsored investment products	(144.1		)	(105.8		)
Liquidation of investments by consolidated sponsored investment products	88.9			25.2
Purchase of investments by consolidated variable interest entities	(360.9		)	(175.0		)
Liquidation of investments by consolidated variable interest entities	333.4			233.7
Decrease in loans receivable, net	16.5			17.9
Decrease in loans receivable held by consolidated variable interest entities, net	—			41.5
Additions of property and equipment, net	(28.2		)	(45.3		)
Acquisition of subsidiary, net of cash acquired	5.7			—
Cash and cash equivalents recognized due to consolidation of sponsored investment products	2.8			—
Net cash provided by investing activities	98.0			441.6
Increase (decrease) in deposits	2.5			(53.1		)
Issuance of common stock	27.3			28.2
Dividends paid on common stock	(759.3		)	(547.4		)
Repurchase of common stock	(121.3		)	(416.8		)
Excess tax benefit from stock-based compensation	11.7			17.6
Decrease in commercial paper, net	—			(5.0		)
Payments on debt	(479.4		)	—

[Table continued on next page]

See Notes to Condensed Consolidated Financial Statements.

5

FRANKLIN RESOURCES, INC.

Condensed Consolidated Statements of Cash Flows

Unaudited

[Table continued from previous page]

	Six Months Ended March 31,
(in millions)	2013			2012
Proceeds from issuance of debt by consolidated sponsored investment products	$	301.1		$	22.8
Payments on debt by consolidated sponsored investment products	(324.8		)	(71.5		)
Payments on debt by consolidated variable interest entities	(95.3		)	(159.0		)
Noncontrolling interests	87.6			137.5
Net cash used in financing activities	(1,349.9		)	(1,046.7		)
Effect of exchange rate changes on cash and cash equivalents	(15.5		)	7.3
Decrease in cash and cash equivalents	(495.6		)	(119.5		)
Cash and cash equivalents, beginning of period	6,051.4			5,198.6
Cash and Cash Equivalents, End of Period	$	5,555.8		$	5,079.1
Supplemental Disclosure of Non-Cash Activities
Decrease in noncontrolling interests due to net deconsolidation of certain sponsored investment products	$	(10.7	)	$	(30.9	)
Increase in noncontrolling interests due to acquisition	38.2			—
Contingent consideration liability recognized due to acquisition	90.6			—
Transfers of loans receivable, net to loans held for sale	—			117.5
Transfers of loans receivable of consolidated variable interest entities, net to loans held for sale	—			37.4
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	430.1		$	442.1
Cash paid for interest	26.8			21.3
Cash paid for interest by consolidated sponsored investment products and consolidated variable interest entities	24.7			26.6

See Notes to Condensed Consolidated Financial Statements.

6

FRANKLIN RESOURCES, INC.

Notes to Condensed Consolidated Financial Statements

March 31, 2013

(Unaudited)

Note 1 – Basis of Presentation

The unaudited interim financial statements of Franklin Resources, Inc. (“Franklin”) and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared by the Company in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. These financial statements should be read together with the Company’s audited financial statements included in its Form 10-K for the fiscal year ended September 30, 2012 (“fiscal year 2012”). Certain amounts for the comparative prior fiscal year period have been reclassified to conform to the financial statement presentation as of and for the period ended March 31, 2013.

Note 2 – New Accounting Guidance

Recently Adopted Accounting Guidance

On October 1, 2012, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance that requires the components of net income and other comprehensive income to be presented in one continuous statement or in two separate but consecutive statements. The Company elected to present the components of comprehensive income in two separate but consecutive statements. See the consolidated statements of comprehensive income in the condensed consolidated financial statements.

On October 1, 2012, the Company adopted new FASB amendments to the existing impairment guidance for goodwill and indefinite-lived intangible assets. The amendments permit a reporting entity to first assess qualitative factors to determine whether it is necessary to perform the annual quantitative impairment tests for goodwill and indefinite-lived intangible assets. The adoption of these amendments did not have a material impact on the Company's consolidated financial statements.

New Accounting Guidance Not Yet Adopted

In February 2013, the FASB issued new guidance requiring an entity to report significant reclassifications out of accumulated other comprehensive income by component either on the face of the financial statements or in the notes. The adoption of the guidance in the first quarter of the fiscal year ending September 30, 2014 will result in additional disclosures of the changes in the various components of the Company's accumulated other comprehensive income balances.

Note 3 – Acquisition

On November 1, 2012, the Company acquired approximately 69% of the equity of K2 Advisors Holdings LLC (“K2”), a fund of hedge funds solutions provider. The acquisition was transacted through a $182.9 million cash investment in K2. The Company also agreed to acquire K2’s remaining equity interests over a multi-year period beginning in fiscal year 2017, resulting in the conversion of this equity to a liability. The amount of the liability is contingent on K2’s future revenue and profits and had an estimated fair value of $90.6 million on November 1, 2012. As a result of the conversion, the Company owns 100% of K2’s outstanding equity for U.S. GAAP purposes.

7

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

(in millions)	Estimated Fair Value
As of November 1, 2012
Cash, including cash invested	$	191.6
Investments of consolidated sponsored investment products	31.1
Indefinite-lived intangible assets	105.2
Definite-lived intangible assets	43.8
Goodwill	110.1
Other assets	28.0
Debt	(176.5		)
Other liabilities	(21.6		)
Noncontrolling interests	(38.2		)
Total Identifiable Net Assets	$	273.5

The intangible assets relate to management contracts. The definite-lived intangible assets will be amortized over a period of six years. The debt was retired immediately following the acquisition. At acquisition date, K2 had $8.7 billion in assets under management (“AUM”).

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

Note 4 – Stockholders' Equity and Redeemable Noncontrolling Interests

The changes in total stockholders’ equity and redeemable noncontrolling interests were as follows:

(in millions)	Franklin Resources,  Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests		Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2013
Balance at October 1, 2012	$	9,201.3		$	559.2	$	9,760.5		$	26.7
Net income	1,088.9			5.1		1,094.0			4.1
Net loss reclassified to appropriated retained earnings	(28.2		)	28.2		—
Other comprehensive loss	(53.3		)			(53.3		)
Cash dividends on common stock	(763.6		)			(763.6		)
Repurchase of common stock	(121.3		)			(121.3		)
Noncontrolling interests
Net subscriptions				55.6		55.6			32.0
Net consolidation (deconsolidation) of certain sponsored investment products				4.4		4.4			(15.1		)
Acquisition				5.4		5.4			32.8
Other1	96.2					96.2
Balance at March 31, 2013	$	9,420.0		$	657.9	$	10,077.9		$	80.5

________________

¹  Primarily relates to stock-based compensation plans.

8

(in millions)	Franklin Resources, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2012
Balance at October 1, 2011	$	8,524.7		$	579.2		$	9,103.9		$	18.6
Net income (loss)	984.0			(5.8		)	978.2			3.3
Net income reclassified to appropriated retained earnings	15.5			(15.5		)	—
Other comprehensive income	35.9						35.9
Cash dividends on common stock	(551.6		)				(551.6		)
Repurchase of common stock	(416.8		)				(416.8		)
Noncontrolling interests
Net subscriptions				105.6			105.6			31.9
Net deconsolidation of certain sponsored investment products				—			—			(30.9		)
Other1	98.1						98.1
Balance at March 31, 2012	$	8,689.8		$	663.5		$	9,353.3		$	22.9

________________

¹  Primarily relates to stock-based compensation plans.

During the three and six months ended March 31, 2013, the Company repurchased 163 thousand and 926 thousand shares of its common stock at a cost of $23.3 million and $121.3 million under its stock repurchase program. At March 31, 2013, approximately 6.3 million shares of common stock remained available for repurchase under the stock repurchase program, which is not subject to an expiration date. During the three and six months ended March 31, 2012 , the Company repurchased approximately 1.0 million and 4.0 million shares of its common stock at a cost of $125.9 million and $416.8 million.

Note 5 – Earnings per Share

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

(in millions, except per share data)	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013		2012
Net Income Attributable to Franklin Resources, Inc.	$	572.8	$	503.2	$	1,088.9	$	984.0
Less: Allocation of earnings to participating nonvested stock and stock unit awards	4.0		3.4		7.4		6.3
Net Income Available to Common Stockholders	$	568.8	$	499.8	$	1,081.5	$	977.7
Weighted-average shares outstanding – basic	211.3		214.5		211.4		215.3
Effect of dilutive common stock options and non-participating nonvested stock unit awards	0.3		0.6		0.3		0.6
Weighted-Average Shares Outstanding – Diluted	211.6		215.1		211.7		215.9
Earnings per Share
Basic	$	2.69	$	2.33	$	5.12	$	4.54
Diluted	2.69		2.32		5.11		4.53

Non-participating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive were de minimus for the three and six months ended March 31, 2013, and 0.2 million and 0.5 million for the three and six months ended March 31, 2012.

Note 6 – Investments

The disclosures below include details of the Company’s investments, excluding those of consolidated variable interest entities (“VIEs”) and consolidated sponsored investment products (“SIPs”). See Note 10 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the investments held by these entities.

9

Investments consisted of the following:

(in millions)	March 31, 2013		September 30, 2012
Investment securities, trading	$	1,214.0	$	1,130.6
Investment securities, available-for-sale
SIPs	520.5		587.2
Securities of U.S. states and political subdivisions	23.4		26.8
Securities of the U.S. Treasury and federal agencies	25.3		2.4
Corporate debt securities1	20.0		70.3
Mortgage-backed securities – agency residential2	117.9		169.3
Other equity securities	8.9		14.0
Total investment securities, available-for-sale	716.0		870.0
Investments in equity method investees	547.2		489.0
Other investments	78.5		94.2
Total	$	2,555.7	$	2,583.8

________________

¹  Corporate debt securities are insured by non-U.S. government agencies or the Federal Deposit Insurance Corporation.

²  Consist of U.S. government-sponsored enterprise obligations.

At March 31, 2013 and September 30, 2012, investment securities with aggregate carrying amounts of $95.4 million and $120.4 million were pledged as collateral for the ability to borrow from the Federal Reserve Bank, $44.2 million and $45.2 million were pledged as collateral for outstanding Federal Home Loan Bank (“FHLB”) borrowings and amounts available in secured FHLB short-term borrowing capacity, and $7.3 million was pledged as collateral for the ability to borrow from uncommitted short-term bank lines of credit (see Note 9 - Debt).

A summary of the gross unrealized gains and losses relating to investment securities, available-for-sale is as follows:

(in millions)			Gross Unrealized
as of March 31, 2013	Cost Basis		Gains		Losses			Fair Value
SIPs	$	452.2	$	70.3	$	(2.0	)	$	520.5
Securities of U.S. states and political subdivisions	22.4		1.0		—			23.4
Securities of the U.S. Treasury and federal agencies	25.3		—		—			25.3
Corporate debt securities	20.0		—		—			20.0
Mortgage-backed securities – agency residential	115.3		2.6		—			117.9
Other equity securities	8.6		0.3		—			8.9
Total	$	643.8	$	74.2	$	(2.0	)	$	716.0

(in millions)			Gross Unrealized
as of September 30, 2012	Cost Basis		Gains		Losses			Fair Value
SIPs	$	516.8	$	72.1	$	(1.7	)	$	587.2
Securities of U.S. states and political subdivisions	25.6		1.2		—			26.8
Securities of the U.S. Treasury and federal agencies	2.4		—		—			2.4
Corporate debt securities	70.0		0.3		—			70.3
Mortgage-backed securities – agency residential	164.8		4.5		—			169.3
Other equity securities	13.5		0.6		(0.1		)	14.0
Total	$	793.1	$	78.7	$	(1.8	)	$	870.0

The net unrealized holding gains on investment securities, available-for-sale included in accumulated other comprehensive income were $5.3 million and $23.7 million for the three and six months ended March 31, 2013, and $36.3 million and $44.1 million for the three and six months ended March 31, 2012.

10

The following tables show the gross unrealized losses and fair values of investment securities, available-for-sale with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of March 31, 2013
SIPs	$	21.0	$	(1.8	)	$	1.6	$	(0.2	)	$	22.6	$	(2.0	)

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of September 30, 2012
SIPs	$	30.0	$	(0.7	)	$	21.7	$	(1.0	)	$	51.7	$	(1.7	)
Other equity securities	4.4		(0.1		)	—		—			4.4		(0.1		)
Total	$	34.4	$	(0.8	)	$	21.7	$	(1.0	)	$	56.1	$	(1.8	)

The Company recognized $0.7 million and $1.0 million of other-than-temporary impairment of investments for the three and six months ended March 31, 2013, including $0.3 million in the six-month period related to available-for-sale investments in SIPs. The Company did not recognize any other-than-temporary impairment of investments for the six months ended March 31, 2012.

At March 31, 2013, contractual maturities of available-for-sale debt securities were as follows:

(in millions)	Cost Basis		Fair Value
Due in one year or less	$	45.8	$	45.8
Due after one year through five years	20.2		21.1
Due after five years through ten years	0.1		0.1
Due after ten years	1.6		1.7
Total	$	67.7	$	68.7

Mortgage-backed securities are not included in the table above as their actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Note 7 – Fair Value Measurements

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

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 Company's assessment of the hierarchy level of the assets and 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.
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 markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data. Level 2 quoted prices are generally obtained from two independent third-party brokers or dealers, including prices derived from model-based valuation techniques for which the significant assumptions are observable in the market 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.

11

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

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Investment securities, trading	$	1,132.3	$	81.4	$	0.3	$	1,214.0
Investment securities, available-for-sale
SIPs	520.5		—		—		520.5
Securities of U.S. states and political subdivisions	—		23.4		—		23.4
Securities of the U.S. Treasury and federal agencies	—		25.3		—		25.3
Corporate debt securities	—		20.0		—		20.0
Mortgage-backed securities – agency residential	—		117.9		—		117.9
Other equity securities	8.9		—		—		8.9
Life settlement contracts	—		—		13.1		13.1
Total Assets Measured at Fair Value	$	1,661.7	$	268.0	$	13.4	$	1,943.1
Liabilities
Contingent consideration liability	$	—	$	—	$	90.0	$	90.0

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Investment securities, trading	$	1,058.6	$	69.3	$	2.7	$	1,130.6
Investment securities, available-for-sale
SIPs	587.2		—		—		587.2
Securities of U.S. states and political subdivisions	—		26.8		—		26.8
Securities of the U.S. Treasury and federal agencies	—		2.4		—		2.4
Corporate debt securities	—		70.3		—		70.3
Mortgage-backed securities – agency residential	—		169.3		—		169.3
Other equity securities	14.0		—		—		14.0
Life settlement contracts	—		—		12.1		12.1
Total Assets Measured at Fair Value	$	1,659.8	$	338.1	$	14.8	$	2,012.7

The fair values of substantially all trading investments and of available-for-sale SIPs and other equity securities are determined based on their published net asset values. The fair values of certain trading investments and of available-for-sale debt securities are determined using quoted market prices, if available, or independent third-party broker or dealer price quotes, which are evaluated for reasonableness. The fair value of life settlement contracts is determined using a discounted cash flow valuation technique.

The contingent consideration liability relates to the Company's commitment to acquire the remaining interests in K2. The fair value is determined using an income-based method which considers the net present value of anticipated future cash flows.

There were no transfers between Level 1 and Level 2, or into or out of Level 3, during the three and six months ended March 31, 2013 and 2012.

12

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments			Contingent Consideration Liability
for the three months ended March 31, 2013
Balance at January 1, 2013	$	13.0		$	(90.3	)
Total realized and unrealized gains
Included in investment and other income, net	0.5			—
Included in general, administrative and other expense	—			0.2
Other	—			0.1
Purchases	0.1			—
Settlements	(0.2		)	—
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains included in net income relating to assets and liabilities held at March 31, 2013	$	0.3		$	0.3

(in millions)	Investments			Contingent Consideration Liability
for the six months ended March 31, 2013
Balance at October 1, 2012	$	14.8		$	—
Acquisition	—			(90.6		)
Total realized and unrealized gains (losses)
Included in investment and other income, net	0.9			—
Included in general, administrative and other expense	—			(2.2		)
Other	—			(0.2		)
Purchases	0.7			—
Sales	(1.6		)	—
Settlements	(1.4		)	3.0
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	0.7		$	(2.4	)

(in millions)	Investments
for the three months ended March 31, 2012
Balance at January 1, 2012	$	11.2
Realized and unrealized gains included in investment and other income, net	0.9
Purchases	0.4
Settlements	(0.9		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.3

(in millions)	Investments
for the six months ended March 31, 2012
Balance at October 1, 2011	$	10.9
Realized and unrealized gains included in investment and other income, net	1.8
Purchases	0.9
Settlements	(2.0		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.8

13

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

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	13.1	Discounted cash flow	Life expectancy	21–165 months (79)
				Internal rate of return	1.5%–21.7% (11.6%)
Contingent consideration liability	90.0		Discounted cash flow	AUM growth rate	6.0%–19.7% (12.0%)
				EBITDA margin	31.3% - 38.9% (36.2%)
				Discount rate	14.0%

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	12.1	Discounted cash flow	Life expectancy	22–171 months (82)
				Internal rate of return	1.5%–22.3% (11.7%)

For life settlement contracts, a significant increase (decrease) in the life expectancy or the internal rate of return in isolation would result in a significantly lower (higher) fair value measurement.

For the contingent consideration liability, a significant increase (decrease) in the AUM growth rate or EBITDA margin, or decrease (increase) in the discount rate, in isolation would result in a significantly higher (lower) fair value measurement.

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

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents	1	$	5,411.3	$	5,411.3	$	5,784.3	$	5,784.3
Other investments1	2 or 3	64.9		71.4		80.2		85.1
Loans receivable, net	2	238.3		241.1		254.4		258.7
Financial Liabilities
Deposits	2	674.2		675.0		671.7		672.4
Debt
FHLB advances	2	66.0		69.9		69.0		74.5
Senior notes	2	1,197.4		1,274.9		1,497.1		1,571.2

_________________

¹    Primarily consist of Level 3 assets.

Note 8 – Goodwill and Other Intangible Assets

Changes in the carrying value of goodwill were as follows:

(in millions)
for the six months ended March 31,	2013			2012
Balance at beginning of period	$	1,540.8		$	1,536.2
Acquisition	110.1			—
Foreign exchange and other	(6.7		)	1.6
Balance at End of Period	$	1,644.2		$	1,537.8

14

Intangible assets were as follows:

	March 31, 2013							September 30, 2012
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
(in millions)
Definite-lived intangible assets
Customer base	$	166.3	$	(140.1	)	$	26.2	$	166.6	$	(135.9	)	$	30.7
Management contracts and other	93.1		(39.8		)	53.3		49.3		(36.0		)	13.3
	259.4		(179.9		)	79.5		215.9		(171.9		)	44.0
Indefinite-lived intangible assets
Management contracts	657.2		—			657.2		557.1		—			557.1
Total	$	916.6	$	(179.9	)	$	736.7	$	773.0	$	(171.9	)	$	601.1

The Company acquired $43.8 million of definite-lived intangible assets and $105.2 million of indefinite-lived intangible assets on November 1, 2012 in the acquisition of K2.

Amortization expense related to definite-lived intangible assets was $4.5 million and $8.3 million for the three and six months ended March 31, 2013, and $2.7 million and $5.3 million for the three and six months ended March 31, 2012. No impairment loss in the value of goodwill and other intangible assets was recognized during these periods.

The estimated remaining amortization expense related to definite-lived intangible assets as of March 31, 2013 was as follows:

(in millions)
for the fiscal years ending September 30,	Amount
2013	$	8.9
2014	17.7
2015	17.6
2016	12.9
2017	8.8
Thereafter	13.6
Total	$	79.5

Note 9 – Debt

The disclosures below include details of the Company’s debt, excluding that of consolidated VIEs and consolidated SIPs. See Note 10 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the debt of these entities.

Debt consisted of the following:

(dollars in millions)	March 31, 2013		Effective Interest  Rate		September 30, 2012		Effective Interest Rate
FHLB advances	$	66.0	3.23	%	$	69.0	3.30	%
Senior notes
$300 million 2.000% notes due May 2013	—		N/A		299.9		2.28	%
$250 million 3.125% notes due May 2015	249.9		3.32	%	249.9		3.32	%
$300 million 1.375% notes due September 2017	298.5		1.66	%	298.4		1.66	%
$350 million 4.625% notes due May 2020	349.7		4.74	%	349.7		4.74	%
$300 million 2.800% notes due September 2022	299.3		2.93	%	299.2		2.93	%
	1,197.4				1,497.1
Total Debt	$	1,263.4			$	1,566.1

At March 31, 2013, the Company’s outstanding senior unsecured and unsubordinated notes had an aggregate face value of $1.2 billion. The notes have fixed interest rates with interest payable semi-annually and 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. In October 2012, the Company redeemed its outstanding 2.000% notes due in May 2013 at a make-whole redemption price of $305.4 million. The indentures governing the notes contain limitations on the Company’s ability and the ability of its subsidiaries

15

to pledge voting stock or profit participating equity interests in its subsidiaries to secure other debt without similarly securing the notes equally and ratably. The indentures also 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. At March 31, 2013, the Company was in compliance with the covenants of the notes.

At March 31, 2013, maturities for debt were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	18.5
2014	—
2015	260.4
2016	8.0
2017	298.5
Thereafter	678.0
Total	$	1,263.4

At March 31, 2013, 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 April 2012, $260.0 million available in uncommitted short-term bank lines of credit under the Federal Reserve system, $93.3 million available through the secured Federal Reserve Bank short-term discount window, $14.7 million available in uncommitted short-term bank lines of credit and $6.8 million available in secured FHLB short-term borrowing capacity.

Note 10 – Variable Interest Entities and Consolidated Sponsored Investment Products

The Company sponsors and manages various types of investment products, which consist of both VIEs and non-VIEs. The Company consolidates the non-VIE products which it controls and the VIE products for which it is the primary beneficiary. The Company has no right to the consolidated products' assets, other than its direct equity investment in them, and/or investment management fees earned from them. The debt holders of these consolidated entities 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 entities' liabilities.

16

The balances of consolidated VIEs and consolidated SIPs included in the Company's condensed consolidated balance sheets were as follows:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Assets
Cash and cash equivalents	$	100.2	$	44.3	$	144.5	$	224.3	$	42.8	$	267.1
Receivables	24.7		38.7		63.4		2.7		23.7		26.4
Investments	1,012.9		1,228.8		2,241.7		984.1		1,046.6		2,030.7
Other assets	—		0.7		0.7		—		0.7		0.7
Total Assets	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9
Liabilities
Accounts payable and accrued expenses	$	—	$	39.0	$	39.0	$	—	$	21.8	$	21.8
Debt, at fair value	1,073.2		—		1,073.2		1,100.9		—		1,100.9
Debt	—		86.4		86.4		—		110.2		110.2
Other liabilities	45.5		8.5		54.0		61.9		8.5		70.4
Total liabilities	1,118.7		133.9		1,252.6		1,162.8		140.5		1,303.3
Redeemable Noncontrolling Interests	—		80.5		80.5		—		26.7		26.7
Stockholders' Equity
Nonredeemable noncontrolling interests	—		641.3		641.3		—		556.8		556.8
Other equity	19.1		456.8		475.9		48.3		389.8		438.1
Total stockholders' equity	19.1		1,098.1		1,117.2		48.3		946.6		994.9
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9

The consolidated VIEs and consolidated SIPs did not have a significant impact on net income attributable to the Company during the three and six months ended March 31, 2013 and 2012.

Consolidated VIEs

Consolidated VIEs consist of sponsored collateralized loan obligations (“CLOs”), which are asset-backed financing entities collateralized by a pool of corporate debt securities.

The assets and liabilities of the CLOs are carried at fair value. Changes in the fair values were as follows:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Net gains from changes in fair value of assets	$	18.9		$	29.7		$	41.1		$	57.4
Net losses from changes in fair value of liabilities	(26.6		)	(34.1		)	(67.9		)	(39.1		)
Total net gains (losses)	$	(7.7	)	$	(4.4	)	$	(26.8	)	$	18.3

The following tables present the unpaid principal balance and fair value of investments, including investments 90 days or more past due, and debt of the CLOs:

(in millions)	Total Investments		Investments 90 Days or More Past Due			Debt
as of March 31, 2013
Unpaid principal balance	$	1,012.9	$	7.6		$	1,114.2
Excess unpaid principal over fair value	—		(7.4		)	(41.0		)
Fair value	$	1,012.9	$	0.2		$	1,073.2

17

(in millions)	Total Investments			Investments 90 Days or More Past Due			Debt
as of September 30, 2012
Unpaid principal balance	$	996.1		$	7.2		$	1,186.5
Excess unpaid principal over fair value	(12.0		)	(6.7		)	(85.6		)
Fair value	$	984.1		$	0.5		$	1,100.9

Consolidated SIPs

Consolidated SIPs consist of limited partnerships and similar structures and other fund products.

Investments

Investments of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Investment securities, trading	$	—	$	234.1	$	234.1	$	—	$	194.4	$	194.4
Other debt securities	1,012.9		330.3		1,343.2		984.1		317.5		1,301.6
Other equity securities	—		664.4		664.4		—		534.7		534.7
Total Investments	$	1,012.9	$	1,228.8	$	2,241.7	$	984.1	$	1,046.6	$	2,030.7

Investments of consolidated VIEs consist of corporate debt securities. Other debt and equity securities of consolidated SIPs primarily consist of direct investments in secured and unsecured debt securities and equity securities of entities in emerging markets, which are generally not traded in active markets. Other equity securities also include investments in funds that are not traded in active markets.

Debt

Debt of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013		Effective Interest Rate		September 30, 2012		Effective Interest Rate
(dollars in millions)
Debt of CLOs, at fair value, due fiscal years 2016-2024	$	1,073.2	1.30	%	$	1,100.9	1.48	%
Debt of consolidated SIPs due fiscal years 2013-2018	86.4		4.00	%	110.2		4.20	%
Total Debt	$	1,159.6			$	1,211.1

The debt of CLOs had floating interest rates ranging from 0.52% to 9.81% at March 31, 2013, and from 0.67% to 9.98% at September 30, 2012.

The debt of consolidated SIPs had both fixed and floating interest rates ranging from 2.46% to 6.28% at March 31, 2013, and from 1.98% to 7.03% at September 30, 2012. The repayment of amounts outstanding under certain debt agreements is secured by the assets of the consolidated SIPs and, in some cases, a pledge of the right to call capital.

At March 31, 2013, contractual maturities for debt of consolidated VIEs and consolidated SIPs were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	40.3
2014	—
2015	—
2016	3.4
2017	15.2
Thereafter	1,100.7
Total	$	1,159.6

18

Fair Value Measurements

The tables below present the balances of assets and liabilities of consolidated VIEs and consolidated SIPs measured at fair value on a recurring basis.See Note 7 – Fair Value Measurements for information related to the three levels of fair value hierarchy.

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Cash and cash equivalents of consolidated VIEs	$	100.2	$	—	$	—	$	100.2
Receivables of consolidated VIEs	—		24.7		—		24.7
Investments of consolidated VIEs	—		1,012.9		—		1,012.9
Investments of consolidated SIPs
Debt securities	8.7		57.9		330.2		396.8
Equity securities	174.7		32.8		624.5		832.0
Total Assets Measured at Fair Value	$	283.6	$	1,128.3	$	954.7	$	2,366.6
Liabilities
Debt of consolidated VIEs	$	—	$	997.4	$	75.8	$	1,073.2
Other liabilities of consolidated VIEs	—		45.5		—		45.5
Total Liabilities Measured at Fair Value	$	—	$	1,042.9	$	75.8	$	1,118.7

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Cash and cash equivalents of consolidated VIEs	$	—	$	224.3	$	—	$	224.3
Receivables of consolidated VIEs	—		2.7		—		2.7
Investments of consolidated VIEs	—		984.1		—		984.1
Investments of consolidated SIPs
Debt securities	6.3		49.3		317.5		373.1
Equity securities	145.9		0.6		527.0		673.5
Total Assets Measured at Fair Value	$	152.2	$	1,261.0	$	844.5	$	2,257.7
Liabilities
Debt of consolidated VIEs	$	—	$	1,033.0	$	67.9	$	1,100.9
Other liabilities of consolidated VIEs	—		61.9		—		61.9
Total Liabilities Measured at Fair Value	$	—	$	1,094.9	$	67.9	$	1,162.8

The fair value of cash and cash equivalents of consolidated VIEs is based on quoted market prices. The fair values of the other assets and liabilities of consolidated VIEs are primarily obtained from independent third-party broker or dealer price quotes. The fair value of a portion of the debt of consolidated VIEs is determined using significant unobservable inputs in a market-based approach.

Investments of consolidated SIPs consist of trading securities and other investments that are not generally traded in active markets. The fair value of the trading securities is determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available. If events occur after the close of the primary market for any security, the quoted market prices may be adjusted for the observable price movements within country specific market proxies.

The investments that are not generally traded in active markets consist of debt and equity securities of entities in emerging markets and fund products. The fair values of the debt and equity securities are determined using significant unobservable inputs in either a market-based or income-based approach. The fair value of the fund products is determined using net asset value (“NAV”) as a practical expedient. These investments are classified as Level 2 if they are redeemable on a quarterly basis or Level 3 if they are periodically redeemable, subject to certain restrictions, or nonredeemable.

19

The investments in fund products for which fair value was estimated using NAV as a practical expedient consisted of the following:

(in millions)	Fair Value Level	Redemption Frequency	March 31, 2013		September 30, 2012
Hedge funds	2	Quarterly	$	31.8	$	—
Hedge funds	3	Biennially	0.8		—
Global fixed-income fund	3	Periodically with certain restrictions	205.4		172.7
Real estate and private equity funds	3	Nonredeemable	201.3		141.5
Total			$	439.3	$	314.2

The investments in real estate and private equity funds are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over a weighted-average period of approximately 5.4 years and 5.9 years at March 31, 2013 and September 30, 2012. The consolidated SIPs' unfunded commitments to these funds totaled approximately $148.6 million and $123.0 million at March 31, 2013 and September 30, 2012, of which the Company was contractually obligated to fund $3.3 million and $2.9 million based on its ownership percentage in the SIPs.

Transfers into Level 2 from Level 1 were nil and $47.0 million during the three and six months ended March 31, 2013, and transfers into Level 1 from Level 2 were $53.8 million during both periods. Transfers into Level 2 from Level 1 were $0.9 million during the three and six months ended March 31, 2012, and transfers into Level 1 from Level 2 were nil and $25.7 million during the same periods. Securities were transferred into Level 2 when they were valued using adjusted quoted market prices for observable after-market price movements within country-specific market proxies or when they were valued based on prices of comparable or similar securities because quoted market prices were not available as trading in the securities was temporarily halted. Securities were transferred into Level 1 when they were valued using unadjusted quoted market prices.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2013	Debt			Equity
Balance at January 1, 2013	$	326.2		$	537.6		$	863.8		$	(78.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(2.7		)	40.2			37.5			2.5
Purchases	30.1			66.5			96.6			—
Sales	(19.4		)	(18.4		)	(37.8		)	—
Effect of exchange rate changes	(4.0		)	(1.4		)	(5.4		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	(2.2	)	$	40.1		$	37.9		$	2.5

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2013	Debt			Equity
Balance at October 1, 2012	$	317.5		$	527.0		$	844.5		$	(67.9	)
Realized and unrealized gains (losses) included in investment and other income, net	5.8			50.0			55.8			(7.9		)
Purchases	53.4			85.9			139.3			—
Sales	(46.0		)	(39.1		)	(85.1		)	—
Acquisition	—			0.8			0.8			—
Effect of exchange rate changes	(0.5		)	(0.1		)	(0.6		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	6.7		$	51.4		$	58.1		$	(7.9	)

20

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2012				Debt			Equity
Balance at January 1, 2012	$	3.5		$	350.0		$	326.0		$	679.5		$	(85.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(25.3		)	0.2			(26.1		)	(3.7		)
Purchases	—			11.6			41.0			52.6			—
Sales	—			(16.1		)	(56.4		)	(72.5		)	—
Settlements	—			(0.1		)	(0.1		)	(0.2		)	23.5
Effect of exchange rate changes	—			(1.1		)	(0.4		)	(1.5		)	0.2
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(14.9	)	$	2.3		$	(13.6	)	$	(3.7	)

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2012				Debt			Equity
Balance at October 1, 2011	$	1.9		$	324.9		$	283.7		$	610.5		$	(83.9	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(17.7		)	(17.3		)	(36.0		)	(6.6		)
Purchases	—			31.6			101.8			133.4			—
Sales	—			(18.9		)	(57.6		)	(76.5		)	—
Settlements	—			(0.3		)	(0.1		)	(0.4		)	23.5
Transfers into Level 3	1.6			—			—			1.6			—
Effect of exchange rate changes	—			(0.6		)	(0.2		)	(0.8		)	1.7
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized losses included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(6.9	)	$	(15.0	)	$	(22.9	)	$	(6.6	)

There were no transfers into or out of Level 3 during the three and six months ended March 31, 2013 and the three months ended March 31, 2012.

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets were as follows:

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	330.2	Discounted cash flow	Discount rate	5.7%–25.6% (12.5%)
				Risk premium	0.0%–19.3% (2.5%)
Equity securities	145.8		Market comparable companies	EBITDA multiple	5.0–10.2 (8.6)
				Discount for lack of marketability	20.0%–30.0% (24.0%)
	52.1		Discounted cash flow	Discount rate	12.0%–18.0% (16.1%)
				Discount for lack of marketability	0.0%–50.0% (21.4%)
	19.1		Market pricing	Price to book value ratio	1.7

21

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	317.5	Discounted cash flow	Discount rate	4.9%–25.6% (11.8%)
				Risk premium	0.0%–7.3% (2.1%)
Equity securities	144.4		Market comparable companies	EBITDA multiple	5.5–8.6 (7.3)
				Discount for lack of marketability	15.0%–30.0% (22.1%)
	47.4		Discounted cash flow	Discount rate	12.0%–15.0% (14.8%)
				Discount for lack of marketability	0.0%–50.0% (27.8%)
	21.0		Market pricing	Price to book value ratio	1.7

Level 3 debt securities held by consolidated SIPs consisted of mezzanine loans, convertible debentures and corporate loans and notes, and equity securities consisted primarily of common and preferred shares at March 31, 2013 and September 30, 2012.

The fair values of certain Level 3 assets and liabilities that were determined based on third-party pricing information or NAV are excluded from the above two tables. At March 31, 2013 and September 30, 2012, the exclusions consisted of $75.8 million and $67.9 million of debt of consolidated VIEs that was valued using third-party broker or dealer price quotes and $407.5 million and $314.2 million of investments in various funds held by consolidated SIPs for which fair value was estimated using NAV as a practical expedient.

Following are descriptions of the sensitivity of the Level 3 recurring fair value measurements to changes in the significant unobservable inputs presented in the above tables.

For securities utilizing the discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk. Generally, a change in the discount rate is accompanied by a directionally similar change in the risk premium and discount for lack of marketability.

For securities utilizing the market comparable companies valuation technique, a significant increase (decrease) in the EBITDA multiple in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the discount for lack of marketability in isolation would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk.

For securities utilizing a market pricing valuation technique, a significant increase (decrease) in the price to book value ratio would result in a significantly higher (lower) fair value measurement.

Financial instruments of consolidated VIEs and consolidated SIPs that were not measured at fair value were as follows:

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents of consolidated SIPs	1	$	44.3	$	44.3	$	42.8	$	42.8
Financial Liabilities
Debt of consolidated SIPs	3	86.4		88.2		110.2		113.0

Non-consolidated VIEs

VIEs for which the Company is not the primary beneficiary consist of certain sponsored and other investment products from which the Company earns investment management and related services fees and/or in which it has an equity ownership interest.

22

The carrying values of the investment management and related service fees receivable from and the equity ownership interests in these VIEs included in the Company’s condensed consolidated balance sheets are set forth below. These amounts represent the Company’s maximum exposure to loss from these investment products.

(in millions)	March 31, 2013		September 30, 2012
Receivables	$	53.8	$	43.8
Investments	203.6		199.7
Total	$	257.4	$	243.5

The Company’s total AUM of non-consolidated VIEs was $36.3 billion at March 31, 2013 and $35.3 billion at September 30, 2012.

While the Company has no contractual obligation to do so, it routinely makes cash investments in the course of launching SIPs. The Company also may voluntarily elect to provide its SIPs with additional direct or indirect financial support based on its business objectives. The Company did not provide financial or other support to its SIPs during fiscal year 2012 or the six months ended March 31, 2013.

Note 11 – Commitments and Contingencies

Legal Proceedings

The Company is from time to time involved in 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 March 31, 2013, to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.

Other Commitments and Contingencies

The Company, in its role as agent or trustee, facilitates the settlement of investor share purchase, redemption and other transactions with affiliated mutual funds. The Company is appointed by the affiliated mutual funds as agent or trustee to manage, on their behalf, bank deposit accounts that contain only (i) cash remitted by investors to the affiliated mutual funds for the direct purchase of fund shares, or (ii) cash remitted by the affiliated mutual funds for direct delivery to the investors for either the proceeds of fund shares liquidated at the investors’ direction, or dividends and capital gains earned on fund shares. At March 31, 2013 and September 30, 2012, the Company held cash of $301.6 million and $202.4 million off-balance sheet in agency or trust for investors and the affiliated mutual funds.

At March 31, 2013, there were no changes that would have a material effect on the other commitments and contingencies reported in the Company’s Form 10-K for fiscal year 2012.

Note 12 – Stock-Based Compensation

Stock awards generally entitle holders to the right to sell the underlying shares of the Company’s common stock once the awards vest. Stock unit awards generally entitle holders to receive the underlying shares of common stock once the awards vest. Certain performance-based long-term stock and stock unit awards have been granted that generally vest based on the achievement of predetermined Company financial performance goals. In the event a performance measure is not achieved at or above a specified threshold level, the portion of the award tied to such performance measure is forfeited.

Total unrecognized compensation cost related to nonvested stock and stock unit awards, net of estimated forfeitures, was $168.9 million at March 31, 2013. This cost is expected to be recognized over a remaining weighted-average vesting period of 1.9 years.

Nonvested stock and stock unit award activity was as follows:

(shares in thousands)	Shares		Weighted-Average Grant-Date Fair Value
Nonvested balance at September 30, 2012	1,327		$	110.50
Granted	900		131.93
Vested	(210	)	109.73
Forfeited/canceled	(60	)	112.65
Nonvested Balance at March 31, 2013	1,957		$	120.37

23

Note 13 – Other Income (Expenses)

Other income (expenses) consisted of the following:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Investment and Other Income, Net
Dividend income	$	2.7		$	5.7		$	5.5		$	12.5
Interest income	2.4			2.0			5.5			4.1
Gains on trading investment securities, net	8.3			10.3			13.6			20.8
Realized gains on sale of investment securities, available-for-sale	6.6			8.3			27.8			22.7
Realized losses on sale of investment securities, available-for-sale	—			(0.2		)	—			(1.7		)
Income from investments in equity method investees	20.4			39.1			42.2			61.6
Other-than-temporary impairment of investment securities	(0.7		)	—			(1.0		)	—
Gains on investments of consolidated SIPs, net	41.5			27.4			62.4			11.7
Gains (losses) on assets and liabilities of consolidated VIEs, net	(7.7		)	(4.4		)	(26.8		)	18.3
Foreign currency exchange gains (losses), net	18.6			(9.8		)	7.3			(4.6		)
Other, net	4.4			4.0			5.5			8.2
Total	96.5			82.4			142.0			153.6
Interest expense	(10.9		)	(9.6		)	(25.4		)	(18.2		)
Other Income, Net	$	85.6		$	72.8		$	116.6		$	135.4

Substantially all of the Company’s dividend income and realized gains and losses on sale of investment securities, available-for-sale were generated by investments in its sponsored investment products. Interest income was primarily generated by cash equivalents and investments in trading securities and debt securities of U.S. states and political subdivisions. Proceeds from the sale of investment securities, available-for-sale were $41.0 million and $200.0 million for the three and six months ended March 31, 2013, and $118.7 million and $371.9 million for the three and six months ended March 31, 2012.

The Company recognized net gains on trading investment securities that were held at March 31, 2013 and 2012 of $7.7 million and $9.4 million during the three and six months ended March 31, 2013, and $9.9 million and $18.9 million during the three and six months ended March 31, 2012. Net gains on trading investment securities of consolidated SIPs that were held at March 31, 2013 and 2012 were $7.3 million and $13.4 million during the three and six months ended March 31, 2013, and $46.4 million and $39.4 million during the three and six months ended March 31, 2012.

Note 14 – Banking Regulatory Ratios

Franklin is a bank holding company and a financial holding company subject to various U.S. regulatory capital requirements. Based on the Company's calculations, it exceeded the applicable capital adequacy requirements as listed below.

(dollar amounts in millions)	March 31, 2013			September 30, 2012			Capital Adequacy Minimum
Tier 1 capital	$	6,802.8		$	6,788.8		N/A
Total risk-based capital	6,876.3			6,799.6			N/A
Tier 1 leverage ratio	57		%	59		%	5	%
Tier 1 risk-based capital ratio	55		%	54		%	4	%
Total risk-based capital ratio	56		%	54		%	8	%

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

In this section, we discuss and analyze the results of operations and financial condition of Franklin Resources, Inc. (“Franklin”) and its subsidiaries (collectively, the “Company”). In addition to historical information, we also make statements relating to the future, called “forward-looking” statements, which are provided under the “safe harbor” protection of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “will,” “may,” “could,” “expect,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” or other similar words. Moreover, statements that speculate about future events are forward-looking statements. These forward-looking statements involve

24

a number of known and unknown risks, uncertainties and other important factors that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. You should carefully review the “Risk Factors” section set forth below, which describes these risks, uncertainties and other important factors in more detail.

While forward-looking statements are our best prediction at the time that they are made, you should not rely on them. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. If a circumstance occurs after the date of this Form 10-Q that causes any of our forward-looking statements to be inaccurate, whether as a result of new information, future developments or otherwise, we do not have an obligation, and we undertake no obligation, to announce publicly the change to our expectations, or to make any revisions to our forward-looking statements, unless required by law.

The following discussion should be read in conjunction with our Form 10-K for the fiscal year ended September 30, 2012 (“fiscal year 2012”) filed with the U.S. Securities and Exchange Commission (the “SEC”), and the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q.

Overview

We are a global investment management organization and derive our operating revenues and net income from providing investment management and related services to investors in jurisdictions worldwide through products that include investment funds and institutional, high net-worth and separately-managed accounts (collectively, our “sponsored investment products” or “SIPs”). In addition to investment management, our services include fund administration, sales, distribution, shareholder services, transfer agency, trustee, custodial and other fiduciary services, as well as select private banking services. Our SIPs and investment management and related services are distributed or marketed to the public globally under seven distinct brand names: Franklin, Templeton, Mutual Series, Bissett, Fiduciary Trust, Darby, Balanced Equity Management and K2. We offer a broad range of SIPs under equity, hybrid, fixed-income and cash management funds and accounts, including alternative investment products, that meet a wide variety of specific investment needs of individual and institutional investors. We also manage certain sub-advised investment products which may be sold to the public under one of our brand names or those of other companies or on a co-branded basis.

The level of our revenues depends largely on the level and relative mix of assets under management (“AUM”). As noted in the “Risk Factors” section set forth below, the amount and mix of our AUM are subject to significant fluctuations and can negatively impact our revenues and income. The level of our revenues also depends on mutual fund sales and the number of mutual fund shareholder accounts. The fees charged for our services are based on contracts with our SIPs or our clients. These arrangements could change in the future.

During the first half of our fiscal year, the global financial markets provided overall positive returns as the MSCI World Index increased 8% and 11% and the S&P 500 Index increased 11% and 10% for the three and six months ended March 31, 2013. The market performance was tempered by investor concerns regarding weak global economic growth, uncertainty about the U.S. federal budget, and the continuing European debt crisis. We believe that ongoing global economic concerns are likely to result in continued market volatility.

Our total AUM at March 31, 2013 was $823.7 billion, 10% higher than at September 30, 2012 and 14% higher than at March 31, 2012. Simple monthly average AUM (“average AUM”) for the three and six months ended March 31, 2013increased14% and 13% from the same periods in the prior fiscal year, primarily driven by $67.6 billion of market appreciation and $26.3 billion of net new flows during the previous twelve months.

The business and regulatory environments in which we operate remain complex, uncertain and subject to change. In the U.S., the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 , rules adopted by the Commodity Futures Trading Commission in 2012 and the Foreign Account Tax Compliance Act impose additional restrictions, limitations and registration and reporting requirements on our business. We are also subject to numerous regulations by U.S. and non-U.S. regulators that add further complexity to our ongoing global compliance operations. We expect that such regulatory requirements and developments will cause us to incur additional administrative and compliance costs.

25

Uncertainties regarding economic stabilization and improvement remain for the foreseeable future. As we continue to confront the challenges of the current economic and regulatory environments, we remain focused on the investment performance of our SIPs and on providing high quality customer service to our clients. While we are focused on expense management, we will also seek to attract, retain and develop employees and invest strategically in systems and technology that will provide a secure and stable environment. We will continue to seek to protect and further our brand recognition while developing and maintaining broker/dealer and client relationships. The success of these and other strategies may be influenced by the factors discussed in the “Risk Factors” section set forth below.

RESULTS OF OPERATIONS

	Three Months Ended March 31,						Percent Change		Six Months Ended March 31,						Percent Change
(dollar amounts in millions, except per share data)	2013			2012					2013			2012
Operating Income	$	729.4		$	617.1		18	%	$	1,414.5		$	1,249.5		13	%
Net Income Attributable to Franklin Resources, Inc.	572.8			503.2			14	%	1,088.9			984.0			11	%
Earnings per Share
Basic	$	2.69		$	2.33		15	%	$	5.12		$	4.54		13	%
Diluted	2.69			2.32			16	%	5.11			4.53			13	%
Operating Margin1	36.2		%	34.3		%			36.1		%	35.7		%

_________________

¹    Defined as operating income divided by total operating revenues.

Operating income increased$112.3 million and $165.0 million, and net income attributable to Franklin Resources, Inc. increased$69.6 million and $104.9 million for the three and six months ended March 31, 2013, as compared to the same periods in the prior fiscal year. The increases were primarily due to 12% increases in operating revenues in both periods, which were driven by 14% and 13% increases in average AUM, partially offset by 9% and 11% increases in operating expenses.

Diluted earnings per share increased in both periods consistent with the increases in net income and 2% decreases in diluted average common shares outstanding primarily resulting from repurchases of shares of our common stock during the twelve-month period ended March 31, 2013.

Assets Under Management

AUM by investment objective was as follows:

(dollar amounts in billions)	March 31, 2013		March 31, 2012		Percent Change
Equity
Global/international	$	231.0	$	216.2	7	%
United States	88.9		83.7		6	%
Total equity	319.9		299.9		7	%
Hybrid	129.2		103.5		25	%
Fixed-Income
Tax-free	84.5		77.3		9	%
Taxable
Global/international	226.5		187.8		21	%
United States	58.2		51.5		13	%
Total fixed-income	369.2		316.6		17	%
Cash Management	5.4		5.7		(5	)%
Total	$	823.7	$	725.7	14	%
Average for the Three-Month Period	$	807.3	$	706.9	14	%
Average for the Six-Month Period	$	786.0	$	693.9	13	%

26

AUM at March 31, 2013increased14% from March 31, 2012, primarily due to $67.6 billion of market appreciation and $26.3 billion of net new flows during the twelve-month period. Strong positive returns in global markets resulted in valuation increases in all long-term investment objectives. The net new flows were primarily driven by inflows in global/international fixed-income products.

Average AUM benefited from the same factors, increasing 14% and 13% during the three and six months ended March 31, 2013, as compared to the same periods in the prior fiscal year. Average AUM is generally more indicative of trends in revenue for providing investment management and fund administration services than the year-over-year change in ending AUM.

The average mix of AUM by investment objective is shown below. The change in mix towards fixed-income products for the three and six months ended March 31, 2013, as compared to the same periods in the prior fiscal year, reflects investor preference for globally diversified fixed-income investments.

	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013		2012
Equity
Global/international	28	%	30	%	28	%	30	%
United States	11	%	11	%	11	%	11	%
Total equity	39	%	41	%	39	%	41	%
Hybrid	15	%	14	%	15	%	14	%
Fixed-Income
Tax-free	11	%	11	%	11	%	11	%
Taxable
Global/international	27	%	26	%	27	%	26	%
United States	7	%	7	%	7	%	7	%
Total fixed-income	45	%	44	%	45	%	44	%
Cash Management	1	%	1	%	1	%	1	%
Total	100	%	100	%	100	%	100	%

Components of the change in AUM were as follows:

(dollar amounts in billions)	Three Months Ended March 31,						Percent Change		Six Months Ended March 31,						Percent Change
	2013			2012					2013			2012
Beginning AUM	$	781.8		$	670.3		17	%	$	749.9		$	659.9		14	%
Long-term sales	59.5			48.5			23	%	105.5			86.7			22	%
Long-term redemptions	(40.9		)	(42.7		)	(4	)%	(85.6		)	(95.7		)	(11	)%
Net cash management	(0.3		)	(0.2		)	50	%	(1.3		)	(1.0		)	30	%
Net new flows	18.3			5.6			227	%	18.6			(10.0		)	NM
Reinvested distributions	3.4			3.2			6	%	12.5			10.5			19	%
Net flows	21.7			8.8			147	%	31.1			0.5			NM
Distributions	(4.3		)	(4.3		)	0	%	(15.3		)	(12.8		)	20	%
Acquisition	—			—			0	%	8.7			—			NM
Appreciation and other	24.5			50.9			(52	)%	49.3			78.1			(37	)%
Ending AUM	$	823.7		$	725.7		14	%	$	823.7		$	725.7		14	%

27

Components of the change in AUM by investment objective were as follows:

(in billions)	Equity									Fixed-Income
for the three months ended March 31, 2013	Global/ International			United States			Hybrid			Tax-Free			Taxable Global/ International			Taxable United States			Cash Management			Total
AUM at January 1, 2013	$	222.2		$	81.2		$	121.0		$	84.3		$	209.8		$	57.6		$	5.7		$	781.8
Long-term sales	12.0			4.0			6.2			3.2			29.6			4.5			—			59.5
Long-term redemptions	(11.4		)	(4.6		)	(3.8		)	(2.8		)	(14.3		)	(4.0		)	—			(40.9		)
Net exchanges	0.1			0.1			0.4			(0.2		)	—			(0.4		)	—			—
Net cash management	—			—			—			—			—			—			(0.3		)	(0.3		)
Net new flows	0.7			(0.5		)	2.8			0.2			15.3			0.1			(0.3		)	18.3
Reinvested distributions	0.2			—			1.0			0.6			1.2			0.4			—			3.4
Net flows	0.9			(0.5		)	3.8			0.8			16.5			0.5			(0.3		)	21.7
Distributions	(0.1		)	(0.1		)	(1.2		)	(0.8		)	(1.6		)	(0.5		)	—			(4.3		)
Appreciation and other	8.0			8.3			5.6			0.2			1.8			0.6			—			24.5
AUM at March 31, 2013	$	231.0		$	88.9		$	129.2		$	84.5		$	226.5		$	58.2		$	5.4		$	823.7

(in billions)	Equity									Fixed-Income
for the three months ended March 31, 2012	Global/ International			United States			Hybrid			Tax-Free			Taxable Global/ International			Taxable United States			Cash Management			Total
AUM at January 1, 2012	$	194.5		$	75.7		$	96.4		$	74.1		$	174.7		$	48.9		$	6.0		$	670.3
Long-term sales	11.6			4.9			5.5			3.8			18.2			4.5			—			48.5
Long-term redemptions	(11.2		)	(4.9		)	(3.5		)	(2.3		)	(17.6		)	(3.2		)	—			(42.7		)
Net exchanges	(0.2		)	0.2			0.2			—			(0.1		)	0.1			(0.2		)	—
Net cash management	—			—			—			—			—			—			(0.2		)	(0.2		)
Net new flows	0.2			0.2			2.2			1.5			0.5			1.4			(0.4		)	5.6
Reinvested distributions	0.1			—			1.0			0.6			1.1			0.4			—			3.2
Net flows	0.3			0.2			3.2			2.1			1.6			1.8			(0.4		)	8.8
Distributions	—			—			(1.1		)	(0.8		)	(1.9		)	(0.5		)	—			(4.3		)
Appreciation and other	21.4			7.8			5.0			1.9			13.4			1.3			0.1			50.9
AUM at March 31, 2012	$	216.2		$	83.7		$	103.5		$	77.3		$	187.8		$	51.5		$	5.7		$	725.7

AUM increased$41.9 billion or 5% during the quarter ended March 31, 2013, resulting from $24.5 billion of market appreciation and $18.3 billion of net new flows. Overall positive returns in global markets, evidenced by increases in the MSCI World Index of 8% and the S&P 500 Index of 11%, resulted in market appreciation in all long-term investment objectives, most significantly in equity and hybrid products. Long-term sales of $59.5 billionincreased23% from the prior-year period primarily due to higher sales of global/international fixed-income products, and long-term redemptions decreased4% to $40.9 billion.

AUM increased$55.4 billion or 8% during the quarter ended March 31, 2012, driven by market appreciation of $50.9 billion and net new flows of $5.6 billion. The market appreciation was in all long-term investment objectives and reflected strong positive returns in global markets, evidenced by increases in the MSCI World Index of 12% and the S&P 500 Index of 13%. The net new flows were driven primarily by U.S. fixed-income and hybrid products as investor concerns related to the European sovereign debt crisis and the strength of the global economic recovery contributed to lower net flows in global/international fixed-income and equity products.

28

(in billions)	Equity									Fixed-Income
for the six months ended March 31, 2013	Global/ International			United States			Hybrid			Tax-Free			Taxable Global/ International			Taxable United States			Cash Management			Total
AUM at October 1, 2012	$	214.9		$	82.2		$	110.1		$	83.2		$	196.4		$	56.7		$	6.4		$	749.9
Long-term sales	21.6			7.4			11.7			7.0			49.3			8.5			—			105.5
Long-term redemptions	(25.2		)	(9.7		)	(8.6		)	(6.0		)	(28.3		)	(7.8		)	—			(85.6		)
Net exchanges	(0.1		)	(0.2		)	0.2			(0.2		)	0.2			(0.2		)	0.3			—
Net cash management	—			—			—			—			—			—			(1.3		)	(1.3		)
Net new flows	(3.7		)	(2.5		)	3.3			0.8			21.2			0.5			(1.0		)	18.6
Reinvested distributions	2.7			1.4			2.2			1.2			4.1			0.9			—			12.5
Net flows	(1.0		)	(1.1		)	5.5			2.0			25.3			1.4			(1.0		)	31.1
Distributions	(2.7		)	(1.6		)	(2.7		)	(1.6		)	(5.4		)	(1.3		)	—			(15.3		)
Acquisition	—			—			8.7			—			—			—			—			8.7
Appreciation and other	19.8			9.4			7.6			0.9			10.2			1.4			—			49.3
AUM at March 31, 2013	$	231.0		$	88.9		$	129.2		$	84.5		$	226.5		$	58.2		$	5.4		$	823.7

(in billions)	Equity									Fixed-Income
for the six months ended March 31, 2012	Global/ International			United States			Hybrid			Tax-Free			Taxable Global/ International			Taxable United States			Cash Management			Total
AUM at October 1, 2011	$	185.8		$	68.4		$	101.3		$	72.0		$	178.8		$	46.9		$	6.7		$	659.9
Long-term sales	21.4			8.6			9.6			6.6			32.4			8.1			—			86.7
Long-term redemptions	(21.6		)	(9.2		)	(18.6		)	(4.5		)	(35.3		)	(6.5		)	—			(95.7		)
Net exchanges	(0.9		)	0.3			0.3			0.2			(0.6		)	0.8			(0.1		)	—
Net cash management	—			—			—			—			—			—			(1.0		)	(1.0		)
Net new flows	(1.1		)	(0.3		)	(8.7		)	2.3			(3.5		)	2.4			(1.1		)	(10.0		)
Reinvested distributions	1.6			1.3			2.2			1.2			3.4			0.8			—			10.5
Net flows	0.5			1.0			(6.5		)	3.5			(0.1		)	3.2			(1.1		)	0.5
Distributions	(1.8		)	(1.4		)	(2.5		)	(1.6		)	(4.5		)	(1.0		)	—			(12.8		)
Appreciation and other	31.7			15.7			11.2			3.4			13.6			2.4			0.1			78.1
AUM at March 31, 2012	$	216.2		$	83.7		$	103.5		$	77.3		$	187.8		$	51.5		$	5.7		$	725.7

AUM increased$73.8 billion or 10% during the six months ended March 31, 2013, primarily resulting from $49.3 billion of market appreciation and $18.6 billion of net new flows. Overall positive returns in global markets, evidenced by increases in the MSCI World Index of 11% and the S&P 500 Index of 10%, resulted in market appreciation in all long-term investment objectives. Long-term sales of $105.5 billionincreased22% from the prior-year period primarily due to higher sales of global/international fixed-income products. Long-term redemptions decreased11% to $85.6 billion primarily due to a prior year $11.1 billion redemption from an institutional advisory account in the hybrid objective and lower current year redemptions of global/international fixed-income products.

AUM increased$65.8 billion or 10% during the six months ended March 31, 2012 due to market appreciation of $78.1 billion, partially offset by net new outflows of $10.0 billion. The market appreciation was in all long-term investment objectives and reflected strong positive returns in global markets, evidenced by increases in the MSCI World Index of 20% and the S&P 500 Index of 26%. Net new outflows resulted as investor concerns about the European debt crisis negatively impacted long-term sales and redemptions, most notably for global/international fixed-income products. Redemptions also included $11.1 billion from an institutional advisory account in the hybrid objective.

29

The average mix of AUM by sales region is shown below.

	Three Months Ended March 31,				Percent Change		Six Months Ended March 31,				Percent Change
(dollar amounts in billions)	2013		2012				2013		2012
United States	$	522.4	$	460.0	14	%	$	511.3	$	450.9	13	%
International
Europe, the Middle East and Africa	136.9		113.1		21	%	131.0		111.0		18	%
Asia-Pacific	84.1		74.7		13	%	81.3		73.9		10	%
Canada	35.3		32.5		9	%	34.9		31.7		10	%
Latin America1	28.6		26.6		8	%	27.5		26.4		4	%
Total international	284.9		246.9		15	%	274.7		243.0		13	%
Total	$	807.3	$	706.9	14	%	$	786.0	$	693.9	13	%

_________________

¹    Latin America sales region includes North America-based advisors serving non-resident clients.

Due to the global nature of our business operations, investment management and related services may be performed in locations unrelated to the sales region.

Investment Performance Overview

A key driver of our overall success is the long-term investment performance of our SIPs. A standard measure of the performance of these investment products is the percentage of AUM exceeding benchmarks and peer group medians. The long-term investment performance of our fixed-income products has been strong with AUM frequently outperforming the benchmarks and peer group medians for the three-, five- and ten-year periods ended March 31, 2013. Our global/international fixed-income and hybrid funds generated strong results with at least 88% and 85% of AUM exceeding the benchmarks and 93% and 96% of AUM exceeding the peer group medians for all periods presented. In addition, at least 82% of AUM in our tax-free fixed-income products exceeded the peer group medians for the five- and ten-year periods. The performance of our equity products has also been solid with AUM regularly exceeding the peer group medians for all periods presented. 

The performance of our products against benchmarks and peer group medians is presented in the table below.

	Benchmark Comparison								Peer Group Comparison
	% of AUM Exceeding Benchmark								% of AUM in Top Two Peer Group Quartiles
as of March 31, 2013	1-Year		3-Year		5-Year		10-Year		1-Year		3-Year		5-Year		10-Year
Equity
Global/international	60	%	41	%	61	%	56	%	70	%	66	%	77	%	69	%
United States	43	%	14	%	26	%	39	%	61	%	42	%	58	%	40	%
Total equity	55	%	33	%	50	%	50	%	67	%	58	%	71	%	58	%
Hybrid	87	%	85	%	95	%	96	%	97	%	96	%	97	%	98	%
Fixed-Income
Tax-free	60	%	54	%	49	%	51	%	43	%	47	%	82	%	100	%
Taxable
Global/international	94	%	88	%	92	%	89	%	97	%	93	%	99	%	99	%
United States	56	%	65	%	68	%	77	%	59	%	64	%	59	%	69	%
Total fixed-income	79	%	76	%	77	%	76	%	77	%	77	%	88	%	94	%

AUM measured in the benchmark and peer group rankings represents 88% of our total AUM as of March 31, 2013. The benchmark comparisons are based on each fund's return as compared to a market index that has been selected to be generally consistent with the investment objectives of the fund. The peer group rankings are sourced from Lipper, Morningstar or eVestment in each fund's market and were based on an absolute ranking of returns as of March 31, 2013. For products with multiple share classes, rankings for the primary share class are applied to the entire product. Private equity, certain privately-offered emerging market and real estate funds, cash management and funds acquired in 2012 are not included. Certain other funds and products were also excluded because of limited benchmark or peer group data. Had this data been available, the results may have been different. These results assume the reinvestment of dividends, are based on data available as of April 17, 2013 and are subject to revision. While we remain focused on achieving strong long-term performance, our future benchmark and peer group rankings may vary from our past performance.

30

Operating Revenues

The table below presents the percentage change in each revenue category.

(dollar amounts in millions)	Three Months Ended March 31,				Percent Change		Six Months Ended March 31,				Percent Change
	2013		2012				2013		2012
Investment management fees	$	1,267.5	$	1,126.4	13	%	$	2,467.4	$	2,201.5	12	%
Sales and distribution fees	642.7		585.9		10	%	1,246.8		1,110.2		12	%
Shareholder servicing fees	76.6		76.7		0	%	151.0		152.1		(1	)%
Other, net	26.8		10.3		160	%	50.2		37.4		34	%
Total Operating Revenues	$	2,013.6	$	1,799.3	12	%	$	3,915.4	$	3,501.2	12	%

Investment Management Fees

Investment management fees are generally calculated under contractual arrangements with our SIPs and the sub-advised products that we manage as a percentage of the market value of AUM. Annual rates vary by investment objective and type of services provided. Rates for products sold outside of the U.S. are generally higher than for U.S. products because they are structured to compensate for certain distribution costs.

Investment management fees increased $141.1 million and $265.9 million for the three and six months ended March 31, 2013. The increases resulted almost entirely from 14% and 13% increases in average AUM, partially offset by the impact of a slightly lower effective fee rate in both periods. Average AUM increased in all sales regions, with the highest absolute growth in U.S. products, and across all long-term investment objectives.

Our effective investment management fee rate (annualized investment management fees divided by average AUM) decreased to 62.8 basis points for the three and six months ended March 31, 2013 from 63.7 basis points and 63.5 basis points for the same periods in the prior fiscal year. The rate decreases primarily resulted from slightly lower weighting of global/international equity AUM, which generally carry the highest fee rates.

Performance-based investment management fees were $2.2 million and $5.1 million for the three and six months ended March 31, 2013 and $0.5 million and $0.6 million for the same periods in the prior fiscal year, and had an insignificant impact on the effective investment management fee rates.

Our product offerings and global operations are diverse. As such, the impact of future changes in the market value of AUM on investment management fees will be affected by the relative mix of investment objective, geographic region, distribution channel and investment vehicle of the assets.

Sales and Distribution Fees

We earn fees from the sale of certain classes of SIPs on which investors pay a commission at the time of purchase (“commissionable sales”). Sales commissions are reduced or eliminated on some share classes and for some sale transactions depending upon the amount invested and the type of investor. Therefore, sales fees will change with the overall level of gross sales, the size of individual transactions, and the relative mix of sales between different share classes and types of investors.

Globally, our mutual funds and certain other products generally pay us distribution fees in return for sales, marketing and distribution efforts on their behalf. Specifically, the majority of U.S.-registered mutual funds, with the exception of certain of our money market mutual funds, have adopted distribution plans under Rule 12b-1 (the “Rule 12b-1 Plans”) promulgated under the Investment Company Act of 1940. The Rule 12b-1 Plans permit the mutual funds to bear certain expenses relating to the distribution of their shares, such as expenses for marketing, advertising, printing and sales promotion, subject to the Rule 12b-1 Plans' limitations on amounts. The individual Rule 12b-1 Plans set a percentage limit for Rule 12b-1 expenses based on average daily net AUM of the mutual fund. Similar arrangements exist for the distribution of our non-U.S. funds where, generally, the distributor of the funds in the local market arranges for and pays commissions.

We pay substantially all of our sales and distribution fees to the financial advisers and other intermediaries who sell our SIPs to the public on our behalf. See the description of sales, distribution and marketing expenses below.

31

Sales and distribution fees by revenue driver are presented below:

(dollar amounts in millions)	Three Months Ended March 31,				Percent Change		Six Months Ended March 31,				Percent Change
	2013		2012				2013		2012
Asset-based fees	$	419.8	$	384.2	9	%	$	823.5	$	753.0	9	%
Sales-based fees	220.2		199.0		11	%	418.2		351.3		19	%
Contingent sales charges	2.7		2.7		0	%	5.1		5.9		(14	)%
Sales and Distribution	$	642.7	$	585.9	10	%	$	1,246.8	$	1,110.2	12	%

Asset-based distribution fees increased$35.6 million and $70.5 million for the three and six months ended March 31, 2013 primarily due to 11% and 10% increases in the related average AUM. Annualized distribution fees as a percentage of average AUM were 0.21% for the three and six months ended March 31, 2013 and 0.22% for the same periods in the prior fiscal year.

Sales-based fees increased$21.2 million and $66.9 million for the three and six months ended March 31, 2013 primarily due to 16% and 23% increases in total commissionable sales, partially offset by a lower mix of U.S. product sales in both periods. U.S. products typically generate higher sales fees than non-U.S. products. Sales fees as a percentage of commissionable sales were 3.2% and 3.3% for the three and six months ended March 31, 2013, and 3.4% for the same periods in the prior fiscal year. Commissionable sales represented 12% of total sales for the three and six months ended March 31, 2013 and for the same periods in the prior fiscal year.

Contingent sales charges are earned from investor redemptions within a certain contracted period of time. These charges are levied only on certain shares sold without a front-end sales charge, and vary with the mix of redemptions of these shares.

Shareholder Servicing Fees

We receive shareholder servicing fees as compensation for providing transfer agency services, which include providing customer statements, transaction processing, customer service, and tax reporting. These fees are generally fixed charges per shareholder account that vary with the particular type of fund and the service being rendered. In some instances, we charge SIPs these fees based on the level of AUM. In the U.S., transfer agency service agreements provide that accounts closed in a calendar year generally remain billable at a reduced rate through the second quarter of the following calendar year. In Canada, such agreements provide that accounts closed in the calendar year remain billable for four months after the end of the calendar year. Accordingly, the level of fees will vary with the change in open accounts and the level of closed accounts that remain billable.

Other services include tax planning and preparation for individual and trust clients, for which fees are primarily account based, and trustee services, for which fees are based on the level of AUM.

Shareholder servicing fees decreased$0.1 million and $1.1 million for the three and six months ended March 31, 2013 primarily due to the net impacts of decreases in fees of $2.5 million and $5.2 million from closed accounts in the U.S. that remain billable at a reduced rate, increases in fees of $1.5 million and $3.2 million from 7% and 6% increases in active accounts in the U.S., and increases in fees of $1.2 million and $1.3 million in Europe primarily due to higher levels of AUM.

Other, Net

Other, net revenue primarily consists of dividend and interest income from consolidated SIPs. It also includes interest income and expense and provisions for loan losses from lending activities.

Other, net revenue increased$16.5 million and $12.8 million for the three and six months ended March 31, 2013 primarily due to $14.7 million and $15.2 million increases in income from consolidated SIPs. The increase for the six-month period was partially offset by a $2.5 million decrease in net revenue from banking/finance services resulting from a significant reduction in these services during the second half of fiscal year 2012.

32

Operating Expenses

The table below presents the percentage change in each operating expense category.

	Three Months Ended March 31,				Percent Change		Six Months Ended March 31,				Percent Change
(dollar amounts in millions)	2013		2012				2013		2012
Sales, distribution and marketing	$	780.8	$	715.5	9	%	$	1,511.7	$	1,346.1	12	%
Compensation and benefits	355.1		323.0		10	%	690.2		623.4		11	%
Information systems and technology	44.8		43.3		3	%	88.4		84.7		4	%
Occupancy	31.9		31.9		0	%	65.3		63.7		3	%
General, administrative and other	71.6		68.5		5	%	145.3		133.8		9	%
Total Operating Expenses	$	1,284.2	$	1,182.2	9	%	$	2,500.9	$	2,251.7	11	%

Sales, Distribution and Marketing

Sales, distribution and marketing expenses primarily consist of payments to financial advisers, broker/dealers and other third parties for providing services to investors in our SIPs, including marketing support services. Sales expenses are determined as percentages of sales and are incurred from the same commissionable sales transactions that generate sales fee revenues. Distribution expenses are determined as percentages of AUM and are incurred from assets that generate either distribution fees or higher levels of investment management fees. Marketing support expenses are based on sales, AUM or a combination thereof. Also included is the amortization of deferred sales commissions related to up-front commissions on shares sold without a front-end sales charge to shareholders. The deferred sales commissions are amortized over the periods in which commissions are generally recovered from distribution fee revenues and contingent sales charges received from shareholders of the funds upon redemption of their shares.

Sales, distribution and marketing expenses by cost driver are presented below.

	Three Months Ended March 31,				Percent     Change		Three Months Ended March 31,				Percent     Change
(dollar amounts in millions)	2013		2012				2013		2012
Asset-based expenses	$	541.4	$	501.0	8	%	$	1,056.0	$	958.5	10	%
Sales-based expenses	204.5		181.4		13	%	387.9		321.1		21	%
Amortization of deferred sales commissions	34.9		33.1		5	%	67.8		66.5		2	%
Sales, Distribution and Marketing	$	780.8	$	715.5	9	%	$	1,511.7	$	1,346.1	12	%

Asset-based expenses increased$40.4 million and $97.5 million for the three and six months ended March 31, 2013 primarily due to distribution expense increases of $17.2 million and $49.4 million on non-U.S. products and $20.4 million and $42.9 million on U.S. products. The distribution expense increases primarily resulted from higher related average AUM of 11% and 9% internationally and 8% and 9% in the U.S. The U.S. product expenses were also impacted by a higher mix of Class C assets, which have higher expense rates than other U.S. product classes. Annualized asset-based expenses as a percentage of average AUM were 0.27% for the three and six months ended March 31, 2013 and 0.28% for the same periods in the prior fiscal year. Distribution expenses, which are typically higher for non-U.S. products, are generally not directly correlated with distribution fee revenues due to international fee structures which provide for recovery of certain distribution costs through investment management fees.

Sales-based expenses increased$23.1 million and $66.8 million for the three and six months ended March 31, 2013 primarily due to 16% and 23% increases in total commissionable sales, partially offset by a lower mix of U.S. product sales in both periods. U.S. products typically generate higher sales commissions than non-U.S. products. Sales-based expenses as a percentage of sales-based fees were 93% for the three and six months ended March 31, 2013 and 91% for the same periods in the prior fiscal year.

Amortization of deferred sales commissions increased $1.8 million and $1.3 million for the three and six months ended March 31, 2013 primarily due to higher sales of U.S. Class C shares, which are sold without a front-end sales charge to shareholders.

Compensation and Benefits

Compensation and benefit expenses increased$32.1 million and $66.8 million for the three and six months ended March 31, 2013 primarily due to increases in variable compensation and salaries, wages and benefits. Variable compensation increased $13.9 million and $37.9 million primarily due to higher bonus expense based on our performance. Salaries, wages and benefits increased $20.6 million and $31.2 million primarily due to higher staffing levels and annual merit salary adjustments that were effective December 1, 2012 and 2011. Compensation and benefit expenses as a percentage of operating revenues were 18% for

33

the three and six months ended March 31, 2013 and 2012. At March 31, 2013, our global workforce had increased to approximately 8,700 employees from approximately 8,500 employees at March 31, 2012.

We continue to place a high emphasis on our pay for performance philosophy. As such, any changes in the underlying performance of our SIPs or changes in the composition of our incentive compensation offerings could have an impact on compensation and benefit expenses going forward. However, in order to attract and retain talented individuals, our level of compensation and benefit expenses may increase more quickly or decrease more slowly than our revenue.

Information Systems and Technology

Information systems and technology costs increased$1.5 million and $3.7 million for the three and six months ended March 31, 2013 primarily due to higher investments in strategic technology projects for operational purposes.

Details of capitalized information systems and technology costs are shown below.

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Net carrying value at beginning of period	$	91.1		$	78.2		$	90.3		$	67.9
Additions, net of disposals	10.4			13.2			20.5			30.9
Amortization	(10.5		)	(7.4		)	(19.8		)	(14.8		)
Net Carrying Value at End of Period	$	91.0		$	84.0		$	91.0		$	84.0

Occupancy

We conduct our worldwide operations using a combination of leased and owned facilities. Occupancy costs include rent and other facilities-related costs including depreciation and utilities.

Occupancy costs were the same for the three-month periods ended March 31, 2013 and 2012. Occupancy costs increased$1.6 million for the six months ended March 31, 2013 primarily due to increases in rent expense and building maintenance costs.

General, Administrative and Other

General, administrative and other operating expenses primarily consist of fund administration services and shareholder servicing fees payable to external parties, advertising and promotion costs, corporate travel and entertainment, professional fees, and other miscellaneous expenses.

General, administrative and other operating expenses increased$3.1 million and $11.5 million for the three and six months ended March 31, 2013 primarily due to $1.8 million and $3.0 million increases in amortization of intangible assets related to the acquisition of K2, and $1.2 million and $2.2 million increases in advertising and sales and promotion expenses due to higher levels of business activity. The increase for the six-month period also included a $5.4 million increase in professional fees related to changes in our banking/finance business and other corporate activities, and a $2.2 million increase in the contingent consideration liability related to the acquisition of K2.

We are committed to investing in advertising and promotion in response to changing business conditions, and to advance our products where we see continued or potential new growth opportunities. As a result of potential changes in our strategic marketing campaigns, the level of advertising and promotion expenditures may increase more rapidly, or decrease more slowly, than our revenues.

Other Income (Expenses)

Other income (expenses) were as follows:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Investment and other income, net	$	96.5		$	82.4		$	142.0		$	153.6
Interest expense	(10.9		)	(9.6		)	(25.4		)	(18.2		)
Other Income, Net	$	85.6		$	72.8		$	116.6		$	135.4

34

Other income (expenses) consists of net investment and other income and interest expense, excluding interest income and expense from banking/finance activities. Net investment and other income consists primarily of gains (losses) on trading investment securities, investments of consolidated SIPs and assets and liabilities of consolidated variable interest entities (“VIEs”); realized gains (losses) on sale of available-for-sale investment securities; income (losses) from equity method investees; dividend and interest income; other-than-temporary impairments and foreign currency exchange gains (losses).

Other income (expenses) increased$12.8 million for the three months ended March 31, 2013 primarily due to net gains from foreign currency exchange as the U.S. dollar strengthened against the Euro and Pound Sterling in the current-year period, resulting in $18.6 million of net gains as compared to $9.8 million of net losses in the prior year. The increase was substantially offset by an $18.7 million decrease in income from equity method investees due to lower market valuation gains.

Other income (expenses) decreased $18.8 million for the six months ended March 31, 2013 primarily due to lower market valuations for certain investments and higher interest expense, partially offset by higher net gains from securities held by consolidated SIPs and foreign currency exchange. Changes in the fair value of the assets and liabilities of consolidated CLOs resulted in net losses of $26.8 million as compared to $18.3 million of net gains in the prior-year period. Lower market valuations also resulted in a $19.4 million decrease in income from equity method investees and a $7.2 million decrease in net gains on trading investment securities. Interest expense increased $7.2 million primarily due to $3.7 million related to the early redemption of senior notes and a higher debt balance. These changes were substantially offset by a $50.7 million increase in net gains from securities held by consolidated SIPs. Additionally, the strengthened U.S. dollar against the Euro and Pound Sterling resulted in foreign currency exchange net gains of $7.3 million as compared to $4.6 million of net losses in the prior year.

Substantially all of the net gains (losses) of consolidated CLOs and limited partnerships and similar structures and a significant noncontrolling percentage of the net gains (losses) from other consolidated SIPs are offset in noncontrolling interests in our condensed consolidated statements of income.

Our investments in SIPs include initial cash investments made in the course of launching mutual fund and other investment product offerings, as well as investments for other business reasons. The market conditions that impact our AUM similarly affect the investment income earned or losses incurred on our SIPs investments.

The consolidated cash, cash equivalents and investments portfolio by investment objective at March 31, 2013 was as follows:

(dollar amounts in millions)	Total Portfolio		Percent of Total Portfolio		Trading Securities Included in Portfolio		Percent of Total Trading Securities		Assets of Consolidated VIEs and SIPs Included in Total Portfolio		Percent of Total
Cash and Cash Equivalents	$	5,555.8	54	%	$	—	0	%	$	144.5	6	%
Investment Securities
Equity
Global/international	553.4		6	%	—		0	%	392.5		16	%
United States	26.3		0	%	—		0	%	—		0	%
Total equity	579.7		6	%	—		0	%	392.5		16	%
Hybrid	241.7		2	%	—		0	%	186.3		8	%
Fixed-Income
Tax-free	23.4		0	%	—		0	%	—		0	%
Taxable
Global/international	1,010.0		10	%	95.4		8	%	650.0		27	%
United States	2,316.9		22	%	1,118.6		92	%	1,012.9		43	%
Total fixed-income	3,350.3		32	%	1,214.0		100	%	1,662.9		70	%
Total Investment Securities	4,171.7		40	%	1,214.0		100	%	2,241.7		94	%
Other Investments	625.7		6	%	—		0	%	—		0	%
Total Cash and Cash Equivalents and Investments	$	10,353.2	100	%	$	1,214.0	100	%	$	2,386.2	100	%

Investments of consolidated VIEs and SIPs are generally assigned a classification in the table above based on the investment objective of the consolidated VIEs and SIPs holding the securities. Other investments include $409.4 million of investments in equity method investees that hold securities which primarily have a global/international equity investment objective, are subject to market valuation risks and are readily marketable.

35

Taxes on Income

As a multi-national corporation, we often provide our services from locations outside the U.S. Some of these jurisdictions have lower tax rates than the U.S. The mix of pre-tax income subject to these lower rates, when aggregated with income originating in the U.S., produces a lower overall effective income tax rate than existing U.S. federal and state income tax rates.

Our effective income tax rate was 27.2% and 28.3% for the three and six months ended March 31, 2013, as compared to 29.3% and 29.1% for the same periods in the prior fiscal year. The rate decreases were primarily due to reductions in gains on foreign investments subject to U.S. taxes, reductions of taxes in non-U.S. jurisdictions for prior years, and net income attributable to noncontrolling interests as compared to net losses in the prior-year periods, partially offset by increases in forecasted earnings in higher tax jurisdictions.

The effective income tax rate for future reporting periods will continue to reflect the relative contributions of non-U.S. earnings that are subject to reduced tax rates and that are not currently included in U.S. taxable income. Changes in tax rates in these jurisdictions may affect our effective income tax rate and net income.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows were as follows:

	Six Months Ended March 31,
(in millions)	2013			2012
Cash Flow Data
Operating cash flows	$	771.8		$	478.3
Investing cash flows	98.0			441.6
Financing cash flows	(1,349.9		)	(1,046.7		)

Net cash provided by operating activities increased during the six months ended March 31, 2013 primarily due to a lower net increase in trading securities and higher net income. Net cash provided by investing activities decreased mainly due to lower liquidations of investments and net purchases of investments by consolidated VIEs in the current year as compared to net liquidations in the prior year. Net cash used in financing activities increased primarily due to payments on debt and higher dividends paid on common stock, partially offset by lower repurchases of common stock.

The assets and liabilities of our consolidated VIEs and consolidated SIPs attributable to third-party investors do not impact our liquidity and capital resources. We have no right to these consolidated entities’ assets, other than our direct equity investment in them, and/or investment management fees earned from them. The debt holders of these consolidated entities have no recourse to our assets beyond the level of our direct investment, therefore we bear no other risks associated with the entities' liabilities. Accordingly, the assets and liabilities of our consolidated VIEs and consolidated SIPs, other than our direct investments in them, are excluded from the amounts and discussion below.

Our liquid assets and debt consisted of the following:

(in millions)	March 31, 2013		September 30, 2012
Assets
Cash and cash equivalents	$	5,411.3	$	5,784.3
Receivables	931.2		823.8
Investments	2,210.5		2,266.7
Total Liquid Assets	$	8,553.0	$	8,874.8
Liabilities
Debt
Federal Home Loan Bank advances	$	66.0	$	69.0
Senior notes	1,197.4		1,497.1
Total Debt	$	1,263.4	$	1,566.1

36

Liquidity

Liquid assets consist of cash and cash equivalents, receivables, and certain investments. Cash and cash equivalents primarily consist of cash on hand, deposits with financial institutions, money market funds, securities of U.S. government-sponsored enterprises and the U.S. Treasury, and time deposits. Liquid investments consist of trading and available-for-sale securities, investments in equity method investees consisting of mutual fund SIPs, direct investments in redeemable consolidated SIPs, and time deposits with maturities greater than three months.

Cash and cash equivalents at March 31, 2013decreased from September 30, 2012 primarily due to net cash used in financing activities, partially offset by net cash provided by operating and investing activities. The percentages of cash and cash equivalents held by our U.S. and non-U.S. operations were 36% and 64% at March 31, 2013, and 46% and 54% at September 30, 2012.

We utilize a significant portion of our liquid assets to fund operational and regulatory requirements and capital contributions relating to our SIPs. Certain of our subsidiaries are required by our internal policy or regulation to maintain minimum levels of capital which are partially maintained by retaining cash and cash equivalents. As a result, such subsidiaries may be restricted in their ability to transfer cash to their parent companies. Also, as a multi-national corporation, we operate in various locations outside of the U.S. Certain of our non-U.S. subsidiaries are subject to regulatory or contractual repatriation restrictions or requirements. Such restrictions and requirements limit our ability to transfer cash between various international jurisdictions, including repatriation to the U.S. Should we require more capital in the U.S. than is generated domestically, we could elect to reduce the level of discretionary activities, such as share repurchases, or we could elect to repatriate future earnings from non-U.S. jurisdictions or raise capital through debt or equity issuance. Certain of these alternatives could result in higher effective tax rates, increased interest expense or other dilution to our earnings. At March 31, 2013, our U.S. and non-U.S. subsidiaries held approximately $1,948.8 million and $2,105.4 million of our liquid assets to satisfy operational and regulatory requirements and capital contributions to our SIPs, as compared to approximately $2,094.3 million and $1,988.8 million held at September 30, 2012.

Capital Resources

We believe that we can meet our present and reasonably foreseeable operating cash needs and future commitments through existing liquid assets, continuing cash flows from operations, the ability to issue debt or equity securities and borrowing capacity under current credit facilities.

In prior fiscal years, we issued senior unsecured and unsubordinated notes for general corporate purposes, to redeem outstanding notes and to finance an acquisition. At March 31, 2013, $1,197.4 million of the notes were outstanding with a total face value of $1,200.0 million. The notes consist of $250.0 million issued at a fixed interest rate of 3.125% per annum which mature in 2015, $300.0 million issued at a fixed interest rate of 1.375% per annum which mature in 2017, $350.0 million issued at a fixed interest rate of 4.625% per annum which mature in 2020 and $300.0 million issued at a fixed interest rate of 2.800% per annum which mature in 2022.

Interest on the notes is payable semi-annually. The notes contain an optional redemption feature that allows us to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price. The indentures governing the notes contain limitations on our ability and the ability of our subsidiaries to pledge voting stock or profit participating equity interests in our subsidiaries to secure other debt without similarly securing the notes equally and ratably. The indentures also include requirements that must be met if we consolidate or merge with, or sell all of our assets to, another entity. At March 31, 2013, we were in compliance with the covenants of the notes.

At March 31, 2013, $66.0 million of advances from the Federal Home Loan Bank (the “FHLB”) were outstanding with a weighted-average interest rate of 3.23%. FHLB advances are subject to collateralization requirements.

At March 31, 2013, we had $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program which has been inactive since April 2012, $260.0 million available in uncommitted short-term bank lines of credit under the Federal Reserve system, $93.3 million available through the secured Federal Reserve Bank short-term discount window, $14.7 million available in uncommitted short-term bank lines of credit and $6.8 million available in secured FHLB short-term borrowing capacity.

Our ability to access the capital markets in a timely manner depends on a number of factors, including our credit rating, the condition of the global economy, investors’ willingness to purchase our securities, interest rates, credit spreads and the valuation levels of equity markets. If we are unable to access capital markets in a timely manner, our business could be adversely impacted.

37

Uses of Capital

We expect that our main uses of cash will be to invest in and grow our business, acquire shares of our common stock, fund property and equipment purchases, invest in our SIPs, pay operating expenses of the business, enhance technology infrastructure and business processes, pay stockholder dividends and repay and service debt.

We declare and pay dividends on a quarterly basis. We declared regular cash dividends of $0.58 per share ($0.29 per share per quarter) and a special cash dividend of $3.00 per share during the six months ended March 31, 2013, and regular cash dividends of $0.54 per share ($0.27 per share per quarter) and a special cash dividend of $2.00 per share during the six months ended March 31, 2012. We currently expect to continue paying comparable regular cash dividends on a quarterly basis to holders of our common stock depending upon earnings and other relevant factors.

We maintain a stock repurchase program to manage our equity capital with the objective of maximizing shareholder value. Our stock repurchase program is effected through regular open-market purchases and private transactions in accordance with applicable laws and regulations. During the three and six months ended March 31, 2013, we repurchased approximately 163 thousand and 926 thousand shares of our common stock at a cost of $23.3 million and $121.3 million. At March 31, 2013, approximately 6.3 million shares of our common stock remained available for repurchase under our common stock repurchase program, which is not subject to an expiration date. During the three and six months ended March 31, 2012, we repurchased approximately 1.0 million and 4.0 million shares of our common stock at a cost of $125.9 million and $416.8 million.

During the six months ended March 31, 2013 and 2012, we invested $5.6 million and $32.5 million, net of redemptions, in our SIPs.

In October 2012, we redeemed our outstanding 2.000% senior notes due in May 2013 at a make-whole redemption price of $305.4 million.

In November 2012, we acquired an ownership interest of approximately 69% of K2 Advisors Holdings LLC (“K2”), a fund of hedge funds solutions provider. The purchase consideration included a $182.9 million cash investment in K2, which was primarily used to retire $176.5 million of debt immediately following the acquisition.

The funds that we manage have their own resources available for purposes of providing liquidity to meet shareholder redemptions, including securities that can be sold or provided to investors as in-kind redemptions, and lines of credit. While we have no contractual obligation to do so, we may voluntarily elect to provide the funds with direct or indirect financial support based on our business objectives.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

Our contractual obligations and commercial commitments are summarized in our Form 10-K for the fiscal year ended September 30, 2012.

Concurrent with our acquisition of a majority interest of K2 in November 2012, we committed to acquire the remaining interests over a multi-year period beginning in fiscal year 2017. The amount of the resulting liability is contingent on K2's future revenues and profits and had an estimated fair value of $90.0 million at March 31, 2013. This amount is based on payments of $1.1 million in fiscal year 2013, $11.2 million in fiscal years 2014-2015, $33.7 million in fiscal years 2016-2017 and $44.0 million thereafter.

As disclosed above, we redeemed our outstanding 2.000% senior notes due in May 2013 at a make-whole redemption price of $305.4 million in October 2012.

At March 31, 2013, there were no other material changes outside the ordinary course in our other contractual obligations and commercial commitments from September 30, 2012.

OFF-BALANCE SHEET ARRANGEMENTS

In our role as agent or trustee, we facilitate the settlement of investor share purchase, redemption, and other transactions with affiliated mutual funds. We are appointed by the affiliated mutual funds as agent or trustee to manage, on their behalf, bank deposit accounts that contain only (i) cash remitted by investors to the affiliated mutual funds for the direct purchase of fund shares, or (ii) cash remitted by the affiliated mutual funds for direct delivery to the investors for either the proceeds of fund shares liquidated at the investors’ direction, or dividends and capital gains earned on fund shares. At March 31, 2013 and September 30, 2012, we held cash of approximately $301.6 million and $202.4 million off-balance sheet in agency or trust for investors and the affiliated mutual funds.

38

CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results may differ from those estimates under different assumptions. The following are updates to our critical accounting policies disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K for the fiscal year ended September 30, 2012.

Consolidation

We consolidate our subsidiaries and SIPs in which we have a controlling financial interest. We are considered to have a controlling financial interest when we own a majority of the voting interest in an entity or are the primary beneficiary of a VIE. We also consolidate non-VIE limited partnerships and similar structures for which we are deemed to have control.

The variable interests that we have in investment entity VIEs consist of our equity ownership interest in and/or investment management fees earned from these VIEs. As of March 31, 2013, we were the primary beneficiary of three of these VIEs.

Fair Value Measurements

We record the majority of our investments in the consolidated financial statements at fair value or amounts that approximate fair value. We use 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.

As of March 31, 2013, Level 3 assets represented 22% of total assets measured at fair value, substantially all of which related to investments of consolidated SIPs in equity and debt securities of entities and funds which are not traded in active markets. Level 3 liabilities, comprised of a contingent consideration liability and debt of consolidated VIEs, represented 14% of total liabilities measured at fair value at March 31, 2013. There were no transfers into or out of Level 3 during the six months ended March 31, 2013.

Goodwill and Other Intangible Assets

Subsequent to our annual impairment tests as of August 1, 2012, there were no impairments to goodwill or indefinite-lived intangible assets as we determined no events occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying value, or indicate that our indefinite-lived intangible assets might be impaired.

We test definite-lived intangible assets for impairment quarterly. As of March 31, 2013, the undiscounted future cash flow projections for $68.3 million, or 86%, of our definite-lived intangible assets exceeded their carrying values by at least 40%. We estimated the future undiscounted cash flows for these assets using AUM growth rates ranging from 5% to 20%. As of March 31, 2013, a decline in their related AUM of 28% could cause us to evaluate whether their fair value is below the carrying value. There was no impairment of definite-lived intangible assets for the six months ended March 31, 2013.

Revenues

Investment management and distribution fees are determined based on a percentage of AUM. AUM is generally based on the fair value of the underlying securities held by SIPs 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. The fair values of the underlying securities for which market prices are not readily available are internally valued using various methodologies which incorporate unobservable inputs as appropriate for each security type. As of March 31, 2013, our total AUM by fair value hierarchy level was 39% Level 1, 60% Level 2 and 1% Level 3.

NEW ACCOUNTING GUIDANCE

See Note 2 – New Accounting Guidance in the notes to condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q.

39

RISK FACTORS

Volatility and disruption of the capital and credit markets, and adverse changes in the global economy, may significantly affect our results of operations and may put pressure on our financial results. The capital and credit markets continue to experience volatility and disruption worldwide. Declines in global financial market conditions have in the past resulted in significant decreases in our assets under management (“AUM”), revenues and income, and future declines may negatively impact our performance. Such declines have had and may in the future have an adverse impact on our results of operations. We may need to modify our business, strategies or operations and we may be subject to additional constraints or costs in order to satisfy new regulatory requirements or to compete in a changed business environment.

The amount and mix of our AUM are subject to significant fluctuations. Fluctuations in the amount and mix of our AUM may be attributable in part to market conditions outside of our control that have had, and in the future could have, a negative impact on our revenues and income. We derive our operating revenues and net income from providing investment management and related services. The level of our revenues depends largely on the level and mix of AUM. Any decrease in the value or amount of our AUM because of market volatility or other factors negatively impacts our revenues and income. We are subject to an increased risk of asset volatility from changes in the global financial and equity markets. Individual financial and equity markets may be adversely affected by economic, political, financial or other instabilities that are particular to the country or regions in which a market is located, including without limitation local acts of terrorism, economic crises, political protests, insurrection or other business, social or political crises. Declines in these markets have caused in the past, and may cause in the future, a decline in our revenues and income. Global economic conditions, exacerbated by war, terrorism, natural disasters or financial crises, changes in the equity marketplace, unanticipated changes in currency exchange rates, interest rates, inflation rates, the yield curve, defaults by derivative counterparties, bond default risks, the sovereign debt crisis in Europe and other factors that are difficult to predict affect the mix, market values and levels of our AUM. The funds we manage may be subject to an unanticipated large number of redemptions as a result of such events, causing the funds to sell securities they hold, possibly at a loss, or draw on any available lines of credit to obtain cash to settle these redemptions, or settle in-kind with securities held in the applicable fund. We may also, in our discretion, provide financial support to a fund to enable it to maintain sufficient liquidity in such event. Our investment management fee revenues are primarily based on a percentage of the value of AUM and vary with the nature of the account or product managed. A decline in the price of stocks or bonds, or in particular market segments, or in the securities market generally, could cause the value and returns on our AUM to decline, resulting in a decline in our revenues and income. Moreover, changing market conditions may cause a shift in our asset mix between international and U.S. assets, potentially resulting in a decline in our revenues and income depending upon the nature of our AUM and the level of management fees we earn based on our AUM. We generally derive higher investment management and distribution fees from our international products than from our U.S. products, and higher sales fees from our U.S. products than from our international products. Additionally, changing market conditions may cause a shift in our asset mix towards fixed-income products and a related decline in our revenues and income, as we generally derive higher fee revenues and income from equity products than from fixed-income products we manage. On the other hand, increases in interest rates, in particular if rapid, or high interest rates, as well as any uncertainty in the future direction of interest rates, may have a negative impact on our fixed-income products as rising interest rates or interest rate uncertainty typically decrease the total return on many bond investments due to lower market valuations of existing bonds. Any decrease in the level of our AUM resulting from price declines, interest rate volatility or uncertainty, increased redemptions or other factors could negatively impact our revenues and income.

We are subject to extensive and complex, overlapping and frequently changing rules, regulations and legal interpretations. There is uncertainty associated with the regulatory environment in which we operate. Our business is subject to extensive and complex, overlapping and frequently changing rules, regulations and legal interpretations in the countries in which we operate, including, among others, securities, banking, accounting, tax, ethics and privacy laws and regulations.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Reform Act") imposes additional restrictions and limitations on us and will likely result in increased scrutiny and oversight of our financial services and products as the various rules and regulations required for implementation continue to be adopted. Due to the complexity and broad scope of the Reform Act and the time required for regulatory implementation, we are not able to predict at this time all of the specific requirements that will be adopted by regulatory agencies having authority over us pursuant to the Reform Act, or the impact of all of the changes in regulation. The so-called “Volcker Rule” provisions of the Reform Act restrict the ability of affiliates of insured depository institutions, such as Franklin, to sponsor or invest in private funds or to engage in certain types of proprietary trading. While the Volcker Rule became effective on July 21, 2012, final rules for its implementation have not yet been adopted. On April 19, 2012, the Board of Governors of the Federal Reserve System (the “FRB”) issued a Statement of Policy that confirmed that banking institutions will have two years from the effective date to conform their activities to the requirements of the Volcker Rule. In addition to the rulemaking mandated by the Reform Act, rules adopted by the Commodity Futures Trading Commission (“CFTC”) in 2012 removed or limited previously available exemptions and exclusions which have imposed additional registration and reporting requirements for operators of certain of our mutual funds and other pooled vehicles that use or trade in futures, swaps and other derivatives considered commodity interests and regulated by the CFTC. These regulatory amendments may also restrict

40

the use of commodity interests regulated by the CFTC by certain of our mutual funds or other pooled vehicles. Further, upon implementation, the Foreign Account Tax Compliance Act ("FATCA"), which is intended to address tax compliance issues related to U.S. taxpayers holding non-U.S. accounts, will require non-U.S. financial institutions to report to the Internal Revenue Service (“IRS”) information about financial accounts held by U.S. taxpayers and impose withholding, documentation and reporting requirements on non-U.S. financial institutions. Full implementation of FATCA will be phased in over a multi-year period commencing in 2013, and additional guidance with respect to that phase-in is expected over time. Changes to the regulation of money market funds currently under discussion could significantly change the structure and operations of those funds. We expect that such regulatory requirements and developments will cause us to incur additional administrative and compliance costs.

Financial reporting requirements, and the processes, controls and procedures that have been put in place to address them, are often comprehensive and complex. We may be adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation of existing laws and regulations. While management has focused attention and resources on our compliance policies, procedures and practices, non-compliance with applicable laws or rules or regulations, conflicts of interest requirements or fiduciary principles, or our inability to keep up with, or adapt to, an ever changing, complex regulatory environment, could result in civil liability, criminal liability and/or sanctions against us, including fines and censures, injunctive relief, suspension or expulsion from a particular jurisdiction or market or the revocation of licenses, any of which could adversely affect our reputation, prospects, revenues and income.

We are subject to U.S. federal securities laws, state laws regarding securities fraud, other federal and state laws and rules and regulations of certain regulatory and self-regulatory organizations, including those rules and regulations promulgated by, among others, the SEC, the Financial Industry Regulatory Authority and the New York Stock Exchange. Because of our non-U.S. operations and/or trading in our securities that take place outside the U.S., we are also subject to regulation by non-U.S. regulators and U.S. regulators such as the Department of Justice and the SEC with respect to the Foreign Corrupt Practices Act of 1977. Certain of our subsidiaries are registered with the SEC under the Investment Advisers Act of 1940 and many of our funds are registered with the SEC under the Investment Company Act, both of which impose numerous obligations, as well as detailed operational requirements, on our subsidiaries which are investment advisers to registered investment companies. Our subsidiaries must comply with a myriad of complex and changing U.S. and/or non-U.S. rules and regulations, some of which may conflict, as well as complex tax regimes. Additionally, as we continue to expand our operations, sometimes rapidly, into additional non-U.S. jurisdictions, the rules and regulations of these non-U.S. jurisdictions become applicable, sometimes with short compliance deadlines, and add further regulatory complexity to our ongoing global compliance operations.

We are also a bank holding company and a financial holding company subject to the supervision and regulation of the FRB and are subject to the restrictions, limitations and prohibitions of the Bank Holding Company Act of 1956 (the “BHC Act”) and the Gramm-Leach-Bliley Act. In addition, significant aspects of the Reform Act relate to changes in the regulation of banks, thrifts, holding companies and related institutions, including with respect to regulation and supervision in the banking industry, and the imposition of various restrictions and limitations on certain activities of such entities. The Reform Act includes a number of measures that will increase capital and liquidity requirements, impose limits on leverage, and enhance supervisory authority and regulatory oversight of non-banking entities which may apply to our business. The FRB may impose additional limitations or restrictions on our activities, including if the FRB believes that we do not have the appropriate financial and managerial resources to commence or conduct an activity or make an acquisition. Further, our banking subsidiaries, Fiduciary Trust Company International (“Fiduciary Trust”) and Franklin Templeton Bank & Trust, F.S.B. (“FTB&T”), are subject to extensive regulation, supervision and examination by their respective banking regulators, which include the Federal Deposit Insurance Corporation for both, the New York State Department of Financial Services for Fiduciary Trust and the Office of the Comptroller of the Currency for FTB&T.

The laws and regulations imposed by our banking regulators generally involve restrictions and requirements in connection with a variety of technical, specialized, and expanding matters and concerns. For example, compliance with anti-money laundering and Know-Your-Customer requirements, both domestically and internationally, and the Bank Secrecy Act has taken on heightened importance with regulators as a result of efforts to, among other things, limit terrorism. At the same time, there has been increased regulation with respect to the protection of customer privacy and the need to secure sensitive customer information. As we continue to address these requirements or focus on meeting new or expanded ones, we may expend a substantial amount of time and resources. Any inability to meet these requirements, within the timeframes set by regulators, may subject us to sanctions or other restrictions by the regulators that could impact our broader business. Moreover, being subject to banking regulation may put us at a disadvantage compared to our competitors which are not subject to such requirements.

Regulatory and legislative actions and reforms have made the regulatory environment in which we operate more costly and future actions and reforms could adversely impact our AUM, increase costs and negatively impact our profitability and future financial results. Since 2001, the federal securities laws have been augmented substantially and made significantly more complex by, among other measures, the Sarbanes-Oxley Act of 2002, the USA Patriot Act of 2001 and the Reform Act. Moreover, the adoption of new laws or regulations and changes in the interpretation or enforcement of existing laws or regulations have directly

41

affected, and may continue to affect, our business. With new laws and changes in interpretation of existing requirements, the associated time we must dedicate to, and related costs we must incur in, meeting the regulatory complexities of our business have increased. In particular, many provisions of the Reform Act still require the adoption of rules to implement the Reform Act and mandate multiple studies, which could result in additional legislative or regulatory action. We may be required to invest significant management time and resources to address the various provisions of the Reform Act and the numerous regulations that are required to be issued under it. In addition, the SEC has proposed changes to Rule 12b-1 promulgated under the Investment Company Act which, if adopted, could limit our ability to recover expenses relating to the distribution of our funds. Outlays associated with meeting regulatory complexities have also increased as we expand our business into new jurisdictions. Compliance activities to meet these and other new legal requirements have required us to expend additional time and resources, and, consequently, we are incurring increased costs of doing business, which potentially negatively impacts our profitability and future financial results. Moreover, any potential accounting or reporting error, whether financial or otherwise, if material, could damage our reputation, adversely affect our ability to conduct business, and decrease revenues and income. Finally, any regulatory and legislative actions and reforms affecting the mutual fund industry, including compliance initiatives, may negatively impact revenues by increasing our costs of accessing or dealing in the financial markets or by making certain investment offerings less favorable to our clients.

Failure to comply with the laws, rules or regulations in any of the non-U.S. jurisdictions in which we operate could result in substantial harm to our reputation and results of operations. As with all investment management companies, our activities are highly regulated in almost all countries in which we conduct business. The regulatory environments of the non-U.S. jurisdictions where we conduct our business or where the funds and products we manage are organized or sold are complex, uncertain and subject to change. Local regulatory environments may vary widely and place additional demands on our sales, legal and compliance personnel. Failure to comply with the applicable laws, rules, regulations, codes, directives, notices or guidelines in any of our non-U.S. jurisdictions could result in a wide range of penalties and disciplinary actions, including fines, censures and the suspension or expulsion from a particular jurisdiction or market or the revocation of licenses, any of which could adversely affect our reputation and operations. In recent years, the non-U.S. regulatory environments in which we operate have seen significant increased and evolving regulation, which has imposed and may continue to impose additional compliance and operational costs on us in the applicable jurisdictions. Regulators in non-U.S. jurisdictions could also change their policies or laws in a manner that might restrict or otherwise impede our ability to offer our investment products and services in their respective markets, or we may be unable to keep up with, or adapt to, the ever changing, complex regulatory requirements in such jurisdictions or markets, which could further negatively impact our business.

Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and liquidity. We are subject to income taxes as well as non-income based taxes, in both the U.S. and various non-U.S. jurisdictions and are subject to ongoing tax audits in the U.S. and various non-U.S. jurisdictions. Tax authorities may disagree with certain positions we have taken and assess additional taxes. We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. However, there can be no assurance that we will accurately predict the outcomes of these audits, and the actual outcomes of these audits could have a material impact on our net income or financial condition. Changes in tax laws or tax rulings could materially impact our effective tax rate. For example, proposals for fundamental U.S. corporate tax reform, if enacted, could change the amount of taxes we are required to pay and have a significant impact on our future results of operations, profitability and financial condition.

Any significant limitation, failure or security breach of our information and cyber security infrastructure, software applications, technology or other systems that are critical to our operations could constrain our operations. We are highly dependent upon the use of various proprietary and third-party information and security technology, software applications and other technology systems to operate our business. We are also dependent on the effectiveness of our information and cyber security policies, procedures and capabilities to protect our computer and telecommunications systems and the data that reside on or are transmitted through them. We use our technology to, among other things, obtain securities pricing information, process client transactions, and provide reports and other customer services to the clients of the funds we manage. Any inaccuracies, delays, systems failures or security breaches in these and other processes could subject us to client dissatisfaction and losses. Although we take protective measures, including measures to effectively secure information through system security technology, our technology systems may still be vulnerable to unauthorized access, computer viruses or other events that have a security impact, such as an external hacker attack or an authorized employee or vendor inadvertently causing us to release confidential information, which could materially damage our operations or cause the disclosure or modification of sensitive or confidential information. Breach of our technology systems could result in the loss of valuable information, breach of client contracts, liability for stolen assets or information, remediation costs to repair damage caused by the breach, additional security costs to mitigate against future incidents, regulatory actions and litigation costs resulting from the incident. Moreover, loss of confidential customer identification information could harm our reputation and subject us to liability under laws that protect confidential personal data, resulting in increased costs or a decline in our revenues or common stock price.

42

Further, although we take precautions to password protect and encrypt our laptops and other mobile electronic hardware, if such hardware is stolen, misplaced or left unattended, it may become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us. Most of the software applications that we use in our business are licensed from, and supported, upgraded and maintained by, third-party vendors. A suspension or termination of certain of these licenses or the related support, upgrades and maintenance could cause temporary system delays or interruption. In addition, our failure to properly manage and operate our data centers could have an adverse impact on our business. Although we have in place certain disaster recovery plans, we may experience system delays and interruptions as a result of natural disasters, power failures, acts of war, and third-party failures. Technology is subject to rapid change and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products, which could affect our business. Potential system failures or breaches, or advancements in technology, and the cost necessary to address them, could result in material financial loss or costs, regulatory actions, breach of client contracts, reputational harm or legal claims and liability, which in turn could negatively impact our revenues and income.

Our business operations are complex and a failure to properly perform operational tasks or the misrepresentation of our products and services, or the termination of investment management agreements representing a significant portion of our AUM, could have an adverse effect on our revenues and income. Through our subsidiaries, we provide investment management and related services to our sponsored investment products, that consist of investment funds and institutional, high net-worth and separately-managed accounts. In addition to investment management, our services include fund administration, sales, distribution, shareholder services, transfer agency, trustee, custodial and other fiduciary services, as well as select private banking services. In order to be competitive, we must properly perform our fund and portfolio administration and related responsibilities, including portfolio recordkeeping and accounting, security pricing, corporate actions, investment restrictions compliance, daily net asset value computations, account reconciliations, and required distributions to fund shareholders. In addition, the intentional or unintentional misrepresentation of our products and services in advertising materials, public relations information, social media or other external communications could adversely affect our reputation and business prospects. Our investment management fees, which represent a majority of our revenues, are dependent on fees earned under investment management agreements that we have with the sponsored investment products we advise. Our revenues could be adversely affected if such agreements representing a significant portion of our AUM are terminated or significantly altered. Further, certain of our subsidiaries may act as general partner for various investment partnerships, which may subject them to liability for the partnerships' liabilities. If we fail to properly perform and monitor our operations, our business could suffer and our revenues and income could be adversely affected.

We face risks, and corresponding potential costs and expenses, associated with conducting operations and growing our business in numerous countries. We sell mutual funds and offer investment management and related services in many different regulatory jurisdictions around the world, and intend to continue to expand our operations internationally. As we do so, we will continue to face challenges to the adequacy of our resources, procedures and controls to consistently and effectively operate our business. In order to remain competitive, we must be proactive and prepared to implement necessary resources when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions. As we grow, we face a heightened risk that the necessary resources and/or personnel will be unavailable to take full advantage of strategic opportunities when they appear or that strategic decisions can be efficiently implemented. Local regulatory environments may vary widely, as may the adequacy and sophistication of each. Similarly, local distributors, and their policies and practices as well as financial viability, may be inconsistent or less developed or mature. Notwithstanding potential long-term cost savings by increasing certain operations, such as transfer agent and other back-office operations, in countries or regions of the world with lower operating costs, growth of our international operations may involve near-term increases in expenses as well as additional capital costs, such as information systems and technology costs and costs related to compliance with particular regulatory or other local requirements or needs. Local requirements or needs may also place additional demands on sales and compliance personnel and resources, such as meeting local language requirements, while also integrating personnel into an organization with a single operating language. Finding, hiring and retaining additional, well-qualified personnel and crafting and adopting policies, procedures and controls to address local or regional requirements remain a challenge as we expand our operations internationally. Moreover, regulators in non-U.S. jurisdictions could also change their policies or laws in a manner that might restrict or otherwise impede our ability to distribute or register investment products in their respective markets. Any of these local requirements, activities, or needs could increase the costs and expenses we incur in a specific jurisdiction without any corresponding increase in revenues and income from operating in the jurisdiction. In addition, from time to time we enter into international joint ventures in which we may not have control. These investments in joint ventures may involve risks, including the risk that the controlling joint venture partner may have business interests, strategies or goals that are inconsistent with ours, and the risk that business decisions or other actions or omissions of the controlling joint venture partner or the joint venture company may result in harm to our reputation or adversely affect the value of our investment in the joint venture.

We depend on key personnel and our financial performance could be negatively affected by the loss of their services. The success of our business will continue to depend upon our key personnel, including our portfolio and fund managers, investment analysts, investment advisers, sales and management personnel and other professionals as well as our executive officers and

43

business unit heads. Competition for qualified, motivated, and highly skilled executives, professionals and other key personnel in the investment management industry remains significant. Our success depends to a substantial degree upon our ability to find, attract, retain, and motivate qualified individuals, including through competitive compensation packages, and upon the continued contributions of these people. Regulations, including those contained in the Capital Requirements Directive of the European Union (“EU”), those recently adopted under the EU's Alternative Investment Fund Manager Directive, those required to be adopted under the Reform Act and certain regulations proposed under the EU's draft Undertakings for Collective Investment in Transferable SecuritiesV Directive, could impose restrictions on compensation paid by financial institutions, which could restrict our ability to compete effectively for qualified professionals. As our business grows, we are likely to need to increase correspondingly the overall number of individuals that we employ. Moreover, in order to retain certain key personnel, we may be required to increase compensation to such individuals, resulting in additional expense without a corresponding increase in potential revenues. We cannot assure you that we will be successful in finding, attracting and retaining qualified individuals, and the departure of key investment personnel, in particular, if not replaced, could cause us to lose clients, which could have a material adverse effect on our financial condition, results of operations and business prospects.

Strong competition from numerous and sometimes larger companies with competing offerings and products could limit or reduce sales of our products, potentially resulting in a decline in our market share, revenues and income. We compete with numerous investment management companies, securities brokerage and investment banking firms, insurance companies, banks and other financial institutions. Our investment products also compete with products offered by these competitors as well as real estate investment trusts, hedge funds and others. The periodic establishment of new investment management companies and other competitors increases the competition that we face. At the same time, consolidation in the financial services industry has created stronger competitors with greater financial resources and broader distribution channels than our own. Competition is based on various factors, including, among others, business reputation, investment performance, product mix and offerings, service quality and innovation, distribution relationships, and fees charged. Additionally, competing securities broker/dealers whom we rely upon to distribute and sell our mutual funds may also sell their own proprietary funds and investment products, which could limit the distribution of our investment products. To the extent that existing or potential clients, including securities broker/dealers, decide to invest in or distribute the products of our competitors, the sales of our products as well as our market share, revenues and income could decline. Our ability to attract and retain AUM is also dependent on the relative investment performance of our funds and other managed investment portfolios, offering a mix of sponsored investment products that meets investor demand and our ability to maintain our investment management fees at competitive levels.

Changes in the third-party distribution and sales channels on which we depend could reduce our income and hinder our growth. We derive nearly all of our fund sales through third-party broker/dealers and other similar investment advisers. Increasing competition for these distribution channels and regulatory initiatives have caused our distribution costs to rise and could cause further increases in the future or could otherwise negatively impact the distribution of our products. Pursuant to the Reform Act, the SEC may establish different standards for broker/dealers in their interaction with retail customers, which could have an impact on sales and/or distribution costs. Higher distribution costs lower our income; consolidations in the broker/dealer industry could also adversely impact our income. Moreover, if several of the major financial advisers who distribute our products were to cease operations or limit or otherwise end the distribution of our products, it could have a significant adverse impact on our income. There is no assurance we will continue to have access to the third-party broker/dealers and similar investment advisers that currently distribute our products, or continue to have the opportunity to offer all or some of our existing products through them. A failure to maintain strong business relationships with the major investment advisers who currently distribute our products may also impair our distribution and sales operations. Because we use broker/dealers and other similar investment advisers to sell our products, we do not control the ultimate investment recommendations given to clients. Any inability to access and successfully sell our products to clients through third-party distribution channels could have a negative effect on our level of AUM, income and overall business and financial condition.

Our increasing focus on international markets as a source of investments and sales of investment products subjects us to increased exchange rate and other risks in connection with our revenues and income generated overseas. While we maintain a significant portion of our operations in the U.S., we also provide services and earn revenues in The Bahamas, Asia-Pacific, Europe, Canada, Latin America, the Middle East and Africa. As a result, we are subject to foreign exchange risk through our non-U.S. operations. Fluctuations in the exchange rates to the U.S. dollar may affect our financial results from one period to the next. While we have taken steps to reduce our exposure to foreign exchange risk, for example, by denominating a significant amount of our transactions in U.S. dollars, the situation may change in the future as our business continues to grow outside the U.S. Appreciation of the U.S. dollar could moderate revenues from managing investment products internationally or could affect relative investment performance of certain funds invested in non-U.S. securities. In addition, we have risk associated with the foreign exchange revaluation of U.S. dollar balances held by certain non-U.S. subsidiaries for which the local currency is the functional currency. Separately, management fees that we earn tend to be higher in connection with international AUM than with U.S. AUM. Consequently, a downturn in international markets could have a significant effect on our revenues and income. Moreover, as our business continues to grow in non-U.S. markets, any ongoing and future business, economic, social or political unrest affecting

44

these markets, in addition to any direct consequences such unrest may have on our personnel and facilities located in the affected area, may also have a more lasting impact on the long-term investment climate in these and other areas and, as a result, our AUM and the corresponding revenues and income that we generate from them may be negatively affected.

Harm to our reputation or poor investment performance of our products could reduce the level of our AUM or affect our sales, potentially negatively impacting our revenues and income. Our reputation is critical to the success of our business. We believe that our Franklin Templeton Investments brand has been, and continues to be, well received both in our industry and with our clients, reflecting the fact that our brand, like our business, is based in part on trust and confidence. If our reputation is harmed, existing clients may reduce amounts held in, or withdraw entirely from, funds that we advise or funds may terminate their management agreements with us, which could reduce the amount of AUM and cause us to suffer a corresponding loss in our revenues and income. Our investment performance, along with achieving and maintaining superior distribution and client services, is also critical to the success of our business. Strong investment performance often stimulates sales of our investment products. Poor investment performance as compared to third-party benchmarks or competitive products could lead to a decrease in sales of investment products we manage and stimulate redemptions from existing products, generally lowering the overall level of AUM and reducing the management fees we earn. We cannot assure you that past or present investment performance in the investment products we manage will be indicative of future performance. Any poor investment performance may negatively impact our revenues and income. Reputational harm or poor investment performance may cause us to lose current employees and we may be unable to continue to attract new ones with similar qualifications, motivations, or skills. If we fail to address, or appear to fail to address, successfully and promptly the underlying causes of any reputational harm or poor investment performance, we may be unsuccessful in repairing any existing harm to our reputation or performance and our future business prospects would likely be affected.

Our future results are dependent upon maintaining an appropriate level of expenses, which is subject to fluctuation. The level of our expenses is subject to fluctuation and may increase for the following or other reasons: changes in the level and scope of our advertising expenses in response to market conditions; variations in the level of total compensation expense due to, among other things, bonuses, changes in our employee count and mix, and competitive factors; changes in expenses and capital costs, including costs incurred to maintain and enhance our administrative and operating services infrastructure or to cover uninsured losses and an increase in insurance expenses including through the assumption of higher deductibles and/or co-insurance liability.

Our ability to successfully integrate widely varied business lines can be impeded by systems and other technological limitations. Our continued success in effectively managing and growing our business depends on our ability to integrate the varied accounting, financial, information, and operational systems of our various businesses on a global basis. Moreover, adapting or developing our existing technology systems to meet our internal needs, as well as client needs, industry demands and new regulatory requirements, is also critical for our business. The constant introduction of new technologies presents new challenges to us. We have an ongoing need to continually upgrade and improve our various technology systems, including our data processing, financial, accounting, shareholder servicing and trading systems. Further, we also must be proactive and prepared to implement technology systems when growth opportunities present themselves, whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions. These needs could present operational issues or require, from time to time, significant capital spending. It also may require us to reevaluate the current value and/or expected useful lives of our technology systems, which could negatively impact our results of operations.

Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability. Should we experience a local or regional disaster or other business continuity problem, such as an earthquake, tsunami, terrorist attack, pandemic or other natural or man-made disaster, our continued success will depend, in part, on the safety and availability of our personnel, our office facilities, and the proper functioning of our computer, telecommunication and other related systems and operations. While our operational size, the diversity of locations from which we operate, and our redundant back-up systems provide us with a strong advantage should we experience a local or regional disaster or other business continuity event, we could still experience near-term operational challenges, in particular depending upon how a local or regional event may affect our human capital across our operations or with regard to particular aspects of our operations, such as key executive officers or personnel in our technology group. Moreover, as we grow our operations in new geographic regions, the potential for particular types of natural or man-made disasters, political, economic or infrastructure instabilities, or other country- or region-specific business continuity risks increases. Past disaster recovery efforts have demonstrated that even seemingly localized events may require broader disaster recovery efforts throughout our operations and, consequently, we regularly assess and take steps to improve upon our existing business continuity plans and key management succession. However, a disaster on a significant scale or affecting certain of our key operating areas within or across regions, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability.

45

Certain of the portfolios we manage, including our emerging market portfolios, are vulnerable to significant market-specific political, economic or other risks, any of which may negatively impact our revenues andincome. Our emerging market portfolios and revenues derived from managing these portfolios are subject to significant risks of loss from political, economic, and diplomatic developments, currency fluctuations, social instability, changes in governmental policies, expropriation, nationalization, asset confiscation and changes in legislation related to non-U.S. ownership. International trading markets, particularly in some emerging market countries, are often smaller, less liquid, less regulated and significantly more volatile than those in the U.S.

Regulatory and governmental examinations and/or investigations, litigation and the legal risks associated with our business, could adversely impact our AUM, increase costs and negatively impact our profitability and/or our future financial results. From time to time we may receive requests for documents or other information from governmental authorities or regulatory bodies or we also may become the subject of governmental or regulatory investigations and/or examinations, and governmental or regulatory investigations and/or examinations that have been inactive could become active. In addition, we may be named in litigation. We may be obligated, and under our certificate of incorporation and by-laws and our standard form of indemnification agreement with certain directors in some instances, we are obligated, or we may choose, to indemnify directors, officers or employees against liabilities and expenses they may incur in connection with such matters to the extent permitted under applicable law. Even if claims made against us are without merit, litigation typically is an expensive process. Risks associated with legal liability often are difficult to assess or quantify and their existence and magnitude can remain unknown for significant periods of time. Eventual exposures from and expenses incurred relating to any litigation, investigations, examinations and settlements could adversely impact our AUM, increase costs and negatively impact our profitability and/or our financial results. Judgments, findings or allegations of wrongdoing by regulatory or governmental authorities or in litigation against us or settlements with respect thereto could affect our reputation, increase our costs of doing business and/or negatively impact our revenues, any of which could have a material negative impact on our financial results.

Our ability to meet cash needs depends upon certain factors, including the market value of our assets, operating cash flows and our perceived creditworthiness. Our ability to meet anticipated cash needs depends upon factors such as the market value of our assets, our operating cash flows and our creditworthiness as perceived by lenders. If we are unable to obtain funds and financing, we may be forced to incur unanticipated costs or revise our business plans. Further, our access to the capital markets depends significantly on our credit ratings. A reduction in our long- or short-term credit ratings could increase our borrowing costs and limit our access to the capital markets. Volatility in the global financing markets may also impact our ability to access the capital markets should we seek to do so, and have an adverse effect on investors' willingness to purchase our securities, interest rates, credit spreads and the valuation levels of equity markets. If we are unable to obtain funds and financing, or access the capital markets in a timely manner, we may be forced to incur unanticipated costs or revise our business plans, and our business could be adversely impacted.

Our business could be negatively affected if we or our banking subsidiaries fail to satisfy regulatory and supervisory standards. Franklin and its banking subsidiaries are subject to significant regulation, supervision and examination by their respective banking regulators, which includes minimum regulatory capital standards. Franklin is subject to minimum capital and other regulatory and supervisory standards because it is a bank holding company and financial holding company registered with and supervised by the FRB under the BHC Act. Our business could be negatively affected if Franklin or its banking subsidiaries fail to meet these standards. Loss of financial holding company status could require that we either cease activities that are only permissible for us to engage in as a financial holding company or divest our banking subsidiaries if we desire to continue such activities. The banking regulators are authorized (and sometimes required) to impose a wide range of requirements, conditions, and restrictions on banks, thrifts, and bank holding companies that fail to maintain adequate capital levels. The Reform Act imposes more stringent capital, liquidity and leverage ratio requirements on bank holding companies. In addition, liquidity needs could affect our banking services, which may be subject to an unanticipated large number of withdrawals as a result of a number of factors, such as changed or unstable economic conditions, adverse trends or events, interest rates paid by competitors, general interest rate levels, and returns available to clients on alternative investments. Our banking subsidiaries may be required from time to time to rely on secondary sources of liquidity, such as the sale of investment securities, Federal Home Loan Bank advances and federal funds lines to enable them to meet such withdrawal demands. These secondary sources may not be sufficient to meet liquidity needs.

We are dependent on the earnings of our subsidiaries. Substantially all of our operations are conducted through our subsidiaries. As a result, our cash flow and our ability to fund operations are dependent upon the earnings of our subsidiaries and the distribution of earnings, loans or other payments by our subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to provide us with funds for our payment obligations, whether by dividends, distributions, loans or other payments. Any payments to us by our subsidiaries could be subject to statutory or contractual restrictions and are contingent upon our subsidiaries' earnings and business considerations.

46

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of business, our financial position is subject to market risk, including, but not limited to, potential loss due to changes in the value of financial instruments including those resulting from adverse changes in interest rates, foreign currency exchange rates and market valuation. Financial instruments include, but are not limited to, investment securities, loans, deposits and debt obligations. Management is responsible for managing market risk. Our Enterprise Risk Management Committee is responsible for providing a framework to assist management to identify, assess, and manage market and other risks.

Our market risk from assets and liabilities of consolidated VIEs and consolidated SIPs is limited to that of our direct investments in, and/or investment management fees earned from, these entities. Accordingly, the assets and liabilities of our consolidated VIEs and consolidated SIPs are excluded from the discussion below.

AUM Market Price Risk

We are exposed to market risk through our investment management and distribution fees, which are generally calculated as a percentage of the market value of AUM. Changes in equity market prices, interest rates, credit spreads, foreign exchange rates, or a combination of these factors could cause the value of AUM to decline, which would result in lower investment management and distribution fees. Our exposure to these risks is minimized as we sponsor a broad range of investment products in various global jurisdictions, which serves to mitigate the impact of changes in any particular market(s) or region(s).

Interest Rate Risk

We are exposed to changes in interest rates, primarily through our investments in debt securities, loans receivable, deposits and debt obligations. At March 31, 2013, we had exposure from $1,687.4 million of investments in debt securities and SIPs that invest in debt securities, $238.3 million of net loans receivable and $558.9 million of interest-bearing deposits. We minimize the impact of changes in interest rates related to investments in debt securities by managing the maturities of these securities, and through diversification, ensuring an appropriate mix of fixed rate and floating rate investments. Our exposure to the risks from investments in SIPs is also minimized by our broad range of products in various global jurisdictions, mitigating the impact of changes in any particular market(s) or region(s). We minimize the impact of changes in interest rates related to our debt obligations by entering into financing transactions that ensure an appropriate mix of debt at fixed and variable interest rates. At March 31, 2013, substantially all of our outstanding debt was issued at fixed rates. In addition, we monitor the interest rates and average maturities of our loan and deposit portfolios.

As of March 31, 2013, we have considered the potential impact of a 100 basis point movement in market interest rates on our interest-earning cash and cash equivalents, portfolio of debt securities, loan receivable, deposits and debt obligations. Based on our analysis, we do not expect that such a change would have a material impact on our operating revenues or results of operations in the next twelve months, for any of these categories or in the aggregate.

Foreign Currency Exchange Risk

We are subject to foreign currency exchange risk through our international operations. While we operate primarily in the U.S., we also provide services and earn revenues in The Bahamas, Asia-Pacific, Europe, Canada, Latin America, the Middle East and Africa. Our exposure to foreign currency exchange risk is minimized in relation to our results of operations since a significant portion of these revenues are denominated in U.S. dollars. This situation may change in the future as our business continues to grow outside the U.S. and expenses incurred denominated in foreign currencies increase. The exposure to foreign currency exchange risk in our condensed consolidated balance sheet mostly relates to cash and cash equivalents and investments that are denominated in foreign currencies, primarily in Euro, Indian Rupee, Pound Sterling and Canadian Dollar. These assets accounted for approximately 10% of the total cash and cash equivalents and investments at March 31, 2013. We also have exposure to foreign exchange revaluation of U.S. dollar balances held by certain non-U.S. subsidiaries for which their local currency is the functional currency. These assets accounted for approximately 7% of the total cash and cash equivalents and investments at March 31, 2013. We generally do not use derivative financial instruments to manage foreign currency exchange risk exposure. As a result, both positive and negative currency fluctuations against the U.S. dollar may affect our results of operations and accumulated other comprehensive income.

Market Valuation Risk

We are exposed to market valuation risks related to securities we hold that are carried at fair value. To mitigate the risks we maintain a diversified investment portfolio and, from time to time, we may enter into derivative agreements.

47

The following is a summary of the effect of a 10% increase or decrease in the carrying values of our financial instruments subject to market valuation risks at March 31, 2013.

(in millions)	Carrying Value		Carrying Value Assuming  a 10% Increase		Carrying Value Assuming  a 10% Decrease
Investment securities, trading	$	1,214.0	$	1,335.4	$	1,092.6
Investment securities, available-for-sale	716.0		787.6		644.4
Direct investments in consolidated VIEs and consolidated SIPs	468.3		515.1		421.5
Total	$	2,398.3	$	2,638.1	$	2,158.5

Item 4. Controls and Procedures.

The Company’s management evaluated, with the participation of the Company’s principal executive and principal financial officers, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of March 31, 2013. Based on their evaluation, the Company’s principal executive and principal financial officers concluded that the Company’s disclosure controls and procedures as of March 31, 2013 were designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s fiscal quarter ended March 31, 2013, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

48

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

For a description of our legal proceedings, please see the description set forth in the “Legal Proceedings” section in Note 11 – Commitments and Contingencies in the notes to the condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors.

Our Form 10-K for the fiscal year ended September 30, 2012 filed with the SEC includes a detailed discussion of the Risk Factors applicable to us, which are also set forth under the heading “Risk Factors” in Item 2 of Part I of this Form 10-Q. There are no material changes from the Risk Factors as previously disclosed in our Form 10-K for the fiscal year ended September 30, 2012.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table provides information with respect to the shares of our common stock that we repurchased during the three months ended March 31, 2013.

Month	Total Number of  Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 2013	9,431	$	132.20	9,431	6,475,744
February 2013	74,312	$	140.93	74,312	6,401,432
March 2013	79,492	$	144.97	79,492	6,321,940
Total	163,235			163,235

Under our stock repurchase program, we can repurchase shares of our common stock from time to time in the open market and in private transactions in accordance with applicable laws and regulations, including without limitation applicable federal securities laws. From time to time we have announced the existence of and updates to our continuing policy of repurchasing shares of our common stock. On December 19, 2011, we announced that our Board of Directors authorized the repurchase of up to 10.0 million additional shares of our common stock under our stock repurchase program. At March 31, 2013, approximately 6.3 million shares remained available for repurchase under the program, which is not subject to an expiration date. There were no unregistered sales of equity securities during the period covered by this report.

49

Item 6. Exhibits.

Exhibit No.	Description
Exhibit 3(i)(a)	Registrant’s Certificate of Incorporation, as filed November 28, 1969, incorporated by reference to Exhibit (3)(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (File No. 001-09318) (the “1994 Annual Report”)
Exhibit 3(i)(b)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed March 1, 1985, incorporated by reference to Exhibit (3)(ii) to the 1994 Annual Report
Exhibit 3(i)(c)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed April 1, 1987, incorporated by reference to Exhibit (3)(iii) to the 1994 Annual Report
Exhibit 3(i)(d)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed February 2, 1994, incorporated by reference to Exhibit (3)(iv) to the 1994 Annual Report
Exhibit 3(i)(e)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed on February 4, 2005, incorporated by reference to Exhibit (3)(i)(e) to the Registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2004 (File No. 001-09318)
Exhibit 3(ii)	Registrant’s Amended and Restated Bylaws (as adopted and effective March 14, 2012), incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed with the SEC on March 14, 2012 (File No. 001-09318)
Exhibit 10.1	2006 Directors Deferred Compensation Plan, as amended and restated effective March 13, 2013 (filed herewith)*
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 101	The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL), include: (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) related notes (furnished herewith)

__________

*        Compensatory Plan or Arrangement

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		FRANKLIN RESOURCES, INC.
		(Registrant)
Date:	April 30, 2013	By:	/S/ KENNETH A. LEWIS
			Kenneth A. Lewis
			Executive Vice President and Chief Financial Officer
			(Duly Authorized Officer and Principal Financial Officer)

51

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 3(i)(a)	Registrant’s Certificate of Incorporation, as filed November 28, 1969, incorporated by reference to Exhibit (3)(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (File No. 001-09318) (the “1994 Annual Report”)
Exhibit 3(i)(b)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed March 1, 1985, incorporated by reference to Exhibit (3)(ii) to the 1994 Annual Report
Exhibit 3(i)(c)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed April 1, 1987, incorporated by reference to Exhibit (3)(iii) to the 1994 Annual Report
Exhibit 3(i)(d)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed February 2, 1994, incorporated by reference to Exhibit (3)(iv) to the 1994 Annual Report
Exhibit 3(i)(e)	Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed on February 4, 2005, incorporated by reference to Exhibit (3)(i)(e) to the Registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2004 (File No. 001-09318)
Exhibit 3(ii)	Registrant’s Amended and Restated Bylaws (as adopted and effective March 14, 2012), incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed with the SEC on March 14, 2012 (File No. 001-09318)
Exhibit 10.1	2006 Directors Deferred Compensation Plan, as amended and restated effective March 13, 2013 (filed herewith)*
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
Exhibit 32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
Exhibit 101	The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in Extensible Business Reporting Language (XBRL), include: (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) related notes (furnished herewith)

__________

*        Compensatory Plan or Arrangement

52

EX-10.1

EXHIBIT 10.1

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

Amended and Restated Effective as of March 13, 2013

Amended and Restated Effective as of December 12, 2008

Originally Effective as of December 15, 2005

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

Franklin Resources, Inc., a Delaware corporation, in order to retain the services of and provide incentives to its non-employee Directors, hereby adopts this amended and restated deferred compensation plan, effective as of March 13, 2013; this plan was previously amended and restated effective as of December 12, 2008, and originally adopted effective as of December 15, 2005.

RECITALS

WHEREAS, the Company (as defined below) has adopted a deferred compensation plan to permit its non-employee Directors (as defined below) to postpone receipt and taxation of certain specific amounts of compensation in accordance with the terms hereof;

NOW THEREFORE, the Company hereby amends and restates this deferred compensation plan.

ARTICLE 1

DEFINITIONS

1.1    “Beneficiary” shall mean the beneficiary or beneficiaries designated by a Director to receive his or her deferred compensation benefits in the event of the Director's death.

1.2    “Board of Directors” shall mean the board of directors of the Company.

1.3    “Change in Control” shall mean the occurrence of any change in ownership of the Company, change in effective control of the Company, or change in the ownership of a substantial portion of the assets of the Company, as defined in Code Section 409A(a)(2)(A)(v), the Treasury regulations thereunder, and any other published interpretive authority, as issued or amended from time to time.

1.4    “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time.

1.5    “Committee” shall mean the Compensation Committee of the Board of Directors unless an alternate committee is designated by the Board of Directors to administer the Plan in accordance with Article 8 below.

1.6    “Common Stock” shall mean the common stock of the Company.

1.7    “Company” shall mean Franklin Resources, Inc., a Delaware corporation, and any successor organization thereto.

1.8    “Compensation” shall mean any fees (including meeting fees, committee fees, chairperson fees as well as all other fees) payable or an annual or other stock or Company equity or mutual fund grant issuable by the Company to a Director with respect to his or her service as a Director.

1.9    “Deferral” shall mean a contribution of Compensation credited under the Plan made by the Company (or a subsidiary of the Company, as applicable) on behalf of a specified Participant and shall include any notional distributions credited pursuant to Section 3.4 below.

1.10    “Deferred Compensation Account” shall mean the separate account established under the Plan and the Trust, if any, for each Participant. From time to time, the Company shall furnish each Participant with a statement of his or her Deferred Compensation Account balance.

1.11    “Director” shall mean:

(a)With respect to the period prior to January 1, 2009, (i) a member of the Board of Directors who is not an employee of the Company, or (ii) a member of the board of directors of any subsidiary of the Company who is not an employee of the Company or such subsidiary of the Company; and

1

(b)Effective as of January 1, 2009, (i) a member of the Board of Directors who is not an employee of the Company or any subsidiary or other affiliate of the Company, or (ii) a member of the board of directors of any subsidiary of the Company who is not an employee of the Company or any subsidiary or other affiliate of the Company.

1.12    “Disability” shall mean the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as defined in Code Section 409A(a)(2)(C), the Treasury regulations thereunder, and any other published interpretive authority, as issued or amended from time to time.

1.13    “Participant” shall mean a Director who has elected to participate in the Plan; references to a Participant herein shall refer also to his or her designated Beneficiary where the context so requires. Notwithstanding any provision herein to the contrary, any individual whose participation in the Plan commenced prior to January 1, 2009 and who is a Director (within the meaning of Section 1.11(a)) shall remain eligible to participate thereafter.

1.14    “Plan” shall mean this Franklin Resources, Inc. 2006 Directors Deferred Compensation Plan.

1.15    “Separation from Service” shall mean a Participant's “separation from service” within the meaning of Section Code 409A(a)(2)(A)(i) and its related regulatory and administrative guidance, as determined by the Committee in its sole discretion.

1.16    “Trust” or “Trust Agreement” shall mean the Franklin Resources, Inc. Deferred Compensation Trust Agreement (if and when adopted by the Company) which is intended to conform to terms of the model trust described in Revenue Procedure 92-64, 1992-2 C.B. 422, including any amendments thereto, entered into between the Company and the Trustee to carry out the provisions of the Plan.

1.17    “Trust Fund” shall mean the cash and other property held and administered by the Trustee pursuant to the Trust (if any) to carry out the provisions of the Plan.

1.18    “Trustee” shall mean the designated trustee acting at any time under the Trust.

1.19    “Unforeseeable Emergency” shall mean an unforeseeable emergency as defined in Code Section 409A(a)(2)(B)(ii)(I) (as limited by Code Section 409A(a)(2)(B)(ii)(II)), the Treasury regulations thereunder, and any other published interpretive authority, as issued or amended from time to time.

ARTICLE 2

PARTICIPATION

2.1    Eligible Participants. The Committee shall, from time to time, designate by name those Directors who are eligible to participate in the Plan and the date upon which each such Director's participation may commence. All designated Directors shall be notified by the Committee of their eligibility to participate.

2.2    Withdrawal from Participation. A Director who has joined the Plan as a Participant in a prior year may elect to withdraw from active participation by completing the withdrawal form attached hereto as Exhibit E and delivering it to the Committee or its designee during the period prescribed by Section 3.1 for the submission of deferral elections. Any such withdrawal shall only be effective with respect to a Director's participation in the calendar year immediately following the calendar year during which the notice of withdrawal is submitted. Amounts previously credited to a withdrawing Director's Deferred Compensation Account shall remain subject to the terms of the Plan in all respects during the Director's period of inactive participation, and any earnings and losses and any notional dividends shall continue to be credited to such Director's Deferred Contribution Account in the manner provided by Sections 3.3 and 3.4, respectively, during such period. A Director who has withdrawn from the Plan may recommence active participation in a subsequent calendar year by timely submitting a deferral election as provided by Section 3.1.

ARTICLE 3

CONTRIBUTIONS AND DETERMINATION OF BENEFITS

3.1    Contributions to the Plan. Participants may make Deferrals by electing to defer the payment or issuance, as applicable, of all or any part of his or her Compensation in accordance with the terms hereof. Elections shall be made in the form attached hereto as Exhibit B and filed with the Committee or its designee. Elections must be made no later than the last day of

2

the deferral election period and shall apply only to Compensation for services to be performed after such election. The last day of the deferral election period shall be (i) December 31^st of the calendar year prior to the calendar year in which the Participant will render the services for which he or she will receive any part of the Compensation payable to the Participant during that year or (ii) in the first year in which a Participant first becomes eligible to participate in the Plan (within the meaning of Section 1.409A-2(a)(7)(ii)), thirty (30) days after the Participant becomes eligible to participate in the Plan. No direct contributions by Participants are required or permitted. An election to defer Compensation shall be effective on the date an eligible Participant delivers a completed deferral election form to the Committee or its designee; provided, however, that, if the Participant delivers another properly completed election to defer Compensation prior to the close of the deferral election period described in this Section 3.1, the deferral election on the form bearing the latest date shall control. On the last day of the deferral election period, the controlling election made prior to the close of the period shall be irrevocable, except in accordance with Section 4.8(a). A Participant's deferral election shall remain in effect indefinitely for all years of service until terminated or modified by a subsequent deferral election form which shall become effective and irrevocable in accordance with the preceding provisions of this Section 3.1.

3.2    Investment Elections. In accordance with rules, procedures and options established by the Committee, and subject to Section 3.5 hereof, each Participant shall be permitted to provide written instructions regarding the investment of his or her Deferred Compensation Account. Each Participant may direct that his or her Deferred Compensation Account be invested in shares of Common Stock and/or one or more Franklin Templeton mutual funds as selected by the Participant; provided, however, that the Committee shall have the authority, in its sole discretion, with or without notice, to change or eliminate one or more of the foregoing investment alternatives available to the Participant at any time. Each Participant shall direct the investment of his or her Deferred Compensation Account by submitting to the Committee or its designee an Investment Direction in the form set forth at Exhibit D. In accordance with procedures established by the Committee or its designee, each Participant may change his or her investment directions effective as of the first day of any calendar quarter. Such changes may be made on a validly submitted Investment Direction in the form set forth at Exhibit D no later than the last day of any calendar quarter preceding the effective date of the change. If a Participant fails to provide any investment directions at a time when the Participant has a positive balance in the Deferred Compensation Account, the Company or the Committee shall deem the entire Deferred Compensation Account invested in shares of Company Common Stock. The Company may invest assets allocable to a Participant's Deferred Compensation Account in any manner, in any amount and for any period of time which the Company in its sole discretion may select; but the Company must credit or charge the Participant's Deferred Compensation Account with the same earnings, gains or losses that the Participant would have incurred if the Company had invested the assets allocable to the Participant's Deferred Compensation Account in the specific investments, in the specific amounts and for the specific periods directed by the Participant.

3.3    Investment Earnings or Losses. Any amounts credited to a Participant's Deferred Compensation Account may increase or decrease as a result of the Company's investment of such amounts, as described in Section 3.2 above. In a manner consistent with the allocations described in Section 3.2, the investment earnings or losses under this Section 3.3 shall be credited to a Participant's Deferred Compensation Account, as determined in good faith by the Committee. Each Participant and each Participant's Beneficiary understand and agree that they assume all risk in connection with any decrease in the value of the Deferred Compensation Account as invested in accordance with these Sections 3.2 and 3.3.

3.4    Contribution of Notional Distributions. The Deferred Compensation Account of each Participant shall be credited with notional dividends and other distributions at the same time, in the same form and in the same manner, and in equivalent amounts as dividends and other distributions that are payable from time to time with respect to investments selected by the Participant under the Deferred Compensation Account. Any such notional dividends and other distributions shall be valued as of the date on which they are credited to a Participant's Deferred Compensation Account and reallocated to acquire additional shares of the investments selected by a Participant under the Deferred Compensation Account. If such notional dividends and other distributions are credited in a form other than Common Stock, shares of Franklin Templeton mutual funds or cash, the Committee will determine their value in good faith.

3.5    Blackout Periods. Notwithstanding anything herein to the contrary, during any “blackout period” (as defined in Regulation BTR promulgated by the Securities and Exchange Commission and referred to hereinafter as “Regulation BTR”) in connection with the Plan, if a Participant otherwise would defer receipt of such Participant's Director fees for services rendered as a Director during such blackout period under the Plan and/or direct the investment of such fees in shares of the Common Stock during such blackout period, the Company shall not cause an actual or deemed investment by the Company of such Director fees into shares of Common Stock during such blackout period, but, rather, shall take all steps necessary or appropriate to suspend such investment during, and until then end of, such blackout period required by Regulation BTR. As soon as practicable following the termination of the blackout period required by Regulation BTR, the Company shall cause an actual or deemed investment of the Director fees in shares of Common Stock in accordance with Section 3.2 and such Director's applicable deferral or investment election. Also, during any period that the Director fees are not invested in Common Stock as a result of this Section 3.5, such fees will be credited with interest at the same rate applicable to dividends paid by a Franklin Templeton money market fundas determined by the Committee.

3

3.6    Valuation of Participant's Deferred Compensation Account. The value of a Participant's Deferred Compensation Account as of any date shall be determined based on the value of the underlying investments (selected by the Participant or otherwise in accordance with Section 3.2 hereof) as of the date the value of the Deferred Compensation Account is determined. The value of each underlying investment shall be determined based on the closing sales price for such investment as quoted or otherwise reported on the date of determination (or, if no closing sales price was reported on that date, on the last trading date such closing sales price was reported), as reported in The Wall Street Journal or such other source as the Committee deems reliable.

3.7    Distribution Election. At the time of making a deferral election under Section 3.1, the Participant shall elect the date or dates that distribution of the Participant's Deferred Compensation Account shall occur. Such election shall be made in the form attached hereto as Exhibit C and filed with the Committee or its designee. A Participant's distribution election shall remain in effect with respect to Deferrals for all years of service until terminated or modified by a subsequent distribution election form which shall become effective with respect to Deferrals for calendar years beginning after December 31^st of the calendar year in which such subsequent distribution election is made unless Section 4.4 applies to such subsequent election.

ARTICLE 4

VESTING AND DISTRIBUTION OF BENEFITS

4.1    Vesting of Deferred Compensation Accounts. A Participant's Deferred Compensation Account shall be fully vested at all times.

4.2    Form of Payment. Distributions under the Plan shall be paid solely in cash.

4.3    Scheduled Distribution of Deferred Compensation Accounts. Subject to Sections 4.4, 4.5, 4.6, 4.7 and 4.8, distribution of a Participant's Deferred Compensation Account shall occur on the date or dates elected by the Participant pursuant to Section 3.7. The amount to be distributed from a Participant's Deferred Compensation Account will be determined in accordance with Section 3.6 as of the date of each distribution. In the event the valuation and distribution of all or a portion of a Participant's Deferred Compensation Account shall occur on the same date, the distribution of all or a portion of the Participant's Deferred Compensation Account shall be made as soon as administratively practicable following the valuation of the Participant's Deferred Compensation Account but in no event later than the latest date permitted by Section 1.409A-3(d) of the Treasury regulations.

4.4    Change of Distribution Schedule. A Participant may elect, at any time, to change his or her distribution date(s) with respect to Deferrals for calendar years ending before January 1^st of the calendar year in which such election is made, provided that: (a) such election shall not take effect until at least twelve (12) months after the date on which the new election is made; (b) in the case of payment other than in the event of a Change in Control or upon the Participant's death or Disability, the new election delays payment for at least five (5) years from the date that payment would otherwise have been made absent the new election (or in the case of installment payments treated as a single payment, five (5) years from the date the first payment was scheduled to be paid); and (c) in the case of payments made on fixed payment dates, the new election is made not less than twelve (12) months before the date on which payment would have been made (or, in the case of installment payments, the first installment payment would have been made) absent the new election, and, in any case, in conformance with Code Section 409A(a)(4)(C), the Treasury regulations thereunder, and any other published interpretive authority, as issued or amended from time to time. Notwithstanding the foregoing, for purposes of application of the above limitations on changes to distribution date(s), the entitlement to receive distributions in a series of installment payments shall be treated as the entitlement to a single payment. Any change to a Participant's distribution election under this Section 4.4 shall be made in the form attached hereto as Exhibit C and filed with the Committee or its designee. Any such distribution election form with respect to such a change shall expressly state that it is made pursuant to this Section 4.4.

4.5    Change in Control. In the event of a Change in Control prior to complete distribution to a Participant of the entire balance of his or her Deferred Compensation Account, the remaining balance of the Participant's Deferred Compensation Account shall be determined and payable to the Participant either (a) in accordance with the Participant's distribution schedule, or (b) in a lump sum immediately prior to the consummation of the Change in Control, as previously elected by the Participant on Exhibit C.

4.6    Death Benefit. Upon the death of a Participant prior to complete distribution to him or her of the entire balance of his or her Deferred Compensation Account, the remaining balance of his or her Deferred Compensation Account on the date of death shall be payable to the Participant's Beneficiary designated on Exhibit A. The remaining balance of a Participant's Deferred Compensation Account on the date of death shall be payable to the Participant's Beneficiary either (a) in accordance with the Participant's distribution schedule or (b) in a lump sum, as previously elected by the Participant on Exhibit C.

4

4.7    Disability Benefit. Upon a Participant's Disability prior to complete distribution to him or her of the entire balance of his or her Deferred Compensation Account, the remaining balance of his or her Deferred Compensation Account on the date of Disability shall be payable to the Participant either (a) in accordance with the Participant's distribution schedule or (b) in a lump sum, as previously elected by the Participant on Exhibit C. In the event of a Participant's Disability, the Committee may, in its sole discretion, permit cancellation of his or her Deferrals where such cancellation occurs by the later of the end of the calendar year, or March 15^th of the calendar year following the date, in which or on which the Participant incurs the Disability. Any such distribution or cancellation shall be made in accordance with, as applicable, Code Section 409A(a)(2)(B)(ii), the Treasury Regulations under Section 409A and any other published interpretive authority, as issued from time to time, and any procedures that the Committee or its designee may establish consistent with the Plan and the foregoing.

4.8    Accelerated Full or Partial Distributions. Notwithstanding the foregoing, the Committee may accelerate the payment of a Participant's Deferred Compensation Account in any of the following circumstances, and in such event, the distributed amounts shall be deducted from the Participant's Deferred Compensation Account balance. Any such accelerated payment under Section 4.8 (b), (c), (d), (e) or (f) shall be in accordance with the applicable requirements of Section 1.409A-3(j)(4) of the Treasury regulations.

(a)Unforeseeable Emergency. In the event that a Participant suffers an Unforeseeable Emergency, the Committee may, in its sole discretion, permit (i) cancellation of his or her Deferrals and/or (ii) a distribution to the Participant from his or her Deferred Compensation Account of an amount no greater than the amount reasonably necessary to satisfy the emergency need plus any taxes reasonably anticipated to result from the distribution. Any such cancellation or distribution shall be made in accordance with, as applicable, Code Section 409A(a)(2)(B)(ii), the Treasury Regulations under Section 409A and any other published interpretive authority, as issued from time to time, and any procedures that the Committee or its designee may establish consistent with the Plan and the foregoing.

(b)Domestic Relations Order. In its sole discretion, the Committee may permit acceleration of the time or schedule of a payment under the Plan to an individual other than the Participant as may be necessary to fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B)).

(c)Conflict of Interest. In its sole discretion, the Committee may permit the acceleration of the time or schedule of a payment under the Plan (i) to the extent necessary to permit any Participant who becomes employed in the Federal executive branch to comply with an ethics agreement with the Federal government; or (ii) to the extent reasonably necessary to avoid the violation of an applicable Federal, state, local, or foreign ethics or conflicts of interest law.

(d)De Minimis Distribution. In its sole discretion, the Committee may distribute a Participant's entire Deferred Compensation Account balance in a single lump sum payment to the Participant, provided that (i) the balance of the Participant's Deferred Compensation Account as of the relevant determination date does not exceed the applicable dollar amount then in effect under Section 402(g)(1)(B) of the Code; and (ii) the payment accompanies the termination of the entirety of the Participant's interest in the Plan within the meaning of Section 1.409A-3(j)(4)(v) of the Treasury regulations.

(e)Employment Taxes. In its sole discretion, the Committee may permit acceleration of the time or schedule of a distribution under the Plan as may be necessary to pay the Federal Insurance Contributions Act (“FICA”) tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2) (as applicable) on amounts deferred under the Plan. In addition, the Committee may permit acceleration of the time or schedule of a distribution under the Plan as may be necessary to pay the income tax at source on wages imposed under Code Section 3401 or the corresponding withholding provisions of applicable state, local, or non-U.S. tax laws as a result of the payment of the FICA tax, and to pay the additional income tax at source on wages attributable to the pyramiding Section 3401 wages and taxes. Notwithstanding the foregoing, the total accelerated distribution to a Participant under this Section 4.8(e) shall not exceed the aggregate amount of FICA taxes and the income tax withholding related to such amount of FICA taxes.

(f)Income Inclusion under Code Section 409A. In its sole discretion, the Committee may permit acceleration of the time or schedule of a distribution under the Plan at any time the Plan fails to meet the requirements of Code Section 409A and its related Treasury regulations. Notwithstanding the foregoing, the total accelerated distribution to a Participant under this Section 4.8(f) shall not exceed the amount required to be included as income by the Participant as a result of the failure to meet the requirements of Code Section 409A and the applicable Treasury regulations.

4.9    Delay of Distributions. To the extent permitted under Code Section 409A and the related Treasury regulations, a scheduled distribution of a Participant's Deferred Compensation Account shall be delayed to a date after the scheduled payment date under any of the following circumstances:

5

(a)Company's Financial Exigency. A scheduled distribution of a Participant's Deferred Compensation Account shall be delayed to a date after the scheduled payment dateif the making of the distribution on the scheduled payment date would jeopardize the Company's ability to continue as a going concern. Any such delayed distribution shall be made during the first taxable year of the Participant in which the making of the distribution would not have such effect on the Company.

(b)Payments that would Violate Federal Securities Laws or other Applicable Law. A scheduled distribution from a Participant's Deferred Compensation Account shall be delayed to a date after the scheduled payment date in the event the Committee reasonably anticipates that making the distribution will violate federal securities laws or other applicable law. The delayed distribution must be made at the earliest date at which the Committee reasonably anticipates that making the distribution will not cause such violation. For purposes of this Section 4.9(b), making a payment that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code is not considered a violation of applicable law.

(c)Other Events and Conditions. The Committee may delay a scheduled distribution from the Participant's Deferred Compensation Account upon such other events and conditions as may be prescribed in generally applicable guidance published in the Internal Revenue Bulletin relating to Code Section 409A.

4.10    Participant's Rights Unsecured. The right of Participants and their Beneficiaries to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participants nor their Beneficiaries shall have any rights in or against any amount credited to their Deferred Compensation Accounts or any other specific assets of the Company, except as otherwise provided in the Trust Agreement. The Deferred Compensation Accounts shall be kept solely as nominal accounts, may be carried in cash or any other liquid assets, may be invested in Common Stock, or may be invested in any other assets as may be selected by the Committee in its sole and absolute discretion.

ARTICLE 5

DESIGNATION OF BENEFICIARY

5.1Designation of Beneficiary. A Participant may designate a Beneficiary to receive any amount due hereunder to the Participant via written notice thereof to the Committee or its designee at any time prior to his or her death and may revoke or change the Beneficiary designated therein without the Beneficiary's consent by written notice delivered to the Committee or its designee at any time and from time to time prior to the Participant's death, provided that any such designation or change of designation naming a primary Beneficiary other than the Participant's spouse shall be effective only if written spousal consent is provided to the Committee or its designee. If a Participant's spouse is incapacitated, then the person who holds a power of attorney for the incapacitated spouse or other person authorized to act on behalf of the incapacitated spouse may provide the required spousal consent. If a Participant fails to designate a Beneficiary, or if no such designated Beneficiary shall survive him or her, then such amount shall be paid to his or her estate. The designations of Beneficiaries shall be made in the form attached hereto as Exhibit A.

ARTICLE 6

TRUST PROVISIONS

6.1Trust Agreement. The Company may establish the Trust for the purpose of retaining assets set aside by the Company pursuant to the Trust Agreement for payment of all or a portion of the amounts payable pursuant to the Plan. Any benefits not paid from the Trust shall be paid from the Company's general funds, and any benefits paid from the Trust shall be credited against and reduce by a corresponding amount the Company's liability under the Plan. All Trust Funds shall be subject to the claims of general creditors of the Company in the event the Company is insolvent as defined in the Trust Agreement. The obligations of the Company to pay benefits under the Plan and the obligation of the Trustee to pay benefits under the Trust constitute an unfunded, unsecured promise to pay benefits in the future and the Participant and his or her Beneficiaries shall have no greater rights than general creditors of the Company. No Trust may hold assets located outside of the United States nor provide that assets will become restricted to the provision of benefits under the Plan in connection with a change in the Company's financial health.

6

ARTICLE 7

AMENDMENT AND TERMINATION

7.1    Amendment or Termination.

(a)The Committee shall have the general authority, in its sole discretion, to amend, suspend, or terminate the Plan at any time and for any reason it deems appropriate; provided however, that neither an amendment to the Plan nor the Plan's suspension or termination may adversely affect a Participant's vested rights hereunder without such Participant's prior written consent. Any amendment, suspension, or termination of the Plan must be pursuant to a written document that is executed by a duly-authorized officer of the Company. Except as required under Code Section 409A, no Deferrals shall be made during any suspension of the Plan or after termination of the Plan.

(b)Notwithstanding any provision in the Plan to the contrary, the Committee, in its sole discretion and without the consent of any Participant, may amend or modify the Plan in any manner to provide for the application and effects of Code Section 409A and any related regulatory or administrative guidance issued by the Internal Revenue Service. The Committee shall delay the payment of any benefits payable under this Plan to the extent necessary to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to certain “specified employees” of certain publicly-traded companies) and in such event, any such amount to which a Participant would otherwise be entitled during the six (6) month period immediately following his or her Separation from Service will be paid on the first business day following the expiration of such six (6) month period.

7.2    Liquidation of the Plan. To the extent permitted under Code Section 409A, in connection with the termination of the Plan under Section 7.1, the Committee may liquidate the Plan and distribute all Deferred Compensation Account balances; provided, however, that

(a)The termination and liquidation of the Plan does not occur proximate to a downturn in the financial health of the Company;

(b)All agreements, methods, programs, and other arrangements sponsored by the Company that would be aggregated with the Plan under Section 1.409A-1(c) of the Treasury regulations are also terminated and liquidated;

(c)No payments in liquidation of the Plan are made within twelve (12) months of the date on which the Company takes all necessary action to irrevocably terminate and liquidate the Plan other than payments that would have been payable under the terms of the Plan if the action to terminate and liquidate it had not occurred;

(d)All payments are made within twenty-four (24) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan; and

(e)Neither the Company nor any related entity (within the meaning of Section 1.409A-1(g) of the Treasury regulations) adopts a new plan that would be aggregated with the Plan under Section 1.409A-1(c) of the Treasury regulations within three (3) years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan.

7.3    Termination in the Event of Insolvency. To the extent permitted under Code Section 409A, the Committee shall have the authority, in its sole discretion, to terminate the Plan and distribute each Participant's outstanding Deferred Compensation Account balance within twelve (12) months of a corporate dissolution taxed under Code Section 331 or with the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A); provided that the total accelerated distribution under this Section 7.3 is included in the Participant's gross income in the latest of the following years (or, if earlier, the taxable year in which the amount is actually or constructively received):

(a)The calendar year in which the Plan termination and distribution occurs;

(b)The first calendar year in which the Participant's Deferred Compensation Account balance is no longer subject to a substantial risk of forfeiture; or

(c)The first calendar year in which distribution of the Participant's Deferred Compensation Account is administratively practicable.

7

7.4    Automatic Termination of Plan. The Plan shall automatically terminate on the date when no Participant (or Beneficiary) has any right to or expectation of payment of further benefits under the Plan.

7.5    Other Termination Events. The Committee shall have the authority to terminate the Plan and distribute all Deferred Compensation Account balances to Participants or, if applicable, their Beneficiaries, upon the occurrence of such other events and conditions as may be prescribed in generally applicable guidance published in the Federal Register or the Internal Revenue Bulletin relating to Code Section 409A.

ARTICLE 8

ADMINISTRATION

8.1    Administration. The Committee shall administer and interpret the Plan in accordance with the provisions of the Plan and the Trust Agreement (if any) and shall have the authority in its discretion to adopt, amend or rescind such rules and regulations as it deems advisable in the administration of the Plan. Any determination or decision by the Committee shall be made in its sole discretion and shall be conclusive and binding on all persons who at any time have or claim to have any interest under the Plan.

8.2    Code Section 409A. Notwithstanding anything in the Plan to the contrary, the Company intends that the Plan and payments thereunder comply with Code Section 409A, the regulations thereunder, and any other published interpretive authority, as issued or amended from time to time (collectively, “Code Section 409A”), and the Committee shall administer and construe the Plan in accordance with Code Section 409A. Any terms of the Plan that are undefined or ambiguous shall be interpreted in a manner that complies with Code Section 409A to the extent necessary to comply with Code Section 409A. If for any reason, such as imprecision in drafting, any provision of the Plan does not accurately reflect its intended compliance with Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent. If, notwithstanding the foregoing provisions of this Section 8.2, any provision of the Plan would cause a Participant to incur any additional tax or interest under Code Section 409A, the Company shall reform such provision in a manner intended to avoid the incurrence by such Participant of any such additional tax or interest; provided that the Company shall maintain, to the extent reasonably practicable, the original intent and economic benefit to the Participant of the applicable provision without violating the provisions of Code Section 409A. Although the Company intends that the Plan and administration thereof comply with the requirements of Code Section 409A, the Company does not warrant that the Plan will qualify for favorable tax treatment under Code Section 409A or any other provision of federal, state, local, or non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of Participation in the Plan.

8.3    Liability of Committee, Indemnification. The Committee shall not be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify, defend and hold harmless the members of the Committee from and against any and all liabilities, costs, and expenses incurred by such person(s) as a result of any act, or omission, in connection with the performance of such persons' duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, gross misconduct, breach of fiduciary duty or willful failure to follow the lawful instructions of the Board or criminal acts of such persons. All members of the Board or the Committee and each and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.

8.4    Expenses. The cost of the establishment and the adoption of the Plan by the Company, including but not limited to legal and accounting fees, shall be borne by the Company. The expenses of administering the Plan shall be borne by the Company, and the Company shall bear, and shall not be reimbursed by the Trust, for any tax liability of the Company associated with the investment of assets held by the Trust.

ARTICLE 9

GENERAL AND MISCELLANEOUS

9.1    Rights Against Company. Except as expressly provided by the Plan, the establishment of the Plan shall not be construed as giving to any Participant, employee or any person, any legal, equitable or other rights against the Company, or against its officers, directors, agents or members, or as giving to any Participant or Beneficiary any equity or other interest in the assets or business of the Company or giving any Participant the right to be retained in the employ of the Company. In no event shall the terms of service of a Participant, expressed or implied, be modified or in any way affected by the adoption of the Plan or Trust or

8

any election under the Plan made by a Participant. The rights of a Participant or his or her Beneficiaries hereunder shall be solely those of an unsecured general creditor of the Company.

9.2    Claims Procedures. Claims for benefits under the Plan by a Participant (or his or her beneficiary or duly appointed representative) shall be filed in writing with the Committee. The Committee shall follow the procedures set forth in this Section 9.2 in processing a claim for benefits.

(a)A claim for benefits shall be considered filed only when actually received by the Committee on a form prescribed by the Committee. Within ninety (90) days following receipt by the Committee of a claim for benefits and all necessary documents and information, the Committee shall furnish the Participant or Beneficiary claiming benefits under the Plan (the “Claimant”) with written notice of the decision rendered with respect to such claim. Should special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the Claimant prior to the expiration of the initial 90-day period. In the event the Claimant's claim is wholly or partially denied, the Committee's notice of denial will indicate the reason for denial, the pertinent provisions of the Plan on which the denial is based, an explanation of the claims appeal procedure set forth herein, and a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary.

(b)Any Claimant who has had a claim for benefits denied by the Committee, or is otherwise adversely affected by the action or inaction of the Committee, shall have the right to request further review by the Committee. Such request must be in writing, and must be received by the Committee within sixty (60) days after such person receives notice of the Committee's action. If written request for review is not made within such 60-day period, the Claimant shall forfeit his or her right to review. The Claimant or a duly authorized representative of the Claimant may review all pertinent documents and submit issues and comments in writing. The Committee shall then review the claim. The Committee may issue a written decision reaffirming, modifying or setting aside its former action within ninety (90) days after receipt of the written request for review. Should special circumstances require an extension of time for processing the appeal, written notice of the extension shall be furnished to the Claimant prior to the expiration of the initial 90-day period. An original or copy of the decision on appeal shall be furnished to the Claimant. The decision shall set forth the reasons and pertinent plan provisions or relevant laws on which the decision rests. The decision shall be final and binding upon the Claimant and the Committee and all other persons having or claiming to have an interest in the Plan or in any Account established under the Plan.

(c)In the event of any dispute over benefits under the Plan, all remedies available to the disputing individual under this Section 9.2 must be exhausted before legal recourse of any type is sought. A Claimant's failure to submit a claim or a request for review in accordance with the procedures and deadlines set forth in Section 9.2 shall result in an automatic, conclusive, and binding denial of the Claimant's claim or appeal, as the case may be.

9.3    Assignment or Transfer. No right, title or interest of any kind in the Plan shall be transferable or assignable by any Participant or Beneficiary or be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, whether voluntary or involuntary, nor subject to the debts, contracts, liabilities, engagements, or torts of a Participant or his or her Beneficiary. Any attempt to alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or to dispose of any interest in the Plan shall be void.

9.4    Severability. If any provision of the Plan shall be declared illegal or invalid for any reason, said illegal or invalid provision shall not affect the remaining provisions of the Plan but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provision was not part of the Plan.

9.5    Construction. The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of the Plan. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular. When used herein, the masculine gender includes the feminine and neuter genders, the feminine gender includes the masculine and neuter genders and the neuter gender includes the masculine and feminine genders.

9.6    Governing Law. The validity and effect of the Plan and the rights and obligations of all persons affected hereby shall be construed, administered and enforced in accordance with the laws of the State of California, without giving effect to any choice of law rule, except to the extent preempted by applicable federal law.

9.7    Payment Due to Incompetence. If the Committee receives evidence that a Participant or Beneficiary entitled to receive any payment under the Plan is physically or mentally incompetent to receive such payment, the Committee may, in its sole and absolute discretion, direct the payment to any other person who or trust which has been legally appointed or established for the benefit of such person.

9

9.8    Taxes. All amounts payable hereunder shall be reduced by any and all federal, state, and local taxes imposed upon the Participant or his or her Beneficiary which are required to be paid or withheld by the Company. The determination of the Company regarding applicable income and employment tax withholding requirements shall be final and binding on the Participant.

IN WITNESS WHEREOF, the Company has caused the Plan to be executed by its duly authorized officer as of this 9^th day of April, 2013.

FRANKLIN RESOURCES, INC.,

a Delaware corporation

By:	/s/ Jennifer M. Johnson
	Jennifer M. Johnson

Its: Executive Vice President and Chief Operating Officer

10

EXHIBIT A

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

BENEFICIARY DESIGNATION

In the event that I should die prior to the receipt of all amounts credited to my Deferred Compensation Account under the Franklin Resources, Inc. 2006 Directors Deferred Compensation Plan (the “Plan”), and in lieu of disposing of my interest¹ in my Deferred Compensation Account by my will or the laws of intestate succession, I hereby designate the following person(s) as primary Beneficiary(ies) and contingent Beneficiary(ies) of my interest in my Deferred Compensation Account (please attach additional sheets if necessary):

Primary Beneficiary(ies) (Select only one of the three alternatives)
¨(a) Individuals and/or Charities	% Share
Name____________________________________________________________	_______
Address _____________________________________________________________________________________
Name____________________________________________________________	_______
Address _____________________________________________________________________________________
Name____________________________________________________________	_______
Address _____________________________________________________________________________________
Name____________________________________________________________	_______
Address _____________________________________________________________________________________

_______________________________

1A married Participant whose Deferred Compensation Account is community property may dispose only of his or her own interest in the Deferred Compensation Account. In such cases, the Participant's spouse may designate the Participant or any other person(s) as the beneficiary(ies) of his or her interest in the Deferred Compensation Account on a separate Beneficiary Designation.

Exhibit A A-1

¨(b) Residuary Testamentary Trust

In trust, to the trustee of the trust named as the beneficiary of the residue of my probate estate.

¨ (c) Living Trust

The_____________________________________ Trust, dated ________________________

                (print name of trust) (fill in date trust was established)

Contingent Beneficiary(ies) (Select only one of the three alternatives)
¨ (a) Individuals and/or Charities	% Share
Name____________________________________________________________	_______
Address ______________________________________________________________________________
Name____________________________________________________________	_______
Address ______________________________________________________________________________
Name____________________________________________________________	_______
Address ______________________________________________________________________________
¨(b) Residuary Testamentary Trust
In trust, to the trustee of the trust named as the beneficiary of the residue of my probate estate.

¨(c) Living Trust

The_____________________________________ Trust, dated ___________________________________

        (print name of trust) (fill in date trust was established)

Should all the individual primary Beneficiary(ies) fail to survive me or if the trust named as the primary Beneficiary does not exist at my death (or no will of mine containing a residuary trust is admitted to probate within six months of my death), the contingent Beneficiary(ies) shall be entitled to my interest in the Deferred Compensation Account in the shares indicated. Should any individual beneficiary fail to survive me or a charity named as a beneficiary no longer exists at my death, such beneficiary's share shall be divided among the remaining named primary or contingent Beneficiaries, as appropriate, in proportion to the percentage shares I have allocated to them. In the event that no individual primary Beneficiary(ies) or contingent Beneficiary(ies) survives me, no trust (excluding a residuary testamentary trust) or charity named as a primary Beneficiary or contingent Beneficiary exists at my death, and no will of mine containing a residuary trust is admitted to probate within six months of my death, then my interest in the Deferred Compensation Account shall be disposed of by my will or the laws of intestate succession, as applicable.

Capitalized terms used but not otherwise defined herein shall have the same meanings as set forth in the Plan.

This Beneficiary Designation is effective until I file another such Beneficiary Designation with the Company. Any previous Beneficiary Designations are hereby revoked.

Exhibit A A-2

Submitted by:	Filing Acknowledgement:
o  Participant o Participant's Spouse	Franklin Resources, Inc.
___________________________________________	By: ___________________________________
Name: _______________________________	Its: ___________________________________
Date: ________________________________	Filed with the records of the Company this _____ day of _________________, 20___

Spousal Consent for any interest in a Deferred Compensation Account that is Community Property

Participant's spouse should file a separate beneficiary designation for the spouse's community property interest in the Participant's Deferred Compensation Account.

Spousal Consent for any interest in a Deferred Compensation Account that is not Community Property (necessary if beneficiary is other than Spouse):

I hereby consent to this Beneficiary Designation. This consent does not apply to any subsequent Beneficiary Designation which may be filed by my spouse.

(Signature of Spouse)

Date: ___________________________    

Exhibit A A-3

EXHIBIT B

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

DEFERRAL ELECTION FORM

Name: ___________________

I hereby elect to defer the following Compensation amounts in accordance with the terms of the Franklin Resources, Inc. 2006 Directors Deferred Compensation Plan (the “Plan”). This election shall be effective for amounts earned as a Director of the Company and/or any subsidiary of the Company. This election shall remain in effect indefinitely for all years of service until terminated or modified by a subsequent deferral election form which shall generally be effective for amounts earned in the calendar year following the calendar year such subsequent deferral election form is filed with the Company:

o _______% of my annual stock grant(s).

o _______% of my other stock grant(s).

o _______% of my Directors' fees.

o _______% of my meeting fees.

o _______% of my committee fees.

o _______% of my chairperson fees.

o _______% of all other fees.

Note: As stated above, this election shall remain in effect indefinitely for all years of service until terminated or modified by a subsequent deferral election form. You can file a new election form at any time with respect to deferrals in a subsequent calendar year. A new election form must be filed no later than December 31^st of the calendar year prior to the calendar year for which the new election will be effective.

[Signature page follows]

Exhibit B B-1

Submitted by:	Filing Acknowledgement:
Participant	Franklin Resources, Inc.
___________________________________________	By: ___________________________________
Name: _______________________________	Its: ___________________________________
Date: ________________________________	Filed with the records of the Company this _____ day of _________________, 20___

Exhibit B B-2

EXHIBIT C

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

DISTRIBUTION ELECTION FORM

Name: ___________________

Once I am eligible to receive distributions from the Plan, my Plan deferrals, as adjusted for income, gains or losses under the Plan, shall be paid to me on the following date(s) and in the following increment(s). If the payment date is a Saturday, Sunday or holiday, then the payment shall be made on the next business day. Please elect either “Lump Sum,” “Equal Payments Over a Period of Years,” or “Fixed Payment Dates,” and then make the appropriate sub-election(s).

1.    Lump Sum

o    100% upon a Separation from Service

2.    Equal Payments Over a Period of Years

o Substantially equal quarterly installments over five (5) years beginning on the earlier of the January 20, April 20, July 20, or October 20 immediately following my Separation from Service and continuing on each January 20, April 20, July 20, or October 20 thereafter.

o Substantially equal quarterly installments over ten (10) years beginning on the earlier of the January 20, April 20, July 20, or October 20 immediately following my Separation from Service and continuing on each January 20, April 20, July 20, or October 20 thereafter. (Note: Elect this alternative if you are not a resident of California and intend to comply with California R&TC Section 17952.5.)

Important Note: For purposes of subsequent changes in the timing of the payments as elected above, a series of installment payments shall be treated as the entitlement to a single payment. In general, if you wish to change this election for amounts previously deferred, (a) any change shall not take effect for twelve (12) months from the date of the new election and (b) the commencement of payments (or a lump sum payment) shall occur no earlier than five (5) years after the date the first distribution would have been paid under the prior distribution schedule. If this Distribution Election Form is intended to change the timing of distributions of amounts previously deferred, please check below:

o This Distribution Election Form is made pursuant to Section 4.4 of the Plan.

3.    Fixed Payment Dates

o    ________________    __________________________________________________________________

Percentage                Month            Day            Year

o    ________________    __________________________________________________________________

Percentage                Month            Day            Year

o    ________________    __________________________________________________________________

Percentage                Month            Day            Year

o    ________________    __________________________________________________________________

Percentage                Month            Day            Year

Exhibit C C-1

Important Note: For purposes of subsequent changes in the timing of the payments as elected above, a series of installment payments shall be treated as the entitlement to a single payment. In general, if you wish to change this election for amounts previously deferred, (a) any change shall not take effect for twelve (12) months from the date of the new election, (b) the commencement of payments (or a lump sum payment) shall occur no earlier than five (5) years after the date the first distribution would have been paid under the prior distribution schedule and (c) the change shall be made at least twelve (12) months before the date the first distribution would have been paid absent the change. If this Distribution Election Form is intended to change the timing of distributions of amounts previously deferred, please check below:

o This Distribution Election Form is made pursuant to Section 4.4 of the Plan.

Once the payout of my Plan deferrals has commenced, dividends and other distributions accrued with respect to my Plan deferrals shall be paid to me in the following manner:

Dividends and other distributions accrued with respect to Franklin Templeton Mutual Funds:

o    Reinvested.

o    Paid out on the next payment date.

Dividends and other distributions accrued with respect to Company Common Stock:

o    Reinvested.

o    Paid out on the next payment date.

Upon my death prior to the complete distribution of my Plan deferrals (as adjusted for income, gains and losses under the Plan), the remaining balance shall be payable to my designated beneficiary in the following manner:

o    In a lump sum.

o    In accordance with the distribution schedule elected by me on this Exhibit C.

In the event of my Disability prior to the complete distribution of my Plan deferrals (as adjusted for income, gains and losses under the Plan), the remaining balance shall be payable in the following manner:

o    In a lump sum.

o    In accordance with the distribution schedule elected by me on this Exhibit C.

In the event of a Change in Control prior to the complete distribution of my Plan deferrals (as adjusted for income, gains and losses under the Plan), the remaining balance shall be payable in the following manner:

o    In a lump sum immediately prior to the consummation of a Change in Control.

o    In accordance with the distribution schedule elected by me on this Exhibit C.

Exhibit C C-2

Submitted by:	Filing Acknowledgement:
Participant	Franklin Resources, Inc.
___________________________________________	By: ___________________________________
Name: _______________________________	Its: ___________________________________
Date: ________________________________	Filed with the records of the Company this _____ day of _________________, 20___

Exhibit C C-3

EXHIBIT D

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

INVESTMENT DIRECTION

Effective Date of Change in Investment Direction:        _________________________________________

(select first day of any upcoming calendar quarter)

The Participant hereby directs the investment of his or her Deferred Compensation Account in Franklin Resources, Inc. Common Stock and/or one or more Franklin Templeton mutual funds in accordance with the percentages indicated below.

INVESTMENT	Percentage
Franklin Resources, Inc. Common Stock	%
_______________________________________	%
_______________________________________	%
_______________________________________	%
_______________________________________	%
	100	%

Submitted by:	Filing Acknowledgement:
Participant	Franklin Resources, Inc.
___________________________________________	By: ___________________________________
Name: _______________________________	Its: ___________________________________
Date: ________________________________	Filed with the records of the Company this _____ day of _________________, 20___

Exhibit D D-1

EXHIBIT E

FRANKLIN RESOURCES, INC.

2006 DIRECTORS DEFERRED COMPENSATION PLAN

WITHDRAWAL FORM

Name: ___________________

I am currently a participant in the Franklin Resources, Inc. 2006 Directors Deferred Compensation Plan (the “Plan”).

Effective January 1, ______________ (specify applicable calendar year), I hereby withdraw from the Plan, and no additional amounts of compensation payable to me on or after such date will be deferred under the Plan unless I file a subsequent election form. I shall be eligible to defer additional amounts under the Plan only by timely delivery to the Company of a new election form which shall generally be effective for amounts earned in the calendar year following the calendar year such subsequent deferral election form is filed with the Company. A new election form must be filed no later than December 31^st of the calendar year prior to the calendar year for which the new election form will be effective.

My Plan deferrals (including amounts deferred during the remainder of the current calendar year), as adjusted for losses or gains under the Plan, shall be paid to me in accordance with my most recent Deferral Election Form unless I file a subsequent election form to which the Committee can give effect.

Submitted by:	Filing Acknowledgement:
Participant	Franklin Resources, Inc.
___________________________________________	By: ___________________________________
Name: _______________________________	Its: ___________________________________
Date: ________________________________	Filed with the records of the Company this _____ day of _________________, 20___

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Gregory E. Johnson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Franklin Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 30, 2013	/s/    GREGORY E. JOHNSON
		Gregory E. Johnson
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Kenneth A. Lewis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Franklin Resources, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 30, 2013	/s/    KENNETH A. LEWIS
		Kenneth A. Lewis
		Executive Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (FURNISHED HEREWITH)

I, Gregory E. Johnson, President and Chief Executive Officer of Franklin Resources, Inc. (the “Company”), certify, as of the date hereof and solely for purposes of and pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Dated:	April 30, 2013	/s/    GREGORY E. JOHNSON
		Gregory E. Johnson
		President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (FURNISHED HEREWITH)

I, Kenneth A. Lewis, Executive Vice President and Chief Financial Officer of Franklin Resources, Inc. (the “Company”), certify, as of the date hereof and solely for purposes of and pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Dated:	April 30, 2013	/s/    KENNETH A. LEWIS
		Kenneth A. Lewis
		Executive Vice President and Chief Financial Officer

XML

Earnings per Share - Schedule of Earnings per Share Basic and Diluted (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share Reconciliation [Abstract]
Net Income Attributable to Franklin Resources, Inc.	$ 572.8	$ 503.2	$ 1,088.9	$ 984.0
Less: Allocation of earnings to participating nonvested stock and stock unit awards	4.0	3.4	7.4	6.3
Net Income Available to Common Stockholders	$ 568.8	$ 499.8	$ 1,081.5	$ 977.7
Weighted average shares outstanding - basic	211.3	214.5	211.4	215.3
Effect of dilutive common stock options and non-participating nonvested stock unit awards	0.3	0.6	0.3	0.6
Weighted-Average Shares Outstanding - Diluted	211.6	215.1	211.7	215.9
Earnings per Share
Basic	$ 2.69	$ 2.33	$ 5.12	$ 4.54
Diluted	$ 2.69	$ 2.32	$ 5.11	$ 4.53

XML

Debt - Narrative (Details) (USD $)	6 Months Ended
	Mar. 31, 2013
Debt Disclosure [Abstract]
Face value of long term debt	$ 1,200,000,000
Stated interest rate	2.00%
Early Repayment of Senior Debt	305,400,000
Commercial paper available for issuance under an uncommitted private placement program	500,000,000
Uncommitted Short-term bank lines of credit under the Federal Reserve system	260,000,000
Uncommitted Short-term bank lines of credit available through the secured Federal Reserve short-term discount window	93,300,000
Uncommitted Short-term Bank Line Of Credit	14,700,000
Secured FHLB Short Term Borrowing Capacity	$ 6,800,000

XML

Fair Value Measurements - Quantitative Information about Level 3 (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Mar. 31, 2013	Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Life settlement contracts	13.1	12.1
Contingent consideration liability	90.0
Contingent Consideration Liability [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
AUM growth rate	19.70%
EBITDA margin	38.90%
Contingent Consideration Liability [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
AUM growth rate	6.00%
EBITDA margin	31.30%
Contingent Consideration Liability [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
AUM growth rate	12.00%
EBITDA margin	36.20%
Discount Rate	14.00%
Debt Securities [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	25.60%	25.60%
Debt Securities [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	5.70%	4.90%
Debt Securities [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	12.50%	11.80%
Equity Securities [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	18.00%	15.00%
Equity Securities [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	12.00%	12.00%
Equity Securities [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	16.10%	14.80%
Life settlement contracts [Member] | Maximum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Life Expectancy (in months)	165	171
Internal rate of return	21.70%	22.30%
Life settlement contracts [Member] | Minimum [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Life Expectancy (in months)	21	22
Internal rate of return	1.50%	1.50%
Life settlement contracts [Member] | Weighted Average [Member] | Income Approach Valuation Technique [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Life Expectancy (in months)	79	82
Internal rate of return	11.60%	11.70%

XML

Commitments and Contingencies Narrative (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Off-balance sheet cash held in agency or trust	$ 301.6	$ 202.4

XML

Debt - Outstanding Debt (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
FHLB advances	$ 66.0	$ 69.0
Senior Notes	1,197.4	1,497.1
Total Debt	1,263.4	1,566.1
Stated interest rate	2.00%
FHLB Advances [Member]
Effective Interest Rate	3.23%	3.30%
Notes Due 2013 [Member]
Effective Interest Rate		2.28%
Senior Notes	0	299.9
Face amount of senior notes	300
Stated interest rate	2.00%
Notes Due 2015 [Member]
Effective Interest Rate	3.32%	3.32%
Senior Notes	249.9	249.9
Face amount of senior notes	250
Stated interest rate	3.125%
Notes Due 2017 [Member]
Effective Interest Rate	1.66%	1.66%
Senior Notes	298.5	298.4
Face amount of senior notes	300
Stated interest rate	1.375%
Notes Due 2020 [Member]
Effective Interest Rate	4.74%	4.74%
Senior Notes	349.7	349.7
Face amount of senior notes	350
Stated interest rate	4.625%
Notes Due 2022 [Member]
Effective Interest Rate	2.93%	2.93%
Senior Notes	299.3	299.2
Face amount of senior notes	$ 300
Stated interest rate	2.80%

XML

Fair Value Measurements - Fair Value, by Balance Sheet Grouping (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013		Sep. 30, 2012
Investment securities, trading	$ 1,214.0		$ 1,130.6
Investment securities, available-for-sale	716.0		870.0
Life settlement contracts	13.1		12.1
Total Assets Measured at Fair Value	1,943.1		2,012.7
Contingent consideration liability	90.0
Level 1 [Member]
Investment securities, trading	1,132.3		1,058.6
Life settlement contracts	0		0
Total Assets Measured at Fair Value	1,661.7		1,659.8
Contingent consideration liability	0
Level 2 [Member]
Investment securities, trading	81.4		69.3
Life settlement contracts	0		0
Total Assets Measured at Fair Value	268.0		338.1
Contingent consideration liability	0
Level 3 [Member]
Investment securities, trading	0.3		2.7
Life settlement contracts	13.1		12.1
Total Assets Measured at Fair Value	13.4		14.8
Contingent consideration liability	90.0
Sponsored Investment Products [Member]
Investment securities, available-for-sale	520.5		587.2
Sponsored Investment Products [Member] | Level 1 [Member]
Investment securities, available-for-sale	520.5		587.2
Sponsored Investment Products [Member] | Level 2 [Member]
Investment securities, available-for-sale	0		0
Sponsored Investment Products [Member] | Level 3 [Member]
Investment securities, available-for-sale	0		0
US States and Political Subdivisions Debt Securities [Member]
Investment securities, available-for-sale	23.4		26.8
US States and Political Subdivisions Debt Securities [Member] | Level 1 [Member]
Investment securities, available-for-sale	0		0
US States and Political Subdivisions Debt Securities [Member] | Level 2 [Member]
Investment securities, available-for-sale	23.4		26.8
US States and Political Subdivisions Debt Securities [Member] | Level 3 [Member]
Investment securities, available-for-sale	0		0
Securities of the U.S. Treasury and Federal Agencies [Member]
Investment securities, available-for-sale	25.3		2.4
Securities of the U.S. Treasury and Federal Agencies [Member] | Level 1 [Member]
Investment securities, available-for-sale	0		0
Securities of the U.S. Treasury and Federal Agencies [Member] | Level 2 [Member]
Investment securities, available-for-sale	25.3		2.4
Securities of the U.S. Treasury and Federal Agencies [Member] | Level 3 [Member]
Investment securities, available-for-sale	0		0
Corporate Debt Securities [Member]
Investment securities, available-for-sale	20.0	[1]	70.3	[1]
Corporate Debt Securities [Member] | Level 1 [Member]
Investment securities, available-for-sale	0		0
Corporate Debt Securities [Member] | Level 2 [Member]
Investment securities, available-for-sale	20.0		70.3
Corporate Debt Securities [Member] | Level 3 [Member]
Investment securities, available-for-sale	0		0
Collateralized Mortgage Backed Securities [Member]
Investment securities, available-for-sale	117.9	[2]	169.3	[2]
Collateralized Mortgage Backed Securities [Member] | Level 1 [Member]
Investment securities, available-for-sale	0		0
Collateralized Mortgage Backed Securities [Member] | Level 2 [Member]
Investment securities, available-for-sale	117.9		169.3
Collateralized Mortgage Backed Securities [Member] | Level 3 [Member]
Investment securities, available-for-sale	0		0
Equity Securities, Other [Member]
Investment securities, available-for-sale	8.9		14.0
Equity Securities, Other [Member] | Level 1 [Member]
Investment securities, available-for-sale	8.9		14.0
Equity Securities, Other [Member] | Level 2 [Member]
Investment securities, available-for-sale	0		0
Equity Securities, Other [Member] | Level 3 [Member]
Investment securities, available-for-sale	$ 0		$ 0

[1] Corporate debt securities are insured by non-U.S. government agencies or the Federal Deposit Insurance Corporation.

[2] Consist of U.S. government-sponsored enterprise obligations.

XML

Banking Regulatory Ratios (Tables)

6 Months Ended

Mar. 31, 2013

Banking and Thrift [Abstract]

Schedule of capital adequacy requirements

Based on the Company's calculations, it exceeded the applicable capital adequacy requirements as listed below.

(dollar amounts in millions)	March 31, 2013			September 30, 2012			Capital Adequacy Minimum
Tier 1 capital	$	6,802.8		$	6,788.8		N/A
Total risk-based capital	6,876.3			6,799.6			N/A
Tier 1 leverage ratio	57		%	59		%	5	%
Tier 1 risk-based capital ratio	55		%	54		%	4	%
Total risk-based capital ratio	56		%	54		%	8	%

XML

Other Income (Expenses) - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Other Income and Expenses [Abstract]
Proceeds from sale of investment securities, available-for-sale	$ 41.0	$ 118.7	$ 200.0	$ 371.9
Recognized net gains on trading investment securities	7.7	9.9	9.4	18.9
Net gains on trading investment securities of consolidated SIPs	$ 7.3	$ 46.4	$ 13.4	$ 39.4

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Narrative (Details) (USD $)	3 Months Ended		6 Months Ended			6 Months Ended	12 Months Ended	3 Months Ended		6 Months Ended	12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012	Mar. 31, 2013 Collateralized Auto Loans [Member]	Sep. 30, 2012 Collateralized Auto Loans [Member]	Mar. 31, 2013 Consolidated sponsored investment products [Member]	Mar. 31, 2012 Consolidated sponsored investment products [Member]	Mar. 31, 2013 Consolidated sponsored investment products [Member]	Sep. 30, 2012 Consolidated sponsored investment products [Member]	Mar. 31, 2013 Level 3 [Member] Variable Interest Entity [Member]	Sep. 30, 2012 Level 3 [Member] Variable Interest Entity [Member]
Floating interest rate, minimum						0.52%	0.67%
Floating interest rate, maximum						9.81%	9.98%
Interest Rate, Minimum										2.46%	1.98%
Interest Rate, Maximum										6.28%	7.03%
Liquidation period in certain funds	5 years 4 months 10 days		5 years 4 months 10 days		5 years 10 months 28 days
Consolidated SIPs' unfunded commitments	$ 148,600,000		$ 148,600,000		$ 123,000,000
Unfunded commitments company contractually obligated to fund	3,300,000		3,300,000		2,900,000
Transfers into Level 2 from Level 1 quarter to date	0	0						0	900,000
Transfers into Level 2 from Level 1	0	0	0	0				47,000,000	900,000	47,000,000
Transfers into Level 1 from Level 2 quarter to date	0	0						53,800,000	0
Transfers into Level 1 from Level 2	0	0	0	0				53,800,000	25,700,000	53,800,000
Transfers into or out of Level 3	0	0	0	0					0	0
Debt of consolidated variable interest entities	1,073,200,000		1,073,200,000		1,100,900,000							75,800,000	67,900,000
Investments in various funds held by consolidated SIPs for which fair value was estimated using NAV	439,300,000		439,300,000		314,200,000			407,500,000		407,500,000	314,200,000
AUM of non-consolidated VIEs	$ 36,300,000,000		$ 36,300,000,000		$ 35,300,000,000

XML

Stock-Based Compensation - Narrative (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013
Share-based Compensation [Abstract]
Unrecognized compensation cost related to nonvested awards net of estimated forfeitures	$ 168.9
Unrecognized compensation cost remaining weighted-average vesting period	1 year 11 months 0 days

XML

Earnings per Share (Tables)

6 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of earnings per share basic and diluted

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

(in millions, except per share data)	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013		2012
Net Income Attributable to Franklin Resources, Inc.	$	572.8	$	503.2	$	1,088.9	$	984.0
Less: Allocation of earnings to participating nonvested stock and stock unit awards	4.0		3.4		7.4		6.3
Net Income Available to Common Stockholders	$	568.8	$	499.8	$	1,081.5	$	977.7
Weighted-average shares outstanding – basic	211.3		214.5		211.4		215.3
Effect of dilutive common stock options and non-participating nonvested stock unit awards	0.3		0.6		0.3		0.6
Weighted-Average Shares Outstanding – Diluted	211.6		215.1		211.7		215.9
Earnings per Share
Basic	$	2.69	$	2.33	$	5.12	$	4.54
Diluted	2.69		2.32		5.11		4.53

XML

Goodwill and Other Intangible Assets - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Nov. 01, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Definite-lived intangible assets acquired					$ 43.8
Indefinite-lived intangible assets acquired					105.2
Amortization expense	4.5	2.7	8.3	5.3
Impairment loss	$ 0	$ 0	$ 0	$ 0

XML

Investments - Summary of gross unrealized gains and losses relating to investment securities, available-for-sale (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Investment Holdings [Line Items]
Cost Basis	$ 643.8	$ 793.1
Gross Unrealized Gains	74.2	78.7
Gross Unrealized Losses	(2.0)	(1.8)
Fair Value	716.0	870.0
Sponsored Investment Products [Member]
Investment Holdings [Line Items]
Cost Basis	452.2	516.8
Gross Unrealized Gains	70.3	72.1
Gross Unrealized Losses	(2.0)	(1.7)
Fair Value	520.5	587.2
US States and Political Subdivisions Debt Securities [Member]
Investment Holdings [Line Items]
Cost Basis	22.4	25.6
Gross Unrealized Gains	1.0	1.2
Gross Unrealized Losses	0	0
Fair Value	23.4	26.8
Securities of the U.S. Treasury and Federal Agencies [Member]
Investment Holdings [Line Items]
Cost Basis	25.3	2.4
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	25.3	2.4
Corporate Debt Securities [Member]
Investment Holdings [Line Items]
Cost Basis	20.0	70.0
Gross Unrealized Gains	0	0.3
Gross Unrealized Losses	0	0
Fair Value	20.0	70.3
Collateralized Mortgage Backed Securities [Member]
Investment Holdings [Line Items]
Cost Basis	115.3	164.8
Gross Unrealized Gains	2.6	4.5
Gross Unrealized Losses	0	0
Fair Value	117.9	169.3
Other Equity Securities [Member]
Investment Holdings [Line Items]
Cost Basis	8.6	13.5
Gross Unrealized Gains	0.3	0.6
Gross Unrealized Losses	0	(0.1)
Fair Value	$ 8.9	$ 14.0

XML

Banking Regulatory Ratios (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Tier 1 capital	$ 6,802.8	$ 6,788.8
Total risk-based capital	$ 6,876.3	$ 6,799.6
Tier 1 leverage ratio	57.00%	59.00%
Tier 1 risk-based capital ratio	55.00%	54.00%
Total risk-based capital ratio	56.00%	54.00%
Capital Adequacy Minimum [Member]
Tier 1 leverage ratio	5.00%
Tier 1 risk-based capital ratio	4.00%
Total risk-based capital ratio	8.00%

XML

Stockholders' Equity and Redeemable Noncontrolling Interests - Changes in Stockholders' Equity and Redeemable Noncontrolling Interests (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013		Mar. 31, 2012
Stockholders' Equity Rollforward
Beginning balance			$ 9,201.3
Beginning balance			559.2
Beginning balance			9,760.5
Beginning balance			26.7
Net Income Attributable to Franklin Resources, Inc.	572.8	503.2	1,088.9		984.0
Net Income	593.4	487.8	1,098.1		981.5
Other comprehensive income (loss)	538.3	551.2	1,044.8		1,017.4
Repurchase of common stock			121.3		416.8
Noncontrolling Interests
Net consolidations (deconsolidations) of certain sponsored investment products			(10.7)		(30.9)
Acquisition			38.2		0
Ending balance	9,420.0		9,420.0
Ending balance	657.9		657.9
Ending balance	10,077.9		10,077.9
Ending balance	80.5		80.5
Franklin Resources, Inc. Stockholders' Equity [Member]
Stockholders' Equity Rollforward
Beginning balance			9,201.3		8,524.7
Net Income Attributable to Franklin Resources, Inc.			1,088.9		984.0
Net income (loss) reclassified to appropriated retained earnings			(28.2)		15.5
Other comprehensive income (loss)			(53.3)		35.9
Cash dividends on common stock			(763.6)		(551.6)
Repurchase of common stock			(121.3)		(416.8)
Noncontrolling Interests
Other			96.2	[1]	98.1	[1]
Ending balance	9,420.0	8,689.8	9,420.0		8,689.8
Nonredeemable Noncontrolling Interests [Member]
Stockholders' Equity Rollforward
Beginning balance			559.2		579.2
Net income (loss) attributable to noncontrolling interests	17.8	(15.9)	5.1		(5.8)
Net income (loss) reclassified to appropriated retained earnings			28.2		(15.5)
Noncontrolling Interests
Net subscriptions			55.6		105.6
Net consolidations (deconsolidations) of certain sponsored investment products			4.4		0
Acquisition			5.4
Ending balance	657.9	663.5	657.9		663.5
Total Stockholders' Equity [Member]
Stockholders' Equity Rollforward
Beginning balance			9,760.5		9,103.9
Net Income			1,094.0		978.2
Net income (loss) reclassified to appropriated retained earnings			0		0
Other comprehensive income (loss)			(53.3)		35.9
Cash dividends on common stock			(763.6)		(551.6)
Repurchase of common stock			(121.3)		(416.8)
Noncontrolling Interests
Net subscriptions			55.6		105.6
Net consolidations (deconsolidations) of certain sponsored investment products			4.4		0
Acquisition			5.4
Other			96.2	[1]	98.1	[1]
Ending balance	10,077.9	9,353.3	10,077.9		9,353.3
Redeemable Noncontrolling Interest [Member]
Stockholders' Equity Rollforward
Beginning balance			26.7		18.6
Net income (loss) attributable to noncontrolling interests	2.8	0.5	4.1		3.3
Noncontrolling Interests
Net subscriptions			32.0		31.9
Net consolidations (deconsolidations) of certain sponsored investment products			(15.1)		(30.9)
Acquisition			32.8
Ending balance	$ 80.5	$ 22.9	$ 80.5		$ 22.9

[1] Primarily relates to stock-based compensation plans.

XML

Goodwill and Other Intangible Assets - Intangible Assets (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Schedule of Finite-lived and Indefinite-lived Intangible Assets [Line Items]
Amortized intangible asset carrying value	$ 259.4	$ 215.9
Accumulated amortization	(179.9)	(171.9)
Total	79.5	44.0
Total intangible assets gross carrying value	916.6	773.0
Total intangible assets net carrying value	736.7	601.1
Management contracts
Schedule of Finite-lived and Indefinite-lived Intangible Assets [Line Items]
Non amortized intangible asset value	657.2	557.1
Customer Relationships [Member]
Schedule of Finite-lived and Indefinite-lived Intangible Assets [Line Items]
Amortized intangible asset carrying value	166.3	166.6
Accumulated amortization	(140.1)	(135.9)
Total	26.2	30.7
Other Intangible Assets [Member]
Schedule of Finite-lived and Indefinite-lived Intangible Assets [Line Items]
Amortized intangible asset carrying value	93.1	49.3
Accumulated amortization	(39.8)	(36.0)
Total	$ 53.3	$ 13.3

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	6 Months Ended	12 Months Ended
	Mar. 31, 2013	Sep. 30, 2012
Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Debt Securities	$ 330.2	$ 317.5
Market Approach Valuation Technique [Member] | Common Stock [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Equity Securities	145.8	144.4
Market Approach Valuation Technique [Member] | Preferred Stock [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Equity Securities	19.1	21.0
Price to book value ratio	$ 1.7	$ 1.7
Income Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Equity Securities	$ 52.1	$ 47.4
Minimum [Member] | Market Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount for lack of marketability	20.00%	15.00%
EBITDA multiple	5.0	5.5
Minimum [Member] | Income Approach Valuation Technique [Member] | Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	5.70%	4.90%
Risk premium	0.00%	0.00%
Minimum [Member] | Income Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	12.00%	12.00%
Discount for lack of marketability	0.00%	0.00%
Maximum [Member] | Market Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount for lack of marketability	30.00%	30.00%
EBITDA multiple	10.2	8.6
Maximum [Member] | Income Approach Valuation Technique [Member] | Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	25.60%	25.60%
Risk premium	19.30%	7.30%
Maximum [Member] | Income Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	18.00%	15.00%
Discount for lack of marketability	50.00%	50.00%
Weighted Average [Member] | Market Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount for lack of marketability	24.00%	22.10%
EBITDA multiple	8.6	7.3
Weighted Average [Member] | Income Approach Valuation Technique [Member] | Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	12.50%	11.80%
Risk premium	2.50%	2.10%
Weighted Average [Member] | Income Approach Valuation Technique [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
Discount Rate	16.10%	14.80%
Discount for lack of marketability	21.40%	27.80%

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of investments of consolidated VIEs and consolidated SIPs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Variable Interest Entity [Line Items]
Investment securities, trading	$ 1,214.0	$ 1,130.6
Total Investments	2,555.7	2,583.8
Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Investment securities, trading	0	0
Other debt securities	1,012.9	984.1
Other equity securities	0	0
Total Investments	1,012.9	984.1
Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Investment securities, trading	234.1	194.4
Other debt securities	330.3	317.5
Other equity securities	664.4	534.7
Total Investments	1,228.8	1,046.6
Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Investment securities, trading	234.1	194.4
Other debt securities	1,343.2	1,301.6
Other equity securities	664.4	534.7
Total Investments	$ 2,241.7	$ 2,030.7

XML

Fair Value Measurements - Unobservable Input Reconciliation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Balance - assets	$ 13.0	$ 11.2	$ 14.8	$ 10.9
Balance - liabilities	(90.3)		0
Acquisition - assets			0
Acquisition - liabilities			(90.6)
Total realized and unrealized gains (losses) included in investments and other income, net - assets	0.5	0.9	0.9	1.8
Total realized and unrealized gains (losses) included in investments and other income, net - liabilities	0		0
Included in general, administrative and other expense - assets	0		0
Included in general, administrative and other expense - liabilities	0.2		(2.2)
Total realized and unrealized gains (losses) included in other income - assets	0		0
Total realized and unrealized gains (losses) included in other income - liabilities	0.1		(0.2)
Purchases - assets	0.1	0.4	0.7	0.9
Purchases - liabilities	0		0
Sales - assets			(1.6)
Sales - liabilities			0
Settlements - assets	(0.2)	(0.9)	(1.4)	(2.0)
Settlements - liabilities	0		3.0
Balance - assets	13.4	11.6	13.4	11.6
Balance - liabilities	(90.0)		(90.0)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period		0.3		0.8
Equity Securities [Member]
Balance - assets	537.6	326.0	527.0	283.7
Total realized and unrealized gains (losses) included in investments and other income, net - assets	40.2	0.2	50.0	(17.3)
Purchases - assets	66.5	41.0	85.9	101.8
Sales - assets	(18.4)	(56.4)	(39.1)	(57.6)
Settlements - assets		(0.1)		(0.1)
Balance - assets	624.5	310.3	624.5	310.3
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	40.1	2.3	51.4	(15.0)
Debt Securities [Member]
Balance - assets	326.2	350.0	317.5	324.9
Total realized and unrealized gains (losses) included in investments and other income, net - assets	(2.7)	(25.3)	5.8	(17.7)
Purchases - assets	30.1	11.6	53.4	31.6
Sales - assets	(19.4)	(16.1)	(46.0)	(18.9)
Settlements - assets		(0.1)		(0.3)
Balance - assets	330.2	319.0	330.2	319.0
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	(2.2)	(14.9)	6.7	(6.9)
Investments [Member]
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	0.3		0.7
Contingent Consideration Liability [Member]
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	0.3		(2.4)
Level 3 [Member]
Balance - assets	863.8	679.5	844.5	610.5
Total realized and unrealized gains (losses) included in investments and other income, net - assets	37.5	(26.1)	55.8	(36.0)
Purchases - assets	96.6	52.6	139.3	133.4
Sales - assets	(37.8)	(72.5)	(85.1)	(76.5)
Settlements - assets		(0.2)		(0.4)
Balance - assets	954.7	631.8	954.7	631.8
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	$ 37.9	$ (13.6)	$ 58.1	$ (22.9)

XML

Acquisition

6 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Acquisition

Acquisition

On November 1, 2012, the Company acquired approximately 69% of the equity of K2 Advisors Holdings LLC (“K2”), a fund of hedge funds solutions provider. The acquisition was transacted through a $182.9 million cash investment in K2. The Company also agreed to acquire K2’s remaining equity interests over a multi-year period beginning in fiscal year 2017, resulting in the conversion of this equity to a liability. The amount of the liability is contingent on K2’s future revenue and profits and had an estimated fair value of $90.6 million on November 1, 2012. As a result of the conversion, the Company owns 100% of K2’s outstanding equity for U.S. GAAP purposes.

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

(in millions)	Estimated Fair Value
As of November 1, 2012
Cash, including cash invested	$	191.6
Investments of consolidated sponsored investment products	31.1
Indefinite-lived intangible assets	105.2
Definite-lived intangible assets	43.8
Goodwill	110.1
Other assets	28.0
Debt	(176.5		)
Other liabilities	(21.6		)
Noncontrolling interests	(38.2		)
Total Identifiable Net Assets	$	273.5

The intangible assets relate to management contracts. The definite-lived intangible assets will be amortized over a period of six years. The debt was retired immediately following the acquisition. At acquisition date, K2 had $8.7 billion in assets under management (“AUM”).

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

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of debt of consolidated VIEs and consolidated SIPs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Variable Interest Entity [Line Items]
Debt of consolidated variable interest entities	$ 1,073.2	$ 1,100.9
Debt of consolidated sponsored investment products	86.4	110.2
Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Effective Interest Rate	4.00%	4.20%
Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt of consolidated variable interest entities	1,073.2	1,100.9
Debt of consolidated sponsored investment products	86.4	110.2
Total Debt	$ 1,159.6	$ 1,211.1
Long Term Debt of Consolidated Variable Interest Entities At Fair Value [Member]
Variable Interest Entity [Line Items]
Effective Interest Rate	1.30%	1.48%

XML

Investments - Continuous Loss Position (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value		$ 34.4
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses		(0.8)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value		21.7
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses		(1.0)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		56.1
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses		(1.8)
Sponsored Investment Products [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	21.0	30.0
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(1.8)	(0.7)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1.6	21.7
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(0.2)	(1.0)
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	22.6	51.7
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses	(2.0)	(1.7)
Other Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value		4.4
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses		(0.1)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value		0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses		0
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value		4.4
Available-for-sale Securities, Continuous Unrealized Loss Position, Aggregate Losses		$ (0.1)

XML

Debt (Tables)

6 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Schedule of outstanding debt

Debt consisted of the following:

(dollars in millions)	March 31, 2013		Effective Interest  Rate		September 30, 2012		Effective Interest Rate
FHLB advances	$	66.0	3.23	%	$	69.0	3.30	%
Senior notes
$300 million 2.000% notes due May 2013	—		N/A		299.9		2.28	%
$250 million 3.125% notes due May 2015	249.9		3.32	%	249.9		3.32	%
$300 million 1.375% notes due September 2017	298.5		1.66	%	298.4		1.66	%
$350 million 4.625% notes due May 2020	349.7		4.74	%	349.7		4.74	%
$300 million 2.800% notes due September 2022	299.3		2.93	%	299.2		2.93	%
	1,197.4				1,497.1
Total Debt	$	1,263.4			$	1,566.1

Schedule of contractual maturities of debt

At March 31, 2013, maturities for debt were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	18.5
2014	—
2015	260.4
2016	8.0
2017	298.5
Thereafter	678.0
Total	$	1,263.4

XML

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of changes in carrying value of goodwill

Changes in the carrying value of goodwill were as follows:

(in millions)
for the six months ended March 31,	2013			2012
Balance at beginning of period	$	1,540.8		$	1,536.2
Acquisition	110.1			—
Foreign exchange and other	(6.7		)	1.6
Balance at End of Period	$	1,644.2		$	1,537.8

Schedule of intangible assets

Intangible assets were as follows:

	March 31, 2013							September 30, 2012
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
(in millions)
Definite-lived intangible assets
Customer base	$	166.3	$	(140.1	)	$	26.2	$	166.6	$	(135.9	)	$	30.7
Management contracts and other	93.1		(39.8		)	53.3		49.3		(36.0		)	13.3
	259.4		(179.9		)	79.5		215.9		(171.9		)	44.0
Indefinite-lived intangible assets
Management contracts	657.2		—			657.2		557.1		—			557.1
Total	$	916.6	$	(179.9	)	$	736.7	$	773.0	$	(171.9	)	$	601.1

Schedule of estmated remaining amortization expense

The estimated remaining amortization expense related to definite-lived intangible assets as of March 31, 2013 was as follows:

(in millions)
for the fiscal years ending September 30,	Amount
2013	$	8.9
2014	17.7
2015	17.6
2016	12.9
2017	8.8
Thereafter	13.6
Total	$	79.5

XML

Debt - Debt Maturity (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Debt Maturities In 2013 [Member]
Debt Maturities Summary Within One Year Of Balance Sheet Date	$ 18.5
Debt Maturities In 2014 [Member]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	0
Debt Maturities In 2015 [Member]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	260.4
Debt Maturities In 2016 [Member]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	8.0
Debt Maturities In 2017 [Member]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	298.5
Thereafter [Member]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	678.0
Total Payment [Member]
Total FHLB Advances and Senior Notes Maturities	$ 1,263.4

XML

Investments - Schedule of Maturities of available-for-sale debt securities (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Maturities - Due in one year or less Cost Basis	$ 45.8
Available-for-sale Securities, Debt Maturities - Due in one year or less Fair Value	45.8
Available-for-sale Securities, Debt Maturities - Due after one year through five years Cost Basis	20.2
Available-for-sale Securities, Debt Maturities - Due after one year through five years Fair Value	21.1
Available-for-sale Securities, Debt Maturities - Due after five years through ten years Cost Basis	0.1
Available-for-sale Securities, Debt Maturities - Due after five years through ten years Fair Value	0.1
Available-for-sale Securities, Debt Maturities - Due after ten years Cost Basis	1.6
Available-for-sale Securities, Debt Maturities - Due after ten years Fair Value	1.7
Available-for-sale Securities, Debt Maturities, Amortized Cost Basis	67.7
Available-for-sale Securities, Debt Securities	$ 68.7

XML

Variable Interest Entities and Consolidated Sponsored Investment Products (Tables)

6 Months Ended

Mar. 31, 2013

Variable Interest Entities and Consolidated Sponsored Investment Products [Abstract]

Schedule of balances of consolidated VIEs and consolidated SIPs

The balances of consolidated VIEs and consolidated SIPs included in the Company's condensed consolidated balance sheets were as follows:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Assets
Cash and cash equivalents	$	100.2	$	44.3	$	144.5	$	224.3	$	42.8	$	267.1
Receivables	24.7		38.7		63.4		2.7		23.7		26.4
Investments	1,012.9		1,228.8		2,241.7		984.1		1,046.6		2,030.7
Other assets	—		0.7		0.7		—		0.7		0.7
Total Assets	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9
Liabilities
Accounts payable and accrued expenses	$	—	$	39.0	$	39.0	$	—	$	21.8	$	21.8
Debt, at fair value	1,073.2		—		1,073.2		1,100.9		—		1,100.9
Debt	—		86.4		86.4		—		110.2		110.2
Other liabilities	45.5		8.5		54.0		61.9		8.5		70.4
Total liabilities	1,118.7		133.9		1,252.6		1,162.8		140.5		1,303.3
Redeemable Noncontrolling Interests	—		80.5		80.5		—		26.7		26.7
Stockholders' Equity
Nonredeemable noncontrolling interests	—		641.3		641.3		—		556.8		556.8
Other equity	19.1		456.8		475.9		48.3		389.8		438.1
Total stockholders' equity	19.1		1,098.1		1,117.2		48.3		946.6		994.9
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9

Schedule of changes in fair values of underlying assets and liabilities of the Collateralized Loan Obligations

The assets and liabilities of the CLOs are carried at fair value. Changes in the fair values were as follows:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Net gains from changes in fair value of assets	$	18.9		$	29.7		$	41.1		$	57.4
Net losses from changes in fair value of liabilities	(26.6		)	(34.1		)	(67.9		)	(39.1		)
Total net gains (losses)	$	(7.7	)	$	(4.4	)	$	(26.8	)	$	18.3

Unpaid principal balance and fair value of investments and long-term debt of consolidated CLOs

The following tables present the unpaid principal balance and fair value of investments, including investments 90 days or more past due, and debt of the CLOs:

(in millions)	Total Investments		Investments 90 Days or More Past Due			Debt
as of March 31, 2013
Unpaid principal balance	$	1,012.9	$	7.6		$	1,114.2
Excess unpaid principal over fair value	—		(7.4		)	(41.0		)
Fair value	$	1,012.9	$	0.2		$	1,073.2

(in millions)	Total Investments			Investments 90 Days or More Past Due			Debt
as of September 30, 2012
Unpaid principal balance	$	996.1		$	7.2		$	1,186.5
Excess unpaid principal over fair value	(12.0		)	(6.7		)	(85.6		)
Fair value	$	984.1		$	0.5		$	1,100.9

Schedule of investments of consolidated VIEs and consolidated SIPs

Investments of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Investment securities, trading	$	—	$	234.1	$	234.1	$	—	$	194.4	$	194.4
Other debt securities	1,012.9		330.3		1,343.2		984.1		317.5		1,301.6
Other equity securities	—		664.4		664.4		—		534.7		534.7
Total Investments	$	1,012.9	$	1,228.8	$	2,241.7	$	984.1	$	1,046.6	$	2,030.7

Schedule of debt of consolidated VIEs and consolidated SIPs

Debt of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013		Effective Interest Rate		September 30, 2012		Effective Interest Rate
(dollars in millions)
Debt of CLOs, at fair value, due fiscal years 2016-2024	$	1,073.2	1.30	%	$	1,100.9	1.48	%
Debt of consolidated SIPs due fiscal years 2013-2018	86.4		4.00	%	110.2		4.20	%
Total Debt	$	1,159.6			$	1,211.1

Schedule of contractual maturities for debt of consolidated VIEs and consolidated SIPs

At March 31, 2013, contractual maturities for debt of consolidated VIEs and consolidated SIPs were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	40.3
2014	—
2015	—
2016	3.4
2017	15.2
Thereafter	1,100.7
Total	$	1,159.6

Schedule of balances of assets and liabilities of consolidated VIEs and consolidated SIPs measured at fair value on a recurring basis

The tables below present the balances of assets and liabilities of consolidated VIEs and consolidated SIPs measured at fair value on a recurring basis.See Note 7 – Fair Value Measurements for information related to the three levels of fair value hierarchy.

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Cash and cash equivalents of consolidated VIEs	$	100.2	$	—	$	—	$	100.2
Receivables of consolidated VIEs	—		24.7		—		24.7
Investments of consolidated VIEs	—		1,012.9		—		1,012.9
Investments of consolidated SIPs
Debt securities	8.7		57.9		330.2		396.8
Equity securities	174.7		32.8		624.5		832.0
Total Assets Measured at Fair Value	$	283.6	$	1,128.3	$	954.7	$	2,366.6
Liabilities
Debt of consolidated VIEs	$	—	$	997.4	$	75.8	$	1,073.2
Other liabilities of consolidated VIEs	—		45.5		—		45.5
Total Liabilities Measured at Fair Value	$	—	$	1,042.9	$	75.8	$	1,118.7

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Cash and cash equivalents of consolidated VIEs	$	—	$	224.3	$	—	$	224.3
Receivables of consolidated VIEs	—		2.7		—		2.7
Investments of consolidated VIEs	—		984.1		—		984.1
Investments of consolidated SIPs
Debt securities	6.3		49.3		317.5		373.1
Equity securities	145.9		0.6		527.0		673.5
Total Assets Measured at Fair Value	$	152.2	$	1,261.0	$	844.5	$	2,257.7
Liabilities
Debt of consolidated VIEs	$	—	$	1,033.0	$	67.9	$	1,100.9
Other liabilities of consolidated VIEs	—		61.9		—		61.9
Total Liabilities Measured at Fair Value	$	—	$	1,094.9	$	67.9	$	1,162.8

Schedule of investments in fund products for which fair value was estimated using NAV as a practical expedient

The investments in fund products for which fair value was estimated using NAV as a practical expedient consisted of the following:

(in millions)	Fair Value Level	Redemption Frequency	March 31, 2013		September 30, 2012
Hedge funds	2	Quarterly	$	31.8	$	—
Hedge funds	3	Biennially	0.8		—
Global fixed-income fund	3	Periodically with certain restrictions	205.4		172.7
Real estate and private equity funds	3	Nonredeemable	201.3		141.5
Total			$	439.3	$	314.2

Schedule of changes in Level 3 assets and liabilities of consolidated VIEs and consolidated SIPs

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2013	Debt			Equity
Balance at January 1, 2013	$	326.2		$	537.6		$	863.8		$	(78.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(2.7		)	40.2			37.5			2.5
Purchases	30.1			66.5			96.6			—
Sales	(19.4		)	(18.4		)	(37.8		)	—
Effect of exchange rate changes	(4.0		)	(1.4		)	(5.4		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	(2.2	)	$	40.1		$	37.9		$	2.5

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2013	Debt			Equity
Balance at October 1, 2012	$	317.5		$	527.0		$	844.5		$	(67.9	)
Realized and unrealized gains (losses) included in investment and other income, net	5.8			50.0			55.8			(7.9		)
Purchases	53.4			85.9			139.3			—
Sales	(46.0		)	(39.1		)	(85.1		)	—
Acquisition	—			0.8			0.8			—
Effect of exchange rate changes	(0.5		)	(0.1		)	(0.6		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	6.7		$	51.4		$	58.1		$	(7.9	)

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2012				Debt			Equity
Balance at January 1, 2012	$	3.5		$	350.0		$	326.0		$	679.5		$	(85.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(25.3		)	0.2			(26.1		)	(3.7		)
Purchases	—			11.6			41.0			52.6			—
Sales	—			(16.1		)	(56.4		)	(72.5		)	—
Settlements	—			(0.1		)	(0.1		)	(0.2		)	23.5
Effect of exchange rate changes	—			(1.1		)	(0.4		)	(1.5		)	0.2
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(14.9	)	$	2.3		$	(13.6	)	$	(3.7	)

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2012				Debt			Equity
Balance at October 1, 2011	$	1.9		$	324.9		$	283.7		$	610.5		$	(83.9	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(17.7		)	(17.3		)	(36.0		)	(6.6		)
Purchases	—			31.6			101.8			133.4			—
Sales	—			(18.9		)	(57.6		)	(76.5		)	—
Settlements	—			(0.3		)	(0.1		)	(0.4		)	23.5
Transfers into Level 3	1.6			—			—			1.6			—
Effect of exchange rate changes	—			(0.6		)	(0.2		)	(0.8		)	1.7
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized losses included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(6.9	)	$	(15.0	)	$	(22.9	)	$	(6.6	)

Schedule of valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets were as follows:

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	330.2	Discounted cash flow	Discount rate	5.7%–25.6% (12.5%)
				Risk premium	0.0%–19.3% (2.5%)
Equity securities	145.8		Market comparable companies	EBITDA multiple	5.0–10.2 (8.6)
				Discount for lack of marketability	20.0%–30.0% (24.0%)
	52.1		Discounted cash flow	Discount rate	12.0%–18.0% (16.1%)
				Discount for lack of marketability	0.0%–50.0% (21.4%)
	19.1		Market pricing	Price to book value ratio	1.7

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	317.5	Discounted cash flow	Discount rate	4.9%–25.6% (11.8%)
				Risk premium	0.0%–7.3% (2.1%)
Equity securities	144.4		Market comparable companies	EBITDA multiple	5.5–8.6 (7.3)
				Discount for lack of marketability	15.0%–30.0% (22.1%)
	47.4		Discounted cash flow	Discount rate	12.0%–15.0% (14.8%)
				Discount for lack of marketability	0.0%–50.0% (27.8%)
	21.0		Market pricing	Price to book value ratio	1.7

Schedule of financial instruments of consolidated VIEs and consolidated SIPs not measured at fair value [Table Text Block]

Financial instruments of consolidated VIEs and consolidated SIPs that were not measured at fair value were as follows:

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents of consolidated SIPs	1	$	44.3	$	44.3	$	42.8	$	42.8
Financial Liabilities
Debt of consolidated SIPs	3	86.4		88.2		110.2		113.0

Schedule of maximum exposure to non-consolidated VIEs

The carrying values of the investment management and related service fees receivable from and the equity ownership interests in these VIEs included in the Company’s condensed consolidated balance sheets are set forth below. These amounts represent the Company’s maximum exposure to loss from these investment products.

(in millions)	March 31, 2013		September 30, 2012
Receivables	$	53.8	$	43.8
Investments	203.6		199.7
Total	$	257.4	$	243.5

XML

Stock-Based Compensation (Tables)

6 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Summary of nonvested stock award and stock unit award activity

Nonvested stock and stock unit award activity was as follows:

(shares in thousands)	Shares		Weighted-Average Grant-Date Fair Value
Nonvested balance at September 30, 2012	1,327		$	110.50
Granted	900		131.93
Vested	(210	)	109.73
Forfeited/canceled	(60	)	112.65
Nonvested Balance at March 31, 2013	1,957		$	120.37

XML

New Accounting Guidance

6 Months Ended

Mar. 31, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Guidance

New Accounting Guidance

Recently Adopted Accounting Guidance

On October 1, 2012, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance that requires the components of net income and other comprehensive income to be presented in one continuous statement or in two separate but consecutive statements. The Company elected to present the components of comprehensive income in two separate but consecutive statements. See the consolidated statements of comprehensive income in the condensed consolidated financial statements.

On October 1, 2012, the Company adopted new FASB amendments to the existing impairment guidance for goodwill and indefinite-lived intangible assets. The amendments permit a reporting entity to first assess qualitative factors to determine whether it is necessary to perform the annual quantitative impairment tests for goodwill and indefinite-lived intangible assets. The adoption of these amendments did not have a material impact on the Company's consolidated financial statements.

New Accounting Guidance Not Yet Adopted

In February 2013, the FASB issued new guidance requiring an entity to report significant reclassifications out of accumulated other comprehensive income by component either on the face of the financial statements or in the notes. The adoption of the guidance in the first quarter of the fiscal year ending September 30, 2014 will result in additional disclosures of the changes in the various components of the Company's accumulated other comprehensive income balances.

XML

Other Income (Expenses) (Tables)

6 Months Ended

Mar. 31, 2013

Other Income and Expenses [Abstract]

Schedule of other income (expenses)

Other income (expenses) consisted of the following:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Investment and Other Income, Net
Dividend income	$	2.7		$	5.7		$	5.5		$	12.5
Interest income	2.4			2.0			5.5			4.1
Gains on trading investment securities, net	8.3			10.3			13.6			20.8
Realized gains on sale of investment securities, available-for-sale	6.6			8.3			27.8			22.7
Realized losses on sale of investment securities, available-for-sale	—			(0.2		)	—			(1.7		)
Income from investments in equity method investees	20.4			39.1			42.2			61.6
Other-than-temporary impairment of investment securities	(0.7		)	—			(1.0		)	—
Gains on investments of consolidated SIPs, net	41.5			27.4			62.4			11.7
Gains (losses) on assets and liabilities of consolidated VIEs, net	(7.7		)	(4.4		)	(26.8		)	18.3
Foreign currency exchange gains (losses), net	18.6			(9.8		)	7.3			(4.6		)
Other, net	4.4			4.0			5.5			8.2
Total	96.5			82.4			142.0			153.6
Interest expense	(10.9		)	(9.6		)	(25.4		)	(18.2		)
Other Income, Net	$	85.6		$	72.8		$	116.6		$	135.4

XML

Investments - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012
Schedule of Trading Securities and Other Trading Assets [Line Items]
Aggregate carrying values of investment securities pledged as collateral for the ability to borrow from the Federal Reserve Bank	$ 95.4		$ 95.4		$ 120.4
Aggregate carrying values of investment securities pledged as collateral for outstanding Federal Home Loan Bank borrowing	44.2		44.2		45.2
Aggregate carrying values of investment securities pledged as collateral for ability to borrow uncommitted short-term bank lines of credit	7.3		7.3		7.3
Changes in net holding gains (losses) on investment securities, available-for-sale included in accumulated other comprehensive income	5.3	36.3	23.7	44.1
Other-than-temporary impairment of investments	(0.7)	0	(1.0)	0
Other-than-temporary impairment of investment securities, available-for-sale	$ (0.3)		$ (0.3)

XML

Goodwill and Other Intangible Assets - Estimated remaining amortization expense (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2013	$ 8.9
2014	17.7
2015	17.6
2016	12.9
2017	8.8
Thereafter	13.6
Total	$ 79.5	$ 44.0

XML

Stock-Based Compensation (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	6 Months Ended
	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested beginning balance shares	1,327
Nonvested beginning balance, Weighted Average Grant Date Fair Value	$ 110.50
Shares granted	900
Weighted Average Grant Date Fair Value of shares granted	$ 131.93
Shares vested	(210)
Weighted Average Grant Date Fair Value of shares vested	$ 109.73
Shares forfeited/cancelled	(60)
Weighted Average Grant Date Fair Value of shares forfeited/cancelled	$ 112.65
Nonvested ending balance shares	1,957
Nonvested ending balance, Weighted Average Grant Date Fair Value	$ 120.37

XML

Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Operating Revenues
Investment management fees	$ 1,267.5	$ 1,126.4	$ 2,467.4	$ 2,201.5
Sales and distribution fees	642.7	585.9	1,246.8	1,110.2
Shareholder servicing fees	76.6	76.7	151.0	152.1
Other, net	26.8	10.3	50.2	37.4
Total operating revenues	2,013.6	1,799.3	3,915.4	3,501.2
Operating Expenses
Sales, distribution and marketing	780.8	715.5	1,511.7	1,346.1
Compensation and benefits	355.1	323.0	690.2	623.4
Information systems and technology	44.8	43.3	88.4	84.7
Occupancy	31.9	31.9	65.3	63.7
General, administrative and other	71.6	68.5	145.3	133.8
Total operating expenses	1,284.2	1,182.2	2,500.9	2,251.7
Operating Income	729.4	617.1	1,414.5	1,249.5
Other Income (Expenses)
Investment and other income, net	96.5	82.4	142.0	153.6
Interest expense	(10.9)	(9.6)	(25.4)	(18.2)
Other income, net	85.6	72.8	116.6	135.4
Income before taxes	815.0	689.9	1,531.1	1,384.9
Taxes on income	221.6	202.1	433.0	403.4
Net income	593.4	487.8	1,098.1	981.5
Net Income Attributable to Franklin Resources, Inc.	572.8	503.2	1,088.9	984.0
Earnings per Share
Basic	$ 2.69	$ 2.33	$ 5.12	$ 4.54
Diluted	$ 2.69	$ 2.32	$ 5.11	$ 4.53
Dividends per Share	$ 0.29	$ 0.27	$ 3.58	$ 2.54
Nonredeemable Noncontrolling Interests [Member]
Other Income (Expenses)
Net income (loss) attributable to noncontrolling interests	17.8	(15.9)	5.1	(5.8)
Redeemable Noncontrolling Interest [Member]
Other Income (Expenses)
Net income (loss) attributable to noncontrolling interests	$ 2.8	$ 0.5	$ 4.1	$ 3.3

XML

Fair Value Measurements - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Transfers into Level 1 from Level 2 quarter to date	$ 0	$ 0
Transfers into Level 1 from Level 2	0	0	0	0
Transfers into Level 2 from Level 1 quarter to date	0	0
Transfers into Level 2 from Level 1	0	0	0	0
Transfers into or out of Level 3	$ 0	$ 0	$ 0	$ 0

XML

Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net Income	$ 1,098.1	$ 981.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	114.6	108.4
Stock-based compensation	57.1	50.3
Excess tax benefit from stock-based compensation	(11.7)	(17.6)
Gains on sale of assets	(27.8)	(21.4)
Income from investments in equity method investees	(42.2)	(61.6)
Net (gain) losses on other investments of consolidated sponsored investment products	(46.0)	27.4
Net (gains) losses of consolidated variable interest entities	26.5	(17.7)
Other	3.9	21.0
Changes in operating assets and liabilities:
Increase in receivables, prepaid expenses and other	(201.7)	(98.7)
Increase in trading securities, net	(83.9)	(240.4)
Increase in trading securities of consolidated sponsored investment products, net	(69.3)	(81.1)
Decrease in accrued compensation and benefits	(89.2)	(101.5)
Increase in commissions payable	38.9	11.3
Increase (decrease) in income taxes payable	16.6	(55.8)
Decrease in other liabilities	(12.1)	(25.8)
Net cash provided by operating activities	771.8	478.3
Net cash provided by investing activities
Purchase of investments	(137.4)	(107.3)
Liquidation of investments	321.3	556.7
Purchase of investments by consolidated sponsored investment products	(144.1)	(105.8)
Liquidation of investments by consolidated sponsored investment products	88.9	25.2
Purchase of investments by consolidated variable interest entities	(360.9)	(175.0)
Liquidation of investments by consolidated variable interest entities	333.4	233.7
Decrease in loans receivable, net	16.5	17.9
Decrease in loans receivable held by consolidated variable interest entities, net	0	41.5
Additions of property and equipment, net	(28.2)	(45.3)
Acquisition of subsidiary, net of cash acquired	5.7	0
Cash and cash equivalents recognized due to consolidation of sponsored investment products	2.8	0
Net cash provided by investing activities	98.0	441.6
Net cash provided by (used in) financing activities
Increase (decrease) in deposits	2.5	(53.1)
Issuance of common stock	27.3	28.2
Dividends paid on common stock	(759.3)	(547.4)
Repurchase of common stock	(121.3)	(416.8)
Excess tax benefit from stock-based compensation	11.7	17.6
Decrease in commercial paper, net	0	(5.0)
Payments on debt	(479.4)	0
Proceeds from issuance of debt by consolidated sponsored investment products	301.1	22.8
Payments on debt by consolidated sponsored investment products	(324.8)	(71.5)
Payments on debt by consolidated variable interest entities	(95.3)	(159.0)
Noncontrolling interests	87.6	137.5
Net cash used in financing activities	(1,349.9)	(1,046.7)
Effect of exchange rate changes on cash and cash equivalents	(15.5)	7.3
Decrease in cash and cash equivalents	(495.6)	(119.5)
Cash and cash equivalents, beginning of period	6,051.4	5,198.6
Cash and Cash Equivalents, End of Period	5,555.8	5,079.1
Supplemental Disclosure of Non-Cash Activities
Decrease in noncontrolling interests due to net deconsolidation of certain sponsored investment products	(10.7)	(30.9)
Increase in noncontrolling interests due to acquisition	38.2	0
Contingent consideration liability recognized due to acquisition	90.6	0
Transfers of loans receivable, net to loans held for sale	0	117.5
Transfers of loans receivable of consolidated variable interest entities, net to loans held for sale	0	37.4
Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	430.1	442.1
Cash paid for interest	26.8	21.3
Cash paid for interest by consolidated sponsored investment products and consolidated variable interest entities	$ 24.7	$ 26.6

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of changes in fair values of underlying assets and liabilities of the Collateralized Loan Obligations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Variable Interest Entity [Line Items]
Net gains from changes in fair value of assets	$ 18.9	$ 29.7	$ 41.1	$ 57.4
Net losses from changes in fair value of liabilities	(26.6)	(34.1)	(67.9)	(39.1)
Total net gains (losses)	$ (7.7)	$ (4.4)	$ (26.8)	$ 18.3

XML

Acquisition - Estimated fair values of the assets acquired and liabilities and noncontrolling interests assumed (Details) (USD $) In Millions, unless otherwise specified	Nov. 01, 2012
Business Acquisition [Line Items]
Cash, including cash invested	$ 191.6
Investments of consolidated sponsored investment products	31.1
Indefinite-lived intangible assets	105.2
Definite-lived intangible assets	43.8
Goodwill	110.1
Other assets	28.0
Debt	(176.5)
Other liabilities	(21.6)
Noncontrolling interests	(38.2)
Total Identifiable Net Assets	$ 273.5

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of investments in fund products for which fair value was estimated using NAV as a practical expedient (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Investments in funds products for which fair value was estimated using NAV	$ 439.3	$ 314.2
Hedge Funds [Member] | Level 2 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Investments in funds products for which fair value was estimated using NAV	31.8	0
Hedge Funds [Member] | Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Investments in funds products for which fair value was estimated using NAV	0.8	0
Global Fixed-Income Funds [Member] | Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Investments in funds products for which fair value was estimated using NAV	205.4	172.7
Real Estate and Private Equity Funds [Member] | Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Investments in funds products for which fair value was estimated using NAV	$ 201.3	$ 141.5

XML

Variable Interest Entities and Consolidated Sponsored Investment Products (Policies)

6 Months Ended

Mar. 31, 2013

Variable Interest Entities and Consolidated Sponsored Investment Products [Abstract]

Consolidation

The Company sponsors and manages various types of investment products, which consist of both VIEs and non-VIEs. The Company consolidates the non-VIE products which it controls and the VIE products for which it is the primary beneficiary. The Company has no right to the consolidated products' assets, other than its direct equity investment in them, and/or investment management fees earned from them. The debt holders of these consolidated entities 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 entities' liabilities.

Other assets and liabilities of consolidated VIEs

The fair value of cash and cash equivalents of consolidated VIEs is based on quoted market prices. The fair values of the other assets and liabilities of consolidated VIEs are primarily obtained from independent third-party broker or dealer price quotes. The fair value of a portion of the debt of consolidated VIEs is determined using significant unobservable inputs in a market-based approach.

Investments of consolidated SIPs

Investments of consolidated SIPs consist of trading securities and other investments that are not generally traded in active markets. The fair value of the trading securities is determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available. If events occur after the close of the primary market for any security, the quoted market prices may be adjusted for the observable price movements within country specific market proxies.

Investments of fund products fair valued using NAV

The investments that are not generally traded in active markets consist of debt and equity securities of entities in emerging markets and fund products. The fair values of the debt and equity securities are determined using significant unobservable inputs in either a market-based or income-based approach. The fair value of the fund products is determined using net asset value (“NAV”) as a practical expedient. These investments are classified as Level 2 if they are redeemable on a quarterly basis or Level 3 if they are periodically redeemable, subject to certain restrictions, or nonredeemable.

XML

Stockholders' Equity and Redeemable Noncontrolling Interests - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Stockholders' Equity Note [Abstract]
Number of shares repurchased during period	0.2	1.0	0.9	4.0
Cost of shares repurchased during period	$ 23.3	$ 125.9	$ 121.3	$ 416.8
Remaining number of shares authorized to be repurchased	6.3		6.3

XML

Stockholders' Equity and Redeemable Noncontrolling Interests (Tables)

6 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

Changes in total stockholders' equity and redeemable noncontrolling interests

The changes in total stockholders’ equity and redeemable noncontrolling interests were as follows:

(in millions)	Franklin Resources,  Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests		Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2013
Balance at October 1, 2012	$	9,201.3		$	559.2	$	9,760.5		$	26.7
Net income	1,088.9			5.1		1,094.0			4.1
Net loss reclassified to appropriated retained earnings	(28.2		)	28.2		—
Other comprehensive loss	(53.3		)			(53.3		)
Cash dividends on common stock	(763.6		)			(763.6		)
Repurchase of common stock	(121.3		)			(121.3		)
Noncontrolling interests
Net subscriptions				55.6		55.6			32.0
Net consolidation (deconsolidation) of certain sponsored investment products				4.4		4.4			(15.1		)
Acquisition				5.4		5.4			32.8
Other1	96.2					96.2
Balance at March 31, 2013	$	9,420.0		$	657.9	$	10,077.9		$	80.5

________________

¹  Primarily relates to stock-based compensation plans.

(in millions)	Franklin Resources, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2012
Balance at October 1, 2011	$	8,524.7		$	579.2		$	9,103.9		$	18.6
Net income (loss)	984.0			(5.8		)	978.2			3.3
Net income reclassified to appropriated retained earnings	15.5			(15.5		)	—
Other comprehensive income	35.9						35.9
Cash dividends on common stock	(551.6		)				(551.6		)
Repurchase of common stock	(416.8		)				(416.8		)
Noncontrolling interests
Net subscriptions				105.6			105.6			31.9
Net deconsolidation of certain sponsored investment products				—			—			(30.9		)
Other1	98.1						98.1
Balance at March 31, 2012	$	8,689.8		$	663.5		$	9,353.3		$	22.9

________________

¹  Primarily relates to stock-based compensation plans.

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of financial instruments of consolidated VIEs and consolidated SIPs not measured at fair value (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Variable Interest Entity [Line Items]
Cash and cash equivalents of consolidated SIPs	$ 5,411.3	$ 5,784.3
Debt of consolidated SIPs	86.4	110.2
Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents of consolidated SIPs	44.3	42.8
Cash and Cash Equivalents [Member]
Variable Interest Entity [Line Items]
Fair Value Level	1
Cash and Cash Equivalents [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Fair Value Level	1
Debt of consolidated SIPs [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Fair Value Level	3
Carrying Value [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents of consolidated SIPs	5,411.3	5,784.3
Estimated Fair Value [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents of consolidated SIPs	5,411.3	5,784.3
Estimated Fair Value [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents of consolidated SIPs	44.3	42.8
Debt of consolidated SIPs	$ 88.2	$ 113.0

XML

Basis of Presentation

6 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The unaudited interim financial statements of Franklin Resources, Inc. (“Franklin”) and its consolidated subsidiaries (collectively, the “Company”) included herein have been prepared by the Company in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Under these rules and regulations, some information and footnote disclosures normally included in financial statements prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been shortened or omitted. Management believes that all adjustments necessary for a fair statement of the financial position and the results of operations for the periods shown have been made. All adjustments are normal and recurring. These financial statements should be read together with the Company’s audited financial statements included in its Form 10-K for the fiscal year ended September 30, 2012 (“fiscal year 2012”). Certain amounts for the comparative prior fiscal year period have been reclassified to conform to the financial statement presentation as of and for the period ended March 31, 2013.

XML

Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Net Income	$ 593.4	$ 487.8	$ 1,098.1	$ 981.5
Other Comprehensive Income (Loss), Net of Tax
Net unrealized gains (losses) on investments	(16.9)	22.5	(19.0)	17.7
Currency translation adjustments	(38.9)	40.9	(35.0)	18.4
Net unrealized gains (losses) on defined benefit plans	0.7	0	0.7	(0.2)
Total comprehensive income	538.3	551.2	1,044.8	1,017.4
Comprehensive Income Attributable to Franklin Resources, Inc.	517.7	566.6	1,035.6	1,019.9
Nonredeemable Noncontrolling Interests [Member]
Other Comprehensive Income (Loss), Net of Tax
Comprehensive income (loss) attributable to noncontrolling interests	17.8	(15.9)	5.1	(5.8)
Redeemable Noncontrolling Interest [Member]
Other Comprehensive Income (Loss), Net of Tax
Comprehensive income (loss) attributable to noncontrolling interests	$ 2.8	$ 0.5	$ 4.1	$ 3.3

XML

Commitments and Contingencies

6 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

The Company is from time to time involved in 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 March 31, 2013, to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.

Other Commitments and Contingencies

The Company, in its role as agent or trustee, facilitates the settlement of investor share purchase, redemption and other transactions with affiliated mutual funds. The Company is appointed by the affiliated mutual funds as agent or trustee to manage, on their behalf, bank deposit accounts that contain only (i) cash remitted by investors to the affiliated mutual funds for the direct purchase of fund shares, or (ii) cash remitted by the affiliated mutual funds for direct delivery to the investors for either the proceeds of fund shares liquidated at the investors’ direction, or dividends and capital gains earned on fund shares. At March 31, 2013 and September 30, 2012, the Company held cash of $301.6 million and $202.4 million off-balance sheet in agency or trust for investors and the affiliated mutual funds.

At March 31, 2013, there were no changes that would have a material effect on the other commitments and contingencies reported in the Company’s Form 10-K for fiscal year 2012.

XML

Document and Entity Information	6 Months Ended
	Mar. 31, 2013	Apr. 23, 2013
Document Information [Line Items]
Entity Registrant Name	Franklin Resources Inc
Entity Central Index Key	0000038777
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		212,609,362

XML

Stock-Based Compensation

6 Months Ended

Mar. 31, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock awards generally entitle holders to the right to sell the underlying shares of the Company’s common stock once the awards vest. Stock unit awards generally entitle holders to receive the underlying shares of common stock once the awards vest. Certain performance-based long-term stock and stock unit awards have been granted that generally vest based on the achievement of predetermined Company financial performance goals. In the event a performance measure is not achieved at or above a specified threshold level, the portion of the award tied to such performance measure is forfeited.

Total unrecognized compensation cost related to nonvested stock and stock unit awards, net of estimated forfeitures, was $168.9 million at March 31, 2013. This cost is expected to be recognized over a remaining weighted-average vesting period of 1.9 years.

Nonvested stock and stock unit award activity was as follows:

(shares in thousands)	Shares		Weighted-Average Grant-Date Fair Value
Nonvested balance at September 30, 2012	1,327		$	110.50
Granted	900		131.93
Vested	(210	)	109.73
Forfeited/canceled	(60	)	112.65
Nonvested Balance at March 31, 2013	1,957		$	120.37

XML

Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Assets
Cash and cash equivalents	$ 5,411.3	$ 5,784.3
Receivables	994.6	850.2
Investments	2,555.7	2,583.8
Loans receivable, net	238.3	254.4
Deferred taxes	100.3	94.9
Property and equipment, net	573.9	582.7
Goodwill and other intangible assets, net	2,380.9	2,141.9
Other	169.0	161.5
Total Assets	14,810.2	14,751.5
Liabilities
Compensation and benefits	312.9	400.5
Accounts payable and accrued expenses	246.6	241.6
Commissions	422.8	383.9
Deposits	674.2	671.7
Debt	1,263.4	1,566.1
Debt of consolidated sponsored investment products	86.4	110.2
Debt of consolidated variable interest entities	1,073.2	1,100.9
Other	245.6	151.2
Deferred taxes	281.2	276.3
Total liabilities	4,651.8	4,964.3
Redeemable Noncontrolling Interests	80.5	26.7
Stockholders' Equity
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued	0	0
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 212,595,884 and 212,208,957 shares issued and outstanding at March 31, 2013 and September 30, 2012	21.3	21.2
Retained earnings	9,384.5	9,084.4
Appropriated retained earnings of consolidated variable interest entities	5.5	33.7
Accumulated other comprehensive income	8.7	62.0
Total Franklin Resources, Inc. stockholders' equity	9,420.0	9,201.3
Nonredeemable noncontrolling interests	657.9	559.2
Total stockholders' equity	10,077.9	9,760.5
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	14,810.2	14,751.5
Consolidated sponsored investment products [Member]
Assets
Cash and cash equivalents	44.3	42.8
Receivables	38.7	23.7
Investments	1,228.8	1,046.6
Other	0.7	0.7
Total Assets	1,312.5	1,113.8
Liabilities
Accounts payable and accrued expenses	39.0	21.8
Other	8.5	8.5
Total liabilities	133.9	140.5
Redeemable Noncontrolling Interests	80.5	26.7
Stockholders' Equity
Nonredeemable noncontrolling interests	641.3	556.8
Total stockholders' equity	1,098.1	946.6
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	1,312.5	1,113.8
Variable Interest Entity [Member]
Assets
Cash and cash equivalents	100.2	224.3
Receivables	24.7	2.7
Investments	1,012.9	984.1
Other	0	0
Total Assets	1,137.8	1,211.1
Liabilities
Accounts payable and accrued expenses	0	0
Other	45.5	61.9
Total liabilities	1,118.7	1,162.8
Redeemable Noncontrolling Interests	0	0
Stockholders' Equity
Nonredeemable noncontrolling interests	0	0
Total stockholders' equity	19.1	48.3
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	$ 1,137.8	$ 1,211.1

XML

Investments

6 Months Ended

Mar. 31, 2013

Investments [Abstract]

Investments

Investments

The disclosures below include details of the Company’s investments, excluding those of consolidated variable interest entities (“VIEs”) and consolidated sponsored investment products (“SIPs”). See Note 10 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the investments held by these entities.

Investments consisted of the following:

(in millions)	March 31, 2013		September 30, 2012
Investment securities, trading	$	1,214.0	$	1,130.6
Investment securities, available-for-sale
SIPs	520.5		587.2
Securities of U.S. states and political subdivisions	23.4		26.8
Securities of the U.S. Treasury and federal agencies	25.3		2.4
Corporate debt securities1	20.0		70.3
Mortgage-backed securities – agency residential2	117.9		169.3
Other equity securities	8.9		14.0
Total investment securities, available-for-sale	716.0		870.0
Investments in equity method investees	547.2		489.0
Other investments	78.5		94.2
Total	$	2,555.7	$	2,583.8

________________

¹  Corporate debt securities are insured by non-U.S. government agencies or the Federal Deposit Insurance Corporation.

²  Consist of U.S. government-sponsored enterprise obligations.

At March 31, 2013 and September 30, 2012, investment securities with aggregate carrying amounts of $95.4 million and $120.4 million were pledged as collateral for the ability to borrow from the Federal Reserve Bank, $44.2 million and $45.2 million were pledged as collateral for outstanding Federal Home Loan Bank (“FHLB”) borrowings and amounts available in secured FHLB short-term borrowing capacity, and $7.3 million was pledged as collateral for the ability to borrow from uncommitted short-term bank lines of credit (see Note 9 - Debt).

A summary of the gross unrealized gains and losses relating to investment securities, available-for-sale is as follows:

(in millions)			Gross Unrealized
as of March 31, 2013	Cost Basis		Gains		Losses			Fair Value
SIPs	$	452.2	$	70.3	$	(2.0	)	$	520.5
Securities of U.S. states and political subdivisions	22.4		1.0		—			23.4
Securities of the U.S. Treasury and federal agencies	25.3		—		—			25.3
Corporate debt securities	20.0		—		—			20.0
Mortgage-backed securities – agency residential	115.3		2.6		—			117.9
Other equity securities	8.6		0.3		—			8.9
Total	$	643.8	$	74.2	$	(2.0	)	$	716.0

(in millions)			Gross Unrealized
as of September 30, 2012	Cost Basis		Gains		Losses			Fair Value
SIPs	$	516.8	$	72.1	$	(1.7	)	$	587.2
Securities of U.S. states and political subdivisions	25.6		1.2		—			26.8
Securities of the U.S. Treasury and federal agencies	2.4		—		—			2.4
Corporate debt securities	70.0		0.3		—			70.3
Mortgage-backed securities – agency residential	164.8		4.5		—			169.3
Other equity securities	13.5		0.6		(0.1		)	14.0
Total	$	793.1	$	78.7	$	(1.8	)	$	870.0

The net unrealized holding gains on investment securities, available-for-sale included in accumulated other comprehensive income were $5.3 million and $23.7 million for the three and six months ended March 31, 2013, and $36.3 million and $44.1 million for the three and six months ended March 31, 2012.

The following tables show the gross unrealized losses and fair values of investment securities, available-for-sale with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of March 31, 2013
SIPs	$	21.0	$	(1.8	)	$	1.6	$	(0.2	)	$	22.6	$	(2.0	)

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of September 30, 2012
SIPs	$	30.0	$	(0.7	)	$	21.7	$	(1.0	)	$	51.7	$	(1.7	)
Other equity securities	4.4		(0.1		)	—		—			4.4		(0.1		)
Total	$	34.4	$	(0.8	)	$	21.7	$	(1.0	)	$	56.1	$	(1.8	)

The Company recognized $0.7 million and $1.0 million of other-than-temporary impairment of investments for the three and six months ended March 31, 2013, including $0.3 million in the six-month period related to available-for-sale investments in SIPs. The Company did not recognize any other-than-temporary impairment of investments for the six months ended March 31, 2012.

At March 31, 2013, contractual maturities of available-for-sale debt securities were as follows:

(in millions)	Cost Basis		Fair Value
Due in one year or less	$	45.8	$	45.8
Due after one year through five years	20.2		21.1
Due after five years through ten years	0.1		0.1
Due after ten years	1.6		1.7
Total	$	67.7	$	68.7

Mortgage-backed securities are not included in the table above as their actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

XML

Earnings per Share

6 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

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

(in millions, except per share data)	Three Months Ended March 31,				Six Months Ended March 31,
	2013		2012		2013		2012
Net Income Attributable to Franklin Resources, Inc.	$	572.8	$	503.2	$	1,088.9	$	984.0
Less: Allocation of earnings to participating nonvested stock and stock unit awards	4.0		3.4		7.4		6.3
Net Income Available to Common Stockholders	$	568.8	$	499.8	$	1,081.5	$	977.7
Weighted-average shares outstanding – basic	211.3		214.5		211.4		215.3
Effect of dilutive common stock options and non-participating nonvested stock unit awards	0.3		0.6		0.3		0.6
Weighted-Average Shares Outstanding – Diluted	211.6		215.1		211.7		215.9
Earnings per Share
Basic	$	2.69	$	2.33	$	5.12	$	4.54
Diluted	2.69		2.32		5.11		4.53

Non-participating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive were de minimus for the three and six months ended March 31, 2013, and 0.2 million and 0.5 million for the three and six months ended March 31, 2012.

XML

Acquisition (Tables)

6 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Schedule of estimated fair values of the assets acquired and liabilities and noncontrolling interests assumed

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

(in millions)	Estimated Fair Value
As of November 1, 2012
Cash, including cash invested	$	191.6
Investments of consolidated sponsored investment products	31.1
Indefinite-lived intangible assets	105.2
Definite-lived intangible assets	43.8
Goodwill	110.1
Other assets	28.0
Debt	(176.5		)
Other liabilities	(21.6		)
Noncontrolling interests	(38.2		)
Total Identifiable Net Assets	$	273.5

XML

Other Income (Expenses)

6 Months Ended

Mar. 31, 2013

Other Income and Expenses [Abstract]

Other Income (Expenses)

Other Income (Expenses)

Other income (expenses) consisted of the following:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Investment and Other Income, Net
Dividend income	$	2.7		$	5.7		$	5.5		$	12.5
Interest income	2.4			2.0			5.5			4.1
Gains on trading investment securities, net	8.3			10.3			13.6			20.8
Realized gains on sale of investment securities, available-for-sale	6.6			8.3			27.8			22.7
Realized losses on sale of investment securities, available-for-sale	—			(0.2		)	—			(1.7		)
Income from investments in equity method investees	20.4			39.1			42.2			61.6
Other-than-temporary impairment of investment securities	(0.7		)	—			(1.0		)	—
Gains on investments of consolidated SIPs, net	41.5			27.4			62.4			11.7
Gains (losses) on assets and liabilities of consolidated VIEs, net	(7.7		)	(4.4		)	(26.8		)	18.3
Foreign currency exchange gains (losses), net	18.6			(9.8		)	7.3			(4.6		)
Other, net	4.4			4.0			5.5			8.2
Total	96.5			82.4			142.0			153.6
Interest expense	(10.9		)	(9.6		)	(25.4		)	(18.2		)
Other Income, Net	$	85.6		$	72.8		$	116.6		$	135.4

Substantially all of the Company’s dividend income and realized gains and losses on sale of investment securities, available-for-sale were generated by investments in its sponsored investment products. Interest income was primarily generated by cash equivalents and investments in trading securities and debt securities of U.S. states and political subdivisions. Proceeds from the sale of investment securities, available-for-sale were $41.0 million and $200.0 million for the three and six months ended March 31, 2013, and $118.7 million and $371.9 million for the three and six months ended March 31, 2012.

The Company recognized net gains on trading investment securities that were held at March 31, 2013 and 2012 of $7.7 million and $9.4 million during the three and six months ended March 31, 2013, and $9.9 million and $18.9 million during the three and six months ended March 31, 2012. Net gains on trading investment securities of consolidated SIPs that were held at March 31, 2013 and 2012 were $7.3 million and $13.4 million during the three and six months ended March 31, 2013, and $46.4 million and $39.4 million during the three and six months ended March 31, 2012.

XML

Debt

6 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Debt

Debt

The disclosures below include details of the Company’s debt, excluding that of consolidated VIEs and consolidated SIPs. See Note 10 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the debt of these entities.

Debt consisted of the following:

(dollars in millions)	March 31, 2013		Effective Interest  Rate		September 30, 2012		Effective Interest Rate
FHLB advances	$	66.0	3.23	%	$	69.0	3.30	%
Senior notes
$300 million 2.000% notes due May 2013	—		N/A		299.9		2.28	%
$250 million 3.125% notes due May 2015	249.9		3.32	%	249.9		3.32	%
$300 million 1.375% notes due September 2017	298.5		1.66	%	298.4		1.66	%
$350 million 4.625% notes due May 2020	349.7		4.74	%	349.7		4.74	%
$300 million 2.800% notes due September 2022	299.3		2.93	%	299.2		2.93	%
	1,197.4				1,497.1
Total Debt	$	1,263.4			$	1,566.1

At March 31, 2013, the Company’s outstanding senior unsecured and unsubordinated notes had an aggregate face value of $1.2 billion. The notes have fixed interest rates with interest payable semi-annually and 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. In October 2012, the Company redeemed its outstanding 2.000% notes due in May 2013 at a make-whole redemption price of $305.4 million. The indentures governing the 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. The indentures also 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. At March 31, 2013, the Company was in compliance with the covenants of the notes.

At March 31, 2013, maturities for debt were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	18.5
2014	—
2015	260.4
2016	8.0
2017	298.5
Thereafter	678.0
Total	$	1,263.4

At March 31, 2013, 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 April 2012, $260.0 million available in uncommitted short-term bank lines of credit under the Federal Reserve system, $93.3 million available through the secured Federal Reserve Bank short-term discount window, $14.7 million available in uncommitted short-term bank lines of credit and $6.8 million available in secured FHLB short-term borrowing capacity.

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Unpaid Principal Balance and Fair Value of Investments and Long-Term Debt of Consolidated CLOs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Total investments, unpaid principal balance	$ 2,555.7	$ 2,583.8
Total investments, fair value	1,943.1	2,012.7
Long-term debt, unpaid principal balance	1,263.4	1,566.1
Collateralized Loan Obligations [Member]
Total investments, unpaid principal balance	1,012.9	996.1
Total investments, excess unpaid principal over fair value	0	(12.0)
Total investments, fair value	1,012.9	984.1
Investments - 90 days or more past due, unpaid principal balance	7.6	7.2
Investments - 90 days or more past due, excess unpaid principal over fair value	(7.4)	(6.7)
Investments - 90 days or more past due, fair value	0.2	0.5
Long-term debt, unpaid principal balance	1,114.2	1,186.5
Long-term debt, excess unpaid principal over fair value	(41.0)	(85.6)
Long-term debt, fair value	1,073.2	1,100.9
Variable Interest Entity [Member]
Total investments, unpaid principal balance	$ 1,012.9	$ 984.1

XML

Fair Value Measurements

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

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

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 Company's assessment of the hierarchy level of the assets and 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.
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 markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data. Level 2 quoted prices are generally obtained from two independent third-party brokers or dealers, including prices derived from model-based valuation techniques for which the significant assumptions are observable in the market 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.

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

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Investment securities, trading	$	1,132.3	$	81.4	$	0.3	$	1,214.0
Investment securities, available-for-sale
SIPs	520.5		—		—		520.5
Securities of U.S. states and political subdivisions	—		23.4		—		23.4
Securities of the U.S. Treasury and federal agencies	—		25.3		—		25.3
Corporate debt securities	—		20.0		—		20.0
Mortgage-backed securities – agency residential	—		117.9		—		117.9
Other equity securities	8.9		—		—		8.9
Life settlement contracts	—		—		13.1		13.1
Total Assets Measured at Fair Value	$	1,661.7	$	268.0	$	13.4	$	1,943.1
Liabilities
Contingent consideration liability	$	—	$	—	$	90.0	$	90.0

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Investment securities, trading	$	1,058.6	$	69.3	$	2.7	$	1,130.6
Investment securities, available-for-sale
SIPs	587.2		—		—		587.2
Securities of U.S. states and political subdivisions	—		26.8		—		26.8
Securities of the U.S. Treasury and federal agencies	—		2.4		—		2.4
Corporate debt securities	—		70.3		—		70.3
Mortgage-backed securities – agency residential	—		169.3		—		169.3
Other equity securities	14.0		—		—		14.0
Life settlement contracts	—		—		12.1		12.1
Total Assets Measured at Fair Value	$	1,659.8	$	338.1	$	14.8	$	2,012.7

The fair values of substantially all trading investments and of available-for-sale SIPs and other equity securities are determined based on their published net asset values. The fair values of certain trading investments and of available-for-sale debt securities are determined using quoted market prices, if available, or independent third-party broker or dealer price quotes, which are evaluated for reasonableness. The fair value of life settlement contracts is determined using a discounted cash flow valuation technique.

The contingent consideration liability relates to the Company's commitment to acquire the remaining interests in K2. The fair value is determined using an income-based method which considers the net present value of anticipated future cash flows.

There were no transfers between Level 1 and Level 2, or into or out of Level 3, during the three and six months ended March 31, 2013 and 2012.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments			Contingent Consideration Liability
for the three months ended March 31, 2013
Balance at January 1, 2013	$	13.0		$	(90.3	)
Total realized and unrealized gains
Included in investment and other income, net	0.5			—
Included in general, administrative and other expense	—			0.2
Other	—			0.1
Purchases	0.1			—
Settlements	(0.2		)	—
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains included in net income relating to assets and liabilities held at March 31, 2013	$	0.3		$	0.3

(in millions)	Investments			Contingent Consideration Liability
for the six months ended March 31, 2013
Balance at October 1, 2012	$	14.8		$	—
Acquisition	—			(90.6		)
Total realized and unrealized gains (losses)
Included in investment and other income, net	0.9			—
Included in general, administrative and other expense	—			(2.2		)
Other	—			(0.2		)
Purchases	0.7			—
Sales	(1.6		)	—
Settlements	(1.4		)	3.0
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	0.7		$	(2.4	)

(in millions)	Investments
for the three months ended March 31, 2012
Balance at January 1, 2012	$	11.2
Realized and unrealized gains included in investment and other income, net	0.9
Purchases	0.4
Settlements	(0.9		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.3

(in millions)	Investments
for the six months ended March 31, 2012
Balance at October 1, 2011	$	10.9
Realized and unrealized gains included in investment and other income, net	1.8
Purchases	0.9
Settlements	(2.0		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.8

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

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	13.1	Discounted cash flow	Life expectancy	21–165 months (79)
				Internal rate of return	1.5%–21.7% (11.6%)
Contingent consideration liability	90.0		Discounted cash flow	AUM growth rate	6.0%–19.7% (12.0%)
				EBITDA margin	31.3% - 38.9% (36.2%)
				Discount rate	14.0%

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	12.1	Discounted cash flow	Life expectancy	22–171 months (82)
				Internal rate of return	1.5%–22.3% (11.7%)

For life settlement contracts, a significant increase (decrease) in the life expectancy or the internal rate of return in isolation would result in a significantly lower (higher) fair value measurement.

For the contingent consideration liability, a significant increase (decrease) in the AUM growth rate or EBITDA margin, or decrease (increase) in the discount rate, in isolation would result in a significantly higher (lower) fair value measurement.

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

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents	1	$	5,411.3	$	5,411.3	$	5,784.3	$	5,784.3
Other investments1	2 or 3	64.9		71.4		80.2		85.1
Loans receivable, net	2	238.3		241.1		254.4		258.7
Financial Liabilities
Deposits	2	674.2		675.0		671.7		672.4
Debt
FHLB advances	2	66.0		69.9		69.0		74.5
Senior notes	2	1,197.4		1,274.9		1,497.1		1,571.2

_________________

¹    Primarily consist of Level 3 assets.

XML

Goodwill and Other Intangible Assets

6 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Changes in the carrying value of goodwill were as follows:

(in millions)
for the six months ended March 31,	2013			2012
Balance at beginning of period	$	1,540.8		$	1,536.2
Acquisition	110.1			—
Foreign exchange and other	(6.7		)	1.6
Balance at End of Period	$	1,644.2		$	1,537.8

Intangible assets were as follows:

	March 31, 2013							September 30, 2012
	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
(in millions)
Definite-lived intangible assets
Customer base	$	166.3	$	(140.1	)	$	26.2	$	166.6	$	(135.9	)	$	30.7
Management contracts and other	93.1		(39.8		)	53.3		49.3		(36.0		)	13.3
	259.4		(179.9		)	79.5		215.9		(171.9		)	44.0
Indefinite-lived intangible assets
Management contracts	657.2		—			657.2		557.1		—			557.1
Total	$	916.6	$	(179.9	)	$	736.7	$	773.0	$	(171.9	)	$	601.1

The Company acquired $43.8 million of definite-lived intangible assets and $105.2 million of indefinite-lived intangible assets on November 1, 2012 in the acquisition of K2.

Amortization expense related to definite-lived intangible assets was $4.5 million and $8.3 million for the three and six months ended March 31, 2013, and $2.7 million and $5.3 million for the three and six months ended March 31, 2012. No impairment loss in the value of goodwill and other intangible assets was recognized during these periods.

The estimated remaining amortization expense related to definite-lived intangible assets as of March 31, 2013 was as follows:

(in millions)
for the fiscal years ending September 30,	Amount
2013	$	8.9
2014	17.7
2015	17.6
2016	12.9
2017	8.8
Thereafter	13.6
Total	$	79.5

XML

Variable Interest Entities and Consolidated Sponsored Investment Products

6 Months Ended

Mar. 31, 2013

Variable Interest Entities and Consolidated Sponsored Investment Products [Abstract]

Variable Interest Entities and Consolidated Sponsored Investment Products

Variable Interest Entities and Consolidated Sponsored Investment Products

The Company sponsors and manages various types of investment products, which consist of both VIEs and non-VIEs. The Company consolidates the non-VIE products which it controls and the VIE products for which it is the primary beneficiary. The Company has no right to the consolidated products' assets, other than its direct equity investment in them, and/or investment management fees earned from them. The debt holders of these consolidated entities 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 entities' liabilities.

The balances of consolidated VIEs and consolidated SIPs included in the Company's condensed consolidated balance sheets were as follows:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Assets
Cash and cash equivalents	$	100.2	$	44.3	$	144.5	$	224.3	$	42.8	$	267.1
Receivables	24.7		38.7		63.4		2.7		23.7		26.4
Investments	1,012.9		1,228.8		2,241.7		984.1		1,046.6		2,030.7
Other assets	—		0.7		0.7		—		0.7		0.7
Total Assets	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9
Liabilities
Accounts payable and accrued expenses	$	—	$	39.0	$	39.0	$	—	$	21.8	$	21.8
Debt, at fair value	1,073.2		—		1,073.2		1,100.9		—		1,100.9
Debt	—		86.4		86.4		—		110.2		110.2
Other liabilities	45.5		8.5		54.0		61.9		8.5		70.4
Total liabilities	1,118.7		133.9		1,252.6		1,162.8		140.5		1,303.3
Redeemable Noncontrolling Interests	—		80.5		80.5		—		26.7		26.7
Stockholders' Equity
Nonredeemable noncontrolling interests	—		641.3		641.3		—		556.8		556.8
Other equity	19.1		456.8		475.9		48.3		389.8		438.1
Total stockholders' equity	19.1		1,098.1		1,117.2		48.3		946.6		994.9
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	$	1,137.8	$	1,312.5	$	2,450.3	$	1,211.1	$	1,113.8	$	2,324.9

The consolidated VIEs and consolidated SIPs did not have a significant impact on net income attributable to the Company during the three and six months ended March 31, 2013 and 2012.

Consolidated VIEs

Consolidated VIEs consist of sponsored collateralized loan obligations (“CLOs”), which are asset-backed financing entities collateralized by a pool of corporate debt securities.

The assets and liabilities of the CLOs are carried at fair value. Changes in the fair values were as follows:

	Three Months Ended March 31,						Six Months Ended March 31,
(in millions)	2013			2012			2013			2012
Net gains from changes in fair value of assets	$	18.9		$	29.7		$	41.1		$	57.4
Net losses from changes in fair value of liabilities	(26.6		)	(34.1		)	(67.9		)	(39.1		)
Total net gains (losses)	$	(7.7	)	$	(4.4	)	$	(26.8	)	$	18.3

The following tables present the unpaid principal balance and fair value of investments, including investments 90 days or more past due, and debt of the CLOs:

(in millions)	Total Investments		Investments 90 Days or More Past Due			Debt
as of March 31, 2013
Unpaid principal balance	$	1,012.9	$	7.6		$	1,114.2
Excess unpaid principal over fair value	—		(7.4		)	(41.0		)
Fair value	$	1,012.9	$	0.2		$	1,073.2

(in millions)	Total Investments			Investments 90 Days or More Past Due			Debt
as of September 30, 2012
Unpaid principal balance	$	996.1		$	7.2		$	1,186.5
Excess unpaid principal over fair value	(12.0		)	(6.7		)	(85.6		)
Fair value	$	984.1		$	0.5		$	1,100.9

Consolidated SIPs

Consolidated SIPs consist of limited partnerships and similar structures and other fund products.

Investments

Investments of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013						September 30, 2012
	Consolidated						Consolidated
(in millions)	VIEs		SIPs		Total		VIEs		SIPs		Total
Investment securities, trading	$	—	$	234.1	$	234.1	$	—	$	194.4	$	194.4
Other debt securities	1,012.9		330.3		1,343.2		984.1		317.5		1,301.6
Other equity securities	—		664.4		664.4		—		534.7		534.7
Total Investments	$	1,012.9	$	1,228.8	$	2,241.7	$	984.1	$	1,046.6	$	2,030.7

Investments of consolidated VIEs consist of corporate debt securities. Other debt and equity securities of consolidated SIPs primarily consist of direct investments in secured and unsecured debt securities and equity securities of entities in emerging markets, which are generally not traded in active markets. Other equity securities also include investments in funds that are not traded in active markets.

Debt

Debt of consolidated VIEs and consolidated SIPs consisted of the following:

	March 31, 2013		Effective Interest Rate		September 30, 2012		Effective Interest Rate
(dollars in millions)
Debt of CLOs, at fair value, due fiscal years 2016-2024	$	1,073.2	1.30	%	$	1,100.9	1.48	%
Debt of consolidated SIPs due fiscal years 2013-2018	86.4		4.00	%	110.2		4.20	%
Total Debt	$	1,159.6			$	1,211.1

The debt of CLOs had floating interest rates ranging from 0.52% to 9.81% at March 31, 2013, and from 0.67% to 9.98% at September 30, 2012.

The debt of consolidated SIPs had both fixed and floating interest rates ranging from 2.46% to 6.28% at March 31, 2013, and from 1.98% to 7.03% at September 30, 2012. The repayment of amounts outstanding under certain debt agreements is secured by the assets of the consolidated SIPs and, in some cases, a pledge of the right to call capital.

At March 31, 2013, contractual maturities for debt of consolidated VIEs and consolidated SIPs were as follows:

(in millions)
for the fiscal years ending September 30,
2013	$	40.3
2014	—
2015	—
2016	3.4
2017	15.2
Thereafter	1,100.7
Total	$	1,159.6

Fair Value Measurements

The tables below present the balances of assets and liabilities of consolidated VIEs and consolidated SIPs measured at fair value on a recurring basis.See Note 7 – Fair Value Measurements for information related to the three levels of fair value hierarchy.

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Cash and cash equivalents of consolidated VIEs	$	100.2	$	—	$	—	$	100.2
Receivables of consolidated VIEs	—		24.7		—		24.7
Investments of consolidated VIEs	—		1,012.9		—		1,012.9
Investments of consolidated SIPs
Debt securities	8.7		57.9		330.2		396.8
Equity securities	174.7		32.8		624.5		832.0
Total Assets Measured at Fair Value	$	283.6	$	1,128.3	$	954.7	$	2,366.6
Liabilities
Debt of consolidated VIEs	$	—	$	997.4	$	75.8	$	1,073.2
Other liabilities of consolidated VIEs	—		45.5		—		45.5
Total Liabilities Measured at Fair Value	$	—	$	1,042.9	$	75.8	$	1,118.7

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Cash and cash equivalents of consolidated VIEs	$	—	$	224.3	$	—	$	224.3
Receivables of consolidated VIEs	—		2.7		—		2.7
Investments of consolidated VIEs	—		984.1		—		984.1
Investments of consolidated SIPs
Debt securities	6.3		49.3		317.5		373.1
Equity securities	145.9		0.6		527.0		673.5
Total Assets Measured at Fair Value	$	152.2	$	1,261.0	$	844.5	$	2,257.7
Liabilities
Debt of consolidated VIEs	$	—	$	1,033.0	$	67.9	$	1,100.9
Other liabilities of consolidated VIEs	—		61.9		—		61.9
Total Liabilities Measured at Fair Value	$	—	$	1,094.9	$	67.9	$	1,162.8

The fair value of cash and cash equivalents of consolidated VIEs is based on quoted market prices. The fair values of the other assets and liabilities of consolidated VIEs are primarily obtained from independent third-party broker or dealer price quotes. The fair value of a portion of the debt of consolidated VIEs is determined using significant unobservable inputs in a market-based approach.

Investments of consolidated SIPs consist of trading securities and other investments that are not generally traded in active markets. The fair value of the trading securities is determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available. If events occur after the close of the primary market for any security, the quoted market prices may be adjusted for the observable price movements within country specific market proxies.

The investments that are not generally traded in active markets consist of debt and equity securities of entities in emerging markets and fund products. The fair values of the debt and equity securities are determined using significant unobservable inputs in either a market-based or income-based approach. The fair value of the fund products is determined using net asset value (“NAV”) as a practical expedient. These investments are classified as Level 2 if they are redeemable on a quarterly basis or Level 3 if they are periodically redeemable, subject to certain restrictions, or nonredeemable.

The investments in fund products for which fair value was estimated using NAV as a practical expedient consisted of the following:

(in millions)	Fair Value Level	Redemption Frequency	March 31, 2013		September 30, 2012
Hedge funds	2	Quarterly	$	31.8	$	—
Hedge funds	3	Biennially	0.8		—
Global fixed-income fund	3	Periodically with certain restrictions	205.4		172.7
Real estate and private equity funds	3	Nonredeemable	201.3		141.5
Total			$	439.3	$	314.2

The investments in real estate and private equity funds are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over a weighted-average period of approximately 5.4 years and 5.9 years at March 31, 2013 and September 30, 2012. The consolidated SIPs' unfunded commitments to these funds totaled approximately $148.6 million and $123.0 million at March 31, 2013 and September 30, 2012, of which the Company was contractually obligated to fund $3.3 million and $2.9 million based on its ownership percentage in the SIPs.

Transfers into Level 2 from Level 1 were nil and $47.0 million during the three and six months ended March 31, 2013, and transfers into Level 1 from Level 2 were $53.8 million during both periods. Transfers into Level 2 from Level 1 were $0.9 million during the three and six months ended March 31, 2012, and transfers into Level 1 from Level 2 were nil and $25.7 million during the same periods. Securities were transferred into Level 2 when they were valued using adjusted quoted market prices for observable after-market price movements within country-specific market proxies or when they were valued based on prices of comparable or similar securities because quoted market prices were not available as trading in the securities was temporarily halted. Securities were transferred into Level 1 when they were valued using unadjusted quoted market prices.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2013	Debt			Equity
Balance at January 1, 2013	$	326.2		$	537.6		$	863.8		$	(78.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(2.7		)	40.2			37.5			2.5
Purchases	30.1			66.5			96.6			—
Sales	(19.4		)	(18.4		)	(37.8		)	—
Effect of exchange rate changes	(4.0		)	(1.4		)	(5.4		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	(2.2	)	$	40.1		$	37.9		$	2.5

(in millions)	Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2013	Debt			Equity
Balance at October 1, 2012	$	317.5		$	527.0		$	844.5		$	(67.9	)
Realized and unrealized gains (losses) included in investment and other income, net	5.8			50.0			55.8			(7.9		)
Purchases	53.4			85.9			139.3			—
Sales	(46.0		)	(39.1		)	(85.1		)	—
Acquisition	—			0.8			0.8			—
Effect of exchange rate changes	(0.5		)	(0.1		)	(0.6		)	—
Balance at March 31, 2013	$	330.2		$	624.5		$	954.7		$	(75.8	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	6.7		$	51.4		$	58.1		$	(7.9	)

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the three months ended March 31, 2012				Debt			Equity
Balance at January 1, 2012	$	3.5		$	350.0		$	326.0		$	679.5		$	(85.3	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(25.3		)	0.2			(26.1		)	(3.7		)
Purchases	—			11.6			41.0			52.6			—
Sales	—			(16.1		)	(56.4		)	(72.5		)	—
Settlements	—			(0.1		)	(0.1		)	(0.2		)	23.5
Effect of exchange rate changes	—			(1.1		)	(0.4		)	(1.5		)	0.2
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(14.9	)	$	2.3		$	(13.6	)	$	(3.7	)

(in millions)	Investments of Consolidated VIEs			Investments of Consolidated SIPs						Total  Level 3 Assets			Debt of Consolidated VIEs
for the six months ended March 31, 2012				Debt			Equity
Balance at October 1, 2011	$	1.9		$	324.9		$	283.7		$	610.5		$	(83.9	)
Realized and unrealized gains (losses) included in investment and other income, net	(1.0		)	(17.7		)	(17.3		)	(36.0		)	(6.6		)
Purchases	—			31.6			101.8			133.4			—
Sales	—			(18.9		)	(57.6		)	(76.5		)	—
Settlements	—			(0.3		)	(0.1		)	(0.4		)	23.5
Transfers into Level 3	1.6			—			—			1.6			—
Effect of exchange rate changes	—			(0.6		)	(0.2		)	(0.8		)	1.7
Balance at March 31, 2012	$	2.5		$	319.0		$	310.3		$	631.8		$	(65.3	)
Change in unrealized losses included in net income relating to assets and liabilities held at March 31, 2012	$	(1.0	)	$	(6.9	)	$	(15.0	)	$	(22.9	)	$	(6.6	)

There were no transfers into or out of Level 3 during the three and six months ended March 31, 2013 and the three months ended March 31, 2012.

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements of assets were as follows:

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	330.2	Discounted cash flow	Discount rate	5.7%–25.6% (12.5%)
				Risk premium	0.0%–19.3% (2.5%)
Equity securities	145.8		Market comparable companies	EBITDA multiple	5.0–10.2 (8.6)
				Discount for lack of marketability	20.0%–30.0% (24.0%)
	52.1		Discounted cash flow	Discount rate	12.0%–18.0% (16.1%)
				Discount for lack of marketability	0.0%–50.0% (21.4%)
	19.1		Market pricing	Price to book value ratio	1.7

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Debt securities	$	317.5	Discounted cash flow	Discount rate	4.9%–25.6% (11.8%)
				Risk premium	0.0%–7.3% (2.1%)
Equity securities	144.4		Market comparable companies	EBITDA multiple	5.5–8.6 (7.3)
				Discount for lack of marketability	15.0%–30.0% (22.1%)
	47.4		Discounted cash flow	Discount rate	12.0%–15.0% (14.8%)
				Discount for lack of marketability	0.0%–50.0% (27.8%)
	21.0		Market pricing	Price to book value ratio	1.7

Level 3 debt securities held by consolidated SIPs consisted of mezzanine loans, convertible debentures and corporate loans and notes, and equity securities consisted primarily of common and preferred shares at March 31, 2013 and September 30, 2012.

The fair values of certain Level 3 assets and liabilities that were determined based on third-party pricing information or NAV are excluded from the above two tables. At March 31, 2013 and September 30, 2012, the exclusions consisted of $75.8 million and $67.9 million of debt of consolidated VIEs that was valued using third-party broker or dealer price quotes and $407.5 million and $314.2 million of investments in various funds held by consolidated SIPs for which fair value was estimated using NAV as a practical expedient.

Following are descriptions of the sensitivity of the Level 3 recurring fair value measurements to changes in the significant unobservable inputs presented in the above tables.

For securities utilizing the discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk. Generally, a change in the discount rate is accompanied by a directionally similar change in the risk premium and discount for lack of marketability.

For securities utilizing the market comparable companies valuation technique, a significant increase (decrease) in the EBITDA multiple in isolation would result in a significantly higher (lower) fair value measurement. A significant increase (decrease) in the discount for lack of marketability in isolation would result in a significantly lower (higher) fair value measurement. The discount for lack of marketability used to determine fair value may include other factors such as liquidity or credit risk.

For securities utilizing a market pricing valuation technique, a significant increase (decrease) in the price to book value ratio would result in a significantly higher (lower) fair value measurement.

Financial instruments of consolidated VIEs and consolidated SIPs that were not measured at fair value were as follows:

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents of consolidated SIPs	1	$	44.3	$	44.3	$	42.8	$	42.8
Financial Liabilities
Debt of consolidated SIPs	3	86.4		88.2		110.2		113.0

Non-consolidated VIEs

VIEs for which the Company is not the primary beneficiary consist of certain sponsored and other investment products from which the Company earns investment management and related services fees and/or in which it has an equity ownership interest.

The carrying values of the investment management and related service fees receivable from and the equity ownership interests in these VIEs included in the Company’s condensed consolidated balance sheets are set forth below. These amounts represent the Company’s maximum exposure to loss from these investment products.

(in millions)	March 31, 2013		September 30, 2012
Receivables	$	53.8	$	43.8
Investments	203.6		199.7
Total	$	257.4	$	243.5

The Company’s total AUM of non-consolidated VIEs was $36.3 billion at March 31, 2013 and $35.3 billion at September 30, 2012.

While the Company has no contractual obligation to do so, it routinely makes cash investments in the course of launching SIPs. The Company also may voluntarily elect to provide its SIPs with additional direct or indirect financial support based on its business objectives. The Company did not provide financial or other support to its SIPs during fiscal year 2012 or the six months ended March 31, 2013.

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of balances of assets and liabilities of consolidated VIEs and consolidated SIPs measured at fair value (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Variable Interest Entity [Line Items]
Cash and cash equivalents	$ 5,411.3	$ 5,784.3
Investments	2,555.7	2,583.8
Total Assets Measured at Fair Value	1,943.1	2,012.7
Debt of consolidated variable interest entities	1,073.2	1,100.9
Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	100.2	224.3
Investments	1,012.9	984.1
Debt Securities	1,012.9	984.1
Equity Securities	0	0
Total [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	100.2	224.3
Receivables of consolidated VIEs	24.7	2.7
Investments	1,012.9	984.1
Debt Securities	396.8	373.1
Equity Securities	832.0	673.5
Debt of consolidated variable interest entities	1,073.2	1,100.9
Other liabilities of consolidated VIEs	45.5	61.9
Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	44.3	42.8
Investments	1,228.8	1,046.6
Debt Securities	330.3	317.5
Equity Securities	664.4	534.7
Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	144.5	267.1
Investments	2,241.7	2,030.7
Debt Securities	1,343.2	1,301.6
Equity Securities	664.4	534.7
Total Assets Measured at Fair Value	2,366.6	2,257.7
Debt of consolidated variable interest entities	1,073.2	1,100.9
Liabilities, Fair Value Disclosure	1,118.7	1,162.8
Level 1 [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	1,661.7	1,659.8
Level 1 [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	100.2	0
Receivables of consolidated VIEs	0	0
Investments	0	0
Debt of consolidated variable interest entities	0	0
Other liabilities of consolidated VIEs	0	0
Level 1 [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Debt Securities	8.7	6.3
Equity Securities	174.7	145.9
Level 1 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	283.6	152.2
Liabilities, Fair Value Disclosure	0	0
Level 2 [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	268.0	338.1
Level 2 [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	0	224.3
Receivables of consolidated VIEs	24.7	2.7
Investments	1,012.9	984.1
Debt of consolidated variable interest entities	997.4	1,033.0
Other liabilities of consolidated VIEs	45.5	61.9
Level 2 [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Debt Securities	57.9	49.3
Equity Securities	32.8	0.6
Level 2 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	1,128.3	1,261.0
Liabilities, Fair Value Disclosure	1,042.9	1,094.9
Level 3 [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	13.4	14.8
Level 3 [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	0	0
Receivables of consolidated VIEs	0	0
Investments	0	0
Debt of consolidated variable interest entities	75.8	67.9
Other liabilities of consolidated VIEs	0	0
Level 3 [Member] | Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Debt Securities	330.2	317.5
Equity Securities	624.5	527.0
Level 3 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Total Assets Measured at Fair Value	954.7	844.5
Liabilities, Fair Value Disclosure	$ 75.8	$ 67.9

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of changes in Level 3 assets and liabilities of consolidated VIEs and consolidated SIPs (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Variable Interest Entity [Line Items]
Balance - assets	$ 13.0	$ 11.2	$ 14.8	$ 10.9
Balance - liabilities	(90.3)		0
Total realized and unrealized gains (losses) included in investments and other income, net - assets	0.5	0.9	0.9	1.8
Total realized and unrealized gains (losses) included in investments and other income, net - liabilities	0		0
Purchases - assets	0.1	0.4	0.7	0.9
Purchases - liabilities	0		0
Sales - assets			(1.6)
Sales - liabilities			0
Settlements - assets	(0.2)	(0.9)	(1.4)	(2.0)
Settlements - liabilities	0		3.0
Balance - assets	13.4	11.6	13.4	11.6
Balance - liabilities	(90.0)		(90.0)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period		0.3		0.8
Debt Securities [Member]
Variable Interest Entity [Line Items]
Balance - assets	326.2	350.0	317.5	324.9
Total realized and unrealized gains (losses) included in investments and other income, net - assets	(2.7)	(25.3)	5.8	(17.7)
Purchases - assets	30.1	11.6	53.4	31.6
Sales - assets	(19.4)	(16.1)	(46.0)	(18.9)
Acquisition - assets			0
Settlements - assets		(0.1)		(0.3)
Transfers Into Level 3 - Assets				0
Effect of exchange rate changes	(4.0)	(1.1)	(0.5)	(0.6)
Balance - assets	330.2	319.0	330.2	319.0
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	(2.2)	(14.9)	6.7	(6.9)
Equity Securities [Member]
Variable Interest Entity [Line Items]
Balance - assets	537.6	326.0	527.0	283.7
Total realized and unrealized gains (losses) included in investments and other income, net - assets	40.2	0.2	50.0	(17.3)
Purchases - assets	66.5	41.0	85.9	101.8
Sales - assets	(18.4)	(56.4)	(39.1)	(57.6)
Acquisition - assets			0.8
Settlements - assets		(0.1)		(0.1)
Transfers Into Level 3 - Assets				0
Effect of exchange rate changes	(1.4)	(0.4)	(0.1)	(0.2)
Balance - assets	624.5	310.3	624.5	310.3
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	40.1	2.3	51.4	(15.0)
Long Term Debt of Consolidated VIEs [Member]
Variable Interest Entity [Line Items]
Balance - liabilities	(78.3)	(85.3)	(67.9)	(83.9)
Total realized and unrealized gains (losses) included in investments and other income, net - liabilities	2.5	(3.7)	(7.9)	(6.6)
Purchases - liabilities	0	0	0	0
Sales - liabilities	0	0	0	0
Acquisition - liabilities			0
Settlements - liabilities		23.5		23.5
Transfers Into Level 3 - Liabilities				0
Effect of exchange rate changes	0	0.2	0	1.7
Balance - liabilities	(75.8)	(65.3)	(75.8)	(65.3)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	2.5	(3.7)	(7.9)	(6.6)
Investments of Consolidated VIEs [Member]
Variable Interest Entity [Line Items]
Balance - assets		3.5		1.9
Total realized and unrealized gains (losses) included in investments and other income, net - assets		(1.0)		(1.0)
Purchases - assets		0		0
Sales - assets		0		0
Settlements - assets		0		0
Transfers Into Level 3 - Assets				1.6
Effect of exchange rate changes		0		0
Balance - assets		2.5		2.5
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period		(1.0)		(1.0)
Level 3 [Member]
Variable Interest Entity [Line Items]
Balance - assets	863.8	679.5	844.5	610.5
Total realized and unrealized gains (losses) included in investments and other income, net - assets	37.5	(26.1)	55.8	(36.0)
Purchases - assets	96.6	52.6	139.3	133.4
Sales - assets	(37.8)	(72.5)	(85.1)	(76.5)
Acquisition - assets			0.8
Settlements - assets		(0.2)		(0.4)
Transfers Into Level 3 - Assets				1.6
Effect of exchange rate changes	(5.4)	(1.5)	(0.6)	(0.8)
Balance - assets	954.7	631.8	954.7	631.8
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the period	$ 37.9	$ (13.6)	$ 58.1	$ (22.9)

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of contractual maturities for debt of consolidated VIEs and consolidated SIPs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Debt Maturities In 2013 [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Within One Year Of Balance Sheet Date	$ 18.5
Debt Maturities In 2013 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Within One Year Of Balance Sheet Date	40.3
Debt Maturities In 2014 [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	0
Debt Maturities In 2014 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	0
Debt Maturities In 2015 [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	260.4
Debt Maturities In 2015 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	0
Debt Maturities In 2016 [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	8.0
Debt Maturities In 2016 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	3.4
Debt Maturities In 2017 [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	298.5
Debt Maturities In 2017 [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	15.2
Thereafter [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	678.0
Thereafter [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Debt Maturities Summary Due More Than One Year Of Balance Sheet Date	1,100.7
Total Payment [Member]
Variable Interest Entity [Line Items]
Total Debt Maturities Summary	1,263.4
Total Payment [Member] | Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Total Debt Maturities Summary	$ 1,159.6

XML

Acquisition - Narrative (Details) (USD $)	6 Months Ended
	Mar. 31, 2013	Nov. 01, 2012
Business Acquisition [Line Items]
Ownership interest acquired		69.00%
Purchase consideration		$ 182,900,000
Contingent consideration liability		90,600,000
Definite-lived intangible assets acquired amortization period (years)	6 years 0 months 0 days
Assets under management at acquisition date		$ 8,700,000,000

XML

Goodwill and Other Intangible Assets - Changes in carrying value of goodwill (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Goodwill [Roll Forward]
Balance at beginning of period	$ 1,540.8	$ 1,536.2
Acquisition	110.1	0
Foreign exchange and other	(6.7)	1.6
Balance at End of Period	$ 1,644.2	$ 1,537.8

XML

Fair Value Measurements (Policies)

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

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 Company's assessment of the hierarchy level of the assets and 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.
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 markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data. Level 2 quoted prices are generally obtained from two independent third-party brokers or dealers, including prices derived from model-based valuation techniques for which the significant assumptions are observable in the market 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.

The fair values of substantially all trading investments and of available-for-sale SIPs and other equity securities are determined based on their published net asset values. The fair values of certain trading investments and of available-for-sale debt securities are determined using quoted market prices, if available, or independent third-party broker or dealer price quotes, which are evaluated for reasonableness. The fair value of life settlement contracts is determined using a discounted cash flow valuation technique.

The contingent consideration liability relates to the Company's commitment to acquire the remaining interests in K2. The fair value is determined using an income-based method which considers the net present value of anticipated future cash flows.

XML

Investments (Tables)

6 Months Ended

Mar. 31, 2013

Investments [Abstract]

Summary of Investments

Investments consisted of the following:

(in millions)	March 31, 2013		September 30, 2012
Investment securities, trading	$	1,214.0	$	1,130.6
Investment securities, available-for-sale
SIPs	520.5		587.2
Securities of U.S. states and political subdivisions	23.4		26.8
Securities of the U.S. Treasury and federal agencies	25.3		2.4
Corporate debt securities1	20.0		70.3
Mortgage-backed securities – agency residential2	117.9		169.3
Other equity securities	8.9		14.0
Total investment securities, available-for-sale	716.0		870.0
Investments in equity method investees	547.2		489.0
Other investments	78.5		94.2
Total	$	2,555.7	$	2,583.8

________________

¹  Corporate debt securities are insured by non-U.S. government agencies or the Federal Deposit Insurance Corporation.

²  Consist of U.S. government-sponsored enterprise obligations.

Summary of the gross unrealized gains and losses relating to investment securities, available-for-sale

A summary of the gross unrealized gains and losses relating to investment securities, available-for-sale is as follows:

(in millions)			Gross Unrealized
as of March 31, 2013	Cost Basis		Gains		Losses			Fair Value
SIPs	$	452.2	$	70.3	$	(2.0	)	$	520.5
Securities of U.S. states and political subdivisions	22.4		1.0		—			23.4
Securities of the U.S. Treasury and federal agencies	25.3		—		—			25.3
Corporate debt securities	20.0		—		—			20.0
Mortgage-backed securities – agency residential	115.3		2.6		—			117.9
Other equity securities	8.6		0.3		—			8.9
Total	$	643.8	$	74.2	$	(2.0	)	$	716.0

(in millions)			Gross Unrealized
as of September 30, 2012	Cost Basis		Gains		Losses			Fair Value
SIPs	$	516.8	$	72.1	$	(1.7	)	$	587.2
Securities of U.S. states and political subdivisions	25.6		1.2		—			26.8
Securities of the U.S. Treasury and federal agencies	2.4		—		—			2.4
Corporate debt securities	70.0		0.3		—			70.3
Mortgage-backed securities – agency residential	164.8		4.5		—			169.3
Other equity securities	13.5		0.6		(0.1		)	14.0
Total	$	793.1	$	78.7	$	(1.8	)	$	870.0

Summary of gross unrealized losses and fair values of investment securities in a continuous unrealized loss position

The following tables show the gross unrealized losses and fair values of investment securities, available-for-sale with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of March 31, 2013
SIPs	$	21.0	$	(1.8	)	$	1.6	$	(0.2	)	$	22.6	$	(2.0	)

	Less Than 12 Months					12 Months or Greater					Total
(in millions)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
as of September 30, 2012
SIPs	$	30.0	$	(0.7	)	$	21.7	$	(1.0	)	$	51.7	$	(1.7	)
Other equity securities	4.4		(0.1		)	—		—			4.4		(0.1		)
Total	$	34.4	$	(0.8	)	$	21.7	$	(1.0	)	$	56.1	$	(1.8	)

Schedule of contractual maturities of available-for-sale debt securities

At March 31, 2013, contractual maturities of available-for-sale debt securities were as follows:

(in millions)	Cost Basis		Fair Value
Due in one year or less	$	45.8	$	45.8
Due after one year through five years	20.2		21.1
Due after five years through ten years	0.1		0.1
Due after ten years	1.6		1.7
Total	$	67.7	$	68.7

Mortgage-backed securities are not included in the table above as their actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

XML

Fair Value Measurements - Schedule of financial instruments not measured at fair value (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013		Sep. 30, 2012
Cash and cash equivalents	$ 5,411.3		$ 5,784.3
Loans receivable, net	238.3		254.4
Deposits	674.2		671.7
FHLB advances	66.0		69.0
Senior Notes	1,197.4		1,497.1
Carrying Value [Member]
Cash and cash equivalents	5,411.3		5,784.3
Other Investments	64.9	[1]	80.2	[1]
Loans receivable, net	238.3		254.4
Deposits	674.2		671.7
FHLB advances	66.0		69.0
Senior Notes	1,197.4		1,497.1
Estimated Fair Value [Member]
Cash and cash equivalents	5,411.3		5,784.3
Other Investments	71.4	[1]	85.1	[1]
Loans receivable, net	241.1		258.7
Deposits	675.0		672.4
FHLB advances	69.9		74.5
Senior Notes	$ 1,274.9		$ 1,571.2
Deposits [Member]
Fair Value Level	2
Federal Home Loan Bank Advances [Member]
Fair Value Level	2
Senior Notes [Member]
Fair Value Level	2
Cash and Cash Equivalents [Member]
Fair Value Level	1
Other Investments [Member] | Cost-method Investments [Member]
Fair Value Level	3
Other Investments [Member] | Time Deposits [Member]
Fair Value Level	2
Loans Receivable [Member]
Fair Value Level	2

[1] Primarily consist of Level 3 assets.

XML

Investments - Summary of Investments (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013		Sep. 30, 2012
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, trading	$ 1,214.0		$ 1,130.6
Investment securities, available-for-sale	716.0		870.0
Investments in equity method investees	547.2		489.0
Other Investments	78.5		94.2
Total Investments	2,555.7		2,583.8
Sponsored Investment Products [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	520.5		587.2
US States and Political Subdivisions Debt Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	23.4		26.8
Securities of the U.S. Treasury and Federal Agencies [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	25.3		2.4
Corporate Debt Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	20.0	[1]	70.3	[1]
Collateralized Mortgage Backed Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	117.9	[2]	169.3	[2]
Other Equity Securities [Member]
Schedule of Trading Securities and Other Trading Assets [Line Items]
Investment securities, available-for-sale	$ 8.9		$ 14.0

[1] Corporate debt securities are insured by non-U.S. government agencies or the Federal Deposit Insurance Corporation.

[2] Consist of U.S. government-sponsored enterprise obligations.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Investments, Fair Value Disclosure	$ 1,943.1	$ 2,012.7
Preferred Stock, Par or Stated Value Per Share	$ 1.00	$ 1.00
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par or Stated Value Per Share	$ 0.10	$ 0.10
Common Stock, Shares Authorized	1,000,000,000	1,000,000,000
Common Stock, Shares, Issued	212,595,884	212,208,957
Common Stock, Shares, Outstanding	212,595,884	212,208,957

XML

Stockholders' Equity and Redeemable Noncontrolling Interests

6 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity and Redeemable Noncontrolling Interests

Stockholders' Equity and Redeemable Noncontrolling Interests

The changes in total stockholders’ equity and redeemable noncontrolling interests were as follows:

(in millions)	Franklin Resources,  Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests		Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2013
Balance at October 1, 2012	$	9,201.3		$	559.2	$	9,760.5		$	26.7
Net income	1,088.9			5.1		1,094.0			4.1
Net loss reclassified to appropriated retained earnings	(28.2		)	28.2		—
Other comprehensive loss	(53.3		)			(53.3		)
Cash dividends on common stock	(763.6		)			(763.6		)
Repurchase of common stock	(121.3		)			(121.3		)
Noncontrolling interests
Net subscriptions				55.6		55.6			32.0
Net consolidation (deconsolidation) of certain sponsored investment products				4.4		4.4			(15.1		)
Acquisition				5.4		5.4			32.8
Other1	96.2					96.2
Balance at March 31, 2013	$	9,420.0		$	657.9	$	10,077.9		$	80.5

________________

¹  Primarily relates to stock-based compensation plans.

(in millions)	Franklin Resources, Inc. Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Stockholders’ Equity			Redeemable Noncontrolling Interests
for the six months ended March 31, 2012
Balance at October 1, 2011	$	8,524.7		$	579.2		$	9,103.9		$	18.6
Net income (loss)	984.0			(5.8		)	978.2			3.3
Net income reclassified to appropriated retained earnings	15.5			(15.5		)	—
Other comprehensive income	35.9						35.9
Cash dividends on common stock	(551.6		)				(551.6		)
Repurchase of common stock	(416.8		)				(416.8		)
Noncontrolling interests
Net subscriptions				105.6			105.6			31.9
Net deconsolidation of certain sponsored investment products				—			—			(30.9		)
Other1	98.1						98.1
Balance at March 31, 2012	$	8,689.8		$	663.5		$	9,353.3		$	22.9

________________

¹  Primarily relates to stock-based compensation plans.

During the three and six months ended March 31, 2013, the Company repurchased 163 thousand and 926 thousand shares of its common stock at a cost of $23.3 million and $121.3 million under its stock repurchase program. At March 31, 2013, approximately 6.3 million shares of common stock remained available for repurchase under the stock repurchase program, which is not subject to an expiration date. During the three and six months ended March 31, 2012 , the Company repurchased approximately 1.0 million and 4.0 million shares of its common stock at a cost of $125.9 million and $416.8 million.

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of balances of consolidated VIEs and consolidated SIPs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Variable Interest Entity [Line Items]
Cash and cash equivalents	$ 5,411.3	$ 5,784.3
Receivables	994.6	850.2
Investments	2,555.7	2,583.8
Other Assets	169.0	161.5
Total Assets	14,810.2	14,751.5
Accounts payable and accrued expenses	246.6	241.6
Debt of consolidated variable interest entities	1,073.2	1,100.9
Debt	1,263.4	1,566.1
Debt of consolidated sponsored investment products	86.4	110.2
Other Liabilities	245.6	151.2
Total liabilities	4,651.8	4,964.3
Redeemable Noncontrolling Interests	80.5	26.7
Nonredeemable noncontrolling interests	657.9	559.2
Total stockholders' equity	10,077.9	9,760.5
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	14,810.2	14,751.5
Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	100.2	224.3
Receivables	24.7	2.7
Investments	1,012.9	984.1
Other Assets	0	0
Total Assets	1,137.8	1,211.1
Accounts payable and accrued expenses	0	0
Other Liabilities	45.5	61.9
Total liabilities	1,118.7	1,162.8
Redeemable Noncontrolling Interests	0	0
Nonredeemable noncontrolling interests	0	0
Other equity	19.1	48.3
Total stockholders' equity	19.1	48.3
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	1,137.8	1,211.1
Consolidated sponsored investment products [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	44.3	42.8
Receivables	38.7	23.7
Investments	1,228.8	1,046.6
Other Assets	0.7	0.7
Total Assets	1,312.5	1,113.8
Accounts payable and accrued expenses	39.0	21.8
Other Liabilities	8.5	8.5
Total liabilities	133.9	140.5
Redeemable Noncontrolling Interests	80.5	26.7
Nonredeemable noncontrolling interests	641.3	556.8
Other equity	456.8	389.8
Total stockholders' equity	1,098.1	946.6
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	1,312.5	1,113.8
Total VIEs and SIPs [Member]
Variable Interest Entity [Line Items]
Cash and cash equivalents	144.5	267.1
Receivables	63.4	26.4
Investments	2,241.7	2,030.7
Other Assets	0.7	0.7
Total Assets	2,450.3	2,324.9
Accounts payable and accrued expenses	39.0	21.8
Debt of consolidated variable interest entities	1,073.2	1,100.9
Debt of consolidated sponsored investment products	86.4	110.2
Other Liabilities	54.0	70.4
Total liabilities	1,252.6	1,303.3
Redeemable Noncontrolling Interests	80.5	26.7
Nonredeemable noncontrolling interests	641.3	556.8
Other equity	475.9	438.1
Total stockholders' equity	1,117.2	994.9
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity	2,450.3	2,324.9
Debt of Consolidated Variable Interest Entities [Member] | Variable Interest Entity [Member]
Variable Interest Entity [Line Items]
Debt	$ 0	$ 0

XML

Variable Interest Entities and Consolidated Sponsored Investment Products - Schedule of Maximum Exposure to Loss on non-consolidated VIEs (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Sep. 30, 2012
Non-consolidated VIEs carrying value	$ 257.4	$ 243.5
Receivable [Member]
Non-consolidated VIEs carrying value	53.8	43.8
Investments [Member]
Non-consolidated VIEs carrying value	$ 203.6	$ 199.7

XML

Fair Value Measurements (Tables)

6 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

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

(in millions)	Level 1		Level 2		Level 3		Total
as of March 31, 2013
Assets
Investment securities, trading	$	1,132.3	$	81.4	$	0.3	$	1,214.0
Investment securities, available-for-sale
SIPs	520.5		—		—		520.5
Securities of U.S. states and political subdivisions	—		23.4		—		23.4
Securities of the U.S. Treasury and federal agencies	—		25.3		—		25.3
Corporate debt securities	—		20.0		—		20.0
Mortgage-backed securities – agency residential	—		117.9		—		117.9
Other equity securities	8.9		—		—		8.9
Life settlement contracts	—		—		13.1		13.1
Total Assets Measured at Fair Value	$	1,661.7	$	268.0	$	13.4	$	1,943.1
Liabilities
Contingent consideration liability	$	—	$	—	$	90.0	$	90.0

(in millions)	Level 1		Level 2		Level 3		Total
as of September 30, 2012
Assets
Investment securities, trading	$	1,058.6	$	69.3	$	2.7	$	1,130.6
Investment securities, available-for-sale
SIPs	587.2		—		—		587.2
Securities of U.S. states and political subdivisions	—		26.8		—		26.8
Securities of the U.S. Treasury and federal agencies	—		2.4		—		2.4
Corporate debt securities	—		70.3		—		70.3
Mortgage-backed securities – agency residential	—		169.3		—		169.3
Other equity securities	14.0		—		—		14.0
Life settlement contracts	—		—		12.1		12.1
Total Assets Measured at Fair Value	$	1,659.8	$	338.1	$	14.8	$	2,012.7

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

(in millions)	Investments			Contingent Consideration Liability
for the three months ended March 31, 2013
Balance at January 1, 2013	$	13.0		$	(90.3	)
Total realized and unrealized gains
Included in investment and other income, net	0.5			—
Included in general, administrative and other expense	—			0.2
Other	—			0.1
Purchases	0.1			—
Settlements	(0.2		)	—
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains included in net income relating to assets and liabilities held at March 31, 2013	$	0.3		$	0.3

(in millions)	Investments			Contingent Consideration Liability
for the six months ended March 31, 2013
Balance at October 1, 2012	$	14.8		$	—
Acquisition	—			(90.6		)
Total realized and unrealized gains (losses)
Included in investment and other income, net	0.9			—
Included in general, administrative and other expense	—			(2.2		)
Other	—			(0.2		)
Purchases	0.7			—
Sales	(1.6		)	—
Settlements	(1.4		)	3.0
Balance at March 31, 2013	$	13.4		$	(90.0	)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at March 31, 2013	$	0.7		$	(2.4	)

(in millions)	Investments
for the three months ended March 31, 2012
Balance at January 1, 2012	$	11.2
Realized and unrealized gains included in investment and other income, net	0.9
Purchases	0.4
Settlements	(0.9		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.3

(in millions)	Investments
for the six months ended March 31, 2012
Balance at October 1, 2011	$	10.9
Realized and unrealized gains included in investment and other income, net	1.8
Purchases	0.9
Settlements	(2.0		)
Balance at March 31, 2012	$	11.6
Change in unrealized gains included in net income relating to assets held at March 31, 2012	$	0.8

Schedule of valuation techniques and significant unobservable inputs used in level 3 fair value measurements

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

(in millions)
as of March 31, 2013	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	13.1	Discounted cash flow	Life expectancy	21–165 months (79)
				Internal rate of return	1.5%–21.7% (11.6%)
Contingent consideration liability	90.0		Discounted cash flow	AUM growth rate	6.0%–19.7% (12.0%)
				EBITDA margin	31.3% - 38.9% (36.2%)
				Discount rate	14.0%

(in millions)
as of September 30, 2012	Fair Value		Valuation Technique	Significant Unobservable Inputs	Range (Weighted Average)
Life settlement contracts	$	12.1	Discounted cash flow	Life expectancy	22–171 months (82)
				Internal rate of return	1.5%–22.3% (11.7%)

Schedule of financial instruments not measured at fair value

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

(in millions)		March 31, 2013				September 30, 2012
	Fair Value Level	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial Assets
Cash and cash equivalents	1	$	5,411.3	$	5,411.3	$	5,784.3	$	5,784.3
Other investments1	2 or 3	64.9		71.4		80.2		85.1
Loans receivable, net	2	238.3		241.1		254.4		258.7
Financial Liabilities
Deposits	2	674.2		675.0		671.7		672.4
Debt
FHLB advances	2	66.0		69.9		69.0		74.5
Senior notes	2	1,197.4		1,274.9		1,497.1		1,571.2

_________________

¹    Primarily consist of Level 3 assets.

XML

Other Income (Expenses) - Schedule of Other Nonoperating Income and Expense by Component (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Other Income and Expenses [Abstract]
Dividend income	$ 2.7	$ 5.7	$ 5.5	$ 12.5
Interest income	2.4	2.0	5.5	4.1
Gains on trading investment securities, net	8.3	10.3	13.6	20.8
Realized gains on sale of investment securities, available-for-sale	6.6	8.3	27.8	22.7
Realized losses on sale of investment securities, available-for-sale	0	(0.2)	0	(1.7)
Income from investments in equity method investees	20.4	39.1	42.2	61.6
Other-than-temporary impairment of investment securities	(0.7)	0	(1.0)	0
Gains on investments of consolidated SIPs, net	41.5	27.4	62.4	11.7
Gains (losses) on assets and liabilities of consolidated VIEs, net	(7.7)	(4.4)	(26.8)	18.3
Foreign currency exchange gains (losses), net	18.6	(9.8)	7.3	(4.6)
Other, net	4.4	4.0	5.5	8.2
Total	96.5	82.4	142.0	153.6
Interest expense	(10.9)	(9.6)	(25.4)	(18.2)
Other income, net	$ 85.6	$ 72.8	$ 116.6	$ 135.4

XML

Earnings per Share - Narrative (Details) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Mar. 31, 2012	Mar. 31, 2012
Earnings Per Share [Abstract]
Shares of non participating nonvested stock	0.2	0.5

XML

Banking Regulatory Ratios

6 Months Ended

Mar. 31, 2013

Banking and Thrift [Abstract]

Banking Regulatory Ratios

Banking Regulatory Ratios

Franklin is a bank holding company and a financial holding company subject to various U.S. regulatory capital requirements. Based on the Company's calculations, it exceeded the applicable capital adequacy requirements as listed below.

(dollar amounts in millions)	March 31, 2013			September 30, 2012			Capital Adequacy Minimum
Tier 1 capital	$	6,802.8		$	6,788.8		N/A
Total risk-based capital	6,876.3			6,799.6			N/A
Tier 1 leverage ratio	57		%	59		%	5	%
Tier 1 risk-based capital ratio	55		%	54		%	4	%
Total risk-based capital ratio	56		%	54		%	8	%