ben-20240630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


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

For the quarterly period ended June 30, 2024


☐			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)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	BEN	New York Stock Exchange

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. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of the registrant’s common stock outstanding at July 19, 2024: 522,998,430.

Table of Contents

INDEX TO FORM 10-Q


			Page
PART I		Financial Information
	Item 1.	Financial Statements (unaudited)
		Consolidated Statements of Income	3
		Consolidated Statements of Comprehensive Income	4
		Consolidated Balance Sheets	5
		Consolidated Statements of Stockholders’ Equity	6
		Consolidated Statements of Cash Flows	8
		Notes to Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
	Item 4.	Controls and Procedures	42

PART II		Other Information
	Item 1.	Legal Proceedings	43
	Item 1A.	Risk Factors	43
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

	Item 6.	Exhibits	43

Exhibit Index			44
Signatures			45

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited


	Three Months Ended June 30,				Nine Months Ended June 30,
(in millions, except per share data)	2024		2023		2024		2023
Operating Revenues
Investment management fees	$	1,689.9	$	1,613.4	$	5,056.0	$	4,818.5
Sales and distribution fees	358.3		304.0		1,013.0		897.3
Shareholder servicing fees	61.8		38.8		162.3		115.5
Other	12.9		12.8		35.5		32.0
Total operating revenues	2,122.9		1,969.0		6,266.8		5,863.3
Operating Expenses
Compensation and benefits	893.8		841.2		2,890.3		2,667.7
Sales, distribution and marketing	481.1		406.8		1,366.2		1,202.0
Information systems and technology	156.6		127.3		442.7		376.7
Occupancy	104.8		56.9		247.7		171.1
Amortization of intangible assets	84.0		85.4		254.4		254.6
General, administrative and other	180.1		136.5		507.2		427.2
Total operating expenses	1,900.4		1,654.1		5,708.5		5,099.3
Operating Income	222.5		314.9		558.3		764.0
Other Income (Expenses)
Investment and other income, net	74.5		49.8		300.2		200.3
Interest expense	(25.7)		(34.9)		(72.2)		(99.3)
Investment and other income of consolidated investment products, net	37.6		1.7		103.7		75.3
Expenses of consolidated investment products	(8.8)		(0.8)		(20.6)		(15.7)
Other income, net	77.6		15.8		311.1		160.6
Income before taxes	300.1		330.7		869.4		924.6
Taxes on income	68.1		84.1		205.8		237.3
Net income	232.0		246.6		663.6		687.3
Less: net income (loss) attributable to
Redeemable noncontrolling interests	43.0		26.8		95.3		108.5
Nonredeemable noncontrolling interests	15.0		(7.7)		18.8		(8.5)
Net Income Attributable to Franklin Resources, Inc.	$	174.0	$	227.5	$	549.5	$	587.3

Earnings per Share
Basic	$	0.32	$	0.44	$	1.04	$	1.14
Diluted	0.32		0.44		1.03		1.14

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited


(in millions)	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Net Income	$	232.0	$	246.6	$	663.6	$	687.3
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax	(8.5)		16.5		21.1		159.7
Net unrealized gains (losses) on defined benefit plans, net of tax	(0.1)		(0.6)		0.3		(1.4)
Net unrealized gains (losses) on investments, net of tax	(0.1)		—		—		0.2
Total other comprehensive income (loss)	(8.7)		15.9		21.4		158.5
Total comprehensive income	223.3		262.5		685.0		845.8
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests	43.0		26.8		95.3		108.5
Nonredeemable noncontrolling interests	15.0		(7.7)		18.8		(8.5)
Comprehensive Income Attributable to Franklin Resources, Inc.	$	165.3	$	243.4	$	570.9	$	745.8

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

Unaudited


(in millions, except share and per share data)	June 30, 2024		September 30, 2023
Assets
Cash and cash equivalents	$	3,378.5	$	3,686.4
Receivables	1,570.5		1,348.4
Investments (including $720.4 and $872.8 at fair value at June 30, 2024 and September 30, 2023)	2,224.5		2,222.0
Assets of consolidated investment products
Cash and cash equivalents	733.2		716.0
Investments, at fair value	11,631.6		9,637.2
Property and equipment, net	904.8		800.1
Goodwill	6,198.5		6,003.8
Intangible assets, net	5,267.8		4,902.2
Operating lease right-of-use assets	844.3		406.3
Other	501.2		398.8
Total Assets	$	33,254.9	$	30,121.2

Liabilities
Compensation and benefits	$	1,691.7	$	1,665.1
Accounts payable and accrued expenses	532.2		530.0

Income taxes	382.6		513.5
Debt	3,035.0		3,052.8
Liabilities of consolidated investment products
Accounts payable and accrued expenses	716.6		349.7
Debt	9,637.7		8,231.8
Deferred tax liabilities	421.1		450.4
Operating lease liabilities	975.6		467.8
Other	961.0		1,286.2
Total liabilities	18,353.5		16,547.3
Commitments and Contingencies (Note 11)
Redeemable Noncontrolling Interests	1,266.2		1,026.1
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; 522,059,992 and 495,937,891 shares issued and outstanding at June 30, 2024 and September 30, 2023	52.2		49.6
Capital in excess of par	984.6		—
Retained earnings	12,321.3		12,376.6
Accumulated other comprehensive loss	(487.9)		(509.3)
Total Franklin Resources, Inc. stockholders’ equity	12,870.2		11,916.9
Nonredeemable noncontrolling interests	765.0		630.9
Total stockholders’ equity	13,635.2		12,547.8
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	33,254.9	$	30,121.2

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Unaudited


	Franklin Resources, Inc.											Non- redeemable Non- controlling Interests		Total Stockholders’ Equity
	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accum- ulated Other Compre- hensive Loss		Stockholders’ Equity
(in millions)
for the nine months ended June 30, 2024	Shares	Amount
Balance at October 1, 2023	495.9	$	49.6	$	—	$	12,376.6	$	(509.3)	$	11,916.9	$	630.9	$	12,547.8
Net income (loss)						251.3				251.3		(4.5)		246.8
Other comprehensive income								59.0		59.0				59.0
Dividends declared on common stock ($0.31 per share)						(167.6)				(167.6)				(167.6)
Repurchase of common stock	(2.4)	(0.2)		(66.6)		8.0				(58.8)				(58.8)
Issuance of common stock	1.2	0.1		26.7						26.8				26.8
Stock-based compensation				39.9						39.9				39.9
Net subscriptions and other												9.6		9.6
Adjustment to fair value of redeemable noncontrolling interests						(65.9)				(65.9)				(65.9)
Balance at December 31, 2023	494.7	$	49.5	$	—	$	12,402.4	$	(450.3)	$	12,001.6	$	636.0	$	12,637.6
Net income						124.2				124.2		8.3		132.5
Other comprehensive loss								(28.9)		(28.9)				(28.9)
Dividends declared on common stock ($0.31 per share)						(169.3)				(169.3)				(169.3)
Repurchase of common stock	(0.4)	(0.1)		(11.6)		—				(11.7)				(11.7)
Issuance of common stock	0.3	—		10.7						10.7				10.7
Stock-based compensation				86.3						86.3				86.3
Acquisition	31.6	3.2		936.9						940.1		25.8		965.9
Net subscriptions and other												63.1		63.1
Net deconsolidation of investment products												(12.6)		(12.6)
Adjustment to fair value of redeemable noncontrolling interests						(91.9)				(91.9)				(91.9)
Balance at March 31, 2024	526.2	$	52.6	$	1,022.3	$	12,265.4	$	(479.2)	$	12,861.1	$	720.6	$	13,581.7
Net income						174.0				174.0		15.0		189.0
Other comprehensive loss								(8.7)		(8.7)				(8.7)
Dividends declared on common stock ($0.31 per share)						(167.0)				(167.0)				(167.0)
Repurchase of common stock	(4.3)	(0.4)		(101.1)		—				(101.5)				(101.5)
Issuance of common stock	0.2	—		4.5						4.5				4.5
Stock-based compensation				58.9						58.9				58.9
Net subscriptions and other												29.4		29.4
Adjustment to fair value of redeemable noncontrolling interests						48.9				48.9				48.9
Balance at June 30, 2024	522.1	$	52.2	$	984.6	$	12,321.3	$	(487.9)	$	12,870.2	$	765.0	$	13,635.2

See Notes to Consolidated Financial Statements.

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	Franklin Resources, Inc.											Non- redeemable Non- controlling Interests		Total Stockholders’ Equity
	Common Stock			Capital in Excess of Par Value		Retained Earnings		Accum- ulated Other Compre- hensive Loss		Stockholders’ Equity
(in millions)
for the nine months ended June 30, 2023	Shares	Amount
Balance at October 1, 2022	499.6	$	50.0	$	—	$	12,045.6	$	(621.0)	$	11,474.6	$	824.3	$	12,298.9

Net income						165.6				165.6		3.5		169.1
Other comprehensive income								124.7		124.7				124.7
Dividends declared on common stock ($0.30 per share)						(153.6)				(153.6)				(153.6)
Repurchase of common stock	(0.5)	(0.1)		(69.1)		55.0				(14.2)				(14.2)
Issuance of common stock	1.2	0.1		33.5						33.6				33.6
Stock-based compensation				35.6						35.6				35.6
Net subscriptions and other												97.1		97.1
Net deconsolidation of investment products												(35.7)		(35.7)
Balance at December 31, 2022	500.3	$	50.0	$	—	$	12,112.6	$	(496.3)	$	11,666.3	$	889.2	$	12,555.5
Net income (loss)						194.2				194.2		(4.3)		189.9
Other comprehensive income								17.9		17.9				17.9
Dividends declared on common stock ($0.30 per share)						(153.8)				(153.8)				(153.8)
Repurchase of common stock	(0.1)	—		(66.0)		62.4				(3.6)				(3.6)
Issuance of common stock	0.7	0.1		25.2						25.3				25.3
Stock-based compensation				40.8						40.8				40.8
Net subscriptions and other												50.1		50.1
Net deconsolidation of investment products												(324.2)		(324.2)
Adjustment to fair value of redeemable noncontrolling interests						44.7				44.7				44.7
Balance at March 31, 2023	500.9	$	50.1	$	—	$	12,260.1	$	(478.4)	$	11,831.8	$	610.8	$	12,442.6
Net income (loss)						227.5				227.5		(7.7)		219.8
Other comprehensive income								15.9		15.9				15.9
Dividends declared on common stock ($0.30 per share)						(152.9)				(152.9)				(152.9)
Repurchase of common stock	(2.0)	(0.2)		(15.9)		(34.8)				(50.9)				(50.9)
Issuance of common stock	0.1	—		3.6						3.6				3.6
Stock-based compensation				12.3						12.3				12.3
Net distributions and other												(11.3)		(11.3)
Net deconsolidation of investment products												(0.7)		(0.7)

Adjustment to fair value of redeemable noncontrolling interests						60.8				60.8				60.8
Balance at June 30, 2023	499.0	$	49.9	$	—	$	12,360.7	$	(462.5)	$	11,948.1	$	591.1	$	12,539.2

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited


	Nine Months Ended June 30,
(in millions)	2024		2023

Net Income	$	663.6	$	687.3
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	194.6		137.9
Amortization of deferred sales commissions	43.3		37.2
Depreciation and other amortization	86.5		78.3
Amortization of intangible assets	254.4		254.6
Net gains on investments	(17.3)		(62.3)
Income from investments in equity method investees	(122.3)		(43.5)
Net losses on investments of consolidated investment products	19.4		116.0
Net purchase of investments by consolidated investment products	(459.5)		(833.2)
Deferred income taxes	(35.0)		50.8
Other	135.3		58.6
Changes in operating assets and liabilities:
Increase in receivables and other assets	(61.4)		(69.8)
Decrease in investments, net	23.8		6.4
Decrease in accrued compensation and benefits	(35.0)		(84.3)
Decrease in income taxes payable	(127.8)		(58.9)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	(55.8)		48.3
Increase (decrease) in accounts payable and accrued expenses of consolidated investment products	(93.7)		1.3
Net cash provided by operating activities	413.1		324.7
Purchase of investments	(952.0)		(665.1)
Liquidation of investments	1,149.5		524.3
Purchase of investments by consolidated collateralized loan obligations	(4,099.1)		(3,465.6)
Liquidation of investments by consolidated collateralized loan obligations	3,034.0		1,230.3
Additions of property and equipment, net	(107.3)		(121.5)
Acquisitions, net of cash acquired (including $281.4 in cash and cash equivalents of consolidated investment products in fiscal year 2024)	175.1		(500.5)
Payments of contingent consideration asset	—		5.5
Payments of deferred consideration liability	(434.9)		(241.8)
Net consolidation (deconsolidation) of investment products	12.0		(43.8)
Net cash used in investing activities	(1,222.7)		(3,278.2)

[Table continued on next page]

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

[Table continued from previous page]


	Nine Months Ended June 30,
(in millions)	2024		2023

Issuance of common stock	$	7.3	$	13.4
Dividends paid on common stock	(489.3)		(454.8)
Repurchase of common stock	(172.0)		(70.0)



Proceeds from repurchase agreement	—		174.8
Payments on repurchase agreement	(45.8)		—
Proceeds from debt of consolidated investment products	1,617.6		3,213.6
Payments on debt of consolidated investment products	(609.2)		(926.9)
Payments on contingent consideration liabilities	(5.1)		(7.6)
Noncontrolling interests	202.9		550.1
Net cash provided by financing activities	506.4		2,492.6
Effect of exchange rate changes on cash and cash equivalents	12.5		66.0
Decrease in cash and cash equivalents	(290.7)		(394.9)
Cash and cash equivalents, beginning of period	4,402.4		4,782.5
Cash and Cash Equivalents, End of Period	$	4,111.7	$	4,387.6

Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	357.9	$	225.4
Cash paid for interest	67.5		55.5
Cash paid for interest by consolidated investment products	522.2		232.2

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024

(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 in accordance with the instructions to Form 10-Q and the rules and regulations of the U.S. Securities and Exchange Commission (“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 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. Management also believes that the accounting estimates are appropriate, and the resulting balances are reasonable; however, due to the inherent uncertainties in making estimates, actual amounts may differ from these estimates. These financial statements should be read together with the Company’s audited financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (“fiscal year 2023”).

During the quarter ended March 31, 2024, the Company identified that it did not eliminate the investment income from certain consolidated limited partnerships for the fiscal year ended September 30, 2023, resulting in offsetting adjustments to investment and other income, net and net income attributable to nonredeemable noncontrolling interest. The Company is not entitled to the economic returns associated with the underlying investments held by these limited partnerships.

There is no impact on operating income, net income attributable to Franklin Resources, Inc., earnings per share, total assets, total liabilities, retained earnings or total shareholders’ equity. There is no impact on the financial results attributable to the Company’s shareholders. The Company has determined this did not result in a material misstatement to its previously issued consolidated financial statements. For comparability, the Company has revised the comparative prior period amounts included in the consolidated statements of income, consolidated statements of stockholders’ equity, consolidated statements of cash flows, and related footnote disclosures.

The impacts on the consolidated statements of income for the three and nine months ended June 30, 2023 are as follows:


(in millions)	Three Months Ended June 30, 2023						Nine Months Ended June 30, 2023
	As Reported		Adjustments		As Revised		As Reported		Adjustments		As Revised
Operating Income	$	314.9	$	—	$	314.9	$	764.0	$	—	$	764.0
Other income, net
Investment and other income, net	51.2		(1.4)		49.8		267.9		(67.6)		200.3
Other income, net	17.2		(1.4)		15.8		228.2		(67.6)		160.6
Income before taxes	332.1		(1.4)		330.7		992.2		(67.6)		924.6
Net income	248.0		(1.4)		246.6		754.9		(67.6)		687.3
Less: net income (loss) attributable to nonredeemable noncontrolling interest	(6.3)		(1.4)		(7.7)		59.1		(67.6)		(8.5)
Net Income Attributable to Franklin Resources, Inc.	227.5		—		227.5		587.3		—		587.3

The impact on the consolidated statement of cash flows for the nine months ended June 30, 2023 are as follows:


(in millions)	Nine Months Ended June 30, 2023
	As Reported		Adjustments		As Revised
Net cash provided by (used in) operating activities	$	365.3	$	(40.6)	$	324.7
Net cash used in investing activities	(3,251.2)		(27.0)		(3,278.2)
Net cash provided by financing activities	2,425.0		67.6		2,492.6
Decrease in cash and cash equivalents	(394.9)		—		(394.9)

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Note 2 – New Accounting Guidance

Accounting Guidance Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued an amendment to the existing segment reporting guidance. The amendment requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker by reportable segment and clarifies that single reportable segment entities are required to apply all existing segment disclosures in the guidance. The amendment is effective for the Company on October 1, 2024, and is retrospectively applicable to all prior periods presented in its consolidated financial statements. The Company is currently evaluating the impact that the adoption will have on its consolidated financial statements.

In December 2023, the FASB issued an amendment to the existing income taxes guidance. The amendment requires the disclosure of additional information with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. The amendment allows for either a prospective or retrospective approach on adoption and is effective for the Company on October 1, 2025. The Company is currently evaluating the impact that the adoption will have on its consolidated financial statements and has not yet determined its transition approach.

Note 3 – Acquisition

Putnam Investments

On January 1, 2024, the Company acquired Putnam Investments (“Putnam”) from Great-West Lifeco Inc. (“Great-West”) for 31.61 million shares of its common stock, cash consideration paid at close of $221.7 million for investments and other purchase-related amounts, and deferred cash consideration of $100.0 million paid on July 1, 2024. The cash consideration paid at close and the deferred cash consideration were funded from existing cash. See below for a summary of the total purchase consideration transferred at closing:


(in millions)	Total
Equity consideration1, 2	$	940.1
Cash consideration	221.7
Deferred cash consideration	100.0
Less: Other adjustments3	(27.4)
Total Purchase Consideration	$	1,234.4

1Excludes shares granted under a deferred compensation program.

2Market price on closing date of $29.79.

3Primarily relates to payments treated as future compensation expense.

Great-West became a long-term shareholder of the Company with an approximate 6.0% stake in the common stock of the Company as of the acquisition date. Shares representing 4.9% of the Company’s outstanding Common Stock at closing are subject to a five-year lock-up. The remaining shares were subject to a 180-day lock-up following the date of closing which has expired.

The acquisition of Putnam accelerates the Company’s growth in the retirement sector by increasing the amount of the Company’s defined contribution AUM. Additionally, the acquisition expands the Company’s insurance assets, further strengthening its presence in these key market segments to better serve clients.

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The following table summarizes the initial and revised estimated fair value amounts recognized for the assets acquired and liabilities assumed and resulting goodwill as of the acquisition date. The issuance of common stock consideration represents a non-cash financing activity related to the statement of cash flows.


(in millions)	Initial Estimated Fair Value		Adjustments		Revised Estimated Fair Value
as of January 1, 2024
Cash and cash equivalents	$	101.1	$	—	$	101.1
Receivables	118.9		—		118.9
Investments	111.2		—		111.2
Assets of consolidated investment products
Cash and cash equivalents	281.4		—		281.4
Investments, at fair value	849.5		—		849.5
Property and equipment	87.1		(5.7)		81.4
Goodwill	189.8		0.4		190.2
Indefinite-lived intangible assets	542.5		14.7		557.2
Definite-lived intangible asset	52.9		4.8		57.7
Operating lease right-of-use assets	109.2		—		109.2
Other assets	20.4		—		20.4
Compensation and benefits	(57.8)		—		(57.8)
Accounts payable and accrued expenses	(40.9)		(11.4)		(52.3)
Liabilities of consolidated investment products
Accounts payable and accrued expenses	(259.6)		—		(259.6)
Debt	(706.8)		—		(706.8)
Operating lease liabilities	(109.2)		—		(109.2)
Other liabilities	(12.1)		—		(12.1)
Redeemable noncontrolling interests	(20.2)		—		(20.2)
Nonredeemable noncontrolling interests	(25.8)		—		(25.8)
Total Identifiable Net Assets	$	1,231.6	$	2.8	$	1,234.4

The adjustments to the initial estimated fair values are primarily a result of new information obtained about facts that existed as of the acquisition date. The purchase price allocation is preliminary and subject to change during the measurement period, which is not to exceed one year from the acquisition date. At this time, the Company does not expect material changes to the assets acquired or liabilities assumed.

The goodwill is primarily attributable to expected growth opportunities from the combined operations and is expected to be deductible for tax purposes. The definite-lived intangible asset relates to trade name, which is amortized over its estimated useful life of 10.0 years. Amortization expense related to the trade name was $1.6 million and $2.9 million for the three and nine months ended June 30, 2024. The estimated remaining amortization expense is $1.4 million for the year and $5.8 million per year thereafter.

Transaction costs incurred in connection with the acquisition were $18.3 million for the nine months ended June 30, 2024. These costs are primarily comprised of professional fees, recorded in general, administrative and other expenses. The Company also incurred $132.0 million of acquisition-related compensation and benefits expense during the period, primarily related to the acceleration of expense for historical Putnam compensation arrangements, retention bonuses and termination benefits.

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

Operating revenues of the acquired business from January 1, 2024 through June 30, 2024 were approximately $430 million. Net income is not available to be separately reported due to the ongoing integration of the combined businesses.

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Note 4 – Earnings per Share

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


(in millions, except per share data)	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Net income attributable to Franklin Resources, Inc.	$	174.0	$	227.5	$	549.5	$	587.3
Less: allocation of earnings to participating nonvested stock and stock unit awards	7.5		10.2		23.8		26.7
Net Income Available to Common Stockholders	$	166.5	$	217.3	$	525.7	$	560.6

Weighted-average shares outstanding – basic	516.5		490.7		507.2		490.3
Dilutive effect of nonparticipating nonvested stock unit awards	0.7		0.7		0.8		0.7
Weighted-Average Shares Outstanding – Diluted	517.2		491.4		508.0		491.0

Earnings per Share
Basic	$	0.32	$	0.44	$	1.04	$	1.14
Diluted	0.32		0.44		1.03		1.14

There were no nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive for the three and nine months ended June 30, 2024 and such awards were insignificant for the three and nine months ended June 30, 2023.

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Note 5 – Revenues

Operating revenues by geographic area were as follows:


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the three months ended June 30, 2024
Investment management fees	$	1,273.7	$	216.2	$	71.8	$	59.1	$	69.1	$	1,689.9
Sales and distribution fees	256.8		86.7		4.7		10.1		—		358.3
Shareholder servicing fees	53.2		8.1		0.5		—		—		61.8
Other	12.7		—		0.2		—		—		12.9
Total	$	1,596.4	$	311.0	$	77.2	$	69.2	$	69.1	$	2,122.9


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the nine months ended June 30, 2024
Investment management fees	$	3,819.8	$	630.1	$	210.2	$	173.8	$	222.1	$	5,056.0
Sales and distribution fees	718.8		250.3		14.3		29.6		—		1,013.0
Shareholder servicing fees	136.8		23.6		1.8		0.1		—		162.3
Other	31.1		0.7		3.4		—		0.3		35.5
Total	$	4,706.5	$	904.7	$	229.7	$	203.5	$	222.4	$	6,266.8


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the three months ended June 30, 2023
Investment management fees	$	1,232.3	$	192.3	$	64.3	$	53.9	$	70.6	$	1,613.4
Sales and distribution fees	213.5		75.4		5.1		10.0		—		304.0
Shareholder servicing fees	30.3		8.0		0.5		—		—		38.8
Other	11.9		0.5		0.4		—		—		12.8
Total	$	1,488.0	$	276.2	$	70.3	$	63.9	$	70.6	$	1,969.0


(in millions)	United States		Luxembourg		Asia-Pacific		Americas Excluding United States		Europe, Middle East and Africa, Excluding Luxembourg		Total
for the nine months ended June 30, 2023
Investment management fees	$	3,672.9	$	570.7	$	214.4	$	162.0	$	198.5	$	4,818.5
Sales and distribution fees	634.1		217.4		15.1		30.7		—		897.3
Shareholder servicing fees	90.2		23.5		1.6		0.2		—		115.5
Other	30.1		0.8		0.8		—		0.3