Franklin Resources : Second Quarter 2025 Investor Presentation

Franklin Resources, Inc. Second Quarter 2025 Results

May 2, 2025 | Investor Presentation

Jenny Johnson

President

Chief Executive Officer

Matthew Nicholls Executive Vice President Chief Financial Officer Chief Operating Officer

Adam Spector

Executive Vice President Head of Global Distribution

Second Quarter 2025 Business Highlights

Franklin Templeton is one of the most comprehensive global asset managers with $1.54 trillion in AUM; diversified by specialist investment manager, asset class, vehicle, and geography

Flow Trends

• Long-term inflows increased 9% from the prior quarter excluding reinvested distributions

  • Gross sales increased across all asset classes

• Long-term net outflows were $26.2 billion

  • Excluding Western Asset Management ("Western"), long-term net inflows were $7.4 billion

  • Positive net flows in Multi-Asset and Alternatives with a combined total of $9.7 billion

• Institutional pipeline of won but unfunded mandates increased by $2.3 billion to $20.4 billion

  Key Areas of Growth

• Fundraised $6.8 billion in Alternatives, of which $6.1 billion in private market assets broadly distributed across strategies

• Alternatives by Franklin Templeton: This quarter, launched Franklin Lexington Private Markets Fund ("FLEX") in the US and internationally. These perpetual funds are designed for wealth channel clients and raised $2.0 billion ($1.1 billion in the US and $0.9 billion internationally)

• ETF: $4.1 billion of net flows (14th consecutive positive quarter) with record high AUM of $37.0 billion; 10 US and 2 non-US ETFs over $1 billion

• Retail SMA AUM was $144.2 billion with net inflows of $1.5 billion and excluding Western, had record net inflows of $3.2 billion

  • Canvas®: Record net flows and AUM of $1.2 billion and $11.4 billion, respectively

• Non-US AUM of approximately $470 billion with positive net flows in EMEA and the Americas

  • Launched Putnam's flagship strategies internationally

    Investment Performance

• Over half of the mutual fund AUM is outperforming its peer median across all periods

• Over half of strategy composite AUM is outperforming its benchmark in the 3-, 5-, and 10-year periods

Second Quarter 2025 Financial Summary1

Key metrics

(in US$ millions, except AUM in billions and per share data)

	Q2 2025	Q1 2025	Q2 2024
Ending AUM2	$ 1,540.6	$ 1,575.7	$ 1,644.7
Average AUM2	1,570.5	1,634.5	1,581.1
Adj. revenue	1,610.2	1,682.7	1,665.1
Adj. operating income	377.2	412.8	419.6
Adj. net income	254.4	320.5	306.6
Adj. diluted EPS	0.47	0.59	0.56
Adj. effective fee rate3	38.3 bps	37.2 bps	38.5 bps
Adj. operating margin	23.4%	24.5%	25.2%

• AUM of $1.54 trillion decreased from the prior quarter due to the impact of long-term net outflows at Western and negative markets

• Adjusted effective fee rate3 ("EFR") of 38.3 bps compared to 37.2 bps in the prior quarter. The increase in the current quarter was primarily driven by Western outflows

• Adjusted operating income declined from the prior quarter primarily due to compensation expense related to the start of the calendar year and the impact of Western, partially offset by the prior quarter annual deferred compensation acceleration for retirement-eligible employees

• Adjusted net income and EPS declined from the prior quarter primarily due to lower adjusted operating income, losses on investments and foreign exchange losses in the current quarter compared to gains in the prior quarter, partially offset by a lower income tax rate due to discrete tax items

  • Includes $41 million seed investment loss related to a renewable energy investment fund which has been closed

    1) For the reconciliations from US GAAP to non-GAAP measures see the appendix to this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com. 2) Excludes approximately $12.6 billion of AUM in our China joint venture. 3) The adjusted effective fee rate is annualized adjusted investment management

    Second Quarter 2025 AUM and Investment Performance
    
    
    
    Diversification by Asset Class, Client Type, Region, and Specialist Investment Manager ("SIM")

    AUM by asset class, client type, and region

    AUM of $1.54 trillion as of March 31, 2025

    Cash 4%

    Multi-Asset 11%

    Alternative 16%

    HNW 3%

    Americas 7%

    APAC 10%

    Institutional 42%

    EMEA 13%

    Fixed Income 29%

    Equity 40%

    Retail 55%

    U.S. 70%

    Asset Class

    Client Type

    Region

    Q2 Adjusted Operating Revenue by SIM

    As of March 31, 2025

    11%

    All other SIMs

    25%

    10%

    9%

    6%

    7%

    9%

    7%

    8%

    8%

    Equity

    Fixed Income

    Alternative

• Our AUM is diversified across asset class, client type, region, and investment teams

  
  
  Investment Performance Summary

  Percentage of AUM above peer median and benchmark1

  As of March 31, 2025

  58%

  55%

  56%

  60%

  63%

  56%

  52%

  43%

  1-year 3-year 5-year 10-year

  Mutual funds vs. peers Strategy composites vs. benchmark
  
  

  • Mutual Funds: Compared to the prior quarter, investment performance increased in the 1- and 5-year periods and declined in the 3-year period primarily due to the categorization of one of our largest funds managed for yield, and stayed flat in the 10-year period

  • Strategy Composites: Compared to the prior quarter, investment performance increased in the 3- and 5-year periods, stayed relatively flat in the 10-year period and declined in the 1-year period primarily due to certain alternative strategies

    1) Benchmark comparisons are based on each strategy's composite returns (composites may include retail SMA and mutual fund assets managed as part of the same strategy) as compared to a market index that has been selected to be generally consistent with the investment objectives of the account. Multi-asset strategies that lack benchmarks consistent with their investment objectives are excluded. Composite AUM measured for the 1-, 3-, 5-, and 10-year periods represent 55%, 55%, 54%, and 49%, respectively, of the firm's total AUM as of March 31, 2025. Mutual fund performance is sourced from Morningstar and measures the percentage of ranked fund AUM in the top two quartiles of their peer groups. Mutual fund AUM measured for the 1-, 3-, 5-, and 10-year periods represents 39%, 38%, 38%, and 35%, respectively, of the firm's total AUM as of March 31, 2025.

    
    
    AUM and Flows1

    (in US$ billions, for the three months ended)

    Total AUM: $1.54 trillion

    84.9

    82.7

    82.5

    96.9

    86.8

    3.1

    3.6

    3.2

    20.1

    3.3

    2.8

    3.3

    5.7

    7.4

    (78.0)

    (85.9)

    (113.8)

    (113.0)

    (50.0)

    (31.3)

    (3.2)

    (26.2)

    6.9

    17.9

    
    
    

    (146.9)

    Mar-24 Jun-24 Sep-24 Dec-24 2

    Mar-25

    Long-term inflows

    Long-term outflows

    Long-term net flows

    Ex-Western longterm net flows

    Reinvested distributions

    
    
    

  • Long-term inflows increased 9% from the prior quarter and 2% from the prior year quarter (excluding reinvested distributions)

  • Long-term net outflows included $33.6 billion of net outflows at Western. Excluding Western, long-term net inflows were $7.4 billion, compared to $17.9 billion in the prior quarter and $2.8 billion in the prior year quarter

  • Institutional pipeline of won but unfunded mandates increased by $2.3 billion to $20.4 billion from the prior quarter. The pipeline remains diversified by asset class and across our specialist investment managers

1. Excludes all cash management flows. 2) Long-term inflows and outflows were each revised from previously reported amounts to reflect fund activity of $0.9 billion settling in January 2025. The revision did not impact net flows or ending AUM.

   AUM and Flows

   (in US$ billions, for the three months ended)

   Equity: $598 billion Fixed Income: $446 billion

   27.5 32.0

   0.8

   36.8

   55.9

   12.5

   38.9

   43.8 37.4 33.0

   26.4 26.5

   (5.3)

   (1.6)

   (5.4)

   (32.8) (33.6) (36.0) (43.4) (44.3)

   (35.5) (42.2)

   (33.9)

   (66.9)

   (66.7)

   (93.1)

   (30.5)

   (4.8)

   (57.0)

   Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

   Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

   Long-term inflows

   Long-term outflows

   Long-term net flows

   Ex-Western longterm net flows

   • LT inflows of $38.9 billion increased 41% compared to prior year quarter. Gross sales have increased for the past 6 consecutive quarters

   • Equity net outflows were $5.4 billion as the risk-off environment impacted growth strategies. Net inflows into value, smart beta, and international strategies

   • Fixed income net outflows were $30.5 billion. Excluding Western, fixed income net inflows were $2.8 billion

   • Net inflows into multi-sector, munis, stable value, and high yield strategies

   8.3 3.6

   1.7

   .4

   1

   .3

   0

   2.8

   
   
   AUM and Flows
   
   

   (in US$ billions, for the three months ended)

   3.3

   Alternative: $252 billion

   
   
   

   Multi-Asset: $176 billion

   0.8

   1.4

   1.0

   (1.0)

   6.4

   0.7

1.4

1.6

1.7

6.6

3.4

3.4

4.0

3.4

(2.1)

8.5 3

1.8

2.9

10.2 9.9 8.7

3.4

11.2

12.9

2.8

(2.4)

(2.0)

(2.6)

(5.0)

(7.3) (8.1)

(5.9)

(7.8)

(9.6)

1 2

Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

Long-term inflows 2

Long-term outflows

Long-term net flows

Ex-Western longterm net flows

• $8.5 billion of inflows3 represents fee generating capital raised or called in this quarter

• $6.8 billion was fundraised in the quarter, which includes $6.1 billion in private market assets4, representing both fee and non-fee generating capital

• Aggregate realizations and distributions5 were $2.8 billion

  See page 17 for additional detail

• Multi-asset net inflows were $3.3 billion led by positive net flows into Franklin Templeton Investment Solutions, Canvas, Franklin Income Investors, and Fiduciary Trust

1) Western alternative outflows included ($1.5) billion related to Macro Opps fund closure in Q4 2024. 2) Long-term inflows and outflows were each revised from previously reported amounts to reflect fund activity of $0.9 billion settling in January 2025. The revision did not impact net flows or ending AUM. 3) Inflows only include fee generating capital; fundraises in non-fee generating capital are represented in net market change, dist. & other. 4) Private markets includes Collateralized Loan Obligations ("CLOs"). Fundraising represent subscriptions, commitments and other increases in available capital in non-fee generating or fee generating AUM this

Second Quarter 2025 Financial Results

Financial Results1

Mar-24	Jun-24	2 Sep-24	Dec-24	Mar-25		US GAAP	Mar-24	Jun-24	Sep-242	Dec-24	Mar-25
129.3	222.5	(150.7)	219.0	145.6		Net Income	124.2	174.0	(84.7)	163.6	151.4

(GAAP and non-GAAP in US$ millions except per share data, for the three months ended)

US GAAP

Operating Income

Operating

6.0% 10.5% (6.8%) 9.7% 6.9%

Diluted EPS $0.23 $0.32 ($0.17) $0.29 $0.26

Margin

Adjusted operating income and adjusted operating margin

Adjusted net income and adjusted diluted earnings per share

25.2% 25.7% 26.3% 24.5%

452

23.4%

$0.56 $0.60 $0.59 $0.59 $0.47

420 425

413 377

307 326 315 321

254

Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

• Adjusted operating income declined 8.6% from the prior quarter primarily due to compensation expense related to the start of the calendar year, the impact of Western outflows, and the impact of two fewer calendar days, partially offset by the prior quarter annual deferred compensation acceleration for retirement-eligible employees

• Adjusted operating income declined 10.1% from the prior year quarter primarily due to the impact of Western outflows and higher sales commissions, partially offset by the addition of Putnam and the realization of cost savings initiatives

• Adjusted net income and EPS declined by 20.6% and 20.3% from the prior quarter, respectively, reflecting lower adjusted operating income, losses on investments in the current quarter and foreign exchange losses as compared to gains in the prior quarter, partially offset by a lower tax rate due to discrete tax benefits

• This quarter includes $41 million seed investment loss related to a renewable energy investment fund which has been closed

• Adjusted net income and EPS declined by 17.0% and 16.1% from the prior year quarter, respectively, reflecting lower adjusted operating income and losses on investments, partially offset by a lower tax rate due to discrete tax benefits

1) For the reconciliations from US GAAP to non-GAAP measures see the appendix to this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to 12

historical earnings commentaries available at franklinresources.com. 2) GAAP financial results include a $389.2 million non-cash impairment of an indefinite-lived intangible asset related to certain mutual fund contracts managed by Western.

Adjusted operating expenses

1,246

1,229

1,265

1,270

1,233

Mar-24

Jun-24

Sep-24

Dec-24

Mar-25

• Adjusted operating expenses decreased by 2.9% from the prior quarter primarily due to the prior quarter annual deferred compensation acceleration for retirement-eligible employees, partially offset by compensation expense related to the start of the calendar year and higher sales commissions

• Adjusted operating expenses decreased by 1.0% from the prior year quarter primarily due to lower incentive compensation on lower revenues, the realization of cost savings initiatives and the consolidation of NYC office space, partially offset by higher sales commissions

• We announced $200 to $250 million of cost savings initiatives to be realized in FY 2026

Financial Results1

(Non-GAAP in US$ millions except EFR)

Adjusted operating revenue and effective fee rate2

38.5

37.5

37.4

37.2

38.3

1,665

1,654

1,717

1,683

1,610

Mar-24

Jun-24

Sep-24

Dec-24

Adj EFR2 (bps)

Mar-25

Adj Operating Revenue

• Adjusted operating revenue declined 4.3% from the prior quarter primarily due to the impact of Western outflows, the impact of two fewer calendar days, and lower performance fees

• Adjusted operating revenue declined 3.3% from the prior year quarter primarily due to the impact of Western outflows and lower performance fees, partially offset by the growth of Putnam

• Adjusted performance fees were $55.7 million compared to

  $72.5 million in the prior quarter and $71.0 million in prior year quarter

• Adjusted EFR2 of 38.3 bps compared to 37.2 bps in the prior quarter, primarily due to Western outflows, and 38.5 bps in the prior year quarter

1. For the reconciliations from US GAAP to non-GAAP measures see the appendix to this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com. 2) The adjusted effective fee rate is annualized adjusted investment management fees, excluding performance fees, divided by average AUM for the period.

   13

   Debt3

   (In US$ millions, as of March 31, 2025)

   850

   550

   450

   350

   4.750%

   1.600%

   5.625%

   2.950%

   2026

   2030

   2044

   2051

   
   
   Capital Management

   Dividends and share repurchases

   (In US$ millions, for the trailing twelve months ended)

   360

   309 274

   221

   220

   643

   656

   671

   677

   682

   Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

   Dividends Repurchases

   Allocation of cash and investments1

   (In US$ billions, as of March 31, 2025)

   6.1

   0.4

   2.6

   Total cash and investments

   Product development and other strategic investments

   and related 2

   commitments

   Regulatory Operating

   capital liquidity & requirements discretionary

   cash and investments

   3.1

Shareholder Return

• In February, we announced a quarterly cash dividend of $0.32 per share, a 3.2% increase over the dividends paid for the prior year quarter

• During the quarter, we returned $184 million to shareholders including $174 million in dividends and $10 million in share repurchases. We typically plan to repurchase shares to offset employee-related equity issuances throughout the year. In addition, we opportunistically repurchase shares taking into account debt maturities, acquisition-related payments, and general market conditions

  Liquidity

• Total cash and investments were $6.1 billion1 as of March 31, 2025 compared to $6.3 billion as of December 31, 2024 after reducing net debt by $100 million

• On April 30 2025, we entered into an Amended and Restated Revolving Credit Agreement with a five-year term and $1.1 billion of aggregate available borrowings, $300.0 million of which was currently outstanding as of April 30, 2025

• Approximately $790 million of nominal cash tax benefits available related to acquisitions, which we expect to realize over the next 15 years

  Debt

• As of March 31, 2025, we maintained senior debt with an aggregate principal amount due of $2.2 billion3. The $400.0 million 2.850% senior notes due March 2025 were repaid on March 31, 2025

• Interest due to debt holders was $23.0 million compared to $21.9 million in the prior quarter and $24.4 million in the prior year quarter due to lower outstanding debt

1) Includes our direct investments in Consolidated Investment Products of $1.1 billion and approximately $365 million of employee-owned and other third-party investments made through partnerships, approximately $236 million of investments related to long-term repurchase agreements and other net financing arrangements, and approximately $431 million of cash and investments related to deferred compensation plans. 2) Includes $500 million of undrawn

capital commitments to funds that is currently held as cash. 3) Excludes fair value adjustments from purchase accounting. 14

Appendix

AUM and Flows

Mar 31, Dec 31, Mar 31,

(In US$ billions)12025 20243

% Change 2024 % Change

Beginning AUM	$1,575.7	$1,678.6	(6.1%)	$1,455.5	8.3%
Long-term inflows	86.8	96.9	(10.4%)	84.9	2.2%
Long-term outflows	(113.0)	(146.9)	(23.1%)	(78.0)	44.9%
Long-term net flows	(26.2)	(50.0)	(47.6%)	6.9	NM
Cash management net flows	2.7	-	NM	(4.8)	NM
Total net flows	(23.5)	(50.0)	(53.0%)	2.1	NM
Acquisitions	-	-	NM	148.3	NM
Net market change, dist. & other	(11.6)	(52.9)	(78.1%)	38.8	NM
Ending AUM	$1,540.6	$1,575.7	(2.2%)	$1,644.7	(6.3%)
Average AUM2	$1,570.5	$1,634.5	(3.9%)	$1,581.1	(0.7%)

1) Excludes approximately $12.6 billion of AUM in our China joint venture. 2) Average AUM for the quarter is calculated as the average of the month-end AUM for the trailing four months. 3) Long-term inflows and outflows were each revised from previously reported amounts to reflect fund activity of $0.9 billion settling in January 2025. The revision did not impact net flows or ending AUM.

Alternative AUM Roll Forward

(in US$ billions)

Three months ended March 31, 2025

Beginning Balance

Fundraising1

$228.8

6.1

$20.0

0.7

$248.8

6.8

Private Markets1 Liquid & Other Total

Realizations & distributions2

(2.8)

(0.0)

(2.8)

Outflows (1.0) (1.1) (2.1)

Net market change, FX, other (0.1) 1.2 1.1

Ending AUM

$231.1

$20.7

$251.8

• $6.8 billion was fundraised in the quarter, which includes $6.1 billion in private market assets1, representing both fee and non-fee generating capital

• $8.5 billion of inflows (on page 10) represents fee-generating capital raised or called in this quarter

• Aggregate realizations and distributions2 were $2.8 billion

1. Private markets includes Collateralized Loan Obligations ("CLOs"). Fundraising represent subscriptions, commitments and other increases in available capital in non-fee generating or fee generating AUM this quarter.

2. Alternative realizations & distributions exclude client-driven redemptions, which are included in alternative outflows.

Financial Results

(GAAP and non-GAAP in US$ millions except per share data, for the three months ended)

				Mar-25 Adjusted vs.		Mar-25 Adjusted vs.
Mar-25		Mar-25	Dec-24	Dec-24	Mar-24	Mar-24
US GAAP	Adjustments	Adjusted	Adjusted	Adjusted	Adjusted	Adjusted

Revenues1

Investment management fees, ex. performance fees	1,601.7	(120.1)	1,481.6	1,533.4	(3%)	1,513.5	(2%)
Performance fees	71.9	(16.2)	55.7	72.5	(23%)	71.0	(22%)
Sales and distribution fees	364.9	(364.9)	-	-	NM	-	NM
Shareholder servicing fees	61.9	-	61.9	63.5	(3%)	68.0	(9%)
Other	11.0	-	11.0	13.3	(17%)	12.6	(13%)
Total Operating Revenues	2,111.4	(501.2)	1,610.2	1,682.7	(4%)	1,665.1	(3%)

Effective fee rate238.3 bps 37.2 bps 38.5 bps

Adjusted Operating Revenues - Quarters Ended December 31, 2024 and March 31, 2025

1,682.7

(51.8)

1,610.2

(16.8)

(1.6)

(2.3)

12/24

Investment management fees

Performance fees

Shareholder servicing fees

Other

3/25

1. For the reconciliations from US GAAP to non-GAAP measures see pages 21 through 23 of this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com. 2) The adjusted effective fee rate is annualized adjusted investment management fees, excluding performance fees, divided by average AUM for the period.

Financial Results

				Mar-25 Adjusted vs.		Mar-25 Adjusted vs.
Mar-25		Mar-25	Dec-24	Dec-24	Mar-24	Mar-24
US GAAP	Adjustments	Adjusted	Adjusted	Adjusted	Adjusted	Adjusted

(GAAP and non-GAAP in US$ millions except per share data, for the three months ended)

Expenses1

Compensation & benefits	920.0	(87.0)	833.0	863.0	(3%)	844.3	(1%)
Sales, distribution & marketing	498.1	(498.1)	-	-	NM	-	NM
Information systems & technology	158.7	(9.8)	148.9	147.3	1%	150.4	(1%)
Occupancy	69.3	-	69.3	75.1	(8%)	76.2	(9%)
Amortization of intangible assets	112.5	(112.5)	-	-	NM	-	NM
Impairment of intangible assets	24.4	(24.4)	-	-	NM	-	NM
General, administrative & other	182.8	(1.0)	181.8	184.5	(1%)	174.6	4%
Total Operating Expenses	1,965.8	(732.8)	1,233.0	1,269.9	(3%)	1,245.5	(1%)

Adjusted Operating Expenses - Quarters Ended December 31, 2024 and March 31, 2025

1,269.9

1.6

1,233.0

(30.0) (5.8) (2.7)

12/24

Compensation and benefits

Information systems & technology

Occupancy

General, administrative & other

3/25

1. For the reconciliations from US GAAP to non-GAAP measures see pages 21 through 23 of this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com.

Financial Results

(GAAP and non-GAAP in US$ millions except per share data, for the three months ended)

				Mar-25 Adjusted vs.		Mar-25 Adjusted vs.
Mar-25		Mar-25	Dec-24	Dec-24	Mar-24	Mar-24
US GAAP	Adjustments	Adjusted	Adjusted	Adjusted	Adjusted	Adjusted

Other Income (Expense), Net1

Investment and other income, net	94.1	(88.2)	5.9	94.7	(94%)	67.6	(91%)
Interest expense	(20.8)	(4.2)	(25.0)	(27.2)	(8%)	(30.0)	(17%)
Investment and other income (losses) of CIPs	(164.7)	164.7	-	-	NM	-	NM
Expenses of CIPs	(11.5)	11.5	-	-	NM	-	NM
Other Income (Expense), Net	(102.9)	83.8	(19.1)	67.5	NM	37.6	NM

Adjusted Other Income - Quarters Ended December 31, 2024 and March 31, 2025

67.5

(66.1)

2.2

(0.3)

(19.1)

12/24

Realized gains & losses on investments, net and other 2

(22.4)

Foreign exchange gains & losses, net

Rental income

Lower interest expense

3/25

1. For the reconciliations from US GAAP to non-GAAP measures see pages 21 through 23 of this commentary and the Supplemental Non-GAAP Financial Measures section of the earnings release. For prior periods please refer to historical earnings commentaries available at franklinresources.com. 2) Includes $41 million seed investment loss related to a renewable energy investment fund which has been closed.

Reconciliation of US GAAP results to Non-GAAP Results

Three months ended March 31, 2025

(in US$ millions except per share data)

US GAAP

Basis

Consolidated Investment Products

Sales, distribution and marketing

Acquisition-related

Special

Termination Plan

Unrealized investment (gains) losses

Deferred Comp Plan and other

Tax Expense of Adjustments

Non-GAAP

Basis

Revenues
Investment management fees	1,673.6	13.1	(133.2) (16.2) 1 - - - -	1,537.3
Sales and distribution fees	364.9	-	(364.9) - - - - -	-
Shareholder servicing fees	61.9	-	- - - - - -	61.9
Other	11.0	-	- - - - - -	11.0
Total Operating Revenues 2,111.4 13.1 (498.1) (16.2) - - - - Expenses Compensation and benefits 920.0 - - (50.9) 1 (17.3) - (18.8) -Sales, distribution and marketing 498.1 - (498.1) - - - - -Information systems and technology 158.7 - - (9.8) - - - -Occupancy 69.3 - - - - - - -Amortization of intangible assets 112.5 - - (112.5) - - - -Impairment of intangible assets 24.4 - - (24.4) - - - -General, administrative and other 182.8 - - (0.9) (0.1) - - -				1,610.2 833.0 -148.9 69.3 - -181.8

Total Operating Expenses

1,965.8	-	(498.1)	(198.5)	(17.4)	-	(18.8)	-	1,233.0
145.6	13.1	-	182.3	17.4	-	18.8	-	377.2
94.1	(46.4)	-	1.6	-	(38.7)	(4.7)	-	5.9
(20.8)	-	-	(4.2)	-	-	-	-	(25.0)
(164.7)	164.7	-	-	-	-	-	-	-
(11.5)	11.5	-	-	-	-	-	-	-
(102.9)	129.8	-	(2.6)	-	(38.7)	(4.7)	-	(19.1)
42.7	142.9	-	179.7	17.4	(38.7)	14.1	-	358.1
31.1	-	-	-	-	-	-	49.2	80.3
11.6	142.9	-	179.7	17.4	(38.7)	14.1	(49.2)	277.8
(139.8)	151.2	- -		-	4.2	7.8	-	23.4
151.4	(8.3)	- 179.7		17.4	(42.9)	6.3	(49.2)	254.4
14.3								11.0
137.1								243.4

Operating Income

Other Income (Expense)

Investment and other income (losses) net Interest expense

Investment and other income (losses) of CIPs, net

Expenses of CIPs

Total Other Income (Expense) Income before taxes

Taxes on income

Net income

Net Income Attributable to Franklin Resources, Inc.

Less: Net income (loss) attributable to noncontrolling interests

Less: allocation of earnings to participating nonvested stock and stock unit awards

Net Income Available to Franklin Resources, Inc. Common Stockholders

Diluted EPS	$ 0.26	Adjusted Diluted EPS	$ 0.47
Avg. Diluted Shares Outstanding	519.9	Avg. Diluted Shares Outstanding	519.9
Operating Margin	6.9%	Adjusted Operating Margin	23.4%

Reconciliation of US GAAP results to Non-GAAP Results

Three months ended December 31, 2024

(in US$ millions except per share data)

Revenues

US GAAP

Basis

Consolidated Investment Products

Sales, distribution and marketing

Acquisition-related

Special

Termination Plan

Investment management fees	1,799.3	12.5	(136.8)	(69.1)	-	-	-	-	1,605.9
Sales and distribution fees	375.5	-	(375.5)	-	-	-	-	-	-
Shareholder servicing fees	63.5	-	-	-	-	-	-	-	63.5
Other	13.3	-	-	-	-	-	-	-	13.3
Total Operating Revenues	2,251.6	12.5	(512.3)	(69.1)	-	-	-	-	1,682.7
Expenses
Compensation and benefits Sales, distribution and marketing Information systems and technology Occupancy Amortization of intangible assets General, administrative and other	991.4 512.3 156.0 75.1 112.6 185.2	1 - - (114.9) (0.4) - (13.1) - - (512.3) - - - - - - - (8.7) - - - - - - - - - - - - - (112.6) - - - - - - (0.7) - - - -							863.0 -147.3 75.1 -184.5

1

Unrealized investment (gains) losses

Deferred Comp Plan and other

Tax Expense of Non-GAAP Adjustments Basis

Total Operating Expenses

2,032.6	-	(512.3)	(236.9)	(0.4)	-	(13.1)	-	1,269.9
219.0	12.5	-	167.8	0.4	-	13.1	-	412.8
10.5	45.3	-	2.5	-	36.0	0.4	-	94.7
(23.1)	-	-	(4.1)	-	-	-	-	(27.2)
114.1	(114.1)	-	-	-	-	-	-	-
(7.3)	7.3	-	-	-	-	-	-	-
94.2	(61.5)	-	(1.6)	-	36.0	0.4	-	67.5
313.2	(49.0)	-	166.2	0.4	36.0	13.5	-	480.3
81.1	-	-	-	-	-	-	50.8	131.9
232.1	(49.0)	-	166.2	0.4	36.0	13.5	(50.8)	348.4
68.5	(53.2)	- -		-	4.5	8.1	-	27.9
163.6	4.2	- 166.2		0.4	31.5	5.4	(50.8)	320.5
15.4								14.5
148.2								306.0

Operating Income

Other Income (Expense)

Investment and other income (losses) net Interest expense

Investment and other income (losses) of CIPs, net

Expenses of CIPs

Total Other Income (Expense) Income before taxes

Taxes on income

Net income

Net Income Attributable to Franklin Resources, Inc.

Less: Net income (loss) attributable to noncontrolling interests

Less: allocation of earnings to participating nonvested stock and stock unit awards

Net Income Available to Franklin Resources, Inc. Common Stockholders

Diluted EPS	$ 0.29	Adjusted Diluted EPS	$ 0.59
Avg. Diluted Shares Outstanding	518.2	Avg. Diluted Shares Outstanding	518.2
Operating Margin	9.7%	Adjusted Operating Margin	24.5%

Reconciliation of US GAAP results to Non-GAAP Results

Three months ended March 31, 2024

(in US$ millions except per share data)

Revenues

US GAAP

Basis

Consolidated Investment Products

Sales, distribution and marketing

Acquisition-related

Special

Termination Plan

1

Unrealized investment (gains) losses

Deferred Comp Plan and other

Tax Expense of Non-GAAP Adjustments Basis

Investment management fees	1,713.9	10.8	(125.8)	(14.4)	-	-	-	-	1,584.5
Sales and distribution fees	358.3	0.2	(358.5)	-	-	-	-	-	-
Shareholder servicing fees	68.0	-	-	-	-	-	-	-	68.0
Other	12.6	-	-	-	-	-	-	-	12.6
Total Operating Revenues	2,152.8	11.0	(484.3)	(14.4)	-	-	-	-	1,665.1
Expenses		1

Compensation and benefits

Sales, distribution and marketing Information systems and technology Occupancy

Amortization of intangible assets General, administrative and other

1,028.2

484.3

155.1

76.2

84.6

195.1

- - (118.9) (40.4) - (24.6) -

- (484.3) - - - - -

- - (4.7) - - - -

- - - - - - -

- - (84.6) - - - -

- - (20.5) - - - -

844.3

-150.4

76.2

-174.6

Total Operating Expenses 2,023.5 - (484.3) (228.7) (40.4) - (24.6) - 1,245.5

Operating Income 129.3 11.0 - 214.3 40.4 - 24.6 - 419.6

Other Income (Expense)

Investment and other income (losses) net 52.5 45.4 - - - (12.4) (17.9) - 67.6

Interest expense (27.7) - - (2.3) - - - - (30.0)

Investment and other income (losses) of CIPs, net

89.9 (89.9) - - - - - - -

Expenses of CIPs (5.9) 5.9 - - - - - - -

Total Other Income (Expense) 108.8 (38.6) - (2.3) - (12.4) (17.9) - 37.6

Income before taxes 238.1 (27.6) - 212.0 40.4 (12.4) 6.7 - 457.2

Taxes on income 62.8 - - - - - - 60.4 123.2

Net income 175.3 (27.6) - 212.0 40.4 (12.4) 6.7 (60.4) 334.0

Less: Net income (loss) attributable to noncontrolling interests

Net Income Attributable to Franklin Resources, Inc.

Less: allocation of earnings to participating nonvested stock and stock unit awards

Net Income Available to Franklin Resources, Inc. Common Stockholders

51.1 (31.1) - - - (2.8) 10.2 - 27.4

124.2 3.5 - 212.0 40.4 (9.6) (3.5) (60.4) 306.6

7.2 14.1

117.0 292.5

Diluted EPS	$ 0.23	Adjusted Diluted EPS	$ 0.56
Avg. Diluted Shares Outstanding	519.2	Avg. Diluted Shares Outstanding	519.2
Operating Margin	6.0%	Adjusted Operating Margin	25.2%