FRANKLIN RESOURCES INC [BEN] Filings

10-Q 1 ben-20230630.htm 10-Q ben-20230630

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, 2023


☐			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 21, 2023: 498,977,820.

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	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
	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	44
	Item 5.	Other Information	44
	Item 6.	Exhibits	44

Exhibit Index			45
Signatures			46

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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)	2023		2022		2023		2022
Operating Revenues
Investment management fees	$	1,613.4	$	1,636.1	$	4,818.5	$	5,045.8
Sales and distribution fees	304.0		335.6		897.3		1,104.0
Shareholder servicing fees	38.8		46.9		115.5		146.8
Other	12.8		12.7		32.0		39.7
Total operating revenues	1,969.0		2,031.3		5,863.3		6,336.3
Operating Expenses
Compensation and benefits	841.2		766.7		2,667.7		2,321.8
Sales, distribution and marketing	406.8		440.3		1,202.0		1,432.8
Information systems and technology	127.3		125.9		376.7		376.6
Occupancy	56.9		53.8		171.1		163.1
Amortization of intangible assets	85.4		81.8		254.6		200.5
General, administrative and other	136.5		158.1		427.2		416.1
Total operating expenses	1,654.1		1,626.6		5,099.3		4,910.9
Operating Income	314.9		404.7		764.0		1,425.4
Other Income (Expenses)
Investment and other income, net	51.2		13.0		267.9		97.7
Interest expense	(34.9)		(28.9)		(99.3)		(71.1)
Investment and other income (losses) of consolidated investment products, net	1.7		(74.4)		75.3		33.3
Expenses of consolidated investment products	(0.8)		(1.3)		(15.7)		(10.1)
Other income (expenses), net	17.2		(91.6)		228.2		49.8
Income before taxes	332.1		313.1		992.2		1,475.2
Taxes on income	84.1		89.5		237.3		347.7
Net income	248.0		223.6		754.9		1,127.5
Less: net income (loss) attributable to
Redeemable noncontrolling interests	26.8		(0.5)		108.5		(50.2)
Nonredeemable noncontrolling interests	(6.3)		(32.3)		59.1		118.5
Net Income Attributable to Franklin Resources, Inc.	$	227.5	$	256.4	$	587.3	$	1,059.2

Earnings per Share
Basic	$	0.44	$	0.50	$	1.14	$	2.07
Diluted	0.44		0.50		1.14		2.07

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,
	2023		2022		2023		2022
Net Income	$	248.0	$	223.6	$	754.9	$	1,127.5
Other Comprehensive Income (Loss)
Currency translation adjustments, net of tax	16.5		(100.6)		159.7		(123.8)
Net unrealized losses on defined benefit plans, net of tax	(0.6)		(2.4)		(1.4)		(2.2)
Net unrealized gains on investments, net of tax	—		—		0.2		—
Total other comprehensive income (loss)	15.9		(103.0)		158.5		(126.0)
Total comprehensive income	263.9		120.6		913.4		1,001.5
Less: comprehensive income (loss) attributable to
Redeemable noncontrolling interests	26.8		(0.5)		108.5		(50.2)
Nonredeemable noncontrolling interests	(6.3)		(32.3)		59.1		118.5
Comprehensive Income Attributable to Franklin Resources, Inc.	$	243.4	$	153.4	$	745.8	$	933.2

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, 2023		September 30, 2022
Assets
Cash and cash equivalents	$	3,728.6	$	4,134.9
Receivables	1,341.9		1,264.8
Investments (including $867.3 and $613.5 at fair value at June 30, 2023 and September 30, 2022)	2,249.1		1,651.3
Assets of consolidated investment products
Cash and cash equivalents	659.0		647.6
Investments, at fair value	9,639.0		7,898.1
Property and equipment, net	806.1		743.3
Goodwill	6,012.3		5,778.6
Intangible assets, net	4,994.9		5,082.1
Operating lease right-of-use assets	431.0		464.5
Other	372.7		395.4
Total Assets	$	30,234.6	$	28,060.6

Liabilities
Compensation and benefits	$	1,461.2	$	1,464.4
Accounts payable and accrued expenses	563.5		466.2

Income taxes	448.6		523.1
Debt	3,358.7		3,376.4
Liabilities of consolidated investment products
Accounts payable and accrued expenses	565.4		646.9
Debt	7,988.7		5,457.7
Deferred tax liabilities	450.7		347.8
Operating lease liabilities	494.8		528.4
Other	1,313.7		1,425.0
Total liabilities	16,645.3		14,235.9
Commitments and Contingencies (Note 10)
Redeemable Noncontrolling Interests	1,050.1		1,525.8
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; 499,012,841 and 499,575,175 shares issued and outstanding at June 30, 2023 and September 30, 2022	49.9		50.0
Retained earnings	12,360.7		12,045.6
Accumulated other comprehensive loss	(462.5)		(621.0)
Total Franklin Resources, Inc. stockholders’ equity	11,948.1		11,474.6
Nonredeemable noncontrolling interests	591.1		824.3
Total stockholders’ equity	12,539.2		12,298.9
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity	$	30,234.6	$	28,060.6

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, 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		4.7		170.3
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												95.9		95.9
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						194.2				194.2		60.7		254.9
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 distributions and other												(14.9)		(14.9)
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		(6.3)		221.2
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												(12.7)		(12.7)
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.											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, 2022	Shares	Amount
Balance at October 1, 2021	501.8	$	50.2	$	—	$	11,550.8	$	(377.6)	$	11,223.4	$	587.2	$	11,810.6

Net income						453.2				453.2		84.1		537.3
Other comprehensive loss								(12.0)		(12.0)				(12.0)
Dividends declared on common stock ($0.29 per share)						(148.9)				(148.9)				(148.9)
Repurchase of common stock	(0.7)	—		(58.8)		37.1				(21.7)				(21.7)
Issuance of common stock	1.4	0.1		47.6						47.7				47.7
Stock-based compensation				11.2						11.2				11.2
Net distributions and other												(27.8)		(27.8)
Balance at December 31, 2021	502.5	$	50.3	$	—	$	11,892.2	$	(389.6)	$	11,552.9	$	643.5	$	12,196.4
Net income						349.6				349.6		66.7		416.3
Other comprehensive loss								(11.0)		(11.0)				(11.0)
Dividends declared on common stock ($0.29 per share)						(148.3)				(148.3)				(148.3)
Repurchase of common stock	(2.7)	(0.4)		(66.7)		(13.7)				(80.8)				(80.8)
Issuance of common stock	0.6	0.1		18.5						18.6				18.6
Stock-based compensation				48.2						48.2				48.2
Net distributions and other												(21.7)		(21.7)
Net deconsolidation of investment products												(39.6)		(39.6)
Adjustment to fair value of redeemable noncontrolling interests						(188.5)				(188.5)				(188.5)
Balance at March 31, 2022	500.4	$	50.0	$	—	$	11,891.3	$	(400.6)	$	11,540.7	$	648.9	$	12,189.6
Net income (loss)						256.4				256.4		(32.3)		224.1
Other comprehensive loss								(103.0)		(103.0)				(103.0)
Dividends declared on common stock ($0.29 per share)						(147.7)				(147.7)				(147.7)
Repurchase of common stock	(2.0)	(0.2)		(48.3)		(2.5)				(51.0)				(51.0)
Issuance of common stock	—	—		1.8						1.8				1.8
Stock-based compensation				46.5						46.5				46.5
Net distributions and other												(24.8)		(24.8)
Net deconsolidation of investment products												(0.3)		(0.3)
Acquisition												149.9		149.9
Balance at June 30, 2022	498.4	$	49.8	$	—	$	11,997.5	$	(503.6)	$	11,543.7	$	741.4	$	12,285.1

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)	2023		2022

Net Income	$	754.9	$	1,127.5
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	137.9		160.9
Amortization of deferred sales commissions	37.2		49.6
Depreciation and other amortization	78.3		68.8
Amortization of intangible assets	254.6		200.5
Net (gains) losses on investments	(62.3)		32.9
Income from investments in equity method investees	(111.1)		(51.6)
Net losses on investments of consolidated investment products	116.0		22.0
Net purchase of investments by consolidated investment products	(833.2)		(312.2)
Deferred income taxes	50.8		55.9
Other	99.2		33.0
Changes in operating assets and liabilities:
Increase in receivables and other assets	(69.8)		(97.3)
Decrease (increase) in investments, net	6.4		(33.2)
Increase (decrease) in accrued compensation and benefits	(84.3)		45.1
Decrease in income taxes payable	(58.9)		(176.3)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	48.3		(9.1)
Increase (decrease) in accounts payable and accrued expenses of consolidated investment products	1.3		(26.2)
Net cash provided by operating activities	365.3		1,090.3
Purchase of investments	(665.1)		(676.5)
Liquidation of investments	551.3		872.0
Purchase of investments by consolidated collateralized loan obligations	(3,465.6)		(3,198.4)
Liquidation of investments by consolidated collateralized loan obligations	1,230.3		1,501.4
Additions of property and equipment, net	(121.5)		(55.6)
Acquisitions, net of cash acquired	(500.5)		(1,354.7)
Payments of contingent consideration asset	5.5		20.9
Payments of deferred consideration liability	(241.8)		—
Net (deconsolidation) consolidation of investment products	(43.8)		211.0
Net cash used in investing activities	(3,251.2)		(2,679.9)

[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)	2023		2022

Issuance of common stock	$	13.4	$	13.6
Dividends paid on common stock	(454.8)		(437.1)
Repurchase of common stock	(70.0)		(154.0)



Proceeds from repurchase agreement	174.8		—
Proceeds from debt of consolidated investment products	3,213.6		4,345.2
Payments on debt of consolidated investment products	(926.9)		(2,469.3)
Payments on contingent consideration liabilities	(7.6)		(4.1)
Noncontrolling interests	482.5		194.9
Net cash provided by financing activities	2,425.0		1,489.2
Effect of exchange rate changes on cash and cash equivalents	66.0		(68.1)
Decrease in cash and cash equivalents	(394.9)		(168.5)
Cash and cash equivalents, beginning of period	4,782.5		4,647.2
Cash and Cash Equivalents, End of Period	$	4,387.6	$	4,478.7

Supplemental Disclosure of Cash Flow Information
Cash paid for income taxes	$	225.4	$	456.7
Cash paid for interest	55.5		61.8
Cash paid for interest by consolidated investment products	232.2		107.0

See Notes to Consolidated Financial Statements.

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FRANKLIN RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

(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. 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, 2022 (“fiscal year 2022”).

Note 2 – Acquisition

BNY Alcentra Group Holdings, Inc.

On November 1, 2022, the Company acquired all of the outstanding ownership interests in BNY Alcentra Group Holdings, Inc. (together with its subsidiaries “Alcentra”) from The Bank of New York Mellon Corporation. Total purchase price consisted of cash consideration of $594.1 million, which includes $188.3 million for certain securities held in Alcentra’s collateralized loan obligations (“CLOs”); deferred consideration of $62.0 million due November 1, 2023; and contingent consideration to be paid upon the achievement of certain performance thresholds over the next four years of up to $350.0 million that has an acquisition-date fair value of $24.6 million. The consideration paid was funded from existing cash. During the quarter ended March 31, 2023, cash consideration increased by $6.8 million due to a net working capital adjustment and deferred consideration increased by $1.6 million.

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:


(in millions)	Initial Estimated Fair Value		Adjustments		Revised Estimated Fair Value
as of November 1, 2022
Cash and cash equivalents	$	93.6	$	—	$	93.6
Receivables	57.2		(8.8)		48.4
Investments	285.3		1.6		286.9
Goodwill	152.6		52.7		205.3
Indefinite-lived intangible assets	89.9		—		89.9
Definite-lived intangible assets	55.7		—		55.7
Other assets	9.0		3.1		12.1
Deferred tax liabilities	—		(36.7)		(36.7)
Compensation and benefits and other liabilities	(71.0)		(3.5)		(74.5)
Total Identifiable Net Assets	$	672.3	$	8.4	$	680.7

The adjustments to the initial estimated fair values are a result of new information obtained about the 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.

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The goodwill is primarily attributable to expected growth opportunities from the combined operations and is not deductible for tax purposes. The definite-lived intangible assets relate to acquired investment management contracts and trade names, which are amortized over their estimated useful lives ranging from 3.0 years to 10.0 years. Amortization expense related to the definite-lived intangible assets was $3.5 million and $9.3 million for the three and nine months ended June 30, 2023. These assets had a weighted-average remaining useful life of 4.8 years at June 30, 2023, with estimated remaining amortization expense as follows:


(in millions)
for the fiscal years ending September 30,	Amount
2023 (remainder of year)	$	3.5
2024	14.0
2025	14.0
2026	3.9
2027	2.9
Thereafter	8.1
Total	$	46.4

Costs incurred in connection with the acquisition were $14.1 million for the nine months ended June 30, 2023.

Alcentra contributed $116.7 million of operating revenue and did not have a material impact to net income attributable to Franklin Resources, Inc. for the nine months ended June 30, 2023. Consequently, the Company has not presented pro forma combined results of operations for this acquisition.

In connection with the acquisition, the Company on December 15, 2022 entered into repurchase agreements with a third-party financing company for certain securities held by the Company in Alcentra’s CLOs. As of June 30, 2023, other liabilities includes repurchase agreements of $172.9 million with maturity values of €132.3 million and $42.4 million in local currency. The Company has pledged Alcentra investments with a carrying value of $179.3 million as collateral as of June 30, 2023. The repurchase agreements have contractual maturity dates ranging between 2029 to 2034.

Note 3 – 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,
	2023		2022		2023		2022
Net income attributable to Franklin Resources, Inc.	$	227.5	$	256.4	$	587.3	$	1,059.2
Less: allocation of earnings to participating nonvested stock and stock unit awards	10.2		11.2		26.7		45.6
Net Income Available to Common Stockholders	$	217.3	$	245.2	$	560.6	$	1,013.6

Weighted-average shares outstanding – basic	490.7		487.5		490.3		489.1
Dilutive effect of nonparticipating nonvested stock unit awards	0.7		0.4		0.7		0.6
Weighted-Average Shares Outstanding – Diluted	491.4		487.9		491.0		489.7

Earnings per Share
Basic	$	0.44	$	0.50	$	1.14	$	2.07
Diluted	0.44		0.50		1.14		2.07

Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were insignificant for the three and nine months ended June 30, 2023 and 2022.

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Note 4 – 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, 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		32.0
Total	$	4,427.3	$	812.4	$	231.9	$	192.9	$	198.8	$	5,863.3


(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, 2022
Investment management fees	$	1,234.7	$	211.6	$	71.2	$	59.4	$	59.2	$	1,636.1
Sales and distribution fees	238.1		80.2		5.8		11.5		—		335.6
Shareholder servicing fees	37.5		8.5		0.4		0.1		0.4		46.9
Other	12.0		0.3		0.2		—		0.2		12.7
Total	$	1,522.3	$	300.6	$	77.6	$	71.0	$	59.8	$	2,031.3


(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, 2022
Investment management fees	$	3,720.8	$	707.2	$	242.5	$	194.3	$	181.0	$	5,045.8
Sales and distribution fees	778.1		268.3		20.0		37.6		—		1,104.0
Shareholder servicing fees	116.4		27.9		1.1		0.2		1.2		146.8
Other	38.2		0.8		0.5		—		0.2		39.7
Total	$	4,653.5	$	1,004.2	$	264.1	$	232.1	$	182.4	$	6,336.3

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

Revenues earned from sponsored funds were 83% of the Company’s total operating revenues for the three and nine months ended June 30, 2023 and 83% and 81% for the three and nine months ended June 30, 2022.

Table of Contents

Note 5 – Investments

The disclosures below include details of the Company’s investments, excluding those of consolidated investment products (“CIPs”). See Note 7 – Consolidated Investment Products for information related to the investments held by these entities.

Investments consisted of the following:


(in millions)	June 30, 2023		September 30, 2022
Investments, at fair value
Sponsored funds and separate accounts	$	616.6	$	413.0
Investments related to long-term incentive plans	202.3		143.3
Other equity and debt investments	48.4		57.2
Total investments, at fair value	867.3		613.5
Investments in equity method investees	1,118.5		771.5
Other investments	263.3		266.3
Total	$	2,249.1	$	1,651.3

Note 6 – Fair Value Measurements

The disclosures below include details of the Company’s fair value measurements, excluding those of CIPs. See Note 7 – Consolidated Investment Products for information related to fair value measurements of the assets and liabilities of these entities.

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


(in millions)	Level 1		Level 2		Level 3		NAV as a Practical Expedient		Total
as of June 30, 2023
Assets
Investments, at fair value
Sponsored funds and separate accounts	$	333.3	$	220.7	$	17.9	$	44.7	$	616.6
Investments related to long-term incentive plans	179.9		—		—		22.4		202.3
Other equity and debt investments	3.4		7.5		4.3		33.2		48.4
Contingent consideration asset	—		—		4.4		—		4.4
Total Assets Measured at Fair Value	$	516.6	$