San Mateo, CA, January 29, 2024 – Franklin Resources, Inc. (the “Company”) [NYSE: BEN] today announced net income1 of $251.3 million or $0.50 per diluted share for the quarter ended December 31, 2023, as compared to $295.5 million or $0.58 per diluted share for the previous quarter, and $165.6 million or $0.32 per diluted share for the quarter ended December 31, 2022. Operating income was $206.5 million for the quarter ended December 31, 2023, as compared to $338.3 million for the previous quarter and $194.0 million for the prior year.

As supplemental information, the Company is providing certain adjusted performance measures which are based on methodologies other than generally accepted accounting principles. Adjusted net income2 was $328.5 million and adjusted diluted earnings per share2 was $0.65 for the quarter ended December 31, 2023, as compared to $427.0 million and $0.84 for the previous quarter, and $262.4 million and $0.51 for the quarter ended December 31, 2022. Adjusted operating income2 was $417.0 million for the quarter ended December 31, 2023, as compared to $511.7 million for the previous quarter and $395.1 million for the prior year.

“Our first fiscal quarter results reflect ongoing momentum in a number of significant areas across asset classes, investment vehicles and geographies to meet the varied needs of our diverse global client base,” said Jenny Johnson, President and CEO of Franklin Resources, Inc. “During the quarter, we saw positive net flows into alternatives, multi-asset, equity, ETFs and SMAs. We also continued to see aggregate positive net flows in non-U.S. regions.

“Reflecting client demand, we continue to see robust growth in our private market strategies. Our three largest alternative managers, Benefit Street Partners, Clarion Partners and Lexington Partners, each had net inflows in the quarter with a combined total of $3.8 billion. Earlier this month, Lexington Partners announced the closing of its latest flagship global secondary fund with $22.7 billion of total capital commitments and with approximately 20% of the capital raised in the fund coming from the wealth management channel. The fund ranks among the largest raised to date in the secondary market and significantly exceeded Lexington’s prior secondary fund, which closed with $14 billion raised in 2020. Also this month, Benefit Street Partners closed its fifth flagship private credit fund with $4.7 billion of total capital commitments. Reflecting the strong demand for the asset class, Benefit Street Partners exceeded its fundraise target.

“We were pleased to close our acquisition of Putnam Investments from Great-West Lifeco on January 1, 2024. With $148 billion in assets under management, Putnam adds complementary investment capabilities and a track record of strong investment performance with 87% or higher of mutual fund AUM outperforming its peers over all standard time periods. The transaction also enhances our presence in the attractive retirement and insurance markets. The addition of Putnam brings Franklin Templeton’s total AUM to approximately $1.6 trillion.

“We continue to focus on strong expense discipline and our net cash and investments position allows us to continue to invest in growth and innovation for the benefit of all our stakeholders.”

Total assets under management (“AUM”) were $1,455.5 billion at December 31, 2023, up $81.3 billion or 6% during the quarter due to the positive impact of $81.6 billion of net market change, distributions, and other, and $4.7 billion of cash management net inflows, offset in part by $5.0 billion of long-term net outflows.

Cash and cash equivalents and investments were $5.6 billion and, including the Company’s direct investments in consolidated investment products (“CIPs”), were $6.7 billion4 at December 31, 2023. Total stockholders’ equity was $12.6 billion and the Company had 494.7 million shares of common stock outstanding at December 31, 2023. The Company repurchased 2.4 million shares of its common stock for a total cost of $58.8 million during the quarter ended December 31, 2023.

A written commentary on the results by Jenny Johnson, President and CEO; Matthew Nicholls, Executive Vice President, CFO and COO; and Adam Spector, Executive Vice President, Head of Global Distribution will be available via investors.franklinresources.com today at approximately 8:30 a.m. Eastern Time.

Ms. Johnson and Messrs. Nicholls and Spector will also lead a live teleconference today at 11:00 a.m. Eastern Time to answer questions. Access to the teleconference will be available via investors.franklinresources.com or by dialing (+1) (888) 396-8049 in North America or (+1) (416) 764-8646 in other locations using access code 09627581. A replay of the teleconference can also be accessed by calling (+1) (877) 674-7070 in North America or (+1) 416-764-8692 in other locations using access code 627581# after 2:00 p.m. Eastern Time on January 29, 2024 through February 5, 2024, or via investors.franklinresources.com.

Analysts and investors are encouraged to review the Company’s recent filings with the U.S. Securities and Exchange Commission and to contact Investor Relations at (650) 312-4091 before the live teleconference for any clarifications or questions related to the earnings release or written commentary.

As supplemental information, we are providing performance measures for “adjusted operating income,” “adjusted operating margin,” “adjusted net income” and “adjusted diluted earnings per share,” each of which is based on methodologies other than generally accepted accounting principles (“non-GAAP measures”). Management believes these non-GAAP measures are useful indicators of our financial performance and may be helpful to investors in evaluating our relative performance against industry peers.

“Adjusted operating income,” “adjusted operating margin,” “adjusted net income” and “adjusted diluted earnings per share” are defined below, followed by reconciliations of operating income, operating margin, net income attributable to Franklin Resources, Inc. and diluted earnings per share on a U.S. GAAP basis to these non-GAAP measures. Non-GAAP measures should not be considered in isolation from, or as substitutes for, any financial information prepared in accordance with U.S. GAAP, and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to these non-GAAP measures if deemed appropriate.

We define adjusted operating income as operating income adjusted to exclude the following:

•Elimination of operating revenues upon consolidation of investment products.

•Acquisition-related items:

•Special termination benefits related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

•Impact on compensation and benefits expense from gains and losses on investments related to deferred compensation plans, which is offset in investment and other income (losses), net.

•Impact on compensation and benefits expense related to minority interests in certain subsidiaries, which is offset in net income (loss) attributable to redeemable noncontrolling interests.

We calculate adjusted operating margin as adjusted operating income divided by adjusted operating revenues. We define adjusted operating revenues as operating revenues adjusted to exclude the following:

•Elimination of operating revenues upon consolidation of investment products.

•Acquisition-related performance-based investment management fees which are passed through as compensation and benefits expense.

•Sales and distribution fees and a portion of investment management fees allocated to cover sales, distribution and marketing expenses paid to the financial advisers and other intermediaries who sell our funds on our behalf.

We define adjusted net income as net income attributable to Franklin Resources, Inc. adjusted to exclude the following:

•Activities of CIPs.

•Acquisition-related items:

◦Write off of noncontrolling interests related to the wind down of an acquired business.

◦Interest expense for amortization of Legg Mason debt premium from acquisition-date fair value adjustment.

•Special termination benefits related to workforce optimization initiatives related to past acquisitions and certain initiatives undertaken by the Company.

•Net gains or losses on investments related to deferred compensation plans which are not offset by compensation and benefits expense.

•Net compensation and benefits expense related to minority interests in certain subsidiaries not offset by net income (loss) attributable to redeemable noncontrolling interests.

•Unrealized investment gains and losses.

•Net income tax expense of the above adjustments based on the respective blended rates applicable to the adjustments.

We define adjusted diluted earnings per share as diluted earnings per share adjusted to exclude the per share impacts of the adjustments applied to net income in calculating adjusted net income.

In calculating our non-GAAP measures, we adjust for the impact of CIPs because it is not considered reflective of our underlying results of operations. Acquisition-related items and special termination benefits are excluded to facilitate comparability to other asset management firms. We adjust for compensation and benefits expense related to funded deferred compensation plans because it is partially offset in other income (expense), net. We adjust for compensation and benefits expense and net income (loss) attributable to redeemable noncontrolling interests to reflect the economics of certain profits interest arrangements. Sales and distribution fees and a portion of investment management fees generally cover sales, distribution and marketing expenses and, therefore, are excluded from adjusted operating revenues. In addition, when calculating adjusted net income and adjusted diluted earnings per share we exclude unrealized investment gains and losses included in investment and other income (losses) because the related investments are generally expected to be held long term.

The calculations of adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per share are as follows:

__________________

*    The impact of CIPs is summarized as follows:

1.Net income represents net income attributable to Franklin Resources, Inc.

2.“Adjusted net income,” “adjusted diluted earnings per share,” “adjusted operating income” and “adjusted operating margin” are based on methodologies other than generally accepted accounting principles. See “Supplemental Non-GAAP Financial Measures” for definitions and reconciliations of these measures.

3.Average AUM represents monthly average AUM.

4.Includes our direct investments in CIPs of $1.0 billion, approximately $300 million of employee-owned and other third-party investments made through partnerships, and approximately $370 million of investments that are subject to long-term repurchase agreements and other financing arrangements. Excludes $800 million undrawn revolving credit facility.

5.Net market change, distributions and other includes appreciation (depreciation), distributions to investors that represent return on investments and return of capital, and foreign exchange revaluation.

Franklin Resources, Inc. (NYSE: BEN) is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the Company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and approximately $1.5 trillion in AUM as of December 31, 2023. The Company posts information that may be significant for investors in the Investor Relations and News Center sections of its website, and encourages investors to consult those sections regularly. For more information, please visit investors.franklinresources.com.

Some of the statements herein may include forward-looking statements that reflect our current views with respect to future events, financial performance and market conditions. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts and generally can be identified by words or phrases written in the future tense and/or preceded by words such as “anticipate,” “believe,” “could,” “depends,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “potential,” “seek,” “should,” “will,” “would,” or other similar words or variations thereof, or the negative thereof, but these terms are not the exclusive means of identifying such statements.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors that may cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements, including market and volatility risks, investment performance and reputational risks, global operational risks, competition and distribution risks, third-party risks, technology and security risks, human capital risks, cash management risks, and legal and regulatory risks. While forward-looking statements are our best prediction at the time that they are made, you should not rely on them and are cautioned against doing so. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other possible 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. 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.

These and other risks, uncertainties and other important factors are described in more detail in our recent filings with the U.S. Securities and Exchange Commission, including, without limitation, in Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and our subsequent Quarterly Reports on Form 10-Q. If a circumstance occurs after the date of this press release that causes any of our forward-looking statements to be inaccurate, whether as a result of new information, future developments or otherwise, we undertake no obligation to announce publicly the change to our expectations, or to make any revision to our forward-looking statements, to reflect any change in assumptions, beliefs or expectations, or any change in events, conditions or circumstances upon which any forward-looking statement is based, unless required by law.

# # #