x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-2670991
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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One Franklin Parkway, San Mateo, CA
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94403
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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Financial Information
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Item 1.
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Financial Statements (unaudited)
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|
|
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3
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|
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4
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5
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6
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7
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Item 2.
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20
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Item 3.
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41
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Item 4.
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42
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Other Information
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Item 1.
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42
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Item 1A.
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42
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Item 2.
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42
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Item 6.
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43
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44
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45
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Three Months Ended
December 31, |
||||||
(in millions, except per share data)
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2016
|
|
2015
|
||||
Operating Revenues
|
|
|
|
|
||||
Investment management fees
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$
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1,063.2
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$
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1,186.7
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Sales and distribution fees
|
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419.3
|
|
|
478.4
|
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||
Shareholder servicing fees
|
|
56.6
|
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61.9
|
|
||
Other
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21.7
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31.0
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||
Total operating revenues
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1,560.8
|
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1,758.0
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Operating Expenses
|
|
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|
||||
Sales, distribution and marketing
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520.0
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|
|
588.6
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||
Compensation and benefits
|
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311.5
|
|
|
342.5
|
|
||
Information systems and technology
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51.7
|
|
|
51.2
|
|
||
Occupancy
|
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29.1
|
|
|
30.7
|
|
||
General, administrative and other
|
|
61.6
|
|
|
91.4
|
|
||
Total operating expenses
|
|
973.9
|
|
|
1,104.4
|
|
||
Operating Income
|
|
586.9
|
|
|
653.6
|
|
||
Other Income (Expenses)
|
|
|
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|
||||
Investment and other income, net
|
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46.1
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|
|
30.5
|
|
||
Interest expense
|
|
(13.3
|
)
|
|
(12.0
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)
|
||
Other income, net
|
|
32.8
|
|
|
18.5
|
|
||
Income before taxes
|
|
619.7
|
|
|
672.1
|
|
||
Taxes on income
|
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200.9
|
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209.7
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||
Net income
|
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418.8
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|
462.4
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||
Less: net income (loss) attributable to
|
|
|
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|
||||
Nonredeemable noncontrolling interests
|
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2.1
|
|
|
13.6
|
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Redeemable noncontrolling interests
|
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(23.5
|
)
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1.0
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Net Income Attributable to Franklin Resources, Inc.
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$
|
440.2
|
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$
|
447.8
|
|
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||||
Earnings per Share
|
|
|
|
|
||||
Basic
|
|
$
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0.77
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$
|
0.74
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Diluted
|
|
0.77
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|
|
0.74
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||
Dividends Declared per Share
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|
$
|
0.20
|
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$
|
0.18
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(in millions)
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Three Months Ended
December 31, |
||||||
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2016
|
|
2015
|
|||||
Net Income
|
|
$
|
418.8
|
|
|
$
|
462.4
|
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Other Comprehensive Income (Loss)
|
|
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|
||||
Net unrealized losses on investments, net of tax
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(2.4
|
)
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|
(5.9
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)
|
||
Currency translation adjustments, net of tax
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|
(60.9
|
)
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|
(23.6
|
)
|
||
Net unrealized gains on defined benefit plans, net of tax
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—
|
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0.6
|
|
||
Total other comprehensive loss
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|
(63.3
|
)
|
|
(28.9
|
)
|
||
Total comprehensive income
|
|
355.5
|
|
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433.5
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||
Less: comprehensive income (loss) attributable to
|
|
|
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|
||||
Nonredeemable noncontrolling interests
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2.1
|
|
|
13.6
|
|
||
Redeemable noncontrolling interests
|
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(23.5
|
)
|
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1.0
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Comprehensive Income Attributable to Franklin Resources, Inc.
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$
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376.9
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$
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418.9
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(in millions, except share and per share data)
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December 31,
2016 |
|
September 30,
2016 |
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
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$
|
8,223.6
|
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$
|
8,247.1
|
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Receivables
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930.0
|
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794.3
|
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||
Investments (including $521.6 and $1,437.6 at fair value at December 31, 2016 and September 30, 2016)
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1,512.8
|
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|
2,416.6
|
|
||
Assets of consolidated sponsored investment products
|
|
|
|
|
||||
Cash and cash equivalents
|
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231.2
|
|
|
236.2
|
|
||
Investments, at fair value
|
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2,456.1
|
|
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1,513.4
|
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||
Property and equipment, net
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512.5
|
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|
523.2
|
|
||
Goodwill and other intangible assets, net
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2,200.4
|
|
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2,211.3
|
|
||
Other
|
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143.7
|
|
|
156.7
|
|
||
Total Assets
|
|
$
|
16,210.3
|
|
|
$
|
16,098.8
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Compensation and benefits
|
|
$
|
191.8
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|
$
|
357.4
|
|
Accounts payable and accrued expenses
|
|
214.8
|
|
|
233.3
|
|
||
Dividends
|
|
114.6
|
|
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104.6
|
|
||
Commissions
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292.4
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|
|
302.0
|
|
||
Income taxes
|
|
191.7
|
|
|
23.0
|
|
||
Debt
|
|
1,394.4
|
|
|
1,401.2
|
|
||
Debt of consolidated sponsored investment products
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340.1
|
|
|
682.2
|
|
||
Deferred taxes
|
|
151.7
|
|
|
161.5
|
|
||
Other
|
|
230.6
|
|
|
244.3
|
|
||
Total liabilities
|
|
3,122.1
|
|
|
3,509.5
|
|
||
Commitments and Contingencies (Note 9)
|
|
|
|
|
||||
Redeemable Noncontrolling Interests
|
|
841.2
|
|
|
61.1
|
|
||
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; 565,683,547 and 570,345,156 shares issued and outstanding at December 31, 2016 and September 30, 2016
|
|
56.6
|
|
|
57.0
|
|
||
Retained earnings
|
|
12,326.0
|
|
|
12,226.2
|
|
||
Accumulated other comprehensive loss
|
|
(417.8
|
)
|
|
(347.4
|
)
|
||
Total Franklin Resources, Inc. stockholders’ equity
|
|
11,964.8
|
|
|
11,935.8
|
|
||
Nonredeemable noncontrolling interests
|
|
282.2
|
|
|
592.4
|
|
||
Total stockholders’ equity
|
|
12,247.0
|
|
|
12,528.2
|
|
||
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
|
|
$
|
16,210.3
|
|
|
$
|
16,098.8
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Net Income
|
|
$
|
418.8
|
|
|
$
|
462.4
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Amortization of deferred sales commissions
|
|
17.1
|
|
|
22.8
|
|
||
Depreciation and other amortization
|
|
19.9
|
|
|
22.6
|
|
||
Stock-based compensation
|
|
30.4
|
|
|
34.0
|
|
||
Gains on sale of assets
|
|
(0.8
|
)
|
|
(7.2
|
)
|
||
Income from investments in equity method investees
|
|
(34.2
|
)
|
|
(24.8
|
)
|
||
Net losses (gains) on other investments of consolidated sponsored investment products
|
|
(2.0
|
)
|
|
7.6
|
|
||
Deferred income taxes
|
|
(6.9
|
)
|
|
(1.8
|
)
|
||
Other
|
|
(12.1
|
)
|
|
14.9
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Increase in receivables, prepaid expenses and other
|
|
(19.3
|
)
|
|
(42.5
|
)
|
||
Decrease in trading securities, net
|
|
27.9
|
|
|
1.5
|
|
||
Decrease (increase) in trading securities of consolidated sponsored investment products, net
|
|
43.9
|
|
|
(102.5
|
)
|
||
Decrease in accrued compensation and benefits
|
|
(161.9
|
)
|
|
(221.5
|
)
|
||
Decrease in commissions payable
|
|
(9.6
|
)
|
|
(23.8
|
)
|
||
Increase in income taxes payable
|
|
167.1
|
|
|
160.4
|
|
||
Decrease in other liabilities
|
|
(32.1
|
)
|
|
(6.9
|
)
|
||
Net cash provided by operating activities
|
|
446.2
|
|
|
295.2
|
|
||
Purchase of investments
|
|
(28.8
|
)
|
|
(20.9
|
)
|
||
Liquidation of investments
|
|
35.2
|
|
|
128.3
|
|
||
Purchase of other investments by consolidated sponsored investment products
|
|
(69.4
|
)
|
|
(91.6
|
)
|
||
Liquidation of other investments by consolidated sponsored investment products
|
|
72.7
|
|
|
104.7
|
|
||
Additions of property and equipment, net
|
|
(12.8
|
)
|
|
(19.1
|
)
|
||
Adoption of new accounting guidance
|
|
(49.2
|
)
|
|
—
|
|
||
Net deconsolidation of sponsored investment products
|
|
(6.1
|
)
|
|
(12.2
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(58.4
|
)
|
|
89.2
|
|
||
Dividends paid on common stock
|
|
(103.4
|
)
|
|
(91.5
|
)
|
||
Repurchase of common stock
|
|
(256.2
|
)
|
|
(381.5
|
)
|
||
Proceeds from debt of consolidated sponsored investment products
|
|
0.4
|
|
|
1.0
|
|
||
Payments on debt by consolidated sponsored investment products
|
|
(3.2
|
)
|
|
(27.9
|
)
|
||
Payments on contingent consideration liability
|
|
(2.2
|
)
|
|
(2.8
|
)
|
||
Noncontrolling interests
|
|
(1.3
|
)
|
|
39.3
|
|
||
Net cash used in financing activities
|
|
(365.9
|
)
|
|
(463.4
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(50.4
|
)
|
|
(20.1
|
)
|
||
Decrease in cash and cash equivalents
|
|
(28.5
|
)
|
|
(99.1
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
8,483.3
|
|
|
8,368.1
|
|
||
Cash and Cash Equivalents, End of Period
|
|
$
|
8,454.8
|
|
|
$
|
8,269.0
|
|
|
|
|
|
|
||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
||||
Cash paid for income taxes
|
|
$
|
33.1
|
|
|
$
|
48.1
|
|
Cash paid for interest
|
|
10.1
|
|
|
8.8
|
|
||
Cash paid for interest by consolidated sponsored investment products
|
|
3.3
|
|
|
6.7
|
|
(in millions)
|
|
Franklin
Resources, Inc.
Stockholders’
Equity
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
Stockholders’
Equity
|
||||||
for the three months ended December 31, 2016
|
|
|
|
|||||||||
Balance at October 1, 2016
|
|
$
|
11,935.8
|
|
|
$
|
592.4
|
|
|
$
|
12,528.2
|
|
Adoption of new accounting guidance
|
|
(1.3
|
)
|
|
(324.6
|
)
|
|
(325.9
|
)
|
|||
Net income
|
|
440.2
|
|
|
2.1
|
|
|
442.3
|
|
|||
Other comprehensive loss
|
|
(63.3
|
)
|
|
|
|
(63.3
|
)
|
||||
Cash dividends declared on common stock
|
|
(113.4
|
)
|
|
|
|
(113.4
|
)
|
||||
Repurchase of common stock
|
|
(261.7
|
)
|
|
|
|
(261.7
|
)
|
||||
Net subscriptions
|
|
|
|
12.3
|
|
|
12.3
|
|
||||
Stock-based compensation
|
|
28.5
|
|
|
|
|
28.5
|
|
||||
Balance at December 31, 2016
|
|
$
|
11,964.8
|
|
|
$
|
282.2
|
|
|
$
|
12,247.0
|
|
(in millions)
|
|
Franklin
Resources, Inc.
Stockholders’
Equity
|
|
Nonredeemable
Noncontrolling
Interests
|
|
Total
Stockholders’
Equity
|
||||||
for the three months ended December 31, 2015
|
|
|
|
|||||||||
Balance at October 1, 2015
|
|
$
|
11,841.0
|
|
|
$
|
654.8
|
|
|
$
|
12,495.8
|
|
Net income
|
|
447.8
|
|
|
13.6
|
|
|
461.4
|
|
|||
Other comprehensive loss
|
|
(28.9
|
)
|
|
|
|
(28.9
|
)
|
||||
Cash dividends declared on common stock
|
|
(107.6
|
)
|
|
|
|
(107.6
|
)
|
||||
Repurchase of common stock
|
|
(404.1
|
)
|
|
|
|
(404.1
|
)
|
||||
Net distributions
|
|
|
|
(28.7
|
)
|
|
(28.7
|
)
|
||||
Stock-based compensation
|
|
33.0
|
|
|
|
|
33.0
|
|
||||
Balance at December 31, 2015
|
|
$
|
11,781.2
|
|
|
$
|
639.7
|
|
|
$
|
12,420.9
|
|
(in millions, except per share data)
|
|
Three Months Ended
December 31, |
||||||
|
2016
|
|
2015
|
|||||
Net income attributable to Franklin Resources, Inc.
|
|
$
|
440.2
|
|
|
$
|
447.8
|
|
Less: allocation of earnings to participating nonvested stock and stock unit awards
|
|
3.0
|
|
|
2.7
|
|
||
Net Income Available to Common Stockholders
|
|
$
|
437.2
|
|
|
$
|
445.1
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding – basic
|
|
565.1
|
|
|
597.6
|
|
||
Dilutive effect of nonparticipating nonvested stock unit awards
|
|
0.1
|
|
|
0.1
|
|
||
Weighted-Average Shares Outstanding – Diluted
|
|
565.2
|
|
|
597.7
|
|
||
|
|
|
|
|
||||
Earnings per Share
|
|
|
|
|
||||
Basic
|
|
$
|
0.77
|
|
|
$
|
0.74
|
|
Diluted
|
|
0.77
|
|
|
0.74
|
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Investment securities, trading
|
|
|
|
|
||||
SIPs
|
|
$
|
138.8
|
|
|
$
|
844.4
|
|
Debt and other equity securities
|
|
264.2
|
|
|
277.5
|
|
||
Total investment securities, trading
|
|
403.0
|
|
|
1,121.9
|
|
||
Investment securities, available-for-sale
|
|
|
|
|
||||
SIPs
|
|
102.3
|
|
|
297.7
|
|
||
Debt and other equity securities
|
|
3.0
|
|
|
3.7
|
|
||
Total investment securities, available-for-sale
|
|
105.3
|
|
|
301.4
|
|
||
Investments in equity method investees
|
|
816.0
|
|
|
797.4
|
|
||
Other investments
|
|
188.5
|
|
|
195.9
|
|
||
Total
|
|
$
|
1,512.8
|
|
|
$
|
2,416.6
|
|
(in millions)
|
|
|
|
Gross Unrealized
|
|
|
||||||||||
as of December 31, 2016
|
Cost Basis
|
|
Gains
|
|
Losses
|
|
Fair Value
|
|||||||||
SIPs
|
|
$
|
103.2
|
|
|
$
|
1.0
|
|
|
$
|
(1.9
|
)
|
|
$
|
102.3
|
|
Debt and other equity securities
|
|
2.9
|
|
|
0.1
|
|
|
—
|
|
|
3.0
|
|
||||
Total
|
|
$
|
106.1
|
|
|
$
|
1.1
|
|
|
$
|
(1.9
|
)
|
|
$
|
105.3
|
|
(in millions)
|
|
|
|
Gross Unrealized
|
|
|
||||||||||
as of September 30, 2016
|
Cost Basis
|
|
Gains
|
|
Losses
|
|
Fair Value
|
|||||||||
SIPs
|
|
$
|
289.6
|
|
|
$
|
13.7
|
|
|
$
|
(5.6
|
)
|
|
$
|
297.7
|
|
Debt and other equity securities
|
|
3.6
|
|
|
0.1
|
|
|
—
|
|
|
3.7
|
|
||||
Total
|
|
$
|
293.2
|
|
|
$
|
13.8
|
|
|
$
|
(5.6
|
)
|
|
$
|
301.4
|
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(in millions)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|||||||||||||
as of December 31, 2016
|
|
|
|
|
|
|||||||||||||||||||
SIPs
|
|
$
|
19.5
|
|
|
$
|
(1.1
|
)
|
|
$
|
5.2
|
|
|
$
|
(0.8
|
)
|
|
$
|
24.7
|
|
|
$
|
(1.9
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
(in millions)
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Gross
Unrealized
Losses
|
|||||||||||||
as of September 30, 2016
|
|
|
|
|
|
|||||||||||||||||||
SIPs
|
|
$
|
75.8
|
|
|
$
|
(4.3
|
)
|
|
$
|
18.0
|
|
|
$
|
(1.3
|
)
|
|
$
|
93.8
|
|
|
$
|
(5.6
|
)
|
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
as of September 30, 2016
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Investment securities, trading
|
|
|
|
|
|
|
|
|
||||||||
SIPs
|
|
$
|
844.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
844.4
|
|
Debt and other equity securities
|
|
2.6
|
|
|
84.1
|
|
|
190.8
|
|
|
277.5
|
|
||||
Investment securities, available-for-sale
|
|
|
|
|
|
|
|
|
||||||||
SIPs
|
|
297.7
|
|
|
—
|
|
|
—
|
|
|
297.7
|
|
||||
Debt and other equity securities
|
|
1.6
|
|
|
2.1
|
|
|
—
|
|
|
3.7
|
|
||||
Life settlement contracts
|
|
—
|
|
|
—
|
|
|
14.3
|
|
|
14.3
|
|
||||
Total Assets Measured at Fair Value
|
|
$
|
1,146.3
|
|
|
$
|
86.2
|
|
|
$
|
205.1
|
|
|
$
|
1,437.6
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liability
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration liability
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98.1
|
|
|
$
|
98.1
|
|
|
|
2016
|
|
2015
|
||||||||||||
(in millions)
|
|
Investments
|
|
Contingent
Consideration Liability |
|
Investments
|
|
Contingent
Consideration Liability |
||||||||
for the three months ended December 31,
|
|
|
|
|
||||||||||||
Balance at beginning of period
|
|
$
|
205.1
|
|
|
$
|
(98.1
|
)
|
|
$
|
20.7
|
|
|
$
|
(102.9
|
)
|
Total realized and unrealized gains (losses)
|
|
|
|
|
|
|
|
|
||||||||
Included in investment and other income, net
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
Included in general, administrative and other expense
|
|
—
|
|
|
12.2
|
|
|
—
|
|
|
(16.2
|
)
|
||||
Purchases
|
|
0.5
|
|
|
—
|
|
|
3.3
|
|
|
—
|
|
||||
Sales
|
|
(2.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
|
(1.7
|
)
|
|
2.2
|
|
|
(0.8
|
)
|
|
3.3
|
|
||||
Foreign exchange revaluation
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at End of Period
|
|
$
|
198.7
|
|
|
$
|
(83.7
|
)
|
|
$
|
23.8
|
|
|
$
|
(115.8
|
)
|
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at end of period
|
|
$
|
(0.1
|
)
|
|
$
|
12.2
|
|
|
$
|
0.2
|
|
|
$
|
(16.2
|
)
|
(in millions)
|
|
|
|
|
|
|
|
|
||
as of September 30, 2016
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Range (Weighted Average)
|
||
Investment securities, trading – debt and other equity securities
|
|
$
|
190.8
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.6%–6.9% (6.7%)
|
|
|
|
Risk premium
|
|
2.0%–17.9% (16.5%)
|
|||||
|
|
|
|
|
Liquidity discount
|
|
0.0%–10.0% (9.6%)
|
|||
|
|
|
|
|
|
|
|
|||
Life settlement contracts
|
|
14.3
|
|
|
Discounted cash flow
|
|
Life expectancy
|
|
20–132 months (65)
|
|
Discount rate
|
|
3.3%–18.0% (11.5%)
|
||||||||
|
|
|
|
|
|
|
|
|
||
Contingent consideration liability
|
|
98.1
|
|
|
Discounted cash flow
|
|
AUM growth rate
|
|
2.4%–11.5% (5.9%)
|
|
EBITDA margin
|
|
14.3%
|
||||||||
Discount rate
|
|
13.2%
|
(in millions)
|
|
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||||||||
|
Fair Value
Level
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
1
|
|
$
|
8,223.6
|
|
|
$
|
8,223.6
|
|
|
$
|
8,247.1
|
|
|
$
|
8,247.1
|
|
Other investments
|
|
|
|
|
|
|
|
|
|
|
||||||||
Time deposits
|
|
2
|
|
128.0
|
|
|
128.0
|
|
|
131.6
|
|
|
131.6
|
|
||||
Cost method investments
|
|
3
|
|
47.2
|
|
|
59.5
|
|
|
50.0
|
|
|
61.3
|
|
||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
|
2
|
|
1,342.8
|
|
|
1,365.1
|
|
|
1,348.5
|
|
|
1,412.5
|
|
||||
Loan
|
|
2
|
|
51.6
|
|
|
51.5
|
|
|
52.7
|
|
|
52.7
|
|
(in millions)
|
|
December 31, 2016
|
|
September 30, 2016
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
231.2
|
|
|
$
|
236.2
|
|
Receivables
|
|
174.1
|
|
|
47.9
|
|
||
Investments, at fair value
|
|
2,456.1
|
|
|
1,513.4
|
|
||
Other assets
|
|
0.8
|
|
|
1.4
|
|
||
Total Assets
|
|
$
|
2,862.2
|
|
|
$
|
1,798.9
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
$
|
67.9
|
|
|
$
|
65.2
|
|
Debt
|
|
340.1
|
|
|
682.2
|
|
||
Other liabilities
|
|
7.2
|
|
|
8.5
|
|
||
Total liabilities
|
|
415.2
|
|
|
755.9
|
|
||
Redeemable Noncontrolling Interests
|
|
841.2
|
|
|
61.1
|
|
||
Stockholders
’
Equity
|
|
|
|
|
||||
Franklin Resources, Inc.’s interests
|
|
1,349.3
|
|
|
414.1
|
|
||
Nonredeemable noncontrolling interests
|
|
256.5
|
|
|
567.8
|
|
||
Total stockholders’ equity
|
|
1,605.8
|
|
|
981.9
|
|
||
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders
’
Equity
|
|
$
|
2,862.2
|
|
|
$
|
1,798.9
|
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Investment securities, trading
|
|
$
|
1,810.3
|
|
|
$
|
287.8
|
|
Other debt securities
|
|
366.9
|
|
|
618.3
|
|
||
Other equity securities
|
|
278.9
|
|
|
607.3
|
|
||
Total
|
|
$
|
2,456.1
|
|
|
$
|
1,513.4
|
|
(in millions)
|
|
Redemption Frequency
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Real estate and private equity funds
|
|
Nonredeemable
|
|
$
|
146.3
|
|
|
$
|
444.2
|
|
Hedge funds
|
|
Monthly, quarterly or triennially
|
|
—
|
|
|
1.8
|
|
||
Total
|
|
|
|
$
|
146.3
|
|
|
$
|
446.0
|
|
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV as a Practical Expedient
|
|
Total
|
||||||||||
as of December 31, 2016
|
|
|
|
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents of CLO
|
|
$
|
54.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54.8
|
|
Receivables of CLO
|
|
—
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|||||
Investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
272.2
|
|
|
93.5
|
|
|
131.6
|
|
|
146.3
|
|
|
643.6
|
|
|||||
Debt securities
|
|
0.2
|
|
|
1,687.9
|
|
|
124.4
|
|
|
—
|
|
|
1,812.5
|
|
|||||
Total Assets Measured at Fair Value
|
|
$
|
327.2
|
|
|
$
|
1,783.4
|
|
|
$
|
256.0
|
|
|
$
|
146.3
|
|
|
$
|
2,512.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other liabilities
|
|
$
|
0.2
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.2
|
|
(in millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV as a Practical Expedient
|
|
Total
|
||||||||||
as of September 30, 2016
|
|
|
|
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents of CLOs
|
|
$
|
146.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
146.4
|
|
Receivables of CLOs
|
|
—
|
|
|
23.6
|
|
|
—
|
|
|
—
|
|
|
23.6
|
|
|||||
Investments
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity securities
|
|
155.4
|
|
|
0.5
|
|
|
160.3
|
|
|
446.0
|
|
|
762.2
|
|
|||||
Debt securities
|
|
—
|
|
|
618.9
|
|
|
132.3
|
|
|
—
|
|
|
751.2
|
|
|||||
Total Assets Measured at Fair Value
|
|
$
|
301.8
|
|
|
$
|
643.0
|
|
|
$
|
292.6
|
|
|
$
|
446.0
|
|
|
$
|
1,683.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other liabilities
|
|
$
|
0.1
|
|
|
$
|
8.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.5
|
|
|
|
2016
|
|
2015
|
||||||||||||||||||||
(in millions)
|
|
Equity
Securities
|
|
Debt
Securities
|
|
Total
Level 3
Assets
|
|
Equity
Securities |
|
Debt
Securities |
|
Total
Level 3 Assets |
||||||||||||
for the three months ended December 31,
|
|
|
|
|
|
|||||||||||||||||||
Balance at beginning of period
|
|
$
|
160.3
|
|
|
$
|
132.3
|
|
|
$
|
292.6
|
|
|
$
|
191.6
|
|
|
$
|
130.2
|
|
|
$
|
321.8
|
|
Adoption of new accounting guidance
|
|
(45.4
|
)
|
|
(0.5
|
)
|
|
(45.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Realized and unrealized gains (losses) included in investment and other income, net
|
|
(3.3
|
)
|
|
(0.3
|
)
|
|
(3.6
|
)
|
|
(1.1
|
)
|
|
1.1
|
|
|
—
|
|
||||||
Purchases
|
|
21.0
|
|
|
2.2
|
|
|
23.2
|
|
|
—
|
|
|
2.5
|
|
|
2.5
|
|
||||||
Sales
|
|
(0.1
|
)
|
|
(6.4
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
(9.6
|
)
|
|
(9.6
|
)
|
||||||
Foreign exchange revaluation
|
|
(0.9
|
)
|
|
(2.9
|
)
|
|
(3.8
|
)
|
|
(2.4
|
)
|
|
(0.3
|
)
|
|
(2.7
|
)
|
||||||
Balance at End of Period
|
|
$
|
131.6
|
|
|
$
|
124.4
|
|
|
$
|
256.0
|
|
|
$
|
188.1
|
|
|
$
|
123.9
|
|
|
$
|
312.0
|
|
Change in unrealized gains (losses) included in net income relating to assets held at end of period
|
|
$
|
(3.4
|
)
|
|
$
|
(0.2
|
)
|
|
$
|
(3.6
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
0.3
|
|
|
$
|
(0.8
|
)
|
(in millions)
|
|
|
|
|
|
|
|
|
||
as of September 30, 2016
|
|
Fair Value
|
|
Valuation Technique
|
|
Significant Unobservable Inputs
|
|
Range (Weighted Average)
|
||
Equity securities
|
|
$
|
113.1
|
|
|
Market comparable companies
|
|
EBITDA multiple
|
|
5.0–14.2 (10.3)
|
Discount for lack of marketability
|
25.0%–50.0% (36.6%)
|
|||||||||
24.3
|
|
Discounted cash flow
|
Discount rate
|
5.0%–19.0% (13.7%)
|
||||||
22.9
|
|
Market pricing
|
Price to book value ratio
|
1.8–2.3 (2.0)
|
||||||
|
|
|
|
|
|
|
|
|
||
Debt securities
|
|
119.7
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
6.0%–15.0% (10.4%)
|
|
Risk premium
|
0.0%–28.0% (9.7%)
|
|||||||||
|
|
|
EBITDA multiple
|
|
5.5
|
|||||
|
12.6
|
|
|
Market pricing
|
|
Private sale pricing
|
|
$57 per $100 of par
|
(in millions)
|
|
Fair Value
Level
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||||||||
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
|
Carrying
Value
|
|
Estimated
Fair Value
|
||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
1
|
|
$
|
176.4
|
|
|
$
|
176.4
|
|
|
$
|
89.8
|
|
|
$
|
89.8
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt of CLOs
1
|
|
2 or 3
|
|
285.5
|
|
|
279.4
|
|
|
607.2
|
|
|
594.5
|
|
||||
Other debt
|
|
3
|
|
54.6
|
|
|
54.3
|
|
|
75.0
|
|
|
74.6
|
|
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||||
(in millions)
|
|
Amount
|
|
Effective
Interest
Rate
|
|
Amount
|
|
Effective
Interest
Rate
|
||||
Debt of CLOs
|
|
$
|
285.5
|
|
|
3.18%
|
|
$
|
607.2
|
|
|
2.24%
|
Other debt
|
|
54.6
|
|
|
5.59%
|
|
75.0
|
|
|
4.79%
|
||
Total
|
|
$
|
340.1
|
|
|
|
|
$
|
682.2
|
|
|
|
(in millions)
|
|
|
|
|
||||
for the three months ended December 31,
|
|
2016
|
|
2015
|
||||
Balance at beginning of period
|
|
$
|
61.1
|
|
|
$
|
59.6
|
|
Adoption of new accounting guidance
|
|
824.7
|
|
|
—
|
|
||
Net income (loss)
|
|
(23.5
|
)
|
|
1.0
|
|
||
Net subscriptions (distributions) and other
|
|
(13.6
|
)
|
|
68.0
|
|
||
Net deconsolidations
|
|
(7.5
|
)
|
|
(75.4
|
)
|
||
Balance at End of Period
|
|
$
|
841.2
|
|
|
$
|
53.2
|
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Unpaid principal balance
|
|
$
|
244.3
|
|
|
$
|
496.0
|
|
Difference between unpaid principal balance and fair value
|
|
—
|
|
|
(8.2
|
)
|
||
Fair Value
|
|
$
|
244.3
|
|
|
$
|
487.8
|
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Investments
|
|
$
|
229.9
|
|
|
$
|
77.3
|
|
Receivables
|
|
100.7
|
|
|
21.4
|
|
||
Total
|
|
$
|
330.6
|
|
|
$
|
98.7
|
|
(shares in thousands)
|
|
Time-Based
Shares
|
|
Performance-
Based Shares
|
|
Total Shares
|
|
Weighted-Average
Grant-Date
Fair Value
|
|||||
for the three months ended December 31, 2016
|
|
|
|
|
|||||||||
Nonvested balance at October 1, 2016
|
|
2,369
|
|
|
1,288
|
|
|
3,657
|
|
|
$
|
45.67
|
|
Granted
|
|
2,696
|
|
|
1,110
|
|
|
3,806
|
|
|
34.11
|
|
|
Vested
|
|
(26
|
)
|
|
(353
|
)
|
|
(379
|
)
|
|
49.71
|
|
|
Forfeited/canceled
|
|
(114
|
)
|
|
(274
|
)
|
|
(388
|
)
|
|
44.18
|
|
|
Nonvested Balance at December 31, 2016
|
|
4,925
|
|
|
1,771
|
|
|
6,696
|
|
|
$
|
38.96
|
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Investment and Other Income, Net
|
|
|
|
|
||||
Dividend income
|
|
$
|
2.4
|
|
|
$
|
2.8
|
|
Interest income
|
|
13.6
|
|
|
3.6
|
|
||
Gains (losses) on trading investment securities, net
|
|
2.0
|
|
|
(7.3
|
)
|
||
Realized gains on sale of investment securities, available-for-sale
|
|
0.6
|
|
|
7.8
|
|
||
Realized losses on sale of investment securities, available-for-sale
|
|
(0.7
|
)
|
|
(0.8
|
)
|
||
Income from investments in equity method investees
|
|
34.2
|
|
|
24.8
|
|
||
Other-than-temporary impairment of investments
|
|
(0.3
|
)
|
|
(0.4
|
)
|
||
Losses on investments of consolidated SIPs, net
|
|
(29.9
|
)
|
|
(5.7
|
)
|
||
Foreign currency exchange gains, net
|
|
19.8
|
|
|
3.5
|
|
||
Other, net
|
|
4.4
|
|
|
2.2
|
|
||
Total
|
|
46.1
|
|
|
30.5
|
|
||
Interest Expense
|
|
(13.3
|
)
|
|
(12.0
|
)
|
||
Other Income, Net
|
|
$
|
32.8
|
|
|
$
|
18.5
|
|
(in millions)
|
|
Unrealized
Gains (Losses) on Investments |
|
Currency
Translation
Adjustments
|
|
Unrealized
Losses on
Defined Benefit
Plans
|
|
Total
|
||||||||
for the three months ended December 31, 2016
|
|
|
|
|
||||||||||||
Balance at October 1, 2016
|
|
$
|
6.8
|
|
|
$
|
(346.1
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(347.4
|
)
|
Adoption of new accounting guidance
|
|
(6.8
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(7.1
|
)
|
||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss before reclassifications, net of tax
|
|
(2.6
|
)
|
|
(60.9
|
)
|
|
—
|
|
|
(63.5
|
)
|
||||
Reclassifications to net investment and other income, net of tax
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
||||
Total other comprehensive loss
|
|
(2.4
|
)
|
|
(60.9
|
)
|
|
—
|
|
|
(63.3
|
)
|
||||
Balance at December 31, 2016
|
|
$
|
(2.4
|
)
|
|
$
|
(407.3
|
)
|
|
$
|
(8.1
|
)
|
|
$
|
(417.8
|
)
|
(in millions)
|
|
Unrealized
Gains on Investments |
|
Currency
Translation
Adjustments
|
|
Unrealized
Losses on
Defined Benefit
Plans
|
|
Total
|
||||||||
for the three months ended December 31, 2015
|
|
|
|
|
||||||||||||
Balance at October 1, 2015
|
|
$
|
19.3
|
|
|
$
|
(327.8
|
)
|
|
$
|
(5.7
|
)
|
|
$
|
(314.2
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
|
0.8
|
|
|
(23.6
|
)
|
|
0.6
|
|
|
(22.2
|
)
|
||||
Reclassifications to net investment and other income, net of tax
|
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
(6.7
|
)
|
||||
Total other comprehensive income (loss)
|
|
(5.9
|
)
|
|
(23.6
|
)
|
|
0.6
|
|
|
(28.9
|
)
|
||||
Balance at December 31, 2015
|
|
$
|
13.4
|
|
|
$
|
(351.4
|
)
|
|
$
|
(5.1
|
)
|
|
$
|
(343.1
|
)
|
|
|
Three Months Ended
December 31, |
|
Percent
Change
|
|||||||
(in millions, except per share data)
|
|
2016
|
|
2015
|
|
||||||
Operating revenues
|
|
$
|
1,560.8
|
|
|
$
|
1,758.0
|
|
|
(11
|
%)
|
Operating income
|
|
586.9
|
|
|
653.6
|
|
|
(10
|
%)
|
||
Net income attributable to Franklin Resources, Inc.
|
|
440.2
|
|
|
447.8
|
|
|
(2
|
%)
|
||
Diluted earnings per share
|
|
$
|
0.77
|
|
|
$
|
0.74
|
|
|
4
|
%
|
Operating margin
1
|
|
37.6
|
%
|
|
37.2
|
%
|
|
|
|
1
|
Defined as operating income divided by total operating revenues.
|
(in billions)
|
|
December 31,
2016 |
|
December 31,
2015 |
|
Percent
Change
|
|||||
Equity
|
|
|
|
|
|
|
|||||
Global/international
|
|
$
|
196.7
|
|
|
$
|
211.7
|
|
|
(7
|
%)
|
United States
|
|
101.6
|
|
|
102.0
|
|
|
0
|
%
|
||
Total equity
|
|
298.3
|
|
|
313.7
|
|
|
(5
|
%)
|
||
Hybrid
|
|
138.3
|
|
|
134.4
|
|
|
3
|
%
|
||
Fixed Income
|
|
|
|
|
|
|
|||||
Tax-free
|
|
71.7
|
|
|
72.4
|
|
|
(1
|
%)
|
||
Taxable
|
|
|
|
|
|
|
|||||
Global/international
|
|
153.6
|
|
|
182.0
|
|
|
(16
|
%)
|
||
United States
|
|
51.9
|
|
|
54.8
|
|
|
(5
|
%)
|
||
Total fixed income
|
|
277.2
|
|
|
309.2
|
|
|
(10
|
%)
|
||
Cash Management
|
|
6.2
|
|
|
6.6
|
|
|
(6
|
%)
|
||
Total
|
|
$
|
720.0
|
|
|
$
|
763.9
|
|
|
(6
|
%)
|
(in billions)
|
|
Average AUM
|
|
Percent
Change
|
|
Mix of Average AUM
|
|||||||||||
for the three months ended December 31,
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||||
Global/international
|
|
$
|
197.0
|
|
|
$
|
216.6
|
|
|
(9
|
%)
|
|
27
|
%
|
|
28
|
%
|
United States
|
|
101.3
|
|
|
103.4
|
|
|
(2
|
%)
|
|
14
|
%
|
|
13
|
%
|
||
Total equity
|
|
298.3
|
|
|
320.0
|
|
|
(7
|
%)
|
|
41
|
%
|
|
41
|
%
|
||
Hybrid
|
|
136.7
|
|
|
139.2
|
|
|
(2
|
%)
|
|
19
|
%
|
|
18
|
%
|
||
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax-free
|
|
74.1
|
|
|
72.0
|
|
|
3
|
%
|
|
10
|
%
|
|
9
|
%
|
||
Taxable
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Global/international
|
|
155.0
|
|
|
186.4
|
|
|
(17
|
%)
|
|
22
|
%
|
|
24
|
%
|
||
United States
|
|
52.4
|
|
|
57.2
|
|
|
(8
|
%)
|
|
7
|
%
|
|
7
|
%
|
||
Total fixed income
|
|
281.5
|
|
|
315.6
|
|
|
(11
|
%)
|
|
39
|
%
|
|
40
|
%
|
||
Cash Management
|
|
6.2
|
|
|
6.7
|
|
|
(7
|
%)
|
|
1
|
%
|
|
1
|
%
|
||
Total
|
|
$
|
722.7
|
|
|
$
|
781.5
|
|
|
(8
|
%)
|
|
100
|
%
|
|
100
|
%
|
(in billions)
|
|
Three Months Ended
December 31, |
|
Percent
Change
|
|||||||
|
2016
|
|
2015
|
|
|||||||
Beginning AUM
|
|
$
|
733.3
|
|
|
$
|
770.9
|
|
|
(5
|
%)
|
Long-term sales
|
|
24.5
|
|
|
33.1
|
|
|
(26
|
%)
|
||
Long-term redemptions
|
|
(46.7
|
)
|
|
(53.3
|
)
|
|
(12
|
%)
|
||
Long-term net exchanges
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
100
|
%
|
||
Reinvested distributions
|
|
8.2
|
|
|
11.5
|
|
|
(29
|
%)
|
||
Net flows
|
|
(14.4
|
)
|
|
(8.9
|
)
|
|
62
|
%
|
||
Net market change and other
|
|
1.1
|
|
|
1.9
|
|
|
(42
|
%)
|
||
Ending AUM
|
|
$
|
720.0
|
|
|
$
|
763.9
|
|
|
(6
|
%)
|
(in billions)
|
|
Equity
|
|
Hybrid
|
|
Fixed Income
|
|
Cash Management
|
|
Total
|
||||||||||||||||||||||
for the three months ended December 31, 2016
|
|
Global/
International
|
|
United
States
|
|
|
Tax-Free
|
|
Taxable
Global/
International
|
|
Taxable
United
States
|
|
|
|||||||||||||||||||
AUM at October 1, 2016
|
|
$
|
200.4
|
|
|
$
|
103.3
|
|
|
$
|
137.4
|
|
|
$
|
76.5
|
|
|
$
|
156.2
|
|
|
$
|
53.4
|
|
|
$
|
6.1
|
|
|
$
|
733.3
|
|
Long-term sales
|
|
5.9
|
|
|
3.7
|
|
|
4.0
|
|
|
2.2
|
|
|
6.1
|
|
|
2.6
|
|
|
—
|
|
|
24.5
|
|
||||||||
Long-term redemptions
|
|
(10.7
|
)
|
|
(7.5
|
)
|
|
(6.7
|
)
|
|
(3.7
|
)
|
|
(14.2
|
)
|
|
(3.9
|
)
|
|
—
|
|
|
(46.7
|
)
|
||||||||
Long-term net exchanges
|
|
(0.2
|
)
|
|
0.2
|
|
|
0.1
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
0.2
|
|
|
—
|
|
|
(0.4
|
)
|
||||||||
Reinvested distributions
|
|
2.1
|
|
|
3.1
|
|
|
1.4
|
|
|
0.5
|
|
|
0.8
|
|
|
0.3
|
|
|
—
|
|
|
8.2
|
|
||||||||
Net flows
|
|
(2.9
|
)
|
|
(0.5
|
)
|
|
(1.2
|
)
|
|
(1.5
|
)
|
|
(7.5
|
)
|
|
(0.8
|
)
|
|
—
|
|
|
(14.4
|
)
|
||||||||
Net market change and other
|
(0.8
|
)
|
|
(1.2
|
)
|
|
2.1
|
|
|
(3.3
|
)
|
|
4.9
|
|
|
(0.7
|
)
|
|
0.1
|
|
|
1.1
|
|
|||||||||
AUM at December 31, 2016
|
|
$
|
196.7
|
|
|
$
|
101.6
|
|
|
$
|
138.3
|
|
|
$
|
71.7
|
|
|
$
|
153.6
|
|
|
$
|
51.9
|
|
|
$
|
6.2
|
|
|
$
|
720.0
|
|
(in billions)
|
|
Equity
|
|
Hybrid
|
|
Fixed Income
|
|
Cash Management
|
|
Total
|
||||||||||||||||||||||
for the three months ended December 31, 2015
|
|
Global/
International
|
|
United
States
|
|
|
Tax-Free
|
|
Taxable
Global/
International
|
|
Taxable
United
States
|
|
|
|||||||||||||||||||
AUM at October 1, 2015
|
|
$
|
212.1
|
|
|
$
|
100.8
|
|
|
$
|
138.3
|
|
|
$
|
71.7
|
|
|
$
|
182.7
|
|
|
$
|
58.5
|
|
|
$
|
6.8
|
|
|
$
|
770.9
|
|
Long-term sales
|
|
6.6
|
|
|
3.5
|
|
|
4.0
|
|
|
1.7
|
|
|
15.0
|
|
|
2.3
|
|
|
—
|
|
|
33.1
|
|
||||||||
Long-term redemptions
|
|
(11.9
|
)
|
|
(7.0
|
)
|
|
(9.2
|
)
|
|
(2.2
|
)
|
|
(18.4
|
)
|
|
(4.6
|
)
|
|
—
|
|
|
(53.3
|
)
|
||||||||
Long-term net exchanges
|
|
(0.1
|
)
|
|
0.4
|
|
|
(0.4
|
)
|
|
0.3
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||||||
Reinvested distributions
|
|
3.1
|
|
|
4.3
|
|
|
1.9
|
|
|
0.5
|
|
|
1.3
|
|
|
0.4
|
|
|
—
|
|
|
11.5
|
|
||||||||
Net flows
|
|
(2.3
|
)
|
|
1.2
|
|
|
(3.7
|
)
|
|
0.3
|
|
|
(2.3
|
)
|
|
(2.1
|
)
|
|
—
|
|
|
(8.9
|
)
|
||||||||
Net market change and other
|
1.9
|
|
|
—
|
|
|
(0.2
|
)
|
|
0.4
|
|
|
1.6
|
|
|
(1.6
|
)
|
|
(0.2
|
)
|
|
1.9
|
|
|||||||||
AUM at December 31, 2015
|
|
$
|
211.7
|
|
|
$
|
102.0
|
|
|
$
|
134.4
|
|
|
$
|
72.4
|
|
|
$
|
182.0
|
|
|
$
|
54.8
|
|
|
$
|
6.6
|
|
|
$
|
763.9
|
|
|
|
Three Months Ended
December 31, |
|
Percent
Change |
|||||||
(in billions)
|
|
2016
|
|
2015
|
|
||||||
United States
|
|
$
|
492.1
|
|
|
$
|
526.8
|
|
|
(7
|
%)
|
International
|
|
|
|
|
|
|
|||||
Europe, the Middle East and Africa
|
|
101.1
|
|
|
116.9
|
|
|
(14
|
%)
|
||
Asia-Pacific
|
|
82.3
|
|
|
84.1
|
|
|
(2
|
%)
|
||
Canada
|
|
30.4
|
|
|
32.2
|
|
|
(6
|
%)
|
||
Latin America
1
|
|
16.8
|
|
|
21.5
|
|
|
(22
|
%)
|
||
Total international
|
|
230.6
|
|
|
254.7
|
|
|
(9
|
%)
|
||
Total
|
|
$
|
722.7
|
|
|
$
|
781.5
|
|
|
(8
|
%)
|
1
|
Latin America sales region includes North America-based advisers serving non-resident clients.
|
|
|
Benchmark Comparison
1,2
|
|
Peer Group Comparison
1,3
|
||||||||||||||||||||
|
|
% of AUM Exceeding Benchmark
|
|
% of AUM in Top Two Peer Group Quartiles
|
||||||||||||||||||||
as of December 31, 2016
|
|
1-Year
|
|
3-Year
|
|
5-Year
|
|
10-Year
|
|
1-Year
|
|
3-Year
|
|
5-Year
|
|
10-Year
|
||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Global/international
|
|
58
|
%
|
|
27
|
%
|
|
28
|
%
|
|
52
|
%
|
|
69
|
%
|
|
39
|
%
|
|
64
|
%
|
|
51
|
%
|
United States
|
|
45
|
%
|
|
7
|
%
|
|
1
|
%
|
|
32
|
%
|
|
65
|
%
|
|
53
|
%
|
|
28
|
%
|
|
69
|
%
|
Total equity
|
|
53
|
%
|
|
20
|
%
|
|
18
|
%
|
|
44
|
%
|
|
67
|
%
|
|
44
|
%
|
|
50
|
%
|
|
59
|
%
|
Hybrid
|
|
91
|
%
|
|
9
|
%
|
|
8
|
%
|
|
8
|
%
|
|
93
|
%
|
|
88
|
%
|
|
91
|
%
|
|
94
|
%
|
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Tax-free
|
|
90
|
%
|
|
74
|
%
|
|
62
|
%
|
|
27
|
%
|
|
94
|
%
|
|
75
|
%
|
|
61
|
%
|
|
100
|
%
|
Taxable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Global/international
|
|
85
|
%
|
|
68
|
%
|
|
87
|
%
|
|
88
|
%
|
|
93
|
%
|
|
90
|
%
|
|
91
|
%
|
|
97
|
%
|
United States
|
|
67
|
%
|
|
27
|
%
|
|
59
|
%
|
|
45
|
%
|
|
60
|
%
|
|
22
|
%
|
|
36
|
%
|
|
60
|
%
|
Total fixed income
|
|
83
|
%
|
|
62
|
%
|
|
74
|
%
|
|
59
|
%
|
|
87
|
%
|
|
72
|
%
|
|
71
|
%
|
|
91
|
%
|
1
|
AUM measured in the benchmark and peer group rankings represents 90% and 82% of our total AUM as of
December 31, 2016
.
|
2
|
The benchmark comparisons are based on each fund’s return as compared to a market index that has been selected to be generally consistent with the investment objectives of the fund.
|
3
|
The peer group rankings are sourced from either Lipper, a Thomson Reuters Company, Morningstar or eVestment in each fund’s market and were based on an absolute ranking of returns. © 2017 Morningstar, Inc. All rights reserved. The information herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
|
(in millions)
|
|
Three Months Ended
December 31, |
|
Percent
Change |
|||||||
|
2016
|
|
2015
|
|
|||||||
Investment management fees
|
|
$
|
1,063.2
|
|
|
$
|
1,186.7
|
|
|
(10
|
%)
|
Sales and distribution fees
|
|
419.3
|
|
|
478.4
|
|
|
(12
|
%)
|
||
Shareholder servicing fees
|
|
56.6
|
|
|
61.9
|
|
|
(9
|
%)
|
||
Other
|
|
21.7
|
|
|
31.0
|
|
|
(30
|
%)
|
||
Total Operating Revenues
|
|
$
|
1,560.8
|
|
|
$
|
1,758.0
|
|
|
(11
|
%)
|
(in millions)
|
|
Three Months Ended
December 31, |
|
Percent
Change |
|||||||
|
2016
|
|
2015
|
|
|||||||
Asset-based fees
|
|
$
|
338.3
|
|
|
$
|
377.2
|
|
|
(10
|
%)
|
Sales-based fees
|
|
78.8
|
|
|
99.1
|
|
|
(20
|
%)
|
||
Contingent sales charges
|
|
2.2
|
|
|
2.1
|
|
|
5
|
%
|
||
Sales and Distribution Fees
|
|
$
|
419.3
|
|
|
$
|
478.4
|
|
|
(12
|
%)
|
|
|
Three Months Ended
December 31, |
|
Percent
Change
|
|||||||
(in millions)
|
|
2016
|
|
2015
|
|
||||||
Sales, distribution and marketing
|
|
$
|
520.0
|
|
|
$
|
588.6
|
|
|
(12
|
%)
|
Compensation and benefits
|
|
311.5
|
|
|
342.5
|
|
|
(9
|
%)
|
||
Information systems and technology
|
|
51.7
|
|
|
51.2
|
|
|
1
|
%
|
||
Occupancy
|
|
29.1
|
|
|
30.7
|
|
|
(5
|
%)
|
||
General, administrative and other
|
|
61.6
|
|
|
91.4
|
|
|
(33
|
%)
|
||
Total Operating Expenses
|
|
$
|
973.9
|
|
|
$
|
1,104.4
|
|
|
(12
|
%)
|
|
|
Three Months Ended
December 31, |
|
Percent
Change |
|||||||
(in millions)
|
|
2016
|
|
2015
|
|
||||||
Asset-based expenses
|
|
$
|
431.8
|
|
|
$
|
478.6
|
|
|
(10
|
%)
|
Sales-based expenses
|
|
71.1
|
|
|
87.2
|
|
|
(18
|
%)
|
||
Amortization of deferred sales commissions
|
|
17.1
|
|
|
22.8
|
|
|
(25
|
%)
|
||
Sales, Distribution and Marketing
|
|
$
|
520.0
|
|
|
$
|
588.6
|
|
|
(12
|
%)
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Net carrying value at beginning of period
|
|
$
|
88.1
|
|
|
$
|
89.8
|
|
Additions, net of disposals
|
|
20.5
|
|
|
11.2
|
|
||
Amortization
|
|
(12.5
|
)
|
|
(11.9
|
)
|
||
Net Carrying Value at End of Period
|
|
$
|
96.1
|
|
|
$
|
89.1
|
|
|
|
Three Months Ended
December 31, |
|
Percent
Change |
|||||||
(in millions)
|
|
2016
|
|
2015
|
|
||||||
Investment and other income, net
|
|
$
|
46.1
|
|
|
$
|
30.5
|
|
|
51
|
%
|
Interest expense
|
|
(13.3
|
)
|
|
(12.0
|
)
|
|
11
|
%
|
||
Other Income, Net
|
|
$
|
32.8
|
|
|
$
|
18.5
|
|
|
77
|
%
|
(in millions)
|
|
Total Portfolio
|
|
Percent of Total Portfolio
|
|
Trading Securities Included in Portfolio
|
|
Percent of Total Trading Securities
|
|
Assets of Consolidated SIPs Included in Total Portfolio
|
|
Percent of Total
|
|||||||||
Cash and Cash Equivalents
|
|
$
|
8,454.8
|
|
|
68
|
%
|
|
$
|
—
|
|
|
0
|
%
|
|
$
|
231.2
|
|
|
8
|
%
|
Investment Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global/international
|
|
364.9
|
|
|
3
|
%
|
|
0.4
|
|
|
0
|
%
|
|
341.7
|
|
|
13
|
%
|
|||
United States
|
|
4.2
|
|
|
0
|
%
|
|
0.3
|
|
|
0
|
%
|
|
2.6
|
|
|
0
|
%
|
|||
Total equity
|
|
369.1
|
|
|
3
|
%
|
|
0.7
|
|
|
0
|
%
|
|
344.3
|
|
|
13
|
%
|
|||
Hybrid
|
|
294.5
|
|
|
2
|
%
|
|
76.4
|
|
|
19
|
%
|
|
205.4
|
|
|
8
|
%
|
|||
Fixed Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax-free
|
|
1.6
|
|
|
0
|
%
|
|
—
|
|
|
0
|
%
|
|
—
|
|
|
0
|
%
|
|||
Taxable
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Global/international
|
|
1,211.2
|
|
|
10
|
%
|
|
264.3
|
|
|
66
|
%
|
|
903.1
|
|
|
34
|
%
|
|||
United States
|
|
1,088.0
|
|
|
9
|
%
|
|
61.6
|
|
|
15
|
%
|
|
1,003.3
|
|
|
37
|
%
|
|||
Total fixed income
|
|
2,300.8
|
|
|
19
|
%
|
|
325.9
|
|
|
81
|
%
|
|
1,906.4
|
|
|
71
|
%
|
|||
Total investment securities
|
|
2,964.4
|
|
|
24
|
%
|
|
403.0
|
|
|
100
|
%
|
|
2,456.1
|
|
|
92
|
%
|
|||
Other Investments
|
|
1,004.5
|
|
|
8
|
%
|
|
—
|
|
|
0
|
%
|
|
—
|
|
|
0
|
%
|
|||
Total Cash and Cash Equivalents and Investments
|
|
$
|
12,423.7
|
|
|
100
|
%
|
|
$
|
403.0
|
|
|
100
|
%
|
|
$
|
2,687.3
|
|
|
100
|
%
|
|
|
Three Months Ended
December 31, |
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Cash Flow Data
|
|
|
|
|
||||
Operating cash flows
|
|
$
|
446.2
|
|
|
$
|
295.2
|
|
Investing cash flows
|
|
(58.4
|
)
|
|
89.2
|
|
||
Financing cash flows
|
|
(365.9
|
)
|
|
(463.4
|
)
|
(in millions)
|
|
December 31,
2016 |
|
September 30,
2016 |
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
8,223.6
|
|
|
$
|
8,247.1
|
|
Receivables
|
|
755.9
|
|
|
746.4
|
|
||
Investments
|
|
1,916.1
|
|
|
1,896.7
|
|
||
Total Liquid Assets
|
|
$
|
10,895.6
|
|
|
$
|
10,890.2
|
|
Liability
|
|
|
|
|
||||
Debt
|
|
$
|
1,394.4
|
|
|
$
|
1,401.2
|
|
Month
|
|
Total Number of
Shares Purchased
|
|
Average Price
Paid per
Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs
|
|
Maximum Number of
Shares that May Yet Be
Purchased Under the Plans
or Programs
|
|||||
October 2016
|
|
2,001,691
|
|
|
$
|
34.78
|
|
|
2,001,691
|
|
|
48,683,238
|
|
November 2016
|
|
2,915,300
|
|
|
36.59
|
|
|
2,915,300
|
|
|
45,767,938
|
|
|
December 2016
|
|
2,134,718
|
|
|
40.01
|
|
|
2,134,718
|
|
|
43,633,220
|
|
|
Total
|
|
7,051,709
|
|
|
|
|
7,051,709
|
|
|
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
3(i)(a)
|
|
|
Registrant’s Certificate of Incorporation, as filed November 28, 1969, incorporated by reference to Exhibit (3)(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (File No. 001-09318) (the “1994 Annual Report”)
|
|
|
|
|
3(i)(b)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed March 1, 1985, incorporated by reference to Exhibit 3(ii) to the 1994 Annual Report
|
|
|
|
|
3(i)(c)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed April 1, 1987, incorporated by reference to Exhibit 3(iii) to the 1994 Annual Report
|
|
|
|
|
3(i)(d)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed February 2, 1994, incorporated by reference to Exhibit 3(iv) to the 1994 Annual Report
|
|
|
|
|
3(i)(e)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed on February 4, 2005, incorporated by reference to Exhibit (3)(i)(e) to the Registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2004 (File No. 001-09318)
|
|
|
|
|
3(ii)
|
|
|
Registrant’s Amended and Restated Bylaws (as adopted and effective September 16, 2015) (filed herewith)
|
|
|
|
|
10.1
|
|
|
Non-Employee Director Compensation as of October 17, 2016 (filed herewith)*
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
|
|
|
32.1
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
|
|
|
|
32.2
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
|
|
|
|
101
|
|
|
The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2016, formatted in Extensible Business Reporting Language (XBRL), include: (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related notes (filed herewith)
|
|
|
|
FRANKLIN RESOURCES, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
|
January 27, 2017
|
|
By:
|
/
S
/ K
ENNETH
A. L
EWIS
|
|
|
|
|
Kenneth A. Lewis
|
|
|
|
|
Chief Financial Officer and Executive Vice President
|
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
|
|
3(i)(a)
|
|
|
Registrant’s Certificate of Incorporation, as filed November 28, 1969, incorporated by reference to Exhibit (3)(i) to the Registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 1994 (File No. 001-09318) (the “1994 Annual Report”)
|
|
|
|
|
3(i)(b)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed March 1, 1985, incorporated by reference to Exhibit 3(ii) to the 1994 Annual Report
|
|
|
|
|
3(i)(c)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed April 1, 1987, incorporated by reference to Exhibit 3(iii) to the 1994 Annual Report
|
|
|
|
|
3(i)(d)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed February 2, 1994, incorporated by reference to Exhibit 3(iv) to the 1994 Annual Report
|
|
|
|
|
3(i)(e)
|
|
|
Registrant’s Certificate of Amendment of Certificate of Incorporation, as filed on February 4, 2005, incorporated by reference to Exhibit (3)(i)(e) to the Registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2004 (File No. 001-09318)
|
|
|
|
|
3(ii)
|
|
|
Registrant’s Amended and Restated Bylaws (as adopted and effective September 16, 2015) (filed herewith)
|
|
|
|
|
10.1
|
|
|
Non-Employee Director Compensation as of October 17, 2016 (filed herewith)*
|
|
|
|
|
31.1
|
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
|
|
|
31.2
|
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
|
|
|
32.1
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
|
|
|
|
32.2
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)
|
|
|
|
|
101
|
|
|
The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2016, formatted in Extensible Business Reporting Language (XBRL), include: (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) related notes (filed herewith)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Franklin Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 27, 2017
|
|
/s/ G
REGORY
E. J
OHNSON
|
|
|
|
Gregory E. Johnson
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Franklin Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
January 27, 2017
|
|
/s/ K
ENNETH
A. L
EWIS
|
|
|
|
Kenneth A. Lewis
|
|
|
|
Chief Financial Officer and Executive Vice President
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
|
Date:
|
January 27, 2017
|
|
/s/ G
REGORY
E. J
OHNSON
|
|
|
|
Gregory E. Johnson
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
|
Date:
|
January 27, 2017
|
|
/s/ K
ENNETH
A. L
EWIS
|
|
|
|
Kenneth A. Lewis
|
|
|
|
Chief Financial Officer and Executive Vice President
|