FRANKLIN RESOURCES INC, 10-K filed on 11/12/2015
Annual Report
Document and Entity Information (USD $)
In Billions, except Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Oct. 31, 2015
Mar. 31, 2015
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
Franklin Resources Inc 
 
 
Entity Central Index Key
0000038777 
 
 
Document Type
10-K 
 
 
Document Period End Date
Sep. 30, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--09-30 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 20.1 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
601,489,475 
 
Consolidated Statements of Income (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Operating Revenues
 
 
 
Investment management fees
$ 5,327.8 
$ 5,565.7 
$ 5,071.4 
Sales and distribution fees
2,252.4 
2,546.4 
2,516.0 
Shareholder servicing fees
262.8 
281.1 
303.7 
Other
105.7 
98.2 
93.9 
Total operating revenues
7,948.7 
8,491.4 
7,985.0 
Operating Expenses
 
 
 
Sales, distribution and marketing
2,762.3 
3,088.2 
3,042.1 
Compensation and benefits
1,453.3 
1,467.9 
1,384.5 
Information systems and technology
224.3 
216.3 
191.1 
Occupancy
132.7 
137.7 
134.2 
General, administrative and other
348.5 
360.1 
311.8 
Total operating expenses
4,921.1 
5,270.2 
5,063.7 
Operating Income
3,027.6 
3,221.2 
2,921.3 
Other Income (Expenses)
 
 
 
Investment and other income, net
40.4 
235.8 
152.2 
Interest expense
(39.6)
(47.4)
(46.9)
Other income, net
0.8 
188.4 
105.3 
Income before taxes
3,028.4 
3,409.6 
3,026.6 
Taxes on income
923.7 
997.9 
855.9 
Net income
2,104.7 
2,411.7 
2,170.7 
Less: net income (loss) attributable to
 
 
 
Nonredeemable noncontrolling interests
75.5 
6.8 
16.9 
Redeemable noncontrolling interests
(6.1)
20.6 
3.6 
Net Income Attributable to Franklin Resources, Inc.
$ 2,035.3 
$ 2,384.3 
$ 2,150.2 
Earnings per Share
 
 
 
Basic
$ 3.29 
$ 3.79 
$ 3.37 
Diluted
$ 3.29 
$ 3.79 
$ 3.37 
Dividends per Share
$ 1.10 
$ 0.48 
$ 1.39 
Consolidated Statements of Comprehensive Income (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net Income
$ 2,104.7 
$ 2,411.7 
$ 2,170.7 
Other Comprehensive Income (Loss)
 
 
 
Net unrealized losses on investments, net of tax
(11.7)
(40.9)
(8.1)
Currency translation adjustments, net of tax
(184.2)
(80.4)
(49.5)
Net unrealized gains (losses) on defined benefit plans, net of tax
(0.6)
(2.5)
1.7 
Total other comprehensive income (loss)
(196.5)
(123.8)
(55.9)
Total comprehensive income
1,908.2 
2,287.9 
2,114.8 
Less: comprehensive income (loss) attributable to
 
 
 
Nonredeemable noncontrolling interests
75.5 
6.8 
16.9 
Redeemable noncontrolling interests
(6.1)
20.6 
3.6 
Comprehensive Income Attributable to Franklin Resources, Inc.
$ 1,838.8 
$ 2,260.5 
$ 2,094.3 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Assets
 
 
Cash and cash equivalents
$ 8,368.1 
$ 7,596.0 
Receivables
838.0 
950.0 
Investments
2,459.2 
2,516.1 
Investments, at fair value
1,712.3 
1,845.6 
Deferred taxes, net
100.7 
98.1 
Property and equipment, net
510.1 
530.7 
Goodwill and other intangible assets, net
2,257.0 
2,325.9 
Other
152.7 
178.2 
Total Assets
16,335.7 
16,357.1 
Liabilities
 
 
Compensation and benefits
433.2 
465.1 
Accounts payable and accrued expenses
232.1 
237.5 
Dividends
92.6 
76.9 
Commissions
359.9 
440.3 
Debt
1,348.0 
1,198.2 
Debt of consolidated sponsored investment products
81.2 
122.3 
Debt of consolidated variable interest entities
726.1 
828.5 
Deferred taxes
241.4 
259.3 
Other
265.8 
281.8 
Total liabilities
3,780.3 
3,909.9 
Commitments and Contingencies (Note 11)
   
   
Redeemable Noncontrolling Interests
59.6 
234.8 
Stockholders’ Equity
 
 
Preferred stock, $1.00 par value, 1,000,000 shares authorized; none issued
0 
0 
Common stock, $0.10 par value, 1,000,000,000 shares authorized; 603,517,181 and 622,893,090 shares issued and outstanding at September 30, 2015 and 2014
60.4 
62.3 
Retained earnings
12,094.8 
11,625.6 
Appropriated retained earnings of consolidated variable interest entities
0 
13.9 
Accumulated other comprehensive loss
(314.2)
(117.7)
Total Franklin Resources, Inc. stockholders’ equity
11,841.0 
11,584.1 
Nonredeemable noncontrolling interests
654.8 
628.3 
Total stockholders’ equity
12,495.8 
12,212.4 
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
16,335.7 
16,357.1 
Consolidated sponsored investment products [Member]
 
 
Assets
 
 
Cash and cash equivalents
108.5 
44.9 
Receivables
10.0 
16.2 
Investments, at fair value
977.4 
1,373.7 
Other
0.7 
0.7 
Total Assets
1,096.6 
1,435.5 
Liabilities
 
 
Accounts payable and accrued expenses
10.8 
18.5 
Debt of consolidated sponsored investment products
81.2 
122.3 
Other
6.3 
12.4 
Total liabilities
98.3 
153.2 
Redeemable Noncontrolling Interests
59.6 
234.8 
Stockholders’ Equity
 
 
Total Franklin Resources, Inc. stockholders’ equity
308.8 
436.5 
Nonredeemable noncontrolling interests
629.9 
611.0 
Total stockholders’ equity
938.7 
1,047.5 
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
1,096.6 
1,435.5 
Consolidated variable interest entities [Member]
 
 
Assets
 
 
Cash and cash equivalents
74.7 
74.3 
Receivables
11.5 
23.0 
Investments, at fair value
672.5 
788.4 
Other
0 
0 
Total Assets
758.7 
885.7 
Liabilities
 
 
Accounts payable and accrued expenses
25.3 
35.3 
Debt of consolidated variable interest entities
726.1 
828.5 
Other
0 
0 
Total liabilities
751.4 
863.8 
Redeemable Noncontrolling Interests
0 
0 
Stockholders’ Equity
 
 
Total Franklin Resources, Inc. stockholders’ equity
7.3 
21.9 
Nonredeemable noncontrolling interests
0 
0 
Total stockholders’ equity
7.3 
21.9 
Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity
758.7 
885.7 
Franklin Resources, Inc. [Member]
 
 
Assets
 
 
Cash and cash equivalents
8,184.9 
7,476.8 
Investments
$ 2,459.2 
$ 2,516.1 
Consolidated Balance Sheets (Parentheticals) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Statement of Financial Position [Abstract]
 
 
Investments, at fair value
$ 1,712.3 
$ 1,845.6 
Preferred stock, par value
$ 1.00 
$ 1.00 
Preferred stock, shares authorized
1,000,000 
1,000,000 
Preferred stock, shares issued
0 
0 
Common stock, par value
$ 0.10 
$ 0.10 
Common stock, shares authorized
1,000,000,000 
1,000,000,000 
Common stock, shares issued
603,517,181 
622,893,090 
Common stock, shares outstanding
603,517,181 
622,893,090 
Consolidated Statements of Stockholders' Equity Statement (USD $)
In Millions, unless otherwise specified
Total
Common Stock [Member]
Capital in Excess of Par Value [Member]
Retained Earnings [Member]
Appropriated Retained Earnings of Consolidated Variable Interest Entities [Member]
Accumulated Other Comprehensive Income [Member]
Stockholders' Equity [Member]
Nonredeemable Noncontrolling Interest [Member]
Total Stockholders' Equity [Member]
New Accounting Pronouncement, Early Adoption, Effect [Member]
New Accounting Pronouncement, Early Adoption, Effect [Member]
Appropriated Retained Earnings of Consolidated Variable Interest Entities [Member]
Beginning balance at Sep. 30, 2012
 
 
 
 
 
 
 
$ 559.2 
 
 
 
Beginning balance at Sep. 30, 2012
9,760.5 
 
 
 
 
 
 
 
 
 
 
Beginning balance at Sep. 30, 2012
 
63.7 
0 
9,041.9 
33.7 
62.0 
9,201.3 
 
 
 
 
Beginning balance - Shares at Sep. 30, 2012
 
636.6 
 
 
 
 
 
 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Franklin Resources, Inc.
2,150.2 
 
 
2,150.2 
 
 
2,150.2 
 
 
 
 
Nonredeemable noncontrolling interests
16.9 
 
 
 
 
 
 
 
 
 
 
Net Income
2,167.1 
 
 
 
 
 
 
 
 
 
 
Net income (loss) reclassified to appropriated retained earnings
 
 
 
 
(20.1)
 
(20.1)
20.1 
 
 
 
Other Comprehensive Income (Loss)
(55.9)
 
 
 
 
(55.9)
(55.9)
 
 
 
 
Cash dividends on common stock
(888.7)
 
 
(888.7)
 
 
(888.7)
 
 
 
 
Repurchase of common stock - Shares
 
(10.5)
 
 
 
 
 
 
 
 
 
Repurchase of common stock - Amount
(491.0)
(1.1)
(177.7)
(312.2)
 
 
(491.0)
 
 
 
 
Issuance of common stock - Shares
 
4.8 
 
 
 
 
 
 
 
 
 
Issuance of common stock - Amount
147.5 
0.5 
147.0 
 
 
 
147.5 
 
 
 
 
Excess tax benefit from stock-based compensation
24.4 
 
24.4 
 
 
 
24.4 
 
 
 
 
Stock-based compensation
6.3 
 
6.3 
 
 
 
6.3 
 
 
 
 
Net subscriptions (distributions)
63.7 
 
 
 
 
 
 
63.7 
 
 
 
Net consolidation (deconsolidation) of sponsored investment products
(11.0)
 
 
 
 
 
 
4.1 
4.1 
 
 
Acquisition
38.2 
 
 
 
 
 
 
5.4 
5.4 
 
 
Deconsolidation of variable interest entity
(0.9)
 
 
 
(0.9)
 
(0.9)
 
 
 
 
Reclassification
(57.0)
 
 
 
 
 
 
(57.0)
 
 
 
Ending balance at Sep. 30, 2013
 
 
 
 
 
 
 
612.4 
 
 
 
Ending balance at Sep. 30, 2013
10,685.5 
 
 
 
 
 
 
 
 
 
 
Ending balance at Sep. 30, 2013
 
63.1 
0 
9,991.2 
12.7 
6.1 
10,073.1 
 
 
 
 
Ending balance - Shares at Sep. 30, 2013
 
630.9 
 
 
 
 
 
 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Franklin Resources, Inc.
2,384.3 
 
 
2,384.3 
 
 
2,384.3 
 
 
 
 
Nonredeemable noncontrolling interests
6.8 
 
 
 
 
 
 
 
 
 
 
Net Income
2,391.1 
 
 
 
 
 
 
 
 
 
 
Net income (loss) reclassified to appropriated retained earnings
 
 
 
 
1.2 
 
1.2 
(1.2)
 
 
 
Other Comprehensive Income (Loss)
(123.8)
 
 
 
 
(123.8)
(123.8)
 
 
 
 
Cash dividends on common stock
(301.7)
 
 
(301.7)
 
 
(301.7)
 
 
 
 
Repurchase of common stock - Shares
 
(11.5)
 
 
 
 
 
 
 
 
 
Repurchase of common stock - Amount
(622.2)
(1.1)
(172.9)
(448.2)
 
 
(622.2)
 
 
 
 
Issuance of common stock - Shares
 
3.5 
 
 
 
 
 
 
 
 
 
Issuance of common stock - Amount
149.2 
0.3 
148.9 
 
 
 
149.2 
 
 
 
 
Excess tax benefit from stock-based compensation
13.3 
 
13.3 
 
 
 
13.3 
 
 
 
 
Stock-based compensation
10.7 
 
10.7 
 
 
 
10.7 
 
 
 
 
Net subscriptions (distributions)
10.3 
 
 
 
 
 
 
10.3 
 
 
 
Net consolidation (deconsolidation) of sponsored investment products
0 
 
 
 
 
 
 
 
 
 
 
Acquisition
0 
 
 
 
 
 
 
 
 
 
 
Reclassification
0 
 
 
 
 
 
 
 
 
 
 
Ending balance at Sep. 30, 2014
628.3 
 
 
 
 
 
 
628.3 
 
 
 
Ending balance at Sep. 30, 2014
12,212.4 
 
 
 
 
 
 
 
 
 
 
Ending balance at Sep. 30, 2014
11,584.1 
62.3 
0 
11,625.6 
13.9 
(117.7)
11,584.1 
 
 
 
 
Ending balance - Shares at Sep. 30, 2014
 
622.9 
 
 
 
 
 
 
 
 
 
Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Adjustment for adoption of new accounting guidance
 
 
 
0.3 
 
 
 
 
 
14.2 
13.9 
Net Income Attributable to Franklin Resources, Inc.
2,035.3 
 
 
2,035.3 
 
 
2,035.3 
 
 
 
 
Nonredeemable noncontrolling interests
75.5 
 
 
 
 
 
 
 
 
 
 
Net Income
2,110.8 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss)
(196.5)
 
 
 
 
(196.5)
(196.5)
 
 
 
 
Cash dividends on common stock
(682.1)
 
 
(682.1)
 
 
(682.1)
 
 
 
 
Repurchase of common stock - Shares
 
(22.5)
 
 
 
 
 
 
 
 
 
Repurchase of common stock - Amount
(1,059.8)
(2.2)
(173.9)
(883.7)
 
 
(1,059.8)
 
 
 
 
Issuance of common stock - Shares
 
3.1 
 
 
 
 
 
 
 
 
 
Issuance of common stock - Amount
154.8 
0.3 
154.5 
 
 
 
154.8 
 
 
 
 
Excess tax benefit from stock-based compensation
10.9 
 
10.9 
 
 
 
10.9 
 
 
 
 
Stock-based compensation
8.5 
 
8.5 
 
 
 
8.5 
 
 
 
 
Net subscriptions (distributions)
(49.0)
 
 
 
 
 
 
(49.0)
 
 
 
Net consolidation (deconsolidation) of sponsored investment products
0 
 
 
 
 
 
 
 
 
 
 
Acquisition
0 
 
 
 
 
 
 
 
 
 
 
Reclassification
0 
 
 
 
 
 
 
 
 
 
 
Ending balance at Sep. 30, 2015
654.8 
 
 
 
 
 
 
654.8 
 
 
 
Ending balance at Sep. 30, 2015
12,495.8 
 
 
 
 
 
 
 
 
 
 
Ending balance at Sep. 30, 2015
$ 11,841.0 
$ 60.4 
$ 0 
$ 12,094.8 
$ 0 
$ (314.2)
$ 11,841.0 
 
 
 
 
Ending balance - Shares at Sep. 30, 2015
 
603.5 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Net cash provided by operating activities
 
 
 
Net Income
$ 2,104.7 
$ 2,411.7 
$ 2,170.7 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Amortization of deferred sales commissions
112.8 
127.8 
138.0 
Depreciation and other amortization
97.4 
94.6 
93.5 
Stock-based compensation
140.0 
127.7 
113.4 
Excess tax benefit from stock-based compensation
(11.0)
(12.2)
(20.3)
Gains on sale of assets
(31.6)
(59.7)
(51.2)
Losses (income) from investments in equity method investees
63.2 
(68.1)
(74.0)
Net gains on other investments of consolidated sponsored investment products
(28.9)
(16.9)
(29.4)
Net (gains) losses of consolidated variable interest entities
(6.0)
(6.1)
17.1 
Other
17.3 
6.1 
4.1 
Changes in operating assets and liabilities:
 
 
 
Decrease (increase) in receivables, prepaid expenses and other
45.2 
(113.7)
(268.1)
Decrease (increase) in trading securities, net
23.3 
(80.2)
(65.6)
Increase in trading securities of consolidated sponsored investment products, net
(181.1)
(482.9)
(145.9)
Originations of loans held for sale
0 
(38.3)
0 
Proceeds from sale of loans originated for resale
0 
38.4 
0 
Increase (decrease) in accrued compensation and benefits
(16.7)
24.3 
45.9 
Increase (decrease) in commissions payable
(80.4)
2.6 
53.8 
Increase in income taxes payable
20.0 
15.8 
50.1 
Increase (decrease) in other liabilities
(16.2)
167.1 
3.6 
Net cash provided by operating activities
2,252.0 
2,138.0 
2,035.7 
Net cash provided by investing activities
 
 
 
Purchase of investments
(297.2)
(303.2)
(315.6)
Liquidation of investments
405.5 
583.9 
588.8 
Purchase of investments by consolidated sponsored investment products
(164.1)
(324.2)
(248.4)
Liquidation of investments by consolidated sponsored investment products
241.6 
181.0 
231.4 
Purchase of investments by consolidated variable interest entities
(274.8)
(259.4)
(685.9)
Liquidation of investments by consolidated variable interest entities
402.3 
488.9 
706.3 
Decrease (increase) in loans receivable, net
0 
38.0 
(16.8)
Decrease in loans transferred to held for sale
0 
8.2 
0 
Proceeds from sale of loans transferred to held for sale
0 
181.3 
41.1 
Additions of property and equipment, net
(68.8)
(53.1)
(62.2)
Acquisitions of subsidiaries, net of cash acquired
0 
0 
0.8 
Increase (decrease) in cash and cash equivalents due to net consolidation (deconsolidation) of sponsored investment products
4.4 
(150.8)
(6.6)
Net cash provided by investing activities
248.9 
390.6 
232.9 
Net cash used in financing activities
 
 
 
Decrease in deposits
(0.3)
(587.5)
(84.9)
Issuance of common stock
25.5 
32.6 
41.3 
Dividends paid on common stock
(666.4)
(290.4)
(882.7)
Repurchase of common stock
(1,059.8)
(622.2)
(491.0)
Excess tax benefit from stock-based compensation
11.0 
12.2 
20.3 
Proceeds from issuance of debt
395.7 
0 
0 
Payments on debt
(250.0)
0 
(545.4)
Proceeds from issuance of debt by consolidated sponsored investment products
571.8 
793.6 
617.8 
Payments on debt by consolidated sponsored investment products
(611.2)
(779.3)
(620.6)
Payments on debt by consolidated variable interest entities
(121.0)
(194.3)
(195.7)
Payments on contingent consideration liabilities
(7.9)
(6.3)
(1.1)
Noncontrolling interests
100.4 
446.3 
123.9 
Net cash used in financing activities
(1,612.2)
(1,195.3)
(2,018.1)
Effect of exchange rate changes on cash and cash equivalents
(116.6)
(60.4)
21.2 
Increase in cash and cash equivalents
772.1 
1,272.9 
271.7 
Cash and cash equivalents, beginning of year
7,596.0 
6,323.1 
6,051.4 
Cash and Cash Equivalents, End of Year
8,368.1 
7,596.0 
6,323.1 
Supplemental Disclosure of Non-Cash Activities
 
 
 
Contingent consideration liabilities recognized due to acquisitions
0 
0 
93.6 
Decrease in noncontrolling interests due to net deconsolidation of sponsored investment products
0 
0 
(11.0)
Increase in noncontrolling interests due to acquisition
0 
0 
38.2 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash paid for income taxes
925.0 
979.3 
825.9 
Cash paid for interest
44.6 
40.2 
47.9 
Cash paid for interest by consolidated variable interest entities and consolidated sponsored investment products
$ 33.0 
$ 43.6 
$ 54.1 
Significant Accounting Policies
Significant Accounting Policies
Significant Accounting Policies
Business. Franklin Resources, Inc. (“Franklin”) is a holding company that, together with its various subsidiaries (collectively, the “Company”) is referred to as Franklin Templeton Investments. The Company provides investment management and related services to investors globally through products that include investment funds and institutional, high net-worth and separately-managed accounts (collectively, the “sponsored investment products” or “SIPs”). In addition to investment management, the Company’s services include fund administration, sales, distribution, marketing, shareholder servicing, and trust, custody and other fiduciary services.
Basis of Presentation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Management 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. Certain comparative amounts for prior fiscal years have been reclassified to conform to the financial statement presentation as of and for the fiscal year ended September 30, 2015 (“fiscal year 2015”).
Consolidation. The consolidated financial statements include the accounts of Franklin and its subsidiaries and SIPs in which it has a controlling financial interest. The Company has a controlling financial interest when it owns a majority of the voting interest in an entity or when it is the primary beneficiary of a variable interest entity (“VIE”). The Company also consolidates non-VIE limited partnerships and similar structures that it controls. All material intercompany accounts and transactions have been eliminated.
A VIE is an entity in which the equity investment holders have not contributed sufficient capital to finance its activities or the equity investment holders do not have defined rights and obligations normally associated with an equity investment. The Company’s VIEs are all investment entities, and its variable interests consist of its equity ownership interest in and/or investment management fees earned from these entities.
The Company uses two models for determining whether it is the primary beneficiary of VIEs. For all VIEs with the exception of collateralized loan obligations (“CLOs”), the Company is the primary beneficiary if it has the majority of the risks or rewards of ownership, which it determines using expected cash flow scenarios. For CLOs, the Company is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or right to receive benefits from the VIE that could potentially be significant to the VIE. Under both models, the key estimates and assumptions used in the analyses include the amount of assets under management (“AUM”), investment management fee rates, the life of the investment product, prepayment rates, and the discount rate.
The Company is presumed to control non-VIE limited partnerships and similar structures for which it is the general partner or managing member unless the limited partners or other investors have the substantive ability to remove the Company as general partner or managing member or otherwise participate in the decision-making of the entity. The Company’s risk of loss in these entities is limited to its investments in the entities as the general partner and managing member entities are structured as limited liability companies.
Earnings per Share. Basic earnings per share is computed by dividing net income available to the Company’s common shareholders, which exclude participating securities, by the weighted-average number of shares of common stock outstanding during the period. The Company’s participating securities consist of its nonvested stock and stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the two-class method.
Fair Value Measurements. The Company uses a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on whether the inputs to those valuation techniques are observable or unobservable. The three levels of fair value hierarchy are set forth below. The Company’s assessment of the hierarchy level of the assets or liabilities measured at fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Transfers between levels are recognized at the end of each quarter.
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities.
 
 
Level 2
Observable inputs other than Level 1 quoted prices, such as non-binding quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data. Level 2 quoted prices are generally obtained from two independent third-party brokers or dealers, including prices derived from model-based valuation techniques for which the significant assumptions are observable in the market or corroborated by observable market data. Quoted prices are validated through price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of third-party vendors.
 
 
Level 3
Unobservable inputs that are supported by little or no market activity. These inputs require significant management judgment and reflect the Company's estimation of assumptions that market participants would use in pricing the asset or liability.

The fair values for Level 3 assets and liabilities are determined using various methodologies in accordance with the Company’s global valuation and pricing policy which defines valuation and pricing conventions for each security type. When available, fair value is measured based on the reported net asset value (“NAV”) of underlying investments or independent third-party broker or dealer price quotes. These inputs are evaluated for reasonableness through various procedures which include due diligence reviews of the third parties, price comparisons across pricing vendors, stale price reviews and subsequent sales testing. If these inputs are not available, the Company primarily employs a market-based method, using purchase multiples observed for comparable third-party transactions, valuations of comparable entities, projected operating results of the investee entity or subsequent financing transactions entered into by the investee entity. If the inputs for a market-based method are not available, the Company utilizes an income-based method, which considers the net present value of anticipated future cash flows of the investment. A discount may be applied due to the nature or duration of any restrictions on the disposition of the investment. The Company reviews and approves the market-based and income-based methods on a periodic basis for changes that would impact the unobservable inputs incorporated into the valuation process. The fair value measurements from these methods are further validated through price variance analysis, subsequent sales testing and market comparable sales.
The Company records a substantial amount of its investments at fair value or amounts that approximate fair value on a recurring basis. Fair values are estimated for disclosure purposes for financial instruments that are not measured at fair value.
Fair Value Option. Effective October 1, 2014, the financial assets and financial liabilities of consolidated CLOs are measured using the more observable fair value of either the financial assets or financial liabilities. See Note 2 – New Accounting Guidance. The Company had previously elected the fair value option for all assets and liabilities of its consolidated CLOs as this option better matched the changes in fair value of the assets and liabilities. The decision to elect the fair value option, which is irrevocable once elected, is determined on an instrument by instrument basis and applied to an entire instrument. The net gains or losses on the assets and liabilities of consolidated CLOs through September 30, 2014 included interest income and expense and were recognized in investment and other income, net in the consolidated statements of income.
Cash and Cash Equivalents consist of cash on hand, deposits with financial institutions, time deposits, securities of U.S. government-sponsored enterprises and the U.S. Treasury, debt instruments with original maturities of three months or less at the purchase date, and other highly liquid investments, including money market funds, which are readily convertible into cash. The money market funds are nonconsolidated SIPs. Cash and cash equivalents are carried at cost, except for securities of U.S. government-sponsored enterprises and the U.S. Treasury, which are carried at amortized cost. Due to the short-term nature and liquidity of these financial instruments, the carrying values of these assets approximate fair value and, for disclosure purposes, they are classified as Level 1.
The Company maintains cash and cash equivalents with financial institutions in various countries, limits the amount of credit exposure with any given financial institution and conducts ongoing evaluations of the creditworthiness of the financial institutions with which it does business.
Receivables consist primarily of fees receivable from SIPs and are carried at invoiced amounts. Due to the short-term nature and liquidity of the receivables, the carrying values of these assets approximate fair value.
Investments consist of investment securities, trading and available-for-sale, investments in equity method investees and other investments.
Investment Securities, Trading consist primarily of nonconsolidated SIPs and to a lesser extent, debt securities, and are carried at fair value. Changes in the fair value of trading securities are recognized as gains and losses in earnings. The fair value of the SIPs is determined based on their published NAV and they are classified as Level 1. The fair value of the debt securities is primarily determined using independent third-party broker or dealer price quotes, and they are classified as Level 2. The fair value of certain debt securities is determined using discounted cash flow techniques and they are classified as Level 3.
Investment Securities, Available-for-Sale consist of nonconsolidated SIPs, mortgage-backed securities and other equity and debt securities. The securities are carried at fair value. Realized gains and losses are included in investment income using the average cost method. Unrealized gains and losses are recorded net of tax as part of accumulated other comprehensive income (loss) until realized. The fair value of the SIPs is determined based on their published NAV and they are classified as Level 1. The fair value of the debt securities is primarily determined using independent third-party broker or dealer price quotes and they are classified as Level 2.
The fair value of other equity securities is determined using either quoted market prices, in which case they are classified as Level 1, or independent third-party broker or dealer price quotes, in which case they are classified as Level 2.
Investments in Equity Method Investees consist of equity investments in entities, including SIPs, over which the Company is able to exercise significant influence, but not control. Significant influence is generally considered to exist when the Company’s ownership interest in the voting stock of the investee is between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, also are considered in determining whether the equity method of accounting is appropriate. Investments in limited partnerships and limited liability companies for which the Company is not deemed to have control are accounted for using the equity method when the Company’s investment is more than minor or when the Company is the general partner. Under the equity method of accounting, the investments are initially carried at cost and subsequently adjusted by the Company’s proportionate share of the entities’ net income, which is recognized in earnings.
Other Investments consist of equity investments in entities over which the Company is unable to exercise significant influence and are not marketable, time deposits and life settlement contracts. The equity investments are accounted for under the cost method. For disclosure purposes, the fair value of these investments is generally estimated based on their NAV and they are classified as Level 3. Time deposits that have maturities greater than three months but less than one year from the date of purchase are carried at cost. Due to the short-term nature and liquidity of these financial instruments, the carrying values of the time deposits approximate fair value, and they are classified as Level 2. Life settlement contracts are carried at fair value, which is determined based on discounted cash flows using significant unobservable inputs, and are classified as Level 3.
Impairment of Investments. Investments other than trading securities are evaluated for other-than-temporary impairment on a quarterly basis when the cost of an investment exceeds its fair value. For equity securities, the Company considers many factors, including the severity and duration of the decline in the fair value below cost, the Company’s intent and ability to hold the security for a period of time sufficient for an anticipated recovery in fair value, and the financial condition and specific events related to the issuer. When an impairment of an equity security is determined to be other-than-temporary, the impairment is recognized in earnings. For debt securities, if the Company intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost, the entire impairment is recognized in earnings. If the Company does not intend to sell or it is not more likely than not that it will be required to sell the security before anticipated recovery of its amortized cost, the impairment is separated into the amount of the total impairment related to the credit loss and the amount of the total impairment related to all other factors. The credit loss component is the difference between the security's amortized cost and the present value of the expected cash flows, and is recognized in earnings. Losses related to all other factors are recognized in accumulated other comprehensive income (loss).
Cash and Cash Equivalents of Consolidated SIPs consist of deposits with financial institutions and highly liquid investments, including money market funds, which are readily convertible into cash, and are carried at cost. Due to the short-term nature and liquidity of these financial instruments, their carrying values approximate fair value and, for disclosure purposes, they are classified as Level 1.
Investments of Consolidated SIPs consist of trading securities and other investments that are not generally traded in active markets, and are carried at fair value. Changes in the fair value of the investments are recognized as gains and losses in earnings. The fair value of the trading securities is determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available. These securities are classified as Level 1 or Level 2. The quoted market prices may be adjusted if events occur, such as significant price changes in U.S.-traded market proxies after the close of corresponding foreign markets, trade halts or suspensions, or unscheduled market closures. The market proxies consist of correlated country-specific exchange-traded securities, such as futures, American Depositary Receipts indices or exchange-traded funds. The price adjustments are primarily determined based on third-party factors derived from model-based valuation techniques for which the significant assumptions are observable in the market.
The investments that are not generally traded in active markets consist of debt and equity securities of entities in emerging markets and fund products. The fair values of the debt and equity securities are determined using significant unobservable inputs in either a market-based or income-based approach and they are classified as Level 3. The fair value of the fund products is determined using NAV as a practical expedient. These investments are classified as Level 2 if they are redeemable without restriction on at least a quarterly basis, or Level 3 if they have a redemption frequency greater than quarterly, are subject to redemption restrictions, or are nonredeemable.
Cash and Cash Equivalents of Consolidated VIEs consist of investments in a money market fund and are carried at fair value. The fair value of the fund is based on its published NAV and it is classified as Level 1.
Investments of Consolidated VIEs consist of corporate debt securities and are carried at fair value. The fair value is primarily obtained from independent third-party broker or dealer price quotes and they are classified as Level 2.
Property and Equipment, net are recorded at cost and are depreciated using the straight-line method over their estimated useful lives which range from three to 35 years. Expenditures for repairs and maintenance are charged to expense when incurred. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the lease term, whichever is shorter.
Internal and external costs incurred in connection with developing or obtaining software for internal use are capitalized and amortized over the estimated useful lives of the software, which range from three to five years, beginning when the software project is complete and the application is put into production.
Property and equipment is tested for impairment when there is an indication that the carrying value of an asset may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined to not be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value. Fair value is determined by discounted future cash flows models, appraisals or other applicable methods.
Goodwill and Other Intangible Assets, net. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. Other intangible assets consist of investment management contracts and customer base assets resulting from business acquisitions. These intangible assets are amortized over their estimated useful lives, which range from six to 15 years, using the straight-line method, unless the asset is determined to have an indefinite useful life. Indefinite-lived intangible assets represent contracts to manage investment assets for which there is no foreseeable limit on the contract period.
Goodwill and indefinite-lived intangible assets are tested for impairment annually as of August 1 and when an event occurs or circumstances change that more likely than not reduce the fair value of the related reporting unit or indefinite-lived intangible asset below its carrying value. The Company has one reporting unit, investment management and related services, consistent with its single operating segment, to which all goodwill has been assigned.
Goodwill and indefinite-lived intangible assets may first be assessed for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. The qualitative analysis considers entity-specific and macroeconomic factors and their potential impact on the key assumptions used in the determination of the fair value of the reporting unit or indefinite-lived intangible asset. A quantitative impairment test is performed if the results of the qualitative assessment indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value or an indefinite-lived intangible asset is impaired, or if a qualitative assessment is not performed.
The quantitative goodwill impairment test involves a two-step process. The first step compares the fair value of the reporting unit to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is performed to compute the amount of any impairment. In the second step, impairment is computed by comparing the implied fair value of the reporting unit goodwill with the carrying value of the goodwill.
The quantitative indefinite-lived intangible assets impairment test compares the fair value of the asset to its carrying value. If the carrying value is higher than the fair value, impairment is recognized in the amount of the difference in values.
In estimating the fair value of the reporting unit and indefinite-lived intangible assets, the Company uses valuation techniques based on an income approach under which future cash flows are discounted. The future cash flow estimates include assumptions about revenue and AUM growth rates, the pre-tax profit margin, the average effective fee rate, the effective tax rate, and the discount rate, which is based on the Company’s weighted average cost of capital.
Definite-lived intangible assets are tested for impairment quarterly. Impairment is indicated when the carrying value of the asset is not recoverable and exceeds its fair value. In evaluating the recoverability of definite-lived intangible assets, the Company estimates the undiscounted future cash flows to be derived from these assets. The future undiscounted cash flow projections include assumptions about revenue and AUM growth rates, effective fee rates, investor redemptions, the pre-tax profit margin, and expected useful lives. If the carrying value of an asset is not recoverable through the related undiscounted cash flows, the impairment is measured based on the amount by which the carrying value of the asset exceeds its fair value and recognized in general, administrative and other expense. The fair value of the asset is determined by discounted cash flows or other methods as appropriate for the asset type.
Deferred Sales Commissions consist of up-front commissions paid to financial advisers and broker/dealers on shares sold without a front-end sales charge to investors, and are amortized over the periods in which they are generally recovered from related revenues, which range from one to seven years. Deferred sales commissions are included in other assets in the consolidated balance sheet.
Contingent Consideration Liabilities primarily consist of the expected future payments related to the Company’s commitment to acquire the remaining interests in K2 Advisors Holdings, LLC (“K2”) and are included in other liabilities on the consolidated balance sheet. The liabilities are carried at fair value, determined using an income-based method which considers the net present value of anticipated future cash flows based on estimated future revenue and profits and timing of payments, and are classified as Level 3.
Debt consists of senior notes, which are carried at amortized cost. For disclosure purposes, the fair value is estimated using quoted market prices, independent third-party broker or dealer price quotes, or prices of publicly traded debt with similar maturities, credit risk and interest rates. The notes are classified as Level 2.
Debt of Consolidated SIPs is carried at amortized cost. For disclosure purposes, the fair value is estimated using a discounted cash flow model that considers current interest rate levels, the quality of the underlying collateral and current economic conditions. The debt is classified as Level 3.
Debt of Consolidated VIEs consists of debt of CLOs. Effective October 1, 2014, the debt is measured based on the fair value of the assets of the consolidated CLOs less the fair value of the Company’s own economic interests in the CLOs. See Note 2 – New Accounting Guidance. As of September 30, 2014, the debt was carried at fair value, which was obtained from independent third-party broker or dealer price quotes. The debt was classified as Level 2 unless the price quotes were derived from significant unobservable inputs, in which case it was classified as Level 3.
Noncontrolling Interests relate almost entirely to consolidated SIPs. Noncontrolling interests that are currently redeemable or convertible for cash or other assets at the option of the holder are classified as temporary equity. Nonredeemable noncontrolling interests are classified as a component of equity. Net income (loss) attributable to third-party investors is reflected as net income (loss) attributable to nonredeemable and redeemable noncontrolling interests in the consolidated statements of income. Sales and redemptions of shares of consolidated SIPs by third-party investors are a component of the change in noncontrolling interests included in financing activities in the consolidated statements of cash flows.
Appropriated Retained Earnings of Consolidated VIEs. As of September 30, 2014 this amount represented the difference between the fair values of consolidated CLOs’ assets and liabilities. The difference was recognized as appropriated retained earnings as the CLO debt holders, not the Company, would ultimately receive the benefits or absorb the losses associated with the CLOs’ assets and liabilities. Net income attributable to third-party investors through September 30, 2014 was reflected as net income attributable to nonredeemable noncontrolling interests in the consolidated statements of income. See Note 2 – New Accounting Guidance.
Revenues. Fees from providing investment management and fund administration services (“investment management fees”), distribution fees and shareholder servicing fees are recognized as earned, over the period in which services are rendered, except for performance-based investment management fees, which are recognized when earned. Sales commissions related to the sale of shares of SIPs are recognized on trade date. Investment management fees, other than performance-based fees, and distribution fees are determined based on a percentage of AUM, primarily on a monthly basis using average daily AUM. Performance-based investment management fees are based on performance targets established in the related investment management contracts. Shareholder servicing fees are generally calculated based on the number and type of accounts serviced.
AUM is generally based on the fair value of the underlying securities held by SIPs and is calculated using fair value methods derived primarily from unadjusted quoted market prices, unadjusted independent third-party broker or dealer price quotes in active markets, or market prices or price quotes adjusted for observable price movements after the close of the primary market. The fair values of the underlying securities for which market prices are not readily available are internally valued using various methodologies which incorporate significant unobservable inputs as appropriate for each security type and represent an insignificant percentage of total AUM. Pricing of the securities held by SIPs is governed by the Company’s global valuation and pricing policy, which defines valuation and pricing conventions for each security type, including practices for responding to unexpected or unusual market events.
Sales commissions and distribution fees are recorded gross of sales and distribution expenses paid to financial advisers and other intermediaries as the Company acts as the principal in its role as primary obligor to the sales and distribution agreements.
Stock-Based Compensation. The fair value of share-based payment awards is estimated on the date of grant based on the market price of the underlying shares of the Company’s common stock and is amortized to compensation expense on a straight-line basis over the related vesting period, which is generally three years. Expense relating to awards subject to performance conditions is recognized if it is probable that the performance goals will be achieved. The probability of achievement is assessed on a quarterly basis. The total number of awards expected to vest is adjusted for estimated forfeitures.
Postretirement Benefits. Defined contribution plan costs are expensed as incurred. Defined benefit plan costs are expensed as the benefits are earned.
Income Taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is expected to be recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. For each tax position taken or expected to be taken in a tax return, the Company determines whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company recognizes the accrual of interest on uncertain tax positions in interest expense and penalties in other operating expenses.
As a multinational corporation, the Company operates in various locations outside the United States and generates earnings from its non-U.S. subsidiaries. The Company indefinitely reinvests the undistributed earnings of its non-U.S. subsidiaries, except for income previously taxed in the U.S., subject to regulatory or legal repatriation restrictions or requirements, and the excess net earnings reduced by cash needs for operational and regulatory capital requirements, capital management plans and capital expenditure plans of its Canadian and U.K. subsidiaries.
Foreign Currency Translation and Transactions. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated at current exchange rates as of the end of the accounting period. The related revenues and expenses are translated at average exchange rates in effect during the period. Net exchange gains and losses resulting from translation are excluded from income and are recorded as part of accumulated other comprehensive income (loss). Transactions denominated in a foreign currency are revalued at the current exchange rate at the transaction date and any related gains and losses are recognized in earnings.
New Accounting Guidance
New Accounting Guidance
New Accounting Guidance
Accounting Guidance Adopted During Fiscal Year 2015
On October 1, 2014, the Company adopted new Financial Accounting Standards Board (“FASB”) guidance that provides an entity the election to measure the financial assets and financial liabilities of a consolidated collateralized financing entity using the more observable fair value of either the financial assets or financial liabilities, and elected this measurement alternative for its consolidated CLOs. The adoption resulted in a $14.2 million increase in debt of consolidated VIEs, a $13.9 million reduction in appropriated retained earnings of consolidated VIEs and a $0.3 million reduction in retained earnings as of October 1, 2014. The Company’s subsequent earnings from the consolidated CLOs reflect changes in fair value of its own economic interests in the CLOs, and no longer include gains or losses on assets and liabilities of the CLOs, which were primarily attributable to noncontrolling interests.
New Accounting Guidance Not Yet Adopted
In February 2015, the FASB issued an amendment to the existing consolidation guidance. The amendment modifies the consolidation framework for certain investment entities and all limited partnerships. It also eliminates certain criteria used to determine whether fees paid to a decision maker are a variable interest. The amendment allows for either a full retrospective or modified approach at adoption, and is effective for the Company in the first quarter of the fiscal year ending September 30, 2017. The Company is currently evaluating the impact that the adoption of the amendment will have on its consolidated financial statements.
In May 2014, the FASB issued new guidance that requires use of a single principles-based model for recognition of revenue from contracts with customers. The core principle of the model is that revenue is recognized upon the transfer of promised goods or services to customers in an amount that reflects the expected consideration to be received for the goods or services. The guidance allows for either a full retrospective or modified approach at adoption. Subsequent to issuance, the FASB deferred the effective date of the guidance by one year, and it is now effective for the Company in the first quarter of the fiscal year ending September 30, 2019. The Company is currently evaluating the impact that the adoption of the guidance will have on its consolidated financial statements.
Earnings per Share
Earnings per Share
Earnings per Share
The components of basic and diluted earnings per share were as follows:
(in millions, except per share data)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Net Income Attributable to Franklin Resources, Inc.
 
$
2,035.3

 
$
2,384.3

 
$
2,150.2

Less: Allocation of earnings to participating nonvested stock and stock unit awards
 
12.0

 
14.3

 
13.9

Net Income Available to Common Stockholders
 
$
2,023.3

 
$
2,370.0

 
$
2,136.3

 
 
 
 
 
 
 
Weighted-average shares outstanding – basic
 
614.8

 
624.8

 
633.1

Dilutive effect of nonparticipating nonvested stock unit awards and common stock options
 
0.1

 
0.4

 
1.0

Weighted-Average Shares Outstanding – Diluted
 
614.9

 
625.2

 
634.1

 
 
 
 
 
 
 
Earnings per Share
 
 
 
 

 
 

Basic
 
$
3.29

 
$
3.79

 
$
3.37

Diluted
 
3.29

 
3.79

 
3.37


Nonparticipating nonvested stock unit awards excluded from the calculation of diluted earnings per share because their effect would have been antidilutive were 0.9 million for fiscal year 2015, 0.1 million for the fiscal year ended September 30, 2014 (“fiscal year 2014”), and nil for the fiscal year ended September 30, 2013 (“fiscal year 2013”).
Investments
Investments
Investments
The disclosures below include details of the Company’s investments, excluding those of consolidated SIPs and consolidated VIEs. See Note 9 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the investments held by these entities.
Investments consisted of the following:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Investment securities, trading
 
$
1,251.2

 
$
1,277.5

Investment securities, available-for-sale
 
 
 
 
SIPs
 
408.3

 
517.6

Debt securities
 
23.0

 
29.9

Other equity securities
 
15.1

 
6.6

Total investment securities, available-for-sale
 
446.4

 
554.1

Investments in equity method investees
 
655.3

 
594.9

Other investments
 
106.3

 
89.6

Total
 
$
2,459.2

 
$
2,516.1


At September 30, 2015 and 2014, investment securities with aggregate carrying amounts of $4.3 million and $6.1 million were pledged as collateral.
A summary of the gross unrealized gains and losses relating to investment securities, available-for-sale is as follows:
(in millions)
 
 
 
Gross Unrealized
 
 
as of September 30, 2015
Cost Basis
 
Gains
 
Losses
 
Fair Value
SIPs
 
$
382.6

 
$
32.4

 
$
(6.7
)
 
$
408.3

Debt securities
 
22.8

 
0.2

 
—

 
23.0

Other equity securities
 
15.1

 
0.2

 
(0.2
)
 
15.1

Total
 
$
420.5

 
$
32.8

 
$
(6.9
)
 
$
446.4

(in millions)
 
 
 
Gross Unrealized
 
 
as of September 30, 2014
Cost Basis
 
Gains
 
Losses
 
Fair Value
SIPs
 
$
477.0

 
$
43.5

 
$
(2.9
)
 
$
517.6

Debt securities
 
29.7

 
0.3

 
(0.1
)
 
29.9

Other equity securities
 
6.3

 
0.3

 
—

 
6.6

Total
 
$
513.0

 
$
44.1

 
$
(3.0
)
 
$
554.1

 
The following tables show the gross unrealized losses and fair values of available-for-sale securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
 
 
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, 2015
 
 
 
 
 
SIPs
 
$
99.8

 
$
(5.6
)
 
$
21.0

 
$
(1.1
)
 
$
120.8

 
$
(6.7
)
Other equity securities
 
10.9

 
(0.2
)
 
—

 
—

 
10.9

 
(0.2
)
Total
 
$
110.7

 
$
(5.8
)
 
$
21.0

 
$
(1.1
)
 
$
131.7

 
$
(6.9
)
 
 
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, 2014
 
 
 
 
 
SIPs
 
$
156.4

 
$
(2.7
)
 
$
1.5

 
$
(0.2
)
 
$
157.9

 
$
(2.9
)
Debt securities
 
4.0

 
—

 
11.6

 
(0.1
)
 
15.6

 
(0.1
)
Total
 
$
160.4

 
$
(2.7
)
 
$
13.1

 
$
(0.3
)
 
$
173.5

 
$
(3.0
)
 
The Company recognized $10.0 million, $0.6 million and $2.4 million of other-than-temporary impairment during fiscal years 2015, 2014 and 2013, of which $8.2 million, $0.4 million and $1.7 million related to available-for-sale SIPs. The Company did not recognize any other-than-temporary impairment of available-for-sale debt securities during fiscal years 2015, 2014 and 2013.
At September 30, 2015, available-for-sale debt securities were primarily comprised of mortgage-backed securities. The actual maturities of these securities may differ from contractual maturities because issuers may have the right to call or prepay obligations.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The disclosures below include details of the Company’s fair value measurements, excluding those of consolidated SIPs and consolidated VIEs. See Note 9 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to fair value measurements of the assets and liabilities of these entities.
Assets and liabilities measured at fair value on a recurring basis were as follows:  
(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
as of September 30, 2015
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities, trading
 
$
1,168.2

 
$
77.0

 
$
6.0

 
$
1,251.2

Investment securities, available-for-sale
 
 
 
 
 
 
 
 
SIPs
 
408.3

 
—

 
—

 
408.3

Debt securities
 
—

 
23.0

 
—

 
23.0

Other equity securities
 
12.2

 
2.9

 
—

 
15.1

Life settlement contracts
 
—

 
—

 
14.7

 
14.7

Total Assets Measured at Fair Value
 
$
1,588.7

 
$
102.9

 
$
20.7

 
$
1,712.3

Liabilities
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
$
—

 
$
—

 
$
102.9

 
$
102.9


(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
as of September 30, 2014
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities, trading
 
$
1,196.1

 
$
81.4

 
$
—

 
$
1,277.5

Investment securities, available-for-sale
 
 
 
 
 
 
 
 
SIPs
 
517.6

 
—

 
—

 
517.6

Debt securities
 
—

 
29.9

 
—

 
29.9

Other equity securities
 
1.7

 
4.9

 
—

 
6.6

Life settlement contracts
 
—

 
—

 
14.0

 
14.0

Total Assets Measured at Fair Value
 
$
1,715.4

 
$
116.2

 
$
14.0

 
$
1,845.6

Liabilities
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
$
—

 
$
—

 
$
98.5

 
$
98.5


There were no transfers between Level 1 and Level 2, or into or out of Level 3, during fiscal years 2015 and 2014.
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

 
2015
 
2014
(in millions)
 
Investments
 
Contingent Consideration Liabilities
 
Investments
 
Contingent Consideration Liabilities
for the fiscal years ended September 30,
 
 
Balance at beginning of year
 
$
14.0

 
$
(98.5
)
 
$
13.8

 
$
(97.7
)
Total realized and unrealized gains (losses)
 
 
 
 
 
 
 
 
Included in investment and other income, net
 
1.6

 
—

 
2.9

 
—

Included in general, administrative and other expense
 
—

 
(12.4
)
 
—

 
(6.7
)
Other
 
—

 
(0.1
)
 
—

 
(0.4
)
Purchases
 
6.6

 
—

 
0.1

 
—

Sales
 
—

 
—

 
(0.7
)
 
—

Settlements
 
(1.5
)
 
7.9

 
(2.1
)
 
6.3

Foreign exchange revaluation
 
—

 
0.2

 
—

 
—

Balance at End of Year
 
$
20.7

 
$
(102.9
)
 
$
14.0

 
$
(98.5
)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at end of year
 
$
0.8

 
$
(12.5
)
 
$
1.2

 
$
(7.1
)

The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows:
(in millions)
 
 
 
 
 
 
 
 
as of September 30, 2015
 
Fair Value
 
Valuation Technique
 
Significant Unobservable Inputs
 
Range (Weighted Average)
Investment securities, trading
 
$
6.0

 
Discounted cash flow
 
Discount rate
 
5.2%–6.1% (5.7%)
 
 
 
Risk premium
 
2.7%–2.8% (2.8%)
 
 
 
 
 
 
 
 
 
Life settlement contracts
 
14.7

 
Discounted cash flow
 
Life expectancy
 
21–141 months (68)
Discount rate
 
3.3%–19.0% (11.7%)
 
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
102.9

 
Discounted cash flow
 
AUM growth rate
 
0.5%–5.8% (4.4%)
EBITDA margin
 
19.3%–22.9% (22.0%)
Discount rate
 
14.0%
(in millions)
 
 
 
 
 
 
 
 
as of September 30, 2014
 
Fair Value
 
Valuation Technique
 
Significant Unobservable Inputs
 
Range (Weighted Average)
Life settlement contracts
 
$
14.0

 
Discounted cash flow
 
Life expectancy
 
23–150 months (71)
Discount rate
 
3.3%–21.7% (11.7%)
 
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
98.5

 
Discounted cash flow
 
AUM growth rate
 
3.4%–20.2% (12.8%)
EBITDA margin
 
21.9%–30.4% (28.2%)
Discount rate
 
14.0%

For investment securities, trading, a significant increase (decrease) in the discount rate or risk premium in isolation would result in a significantly lower (higher) fair value measurement.
For life settlement contracts, a significant increase (decrease) in the life expectancy or the discount rate in isolation would result in a significantly lower (higher) fair value measurement.
For the contingent consideration liabilities, a significant increase (decrease) in the AUM growth rate or EBITDA margin, or decrease (increase) in the discount rate, in isolation would result in a significantly higher (lower) fair value measurement.
Financial instruments that were not measured at fair value were as follows:
(in millions)
 
 
 
2015
 
2014
as of September 30,
 
Fair Value Level
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Financial Assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
1
 
$
8,184.9

 
$
8,184.9

 
$
7,476.8

 
$
7,476.8

Other investments1
 
2 or 3
 
91.6

 
97.1

 
75.6

 
87.8

Financial Liabilities
 
 
 
 
 
 
 
 

 
 

Debt
 
2
 
1,348.0

 
1,374.9

 
1,198.2

 
1,235.8


_________________
1     Primarily consist of Level 3 assets.
Property and Equipment, Net
Property and Equipment, Net
Property and Equipment
Property and equipment consisted of the following:
(in millions)
 
 
 
 
 
Useful Lives
In Years
as of September 30,
 
2015
 
2014
 
Furniture, software and equipment
 
$
733.6

 
$
693.5

 
3 – 10
Premises and leasehold improvements
 
557.0

 
562.3

 
5 – 35
Land
 
74.2

 
74.3

 
N/A
Total cost
 
1,364.8

 
1,330.1

 
 
Less: accumulated depreciation and amortization
 
(854.7
)
 
(799.4
)
 
 
Property and Equipment, Net
 
$
510.1

 
$
530.7

 
 

Depreciation and amortization expense related to property and equipment was $81.6 million, $82.6 million and $76.9 million in fiscal years 2015, 2014 and 2013. The Company recognized an insignificant impairment of equipment during fiscal year 2015, and no impairment during fiscal years 2014 and 2013.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and other intangible assets, net consisted of the following:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Goodwill
 
$
1,661.2

 
$
1,691.0

Indefinite-lived intangible assets
 
538.3

 
547.4

Definite-lived intangible assets, net
 
57.5

 
87.5

Total
 
$
2,257.0

 
$
2,325.9


Changes in the carrying value of goodwill were as follows:
(in millions)
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
Balance at beginning of year
 
$
1,691.0

 
$
1,701.5

Foreign exchange revaluation
 
(29.8
)
 
(10.5
)
Balance at End of Year
 
$
1,661.2

 
$
1,691.0


Definite-lived intangible assets were as follows:
 
 
2015
 
2014
(in millions)
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
as of September 30,
 
 
 
 
 
 
Customer base
 
$
164.5

 
$
(160.3
)
 
$
4.2

 
$
165.6

 
$
(152.7
)
 
$
12.9

Management contracts
 
89.5

 
(36.2
)
 
53.3

 
133.2

 
(58.6
)
 
74.6

Total
 
$
254.0

 
$
(196.5
)
 
$
57.5

 
$
298.8

 
$
(211.3
)
 
$
87.5

Indefinite-lived intangible assets consist of management contracts. Amortization expense related to definite-lived intangible assets was $20.1 million, $20.8 million and $20.0 million for fiscal years 2015, 2014 and 2013. The Company recognized impairment of $8.2 million of management contract definite-lived intangible assets during fiscal year 2015 due to decreased AUM growth rate assumptions. No impairment of goodwill and other intangible assets was recognized during fiscal years 2014 and 2013.
Definite-lived intangible assets had a weighted-average remaining useful life of 8.0 years at September 30, 2015, with estimated remaining amortization expense as follows:
(in millions)
 
 
for the fiscal years ending September 30,
 
Amount
2016
 
$
13.1

2017
 
9.0

2018
 
9.0

2019
 
4.0

2020
 
3.5

Thereafter
 
18.9

Total
 
$
57.5

Debt
Debt
Debt
The disclosures below include details of the Company’s debt, excluding that of consolidated SIPs and consolidated VIEs. See Note 9 – Variable Interest Entities and Consolidated Sponsored Investment Products for information related to the debt of these entities.
Debt consisted of the following:
(in millions)
 
2015
 
Effective
Interest Rate
 
2014
 
Effective
Interest Rate
as of September 30,
$250 million 3.125% notes due May 2015
 
$
—

 
N/A

 
$
250.0

 
3.32
%
$300 million 1.375% notes due September 2017
 
299.4

 
1.66
%
 
299.0

 
1.66
%
$350 million 4.625% notes due May 2020
 
349.8

 
4.74
%
 
349.8

 
4.74
%
$300 million 2.800% notes due September 2022
 
299.5

 
2.93
%
 
299.4

 
2.93
%
$400 million 2.850% notes due March 2025
 
399.3

 
2.97
%
 
—

 
N/A

Total
 
$
1,348.0

 
 
 
$
1,198.2

 
 

In March 2015, the Company issued senior unsecured and unsubordinated notes with a total face value of $400.0 million due in March 2025. The Company incurred $3.6 million in debt issuance costs, which are included in other assets in the consolidated balance sheet, and the notes were issued at a discount of $0.7 million. The debt issuance costs and discount are being amortized over the term of the notes. Net proceeds from the issuance of the notes were used to repay the $250.0 million 3.125% notes upon maturity in May 2015 and for general corporate purposes.
At September 30, 2015, the Company’s outstanding senior unsecured and unsubordinated notes had an aggregate face value of $1.4 billion. The notes have fixed interest rates with interest payable semi-annually and contain an optional redemption feature that allows the Company to redeem each series of notes prior to maturity in whole or in part at any time, at a make-whole redemption price. The indentures governing the notes contain limitations on the Company’s ability and the ability of its subsidiaries to pledge voting stock or profit participating equity interests in its subsidiaries to secure other debt without similarly securing the notes equally and ratably. The indentures also include requirements that must be met if the Company consolidates or merges with, or sells all or substantially all of its assets to, another entity. At September 30, 2015, the Company was in compliance with the covenants of the notes.
At September 30, 2015, maturities for debt were as follows: 
(in millions)
 
Carrying Amount
for the fiscal years ending September 30,
2016
 
$
—

2017
 
299.4

2018
 
—

2019
 
—

2020
 
349.8

Thereafter
 
698.8

Total
 
$
1,348.0


At September 30, 2015, the Company had $500.0 million of short-term commercial paper available for issuance under an uncommitted private placement program which has been inactive since 2012.
Taxes on Income
Taxes on Income
Taxes on Income
Taxes on income were as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Current expense
 
 
 
 
 
 
Federal
 
$
733.9

 
$
803.6

 
$
699.6

State
 
83.1

 
82.4

 
76.8

Non-U.S.
 
121.1

 
114.1

 
85.7

Deferred benefit
 
(14.4
)
 
(2.2
)
 
(6.2
)
Total
 
$
923.7

 
$
997.9

 
$
855.9


The tax benefit from the utilization of net operating loss carry-forwards was insignificant in fiscal years 2015, 2014 and 2013. In fiscal years 2015, 2014 and 2013, the Company’s income taxes payable for federal, state and non-U.S. purposes were reduced by tax benefits of $10.9 million, $13.3 million and $24.4 million associated with its stock-based compensation plans. The benefits were recorded as increases in capital in excess of par value.
Income before taxes consisted of the following:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
U.S.
 
$
2,026.4

 
$
2,160.8

 
$
1,904.1

Non-U.S.
 
1,002.0

 
1,248.8

 
1,122.5

Total
 
$
3,028.4

 
$
3,409.6

 
$
3,026.6


The Company’s income in certain countries is subject to reduced tax rates due to tax rulings. The impact of the reduced rates on income tax expense was $68.3 million or $0.11 per diluted share for fiscal year 2015, $100.6 million or $0.16 per diluted share for fiscal year 2014, and $80.1 million or $0.12 per diluted share for fiscal year 2013. The tax rulings will expire in fiscal years 2019 and 2022.
The significant components of deferred tax assets and deferred tax liabilities were as follows:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Deferred Tax Assets
 
 
 
 
Deferred compensation and employee benefits
 
$
60.8

 
$
65.5

Net operating loss carry-forwards
 
40.3

 
34.0

Stock-based compensation
 
38.7

 
35.9

Tax benefit for uncertain tax positions
 
29.6

 
32.5

Other
 
11.6

 
12.6

Total deferred tax assets
 
181.0

 
180.5

Valuation allowance for net operating loss carry-forwards
 
(34.0
)
 
(26.3
)
Deferred tax assets, net of valuation allowance
 
147.0

 
154.2

Deferred Tax Liabilities
 
 
 
 
Goodwill and other purchased intangibles
 
217.3

 
231.4

Deferred commissions
 
21.2

 
28.1

Depreciation on fixed assets
 
13.4

 
18.2

Unrealized gains on investments
 
—

 
17.9

Other
 
35.8

 
19.8

Total deferred tax liabilities
 
287.7

 
315.4

Net Deferred Tax Liability
 
$
140.7

 
$
161.2


Deferred income tax assets and liabilities that relate to the same tax jurisdiction are recorded net on the consolidated balance sheets. The components of the net deferred tax liability were classified in the consolidated balance sheets as follows:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Deferred tax assets, net
 
$
100.7

 
$
98.1

Deferred tax liabilities
 
241.4

 
259.3

Net Deferred Tax Liability
 
$
140.7

 
$
161.2

 
At September 30, 2015, there were $151.0 million of non-U.S. net operating loss carry-forwards, $66.7 million of which expire between 2018 and 2025 with the remaining carry-forwards having an indefinite life. In addition, there were $110.1 million in state net operating loss carry-forwards that expire between 2020 and 2035. A partial valuation allowance has been provided to offset the related deferred tax assets due to the uncertainty of realizing the benefit of the net operating loss carry-forwards. The valuation allowance increased $7.7 million in fiscal year 2015 and $7.6 million in fiscal year 2014.
The Company has made no provision for U.S. income taxes on $7.9 billion of cumulative undistributed non-U.S. earnings that are indefinitely reinvested at September 30, 2015. Determination of the potential amount of unrecognized deferred U.S. income tax liability related to such reinvested non-U.S. earnings is not practicable because of the numerous assumptions associated with this hypothetical calculation. However, foreign tax credits would be available to reduce some portion of this amount. Changes to the Company’s policy of reinvestment or repatriation of non-U.S. earnings may have a significant effect on its financial condition and results of operations.
The following reconciles the amount of tax expense at the federal statutory rate and taxes on income as reflected in the consolidated statements of income:
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Federal taxes at statutory rate
 
$
1,059.9

 
35.0
 %
 
$
1,193.4

 
35.0
 %
 
$
1,059.3

 
35.0
 %
State taxes, net of federal tax effect
 
51.6

 
1.7
 %
 
52.4

 
1.5
 %
 
47.3

 
1.6
 %
Effect of non-U.S. operations
 
(148.5
)
 
(4.9
)%
 
(246.3
)
 
(7.2
)%
 
(248.0
)
 
(8.2
)%
Effect of net income attributable to noncontrolling interests
 
(24.3
)
 
(0.8
)%
 
(9.6
)
 
(0.3
)%
 
(7.1
)
 
(0.2
)%
Other
 
(15.0
)
 
(0.5
)%
 
8.0

 
0.3
 %
 
4.4

 
0.1
 %
Tax Provision
 
$
923.7

 
30.5
 %
 
$
997.9

 
29.3
 %
 
$
855.9

 
28.3
 %

A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Balance at beginning of year
 
$
118.2

 
$
109.5

 
$
101.3

Additions for tax positions of prior years
 
12.6

 
3.0

 
16.5

Reductions for tax positions of prior years
 
(3.4
)
 
(2.4
)
 
(17.1
)
Additions for tax positions related to the current year
 
16.2

 
14.1

 
13.4

Settlements with taxing authorities
 
(0.1
)
 
(0.3
)
 
—

Expirations of statute of limitations
 
(38.3
)
 
(5.7
)
 
(4.6
)
Balance at End of Year
 
$
105.2

 
$
118.2

 
$
109.5


If recognized, substantially all of the balance, net of any deferred tax benefits, would favorably affect the Company’s effective income tax rate in future periods.
Accrued interest on uncertain tax positions at September 30, 2015 and 2014 was $11.2 million and $18.0 million, and is not presented in the unrecognized tax benefits table above. Interest expense (benefit) of $(6.6) million, $2.4 million and $1.0 million was recognized in the consolidated statements of income during fiscal years 2015, 2014 and 2013. Accrued penalties at September 30, 2015 and 2014 were insignificant.
The Company files a consolidated U.S. federal income tax return, multiple U.S. state and local income tax returns, and income tax returns in multiple non-U.S. jurisdictions. The Company is subject to examination by the taxing authorities in these jurisdictions. The Company’s major tax jurisdictions and the tax years for which the statutes of limitations have not expired are as follows: India 2001 to 2015; Canada 2008 to 2015; Singapore 2010 to 2015; Hong Kong 2009 to 2015; Luxembourg and U.S. federal 2012 to 2015; the U.K. 2014 to 2015; the State of California 2007 to 2015; the State of Minnesota 2009 to 2015; the States of Florida, Massachusetts and New York, and City of New York 2012 to 2015.
The Company has on-going examinations in various stages of completion in the States of California, Massachusetts, Minnesota and New York, Brazil, Canada, France, Germany, Hong Kong and India. Examination outcomes and the timing of settlements are subject to significant uncertainty. Such settlements may involve some or all of the following: the payment of additional taxes, the adjustment of deferred taxes and/or the recognition of unrecognized tax benefits. The Company has recognized a tax benefit only for those positions that meet the more-likely-than-not recognition threshold. It is reasonably possible that the total unrecognized tax benefit as of September 30, 2015 could decrease by an estimated $35.3 million within the next twelve months as a result of potential settlements with U.S. states and non-U.S. taxing authorities and the expiration of statutes of limitations in the U.S. federal and certain U.S. state and local and non-U.S. tax jurisdictions.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Legal Proceedings
The Company is from time to time involved in litigation relating to claims arising in the normal course of business. Management is of the opinion that the ultimate resolution of such claims will not materially affect the Company’s business, financial position, results of operations or liquidity. In management’s opinion, an adequate accrual has been made as of September 30, 2015 to provide for any probable losses that may arise from such matters for which the Company could reasonably estimate an amount.
Other Commitments and Contingencies
The Company leases office space and equipment under operating leases expiring at various dates through fiscal year 2031. Lease expense was $58.0 million, $58.2 million and $57.4 million in fiscal years 2015, 2014 and 2013. Sublease income totaled $1.7 million in fiscal years 2015 and 2014, and $2.0 million in fiscal year 2013.
Future minimum lease payments under long-term non-cancelable operating leases were as follows as of September 30, 2015:
(in millions)
 
 
for the fiscal years ending September 30,
 
Amount
2016
 
$
46.2

2017
 
40.4

2018
 
37.3

2019
 
32.4

2020
 
26.2

Thereafter
 
194.1

Total Minimum Lease Payments
 
$
376.6


Future minimum rentals to be received under non-cancelable subleases totaled $2.7 million at September 30, 2015.
While the Company has no contractual obligation to do so, it routinely makes cash investments in the course of launching SIPs. At September 30, 2015, the Company had $28.9 million of committed capital contributions which relate to discretionary commitments to invest in SIPs and other investment products. These unfunded commitments are not recorded in the Company’s consolidated balance sheet.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
The Company’s stock-based compensation plans consist of the Amended and Restated Annual Incentive Compensation Plan (the “AIP”), the 2002 Universal Stock Incentive Plan, as amended and restated (the “USIP”) and the amended and restated Franklin Resources, Inc. 1998 Employee Stock Investment Plan (the “ESIP”). The Compensation Committee of the Board of Directors determines the terms and conditions of awards under the AIP, the USIP and the ESIP.
Stock-based compensation expenses were as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Stock and stock unit awards
 
$
133.6

 
$
121.1

 
$
107.2

Employee stock investment plan
 
6.4

 
6.6

 
6.2

Total
 
$
140.0

 
$
127.7

 
$
113.4


Stock and Stock Unit Awards
Under the terms of the AIP, eligible employees may receive cash, equity awards and/or mutual fund unit awards generally based on the performance of the Company, its funds and the individual employee. The USIP provides for the issuance of the Company’s common stock for various stock-related awards to officers, directors and employees. There are 120.0 million shares authorized under the USIP, of which 27.2 million shares were available for grant at September 30, 2015.
Stock awards generally entitle holders to the right to sell the underlying shares of the Company’s common stock once the awards vest. Stock unit awards generally entitle holders to receive the underlying shares of common stock once the awards vest. Awards generally vest based on the passage of time or the achievement of predetermined Company financial performance goals. In the event a performance measure is not achieved at or above a specified threshold level, the portion of the award tied to such performance measure is forfeited.
Stock and stock unit award activity was as follows:
(shares in thousands)
 
Time-Based Shares
 
Performance-Based Shares
 
Total Shares
 
Weighted-Average
Grant-Date Fair Value
for the fiscal year ended September 30, 2015
 
 
 
 
Nonvested balance at September 30, 2014
 
2,150

 
1,323

 
3,473

 
$
48.55

Granted
 
2,153

 
506

 
2,659

 
55.65

Vested
 
(2,075
)
 
(529
)
 
(2,604
)
 
49.07

Forfeited/canceled
 
(143
)
 
(127
)
 
(270
)
 
48.17

Nonvested Balance at September 30, 2015
 
2,085

 
1,173

 
3,258

 
$
53.97


Total unrecognized compensation expense related to nonvested stock and stock unit awards, net of estimated forfeitures, was $134.0 million at September 30, 2015. This expense is expected to be recognized over a remaining weighted-average vesting period of 1.6 years. The weighted-average grant-date fair values of stock awards and stock unit awards granted during fiscal years 2015, 2014 and 2013 were $55.65, $53.89 and $44.01 per share. The total fair value of stock and stock unit awards vested during the same periods was $115.2 million, $153.0 million and $126.3 million.
The Company generally does not repurchase shares upon vesting of stock and stock unit awards. However, in order to pay taxes due in connection with the vesting of employee and executive officer stock and stock unit awards, shares are repurchased using a net stock issuance method.
Stock Options
There were no stock options outstanding at September 30, 2015 or 2014, and no stock option activity during fiscal year 2015. The total intrinsic values of stock options exercised during fiscal years 2014 and 2013 were $17.9 million and $43.3 million. Cash received from stock option exercises during the same periods was $7.2 million and $18.1 million, and income tax benefits from the exercises were $5.9 million and $19.3 million.
Employee Stock Investment Plan
The ESIP allows eligible participants to buy shares of the Company’s common stock at a discount of its market value on defined dates. A total of 0.6 million shares were issued under the ESIP during fiscal year 2015, and 5.2 million shares were reserved for future issuance at September 30, 2015.
Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans
Defined Benefit Plans
Franklin Templeton Global Investors Limited, a subsidiary of Franklin located in the U.K., sponsors a defined benefit pension plan (the “Pension Plan”). In addition, Fiduciary Trust Company International, a subsidiary of Franklin located in the U.S., sponsors a defined benefit healthcare plan (the “Healthcare Plan”) that provides post-retirement medical benefits to full-time employees who have worked ten years and attained age 55 while in the service of Fiduciary Trust, or have met alternate eligibility criteria. Both plans are closed to new participants, and the Pension Plan was closed to new contributions in May 2012.
Financial information for the plans was as follows:
(in millions)
 
Pension Plan
 
Healthcare Plan
as of and for the fiscal years ended September 30,
 
2015
 
2014
 
2015
 
2014
Change in Benefit Obligation
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
39.9

 
$
41.4

 
$
5.4

 
$
5.5

Interest cost
 
1.5

 
1.9

 
0.2

 
0.2

Benefits paid
 
(1.0
)
 
(5.3
)
 
(0.5
)
 
(0.8
)
Actuarial (gains) losses
 
(1.3
)
 
1.8

 
1.5

 
0.5

Foreign exchange revaluation
 
(2.7
)
 
0.1

 
—

 
—

Benefit Obligation at End of Year
 
$
36.4

 
$
39.9

 
$
6.6

 
$
5.4

Change in Fair Value of Plan Assets
 
 
 
 

 
 
 
 

Fair value of plan assets at beginning of year
 
$
40.8

 
$
41.1

 
$
—

 
$
—

Actual return on assets
 
(0.3
)
 
3.8

 
—

 
—

Employer contributions
 
1.0

 
1.1

 
0.5

 
0.8

Benefits paid
 
(1.0
)
 
(5.3
)
 
(0.5
)
 
(0.8
)
Foreign exchange revaluation
 
(2.7
)
 
0.1

 
—

 
—

Fair Value of Plan Assets at End of Year
 
$
37.8

 
$
40.8

 
$
—

 
$
—

Funded Status
 
$
1.4

 
$
0.9

 
$
(6.6
)
 
$
(5.4
)

(in millions)
 
Pension Plan
 
Healthcare Plan
as of and for the fiscal years ended September 30,
 
2015
 
2014
 
2015
 
2014
Amounts Recognized in the Consolidated Balance Sheets
 
 
 
 
 
 
 
 
Other assets
 
$
1.4

 
$
0.9

 
$
—

 
$
—

Compensation and benefits
 
—

 
—

 
(0.4
)
 
(0.4
)
Other liabilities
 
—

 
—

 
(6.2
)
 
(5.0
)
Net Asset (Liability)
 
$
1.4

 
$
0.9

 
$
(6.6
)
 
$
(5.4
)
Weighted-Average Assumptions
 
 
 
 

 
 
 
 

Discount rate
 
3.90
%
 
4.10
%
 
4.20
%
 
4.05
%
Expected long-term rate of return on plan assets1
 
5.80
%
 
6.41
%
 
N/A

 
N/A

Rate of compensation increase
 
N/A

 
N/A

 
2.50
%
 
2.50
%
________________
1 
The expected long-term rate of return on plan assets is based on the weighted-average historic performance of each asset class and current market conditions.

The components of net periodic benefit cost (gain) for the plans were as follows:
(in millions)
 
Pension Plan
 
Healthcare Plan
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Interest cost
 
$
1.5

 
$
1.9

 
$
2.3

 
$
0.2

 
$
0.2

 
$
0.2

Plan settlements
 
—

 
—

 
1.6

 
—

 
—

 
—

Expected return on plan assets
 
(2.2
)
 
(2.6
)
 
(3.2
)
 
—

 
—

 
—

Amortization of net actuarial losses
 
—

 
—

 
—

 
0.1

 
—

 
0.3

Net Periodic Benefit Cost (Gain)
 
$
(0.7
)
 
$
(0.7
)
 
$
0.7

 
$
0.3

 
$
0.2

 
$
0.5


As of September 30, 2015 and 2014, the Pension Plan assets were invested in investment funds with holdings of $28.6 million and $34.6 million in equity securities, $5.6 million and $3.3 million in debt securities, and $3.6 million and $2.9 million in cash and cash equivalents. The fair value of the investment funds, which are classified as Level 1, is determined based on the published NAV of the funds. There were no Pension Plan assets classified as Level 2 or 3 during fiscal years 2015 or 2014.
The Company has no target allocation set for the Pension Plan as the plan members control all investment decisions. The Healthcare Plan is an unfunded benefit plan. The Company expects to contribute $1.0 million to the Pension Plan and $0.4 million to the Healthcare Plan in fiscal year 2016.
The plan benefits expected to be paid over the next ten years were as follows: 
(in millions)
 
Pension Plan
 
Healthcare Plan
for the fiscal years ending September 30,
2016
 
$
1.1

 
$
0.5

2017
 
0.4

 
0.5

2018
 
0.3

 
0.4

2019
 
0.3

 
0.5

2020
 
1.5

 
0.5

Thereafter in the succeeding five years
 
19.0

 
2.4


Defined Contribution Plans
The Company sponsors a 401(k) plan that covers substantially all U.S. employees who meet certain employment requirements. Participants may contribute up to 50% of pretax annual compensation and up to 100% of the cash portion of the participant’s year-end bonus, as defined by the plan and subject to Internal Revenue Code limitations, each year to the plan. In addition, certain of the Company’s non-U.S. subsidiaries sponsor defined contribution plans primarily for the purpose of providing deferred compensation incentives for its employees and to comply with local regulatory requirements. The total expenses recognized for defined contribution plans in the consolidated statements of income were $46.4 million, $47.0 million and $44.0 million for fiscal years 2015, 2014 and 2013.
Segment and Geographic Information
Segment and Geographic Information
Segment and Geographic Information
The Company has one operating segment, investment management and related services.
Geographic information was as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Operating Revenues
 
 
 
 
 
 
United States
 
$
4,634.2

 
$
5,014.4

 
$
5,389.5

Luxembourg
 
2,278.6

 
2,034.0

 
363.4

Canada
 
339.0

 
357.6

 
323.3

Asia-Pacific
 
311.8

 
420.2

 
661.0

The Bahamas
 
250.2

 
492.7

 
1,049.7

Europe, the Middle East and Africa, excluding Luxembourg
 
126.8

 
159.8

 
184.4

Latin America
 
8.1

 
12.7

 
13.7

Total
 
$
7,948.7

 
$
8,491.4

 
$
7,985.0


(in millions)
 
 
 
 
 
 
as of September 30,
 
2015
 
2014
 
2013
Property and Equipment, Net
 
 
 
 
 
 
United States
 
$
406.9

 
$
417.0

 
$
443.4

Asia-Pacific
 
68.9

 
78.0

 
81.0

Europe, the Middle East and Africa
 
14.8

 
13.8

 
15.3

The Bahamas
 
14.6

 
15.1

 
15.7

Canada
 
4.5

 
5.9

 
8.1

Latin America
 
0.4

 
0.9

 
0.6

Total
 
$
510.1

 
$
530.7

 
$
564.1


Operating revenues are generally allocated to geographic areas based on the location of the office providing services. During fiscal year 2014, one of the Company’s Luxembourg subsidiaries became the management company responsible for providing investment management, distribution and shareholder servicing services to the Company’s cross-border SIPs. These services were previously the responsibility of subsidiaries in The Bahamas, Asia-Pacific and the United States.
Other Income (Expenses)
Other Income (Expenses)
Other Income (Expenses)
Other income (expenses) consisted of the following:  
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Investment and Other Income, Net
 
 
 
 
 
 
Dividend income
 
$
10.3

 
$
10.1

 
$
10.8

Interest income
 
10.8

 
9.1

 
7.5

Gains (losses) on trading investment securities, net
 
(22.3
)
 
10.4

 
8.7

Realized gains on sale of investment securities, available-for-sale
 
28.1

 
57.8

 
50.9

Realized losses on sale of investment securities, available-for-sale
 
(4.0
)
 
(1.0
)
 
(0.9
)
Income (losses) from investments in equity method investees
 
(63.2
)
 
68.1

 
74.0

Other-than-temporary impairment of investments
 
(10.0
)
 
(0.6
)
 
(2.4
)
Gains on investments of consolidated SIPs, net
 
18.0

 
33.9

 
42.4

Gains (losses) from consolidated VIEs, net
 
8.3

 
7.1

 
(16.0
)
Foreign currency exchange gains (losses), net
 
57.0

 
32.1

 
(30.9
)
Other, net
 
7.4

 
8.8

 
8.1

Total
 
40.4

 
235.8

 
152.2

Interest Expense
 
(39.6
)
 
(47.4
)
 
(46.9
)
Other Income, Net
 
$
0.8

 
$
188.4

 
$
105.3

Substantially all of the Company’s dividend income and realized gains and losses on sale of available-for-sale securities were generated by investments in its nonconsolidated SIPs. Interest income was primarily generated by trading investment securities and cash equivalents. Proceeds from the sale of available-for-sale securities were $221.3 million, $380.4 million and $367.1 million for fiscal years 2015, 2014 and 2013. The realized gains and losses on sale of available-for-sale securities and the amounts of other-than-temporary impairment of investments related to available-for-sale securities were reclassified into investment and other income, net from accumulated other comprehensive loss.
Net gains (losses) recognized on the Company’s trading investment securities that were held at September 30, 2015, 2014 and 2013 were $(20.3) million, $5.2 million and $0.6 million. Net gains (losses) recognized on trading investment securities of consolidated SIPs that were held at September 30, 2015, 2014 and 2013 were $(17.7) million, $3.7 million and $12.2 million.
Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Notes)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) by component were as follows: 
(in millions)
 
Unrealized Gains (Losses) on Investments
 
Currency Translation Adjustments
 
Unrealized Losses on Defined Benefit Plans
 
Total
for the fiscal year ended September 30, 2015
 
 
 
 
Balance at October 1, 2014
 
$
31.0

 
$
(143.6
)
 
$
(5.1
)
 
$
(117.7
)
Other comprehensive income (loss) before reclassifications, net of tax
 
1.4

 
(184.2
)
 
(0.6
)
 
(183.4
)
Reclassifications to net investment and other income, net of tax
 
(13.1
)
 
—

 
—

 
(13.1
)
Total other comprehensive loss
 
(11.7
)
 
(184.2
)
 
(0.6
)
 
(196.5
)
Balance at September 30, 2015
 
$
19.3

 
$
(327.8
)
 
$
(5.7
)
 
$
(314.2
)
(in millions)
 
Unrealized Gains (Losses) on Investments
 
Currency Translation Adjustments
 
Unrealized Losses on Defined Benefit Plans
 
Total
for the fiscal year ended September 30, 2014
 
 
 
 
Balance at October 1, 2013
 
$
71.9

 
$
(63.2
)
 
$
(2.6
)
 
$
6.1

Other comprehensive income (loss) before reclassifications, net of tax
 
5.9

 
(80.4
)
 
(2.5
)
 
(77.0
)
Reclassifications to net investment and other income, net of tax
 
(46.8
)
 
—

 
—

 
(46.8
)
Total other comprehensive loss
 
(40.9
)
 
(80.4
)
 
(2.5
)
 
(123.8
)
Balance at September 30, 2014
 
$
31.0

 
$
(143.6
)
 
$
(5.1
)
 
$
(117.7
)
Significant Accounting Policies (Policies)
Business 
Business. Franklin Resources, Inc. (“Franklin”) is a holding company that, together with its various subsidiaries (collectively, the “Company”) is referred to as Franklin Templeton Investments. The Company provides investment management and related services to investors globally through products that include investment funds and institutional, high net-worth and separately-managed accounts (collectively, the “sponsored investment products” or “SIPs”). In addition to investment management, the Company’s services include fund administration, sales, distribution, marketing, shareholder servicing, and trust, custody and other fiduciary services.
Basis of presentation 
Basis of Presentation. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Management 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. Certain comparative amounts for prior fiscal years have been reclassified to conform to the financial statement presentation as of and for the fiscal year ended September 30, 2015 (“fiscal year 2015”).
Consolidation 
Consolidation. The consolidated financial statements include the accounts of Franklin and its subsidiaries and SIPs in which it has a controlling financial interest. The Company has a controlling financial interest when it owns a majority of the voting interest in an entity or when it is the primary beneficiary of a variable interest entity (“VIE”). The Company also consolidates non-VIE limited partnerships and similar structures that it controls. All material intercompany accounts and transactions have been eliminated.
A VIE is an entity in which the equity investment holders have not contributed sufficient capital to finance its activities or the equity investment holders do not have defined rights and obligations normally associated with an equity investment. The Company’s VIEs are all investment entities, and its variable interests consist of its equity ownership interest in and/or investment management fees earned from these entities.
The Company uses two models for determining whether it is the primary beneficiary of VIEs. For all VIEs with the exception of collateralized loan obligations (“CLOs”), the Company is the primary beneficiary if it has the majority of the risks or rewards of ownership, which it determines using expected cash flow scenarios. For CLOs, the Company is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or right to receive benefits from the VIE that could potentially be significant to the VIE. Under both models, the key estimates and assumptions used in the analyses include the amount of assets under management (“AUM”), investment management fee rates, the life of the investment product, prepayment rates, and the discount rate.
The Company is presumed to control non-VIE limited partnerships and similar structures for which it is the general partner or managing member unless the limited partners or other investors have the substantive ability to remove the Company as general partner or managing member or otherwise participate in the decision-making of the entity. The Company’s risk of loss in these entities is limited to its investments in the entities as the general partner and managing member entities are structured as limited liability companies.
The Company sponsors and manages various types of investment products, which consist of both VIEs and non-VIEs. The Company consolidates the VIE products for which it is the primary beneficiary and the non-VIE products which it controls. The Company has no right to the consolidated products’ assets, other than its direct equity investment in them, and/or investment management fees earned from them. The debt holders of these consolidated entities have no recourse to the Company’s assets beyond the level of its direct investment, therefore the Company bears no other risks associated with the entities’ liabilities.
Earnings per Share 
Earnings per Share. Basic earnings per share is computed by dividing net income available to the Company’s common shareholders, which exclude participating securities, by the weighted-average number of shares of common stock outstanding during the period. The Company’s participating securities consist of its nonvested stock and stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents. Diluted earnings per share is computed on the basis of the weighted-average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the two-class method.
Fair Value Measurements 
Fair Value Measurements. The Company uses a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based on whether the inputs to those valuation techniques are observable or unobservable. The three levels of fair value hierarchy are set forth below. The Company’s assessment of the hierarchy level of the assets or liabilities measured at fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Transfers between levels are recognized at the end of each quarter.
Level 1
Unadjusted quoted prices in active markets for identical assets or liabilities.
 
 
Level 2
Observable inputs other than Level 1 quoted prices, such as non-binding quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable or corroborated by observable market data. Level 2 quoted prices are generally obtained from two independent third-party brokers or dealers, including prices derived from model-based valuation techniques for which the significant assumptions are observable in the market or corroborated by observable market data. Quoted prices are validated through price variance analysis, subsequent sales testing, stale price review, price comparison across pricing vendors and due diligence reviews of third-party vendors.
 
 
Level 3
Unobservable inputs that are supported by little or no market activity. These inputs require significant management judgment and reflect the Company's estimation of assumptions that market participants would use in pricing the asset or liability.

The fair values for Level 3 assets and liabilities are determined using various methodologies in accordance with the Company’s global valuation and pricing policy which defines valuation and pricing conventions for each security type. When available, fair value is measured based on the reported net asset value (“NAV”) of underlying investments or independent third-party broker or dealer price quotes. These inputs are evaluated for reasonableness through various procedures which include due diligence reviews of the third parties, price comparisons across pricing vendors, stale price reviews and subsequent sales testing. If these inputs are not available, the Company primarily employs a market-based method, using purchase multiples observed for comparable third-party transactions, valuations of comparable entities, projected operating results of the investee entity or subsequent financing transactions entered into by the investee entity. If the inputs for a market-based method are not available, the Company utilizes an income-based method, which considers the net present value of anticipated future cash flows of the investment. A discount may be applied due to the nature or duration of any restrictions on the disposition of the investment. The Company reviews and approves the market-based and income-based methods on a periodic basis for changes that would impact the unobservable inputs incorporated into the valuation process. The fair value measurements from these methods are further validated through price variance analysis, subsequent sales testing and market comparable sales.
The Company records a substantial amount of its investments at fair value or amounts that approximate fair value on a recurring basis. Fair values are estimated for disclosure purposes for financial instruments that are not measured at fair value.
Fair Value Option 
Fair Value Option. Effective October 1, 2014, the financial assets and financial liabilities of consolidated CLOs are measured using the more observable fair value of either the financial assets or financial liabilities. See Note 2 – New Accounting Guidance. The Company had previously elected the fair value option for all assets and liabilities of its consolidated CLOs as this option better matched the changes in fair value of the assets and liabilities. The decision to elect the fair value option, which is irrevocable once elected, is determined on an instrument by instrument basis and applied to an entire instrument. The net gains or losses on the assets and liabilities of consolidated CLOs through September 30, 2014 included interest income and expense and were recognized in investment and other income, net in the consolidated statements of income.
Cash and Cash Equivalents 
Cash and Cash Equivalents consist of cash on hand, deposits with financial institutions, time deposits, securities of U.S. government-sponsored enterprises and the U.S. Treasury, debt instruments with original maturities of three months or less at the purchase date, and other highly liquid investments, including money market funds, which are readily convertible into cash. The money market funds are nonconsolidated SIPs. Cash and cash equivalents are carried at cost, except for securities of U.S. government-sponsored enterprises and the U.S. Treasury, which are carried at amortized cost. Due to the short-term nature and liquidity of these financial instruments, the carrying values of these assets approximate fair value and, for disclosure purposes, they are classified as Level 1.
The Company maintains cash and cash equivalents with financial institutions in various countries, limits the amount of credit exposure with any given financial institution and conducts ongoing evaluations of the creditworthiness of the financial institutions with which it does business.
Receivables 
Receivables consist primarily of fees receivable from SIPs and are carried at invoiced amounts. Due to the short-term nature and liquidity of the receivables, the carrying values of these assets approximate fair value.
Investments 
Investments consist of investment securities, trading and available-for-sale, investments in equity method investees and other investments.
Investment Securities, Trading consist primarily of nonconsolidated SIPs and to a lesser extent, debt securities, and are carried at fair value. Changes in the fair value of trading securities are recognized as gains and losses in earnings. The fair value of the SIPs is determined based on their published NAV and they are classified as Level 1. The fair value of the debt securities is primarily determined using independent third-party broker or dealer price quotes, and they are classified as Level 2. The fair value of certain debt securities is determined using discounted cash flow techniques and they are classified as Level 3.
Investment Securities, Available-for-Sale consist of nonconsolidated SIPs, mortgage-backed securities and other equity and debt securities. The securities are carried at fair value. Realized gains and losses are included in investment income using the average cost method. Unrealized gains and losses are recorded net of tax as part of accumulated other comprehensive income (loss) until realized. The fair value of the SIPs is determined based on their published NAV and they are classified as Level 1. The fair value of the debt securities is primarily determined using independent third-party broker or dealer price quotes and they are classified as Level 2.
The fair value of other equity securities is determined using either quoted market prices, in which case they are classified as Level 1, or independent third-party broker or dealer price quotes, in which case they are classified as Level 2.
Investments in Equity Method Investees consist of equity investments in entities, including SIPs, over which the Company is able to exercise significant influence, but not control. Significant influence is generally considered to exist when the Company’s ownership interest in the voting stock of the investee is between 20% and 50%, although other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, also are considered in determining whether the equity method of accounting is appropriate. Investments in limited partnerships and limited liability companies for which the Company is not deemed to have control are accounted for using the equity method when the Company’s investment is more than minor or when the Company is the general partner. Under the equity method of accounting, the investments are initially carried at cost and subsequently adjusted by the Company’s proportionate share of the entities’ net income, which is recognized in earnings.
Other Investments consist of equity investments in entities over which the Company is unable to exercise significant influence and are not marketable, time deposits and life settlement contracts. The equity investments are accounted for under the cost method. For disclosure purposes, the fair value of these investments is generally estimated based on their NAV and they are classified as Level 3. Time deposits that have maturities greater than three months but less than one year from the date of purchase are carried at cost. Due to the short-term nature and liquidity of these financial instruments, the carrying values of the time deposits approximate fair value, and they are classified as Level 2. Life settlement contracts are carried at fair value, which is determined based on discounted cash flows using significant unobservable inputs, and are classified as Level 3.
Impairment of Investments. Investments other than trading securities are evaluated for other-than-temporary impairment on a quarterly basis when the cost of an investment exceeds its fair value. For equity securities, the Company considers many factors, including the severity and duration of the decline in the fair value below cost, the Company’s intent and ability to hold the security for a period of time sufficient for an anticipated recovery in fair value, and the financial condition and specific events related to the issuer. When an impairment of an equity security is determined to be other-than-temporary, the impairment is recognized in earnings. For debt securities, if the Company intends to sell or it is more likely than not that it will be required to sell a security before recovery of its amortized cost, the entire impairment is recognized in earnings. If the Company does not intend to sell or it is not more likely than not that it will be required to sell the security before anticipated recovery of its amortized cost, the impairment is separated into the amount of the total impairment related to the credit loss and the amount of the total impairment related to all other factors. The credit loss component is the difference between the security's amortized cost and the present value of the expected cash flows, and is recognized in earnings. Losses related to all other factors are recognized in accumulated other comprehensive income (loss).
Cash and Cash Equivalents of Consolidated SIPs 
Cash and Cash Equivalents of Consolidated SIPs consist of deposits with financial institutions and highly liquid investments, including money market funds, which are readily convertible into cash, and are carried at cost. Due to the short-term nature and liquidity of these financial instruments, their carrying values approximate fair value and, for disclosure purposes, they are classified as Level 1.
Investments of Consolidated Sponsored Investment Products 
Investments of Consolidated SIPs consist of trading securities and other investments that are not generally traded in active markets, and are carried at fair value. Changes in the fair value of the investments are recognized as gains and losses in earnings. The fair value of the trading securities is determined using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices are not available. These securities are classified as Level 1 or Level 2. The quoted market prices may be adjusted if events occur, such as significant price changes in U.S.-traded market proxies after the close of corresponding foreign markets, trade halts or suspensions, or unscheduled market closures. The market proxies consist of correlated country-specific exchange-traded securities, such as futures, American Depositary Receipts indices or exchange-traded funds. The price adjustments are primarily determined based on third-party factors derived from model-based valuation techniques for which the significant assumptions are observable in the market.
The investments that are not generally traded in active markets consist of debt and equity securities of entities in emerging markets and fund products. The fair values of the debt and equity securities are determined using significant unobservable inputs in either a market-based or income-based approach and they are classified as Level 3. The fair value of the fund products is determined using NAV as a practical expedient. These investments are classified as Level 2 if they are redeemable without restriction on at least a quarterly basis, or Level 3 if they have a redemption frequency greater than quarterly, are subject to redemption restrictions, or are nonredeemable.
Cash and Cash Equivalents of Consolidated VIEs 
Cash and Cash Equivalents of Consolidated VIEs consist of investments in a money market fund and are carried at fair value. The fair value of the fund is based on its published NAV and it is classified as Level 1.
Investments of Consolidated VIEs 
Investments of Consolidated VIEs consist of corporate debt securities and are carried at fair value. The fair value is primarily obtained from independent third-party broker or dealer price quotes and they are classified as Level 2.
Property and Equipment, net 
Property and Equipment, net are recorded at cost and are depreciated using the straight-line method over their estimated useful lives which range from three to 35 years. Expenditures for repairs and maintenance are charged to expense when incurred. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the lease term, whichever is shorter.
Internal and external costs incurred in connection with developing or obtaining software for internal use are capitalized and amortized over the estimated useful lives of the software, which range from three to five years, beginning when the software project is complete and the application is put into production.
Property and equipment is tested for impairment when there is an indication that the carrying value of an asset may not be recoverable. Carrying values are not recoverable when the undiscounted cash flows estimated to be generated by the assets are less than their carrying values. When an asset is determined to not be recoverable, the impairment is measured based on the excess, if any, of the carrying value of the asset over its respective fair value. Fair value is determined by discounted future cash flows models, appraisals or other applicable methods.
Goodwill and Other Intangible Assets, net 
Goodwill and Other Intangible Assets, net. Goodwill represents the excess cost of a business acquisition over the fair value of the net assets acquired. Other intangible assets consist of investment management contracts and customer base assets resulting from business acquisitions. These intangible assets are amortized over their estimated useful lives, which range from six to 15 years, using the straight-line method, unless the asset is determined to have an indefinite useful life. Indefinite-lived intangible assets represent contracts to manage investment assets for which there is no foreseeable limit on the contract period.
Goodwill and indefinite-lived intangible assets are tested for impairment annually as of August 1 and when an event occurs or circumstances change that more likely than not reduce the fair value of the related reporting unit or indefinite-lived intangible asset below its carrying value. The Company has one reporting unit, investment management and related services, consistent with its single operating segment, to which all goodwill has been assigned.
Goodwill and indefinite-lived intangible assets may first be assessed for qualitative factors to determine whether it is necessary to perform a quantitative impairment test. The qualitative analysis considers entity-specific and macroeconomic factors and their potential impact on the key assumptions used in the determination of the fair value of the reporting unit or indefinite-lived intangible asset. A quantitative impairment test is performed if the results of the qualitative assessment indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying value or an indefinite-lived intangible asset is impaired, or if a qualitative assessment is not performed.
The quantitative goodwill impairment test involves a two-step process. The first step compares the fair value of the reporting unit to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step is performed to compute the amount of any impairment. In the second step, impairment is computed by comparing the implied fair value of the reporting unit goodwill with the carrying value of the goodwill.
The quantitative indefinite-lived intangible assets impairment test compares the fair value of the asset to its carrying value. If the carrying value is higher than the fair value, impairment is recognized in the amount of the difference in values.
In estimating the fair value of the reporting unit and indefinite-lived intangible assets, the Company uses valuation techniques based on an income approach under which future cash flows are discounted. The future cash flow estimates include assumptions about revenue and AUM growth rates, the pre-tax profit margin, the average effective fee rate, the effective tax rate, and the discount rate, which is based on the Company’s weighted average cost of capital.
Definite-lived intangible assets are tested for impairment quarterly. Impairment is indicated when the carrying value of the asset is not recoverable and exceeds its fair value. In evaluating the recoverability of definite-lived intangible assets, the Company estimates the undiscounted future cash flows to be derived from these assets. The future undiscounted cash flow projections include assumptions about revenue and AUM growth rates, effective fee rates, investor redemptions, the pre-tax profit margin, and expected useful lives. If the carrying value of an asset is not recoverable through the related undiscounted cash flows, the impairment is measured based on the amount by which the carrying value of the asset exceeds its fair value and recognized in general, administrative and other expense. The fair value of the asset is determined by discounted cash flows or other methods as appropriate for the asset type.
Deferred Sales Commissions 
Deferred Sales Commissions consist of up-front commissions paid to financial advisers and broker/dealers on shares sold without a front-end sales charge to investors, and are amortized over the periods in which they are generally recovered from related revenues, which range from one to seven years. Deferred sales commissions are included in other assets in the consolidated balance sheet.
Contingent consideration liabilities 
Contingent Consideration Liabilities primarily consist of the expected future payments related to the Company’s commitment to acquire the remaining interests in K2 Advisors Holdings, LLC (“K2”) and are included in other liabilities on the consolidated balance sheet. The liabilities are carried at fair value, determined using an income-based method which considers the net present value of anticipated future cash flows based on estimated future revenue and profits and timing of payments, and are classified as Level 3.
Debt 
Debt consists of senior notes, which are carried at amortized cost. For disclosure purposes, the fair value is estimated using quoted market prices, independent third-party broker or dealer price quotes, or prices of publicly traded debt with similar maturities, credit risk and interest rates. The notes are classified as Level 2.
Debt of consolidated sponsored investment products 
Debt of Consolidated SIPs is carried at amortized cost. For disclosure purposes, the fair value is estimated using a discounted cash flow model that considers current interest rate levels, the quality of the underlying collateral and current economic conditions. The debt is classified as Level 3.
Debt of consolidated VIEs 
Debt of Consolidated VIEs consists of debt of CLOs. Effective October 1, 2014, the debt is measured based on the fair value of the assets of the consolidated CLOs less the fair value of the Company’s own economic interests in the CLOs. See Note 2 – New Accounting Guidance. As of September 30, 2014, the debt was carried at fair value, which was obtained from independent third-party broker or dealer price quotes. The debt was classified as Level 2 unless the price quotes were derived from significant unobservable inputs, in which case it was classified as Level 3.
Noncontrolling Interests 
Noncontrolling Interests relate almost entirely to consolidated SIPs. Noncontrolling interests that are currently redeemable or convertible for cash or other assets at the option of the holder are classified as temporary equity. Nonredeemable noncontrolling interests are classified as a component of equity. Net income (loss) attributable to third-party investors is reflected as net income (loss) attributable to nonredeemable and redeemable noncontrolling interests in the consolidated statements of income. Sales and redemptions of shares of consolidated SIPs by third-party investors are a component of the change in noncontrolling interests included in financing activities in the consolidated statements of cash flows.
Appropriated retained earnings of consolidated VIEs 
Appropriated Retained Earnings of Consolidated VIEs. As of September 30, 2014 this amount represented the difference between the fair values of consolidated CLOs’ assets and liabilities. The difference was recognized as appropriated retained earnings as the CLO debt holders, not the Company, would ultimately receive the benefits or absorb the losses associated with the CLOs’ assets and liabilities. Net income attributable to third-party investors through September 30, 2014 was reflected as net income attributable to nonredeemable noncontrolling interests in the consolidated statements of income. See Note 2 – New Accounting Guidance.
Revenues 
Revenues. Fees from providing investment management and fund administration services (“investment management fees”), distribution fees and shareholder servicing fees are recognized as earned, over the period in which services are rendered, except for performance-based investment management fees, which are recognized when earned. Sales commissions related to the sale of shares of SIPs are recognized on trade date. Investment management fees, other than performance-based fees, and distribution fees are determined based on a percentage of AUM, primarily on a monthly basis using average daily AUM. Performance-based investment management fees are based on performance targets established in the related investment management contracts. Shareholder servicing fees are generally calculated based on the number and type of accounts serviced.
AUM is generally based on the fair value of the underlying securities held by SIPs and is calculated using fair value methods derived primarily from unadjusted quoted market prices, unadjusted independent third-party broker or dealer price quotes in active markets, or market prices or price quotes adjusted for observable price movements after the close of the primary market. The fair values of the underlying securities for which market prices are not readily available are internally valued using various methodologies which incorporate significant unobservable inputs as appropriate for each security type and represent an insignificant percentage of total AUM. Pricing of the securities held by SIPs is governed by the Company’s global valuation and pricing policy, which defines valuation and pricing conventions for each security type, including practices for responding to unexpected or unusual market events.
Sales commissions and distribution fees are recorded gross of sales and distribution expenses paid to financial advisers and other intermediaries as the Company acts as the principal in its role as primary obligor to the sales and distribution agreements.
Stock-based Compensation 
Stock-Based Compensation. The fair value of share-based payment awards is estimated on the date of grant based on the market price of the underlying shares of the Company’s common stock and is amortized to compensation expense on a straight-line basis over the related vesting period, which is generally three years. Expense relating to awards subject to performance conditions is recognized if it is probable that the performance goals will be achieved. The probability of achievement is assessed on a quarterly basis. The total number of awards expected to vest is adjusted for estimated forfeitures.
Postretirement Benefits 
Postretirement Benefits. Defined contribution plan costs are expensed as incurred. Defined benefit plan costs are expensed as the benefits are earned.
Income Taxes 
Income Taxes. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts in the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is expected to be recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. For each tax position taken or expected to be taken in a tax return, the Company determines whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. The Company recognizes the accrual of interest on uncertain tax positions in interest expense and penalties in other operating expenses.
As a multinational corporation, the Company operates in various locations outside the United States and generates earnings from its non-U.S. subsidiaries. The Company indefinitely reinvests the undistributed earnings of its non-U.S. subsidiaries, except for income previously taxed in the U.S., subject to regulatory or legal repatriation restrictions or requirements, and the excess net earnings reduced by cash needs for operational and regulatory capital requirements, capital management plans and capital expenditure plans of its Canadian and U.K. subsidiaries.
Foreign Currency Translation 
Foreign Currency Translation and Transactions. Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated at current exchange rates as of the end of the accounting period. The related revenues and expenses are translated at average exchange rates in effect during the period. Net exchange gains and losses resulting from translation are excluded from income and are recorded as part of accumulated other comprehensive income (loss). Transactions denominated in a foreign currency are revalued at the current exchange rate at the transaction date and any related gains and losses are recognized in earnings.
Other assets and liabilities of consolidated VIEs [Policy Text Block] 
Receivables and accounts payable and accrued expenses of consolidated VIEs consist primarily of investment trades pending settlement. The fair values of these assets and liabilities are obtained from independent third-party broker or dealer quotes.
Other Liabilities of Consolidated SIPs [Policy Text Block] 
Other liabilities of consolidated SIPs consist of short positions in debt and equity securities. The fair value of the liabilities is determined based on the fair value of the underlying securities using quoted market prices, or independent third-party broker or dealer price quotes if quoted market prices securities are not available.
Earnings per Share (Tables)
Schedule of earnings per share basic and diluted
The components of basic and diluted earnings per share were as follows:
(in millions, except per share data)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Net Income Attributable to Franklin Resources, Inc.
 
$
2,035.3

 
$
2,384.3

 
$
2,150.2

Less: Allocation of earnings to participating nonvested stock and stock unit awards
 
12.0

 
14.3

 
13.9

Net Income Available to Common Stockholders
 
$
2,023.3

 
$
2,370.0

 
$
2,136.3

 
 
 
 
 
 
 
Weighted-average shares outstanding – basic
 
614.8

 
624.8

 
633.1

Dilutive effect of nonparticipating nonvested stock unit awards and common stock options
 
0.1

 
0.4

 
1.0

Weighted-Average Shares Outstanding – Diluted
 
614.9

 
625.2

 
634.1

 
 
 
 
 
 
 
Earnings per Share
 
 
 
 

 
 

Basic
 
$
3.29

 
$
3.79

 
$
3.37

Diluted
 
3.29

 
3.79

 
3.37

Investments (Tables)
Summary of Investments 
Investments consisted of the following:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Investment securities, trading
 
$
1,251.2

 
$
1,277.5

Investment securities, available-for-sale
 
 
 
 
SIPs
 
408.3

 
517.6

Debt securities
 
23.0

 
29.9

Other equity securities
 
15.1

 
6.6

Total investment securities, available-for-sale
 
446.4

 
554.1

Investments in equity method investees
 
655.3

 
594.9

Other investments
 
106.3

 
89.6

Total
 
$
2,459.2

 
$
2,516.1


Summary of the gross unrealized gains and losses relating to investment securities, available-for-sale 
A summary of the gross unrealized gains and losses relating to investment securities, available-for-sale is as follows:
(in millions)
 
 
 
Gross Unrealized
 
 
as of September 30, 2015
Cost Basis
 
Gains
 
Losses
 
Fair Value
SIPs
 
$
382.6

 
$
32.4

 
$
(6.7
)
 
$
408.3

Debt securities
 
22.8

 
0.2

 
—

 
23.0

Other equity securities
 
15.1

 
0.2

 
(0.2
)
 
15.1

Total
 
$
420.5

 
$
32.8

 
$
(6.9
)
 
$
446.4

(in millions)
 
 
 
Gross Unrealized
 
 
as of September 30, 2014
Cost Basis
 
Gains
 
Losses
 
Fair Value
SIPs
 
$
477.0

 
$
43.5

 
$
(2.9
)
 
$
517.6

Debt securities
 
29.7

 
0.3

 
(0.1
)
 
29.9

Other equity securities
 
6.3

 
0.3

 
—

 
6.6

Total
 
$
513.0

 
$
44.1

 
$
(3.0
)
 
$
554.1

Summary of gross unrealized losses and fair values of investment securities in a continuous unrealized loss position 
The following tables show the gross unrealized losses and fair values of available-for-sale securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
 
 
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, 2015
 
 
 
 
 
SIPs
 
$
99.8

 
$
(5.6
)
 
$
21.0

 
$
(1.1
)
 
$
120.8

 
$
(6.7
)
Other equity securities
 
10.9

 
(0.2
)
 
—

 
—

 
10.9

 
(0.2
)
Total
 
$
110.7

 
$
(5.8
)
 
$
21.0

 
$
(1.1
)
 
$
131.7

 
$
(6.9
)
 
 
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, 2014
 
 
 
 
 
SIPs
 
$
156.4

 
$
(2.7
)
 
$
1.5

 
$
(0.2
)
 
$
157.9

 
$
(2.9
)
Debt securities
 
4.0

 
—

 
11.6

 
(0.1
)
 
15.6

 
(0.1
)
Total
 
$
160.4

 
$
(2.7
)
 
$
13.1

 
$
(0.3
)
 
$
173.5

 
$
(3.0
)
Fair Value Measurements (Tables)
Schedule of assets and liabilities measured at fair value on a recurring basis 
Assets and liabilities measured at fair value on a recurring basis were as follows:  
(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
as of September 30, 2015
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities, trading
 
$
1,168.2

 
$
77.0

 
$
6.0

 
$
1,251.2

Investment securities, available-for-sale
 
 
 
 
 
 
 
 
SIPs
 
408.3

 
—

 
—

 
408.3

Debt securities
 
—

 
23.0

 
—

 
23.0

Other equity securities
 
12.2

 
2.9

 
—

 
15.1

Life settlement contracts
 
—

 
—

 
14.7

 
14.7

Total Assets Measured at Fair Value
 
$
1,588.7

 
$
102.9

 
$
20.7

 
$
1,712.3

Liabilities
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
$
—

 
$
—

 
$
102.9

 
$
102.9


(in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
as of September 30, 2014
 
 
 
 
Assets
 
 
 
 
 
 
 
 
Investment securities, trading
 
$
1,196.1

 
$
81.4

 
$
—

 
$
1,277.5

Investment securities, available-for-sale
 
 
 
 
 
 
 
 
SIPs
 
517.6

 
—

 
—

 
517.6

Debt securities
 
—

 
29.9

 
—

 
29.9

Other equity securities
 
1.7

 
4.9

 
—

 
6.6

Life settlement contracts
 
—

 
—

 
14.0

 
14.0

Total Assets Measured at Fair Value
 
$
1,715.4

 
$
116.2

 
$
14.0

 
$
1,845.6

Liabilities
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
$
—

 
$
—

 
$
98.5

 
$
98.5

Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis 
The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were as follows:

 
2015
 
2014
(in millions)
 
Investments
 
Contingent Consideration Liabilities
 
Investments
 
Contingent Consideration Liabilities
for the fiscal years ended September 30,
 
 
Balance at beginning of year
 
$
14.0

 
$
(98.5
)
 
$
13.8

 
$
(97.7
)
Total realized and unrealized gains (losses)
 
 
 
 
 
 
 
 
Included in investment and other income, net
 
1.6

 
—

 
2.9

 
—

Included in general, administrative and other expense
 
—

 
(12.4
)
 
—

 
(6.7
)
Other
 
—

 
(0.1
)
 
—

 
(0.4
)
Purchases
 
6.6

 
—

 
0.1

 
—

Sales
 
—

 
—

 
(0.7
)
 
—

Settlements
 
(1.5
)
 
7.9

 
(2.1
)
 
6.3

Foreign exchange revaluation
 
—

 
0.2

 
—

 
—

Balance at End of Year
 
$
20.7

 
$
(102.9
)
 
$
14.0

 
$
(98.5
)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at end of year
 
$
0.8

 
$
(12.5
)
 
$
1.2

 
$
(7.1
)

Schedule of valuation techniques and significant unobservable inputs used in Level 3 fair value measurements 
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows:
(in millions)
 
 
 
 
 
 
 
 
as of September 30, 2015
 
Fair Value
 
Valuation Technique
 
Significant Unobservable Inputs
 
Range (Weighted Average)
Investment securities, trading
 
$
6.0

 
Discounted cash flow
 
Discount rate
 
5.2%–6.1% (5.7%)
 
 
 
Risk premium
 
2.7%–2.8% (2.8%)
 
 
 
 
 
 
 
 
 
Life settlement contracts
 
14.7

 
Discounted cash flow
 
Life expectancy
 
21–141 months (68)
Discount rate
 
3.3%–19.0% (11.7%)
 
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
102.9

 
Discounted cash flow
 
AUM growth rate
 
0.5%–5.8% (4.4%)
EBITDA margin
 
19.3%–22.9% (22.0%)
Discount rate
 
14.0%
(in millions)
 
 
 
 
 
 
 
 
as of September 30, 2014
 
Fair Value
 
Valuation Technique
 
Significant Unobservable Inputs
 
Range (Weighted Average)
Life settlement contracts
 
$
14.0

 
Discounted cash flow
 
Life expectancy
 
23–150 months (71)
Discount rate
 
3.3%–21.7% (11.7%)
 
 
 
 
 
 
 
 
 
Contingent consideration liabilities
 
98.5

 
Discounted cash flow
 
AUM growth rate
 
3.4%–20.2% (12.8%)
EBITDA margin
 
21.9%–30.4% (28.2%)
Discount rate
 
14.0%
Schedule of financial instruments not measured at fair value 
Financial instruments that were not measured at fair value were as follows:
(in millions)
 
 
 
2015
 
2014
as of September 30,
 
Fair Value Level
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
Financial Assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
1
 
$
8,184.9

 
$
8,184.9

 
$
7,476.8

 
$
7,476.8

Other investments1
 
2 or 3
 
91.6

 
97.1

 
75.6

 
87.8

Financial Liabilities
 
 
 
 
 
 
 
 

 
 

Debt
 
2
 
1,348.0

 
1,374.9

 
1,198.2

 
1,235.8


_________________
1     Primarily consist of Level 3 assets.
Property and Equipment, Net (Tables)
Summary of property and equipment
Property and equipment consisted of the following:
(in millions)
 
 
 
 
 
Useful Lives
In Years
as of September 30,
 
2015
 
2014
 
Furniture, software and equipment
 
$
733.6

 
$
693.5

 
3 – 10
Premises and leasehold improvements
 
557.0

 
562.3

 
5 – 35
Land
 
74.2

 
74.3

 
N/A
Total cost
 
1,364.8

 
1,330.1

 
 
Less: accumulated depreciation and amortization
 
(854.7
)
 
(799.4
)
 
 
Property and Equipment, Net
 
$
510.1

 
$
530.7

 
 
Goodwill and Other Intangible Assets (Tables)
Goodwill and other intangible assets, net 
Goodwill and other intangible assets, net consisted of the following:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Goodwill
 
$
1,661.2

 
$
1,691.0

Indefinite-lived intangible assets
 
538.3

 
547.4

Definite-lived intangible assets, net
 
57.5

 
87.5

Total
 
$
2,257.0

 
$
2,325.9

Schedule of changes in carrying value of goodwill 
Changes in the carrying value of goodwill were as follows:
(in millions)
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
Balance at beginning of year
 
$
1,691.0

 
$
1,701.5

Foreign exchange revaluation
 
(29.8
)
 
(10.5
)
Balance at End of Year
 
$
1,661.2

 
$
1,691.0

Schedule of definite-lived intangible assets 
Definite-lived intangible assets were as follows:
 
 
2015
 
2014
(in millions)
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
as of September 30,
 
 
 
 
 
 
Customer base
 
$
164.5

 
$
(160.3
)
 
$
4.2

 
$
165.6

 
$
(152.7
)
 
$
12.9

Management contracts
 
89.5

 
(36.2
)
 
53.3

 
133.2

 
(58.6
)
 
74.6

Total
 
$
254.0

 
$
(196.5
)
 
$
57.5

 
$
298.8

 
$
(211.3
)
 
$
87.5

Schedule of estimated remaining amortization expense 
Definite-lived intangible assets had a weighted-average remaining useful life of 8.0 years at September 30, 2015, with estimated remaining amortization expense as follows:
(in millions)
 
 
for the fiscal years ending September 30,
 
Amount
2016
 
$
13.1

2017
 
9.0

2018
 
9.0

2019
 
4.0

2020
 
3.5

Thereafter
 
18.9

Total
 
$
57.5

Debt (Tables)
Schedule of outstanding debt 
Debt consisted of the following:
(in millions)
 
2015
 
Effective
Interest Rate
 
2014
 
Effective
Interest Rate
as of September 30,
$250 million 3.125% notes due May 2015
 
$
—

 
N/A

 
$
250.0

 
3.32
%
$300 million 1.375% notes due September 2017
 
299.4

 
1.66
%
 
299.0

 
1.66
%
$350 million 4.625% notes due May 2020
 
349.8

 
4.74
%
 
349.8

 
4.74
%
$300 million 2.800% notes due September 2022
 
299.5

 
2.93
%
 
299.4

 
2.93
%
$400 million 2.850% notes due March 2025
 
399.3

 
2.97
%
 
—

 
N/A

Total
 
$
1,348.0

 
 
 
$
1,198.2

 
 
Schedule of contractual maturities of debt 
At September 30, 2015, maturities for debt were as follows: 
(in millions)
 
Carrying Amount
for the fiscal years ending September 30,
2016
 
$
—

2017
 
299.4

2018
 
—

2019
 
—

2020
 
349.8

Thereafter
 
698.8

Total
 
$
1,348.0

Taxes on Income (Tables)
Components of income tax expense 
Taxes on income were as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Current expense
 
 
 
 
 
 
Federal
 
$
733.9

 
$
803.6

 
$
699.6

State
 
83.1

 
82.4

 
76.8

Non-U.S.
 
121.1

 
114.1

 
85.7

Deferred benefit
 
(14.4
)
 
(2.2
)
 
(6.2
)
Total
 
$
923.7

 
$
997.9

 
$
855.9

Schedule of income before taxes 
Income before taxes consisted of the following:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
U.S.
 
$
2,026.4

 
$
2,160.8

 
$
1,904.1

Non-U.S.
 
1,002.0

 
1,248.8

 
1,122.5

Total
 
$
3,028.4

 
$
3,409.6

 
$
3,026.6

Components of deferred tax assets and liabilities 
The significant components of deferred tax assets and deferred tax liabilities were as follows:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Deferred Tax Assets
 
 
 
 
Deferred compensation and employee benefits
 
$
60.8

 
$
65.5

Net operating loss carry-forwards
 
40.3

 
34.0

Stock-based compensation
 
38.7

 
35.9

Tax benefit for uncertain tax positions
 
29.6

 
32.5

Other
 
11.6

 
12.6

Total deferred tax assets
 
181.0

 
180.5

Valuation allowance for net operating loss carry-forwards
 
(34.0
)
 
(26.3
)
Deferred tax assets, net of valuation allowance
 
147.0

 
154.2

Deferred Tax Liabilities
 
 
 
 
Goodwill and other purchased intangibles
 
217.3

 
231.4

Deferred commissions
 
21.2

 
28.1

Depreciation on fixed assets
 
13.4

 
18.2

Unrealized gains on investments
 
—

 
17.9

Other
 
35.8

 
19.8

Total deferred tax liabilities
 
287.7

 
315.4

Net Deferred Tax Liability
 
$
140.7

 
$
161.2

Components of net deferred tax assets or liabilities as classified in the consolidated balance sheets 
The components of the net deferred tax liability were classified in the consolidated balance sheets as follows:
(in millions)
 
 
 
 
as of September 30,
 
2015
 
2014
Deferred tax assets, net
 
$
100.7

 
$
98.1

Deferred tax liabilities
 
241.4

 
259.3

Net Deferred Tax Liability
 
$
140.7

 
$
161.2

 
Reconciliation of the amount of tax expense at the federal statutory rate and taxes on income 
The following reconciles the amount of tax expense at the federal statutory rate and taxes on income as reflected in the consolidated statements of income:
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Federal taxes at statutory rate
 
$
1,059.9

 
35.0
 %
 
$
1,193.4

 
35.0
 %
 
$
1,059.3

 
35.0
 %
State taxes, net of federal tax effect
 
51.6

 
1.7
 %
 
52.4

 
1.5
 %
 
47.3

 
1.6
 %
Effect of non-U.S. operations
 
(148.5
)
 
(4.9
)%
 
(246.3
)
 
(7.2
)%
 
(248.0
)
 
(8.2
)%
Effect of net income attributable to noncontrolling interests
 
(24.3
)
 
(0.8
)%
 
(9.6
)
 
(0.3
)%
 
(7.1
)
 
(0.2
)%
Other
 
(15.0
)
 
(0.5
)%
 
8.0

 
0.3
 %
 
4.4

 
0.1
 %
Tax Provision
 
$
923.7

 
30.5
 %
 
$
997.9

 
29.3
 %
 
$
855.9

 
28.3
 %
Reconciliation of gross unrecognized tax benefits 
A reconciliation of the beginning and ending balances of gross unrecognized tax benefits is as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Balance at beginning of year
 
$
118.2

 
$
109.5

 
$
101.3

Additions for tax positions of prior years
 
12.6

 
3.0

 
16.5

Reductions for tax positions of prior years
 
(3.4
)
 
(2.4
)
 
(17.1
)
Additions for tax positions related to the current year
 
16.2

 
14.1

 
13.4

Settlements with taxing authorities
 
(0.1
)
 
(0.3
)
 
—

Expirations of statute of limitations
 
(38.3
)
 
(5.7
)
 
(4.6
)
Balance at End of Year
 
$
105.2

 
$
118.2

 
$
109.5

Commitments and Contingencies (Tables)
Future minimum lease payments under long-term non-cancelable operating leases
Future minimum lease payments under long-term non-cancelable operating leases were as follows as of September 30, 2015:
(in millions)
 
 
for the fiscal years ending September 30,
 
Amount
2016
 
$
46.2

2017
 
40.4

2018
 
37.3

2019
 
32.4

2020
 
26.2

Thereafter
 
194.1

Total Minimum Lease Payments
 
$
376.6

Stock-Based Compensation (Tables)
Summary of stock-based compensation expenses 
Stock-based compensation expenses were as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Stock and stock unit awards
 
$
133.6

 
$
121.1

 
$
107.2

Employee stock investment plan
 
6.4

 
6.6

 
6.2

Total
 
$
140.0

 
$
127.7

 
$
113.4

Summary of nonvested stock and stock unit award activity 
Stock and stock unit award activity was as follows:
(shares in thousands)
 
Time-Based Shares
 
Performance-Based Shares
 
Total Shares
 
Weighted-Average
Grant-Date Fair Value
for the fiscal year ended September 30, 2015
 
 
 
 
Nonvested balance at September 30, 2014
 
2,150

 
1,323

 
3,473

 
$
48.55

Granted
 
2,153

 
506

 
2,659

 
55.65

Vested
 
(2,075
)
 
(529
)
 
(2,604
)
 
49.07

Forfeited/canceled
 
(143
)
 
(127
)
 
(270
)
 
48.17

Nonvested Balance at September 30, 2015
 
2,085

 
1,173

 
3,258

 
$
53.97

Employee Benefit Plans (Tables)
Schedule of changes in plan benefit obligations and assets 
Financial information for the plans was as follows:
(in millions)
 
Pension Plan
 
Healthcare Plan
as of and for the fiscal years ended September 30,
 
2015
 
2014
 
2015
 
2014
Change in Benefit Obligation
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
39.9

 
$
41.4

 
$
5.4

 
$
5.5

Interest cost
 
1.5

 
1.9

 
0.2

 
0.2

Benefits paid
 
(1.0
)
 
(5.3
)
 
(0.5
)
 
(0.8
)
Actuarial (gains) losses
 
(1.3
)
 
1.8

 
1.5

 
0.5

Foreign exchange revaluation
 
(2.7
)
 
0.1

 
—

 
—

Benefit Obligation at End of Year
 
$
36.4

 
$
39.9

 
$
6.6

 
$
5.4

Change in Fair Value of Plan Assets
 
 
 
 

 
 
 
 

Fair value of plan assets at beginning of year
 
$
40.8

 
$
41.1

 
$
—

 
$
—

Actual return on assets
 
(0.3
)
 
3.8

 
—

 
—

Employer contributions
 
1.0

 
1.1

 
0.5

 
0.8

Benefits paid
 
(1.0
)
 
(5.3
)
 
(0.5
)
 
(0.8
)
Foreign exchange revaluation
 
(2.7
)
 
0.1

 
—

 
—

Fair Value of Plan Assets at End of Year
 
$
37.8

 
$
40.8

 
$
—

 
$
—

Funded Status
 
$
1.4

 
$
0.9

 
$
(6.6
)
 
$
(5.4
)
Schedule of amounts recognized in the consolidated balance sheets 
(in millions)
 
Pension Plan
 
Healthcare Plan
as of and for the fiscal years ended September 30,
 
2015
 
2014
 
2015
 
2014
Amounts Recognized in the Consolidated Balance Sheets
 
 
 
 
 
 
 
 
Other assets
 
$
1.4

 
$
0.9

 
$
—

 
$
—

Compensation and benefits
 
—

 
—

 
(0.4
)
 
(0.4
)
Other liabilities
 
—

 
—

 
(6.2
)
 
(5.0
)
Net Asset (Liability)
 
$
1.4

 
$
0.9

 
$
(6.6
)
 
$
(5.4
)
Weighted-Average Assumptions
 
 
 
 

 
 
 
 

Discount rate
 
3.90
%
 
4.10
%
 
4.20
%
 
4.05
%
Expected long-term rate of return on plan assets1
 
5.80
%
 
6.41
%
 
N/A

 
N/A

Rate of compensation increase
 
N/A

 
N/A

 
2.50
%
 
2.50
%
________________
1 
The expected long-term rate of return on plan assets is based on the weighted-average historic performance of each asset class and current market conditions.
Schedule of net periodic benefit costs for all plans 
The components of net periodic benefit cost (gain) for the plans were as follows:
(in millions)
 
Pension Plan
 
Healthcare Plan
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Interest cost
 
$
1.5

 
$
1.9

 
$
2.3

 
$
0.2

 
$
0.2

 
$
0.2

Plan settlements
 
—

 
—

 
1.6

 
—

 
—

 
—

Expected return on plan assets
 
(2.2
)
 
(2.6
)
 
(3.2
)
 
—

 
—

 
—

Amortization of net actuarial losses
 
—

 
—

 
—

 
0.1

 
—

 
0.3

Net Periodic Benefit Cost (Gain)
 
$
(0.7
)
 
$
(0.7
)
 
$
0.7

 
$
0.3

 
$
0.2

 
$
0.5

Schedule of benefits expected to be paid over the next ten years 
The plan benefits expected to be paid over the next ten years were as follows: 
(in millions)
 
Pension Plan
 
Healthcare Plan
for the fiscal years ending September 30,
2016
 
$
1.1

 
$
0.5

2017
 
0.4

 
0.5

2018
 
0.3

 
0.4

2019
 
0.3

 
0.5

2020
 
1.5

 
0.5

Thereafter in the succeeding five years
 
19.0

 
2.4

Segment and Geographic Information (Tables)
Schedule of operating revenues, property and equipment by geographic areas
Geographic information was as follows:
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Operating Revenues
 
 
 
 
 
 
United States
 
$
4,634.2

 
$
5,014.4

 
$
5,389.5

Luxembourg
 
2,278.6

 
2,034.0

 
363.4

Canada
 
339.0

 
357.6

 
323.3

Asia-Pacific
 
311.8

 
420.2

 
661.0

The Bahamas
 
250.2

 
492.7

 
1,049.7

Europe, the Middle East and Africa, excluding Luxembourg
 
126.8

 
159.8

 
184.4

Latin America
 
8.1

 
12.7

 
13.7

Total
 
$
7,948.7

 
$
8,491.4

 
$
7,985.0


(in millions)
 
 
 
 
 
 
as of September 30,
 
2015
 
2014
 
2013
Property and Equipment, Net
 
 
 
 
 
 
United States
 
$
406.9

 
$
417.0

 
$
443.4

Asia-Pacific
 
68.9

 
78.0

 
81.0

Europe, the Middle East and Africa
 
14.8

 
13.8

 
15.3

The Bahamas
 
14.6

 
15.1

 
15.7

Canada
 
4.5

 
5.9

 
8.1

Latin America
 
0.4

 
0.9

 
0.6

Total
 
$
510.1

 
$
530.7

 
$
564.1

Other Income (Expenses) (Tables)
Schedule of other income (expenses)
Other income (expenses) consisted of the following:  
(in millions)
 
 
 
 
 
 
for the fiscal years ended September 30,
 
2015
 
2014
 
2013
Investment and Other Income, Net
 
 
 
 
 
 
Dividend income
 
$
10.3

 
$
10.1

 
$
10.8

Interest income
 
10.8

 
9.1

 
7.5

Gains (losses) on trading investment securities, net
 
(22.3
)
 
10.4

 
8.7

Realized gains on sale of investment securities, available-for-sale
 
28.1

 
57.8

 
50.9

Realized losses on sale of investment securities, available-for-sale
 
(4.0
)
 
(1.0
)
 
(0.9
)
Income (losses) from investments in equity method investees
 
(63.2
)
 
68.1

 
74.0

Other-than-temporary impairment of investments
 
(10.0
)
 
(0.6
)
 
(2.4
)
Gains on investments of consolidated SIPs, net
 
18.0

 
33.9

 
42.4

Gains (losses) from consolidated VIEs, net
 
8.3

 
7.1

 
(16.0
)
Foreign currency exchange gains (losses), net
 
57.0

 
32.1

 
(30.9
)
Other, net
 
7.4

 
8.8

 
8.1

Total
 
40.4

 
235.8

 
152.2

Interest Expense
 
(39.6
)
 
(47.4
)
 
(46.9
)
Other Income, Net
 
$
0.8

 
$
188.4

 
$
105.3

Accumulated Other Comprehensive Income Accumulated Other Comprehensive Income (Tables)
Schedule of Accumulated Other Comprehensive Income (Loss)
Changes in accumulated other comprehensive income (loss) by component were as follows: 
(in millions)
 
Unrealized Gains (Losses) on Investments
 
Currency Translation Adjustments
 
Unrealized Losses on Defined Benefit Plans
 
Total
for the fiscal year ended September 30, 2015
 
 
 
 
Balance at October 1, 2014
 
$
31.0

 
$
(143.6
)
 
$
(5.1
)
 
$
(117.7
)
Other comprehensive income (loss) before reclassifications, net of tax
 
1.4

 
(184.2
)
 
(0.6
)
 
(183.4
)
Reclassifications to net investment and other income, net of tax
 
(13.1
)
 
—

 
—

 
(13.1
)
Total other comprehensive loss
 
(11.7
)
 
(184.2
)
 
(0.6
)
 
(196.5
)
Balance at September 30, 2015
 
$
19.3

 
$
(327.8
)
 
$
(5.7
)
 
$
(314.2
)
(in millions)
 
Unrealized Gains (Losses) on Investments
 
Currency Translation Adjustments
 
Unrealized Losses on Defined Benefit Plans
 
Total
for the fiscal year ended September 30, 2014
 
 
 
 
Balance at October 1, 2013
 
$
71.9

 
$
(63.2
)
 
$
(2.6
)
 
$
6.1

Other comprehensive income (loss) before reclassifications, net of tax
 
5.9

 
(80.4
)
 
(2.5
)
 
(77.0
)
Reclassifications to net investment and other income, net of tax
 
(46.8
)
 
—

 
—

 
(46.8
)
Total other comprehensive loss
 
(40.9
)
 
(80.4
)
 
(2.5
)
 
(123.8
)
Balance at September 30, 2014
 
$
31.0

 
$
(143.6
)
 
$
(5.1
)
 
$
(117.7
)
Significant Accounting Policies - Narrative (Details)
12 Months Ended
Sep. 30, 2015
Property, Plant and Equipment [Line Items]
 
Number of reporting units
1 
Stock-based compensation award vesting period
3 years 
Deferred sales commission amortization period, minimum
1 year 
Deferred sales commission amortization period, maximum
7 years 
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
6 years 
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Finite-Lived Intangible Asset, Useful Life
15 years 
Property and equipment [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property and Equipment, Useful Life
3 years 
Property and equipment [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property and Equipment, Useful Life
35 years 
Software development costs [Member] |
Minimum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property and Equipment, Useful Life
3 years 
Software development costs [Member] |
Maximum [Member]
 
Property, Plant and Equipment [Line Items]
 
Property and Equipment, Useful Life
5 years 
New Accounting Guidance New Accounting Guidance - Narrative (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Oct. 1, 2014
New Accounting Pronouncement, Early Adoption, Effect [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
 
 
 
Debt of consolidated variable interest entities
$ 726.1 
$ 828.5 
$ 14.2 
Appropriated retained earnings of consolidated variable interest entities
0 
(13.9)
13.9 
Retained earnings
$ (12,094.8)
$ (11,625.6)
$ 0.3 
Earnings per Share - Narrative (Details)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Earnings Per Share [Abstract]
 
 
 
Shares of non participating nonvested stock unit awards excluded from the calculation of diluted EPS
0.9 
0.1 
0 
Earnings per Share - Schedule of Earnings per Share Basic and Diluted (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Earnings Per Share Reconciliation [Abstract]
 
 
 
Net Income Attributable to Franklin Resources, Inc.
$ 2,035.3 
$ 2,384.3 
$ 2,150.2 
Less: Allocation of earnings to participating nonvested stock and stock unit awards - basic
12.0 
14.3 
13.9 
Less: Allocation of earnings to participating nonvested stock and stock unit awards - diluted
12.0 
14.3 
13.9 
Net Income Available to Common Stockholders - basic
2,023.3 
2,370.0 
2,136.3 
Net Income Available to Common Stockholders - diluted
$ 2,023.3 
$ 2,370.0 
$ 2,136.3 
Weighted-average shares outstanding – basic
614.8 
624.8 
633.1 
Dilutive effect of nonparticipating nonvested stock unit awards and common stock options
0.1 
0.4 
1.0 
Weighted-Average Shares Outstanding – Diluted
614.9 
625.2 
634.1 
Earnings Per Share [Abstract]
 
 
 
Basic
$ 3.29 
$ 3.79 
$ 3.37 
Diluted
$ 3.29 
$ 3.79 
$ 3.37 
Investments - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Investments [Abstract]
 
 
 
Aggregate carrying values of investment securities pledged as collateral
$ 4.3 
$ 6.1 
 
Other-than-temporary impairment of investments
10.0 
0.6 
2.4 
Other-than-temporary impairment of available-for-sale SIPs
8.2 
0.4 
1.7 
Other-than-temporary impairment of available-for-sale debt securities
$ 0 
$ 0 
$ 0 
Investments - Summary of Investments (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Investment [Line Items]
 
 
Investment securities, trading
$ 1,251.2 
$ 1,277.5 
Investment securities, available-for-sale
446.4 
554.1 
Investments in equity method investees
655.3 
594.9 
Other investments
106.3 
89.6 
Total Investments
2,459.2 
2,516.1 
Sponsored Investment Products [Member]
 
 
Investment [Line Items]
 
 
Investment securities, available-for-sale
408.3 
517.6 
Debt Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, available-for-sale
23.0 
29.9 
Other Equity Securities [Member]
 
 
Investment [Line Items]
 
 
Investment securities, available-for-sale
$ 15.1 
$ 6.6 
Investments - Summary of gross unrealized gains and losses relating to investment securities available-for-sale (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Investment [Line Items]
 
 
Cost Basis
$ 420.5 
$ 513.0 
Gross Unrealized Gains
32.8 
44.1 
Gross Unrealized Losses
(6.9)
(3.0)
Fair Value
446.4 
554.1 
Sponsored Investment Products [Member]
 
 
Investment [Line Items]
 
 
Cost Basis
382.6 
477.0 
Gross Unrealized Gains
32.4 
43.5 
Gross Unrealized Losses
(6.7)
(2.9)
Fair Value
408.3 
517.6 
Debt Securities [Member]
 
 
Investment [Line Items]
 
 
Cost Basis
22.8 
29.7 
Gross Unrealized Gains
0.2 
0.3 
Gross Unrealized Losses
0 
(0.1)
Fair Value
23.0 
29.9 
Other Equity Securities [Member]
 
 
Investment [Line Items]
 
 
Cost Basis
15.1 
6.3 
Gross Unrealized Gains
0.2 
0.3 
Gross Unrealized Losses
(0.2)
0 
Fair Value
$ 15.1 
$ 6.6 
Investments - Summary of gross unrealized losses and fair values of investment securities in a continuous unrealized loss position (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
$ 110.7 
$ 160.4 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Gross Unrealized Losses
(5.8)
(2.7)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Fair Value
21.0 
13.1 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Gross Unrealized Losses
(1.1)
(0.3)
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Fair Value
131.7 
173.5 
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Gross Unrealized Losses
(6.9)
(3.0)
Sponsored Investment Products [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
99.8 
156.4 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Gross Unrealized Losses
(5.6)
(2.7)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Fair Value
21.0 
1.5 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Gross Unrealized Losses
(1.1)
(0.2)
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Fair Value
120.8 
157.9 
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Gross Unrealized Losses
(6.7)
(2.9)
Other Equity Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
10.9 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Gross Unrealized Losses
(0.2)
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Fair Value
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Gross Unrealized Losses
0 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Fair Value
10.9 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Gross Unrealized Losses
(0.2)
 
Debt Securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value
 
4.0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Gross Unrealized Losses
 
0 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Fair Value
 
11.6 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Greater, Gross Unrealized Losses
 
(0.1)
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Fair Value
 
15.6 
Available-for-sale Securities, Continuous Unrealized Loss Position, Total Gross Unrealized Losses
 
$ (0.1)
Fair Value Measurement - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Fair Value Disclosures [Abstract]
 
 
Transfers into Level 1 from Level 2 - assets
$ 0 
$ 0 
Transfers into Level 2 from Level 1 - assets
0 
0 
Transfers into Level 1 from Level 2 - liabilities
0 
0 
Transfers into Level 2 from Level 1 - liabilities
0 
0 
Transfers into Level 3 - assets
0 
0 
Transfers into Level 3 - liabilities
0 
0 
Transfers out of Level 3 - assets
0 
 
Transfers out of Level 3 - liabilities
$ 0 
 
Fair Value Measurements - Fair Value, by Balance Sheet Grouping (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Investment securities, trading
$ 1,251.2 
$ 1,277.5 
Investment securities, available-for-sale
446.4 
554.1 
Life settlement contracts
14.7 
14.0 
Total Assets Measured at Fair Value
1,712.3 
1,845.6 
Contingent consideration liabilities
102.9 
98.5 
Level 1 [Member]
 
 
Investment securities, trading
1,168.2 
1,196.1 
Life settlement contracts
0 
0 
Total Assets Measured at Fair Value
1,588.7 
1,715.4 
Contingent consideration liabilities
0 
0 
Level 2 [Member]
 
 
Investment securities, trading
77.0 
81.4 
Life settlement contracts
0 
0 
Total Assets Measured at Fair Value
102.9 
116.2 
Contingent consideration liabilities
0 
0 
Level 3 [Member]
 
 
Investment securities, trading
6.0 
0 
Total Assets Measured at Fair Value
20.7 
14.0 
Sponsored Investment Products [Member]
 
 
Investment securities, available-for-sale
408.3 
517.6 
Sponsored Investment Products [Member] |
Level 1 [Member]
 
 
Investment securities, available-for-sale
408.3 
517.6 
Sponsored Investment Products [Member] |
Level 2 [Member]
 
 
Investment securities, available-for-sale
0 
0 
Sponsored Investment Products [Member] |
Level 3 [Member]
 
 
Investment securities, available-for-sale
0 
0 
Debt Securities [Member]
 
 
Investment securities, available-for-sale
23.0 
29.9 
Debt Securities [Member] |
Level 1 [Member]
 
 
Investment securities, available-for-sale
0 
0 
Debt Securities [Member] |
Level 2 [Member]
 
 
Investment securities, available-for-sale
23.0 
29.9 
Debt Securities [Member] |
Level 3 [Member]
 
 
Investment securities, available-for-sale
0 
0 
Other Equity Securities [Member]
 
 
Investment securities, available-for-sale
15.1 
6.6 
Other Equity Securities [Member] |
Level 1 [Member]
 
 
Investment securities, available-for-sale
12.2 
1.7 
Other Equity Securities [Member] |
Level 2 [Member]
 
 
Investment securities, available-for-sale
2.9 
4.9 
Other Equity Securities [Member] |
Level 3 [Member]
 
 
Investment securities, available-for-sale
$ 0 
$ 0 
Fair Value Measurements - Schedule of changes in Level 3 assets and liabilities (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Contingent Consideration Liability [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Balance at beginning of year - liabilities
$ (98.5)
$ (97.7)
Purchases - liabilities
0 
0 
Sales - liabilities
0 
0 
Settlements - liabilities
7.9 
6.3 
Foreign exchange revaluation
0.2 
0 
Balance at End of Year - liabilities
(102.9)
(98.5)
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the year
(12.5)
(7.1)
Investments [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Balance at beginning of year - assets
14.0 
13.8 
Purchases - assets
6.6 
0.1 
Sales - assets
0 
(0.7)
Settlements - assets
(1.5)
(2.1)
Foreign exchange revaluation
0 
0 
Balance at End of Year - assets
20.7 
14.0 
Change in unrealized gains (losses) included in net income relating to assets and liabilities held at the end of the year
0.8 
1.2 
Investment and other income [Member] |
Contingent Consideration Liability [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - liabilities
0 
0 
Investment and other income [Member] |
Investments [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - assets
1.6 
2.9 
General, administrative and other expense [Member] |
Contingent Consideration Liability [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - liabilities
(12.4)
(6.7)
General, administrative and other expense [Member] |
Investments [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - assets
0 
0 
Other Income [Member] |
Contingent Consideration Liability [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - liabilities
(0.1)
(0.4)
Other Income [Member] |
Investments [Member]
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Total realized and unrealized gains (losses) - assets
$ 0 
$ 0 
Fair Value Measurements - Quantitative Information about Level 3 assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Investment securities, trading
$ 1,251.2 
$ 1,277.5 
Life settlement contracts
14.7 
14.0 
Contingent consideration liabilities
102.9 
98.5 
Contingent Consideration Liability [Member] |
Minimum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
AUM growth rate
0.50% 
3.40% 
EBITDA margin
19.30% 
21.90% 
Contingent Consideration Liability [Member] |
Maximum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
AUM growth rate
5.80% 
20.20% 
EBITDA margin
22.90% 
30.40% 
Contingent Consideration Liability [Member] |
Weighted Average [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Discount rate
14.00% 
14.00% 
AUM growth rate
4.40% 
12.80% 
EBITDA margin
22.00% 
28.20% 
Trading Securities [Member] |
Minimum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Discount rate
5.20% 
 
Risk premium
2.70% 
 
Trading Securities [Member] |
Maximum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Discount rate
6.10% 
 
Risk premium
2.80% 
 
Trading Securities [Member] |
Weighted Average [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Discount rate
5.70% 
 
Risk premium
2.80% 
 
Life settlement contracts [Member] |
Minimum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Life expectancy (in months)
21 
23 
Discount rate
3.30% 
3.30% 
Life settlement contracts [Member] |
Maximum [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Life expectancy (in months)
141 
150 
Discount rate
19.00% 
21.70% 
Life settlement contracts [Member] |
Weighted Average [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Life expectancy (in months)
68 
71 
Discount rate
11.70% 
11.70% 
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Investment securities, trading
6.0 
0 
Level 3 [Member] |
Income Approach Valuation Technique [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Line Items]
 
 
Investment securities, trading
6.0 
 
Life settlement contracts
14.7 
14.0 
Contingent consideration liabilities
$ 102.9 
$ 98.5 
Fair Value Measurements - Financial instruments not measured at fair value (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash and cash equivalents
$ 8,368.1 
$ 7,596.0 
$ 6,323.1 
$ 6,051.4 
Carrying Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash and cash equivalents
8,184.9 
7,476.8 
 
 
Other Investments
91.6 
75.6 
 
 
Debt
1,348.0 
1,198.2 
 
 
Estimated Fair Value [Member] |
Level 1 [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash and cash equivalents
8,184.9 
7,476.8 
 
 
Estimated Fair Value [Member] |
Level 2 or Level 3 [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Other Investments
97.1 
87.8 
 
 
Estimated Fair Value [Member] |
Level 2 [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Debt
$ 1,374.9 
$ 1,235.8 
 
 
Property and Equipment, Net - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Property, Plant and Equipment, Net [Abstract]
 
 
 
Depreciation and amortization expense
$ 81.6 
$ 82.6 
$ 76.9 
Impairment loss on property and equipment
$ 8.2 
$ 0 
$ 0 
Property and Equipment, Net - Summary of property and equipment (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2015
Furniture, software and equipment [Member]
Sep. 30, 2014
Furniture, software and equipment [Member]
Sep. 30, 2015
Premises and leasehold improvements [Member]
Sep. 30, 2014
Premises and leasehold improvements [Member]
Sep. 30, 2015
Land [Member]
Sep. 30, 2014
Land [Member]
Sep. 30, 2015
Minimum [Member]
Furniture, software and equipment [Member]
Sep. 30, 2015
Minimum [Member]
Premises and leasehold improvements [Member]
Sep. 30, 2015
Maximum [Member]
Furniture, software and equipment [Member]
Sep. 30, 2015
Maximum [Member]
Premises and leasehold improvements [Member]
Property, Plant and Equipment, Net, by Type [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Equipment, Gross
$ 1,364.8 
$ 1,330.1 
 
$ 733.6 
$ 693.5 
$ 557.0 
$ 562.3 
$ 74.2 
$ 74.3 
 
 
 
 
Less: accumulated depreciation and amortization
(854.7)
(799.4)
 
 
 
 
 
 
 
 
 
 
 
Property and Equipment, net
$ 510.1 
$ 530.7 
$ 564.1 
 
 
 
 
 
 
 
 
 
 
Property and Equipment, Useful Life
 
 
 
 
 
 
 
 
 
3 years 
5 years 
10 years 
35 years 
Goodwill and Other Intangible Assets - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
 
Amortization expense
$ 20.1 
$ 20.8 
$ 20.0 
Impairment loss of definite-lived intangible assets
$ 8.2 
$ 0 
$ 0 
Definite-lived intangible assets, weighted average useful life
8 years 0 months 0 days 
 
 
Goodwill and Other Intangible Assets - Schedule of goodwill and intangible assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Intangible Assets, Net (Including Goodwill) [Abstract]
 
 
 
Goodwill
$ 1,661.2 
$ 1,691.0 
$ 1,701.5 
Indefinite-Lived Intangible Assets (Excluding Goodwill)
538.3 
547.4 
 
Finite-Lived Intangible Assets, Net
57.5 
87.5 
 
Intangible Assets, Net (Including Goodwill)
$ 2,257.0 
$ 2,325.9 
 
Goodwill and Other Intangible Assets - Schedule of changes in carrying values of goodwill (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Goodwill [Roll Forward]
 
 
Balance at beginning of year
$ 1,691.0 
$ 1,701.5 
Foreign exchange revaluation
(29.8)
(10.5)
Balance at End of Year
$ 1,661.2 
$ 1,691.0 
Goodwill and Other Intangible Assets - Schedule of definite lived intangible assets (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Finite-Lived Intangible Assets [Line Items]
 
 
Amortized intangible assets gross carrying value
$ 254.0 
$ 298.8 
Accumulated Amortization
(196.5)
(211.3)
Total
57.5 
87.5 
Customer Base [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Amortized intangible assets gross carrying value
164.5 
165.6 
Accumulated Amortization
(160.3)
(152.7)
Total
4.2 
12.9 
Management contracts [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Amortized intangible assets gross carrying value
89.5 
133.2 
Accumulated Amortization
(36.2)
(58.6)
Total
$ 53.3 
$ 74.6 
Goodwill and Other Intangible Assets - Schedule of estimated remaining amortization expense (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
 
 
2016
$ 13.1 
 
2017
9.0 
 
2018
9.0 
 
2019
4.0 
 
2020
3.5 
 
Thereafter
18.9 
 
Total
$ 57.5 
$ 87.5 
Debt - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Mar. 31, 2015
Face value of senior unsecured and unsubordinated notes
$ 1,400.0 
 
 
 
Debt issuance cost
3.6 
 
 
 
Debt issuance discount
 
 
 
0.7 
Payments on debt
250.0 
0 
545.4 
 
Notes Due 2025 [Member]
 
 
 
 
Face value of senior unsecured and unsubordinated notes
 
 
 
400.0 
Stated interest rate
2.85% 
 
 
 
Notes Due 2015 [Member]
 
 
 
 
Payments on debt
250.0 
 
 
 
Stated interest rate
3.125% 
 
 
 
Commercial Paper [Member]
 
 
 
 
Commercial paper available for issuance under an uncommitted private placement program
$ 500.0 
 
 
 
Debt - Outstanding Debt (Details) (USD $)
Sep. 30, 2015
Sep. 30, 2014
Debt Instrument [Line Items]
 
 
Debt
$ 1,348,000,000 
$ 1,198,200,000 
Notes Due 2015 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt
 
250,000,000 
Effective Interest Rate
 
3.32% 
Face value of senior notes
250,000,000.0 
 
Stated interest rate
3.125% 
 
Notes Due 2017 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt
299,400,000 
299,000,000 
Effective Interest Rate
 
1.66% 
Face value of senior notes
300,000,000 
 
Stated interest rate
1.375% 
 
Notes Due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt
349,800,000 
349,800,000 
Effective Interest Rate
 
4.74% 
Face value of senior notes
350,000,000 
 
Stated interest rate
4.625% 
 
Notes Due 2022 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt
299,500,000 
299,400,000 
Effective Interest Rate
 
2.93% 
Face value of senior notes
300,000,000 
 
Stated interest rate
2.80% 
 
Notes Due 2025 [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt
399,300,000 
 
Effective Interest Rate
 
2.97% 
Face value of senior notes
$ 400,000,000.0 
 
Stated interest rate
2.85% 
 
Debt - Debt Maturity (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Long-term Debt, Fiscal Year Maturity [Abstract]
 
 
2016
$ 0 
 
2017
299.4 
 
2018
0 
 
2019
0 
 
2020
349.8 
 
Thereafter
698.8 
 
Total
$ 1,348.0 
$ 1,198.2 
Taxes on Income - Narrative (Details) (USD $)
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Income Tax Examination [Line Items]
 
 
 
Tax benefits associated with stock-based compensation plans
$ 10,900,000 
$ 13,300,000 
$ 24,400,000 
Reduced rates on income tax expense, amount
68,300,000 
100,600,000 
80,100,000 
Reduced rates on income tax expense, income tax benefits per share
$ 0.11 
$ 0.16 
$ 0.12 
Foreign net operating loss carry forwards expiration amount
66,700,000 
 
 
State net operating loss carry-forward
110,100,000 
 
 
Valuation allowance
7,700,000 
7,600,000 
 
Cumulative undistributed foreign earnings
7,900,000,000 
 
 
Accrued interest on uncertain tax positions
11,200,000 
18,000,000 
 
Interest expense (benefit) recognized
(6,600,000)
2,400,000 
1,000,000 
Estimated decrease in unrecognized tax benefits within the next twelve months
35,300,000 
 
 
Foreign Tax Authority [Member]
 
 
 
Income Tax Examination [Line Items]
 
 
 
Foreign net operating loss carry-forwards
$ 151,000,000 
 
 
Taxes on Income - Components of income tax expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Income Tax Disclosure [Abstract]
 
 
 
Federal
$ 733.9 
$ 803.6 
$ 699.6 
State
83.1 
82.4 
76.8 
Non-U.S.
121.1 
114.1 
85.7 
Deferred benefit
(14.4)
(2.2)
(6.2)
Total
$ 923.7 
$ 997.9 
$ 855.9 
Taxes on Income - Schedule of income before taxes (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Income Tax Disclosure [Abstract]
 
 
 
U.S.
$ 2,026.4 
$ 2,160.8 
$ 1,904.1 
Non-U.S.
1,002.0 
1,248.8 
1,122.5 
Total
$ 3,028.4 
$ 3,409.6 
$ 3,026.6 
Taxes on Income - Components of deferred tax assets and liabilities (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Deferred Tax Assets
 
 
Deferred compensation and employee benefits
$ 60.8 
$ 65.5 
Net operating loss carry-forwards
40.3 
34.0 
Stock-based compensation
38.7 
35.9 
Tax benefit for uncertain tax positions
29.6 
32.5 
Other
11.6 
12.6 
Total deferred tax assets
181.0 
180.5 
Valuation allowance for net operating loss carry-forwards
(34.0)
(26.3)
Deferred tax assets, net of valuation allowance
147.0 
154.2 
Deferred Tax Liabilities
 
 
Goodwill and other purchased intangibles
217.3 
231.4 
Deferred commissions
21.2 
28.1 
Depreciation on fixed assets
13.4 
18.2 
Unrealized gains on investments
0 
17.9 
Other
35.8 
19.8 
Total deferred tax liabilities
287.7 
315.4 
Net Deferred Tax Liability
$ 140.7 
$ 161.2 
Taxes on Income - Components of net deferred tax assets or liabilities as classified in the consolidated balance sheet (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Sep. 30, 2014
Income Tax Disclosure [Abstract]
 
 
Deferred tax assets, net
$ 100.7 
$ 98.1 
Deferred tax liabilities
241.4 
259.3 
Net Deferred Tax Liability
$ 140.7 
$ 161.2 
Taxes on Income - Reconciliation of the amount of tax expense at the federal statutory rate and taxes on income (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Effective Income Tax Rate Reconciliation, Percent [Abstract]
 
 
 
Federal taxes at statutory rate
$ 1,059.9 
$ 1,193.4 
$ 1,059.3 
Federal statutory rate
35.00% 
35.00% 
35.00% 
State taxes, net of federal tax effect
51.6 
52.4 
47.3 
State taxes, net of federal tax effect rate
1.70% 
1.50% 
1.60% 
Effect of non-U.S. operations
(148.5)
(246.3)
(248.0)
Effect of non-U.S. operation rate
(4.90%)
(7.20%)
(8.20%)
Effect of net income attributable to noncontrolling interests
(24.3)
(9.6)
(7.1)
Effect of net income attributable to noncontrolling interest rate
(0.80%)
(0.30%)
(0.20%)
Other
(15.0)
8.0 
4.4 
Other rate
(0.50%)
0.30% 
0.10% 
Tax Provision
$ 923.7 
$ 997.9 
$ 855.9 
Effective Tax Rate
30.50% 
29.30% 
28.30% 
Taxes on Income - Reconciliation of gross unrecognized tax benefits (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Balance at beginning of year
$ 118.2 
$ 109.5 
$ 101.3 
Additions for tax positions of prior years
12.6 
3.0 
16.5 
Reductions for tax positions of prior years
(3.4)
(2.4)
(17.1)
Additions for tax positions related to the current year
16.2 
14.1 
13.4 
Settlements with taxing authorities
(0.1)
(0.3)
0 
Expirations of statute of limitations
(38.3)
(5.7)
(4.6)
Balance at End of Year
$ 105.2 
$ 118.2 
$ 109.5 
Commitments and Contingencies - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
 
 
 
Lease expense
$ 58.0 
$ 58.2 
$ 57.4 
Sublease income
1.7 
1.7 
2.0 
Future minimum rentals to be received under non-cancelable subleases
2.7 
 
 
Committed capital contributions
$ 28.9 
 
 
Commitments and Contingencies - Future minimum lease payments under long-term non-cancelable operating leases (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
 
2016
$ 46.2 
2017
40.4 
2018
37.3 
2019
32.4 
2020
26.2 
Thereafter
194.1 
Total Minimum Lease Payments
$ 376.6 
Stock-Based Compensation - Narrative (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Share-based Compensation [Abstract]
 
 
 
Number of shares authorized for issuance under the USIP
120.0 
 
 
Number of shares available for grant under USIP
27.2 
 
 
Unrecognized compensation cost related to nonvested awards net of estimated forfeitures
$ 134.0 
 
 
Weighted-average remaining contractual term (in years)
1 year 7 months 18 days 
 
 
Weighted-average grant-date fair values of stock awards and stock unit awards granted
$ 55.65 
$ 53.89 
$ 44.01 
Fair value of stock awards and stock unit awards vested
115.2 
153.0 
126.3 
Total intrinsic values of share options exercised
 
17.9 
43.3 
Cash received from stock option exercises
 
7.2 
18.1 
Income tax benefits from stock options exercises
 
$ 5.9 
$ 19.3 
Total shares issued under ESIP
0.6 
 
 
Shares reserved for future issuance under ESIP
5.2 
 
 
Stock-Based Compensation - Summary of stock-based compensation expense (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Allocated Share-based Compensation Expense
$ 140.0 
$ 127.7 
$ 113.4 
Employee stock investment plan
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Allocated Share-based Compensation Expense
6.4 
6.6 
6.2 
Stock and stock unit awards
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
 
Allocated Share-based Compensation Expense
$ 133.6 
$ 121.1 
$ 107.2 
Stock-Based Compensation - Summary of nonvested stock and stock unit award activity (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Nonvested balance at September 30, 2014
3,473 
Granted
2,659 
Vested
(2,604)
Forfeited/canceled
(270)
Nonvested Balance at September 30, 2015
3,258 
Nonvested beginning balance, Weighted Average Grant Date Fair Value
$ 48.55 
Weighted Average Grant Date Fair Value of shares granted
$ 55.65 
Weighted Average Grant Date Fair Value of shares vested
$ 49.07 
Weighted Average Grant Date Fair Value of shares forfeited/canceled
$ 48.17 
Nonvested ending balance, Weighted Average Grant Date Fair Value
$ 53.97 
Time-Based Shares
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Nonvested balance at September 30, 2014
2,150 
Granted
2,153 
Vested
(2,075)
Forfeited/canceled
(143)
Nonvested Balance at September 30, 2015
2,085 
Performance-Based Shares
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Nonvested balance at September 30, 2014
1,323 
Granted
506 
Vested
(529)
Forfeited/canceled
(127)
Nonvested Balance at September 30, 2015
1,173 
Employee Benefit Plans - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Number of years worked for post retirement medical benefits
10 years 0 months 0 days 
 
 
Post-retirement age for medical benefits
55 years 0 months 0 days 
 
 
Participants annual maximum contribution to defined contribution plan, pre-tax
50.00% 
 
 
Percentage of annual bonus eligible for defined contribution plan
100.00% 
 
 
Expenses recognized for defined contribution plans
$ 46.4 
$ 47.0 
$ 44.0 
Pension Plan [Member]
 
 
 
Expected future contributions to benefit plans in next fiscal year
1.0 
 
 
Healthcare Plan [Member]
 
 
 
Expected future contributions to benefit plans in next fiscal year
0.4 
 
 
Equity Securities [Member]
 
 
 
Defined benefit pension plan assets investments
28.6 
34.6 
 
Debt Securities [Member]
 
 
 
Defined benefit pension plan assets investments
5.6 
3.3 
 
Cash and Cash Equivalents [Member]
 
 
 
Defined benefit pension plan assets investments
$ 3.6 
$ 2.9 
 
Employee Benefit Plans - Schedule of changes in plan benefit obligations and assets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Pension Plan [Member]
 
 
 
Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation at beginning of year
$ 39.9 
$ 41.4 
 
Interest cost
1.5 
1.9 
2.3 
Benefits paid
(1.0)
(5.3)
 
Actuarial (gains) losses
(1.3)
1.8 
 
Foreign exchange revaluation
(2.7)
0.1 
 
Benefit Obligation at End of Year
36.4 
39.9 
41.4 
Change in Fair Value of Plan Assets [Roll Forward]
 
 
 
Fair value of plan assets at beginning of year
40.8 
41.1 
 
Actual return on assets
(0.3)
3.8 
 
Employer contributions
1.0 
1.1 
 
Benefits paid
(1.0)
(5.3)
 
Foreign exchange revaluation
(2.7)
0.1 
 
Fair Value of Plan Assets at End of Year
37.8 
40.8 
41.1 
Funded Status
1.4 
0.9 
 
Healthcare Plan [Member]
 
 
 
Change in Benefit Obligation [Roll Forward]
 
 
 
Benefit obligation at beginning of year
5.4 
5.5 
 
Interest cost
0.2 
0.2 
0.2 
Benefits paid
(0.5)
(0.8)
 
Actuarial (gains) losses
1.5 
0.5 
 
Foreign exchange revaluation
0 
0 
 
Benefit Obligation at End of Year
6.6 
5.4 
5.5 
Change in Fair Value of Plan Assets [Roll Forward]
 
 
 
Fair value of plan assets at beginning of year
0 
0 
 
Actual return on assets
0 
0 
 
Employer contributions
0.5 
0.8 
 
Benefits paid
(0.5)
(0.8)
 
Foreign exchange revaluation
0 
0 
 
Fair Value of Plan Assets at End of Year
0 
0 
0 
Funded Status
$ (6.6)
$ (5.4)
 
Employee Benefit Plans - Schedule of amounts recognized in the consolidated balance sheets (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Pension Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Other assets
$ 1.4 
$ 0.9 
Compensation and benefits
0 
0 
Other liabilities
0 
0 
Net Asset (Liability)
1.4 
0.9 
Weighted-Average Assumptions
 
 
Discount rate
3.90% 
4.10% 
Expected long-term rate of return on plan assets
5.80% 1
6.41% 1
Healthcare Plan [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Other assets
0 
0 
Compensation and benefits
(0.4)
(0.4)
Other liabilities
(6.2)
(5.0)
Net Asset (Liability)
$ (6.6)
$ (5.4)
Weighted-Average Assumptions
 
 
Discount rate
4.20% 
4.05% 
Rate of compensation increase
2.50% 
2.50% 
Employee Benefit Plans - Schedule of net periodic benefit costs for all plans (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Pension Plan [Member]
 
 
 
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
 
 
 
Interest cost
$ 1.5 
$ 1.9 
$ 2.3 
Plan settlements
0 
0 
1.6 
Expected return on plan assets
(2.2)
(2.6)
(3.2)
Amortization of net actuarial losses
0 
0 
0 
Net Periodic Benefit Cost (Gain)
(0.7)
(0.7)
0.7 
Healthcare Plan [Member]
 
 
 
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
 
 
 
Interest cost
0.2 
0.2 
0.2 
Plan settlements
0 
0 
0 
Expected return on plan assets
0 
0 
0 
Amortization of net actuarial losses
0.1 
0 
0.3 
Net Periodic Benefit Cost (Gain)
$ 0.3 
$ 0.2 
$ 0.5 
Segment and Geographic Information - Narrative (Details)
12 Months Ended
Sep. 30, 2015
Segment Reporting [Abstract]
 
Number of operating segments
1 
Segment and Geographic Information - Schedule of operating revenues, property and equipment by geographic areas (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
$ 7,948.7 
$ 8,491.4 
$ 7,985.0 
Property and equipment, net
510.1 
530.7 
564.1 
United States
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
4,634.2 
5,014.4 
5,389.5 
Property and equipment, net
406.9 
417.0 
443.4 
Luxembourg
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
2,278.6 
2,034.0 
363.4 
Canada
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
339.0 
357.6 
323.3 
Property and equipment, net
4.5 
5.9 
8.1 
Asia-Pacific
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
311.8 
420.2 
661.0 
Property and equipment, net
68.9 
78.0 
81.0 
The Bahamas
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
250.2 
492.7 
1,049.7 
Property and equipment, net
14.6 
15.1 
15.7 
EMEA [Member]
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Property and equipment, net
14.8 
13.8 
15.3 
Europe, the Middle East and Africa, excluding Luxembourg [Member]
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
126.8 
159.8 
184.4 
Latin America
 
 
 
Revenues from external customers and long-lived assets [line items]
 
 
 
Operating Revenues
8.1 
12.7 
13.7 
Property and equipment, net
$ 0.4 
$ 0.9 
$ 0.6 
Other Income (Expenses) - Narrative (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Other Income and Expenses [Abstract]
 
 
 
Proceeds from the sale of available-for-sale securities
$ 221.3 
$ 380.4 
$ 367.1 
Recognized net gains (losses) on trading investment securities
(20.3)
5.2 
0.6 
Recognized net gains (losses) on trading investment securities of consolidated SIPs
$ (17.7)
$ 3.7 
$ 12.2 
Other Income (Expenses) - Schedule of Other Nonoperating Income and Expense by Component (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Other Income and Expenses [Abstract]
 
 
 
Dividend income
$ 10.3 
$ 10.1 
$ 10.8 
Interest income
10.8 
9.1 
7.5 
Gains (losses) on trading investment securities, net
(22.3)
10.4 
8.7 
Realized gains on sale of investment securities, available-for-sale
28.1 
57.8 
50.9 
Realized losses on sale of investment securities, available-for-sale
(4.0)
(1.0)
(0.9)
Income (losses) from investments in equity method investees
(63.2)
68.1 
74.0 
Other-than-temporary impairment of investments
(10.0)
(0.6)
(2.4)
Gains on investments of consolidated SIPs, net
18.0 
33.9 
42.4 
Gains (losses) from consolidated VIEs, net
8.3 
7.1 
(16.0)
Foreign currency exchange gains (losses), net
57.0 
32.1 
(30.9)
Other, net
7.4 
8.8 
8.1 
Total
40.4 
235.8 
152.2 
Interest expense
(39.6)
(47.4)
(46.9)
Other Income, Net
$ 0.8 
$ 188.4 
$ 105.3 
Accumulated Other Comprehensive Income - Changes in accumulated other comprehensive income by component (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Balance at beginning of period
$ (117.7)
 
 
Net unrealized gains (losses) on investments, net of tax
(11.7)
(40.9)
(8.1)
Currency translation adjustments, net of tax
(184.2)
(80.4)
(49.5)
Net unrealized gains (losses) on defined benefit plans, net of tax
(0.6)
(2.5)
1.7 
Total other comprehensive income (loss)
(196.5)
(123.8)
(55.9)
Balance at end of period
(314.2)
(117.7)
 
Unrealized Gains (Losses) on Investments [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Balance at beginning of period
31.0 
71.9 
 
Other comprehensive income (loss) before reclassifications, net of tax
1.4 
5.9 
 
Reclassifications to net investment and other income, net of tax
(13.1)
(46.8)
 
Net unrealized gains (losses) on investments, net of tax
(11.7)
(40.9)
 
Balance at end of period
19.3 
31.0 
 
Currency Translation Adjustments [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Balance at beginning of period
(143.6)
(63.2)
 
Other comprehensive income (loss) before reclassifications, net of tax
(184.2)
(80.4)
 
Reclassifications to net investment and other income, net of tax
0 
0 
 
Currency translation adjustments, net of tax
(184.2)
(80.4)
 
Balance at end of period
(327.8)
(143.6)
 
Unrealized Gains (Losses) on Defined Benefit Plans [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Balance at beginning of period
(5.1)
(2.6)
 
Other comprehensive income (loss) before reclassifications, net of tax
(0.6)
(2.5)
 
Reclassifications to net investment and other income, net of tax
0 
0 
 
Net unrealized gains (losses) on defined benefit plans, net of tax
(0.6)
(2.5)
 
Balance at end of period
(5.7)
(5.1)
 
Total [Member]
 
 
 
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
Balance at beginning of period
(117.7)
6.1 
 
Other comprehensive income (loss) before reclassifications, net of tax
(183.4)
(77.0)
 
Reclassifications to net investment and other income, net of tax
(13.1)
(46.8)
 
Total other comprehensive income (loss)
(196.5)
(123.8)
 
Balance at end of period
$ (314.2)
$ (117.7)