Consolidated Investment Products (Tables)
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6 Months Ended |
Mar. 31, 2019 |
Consolidated Investment Products [Abstract] |
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Schedule of balances of CIPs |
The balances related to CIPs included in the Company’s consolidated balance sheets were as follows: | | | | | | | | | | (in millions) | | March 31, 2019 | | September 30, 2018 | Assets | | | | | Cash and cash equivalents | | $ | 265.4 |
| | $ | 299.8 |
| Receivables | | 93.5 |
| | 114.2 |
| Investments, at fair value | | 2,139.6 |
| | 2,109.4 |
| Other assets | | — |
| | 1.0 |
| Total Assets | | $ | 2,498.5 |
| | $ | 2,524.4 |
| | | | | | Liabilities | | | | | Accounts payable and accrued expenses | | $ | 44.9 |
| | $ | 68.0 |
| Debt | | 32.8 |
| | 32.6 |
| Other liabilities | | — |
| | 9.3 |
| Total liabilities | | 77.7 |
| | 109.9 |
| Redeemable Noncontrolling Interests | | 819.3 |
| | 1,043.6 |
| Stockholders’ Equity | | | | | Franklin Resources, Inc.’s interests | | 1,161.2 |
| | 1,092.6 |
| Nonredeemable noncontrolling interests | | 440.3 |
| | 278.3 |
| Total stockholders’ equity | | 1,601.5 |
| | 1,370.9 |
| Total Liabilities, Redeemable Noncontrolling Interests and Stockholders’ Equity | | $ | 2,498.5 |
| | $ | 2,524.4 |
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Schedule of investments of CIPs |
Investments of CIPs consisted of the following: | | | | | | | | | | (in millions) | | March 31, 2019 | | September 30, 2018 | Investment securities traded in active markets | | $ | 1,521.5 |
| | $ | 1,651.8 |
| Other equity securities | | 418.9 |
| | 311.0 |
| Other debt securities | | 131.7 |
| | 114.3 |
| Loans | | 38.4 |
| | 32.3 |
| Real estate | | 29.1 |
| | — |
| Total | | $ | 2,139.6 |
| | $ | 2,109.4 |
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Schedule of assets and liabilities measured at fair value on a recurring basis |
Assets and liabilities of CIPs measured at fair value on a recurring basis were as follows: | | | | | | | | | | | | | | | | | | | | | | (in millions) | | Level 1 | | Level 2 | | Level 3 | | NAV as a Practical Expedient | | Total | as of March 31, 2019 | | | | | | Assets | | | | | | | | | | | Investments | | | | | | | | | | | Equity securities | | $ | 161.0 |
| | $ | 271.0 |
| | $ | 257.6 |
| | $ | 162.4 |
| | $ | 852.0 |
| Debt securities | | 0.6 |
| | 1,087.8 |
| | 131.7 |
| | — |
| | 1,220.1 |
| Loans | | — |
| | — |
| | 38.4 |
| | — |
| | 38.4 |
| Real estate | | — |
| | — |
| | 29.1 |
| | — |
| | 29.1 |
| Total Assets Measured at Fair Value | | $ | 161.6 |
| | $ | 1,358.8 |
| | $ | 456.8 |
| | $ | 162.4 |
| | $ | 2,139.6 |
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| | | | | | | | | | | | | | | | | | | | | | (in millions) | | Level 1 | | Level 2 | | Level 3 | | NAV as a Practical Expedient | | Total | as of September 30, 2018 | | | | | | Assets | | | | | | | | | | | Investments | | | | | | | | | | | Equity securities | | $ | 270.7 |
| | $ | 154.8 |
| | $ | 199.7 |
| | $ | 113.8 |
| | $ | 739.0 |
| Debt securities | | 0.6 |
| | 1,219.5 |
| | 118.0 |
| | — |
| | 1,338.1 |
| Loans | | — |
| | — |
| | 32.3 |
| | — |
| | 32.3 |
| Total Assets Measured at Fair Value | | $ | 271.3 |
| | $ | 1,374.3 |
| | $ | 350.0 |
| | $ | 113.8 |
| | $ | 2,109.4 |
| | | | | | | | | | | | Liabilities | | | | | | | | | | | Other liabilities | | $ | 0.6 |
| | $ | 8.7 |
| | $ | — |
| | $ | — |
| | $ | 9.3 |
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Schedule of changes in Level 3 assets of CIPs |
Changes in Level 3 assets were as follows: | | | | | | | | | | | | | | | | | | | | | | (in millions) | | Equity Securities | | Debt Securities | | Loans | | Real Estate | | Total Level 3 Assets | for the three months ended March 31, 2019 | Balance at January 1, 2019 | | $ | 193.6 |
| | $ | 100.9 |
| | $ | 39.2 |
| | $ | — |
| | $ | 333.7 |
| Acquisition | | 45.2 |
| | 39.7 |
| | — |
| | — |
| | 84.9 |
| Realized and unrealized gains (losses) included in investment and other income, net | | (4.5 | ) | | (3.8 | ) | | (0.5 | ) | | 3.4 |
| | (5.4 | ) | Purchases | | 25.7 |
| | 9.4 |
| | — |
| | 25.6 |
| | 60.7 |
| Sales | | (0.3 | ) | | (14.2 | ) | | (0.3 | ) | | — |
| | (14.8 | ) | Foreign exchange revaluation | | (2.1 | ) | | (0.3 | ) | | — |
| | 0.1 |
| | (2.3 | ) | Balance at March 31, 2019 | | $ | 257.6 |
| | $ | 131.7 |
| | $ | 38.4 |
| | $ | 29.1 |
| | $ | 456.8 |
| Change in unrealized gains (losses) included in net income (loss) relating to assets held at the end of period | | $ | (4.8 | ) | | $ | (3.2 | ) | | $ | (0.2 | ) | | $ | 3.4 |
| | $ | (4.8 | ) |
| | | | | | | | | | | | | | | | | | | | | | (in millions) | | Equity Securities | | Debt Securities | | Loans | | Real Estate | | Total Level 3 Assets | for the six months ended March 31, 2019 | Balance at October 1, 2018 | | $ | 199.7 |
| | $ | 118.0 |
| | $ | 32.3 |
| | $ | — |
| | $ | 350.0 |
| Acquisition | | 45.2 |
| | 39.7 |
| | — |
| | — |
| | 84.9 |
| Realized and unrealized gains (losses) included in investment and other income, net | | 6.9 |
| | (11.0 | ) | | (1.5 | ) | | 3.4 |
| | (2.2 | ) | Purchases | | 35.4 |
| | 9.4 |
| | 8.2 |
| | 25.6 |
| | 78.6 |
| Sales | | (0.4 | ) | | (20.1 | ) | | (0.6 | ) | | — |
| | (21.1 | ) | Settlements | | (1.0 | ) | | (0.1 | ) | | — |
| | — |
| | (1.1 | ) | Transfers into Level 3 | | 0.1 |
| | — |
| | — |
| | — |
| | 0.1 |
| Transfers out of Level 3 | | (25.4 | ) | | (3.6 | ) | | — |
| | — |
| | (29.0 | ) | Foreign exchange revaluation | | (2.9 | ) | | (0.6 | ) | | — |
| | 0.1 |
| | (3.4 | ) | Balance at March 31, 2019 | | $ | 257.6 |
| | $ | 131.7 |
| | $ | 38.4 |
| | $ | 29.1 |
| | $ | 456.8 |
| Change in unrealized gains (losses) included in net income (loss) relating to assets held at the end of period | | $ | 7.0 |
| | $ | (3.9 | ) | | $ | (0.9 | ) | | $ | 3.4 |
| | $ | 5.6 |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended March 31, 2018 | | Six Months Ended March 31, 2018 | | | Equity Securities | | Debt Securities | | Total Level 3 Assets | | Equity Securities | | Debt Securities | | Total Level 3 Assets | (in millions) | | Balance at beginning of period | | $ | 159.6 |
| | $ | 136.2 |
| | $ | 295.8 |
| | $ | 160.7 |
| | $ | 135.4 |
| | $ | 296.1 |
| Realized and unrealized gains included in investment and other income, net | | 15.6 |
| | 2.0 |
| | 17.6 |
| | 17.5 |
| | 2.1 |
| | 19.6 |
| Purchases | | 11.5 |
| | 10.5 |
| | 22.0 |
| | 22.6 |
| | 10.5 |
| | 33.1 |
| Sales | | — |
| | (37.7 | ) | | (37.7 | ) | | (14.9 | ) | | (37.7 | ) | | (52.6 | ) | Foreign exchange revaluation | | 1.7 |
| | 1.2 |
| | 2.9 |
| | 2.5 |
| | 1.9 |
| | 4.4 |
| Balance at End of Period | | $ | 188.4 |
| | $ | 112.2 |
| | $ | 300.6 |
| | $ | 188.4 |
| | $ | 112.2 |
| | $ | 300.6 |
| Change in unrealized gains included in net income (loss) relating to assets held at the end of period | | $ | 15.4 |
| | $ | — |
| | $ | 15.4 |
| | $ | 16.3 |
| | $ | 0.1 |
| | $ | 16.4 |
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Schedule of valuation techniques and significant unobservable inputs used in Level 3 fair value measurements |
Valuation techniques and significant unobservable inputs used in Level 3 fair value measurements were as follows: | | | | | | | | | | | | (in millions) | | | | | | | | | as of March 31, 2019 | | Fair Value | | Valuation Technique | | Significant Unobservable Inputs | | Range (Weighted Average 1) | Equity securities | | $ | 156.8 |
| | Market comparable companies | | EBITDA multiple | | 4.7–13.6 (9.0) | 80.7 |
| | Discounted cash flow | | Discount rate | | 6.0%–18.2% (13.0%) | 20.1 |
| | Market pricing | | Private sale pricing | | $0.25–$3.38 ($1.62) per share | | | | | | | | | | Debt securities | | 111.9 |
| | Discounted cash flow | | Discount rate | | 6.0%–23.0% (12.9%) | 19.8 |
| | Comparable trading multiple | | Price-to-earnings ratio | | 10.0 | Enterprise value/ EBITDA multiple | | 12.3 | | | | | | | | | | Loans | | 38.4 |
| | Discounted cash flow | | Loss-adjusted discount rate | | 3.0%–25.3% (13.2%) | | | | | | | | | | Real estate | | 29.1 |
| | Yield capitalization | | Equivalent yield | | 5.0% |
__________________ | | 1 | Based on the relative fair value of the instruments. |
| | | | | | | | | | | | (in millions) | | | | | | | | | as of September 30, 2018 | | Fair Value | | Valuation Technique | | Significant Unobservable Inputs | | Range (Weighted Average) | Equity securities | | $ | 171.9 |
| | Market comparable companies | | EBITDA multiple | | 5.0–13.6 (9.3) | 27.8 |
| Discounted cash flow | Discount rate | 8.0%–16.5% (14.1%) | | | | | | | | | | Debt securities | | 78.7 |
| | Discounted cash flow | | Discount rate | | 7.0%–14.8% (10.8%) | 33.9 |
| Comparable trading multiple | Price-to-earnings ratio | 10.0 | Enterprise value/ EBITDA multiple | 20.9 | 5.4 |
| Market pricing | Private sale pricing | $42 per $100 of par | | | | | | | | | | Loans | | 32.3 |
| | Discounted cash flow | | Loss-adjusted discount rate | | 3.0%–22.7% (12.0%) |
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Schedule of financial instruments of CIPs not measured at fair value |
Financial instruments of CIPs that were not measured at fair value were as follows: | | | | | | | | | | | | | | | | | | | | (in millions) | | Fair Value Level | | March 31, 2019 | | September 30, 2018 | | | Carrying Value | | Estimated Fair Value | | Carrying Value | | Estimated Fair Value | Financial Asset | | | | | | | | | | | Cash and cash equivalents | | 1 | | $ | 265.4 |
| | $ | 265.4 |
| | $ | 299.8 |
| | $ | 299.8 |
| Financial Liability | | | | | | | | | | | Debt | | 3 | | $ | 32.8 |
| | $ | 32.6 |
| | $ | 32.6 |
| | $ | 32.4 |
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Schedule of changes in redeemable noncontrolling interests of CIPs |
Changes in redeemable noncontrolling interests of CIPs were as follows: | | | | | | | | | | (in millions) | | | | | for the six months ended March 31, | | 2019 | | 2018 | Balance at beginning of period | | $ | 1,043.6 |
| | $ | 1,941.9 |
| Net income | | 6.1 |
| | 26.7 |
| Net (distributions) subscriptions and other | | (6.2 | ) | | 115.8 |
| Net deconsolidations | | (224.2 | ) | | — |
| Balance at End of Period | | $ | 819.3 |
| | $ | 2,084.4 |
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