The following tables summarize information regarding the changes in plan benefit obligations andassets, the funded status and the amounts recognized in the consolidated balance sheets in relation to thedefined benefit pension plan and the defined benefit healthcare plan, under other benefits.(in thousands)Pension Benefits Other Benefitsas of and for the fiscal years ended September 30,2009 2008 2009 2008Change in Benefit ObligationBenefit obligation at beginning of year ....................... $31,870 $ 39,558 $ 5,249 $ 5,779Service cost ............................................ 3,636 4,009 14 17Interest cost ............................................ 1,770 2,411 400 346Participant contributions .................................. 1,056 1,277 — —Benefits paid ........................................... (293) (403) (667) (723)Actuarial (gains) losses ................................... 3,565 (10,051) 1,375 (170)Foreign currency movements ............................... (2,868) (4,931) — —Benefit Obligation at End of Year ..................... $38,736 $ 31,870 $ 6,371 $ 5,249Change in Fair Value of Plan AssetsFair value of plan assets at beginning of year .................. $32,542 $ 40,080 $ — $ —Actual return on assets .................................... 4,554 (7,620) — —Employer contributions ................................... 3,906 4,231 667 723Participant contributions .................................. 1,056 1,277 — —Benefits paid ........................................... (293) (403) (667) (723)Foreign currency movements ............................... (2,955) (5,023) — —Fair Value of Plan Assets at End of Year ............... $38,810 $ 32,542 $ — $ —Funded Status ...................................... $ 74 $ 672 $(6,371) $(5,249)(in thousands)Pension Benefits Other Benefitsas of and for the fiscal years ended September 30,2009 2008 2009 2008Amounts Recognized in the Consolidated Balance SheetsPrepaid assets ............................................. $ 74 $ 672 $ — $ —Current liabilities .......................................... — — (452) (490)Other non-current liabilities .................................. — — (5,919) (4,759)Net Prepaid Asset (Liability) ............................ $ 74 $ 672 $(6,371) $(5,249)Deferred taxes ............................................. 802 490 282 (311)Other comprehensive loss (income), net of tax ................... 2,063 1,261 445 (365)Weighted-Average AssumptionsDiscount rate .............................................. 5.60% 6.50% 5.75% 8.00%Expected return on plan assets ................................ 7.13% 7.47% N/A N/AIncrease in compensation rate ................................. 4.80% 5.00% 4.50% 4.50%The following table summarizes the components of net periodic benefit cost for all plans.(in thousands)Pension BenefitsOther Benefitsfor the fiscal years ended September 30,2009 2008 2007 2009 2008 2007Service cost .................................... $ 3,636 $ 4,009 $ 3,269 $ 14 $ 17 $ 19Interest cost .................................... 1,770 2,411 1,646 400 346 355Expected return on plan assets ...................... (2,234) (3,152) (2,543) — — —Amortization of prior service cost ................... — — — — — 193Amortization of net actuarial gains .................. — — — (28) — —Net Periodic Benefit Cost .................... $ 3,172 $ 3,268 $ 2,372 $386 $363 $567106
The Company’s pension plan assets are predominantly invested in equity securities. The Company hasno target allocation set for the pension plan as the plan members control all investment decisions. Thehealthcare plan is an unfunded benefit plan. The Company expects to contribute $4.5 million to the pensionplan and $0.5 million to the healthcare benefit plan in fiscal year 2010. The expected future benefitspayments over the next 10 years for the pension plan and for the healthcare plan are $9.7 million and $5.4million.Note 18 – Segment InformationThe Company bases its operating segment selection process primarily on services offered. TheCompany derives substantially all of its operating revenues and net income from providing investmentmanagement and related services to its sponsored investment products. This is the Company’s primarybusiness activity and operating segment. The Company’s investment management and related services aremarketed to the public globally under six distinct brand names: Franklin, Templeton, Mutual Series, Bissett,Fiduciary Trust and Darby.The Company’s secondary business activity and operating segment is banking/finance. The banking/finance segment offers select retail banking and consumer lending services and private banking services tohigh net-worth clients. Consumer lending and retail banking activities include automobile lending servicesrelated to the purchase, securitization, and servicing of retail installment sales contracts originated byindependent automobile dealerships, consumer credit and debit cards, real estate equity lines, and homeequity/mortgage lending, and other consumer lending.Financial information for the Company’s two operating segments is presented in the table below. Intersegmenttransactions are immaterial and excluded from segment income (loss) and assets. Operatingrevenues of the banking/finance segment are reported net of interest expense, the provision for loan lossesand changes in fair value of residual interests from securitization transactions.(in thousands)as of and for the fiscal year ended September 30, 2009InvestmentManagementand RelatedServicesBanking/FinanceAssets .................................................. $8,429,298 $1,039,165 $9,468,463Operating revenues ....................................... 4,195,592 (1,505) 4,194,087Interest expense .......................................... (3,771) N/A (3,771)Income (loss) before taxes .................................. 1,331,428 (50,336) 1,281,092as of and for the fiscal year ended September 30, 2008Assets .................................................. $8,115,141 $1,061,379 $9,176,520Operating revenues ....................................... 5,995,796 36,590 6,032,386Interest expense .......................................... (15,758) N/A (15,758)Income (loss) before taxes .................................. 2,238,595 (2,006) 2,236,589as of and for the fiscal year ended September 30, 2007Assets .................................................. $8,884,094 $1,048,178 $9,932,272Operating revenues ....................................... 6,146,371 59,398 6,205,769Interest expense .......................................... (23,220) N/A (23,220)Income before taxes ....................................... 2,437,868 27,433 2,465,301Total107
- Page 1 and 2:
G A I N F R O M O U R P E R S P E C
- Page 3 and 4:
Letter to StockholdersGregory E. Jo
- Page 5 and 6:
LETTER TO STOCKHOLDERSHaving announ
- Page 7 and 8:
Directors and OfficersDirectorsChar
- Page 9 and 10:
Performance GraphThe following perf
- Page 11 and 12:
(MARK ONE)UNITED STATESSECURITIES A
- Page 14 and 15:
operational and other services requ
- Page 16 and 17:
A. Assets Under Management (“AUM
- Page 18 and 19:
60 days. If agreements representing
- Page 20 and 21:
Similar arrangements exist with the
- Page 22 and 23:
We generally operate our institutio
- Page 24 and 25:
Franklin Templeton Variable Insuran
- Page 26 and 27:
CATEGORY(and approximate amount of
- Page 28 and 29:
The following table sets forth the
- Page 30 and 31:
Korea; the Commission de Surveillan
- Page 32 and 33:
COMPETITIONThe financial services i
- Page 34 and 35:
or other efforts successfully stabi
- Page 36 and 37:
and, consequently, we are incurring
- Page 38 and 39:
such as information, systems and te
- Page 40 and 41:
like our business, is based in part
- Page 42 and 43:
orrowing costs and limit our access
- Page 44 and 45:
director of various subsidiaries of
- Page 46 and 47:
PART IIItem 5. Market for Registran
- Page 48 and 49:
OverviewWe are a global investment
- Page 50 and 51:
Net income decreased in fiscal year
- Page 52 and 53:
Investment Management Fee RateThe f
- Page 54 and 55:
accounts closed in a calendar year
- Page 56 and 57:
Information Systems, Technology and
- Page 58 and 59:
Our investments in sponsored invest
- Page 60 and 61:
At September 30, 2009, we had $355.
- Page 62 and 63:
Off-Balance Sheet ArrangementsAs of
- Page 64 and 65:
The fair value of retained subordin
- Page 66 and 67: Indefinite-lived intangible assets
- Page 68 and 69: the position will be sustained upon
- Page 70 and 71: Selected Quarterly Financial Data (
- Page 72 and 73: The following is a summary of the e
- Page 74 and 75: Item 8.Financial Statements and Sup
- Page 76 and 77: REPORT OF INDEPENDENT REGISTERED PU
- Page 78 and 79: CONSOLIDATED BALANCE SHEETS(dollars
- Page 80 and 81: CONSOLIDATED STATEMENTS OF STOCKHOL
- Page 82 and 83: CONSOLIDATED STATEMENTS OF CASH FLO
- Page 84 and 85: Fair Value Measurements. The Compan
- Page 86 and 87: Company held interest-rate swap agr
- Page 88 and 89: not performed. If the carrying valu
- Page 90 and 91: Accumulated Other Comprehensive Inc
- Page 92 and 93: acquisition cost was allocated to t
- Page 94 and 95: FHLB borrowings and amounts availab
- Page 96 and 97: The Company recognized other-than-t
- Page 98 and 99: The changes in Level 3 assets measu
- Page 100 and 101: Changes in the allowance for loan l
- Page 102 and 103: Company sold retained subordinated
- Page 104 and 105: Certain of the goodwill and intangi
- Page 106 and 107: At September 30, 2009, maturities o
- Page 108 and 109: The components of the net deferred
- Page 110 and 111: At September 30, 2009, the banking/
- Page 112 and 113: Total assets under management of in
- Page 114 and 115: Stock OptionsThe following table su
- Page 118 and 119: Operating revenues of the banking/f
- Page 120 and 121: minimum Tier 1 and Total risk-based
- Page 122 and 123: PART IIIItem 10. Directors, Executi
- Page 124 and 125: Item 15.(a)(1)(a)(2)(a)(3)PART IVEx
- Page 126 and 127: Exhibit No.Description10.17 Represe
- Page 128 and 129: Exhibit No.Description12 Computatio
- Page 130 and 131: Exhibit No.DescriptionEXHIBIT INDEX
- Page 132 and 133: Exhibit No.Description10.22 Amendme
- Page 134 and 135: (dollars in thousands)COMPUTATION O
- Page 136 and 137: NameState or Nation ofIncorporation
- Page 138 and 139: CONSENT OF INDEPENDENT REGISTERED P
- Page 140 and 141: EXHIBIT 31.2CERTIFICATIONI, Kenneth
- Page 142 and 143: CERTIFICATION PURSUANT TO 18 U.S.C.
- Page 144: One Franklin ParkwaySan Mateo, CA 9