BENFranklin Resources

Western Asset Management Investigations and Litigation. As previously disclosed, the Company launched an internal investigation into certain trade allocations of treasury derivatives in select WAM Western Asset Management (“WAM”) managed accounts. accounts by its then-co-Chief Investment Officer, Ken Leech. WAM received notification of parallel investigations by the SEC and the U.S. Department of Justice (“DOJ”). WAM also received notice of an investigation into these trading activities by the CFTC. On June 30, 2025, The Company and WAM fully cooperated with these investigations. As previously disclosed, the CFTC informed WAM that it closed its investigation. The SEC and On June 3, 2026, the DOJ investigations remain ongoing. The Company and notified WAM have fully cooperated, and will continue to fully cooperate with the SEC and DOJ investigations. Ken Leech, the former co-Chief Investment Officer of WAM, received a “Wells Notice” from the staff of the SEC in August 2024, and was placed on administrative leave at that time. Mr. Leech retired and it is no longer with a subject of the Company, as previously disclosed. DOJ investigation and that it will take no further action. On November 25, 2024, June 5, 2026, the SEC filed issued an order resolving its investigation of WAM in its entirety (the “Settlement”). Under the Settlement, WAM, without admitting any wrongdoing, agreed to pay a complaint in the United States District Court civil penalty of $100.0 million to be paid into a Fair Fund for the Southern District benefit of New York against Mr. Leech alleging violations investors. These outcomes end the investigations of certain laws related to trade allocations. Concurrently, WAM by the DOJ filed an indictment with the United States District Court for the Southern District of New York against Mr. Leech for similar allegations and for false statements made to the SEC.

During fiscal year 2026, we borrowed an aggregate of $850.0 million under the revolving credit facility, of which $150.0 million was repaid on February 9, 2026, and the remaining $700.0 million was repaid on August 15, 2026. No borrowings were outstanding under the facility at September 30, 2026. On April 30, 2025, October 19, 2026, we entered into an Amended and Restated Revolving Credit Agreement (the “Amended and Restated Credit Agreement”) with a five-year term and $1.1 billion of aggregate available borrowings. As of April 30, 2025, the borrowed $300.0 million of borrowings outstanding under our prior credit facility were transferred to the Amended and Restated Credit Agreement. The borrowing remains outstanding at the time of this filing and the proceeds were used for general corporate purposes. Interest is payable semi-annually on any outstanding amounts and is based on the Term Secured Overnight Financing Rate (“Term SOFR”) plus a credit spread of 87.5 basis points and a Term SOFR adjustment of 10 basis points. On September 5, 2025, the Company repaid all of the outstanding $300.0 million borrowings at the principal amount plus accrued interest of $5.5 million. The Amended and Restated Credit Agreement contains a financial performance covenant requiring that the Company maintain a consolidated net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 3.25 to 1.00. We were in compliance with all debt covenants at September 30, 2025. 2026.

Due to market volatility, reputational harm or other events or conditions described above, our funds may need to sell securities or instruments that they hold, possibly at a loss, or draw on any available lines of credit, to obtain cash to maintain sufficient liquidity or settle redemptions, or settle in-kind with securities held in the applicable fund. While we have no legal or contractual obligation to do so, we have in the past provided, and may in the future at our discretion provide, financial support to our funds to enable them to maintain sufficient liquidity in any such event. Changes in investor preferences regarding our more popular products have in the past caused, and could in the future cause, sizable redemptions and lower the value of our AUM, which would result in lower revenue and operating results. Increased market volatility and changes in investor preferences also increase the risk of fund closures. Any decrease in the level of our AUM resulting from market declines, credit or interest rate volatility or uncertainty, increased redemptions or other factors could negatively impact our revenues and income.

Cash and Cash Equivalents primarily consist of nonconsolidated sponsored money market funds and deposits with financial institutions and are carried at cost. Due to the short-term nature and liquidity of these financial instruments, their carrying values approximate fair value. Cash equivalents also include investments in money market funds held in connection with the Company's deferred compensation plans. These amounts are restricted in use and are not available for general operating purposes.