Slide 1: First Quarter Results
Franklin Resources, Inc. First Quarter Results January 30, 2023 | Executive earnings commentary Jenny Johnson Matthew Nicholls Adam Spector President Executive Vice President Executive Vice President Chief Executive Officer Chief Financial Officer Head of Global Distribution Chief Operating Officer
Slide 2: First quarter highlights: key metrics
First quarter highlights Key metrics ($ in millions, except AUM in billions % Change (except adj. EFR and margin) and per share data) Q1 2023 vs. Q4 2022 vs. Q1 2022 Ending AUM1 $1,387.7 7.0% (12.1%) Average AUM1 1,353.5 (1.5%) (12.9%) Adj. operating revenue 1,439.1 (6.1%) (16.4%) Adj. operating inc
Slide 3: First quarter highlights: financial results
First quarter highlights Financial results • This quarter’s financial results include two months of Alcentra, following the closing on November 1. • Average AUM decreased by 1.5% to $1.35 trillion. Ending AUM was $1.39 trillion, an increase of 7% from the prior quarter primarily due to market apprec
Slide 4: First quarter highlights: AUM and flows, cont'd
First quarter highlights AUM and Flows, Cont’d. • Our long-term net flows continued to benefit from a diversified mix of assets in the quarter: – Alternative: Benefit Street Partners, Clarion Partners, and Lexington Partners each had net inflows, with a combined total of $2.4 billion, which were off
Slide 5: AUM and investment performance
AUM and investment performance Diversified by asset class, Percentage of AUM above client type and region peer median and benchmark1 AUM of $1.39 trillion as December 31, 2022 As of December 31, 2022 Cash 5% HNW 2% Americas 8% Multi-Asset 10% APAC 9% 67% Alternative EMEA 11% 59% Retail 57% 56% 57% 5
Slide 6: AUM and flows
AUM and flows Dec 31, Sept 30, Dec 31, (In US$ billions)1 2022 2022 % Change 2021 % Change Beginning AUM $1,297.4 $1,379.8 (6%) $1,530.1 (15%) Long-term inflows 70.5 59.9 18% 107.0 (34%) Long-term outflows (81.4) (80.3) (1%) (82.9) 2% Long-term net flows (10.9) (20.4) 47% 24.1 NM Cash management net
Slide 7: Long-term flows by asset class
Fixed Income: $495 billion Equity: $419 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) 43.7 46.1 35.2 33.3 28.5 29.8 26.2 24.5 27.2 22.6 12.7 8.1 0.3 (7.9) (6.1) (6.0) (9.2) (14.3) (13.3) (16.1) (28.6) (26.9) (35.6) (33.4) (35.9) (33.7) (41.2) (42
Slide 8: Financial results
Financial results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 US GAAP Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Operating Net 557.7 463.0 404.7 348.5 194.0 453.2 349.6 256.4 232.7 165.6 Income Income Operating Diluted 25.
Slide 9: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-22 Dec-22 Adjusted Adjusted vs. vs. Dec-22 Dec-22 Sep-22 Sep-22 Dec-21 Dec-21 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,422.8 (92.2) 1,330.6 1,341.8
Slide 10: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-22 Dec-22 Adjusted Adjusted vs. vs. Dec-22 Dec-22 Sep-22 Sep-22 Dec-21 Dec-21 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 979.2 (234.7) 744.5 711.6 5% 755.3 (1%)
Slide 11: Other Income (Expense), Net
Other Income (Expense), Net1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Dec-22 Dec-22 Adjusted Adjusted vs. vs. Dec-22 Dec-22 Sep-22 Sep-22 Dec-21 Dec-21 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment and other income, net 91.1 (66.9)
Slide 12: Capital management
Capital management Dividends and share repurchases Allocation of cash and investments1 (In US$ millions, for the trailing twelve months ended) (In US$ billions, as of December 31, 2022) 6.6 219 224 184 181 173 3.0 587 592 598 579 583 0.2 3.4 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Total cash Product Regu
Slide 13: Reconciliation: three months ended December 31, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended December 31, 2022 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution and Termination investment Basis related Plan and ot
Slide 14: Reconciliation: three months ended September 30, 2022
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended September 30, 2022 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution Termination investment Basis related Plan and other
Slide 15: Reconciliation: three months ended December 31, 2021
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended December 31, 2021 Consolidated Sales, Special Unrealized US GAAP Acquisition- Deferred Comp Non-GAAP (in US$ millions except per share data) Investment distribution Termination investment Basis related Plan Basis Prod
Slide 16: Appendix: forward-looking statements
Appendix Some of the statements herein may include forward-looking statements that reflect our current views with respect to future events, financial performance and market conditions. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of