Franklin Resources, Inc. · NYSE:BEN

Franklin Resources — Q2 2014 Earnings Presentation

25 slides from Franklin Resources's earnings presentation, Apr 28, 2014

  1. Slide 1: Franklin Resources, Inc. Second Quarter Results

    FRANKLIN RESOURCES, INC. April 28, 2014 Franklin Resources, Inc. Second Quarter Results

  2. Slide 2: Forward-Looking Statements

    FRANKLIN RESOURCES, INC. Forward-Looking Statements Statements in this presentation regarding Franklin Resources, Inc. (“Franklin”) and its subsidiaries, which are not historical facts, are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

  3. Slide 3: Audio Commentary and Conference Call Details

    FRANKLIN RESOURCES, INC. Audio Commentary and Conference Call Details Pre-recorded audio commentary on the results from Franklin Resources, Inc.’s Chairman, CEO and President Greg Johnson and CFO and Executive Vice President Ken Lewis will be available today at approximately 8:30 a.m. Eastern Time.

  4. Slide 4: Highlights

    FRANKLIN RESOURCES, INC. Highlights • Investment performance across U.S. and cross-border funds remains strong with the majority of assets in the top half of their peer groups across all time periods. • Assets under management reached a new high, benefiting from strong diversification by investment

  5. Slide 5: Investment Performance

    FRANKLIN RESOURCES, INC. Investment Performance

  6. Slide 6: Investment Performance – U.S.-Registered and Cross-Border Mutual Funds

    FRANKLIN RESOURCES, INC. Investment Performance – U.S.-Registered and Cross-Border Mutual Funds Percentage of Long-Term Assets in Top Two Peer Group Quartiles1 10-Year Periods ended March 31, 2014 Total Equity & Hybrid Fixed-Income (AUM: $601) (AUM: $317) (AUM: $284) 88% 85% 91% 1-Year 3-Year 5-Year

  7. Slide 7: Assets Under Management and Flows

    FRANKLIN RESOURCES, INC. Assets Under Management and Flows

  8. Slide 8: Assets Under Management

    FRANKLIN RESOURCES, INC. Assets Under Management (in US$ billions, for the three months ended) End of Period Simple Monthly Average 879.1 886.9 876.4 865.9 844.7 823.7 833.2 827.8 815.0 807.3 3/13 6/13 9/13 12/13 3/14 3/13 6/13 9/13 12/13 3/14 8

  9. Slide 9: Assets Under Management by Investment Objective and Sales Region

    FRANKLIN RESOURCES, INC. Assets Under Management By Investment Objective By Sales Region As of March 31, 2014 As of March 31, 2014 Latin America1 Equity 4% Cash Mgmt 42% 1% Canada 4% Asia-Pacific 10% United States 65% Europe, the Fixed-Income Middle East 40% and Africa Hybrid 17% 17% (in billions) 3

  10. Slide 10: Long-Term Flows and Market Appreciation (Depreciation) Summary

    FRANKLIN RESOURCES, INC. Long-Term Flows and Market Appreciation (Depreciation) Summary (in US$ billions, for the three months ended) Long-Term Flows1 Appreciation (Depreciation) and Other 59.5 62.1 48.0 49.8 49.8 36.0 33.1 18.6 24.5 7.4 15.9 0.0 (2.9) (6.8) (16.3) (40.9) (50.5) (49.7) (53.9) (56.7)

  11. Slide 11: United States and International Flows

    FRANKLIN RESOURCES, INC. United States and International Flows (in US$ billions, for the three months ended) United States International 32.0 33.6 27.5 28.5 25.8 25.3 25.5 24.5 22.2 24.3 (20.5) (20.4) (25.5) (22.6) (24.2) (27.9) (27.9) (26.2) (26.0) (30.5) 3/13 6/13 9/13 12/13 3/14 3/13 6/13 9/13 12

  12. Slide 12: Flows by Investment Objective: Global / International Equity and Fixed-Income

    FRANKLIN RESOURCES, INC. Flows by Investment Objective: Global / International Equity and Fixed-Income (in US$ billions, for the three months ended) Global / International Equity Global / International Fixed Income 29.6 30.2 15.1 15.3 16.1 15.9 13.2 14.3 12.0 11.4 12.5 10.2 0.7 3.1 1.2 (2.2) (1.2) (

  13. Slide 13: Flows by Investment Objective: U.S. Equity & Hybrid

    FRANKLIN RESOURCES, INC. Flows by Investment Objective: U.S. Equity & Hybrid (in US$ billions, for the three months ended) U.S. Equity Hybrid 8.2 7.9 8.1 6.8 6.5 6.1 6.2 5.5 4.5 4.0 2.8 3.2 3.2 2.6 2.7 1.2 1.4 0.4 (0.5) (1.2) (3.8) (4.1) (4.6) (5.2) (5.1) (5.6) (6.1) (6.1) (6.2) (7.2) 3/13 6/13 9/13

  14. Slide 14: Flows by Investment Objective: Tax-Free and Taxable U.S. Fixed-Income

    FRANKLIN RESOURCES, INC. Flows by Investment Objective: Tax-Free and Taxable U.S. Fixed-Income (in US$ billions, for the three months ended) Tax-Free Fixed-Income Taxable U.S. Fixed-Income 5.2 4.5 4.6 4.3 3.7 3.2 2.9 2.5 2.3 1.9 0.4 0.5 0.7 0.2 0.1 (1.5) (0.2) (2.5) (3.4) (2.8) (3.6) (3.3) (5.4) (4.

  15. Slide 15: Operating Results and Capital Management

    FRANKLIN RESOURCES, INC. Operating Results and Capital Management

  16. Slide 16: Quarterly Financial Highlights

    Unaudited FRANKLIN RESOURCES, INC. Quarterly Financial Highlights (in US$ millions, except per share data, for the three months ended) Operating and Net Income1 Diluted Earnings Per Share 813 772 786 $0.96 729 735 $0.90 $0.89 $0.86 604 573 561 $0.80 552 509 3/13 6/13 9/13 12/13 3/14 3/13 6/13 9/13 1

  17. Slide 17: Operating Revenues

    Unaudited FRANKLIN RESOURCES, INC. Operating Revenues (in millions, for the three months ended) 31-Mar-14 31-Dec-13 Mar-14 vs. Dec-13 30-Sep-13 30-Jun-13 31-Mar-13 Mar-14 vs. Mar-13 Investment management fees $ 1,368.0 $ 1,373.8 0% $ 1,285.7 $ 1,318.3 $ 1,267.5 8% Sales and distribution fees 638.6 6

  18. Slide 18: Operating Expenses

    Unaudited FRANKLIN RESOURCES, INC. Operating Expenses (in millions, for the three months ended) 31-Mar-14 31-Dec-13 Mar-14 vs. Dec-13 30-Sep-13 30-Jun-13 31-Mar-13 Mar-14 vs. Mar-13 Sales, distribution and marketing $ 766.3 $ 776.7 (1%) $ 717.6 $ 812.8 $ 780.8 (2%) Compensation and benefits 372.3 34

  19. Slide 19: Other Income – U.S. GAAP

    Unaudited FRANKLIN RESOURCES, INC. Other Income – U.S. GAAP (in US$ millions, for the three months ended March 31, 2014) 3.7 (11.4) 1.4 10.8 (15.4) 11.6 9.7 2.2 17.2 4.6 5.6 Dividend and Equity Available- Trading Interest Other Consolidated Consolidated Total other Noncontrolling Other income, inter

  20. Slide 20: Operating Results

    Unaudited FRANKLIN RESOURCES, INC. Operating Results (in millions, except per share data, for the three months ended) 31-Mar-14 31-Dec-13 Mar-14 vs. Dec-13 30-Sep-13 30-Jun-13 31-Mar-13 Mar-14 vs. Mar-13 Income Before Taxes $ 791.6 $ 848.7 (7%) $ 723.5 $ 772.0 $ 815.0 (3%) Taxes on income 238.8 252.

  21. Slide 21: Profitability

    Unaudited FRANKLIN RESOURCES, INC. Profitability (in US$ billions, except as noted, for the fiscal period ended) Operating Margin vs. Average Assets Under Management 37.3% 38.0% 36.6% 34.8% 35.4% 33.3% 33.5% 32.3% 870 29.9% 28.7% 808 27.1% 706 694 Avg. AUM: 10 % CAGR 582 605 571 482 442 411 340 9/04

  22. Slide 22: Capital Management

    Unaudited FRANKLIN RESOURCES, INC. Capital Management (in US$ billions, except as noted, as of and for the period ended) Change in Ending Shares Outstanding 15% U.S. Asset Managers 10% (ex-BEN)1: 2.2% 5% Compound Annual Dilution 0% -5% BEN: 2.0% Compound Annual -10% Accretion -15% 3/09 9/09 3/10 9/1

  23. Slide 23: Appendix

    FRANKLIN RESOURCES, INC. Appendix

  24. Slide 24: Sales and Distribution Summary

    Unaudited FRANKLIN RESOURCES, INC. Sales and Distribution Summary (in millions, for the three months ended) The table to the left summarizes the asset and sales 31-Mar-14 31-Dec-13 Change % Change based distribution fees, net of expense. Asset based fees, net $ (115.8) $ (125.0) $ 9.2 (7%) • Asset b

  25. Slide 25: Consolidated SIPs and VIEs Related Adjustments

    Unaudited FRANKLIN RESOURCES, INC. Consolidated SIPs and VIEs Related Adjustments (in millions, for the three months ended) 31-Mar-14 31-Dec-13 The table to the left summarizes the impact of consolidating Operating Revenues $ 8.3 $ 12.1 SIPs and VIEs on the Company’s reported U.S. GAAP Operating Exp

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