Slide 1: Preliminary Fourth Quarter and Fiscal Year Results
Franklin Resources, Inc. Greg Johnson Chairman and Chief Executive Officer Preliminary Fourth Quarter Ken Lewis Chief Financial Officer and Fiscal Year Results October 26, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements The financial results in this presentation are preliminary. 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 Securit
Slide 3: Audio Commentary and Conference Call Details
Audio Commentary and Conference Call Details Pre-recorded audio commentary on the results from Franklin Resources, Inc.’s Chairman and CEO Greg Johnson and CFO and Executive Vice President Ken Lewis will be available today at approximately 8:30 a.m. Eastern Time. They will also lead a live teleconfe
Slide 4: Highlights
Highlights INVESTMENT Relative investment performance in equity, hybrid and fixed income categories all improved across the 1-, 3-, 5- and 10-year periods PERFORMANCE & FLOWS International retail and U.S. fixed income flows improved Fiscal year operating income of $2.4 billion and a strong operating
Slide 5: Investment Performance and Flows
Investment Performance and Flows
Slide 6: Investment Performance U.S.-Registered and Cross-Border Mutual Funds
Investment Performance U.S.-Registered and Cross-Border Mutual Funds Percentage of Total Long-Term Assets ($482 billion) in the Top Two Peer Group Quartiles 3-Year 5-Year 10-Year 31% 69% 80% Equity & Hybrid - $275 billion 37% 75% 77% Fixed Income - $207 billion 24% 62% 83% The peer group rankings ar
Slide 7: Assets Under Management Overview
Assets Under Management Overview (in US$ billions, for the three months ended) Simple Monthly Average vs. End of Period As of September 30, 2016 825 41% 1% 771 782 764 737 743 740 732 736 733 2% 4% 68% 12% 14% 39% 19% 9/15 12/15 3/16 6/16 9/16 Sales Region Sep-16 United States $ 499.2 Average AUM
Slide 8: Long-Term Flows and Market Return Summary
Long-Term Flows and Market Return Summary (in US$ billions, for the three months ended) Long-Term Flows Appreciation (Depreciation) & Other 24.4 33.1 15.0 30.5 9.8 23.2 22.7 22.7 4.2 (20.4) (24.1) (19.2) (22.0) (28.4) (41.8) (47.2) (44.6) (53.3) (65.8) (58.1) 9/15 12/15 3/16 6/16 9/16 9/15 12/15 3/1
Slide 9: United States and International, Retail and Institutional Flows
United States and International, Retail and Institutional Flows (in US$ billions, for the three months ended) United States International 12.5 11.9 11.5 11.3 10.3 9.8 10.2 7.2 6.5 7.7 4.3 5.5 3.5 3.4 2.5 3.4 2.6 2.5 2.0 2.0 (4.2) (5.4) (4.2) (5.7) (5.6) (5.3) (4.8) (7.5) (6.2) (8.2) (12.8) (12.2) (1
Slide 10: Flows by Investment Objective: Global / International Equity and Fixed Income
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 15.0 9.7 8.1 6.6 6.7 6.2 6.3 5.4 5.0 4.9 (0.5) (0.2) (0.3) (0.4) (0.3) (0.4) (0.3) (0.1) (0.1) (1.6) (5.1) (3.
Slide 11: Flows by Investment Objective: U.S. Equity and Hybrid
Flows by Investment Objective: U.S. Equity and Hybrid (in US$ billions, for the three months ended) U.S. Equity Hybrid 3.9 3.6 4.3 4.0 3.9 3.5 3.1 3.5 3.6 2.8 (0.2) (0.1) (0.3) (0.2) (0.2) (0.4) (1.8) (0.9) (2.4) (1.6) (1.9) (2.2) (2.9) (2.2) (2.2) (3.1) (2.9) (3.5) (4.4) (5.0) (5.5) (5.2) (5.6) (5.
Slide 12: Flows by Investment Objective: Tax-Free and Taxable U.S. Fixed Income
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 2.4 2.6 2.2 2.8 2.6 1.7 1.7 2.3 1.9 1.9 0.4 0.6 0.1 0.0 (0.1) (0.1) (0.1) (0.3) (0.2) (0.6) (1.4) (1.6) (1.8) (2.5) (2.3) (2.2) (2.3) (2
Slide 13: Financial Results
@. FRANKLIN TEMPLETON INVESTMENTS. Financial Results
Slide 14: Fiscal Year Financial Highlights
Unaudited Fiscal Year Financial Highlights (in US$ millions, except per share data, for the fiscal years ended) Operating and Net Income1 Diluted Earnings Per Share 3,221 $3.79 3,028 2,921 $3.37 $3.29 2,515 $2.98 2,366 $2.94 2,384 2,150 2,035 1,931 1,727 9/12 9/13 9/14 9/15 9/16 9/12 9/13 9/14 9/15
Slide 15: Quarterly Financial Highlights
Unaudited Quarterly Financial Highlights (in US$ millions, except per share data, for the three months ended) Operating and Net Income1 Diluted Earnings Per Share $0.82 718 $0.77 $0.74 654 595 579 $0.61 $0.59 537 472 448 446 358 360 9/15 12/15 3/16 6/16 9/16 9/15 12/15 3/16 6/16 9/16 Operating Inc
Slide 16: Operating Revenues
Unaudited Operating Revenues (in US$ millions, for the three months ended) Sep-16 vs. Sep-16 vs. Sep-16 Jun-16 Mar-16 Dec-15 Sep-15 Jun-16 Sep-15 Investment management fees $ 1,096.3 $ 1,093.5 0% $ 1,095.2 $ 1,186.7 $ 1,256.9 (13%) Sales and distribution fees 440.8 450.2 (2%) 437.0 478.4 510.6 (14%)
Slide 17: Operating Expenses
Unaudited Operating Expenses (in US$ millions, for the three months ended) Sep-16 vs. Sep-16 vs. Sep-16 Jun-16 Mar-16 Dec-15 Sep-15 Jun-16 Sep-15 Sales, distribution and marketing $ 536.2 $ 553.4 (3%) $ 531.7 $ 588.6 $ 626.3 (14%) Compensation and benefits 317.2 326.9 (3%) 374.3 342.5 336.8 (6%) Inf
Slide 18: Operating Leverage
Unaudited Operating Leverage Operating Margin (%) vs. Average AUM (in US$ billions for the fiscal year ended) 37.3% 37.9% 38.1% 35.7% 35.4% 36.6% 33.3% 34.8% 33.5% 32.3% 888 870 808 28.7% 749 Average AUM: 694 706 4.5% CAGR 582 605 571 482 442 9/06 9/07 9/08 9/09 9/10 9/11 9/12 9/13 9/14 9/15 9/16 Fi
Slide 19: Other Income – U.S. GAAP
Unaudited Other Income – U.S. GAAP (in US$ millions, for the three months ended September 30, 2016) 0.3 3.2 7.6 2.1 (13.4) 13.6 (0.8) 33.0 64.5 56.9 18.9 Dividend and Equity method Available-for- Trading Interest Foreign Consolidated Consolidated Total other Noncontrolling Other income, interest inc
Slide 20: Capital Management
@. FRANKLIN TEMPLETON INVESTMENTS. Capital Management
Slide 21: Share Repurchases Accretive to Earnings per Share
Unaudited Share Repurchases Accretive to Earnings per Share Change in Ending Shares Outstanding 20% 15% U.S. Asset Managers (ex- 10% BEN)1: 2.7% Compound Annual Dilution 5% 0% -5% -10% BEN: 2.7% Compound -15% Annual Accretion -20% 9/11 3/12 9/12 3/13 9/13 3/14 9/14 3/15 9/15 3/16 9/16 BEN U.S. A
Slide 22: Return of Capital Distributing U.S. Free Cash Flow
Unaudited Return of Capital Distributing U.S. Free Cash Flow Trailing 12 Months Share Repurchases and Dividends1 (US$ millions and percentage of net income) $1,977 $1,856 $1,741 $1,696 $1,745 52% 97% 87% 77% 68% 34% 20% 24% 25% 24% 9/15 12/15 3/16 6/16 9/16 Dividends Share Repurchases 1. The cha
Slide 23: Appendix
@. FRANKLIN TEMPLETON INVESTMENTS. Appendix
Slide 24: Strong Balance Sheet
Unaudited Strong Balance Sheet Net Cash and Investments1 (US$ billions) 9.6 9.7 9.2 7.3 6.5 7.4 7.9 8.5 6.5 5.6 1.8 1.7 0.9 0.8 1.2 FYE-9/12 FYE-9/13 FYE-9/14 FYE-9/15 FYE-9/16 U.S. Net Cash and Investments Non-U.S. Net Cash and Investments 1. Net cash and investments consists of Franklin Resour
Slide 25: Sales and Distribution Summary
Unaudited Sales and Distribution Summary (in US$ millions, for the three months ended) Sep-16 Jun-16 Change % Change Asset-based fees $ 347.8 $ 345.7 2.1 1% This table summarizes the asset- and sales- Asset-based expenses (438.2) (442.1) 3.9 (1%) based distribution fees, net of expense. Asset-based
Slide 26: Consolidated SIPs and VIEs Related Adjustments
Unaudited Consolidated SIPs and VIEs Related Adjustments (in US$ millions, for the three and twelve months ended) FY This table summarizes the impact of Sep-16 Sep-16 consolidating SIPs and VIEs on the Company’s Operating Revenues $ 8.3 $ 64.4 reported U.S. GAAP financial results. Operating Expenses