Slide 1: Franklin Resources, Inc. Second Quarter Results
Franklin Resources, Inc. Second Quarter Results April 29, 2024| 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 Co
Slide 2: Quarter highlights: key metrics and summary
First quarter highlights Key metrics ($US in millions, except AUM in billions and per share data) % Change (except adj. EFR and margin) Q2 2024 vs. Q1 2024 vs. Q2 2023 1 Ending AUM $1,644.7 13.0% 15.7% Average AUM1 1,581.1 13.4% 11.4% Adj. revenue 1,665.1 8.9% 9.4% Adj. operating income 419.6 0.6% (
Slide 3: Summary highlights, continued
Summary highlights, continued • Putnam: On January 1, we closed the acquisition of Putnam from Great-West. In the quarter, Putnam generated positive net flows and AUM increased by 8% to $159.8 billion. Investment performance continued to be strong with 89% or higher of mutual fund AUM outperforming
Slide 4: AUM, revenue, and investment performance
AUM, revenue, and investment performance Diversified by asset class, client type, and region Percentage of AUM above AUM of $1.64 trillion as of March 31, 2024 peer median and benchmark1 As of March 31, 2024 69% Cash 3% HNW 2% Americas 7% 62% 62% Multi-Asset 60% 10% APAC 10% 56% Alternative 51% 51%
Slide 5: AUM and flows
AUM and flows March 31, December 31, March 31, (in US$ billions)1 2024 2023 % Change 2023 % Change Beginning AUM $1,455.5 $1,374.2 6% $1,387.7 5% Long-term inflows 84.9 68.9 23% 61.8 37% Long-term outflows (78.0) (73.9) (6%) (65.5) (19%) Long-term net flows 6.9 (5.0) NM (3.7) NM Cash management net
Slide 6: Net flows by asset class: Equity, Fixed Income, Alternative
Equity: $593 billion Fixed Income: $571 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) Equity net outflows were $5.3 billion. We saw positive net Fixed income net inflows were $8.3 billion and included an flows into Large Cap Value and Smart Beta.
Slide 7: Financial results
Financial results1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 US GAAP Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Operating Net 255.1 314.9 338.3 206.5 129.3 194.2 227.5 295.5 251.3 124.2 Income Income Operating Diluted 13.
Slide 8: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-24 Mar-24 Adjusted Adjusted vs. vs. Mar-24 Mar-24 Dec-23 Dec-23 Mar-23 Mar-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,628.7 (115.2) 1,513.5 1,392.8
Slide 9: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-24 Mar-24 Adjusted Adjusted vs. vs. Mar-24 Mar-24 Dec-23 Dec-23 Mar-23 Mar-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 1,028.2 (183.9) 844.3 789.2 7% 763.3 11
Slide 10: Other Income (Expense), Net
Other Income (Expense), Net1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Mar-24 Mar-24 Adjusted Adjusted vs. vs. Mar-24 Mar-24 Dec-23 Dec-23 Mar-23 Mar-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted2 Adjusted Investment and other income, net 52.5 15.1
Slide 11: 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 March 31, 2024) 301 309 256 6.9 96 96 643 3.5 610 614 628 604 0.3 3.1 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Total cash Product Regulator
Slide 12: Reconciliation of US GAAP to Non-GAAP: three months ended March 31, 2024
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended March 31, 2024 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 other
Slide 13: Reconciliation of US GAAP to Non-GAAP: three months ended December 31, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended December 31, 2023 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 of US GAAP to Non-GAAP: three months ended March 31, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended March 31, 2023 1 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 oth
Slide 15: 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