Franklin Resources, Inc. · NYSE:BEN
Franklin Resources — Q1 2012 Earnings Presentation
20 slides from Franklin Resources's earnings presentation, Feb 1, 2012
Slide 1: First Quarter Results – February 1, 2012
FRANKLIN RESOURCES, INC. Franklin Resources, Inc. First Quarter Results – February 1, 2012
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.
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 President and Chief Executive Officer Greg Johnson and Executive Vice President and Chief Financial Officer Ken Lewis will be available today at approxim
Slide 4: Highlights
FRANKLIN RESOURCES, INC. Highlights • Overall investment performance remains strong across equity, hybrid and fixed-income strategies • The global fixed-income funds that grabbed the most attention for their short-term underperformance during 2011 have rebounded significantly • Tax-free fixed-income
Slide 5: Investment Performance
FRANKLIN RESOURCES, INC. Investment Performance
Slide 6: Investment Performance – Lipper Rankings of U.S.-Registered Long-Term Mutual Funds
FRANKLIN RESOURCES, INC. Investment Performance – Lipper Rankings of U.S.-Registered Long-Term Mutual Funds1 Percentage of Assets in the Top Two Quartiles Franklin Templeton By Category as of December 31, 2011 73% Franklin 90% 90% 86% Equity 88% 83% 79% 86% 75% 76% 29% Templeton 73% 60% 62% Equity 2
Slide 7: Assets Under Management and Flows
FRANKLIN RESOURCES, INC. Assets Under Management and Flows
Slide 8: Assets Under Management
FRANKLIN RESOURCES, INC. Assets Under Management (in billions, for the three months ended) End of Period Simple Monthly Average 734.2 726.7 703.5 714.4 670.7 670.3 687.2 675.0 659.9 655.6 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec-11 8
Slide 9: Assets Under Management by Investment Objective and Sales Region
FRANKLIN RESOURCES, INC. Assets Under Management (in billions) By Investment Objective By Sales Region (chart is as of December 31, 2011) (chart is as of December 31, 2011) Latin Cash 1 America Management 4% 1% Canada 5% Equity Fixed- 40% Asia-Pacific United Income 10% States 45% 65% Europe, the Mid
Slide 10: Market Appreciation and Flows Summary
FRANKLIN RESOURCES, INC. Market Appreciation and Flows Summary (in billions, for the three months ended) Appreciation (Depreciation) and Other Long-Term Flows1 55.6 57.4 54.9 52.9 24.1 27.0 23.4 38.2 9.6 21.4 15.4 9.0 3.4 2.5 (3.8) (14.9) (40.8) (41.9) (35.9) (46.4) (87.6) (49.7) (52.8) (53.0) 31-De
Slide 11: United States and International Flows
FRANKLIN RESOURCES, INC. United States and International Flows1 (in billions, for the three months ended) United States2 International 31.6 29.6 28.7 28.7 25.3 26.9 25.8 24.2 21.2 17.0 (18.9) (22.0) (18.6) (17.3) (21.3) (19.9) (21.9) (24.8) (25.1) (24.9) (30.9) (33.1) 31-Dec-10 31-Mar-11 30-Jun-11 3
Slide 12: Net New Flows by Investment Objective
FRANKLIN RESOURCES, INC. Net New Flows by Investment Objective (in billions, for the three months ended) Dec-11 vs. Dec-11 vs. 31-Dec-11 30-Sep-11 31-Dec-10 Sep-11 Dec-10 Equity sales $ 13.5 $ 15.2 (11%) $ 19.9 (32%) Equity redemptions (14.7) (21.3) (31%) (18.4) (20%) Equity net exchanges (0.6) (0.8
Slide 13: Operating Results
FRANKLIN RESOURCES, INC. Operating Results
Slide 14: Quarterly Financial Highlights
Unaudited FRANKLIN RESOURCES, INC. Quarterly Financial Highlights (in millions, except per share data, for the three months ended) Operating and Net Income1 Diluted Earnings Per Share2 683 688 659 $2.23 $2.25 $2.26 632 $2.20 629 $1.88 501 503 503 481 416 31-Dec-10 31-Mar-11 30-Jun-11 30-Sep-11 31-De
Slide 15: Operating Revenues
Unaudited FRANKLIN RESOURCES, INC. Operating Revenues (in millions, for the three months ended) Dec-11 vs. Dec-11 vs. 31-Dec-11 30-Sep-11 30-Jun-11 31-Mar-11 31-Dec-10 Sep-11 Dec-10 Investment management fees $ 1,075.1 $ 1,193.2 (10%) $ 1,168.9 $ 1,102.7 $ 1,066.5 1% Sales and distribution fees 524.
Slide 16: Operating Expenses
Unaudited FRANKLIN RESOURCES, INC. Operating Expenses (in millions, for the three months ended) Dec-11 vs. Dec-11 vs. 31-Dec-11 30-Sep-11 30-Jun-11 31-Mar-11 31-Dec-10 Sep-11 Dec-10 Sales, distribution and marketing $ 630.6 $ 669.4 (6%) $ 719.3 $ 676.9 $ 647.1 (3%) Compensation and benefits 300.4 30
Slide 17: Other Income – U.S. GAAP
Unaudited FRANKLIN RESOURCES, INC. Other Income – U.S. GAAP (in millions, for the three months ended December 31, 2011) (8.5) 9.4 (5.6) 22.7 10.5 (8.6) (10.1) 12.9 62.6 54.1 22.5 8.9 Dividend and Equity metho d A vailable-fo r-sale Trading Interest expense Other Trading No n-current Co nso lidated T
Slide 18: Consolidation of Sponsored Investment Products and Variable Interest Entities
Unaudited FRANKLIN RESOURCES, INC. Consolidation of Sponsored Investment Products and Variable Interest Entities Summary (in millions, for the three months ended December 31, 2011) • The tables below summarize the impact of consolidating sponsored investment products and variable interest entities o
Slide 19: Operating Results
Unaudited FRANKLIN RESOURCES, INC. Operating Results (in millions, except per share data, for the three months ended) Dec-11 vs. Dec-11 vs. 31-Dec-11 30-Sep-11 30-Jun-11 31-Mar-11 31-Dec-10 Sep-11 Dec-10 Income Before Taxes $ 695.0 $ 560.8 24% $ 687.1 $ 678.6 $ 697.7 (0%) Taxes on income 201.3 203.9
Slide 20: Operating Margin and Capital Management
Unaudited FRANKLIN RESOURCES, INC. Operating Margin and Capital Management (in millions, except as noted, as of and for the period ended) Quarterly Operating Margin Quarterly Stock Repurchase Activity 38.8% 37.5% 223.3 221.8 36.0% 36.8% 37.2% 220.4 217.7 215.9 3.1 3.0 1.7 1.8 1.6 31-Dec-10 31-Mar-11