Slide 1: Franklin Resources, Inc. Third Quarter Results
Franklin Resources, Inc. Third Quarter Results July 26, 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 Cont
Slide 2: Third quarter highlights
Third quarter highlights Key metrics (US$ in millions, except AUM in billions and per share data) % Change (except adj. EFR and margin) Q3 2024 vs. Q2 2024 vs. Q3 2023 1 Ending AUM $1,646.6 0.1% 15.0% Average AUM1 1,632.6 3.3% 15.0% Adj. revenue 1,654.1 (0.7%) 5.8% Adj. operating income 424.9 1.3% (
Slide 3: Summary highlights, continued
Summary highlights, continued • Alternatives: Since becoming a part of Franklin Templeton, each alternative asset manager has continued to grow and diversify across strategies, product vehicles, and clients. – On May 8, Benefit Street Partners announced the final close of its BSP Special Situations
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 $1.65 trillion as of June 30, 2024 peer median and benchmark1 As of June 30, 2024 70% Cash 4% HNW 2% Americas 7% 60% Multi-Asset 10% APAC 11% 56% 53% 52% Alternative 48% 49% In
Slide 5: AUM and flows
AUM and flows June 30, March 31, June 30, (in US$ billions)1 2024 2024 % Change 2023 % Change Beginning AUM $1,644.7 $1,455.5 13% $1,422.1 16% Long-term inflows 82.7 84.9 -3% 67.4 23% Long-term outflows (85.9) (78.0) 10% (67.2) 28% Long-term net flows (3.2) 6.9 NM 0.2 NM Cash management net flows 3.
Slide 6: Net flows by asset class: Equity, Fixed Income, Alternative, Multi-Asset
Equity: $595 billion Fixed Income: $565 billion (in US$ billions, for the three months ended) (in US$ billions, for the three months ended) Equity net outflows were $1.6 billion. We saw positive net Fixed income net outflows were $4.8 billion. We saw client flows into Large Cap Value, International
Slide 7: Financial results
Financial results 1 (GAAP and non-GAAP in US$ millions except per share data, for the three months ended) US GAAP Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 US GAAP Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Operating Net 314.9 338.3 206.5 129.3 222.5 227.5 295.5 251.3 124.2 174.0 Income Income2 Operating Diluted 1
Slide 8: Revenues
Revenues1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Jun-24 Jun-24 Adjusted Adjusted vs. vs. Jun-24 Jun-24 Mar-24 Mar-24 Jun-23 Jun-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Investment management fees, ex. 1,633.3 (110.5) 1,522.8 1,513.5
Slide 9: Expenses
Expenses1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Jun-24 Jun-24 Adjusted Adjusted vs. vs. Jun-24 Jun-24 Mar-24 Mar-24 Jun-23 Jun-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted Adjusted Compensation & benefits 893.8 (72.5) 821.3 844.3 (3%) 773.9 6%
Slide 10: Other Income (Expense), Net
Other Income (Expense), Net 1 (GAAP and non-GAAP in US$ millions except per share data, for the three months) Jun-24 Jun-24 Adjusted Adjusted vs. vs. Jun-24 Jun-24 Mar-24 Mar-24 Jun-23 Jun-23 US GAAP Adjustments Adjusted Adjusted Adjusted Adjusted2 Adjusted Investment and other income, net 74.5 5.7
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 June 30, 2024) 360 309 6.8 301 256 3.2 96 643 656 610 614 628 0.5 3.1 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Total cash Product Regulator
Slide 12: Appendix: Reconciliation, three months ended June 30, 2024
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended June 30, 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: Appendix: Reconciliation, 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 14: Appendix: Reconciliation, three months ended June 30, 2023
Appendix Reconciliation of US GAAP results to Non-GAAP results: Three months ended June 30, 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 1 related Plan and othe
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