SAN MATEO, Calif.--(BUSINESS WIRE)--
Franklin Resources, Inc. (Franklin Templeton Investments)
(NYSE:BEN) today announced net income of $305.1 million, or $1.30 per
share diluted, on revenues of $1,321.5 million for the quarter ended
September 30, 2008. For the quarter ended June 30, 2008, net income
was $403.3 million, or $1.71 per share diluted, on revenues of
$1,521.6 million. For the quarter ended September 30, 2007, net income
was $436.9 million, or $1.76 per share diluted, on revenues of
$1,629.1 million.
Operating income for the quarter ended September 30, 2008 was
$419.5 million, as compared to $532.2 million for the prior quarter
and $541.4 million for the quarter ended September 30, 2007. The
company's non-operating income for the quarter ended September 30,
2008 included $77.8 million of investment and other income, net, as
compared to $34.0 million for the prior quarter and $86.0 million for
the quarter ended September 30, 2007.
Total assets under management by the company's subsidiaries were
$507.3 billion at September 30, 2008, as compared to $580.2 billion at
June 30, 2008 and $645.9 billion at September 30, 2007. Simple monthly
average assets under management during the quarter ended September 30,
2008 were $555.4 billion, as compared to $602.9 billion in the prior
quarter and $627.3 billion in the same quarter a year ago. Equity
assets comprised 52% of total assets under management at September 30,
2008, as compared to 55% of total assets under management at June 30,
2008 and 60% of total assets under management at September 30, 2007.
Fixed-income assets comprised 28% of total assets under management at
September 30, 2008, as compared to 25% of total assets under
management at June 30, 2008 and 21% of total assets under management
at September 30, 2007. Hybrid assets accounted for 19% of total assets
under management at September 30, 2008 and June 30, 2008, as compared
to 18% of total assets under management at September 30, 2007. Net new
flows for the quarter ended September 30, 2008 were $(8.6) billion, as
compared to $1.2 billion for the prior quarter and $9.8 billion for
the same quarter a year ago.
Cash and cash equivalents were $2.5 billion at September 30, 2008,
as compared to $3.6 billion at September 30, 2007. Stockholders'
equity was $7.1 billion at September 30, 2008, as compared to $7.3
billion at September 30, 2007. The company had 232.8 million shares of
common stock outstanding at September 30, 2008, as compared to 245.5
million shares outstanding at September 30, 2007. During the quarter
ended September 30, 2008, the company repurchased 2.4 million shares
of its common stock for a total cost of $226.1 million. During the
fiscal year ended September 30, 2008, the company repurchased 14.2
million shares of its common stock for a total cost of $1.5 billion.
Fiscal Fourth Quarter 2008 Highlights
Global Business Developments(1)
(See important footnotes in "Supplemental Information" section at
the end of this release.)
-- Standard & Poor's Rating Services recently raised its
long-term and short-term ratings of Franklin Resources, Inc.
to "AA-" and "A-1+" from "A+" and "A-1", respectively.
-- Franklin Resources, Inc. appointed David E. Smart as Global
Head of Sovereign Funds and Supranationals, responsible for
managing existing sovereign fund relationships, as well as
expanding the company's sovereign funds and supranational
client base globally.
-- Franklin Templeton opened a representative office in Ho Chi
Minh City, Vietnam.
-- Franklin Templeton introduced the U.S.-registered Templeton
Global Total Return Fund and retail share classes of the
Franklin Large Cap Equity Fund.
-- Franklin Templeton began performing record-keeping services
for the Franklin Templeton 529 and NJBEST 529 plans, for which
it is already the distributor and program manager.
-- Franklin Templeton's annual Investment Outlook and
Opportunities Forum 2008, held in Toronto, Canada, was
attended by over 2,300 investment advisors and clients.
-- Franklin Templeton's financial advisor and institutional web
sites were recognized in kasina's "Top 10 Web Sites for
Financial Intermediaries" and "Top 10 Institutional Web Sites"
for the second consecutive year.
-- More than 1,000 volunteers participated in the second annual
Involved Impact Days, a company-sponsored event to encourage
community involvement.
Lipper Performance Rankings of Franklin Templeton's
U.S.-Registered Long-Term Mutual Funds (1,2)
FRANKLIN TEMPLETON(3,4)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 55% 52% 90% 92%
----------------------------------------------------------------------
3rd & 4th 45% 48% 10% 8%
----------------------------------------------------------------------
FRANKLIN TEMPLETON EQUITY(3,5)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 47% 28% 84% 89%
----------------------------------------------------------------------
3rd & 4th 53% 72% 16% 11%
----------------------------------------------------------------------
FRANKLIN TEMPLETON FIXED-INCOME(3,6)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 68% 93% 98% 97%
----------------------------------------------------------------------
3rd & 4th 32% 7% 2% 3%
----------------------------------------------------------------------
FRANKLIN EQUITY(3,7)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 18% 21% 88% 86%
----------------------------------------------------------------------
3rd & 4th 82% 79% 12% 14%
----------------------------------------------------------------------
TEMPLETON EQUITY(3,8)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 73% 4% 72% 87%
----------------------------------------------------------------------
3rd & 4th 27% 96% 28% 13%
----------------------------------------------------------------------
MUTUAL SERIES EQUITY(3,9)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 85% 97% 98% 100%
----------------------------------------------------------------------
3rd & 4th 15% 3% 2% 0%
----------------------------------------------------------------------
FRANKLIN TEMPLETON TAXABLE FIXED-INCOME(3,10)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 82% 95% 97% 95%
----------------------------------------------------------------------
3rd & 4th 18% 5% 3% 5%
----------------------------------------------------------------------
FRANKLIN TEMPLETON TAX-FREE FIXED-INCOME(3,11)
Lipper Quartile Period Ended September 30, 2008
----------------------------------------------------
1-Year 3-Year 5-Year 10-Year
Assets (%) Assets (%) Assets (%) Assets (%)
------------ ------------ ------------ -------------
1st & 2nd 63% 92% 99% 98%
----------------------------------------------------------------------
3rd & 4th 37% 8% 1% 2%
----------------------------------------------------------------------
Performance quoted above represents past performance, which cannot
predict or guarantee future results.
Franklin Resources, Inc.
Preliminary Condensed Consolidated Income Statements
Unaudited
(in thousands, except per share data Three months ended
and assets under management) September 30,
--------------------------------
2008 2007 % Change
----------- ----------- --------
Operating Revenues
Investment management fees $ 822,388 $ 963,316 (15%)
Underwriting and distribution fees 424,450 577,762 (27%)
Shareholder servicing fees 69,651 71,035 (2%)
Consolidated sponsored investment
products income, net 1,487 2,506 (41%)
Other, net 3,478 14,518 (76%)
--------------------------------
Total operating revenues 1,321,454 1,629,137 (19%)
--------------------------------
Operating Expenses
Underwriting and distribution 406,526 552,729 (26%)
Compensation and benefits 274,065 285,631 (4%)
Information systems, technology and
occupancy 83,038 89,187 (7%)
Advertising and promotion 45,489 56,128 (19%)
Amortization of deferred sales
commissions 40,696 45,935 (11%)
Other 52,143 58,139 (10%)
--------------------------------
Total operating expenses 901,957 1,087,749 (17%)
--------------------------------
Operating income 419,497 541,388 (23%)
--------------------------------
Other Income (Expenses)
Consolidated sponsored investment
products (losses) gains, net (35,507) (2,719) N/A
Investment and other income, net 77,763 86,034 (10%)
Interest expense (478) (4,971) (90%)
--------------------------------
Other income, net 41,778 78,344 (47%)
--------------------------------
Income before taxes on income 461,275 619,732 (26%)
Taxes on income 156,198 182,824 (15%)
--------------------------------
Net income $ 305,077 $ 436,908 (30%)
================================
Earnings per Share
Basic $ 1.31 $ 1.78 (26%)
Diluted 1.30 1.76 (26%)
Dividends per share $ 0.20 $ 0.15 33%
Average Shares Outstanding (in
thousands)
Basic 232,832 244,807 (5%)
Diluted 234,563 247,869 (5%)
Operating Margin (1) 32% 33%
Assets Under Management (in billions)
Beginning of period $ 580.2 $ 624.0 (7%)
Sales 41.4 52.6 (21%)
Redemptions (50.0) (42.8) 17%
--------------------------------
Net new flows (8.6) 9.8 N/A
Reinvested distributions 3.2 1.6 100%
--------------------------------
Net flows (5.4) 11.4 N/A
Distributions (4.0) (2.3) 74%
(Depreciation) appreciation and
other (63.5) 12.8 N/A
--------------------------------
End of period $ 507.3 $ 645.9 (21%)
================================
Simple Monthly Average for Period $ 555.4 $ 627.3 (11%)
(in thousands, except per share data Twelve months ended
and assets under management) September 30,
--------------------------------
2008 2007 % Change
----------- ----------- --------
Operating Revenues
Investment management fees $3,683,390 $3,573,845 3%
Underwriting and distribution fees 2,002,031 2,277,698 (12%)
Shareholder servicing fees 289,370 277,059 4%
Consolidated sponsored investment
products income, net 10,923 7,804 40%
Other, net 46,672 69,363 (33%)
---------------------------------
Total operating revenues 6,032,386 6,205,769 (3%)
---------------------------------
Operating Expenses
Underwriting and distribution 1,937,113 2,160,631 (10%)
Compensation and benefits 1,120,631 1,080,634 4%
Information systems, technology and
occupancy 320,986 317,938 1%
Advertising and promotion 184,309 189,382 (3%)
Amortization of deferred sales
commissions 170,504 158,114 8%
Other 192,315 231,523 (17%)
---------------------------------
Total operating expenses 3,925,858 4,138,222 (5%)
---------------------------------
Operating income 2,106,528 2,067,547 2%
---------------------------------
Other Income (Expenses)
Consolidated sponsored investment
products (losses) gains, net (71,553) 57,670 N/A
Investment and other income, net 224,898 363,304 (38%)
Interest expense (15,758) (23,220) (32%)
---------------------------------
Other income, net 137,587 397,754 (65%)
---------------------------------
Income before taxes on income 2,244,115 2,465,301 (9%)
Taxes on income 651,314 692,363 (6%)
---------------------------------
Net income $1,592,801 $1,772,938 (10%)
=================================
Earnings per Share
Basic $ 6.74 $ 7.11 (5%)
Diluted 6.68 7.03 (5%)
Dividends per share $ 0.80 $ 0.60 33%
Average Shares Outstanding (in
thousands)
Basic 236,396 249,197 (5%)
Diluted 238,281 252,118 (5%)
Operating Margin (1) 35% 33%
Assets Under Management (in billions)
Beginning of period $ 645.9 $ 511.3 26%
Sales 181.5 185.5 (2%)
Redemptions (190.4) (139.0) 37%
---------------------------------
Net new flows (8.9) 46.5 N/A
Reinvested distributions 28.9 20.7 40%
---------------------------------
Net flows 20.0 67.2 (70%)
Distributions (35.2) (26.0) 35%
(Depreciation) appreciation and
other (123.4) 93.4 N/A
---------------------------------
End of period $ 507.3 $ 645.9 (21%)
=================================
Simple Monthly Average for Period $ 604.9 $ 582.0 4%
(1) Operating margin: Operating income divided by total operating
revenues.
Franklin Resources, Inc.
Preliminary Condensed Consolidated Income Statements
Unaudited
(in thousands, except per share
data, employees
and billable shareholder accounts) Three months ended
---------------------------------
30-Sep-08 30-Jun-08 % Change
----------- ----------- --------
Operating Revenues
Investment management fees $ 822,388 $ 924,722 (11%)
Underwriting and distribution fees 424,450 504,272 (16%)
Shareholder servicing fees 69,651 73,127 (5%)
Consolidated sponsored investment
products income, net 1,487 2,768 (46%)
Other, net 3,478 16,760 (79%)
---------------------------------
Total operating revenues 1,321,454 1,521,649 (13%)
---------------------------------
Operating Expenses
Underwriting and distribution 406,526 492,385 (17%)
Compensation and benefits 274,065 285,651 (4%)
Information systems, technology and
occupancy 83,038 78,477 6%
Advertising and promotion 45,489 44,804 2%
Amortization of deferred sales
commissions 40,696 41,935 (3%)
Other 52,143 46,182 13%
---------------------------------
Total operating expenses 901,957 989,434 (9%)
---------------------------------
Operating income 419,497 532,215 (21%)
---------------------------------
Other Income (Expenses)
Consolidated sponsored investment
products losses, net (35,507) (9,005) 294%
Investment and other income, net 77,763 33,969 129%
Interest expense (478) (3,287) (85%)
---------------------------------
Other income, net 41,778 21,677 93%
---------------------------------
Income before taxes on income 461,275 553,892 (17%)
Taxes on income 156,198 150,580 4%
---------------------------------
Net income $ 305,077 $ 403,312 (24%)
=================================
Earnings per Share
Basic $ 1.31 $ 1.72 (24%)
Diluted 1.30 1.71 (24%)
Dividends per share $ 0.20 $ 0.20 --%
Average Shares Outstanding (in
thousands)
Basic 232,832 234,631 (1%)
Diluted 234,563 236,485 (1%)
Operating Margin(1) 32% 35%
Employees 8,809 8,958 (2%)
Billable Shareholder Accounts
(in millions) 20.4 22.4 (9%)
(in thousands, except per share
data, employees
and billable shareholder
accounts) Three months ended
-------------------------------------
31-Mar-08 31-Dec-07 30-Sep-07
----------- ----------- -----------
Operating Revenues
Investment management fees $ 915,965 $1,020,315 $ 963,316
Underwriting and distribution
fees 499,513 573,796 577,762
Shareholder servicing fees 73,417 73,175 71,035
Consolidated sponsored investment
products income, net 3,764 2,904 2,506
Other, net 11,033 15,401 14,518
-------------------------------------
Total operating revenues 1,503,692 1,685,591 1,629,137
-------------------------------------
Operating Expenses
Underwriting and distribution 485,612 552,590 552,729
Compensation and benefits 280,625 280,290 285,631
Information systems, technology
and occupancy 79,854 79,617 89,187
Advertising and promotion 47,372 46,644 56,128
Amortization of deferred sales
commissions 43,322 44,551 45,935
Other 47,820 46,170 58,139
-------------------------------------
Total operating expenses 984,605 1,049,862 1,087,749
-------------------------------------
Operating income 519,087 635,729 541,388
-------------------------------------
Other Income (Expenses)
Consolidated sponsored investment
products losses, net (26,064) (977) (2,719)
Investment and other income, net 32,393 80,773 86,034
Interest expense (5,948) (6,045) (4,971)
-------------------------------------
Other income, net 381 73,751 78,344
-------------------------------------
Income before taxes on income 519,468 709,480 619,732
Taxes on income 153,372 191,164 182,824
-------------------------------------
Net income $ 366,096 $ 518,316 $ 436,908
=====================================
Earnings per Share
Basic $ 1.55 $ 2.15 $ 1.78
Diluted 1.54 2.12 1.76
Dividends per share $ 0.20 $ 0.20 $ 0.15
Average Shares Outstanding (in
thousands)
Basic 236,520 241,585 244,807
Diluted 238,360 244,147 247,869
Operating Margin(1) 35% 38% 33%
Employees 8,916 8,875 8,699
Billable Shareholder Accounts
(in millions) 22.0 21.2 20.4
(1) Operating margin: Operating income divided by total operating
revenues.
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) Three months ended
-------------------------------------------
30- 30- 31- 31- 30-
Sep- Jun- Mar- Dec- Sep-
08 08 % Change 08 07 07
-------------------------------------------
Equity
Global/international $190.3 $233.7 (19%) $243.4 $286.1 $286.7
Domestic (U.S.) 72.9 82.5 (12%) 84.8 95.8 100.5
-------------------------------------------
Total equity 263.2 316.2 (17%) 328.2 381.9 387.2
-------------------------------------------
Hybrid 93.9 109.5 (14%) 109.8 116.4 117.2
Fixed-Income
Tax-free 59.7 61.6 (3%) 59.6 59.3 59.0
Taxable:
Global/international 52.7 54.3 (3%) 54.5 48.3 44.3
Domestic (U.S.) 30.5 31.6 (3%) 31.5 31.5 31.8
-------------------------------------------
Total fixed-income 142.9 147.5 (3%) 145.6 139.1 135.1
Money Market 7.3 7.0 4% 7.5 6.3 6.4
-------------------------------------------
Total Ending Assets $507.3 $580.2 (13%) $591.1 $643.7 $645.9
===========================================
Simple Monthly Average
Assets Under Management $555.4 $602.9 (8%) $610.2 $651.5 $627.3
ASSETS UNDER MANAGEMENT AND FLOWS
(in billions) Three months ended
-----------------------------------------
30-Sep- 30-Jun- 30-Sep-
08 08 % Change 07 % Change
------- ------- -------- ------- --------
Beginning Assets Under
Management $580.2 $591.1 (2%) $624.0 (7%)
U.S. retail assets(1)
Beginning assets $330.0 $334.8 (1%) $366.5 (10%)
----------------------------------------------------------------------
Sales 12.4 14.9 (17%) 17.8 (30%)
Redemptions (17.9) (14.7) 22% (16.0) 12%
Net exchanges (0.1) (0.2) (50%) (0.4) (75%)
-----------------------------------------
Net new flows (5.6) -- (100%) 1.4 N/A
Reinvested distributions 2.6 3.7 (30%) 1.2 117%
-----------------------------------------
Net flows (3.0) 3.7 N/A 2.6 N/A
Distributions (3.4) (4.4) (23%) (1.9) 79%
(Depreciation)/appreciation
and other (31.9) (4.1) 678% 2.5 N/A
----------------------------------------------------------------------
Ending assets $291.7 $330.0 (12%) $369.7 (21%)
----------------------------------------------------------------------
Other assets, including international and institutional
Beginning assets $250.2 $256.3 (2%) $257.5 (3%)
----------------------------------------------------------------------
Sales 29.0 30.7 (6%) 34.8 (17%)
Redemptions (32.1) (29.7) 8% (26.8) 20%
Net exchanges 0.1 0.2 (50%) 0.4 (75%)
-----------------------------------------
Net new flows (3.0) 1.2 N/A 8.4 N/A
Reinvested distributions 0.6 0.3 100% 0.4 50%
-----------------------------------------
Net flows (2.4) 1.5 N/A 8.8 N/A
Distributions (0.6) (0.3) 100% (0.4) 50%
(Depreciation)/appreciation
and other (31.6) (7.3) 333% 10.3 N/A
----------------------------------------------------------------------
Ending assets $215.6 $250.2 (14%) $276.2 (22%)
----------------------------------------------------------------------
Total Ending Assets $507.3 $580.2 (13%) $645.9 (21%)
======================================================================
Total Assets Under Management
Beginning assets $580.2 $591.1 (2%) $624.0 (7%)
----------------------------------------------------------------------
Sales 41.4 45.6 (9%) 52.6 (21%)
Redemptions (50.0) (44.4) 13% (42.8) 17%
-----------------------------------------
Net new flows (8.6) 1.2 N/A 9.8 N/A
Reinvested distributions 3.2 4.0 (20%) 1.6 100%
-----------------------------------------
Net flows (5.4) 5.2 N/A 11.4 N/A
Distributions (4.0) (4.7) (15%) (2.3) 74%
(Depreciation)/appreciation
and other (63.5) (11.4) 457% 12.8 N/A
----------------------------------------------------------------------
Ending assets $507.3 $580.2 (13%) $645.9 (21%)
======================================================================
(1) U.S. retail assets as of September 30, 2008 included
institutional assets totaling approximately $28.3 billion that were
invested in U.S. retail fund and annuity products. Total institutional
and high net-worth assets at September 30, 2008 were approximately
$160.5 billion, of which high net-worth assets comprised $9.7 billion.
ASSETS UNDER MANAGEMENT AND FLOWS BY INVESTMENT OBJECTIVE
(in billions) Three months ended
-----------------------------
30-Sep-08 30-Jun-08 30-Sep-07
--------- --------- ---------
Global/international equity
Beginning assets $233.7 $243.4 $274.4
----------------------------------------------------------------------
Sales 9.9 15.1 21.9
Redemptions (16.4) (16.8) (17.8)
Net exchanges (1.0) 0.1 0.2
-----------------------------
Net new flows (7.5) (1.6) 4.3
Reinvested distributions 0.7 1.0 0.1
-----------------------------
Net flows (6.8) (0.6) 4.4
Distributions (0.8) (1.1) (0.1)
(Depreciation)/appreciation and other (35.8) (8.0) 8.0
----------------------------------------------------------------------
Ending assets 190.3 233.7 286.7
----------------------------------------------------------------------
Domestic (U.S.) equity
Beginning assets 82.5 84.8 101.6
----------------------------------------------------------------------
Sales 3.3 3.3 4.7
Redemptions (5.4) (3.8) (4.4)
Net exchanges (0.1) -- (0.3)
-----------------------------
Net new flows (2.2) (0.5) --
Reinvested distributions 0.8 0.6 --
-----------------------------
Net flows (1.4) 0.1 --
Distributions (1.0) (0.6) (0.1)
Depreciation and other (7.2) (1.8) (1.0)
----------------------------------------------------------------------
Ending assets 72.9 82.5 100.5
----------------------------------------------------------------------
Hybrid
Beginning assets 109.5 109.8 112.7
----------------------------------------------------------------------
Sales 2.8 3.6 4.7
Redemptions (3.9) (3.4) (2.9)
Net exchanges (0.3) -- (0.1)
-----------------------------
Net new flows (1.4) 0.2 1.7
Reinvested distributions 0.7 1.3 0.6
-----------------------------
Net flows (0.7) 1.5 2.3
Distributions (1.0) (1.5) (0.9)
(Depreciation)/appreciation and other (13.9) (0.3) 3.1
----------------------------------------------------------------------
Ending assets 93.9 109.5 117.2
----------------------------------------------------------------------
Tax-free income
Beginning assets 61.6 59.6 58.2
----------------------------------------------------------------------
Sales 3.2 3.7 2.2
Redemptions (2.1) (2.0) (1.8)
Net exchanges -- -- (0.1)
-----------------------------
Net new flows 1.1 1.7 0.3
Reinvested distributions 0.4 0.4 0.4
-----------------------------
Net flows 1.5 2.1 0.7
Distributions (0.7) (0.7) (0.6)
(Depreciation)/appreciation and other (2.7) 0.6 0.7
----------------------------------------------------------------------
Ending assets $ 59.7 $ 61.6 $ 59.0
----------------------------------------------------------------------
Global/international taxable fixed-
income
Beginning assets $ 54.3 $ 54.5 $ 38.6
----------------------------------------------------------------------
Sales 17.5 15.1 14.9
Redemptions (16.5) (13.1) (11.3)
Net exchanges 0.2 (0.3) --
-----------------------------
Net new flows 1.2 1.7 3.6
Reinvested distributions 0.3 0.3 0.2
-----------------------------
Net flows 1.5 2.0 3.8
Distributions (0.2) (0.3) (0.2)
(Depreciation)/appreciation and other (2.9) (1.9) 2.1
----------------------------------------------------------------------
Ending assets 52.7 54.3 44.3
----------------------------------------------------------------------
Domestic (U.S.) taxable fixed-income
Beginning assets 31.6 31.5 32.8
----------------------------------------------------------------------
Sales 1.8 2.0 1.6
Redemptions (2.3) (1.9) (2.5)
Net exchanges 0.4 0.2 (0.1)
-----------------------------
Net new flows (0.1) 0.3 (1.0)
Reinvested distributions 0.2 0.3 0.2
-----------------------------
Net flows 0.1 0.6 (0.8)
Distributions (0.3) (0.4) (0.3)
(Depreciation)/appreciation and other (0.9) (0.1) 0.1
----------------------------------------------------------------------
Ending assets 30.5 31.6 31.8
----------------------------------------------------------------------
Money market
Beginning assets 7.0 7.5 5.7
----------------------------------------------------------------------
Sales 2.9 2.8 2.6
Redemptions (3.4) (3.4) (2.1)
Net exchanges 0.8 -- 0.4
-----------------------------
Net new flows 0.3 (0.6) 0.9
Reinvested distributions 0.1 0.1 0.1
-----------------------------
Net flows 0.4 (0.5) 1.0
Distributions -- (0.1) (0.1)
(Depreciation)/appreciation and other (0.1) 0.1 (0.2)
----------------------------------------------------------------------
Ending assets 7.3 7.0 6.4
----------------------------------------------------------------------
Ending Assets Under Management $507.3 $580.2 $645.9
======================================================================
Conference Call Information
President and Chief Executive Officer of Franklin Resources, Inc.,
Greg Johnson, and Executive Vice President and Chief Financial
Officer, Ken Lewis, will lead a live conference call on Thursday,
October 23, 2008 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to
discuss Franklin Resources' fiscal fourth quarter 2008 financial
results and answer analysts' questions.
Access to the teleconference will be available via
franklintempleton.com 10 minutes before the start of the call or by
dialing (877) 480-6346 in the U.S. or (706) 902-1906 internationally.
A replay of the call will be archived on the "Our Company" page of
franklintempleton.com through November 6, 2008. The replay can also be
accessed by calling (800) 642-1687 in the U.S. or (706) 645-9291
internationally using access code 64624609, after 5:30 p.m. Eastern
Time on October 23, 2008, through 11:59 p.m. Eastern Time on November
6, 2008.
Questions regarding the teleconference call should be directed to
Franklin Resources, Inc., Investor Relations at (650) 312-4091 or
Corporate Communications at (650) 525-7298.
Franklin Resources, Inc. (NYSE:BEN) is a global investment
management organization operating as Franklin Templeton Investments.
Franklin Templeton Investments provides global and domestic investment
management solutions managed by its Franklin, Templeton, Mutual
Series, Fiduciary Trust, Darby and Bissett investment teams. The San
Mateo, CA-based company has more than 60 years of investment
experience and over $507 billion in assets under management as of
September 30, 2008. For more information, please call 1-800/DIAL
BEN(R) or visit franklintempleton.com.
Supplemental Information
Investors should carefully consider a fund's investment goals,
risks, charges and expenses before investing. To obtain a prospectus,
which contains this and other information, for any U.S.-registered
Franklin Templeton fund, investors should talk to their financial
advisors or call Franklin/Templeton Distributors, Inc. at 1-800/DIAL
BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing.
1. Nothing in this section shall be considered a solicitation to buy
or an offer to sell a security to any person in any jurisdiction
where such offer, solicitation, purchase or sale would be
unlawful under the securities laws of such jurisdiction.
Franklin/Templeton Distributors, Inc., One Franklin Parkway, San
Mateo, CA, is the funds' principal distributor and a wholly owned
subsidiary of Franklin Resources, Inc. The information in the
"Global Business Developments" section above is being provided
for information purposes only.
2. Lipper rankings for Franklin Templeton U.S.-registered mutual
funds are based on Class A shares. Franklin Templeton funds are
compared against a universe of all share classes.
3. Lipper calculates averages by taking all the funds and share
classes in a peer group and averaging their total returns for the
periods indicated. Lipper tracks 149 peer groups of U.S. retail
mutual funds, and the groups vary in size from 9 to 918 funds.
Lipper total return calculations include reinvested dividends and
capital gains, but do not include sales charges or expense
subsidization by the manager. Results may have been different if
these or other factors had been considered.
4. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin
Templeton long-term mutual funds tracked by Lipper, 26, 31, 41
and 42 funds ranked in the top quartile and 27, 32, 28 and 19
funds ranked in the second quartile, for the one-, three-, five-
and 10-year periods, respectively, for their respective Lipper
peer groups.
5. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin
Templeton equity mutual funds tracked by Lipper, 16, 13, 14 and
16 funds ranked in the top quartile and 12, 12, 14 and 8 funds
ranked in the second quartile, for the one-, three-, five- and
10-year periods, respectively, for their respective Lipper peer
groups.
6. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin
Templeton non-money market fixed-income mutual funds tracked by
Lipper, 10, 18, 27 and 26 funds ranked in the top quartile and
15, 20, 14 and 11 funds ranked in the second quartile, for the
one-, three-, five- and 10-year periods, respectively, for their
respective Lipper peer groups.
7. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin equity
mutual funds tracked by Lipper, 11, 9, 9 and 9 funds ranked in
the top quartile and 9, 9, 10 and 6 funds ranked in the second
quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective Lipper peer groups.
8. Source: Lipper(R) Inc., 9/30/08. Of the eligible Templeton equity
mutual funds tracked by Lipper, 2, 1, 1 and 2 funds ranked in the
top quartile and 2, 1, 3 and 1 funds ranked in the second
quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective Lipper peer groups.
9. Source: Lipper(R) Inc., 9/30/08. Of the eligible Mutual Series
equity mutual funds tracked by Lipper, 3, 3, 4 and 5 funds ranked
in the top quartile and 1, 2, 1 and 1 funds ranked in the second
quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective Lipper peer groups.
10. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin
Templeton non-money market taxable fixed- income mutual funds
tracked by Lipper, 5, 6, 3 and 2 funds ranked in the top
quartile and 3, 4, 5 and 5 funds ranked in the second quartile,
for the one-, three-, five- and 10-year periods, respectively,
for their respective Lipper peer groups.
11. Source: Lipper(R) Inc., 9/30/08. Of the eligible Franklin
Templeton non-money market tax-free fixed- income mutual funds
tracked by Lipper, 5, 12, 24 and 24 funds ranked in the top
quartile and 12, 16, 9 and 6 funds ranked in the second
quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective Lipper peer groups.
Forward-Looking Statements:
The financial results in this press release are preliminary.
Statements in this press release regarding Franklin Resources, Inc.
and its subsidiaries, which are not historical facts, are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements involve a number of known and unknown risks, uncertainties
and other important factors, some of which are listed below, that
could cause the actual results and outcomes to differ materially from
any future results or outcomes expressed or implied by such
forward-looking statements. These and other risks, uncertainties and
other important factors are described in more detail in Franklin's
recent filings with the U.S. Securities and Exchange Commission,
including, without limitation, in Risk Factors and Management's
Discussion and Analysis of Financial Condition and Results of
Operations in Franklin's Annual Report on Form 10-K for the fiscal
year ended September 30, 2007, and Franklin's subsequent Form 10-Q
filings.
-- We are subject to extensive and complex, overlapping and
frequently changing rules, regulations and legal
interpretations.
-- Regulatory and legislative actions and reforms have made the
regulatory environment in which we operate more costly and
future actions and reforms could adversely impact our assets
under management, increase costs and negatively impact our
profitability and future financial results.
-- Our ability to maintain the beneficial tax treatment we
anticipate with respect to non-U.S. earnings we have
repatriated is based on current interpretations of the
American Jobs Creation Act of 2004 (the "Jobs Act") and timely
and permitted use of such amounts in accordance with our
domestic reinvestment plan and the Jobs Act.
-- Any significant limitation or failure of our software
applications and other technology systems that are critical to
our operations could constrain our operations.
-- We face risks, and corresponding potential costs and expenses,
associated with conducting operations and growing our business
in numerous countries.
-- We depend on key personnel and our financial performance could
be negatively affected by the loss of their services.
-- Strong competition from numerous and sometimes larger
companies with competing offerings and products could limit or
reduce sales of our products, potentially resulting in a
decline in our market share, revenues and net income.
-- Changes in the distribution and sales channels on which we
depend could reduce our revenues and hinder our growth.
-- The amount and mix of our assets under management are subject
to significant fluctuations and could negatively impact our
revenues and income.
-- Our increasing focus on international markets as a source of
investments and sales of investment products subjects us to
increased exchange rate and other risks in connection with
earnings and income generated overseas.
-- Poor investment performance of our products could affect our
sales or reduce the level of assets under management,
potentially negatively impacting our revenues and income.
-- We could suffer losses in earnings or revenue if our
reputation is harmed.
-- Our future results are dependent upon maintaining an
appropriate level of expenses, which is subject to
fluctuation.
-- Our ability to successfully integrate widely varied business
lines can be impeded by systems and other technological
limitations.
-- Our inability to successfully recover should we experience a
disaster or other business continuity problem could cause
material financial loss, loss of human capital, regulatory
actions, reputational harm or legal liability.
-- Certain of the portfolios we manage, including our emerging
market portfolios, are vulnerable to significant
market-specific political, economic or other risks, any of
which may negatively impact our revenues and income.
-- Our revenues, earnings and income could be adversely affected
if the terms of our management agreements are significantly
altered or these agreements are terminated by the funds we
advise.
-- Diverse and strong competition limits the interest rates that
we can charge on consumer loans.
-- Civil litigation arising out of or relating to previously
settled regulatory and governmental investigations, regulatory
and governmental investigations and/or examinations, and the
legal risks associated with our business, could adversely
impact our assets under management, increase costs and
negatively impact our profitability and/or our future
financial results.
-- Our ability to meet cash needs depends upon certain factors,
including our asset value, credit worthiness and the market
value of our stock.
Source: Franklin Resources, Inc.