SAN MATEO, CA, Apr 28, 2011 (MARKETWIRE via COMTEX) --
Franklin Resources, Inc. (the "Company") (NYSE: BEN) today
announced net income(1) of $503.1 million or $2.25 per diluted share
for the quarter ended March 31, 2011, as compared to $501.2 million
or $2.23 per diluted share in the previous quarter and $356.7 million
or $1.55 per diluted share for the quarter ended March 31, 2010.
Quarter Quarter % Change Quarter % Change
Ended Ended Qtr. Vs. Ended Year vs.
31-Mar-11 31-Dec-10 Qtr. 31-Mar-10 Year
----------- ----------- -------- ----------- --------
Financial Results
Operating revenues
(in millions) $ 1,749.6 $ 1,700.3 3% $ 1,413.1 24%
Operating income
(in millions) 629.5 659.2 (5)% 461.1 37%
Operating margin 36.0% 38.8% 32.6%
Net income(1)
(in millions) $ 503.1 $ 501.2 --% $ 356.7 41%
Diluted earnings
per share $ 2.25 $ 2.23 1% $ 1.55 45%
Assets Under Management
(in billions)
Ending $ 703.5 $ 670.7 5% $ 586.8 20%
Simple monthly
average 687.2 655.6 5% 561.2 22%
Net new flows 8.4 3.2 163% 17.4 (52)%
Non-operating income for the quarter ended March 31, 2011 included
$47.7 million of investment and other income, net, as compared to
$47.0 million for the prior quarter and $42.5 million for the quarter
ended March 31, 2010.
Total assets under management ("AUM") were $703.5 billion at March
31, 2011, up $32.8 billion or 5% during the quarter. The increase was
driven by record long-term sales of $55.6 billion and $23.4 billion
in market appreciation, which were partially offset by long-term
redemptions of $46.4 billion. AUM increased $116.7 billion or 20%
year over year, primarily due to market appreciation of $68.7 billion
and net new flows of $49.8 billion.
Cash and cash equivalents and investments were $8.4 billion at March
31, 2011, as compared to $6.8 billion at September 30, 2010. Included
in the current quarter total is $1.1 billion related to consolidated
variable interest entities as a result of new accounting guidance
adopted effective October 1, 2010. Total stockholders' equity was
$8.4 billion at March 31, 2011, as compared to $7.7 billion at
September 30, 2010. The Company had 221.8 million shares of common
stock outstanding at March 31, 2011, as compared to 224.0 million
shares outstanding at September 30, 2010. During the quarter ended
March 31, 2011, the Company repurchased 1.8 million shares of its
common stock for a total cost of $215.0 million.
Conference Call Information
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 approximately 8:30 a.m. Eastern Time. They will
also lead a live teleconference today at 4:30 p.m. Eastern Time to
answer questions. Analysts and investors are encouraged to contact
Investor Relations for any clarifications or questions on the
contents of the earnings release.
Access to the pre-recorded audio commentary and accompanying slides
are available at franklinresources.com. The pre-recorded audio
commentary can also be accessed by dialing (888) 843-7419 in the U.S.
and Canada or (630) 652-3042 internationally using access code
29520444, any time through 11:59 p.m. Eastern Time on May 12, 2011.
Access to the live teleconference will be available at
franklinresources.com or by dialing (888) 895-5271 in the U.S. and
Canada or (847) 619-6547 internationally. A replay of the call can
also be accessed by calling (888) 843-7419 in the U.S. and Canada or
(630) 652-3042 internationally using access code 29520447, any time
through 11:59 p.m. Eastern Time on May 12, 2011.
Questions regarding the pre-recorded audio commentary or live
teleconference should be directed to Franklin Resources, Inc.,
Investor Relations at (650) 312-4091 or Corporate Communications at
(650) 312-2245.
Lipper Performance Rankings of Franklin Templeton's U.S.-Registered
Long-Term Mutual Funds2,3:
Period Ended March 31, 2011
-------------------------------
Percent of Assets in Top Two
Quartiles(4)
-------------------------------
1-Year 3-Year 5-Year 10-Year
------- ------- ------- -------
Franklin Templeton(5) 52% 82% 72% 89%
Franklin Templeton Equity(6) 64% 83% 62% 88%
Franklin Templeton Fixed-Income(7) 37% 81% 85% 91%
Franklin Equity(8) 70% 85% 81% 82%
Templeton Equity(9) 87% 95% 20% 92%
Mutual Series Equity(10) 1% 54% 59% 100%
Franklin Templeton Taxable Fixed-Income(11) 63% 70% 77% 80%
Franklin Templeton Tax-Free Fixed-Income(12) 15% 90% 91% 100%
Performance quoted above represents past performance, which cannot
predict or guarantee future results.
Investors should carefully consider a fund's investment goals, risks,
charges and expenses before investing. To obtain a summary prospectus
and/or 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 a prospectus
carefully before investing.
Franklin Resources, Inc.
Preliminary Condensed Consolidated Statements of Income(13)
Unaudited
(in thousands, Three Months Ended Six Months Ended
except per March 31, March 31,
share data ---------------------- % ---------------------- %
and AUM) 2011 2010 Change 2011 2010 Change
-------------- ---------- ---------- ------ ---------- ---------- ------
Operating
Revenues
Investment
management
fees $1,076,716 $ 836,077 29% $2,117,594 $1,642,741 29%
Sales and
distribution
fees 587,143 496,781 18% 1,164,975 984,834 18%
Shareholder
servicing
fees 75,750 71,376 6% 147,805 140,919 5%
Other, net 9,954 8,879 12% 19,502 22,030 (11)%
---------- ---------- ------ ---------- ---------- ------
Total
operating
revenues 1,749,563 1,413,113 24% 3,449,876 2,790,524 24%
---------- ---------- ------ ---------- ---------- ------
Operating
Expenses
Sales,
distribution
and marketing 676,935 557,398 21% 1,324,088 1,092,991 21%
Compensation
and benefits 315,810 271,041 17% 608,204 525,353 16%
Information
systems and
technology 41,477 39,809 4% 81,844 77,812 5%
Occupancy 32,703 29,799 10% 63,571 60,406 5%
General,
administrative
and other 53,156 53,931 (1)% 83,453 105,850 (21)%
---------- ---------- ------ ---------- ---------- ------
Total
operating
expenses 1,120,081 951,978 18% 2,161,160 1,862,412 16%
---------- ---------- ------ ---------- ---------- ------
Operating
Income 629,482 461,135 37% 1,288,716 928,112 39%
---------- ---------- ------ ---------- ---------- ------
Other Income
(Expenses)
Consolidated
sponsored
investment
products
gains, net 9,770 5,669 72% 9,032 20,741 (56)%
Investment
and other
income, net 47,681 42,488 12% 94,747 75,466 26%
Interest
expense (8,364) (936) 794% (16,259) (1,678) 869%
---------- ---------- ------ ---------- ---------- ------
Other
income, net 49,087 47,221 4% 87,520 94,529 (7)%
---------- ---------- ------ ---------- ---------- ------
Income before
taxes 678,569 508,356 33% 1,376,236 1,022,641 35%
Taxes on
income 183,004 149,946 22% 390,554 306,682 27%
---------- ---------- ------ ---------- ---------- ------
Net income 495,565 358,410 38% 985,682 715,959 38%
Less: net
income (loss)
attributable to
Nonredeemable
non-
controlling
interests (7,577) 204 NM (19,454) 420 NM
Redeemable
non-
controlling
interests 42 1,521 (97)% 879 3,251 (73)%
---------- ---------- ------ ---------- ---------- ------
Net Income
Attributable
to Franklin
Resources,
Inc. $ 503,100 $ 356,685 41% $1,004,257 $ 712,288 41%
========== ========== ====== ========== ========== ======
Earnings per
Share(14)
Basic $ 2.26 $ 1.56 45% $ 4.49 $ 3.11 44%
Diluted 2.25 1.55 45% 4.47 3.10 44%
Dividends per
Share $ 0.25 $ 0.22 14% $ 0.50 $ 3.44 (85)%
Average Shares
Outstanding
(in thousands)
Basic 221,696 227,046 (2)% 222,440 227,474 (2)%
Diluted 222,696 228,300 (2)% 223,496 228,786 (2)%
Operating
Margin(15) 36.0% 32.6% 37.4% 33.3%
AUM(16)(in
billions)
Ending $ 703.5 $ 586.8 20% $ 703.5 $ 586.8 20%
Simple
monthly
average 687.2 561.2 22% 671.5 547.3 23%
Net new flows 8.4 17.4 (52)% 11.6 31.7 (63)%
Franklin Resources, Inc.
Preliminary Condensed Consolidated Statements of Income(13)
Unaudited
(in thousands, except per share data, Three Months Ended
employees and billable shareholder ---------------------- %
accounts) 31-Mar-11 31-Dec-10 Change
-------------------------------------- ---------- ---------- ------
Operating Revenues
Investment management fees $1,076,716 $1,040,878 3%
Sales and distribution fees 587,143 577,832 2%
Shareholder servicing fees 75,750 72,055 5%
Other, net 9,954 9,548 4%
---------- ---------- ------
Total operating revenues 1,749,563 1,700,313 3%
---------- ---------- ------
Operating Expenses
Sales, distribution and marketing 676,935 647,153 5%
Compensation and benefits 315,810 292,394 8%
Information systems and technology 41,477 40,367 3%
Occupancy 32,703 30,868 6%
General, administrative and other 53,156 30,297 75%
---------- ---------- ------
Total operating expenses 1,120,081 1,041,079 8%
---------- ---------- ------
Operating Income 629,482 659,234 (5)%
---------- ---------- ------
Other Income (Expenses)
Consolidated sponsored investment
products gains (losses), net 9,770 (738) NM
Investment and other income
(losses), net 47,681 47,066 1%
Interest expense (8,364) (7,895) 6%
---------- ---------- ------
Other income (expenses), net 49,087 38,433 28%
---------- ---------- ------
Income before taxes 678,569 697,667 (3)%
Taxes on income 183,004 207,550 (12)%
---------- ---------- ------
Net income 495,565 490,117 1%
Less: net income (loss)
attributable to
Nonredeemable noncontrolling
interests (7,577) (11,877) (36)%
Redeemable noncontrolling
interests 42 837 (95)%
---------- ---------- ------
Net Income Attributable to Franklin
Resources, Inc. $ 503,100 $ 501,157 --%
========== ========== ======
Earnings per Share(14)
Basic $ 2.26 $ 2.24 1%
Diluted 2.25 2.23 1%
Dividends per Share $ 0.25 $ 0.25 --%
Average Shares Outstanding(in
thousands)
Basic 221,696 223,169 (1)%
Diluted 222,696 224,253 (1)%
Operating Margin(15) 36.0% 38.8%
Employees 8,125 7,989 2%
Billable Shareholder Accounts(in
millions) 23.7 22.0 8%
(in thousands, except per share data, Three Months Ended
employees and billable shareholder ----------------------------------
accounts) 30-Sep-10 30-June-10 31-Mar-10
-------------------------------------- ---------- ---------- ----------
Operating Revenues
Investment management fees $ 919,367 $ 915,866 $ 836,077
Sales and distribution fees 529,563 529,313 496,781
Shareholder servicing fees 69,981 72,976 71,376
Other, net 9,493 15,916 8,879
---------- ---------- ----------
Total operating revenues 1,528,404 1,534,071 1,413,113
---------- ---------- ----------
Operating Expenses
Sales, distribution and marketing 599,028 590,876 557,398
Compensation and benefits 275,300 280,333 271,041
Information systems and technology 47,629 40,156 39,809
Occupancy 33,699 35,862 29,799
General, administrative and other 63,744 65,280 53,931
---------- ---------- ----------
Total operating expenses 1,019,400 1,012,507 951,978
---------- ---------- ----------
Operating Income 509,004 521,564 461,135
---------- ---------- ----------
Other Income (Expenses)
Consolidated sponsored investment
products gains (losses), net 2,426 (14,670) 5,669
Investment and other income
(losses), net 50,933 (7,262) 42,488
Interest expense (9,992) (4,836) (936)
---------- ---------- ----------
Other income (expenses), net 43,367 (26,768) 47,221
---------- ---------- ----------
Income before taxes 552,371 494,796 508,356
Taxes on income 176,517 135,113 149,946
---------- ---------- ----------
Net income 375,854 359,683 358,410
Less: net income (loss)
attributable to
Nonredeemable noncontrolling
interests 98 180 204
Redeemable noncontrolling
interests 2,850 (992) 1,521
---------- ---------- ----------
Net Income Attributable to Franklin
Resources, Inc. $ 372,906 $ 360,495 $ 356,685
========== ========== ==========
Earnings per Share(14)
Basic $ 1.66 $ 1.59 $ 1.56
Diluted 1.65 1.58 1.55
Dividends per Share $ 0.22 $ 0.22 $ 0.22
Average Shares Outstanding(in
thousands)
Basic 223,864 225,626 227,046
Diluted 224,958 226,806 228,300
Operating Margin(15) 33.3% 34.0% 32.6%
Employees 7,927 7,869 7,758
Billable Shareholder Accounts(in
millions) 21.1 23.3 22.7
AUM AND FLOWS
Three Months Ended Six Months Ended
March 31, March 31,
------------------ % ------------------ %
(in billions) 2011 2010 Change 2011 2010 Change
---------------------- -------- -------- ------ -------- -------- ------
Beginning AUM $ 670.7 $ 553.5 21% $ 644.9 $ 523.4 23%
Long-term sales 55.6 46.4 20% 110.5 88.6 25%
Long-term
redemptions (46.4) (29.3) 58% (99.2) (57.5) 73%
Net cash management (0.8) 0.3 NM 0.3 0.6 (50)%
-------- -------- ------ -------- -------- ------
Net new flows 8.4 17.4 (52)% 11.6 31.7 (63)%
Reinvested
distributions 2.7 2.1 29% 8.5 5.8 47%
-------- -------- ------ -------- -------- ------
Net flows 11.1 19.5 (43)% 20.1 37.5 (46)%
Distributions (3.3) (2.7) 22% (10.6) (7.2) 47%
Acquisitions 1.6 -- NM 1.6 -- NM
Appreciation and
other 23.4 16.5 42% 47.5 33.1 44%
-------- -------- ------ -------- -------- ------
Ending AUM $ 703.5 $ 586.8 20% $ 703.5 $ 586.8 20%
======== ======== ====== ======== ======== ======
AUM BY INVESTMENT OBJECTIVE
%
(in billions) 31-Mar-11 31-Dec-10 Change 30-Sep-10 30-June-10 31-Mar-10
------------------ --------- --------- ------ --------- ---------- ---------
Equity
Global/
international $ 225.4 $ 219.1 3% $ 204.2 $ 172.9 $ 193.2
United States 83.5 77.0 8% 69.5 63.2 69.8
--------- --------- ------ --------- ---------- ---------
Total equity 308.9 296.1 4% 273.7 236.1 263.0
--------- --------- ------ --------- ---------- ---------
Hybrid 113.4 106.1 7% 110.8 101.6 107.3
Fixed-Income
Tax-free 67.5 71.4 (5)% 77.7 73.8 71.8
Taxable
Global/
international 160.6 144.7 11% 130.7 109.4 97.0
United States 47.1 45.9 3% 45.4 43.3 41.9
--------- --------- ------ --------- ---------- ---------
Total fixed-
income 275.2 262.0 5% 253.8 226.5 210.7
Cash Management 6.0 6.5 (8)% 6.6 6.3 5.8
--------- --------- ------ --------- ---------- ---------
Total AUM $ 703.5 $ 670.7 5% $ 644.9 $ 570.5 $ 586.8
========= ========= ====== ========= ========== =========
Simple Monthly
Average AUM for
the Three-Month
Period $ 687.2 $ 655.6 5% $ 604.7 $ 583.1 $ 561.2
AUM AND FLOWS - UNITED STATES AND INTERNATIONAL
As of and for the Three Months Ended
--------------------------------------------------
% of % of % of
(in billions) 31-Mar-11 Total 31-Dec-10 Total 31-Mar-10 Total
------------------------- --------- ----- --------- ----- --------- -----
Long-Term Sales
United States $ 28.5 51% $ 27.0 49% $ 24.4 53%
International 27.1 49% 27.9 51% 22.0 47%
--------- ----- --------- ----- --------- -----
Total long-term sales $ 55.6 100% $ 54.9 100% $ 46.4 100%
========= ===== ========= ===== ========= =====
Long-Term Redemptions
United States $ (22.4) 48% $ (31.7) 60% $ (16.1) 55%
International (24.0) 52% (21.1) 40% (13.2) 45%
--------- ----- --------- ----- --------- -----
Total long-term
redemptions $ (46.4) 100% $ (52.8) 100% $ (29.3) 100%
========= ===== ========= ===== ========= =====
AUM
United States $ 481.2 68% $ 461.4 69% $ 425.2 72%
International 222.3 32% 209.3 31% 161.6 28%
--------- ----- --------- ----- --------- -----
Total AUM $ 703.5 100% $ 670.7 100% $ 586.8 100%
========= ===== ========= ===== ========= =====
AUM AND FLOWS BY INVESTMENT OBJECTIVE
(in billions) Equity
-----------------
Global/
for the three months ended Inter- United
March 31, 2011 national States Hybrid
------------------------------- -------- -------- --------
AUM at January 1, 2011 $ 219.1 $ 77.0 $ 106.1
Long-term sales 14.6 6.5 5.9
Long-term redemptions (19.1) (4.6) (4.0)
Net exchanges (0.2) 0.5 0.6
Net cash management -- -- --
-------- -------- --------
Net new flows (4.7) 2.4 2.5
Reinvested distributions 0.2 -- 0.8
-------- -------- --------
Net flows (4.5) 2.4 3.3
Distributions (0.1) -- (1.1)
Acquisitions 1.6 -- --
Appreciation (depreciation)
and other 9.3 4.1 5.1
-------- -------- --------
AUM at March 31, 2011 $ 225.4 $ 83.5 $ 113.4
======== ======== ========
(in billions) Fixed-Income
--------------------------
Taxable
Global/ Taxable Cash
for the three months ended Inter- United Manage-
March 31, 2011 Tax-Free national States ment Total
------------------------------- -------- -------- -------- ------- --------
AUM at January 1, 2011 $ 71.4 $ 144.7 $ 45.9 $ 6.5 $ 670.7
Long-term sales 2.1 22.0 4.5 -- 55.6
Long-term redemptions (4.6) (10.6) (3.5) -- (46.4)
Net exchanges (1.0) 0.3 (0.4) 0.2 --
Net cash management -- -- -- (0.8) (0.8)
-------- -------- -------- ------- --------
Net new flows (3.5) 11.7 0.6 (0.6) 8.4
Reinvested distributions 0.5 0.9 0.3 -- 2.7
-------- -------- -------- ------- --------
Net flows (3.0) 12.6 0.9 (0.6) 11.1
Distributions (0.8) (0.9) (0.4) -- (3.3)
Acquisitions -- -- -- -- 1.6
Appreciation (depreciation)
and other (0.1) 4.2 0.7 0.1 23.4
-------- -------- -------- ------- --------
AUM at March 31, 2011 $ 67.5 $ 160.6 $ 47.1 $ 6.0 $ 703.5
======== ======== ======== ======= ========
(in billions) Equity
-----------------
Global/
for the three months ended Inter- United
December 31, 2010 national States Hybrid
------------------------------- -------- -------- --------
AUM at October 1, 2010 $ 204.2 $ 69.5 $ 110.8
Long-term sales 15.6 4.3 5.1
Long-term redemptions (14.6) (3.8) (15.8)
Net exchanges 0.4 0.2 0.3
Net cash management -- -- --
-------- -------- --------
Net new flows 1.4 0.7 (10.4)
Reinvested distributions 1.6 1.1 1.1
-------- -------- --------
Net flows 3.0 1.8 (9.3)
Distributions (2.2) (1.1) (1.4)
Appreciation (depreciation)
and other 14.1 6.8 6.0
-------- -------- --------
AUM at December 31, 2010 $ 219.1 $ 77.0 $ 106.1
======== ======== ========
(in billions) Fixed-Income
--------------------------
Taxable
Global/ Taxable Cash
for the three months ended Inter- United Manage-
December 31, 2010 Tax-Free national States ment Total
------------------------------- -------- -------- -------- ------- --------
AUM at October 1, 2010 $ 77.7 $ 130.7 $ 45.4 $ 6.6 $ 644.9
Long-term sales 3.1 23.5 3.3 -- 54.9
Long-term redemptions (4.2) (11.5) (2.9) -- (52.8)
Net exchanges (0.9) 1.5 (0.2) (1.3) --
Net cash management -- -- -- 1.1 1.1
-------- -------- -------- ------- --------
Net new flows (2.0) 13.5 0.2 (0.2) 3.2
Reinvested distributions 0.5 1.2 0.3 -- 5.8
-------- -------- -------- ------- --------
Net flows (1.5) 14.7 0.5 (0.2) 9.0
Distributions (0.8) (1.4) (0.4) -- (7.3)
Appreciation (depreciation)
and other (4.0) 0.7 0.4 0.1 24.1
-------- -------- -------- ------- --------
AUM at December 31, 2010 $ 71.4 $ 144.7 $ 45.9 $ 6.5 $ 670.7
======== ======== ======== ======= ========
(in billions) Equity
-----------------
Global/
for the three months ended Inter- United
March 31, 2010 national States Hybrid
------------------------------- -------- -------- --------
AUM at January 1, 2010 $ 189.5 $ 66.3 $ 104.0
Long-term sales 11.7 3.0 4.1
Long-term redemptions (11.9) (3.2) (3.1)
Net exchanges (0.1) -- --
Net cash management -- -- --
-------- -------- --------
Net new flows (0.3) (0.2) 1.0
Reinvested distributions 0.2 -- 0.7
-------- -------- --------
Net flows (0.1) (0.2) 1.7
Distributions (0.1) -- (1.0)
Appreciation and other 3.9 3.7 2.6
-------- -------- --------
AUM at March 31, 2010 $ 193.2 $ 69.8 $ 107.3
======== ======== ========
(in billions) Fixed-Income
--------------------------
Taxable
Global/ Taxable Cash
for the three months ended Inter- United Manage-
March 31, 2010 Tax-Free national States ment Total
------------------------------- -------- -------- -------- ------- --------
AUM at January 1, 2010 $ 69.7 $ 77.5 $ 40.4 $ 6.1 $ 553.5
Long-term sales 3.6 20.3 3.7 -- 46.4
Long-term redemptions (2.3) (5.9) (2.9) -- (29.3)
Net exchanges -- 0.8 -- (0.7) --
Net cash management -- -- -- 0.3 0.3
-------- -------- -------- ------- --------
Net new flows 1.3 15.2 0.8 (0.4) 17.4
Reinvested distributions 0.5 0.5 0.2 -- 2.1
-------- -------- -------- ------- --------
Net flows 1.8 15.7 1.0 (0.4) 19.5
Distributions (0.8) (0.5) (0.3) -- (2.7)
Appreciation and other 1.1 4.3 0.8 0.1 16.5
-------- -------- -------- ------- --------
AUM at March 31, 2010 $ 71.8 $ 97.0 $ 41.9 $ 5.8 $ 586.8
======== ======== ======== ======= ========
Franklin Resources, Inc. 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 $703 billion in AUM as of March 31, 2011. For
more information about our company, please visit
franklinresources.com.
Notes
(1) Net income represents net income
attributable to Franklin Resources, Inc.
(2) 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.
(3) 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. Performance rankings for
other share classes may differ. 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 147 peer
groups of U.S. retail mutual funds, and the groups vary in size from
7 to 1,116 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) The source for
the figures in the table is Lipper(R) Inc., 3/31/11.
(5) Of the
eligible Franklin Templeton long-term mutual funds tracked by Lipper,
20, 38, 24 and 40 funds ranked in the top quartile and 29, 31, 31 and
24 funds ranked in the second quartile, for the one-, three-, five-
and 10-year periods, respectively, for their respective Lipper peer
groups.
(6) Of the eligible Franklin Templeton equity mutual funds
tracked by Lipper, 12, 27, 14 and 15 funds ranked in the top quartile
and 18, 9, 8 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) Of the eligible Franklin
Templeton non-money market fixed-income mutual funds tracked by
Lipper, 8, 11, 10 and 25 funds ranked in the top quartile and 11, 22,
23 and 13 funds ranked in the second quartile, for the one-, three-,
five- and 10-year periods, respectively, for their respective Lipper
peer groups.
(8) Of the eligible Franklin equity mutual funds
tracked by Lipper, 8, 20, 10 and 11 funds ranked in the top quartile
and 13, 4, 5 and 3 funds ranked in the second quartile, for the one-,
three-, five- and 10-year periods, respectively, for their respective
Lipper peer groups.
(9) Of the eligible Templeton equity mutual
funds tracked by Lipper, 3, 5, 2 and 2 funds ranked in the top
quartile and 4, 4, 2 and 4 funds ranked in the second quartile, for
the one-, three-, five- and 10-year periods, respectively, for their
respective Lipper peer groups.
(10) Of the eligible Mutual Series
equity mutual funds tracked by Lipper, 1, 2, 2 and 2 funds ranked in
the top quartile and 1, 1, 1 and 4 funds ranked in the second
quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective Lipper peer groups.
(11) Of the
eligible Franklin Templeton non-money market taxable fixed-income
mutual funds tracked by Lipper, 5, 4, 4 and 4 funds ranked in the top
quartile and 4, 5, 4 and 3 funds ranked in the second quartile, for
the one-, three-, five- and 10-year periods, respectively, for their
respective Lipper peer groups.
(12) Of the eligible Franklin
Templeton non-money market tax-free fixed-income mutual funds tracked
by Lipper, 3, 7, 6 and 21 funds ranked in the top quartile and 7, 17,
19 and 10 funds ranked in the second quartile, for the one-, three-,
five- and 10-year periods, respectively, for their respective Lipper
peer groups.
(13) Beginning with the quarter ended December 31,
2010, the Company introduced a new consolidated statement of income
presentation. The presentation change did not represent a restatement
of any previously published financial results. See the Company's Form
8-K filed with the U.S. Securities and Exchange Commission on January
11, 2011 for details.
(14) The computation of earnings per share
pursuant to the two-class method excludes from net income
attributable to Franklin Resources, Inc. the earnings allocated to
participating securities, which consist of nonvested stock and stock
unit awards that contain nonforfeitable rights to dividends or
dividend equivalents. Earnings allocated to participating securities
were $2.8 million, $2.1 million, $1.4 million, $2.0 million and $2.0
million for the three months ended March 31, 2011, December 31, 2010,
September 30, 2010, June 30, 2010 and March 31, 2010, respectively.
(15) Defined as operating income divided by operating revenues.
(16)
AUM consist of assets for which the Company provides various
investment management services as described in Item 1 "Business" in
Part I of its Form 10-K for the fiscal year ended September 30, 2010.
Forward-Looking Statements
The financial results in this press
release are preliminary. Statements in this press release 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.
When used in this press release, words or phrases generally written
in the future tense and/or preceded by words such as "will", "may",
"could", "expect", "believe", "anticipate", "intend", "plan", "seek",
"estimate" or other similar words are forward-looking statements.
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 actual results and outcomes to differ
materially from any future results or outcomes expressed or implied
by such forward-looking statements. Forward-looking statements are
based on our current expectations and assumptions regarding our
business, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject to
inherent uncertainties, risks and changes in circumstances that are
difficult to predict. We caution you therefore against relying on any
of these forward-looking statements. They are neither statements of
historical fact nor guarantees or assurances of future performance.
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, 2010 and Franklin's
subsequent Quarterly Reports on Form 10-Q:
-- Volatility and disruption of the capital and credit markets, and
adverse changes in the global economy, may significantly affect our
results of operations and may put pressure on our financial results.
-- The amount and mix of our AUM are subject to significant fluctuations.
-- 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 AUM, increase costs and
negatively impact our profitability and future financial results.
-- Changes in tax laws or exposure to additional income tax liabilities
could have a material impact on our financial condition, results of
operations and liquidity.
-- Any significant limitation or failure of our software applications,
technology or other systems that are critical to our operations could
constrain our operations.
-- Our investment management business operations are complex and a
failure to properly perform operational tasks or the misrepresentation
of our products and services could have an adverse effect on our
revenues and income.
-- 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 third-party distribution and sales channels on which we
depend could reduce our revenues and hinder our growth.
-- 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 AUM, 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
and other sponsored investment products we advise.
-- Regulatory and governmental examinations and/or investigations,
litigation and the legal risks associated with our business, could
adversely impact our AUM, increase costs and negatively impact our
profitability and/or our future financial results.
-- Our ability to meet cash needs depends upon certain factors, including
the market value of our assets, operating cash flows and our perceived
creditworthiness.
-- Diverse and strong competition limits the interest rates that we can
charge on consumer loans.
-- Our business could be negatively affected if we or our banking
subsidiaries fail to remain well capitalized, and liquidity needs
could affect our banking business.
-- We are dependent on the earnings of our subsidiaries.
Any forward-looking statement made by us in this press release speaks
only as of the date on which it is made. Factors or events that could
cause our actual results to differ may emerge from time to time, and
it is not possible for us to predict all of them. We undertake no
obligation to publicly update any forward-looking statement, whether
as a result of new information, future developments or otherwise,
except as may be required by law.
Contact:
Franklin Resources, Inc.
Investor Relations:
Brian Sevilla
(650) 312-4091
Corporate Communications:
Matt Walsh
(650) 312-2245
franklinresources.com
SOURCE: Franklin Resources, Inc.