SAN MATEO, CA -- (Marketwire) -- 05/02/12 -- Franklin Resources, Inc. (the "Company") (NYSE: BEN) today announced net income(1) of $503.2 million or $2.32 per diluted share for the quarter ended March 31, 2012, as compared to $480.8 million or $2.20 per diluted share for the previous quarter and $503.1 million or $2.25 per diluted share for the quarter ended March 31, 2011.
Quarter Ended % Change Quarter % Change
-------------------- Qtr. vs. Ended Year vs.
31-Mar-12 31-Dec-11 Qtr. 31-Mar-11 Year
--------- --------- -------- --------- --------
Financial Results
($ in millions,
except per share
amounts)
Operating revenues $ 1,799.3 $ 1,701.9 6% $ 1,749.6 3%
Operating income 617.1 632.4 (2)% 629.5 (2)%
Operating margin 34.3% 37.2% 36.0%
Net income(1) $ 503.2 $ 480.8 5% $ 503.1 0%
Diluted earnings per
share $ 2.32 $ 2.20 5% $ 2.25 3%
Assets Under
Management
(in billions)
Ending $ 725.7 $ 670.3 8% $ 703.5 3%
Average(2) 706.9 675.0 5% 687.2 3%
Net new flows 5.6 (15.6) NM 8.4 (33)%
Non-operating income for the quarter ended March 31, 2012 included $82.4 million of investment and other income, net, as compared to $71.2 million for the prior quarter and $57.5 million for the quarter ended March 31, 2011.
Total assets under management ("AUM") were $725.7 billion at March 31, 2012, up $55.4 billion or 8% during the quarter. The increase was driven by $50.9 billion in market appreciation and net new flows of $5.6 billion. AUM increased $22.2 billion or 3% year over year, primarily due to net new flows of $14.8 billion and $10.9 billion from acquisitions.
Cash and cash equivalents and investments were $9.3 billion at March 31, 2012, as compared to $9.4 billion at September 30, 2011. Total stockholders' equity was $9.4 billion at March 31, 2012, as compared to $9.1 billion at September 30, 2011. The Company had 215.1 million shares of common stock outstanding at March 31, 2012, as compared to 217.7 million shares outstanding at September 30, 2011. During the quarter ended March 31, 2012, the Company repurchased approximately 1.0 million shares of its common stock for a total cost of $125.9 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 of a material nature. Analysts and investors are encouraged to review the Company's recent filings with the U.S. Securities and Exchange Commission and to contact Investor Relations before the live teleconference for any clarifications or questions related to the earnings release or pre-recorded audio commentary.
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 32241981, any time through June 1, 2012.
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 32241979, after 7:00 p.m. Eastern Time on May 2, 2012 through June 1, 2012.
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 Funds(3,4):
Period Ended March 31, 2012
----------------------------------
Percent of Assets in Top Two
Quartiles(5)
----------------------------------
1-Year 3-Year 5-Year 10-Year
------- ------- ------- -------
Franklin Templeton(6) 46% 70% 83% 94%
Franklin Templeton Equity(7) 34% 71% 77% 89%
Franklin Templeton Fixed-Income(8) 59% 69% 89% 99%
Franklin Equity(9) 28% 86% 85% 89%
Templeton Equity(10) 30% 74% 67% 88%
Mutual Series Equity(11) 69% 0% 61% 92%
Franklin Templeton Taxable Fixed-
Income(12) 26% 68% 81% 97%
Franklin Templeton Tax-Free Fixed-
Income(13) 86% 71% 95% 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® (1-800/342-5236). Please read a prospectus carefully before investing.
Franklin Resources, Inc.
Condensed Consolidated Statements of Income
Unaudited
Three Months Ended
March 31,
(in thousands, except per share data and ---------------------- %
AUM) 2012 2011 Change
---------- ---------- ------
Operating Revenues(14)
Investment management fees $1,126,320 $1,102,732 2%
Sales and distribution fees 585,945 561,127 4%
Shareholder servicing fees 76,739 75,750 1%
Other, net 10,345 9,954 4%
---------- ---------- ------
Total operating revenues 1,799,349 1,749,563 3%
---------- ---------- ------
Operating Expenses
Sales, distribution and marketing 715,443 676,935 6%
Compensation and benefits 323,031 315,810 2%
Information systems and technology 43,292 41,477 4%
Occupancy 31,894 32,703 (2)%
General, administrative and other 68,532 53,156 29%
---------- ---------- ------
Total operating expenses 1,182,192 1,120,081 6%
---------- ---------- ------
Operating Income 617,157 629,482 (2)%
---------- ---------- ------
Other Income (Expenses)
Investment and other income, net 82,411 57,451 43%
Interest expense (9,633) (8,364) 15%
---------- ---------- ------
Other income, net 72,778 49,087 48%
---------- ---------- ------
Income before taxes 689,935 678,569 2%
Taxes on income 202,151 183,004 10%
---------- ---------- ------
Net income 487,784 495,565 (2)%
Less: net income (loss) attributable to
Nonredeemable noncontrolling interests (15,965) (7,577) 111%
Redeemable noncontrolling interests 530 42 NM
---------- ---------- ------
Net Income Attributable to Franklin
Resources, Inc. $ 503,219 $ 503,100 0%
========== ========== ======
Earnings per Share
Basic $ 2.33 $ 2.26 3%
Diluted 2.32 2.25 3%
Dividends per Share $ 0.27 $ 0.25 8%
Average Shares Outstanding (in thousands)
Basic 214,520 221,696 (3)%
Diluted 215,111 222,696 (3)%
Operating Margin 34.3% 36.0%
AUM (in billions)
Ending $ 725.7 $ 703.5 3%
Average 706.9 687.2 3%
Net new flows 5.6 8.4 (33)%
Six Months Ended
March 31,
(in thousands, except per share data and ---------------------- %
AUM) 2012 2011 Change
---------- ---------- ------
Operating Revenues(14)
Investment management fees $2,201,457 $2,169,239 1%
Sales and distribution fees 1,110,249 1,113,330 0%
Shareholder servicing fees 152,144 147,805 3%
Other, net 37,375 19,502 92%
---------- ---------- ------
Total operating revenues 3,501,225 3,449,876 1%
---------- ---------- ------
Operating Expenses
Sales, distribution and marketing 1,346,061 1,324,088 2%
Compensation and benefits 623,443 608,204 3%
Information systems and technology 84,726 81,844 4%
Occupancy 63,736 63,571 0%
General, administrative and other 133,722 83,453 60%
---------- ---------- ------
Total operating expenses 2,251,688 2,161,160 4%
---------- ---------- ------
Operating Income 1,249,537 1,288,716 (3)%
---------- ---------- ------
Other Income (Expenses)
Investment and other income, net 153,587 103,779 48%
Interest expense (18,198) (16,259) 12%
---------- ---------- ------
Other income, net 135,389 87,520 55%
---------- ---------- ------
Income before taxes 1,384,926 1,376,236 1%
Taxes on income 403,416 390,554 3%
---------- ---------- ------
Net income 981,510 985,682 0%
Less: net income (loss) attributable to
Nonredeemable noncontrolling interests (5,818) (19,454) (70)%
Redeemable noncontrolling interests 3,324 879 278%
---------- ---------- ------
Net Income Attributable to Franklin
Resources, Inc. $ 984,004 $1,004,257 (2)%
========== ========== ======
Earnings per Share
Basic $ 4.54 $ 4.49 1%
Diluted 4.53 4.47 1%
Dividends per Share $ 2.54 $ 0.50 408%
Average Shares Outstanding (in thousands)
Basic 215,336 222,440 (3)%
Diluted 215,912 223,496 (3)%
Operating Margin 35.7% 37.4%
AUM (in billions)
Ending $ 725.7 $ 703.5 3%
Average 693.9 671.5 3%
Net new flows (10.0) 11.6 NM
Franklin Resources, Inc.
Condensed Consolidated Statements of Income
Unaudited
(in thousands, except per share data, Three Months Ended
employees and billable shareholder ---------------------- %
accounts) 31-Mar-12 31-Dec-11 Change
---------- ---------- ------
Operating Revenues(14)
Investment management fees $1,126,320 $1,075,137 5%
Sales and distribution fees 585,945 524,304 12%
Shareholder servicing fees 76,739 75,405 2%
Other, net 10,345 27,030 (62)%
---------- ---------- ------
Total operating revenues 1,799,349 1,701,876 6%
---------- ---------- ------
Operating Expenses
Sales, distribution and marketing 715,443 630,618 13%
Compensation and benefits 323,031 300,412 8%
Information systems and technology 43,292 41,434 4%
Occupancy 31,894 31,842 0%
General, administrative and other 68,532 65,190 5%
---------- ---------- ------
Total operating expenses 1,182,192 1,069,496 11%
---------- ---------- ------
Operating Income 617,157 632,380 (2)%
---------- ---------- ------
Other Income (Expenses)
Investment and other income (losses),
net 82,411 71,176 16%
Interest expense (9,633) (8,565) 12%
---------- ---------- ------
Other income (expenses), net 72,778 62,611 16%
---------- ---------- ------
Income before taxes 689,935 694,991 (1)%
Taxes on income 202,151 201,265 0%
---------- ---------- ------
Net income 487,784 493,726 (1)%
Less: net income (loss) attributable to
Nonredeemable noncontrolling
interests (15,965) 10,147 NM
Redeemable noncontrolling interests 530 2,794 (81)%
---------- ---------- ------
Net Income Attributable to Franklin
Resources, Inc. $ 503,219 $ 480,785 5%
========== ========== ======
Earnings per Share
Basic $ 2.33 $ 2.21 5%
Diluted 2.32 2.20 5%
Dividends per Share $ 0.27 $ 2.27 (88)%
Average Shares Outstanding (in thousands)
Basic 214,520 216,143 (1)%
Diluted 215,111 216,727 (1)%
Operating Margin 34.3% 37.2%
Employees 8,451 8,484 0%
Billable Shareholder Accounts (in
millions) 26.1 25.6 2%
(in thousands, except per share data, Three Months Ended
employees and billable shareholder ----------------------------------
accounts) 30-Sep-11 30-Jun-11 31-Mar-11
---------- ---------- ----------
Operating Revenues(14)
Investment management fees $1,193,232 $1,168,920 $1,102,732
Sales and distribution fees 555,974 594,187 561,127
Shareholder servicing fees 75,469 77,520 75,750
Other, net 12,455 12,406 9,954
---------- ---------- ----------
Total operating revenues 1,837,130 1,853,033 1,749,563
---------- ---------- ----------
Operating Expenses
Sales, distribution and marketing 669,415 719,311 676,935
Compensation and benefits 309,418 313,592 315,810
Information systems and technology 50,028 41,266 41,477
Occupancy 35,335 32,112 32,703
General, administrative and other 84,520 64,055 53,156
---------- ---------- ----------
Total operating expenses 1,148,716 1,170,336 1,120,081
---------- ---------- ----------
Operating Income 688,414 682,697 629,482
---------- ---------- ----------
Other Income (Expenses)
Investment and other income (losses),
net (116,473) 14,503 57,451
Interest expense (11,121) (10,056) (8,364)
---------- ---------- ----------
Other income (expenses), net (127,594) 4,447 49,087
---------- ---------- ----------
Income before taxes 560,820 687,144 678,569
Taxes on income 203,926 208,944 183,004
---------- ---------- ----------
Net income 356,894 478,200 495,565
Less: net income (loss) attributable to
Nonredeemable noncontrolling
interests (57,558) (24,575) (7,577)
Redeemable noncontrolling interests (1,524) (572) 42
---------- ---------- ----------
Net Income Attributable to Franklin
Resources, Inc. $ 415,976 $ 503,347 $ 503,100
========== ========== ==========
Earnings per Share
Basic $ 1.89 $ 2.27 $ 2.26
Diluted 1.88 2.26 2.25
Dividends per Share $ 0.25 $ 0.25 $ 0.25
Average Shares Outstanding (in thousands)
Basic 218,989 220,313 221,696
Diluted 219,840 221,284 222,696
Operating Margin 37.5% 36.8% 36.0%
Employees 8,453 8,458 8,125
Billable Shareholder Accounts (in
millions) 24.8 26.3 23.7
AUM AND FLOWS
Three Months
Ended Six Months Ended
March 31, March 31,
---------------- % ---------------- %
(in billions) 2012 2011 Change 2012 2011 Change
------- ------- ------ ------- ------- ------
Beginning AUM $ 670.3 $ 670.7 0% $ 659.9 $ 644.9 2%
Long-term sales 48.5 55.6 (13)% 86.7 110.5 (22)%
Long-term
redemptions (42.7) (46.4) (8)% (95.7) (99.2) (4)%
Net cash management (0.2) (0.8) (75)% (1.0) 0.3 NM
------- ------- ------ ------- ------- ------
Net new flows 5.6 8.4 (33)% (10.0) 11.6 NM
Reinvested
distributions 3.2 2.7 19% 10.5 8.5 24%
------- ------- ------ ------- ------- ------
Net flows 8.8 11.1 (21)% 0.5 20.1 (98)%
Distributions (4.3) (3.3) 30% (12.8) (10.6) 21%
Acquisitions -- 1.6 (100)% -- 1.6 (100)%
Appreciation and
other 50.9 23.4 118% 78.1 47.5 64%
------- ------- ------ ------- ------- ------
Ending AUM $ 725.7 $ 703.5 3% $ 725.7 $ 703.5 3%
======= ======= ====== ======= ======= ======
AUM BY INVESTMENT OBJECTIVE
31-Mar- 31-Dec- % 30-Sep- 30-Jun- 31-Mar-
(in billions) 12 11 Change 11 11 11
------- ------- ------ ------- ------- -------
Equity
Global/international $ 216.2 $ 194.5 11% $ 185.8 $ 226.2 $ 225.4
United States 83.7 75.7 11% 68.4 83.6 83.5
------- ------- ------ ------- ------- -------
Total equity 299.9 270.2 11% 254.2 309.8 308.9
------- ------- ------ ------- ------- -------
Hybrid 103.5 96.4 7% 101.3 115.1 113.4
Fixed-Income
Tax-free 77.3 74.1 4% 72.0 69.6 67.5
Taxable
Global/international 187.8 174.7 7% 178.8 185.4 160.6
United States 51.5 48.9 5% 46.9 48.1 47.1
------- ------- ------ ------- ------- -------
Total fixed-income 316.6 297.7 6% 297.7 303.1 275.2
Cash Management 5.7 6.0 (5)% 6.7 6.2 6.0
------- ------- ------ ------- ------- -------
Total AUM $ 725.7 $ 670.3 8% $ 659.9 $ 734.2 $ 703.5
======= ======= ====== ======= ======= =======
Average AUM for the Three-
Month Period $ 706.9 $ 675.0 5% $ 714.4 $ 726.7 $ 687.2
AUM AND FLOWS - UNITED STATES AND INTERNATIONAL(15)
As of and for the Three Months Ended
----------------------------------------------------
% of % of % of
(in billions) 31-Mar-12 Total 31-Dec-11 Total 31-Mar-11 Total
--------- ----- --------- ----- --------- -----
Long-Term Sales
United States $ 25.2 52% $ 21.2 55% $ 26.9 48%
International 23.3 48% 17.0 45% 28.7 52%
--------- ----- --------- ----- --------- -----
Total long-term
sales $ 48.5 100% $ 38.2 100% $ 55.6 100%
========= ===== ========= ===== ========= =====
Long-Term Redemptions
United States $ (20.7) 48% $ (33.1) 62% $ (21.3) 46%
International (22.0) 52% (19.9) 38% (25.1) 54%
--------- ----- --------- ----- --------- -----
Total long-term
redemptions $ (42.7) 100% $ (53.0) 100% $ (46.4) 100%
========= ===== ========= ===== ========= =====
AUM
United States $ 472.3 65% $ 439.0 65% $ 467.4 66%
International 253.4 35% 231.3 35% 236.1 34%
--------- ----- --------- ----- --------- -----
Total AUM $ 725.7 100% $ 670.3 100% $ 703.5 100%
========= ===== ========= ===== ========= =====
AUM AND FLOWS BY INVESTMENT OBJECTIVE
(in billions) Equity
----------------------
for the three months
ended Global/ United
March 31, 2012 International States Hybrid
------------- ------- -------
AUM at January 1,
2012 $ 194.5 $ 75.7 $ 96.4
Long-term sales 11.6 4.9 5.5
Long-term
redemptions (11.2) (4.9) (3.5)
Net exchanges (0.2) 0.2 0.2
Net cash
management -- -- --
------------- ------- -------
Net new flows 0.2 0.2 2.2
Reinvested
distributions 0.1 -- 1.0
------------- ------- -------
Net flows 0.3 0.2 3.2
Distributions -- -- (1.1)
Appreciation and
other 21.4 7.8 5.0
------------- ------- -------
AUM at March 31,
2012 $ 216.2 $ 83.7 $ 103.5
============= ======= =======
AUM AND FLOWS BY INVESTMENT OBJECTIVE
(in billions) Fixed-Income
----------------------------------
for the three months Taxable Taxable
ended Global/ United Cash
March 31, 2012 Tax-Free International States Management Total
--------- ------------- -------- ---------- -------
AUM at January 1,
2012 $ 74.1 $ 174.7 $ 48.9 $ 6.0 $ 670.3
Long-term sales 3.8 18.2 4.5 -- 48.5
Long-term
redemptions (2.3) (17.6) (3.2) -- (42.7)
Net exchanges -- (0.1) 0.1 (0.2) --
Net cash
management -- -- -- (0.2) (0.2)
--------- ------------- -------- ---------- -------
Net new flows 1.5 0.5 1.4 (0.4) 5.6
Reinvested
distributions 0.6 1.1 0.4 -- 3.2
--------- ------------- -------- ---------- -------
Net flows 2.1 1.6 1.8 (0.4) 8.8
Distributions (0.8) (1.9) (0.5) -- (4.3)
Appreciation and
other 1.9 13.4 1.3 0.1 50.9
--------- ------------- -------- ---------- -------
AUM at March 31,
2012 $ 77.3 $ 187.8 $ 51.5 $ 5.7 $ 725.7
========= ============= ======== ========== =======
(in billions) Equity
----------------------
for the three months
ended Global/ United
December 31, 2011 International States Hybrid
------------- ------- -------
AUM at October 1,
2011 $ 185.8 $ 68.4 $ 101.3
Long-term sales 9.8 3.7 4.1
Long-term
redemptions (10.4) (4.3) (15.1)
Net exchanges (0.7) 0.1 0.1
Net cash management -- -- --
------------- ------- -------
Net new flows (1.3) (0.5) (10.9)
Reinvested
distributions 1.5 1.3 1.2
------------- ------- -------
Net flows 0.2 0.8 (9.7)
Distributions (1.8) (1.4) (1.4)
Appreciation and
other 10.3 7.9 6.2
------------- ------- -------
AUM at December 31,
2011 $ 194.5 $ 75.7 $ 96.4
============= ======= =======
(in billions) Fixed-Income
---------------------------------
for the three months Taxable Taxable
ended Global/ United Cash
December 31, 2011 Tax-Free International States Management Total
--------- ------------- ------- ---------- -------
AUM at October 1,
2011 $ 72.0 $ 178.8 $ 46.9 $ 6.7 $ 659.9
Long-term sales 2.8 14.2 3.6 -- 38.2
Long-term
redemptions (2.2) (17.7) (3.3) -- (53.0)
Net exchanges 0.2 (0.5) 0.7 0.1 --
Net cash management -- -- -- (0.8) (0.8)
--------- ------------- ------- ---------- -------
Net new flows 0.8 (4.0) 1.0 (0.7) (15.6)
Reinvested
distributions 0.6 2.3 0.4 -- 7.3
--------- ------------- ------- ---------- -------
Net flows 1.4 (1.7) 1.4 (0.7) (8.3)
Distributions (0.8) (2.6) (0.5) -- (8.5)
Appreciation and
other 1.5 0.2 1.1 -- 27.2
--------- ------------- ------- ---------- -------
AUM at December 31,
2011 $ 74.1 $ 174.7 $ 48.9 $ 6.0 $ 670.3
========= ============= ======= ========== =======
(in billions) Equity
-----------------------
for the three months
ended Global/ United
March 31, 2011 International 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
-----------------------------------
for the three months Taxable Taxable
ended Global/ United Cash
March 31, 2011 Tax-Free International States Management 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
========== ============= ======== ========== ======
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 $725 billion in AUM as of March 31, 2012. For more information about our company, please visit franklinresources.com.
Notes
1. Net income represents net income attributable to Franklin Resources, Inc.
2. Average AUM represents simple monthly average AUM.
3. 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.
4. 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 155 peer groups of U.S. retail mutual funds, and the groups vary in size from 9 to 1,101 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.
5. The figures in the table are based on data available from Lipper© Inc. as of April 5, 2012 and are subject to revision.
6. Of the eligible Franklin Templeton long-term mutual funds tracked by Lipper, 35, 27, 43 and 42 funds ranked in the top quartile and 28, 30, 24 and 21 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 equity mutual funds tracked by Lipper, 15, 15, 19 and 13 funds ranked in the top quartile and 15, 9, 10 and 10 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 Templeton non-money market fixed-income mutual funds tracked by Lipper, 20, 12, 24 and 29 funds ranked in the top quartile and 13, 21, 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.
9. Of the eligible Franklin equity mutual funds tracked by Lipper, 8, 10, 13 and 9 funds ranked in the top quartile and 12, 7, 7 and 6 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 Templeton equity mutual funds tracked by Lipper, 2, 5, 4 and 2 funds ranked in the top quartile and 2, 2, 2 and 2 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 Mutual Series equity mutual funds tracked by Lipper, 5, 0, 2 and 2 funds ranked in the top quartile and 1, 0, 1 and 2 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 taxable fixed-income mutual funds tracked by Lipper, 2, 4, 5 and 4 funds ranked in the top quartile and 3, 5, 3 and 5 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups.
13. Of the eligible Franklin Templeton non-money market tax-free fixed-income mutual funds tracked by Lipper, 18, 8, 19 and 25 funds ranked in the top quartile and 10, 16, 11 and 6 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups.
14. In the quarter ended September 30, 2011, the Company discontinued the classification of a portion of the investment management fees earned by certain of its non-U.S. subsidiaries as sales and distribution fees. This presentation change does not represent a restatement of any previously published financial results. See the Company's Form 10-K for the fiscal year ended September 30, 2011 for additional information.
15. International includes North America-based advisors serving non-resident clients.
Forward-Looking Statements
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, 2011 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, failure or security breach 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 income.
- Changes in the third-party distribution and sales channels on which we depend could reduce our income 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 our revenues 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 our revenues and income 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 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.
- 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
