Franklin Resources, Inc. (the “Company”) [NYSE: BEN] today
announced preliminary net income1 of $306.4 million or $0.61
per diluted share for the quarter ended September 30, 2019, as
compared to $245.9 million or $0.48 per diluted share for the
previous quarter, and $502.5 million or $0.96 per diluted
share for the quarter ended September 30, 2018. The previous
quarter included an $86.4 million or $0.17 per diluted share
tax charge and the quarter ended September 30, 2018 included
an $89.6 million or $0.17 per diluted share tax reduction due
to revisions to the estimated transition tax expense2 resulting
from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). Preliminary
net income1 for the year ended September 30, 2019 was
$1,195.7 million or $2.35 per diluted share, as compared to
$764.4 million or $1.39 per diluted share for the previous
year, which included an estimated income tax charge2 of
$968.8 million or $1.80 per diluted share resulting from the
Tax Act.
“Market volatility and net outflows continued to
pressure assets under management and related earnings. However, we
were pleased to see areas of sustained improvement in fiscal year
2019,” said Greg Johnson, Chairman and CEO of Franklin Resources,
Inc. “We have seen strong performance and momentum in several key
asset classes, most notably in our U.S. equity and emerging markets
strategies. On the sales front, U.S. retail gross sales were up 12%
over the prior year, and sales have also continued to strengthen in
several international markets.
“Throughout the year, we focused on making
investments in growth areas, including the acquisition of Benefit
Street Partners. Our investments and efforts directly supported the
firm’s multi-year strategic focus areas, which include
strengthening our distribution teams, growing our alternative
investment capabilities, expanding our multi-asset solutions
business, building and promoting our ETF platform, and implementing
new technology to increase investment opportunities and achieve the
best possible outcomes for our investors.”
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Quarter Ended |
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%
Change |
|
Quarter Ended |
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%
Change |
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Fiscal Year Ended September 30, |
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|
|
30-Sep-19 |
|
30-Jun-19 |
|
Qtr. vs. Qtr. |
30-Sep-18 |
|
Year vs. Year |
|
2019 |
|
2018 |
|
%Change |
|
Financial Results |
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(in
millions, except per share data) |
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Operating
revenues |
|
$ |
1,452.5 |
|
|
$ |
1,476.7 |
|
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(2%) |
|
$ |
1,527.2 |
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|
(5%) |
|
|
$ |
5,774.5 |
|
|
$ |
6,319.1 |
|
|
(9%) |
|
Operating
income |
|
391.5 |
|
|
374.9 |
|
|
4% |
|
478.7 |
|
|
(18%) |
|
|
1,557.4 |
|
|
2,118.6 |
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|
(26%) |
|
Operating
margin |
|
27.0% |
|
|
25.4% |
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|
|
31.3% |
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|
|
27.0% |
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33.5% |
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Net income
1 |
|
$ |
306.4 |
|
|
$ |
245.9 |
|
|
25% |
|
$ |
502.5 |
|
|
(39%) |
|
|
$ |
1,195.7 |
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$ |
764.4 |
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56% |
|
Diluted
earnings per share |
|
0.61 |
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|
0.48 |
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27% |
|
0.96 |
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(36%) |
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|
2.35 |
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|
1.39 |
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69% |
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Assets Under Management |
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(in
billions) |
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Ending |
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$ |
692.6 |
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|
$ |
715.2 |
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(3%) |
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$ |
717.1 |
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(3%) |
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$ |
692.6 |
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$ |
717.1 |
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(3%) |
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Average
3 |
|
702.0 |
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|
710.8 |
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(1%) |
|
724.3 |
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(3%) |
|
|
697.0 |
|
|
740.5 |
|
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(6%) |
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Net
flows |
|
(12.8) |
|
|
(5.4) |
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(13.6) |
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(31.8) |
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(38.0) |
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Total assets under management (“AUM”) were
$692.6 billion at September 30, 2019, down
$22.6 billion or 3% during the quarter due to
$12.8 billion of net outflows and $9.8 billion of net
market change, distributions and other. AUM decreased
$24.5 billion or 3% during the fiscal year due to
$31.8 billion of net outflows and $19.1 billion of net
market change, distributions and other, partially offset by
$26.4 billion from an acquisition.
Cash and cash equivalents and investments were
$7.4 billion at September 30, 2019, as compared to
$8.0 billion at September 30, 2018. Including the
Company’s direct investments in consolidated investment products,
cash and cash equivalents and investments were $8.5 billion at
September 30, 2019, as compared to $9.1 billion at
September 30, 2018. Total stockholders’ equity was
$10.6 billion at September 30, 2019, as compared to
$10.2 billion at September 30, 2018. The Company had
499.3 million shares of common stock outstanding at
September 30, 2019, as compared to 519.1 million shares
outstanding at September 30, 2018. The Company repurchased
5.6 million shares of its common stock for a total cost of
$163.4 million during the quarter ended September 30,
2019, and 24.6 million shares for a total cost of
$756.3 million during the fiscal year.
Conference Call Information
A commentary on the results by Chairman and CEO
Greg Johnson, Executive Vice President and CFO Matthew Nicholls and
President and COO Jennifer Johnson will be available today at
approximately 8:30 a.m. Eastern Time. Access to the commentary
will be available via investors.franklinresources.com.
Johnson, Nicholls and Johnson will also lead a
live teleconference today at 11:00 a.m. Eastern Time to answer
questions of a material nature. Access to the teleconference will
be available via investors.franklinresources.com or by dialing
(877) 407-8293 in the U.S. and Canada or (201) 689-8349
internationally. A replay of the teleconference can also be
accessed by calling (877) 660-6853 in the U.S. and Canada or (201)
612-7415 internationally using access code 13695109, after
2:00 p.m. Eastern Time on October 25, 2019 through
November 25, 2019.
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 at (650) 312-4091
before the live teleconference for any clarifications or questions
related to the earnings release or commentary.
FRANKLIN RESOURCES, INC.
PRELIMINARY CONSOLIDATED STATEMENTS OF
INCOME
Unaudited
|
(in
millions, except per share data and AUM) |
|
Three Months Ended September 30, |
|
%Change |
|
Twelve Months Ended September 30, |
|
% Change |
|
2019 |
|
2018 |
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|
2019 |
|
2018 |
|
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
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Investment management fees |
|
$ |
1,001.6 |
|
|
$ |
1,058.9 |
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|
(5 |
%) |
|
$ |
3,985.2 |
|
|
$ |
4,367.5 |
|
|
(9 |
%) |
Sales and distribution
fees |
|
363.8 |
|
|
380.8 |
|
|
(4 |
%) |
|
1,444.6 |
|
|
1,599.8 |
|
|
(10 |
%) |
Shareholder servicing
fees |
|
51.4 |
|
|
51.8 |
|
|
(1 |
%) |
|
216.3 |
|
|
221.9 |
|
|
(3 |
%) |
Other |
|
35.7 |
|
|
35.7 |
|
|
0 |
% |
|
128.4 |
|
|
129.9 |
|
|
(1 |
%) |
Total operating revenues |
|
1,452.5 |
|
|
1,527.2 |
|
|
(5 |
%) |
|
5,774.5 |
|
|
6,319.1 |
|
|
(9 |
%) |
Operating
Expenses |
|
|
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|
|
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|
Sales, distribution and
marketing |
|
463.3 |
|
|
489.7 |
|
|
(5 |
%) |
|
1,819.6 |
|
|
2,039.7 |
|
|
(11 |
%) |
Compensation and benefits |
|
382.4 |
|
|
345.1 |
|
|
11 |
% |
|
1,584.7 |
|
|
1,390.6 |
|
|
14 |
% |
Information systems and
technology |
|
69.8 |
|
|
68.3 |
|
|
2 |
% |
|
258.5 |
|
|
243.9 |
|
|
6 |
% |
Occupancy |
|
38.8 |
|
|
34.6 |
|
|
12 |
% |
|
133.6 |
|
|
128.6 |
|
|
4 |
% |
General, administrative and
other |
|
106.7 |
|
|
110.8 |
|
|
(4 |
%) |
|
420.7 |
|
|
397.7 |
|
|
6 |
% |
Total operating expenses |
|
1,061.0 |
|
|
1,048.5 |
|
|
1 |
% |
|
4,217.1 |
|
|
4,200.5 |
|
|
0 |
% |
Operating
Income |
|
391.5 |
|
|
478.7 |
|
|
(18 |
%) |
|
1,557.4 |
|
|
2,118.6 |
|
|
(26 |
%) |
Other Income
(Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other income,
net |
|
11.3 |
|
|
10.4 |
|
|
9 |
% |
|
115.1 |
|
|
145.3 |
|
|
(21 |
%) |
Interest expense |
|
(7.0 |
) |
|
(5.8 |
) |
|
21 |
% |
|
(24.7 |
) |
|
(48.7 |
) |
|
(49 |
%) |
Other income, net |
|
4.3 |
|
|
4.6 |
|
|
(7 |
%) |
|
90.4 |
|
|
96.6 |
|
|
(6 |
%) |
Income before taxes |
|
395.8 |
|
|
483.3 |
|
|
(18 |
%) |
|
1,647.8 |
|
|
2,215.2 |
|
|
(26 |
%) |
Taxes on income 2 |
|
86.5 |
|
|
7.0 |
|
|
NM |
|
442.3 |
|
|
1,472.5 |
|
|
(70 |
%) |
Net income |
|
309.3 |
|
|
476.3 |
|
|
(35 |
%) |
|
1,205.5 |
|
|
742.7 |
|
|
62 |
% |
Less: net income (loss)
attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
— |
|
|
5.5 |
|
|
(100 |
%) |
|
6.2 |
|
|
(12.8 |
) |
|
NM |
Nonredeemable noncontrolling interests |
|
2.9 |
|
|
(31.7 |
) |
|
NM |
|
3.6 |
|
|
(8.9 |
) |
|
NM |
Net Income
Attributable to Franklin Resources, Inc. |
|
$ |
306.4 |
|
|
$ |
502.5 |
|
|
(39 |
%) |
|
$ |
1,195.7 |
|
|
$ |
764.4 |
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.61 |
|
|
$ |
0.96 |
|
|
(36 |
%) |
|
$ |
2.35 |
|
|
$ |
1.39 |
|
|
69 |
% |
Diluted |
|
0.61 |
|
|
0.96 |
|
|
(36 |
%) |
|
2.35 |
|
|
1.39 |
|
|
69 |
% |
Dividends Declared per
Share |
|
$ |
0.26 |
|
|
$ |
0.23 |
|
|
13 |
% |
|
$ |
1.04 |
|
|
$ |
3.92 |
|
|
(73 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
497.9 |
|
|
520.9 |
|
|
(4 |
%) |
|
503.6 |
|
|
537.4 |
|
|
(6 |
%) |
Diluted |
|
498.8 |
|
|
521.5 |
|
|
(4 |
%) |
|
504.3 |
|
|
538.0 |
|
|
(6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin |
|
27.0 |
% |
|
31.3 |
% |
|
|
|
27.0 |
% |
|
33.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM (in
billions) |
|
|
|
|
|
|
|
|
|
|
|
|
Ending |
|
$ |
692.6 |
|
|
$ |
717.1 |
|
|
(3 |
%) |
|
$ |
692.6 |
|
|
$ |
717.1 |
|
|
(3 |
%) |
Average |
|
702.0 |
|
|
724.3 |
|
|
(3 |
%) |
|
697.0 |
|
|
740.5 |
|
|
(6 |
%) |
Net flows |
|
(12.8 |
) |
|
(13.6 |
) |
|
|
|
(31.8 |
) |
|
(38.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRANKLIN RESOURCES, INC.
PRELIMINARY CONSOLIDATED STATEMENTS OF
INCOME
Unaudited
|
(in
millions, except per share data) |
|
Three Months Ended |
|
%Change |
|
Three Months Ended |
|
30-Sep-19 |
|
30-Jun-19 |
|
|
31-Mar-19 |
|
31-Dec-18 |
|
30-Sep-18 |
Operating
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Investment management fees |
|
$ |
1,001.6 |
|
|
$ |
1,019.4 |
|
|
(2 |
%) |
|
$ |
992.4 |
|
|
$ |
971.8 |
|
|
$ |
1,058.9 |
|
Sales and distribution
fees |
|
363.8 |
|
|
367.5 |
|
|
(1 |
%) |
|
358.5 |
|
|
354.8 |
|
|
380.8 |
|
Shareholder servicing
fees |
|
51.4 |
|
|
52.7 |
|
|
(2 |
%) |
|
57.1 |
|
|
55.1 |
|
|
51.8 |
|
Other |
|
35.7 |
|
|
37.1 |
|
|
(4 |
%) |
|
25.8 |
|
|
29.8 |
|
|
35.7 |
|
Total operating revenues |
|
1,452.5 |
|
|
1,476.7 |
|
|
(2 |
%) |
|
1,433.8 |
|
|
1,411.5 |
|
|
1,527.2 |
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Sales, distribution and
marketing |
|
463.3 |
|
|
462.4 |
|
|
0 |
% |
|
449.4 |
|
|
444.5 |
|
|
489.7 |
|
Compensation and benefits |
|
382.4 |
|
|
437.7 |
|
|
(13 |
%) |
|
409.6 |
|
|
355.0 |
|
|
345.1 |
|
Information systems and
technology |
|
69.8 |
|
|
65.7 |
|
|
6 |
% |
|
62.1 |
|
|
60.9 |
|
|
68.3 |
|
Occupancy |
|
38.8 |
|
|
32.2 |
|
|
20 |
% |
|
31.4 |
|
|
31.2 |
|
|
34.6 |
|
General, administrative and
other |
|
106.7 |
|
|
103.8 |
|
|
3 |
% |
|
101.8 |
|
|
108.4 |
|
|
110.8 |
|
Total operating expenses |
|
1,061.0 |
|
|
1,101.8 |
|
|
(4 |
%) |
|
1,054.3 |
|
|
1,000.0 |
|
|
1,048.5 |
|
Operating
Income |
|
391.5 |
|
|
374.9 |
|
|
4 |
% |
|
379.5 |
|
|
411.5 |
|
|
478.7 |
|
Other Income
(Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment and other income
(losses), net |
|
11.3 |
|
|
44.2 |
|
|
(74 |
%) |
|
118.7 |
|
|
(59.1 |
) |
|
10.4 |
|
Interest expense |
|
(7.0 |
) |
|
(5.6 |
) |
|
25 |
% |
|
(5.7 |
) |
|
(6.4 |
) |
|
(5.8 |
) |
Other income (expenses), net |
|
4.3 |
|
|
38.6 |
|
|
(89 |
%) |
|
113.0 |
|
|
(65.5 |
) |
|
4.6 |
|
Income before taxes |
|
395.8 |
|
|
413.5 |
|
|
(4 |
%) |
|
492.5 |
|
|
346.0 |
|
|
483.3 |
|
Taxes on income 2 |
|
86.5 |
|
|
158.9 |
|
|
(46 |
%) |
|
110.9 |
|
|
86.0 |
|
|
7.0 |
|
Net income |
|
309.3 |
|
|
254.6 |
|
|
21 |
% |
|
381.6 |
|
|
260.0 |
|
|
476.3 |
|
Less: net income (loss)
attributable to |
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests |
|
— |
|
|
0.1 |
|
|
(100 |
%) |
|
21.5 |
|
|
(15.4 |
) |
|
5.5 |
|
Nonredeemable noncontrolling interests |
|
2.9 |
|
|
8.6 |
|
|
(66 |
%) |
|
(7.4 |
) |
|
(0.5 |
) |
|
(31.7 |
) |
Net Income
Attributable to Franklin Resources, Inc. |
|
$ |
306.4 |
|
|
$ |
245.9 |
|
|
25 |
% |
|
$ |
367.5 |
|
|
$ |
275.9 |
|
|
$ |
502.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.61 |
|
|
$ |
0.48 |
|
|
27 |
% |
|
$ |
0.72 |
|
|
$ |
0.54 |
|
|
$ |
0.96 |
|
Diluted |
|
0.61 |
|
|
0.48 |
|
|
27 |
% |
|
0.72 |
|
|
0.54 |
|
|
0.96 |
|
Dividends Declared per
Share |
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
0 |
% |
|
$ |
0.26 |
|
|
$ |
0.26 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
497.9 |
|
|
501.6 |
|
|
(1 |
%) |
|
504.7 |
|
|
510.3 |
|
|
520.9 |
|
Diluted |
|
498.8 |
|
|
502.3 |
|
|
(1 |
%) |
|
505.1 |
|
|
510.8 |
|
|
521.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Margin |
|
27.0 |
% |
|
25.4 |
% |
|
|
|
26.5 |
% |
|
29.2 |
% |
|
31.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM AND FLOWS
(in
billions) |
|
Three Months Ended September 30, |
|
% |
|
Twelve Months Ended September 30, |
|
% |
|
2019 |
|
2018 |
|
Change |
|
2019 |
|
2018 |
|
Change |
Beginning AUM |
|
$ |
715.2 |
|
|
$ |
724.1 |
|
|
(1 |
%) |
|
$ |
717.1 |
|
|
$ |
753.2 |
|
|
(5 |
%) |
Long-term sales |
|
23.5 |
|
|
22.5 |
|
|
4 |
% |
|
100.6 |
|
|
105.0 |
|
|
(4 |
%) |
Long-term redemptions |
|
(39.1 |
) |
|
(39.2 |
) |
|
0 |
% |
|
(155.9 |
) |
|
(162.1 |
) |
|
(4 |
%) |
Long-term net exchanges |
|
(0.2 |
) |
|
(0.1 |
) |
|
100 |
% |
|
(0.7 |
) |
|
(0.4 |
) |
|
75 |
% |
Long-term reinvested
distributions |
|
3.0 |
|
|
3.2 |
|
|
(6 |
%) |
|
24.2 |
|
|
19.5 |
|
|
24 |
% |
Net
flows |
|
(12.8 |
) |
|
(13.6 |
) |
|
(6 |
%) |
|
(31.8 |
) |
|
(38.0 |
) |
|
(16 |
%) |
Acquisitions |
|
— |
|
|
— |
|
|
NM |
|
|
26.4 |
|
|
9.8 |
|
|
169 |
% |
Net market change,
distributions and other 4 |
|
(9.8 |
) |
|
6.6 |
|
|
NM |
|
|
(19.1 |
) |
|
(7.9 |
) |
|
142 |
% |
Ending
AUM |
|
$ |
692.6 |
|
|
$ |
717.1 |
|
|
(3 |
%) |
|
$ |
692.6 |
|
|
$ |
717.1 |
|
|
(3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM BY INVESTMENT OBJECTIVE
(in
billions) |
|
30-Sep-19 |
|
30-Jun-19 |
|
% Change |
|
31-Mar-19 |
|
31-Dec-18 |
|
30-Sep-18 |
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Global/international |
|
$ |
158.4 |
|
|
$ |
169.8 |
|
|
(7 |
%) |
|
$ |
174.4 |
|
|
$ |
166.0 |
|
|
$ |
194.4 |
|
United States |
|
112.1 |
|
|
112.4 |
|
|
0 |
% |
|
109.5 |
|
|
97.1 |
|
|
115.2 |
|
Total equity |
|
270.5 |
|
|
282.2 |
|
|
(4 |
%) |
|
283.9 |
|
|
263.1 |
|
|
309.6 |
|
Multi-Asset/Balanced |
|
134.3 |
|
|
136.0 |
|
|
(1 |
%) |
|
134.7 |
|
|
124.8 |
|
|
138.9 |
|
Fixed
Income |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-free |
|
66.3 |
|
|
65.0 |
|
|
2 |
% |
|
63.4 |
|
|
62.0 |
|
|
63.9 |
|
Taxable |
|
|
|
|
|
|
|
|
|
|
|
|
Global/international |
|
144.6 |
|
|
154.9 |
|
|
(7 |
%) |
|
152.5 |
|
|
147.7 |
|
|
150.6 |
|
United States |
|
67.4 |
|
|
67.9 |
|
|
(1 |
%) |
|
68.9 |
|
|
42.2 |
|
|
44.8 |
|
Total fixed income |
|
278.3 |
|
|
287.8 |
|
|
(3 |
%) |
|
284.8 |
|
|
251.9 |
|
|
259.3 |
|
Cash
Management |
|
9.5 |
|
|
9.2 |
|
|
3 |
% |
|
8.9 |
|
|
10.1 |
|
|
9.3 |
|
Total
AUM |
|
$ |
692.6 |
|
|
$ |
715.2 |
|
|
(3 |
%) |
|
$ |
712.3 |
|
|
$ |
649.9 |
|
|
$ |
717.1 |
|
Average AUM for the
Three-Month Period |
|
$ |
702.0 |
|
|
$ |
710.8 |
|
|
(1 |
%) |
|
$ |
688.6 |
|
|
$ |
683.2 |
|
|
$ |
724.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM AND FLOWS - UNITED STATES AND INTERNATIONAL
5
|
|
As of and for the Three Months Ended |
(in
billions) |
|
30-Sep-19 |
|
% of Total |
|
30-Jun-19 |
|
% of Total |
|
30-Sep-18 |
|
% of Total |
Long-Term
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
13.1 |
|
|
56 |
% |
|
$ |
14.1 |
|
|
50 |
% |
|
$ |
11.8 |
|
|
52 |
% |
International |
|
10.4 |
|
|
44 |
% |
|
14.3 |
|
|
50 |
% |
|
10.7 |
|
|
48 |
% |
Total long-term sales |
|
$ |
23.5 |
|
|
100 |
% |
|
$ |
28.4 |
|
|
100 |
% |
|
$ |
22.5 |
|
|
100 |
% |
Long-Term
Redemptions |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
(23.0 |
) |
|
59 |
% |
|
$ |
(21.2 |
) |
|
55 |
% |
|
$ |
(22.9 |
) |
|
58 |
% |
International |
|
(16.1 |
) |
|
41 |
% |
|
(17.0 |
) |
|
45 |
% |
|
(16.3 |
) |
|
42 |
% |
Total long-term redemptions |
|
$ |
(39.1 |
) |
|
100 |
% |
|
$ |
(38.2 |
) |
|
100 |
% |
|
$ |
(39.2 |
) |
|
100 |
% |
AUM |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
477.9 |
|
|
69 |
% |
|
$ |
487.9 |
|
|
68 |
% |
|
$ |
482.0 |
|
|
67 |
% |
International |
|
214.7 |
|
|
31 |
% |
|
227.3 |
|
|
32 |
% |
|
235.1 |
|
|
33 |
% |
Total AUM |
|
$ |
692.6 |
|
|
100 |
% |
|
$ |
715.2 |
|
|
100 |
% |
|
$ |
717.1 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUM AND FLOWS BY INVESTMENT
OBJECTIVE
(in billions) |
|
Equity |
|
Multi-Asset/Balanced |
|
Fixed Income |
|
CashManagement |
|
Total |
for the three months ended September 30,
2019 |
|
Global/International |
|
UnitedStates |
|
|
Tax-Free |
|
TaxableGlobal/International |
|
TaxableUnitedStates |
|
|
AUM at July 1, 2019 |
|
$ |
169.8 |
|
|
$ |
112.4 |
|
|
$ |
136.0 |
|
|
$ |
65.0 |
|
|
$ |
154.9 |
|
|
$ |
67.9 |
|
|
$ |
9.2 |
|
|
$ |
715.2 |
|
Long-term sales |
|
3.9 |
|
|
4.6 |
|
|
2.5 |
|
|
2.0 |
|
|
8.2 |
|
|
2.3 |
|
|
— |
|
|
23.5 |
|
Long-term redemptions |
|
(11.6 |
) |
|
(5.5 |
) |
|
(4.5 |
) |
|
(1.9 |
) |
|
(12.1 |
) |
|
(3.5 |
) |
|
— |
|
|
(39.1 |
) |
Long-term net exchanges |
|
(0.3 |
) |
|
0.1 |
|
|
— |
|
|
0.1 |
|
|
(0.3 |
) |
|
0.2 |
|
|
— |
|
|
(0.2 |
) |
Long-term reinvested
distributions |
|
0.2 |
|
|
0.1 |
|
|
1.1 |
|
|
0.4 |
|
|
1.0 |
|
|
0.2 |
|
|
— |
|
|
3.0 |
|
Net
flows |
|
(7.8 |
) |
|
(0.7 |
) |
|
(0.9 |
) |
|
0.6 |
|
|
(3.2 |
) |
|
(0.8 |
) |
|
— |
|
|
(12.8 |
) |
Net market change,
distributions and other 4 |
|
(3.6 |
) |
|
0.4 |
|
|
(0.8 |
) |
|
0.7 |
|
|
(7.1 |
) |
|
0.3 |
|
|
0.3 |
|
|
(9.8 |
) |
AUM at
September 30, 2019 |
$ |
158.4 |
|
|
$ |
112.1 |
|
|
$ |
134.3 |
|
|
$ |
66.3 |
|
|
$ |
144.6 |
|
|
$ |
67.4 |
|
|
$ |
9.5 |
|
|
$ |
692.6 |
|
(in billions) |
|
Equity |
|
Multi-Asset/Balanced |
|
Fixed Income |
|
CashManagement |
|
Total |
for the three months ended June 30, 2019 |
|
Global/International |
|
UnitedStates |
|
|
Tax-Free |
|
TaxableGlobal/International |
|
TaxableUnitedStates |
|
|
AUM at April 1, 2019 |
|
$ |
174.4 |
|
|
$ |
109.5 |
|
|
$ |
134.7 |
|
|
$ |
63.4 |
|
|
$ |
152.5 |
|
|
$ |
68.9 |
|
|
$ |
8.9 |
|
|
$ |
712.3 |
|
Long-term sales |
|
4.4 |
|
|
4.3 |
|
|
3.7 |
|
|
2.1 |
|
|
12.1 |
|
|
1.8 |
|
|
— |
|
|
28.4 |
|
Long-term redemptions |
|
(10.1 |
) |
|
(5.4 |
) |
|
(5.6 |
) |
|
(1.9 |
) |
|
(12.0 |
) |
|
(3.2 |
) |
|
— |
|
|
(38.2 |
) |
Long-term net exchanges |
|
(0.9 |
) |
|
(0.6 |
) |
|
1.4 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Long-term reinvested
distributions |
|
0.3 |
|
|
0.6 |
|
|
1.6 |
|
|
0.4 |
|
|
1.2 |
|
|
0.3 |
|
|
— |
|
|
4.4 |
|
Net
flows |
|
(6.3 |
) |
|
(1.1 |
) |
|
1.1 |
|
|
0.7 |
|
|
1.3 |
|
|
(1.1 |
) |
|
— |
|
|
(5.4 |
) |
Net market change,
distributions and other 4 |
|
1.7 |
|
|
4.0 |
|
|
0.2 |
|
|
0.9 |
|
|
1.1 |
|
|
0.1 |
|
|
0.3 |
|
|
8.3 |
|
AUM at
June 30, 2019 |
$ |
169.8 |
|
|
$ |
112.4 |
|
|
$ |
136.0 |
|
|
$ |
65.0 |
|
|
$ |
154.9 |
|
|
$ |
67.9 |
|
|
$ |
9.2 |
|
|
$ |
715.2 |
|
(in billions) |
|
Equity |
|
Multi-Asset/Balanced |
|
Fixed Income |
|
CashManagement |
|
Total |
for the three months ended September 30,
2018 |
|
Global/International |
|
UnitedStates |
|
|
Tax-Free |
|
TaxableGlobal/International |
|
TaxableUnitedStates |
|
|
AUM at July 1, 2018 |
|
$ |
201.0 |
|
|
$ |
109.6 |
|
|
$ |
137.7 |
|
|
$ |
65.6 |
|
|
$ |
154.5 |
|
|
$ |
46.6 |
|
|
$ |
9.1 |
|
|
$ |
724.1 |
|
Long-term sales |
|
4.3 |
|
|
4.5 |
|
|
3.8 |
|
|
1.2 |
|
|
7.2 |
|
|
1.5 |
|
|
— |
|
|
22.5 |
|
Long-term redemptions |
|
(11.5 |
) |
|
(5.9 |
) |
|
(5.4 |
) |
|
(2.7 |
) |
|
(10.0 |
) |
|
(3.7 |
) |
|
— |
|
|
(39.2 |
) |
Long-term net exchanges |
|
(0.3 |
) |
|
0.4 |
|
|
0.1 |
|
|
(0.1 |
) |
|
(0.2 |
) |
|
— |
|
|
— |
|
|
(0.1 |
) |
Long-term reinvested
distributions |
|
0.2 |
|
|
0.1 |
|
|
1.1 |
|
|
0.5 |
|
|
1.0 |
|
|
0.3 |
|
|
— |
|
|
3.2 |
|
Net
flows |
|
(7.3 |
) |
|
(0.9 |
) |
|
(0.4 |
) |
|
(1.1 |
) |
|
(2.0 |
) |
|
(1.9 |
) |
|
— |
|
|
(13.6 |
) |
Net market change,
distributions and other 4 |
|
0.7 |
|
|
6.5 |
|
|
1.6 |
|
|
(0.6 |
) |
|
(1.9 |
) |
|
0.1 |
|
|
0.2 |
|
|
6.6 |
|
AUM at
September 30, 2018 |
$ |
194.4 |
|
|
$ |
115.2 |
|
|
$ |
138.9 |
|
|
$ |
63.9 |
|
|
$ |
150.6 |
|
|
$ |
44.8 |
|
|
$ |
9.3 |
|
|
$ |
717.1 |
|
Notes
- Net income represents net income attributable to Franklin
Resources, Inc.
- Taxes on income for the quarter ended December 31, 2017
includes an estimated income tax charge of $1.1 billion
resulting from enactment of the Tax Cuts and Jobs Act of 2017,
which was based on information available as of December 31,
2017. The estimate decreased by $0.8 million,
$9.7 million, $89.6 million and $0.4 million during
the quarters ended March 31, 2018, June 30, 2018,
September 30, 2018 and December 31, 2018. The tax charge
increased by $86.4 million during the quarter ended June 30,
2019 due to the reversal of a tax benefit recognized in the prior
fiscal year related to deemed foreign dividends upon issuance of
final regulations by the U.S. Department of Treasury.
- Average AUM represents simple monthly average AUM.
- Net market change, distributions and other includes
appreciation (depreciation), distributions to investors that
represent return on investments and return of capital, foreign
exchange revaluation and net cash management.
- International includes North America-based advisors serving
non-resident clients.
Franklin Resources, Inc. is a global investment
management organization operating as Franklin Templeton. Franklin
Templeton’s goal is to deliver better outcomes by providing global
and domestic investment management to retail, institutional and
sovereign wealth clients in over 170 countries. Through specialized
teams, the Company has expertise across all asset classes,
including equity, fixed income, alternatives and custom multi-asset
solutions. The Company’s more than 600 investment professionals are
supported by its integrated, worldwide team of risk management
professionals and global trading desk network. With employees in
over 30 countries, the California-based company has more than
70 years of investment experience and $692.6 billion in
AUM as of September 30, 2019. The Company posts information
that may be significant for investors in the Investor Relations and
News Center sections of its website, and encourages investors to
consult those sections regularly. For more information, please
visit investors.franklinresources.com.
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,” “preliminary” 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. While
forward-looking statements are our best prediction at the time that
they are made, you should not rely on them and are cautioned
against doing so. 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. 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, 2018 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, complex, overlapping and
frequently changing rules, regulations, policies, and legal
interpretations.
- Global 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 financial
condition and results of operations.
- Failure to comply with the laws, rules or regulations in any of
the jurisdictions in which we operate could result in substantial
harm to our reputation and results of operations.
- 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
information and cyber security infrastructure, software
applications, technology or other systems that are critical to our
operations could disrupt our business and harm our operations and
reputation.
- Our contractual obligations may subject us to indemnification
costs and liability to third parties.
- Our business operations are complex and a failure to properly
perform operational tasks or the misrepresentation of our services
and products, or the termination of investment management
agreements representing a significant portion of our AUM, 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 our products subjects us to increased
exchange rate and market-specific political, economic or other
risks that may adversely impact our revenues and income generated
overseas.
- Harm to our reputation or poor investment performance of our
products could reduce the level of our AUM or affect our sales, and
negatively impact our revenues and income.
- Our future results are dependent upon maintaining an
appropriate level of expenses, which is subject to
fluctuation.
- Our ability to successfully manage and grow our business 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.
- 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.
- 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 |
|
Media Relations:
Matt Walsh (650) 312-2245 |
|
investors.franklinresources.com |
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