SOURCE: Franklin Resources, Inc.

Franklin Resources, Inc.

January 11, 2011 15:42 ET

Franklin Resources, Inc. to Announce First Quarter Results on January 27, 2011 and Introduce New Income Statement Presentation

SAN MATEO, CA--(Marketwire - January 11, 2011) - On Thursday, January 27, 2011, Franklin Resources, Inc. (the company) (NYSE: BEN) will release its first fiscal quarter 2011 operating results at approximately 8:30 a.m. Eastern Time. Pre-recorded audio commentary on the results from President and Chief Executive Officer Greg Johnson and Executive Vice President and Chief Financial Officer Ken Lewis will be available at approximately 8:30 a.m. Eastern Time. They will also lead a live teleconference later that day to answer questions though 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 will be available via 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 28808142, any time through 11:59 p.m. Eastern Time on February 10, 2011.

The live conference call will be held at 4:30 p.m. Eastern Time to answer questions. Access to the teleconference will be available via franklinresources.com or by dialing (800) 446-2782 in the U.S. and Canada or (847) 413-3235 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 28808145, after 7:00 p.m. Eastern Time on January 27, 2011 through 11:59 p.m. Eastern Time on February 10, 2011.

Beginning with the first fiscal quarter 2011 results announcement, the company will introduce a new consolidated statement of income presentation. Today's release includes quarterly and annual operating results for fiscal years 2009 and 2010 in the new presentation. 

Summary of Changes

  • Within operating revenues, underwriting and distribution fees is renamed sales and distribution fees
  • Amortization of deferred sales commissions, previously presented as a separate line, and certain distribution-related expenses, previously included in advertising and promotion expenses, are combined with underwriting and distribution expense in a new line named sales, distribution and marketing
  • Occupancy expense, previously combined with information systems and technology, is now a separate line
  • Advertising and promotion expense not reclassified to sales, distribution and marketing is now included with other expense in a new line named general, administrative and other
  • Net income (loss) attributable to noncontrolling interests is now presented separately for nonredeemable and redeemable noncontrolling interests

These changes are intended to provide investors with improved disclosure of total sales, distribution and marketing expenses and greater transparency of information systems, technology and occupancy expenses. In addition, the change to net income (loss) attributable to noncontrolling interests provides for consistency between the amounts in the statement of income and the changes in stockholders' equity. The presentation change does not represent a restatement of any previously published financial results.

Franklin Resources, Inc.  
Preliminary Condensed Consolidated Income Statements  
Unaudited  
(in thousands, except per share data)  
  Three months ended     Twelve months ended  
  30-Sep-10     30-Jun-10     31-Mar-10     31-Dec-09     30-Sep-10  
Operating Revenues                                      
Investment management fees $ 919,367     $ 915,866     $ 836,077     $ 806,664     $ 3,477,974  
Sales and distribution fees   529,563       529,313       496,781       488,053       2,043,710  
Shareholder servicing fees   69,981       72,976       71,376       69,543       283,876  
Other, net   9,493       15,916       8,879       13,151       47,439  
  Total operating revenues   1,528,404       1,534,071       1,413,113       1,377,411       5,852,999  
Operating Expenses                                      
Sales, distribution and marketing   599,028       590,876       557,398       535,593       2,282,895  
Compensation and benefits   275,300       280,333       271,041       254,312       1,080,986  
Information systems and technology   47,629       40,156       39,809       38,003       165,597  
Occupancy   33,699       35,862       29,799       30,607       129,967  
General, administrative and other   63,744       65,280       53,931       51,919       234,874  
  Total operating expenses   1,019,400       1,012,507       951,978       910,434       3,894,319  
Operating Income   509,004       521,564       461,135       466,977       1,958,680  
Other Income (Expenses)                                      
Consolidated sponsored investment products gains (losses), net   2,426       (14,670 )     5,669       15,072       8,497  
Investment and other income (losses), net   50,933       (7,262 )     42,488       32,978       119,137  
Interest expense   (9,992 )     (4,836 )     (936 )     (742 )     (16,506 )
  Other income (expenses), net   43,367       (26,768 )     47,221       47,308       111,128  
Income before taxes   552,371       494,796       508,356       514,285       2,069,808  
Taxes on income   176,517       135,113       149,946       156,736       618,312  
Net income   375,854       359,683       358,410       357,549       1,451,496  
  Less: net income (loss) attributable to:                                      
    Nonredeemable noncontrolling interests   98       180       204       216       698  
    Redeemable noncontrolling interests   2,850       (992 )     1,521       1,730       5,109  
Net Income Attributable to Franklin Resources, Inc. $ 372,906     $ 360,495     $ 356,685     $ 355,603     $ 1,445,689  
                                       
Earnings per Share 1                                      
    Basic $ 1.66     $ 1.59     $ 1.56     $ 1.55     $ 6.36  
    Diluted   1.65       1.58       1.55       1.54       6.33  
Dividends per Share $ 0.22     $ 0.22     $ 0.22     $ 3.22     $ 3.88  

1 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 $1.4 million, $2.0 million, $2.0 million and $3.3 million for the three months ended September 30, 2010, June 30, 2010, March 31, 2010 and December 31, 2009, and $7.6 million for the twelve months ended September 30, 2010.

Franklin Resources, Inc.  
Preliminary Condensed Consolidated Income Statements  
Unaudited  
(in thousands, except per share data)  
  Three months ended     Twelve months ended  
  30-Sep-09     30-Jun-09     31-Mar-09     31-Dec-08     30-Sep-09  
Operating Revenues                                      
Investment management fees $ 724,953     $ 625,025     $ 552,936     $ 600,274     $ 2,503,188  
Sales and distribution fees   433,361       365,217       304,655       304,929       1,408,162  
Shareholder servicing fees   67,381       67,113       66,514       66,342       267,350  
Other, net   13,232       16,203       (11,833 )     (2,215 )     15,387  
  Total operating revenues   1,238,927       1,073,558       912,272       969,330       4,194,087  
Operating Expenses                                      
Sales, distribution and marketing   475,265       398,218       343,113       336,323       1,552,919  
Compensation and benefits   246,773       230,943       236,732       244,063       958,511  
Information systems and technology   40,614       38,346       37,776       40,114       156,850  
Occupancy   31,385       29,857       27,622       28,484       117,348  
General, administrative and other   60,168       50,008       43,707       51,982       205,865  
  Total operating expenses   854,205       747,372       688,950       700,966       2,991,493  
Operating Income   384,722       326,186       223,322       268,364       1,202,594  
Other Income (Expenses)                                      
Consolidated sponsored investment products gains (losses), net   42,830       44,503       (11,106 )     (47,442 )     28,785  
Investment and other income (losses), net   87,338       52,574       (33,893 )     (45,022 )     60,997  
Interest expense   (268 )     (211 )     (2,092 )     (1,200 )     (3,771 )
  Other income (expenses), net   129,900       96,866       (47,091 )     (93,664 )     86,011  
Income before taxes   514,622       423,052       176,231       174,700       1,288,605  
Taxes on income   136,180       116,204       67,159       64,771       384,314  
Net income   378,442       306,848       109,072       109,929       904,291  
  Less: net income (loss) attributable to:                                      
    Nonredeemable noncontrolling interests   122       289       36       (3,922 )     (3,475 )
    Redeemable noncontrolling interests   10,964       8,843       (1,770 )     (7,049 )     10,988  
Net Income Attributable to Franklin Resources, Inc. $ 367,356     $ 297,716     $ 110,806     $ 120,900     $ 896,778  
                                       
Earnings per Share 1                                      
    Basic $ 1.60     $ 1.28     $ 0.48     $ 0.52     $ 3.87  
    Diluted   1.59       1.28       0.47       0.52       3.85  
Dividends per Share $ 0.21     $ 0.21     $ 0.21     $ 0.21     $ 0.84  

1 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 $2.2 million, $2.4 million, $0.9 million and $0.9 million for the three months ended September 30, 2009, June 30, 2009, March 31, 2009, and December 31, 2008, and $6.4 million for the twelve months ended September 30, 2009.

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 $670 billion in assets under management as of December 31, 2010. For more information, please visit franklinresources.com.

Contact Information

  • Contact:
    Franklin Resources, Inc.
    Corporate Communications:
    Matt Walsh
    (650) 312-2245

    Investor Relations:
    Brian Sevilla
    (650) 312-4091
    franklinresources.com