EX-99.2 3 dex992.htm FRANKLIN RESOURCES, INC. SECOND QUARTER RESULTS PRESENTATION Franklin Resources, Inc. Second Quarter Results presentation
Internal Use Only / Not for Distribution to the Public
Franklin Resources, Inc. Second Quarter Results
April 28, 2010
EXHIBIT 99.2

2
Forward-Looking Statements
The financial results in this presentation are preliminary. Statements in this presentation 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 presentation, 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, 2009 and subsequently filed Form 10-Q’s:  (1) 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; (2) the amount and mix of our assets under management
are subject to significant fluctuations; (3) we are subject to extensive and complex, overlapping and frequently changing rules, regulations and legal interpretations; (4)
regulatory and legislative actions and reforms have made the regulatory environment in which we operate more costly and future actions and reforms could adversely impact
our assets under management, increase costs and negatively impact our profitability and future financial results; (5) 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; (6) our ability to maintain the beneficial tax treatment we anticipate with
respect to non-U.S. earnings we have repatriated is based on current interpretations of the American Jobs Creation Act of 2004 (the “Jobs Act”) and permitted use of such
amounts in accordance with our domestic reinvestment plan and the Jobs Act; (7) any significant limitation or failure of our software applications, technology or other systems
that are critical to our operations could constrain our operations; (8) 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; (9) we face risks, and corresponding potential costs and
expenses, associated with conducting operations and growing our business in numerous countries; (10) we depend on key personnel and our financial performance could be
negatively affected by the loss of their services; (11) 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; (12) changes in the third-party distribution and sales channels on
which we depend could reduce our revenues and hinder our growth; (13) 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; (14) poor investment performance of our
products could affect our sales or reduce the level of assets under management, potentially negatively impacting our revenues and income; (15) we could suffer losses in
earnings or revenue if our reputation is harmed; (16) our future results are dependent upon maintaining an appropriate level of expenses, which is subject to fluctuation; (17)
our ability to successfully integrate widely varied business lines can be impeded by systems and other technological limitations; (18) 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;
(19) 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; (20) 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; (21) regulatory and governmental examinations
and/or investigations, civil litigation relating to previously-settled regulatory and governmental investigations, and the legal risks associated with our business, could adversely
impact our assets under management, increase costs and negatively impact our profitability and/or our future financial results; (22) our ability to meet cash needs depends
upon certain factors, including the market value of our assets, operating cash flows and our perceived credit worthiness; (23) diverse and strong competition limits the interest
rates that we can charge on consumer loans; (24) 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; and (25) we are dependent on the earnings of our subsidiaries.
Any forward-looking statement made by us in this presentation 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.

3
Audio Commentary and Conference Call Details
Pre-recorded audio commentary on the second quarter 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 9:15 a.m. Eastern Time.  They will also lead a live teleconference today at 4:30 p.m. Eastern
Time to answer questions.
Access to the pre-recorded audio commentary and this presentation will be available at franklinresources.com under
the
“Investor
relations
–
Earnings
releases”
section.
The
pre-recorded
audio
commentary
will
also
be
available
by
dialing (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally, using access code 65512854, anytime
through 11:59 p.m. Eastern Time on May 12, 2010.
Access to the live teleconference will be available at franklinresources.com 10 minutes before the start of the call or by
dialing (877) 480-6346 in the U.S. and Canada or (706) 645-0197 internationally. A replay of the call can also be
accessed by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally, using access code
64896983, after 5:30 p.m. Eastern Time today through 11:59 p.m. Eastern Time on May 12, 2010.
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.

4
Highlights of the Fiscal Second Quarter 2010
Relative investment performance remains strong
Over
$17
billion
in
net
new
flows
–
a
record
quarter
Strong growth in international sales and assets under
management

ASSETS UNDER MANAGEMENT

6
Assets Under Management
End of Period
Simple Monthly Average
$586.8
$523.4
$451.2
$391.1
$553.5
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
$561.2
$534.9
$396.6
$428.0
$488.3
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
(in billions, for the three months ended)

7
Assets Under Management
by Investment Objective
by Sales Region
1
Europe sales region includes Middle East and Africa.  ²Asia-Pacific sales region includes Latin America.
(chart is as of March 31, 2010)
(chart is as of March 31, 2010)
United States
72%
Canada
6%
Asia-Pacific
10%
Europe
1
12%
(in billions)
31-Mar-10
31-Dec-09
% Change
United States
425.2
$     
407.9
$     
4%
Europe
1
69.5
60.8
14%
Asia-Pacific
2
58.9
52.5
12%
Canada
33.2
32.3
3%
Total
586.8
$     
553.5
$     
6%
(in billions)
31-Mar-10
31-Dec-09
% Change
Equity
263.0
$     
255.8
$     
3%
Hybrid
107.3
104.0
3%
Fixed-Income
210.7
187.6
12%
Cash Management
5.8
6.1
(5%)
Total
586.8
$     
553.5
$     
6%
2
Hybrid
18%
Equity
45%
Cash
Management
1%
Fixed-Income
36%

FLOW SUMMARY

9
1
Long-term net new flows are defined as long-term sales less long-term redemptions plus long-term net exchanges. 
Flow Summary
Market Appreciation (Depreciation)
Long-Term Flows
1
$16.5
$16.6
($19.0)
$54.7
$60.7
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
(in billions, for the three months ended)
$46.4
($29.3)
$34.9
$27.9
$19.8
$42.2
($23.3)
($22.4)
($28.2)
($24.8)
$17.8
$6.6
$15.1
($5.1)
$12.9
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
Long-term sales
19.8
$       
27.9
$       
34.9
$       
42.2
$       
46.4
$       
Long-term redemptions
(24.8)
        
(22.4)
        
(23.3)
        
(28.2)
        
(29.3)
        
Net cash management
(0.5)
          
0.5
           
0.6
           
0.3
           
0.3
           
Total net new flows
(5.5)
$        
6.0
$         
12.2
$       
14.3
$       
17.4
$       

10
United States and International Flows
United States
(in billions, for the three months ended)
International
$24.4
($16.1)
$23.8
$13.4
$18.1
$21.5
($16.1)
($15.1)
($12.7)
($13.4)
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
$22.0
($13.2)
$13.4
$9.8
$6.4
$18.4
($9.9)
($9.7)
($13.1)
($8.7)
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10

11
Net New Flows by Investment Objective
(for the three months ended)
($ in billions)
31-Mar-10
31-Dec-09
Mar-10 vs.
Dec-09
31-Mar-09
Mar-10 vs.
Mar-09
Equity sales
14.7
$        
13.6
$        
8%
7.5
$           
96%
Equity redemptions
(15.1)
         
(15.7)
         
(4%)
(12.3)
         
23%
Equity net exchanges
(0.1)
            
(0.1)
            
0%
(0.7)
            
(86%)
Equity Net New Flows
(0.5)
            
(2.2)
            
(77%)
(5.5)
            
(91%)
Hybrid sales
4.1
             
4.4
             
(7%)
2.7
             
52%
Hybrid redemptions
(3.1)
            
(2.7)
            
15%
(3.4)
            
(9%)
Hybrid net exchanges
-
               
-
               
0%
(0.1)
            
NM
Hybrid Net New Flows
1.0
             
1.7
             
(41%)
(0.8)
            
NM
Fixed-income sales
27.6
           
24.2
           
14%
9.6
             
188%
Fixed-income redemptions
(11.1)
         
(9.8)
            
13%
(9.1)
            
22%
Fixed-income net exchanges
0.8
             
1.2
             
(33%)
0.7
             
14%
Fixed-Income Net New Flows
17.3
           
15.6
           
11%
1.2
             
NM
Cash Management Net New Flows
(0.4)
            
(0.8)
            
(50%)
(0.4)
            
0%
Total Net New Flows
17.4
$        
14.3
$        
22%
(5.5)
$         
NM
NM = not meaningful

INVESTMENT PERFORMANCE

13
%
of
U.S.
Long-Term
Assets
in
Top
Two
Lipper
Quartiles
Investment Performance
91%
62%
85%
86%
68%
91%
85%
85%
1 - Year
3 - Year
5 - Year
10 - Year
88%
85%
64%
91%
85%
87%
93%
80%
1 - Year
3 - Year
5 - Year
10 - Year
3/31/10
12/31/2009
Franklin Templeton
Franklin Templeton Fixed-Income
Franklin Templeton Equity
1
Lipper rankings for Franklin Templeton U.S.-registered long-term mutual funds are based on Class A shares. Franklin Templeton funds are compared against a universe of all share classes. 
Performance of other share classes may differ.
90%
60%
84%
84%
53%
90%
82%
84%
1 - Year
3 - Year
5 - Year
10 - Year
1

14
99%
90%
0%
100%100%
99%
99%
41%
1 - Year
3 - Year
5 - Year
10 - Year
88%
75%
83%
85%
84%
91%
83%
78%
1 - Year
3 - Year
5 - Year
10 - Year
Investment Performance
%
of
U.S.
Long-Term
Assets
in
Top
Two
Lipper
Quartiles
87%
86%
76%
92%
88%
89%
92%
92%
1 - Year
3 - Year
5 - Year
10 - Year
65%
69%
52%
71%
68%
70%
69%
49%
1 - Year
3 - Year
5 - Year
10 - Year
FTI Tax-Free Fixed-Income
FTI Taxable Fixed-Income
Franklin Equity
Templeton Equity
Mutual Series Equity
100%100%
64%
93%
94%
55%
89%
93%
1 - Year
3 - Year
5 - Year
10 - Year
3/31/10
12/31/2009
1
Lipper rankings for Franklin Templeton U.S.-registered long-term mutual funds are based on Class A shares. Franklin Templeton funds are compared against a universe of all share classes. 
Performance of other share classes may differ.
1

OPERATING RESULTS

16
Quarterly Financial Highlights
Operating
and
Net
Income
Diluted
Earnings
Per
Share
$461.1
$467.0
$223.3
$326.2
$384.7
356.7
110.8
355.6
297.7
367.4
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
$1.55
$1.54
$0.47
$1.28
$1.59
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
(in millions, for the three months ended)
Unaudited
1
2
1
2
Net income attributable to Franklin Resources, Inc.
Effective October 1, 2009, Franklin Resources, Inc. retrospectively adopted a new accounting standard that modifies the earnings per share calculations to recognize its nonvested stock
awards and nonvested stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents as if they were a separate class of stock.

17
Operating Revenues
31-Mar-10
31-Dec-09
Mar-10 vs.
Dec-09
30-Sep-09
30-Jun-09
31-Mar-09
Mar-10 vs.
Mar-09
Investment management fees
836.1
$     
806.7
$     
4%
725.0
$     
625.0
$     
552.9
$     
51%
Underwriting and distribution fees
496.8
       
488.1
       
2%
433.4
       
365.2
       
304.7
       
63%
Shareholder servicing fees
71.4
          
69.5
          
3%
67.4
          
67.1
          
66.5
          
7%
Consolidated sponsored
investment products income, net
0.5
            
0.4
            
25%
1.6
            
2.9
            
1.8
            
(72%)
Other, net
8.3
            
12.7
          
(35%)
11.5
          
13.4
          
(13.6)
        
NM
Total Operating Revenues
1,413.1
$  
1,377.4
$  
3%
1,238.9
$  
1,073.6
$  
912.3
$     
55%
(in millions, for the three months ended)
Unaudited

18
Operating Expenses
31-Mar-10
31-Dec-09
Mar-10 vs.
Dec-09
30-Sep-09
30-Jun-09
31-Mar-09
Mar-10 vs.
Mar-09
Underwriting and distribution
487.0
$     
467.0
$     
4%
418.3
$     
350.7
$     
293.5
$     
66%
Compensation and benefits
271.1
       
254.3
       
7%
246.8
       
230.9
       
236.7
       
15%
Information systems, technology
and occupancy
69.6
          
68.6
          
1%
72.0
          
68.2
          
65.4
          
6%
Advertising and promotion
38.1
          
34.8
          
9%
37.3
          
27.9
          
26.7
          
43%
Amortization of deferred sales
commissions
46.3
          
46.5
          
0%
39.7
          
32.9
          
33.8
          
37%
Other
39.9
          
39.2
          
2%
40.1
          
36.8
          
32.9
          
21%
Total Operating Expenses
952.0
$     
910.4
$     
5%
854.2
$     
747.4
$     
689.0
$     
38%
(in millions, for the three months ended)
Unaudited

19
Operating Results
(in millions, except per share data, for the three months ended)
Unaudited
1
Effective October 1, 2009, Franklin Resources, Inc. retrospectively adopted a new accounting standard that modifies the earnings per share calculations to recognize its nonvested stock
awards and nonvested stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents as if they were a separate class of stock.
31-Mar-10
31-Dec-09
Mar-10 vs.
Dec-09
30-Sep-09
30-Jun-09
31-Mar-09
Mar-10 vs.
Mar-09
Operating Income
461.1
$    
467.0
$    
(1%)
384.7
$    
326.2
$    
223.3
$    
106%
Consolidated sponsored
investment products income
(losses), net
5.6
15.1
(63%)
42.8
44.5
(11.1)
NM
Investment and other income
(losses), net
42.5
33.0
29%
87.3
52.6
(33.9)
NM
Interest expense
(0.9)
(0.8)
13%
(0.2)
(0.2)
(2.1)
(57%)
Other income (expenses), net
47.2
47.3
0%
129.9
96.9
(47.1)
NM
Income Before Taxes
508.3
514.3
(1%)
514.6
423.1
176.2
188%
Taxes on income
149.9
156.8
(4%)
136.2
116.3
67.1
123%
Net Income
358.4
357.5
0%
378.4
306.8
109.1
229%
Less: Net income (loss)
attributable to noncontrolling
interests
1.7
1.9
(11%)
11.0
9.1
(1.7)
NM
Net Income Attributable to
Franklin Resources, Inc.
356.7
$    
355.6
$    
0%
367.4
$    
297.7
$    
110.8
$    
222%
Basic earnings per share
1.56
$      
1.55
$      
1%
1.60
$      
1.29
$      
0.48
$      
225%
Diluted Earnings per Share
1
1.55
$      
1.54
$      
1%
1.59
$      
1.28
$      
0.47
$      
230%
Average shares outstanding (in thousands)
Basic
227,046
227,892
0%
228,741
229,804
231,178
(2%)
Diluted
228,300
229,251
0%
230,061
230,819
231,890
(2%)

20
20%
23%
22%
78%
64%
55%
54%
42%
45%
40%
77%
64%
123%
104%
75%
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
Operating Margin
Operating Margin and Capital Management
24.5%
30.4%
31.1%
33.9%
32.6%
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
Stock Repurchase Activity
1
Dividend and repurchase payout are calculated as amount of dividend declared divided by net income attributable to Franklin Resources, Inc. and amount of stock repurchase divided by net
income attributable to Franklin Resources, Inc, respectively, for the trailing 12 months period.
1.4
1.7
1.1
1.6
1.7
228.2
227.4
230.4
232.0
229.3
31-Mar-09
30-Jun-09
30-Sep-09
31-Dec-09
31-Mar-10
Trailing 12 Months Payout Ratio
(in millions, except payout ratio data, for the three months ended)
Unaudited