EXHIBIT 99.1
| Contact: | Franklin Resources, Inc. | |
| Investor Relations: Greta Gahl (650) 312-4091 | ||
| Corporate Communications: Lisa Gallegos (650) 312-3395 | ||
| franklintempleton.com |
FOR IMMEDIATE RELEASE
Franklin Resources, Inc. Announces Second Quarter Results
San Mateo, CA, April 26, 2007 - Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE: BEN) today announced net income of $440.9 million, or $1.73 per share diluted, on revenues of $1,509.0 million for the quarter ended March 31, 2007. In the quarter ended December 31, 2006, net income was $426.8 million, or $1.67 per share diluted, on revenues of $1,427.8 million. For the quarter ended March 31, 2006, net income was $196.5 million, or $0.74 per share diluted, on revenues of $1,254.8 million.
Operating income for the quarter ended March 31, 2007 was $499.1 million, as compared to $508.1 million for the prior quarter and $349.8 million for the quarter ended March 31, 2006. The company’s non-operating income for the quarter ended March 31, 2007 included $100.9 million of investment and other income, net, as compared to $71.1 million in the prior quarter and $55.4 million for the quarter ended March 31, 2006.
Assets under management by the company’s subsidiaries were $576.0 billion at March 31, 2007, as compared to $552.9 billion at December 31, 2006 and $491.6 billion at March 31, 2006. Simple monthly average assets under management during the quarter ended March 31, 2007 were $563.7 billion compared to $533.1 billion in the preceding quarter and $481.2 billion in the same quarter a year ago. Equity assets comprised 60% of total assets under management at March 31, 2007, December 31, 2006 and March 31, 2006. Fixed-income assets comprised 21% of total assets under management at March 31, 2007 and December 31, 2006, as compared to 22% at March 31, 2006. Hybrid assets accounted for 18% of total assets under management at March 31, 2007 and December 31, 2006, as compared to 17% at March 31, 2006. Sales exceeded redemptions by $10.9 billion for the quarter ended March 31, 2007, as compared to $10.0 billion for the prior quarter and $2.5 billion for the comparable quarter a year ago.
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Fiscal Second Quarter 2007 Highlights
Performance and Products1,2
(See important footnotes in “Supplemental Information” section at the end of the release.)
• | 85% of Franklin Templeton’s long-term mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 88% for the five-year period and 94% for the 10-year period ended March 31, 2007.3,4 |
• | 80% of Franklin Templeton’s equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 83% for the five-year period and 92% for the 10-year period ended March 31, 2007.3,5 |
• | 97% of Franklin Templeton’s fixed income mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three- and five-year periods and 100% for the 10-year period ended March 31, 2007.3,6 |
• | 85% of Franklin equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 86% for the five-year period and 91% for the 10-year period ended March 31, 2007.3,7 |
• | 67% of Templeton equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 75% for the five-year period and 90% for the 10-year period ended March 31, 2007.3,8 |
• | 100% of Mutual Series equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-, five- and 10-year periods ended March 31, 2007.3,9 |
• | 87% of Franklin Templeton’s taxable fixed income mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 88% for the five-year period and 98% for the 10-year period ended March 31, 2007.3,10 |
• | 100% of Franklin Templeton’s tax-free fixed income mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-, five- and 10-year periods ended March 31, 2007.3,11 |
• | Franklin Income Fund ranked in the top decile of the Lipper Mixed-Asset Target Allocation Moderate Funds peer group for total return among 423, 312, 212 and 112 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return and Consistent Return, and was rated 5 stars overall by Morningstar among 364 Conservative Allocation funds as of March 31, 2007.12,21,22 |
• | Franklin MicroCap Value Fund ranked in the top quartile of the Lipper Small-Cap Value Funds peer group for total return among 267, 216, 164 and 64 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return, Consistent Return, Preservation and Expense, and was rated 5 stars overall by Morningstar among 310 Small Value funds as of March 31, 2007.13,21,22 |
• | Templeton Global Smaller Companies Fund ranked in the top quartile of the Lipper Global Small/Mid-Cap Core Funds peer group for total return among 16, 14, 12 and 6 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund was rated 4 stars overall by Morningstar among 412 World Stock funds as of March 31, 2007.14,22 |
• | Mutual Shares Fund ranked in the top two quartiles of the Lipper Multi-Cap Value Funds peer group for total return among 425, 333, 249 and 88 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return and Preservation, and was rated 4 stars overall by Morningstar among 1,100 Large Value funds as of March 31, 2007.15,21,22 |
• | Mutual Beacon Fund ranked in the top quartile of the Lipper Multi-Cap Core Funds peer group for total return among 893, 656, 476 and 197 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return and Preservation, and was rated 5 stars overall by Morningstar among 1,100 Large Value funds as of March 31, 2007.16,21,22 |
• | Mutual Discovery Fund ranked in the top two quartiles of the Lipper Global Multi-Cap Value Funds peer group for total return among 58, 46, 36 and 14 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return and Preservation, and was rated 5 stars overall by Morningstar among 412 World Stock funds as of March 31, 2007.17,21,22 |
| • | Franklin Federal Tax-Free Income Fund ranked in the top quartile of the Lipper General Municipal Debt Funds peer group for total return among 241, 233, 217 and 137 funds for |
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the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return, Consistent Return, Expense and Tax Efficiency, and was rated 4 stars overall by Morningstar among 271 Muni National Long funds as of March 31, 2007.18,21,22 |
• | Franklin California High Yield Municipal Fund ranked in the top decile of the Lipper California Municipal Debt Funds peer group for total return among 116, 107, 94 and 69 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received Lipper Leader awards for Total Return, Consistent Return and Tax Efficiency, and was rated 5 stars overall by Morningstar among 153 Muni California Long funds as of March 31, 2007.19,21,22 |
• | Templeton Global Bond Fund ranked in the top decile of the Lipper Global Income Funds peer group for total return among 106, 97, 81 and 55 funds for the one-, three-, five- and 10-year periods ended March 31, 2007. The fund received a Lipper Leader award for Total Return, and was rated 5 stars overall by Morningstar among 163 World Bond funds as of March 31, 2007.20,21,22 |
Performance quoted represents past performance, which cannot predict or guarantee future results.
Global Business Developments
| • | Launched a company-wide sales and marketing campaign focused on fixed income funds, and, to date, have seen first time fixed income sales from over 4,800 new financial advisors who had not previously used Franklin Templeton fixed income products. |
| • | Opened a new campus at Gachibowli in Hyderabad, India, to serve principally as a support center to the operations and technology groups in Franklin Templeton’s offices worldwide. |
| • | Franklin Templeton Investments was ranked in the top quartile for service quality among 100 German mutual fund distributors, in a study by an external consultant published in the German financial magazine,Capital. |
| • | Standard & Poor’s rated Franklin Templeton as the “Best Foreign Fixed-Income Asset Management Company” in Portugal, and the company was also rated the “Best Bond Group” for 3-year performance at the Hong Kong 2007 Lipper Fund Awards. |
| • | Franklin Templeton was selected from among 41 fund families as the “Best Overall Fund Group” for 3-year performance at the 2007 Lipper Fund Awards – Gulf Region. |
| • | In Canada, DALBAR ranked Franklin Templeton Investments #1 among broker-distributed firms for speed of delivery of 2006 annual statements. |
| • | Franklin Resources, Inc. repurchased four million shares of its outstanding common stock under an accelerated repurchase agreement. |
| • | Upon taking full control of Brazilian local asset management company, Bradesco Templeton Asset Management Ltda., the company marked its relaunch of operations as Franklin Templeton Investimentos (Brasil) Ltda. with an event in Sao Paulo attended by over 500 financial advisors, prospective investors and others. |
• | Commemorated the 30th anniversary of the Franklin Municipal Bond Department, the nation’s largest municipal bond fund manager23 with over $53 billion in municipal bond assets under management,24 in February. |
| • | Announced a global expansion of the Franklin Templeton Academy, a program that offers a comprehensive curriculum designed to help financial advisors cultivate and enhance financial planning and business development skills. |
| • | The Lothian Pension Fund, administered by the City of Edinburgh Council, funded a US$280 million Templeton Global Equity account. |
| • | Franklin Templeton Frontier Emerging Markets Debt Fund, launched in March 2006 for Japanese investors, exceeded US$1 billion in assets under management during the quarter. |
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| Franklin Resources, Inc. | ||||||||||||
| Preliminary Condensed Consolidated Income Statements | ||||||||||||
| Unaudited | ||||||||||||
| (in thousands, except assets under management and per share data) | Three months ended March 31 | Six months ended March 31 | ||||||||||
| 2007 | 2006 | % Change | 2007 | 2006 | % Change | |||||||
Operating Revenues | ||||||||||||
Investment management fees | $850,796 | $726,015 | 17% | $1,682,686 | $1,413,454 | 19% | ||||||
Underwriting and distribution fees | 570,848 | 445,501 | 28% | 1,080,621 | 860,380 | 26% | ||||||
Shareholder servicing fees | 68,333 | 65,065 | 5% | 135,898 | 129,337 | 5% | ||||||
Consolidated sponsored investment products income, net | 1,327 | 2,558 | (48%) | 2,164 | 2,836 | (24%) | ||||||
Other, net | 17,702 | 15,631 | 13% | 35,452 | 30,215 | 17% | ||||||
Total operating revenues | 1,509,006 | 1,254,770 | 20% | 2,936,821 | 2,436,222 | 21% | ||||||
Operating Expenses | ||||||||||||
Underwriting and distribution | 533,946 | 413,236 | 29% | 1,011,997 | 793,313 | 28% | ||||||
Compensation and benefits | 268,471 | 231,182 | 16% | 519,487 | 449,662 | 16% | ||||||
Information systems, technology and occupancy | 73,953 | 73,900 | —% | 149,016 | 147,795 | 1% | ||||||
Advertising and promotion | 46,035 | 36,130 | 27% | 80,896 | 66,467 | 22% | ||||||
Amortization of deferred sales commissions | 37,615 | 32,115 | 17% | 71,362 | 64,117 | 11% | ||||||
Amortization of intangible assets | 2,666 | 4,356 | (39%) | 5,334 | 8,709 | (39%) | ||||||
Intangible assets impairment | — | 68,400 | (100%) | — | 68,400 | (100%) | ||||||
Other | 47,237 | 45,694 | 3% | 91,576 | 83,416 | 10% | ||||||
Total operating expenses | 1,009,923 | 905,013 | 12% | 1,929,668 | 1,681,879 | 15% | ||||||
Operating income | 499,083 | 349,757 | 43% | 1,007,153 | 754,343 | 34% | ||||||
Other Income (Expenses) | ||||||||||||
Consolidated sponsored investment products gains, net | 13,755 | 16,992 | (19%) | 44,041 | 27,806 | 58% | ||||||
Investment and other income, net | 100,857 | 55,388 | 82% | 171,966 | 87,754 | 96% | ||||||
Interest expense | (5,990) | (7,125) | (16%) | (12,112) | (16,313) | (26%) | ||||||
Other income, net | 108,622 | 65,255 | 66% | 203,895 | 99,247 | 105% | ||||||
Income before taxes on income | 607,705 | 415,012 | 46% | 1,211,048 | 853,590 | 42% | ||||||
Taxes on income | 166,839 | 218,496 | (24%) | 343,382 | 339,105 | 1% | ||||||
Net income | $440,866 | $196,516 | 124% | $867,666 | $514,485 | 69% | ||||||
Earnings per Share | ||||||||||||
Basic | $1.75 | $0.76 | 130% | $3.44 | $2.01 | 71% | ||||||
Diluted | 1.73 | 0.74 | 134% | 3.40 | 1.95 | 74% | ||||||
Dividends per share | $0.15 | $0.12 | 25% | $0.30 | $0.24 | 25% | ||||||
Average Shares Outstanding(in thousands) | ||||||||||||
Basic | 251,763 | 258,110 | (2%) | 252,085 | 255,618 | (1%) | ||||||
Diluted | 255,160 | 265,437 | (4%) | 255,151 | 265,117 | (4%) | ||||||
Operating Margin1 | 33% | 28% | 34% | 31% | ||||||||
Assets Under Management(in millions) | ||||||||||||
Beginning of period | $552,905 | $464,850 | 19% | $511,330 | $453,065 | 13% | ||||||
Sales | 43,438 | 32,561 | 33% | 81,049 | 62,931 | 29% | ||||||
Reinvested distributions | 2,322 | 1,440 | 61% | 15,186 | 9,800 | 55% | ||||||
Redemptions | (32,526) | (30,012) | 8% | (60,187) | (54,534) | 10% | ||||||
Distributions | (3,392) | (2,026) | 67% | (18,946) | (12,068) | 57% | ||||||
Dispositions2 | — | — | N/A | (1,968) | — | N/A | ||||||
Appreciation | 13,269 | 24,779 | (46%) | 49,552 | 32,398 | 53% | ||||||
End of period | $576,016 | $491,592 | 17% | $576,016 | $491,592 | 17% | ||||||
Simple Monthly Average for Period | $563,665 | $481,157 | 17% | $547,758 | $467,559 | 17% | ||||||
1 | Operating margin: Operating income divided by total operating revenues. |
2 | The six months ended March 31, 2007 include the divestiture of assets under management of a former subsidiary at October 1, 2006. |
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| Franklin Resources, Inc. | ||||||||||||
| Preliminary Condensed Consolidated Income Statements | ||||||||||||
| Unaudited | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three months ended | ||||||||||||
| 31-Mar-07 | 31-Dec-06 | % Change | 30-Sep-06 | 30-Jun-06 | 31-Mar-06 | |||||||
Operating Revenues | ||||||||||||
Investment management fees | $850,796 | $831,890 | 2% | $764,458 | $786,015 | $726,015 | ||||||
Underwriting and distribution fees | 570,848 | 509,773 | 12% | 448,484 | 447,136 | 445,501 | ||||||
Shareholder servicing fees | 68,333 | 67,565 | 1% | 64,365 | 65,593 | 65,065 | ||||||
Consolidated sponsored investment products income, net | 1,327 | 837 | 59% | 2,123 | 2,753 | 2,558 | ||||||
Other, net | 17,702 | 17,750 | —% | 17,799 | 15,778 | 15,631 | ||||||
Total operating revenues | 1,509,006 | 1,427,815 | 6% | 1,297,229 | 1,317,275 | 1,254,770 | ||||||
Operating Expenses | ||||||||||||
Underwriting and distribution | 533,946 | 478,051 | 12% | 417,361 | 430,727 | 413,236 | ||||||
Compensation and benefits | 268,471 | 251,016 | 7% | 243,906 | 242,686 | 231,182 | ||||||
Information systems, technology and occupancy | 73,953 | 75,063 | (1%) | 80,464 | 74,082 | 73,900 | ||||||
Advertising and promotion | 46,035 | 34,861 | 32% | 48,684 | 41,309 | 36,130 | ||||||
Amortization of deferred sales commissions | 37,615 | 33,747 | 11% | 34,242 | 31,514 | 32,115 | ||||||
Amortization of intangible assets | 2,666 | 2,668 | —% | 2,663 | 2,650 | 4,356 | ||||||
Intangible assets impairment | — | — | N/A | — | — | 68,400 | ||||||
Other | 47,237 | 44,339 | 7% | 42,857 | 42,321 | 45,694 | ||||||
Total operating expenses | 1,009,923 | 919,745 | 10% | 870,177 | 865,289 | 905,013 | ||||||
Operating income | 499,083 | 508,070 | (2%) | 427,052 | 451,986 | 349,757 | ||||||
Other Income (Expenses) | ||||||||||||
Consolidated sponsored investment products gains (losses), net | 13,755 | 30,286 | (55%) | 14,170 | (8,352) | 16,992 | ||||||
Investment and other income, net | 100,857 | 71,109 | 42% | 57,757 | 52,271 | 55,388 | ||||||
Interest expense | (5,990) | (6,122) | (2%) | (6,226) | (6,682) | (7,125) | ||||||
Other income, net | 108,622 | 95,273 | 14% | 65,701 | 37,237 | 65,255 | ||||||
Income before taxes on income | 607,705 | 603,343 | 1% | 492,753 | 489,223 | 415,012 | ||||||
Taxes on income | 166,839 | 176,543 | (5%) | 111,084 | 117,809 | 218,496 | ||||||
Net income | $440,866 | $426,800 | 3% | $381,669 | $371,414 | $196,516 | ||||||
Earnings per Share | ||||||||||||
Basic | $1.75 | $1.69 | 4% | $1.51 | $1.44 | $0.76 | ||||||
Diluted | 1.73 | 1.67 | 4% | 1.49 | 1.41 | 0.74 | ||||||
Dividends per share | $0.15 | $0.15 | —% | $0.12 | $0.12 | $0.12 | ||||||
Average Shares Outstanding(in thousands) | ||||||||||||
Basic | 251,763 | 252,400 | —% | 252,140 | 257,592 | 258,110 | ||||||
Diluted | 255,160 | 255,547 | —% | 255,429 | 262,876 | 265,437 | ||||||
Operating Margin1 | 33% | 36% | 33% | 34% | 28% | |||||||
Employees | 8,337 | 8,211 | 2% | 7,982 | 7,817 | 7,540 | ||||||
Billable Shareholder Accounts(in millions) | 20.5 | 19.5 | 5% | 17.7 | 18.7 | 17.6 | ||||||
1 | Operating margin: Operating income divided by total operating revenues. |
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Franklin Resources, Inc. | ||||
Summary Balance Sheets | ||||
(in thousands) | ||||
Preliminary Unaudited March 31, 2007 | September 30, 2006 | |||
Assets | ||||
Current assets | $5,335,134 | $4,969,601 | ||
Banking/finance assets | 983,391 | 1,148,893 | ||
Non-current assets | 3,298,385 | 3,381,365 | ||
Total assets | $9,616,910 | $9,499,859 | ||
Liabilities and Stockholders’ Equity | ||||
Current liabilities | $933,649 | $962,196 | ||
Banking/finance liabilities | 742,935 | 908,387 | ||
Non-current liabilities | 796,918 | 848,752 | ||
Total liabilities | 2,473,502 | 2,719,335 | ||
Minority interest | 112,427 | 95,796 | ||
Total stockholders’ equity | 7,030,981 | 6,684,728 | ||
Total liabilities and stockholders’ equity | $9,616,910 | $9,499,859 | ||
Ending Shares of Common Stock Outstanding | 249,583 | 253,249 | ||
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ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE | ||||||||||||
(in billions) | ||||||||||||
| Three months ended | ||||||||||||
| 31-Mar-07 | 31-Dec-06 | % Change | 30-Sept-06 | 30-Jun-06 | 31-Mar-06 | |||||||
Equity | ||||||||||||
Global/international | $248.7 | $240.6 | 3% | $217.6 | $209.7 | $210.8 | ||||||
Domestic (U.S.) | 95.1 | 91.0 | 5% | 84.4 | 82.1 | 84.8 | ||||||
Total equity | 343.8 | 331.6 | 4% | 302.0 | 291.8 | 295.6 | ||||||
Hybrid | 105.0 | 98.7 | 6% | 90.6 | 84.6 | 83.5 | ||||||
Fixed-Income | ||||||||||||
Tax-free | 57.3 | 56.6 | 1% | 55.6 | 54.1 | 54.3 | ||||||
Taxable: | ||||||||||||
Domestic (U.S.) | 33.0 | 32.4 | 2% | 32.4 | 31.3 | 31.7 | ||||||
Global/international | 31.0 | 27.3 | 14% | 24.4 | 22.4 | 20.9 | ||||||
Total fixed-income | 121.3 | 116.3 | 4% | 112.4 | 107.8 | 106.9 | ||||||
Money Market | 5.9 | 6.3 | (6%) | 6.3 | 5.9 | 5.6 | ||||||
Total Ending Assets | $576.0 | $552.9 | 4% | $511.3 | $490.1 | $491.6 | ||||||
Simple Monthly Average Assets | $563.7 | $533.1 | 6% | $500.4 | $494.6 | $481.2 | ||||||
ASSETS UNDER MANAGEMENT AND FLOWS | ||||||||||||
(in billions) | ||||||||||||
| Three months ended | ||||||||||||
| 31-Mar-07 | 31-Dec-06 | % Change | 31-Mar-06 | % Change | ||||||||
Beginning Assets Under Management | $552.9 | $511.3 | 8% | $464.8 | 19% | |||||||
U.S. retail assets1 | ||||||||||||
Beginning assets | $330.9 | $307.2 | 8% | $279.7 | 18% | |||||||
Sales | 20.1 | 17.8 | 13% | 15.1 | 33% | |||||||
Reinvested distributions | 1.8 | 11.5 | (84%) | 0.9 | 100% | |||||||
Redemptions | (13.1) | (11.5) | 14% | (12.5) | 5% | |||||||
Distributions | (2.9) | (14.0) | (79%) | (1.6) | 81% | |||||||
Appreciation | 8.4 | 19.9 | (58%) | 13.4 | (37%) | |||||||
Ending assets | $345.2 | $330.9 | 4% | $295.0 | 17% | |||||||
| Other assets, including international and institutional | ||||||||||||
Beginning assets | $222.0 | $204.1 | 9% | $185.1 | 20% | |||||||
Sales | 23.3 | 19.8 | 18% | 17.5 | 33% | |||||||
Reinvested distributions | 0.5 | 1.4 | (64%) | 0.5 | —% | |||||||
Redemptions | (19.4) | (16.1) | 20% | (17.5) | 11% | |||||||
Distributions | (0.5) | (1.6) | (69%) | (0.4) | 25% | |||||||
Dispositions2 | — | (2.0) | (100%) | — | N/A | |||||||
Appreciation | 4.9 | 16.4 | (70%) | 11.4 | (57%) | |||||||
Ending assets | $230.8 | $222.0 | 4% | $196.6 | 17% | |||||||
Total Ending Assets | $576.0 | $552.9 | 4% | $491.6 | 17% | |||||||
| Total Assets Under Management | ||||||||||||
Beginning assets | $552.9 | $511.3 | 8% | $464.8 | 19% | |||||||
Sales | 43.4 | 37.6 | 15% | 32.6 | 33% | |||||||
Reinvested distributions | 2.3 | 12.9 | (82%) | 1.4 | 64% | |||||||
Redemptions | (32.5) | (27.6) | 18% | (30.0) | 8% | |||||||
Distributions | (3.4) | (15.6) | (78%) | (2.0) | 70% | |||||||
Dispositions2 | — | (2.0) | (100%) | — | N/A | |||||||
Appreciation | 13.3 | 36.3 | (63%) | 24.8 | (46%) | |||||||
Ending assets | $576.0 | $552.9 | 4% | $491.6 | 17% | |||||||
1 | U.S. retail assets include institutional assets totaling approximately $50.0 billion that are invested in U.S. retail fund and annuity products. Total institutional and high net-worth assets at March 31, 2007 were approximately $176.9 billion, of which high net-worth assets comprised $10.7 billion. |
2 | The quarter ended December 31, 2006 includes the divestiture of assets under management of a former subsidiary at October 1, 2006. |
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ASSETS UNDER MANAGEMENT AND FLOWS BY INVESTMENT OBJECTIVE | |||||||||||
| (in billions) | Three months ended | ||||||||||
| 31-Mar-07 | 31-Dec-06 | 31-Mar-06 | |||||||||
Global/international equity | |||||||||||
Beginning assets | $240.6 | $217.6 | $193.9 | ||||||||
Sales | 17.2 | 15.2 | 15.4 | ||||||||
Reinvested distributions | 0.7 | 7.1 | 0.3 | ||||||||
Redemptions | (15.1 | ) | (11.9 | ) | (13.9 | ) | |||||
Distributions | (0.8 | ) | (8.1 | ) | — | ||||||
Dispositions1 | — | (2.0 | ) | — | |||||||
Appreciation | 6.1 | 22.7 | 15.1 | ||||||||
Ending assets | 248.7 | 240.6 | 210.8 | ||||||||
Domestic (U.S.) equity | |||||||||||
Beginning assets | 91.0 | 84.4 | 79.6 | ||||||||
Sales | 5.1 | 4.4 | 4.3 | ||||||||
Reinvested distributions | 0.2 | 3.9 | — | ||||||||
Redemptions | (3.9 | ) | (3.6 | ) | (4.8 | ) | |||||
Distributions | (0.2 | ) | (4.3 | ) | (0.3 | ) | |||||
Appreciation | 2.9 | 6.2 | 6.0 | ||||||||
Ending assets | 95.1 | 91.0 | 84.8 | ||||||||
Hybrid | |||||||||||
Beginning assets | 98.7 | 90.6 | 79.7 | ||||||||
Sales | 6.4 | 5.7 | 3.6 | ||||||||
Reinvested distributions | 0.6 | 1.1 | 0.4 | ||||||||
Redemptions | (2.2 | ) | (2.2 | ) | (2.4 | ) | |||||
Distributions | (0.9 | ) | (1.5 | ) | (0.6 | ) | |||||
Appreciation | 2.4 | 5.0 | 2.8 | ||||||||
Ending assets | 105.0 | 98.7 | 83.5 | ||||||||
Tax-free income | |||||||||||
Beginning assets | 56.6 | 55.6 | 53.9 | ||||||||
Sales | 2.2 | 1.9 | 1.8 | ||||||||
Reinvested distributions | 0.4 | 0.4 | 0.3 | ||||||||
Redemptions | (1.5 | ) | (1.4 | ) | (1.5 | ) | |||||
Distributions | (0.7 | ) | (0.6 | ) | (0.5 | ) | |||||
Appreciation | 0.3 | 0.7 | 0.3 | ||||||||
Ending assets | 57.3 | 56.6 | 54.3 | ||||||||
Taxable fixed-income | |||||||||||
Beginning assets | 59.7 | 56.8 | 52.1 | ||||||||
Sales | 8.3 | 6.8 | 5.1 | ||||||||
Reinvested distributions | 0.3 | 0.3 | 0.3 | ||||||||
Redemptions | (5.0 | ) | (4.9 | ) | (4.8 | ) | |||||
Distributions | (0.7 | ) | (1.0 | ) | (0.5 | ) | |||||
Appreciation | 1.4 | 1.7 | 0.4 | ||||||||
Ending assets | 64.0 | 59.7 | 52.6 | ||||||||
Money market | |||||||||||
Beginning assets | 6.3 | 6.3 | 5.6 | ||||||||
Sales | 4.2 | 3.6 | 2.4 | ||||||||
Reinvested distributions | 0.1 | 0.1 | 0.1 | ||||||||
Redemptions | (4.8 | ) | (3.6 | ) | (2.6 | ) | |||||
Distributions | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||
Appreciation | 0.2 | — | 0.2 | ||||||||
Ending assets | 5.9 | 6.3 | 5.6 | ||||||||
Ending Assets Under Management | $576.0 | $552.9 | $491.6 | ||||||||
1 | The quarter ended December 31, 2006 includes the divestiture of assets under management of a former subsidiary at October 1, 2006. |
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Conference Call Information
On Thursday, April 26, 2007, Franklin Resources, Inc., [NYSE:BEN] will release its second fiscal quarter 2007 financial results. President and Chief Executive Officer of Franklin Resources, Inc., Greg Johnson, and Senior Vice President, Chief Financial Officer and Treasurer, Ken Lewis, will lead a live conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) that day to discuss the quarterly results and answer analysts’ questions.
Access to the teleconference will be available via franklintempleton.com 10 minutes before the start of the call or by dialing (877) 480-6346 in the U.S. or (706) 645-0197 internationally.
A replay of the call will be archived on the “Our Company” page of franklintempleton.com through May 10, 2007. The replay can also be accessed by calling (800) 642-1687 in the U.S. or (706) 645-9291 internationally using access code 6218075, after 5:30 p.m. Eastern Time on April 26, 2007, through 11:59 p.m. Eastern Time on May 10, 2007.
Questions regarding the teleconference call should be directed to Franklin Resources, Inc., Investor Relations at (650) 525-8900 or Corporate Communications at (650) 312-2245.
Franklin Resources, Inc. [NYSE:BEN], 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 and Fiduciary Trust investment teams. The San Mateo, CA-based company has 60 years of investment experience and approximately $576 billion in assets under management as of March 31, 2007. For more information, please call 1-800/DIAL BEN® or visit franklintempleton.com.
Supplemental Information
Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. To obtain a 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 the prospectus carefully before investing.
| 1. | 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. |
| 2. | Morningstar ratings and Lipper rankings for Franklin Templeton U.S. based funds are based on Class A shares. Franklin Templeton funds are compared against a universe of all share classes. All Franklin Templeton Class A asset data is based on 02/28/07 figures unless noted otherwise. Indices are unmanaged and one cannot invest directly in them. Unless otherwise noted, fund returns quoted reflect Class A shares. Performance returns, ratings and rankings for other classes may vary. |
| 3. | 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 145 peer groups of U.S. retail mutual funds, and the groups vary in size from 5 to 958 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. |
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Lipper Performance Rankings of Franklin Templeton’s Long-Term Mutual Funds (see also footnote 2
and 3 above)
FRANKLIN TEMPLETON
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 67% | 85% | 88% | 94% | ||||
3rd & 4th | 33% | 15% | 12% | 6% | ||||
FRANKLIN TEMPLETON EQUITY
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 59% | 80% | 83% | 92% | ||||
3rd & 4th | 41% | 20% | 17% | 8% | ||||
FRANKLIN TEMPLETON FIXED INCOME
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 86% | 97% | 97% | 100% | ||||
3rd & 4th | 14% | 3% | 3% | 0% | ||||
FRANKLIN EQUITY
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 81% | 85% | 86% | 91% | ||||
3rd & 4th | 19% | 15% | 14% | 9% | ||||
TEMPLETON EQUITY
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 21% | 67% | 75% | 90% | ||||
3rd & 4th | 79% | 33% | 25% | 10% | ||||
MUTUAL SERIES EQUITY
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 95% | 100% | 100% | 100% | ||||
3rd & 4th | 5% | 0% | 0% | 0% | ||||
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FRANKLIN TEMPLETON TAXABLE FIXED INCOME
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 71% | 87% | 88% | 98% | ||||
3rd & 4th | 29% | 13% | 12% | 2% | ||||
FRANKLIN TEMPLETON TAX-FREE FIXED INCOME
| Quartile | Time Periods Ended March 31, 2007 | |||||||
1-Year Assets (%) | 3-Year Assets (%) | 5-Year Assets (%) | 10-Year Assets (%) | |||||
1st & 2nd | 90% | 100% | 100% | 100% | ||||
3rd & 4th | 10% | 0% | 0% | 0% | ||||
4. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin Templeton long-term mutual funds tracked by Lipper, 35, 50, 43 and 38 funds ranked in the top quartile and 35, 21, 25 and 26 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
5. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin Templeton equity funds tracked by Lipper, 13, 19, 14 and 11 funds ranked in the top quartile and 17, 10, 12 and 13 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
6. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin Templeton non-money market fixed income funds tracked by Lipper, 22, 31, 29 and 27 funds ranked in the top quartile and 18, 11, 13 and 13 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
7. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin equity mutual funds tracked by Lipper, 4, 12, 8 and 5 funds ranked in the top quartile and 13, 6, 7 and 9 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
8. | Source: Lipper® Inc., 03/31/07. Of the eligible Templeton equity mutual funds tracked by Lipper, 5, 1, 2 and 1 funds ranked in the top quartile and 2, 3, 3 and 4 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
9. | Source: Lipper® Inc., 03/31/07. Of the eligible Mutual Series equity mutual funds tracked by Lipper, 4, 6, 4 and 5 funds ranked in the top quartile and 2, 1, 2 and 0 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
10. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin Templeton non-money market taxable fixed income funds tracked by Lipper, 3, 5, 4 and 3 funds ranked in the top quartile and 6, 3, 5 and 4 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
11. | Source: Lipper® Inc., 03/31/07. Of the eligible Franklin Templeton non-money market tax-free fixed income funds tracked by Lipper, 19, 26, 25 and 24 funds ranked in the top quartile and 12, 8, 8 and 9 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. |
12. | Source: Lipper® Inc., 03/31/07. Franklin Income Fund Class A ranked 3 in a universe of 423 funds in Lipper’s “Mixed-Asset Target Allocation Moderate Funds” group for the one-year period, 8 of 312 for the three-year period, 3 of 212 for the five-year period and 5 of 112 for the 10-year period. |
13. | Source: Lipper® Inc., 03/31/07. Franklin MicroCap Value Fund Class A ranked 30 in a universe of 267 funds in Lipper’s “Small-Cap Value Funds” group for the one-year period, 27 of 216 for the three-year period, 12 of 164 for the five-year period and 4 of 64 for the 10-year period. |
14. | Source: Lipper® Inc., 03/31/07. Templeton Global Smaller Companies Fund Class A ranked 2 in a universe of 16 funds in Lipper’s “Global Small/Mid-Cap Core Funds” group for the one-year period, 2 of 14 for the three-year period, 2 of 12 for the five-year period and 1 of 6 for the 10-year period. |
15. | Source: Lipper® Inc., 03/31/07. Mutual Shares Fund Class A ranked 137 in a universe of 425 funds in Lipper’s “Multi-Cap Value Funds” group for the one-year period, 79 of 333 for the three-year period, 33 of 249 for the five-year period and 21 of 88 for the 10-year period. |
16. | Source: Lipper® Inc., 03/31/07. Mutual Beacon Fund Class A ranked 21 in a universe of 893 funds in Lipper’s “Multi-Cap Core Funds” group for the one-year period, 29 of 656 for the three-year period, 21 of 476 for the five-year period and 48 of 197 for the 10-year period. |
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| 17. | Source: Lipper® Inc., 03/31/07. Mutual Discovery Fund Class A ranked 29 in a universe of 58 funds in Lipper’s “Global Multi-Cap Value Funds” group for the one-year period, 8 of 46 for the three-year period, 14 of 36 for the five-year period and 3 of 14 for the 10-year period. |
| 18. | Source: Lipper® Inc., 03/31/07. Franklin Federal Tax-Free Income Fund Class A ranked 55 in a universe of 241 funds in Lipper’s “General Municipal Debt Funds” group for the one-year period, 31 of 233 for the three-year period, 35 of 217 for the five-year period and 34 of 137 for the 10-year period. |
| 19. | Source: Lipper® Inc., 03/31/07. Franklin California High Yield Municipal Fund Class A ranked 5 in a universe of 116 funds in Lipper’s “California Municipal Debt Funds” group for the one-year period, 4 of 107 for the three-year period, 5 of 94 for the five-year period and 3 of 69 for the 10-year period. |
| 20. | Source: Lipper® Inc., 03/31/07. Templeton Global Bond Fund Class A ranked 2 in a universe of 106 funds in Lipper’s “Global Income Funds” group for the one-year period, 2 of 97 for the three-year period, 2 of 81 for the five-year period and 5 of 55 for the 10-year period. |
| 21. | Source: Lipper® Inc., 03/31/07.A Lipper Leaders distinction does not imply that a fund named as a Lipper Leader had the best performance in its category. Lipper Leaders Awards are based on Class A shares. Lipper ratings for Consistent Return reflect funds’ historical risk-adjusted returns, adjusted for volatility, relative to peers. Lipper ratings for Total Return reflect funds’ historical total return performance relative to peers. Lipper ratings for Preservation reflect funds’ historical loss avoidance relative to other funds within the same asset class. Preservation ratings are relative, rather than absolute, measures, and funds named Lipper Leaders for Preservation may still experience losses periodically; those losses may be larger for equity and mixed equity funds than for fixed income funds. Lipper ratings for Tax Efficiency reflect funds’ historical success in postponing taxable distributions relative to peers.Lipper ratings for Expense reflect funds’ expense minimization relative to peers with similar load structures. Lipper ratings are computed for all Lipper classifications with five or more distinct portfolios and span both equity and fixed-income funds (e.g., large-cap core, general U.S. Treasury, etc.).The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks for the Consistent Return, Total Return, Preservation, Tax-Efficiency and Expense metrics over three-, five- and 10-year periods(if applicable). 20% of funds in each peer group are named Lipper Leaders, the next 20% receive a score of 2, the middle 20% are scored 3, the next 20% are scored 4, and the lowest 20% are scored 5.Franklin Income Fund, in Lipper’s Mixed-Asset Target Allocation Moderate Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [312], Lipper Leader [212], Lipper Leader [112]; Consistent Return: Lipper Leader [304], Lipper Leader [206], 2 [102].Franklin MicroCap Value Fund, in Lipper’s Small-Cap Value Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [216], Lipper Leader [164], Lipper Leader [64]; Consistent Return: 2 [212], 2 [164], Lipper Leader [56]; Preservation (in Equity asset class): Lipper Leader [8480], Lipper Leader [6776], Lipper Leader [2656]; Expense: Lipper Leader [80], Lipper Leader [66], Lipper Leader [28].Mutual Shares Fund, in Lipper’s Multi-Cap Value Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: 2 [333], Lipper Leader [249], 2 [88]; Preservation (in Equity asset class): Lipper Leader [8480], Lipper Leader [6776], Lipper Leader [2656].Mutual Beacon Fund, in Lipper’s Multi-Cap Core Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [656], Lipper Leader [476], 2 [197]; Preservation (in Equity asset class): Lipper Leader [8480], Lipper Leader [6776], Lipper Leader [2656].Mutual Discovery Fund, in Lipper’s Global Multi-Cap Value Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [46], 2 [36], 2 [14]; Preservation (in Equity asset class): Lipper Leader [8480], Lipper Leader [6776], Lipper Leader [2656].Franklin Federal Tax-Free Income Fund, in Lipper’s General Municipal Debt Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [233], Lipper Leader [217], 2 [137]; Consistent Return: 2 [225], 2 [211], 2 [123]; Expense: Lipper Leader [97], Lipper Leader [92], Lipper Leader [70]; Tax Efficiency: Lipper Leader [230], Lipper Leader [214], Lipper Leader [134].Franklin California High Yield Municipal Fund, in Lipper’s California Municipal Debt Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [107], Lipper Leader [94], Lipper Leader [69]; Consistent Return: 2 [104], Lipper Leader [94], Lipper Leader [56]; Tax Efficiency: Lipper Leader [107], Lipper Leader [94], Lipper Leader [69].Templeton Global Bond Fund, in Lipper’s Global Income Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [97], Lipper Leader [81], Lipper Leader [55].Lipper ratings are not intended to predict future results, and Lipper does not guarantee the accuracy of this information. More information is available at www.lipperleaders.com. Lipper Leader Copyright 2003, Reuters, All Rights Reserved. |
| 22. | Source: Morningstar© 03/31/07. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages).The Overall Morningstar Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and 10-year (if applicable) |
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Morningstar Rating metrics. Past performance does not guarantee future results. Morningstar Rating is for the A share class only; other classes may have different performance characteristics. The following fund was rated against 364; 185; 90 Conservative Allocation funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Franklin Income Fund 5, 5, 5. The following fund was rated against 310; 238; 79 Small Value funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Franklin MicroCap Value Fund 4, 5, 5. The following fund was rated against 412; 344; 158 World Stock funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Templeton Global Smaller Companies Fund 4, 4, 3. The following funds were rated against 1100; 829; 393 Large Value funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Mutual Shares Fund 3, 4, 5 andMutual Beacon Fund 3, 5, 5. The following fund was rated against 412; 344; 158 World Stock funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Mutual Discovery Fund 4, 4, 5. The following fund was rated against 271; 260; 191 Muni National Long funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Franklin Federal Tax-Free Income Fund 3, 3, 4. The following fund was rated against 153; 138; 113 Muni California Long funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Franklin California High Yield Municipal Fund 5, 5, 5. The following fund was rated against 163; 143; 103 World Bond funds for the respective three-, five- and 10-year periods ended 03/31/07, as applicable. For the three-, five- and 10-year periods ended 03/31/07, the Morningstar ratings were:Templeton Global Bond Fund 5, 5, 5. |
| 23. | Source: Strategic Insight, as of 2/28/07. Based on long-term municipal bond fund assets. |
| 24. | As of 3/31/07. |
Forward-Looking Statements:
The financial results in this press release are preliminary. Statements in this press release regarding Franklin Resources, Inc., which are not historical facts, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These 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 the actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. 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, 2006, and Franklin’s Form 10-Q filings.
| • | We are subject to extensive and often complex, overlapping and frequently changing regulation domestically and abroad. |
| • | Regulatory and legislative actions and reforms are making 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. |
| • | Our ability to maintain the beneficial tax treatment we anticipate with respect to foreign earnings we have repatriated is based on current interpretations of the American Jobs Creation Act of 2004 (the “Jobs Act”) and timely and permitted use of such amounts in accordance with our domestic reinvestment plan and the Jobs Act. |
| • | Any significant limitation or failure of our software applications and other technology systems that are critical to our operations could constrain our operations. |
| • | We face risks, and corresponding potential costs and expenses, associated with conducting operations and growing our business in numerous foreign countries. |
| • | We depend on key personnel and our financial performance could be negatively affected by the loss of their services. |
| • | Strong competition from numerous and sometimes larger companies with competing offerings and products could limit or reduce sales of our products, potentially resulting in a decline in our market share, revenues and net income. |
| • | Changes in the distribution channels on which we depend could reduce our revenues and hinder our growth. |
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| • | The amount or mix of our assets under management are subject to significant fluctuations and could negatively impact our revenues and income. |
| • | Our increasing focus on international markets as a source of investments and sales of investment products subjects us to increased exchange rate and other risks in connection with earnings and income generated overseas. |
| • | Poor investment performance of our products could affect our sales or reduce the level of assets under management, potentially negatively impacting our revenues and income. |
| • | We could suffer losses in earnings or revenue if our reputation is harmed. |
| • | Our future results are dependent upon maintaining an appropriate level of expenses, which is subject to fluctuation. |
| • | Our ability to successfully integrate widely varied business lines can be impeded by systems and other technological limitations. |
| • | Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability. |
| • | Certain of the portfolios we manage, including our emerging market portfolios, are vulnerable to market-specific political, economic or other risks, any of which may negatively impact our revenues and income. |
| • | Our revenues, earnings and income could be adversely affected if the terms of our management agreements are significantly altered or these agreements are terminated by the funds we advise. |
| • | Diverse and strong competition limits the interest rates that we can charge on consumer loans. |
| • | Civil litigation arising out of or relating to previously settled governmental investigations or other matters, governmental or regulatory investigations and/or examinations 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. |
| • | Our ability to meet cash needs depends upon certain factors, including our asset value, credit worthiness and the market value of our stock. |
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