FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
(x)
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1994
or
( )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-9318
FRANKLIN RESOURCES, INC.
(Exact Name of Registrant As Specified In Its Charter)
Delaware 13-2670991
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Mariners Island Blvd., San Mateo, CA 94404
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code (415) 312-2000
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section (13) or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
and (2) has been subject to the filing requirements for at least
the past 90 days.
YES X NO
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
YES NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Outstanding: 81,596,806 shares, common stock, par value $.10 per
share at August 2, 1994.
(Title of Class)
Exhibit index - See page 12
PART I: FINANCIAL INFORMATION
ITEM I: CONDENSED FINANCIAL STATEMENTS
In the opinion of management, all appropriate adjustments necessary to
a fair presentation of the results of operations have been made for the
periods shown. All adjustments are of a normal recurring nature.
Certain 1993 amounts have been reclassified to conform to 1994
presentation. These financial statements should be read in conjunction
with the Company's audited financial statements for the fiscal year
ended September 30, 1993.
Franklin Resources, Inc.
Consolidated Statements of Income
Unaudited
Three months ended Nine months ended
June 30 June 30 June 30 June 30
(Dollars in thousands, except per share data) 1993 1994 1993 1994
Operating revenues:
Investment management fees $127,947 $161,762 $351,119 $474,846
Underwriting commissions, net 23,070 21,425 59,553 84,222
Transfer, trust and related fees 10,692 14,388 29,871 39,388
Banking/finance, real estate and other 4,963 7,304 13,880 18,539
Total operating revenues 166,672 204,879 454,423 616,995
Operating expenses:
General and administrative 75,721 93,856 208,368 265,231
Selling expenses 11,433 18,483 35,352 50,517
Amortization of goodwill 4,446 4,598 11,951 13,712
Interest expense of banking/finance group 2,301 2,382 7,011 7,163
Total operating expenses 93,901 119,319 262,682 336,623
Operating income 72,771 85,560 191,741 280,372
Other income/(expense):
Investment and other income 5,517 5,781 18,667 16,706
Interest expense (8,090) (7,333) (21,037) (21,846)
Other income/(expense), net (2,573) (1,552) (2,370) (5,140)
Income before taxes on income 70,198 84,008 189,371 275,232
Taxes on income 25,400 23,985 67,576 87,607
Net income $44,798 $60,023 $121,795 $187,625
Earnings per share: (See exhibit 11)
Primary $0.54 $0.72 $1.48 $2.24
Fully diluted $0.54 $0.72 $1.48 $2.24
Dividends per share $0.07 $0.08 $0.21 $0.24
The accompanying notes are an integral part of these financial
statements.
Franklin Resources, Inc.
Condensed Consolidated Balance Sheets
Unaudited (Dollars in thousands)
Sep 30 June 30
Assets: 1993 1994
Current assets:
Cash and cash equivalents $293,777 $210,649
Receivables:
Fees from Franklin/Templeton Group of Funds and
institutional accounts 63,471 82,069
Proceeds from sale of funds' shares 39,150 -
Other 16,860 31,117
Investments in Franklin/Templeton Group of Funds, available
for sale 72,401 129,001
Current deferred taxes 5,971 5,724
Prepaid expenses and other 5,812 8,658
Total current assets 497,442 467,218
Banking/finance group assets:
Cash and cash equivalents 9,175 7,904
Loans receivable, net 128,820 280,503
Investment securities, available for sale 69,962 42,075
Other assets 3,199 4,254
Total banking/finance group assets 211,156 334,736
Other Assets:
Investments:
Investment securities, available for sale 74,624 43,660
Real Estate 9,393 9,017
Deferred costs 10,367 8,115
Premises and equipment, net 65,821 89,942
Goodwill, net of $19,765 and $33,502 amortization,
respectively 696,973 683,236
Other assets 15,758 15,730
Total other assets 872,936 849,700
Total assets $1,581,534 $1,651,654
The accompanying notes are an integral part of these financial
statements.
Franklin Resources, Inc.
Condensed Consolidated Balance Sheets
Unaudited (Dollars in thousands)
Sep 30 June 30
Liabilities: 1993 1994
Current liabilities:
Trade payables and accrued expenses $91,708 $99,632
Current maturities of long-term debt 51,716 1,180
Commercial paper - 149,528
Payable to funds for shares sold 38,695 -
Dividends payable 5,747 6,481
Total current liabilities 187,866 256,821
Banking/finance group liabilities:
Deposits of account holders:
Interest bearing demand deposits 10,794 8,664
Non-interest bearing demand deposits 8,986 20,982
Savings and time deposits 175,055 168,185
Other liabilities 974 2,079
Total banking/finance group liabilities 195,809 199,910
Other Liabilities:
Long-term debt 296,000 149,528
Subordinated debentures 150,000 150,000
Other notes and capital leases payable 8,820 4,266
Deferred tax liabilities 10,999 8,252
Other liabilities 11,662 13,198
Total other liabilities 477,481 325,244
Total liabilities 861,156 781,975
Stockholders' equity:
Preferred stock, $1.00 par value, 1,000,000 shares
authorized; no shares issued or outstanding - -
Common stock, $.10 par value; 500,000,000 shares authorized;
82,098,580 and 82,262,137 shares issued; 82,098,580 and
81,596,506 shares outstanding, respectively 8,210 8,226
Capital in excess of par value 83,683 90,752
Retained earnings 630,399 798,404
Less cost of treasury stock - (25,310)
Other (1,914) (2,393)
Total stockholders' equity 720,378 869,679
Total liabilities and stockholders' equity $1,581,534 $1,651,654
The accompanying notes are an integral part of these financial
statements.
Franklin Resources, Inc.
Consolidated Statements of Cash Flows
Unaudited
Nine months ended
June 30 June 30
(Dollars in thousands) 1993 1994
Cash flows from operating activities:
Net income $121,795 $187,625
Adjustments to reconcile net income to net cash provided by
operating activities:
(Increase)/decrease in receivables, prepaid expenses and
other (20,568) 9,744
Decrease in trade payables and accrued expenses (11,655) (29,665)
Increase/(decrease) in deferred tax liabilities 6,000 (822)
Depreciation and amortization 16,018 27,176
Losses/(gains) on disposition of investments 7,761 (1,207)
Total adjustments (2,444) 5,226
Net cash provided by operating activities 119,351 192,851
Cash flows from investing activities:
Liquidation/(purchase) of mutual funds, net 121,514 (18,304)
Purchase of banking/finance investment portfolio (112,898) (53,390)
Liquidation of banking/finance investment portfolio 92,976 80,669
Liquidation/(purchase) of real estate and other investments 1,922 (5,297)
Net (increase)/decrease in banking/finance loans receivable,
net 7,704 (154,268)
Purchases of premises and equipment and other (12,159) (32,162)
Acquisition of Templeton, net of cash acquired (630,333) -
Net cash used in investing activities (531,274) (182,752)
Cash flows from financing activities:
Increase in banking deposits of account holders 12,394 2,995
Dividends paid on common stock (16,560) (18,887)
Acquisition of treasury stock - (26,613)
Issuance of bank debt 360,000 15,413
Issuance of commercial paper - 299,056
Payments on notes and capital leases (4,238) (45,502)
Payments on bank debt (14,000) (321,000)
Other 2,135 40
Net cash provided by/(used in) financing activities 339,731 (94,498)
Net decrease in cash (72,192) (84,399)
Cash and cash equivalents at the beginning of the period 308,644 302,952
Cash and cash equivalents at the end of the period $236,452 $218,553
Supplemental disclosure of non-cash information:
Value of common stock issued in Templeton acquisition $100,376 -
Value of common stock issued in other transactions - $8,343
The accompanying notes are an integral part of these financial
statements.
Notes to Condensed Consolidated Financial Statements
Unaudited
1. Commercial paper
During the period, the Company refinanced $296.0 million in
senior bank debt with the proceeds from $300.0 million in
commercial paper offerings. The Company has a credit agreement
with a group of commercial banks that would allow it at its
option to refinance certain amounts up to five years from the
closing date, May 19, 1994. $149.5 million of the outstanding
balance has been classified long-term in accordance with the
Company's intention and ability to refinance these obligations on
a long-term basis. The Company has interest rate swap agreements
which fix interest rates on $105.0 million of commercial paper
over a six to eighteen month period. The weighted average
effective rate of interest including the effect of the swap
agreements on outstanding commercial paper was 4.460% as of June
30, 1994.
2. Subsequent event
During July, 1994 the Company initiated a $300 million medium
term note program. Two notes for $20 million each were issued
with effective interest rates of 6.412% and 6.486% maturing March
15 and June 26, 1996, respectively. Twice yearly interest
payments are due on April 15 and October 15. Proceeds will be
used to finance expansion of the banking/finance loan portfolio
and for operations.
ITEM II: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Franklin Resources, Inc. and its majority-owned subsidiaries (the
"Company") derives its revenue from its principal line of
business which is providing investment management, administration
and related services to the Franklin and Templeton Groups of
Mutual Funds, managed accounts and other investment products. On
October 30, 1992, the Company acquired the assets and liabilities
of Templeton, Galbraith & Hansberger, Ltd. ("Templeton"), which
performs investment management, distribution and shareholder
service functions for the Templeton Group of Mutual Funds and
managed accounts.
I. Material Changes in Financial Condition
The Company has a diversified base of assets under management and
a full range of investment management products and services to
meet a wide range of investment needs of individuals and
institutions. The Company continues to expand its range of
investment products and services in the United States and abroad.
The Company's revenues are derived largely from the amount and
composition of assets under management. Consequently,
fluctuations in financial markets impact revenues and the results
of operations. The depreciation in world capital markets during
calendar 1994 and the general industry slowdown in mutual fund
sales from a historic peak in January 1994 has resulted in a
decrease in assets under management from a high of $117.6 billion
at that time to $113.0 billion at June 30, 1994. The Company
continues to expect growth in assets under management over time;
however, no assurance can be given that historical growth levels
will be maintained.
Selected Balance Sheet items Sep 30 June 30 $ %
(Dollars in millions): 1993 1994 Change Change
Fees receivable from the Franklin/Templeton
Group of Funds and institutional accounts $63.5 $82.1 $18.6 29.3%
Proceeds receivable from sale of funds' shares $39.2 $0.0 ($39.2) -100.0%
Other receivables $16.9 $31.1 $14.2 84.0%
Investments in Franklin/Templeton Group of
Funds, available for sale $72.4 $129.0 $56.6 78.2%
Investment securities, available for sale $74.6 $43.7 ($30.9) -41.4%
Banking/finance loans receivable, net $128.8 $280.5 $151.7 117.7%
Banking/finance investment securities,
available for sale $70.0 $42.1 ($27.9) -39.9%
Current maturities of long term debt $51.7 $1.2 ($50.5) -97.7%
Commercial paper $0.0 $149.5 $149.5 n/a
Long-term debt $296.0 $149.5 ($146.5) -49.5%
Payable to funds for shares sold $38.7 $0.0 ($38.7) -100.0%
Stockholders' Equity $720.4 $869.7 $149.3 20.7%
Treasury Stock $0.0 ($25.3) ($25.3) n/a
The increase in Fees receivable from the Franklin/Templeton Group
of Funds and institutional accounts resulted from an increase in
investment management and other fees generated from increases in
assets under management, sales and shareholder accounts.
Proceeds from the sale of funds' shares in the prior fiscal year
were processed through the Company's underwriting subsidiaries'
bank account. During the current fiscal year, the proceeds were
processed through mutual fund clearing accounts. Consequently,
these movements are no longer reflected on the Company's balance
sheet. The change had no impact on earnings.
Material Changes in Financial Condition (continued)
The increase in Other receivables was related primarily to
advances to pay deferred sales charges on Canada based mutual
funds.
The increase in Investment in Franklin/Templeton Group of Funds,
available for sale was the result primarily of the
reclassification of certain longer term investments in accordance
with management's intended use of these funds.
The increase in Banking/finance loans receivable, net is due
primarily to increased investment in credit card and dealer auto
loan portfolios. During the past two quarterly periods, the
Company has been successful in penetrating the auto loan market
through a newly formed finance subsidiary. The investment in
auto loan portfolios has resulted in a use of funds.
The decrease in Banking/finance investment securities, available
for sale is due to increased investment in the loan portfolios
referred to above.
The decrease in Current maturities of long-term debt is due to
the repayment of the Company's senior bank debt with the proceeds
from commercial paper offerings of $300.0 million. $149.5
million has been classified long-term. (See Note 1 to the
Condensed Consolidated Financial Statements.) In addition to the
commercial paper facility, the Company has created a $300.0
million medium-term note facility. Both programs provide the
Company with enhanced financing flexibility.
The decrease in Payable to funds for shares sold is related to
the decrease in the Receivable for proceeds from sale of funds'
shares described above.
Stockholders' equity increased primarily as a result of net
income for the period.
Treasury stock increased due to purchases of Company stock
primarily on the open market.
II. Material Changes in Results of Operations
The results of operations will continue to be affected to a major
degree by the level of fees and other revenues the Company earns
from the Franklin and Templeton Groups of Funds. In turn, the
level of these fees is dependent to a major degree on the level
of assets under management. The Franklin/ Templeton business has
operated as a unified organization since the acquisition of
Templeton on October 30, 1992. The following discussion and
analysis, therefore, includes the impact of Templeton since that
time.
Net Assets Under Management June 30 June 30 $ %
(Dollars in millions) 1993 1994 Change Change
Franklin/Templeton Group of Funds:
Tax-free income funds (exclusive of money funds) $38,744 $39,532 $788 2.0%
U.S. Government Fixed income funds (primarily
GNMA's) 18,404 15,285 (3,119) -16.9%
Global/International Fixed income funds 2,068 2,995 927 44.8%
U.S. Equity/Income funds 13,839 16,269 2,430 17.6%
Global/International Equity funds 16,723 23,987 7,264 43.4%
Money funds 2,226 3,165 939 42.2%
Total Franklin/Templeton Group of Funds 92,004 101,233 9,229 10.0%
Franklin/Templeton Institutional Assets 7,940 11,790 3,850 48.5%
Total net assets under management $99,945 $113,023 $13,078 13.1%
Material Changes in Results of Operations (continued)
The increase in assets under management since June 30, 1993 is
attributable to overall net additions to and market appreciation
of assets under management. The depreciation in world capital
markets during calendar year 1994 has affected investor sentiment
resulting in reduced levels of net additions to assets under
management in this period. This capital market depreciation has
resulted in decreasing assets under the Company's management from
a high of $117.6 billion as of January 31, 1994 to $113.0 billion
as of June 30, 1994. It is not possible to predict the future
levels of assets under management which are materially affected
by capital market movements and investor activity.
As shown in the above table, a material portion, 49%, of the
total net assets under management at June 30, 1994 was in fixed
income instruments held in portfolios of tax-free income funds
and U.S. government bond funds. The Company has a conservative
investment philosophy. Consequently, it has not utilized
derivative securities to any material degree in its fixed income
portfolios. During the current reporting period, investors
continued to be attracted to tax-free income funds and away from
U.S. government bond funds.
As shown in the table above, all categories of equity funds and
global/international fixed income funds continued to receive
increased investor interest as compared to the prior period.
Institutional assets represent 10% of the Company's net assets
under management at June 30, 1994. The Company strongly believes
there are opportunities in the institutional business and intends
to pursue development in this area aggressively.
Three months ended Nine months ended
Results of operations June 30 June 30 % June 30 June 30 %
(Dollars in millions): 1993 1994 Change 1993 1994 Change
Operating income $72.8 $85.6 17.5% $191.7 $280.4 46.3%
Operating margin 43.7% 41.8% -4.4% 42.2% 45.4% 7.7%
Net income $44.8 $60.0 34.0% $121.8 $187.6 54.0%
Increases in operating income and net income are primarily
attributable to the increase in operating revenues earned from
the Franklin and Templeton Groups of Funds. Growth in operating
income will continue to be dependent on general economic growth,
the strength of capital markets and the Company's ability to meet
market demands with competitive products and services. Operating
expenses will likely continue to increase with the Company's
continued expansion, the increase in competition and the
Company's continued commitment to improve its products and
services. Operating margin increased for the nine month period
due primarily to the increased rate of growth in operating
revenues. Operating margin decreased for the three month period
due primarily to the general slowdown in sales and decreased
assets under management.
Three months ended Nine months ended
Operating revenues June 30 June 30 % June 30 June 30 %
(Dollars in millions): 1993 1994 Change 1993 1994 Change
Investment management fees $127.9 $161.8 26.4% $351.1 $474.8 35.2%
Underwriter commissions, net 23.1 21.4 -7.1% 59.6 84.2 41.4%
Transfer, trust and related fees 10.7 14.4 34.6% 29.9 39.4 31.9%
Banking/finance, real estate and other 5.0 7.3 47.2% 13.9 18.5 33.6%
Total operating revenues $166.7 $204.9 22.9% $454.4 $617.0 35.8%
Material Changes in Results of Operations (continued)
During the current reporting periods, Investment management fees
have increased as a result of generally increased levels of
assets under management as compared to the corresponding periods
in the previous fiscal year. As previously described, since
January 31, 1994, assets under management have decreased due to
the general downturn in world capital markets.
The increases in net Underwriting commissions were due to higher
sales than in the corresponding periods the previous year.
The Company has received approval from the shareholders of the
FRANKLIN GROUP OF FUNDS to implement a distribution plan pursuant
to Rule 12b-1 of the Investment Company Act of 1940. All plans
have been approved as of June 30, 1994. Simultaneously, the
Company eliminated fees on dividend reinvestments into the funds.
The changes provide a more competitive sales structure and are
not expected to impact revenues materially.
The increase in Transfer, trust and related fees is related
principally to an increase in shareholder accounts, with mutual
fund sales and redemptions also having a direct impact.
The increases in Banking/finance, real estate and other fees were
due principally to the increases in auto and credit card loan
portfolios. The Company's real estate portfolio incurred a $1.0
million after-tax loss as a result of the continuing depressed
conditions in the real estate market.
Three months ended Nine months ended
Operating expenses June 30 June 30 % June 30 June 30 %
(Dollars in millions): 1993 1994 Change 1993 1994 Change
General and administrative $75.7 $93.9 24.0% $208.4 $265.2 27.3%
Selling expenses $11.4 $18.5 61.7% $35.4 $50.5 42.9%
Amortization of goodwill $4.4 $4.6 3.4% $12.0 $13.7 14.7%
Interest expense banking/finance group $2.3 $2.4 3.5% $7.0 $7.2 2.2%
Total operating expenses $93.9 $119.3 27.1% $262.7 $336.6 28.1%
Increases in operating expenses principally result from the
general expansion of the Company's business and are more fully
described below.
General and administrative expenses increased due mainly to
higher employment costs and an increase in premises and equipment
expense related to the expansion of the Company's business.
Selling expenses increased due mainly to television media
advertising and expanded advertising for the Templeton Funds.
Banking/finance interest expense increased primarily as a result
of the growth in customer deposits.
Three months ended Nine months ended
Other income (expense) June 30 June 30 % June 30 June 30 %
(Dollars in millions): 1993 1994 Change 1993 1994 Change
Investment and other income $5.5 $5.8 4.8% $18.7 $16.7 -10.5%
Interest expense ($8.1) ($7.3) -9.4% ($21.0) ($21.8) 3.8%
Other income (expense) ($2.6) ($1.6) 39.7% ($2.4) ($5.1) -116.9%
Material Changes in Results of Operations (continued)
The net decrease in investment income for the nine month period
resulted from the decline in the average level of interest and
dividend rates on investments.
Interest expense for the three month period declined as the
Company paid down principal and was able to take advantage of
more favorable borrowing rates.
Nine months ended
Selected cash flow items June 30 June 30 $ %
(Dollars in millions): 1993 1994 Change Change
Cash flows from operating activities $119.4 $192.9 $73.5 61.6%
Cash flows from investing activities ($531.3) ($182.8) $348.5 -65.6%
Cash flows from financing activities $339.7 ($94.5) ($434.2) -127.8%
The increase in cash flows from operating activities was
primarily the result of net income for the period.
The changes in cash flows from investing and financing activities
during the period were effected primarily by the Company's
purchase of Templeton in October of 1992 for $633 million, net of
cash acquired and the $154.3 million increase in banking/finance
loans receivable. Bank debt of $360.0 million was issued during
the period, in addition to the $150.0 million subordinated
debentures issued in July, 1992, to finance the purchase. As
previously stated, the Company has been successful in increasing
its auto loan portfolio through a newly formed finance company.
This growth will continue to impact liquidity as a use of funds.
At June 30, 1994, the Company held liquid assets of $502.8
million, including $218.6 million in cash and cash equivalents as
compared to $564.8 million and $303.0 million at September 30,
1993. Liquid assets and longer term investment securities,
available for sale were $546.5 million at June 30, 1994 and
$639.4 million at September 30, 1993.
FRANKLIN RESOURCES, INC.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as a part of this report:
Exhibit 4: Instruments defining the rights of security holders,
including indentures
i) Form of Indenture-Exhibit No. 4 to the Company's Registration
Statement on Form S-3 (33-53147) filed by the Company
electronically on April 14, 1994 is hereby incorporated in its
entirety by this reference.
ii) Form of Fixed Rate Note-Exhibit No. 4.1 to Amendment No. 1
to the Company's Registration Statement on Form S-3 (33-53147)
filed by the Company electronically on May 19, 1994 is hereby
incorporated in its entirety by this reference.
iii) Form of Floating Rate Note-Exhibit No. 4.2 to Amendment No.
1 to the Company's Registration Statement on Form S-3 (33-53147)
filed by the Company electronically on May 19, 1994 is hereby
incorporated in its entirety by this reference.
Exhibit 11: Computations of Per Share Earnings (See page 13)
Exhibit 12: Computation of Ratio of Earnings to Fixed Charges
(See page 14)
(b) Reports on Form 8K
The following reports on Form 8-K were filed by the Company
during the quarter ended June 30, 1994:
i) Form 8-K dated April 14, 1994 reporting in Item 5 Other
Events the filing of a preliminary earnings press release by the
Company electronically on April 14, 1994 and including said press
release as an Exhibit under Item 7 Financial Statements and
Exhibits.
ii) Form 8-K dated April 28, 1994 reporting in Item 5 Other
Events the filing of a final earnings press release by the
Company electronically on April 28, 1994 and including said press
release as an Exhibit under Item 7 Financial Statments and
Exhibits.
Exhibit 11
COMPUTATIONS OF PER SHARE EARNINGS
Earnings per share are based on net income divided by the average
number of shares outstanding including common stock equivalents
during the period. The computation is the same as on a fully-
diluted basis.
The computations are:
Three Months Nine Months
Ended June 30 Ended June 30
1993 1994 1993 1994
Average outstanding shares 82,090,891 81,787,792 81,427,208 82,044,383
Common stock equivalents 863,515 1,872,084 863,515 1,872,084
Total shares 82,954,406 83,659,876 82,290,723 83,916,467
Net income $44,798,000 $60,023,000 $121,795,000 $187,625,000
Primary earnings per share of common stock $0.54 $0.72 $1.48 $2.24
Dividends per share of common stock $0.07 $0.08 $0.21 $0.24
Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Nine months ended
(Dollars in thousands) June 30, 1994
Income before taxes on income $275,232
Add fixed charges:
Interest 21,846
Interest factor on rent 3,970
Total fixed charges 25,816
Earnings before fixed charges and taxes on income $301,048
Ratio of earnings to fixed charges 11.66
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
FRANKLIN RESOURCES, INC.
Registrant
Date: August 12, 1994 /s/ Martin L. Flanagan
Martin L. Flanagan
Senior Vice-President, Treasurer
and Chief Financial Officer