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 March 31, 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 (IRS Employer
of 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: 81,767,630 shares, common stock, par value $.10 per
share at May 10, 1994.
(Title of Class)
Exhibit index - See page 14
PART I FINANCIAL INFORMATION
ITEM 1 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 the 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 (dollars in thousands, except per share data)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
March 31, March 31,
1993 1994 1993 1994
<S> <C> <C> <C> <C>
Operating revenues:
Investment management fees $120,423 $161,196 $223,172 $313,084
Underwriting commissions, net 21,276 33,228 36,483 62,797
Transfer, trust and related fees 10,589 13,039 19,179 25,000
Banking, real estate and other 4,715 6,165 8,917 11,235
Total operating revenues 157,003 213,628 287,751 412,116
Operating expenses:
General and administrative 74,677 86,918 132,647 171,375
Selling expenses 12,214 16,372 23,919 32,034
Amortization of goodwill 4,594 4,572 7,505 9,114
Interest expense of banking
subsidiary 1,884 2,425 4,710 4,781
Total operating expenses 93,369 110,287 168,781 217,304
Operating income 63,634 103,341 118,970 194,812
Other income (expenses):
Investment and other income 6,777 5,206 13,150 10,925
Interest expense (7,461) (6,458) (12,947) (14,513)
Other income (expenses), net (684) (1,252) 203 (3,588)
Income before taxes on income 62,950 102,089 119,173 191,224
Taxes on income 20,717 33,488 42,176 63,622
Net income $ 42,233 $ 68,601 $ 76,997 $127,602
Earnings per share: (See exhibit 11)
Primary $.51 $.82 $.94 $1.52
Fully diluted $.51 $.82 $.94 $1.52
Dividends per share $.07 $.08 $.14 $.16
</TABLE>
Franklin Resources, Inc.
Consolidated Balance Sheets
Unaudited (dollars in thousands)
<TABLE>
<CAPTION>
September 30, March 31,
Assets 1993 1994
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 293,777 $ 253,899
Receivables:
Fees from Franklin/Templeton Group
of Funds and institutional accounts 63,471 80,089
Proceeds from sale of funds' shares 39,150 -
Other 16,860 37,517
Investments in the Franklin/Templeton
Group of Funds, available-for-sale 72,401 58,034
Current deferred taxes 5,971 6,107
Prepaid expenses and other 5,812 5,784
Total current assets 497,442 441,430
Franklin Bank Assets:
Cash and cash equivalents 9,175 5,618
Loans receivable, net 128,820 196,080
Investment securities, available-for-
sale 69,962 56,187
Premises and equipment, net 170 344
Other assets 3,029 4,434
Total bank assets 211,156 262,663
Other Assets:
Investments:
Investment securities, available-for-
sale 74,624 143,942
Real estate 9,393 9,142
Deferred costs 10,367 12,170
Premises and equipment, net 65,821 76,970
Goodwill, net of $17,972 and $28,888
accumulated amortization, respectively 696,973 689,751
Other assets 15,758 12,830
Total other assets 872,936 944,805
Total assets $1,581,534 $1,648,898
</TABLE>
Franklin Resources, Inc.
Consolidated Balance Sheets (Continued)
Unaudited (dollars in thousands)
<TABLE>
<CAPTION>
September 30, March 31,
1993 1994
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Trade payables and accrued expenses $ 91,708 $ 108,427
Current maturities of long-term debt 51,716 49,098
Payable to funds for shares sold 38,695 -
Dividends payable 5,747 6,560
Total current liabilities 187,866 164,085
Franklin Bank Liabilities:
Deposits of account holders:
Interest bearing demand deposits 10,794 9,585
Non-interest bearing demand deposits 8,986 18,717
Savings and time deposits 175,055 184,293
Other liabilities 974 1,468
Total bank liabilities 195,809 214,063
Other Liabilities:
Bank debt 296,000 273,083
Subordinated debentures 150,000 150,000
Other notes and capital leases payable 8,820 4,662
Deferred tax liabilities 10,999 4,167
Other liabilities 11,662 12,830
Total other liabilities 477,481 444,742
Total liabilities 861,156 822,890
Stockholders' Equity:
Preferred stock, $1.00 par value,
1,000,000 shares authorized;
no shares issued and outstanding - -
Common stock, $.10 par value,
500,000,000 shares authorized;
82,098,580 and 82,253,292 shares issued
and 82,098,580 and 82,021,005 shares
outstanding, respectively 8,210 8,225
Capital in excess of par value 83,683 90,710
Retained earnings 630,399 744,862
Less cost of treasury stock none and
232,287 shares of common stock - (10,202)
Less unearned restricted stock
compensation (8,335) (12,063)
Unrealized gain on investment
securities, net of tax 6,242 5,047
Foreign currency translation adjustment 179 (571)
Total stockholders' equity 720,378 826,008
Total liabilities and
stockholders' equity $1,581,534 $1,648,898
</TABLE>
Franklin Resources, Inc.
Consolidated Statements Of Cash Flows
Unaudited (dollars in thousands)
<TABLE>
<CAPTION>
For the Six Months
Ended March 31,
1993 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 76,997 $127,602
Items reconciling net income to
net cash provided by operating activities:
Decrease in receivables, prepaid expenses and
other 1,953 2,542
Decrease in trade payables and accrued expenses (20,453) (29,390)
Increase (decrease) in current taxes payable (5,333) 7,413
Decrease in deferred taxes payable (490) (6,968)
Depreciation and amortization 11,046 17,506
Losses (gains) on investments 4,384 (1,417)
Total reconciling items (8,893) (10,314)
Net cash provided by operating activities 68,104 117,288
Cash flows from investing activities:
Liquidation (purchase) of mutual funds, net 148,248 (50,748)
Purchase of bank investment portfolio (64,277) (35,790)
Liquidation of bank investment portfolio 48,706 49,565
Liquidation of real estate investments 226 251
Liquidation (purchase) of other investments 1,450 (5,476)
Net (increase) decrease in bank loans
receivable 5,547 (66,473)
Purchase of premises and equipment and other (8,756) (16,208)
Acquisition of Templeton, net of cash acquired (633,037) -
Net cash used in investing activities (501,893) (124,879)
Cash flows from financing activities:
Increase in deposits of bank account holders,
net 10,062 18,254
Exercise of common stock options 2,038 -
Dividends paid on common stock (10,814) (12,327)
Acquisition of treasury stock - (12,077)
Issuance of bank debt 360,000 12,872
Payments on notes and capital leases (3,745) (42,566)
Net cash provided by (used in) financing
activities 357,541 (35,844)
Net increase decrease in cash and cash
equivalents: (76,248) (43,435)
Cash and cash equivalents beginning of period 308,644 302,952
Cash and cash equivalents end of period $232,396 $259,517
Supplemental disclosure of non-cash information:
Value of common stock issued in Templeton
acquisition $100,376 -
Value of common stock issued in other
transactions - $1,650
</TABLE>
Item 2. 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.
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 has affected the level of assets under management.
Although long-term industry expectations are for growth, no
assurance can be given that historical growth levels will be
maintained.
(1) Material Changes in Financial Condition
Fees receivable from the Franklin/Templeton Group of Funds and
institutional accounts were $80.1 million at March 31, 1994, an
increase of $16.6 million (26%) from $63.5 million at September
30, 1993. This increase results from an increase in revenue
generated from the increase in assets under management during the
period.
Proceeds from sale of funds' shares was zero at March 31, 1994,
decreasing from $39.2 million at September 30, 1993 resulting from
a change in operating procedures. During the prior fiscal year,
such proceeds 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.
Other receivables were $37.5 million at March 31, 1994, an
increase of $20.6 million (122%) from $16.9 million at September
30, 1993. This increase was primarily related to advances to pay
deferred sales charges on Canadian based mutual funds.
Investments in Franklin/Templeton Group of Funds, available-for-
sale were $58.0 million at March 31, 1994, a decrease of $14.4
million (20%) from $72.4 million at September 30, 1993. This
decrease resulted primarily from the acquisition of longer term
investment securities, available-for-sale.
Franklin Bank loan receivables were $196.1 million at March 31,
1994, an increase of $67.3 million (52%) from $128.8 million at
September 30, 1993. This increase is primarily attributable to
increases in credit card and dealer auto loan portfolios.
Trade payables and accrued expenses were $108.4 million at March
31, 1994, an increase of $16.7 million (18%) from $91.7 million at
September 30, 1993. This increase is a result of greater
operating expenses principally related to business expansion
during the period.
Payable to funds for shares sold was zero at March 31, 1994,
decreasing from $38.7 million at September 30, 1993. This
resulted from the change as described under the caption above
"proceeds from sale of funds' shares."
Franklin Bank's non-interest bearing demand deposits were $18.7
million at March 31, 1994, an increase of $9.7 million (108%) from
$9.0 million at September 30, 1993. This increase resulted from
growth in customer deposits.
Bank debt was $273.1 million at March 31, 1994, a decrease of
$22.9 million (8%) from $296.0 million at September 30, 1993.
This decrease is a result of principal payments made during the
period. Swap agreements fix interest rates on $105 million of the
original term loan at 4.44% to 5.02% from between one and three
years. The effective rate of interest under the loan facility
was 4.04% at March 31, 1994.
Stockholders' equity was $826.0 million at March 31, 1994, an
increase of $105.6 million (15%) from $720.4 million at September
30, 1993. This increase was principally a result of net income
for the period.
Unearned restricted stock compensation was $12.1 million at March
31, 1994, an increase of $3.8 million (46%) from $8.3 million at
September 30, 1993. This increase was the result of additional
grants of the company stock to certain of the company's employees
which is restricted for periods of up to four years from the date
of grant. The value of these grant amounts is being amortized
over the restricted period for those grants prior to the adoption
of the Company's Annual Incentive Plan beginning in the 1994
fiscal year. Grants under the Annual Incentive Plan are being
expensed in the plan year.
Cash provided by operating activities was $117.3 million for the
six month period ended March 31, 1994, an increase of $49.2
million (72%) from $68.1 million. The increase for the six month
period was primarily a result of net income for the period.
Changes in cash flows from investing and financing activities for
the six month periods ended March 31, 1994 and 1993 were
principally affected by the Company's purchase of Templeton in
October of 1992 for $633.0 million. Bank debt of $360.0 million
was issued to finance the purchase.
At March 31, 1994, the Company held liquid assets of $491.3
million, including $259.5 million in cash and cash equivalents as
compared to $564.8 million and $293.8 million at September 30,
1993. Liquid assets and longer term investment securities,
available for sale, were $635.3 million at March 31, 1994 and
$639.4 million at September 30, 1993.
(2) Material Changes in Results of Operations
Net income was $68.6 million for the three months ended March 31,
1994, an increase of $26.4 million (63%) from $42.2 million for
the three month period ended March 31, 1993. Net income was
$127.6 million for the six month period ended March 31, 1994, an
increase of $50.6 million (66%) from $77.0 million. These
increases were primarily attributable to a material increase in
the amount of revenues earned from the Franklin and Templeton
Groups of Funds. The following analysis of material changes in
results of operations include the impact of the Templeton
business from the acquisition date of October 30, 1992. The
Franklin/Templeton business has operated as a unified
organization since the time of the acquisition and consequently,
the following discussion and analysis addresses the unified
organization.
Assets Under Management
Total assets under management were $112.7 billion at March 31,
1994, an increase of $17.1 billion (18%) from $95.6 billion at
March 31, 1993. Such increases during the period are principally
attributable to increased net additions and market appreciation
of assets under management. The depreciation in world capital
markets during calendar 1994 has resulted in assets under
management decreasing from a high of $117.6 billion at January
31, 1994. This depreciation has affected investor sentiment
resulting in reduced levels of net additions to assets under
management. It is not possible to predict the future levels of
assets under management which are materially impacted by capital
market movements and investor activity.
As shown in the following table, a material portion (52%) of the
total net assets under management at March 31, 1994 was in fixed
income instruments held in portfolios of tax-free income funds
and U.S. government bond funds. Net assets of tax-free income
funds were $39.7 billion, an increase of $2.9 billion (8%), from
$36.8 billion at March 31, 1993. Net assets of U.S. government
bond funds were $16.3 billion at March 31, 1994, a decrease of
$3.3 billion (-17%) over the prior 1993 period. During the
period reported, investors continued to be attracted to tax-free
income funds and away from U.S. government bond funds.
Net assets of equity and equity income funds were $39.4 billion
at March 31, 1994, an increase of $12.2 billion (45%) from $27.2
billion at March 31, 1993. Equity and equity income funds
represent 35% of the Company's total assets under management at
March 31, 1994 as compared to (28%) at March 31, 1993. The
Templeton products, which invest primarily in the global equity
and fixed income markets, continued to receive increased investor
interest as compared to prior periods.
Institutional assets were $11.5 billion at March 31, 1994, an
increase of $2.2 billion (24%) from $9.3 billion at March 31,
1993. Institutional assets represent 10% of the Company's total
assets under management. The Company strongly believes there are
opportunities in the institutional business and intends to
aggressively pursue development in this area.
FRANKLIN RESOURCES, INC.
Net Assets Under Management
March 31,
(In $ millions)
<TABLE>
<CAPTION>
1993 1994
<S> <C> <C>
FRANKLIN GROUP OF FUNDS:
Tax-Free Income Funds
(exclusive of Money
Funds) $36,796 $39,710
U.S. Government Bond
Funds (primarily GNMAs) 18,062 16,277
Equity/Income Funds 12,777 16,737
Money Funds 2,348 2,949
Total Franklin Group of Funds 69,983 75,673
Templeton Group of
Funds(1)
Equity Funds 14,400 22,705
Fixed Income Funds 2,007 2,818
Total Templeton Family
of Funds 16,407 25,523
Institutional Assets:(2)
Franklin 3,316 1,554
Templeton 5,933 9,967
Total Institutional Assets 9,249 11,521
Total $95,639 $112,717
</TABLE>
(1)Primarily global/international equity funds
(2)Includes both separately managed accounts and institutional funds.
Operating Revenues
Total operating revenues were $213.6 million for the three months
ended March 31, 1994, an increase of $56.6 million (36%) from
$157.0 million for the three month period ended March 31, 1993.
Total operating revenues were $412.1 million for the six month
period ended March 31, 1994, an increase of $124.3 million (43%)
from $287.8 million.
As discussed above, the depreciation in world capital markets has
resulted in a lower level of assets under management since
January 31, 1994 resulting in a decrease in operating revenues
since that time. Despite these recent events, investment
management fees were $161.2 million for the three months ended
March 31, 1994, an increase of $40.8 million (34%) from $120.4
million for the three month period ended March 31, 1993.
Investment management fees were $313.1 million for the six month
period ended March 31, 1994, an increase of $89.9 million (40%)
from $223.2 million. These increases are the result of a general
increase in assets under management resulting from both market
appreciation and net additions to assets under management.
Net underwriting commissions were $33.2 million for the three
months ended March 31, 1994, an increase of $11.9 million (56%)
from $21.3 million for the three month period ended March 31,
1993. Net underwriting commissions were $62.8 million for the
six month period ended March 31, 1994, an increase of $26.3
million (72%) from $36.5 million. These increases resulted from
higher sales than in the prior period.
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. A number of
these plans will begin on May 1, 1994 and it is expected that all
plans will be approved by June 30, 1994. These changes provide a
more competitive sales structure and are not expected to have a
material impact on revenue.
Transfer, trust and related fees were $13.0 million for the three
months ended March 31, 1994, an increase of $2.4 million (23%)
from $10.6 million for the three month period ended March 31,
1993. Transfer, trust and related fees were $25.0 million for
the six month period ended March 31, 1994, an increase of $5.8
million (30%) from $19.2 million. These fees are principally
dependent upon the number of shareholder accounts, with mutual
fund sales and redemptions generally having a direct impact.
Banking, real estate and other revenues were $6.2 million for the
three months ended March 31, 1994, an increase of $1.5 million
(32%) from $4.7 million for the three month period ended March
31, 1993. Banking, real estate and other revenues were $11.2
million for the six month period ended March 31, 1994, an
increase of $2.3 million (26%) from $8.9 million. The banking
subsidiary recognized net operating income of $.8 million during
the three month period ended March 31, 1994, an increase of $.6
million (300%) from $.2 million for the three month period ended
March 31, 1993. The banking subsidiary recognized net operating
income of $.8 million for the six month period ended March 31,
1994 an increase of $.5 million (167%) from $.3 million. The
increase was due to additions to the credit card and auto loan
portfolios. The Company's real estate operations incurred a net
operating loss of $.3 million during the three months ended March
31, 1994, an increase of $4.3 million (93%) from a loss of $4.6
million for the three months ended March 31, 1994. The Company's
real estate operations incurred a net operating loss of $.6
million for the six months ended March 31, 1994, an increase of
$5.5 million (90%) from a loss of $6.1 million. These losses are
a result of the continued depressed real estate market.
Operating Expenses
Operating expenses were $110.3 million for the three months ended
March 31, 1994, an increase of $16.9 million (18%) from $93.4
million for the three month period ended March 31, 1993.
Operating expenses were $217.3 million for the six month period
ended March 31, 1994, an increase of $48.5 million (29%) from
$168.8 million. These increases principally result from the
general expansion of the Company's business and are described
more fully below.
General and administrative expenses were $86.9 million for the
three months ended March 31, 1994, an increase of $12.2 million
(16%) from $74.7 million for the three month period ended March
31, 1993. General and administrative expenses were $171.4
million for the six month period ended March 31, 1994, an
increase of $38.8 million (29%) from $132.5 million. A
significant portion of this increase is a result of higher
employment costs and an increase in premise and equipment
expenses related to the expansion of the Company's business.
Selling expenses were $16.4 million for the three months ended
March 31, 1994, an increase of $4.2 million (34%) from $12.2
million for the three month ended March 31, 1993. Selling
expenses were $32.0 million for the six month period ended March
31, 1994, an increase of $8.1 million (34%) from $23.9 million.
The Company continues to advertise and promote the Company's
range of investment products and services in the United States
and other international markets.
Amortization of goodwill was $4.6 million for the three months
ended March 31, 1993, and 1994. Amortization of goodwill was
$9.1 million for the six month period ended March 31, 1994, an
increase of $1.6 million (21%) from $7.5 million. This increase
is attributable to an additional month's amortization of goodwill
in the current period.
Interest expense of the banking subsidiary was $2.4 million for
the three months ended March 31, 1994, an increase of $0.5
million (26%) from $1.9 million for the three month period ended
March 31, 1993. Interest expense of the banking subsidiary was
$4.8 million for the six month period ended March 31, 1994, an
increase of $0.1 million (2%) from $4.7 million. These increases
result primarily from the growth in the bank's loan portfolio.
Operating income was $103.3 million for the three months ended
March 31, 1994, an increase of $39.7 million (62%) from $63.6
million for the three month period ended March 31, 1993.
Operating income was $194.8 million for the six month period
ended March 31, 1994, an increase of $75.8 million (64%) from
$119.0 million. Total operating expenses will likely continue to
increase with the Company's continued expansion, the increase in
competition and the Company's commitment to continually improve
its products and services. The Company continues to focus on
operating profit margins as an important measure of profitability
as the Company expands. Operating income as a percentage of
operating revenue was 48% for the three month period ended March
31, 1994 as compared to 41% for the comparable period ended 1993,
and was 47% for the six months ended March 31, 1994 as compared
to 41% for the comparable period in 1993. Growth in operating
income will continue to be dependent upon general economic
growth, the strength of the capital markets and the Company's
ability to meet market demands with competitive products and
services.
Other Income (Expense)
Investment and other income was $5.2 million for the three months
ended March 31, 1994, a decrease of $1.6 million (24%) from $6.8
million for the three month period ended March 31, 1993.
Investment and other income was $10.9 million for the six month
period ended March 31, 1994, a decrease of $2.3 million (17%)
from $13.2 million. The net decrease in investment income
resulted primarily from the decline in the average level of
interest and dividend rates on investments.
Interest expense was $6.5 million for the three months ended
March 31, 1994, a decrease of $1.0 million (13%) from $7.5
million for the three month period ended March 31, 1993.
Interest expense was $14.5 million for the six month period ended
March 31, 1994, an increase of $1.6 million (12%) from $12.9
million. The increase in interest expense for the six month
period is attributable to the debt incurred in the Company's
acquisition of Templeton during the first quarter of the prior
year. Interest expense declined during the three month period as
a result of falling interest rates and principal payments.
FRANKLIN RESOURCES, INC.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders of Franklin Resources,
Inc. was held at 10:00 a.m., Pacific Time, on January 19, 1994 at
the offices of the Corporation at 777 Mariners Island Boulevard,
San Mateo, California.
The five proposals presented at the meeting were:
1. The election of nine directors to hold office until the
next Annual Meeting of Stockholders or until their
successors are elected and shall qualify.
2. The ratification of the appointment by the Board of
Directors of Coopers & Lybrand as the Company's
independent certified accountants for the current
fiscal year ending September 30, 1994.
3. The amendment of Article Fourth of the Certificate of
Incorporation of the Company to increase the authorized
capital of the Company from 100,000,000 shares of $.10
par value common stock to 500,000,000 shares of $.10
par value common stock.
4. The adoption of an Annual Incentive Compensation Plan
for certain employees of the Company.
5. The adoption of a Universal Stock Plan for the award of
restricted stock, stock options, and other performance
units for certain employees of the Company in
connection with the Annual Incentive Compensation Plan
and otherwise, and the approval of certain grants
thereunder.
(b) Each of the nine nominees for director was elected and
received the number of votes set forth below:
<TABLE>
<CAPTION>
Name For Withheld
<S> <C> <C>
Harmon E. Burns 54,262,599 599,379
Judson R. Grosvenor 54,305,998 555,980
F. Warren Hellman 54,309,780 552,198
Charles B. Johnson 54,263,655 598,323
Charles E. Johnson 54,257,020 604,958
Rupert H. Johnson, Jr. 54,261,935 600,043
Harry O. Kline 54,167,717 694,261
Peter M. Sacerdote 54,190,361 671,617
Louis E. Woodworth 54,305,973 556,005
</TABLE>
(c) The voting results of the other four proposals were as
follows:
(2) With respect to the proposal to ratify the appointment of
Coopers & Lybrand as the Company's independent certified
accountants for the fiscal year ending September 30, 1994,
54,642,515 shares were voted FOR, 82,298 shares were voted
AGAINST, and 137,165 shares were voted ABSTAIN.
(3) With respect to the proposal to ratify the Amendment of the
Certificate of Incorporation to increase the authorized capital
from 100,000,000 shares of common stock to 500,000,000 shares of
common stock, 46,511,006 shares were voted FOR, 8,225,479 shares
were voted AGAINST, and 125,493 shares were voted ABSTAIN.
(4) With respect to the proposal to ratify the adoption of an
Annual Incentive Compensation Plan for certain employees of the
Company, 47,086,695 shares were voted FOR, 4,067,950 shares were
voted AGAINST, 557,783 shares were voted ABSTAIN, with 3,149,550
BROKER NON-VOTES.
(5) With respect to the proposal to ratify the adoption of a
Universal Stock Plan for the award of restricted stock, stock
options, and other performance units, and the approval of certain
grants thereunder, 49,720,809 shares were voted FOR, 4,198,363
shares were voted AGAINST, 665,032 shares were voted ABSTAIN,
with 277,774 BROKER NON-VOTES.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of the report:
Exhibit 11 - Computation of per share earnings.(See page 15)
(b) Reports on Form 8-K - None
Exhibit 11
COMPUTATION 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 would have been substantially the same as
below on a fully diluted basis.
The computations are:
<TABLE>
<CAPTION>
For The Three Months For the Six Months
Ended March 31, Ended March 31,
1993 1994 1993 1994
<S> <C> <C> <C> <C>
Average
outstanding
shares 82,063,127 82,217,756 81,095,367 82,172,679
Common stock
equivalents 878,899 1,828,705 878,899 1,828,705
Total shares 82,942,026 84,046,461 81,974,266 84,001,384
Net income $42,233,000 $68,601,000 $76,997,000 $127,602,000
Earnings per
share of
common stock $.51 $.82 $.94 $1.52
Dividends per
share of
common stock $.07 $.08 $.14 $ .16
</TABLE>
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: May 13, 1994 /S/Martin L. Flanagan
----------------------
Martin L. Flanagan
Senior Vice-President, Treasurer
and Chief Financial Officer
