Franklin Resources, Inc. (NYSE:BEN) Q1 2015 Earnings Conference Call - Final Transcript

Jan 30, 2015 • 11:00 am ET

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Franklin Resources, Inc. (NYSE:BEN) Q1 2015 Earnings Conference Call - Final Transcript

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Q & A
Operator
operator

(Operator Instructions) Michael Carrier, Bank of America.

Analyst
Michael Carrier

First question just on the flows in the quarter and then in the outlook. I think on he recorded call, you just mentioned that your institutional is really strong. Then in December you had a spike for a couple of reasons on the retail side. I do not know if you could give any color on how significant that spike was in December, just to kind of get a better run rate axe some of the volatility that we saw around whether it is global bond fund or just the market new environment.

Executive
Greg Johnson

Right, I think, we felt like it is certainly worth discussing. We didn't try to go back and quantify because of the difficulty with omnibus, but what happened with the Templeton Global Bond funds is we had a $0.60 special dividend rate at year end and there is not a warning for that kind of a currency dividend and it kind of got the market a little bit off guard and we saw a real spike in redemptions.

And also, it's hard to quantify, because many of the omnibus accounts track that as a redemption and then reinvest it. We think it is somewhere in the $1 billion range potential overstatement of redemptions, but we didn't want to adjust any numbers. We just kind of went the number that we had, but we know that that December number is higher and as we have said January is a more normalized redemption rate.

Analyst
Michael Carrier

And then, Ken, maybe a couple of things to clarify on some of the expense guidance that you gave, so first just on the comp, I think you mentioned 2% higher

Analyst
Michael Carrier

in the next quarter. Just wanted to find out if that excludes or includes the $8 million Darby comp related number. And then just two other items that seemed a little bit lower were the shareholder service revenue and the other revenues. I think, other revenues you said this could be at the higher end, so just wanted to get some color on what's driving that.

Executive
Ken Lewis

Sure. The 2% is our estimate of the absolute reported number, which includes the Darby. Other revenue, we are forecasting that to be lower, because basically because of the bank no longer have that banking business, but the other items that is unpredictable that goes through that line relates to consolidated SIPs. Excluding that, we do think the run rate for other revenue is going to be lower going forward. On shareholder servicing, we think that this is probably about a good run rate for shareholder servicing going forward. The shareholder accounts have been stable and increasing.

Operator
operator

Luke Montgomery, Bernstein Research.

Analyst
Luke Montgomery

Just first on the special dividend, obviously, that is appreciated by some investors, but it was about half, what you did a couple of years ago. I know the tax and legislative environments were different then, but if you could give us a little insight as to the discussion with the