Franklin Resources, Inc. Announces Fourth Quarter Results

• Press Release
• Source: Franklin Resources, Inc.
• On 9:00 am EDT, Tuesday October 27, 2009

SAN MATEO, CA--(Marketwire - 10/27/09) - Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE:BEN - News) today announced net income of $367.4 million, or $1.60 per share diluted, on revenues of $1,238.9 million for the quarter ended September 30, 2009. For the quarter ended June 30, 2009, net income was $297.7 million, or $1.29 per share diluted, on revenues of $1,073.6 million. For the quarter ended September 30, 2008, net income was $300.5 million, or $1.28 per share diluted, on revenues of $1,321.5 million.

Operating income for the quarter ended September 30, 2009 was $384.7 million, as compared to $326.2 million for the prior quarter and $412.0 million for the quarter ended September 30, 2008. The company's non-operating income (expenses) for the quarter ended September 30, 2009 included $87.2 million of investment and other income, net, as compared to $52.3 million for the quarter ended June 30, 2009 and $77.8 million for the quarter ended September 30, 2008.

Total assets under management by the company's subsidiaries were $523.4 billion at September 30, 2009, as compared to $451.2 billion at June 30, 2009 and $507.3 billion at September 30, 2008. Simple monthly average assets under management during the quarter ended September 30, 2009 were $488.3 billion, as compared to $428.0 billion in the prior quarter and $555.4 billion in the same quarter a year ago. Equity assets comprised 47% of total assets under management at September 30, 2009, as compared to 46% of total assets under management at June 30, 2009 and 52% of total assets under management at September 30, 2008. Fixed-income assets comprised 33% of total assets under management at September 30, 2009 and June 30, 2009, as compared to 28% of total assets under management at September 30, 2008. Hybrid assets accounted for 19% of total assets under management at September 30, 2009, June 30, 2009 and September 30, 2008. Net new flows for the quarter ended September 30, 2009 were $12.2 billion, as compared to $6.0 billion for the prior quarter and $(8.6) billion for the same quarter a year ago.

Cash and cash equivalents and investments were $5.8 billion at September 30, 2009, as compared to $5.2 billion at September 30, 2008. Stockholders' equity was $7.6 billion at September 30, 2009, as compared to $7.1 billion at September 30, 2008. The company had 229.3 million shares of common stock outstanding at September 30, 2009, as compared to 232.8 million shares outstanding at September 30, 2008. During the quarter ended September 30, 2009, the company repurchased 1.7 million shares of its common stock for a total cost of $158.2 million.

Fiscal Fourth Quarter 2009 Highlights

Global Business Developments(1)

(See important footnotes in "Supplemental Information" section at the end of this release.)

�
--  Bloomberg Markets highlighted the Templeton Global Bond Fund as #1
    among "U.S. and Global Bonds" funds.(2)
--  In August 2009, SmartMoney named Anne Gudefin, co-portfolio manager of
    the Mutual Global Discovery Fund, as one of "The World's Greatest
    Investors" for 2009.
--  Franklin Templeton Investments expanded its defined contribution
    investment-only sales platform as part of its commitment to strengthen its
    presence in this business.
--  Franklin Templeton Investments launched a new U.S. sales and marketing
    campaign during the quarter to cross sell its equity products to the more
    than 130,000 advisors currently selling its products, with a focus on the
    20,000 advisors who sell only fixed-income products today.
--  Franklin Templeton Investments' annual Investment Outlook and
    Opportunities Forum 2009, held in Toronto, Canada, was attended by over
    1,800 investment advisors and clients.
--  More than 1,700 Franklin Templeton Investments employees and their
    guests participated in the third annual Involved Impact Days, a company-
    sponsored event held to encourage community involvement and volunteerism in
    local communities around the world.
    

Lipper Performance Rankings of Franklin Templeton's U.S.-Registered Long-Term Mutual Funds(1), (3)

�
FRANKLIN TEMPLETON (4), (5)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 85%      85%      85%      90%
                     -------  -------  -------  -------
3rd & 4th                 15%      15%      15%      10%
                     -------  -------  -------  -------



FRANKLIN TEMPLETON EQUITY (4), (6)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 86%      86%      83%      90%
                     -------  -------  -------  -------
3rd & 4th                 14%      14%      17%      10%
                     -------  -------  -------  -------




FRANKLIN TEMPLETON FIXED-INCOME (4), (7)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 83%      85%      86%      90%
                     -------  -------  -------  -------
3rd & 4th                 17%      15%      14%      10%
                     -------  -------  -------  -------




FRANKLIN EQUITY (4), (8)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 85%      78%      76%      87%
                     -------  -------  -------  -------
3rd & 4th                 15%      22%      24%      13%
                     -------  -------  -------  -------




TEMPLETON EQUITY (4), (9)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 87%      92%      88%      92%
                     -------  -------  -------  -------
3rd & 4th                 13%       8%      12%       8%
                     -------  -------  -------  -------





MUTUAL SERIES EQUITY (4), (10)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 88%      99%      99%      98%
                     -------  -------  -------  -------
3rd & 4th                 12%       1%       1%       2%
                     -------  -------  -------  -------




FRANKLIN TEMPLETON TAXABLE FIXED-INCOME (4), (11)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 63%      68%      63%      66%
                     -------  -------  -------  -------
3rd & 4th                 37%      32%      37%      34%
                     -------  -------  -------  -------





FRANKLIN TEMPLETON TAX-FREE FIXED-INCOME (4), (12)

Lipper Quartile        Period Ended September 30, 2009
                     ----------------------------------
                     1-Year   3-Year   5-Year   10-Year
                     Assets   Assets   Assets   Assets
                       (%)      (%)      (%)      (%)
                     -------  -------  -------  -------
1st & 2nd                 93%      92%      97%     100%
                     -------  -------  -------  -------
3rd & 4th                  7%       8%       3%       0%
                     -------  -------  -------  -------

Performance quoted above represents past performance, which cannot
predict or guarantee future results.





Franklin Resources, Inc.
Preliminary Condensed Consolidated Income Statements
Unaudited

(in thousands,
 except per
 share data
 and assets
 under             Three months ended           Twelve months ended
 management)          September 30,                 September 30,
           ----------------------------  --------------------------------
                                   %                                 %
             2009       2008     Change      2009         2008     Change
           ---------  ---------  ------  -----------  -----------  ------
Operating
 Revenues
Investment
 management
 fees     $ 724,953  $ 822,388      (12%)$ 2,503,188  $ 3,683,390     (32%)
Underwriting
 and
 distri-
 bution
 fees        433,361    424,450       2%   1,408,162    2,002,031     (30%)
Shareholder
 servicing
 fees         67,381     69,651      (3%)    267,350      289,370      (8%)
Consolidated
 sponsored
 investment
 products
 income,
 net           1,640      1,487      10%       8,195       10,923     (25%)
Other, net    11,592      3,478     233%       7,192       46,672     (85%)
           ---------  ---------  ------  -----------  -----------  ------
  Total
   operating
   reve-
   nues    1,238,927  1,321,454      (6%)  4,194,087    6,032,386     (30%)
           ---------  ---------  ------  -----------  -----------  ------
Operating
 Expenses
Underwriting
 and
 distri-
 bution      418,284    406,526       3%   1,352,022    1,937,113     (30%)
Compensation
 and
 benefits    246,773    274,091     (10%)    958,511    1,120,657     (14%)
Information
 systems,
 technology
 and
 occupancy    71,999     83,038     (13%)    274,198      320,986     (15%)
Advertising
 and
 promotion    37,314     45,489     (18%)    116,129      184,309     (37%)
Amortization
 of deferred
 sales
 commissions  39,747     48,196     (18%)    142,978      178,004     (20%)
Other         40,088     52,143     (23%)    147,655      192,315     (23%)
           ---------  ---------  ------  -----------  -----------  ------
  Total
   operating
   expenses  854,205    909,483      (6%)  2,991,493    3,933,384     (24%)
           ---------  ---------  ------  -----------  -----------  ------
  Operating
   Income    384,722    411,971      (7%)  1,202,594    2,099,002     (43%)
           ---------  ---------  ------  -----------  -----------  ------
Other
 Income
 (Expenses)
Consolidated
 sponsored
 investment
 products
 gains
 (losses),
 net          31,866    (35,507)     NM       21,706      (71,553)     NM
Investment
 and other
 income,
 net          87,216     77,763      12%      60,563      224,898     (73%)
Interest
 expense        (268)      (478)    (44%)     (3,771)     (15,758)    (76%)
           ---------  ---------  ------  -----------  -----------  ------
  Other
   income,
   net       118,814     41,778     184%      78,498      137,587     (43%)
           ---------  ---------  ------  -----------  -----------  ------
Income
 before
 taxes       503,536    453,749      11%   1,281,092    2,236,589     (43%)
Taxes on
 income      136,180    153,260     (11%)    384,314      648,376     (41%)
           ---------  ---------  ------  -----------  -----------  ------
  Net
   Income  $ 367,356  $ 300,489      22% $   896,778  $ 1,588,213     (44%)
           =========  =========  ======  ===========  ===========  ======

Earnings
 per Share
  Basic    $    1.61  $    1.29      25% $      3.89  $      6.72     (42%)
  Diluted       1.60       1.28      25%        3.87         6.67     (42%)

Dividends
 per Share $    0.21  $    0.20       5% $      0.84  $      0.80       5%

Average
 Shares
 Outstanding
 (in
 thousands)
  Basic      228,741    232,832      (2%)    230,334      236,396      (3%)
  Diluted    230,178    234,563      (2%)    231,454      238,281      (3%)

Operating
 Margin(13)       31%        31%                  29%          35%

Assets
 Under
 Management(14)
 (in billions)
Beginning
 of period $   451.2  $   580.2     (22%)$     507.3  $     645.9     (21%)
  Long-term
   sales        34.9       38.5      (9%)      110.4        170.0     (35%)
  Long-term
   redemp-
   tions       (23.3)     (46.6)    (50%)     (115.6)      (177.9)    (35%)
  Net cash
   manage-
   ment          0.6       (0.5)     NM         (0.3)        (1.0)    (70%)
           ---------  ---------  ------  -----------  -----------  ------
     Net
      new
      flows     12.2       (8.6)     NM         (5.5)        (8.9)    (38%)
  Reinvested
   distri-
   butions       2.4        3.2     (25%)       14.1         28.9     (51%)
           ---------  ---------  ------  -----------  -----------  ------
     Net
      flows     14.6       (5.4)     NM          8.6         20.0     (57%)
  Distri-
   butions      (3.1)      (4.0)    (23%)      (17.9)       (35.2)    (49%)
  Appreciation
   (depreciation)
   and
   other        60.7      (63.5)     NM         25.4       (123.4)     NM
           ---------  ---------  ------  -----------  -----------  ------
End of
 period    $   523.4  $   507.3       3% $     523.4  $     507.3       3%
           =========  =========  ======  ===========  ===========  ======
Simple
 Monthly
 Average
 for
 Period    $   488.3  $   555.4     (12%)$     442.2  $     604.9     (27%)




Franklin Resources, Inc.
Preliminary Condensed Consolidated Income Statements
Unaudited
(in thousands, except per share data, employees
and billable shareholder
accounts)                         Three months ended
             -------------------------------------------------------------
                                     %
             30-Sep-09  30-Jun-09  Change  31-Mar-09  31-Dec-08  30-Sep-08
             ---------  ---------  ------  ---------  ---------  ---------
Operating
 Revenues
Investment
 management
 fees        $ 724,953  $ 625,025      16% $ 552,936  $ 600,274  $ 822,388
Underwriting
 and
 distribution
 fees          433,361    365,217      19%   304,655    304,929    424,450
Shareholder
 servicing
 fees           67,381     67,113       0%    66,514     66,342     69,651
Consolidated
 sponsored
 investment
 products
 income, net     1,640      2,908     (44%)    1,761      1,886      1,487
Other, net      11,592     13,295     (13%)  (13,594)    (4,101)     3,478
             =========  =========  ======  =========  =========  =========
  Total
   operating
   revenues  1,238,927  1,073,558      15%   912,272    969,330  1,321,454
             =========  =========  ======  =========  =========  =========
Operating
 Expenses
Underwriting
 and
 distribution  418,284    350,675      19%   293,534    289,529    406,526
Compensation
 and
 benefits      246,773    230,943       7%   236,732    244,063    274,091
Information
 systems,
 technology
 and
 occupancy      71,999     68,203       6%    65,398     68,598     83,038
Advertising
 and
 promotion      37,314     27,888      34%    26,700     24,227     45,489
Amortization
 of deferred
 sales
 commissions    39,747     32,865      21%    33,754     36,612     48,196
Other           40,088     36,798       9%    32,832     37,937     52,143
             =========  =========  ======  =========  =========  =========
  Total
   operating
   expenses    854,205    747,372      14%   688,950    700,966    909,483
             =========  =========  ======  =========  =========  =========
  Operating
   Income      384,722    326,186      18%   223,322    268,364    411,971
             =========  =========  ======  =========  =========  =========
Other Income
 (Expenses)
Consolidated
 sponsored
 investment
 products
 gains
 (losses),
 net            31,866     35,660     (11%)   (9,336)   (36,484)   (35,507)
Investment
 and other
 income
 (losses),
 net            87,216     52,285      67%   (33,929)   (45,009)    77,763
Interest
 expense          (268)      (211)     27%    (2,092)    (1,200)      (478)
             =========  =========  ======  =========  =========  =========
  Other
   income
   (expenses),
   net         118,814     87,734      35%   (45,357)   (82,693)    41,778
             =========  =========  ======  =========  =========  =========
Income
 before
 taxes         503,536    413,920      22%   177,965    185,671    453,749
Taxes on
 income        136,180    116,204      17%    67,159     64,771    153,260
             =========  =========  ======  =========  =========  =========
  Net Income $ 367,356  $ 297,716      23% $ 110,806  $ 120,900  $ 300,489
             =========  =========  ======  =========  =========  =========

Earnings per
 Share
  Basic      $    1.61  $    1.30      24% $    0.48  $    0.52  $    1.29
  Diluted         1.60       1.29      24%      0.48       0.52       1.28

Dividends
 per Share   $    0.21  $    0.21       0% $    0.21  $    0.21  $    0.20

Average
 Shares
 Outstanding
 (in
 thousands)
  Basic        228,741    229,804       0%   231,178    231,626    232,832
  Diluted      230,178    230,823       0%   231,891    232,688    234,563

Operating
 Margin             31%        30%                24%        28%        31%

Employees        7,745      7,847      (1%)    8,233      8,608      8,809
Billable
 Shareholder
 Accounts
 (in millions)    21.4       22.4      (4%)     21.9       21.0       20.4





ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions)                       Three months ended
                -----------------------------------------------------------
                30-Sep-09 30-Jun-09 % Change  31-Mar-09 31-Dec-08 30-Sep-08
                --------- --------- --------  --------- --------- ---------
  Equity
    Global/
     inter-
     national   $   183.1 $   153.1       20% $   124.7 $   142.6 $   190.3
    Domestic
     (U.S.)          63.9      56.7       13%      48.5      55.2      72.9
                --------- --------- --------  --------- --------- ---------
    Total
     equity         247.0     209.8       18%     173.2     197.8     263.2
                --------- --------- --------  --------- --------- ---------

  Hybrid             98.2      85.8       14%      75.0      78.8      93.9

  Fixed-Income
    Tax-free         69.6      62.4       12%      59.3      56.1      59.7
    Taxable:
      Global/
       inter-
       national(15)  63.3      50.2       26%      43.0      45.9      52.7
      Domestic
       (U.S.)        38.4      35.5        8%      32.5      29.8      30.5
                --------- --------- --------  --------- --------- ---------
    Total
     fixed-
     income         171.3     148.1       16%     134.8     131.8     142.9

  Cash
   Management
   (15),(16)          6.9       7.5       (8%)      8.1       7.8       7.3
                ========= ========= ========  ========= ========= =========
Total Ending
 Assets Under
 Management     $   523.4 $   451.2       16% $   391.1 $   416.2 $   507.3
                ========= ========= ========  ========= ========= =========

Simple Monthly
 Average Assets
 Under
 Management     $   488.3 $   428.0       14% $   396.6 $   438.7 $   555.4






ASSETS UNDER MANAGEMENT AND FLOWS - UNITED STATES AND INTERNATIONAL
(in billions)

                           As of and for the three months ended
                ----------------------------------------------------------
                             % of                % of                % of
                30-Sep-09   Total   30-Jun-09   Total   30-Sep-08   Total
                ---------  -------  ---------  -------  ---------  -------
Long-Term Sales
  United States $    21.5       62% $    18.1       65% $    14.9       39%
  International
   (15)              13.4       38%       9.8       35%      23.6       61%
                ---------  -------  ---------  -------  ---------  -------
  Total
   Long-Term
   Sales        $    34.9      100% $    27.9      100% $    38.5      100%
                =========  =======  =========  =======  =========  =======

Long-Term
 Redemptions
  United States $   (13.4)      58% $   (12.7)      57% $   (20.2)      43%
  International
   (15)              (9.9)      42%      (9.7)      43%     (26.4)      57%
                ---------  -------  ---------  -------  ---------  -------
  Total
   Long-Term
   Redemptions  $   (23.3)     100% $   (22.4)     100% $   (46.6)     100%
                =========  =======  =========  =======  =========  =======

Assets Under
 Management
  United States $   389.3       74% $   339.2       75% $   376.6       74%
  International     134.1       26%     112.0       25%     130.7       26%
                ---------  -------  ---------  -------  ---------  -------
  Total Assets
   Under
   Management   $   523.4      100% $   451.2      100% $   507.3      100%
                =========  =======  =========  =======  =========  =======





ASSETS UNDER MANAGEMENT AND FLOWS BY INVESTMENT OBJECTIVE
(in billions)                                   Three months ended
                                          --------------------------------
                                          30-Sep-09  30-Jun-09  30-Sep-08
                                          ---------- ---------- ----------
Global/international equity
  Beginning assets                        $    153.1 $    124.7 $    233.7
                                          ========== ========== ==========
  Long-term sales                                9.7        8.5        9.9
  Long-term redemptions                         (9.1)      (8.5)     (16.4)
  Net exchanges                                  0.1        0.3       (1.0)
                                          ========== ========== ==========
    Net new flows                                0.7        0.3       (7.5)
  Reinvested distributions                       0.2        0.1        0.7
                                          ========== ========== ==========
    Net flows                                    0.9        0.4       (6.8)
  Distributions                                 (0.1)      (0.2)      (0.8)
  Appreciation (depreciation) and other         29.2       28.2      (35.8)
                                          ========== ========== ==========
  Ending assets                                183.1      153.1      190.3
                                          ========== ========== ==========
Domestic (U.S.) equity
  Beginning assets                              56.7       48.5       82.5
                                          ========== ========== ==========
  Long-term sales                                2.5        2.6        3.3
  Long-term redemptions                         (2.8)      (2.3)      (5.4)
  Net exchanges                                 (0.1)        --       (0.1)
                                          ========== ========== ==========
    Net new flows                               (0.4)       0.3       (2.2)
  Reinvested distributions                       0.3        0.1        0.8
                                          ========== ========== ==========
    Net flows                                   (0.1)       0.4       (1.4)
  Distributions                                 (0.4)      (0.1)      (1.0)
  Appreciation (depreciation) and other          7.7        7.9       (7.2)
                                          ========== ========== ==========
  Ending assets                                 63.9       56.7       72.9
                                          ========== ========== ==========
Hybrid
  Beginning assets                              85.8       75.0      109.5
                                          ========== ========== ==========
  Long-term sales                                3.7        2.9        2.8
  Long-term redemptions                         (2.8)      (2.7)      (3.9)
  Net exchanges                                  0.1        0.1       (0.3)
                                          ========== ========== ==========
    Net new flows                                1.0        0.3       (1.4)
  Reinvested distributions                       0.9        1.2        0.7
                                          ========== ========== ==========
    Net flows                                    1.9        1.5       (0.7)
  Distributions                                 (1.2)      (1.4)      (1.0)
  Appreciation (depreciation) and other         11.7       10.7      (13.9)
                                          ========== ========== ==========
  Ending assets                                 98.2       85.8       93.9
                                          ========== ========== ==========
Tax-free fixed-income
  Beginning assets                              62.4       59.3       61.6
                                          ========== ========== ==========
  Long-term sales                                3.9        3.3        3.2
  Long-term redemptions                         (1.9)      (1.9)      (2.1)
  Net exchanges                                   --         --         --
                                          ========== ========== ==========
    Net new flows                                2.0        1.4        1.1
  Reinvested distributions                       0.5        0.5        0.4
                                          ========== ========== ==========
    Net flows                                    2.5        1.9        1.5
  Distributions                                 (0.8)      (0.7)      (0.7)
  Appreciation (depreciation) and other          5.5        1.9       (2.7)
                                          ========== ========== ==========
  Ending assets                           $     69.6 $     62.4 $     59.7
                                          ========== ========== ==========



ASSETS UNDER MANAGEMENT AND FLOWS BY INVESTMENT OBJECTIVE

(in billions)                                   Three months ended
                                          --------------------------------
                                          30-Sep-09  30-Jun-09  30-Sep-08
                                          ---------- ---------- ----------
Global/international taxable
 fixed-income
  Beginning assets                        $     50.2 $     43.0 $     54.3
                                          ========== ========== ==========
  Long-term sales                               11.6        6.8       17.5
  Long-term redemptions                         (4.3)      (4.7)     (16.5)
  Net exchanges                                  1.3        0.8        0.2
                                          ========== ========== ==========
    Net new flows                                8.6        2.9        1.2
  Reinvested distributions                       0.3        0.4        0.3
                                          ========== ========== ==========
    Net flows                                    8.9        3.3        1.5
  Distributions                                 (0.3)      (0.5)      (0.2)
  Appreciation (depreciation) and other          4.5        4.4       (2.9)
                                          ========== ========== ==========
  Ending assets                                 63.3       50.2       52.7
                                          ========== ========== ==========
Domestic (U.S.) taxable fixed-income
  Beginning assets                              35.5       32.5       31.6
                                          ========== ========== ==========
  Long-term sales                                3.5        3.8        1.8
  Long-term redemptions                         (2.4)      (2.3)      (2.3)
  Net exchanges                                 (0.1)      (0.1)       0.4
                                          ========== ========== ==========
    Net new flows                                1.0        1.4       (0.1)
  Reinvested distributions                       0.2        0.4        0.2
                                          ========== ========== ==========
    Net flows                                    1.2        1.8        0.1
  Distributions                                 (0.3)      (0.4)      (0.3)
  Appreciation (depreciation) and other          2.0        1.6       (0.9)
                                          ========== ========== ==========
  Ending assets                                 38.4       35.5       30.5
                                          ========== ========== ==========
Cash Management
  Beginning assets                               7.5        8.1        7.0
                                          ========== ========== ==========
  Net cash management                            0.6        0.5       (0.5)
  Net exchanges                                 (1.3)      (1.1)       0.8
                                          ========== ========== ==========
    Net new flows                               (0.7)      (0.6)       0.3
  Reinvested distributions                        --         --        0.1
                                          ========== ========== ==========
    Net flows                                   (0.7)      (0.6)       0.4
  Distributions                                   --         --         --
  Appreciation (depreciation) and other          0.1         --       (0.1)
                                          ========== ========== ==========
  Ending assets                                  6.9        7.5        7.3
                                          ========== ========== ==========
Total
  Beginning assets                             451.2      391.1      580.2
                                          ---------- ---------- ----------
  Long-term sales                               34.9       27.9       38.5
  Long-term redemptions                        (23.3)     (22.4)     (46.6)
  Long-term net exchanges                        1.3        1.1       (0.8)
  Net cash management                            0.6        0.5       (0.5)
  Cash management net exchanges                 (1.3)      (1.1)       0.8
                                          ========== ========== ==========
    Net new flows                               12.2        6.0       (8.6)
  Reinvested distributions                       2.4        2.7        3.2
                                          ========== ========== ==========
    Net flows                                   14.6        8.7       (5.4)
  Distributions                                 (3.1)      (3.3)      (4.0)
  Appreciation (depreciation) and other         60.7       54.7      (63.5)
                                          ========== ========== ==========
Ending Assets Under Management            $    523.4 $    451.2 $    507.3
                                          ========== ========== ==========

Conference Call Information

Pre-recorded audio commentary on the fourth quarter results from Franklin Resources, Inc.'s President and Chief Executive Officer, Greg Johnson, and Executive Vice President and Chief Financial Officer, Ken Lewis, will be available today at approximately 9:15 a.m. Eastern Time. They will also lead a live teleconference today at 4:30 p.m. Eastern Time to answer questions.

Access to the pre-recorded audio commentary and accompanying slides will be available at franklinresources.com under the "Investor relations - Earnings releases" section. The pre-recorded audio commentary will also be available by dialing (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally, using access code 32011866, anytime through 11:59 p.m. Eastern Time on November 12, 2009.

Access to the live teleconference will be available at franklinresources.com 10 minutes before the start of the call or by dialing (877) 480-6346 in the U.S. and Canada or (706) 902-1906 internationally. A replay of the call can also be accessed by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally, using access code 31467170, after 5:30 p.m. Eastern Time on October 27, 2009 through 11:59 p.m. Eastern Time on November 12, 2009.

Questions regarding the pre-recorded audio commentary or live teleconference should be directed to Franklin Resources, Inc., Investor Relations at (650) 312-4091 or Corporate Communications at (650) 312-2245.

Franklin Resources, Inc. (NYSE:BEN - News) 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, Fiduciary Trust, Darby and Bissett investment teams. The San Mateo, CA-based company has more than 60 years of investment experience and over $523 billion in assets under management as of September 30, 2009. For more information, please call 1-800/DIAL BEN� or visit franklinresources.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. The information in the "Global Business Developments" section is being provided for information purposes only.

2. Source: Bloomberg Markets October 2009. The score takes into consideration funds' year-to-date, one-, three- and five-year total returns, as well as their three- and five-year Sharpe ratios. Rankings include open-end retail bond funds domiciled in the U.S. with total assets of more than $250 million and exclude index, emerging-market and collective funds. The three- and five-year returns are annualized.

3. Lipper rankings for Franklin Templeton U.S.-registered mutual funds are based on Class A shares. Franklin Templeton funds are compared against a universe of all share classes. Performance rankings for other share classes may differ.

4. 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 149 peer groups of U.S. retail mutual funds, and the groups vary in size from 7 to 956 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.

5. Source: Lipper� Inc., 9/30/09. Of the eligible Franklin Templeton long-term mutual funds tracked by Lipper, 44, 42, 41 and 43 funds ranked in the top quartile and 33, 31, 20 and 19 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., 9/30/09. Of the eligible Franklin Templeton equity mutual funds tracked by Lipper, 26, 19, 15 and 15 funds ranked in the top quartile and 15, 18, 11 and 9 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., 9/30/09. Of the eligible Franklin Templeton non-money market fixed-income mutual funds tracked by Lipper, 18, 23, 26 and 28 funds ranked in the top quartile and 18, 13, 9 and 10 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., 9/30/09. Of the eligible Franklin equity mutual funds tracked by Lipper, 17, 13, 9 and 10 funds ranked in the top quartile and 11, 9, 7 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., 9/30/09. Of the eligible Templeton equity mutual funds tracked by Lipper, 7, 3, 2 and 1 funds ranked in the top quartile and 1, 6, 2 and 4 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., 9/30/09. Of the eligible Mutual Series equity mutual funds tracked by Lipper, 2, 3, 4 and 4 funds ranked in the top quartile and 3, 3, 2 and 1 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., 9/30/09. Of the eligible Franklin Templeton non-money market taxable fixed-income mutual funds tracked by Lipper, 6, 5, 3 and 4 funds ranked in the top quartile and 2, 3, 2 and 2 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., 9/30/09. Of the eligible Franklin Templeton non-money market tax-free fixed-income mutual funds tracked by Lipper, 12, 18, 23 and 24 funds ranked in the top quartile and 16, 10, 7 and 8 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups.

13. Defined as operating income divided by operating revenues.

14. Assets under management include assets for which the company provides various investment management services as described in Item I "Business" in Part I of our Form 10-K for the fiscal year ended September 30, 2008.

15. As a result of regulatory changes, certain amounts previously included in global/international fixed-income are included in cash management effective as of January 1, 2009.

16. Cash management includes both U.S.-registered money market funds and foreign funds with similar investment objectives.

Forward-Looking Statements:

The financial results in this press release are preliminary. Statements in this press release regarding Franklin Resources, Inc. ("Franklin") and its subsidiaries, 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, 2008, and Franklin's subsequent Quarterly Reports on Form 10-Q.

�
--  The ongoing volatility and disruption of the capital and credit
    markets, and adverse changes in the global economy, have significantly
    affected our results of operations and may continue to put pressure on our
    financial results.
--  The amount and mix of our assets under management are subject to
    significant fluctuations.
--  We are subject to extensive and complex, overlapping and frequently
    changing rules, regulations and legal interpretations.
--  Regulatory and legislative actions and reforms have made the
    regulatory environment in which we operate more costly and future actions
    and reforms could adversely impact our assets under management, increase
    costs and negatively impact our profitability and future financial results.
--  Our ability to maintain the beneficial tax treatment we anticipate
    with respect to non-U.S. earnings we have repatriated is based on current
    interpretations of the American Jobs Creation Act of 2004 (the "Jobs Act")
    and permitted use of such amounts in accordance with our domestic
    reinvestment plan and the Jobs Act.
--  Any significant limitation or failure of our software applications,
    technology or other systems that are critical to our operations could
    constrain our operations.
--  Our investment management business operations are complex and a
    failure to properly perform operational tasks or the misrepresentation of
    our products and services could have an adverse effect on our revenues and
    income.
--  We face risks, and corresponding potential costs and expenses,
    associated with conducting operations and growing our business in numerous
    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 third-party distribution and sales channels on which we
    depend could reduce our revenues and hinder our growth.
--  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 significant 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 and other sponsored investment
    products we advise.
--  Regulatory and governmental examinations and/or investigations, civil
    litigation relating to previously-settled regulatory and governmental
    investigations, and the legal risks associated with our business, could
    adversely impact our assets under management, increase costs and negatively
    impact our profitability and/or our future financial results.
--  Our ability to meet cash needs depends upon certain factors, including
    our asset value, credit worthiness and the market value of our stock.
--  Our ability to access the capital markets in a timely manner should we
    seek to do so depends on a number of factors.
--  Diverse and strong competition limits the interest rates that we can
    charge on consumer loans.
--  Our business could be negatively affected if we or our banking
    subsidiaries fail to remain well capitalized.
--  Liquidity needs could affect our banking business.
--  We are dependent on the earnings of our subsidiaries.
    

 
Contact:
Franklin Resources, Inc.
Investor Relations:
Brian Sevilla
(650) 312-4091
Corporate Communications:
Matt Walsh
(650) 312-2245
franklinresources.com