Franklin Resources, Inc. Announces Third Quarter Results

Business Wire, July 26, 2007

SAN MATEO, Calif. -- Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE:BEN) today announced net income of $479.8 million, or $1.91 per share diluted, on revenues of $1,639.8 million for the quarter ended June 30, 2007. In the quarter ended March 31, 2007, net income was $440.9 million, or $1.73 per share diluted, on revenues of $1,509.0 million. For the quarter ended June 30, 2006, net income was $371.4 million, or $1.41 per share diluted, on revenues of $1,317.3 million.

Operating income for the quarter ended June 30, 2007 was $539.5 million, as compared to $499.1 million for the prior quarter and $452.0 million for the quarter ended June 30, 2006. The company's non-operating income for the quarter ended June 30, 2007 included $105.3 million of investment and other income, net, as compared to $100.9 million in the prior quarter and $52.3 million for the quarter ended June 30, 2006.

Assets under management by the company's subsidiaries were $624.0 billion at June 30, 2007, as compared to $576.0 billion at March 31, 2007 and $490.1 billion at June 30, 2006. Simple monthly average assets under management during the quarter ended June 30, 2007 were $605.5 billion, as compared to $563.7 billion in the preceding quarter and $494.6 billion in the same quarter a year ago. Equity assets comprised 60% of total assets under management at June 30, 2007, March 31, 2007 and June 30, 2006. Fixed-income assets comprised 21% of total assets under management at June 30, 2007 and March 31, 2007, as compared to 22% at June 30, 2006. Hybrid assets accounted for 18% of total assets under management at June 30, 2007 and March 31, 2007, as compared to 17% at June 30, 2006. Sales exceeded redemptions by $15.9 billion for the quarter ended June 30, 2007, as compared to $10.9 billion for the prior quarter and $1.3 billion for the comparable quarter a year ago.

Fiscal Third Quarter 2007 Highlights

Global Business Developments

* The company introduced the U.S.-registered Franklin All Cap Value Fund which seeks long-term total return by investing primarily in equity securities of companies of any size that the fund's managers believe are undervalued and have the potential for capital appreciation.

* Launched new funds in Canada, India, Korea and Luxembourg, focused primarily on fixed income, balanced and sector-specific asset classes.

* Franklin Templeton Investments and China Life officially opened their Hong Kong-based asset management company, China Life Franklin Asset Management Co., Limited.

* As part of a company-wide sales and marketing campaign focused on fixed income funds, over 800 financial advisors attended a webcast that featured portfolio managers from the Franklin Templeton Fixed Income Group presenting their economic outlook.

* Franklin Templeton announced plans to join DST Systems' Vision, an interactive website that gives financial intermediaries a consolidated view of their client accounts, by the end of calendar 2007.

* Launched a client education program to provide certain institutional business clients with a comprehensive overview of the company's investment and servicing capabilities.

Investment Performance

Lipper Performance Rankings of Franklin Templeton's U.S.-Registered Long-Term Mutual Funds(1,2)

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

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

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Conference Call Information

On Thursday, July 26, 2007, Franklin Resources, Inc., (NYSE:BEN) will release its third fiscal quarter 2007 financial results. President and Chief Executive Officer of Franklin Resources, Inc., Greg Johnson, and Senior Vice President, Chief Financial Officer and Treasurer, Ken Lewis, will lead a live conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) that day to discuss the quarterly results and answer analysts' questions.

Access to the teleconference will be available via franklintempleton.com 10 minutes before the start of the call or by dialing (877) 480-6346 in the U.S. or (706) 645-0197 internationally.

A replay of the call will be archived on the "Our Company" page of franklintempleton.com through August 26, 2007. The replay can also be accessed by calling (800) 642-1687 in the U.S. or (706) 645-9291 internationally using access code 6899471, after 5:30 p.m. Eastern Time on July 26, 2007, through 11:59 p.m. Eastern Time on August 26, 2007.

Questions regarding the teleconference call 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), is a global investment management organization operating as Franklin Templeton Investments. Franklin Templeton Investments provides global and domestic investment management solutions managed by its Franklin, Templeton, Mutual Series and Fiduciary Trust investment teams. The San Mateo, CA-based company has 60 years of investment experience and approximately $624.0 billion in assets under management as of June 30, 2007. For more information, please call 1-800/DIAL BEN[R] or visit franklintempleton.com.