Franklin Resources, Inc. Announces Fourth Quarter Results

Business Wire, Oct 25, 2007

SAN MATEO, Calif. -- Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE: BEN) today announced net income of $436.9 million, or $1.76 per share diluted, on revenues of $1,629.1 million for the quarter ended September 30, 2007. In the quarter ended June 30, 2007, net income was $468.4 million, or $1.86 per share diluted, on revenues of $1,639.8 million. For the quarter ended September 30, 2006, net income was $381.7 million, or $1.49 per share diluted, on revenues of $1,297.2 million.

Operating income for the quarter ended September 30, 2007 was $541.4 million, as compared to $519.0 million for the prior quarter and $427.1 million for the quarter ended September 30, 2006. The company's non-operating income for the quarter ended September 30, 2007 included $86.0 million of investment and other income, net, as compared to $105.3 million in the prior quarter and $57.8 million for the quarter ended September 30, 2006.

Assets under management by the company's subsidiaries were $645.9 billion at September 30, 2007, as compared to $624.0 billion at June 30, 2007 and $511.3 billion at September 30, 2006. Simple monthly average assets under management during the quarter ended September 30, 2007 were $627.3 billion, as compared to $605.5 billion in the preceding quarter and $500.4 billion in the same quarter a year ago. Equity assets comprised 60% of total assets under management at September 30, 2007 and June 30, 2007, as compared to 59% of total assets under management at September 30, 2006. Fixed-income assets comprised 21% of total assets under management at September 30, 2007 and June 30, 2007, as compared to 22% at September 30, 2006. Hybrid assets accounted for 18% of total assets under management at September 30, 2007, June 30, 2007 and September 30, 2006. Sales exceeded redemptions by $9.8 billion for the quarter ended September 30, 2007, as compared to $15.9 billion for the prior quarter and $2.4 billion for the comparable quarter a year ago.

Fiscal Fourth Quarter 2007 Highlights

Global Business Developments

* Franklin Templeton Investments announced a strategic joint venture with Algebra Capital, an asset management firm in the Middle East/North Africa region, expanding the company's local asset management capabilities.

* Franklin Templeton Investments acquired a majority stake in Riva Financial Systems, the creator of the Riva Transfer Agent software solution suite. The transaction supports the company's long-term goal of having an international transfer agent solution.

* Franklin Templeton Investments launched four new SICAV (Societes d'Investissement a Capital Variable) funds: Franklin Natural Resources Fund, Templeton Global Absolute Return (USD) Fund, Franklin Strategic Income Fund and Templeton Global High Yield Fund.

* Franklin Templeton Real Estate Advisors launched Franklin International Real Estate Fund (FIRE Fund 3), its fourth global private real estate fund in Australia.

* Franklin Templeton Investments introduced Franklin Templeton VIP Founding Funds Allocation Fund as a new investment option for insurance companies to include in their variable annuity and variable life insurance products.

* The annual Outlook and Opportunities Forum 2007, held in Toronto, Canada, was attended by over 2,300 investment advisors and clients.

* In Canada, DALBAR ranked Franklin Templeton Investments #1 among broker-distributed firms for English and French call center services.

* More than 850 Franklin Templeton employees from around the world participated in the first annual Involved Impact Days, a company sponsored event to encourage community involvement.

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.)

FRANKLIN TEMPLETON(3,4)

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FRANKLIN TEMPLETON EQUITY(3,5)

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FRANKLIN TEMPLETON FIXED INCOME(3,6)

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FRANKLIN EQUITY(3,7)

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TEMPLETON EQUITY(3,8)

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MUTUAL SERIES EQUITY(3,9)

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FRANKLIN TEMPLETON TAXABLE FIXED INCOME(3,10)

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FRANKLIN TEMPLETON TAX-FREE FIXED INCOME(3,11)

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

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1 Operating margin: Operating income divided by total operating revenues.

2 The twelve months ended September 30, 2007 balance includes the divestiture of assets under management of a former subsidiary at October 1, 2006.

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1 Operating margin: Operating income divided by total operating revenues.

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1 U.S. retail assets include institutional assets totaling approximately $40.6 billion that are invested in U.S. retail fund and annuity products. Total institutional and high net-worth assets at September 30, 2007 were approximately $200.2 billion, of which high net-worth assets comprised $11.5 billion.

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Conference Call Information

President and Chief Executive Officer of Franklin Resources, Inc., Greg Johnson, and Executive Vice President, Chief Financial Officer and Treasurer, Ken Lewis, will lead a live conference call on Thursday, October 25, 2007 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss Franklin Resources' fourth fiscal quarter 2007 financial results and answer analysts' questions.