Franklin Resources, Inc. Announces First Quarter Results

Business Wire, Jan 24, 2008

SAN MATEO, Calif. -- Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE:BEN) today announced net income of $518.3 million, or $2.12 per share diluted, on revenues of $1,685.6 million for the quarter ended December 31, 2007. In the quarter ended September 30, 2007, net income was $436.9 million, or $1.76 per share diluted, on revenues of $1,629.1 million. For the quarter ended December 31, 2006, net income was $426.8 million, or $1.67 per share diluted, on revenues of $1,427.8 million.

Operating income for the quarter ended December 31, 2007 was $635.7 million, as compared to $541.4 million for the prior quarter and $508.1 million for the quarter ended December 31, 2006. The company's non-operating income for the quarter ended December 31, 2007 included $80.8 million of investment and other income, net, as compared to $86.0 million in the prior quarter and $71.1 million for the quarter ended December 31, 2006.

Total assets under management by the company's subsidiaries were $643.7 billion at December 31, 2007, as compared to $645.9 billion at September 30, 2007 and $552.9 billion at December 31, 2006. Simple monthly average assets under management during the quarter ended December 31, 2007 were $651.5 billion, as compared to $627.3 billion in the preceding quarter and $533.1 billion in the same quarter a year ago. Equity assets comprised 59% of total assets under management at December 31, 2007, as compared to 60% of total assets under management at September 30, 2007 and December 31, 2006. Fixed-income assets comprised 22% of total assets under management at December 31, 2007, as compared to 21% of total assets under management at September 30, 2007 and December 31, 2006. Hybrid assets accounted for 18% of total assets under management at December 31, 2007, September 30, 2007 and December 31, 2006. Sales exceeded redemptions by $4.9 billion for the quarter ended December 31, 2007, as compared to $9.8 billion for the prior quarter and $10.0 billion for the comparable quarter a year ago.

Cash and cash equivalents were $2.9 billion at December 31, 2007, as compared to $3.6 billion at September 30, 2007. Stockholders' equity was $7.0 billion at December 31, 2007, as compared to $7.3 billion at September 30, 2007. The company had 239.7 million shares of common stock outstanding at December 31, 2007, as compared to 245.5 million shares outstanding at September 30, 2007. During the quarter ended December 31, 2007, the company repurchased 6.5 million shares of its common stock for a total cost of $780.5 million.

On January 24, 2008, the company's Board of Directors authorized the company to purchase, from time to time, up to an aggregate of 10.0 million shares of its common stock in either open market or off-market transactions. The size and timing of these purchases will depend on price, market and business conditions and other factors. The stock repurchase program is not subject to an expiration date. The new board authorization is in addition to the existing authorization, of which 1,371,118 shares remained available for repurchase at January 15, 2008. The company repurchased an aggregate of 7.9 million shares during the period October 1, 2007 to January 15, 2008. Shares repurchased under the program are retired.

Fiscal First Quarter 2008 Highlights

Global Business Developments(1)

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

* Franklin Resources, Inc. announced a 33.3% increase in its quarterly dividend over the dividend paid the prior quarter and the same quarter last year. The company has increased its annual dividend rate every year since 1981.

* The Industrial and Commercial Bank of China, China's largest commercial bank, selected Franklin Templeton Investments to manage its newest Qualified Domestic Institutional Investor fund for domestic Chinese retail and institutional investors.

* The NJBEST college savings program, comprised of NJBEST 529 College Savings Plan - New Jersey and Franklin Templeton 529 College Savings Plan, offered by the State of New Jersey Higher Education Student Assistance Authority and managed and distributed by Franklin/Templeton Distributors, Inc., reported that collective assets in the plans surpassed $2 billion.

* Franklin Templeton Investments introduced U.S.-registered Franklin Focused Core Equity Fund and Templeton International Bond Fund.

* Franklin Templeton Investments launched Templeton Emerging Markets Smaller Companies Fund, a new SICAV (Societes d'Investissement a Capital Variable) fund.

* Franklin Templeton Investments (India) launched Franklin Asian Equity Fund, a new open-end equity fund that leverages the expertise of local asset management teams in India, Korea and China.

* In Germany, Templeton Asian Growth Fund and Templeton Global Bond Fund received the Feri Fund Award 2008 in their respective categories of Equities Asia ex Japan and Bonds Global Currencies.

* In Austria, Geld magazine awarded the Austrian Fund of Funds Award to Franklin Templeton Strategic Income Fund for the Best Balanced Fund of Funds/Bonds-Oriented 2007 for the one-year period.