Franklin Resources, Inc
Franklin Resources, Inc.
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Franklin Resources, Inc. Announces First Quarter Results

From: Franklin Resources, Inc.
Contact: Lisa Gallegos
Telephone:(650) 312-3395

San Mateo, CA, January 26, 2006 - Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE: BEN) today reported net income of $318.0 million, or $1.21 per share diluted, on revenues of $1,181.5 million for the quarter ended December 31, 2005.  In the quarter ended September 30, 2005, net income was $334.5 million, or $1.28 per share diluted, on revenues of $1,163.2 million.  For the quarter ended December 31, 2004, net income was $240.0 million, or $0.92 per share diluted, on revenues of $986.0 million. 

Operating income for the quarter ended December 31, 2005 was $404.6 million, as compared to $368.5 million for the prior quarter and $300.1 million for the quarter ended December 31, 2004, an increase of 10% for the quarter ended December 31, 2005 over the prior quarter and 35% over the same quarter in the prior year.  The company’s non-operating income for the quarter ended December 31, 2005 includes $32.4 million of investment and other income, net, as compared to $49.6 million in the prior quarter and $27.4 million for the quarter ended December 31, 2004.  Income taxes were provided at a rate of 27.5% for the quarter, as compared to a reduced rate of 20.25% resulting from the resolution of certain state tax matters in the prior quarter. 

Assets under management by the company’s subsidiaries were $464.8 billion at December 31, 2005, as compared to $453.1 billion at September 30, 2005 and $402.2 billion at December 31, 2004.   Simple monthly average assets under management during the quarter ended December 31, 2005, were $453.3 billion compared to $440.5 billion in the preceding quarter and $381.0 billion in the same quarter a year ago.  Equity assets increased to 59% of total assets under management at December 31, 2005, as compared to 58% for the previous quarter and 57% at December 31, 2004.  Fixed-income assets comprised 23% of total assets under management at December 31, 2005, as compared to 23% for the previous quarter and 25% at December 31, 2004.  Hybrid assets accounted for 17% of total assets under management at December 31, 2005, September 30, 2005 and December 31, 2004.  Sales exceeded redemptions by $5.8 billion for the quarter ended December 31, 2005, as compared to $8.0 billion for the prior quarter and $8.8 billion for the comparable quarter a year ago.

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