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

From: Franklin Resources, Inc.
Contact: Matt Walsh
Telephone:(650) 312-2245

San Mateo, CA, January 27, 2011 - Franklin Resources, Inc. (the Company) [NYSE: BEN] today announced net income1 of $501.2 million, or $2.23 per share diluted, on revenues of $1,700.3 million for the quarter ended December 31, 2010. For the quarter ended September 30, 2010, net income1 was $372.9 million, or $1.65 per share diluted, on revenues of $1,528.4 million. For the quarter ended December 31, 2009, net income1 was $355.6 million, or $1.54 per share diluted, on revenues of $1,377.4 million.

Operating income for the quarter ended December 31, 2010 was $659.2 million, as compared to $509.0 million for the prior quarter and $467.0 million for the quarter ended December 31, 2009. The Company’s non-operating income for the quarter ended December 31, 2010 included $47.1 million of investment and other income, net, as compared to $50.9 million for the prior quarter and $33.0 million for the quarter ended December 31, 2009.

Total assets under management by the Company’s subsidiaries were $670.7 billion at December 31, 2010, as compared to $644.9 billion at September 30, 2010 and $553.5 billion at December 31, 2009. Simple monthly average assets under management during the quarter ended December 31, 2010 were $655.6 billion, as compared to $604.7 billion in the prior quarter and $534.9 billion in the same quarter a year ago. Equity assets comprised 44% of total assets under management at December 31, 2010, as compared to 43% at September 30, 2010 and 46% at December 31, 2009. Fixed-income assets comprised 39% of total assets under management at December 31, 2010 and September 30, 2010, as compared to 34% at December 31, 2009. Hybrid and other assets accounted for 17% of total assets under management at December 31, 2010, as compared to 18% at September 30, 2010 and 20% at December 31, 2009. Net new flows for the quarter ended December 31, 2010 were $3.2 billion, as compared to $19.4 billion for the prior quarter and $14.3 billion for the same quarter a year ago.

Effective October 1, 2010, the Company adopted new accounting guidance related to the consolidation of variable interest entities, which resulted in increases to cash and cash equivalents and investments of $1.1 billion and debt outstanding of $1.2 billion at December 31, 2010. Total cash and cash equivalents and investments were $8.0 billion at December 31, 2010, as compared to $6.8 billion at September 30, 2010. Total stockholders’ equity was $8.1 billion at December 31, 2010, as compared to $7.7 billion at September 30, 2010. The Company had 223.3 million shares of common stock outstanding at December 31, 2010, as compared to 224.0 million shares outstanding at September 30, 2010. During the quarter ended December 31, 2010, the Company repurchased 1.7 million shares of its common stock for a total cost of $198.5 million.

(The preceding paragraphs only represent a portion of the press release.)

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