FRANKLIN TEMPLETON INVESTMENTS. Franklin Resources, Inc. Credit Suisse Financial Services Forum, February 10, 2010

Transcription

1 Franklin Resources, Inc. Credit Suisse Financial Services Forum, February 10, 2010

2 Forward-Looking Statements The financial results in this presentation are preliminary. Statements in this presentation regarding Franklin Resources, Inc. ( Franklin ) and its subsidiaries, which are not historical facts, are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of When used in this presentation, words or phrases generally written in the future tense and/or preceded by words such as will, may, could, expect, believe, anticipate, intend, plan, seek, estimate or other similar words are forward-looking statements. Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forwardlooking statements. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. These and other risks, uncertainties and other important factors are described in more detail in Franklin s recent filings with the U.S. Securities and Exchange Commission, including, without limitation, in Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in Franklin s Annual Report on Form 10-K for the fiscal year ended September 30, 2009: (1) volatility and disruption of the capital and credit markets, and adverse changes in the global economy, may significantly affect our results of operations and may put pressure on our financial results; (2) the amount and mix of our assets under management are subject to significant fluctuations; (3) we are subject to extensive and complex, overlapping and frequently changing rules, regulations and legal interpretations; (4) regulatory and legislative actions and reforms have made the regulatory environment in which we operate more costly and future actions and reforms could adversely impact our assets under management, increase costs and negatively impact our profitability and future financial results; (5) changes in tax laws or exposure to additional income tax liabilities could have a material impact on our financial condition, results of operations and liquidity; (6) our ability to maintain the beneficial tax treatment we anticipate with respect to non- U.S. earnings we have repatriated is based on current interpretations of the American Jobs Creation Act of 2004 (the Jobs Act ) and permitted use of such amounts in accordance with our domestic reinvestment plan and the Jobs Act; (7) any significant limitation or failure of our software applications, technology or other systems that are critical to our operations could constrain our operations; (8) our investment management business operations are complex and a failure to properly perform operational tasks or the misrepresentation of our products and services could have an adverse effect on our revenues and income; (9) we face risks, and corresponding potential costs and expenses, associated with conducting operations and growing our business in numerous countries; (10) we depend on key personnel and our financial performance could be negatively affected by the loss of their services; (11) strong competition from numerous and sometimes larger companies with competing offerings and products could limit or reduce sales of our products, potentially resulting in a decline in our market share, revenues and net income; (12) changes in the third-party distribution and sales channels on which we depend could reduce our revenues and hinder our growth; (13) our increasing focus on international markets as a source of investments and sales of investment products subjects us to increased exchange rate and other risks in connection with earnings and income generated overseas; (14) poor investment performance of our products could affect our sales or reduce the level of assets under management, potentially negatively impacting our revenues and income; (15) we could suffer losses in earnings or revenue if our reputation is harmed; (16) our future results are dependent upon maintaining an appropriate level of expenses, which is subject to fluctuation; (17) our ability to successfully integrate widely varied business lines can be impeded by systems and other technological limitations; (18) our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability; (19) certain of the portfolios we manage, including our emerging market portfolios, are vulnerable to significant market-specific political, economic or other risks, any of which may negatively impact our revenues and income; (20) our revenues, earnings and income could be adversely affected if the terms of our management agreements are significantly altered or these agreements are terminated by the funds and other sponsored investment products we advise; (21) regulatory and governmental examinations and/or investigations, civil litigation relating to previously-settled regulatory and governmental investigations, and the legal risks associated with our business, could adversely impact our assets under management, increase costs and negatively impact our profitability and/or our future financial results; (22) our ability to meet cash needs depends upon certain factors, including the market value of our assets, operating cash flows and our perceived credit worthiness; (23) diverse and strong competition limits the interest rates that we can charge on consumer loans; (24) our business could be negatively affected if we or our banking subsidiaries fail to remain well capitalized, and liquidity needs could affect our banking business; and (25) we are dependent on the earnings of our subsidiaries. Any forward-looking statement made by us in this presentation speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. 1

3 Franklin Investments: A Premier Investment Management Organization World-Class Investment Management $553.5 billion in assets under management 1 with over 350 investment solutions worldwide 2 Fifth-largest U.S. mutual fund manager 3 with 91% of U.S.- registered fund assets ranked in top two Lipper quartiles for 10-year period ended Dec. 31, Fifth-largest cross-border fund manager 5 Enviable multi-manager structure encompassing well-known brands across multiple asset classes Depth and Breadth of Our Presence 1 Offices cover countries representing 84% of the world s GDP Clients in 150+ countries 16 countries with over U.S. $1 billion in AUM Values-Based Culture Responding to evolving customer needs Working in partnership with our customers Leveraging best practices and global platforms Supporting our communities 1. As of 12/31/ Investment solutions are defined as distinct investment strategies available to retail and institutional investors worldwide. 3. As of 12/31/09. Strategic Insight (SimFund MF); ICI..Based on U.S.-based open-end mutual funds. 4. Source: Lipper, Inc., 12/31/09. Reflects Lipper rankings for FT U.S.-registered long-term mutual funds based on Class A shares without sales charges. are compared against a universe of all share classes. Performance rankings for other share classes may differ. 68% and 85% of Franklin U.S.-registered fund assets ranked in the top two Lipper quartiles for the 1- and 5-year periods ended 12/31/09. Of the eligible Franklin long-term mutual funds tracked by Lipper, 26, 37, 40, and 40 funds ranked in the top quartile and 35, 32, 23, and 23 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 5. As of 9/30/09. Strategic Insight (SimFund MF); ICI..Based on cross border retail funds (excluding ETF and Tracker ). A cross-border fund is one that sources less than 80% of its assets from any single country. 2

4 Our World-Class Investment Management Groups FRANKLIN TEMPLETON INVESTMENTS FRANKLIN TEMPLETON MUTUAL SERIES SPECIALIZED INVESTMENT TEAMS * Time-Tested Expertise The separate investment management groups at Franklin, and Mutual Series were launched over 60 years ago Each seeks to offer specialized expertise with distinct investment focuses ranging from tax-free income to core equity to global investing Our portfolio managers stay true to their disciplines, regardless of short-term market cycles True Diversification, Not Duplication Since our management groups may pursue different investment approaches, Franklin, and Mutual Series strategies typically have distinct portfolios The breadth of our product line aims to provide our clients with an array of solutions designed to meet their strategic goals * Specialized Investment Teams include: Franklin Real Estate Advisors, Darby, Asset Management teams, Managed Investment Solutions and Fiduciary Wealth Management. 3

5 1.1.3 GLOBAL DIVERSIFICATION/ACTIVE MANAGEMENT FRANKLIN TEMPLETON INVESTMENTS Specialized Investment Teams: Asset Management Capabilities Brazil Canada China * India Japan Sao Paulo Calgary Shanghai, Hong Kong Chennai Tokyo Fixed Income Fixed Income Fixed Income Fixed Income Private Malaysia MENA * South Korea Vietnam * Kuala Lumpur Dubai Seoul Hanoi Sharia/ Islamic Investing Fixed Income Sukuk Fixed Income Fixed Income Private * Joint venture. 4

6 Full Breadth of Investment Solutions FRANKLIN TEMPLETON INVESTMENTS U.S. Fixed Income Fixed Income Core / Hybrid Value Growth Int l Emerging Markets Asset Mgmt Private Real Estate Key Strategies U.S. Retail 35 Municipal Bond (1977) Bond Fund (1986) Franklin Income Fund (1948) Mutual Shares Fund (1949) Franklin Growth Fund (1948) Growth Fund (1954) Foreign (1982) Developing Markets Trust (1991) Franklin India Growth Fund (2008) N/A Franklin Real Estate Securities Fund (1994) ex-u.s. Retail Franklin U.S. Government (1991) Bond (1991) Balanced (1994) Franklin Mutual Beacon (1997) Franklin U.S. Opportunities (2000) Growth Germany (1982) European (1991) Emerging Markets Investment Trust - UK (1989) Franklin World Perspectives (2008) Darby FT Private Strategy India (2008) Franklin Real Estate (2005) Inst. Franklin U.S. High Yield (2002) Franklin Bond Plus (1986) Franklin & Non-U.S. Blend (2002) (1980) FGA (1991) (1980) Non-U.S. (1989) Emerging Markets (1992) Franklin India (2005) Strategic Emerging Markets Fund III (2008) Franklin Real Estate Advisors (1984) Dates indicate when fund or strategy was first offered. 5

7 Investment Teams Are Supported by Investment Risk Management, Trading and Services Platforms FRANKLIN TEMPLETON INVESTMENTS FRANKLIN TEMPLETON MUTUAL SERIES SPECIALIZED INVESTMENT TEAMS Investment Risk Management and Trading GLOBAL SERVICES PLATFORM Sales and Marketing Shareholder and Client Services Operations and Technology Corporate Services 6

8 1.3 ACCOLADES FRANKLIN TEMPLETON INVESTMENTS Investment Performance U.S. Mutual Percentage of Long-Term Assets in Top Two Lipper Quartiles 10-Year Periods Ended 12/31/09 1 Franklin Franklin 2 Franklin Fixed Income 3 91% 93% 90% 68% 85% 85% 91% 80% 87% 85% 93% 53% 82% 84% 90% 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year 1. Source: Lipper, Inc., 12/31/09. Lipper rankings for Franklin U.S.-registered long-term mutual funds are based on Class A shares and do not include sales charges. Franklin funds are compared against a universe of all share classes. Performance rankings for other share classes may differ. Of the eligible Franklin long-term mutual funds tracked by Lipper, 26, 37, 40, and 40 funds ranked in the top quartile and 35, 32, 23, and 23 funds ranked in the second quartile of their respective Lipper peer groups for the 1-, 3-, 5- and 10-year periods, respectively, for cumulative total return. 2. Source: Lipper, Inc., 12/31/09. Of the eligible Franklin equity mutual funds tracked by Lipper, 20, 19, 14, and 14 funds ranked in the top quartile and 20, 17, 13, and 12 funds ranked in the second quartile of their respective Lipper peer groups for the 1-, 3-, 5-,and 10-year periods, respectively for cumulative total return. 3. Source: Lipper, Inc., 12/31/09. Of the eligible Franklin non-money market fixed income mutual funds tracked by Lipper, 5, 18, 26, and 26 funds ranked in the top quartile and 15, 15, 10, and 11 funds ranked in the second quartile of their respective Lipper peer groups for the 1-, 3-, 5-,and 10-year periods, respectively for cumulative total return. 7

9 1.3 ACCOLADES FRANKLIN TEMPLETON INVESTMENTS Investment Performance Cross-Border Percentage of Long-Term Assets in Top Two Morningstar Quartiles 10-Year Periods ended 12/31/09 1 Franklin Franklin 2 Franklin Fixed Income 3 82% 76% 88% 60% 71% 71% 82% 59% 57% 76% 86% 86% 87% 88% 40% 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year 1-Year 3-Year 5-Year 10-Year 1. Source: Morningstar, 12/31/09. Morningstar rankings for Franklin offshore mutual funds are based on primary share classes and do not include sales charges. Performance rankings for other share classes may differ. Of the eligible Franklin long-term mutual funds tracked by Morningstar, 27, 20, 13, and 9 funds ranked in the top quartile; 17, 8, 7, and 6 funds ranked in the second quartile of their respective Morningstar categories for the 1-, 3-, 5- and 10-year periods, respectively, for average annual total return. 2. Source: Morningstar, 12/31/09. Of the eligible Franklin equity funds tracked by Morningstar, 16, 16, 8, and 7 funds ranked in the top quartile and 16, 5, 5, and 4 funds ranked in the second quartile of their respective Morningstar categories for the 1-, 3-, 5-, and 10-year periods, respectively for average annual total return. 3. Source: Morningstar, 12/31/09. Of the eligible Franklin fixed income funds tracked by Morningstar, 11, 4, 5, and 2 funds ranked in the top quartile and 1, 3, 2, and 2 funds ranked in the second quartile of their respective Morningstar categories for the 1-, 3-, 5- and 10-year periods, respectively for average annual total return. 8

10 A Pioneer in Investing Building Our Firm Franklin Goes Public International Expansion Becoming FTI Acquisitions Acquisitions and Joint Ventures Franklin MENA Fund () VietCombank JV (Vietnam) Franklin World Perspectives Fund () Algebra Capital JV (UAE) 2007 China Life JV (China) / Bradesco Acquisition (Brazil) BRIC Fund (U.S.) Darby Acquisition () / Sealand JV (China) 2003 Pioneer ITI Acquisition (India) Quotential Program Fiduciary Trust Acquisition (U.S.) 2001 Managed Investments Solution (Canada) Bissett (Canada) / Good Morning Securities (Korea) Acquisitions One of the First Firms to Establish Operations in S. Korea Mutual Series Acquisition 1996 Acquisition Began Distributing Products 1990 Began Managing Emerging Markets Account Mandate 1986 Bond Fund (U.S.) 1983 Franklin Offers 1 st 100% GNMA Fund (U.S.) 1977 Franklin Tax-Free Income Fund (U.S.) 1971 Franklin Resources, Inc. IPO 1954 Growth Fund (U.S.) 1953 Began Managing International Fixed Income Account Mandate 1950 Began Managing Account Mandate 1949 Mutual Shares Fund (U.S.) 1948 Franklin Income Fund (U.S.) 1947 Franklin Distributors, Inc. Founded Innovation and Growth 1970s Offices Moved from New York to California 1980s 6 Offices Opened 1990s 17 Offices Opened 2000s 7 Offices Opened 9

11 Our Footprint Offices in Countries Representing 84% of the World's GDP 1 Offices in 30+ Countries Clients in 150+ Countries The Americas Europe/Middle East/Africa Asia-Pacific United States (1947) Bahamas (1968) Canada (1982) Argentina (1994) Brazil (1994) Mexico (2005) United Kingdom (1986) Luxembourg (1988) Switzerland (1988) Spain (1998) France (1994) Italy (1995) Netherlands (1997) Poland (1997) South Africa (1997) UAE (1997) Spain (1998) Sweden (1998) Russia (1999) Austria (2005) Turkey (2005) Hungary (2008) Australia (1986) Taiwan (1986) Singapore (1990) Hong Kong (1994) India (1995) Japan (1996) South Korea (1997) China (2004) Vietnam (2008) Malaysia (2009) 1. Based on information from IMF, World Economic Outlook Database, October * Dates indicates date of entry via an office opening or acquiring stake in a joint venture. 10

12 Portfolio Capabilities Are Fully Leveraged by Our Distribution Infrastructure Investment Strategies U.S. Fixed Income Fixed Income Core / Hybrid Value Growth Int l Emerging Markets Asset Mgmt Private Real Estate Distribution Channels U.S. Advisory Services International Advisory Services U.S. Institutional Services High Net Worth Private and Alternative (Distribution in 150+ countries) Investment Vehicles U.S. Mutual Subadvised Cross-Border () High Net Worth Managed Private Investment Variable Insurance of ly- Registered Commingled Trusts Private Client Closed-End U.S. Institutional 11

13 Investment Strategies Are Deployed Worldwide: Bond Example Investment Strategies Bond U.S. Fixed Income Fixed Income Bond Fund U.S. Retail Market Core / Hybrid Value Growth Int l Emerging Markets Asset Mgmt Private Real Estate Distribution Channels U.S. Advisory Services International Advisory Services U.S. Institutional Services High Net Worth Private and Alternative (Distribution in 150+ countries) Investment Vehicles U.S. Mutual Subadvised Cross-Border () High Net Worth Managed Private Investment Variable Insurance of ly- Registered Commingled Trusts Private Client Closed-End U.S. Institutional 12

14 Investment Strategies Are Deployed Worldwide: Franklin US Government Example Investment Strategies Franklin US Government U.S. Fixed Income Franklin US Government Fund U.S. Retail Market Fixed Income Core / Hybrid Value Growth Int l Emerging Markets Asset Mgmt Private Real Estate Distribution Channels U.S. Advisory Services International Advisory Services U.S. Institutional Services High Net Worth Private and Alternative (Distribution in 150+ countries) Investment Vehicles U.S. Mutual Subadvised Cross-Border () High Net Worth Managed Private Investment Variable Insurance of ly- Registered Commingled Trusts Private Client Closed-End U.S. Institutional 13

15 Investment Strategies Are Deployed Worldwide: Growth Example Investment Strategies Growth U.S. Fixed Income Fixed Income Core / Hybrid Value Growth Growth Fund U.S. Retail Market Int l Emerging Markets Asset Mgmt Private Real Estate Distribution Channels U.S. Advisory Services International Advisory Services U.S. Institutional Services High Net Worth Private and Alternative (Distribution in 150+ countries) Investment Vehicles U.S. Mutual Subadvised Cross-Border () High Net Worth Managed Private Investment Variable Insurance of ly- Registered Commingled Trusts Private Client Closed-End U.S. Institutional 14

16 3 FRANKLIN TEMPLETON INVESTMENTS Broad and Diversified Client and Asset Base Assets Under Management in U.S. $ Billions AUM by Region $523 $554 United States 74% Europe 9% Asia-Pacific 8% $451 Canada 6% $416 $391 47% 46% Middle East/Africa 2% Americas 1% 47% 44% 46% 20% 20% 19% 19% 19% AUM by Client Type Retail 70% 31% 34% 33% 33% 34% U.S. Retail 52% Int'l Retail 18% Institutional 28% 2% 2% 2% 1% 12/08 3/09 6/09 9/09 12/09 1% U.S. Institutional 19% Int'l Institutional 9% Hybrid Fixed Income Cash Management High Net Worth 2% 15

17 Our Business Is Accelerating AUM and Long-Term Sales by Region 1 Cross-Border Long-Term Asset Market Share 2 26% 2% 3% 5% 14% 14% 38% 3.5% 3.7% 3.8% 4.5% 4.9% 5.0% 2.7% 2.9% 74% 62% 1.9% AUM by Region United States ex-u.s. Long-Term Sales by Region United States Europe Asia Pacific Canada Middle East/Africa Americas 12/01 12/02 12/03 12/04 12/05 12/06 12/07 12/08 CYTD 09/09 9/09 1. Long-term sales by region is for the 12-month period ended 12/31/09. Long-term Sales excludes cash management. 2. Source: Lipper FERI, 9/30/09. All retail cross-border products excluding ETF and tracker funds. 16

18 Depth and Breadth of Our Presence Countries with Over U.S. $1 Billion in AUM $407.9B $32.4B Countries with Product Presence $15.3B $17.4B $1.1B $1.5B $1.8B $2.4B $2.6B $3.2B $3.9B $4.9B $5.8B $6.7B $7.4B $7.7B $8.2B Brazil Austria Luxembourg France Singapore Japan Australia Hong Kong Korea Switzerland India Italy UK Germany Taiwan Canada U.S. LAM LAM LAM LAM U.S. U.S. LAM Multiple Vehicles As of 12/31/09. 17

19 Diversification: A Critical Component of Success Franklin Annual Net New Flows by Top 15 Regional Offices, Fiscal Years Rank India Taiwan United States United States United States United States United States United States Gulf & E. Med South America 2 Taiwan India Korea Japan Germany Germany Taiwan Taiwan Hong Kong Taiwan 3 France Germany Germany Germany Japan Switzerland Germany Italy Australia Benelux 4 Nordic Korea Taiwan Taiwan Switzerland Canada Italy Canada Singapore China 5 Japan South America Hong Kong India Italy Italy India India Japan Korea 6 Iberia Singapore Italy Hong Kong India Taiwan Iberia Hong Kong Central & E. Europe Malaysia 7 Hong Kong France Canada South America Iberia South America South America Korea Africa Singapore 8 United Kingdom Japan France Switzerland Canada France Hong Kong South America Central America Hong Kong 9 Gulf & E. Med Hong Kong Japan Italy United Kingdom Japan Gulf & E. Med United Kingdom South America Gulf & E. Med 10 Central & E. Europe Africa Switzerland Singapore France Iberia United Kingdom France France Austria 11 Africa United Kingdom South America Iberia South America Benelux Singapore Australia India Switzerland 12 Austria Nordic United Kingdom Gulf & E. Med Taiwan Hong Kong France Switzerland Austria Central America 13 Central America Iberia Singapore Benelux Singapore Nordic Central & E. Europe Central & E. Europe Nordic Central and E. Europe 14 Australia Switzerland India Central & E. Europe Benelux United Kingdom Central America Central America Taiwan Africa 15 Switzerland Italy Iberia Austria Austria Gulf & E. Med Nordic Iberia Benelux United Kingdom South America region includes: Colombia, Ecuador, French Guiana, Guyana, Peru, Suriname, Venezuela, Argentina, Bolivia, Chile, Paraguay, Uruguay. Central America region includes; Mexico, Panama, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Belize. Nordic region includes: Sweden, Norway, Finland, Denmark, Iceland. Central and Eastern Europe region includes: Poland, Israel, Latvia, Lithuania, Hungary, Czech Republic, Slovak Republic, Croatia, Romania, Bulgaria, Slovenia, Estonia, Russia, Ukraine, Kazakhstan. Gulf and Eastern Mediterranean region includes: Turkey, Cyprus, Greece, Egypt, Lebanon, Jordan, Bahrain, Qatar, Oman, UAE, Kuwait. 18

20 3 FRANKLIN TEMPLETON INVESTMENTS The Franklin Values Put Clients First We strive to know and meet our clients' needs, and we fully accept our fiduciary responsibility to protect shareholders' interests. PUT CLIENTS FIRST BUILD RELATIONSHIPS Build Relationships We work to establish enduring relationships with our clients and business partners. We value collaboration and cooperation in our workplaces. Seek to Achieve Quality Results We value professional excellence and expertise, and we strive to produce consistent, competitive results for our clients. Work with Integrity We speak and act in an honest manner. We believe in being accountable for the impact we have on others. SEEK TO ACHIEVE QUALITY RESULTS WORK WITH INTEGRITY 19

21 Put Clients First: Responding to Evolving Customer Needs Move To Open Architecture Aging Populations Growing Middle Class Increasing Sophistication of Investors Key Points Overseas banks realized the value of offering third party funds as a way to diversify offerings and bring in customers Momentum behind open architecture continues By 2050, 16% of the world s population will be in retirement vs. 8% in This segment typically has different needs as they shift from accumulation to distribution With economic growth accelerating and population growth decelerating, per capita income in emerging markets is likely to rise The global middle class is expected to grow from 430 million in 2000 to 1.1 billion in Investors are demanding more detailed information quickly and customizable Investment selection often involves third/related parties Franklin Capabilities Capitalized on move to open architecture (Germany, Switzerland, Italy, Spain and Korea) Well-positioned in France, the Netherlands, Mexico and Brazil when they make the transition to open architecture Have broad suite of solutions and strategies designed to support retirees evolving needs Well-positioned in Defined Contribution Investment Only (DCIO), institutional and retail channels to serve Defined Benefit & Defined Contribution programs Built Asset Management expertise and track records in high potential countries Launched the Franklin Academy to educate financial advisors in new markets Offer a variety of investment vehicles to help meet needs Built a robust, scalable institutional platform supporting global consultants and gatekeepers 1. Source: United Nations, World Population Prospects. 2. Source: The World Bank. 20

22 Build Relationships: Working in Partnership Enduring Relationships with Advisors and Institutions Relationships with the largest U.S. retail firms average 26 years Longest institutional separate account relationship dates back to % of global institutional relationships are 10+ years long The Trust of Our Business Partners and Clients More than 130,000 active U.S. financial advisor relationships Over 70,000 active global ex-u.s. financial representative relationships 1 Nearly 700 institutional client relationships More than 100 relationships established with consulting firms worldwide Seasoned Sales and Management Professionals Average U.S. Wholesaler tenure: 8 years Average U.S. Relationship Manager tenure: 13 years 1. Based on data collected from Canada, India, Japan and sales of cross-border funds worldwide. 21

23 3 FRANKLIN TEMPLETON INVESTMENTS Historical Assets Under Management and Net New Flows Ending Assets Under Management U.S.$ Billions Long-Term Sales (for the 12 Months Ended) U.S.$ Billions Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Net New Flows (for the 12 Months Ended) U.S.$ Billions Organic Growth Rate (for the 12 Months Ended) Percent % 5% 2.7% 9.1% 6.5% Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 0% -5% -1.4% -1.1% Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 22

24 3.4 FRANKLIN TEMPLETON INVESTMENTS Operating Results (for the 12 Months Ended) Operating Revenues Operating Income U.S.$ Millions U.S.$ Millions 8,000 6,000 4,000 5,051 6,206 6,032 4,194 4,602 2,500 2,000 1,500 1,000 1,633 2,068 2,099 1,203 1,401 2, Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Earnings Per Share (Diluted) U.S.$ Operating Margin Percent $4.86 $7.03 $6.67 $3.87 $ % 30% 20% 32.3% 33.3% 34.8% 28.7% 30.4% 2 10% 0 0% Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Sep-06 Sep-07 Sep-08 Sep-09 Dec , 2008, 2007 and 2006 earnings per share does not reflect the impact of a recently adopted accounting standard that modifies the earnings per share calculation to recognize nonvested stock awards and nonvested stock unit awards that contain nonforfeitable rights to dividends or dividend equivalents as if they were a separate class of stock. 23

25 3.4 FRANKLIN TEMPLETON INVESTMENTS Capital Management Cash and Cash Equivalents and Investments vs. Total Debt U.S.$ Millions 8,000 6,000 5,191 5,493 5,237 5,777 5,429 4,000 2,000 1, Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Cash and Cash Equivalents and Investments Total Debt Total Payout Ratio 1 (for the Fiscal Year Ended) Percent Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Stock Repurchase Activity (as of and for (for the 12 Mths Ended) Shares Millions Sep-06 Sep-07 Sep-08 Sep-09 Dec-09 Stock Repurchase Activity End of Period Shares Outstanding (right axis) Dividend has increased every year since 1981 Strong credit ratings with a stable outlook Standard & Poor's AA- / A-1+ Moody's A1 / P-1 Debt-to-equity ratio of approximately 0.05x 1. Total Payout Ratio = (Dividends on common stock + Purchase of common stock) / net income. 24

26 BEN Total Return vs. S&P 500 & S&P 500 Financials Indexes Comparison of Ten-Year Total Return 12/31/ /31/ % 400% 300% % 100% 0% % '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 Franklin Resources, Inc. S&P 500 Index S&P 500 Financials Index Source: FactSet 25

27 Our Company Recognized Over Time and Across the Globe Mutual Shares Fund and Growth Fund named Top of the Past 50 Years USA Today, Franklin Is King of the Decade. Barron s (U.S.), 2009 and Franklin is a stalwart muni-fund manager overall. Morningstar (U.S.), 2009 Top Fund Company U.S. Fixed Income category Asian Investor magazine (Hong Kong), 2009 Franklin India: Mutual Fund of the Year Award CNBC-TV 18-CRISIL Mutual Fund Awards, 2005 Best Investment Company in Germany FINANZtest, 2005 Best Fund Family in Canada MoneySense magazine, 2005 Franklin named the investment company with the best performing funds, the best brand and the best relationship with financial professionals Performance magazine (Germany), year period ended 12/31/09. A shares only year period ended 12/31/08 and 12/31/09. 26