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Our MissionOur mission is to be the premier global investment managementorganization. Guided by our core values and unique perspective, weachieve this mission by offering high quality investment solutions,providing outstanding service and attracting, motivating and retainingtalented people.Our core values reflect what is most important to us as a company.Put Clients First. We strive to know and meet our clients’ needs, and wefully accept our fiduciary responsibility to protect shareholders’ interests.Build Relationships. We work to establish enduring relationshipswith our clients and business partners. We value collaboration andcooperation in our workplaces.Achieve Quality Results. We value professional excellence and expertise,and we work together to produce consistent, competitive results forour clients.Work with Integrity. We speak and act in an honest manner. We believein being accountable for the impact we have on others.
Letter to StockholdersGregory E. JohnsonPresident and Chief Executive OfficerDear Fellow Stockholders,With the biggest and broadest decline in the financial markets in more than a generation, our fiscal yearended September 30, 2009 was one of the most challenging periods in our company’s 60-year history.Market volatility and the global recession shook investor confidence. However, Franklin Templeton hasnavigated through periods of uncertainty in the past, and despite this year’s challenges, I am proud tosay that we made significant progress on our initiatives and ended the fiscal year on a high note.During the first half of the fiscal year, we remained resolute and focused on expense reduction in responseto the decline in our assets under management. Our approach was measured and strategic. We proactivelyreached out to our clients and, most importantly, delivered strong relative investment performance.With global markets rebounding sharply beginning in March 2009, Franklin Templeton’s assets undermanagement ended the fiscal year at $523.4 billion, despite having decreased to a month-end low of$377.6 billion in February. Sales momentum improved throughout the year, and we finished fiscal 2009with one of the best quarters in company history for net new flows.Although market conditions have improved considerably since the first half of the fiscal year, thecompany’s year-over-year operating income was down 43%. Our simple monthly average assets undermanagement for fiscal year 2009 were $442.2 billion, compared to $604.9 billion for fiscal year 2008.Diluted earnings per share for the year ended September 30, 2009 declined 42% to $3.87 from $6.67 inthe previous year. However, total shareholder return from October 1, 2008 to September 30, 2009 was16%, outpacing returns for the S&P 500 ® Index of -7% and the S&P 500 Financials Index of -24%.UNWAVERING FOCUS ON INVESTMENT EXCELLENCEAt a time when most investment management organizations and financial advisors were remindingclients of the importance of investing with a long-term perspective, Franklin Templeton was recognizedfor delivering on that philosophy. In Barron’s annual review of U.S.-registered mutual fund families,Franklin Templeton topped the performance rankings for the 10-year period ended December 2008, andwas named “King of the Decade.” 11
Page 1: G A I N F R O M O U R P E R S P E C
Page 5 and 6: LETTER TO STOCKHOLDERSHaving announ
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Page 9 and 10: Performance GraphThe following perf
Page 11 and 12: (MARK ONE)UNITED STATESSECURITIES A
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Page 46 and 47: PART IIItem 5. Market for Registran
Page 48 and 49: OverviewWe are a global investment
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Investment Management Fee RateThe f
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accounts closed in a calendar year
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Information Systems, Technology and
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Our investments in sponsored invest
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At September 30, 2009, we had $355.
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Off-Balance Sheet ArrangementsAs of
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The fair value of retained subordin
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Indefinite-lived intangible assets
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the position will be sustained upon
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Selected Quarterly Financial Data (
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The following is a summary of the e
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Item 8.Financial Statements and Sup
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REPORT OF INDEPENDENT REGISTERED PU
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CONSOLIDATED BALANCE SHEETS(dollars
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CONSOLIDATED STATEMENTS OF STOCKHOL
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CONSOLIDATED STATEMENTS OF CASH FLO
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Fair Value Measurements. The Compan
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Company held interest-rate swap agr
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not performed. If the carrying valu
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Accumulated Other Comprehensive Inc
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acquisition cost was allocated to t
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FHLB borrowings and amounts availab
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The Company recognized other-than-t
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The changes in Level 3 assets measu
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Changes in the allowance for loan l
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Company sold retained subordinated
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Certain of the goodwill and intangi
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At September 30, 2009, maturities o
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The components of the net deferred
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At September 30, 2009, the banking/
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Total assets under management of in
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Stock OptionsThe following table su
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The following tables summarize info
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Operating revenues of the banking/f
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minimum Tier 1 and Total risk-based
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PART IIIItem 10. Directors, Executi
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Item 15.(a)(1)(a)(2)(a)(3)PART IVEx
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Exhibit No.Description10.17 Represe
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Exhibit No.Description12 Computatio
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Exhibit No.DescriptionEXHIBIT INDEX
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Exhibit No.Description10.22 Amendme
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(dollars in thousands)COMPUTATION O
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NameState or Nation ofIncorporation
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CONSENT OF INDEPENDENT REGISTERED P
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EXHIBIT 31.2CERTIFICATIONI, Kenneth
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CERTIFICATION PURSUANT TO 18 U.S.C.
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One Franklin ParkwaySan Mateo, CA 9
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