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Item 6. Selected Financial Data.FINANCIAL HIGHLIGHTSas of and for the fiscal years ended September 30, 2009 2008 2007 2006 2005Summary of Operations (in millions)Operating revenues ........................ $4,194.1 $6,032.4 $6,205.8 $5,050.7 $4,310.1Net income .............................. 896.8 1,588.2 1,772.9 1,267.6 1,057.6Financial Data (in millions)Total assets .............................. $9,468.5 $9,176.5 $9,932.3 $9,499.9 $8,893.9Long-term debt 1 .......................... 42.0 156.4 162.1 627.9 1,208.4Stockholders’ equity ....................... 7,632.2 7,074.4 7,332.3 6,684.7 5,684.4Operating cash flows ....................... 641.4 1,409.2 1,673.6 1,277.9 850.0Assets Under Management (in billions)Ending .................................. $ 523.4 $ 507.3 $ 645.9 $ 511.3 $ 453.1Simple monthly average .................... 442.2 604.9 582.0 482.4 410.8Per Common ShareEarningsBasic ............................... $ 3.89 $ 6.72 $ 7.11 $ 4.97 $ 4.22Diluted .............................. 3.87 6.67 7.03 4.86 4.06Cash dividends ........................... 0.84 0.80 0.60 0.48 2.40Book value .............................. 33.28 30.39 29.87 26.40 22.49Employee Headcount ......................... 7,745 8,809 8,699 7,982 7,1561 Includes non-current portion of FHLB advances classified as banking/finance liabilities on our consolidated balancesheets.Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations.Forward-Looking StatementsIn this section, we discuss and analyze the results of operations and financial condition of FranklinResources, Inc. (“Franklin”) and its subsidiaries (collectively, the “Company”). In addition to historicalinformation, we also make statements relating to the future, called “forward-looking” statements, which areprovided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995.Forward-looking statements are generally written in the future tense and/or are preceded by words such as“will”, “may”, “could”, “expect”, “believe”, “anticipate”, “intend”, or other similar words. Moreover,statements that speculate about future events are forward-looking statements. These forward-lookingstatements involve a number of known and unknown risks, uncertainties and other important factors thatcould cause the actual results and outcomes to differ materially from any future results or outcomesexpressed or implied by such forward-looking statements. You should carefully review the “Risk Factors”section set forth in Item 1A of this Annual Report on Form 10-K and in any more recent filings with theU.S. Securities and Exchange Commission (the “SEC”), each of which describe these risks, uncertaintiesand other important factors in more detail. While forward-looking statements are our best prediction at thetime that they are made, you should not rely on them. If a circumstance occurs after the date of this AnnualReport on Form 10-K that causes any of our forward-looking statements to be inaccurate, we do not have anobligation, and we undertake no obligation, to announce publicly the change to our expectations, or to makeany revisions to our forward-looking statements, unless required by law.37