UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 13F

FORM 13F COVER PAGE

Report for the Calendar Year or Quarter Ended:  June 30, 2006

Check here if Amendment [X] ;  Amendment Number: 2
This Amendment (Check only one.):  [ ] is a restatement.
                                   [X] adds new holdings entries.

Institutional Investment Manager Filing this Report:

Name:      Franklin Resources, Inc.
Address:   One Franklin Parkway
           San Mateo, CA  94403-1906

Form 13F File Number: 28-734

The institutional investment manager filing this report and the person by whom
it is signed hereby represent that the person signing the report is authorized
to submit it, that all information contained herein is true, correct and
complete, and that it is understood that all required items, statements,
schedules, lists, and tables, are considered integral parts of this form.

Person Signing this Report on Behalf of Reporting Manager:

Name:   Barbara J. Green
Title:  Vice President, Deputy General Counsel and Secretary
Phone:  650-312-2000

Signature, Place, and Date of Signing:




/s/ BARBARA J. GREEN         San Mateo, California           September 12, 2006


Report Type (Check only one.):

[X] 13F HOLDINGS REPORT.  (Check here if all holdings of this reporting manager
are reported in this report.)
[  ] 13F NOTICE.  (Check here if no holdings reported are in this report, and
all holdings are reported by other reporting manager(s).)
[  ] 13F COMBINATION REPORT.  (Check here if a portion of the holdings for this
reporting manager are reported in this report and a portion are reported by
other reporting manager(s).)








FORM 13F SUMMARY PAGE


Report Summary:

Number of Other Included Managers:  1

Form 13F Information Table Entry Total:  1

Form 13F Information Table Value Total:  $ 186,716
                                         (thousands)


List of Other Included Managers:

Provide a numbered list of the name(s) and Form 13F file number(s) of all
institutional investment managers with respect to which this report is filed,
other than the manager filing this report.


No.   Form 13F File Number     Name
--    --------                 -------------------
5       28-6154                FRANKLIN MUTUAL ADVISERS, LLC




                                                                    FORM 13F INFORMATION TABLE
                                                                   FOR PERIOD ENDED  06/30/2006
                                                                REPORTING MANAGER:   FRANKLIN RESOURCES, INC.
-----------------------------------------------------------------------------------------------------------------------------------
           COLUMN 1                  COLUMN 2       COLUMN 3  COLUMN 4       COLUMN 5    COLUMN 6 COLUMN 7       COLUMN 8

      NAME OF ISSUER                  TITLE          CUSIP     VALUE      SHRS OR SH/ PUT/ INVEST- OTHER      VOTING AUTHORITY
                                        OF                    (X$1000)    PRN AMT PRN CALL MENT    MANA-
                                      CLASS                                                DISCRE- GERS    SOLE    SHARED      NONE
                                                                                           TION
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                       
KINDRED HEALTHCARE INC             COMMON SHS      494580103    186716    7559334 SH       DEFINED 6    7559334         0         0
                                                                 ---------

         GRAND TOTAL                                            186716