EXHIBIT 99
One Franklin Parkway
San Mateo, CA 94403-1906
FRANKLIN TEMPLETON tel 650/312.2000
INVESTMENTS franklintempleton.com
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Contact: Franklin Resources, Inc.
Investor Relations: Alan Weinfeld (650) 525-8900
Corporate Communications: Holly Gibson Brady (650) 312-4701
franklintempleton.com
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FOR IMMEDIATE RELEASE
FRANKLIN RESOURCES, INC. ANNOUNCES FIRST QUARTER RESULTS
SAN MATEO, CA, JANUARY 24, 2002 - Franklin Resources, Inc. (Franklin
Templeton Investments) (NYSE: BEN) today reported net income of $118.5 million,
or $0.45 per share diluted, on revenues of $618.2 million for the quarter ended
December 31, 2001, compared with net income of $83.9 million, or $0.32 per share
diluted, on revenues of $603.9 million in the preceding quarter and net income
of $149.5 million, or $0.61 per share diluted, on revenues of $564.1 million in
the comparable quarter a year ago. Operating results for Fiduciary Trust Company
International, the company's recently acquired subsidiary, are included as of
April 10, 2001.
Revenues were up this quarter as compared to last quarter as a result of
higher underwriting and distribution fees and banking/finance segment income.
Operating expenses were down this quarter as compared to last quarter
principally due to compensation and benefits and other expenses in the current
quarter, a decrease in advertising and promotion, lower amortization of
intangible assets related to the implementation of SFAS No. 142, and a net
charge related to the events of September 11 in the prior quarter.
As of December 31, 2001, assets under management by the company's
subsidiaries were $266.3 billion, as compared to $246.4 billion last quarter and
$226.9 billion at this time last year. Simple monthly average assets under
management during the current quarter were $256.4 billion compared to $261.3
billion in the preceding quarter and $226.5 billion in the same quarter a year
ago. Equity assets now comprise 53% of total assets under management as compared
to 51% last quarter and 65% at December 31, 2000. Fixed income assets now
comprise 30% of total assets under management, as compared to 32% last quarter
and 29% at the same time last year. Hybrid assets now account for 14% of total
assets under management, as compared to 15% last quarter and 4% at the same time
last year. For the quarters ended December 31, 2001 and September 30, 2001,
sales and reinvested dividends exceeded redemptions ("net inflows") complex-wide
by $6.0 billion and $1.8 billion respectively. For the quarter ended December
31, 2000, net inflows were $2.6 billion.
Charles B. Johnson, chairman and CEO of Franklin Resources, Inc., stated,
"This has been a very positive quarter. We posted the strongest net inflows
since March 1998, and we continue to see excellent investment performance across
all asset classes. These leading indicators are very encouraging. Additionally,
we implemented several cost control measures and we will continue to focus on
costs while investing strategically to grow the company."
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FIRST QUARTER 2002 HIGHLIGHTS
PERFORMANCE AND PRODUCTS /1/,/2/
(See important footnotes in "Supplemental Information" section at the end of the
release.)
* Over 85% of Franklin Templeton's long-term U.S. retail mutual fund assets
were in funds ranked in the top two quartiles of their respective Lipper
peer groups for the one-, three-, five- and 10-year periods ended December
31, 2001. /3/,/4/
* Over 90% of Templeton equity mutual fund assets were in funds ranked in the
top two quartiles of their respective Lipper peer groups for the one-,
three-, five- and 10-year periods ended December 31, 2001. Templeton Growth
and Templeton Foreign funds ranked in the first quartile for the same time
periods, and also outpaced their respective benchmark indices, the MSCI
World Index and MSCI EAFE Index, for the same time periods. /3/,/7/
* While the S&P 500, Dow and NASDAQ were down 11.9%, 5.5% and 20.1%
respectively for 2001, Mutual Shares, Mutual Beacon, Mutual Qualified and
Mutual Financial Services funds were up 5.9%, 5.8%, 7.9% and 11.9%,
respectively. Moreover, these funds outperformed all of these indices over
the applicable three-, five- and 10-year periods ended December 31, 2001.
/6/
* For 2001, Franklin Utilities Fund, Franklin Large Cap Value Fund and Mutual
Discovery Fund all received #1 rankings in their respective Lipper peer
groups for the one-year period ended December 31, 2001. /3/,/5/
* Over 95% of Franklin's tax-free income fund assets were in funds rated 4 or
5 stars overall by Morningstar as of December 31, 2001. /8/,/9/ Moreover,
over 90% of Franklin's tax-free income fund assets were in funds ranked in
the top two quartiles of their respective Lipper peer groups for the one-,
three-, five- and 10-year periods ended December 31, 2001. /3/,/10/
* Over 75% of Franklin taxable fixed income assets were in funds ranked in
the top two quartiles of their respective Lipper peer groups for the one-,
three-, five- and 10-year periods ended December 31, 2001. Franklin U.S.
Government Securities Fund, the first and one of the largest GNMA funds,
ranked in the top quartile over the same time periods. /3/,/11/
* Launched two hedge fund of funds for qualified institutional and high net
worth clients.
* Introduced Templeton Global Long-Short Fund to U.S. investors.
* Launched five new Franklin, Templeton and Mutual Series funds for the UK
market and three funds in Hong Kong and Korea. Also introduced Franklin
U.S. Long-Short Fund in Europe and Franklin European Small-Mid Cap Growth
Fund in the company's SICAV group.
* Over 91% of Franklin Templeton Investment Corp.'s Canadian retail mutual
fund assets were in funds ranked 4 or 5 stars overall by Morningstar as of
December 31, 2001. /12/
* Mutual Beacon Fund (Canada) was awarded "Best U.S. Equity Fund" at the 7th
Annual Canadian Mutual Funds Awards Gala.
GLOBAL BUSINESS DEVELOPMENTS
* Franklin Templeton Investments' financial professional Web site was
recognized for the second consecutive year as a "Top 10 Web Site for
Financial Professionals" in KASINA'S annual study.
* Launched AdvisorCentral.Com, an industry-wide Internet portal for financial
advisors.
* AdvisorCentral.Com was rated as the top technology deal of 2001 by AMERICAN
BANKER'S FUTURE BANKER.
* Jennifer Bolt, chief Web officer, has been nominated for INSTITUTIONAL
INVESTOR'S FUND ACTION "E-Commerce Executive/Team of the Year."
* Offered additional online resources to Canadian dealers through FundCom.
* Signed up more than 20% of Franklin Templeton's German-based shareholders
for online account access, and completed the development of a Portuguese
shareholder Web site.
* In his "2002 Buyer's Guide to Mutual Funds" book, Gordon Pape selected
Franklin Templeton as "Company of the Year" and Don Reed as "Executive of
the Year" in Canada.
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FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED
management and per share data) DECEMBER 31
%
2001 2000 CHANGE
---- ---- ------
OPERATING REVENUES
Investment management fees $356,798 $345,785 3%
Underwriting and distribution fees 192,007 164,362 17%
Shareholder servicing fees 47,341 48,222 (2)%
Other, net 22,061 5,705 287%
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TOTAL OPERATING REVENUES 618,207 564,074 10%
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OPERATING EXPENSES
Underwriting and distribution 172,267 145,684 18%
Compensation and benefits 160,143 141,859 13%
Information systems, technology and 74,594 57,528 30%
occupancy
Advertising and promotion 26,425 22,126 19%
Amortization of deferred sales commissions 16,743 18,236 (8)%
Amortization of intangible assets 4,375 9,909 (56)%
Other, net 20,795 19,754 5%
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TOTAL OPERATING EXPENSES 475,342 415,096 15%
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OPERATING INCOME 142,865 148,978 (4)%
--------------------------
OTHER INCOME (EXPENSE)
Investment and other income 18,329 49,956 (63)%
Interest expense (3,168) (2,270) 40%
--------------------------
OTHER INCOME (EXPENSE), NET 15,161 47,686 (68)%
--------------------------
Income before taxes on income 158,026 196,664 (20)%
Taxes on income 39,507 47,199 (16)%
--------------------------
NET INCOME $118,519 $149,465 (21)%
==========================
EARNINGS PER SHARE
Basic $0.45 $0.61 (26)%
Diluted $0.45 $0.61 (26)%
DIVIDENDS PER SHARE $0.070 $0.065 8%
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 260,981 243,708 7%
Diluted 261,636 244,409 7%
EBITDA MARGIN /1/ 30% 38% -
OPERATING MARGIN /2/ 23% 26% -
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $246,385 $229,923 7%
Sales 18,923 12,678 49%
Reinvested Dividends 2,536 5,419 (53)%
Redemptions (15,484) (15,472) 0%
Acquisitions - 3,708 (100)%
Appreciation/(Depreciation) 13,927 (9,347) N/A
END OF PERIOD $266,287 $226,909 17%
SIMPLE MONTHLY AVERAGE FOR PERIOD $256,396 $226,534 13%
/1/ EBITDA Margin: Earnings before interest, taxes on income, depreciation and
the amortization of intangibles divided by total revenues.
/2/ Operating Margin: Operating income divided by total operating revenues.
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FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except
per share data) Three Months Ended
31-Dec-01 30-Sep-01 % 30-Jun-01 31-Mar-01 31-Dec-00
--------- --------- Change --------- --------- ---------
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OPERATING REVENUES
Investment management fees $356,798 $358,738 (1)% $362,543 $340,136 $345,785
Underwriting and distribution fees 192,007 186,192 3% 180,757 178,165 164,362
Shareholder servicing fees 47,341 45,618 4% 53,723 51,962 48,222
Other, net 22,061 13,335 65% 12,450 7,150 5,705
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TOTAL OPERATING REVENUES 618,207 603,883 2% 609,473 577,413 564,074
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OPERATING EXPENSES
Underwriting and distribution 172,267 166,073 4% 162,977 162,134 145,684
Compensation and benefits 160,143 165,705 (3)% 167,643 140,074 141,859
Information systems, technology and 74,594 76,191 (2)% 70,576 59,002 57,528
occupancy
Advertising and promotion 26,425 32,388 (18)% 27,314 24,433 22,126
Amortization of deferred sales commissions 16,743 16,801 0% 16,361 17,579 18,236
Amortization of intangible assets 4,375 19,902 (78)% 16,672 10,107 9,909
Other, net 20,795 25,326 (18)% 23,234 19,611 19,754
September 11, 2001 expense, net - 7,649 (100)% - - -
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TOTAL OPERATING EXPENSES 475,342 510,035 (7)% 484,777 432,940 415,096
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OPERATING INCOME 142,865 93,848 52% 124,696 144,473 148,978
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OTHER INCOME (EXPENSE)
Investment and other income 18,329 19,643 (7)% 34,698 32,054 49,956
Interest expense (3,168) (3,138) 1% (1,889) (3,259) (2,270)
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OTHER INCOME (EXPENSE), NET 15,161 16,505 (8)% 32,809 28,795 47,686
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Income before taxes on income 158,026 110,353 43% 157,505 173,268 196,664
Taxes on income 39,507 26,484 49% 37,802 41,584 47,199
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NET INCOME $118,519 $83,869 41% $119,703 $131,684 $149,465
===============================================================
EARNINGS PER SHARE
Basic $0.45 $0.32 41% $0.46 $0.54 $0.61
Diluted $0.45 $0.32 41% $0.46 $0.54 $0.61
DIVIDENDS PER SHARE $0.070 $0.065 8% $0.065 $0.065 $0.065
AVERAGE SHARES OUTSTANDING (in
thousands)
Basic 260,981 261,639 0% 260,815 244,256 243,708
Diluted 261,636 263,005 (1)% 262,174 245,127 244,409
EBITDA MARGIN /1/ 30% 26% - 32% 35% 38%
Operating Margin /2/ 23% 16% - 20% 25% 26%
EMPLOYEES 6,603 6,868 (4)% 7,101 6,319 6,328
BILLABLE SHAREHOLDER ACCOUNTS (in millions) 8.9 8.4 6% 10.1 10.2 9.7
/1/ EBITDA Margin: Earnings before interest taxes on income, depreciation and the amortization of
intangibles divided by total revenues.
/2/ Operating Margin: Operating income divided by total operating revenues.
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FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts in thousands)
PRELIMINARY
DECEMBER SEPTEMBER
31, 2001 30, 2001
ASSETS
Current Assets $2,218,362 $1,930,276
Banking/Finance Assets 965,066 1,229,244
Other Assets 2,886,526 3,106,130
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TOTAL ASSETS $6,069,954 $6,265,650
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $385,683 $457,433
Banking/Finance Liabilities 816,402 1,070,661
Other Liabilities 775,752 759,660
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Total Liabilities 1,977,837 2,287,754
Total Stockholders' Equity 4,092,117 3,977,896
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,069,954 $6,265,650
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ENDING SHARES OF COMMON STOCK OUTSTANDING 261,342 260,798
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ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions)
31-DEC-01 30-SEP-01 30-JUN-01 31-MAR-01 31-DEC-00
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EQUITY
Global/International $89.4 $80.2 $93.4 $87.6 $96.4
Domestic 51.7 44.5 53.3 45.5 50.0
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Total Equity 141.1 124.7 146.7 133.1 146.4
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HYBRID FUNDS 38.6 36.1 38.3 9.8 10.1
FIXED INCOME
Tax-Free 48.3 48.4 46.9 45.8 45.0
Taxable
Domestic 25.1 24.4 23.4 17.2 16.2
Global/International 7.4 7.2 7.2 3.9 3.7
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Total Fixed Income 80.8 80.0 77.5 66.9 64.9
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MONEY FUNDS 5.8 5.6 5.4 5.9 5.5
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TOTAL ENDING ASSETS $266.3 $246.4 $267.9 $215.7 $226.9
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SIMPLE MONTHLY AVERAGE ASSETS $256.4 $261.3 $255.9 $224.9 $226.5
=============================================================
ASSETS UNDER MANAGEMENT & FLOWS (in billions)
THREE MONTHS ENDED
31-DEC-01 30-SEP-01 % CHANGE 31-DEC-00 % CHANGE
--------- --------- -------- --------- --------
BEGINNING ASSETS UNDER MANAGEMENT $246.4 $267.9 (8)% $229.9 7%
U.S. RETAIL ASSETS
Beginning Assets $158.1 $170.8 (7)% $174.1 (9)%
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Sales 9.8 9.5 3% 7.9 24%
Reinvested Dividends 2.4 0.6 300% 5.0 (52)%
Redemptions (9.6) (9.2) 4% (10.9) (12)%
Acquisitions - - - 1.0 (100)%
Appreciation/(Depreciation) 7.2 (13.6) N/A (8.6) N/A
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Ending Assets 167.9 158.1 6% 168.5 0%
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OTHER ASSETS, INCLUDING INTERNATIONAL, INSTITUTIONAL AND HIGH NET WORTH
Beginning Assets 88.3 97.1 (9)% 55.8 58%
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Sales 9.1 5.3 72% 4.8 90%
Reinvested Dividends 0.2 - - 0.4 (50)%
Redemptions (5.9) (4.4) 34% (4.6) 28%
Acquisitions - - - 2.7 (100)%
Appreciation/(Depreciation) 6.7 (9.7) N/A (0.7) N/A
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Ending Assets 98.4 88.3 11% 58.4 68%
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ENDING ASSETS UNDER MANAGEMENT $266.3 $246.4 8% $226.9 17%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $246.4 $267.9 (8)% $229.9 7%
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Sales 18.9 14.8 28% 12.7 49%
Reinvested Dividends 2.6 0.6 333% 5.4 (52)%
Redemptions (15.5) (13.6) 14% (15.5) 0%
Acquisitions - - - 3.7 (100)%
Appreciation/(Depreciation) 13.9 (23.3) N/A (9.3) N/A
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ENDING ASSETS $266.3 $246.4 8% $226.9 17%
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Note: A significant number of institutional assets are invested in U.S. Retail funds and are disclosed
in that category in the above table. Total institutional and high net worth assets at December 31, 2001
were over $95 billion.
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ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE
(in billions)
THREE MONTHS ENDED
31-DEC-01 30-SEP-01 31-DEC-00
--------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning Assets $80.2 $93.4 $97.6
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Sales 7.2 4.4 3.7
Reinvested Dividends 0.8 - 2.9
Redemptions (6.9) (4.5) (6.7)
Acquisitions - - 2.2
Appreciation/(Depreciation) 8.1 (13.1) (3.3)
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Ending Assets 89.4 80.2 96.4
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DOMESTIC EQUITY
Beginning Assets 44.5 53.3 53.9
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Sales 3.4 2.7 3.4
Reinvested Dividends 1.1 - 1.7
Redemptions (2.2) (2.6) (2.3)
Acquisitions - - -
Appreciation/(Depreciation) 4.9 (8.9) (6.7)
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Ending Assets 51.7 44.5 50.0
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HYBRID
Beginning Assets 36.1 38.3 9.3
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Sales 1.2 0.6 0.2
Reinvested Dividends 0.1 0.1 0.2
Redemptions (0.5) (0.7) (0.4)
Acquisitions - - 1.1
Appreciation/(Depreciation) 1.7 (2.2) (0.3)
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Ending Assets 38.6 36.1 10.1
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TAX-FREE INCOME
Beginning Assets 48.4 46.9 44.0
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Sales 1.6 1.6 0.9
Reinvested Dividends 0.3 0.3 0.3
Redemptions (1.2) (1.1) (1.2)
Acquisitions - - -
Appreciation/(Depreciation) (0.8) 0.7 1.0
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Ending Assets 48.3 48.4 45.0
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TAXABLE FIXED INCOME
Beginning Assets 31.6 30.6 19.8
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Sales 2.6 2.5 1.5
Reinvested Dividends 0.2 0.1 0.2
Redemptions (2.0) (1.9) (1.3)
Acquisitions - - 0.4
Appreciation/(Depreciation) 0.1 0.3 (0.7)
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Ending Assets 32.5 31.6 19.9
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MONEY FUNDS
Beginning Assets 5.6 5.4 5.3
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Sales 2.9 3.0 3.0
Reinvested Dividends 0.1 0.1 0.1
Redemptions (2.7) (2.8) (3.6)
Acquisitions - - -
Appreciation/(Depreciation) (0.1) (0.1) 0.7
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Ending Assets 5.8 5.6 5.5
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ENDING ASSETS UNDER MANAGEMENT $266.3 $246.4 $226.9
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CONFERENCE CALL INFORMATION
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As previously announced, members of the investment community and general
public are invited to listen to the conference call today, Thursday, January 24,
----------------------------
2002 at 1:30 p.m. Pacific Time. Access to the teleconference will be available
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via franklintempleton.com 10 minutes before the start of the call or by dialing
(800) 553-0288 in the U.S. or (612) 288-0340 internationally.
A replay of the call will be archived on franklintempleton.com through
January 31, 2002. The replay can also be accessed by calling (800) 475-6701 in
the U.S. or (320) 365-3844 internationally and using access code #620641, after
5:00 p.m. Pacific Time on January 24 through 11:59 p.m. Pacific Time on January
31.
Franklin Templeton Investments provides global and domestic investment
management, shareholder and distribution services to the Franklin, Templeton and
Mutual Series mutual funds, institutional and private accounts in approximately
125 different nations worldwide. Franklin Templeton Investments' headquarters
are located at One Franklin Parkway, San Mateo, CA, 94403.
SUPPLEMENTAL INFORMATION
- ------------------------
/1/ Nothing in this section shall be considered a solicitation to buy or an
offer to sell a security to any person in any jurisdiction where such offer,
solicitation, purchase or sale would be unlawful under the securities laws of
such jurisdiction. For more information on any U.S. Franklin Templeton fund,
investors should request a prospectus containing more complete information,
including sales charges, expenses and risks, from securities dealers or by
calling Franklin Templeton Distributors, Inc. at 1-800/DIAL BEN(R)
(1-800/342-5236). Investors should read the prospectus carefully before
investing or sending money. Franklin Templeton Distributors, Inc., One Franklin
Parkway, San Mateo, CA, is the funds' principal distributor and a wholly owned
subsidiary of Franklin Resources, Inc.
/2/ PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. Morningstar ratings are
based on Class A shares. Lipper rankings are based on Class A shares, with the
exception of those for Mutual Series, which are based on Class Z shares, which
are offered to qualified investors only and have no sales charges nor Rule 12b-1
fees. All asset data is based on 11/30/01 figures. Indices are unmanaged and one
cannot invest directly in them. Unless otherwise noted, fund returns quoted
reflect Class A shares. Performance returns, ratings and rankings for other
classes may vary. Investment return and principal value will fluctuate with
market conditions and an investor may experience a gain or loss when they sell
their shares.
/3/ Lipper calculates averages by taking all the funds in a peer group and
averaging their total returns for the periods indicated. Lipper tracks 128 peer
groups of long-term U.S. retail mutual funds, and the groups vary in size from 9
to 880. Lipper total return calculations include reinvested dividends and
capital gains, but do not include sales charges or expense subsidization by the
manager. Results may have been different if these or other factors had been
considered.
/4/ Source: Lipper(R) Inc., 12/31/01. Of the eligible Franklin Templeton
non-money market funds tracked by Lipper, 45, 47, 34 and 17 funds ranked in the
top quartile and 22, 14, 20 and 20 funds ranked in the second quartile, for the
one-, three-, five- and 10-year periods, respectively, for their respective
Lipper peer groups.
/5/ Source: Lipper(R) Inc., 12/31/01. Franklin Utilities Fund Advisor Class
ranked #1 in a universe of 96 funds for the one-year period and 16 of 84 for the
three-year period. Franklin Utilities Fund Advisor Class (inception 1/1/97) does
not have a five-year or 10-year track record. Advisor Class shares are offered
to certain qualified investors. Franklin Utilities Fund Class A ranked #2 in a
universe of 96 funds in Lipper's "Utility Funds" group for the one-year period,
17 of 84 for the three-year period, 36 of 69 for the five-year period, and 13 of
18 for the 10-year period. Franklin Large Cap Value Fund Class A ranked #1 in a
universe of 308 funds in Lipper's "Large-Cap Value Funds" group for the one-year
period. Mutual Discovery Fund Class Z ranked #1 in a universe of 40 funds in
Lipper's "Global Small-Cap Funds" group for the one-year period, 5 of 35 for the
three-year period, and 6 of 26 for the five-year period.
/6/ Mutual Shares, Mutual Beacon, Mutual Qualified and Mutual Financial Services
fund returns are based on Class A shares without sales charges. Mutual Shares
and Mutual Beacon funds were down -0.1% and -0.3%, respectively for the one-year
period ended December 31, 2001 based on Class A shares with sales charges.
Mutual Qualified and Mutual Financial Services funds were up 1.7% and 5.4%
respectively for the one-year period ended December 31, 2001 based on Class A
shares with sales charges. Mutual Shares, Mutual Beacon and Mutual Qualified
funds were up 10.4%, 10.6%, 10.3%, respectively for the five-year period ended
December 31, 2001 based on Class A shares with sales charges. Mutual Shares,
Mutual Beacon and Mutual Qualified funds were up 14.4%, 14.7%, 14.6%,
respectively for the 10-year period ended December 31, 2001 based on Class A
shares with sales charges. Mutual Financial Services was up 16.1%
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since inception based on Class A shares with sales charges. Mutual Financial
Services (inception 8/19/97) does not have a five-year or 10-year track record.
Prior to 11/1/96 only a single class of fund shares was offered without a sales
charge and Rule 12b-1 expenses. Returns shown are a restatement of the original
class to include the Rule 12b-1 fees as though in effect from the fund's
inception. Source for S&P 500, Dow, and NASDAQ: Standard & Poor's Micropal.
/7/ Source: Lipper(R) Inc., 12/31/01. 9 out of 11 eligible Templeton equity
funds ranked in the top two Lipper quartiles for the one-year period, 8 of 11
for the three-year period, 5 of 11 for the five-year period and 6 of 8 for the
10-year period for their respective Lipper peer groups. Templeton Growth Fund
Class A ranked 9 in a universe of 290 funds in Lipper's "Global Funds" group for
the one-year period, 25 of 211 for the three-year period, 33 of 135 for the
five-year period and 4 of 27 for the 10-year period. Templeton Foreign Fund
Class A ranked 12 in a universe of 758 funds in Lipper's "International Funds"
group for the one-year period, 35 of 551 for the three-year period, 64 of 351
for the five-year period and 12 of 63 for the 10-year period. Source for MSCI
returns: Standard & Poor's Micropal.
/8/ Source: [Morningstar](C) 12/31/01. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of 12/31/01. The ratings are subject to
change every month. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
Morningstar ratings are calculated from a fund's three-, five-, and 10-year
average annual returns, if applicable, in excess of 90-day Treasury bill returns
with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns. The top 10% of the funds in a broad
asset class receive five stars, the next 22.5% receive four stars, and the next
35% receive three stars. Morningstar does not guarantee the accuracy of the
information.
/9/ Source: [Morningstar](C) 12/31/01. Nineteen Franklin tax-free income funds
received four stars, and nine received five stars.
/10/ Source: Lipper(R)Inc., 12/31/01. 27 out of 34 eligible tax-free funds
ranked in the top two Lipper quartiles for the one-year period, 26 of 34 for the
three-year period, 29 of 34 for the five-year period and 20 of 27 for the
10-year period for their respective Lipper peer groups.
/11/ Source: Lipper(R) Inc., 12/31/01. 5 out of 10 eligible Franklin taxable
fixed income funds ranked in the top two Lipper quartiles for the one-year
period, 5 of 10 for the three-year period, 5 of 8 for the five-year period, and
2 of 6 for the 10-year period for their respective Lipper peer groups. Franklin
U.S. Government Securities Fund Class A ranked 15 in a universe of 60 funds in
Lipper's "GNMA Funds" group for the one-year period, 12 of 47 for the three-year
period, 7 of 38 for the five-year period and 4 of 22 for the 10-year period.
/12/ Source: [Morningstar](C)12/31/01. Of the eligible Canadian funds rated by
Morningstar, six received five stars and 9 received four stars.
FORWARD-LOOKING STATEMENTS
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Statements in this press release regarding Franklin Resources, Inc.'s
business which are not historical facts are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve a number of risks, uncertainties and other
important factors that could cause the actual results and outcomes to differ
materially from any future results or outcomes expressed or implied by such
forward-looking statements. These risks, uncertainties and other important
factors are either set forth below or described in more detail in the risk
factor section in Franklin's recent filings with the U.S. Securities and
Exchange Commission, including, the "Forward-Looking Statements" section of the
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Franklin's Form 10-K for the fiscal year ended September 30, 2001.
* The levels of our assets under management are subject to significant
fluctuations.
* We face strong competition from numerous and sometimes larger companies.
* Changes in the distribution channels on which we depend could reduce our
revenues or hinder our growth.
* We have become subject to an increased risk of asset volatility from
changes in the domestic and global equity markets due to the recent
terrorist attacks.
* Previously announced revenue and cost synergies from the acquisition of
Fiduciary Trust may not be fully realized or may take longer to realize
than expected.
* In the future, we may incur materially increased insurance costs or may not
be able to obtain the same types or amounts of coverage as a result of the
recent terrorist attacks.
* We may not recover all losses on insurance claims for property damage and
business interruptions.
* We could experience disruption from the relocation of Fiduciary Trust's New
York offices, making it more difficult to maintain relationships with
clients or employees.
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