EXHIBIT 99
----------
[LOGO OMITTED] One Franklin Parkway
San Mateo, CA 94403-1906
tel 650/312.2000
franklintempleton.com
- --------------------------------------------------------------------------------
Contact: Franklin Resources, Inc.
Investor Relations: Alan Weinfeld (650) 525-8900
Corporate Communications: Holly Gibson Brady (650) 312-4701
franklintempleton.com
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
FRANKLIN RESOURCES, INC. ANNOUNCES FIRST QUARTER RESULTS
SAN MATEO, CA, JANUARY 23, 2003 - Franklin Resources, Inc. (Franklin
Templeton Investments) (NYSE: BEN) today reported net income of $109.8 million,
or $0.43 per share diluted on revenues of $605.5 million for the quarter ended
December 31, 2002. In the preceding quarter, net income was $68.5 million, or
$0.26 per share diluted (after a pre-tax, non-cash, non-operating charge of
$60.1 million relating to an unrealized loss in the company's corporate
investments, or $0.17 per share diluted after tax) on revenues of $608.3
million. In the comparable quarter a year ago, net income was $118.5 million, or
$0.45 per share diluted, on revenues of $618.2 million. Operating income
decreased 1% this quarter over the prior quarter and decreased 2% over the same
quarter in the prior year.
As of December 31, 2002, assets under management by the company's
subsidiaries were $257.7 billion, as compared to $247.8 billion last quarter and
$266.3 billion at this time last year. Simple monthly average assets under
management during the current quarter were $254.8 billion compared to $259.0
billion in the preceding quarter and $256.4 billion in the same quarter a year
ago. Equity assets now comprise 48% of total assets under management as compared
to 48% last quarter and 53% at December 31, 2001. Fixed-income assets now
comprise 34% of total assets under management, as compared to 35% last quarter
and 30% at the same time last year. As of December 31, 2002, balanced/hybrid
assets account for 15% of total assets under management, as compared to 15% last
quarter and 14% in the comparable quarter a year ago. Sales exceeded redemptions
by $1.1 billion for the current quarter compared to $2.5 billion for the prior
quarter and $3.4 billion for the comparable quarter a year ago.
1
- --------------------------------------------------------------------------------
FISCAL FIRST QUARTER 2003 HIGHLIGHTS
PERFORMANCE AND PRODUCTS /1/,/2/
(See important footnotes in "Supplemental Information" section at the end of the
release.)
* All Mutual Series funds ranked in the top two quartiles of their respective
LIPPER peer groups for the applicable one-, three-, five- and 10-year
periods ended December 31, 2002. /3/,/4/
* Over 90% of Templeton equity mutual fund assets were in funds ranked in the
first quartile of their respective LIPPER peer groups for the one-, three-,
five- and 10-year periods ended December 31, 2002. /3/,/5/
* Our flagship international and global funds, Templeton Foreign Fund and
Templeton Growth Fund, ranked in the top 20% of their respective LIPPER
peer groups for the one-, three-, five- and 10-year periods ended December
31, 2002. /3/,/6/
* Templeton Developing Markets Trust and TIFI Emerging Markets Equity Series
ranked in the top two quartiles of their peer group for the one-, three-,
five- and 10-year periods ended December 31, 2002. /3/,/7/
* Templeton Foreign Fund, Templeton Growth Fund, Templeton Developing Markets
Trust and TIFI Emerging Markets Equity Series all received 4 stars overall
from MORNINGSTAR /8/ as of December 31, 2002, and outpaced their
appropriate MSCI benchmarks over the one-, three-, five- and 10-year
periods ended December 31, 2002. /9/
* A study by MORNINGSTAR identified the 10 biggest wealth-creating funds of
2002. Included on the list were Franklin California Tax-Free Income Fund
Class A, Franklin U.S. Government Securities Fund Class A and Franklin
Federal Tax-Free Income Fund Class A. /10/
* The two largest Franklin tax-free funds, Franklin California Tax-Free
Income Fund and Franklin Federal Tax-Free Income Fund, were both rated 4
stars overall by MORNINGSTAR as of December 31, 2002. /8/
* Our flagship balanced/hybrid product, Franklin Income Fund, ranked in the
top two quartiles of its respective LIPPER peer group over the one-,
three-, five- and 10-year periods ended December 31, 2002. By the end of
2002, assets under management reached an all-time high of $9.5 billion.
/3/,/11/
* Franklin Utilities Fund, the largest utility mutual fund in the industry,
performed in the top two quartiles of its respective LIPPER peer group over
the one-, three-, five- and 10-year periods ended December 31, 2002. In
fact, Franklin Utilities Fund ranked #1 for the one- and three-year periods
ended December 31, 2002 and received the 2002 LIPPER Performance
Achievement Certificate for the one-year period. /3/,/12/
* Franklin Flex Cap Growth Fund was featured in the 2002 MONEY 100.
* At the Canadian Investment Awards, Mutual Beacon Fund was named the "Best
U.S. Fund" and Templeton Emerging Markets Fund was named the "Best Regional
Fund."
GLOBAL BUSINESS DEVELOPMENTS
* Created a fund management joint venture in China with Sealand Securities
Co. Ltd.
* Templeton was awarded a $600 million international equity assignment from
Employees Retirement System of Texas.
* Templeton Asset Management (India) Private Limited completed management
integration, sales office integration and all regulatory approvals for
Pioneer ITI AMC Limited ("Pioneer"). Combined assets under management
increased to $2 billion.
* Launched equity products in Korea, Taiwan, Japan and Australia and
fixed-income products in Korea and India.
* Franklin Templeton India received the "Wealth Creator Award" in India,
which was based on risk adjusted performance, service, disclosures,
compliance and web initiatives.
* Foreign-sold SICAV product line reached $10 billion in assets.
* Franklin Templeton Investments' website, franklintempleton.com, was
recognized in kasina's annual "Top 20 Web Sites - Mutual Funds" study.
* Leading German independent financial advisor magazine, PERFORMANCE, named
Franklin Templeton Investments as the investment company with the best
performing products, the best brand and relationship with brokers, as well
as being the best known among investors.
* Franklin Templeton Private Client Group saw a significant increase in new
accounts due in part to the Templeton and Fiduciary Trust International
Global Equity All Cap portfolio being offered through a major broker
dealer.
* Created an ad campaign for investment professionals promoting the new
Franklin Templeton Charitable Giving Fund.
2
- --------------------------------------------------------------------------------
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED
management and per share data) DECEMBER 31
%
2002 2001 CHANGE
---- ---- ------
OPERATING REVENUES
Investment management fees $351,412 $356,798 (2)%
Underwriting and distribution fees 185,937 192,007 (3)%
Shareholder servicing fees 48,051 47,341 1%
Other, net 20,051 22,061 (9)%
--------------------------
TOTAL OPERATING REVENUES 605,451 618,207 (2)%
--------------------------
OPERATING EXPENSES
Underwriting and distribution 168,847 172,267 (2)%
Compensation and benefits 159,118 160,143 (1)%
Information systems, technology and occupancy 72,595 74,594 (3)%
Advertising and promotion 22,644 26,425 (14)%
Amortization of deferred sales commissions 16,045 16,743 (4)%
Amortization of intangible assets 4,234 4,375 (3)%
Other 22,513 20,795 8%
--------------------------
TOTAL OPERATING EXPENSES 465,996 475,342 (2)%
--------------------------
OPERATING INCOME 139,455 142,865 (2)%
--------------------------
OTHER INCOME (EXPENSE)
Investment and other income 12,303 18,329 (33)%
Interest expense (3,032) (3,168) (4)%
--------------------------
OTHER INCOME, NET 9,271 15,161 (39)%
--------------------------
Income before taxes on income 148,726 158,026 (6)%
Taxes on income 38,966 39,507 (1)%
--------------------------
NET INCOME $109,760 $118,519 (7)%
==========================
EARNINGS PER SHARE
Basic $0.43 $0.45 (4)%
Diluted $0.43 $0.45 (4)%
DIVIDENDS PER SHARE $0.075 $0.070 7%
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 257,600 260,981 (1)%
Diluted 258,218 261,636 (1)%
EBITDA MARGIN /1/ 29% 30% -
OPERATING MARGIN /2/ 23% 23% -
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $247,760 $246,385 1%
Sales 17,124 18,923 (10)%
Reinvested distributions 1,437 2,536 (43)%
Redemptions (16,035) (15,484) 4%
Distributions (2,095) (3,663) (43)%
Acquisitions - - -
Appreciation 9,544 17,590 (46)%
END OF PERIOD $257,735 $266,287 (3)%
SIMPLE MONTHLY AVERAGE FOR PERIOD $254,842 $256,396 (1)%
/1/ EBITDA Margin: Earnings before interest, taxes on income, depreciation and
the amortization of intangibles divided by total revenues. See Supplemental
Information note 13.
/2/ Operating Margin: Operating income divided by total operating revenues.
3
- --------------------------------------------------------------------------------
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except
Per share data) THREE MONTHS ENDED
31-DEC-02 30-SEP-02 % 30-JUN-02 31-MAR-02 31-DEC-01
--------- --------- - --------- --------- ---------
CHANGE
------
OPERATING REVENUES
Investment management fees $351,412 $355,239 (1)% $384,840 $365,778 $356,798
Underwriting and distribution fees 185,937 189,853 (2)% 213,300 197,537 192,007
Shareholder servicing fees 48,051 47,105 2% 48,832 48,024 47,341
Other, net 20,051 16,110 24% 19,078 14,629 22,061
----------------------------------------------------------------
TOTAL OPERATING REVENUES 605,451 608,307 - 666,050 625,968 618,207
----------------------------------------------------------------
OPERATING EXPENSES
Underwriting and distribution 168,847 175,054 (4)% 191,586 177,327 172,267
Compensation and benefits 159,118 157,627 1% 167,570 159,764 160,143
Information systems, technology and
Occupancy 72,595 70,797 3% 75,573 73,197 74,594
Advertising and promotion 22,644 25,703 (12)% 29,268 25,481 26,425
Amortization of deferred sales commissions 16,045 16,141 (1)% 17,677 17,047 16,743
Amortization of intangible assets 4,234 4,236 - 4,238 4,258 4,375
Other 22,513 17,983 25% 26,286 20,875 20,795
----------------------------------------------------------------
TOTAL OPERATING EXPENSES 465,996 467,541 - 512,198 477,949 475,342
----------------------------------------------------------------
OPERATING INCOME 139,455 140,766 (1)% 153,852 148,019 142,865
----------------------------------------------------------------
OTHER INCOME (EXPENSE)
Other-than-temporary decline in investments
Value - (60,068) (100)% - - -
Investment and other income 12,303 14,015 (12)% 18,017 14,782 18,329
Interest expense (3,032) (3,168) (4)% (3,158) (2,808) (3,168)
----------------------------------------------------------------
OTHER INCOME (EXPENSE), NET 9,271 (49,221) N/A 14,859 11,974 15,161
----------------------------------------------------------------
Income before taxes on income 148,726 91,545 62% 168,711 159,993 158,026
Taxes on income 38,966 23,027 69% 43,021 39,997 39,507
----------------------------------------------------------------
NET INCOME $109,760 $68,518 60% $125,690 $119,996 $118,519
================================================================
EARNINGS PER SHARE
Basic $0.43 $0.26 65% $0.48 $0.46 $0.45
Diluted $0.43 $0.26 65% $0.48 $0.46 $0.45
DIVIDENDS PER SHARE $0.075 $0.070 7% $0.070 $0.070 $0.070
AVERAGE SHARES OUTSTANDING (in
thousands)
Basic 257,600 260,444 (1)% 261,952 261,596 260,981
Diluted 258,218 261,497 (1)% 263,087 262,111 261,636
EBITDA Margin /1/ 29% 30% - 30% 30% 30%
Operating Margin /2/ 23% 23% - 23% 24% 23%
EMPLOYEES 6,670 6,711 (1)% 6,457 6,444 6,603
BILLABLE SHAREHOLDER ACCOUNTS (in millions) 10.1 9.6 5% 9.7 9.5 8.9
/1/ EBITDA Margin: Earnings before interest, taxes on income, depreciation and the amortization of intangibles
divided by total revenues. The effect of the September 2002 $60.1 million other-than-temporary decline in
investments value is excluded from EBITDA. EBITDA including this charge was 22% for the 3 months ended September
2002. See Supplemental Information note 13.
/2/ Operating Margin: Operating income divided by total operating revenues.
4
- --------------------------------------------------------------------------------
FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts in thousands)
PRELIMINARY
DECEMBER SEPTEMBER
31, 2002 30, 2002
-------- --------
ASSETS
Current assets $2,425,889 $2,322,808
Banking/ finance assets 1,122,015 1,091,223
Non-current assets 2,971,423 3,008,707
- -------------------------------------------------------------------------------------
TOTAL ASSETS $6,519,327 $6,422,738
- -------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $389,816 $455,019
Banking/ finance liabilities 922,484 883,936
Non-current liabilities 849,226 816,837
- -------------------------------------------------------------------------------------
Total liabilities 2,161,526 2,155,792
Total stockholders' equity 4,357,801 4,266,946
- -------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,519,327 $6,422,738
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
ENDING SHARES OF COMMON STOCK OUTSTANDING 257,921 258,555
- -------------------------------------------------------------------------------------
5
- --------------------------------------------------------------------------------
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) 31-DEC-02 30-SEP-02 30-JUN-02 31-MAR-02 31-DEC-01
-------------------------------------------------------------
EQUITY
Global/international $81.4 $76.5 $93.6 $93.9 $89.4
Domestic (U.S.) 43.5 41.4 48.5 53.2 51.7
-------------------------------------------------------------
Total equity 124.9 117.9 142.1 147.1 141.1
-------------------------------------------------------------
BALANCED/HYBRID 38.3 36.6 39.6 40.8 38.6
FIXED-INCOME
Tax-free 52.1 52.8 50.2 48.7 48.3
Taxable:
Domestic (U.S.) 27.3 26.1 24.7 24.6 25.1
Global/international 9.1 8.6 8.4 7.7 7.4
-------------------------------------------------------------
Total fixed-income 88.5 87.5 83.3 81.0 80.8
-------------------------------------------------------------
MONEY 6.0 5.8 5.4 5.6 5.8
-------------------------------------------------------------
TOTAL ENDING ASSETS $257.7 $247.8 $270.4 $274.5 $266.3
-------------------------------------------------------------
SIMPLE MONTHLY AVERAGE ASSETS $254.8 $259.0 $274.8 $267.9 $256.4
=============================================================
ASSETS UNDER MANAGEMENT & FLOWS
(in billions) THREE MONTHS ENDED
31-DEC-02 30-SEP-02 % CHANGE 31-DEC-01 % CHANGE
--------- --------- -------- --------- --------
BEGINNING ASSETS UNDER MANAGEMENT $247.8 $270.4 (8)% $246.4 1%
U.S. RETAIL ASSETS
Beginning assets $157.7 $169.9 (7)% $158.1 -
---------------------------------------------------------------------------------------------
Sales 9.4 9.5 (1)% 9.8 (4)%
Reinvested distributions 1.3 0.6 117% 2.4 (46)%
Redemptions (8.8) (8.5) 4% (9.6) (8)%
Distributions (1.9) (1.1) 73% (3.5) (46)%
Acquisitions - - - - -
Appreciation/(depreciation) 5.0 (12.7) N/A 10.7 (53)%
---------------------------------------------------------------------------------------------
Ending assets 162.7 157.7 3% 167.9 (3)%
---------------------------------------------------------------------------------------------
OTHER ASSETS, INCLUDING INTERNATIONAL AND INSTITUTIONAL
Beginning assets $90.1 $100.5 (10)% 88.3 2%
---------------------------------------------------------------------------------------------
Sales 7.7 6.6 17% 9.1 (15)%
Reinvested distributions 0.1 - 100% 0.2 (50)%
Redemptions (7.2) (5.0) 44% (5.9) 22%
Distributions (0.2) (0.1) 100% (0.2) -
Acquisitions - 0.8 (100)% - -
Appreciation/(depreciation) 4.5 (12.7) N/A 6.9 (35)%
---------------------------------------------------------------------------------------------
Ending assets 95.0 90.1 5% 98.4 (3)%
---------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $257.7 $247.8 4% $266.3 (3)%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $247.8 $270.4 (8)% $246.4 1%
--------------------------------------------------------------------------------------------
Sales 17.1 16.1 6% 18.9 (10)%
Reinvested distributions 1.4 0.6 133% 2.6 (46)%
Redemptions (16.0) (13.5) 19% (15.5) 3%
Distributions (2.1) (1.2) 75% (3.7) (43)%
Acquisitions - 0.8 (100)% - -
Appreciation/(depreciation) 9.5 (25.4) N/A 17.6 (46)%
--------------------------------------------------------------------------------------------
ENDING ASSETS $257.7 $247.8 4% $266.3 (3)%
--------------------------------------------------------------------------------------------
Note: Institutional assets totaling approximately $15.9 billion are invested in U.S. Retail fund and
annuity products and are disclosed in U.S. Retail assets in the above table. Total institutional and
high net-worth assets at December 31, 2002 were approximately $85.1 billion, of which high net-worth
assets comprised $10.7 billion.
6
- --------------------------------------------------------------------------------
ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
THREE MONTHS ENDED 31-DEC-02 30-SEP-02 31-DEC-01
- ------------------ --------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning assets $76.5 $93.6 $80.2
------------------------------------------------------------------------------------------
Sales 6.5 4.6 7.2
Reinvested distributions 0.6 - 0.8
Redemptions (5.8) (3.9) (6.9)
Distributions (0.6) - (1.0)
Acquisitions - 0.2 -
Appreciation/(depreciation) 4.2 (18.0) 9.1
------------------------------------------------------------------------------------------
Ending assets 81.4 76.5 89.4
------------------------------------------------------------------------------------------
DOMESTIC (U.S.) EQUITY
Beginning assets 41.4 48.5 44.5
------------------------------------------------------------------------------------------
Sales 2.5 3.0 3.4
Reinvested distributions 0.3 - 1.1
Redemptions (2.6) (2.7) (2.2)
Distributions (0.3) - (1.1)
Acquisitions - - -
Appreciation/(depreciation) 2.2 (7.4) 6.0
------------------------------------------------------------------------------------------
Ending assets 43.5 41.4 51.7
------------------------------------------------------------------------------------------
BALANCED/HYBRID
Beginning assets 36.6 39.6 36.1
------------------------------------------------------------------------------------------
Sales 0.9 1.0 1.2
Reinvested distributions 0.1 0.1 0.1
Redemptions (1.0) (0.7) (0.5)
Distributions (0.2) (0.2) (0.3)
Acquisitions - - -
Appreciation/(depreciation) 1.9 (3.2) 2.0
------------------------------------------------------------------------------------------
Ending assets 38.3 36.6 38.6
------------------------------------------------------------------------------------------
TAX-FREE INCOME
Beginning assets 52.8 50.2 48.4
------------------------------------------------------------------------------------------
Sales 1.5 1.9 1.6
Reinvested distributions 0.3 0.3 0.3
Redemptions (1.5) (1.1) (1.2)
Distributions (0.7) (0.7) (0.8)
Acquisitions - - -
(Depreciation)/appreciation (0.3) 2.2 -
------------------------------------------------------------------------------------------
Ending assets 52.1 52.8 48.3
------------------------------------------------------------------------------------------
TAXABLE FIXED-INCOME
Beginning assets 34.7 33.1 31.6
------------------------------------------------------------------------------------------
Sales 3.1 3.3 2.6
Reinvested distributions 0.1 0.2 0.2
Redemptions (2.3) (2.7) (2.0)
Distributions (0.3) (0.3) (0.4)
Acquisitions - 0.3 -
Appreciation 1.1 0.8 0.5
------------------------------------------------------------------------------------------
Ending assets 36.4 34.7 32.5
------------------------------------------------------------------------------------------
MONEY
Beginning assets 5.8 5.4 5.6
------------------------------------------------------------------------------------------
Sales 2.6 2.3 2.9
Reinvested distributions - - 0.1
Redemptions (2.8) (2.4) (2.7)
Distributions - - (0.1)
Acquisitions - 0.3 -
Appreciation 0.4 0.2 -
------------------------------------------------------------------------------------------
Ending assets 6.0 5.8 5.8
------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $257.7 $247.8 $266.3
7
- --------------------------------------------------------------------------------
CONFERENCE CALL INFORMATION
- ---------------------------
As previously announced, members of the investment community and general
public are invited to listen to the earnings conference call today, Thursday,
January 23, 2003 at 1:30 p.m. Pacific Time. Access to the teleconference will be
available via franklintempleton.com 10 minutes before the start of the call or
by dialing (888) 423-3271 in the U.S. or (612) 332-0523 internationally.
A replay of the call will be archived on franklintempleton.com through
January 30, 2003. The replay can also be accessed by calling (800) 475-6701 in
the U.S. or (320) 365-3844 internationally using access code #668150, after 5:00
p.m. Pacific Time on January 23 through 11:59 p.m. Pacific Time on January 30,
2003.
Questions regarding the teleconference call should be directed to Franklin
Resources, Inc. Investor Relations at (650) 525-8900 or Corporate Communications
at (650) 312-3395.
Franklin Templeton Investments provides global and domestic investment
management services to its Franklin, Templeton, Mutual Series, Fiduciary Trust
and other sponsored investment products. The San Mateo, CA-based company has
over 50 years of investment experience. For more information, please visit
franklintempleton.com or call 1-800/DIAL BEN(R).
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 11/30/02 figures
unless noted otherwise. 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 129
peer groups of long-term U.S. retail mutual funds, and the groups vary in
size from 6 to 1002. 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., 12/31/02. While our Mutual Series funds experienced
declines in 2002, 6 out of 6 eligible Mutual Series equity funds ranked in
the top two LIPPER quartiles for the one-year period, 6 of 6 for the
three-year period, 6 of 6 for the five-year period and 4 of 4 for the
10-year period for their respective LIPPER peer groups.
5. Source: Lipper(R)Inc., 12/31/02. While shorter-term performance for some
Templeton funds have been negative, 9 out of 12 eligible Templeton equity
funds ranked in the top LIPPER quartile for the one-year period, 7 of 11
for the three-year period, 4 of 11 for the five-year period and 4 of 9 for
the 10-year period for their respective LIPPER peer groups.
6. Source: Lipper(R) Inc., 12/31/02. Templeton Growth Fund Class A ranked 29
in a universe of 308 funds in LIPPER'S "Global Funds" group for the
one-year period, 17 of 213 for the three-year period, 21 of 153 for the
five-year period and 5 of 28 for the 10-year period. Templeton Foreign Fund
Class A ranked 74 in a universe of 808 funds in LIPPER'S "International
Funds" group for the one-year period, 22 of 604 for the three-year period,
56 of 435 for the five-year period and 12 of 94 for the 10-year period.
Templeton Growth Fund and Templeton Foreign Fund have experienced negative
fund performance.
8
- --------------------------------------------------------------------------------
7. Source: Lipper(R) Inc., 12/31/02. Templeton Developing Markets Trust Class
A ranked 21 in a universe of 190 funds in LIPPER'S "Emerging Markets Funds"
group for the one-year period, 52 of 145 for the three-year period, 45 of
116 for the five-year period and 2 of 7 for the 10-year period. TIFI
Emerging Markets Equity Series ranked 20 in a universe of 190 funds in
LIPPER'S "Emerging Markets Funds" group for the one-year period, 51 of 145
for the three-year period, and 29 of 116 for the five-year period.
Templeton Developing Markets Trust and TIFI Emerging Markets Equity Series
have experienced negative fund performance.
8. Source: [MORNINGSTAR](C)12/31/02. For each fund with at least a three-year
history, MORNINGSTAR calculates a MORNINGSTAR Rating based on a MORNINGSTAR
Risk-Adjusted Return measure that accounts for variation in a fund's
monthly performance (including the effects of sales charges, loads, and
redemption fees), placing more emphasis on downward variations and
rewarding consistent performance. The top 10% of funds in each category
receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3
stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star.
(Each share class is counted as a fraction of one fund within this scale
and rated separately, which may cause slight variations in the distribution
percentages.) The Overall MORNINGSTAR Rating for a fund is derived from a
weighted-average of the performance figures associated with its three-,
five- and 10-year (if applicable) MORNINGSTAR Rating metrics. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. MORNINGSTAR Rating is for
the A share class only; other classes may have different performance
characteristics. The following fund was rated against 664; 488; 102 foreign
stock funds for the respective 3-, 5- and 10-year periods ended 12/31/02,
as applicable. For the 3-, 5- and 10-year periods ended 12/31/02, the
MORNINGSTAR ratings were: Templeton Foreign 5,4,4. The following fund was
rated against 225; 191; 39 world stock funds for the respective 3-, 5- and
10-year periods ended 12/31/02, as applicable. For the 3-, 5- and 10-year
periods ended 12/31/02, the MORNINGSTAR ratings were: Templeton Growth 5,
4, 4. The following funds were rated against 136; 110; and 6 diversified
emerging markets funds for the respective 3-, 5- and 10-year periods ended
12/31/02, as applicable. For the 3-, 5- and 10-year periods ended 12/31/02,
the MORNINGSTAR ratings were: Templeton Developing Markets Trust 3, 3, 5;
TIFI Emerging Markets Equity Series 4, 4, N/A. For the 3-, 5- and 10-year
periods ended 12/31/02, the MORNINGSTAR ratings were: Franklin California
Tax-Free Income Fund 3, 4, 4; Franklin Federal Tax-Free Income Fund 3, 3,
4.
9. Source for MSCI data: Standard and Poor's Micropal, 12/31/02. The following
Templeton Funds were compared to their appropriate MSCI peer group;
Templeton Growth Fund (MSCI World Index), Templeton Foreign Fund (MSCI EAFE
Index), Templeton Developing Markets Trust and TIFI Emerging Markets Equity
Series (MSCI Emerging Markets Free Index). Some Templeton funds have
experienced negative fund performance. Comparisons do not include sales
charges and one cannot invest directly in an index.
10. Source: MORNINGSTAR.COM, "The 10 Biggest Wealth-Creating Funds of 2002,"
12/30/02. For each fund's standardized performance figures, please call
1-800/DIAL BEN(R)or visit our website at franklintempleton.com.
11. Source: Lipper(R)Inc., 12/31/02. Franklin Income Fund Class A ranked 25 in
a universe of 113 funds in LIPPER'S "Income Funds" group for the one-year
period, 4 of 78 for the three-year period, 30 of 63 for the five-year
period and 7 of 13 for the 10-year period. Franklin Income Fund has
experienced negative fund performance.
12. Source: Lipper(R) Inc., 12/31/02. Franklin Utilities Fund Class A ranked 2
in a universe of 93 funds in LIPPER'S "Utility Funds" group for the
one-year period, 2 of 81 for the three-year period, 11 of 75 for the
five-year period and 9 of 22 for the 10-year period. Franklin Utilities
Fund Advisor Class ranked 1 in a universe of 93 funds in LIPPER'S "Utility
Funds" group for the one-year period, 1 of 81 for the three-year period and
10 of 75 for the five-year period. Franklin Utilities Fund has experienced
negative fund performance.
13. EBITDA margin is presented because we consider it an important indicator of
operational strength and performance. However, it should be noted that
EBITDA margin is not a substitute for operating income, net income, cash
flows and other measures of financial performance and EBITDA margin may not
be strictly comparable to similarly titled measures widely used in the
United States or reported by other companies.
FORWARD-LOOKING STATEMENTS
- --------------------------
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 described in more detail in the "Risk Factors" section in Franklin's
recent filings with the U.S. Securities and Exchange Commission, including,
without limitation, the "Risk Factors" section of the 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, 2002.
* Continuing volatility in the equity markets have caused the levels of our
assets under management to fluctuate significantly.
9
- --------------------------------------------------------------------------------
* Continued weak market conditions may lower our assets under management and
reduce our revenues and income.
* 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.
* Previously announced revenue and cost synergies from the acquisition of
Fiduciary Trust Company International may not be fully realized and may
take longer to realize than originally anticipated.
* For the next several years, insurance costs are likely to increase
materially and we may not be able to obtain the same types or amounts of
coverage.
* Our insurance policies may not cover all losses for property damage, extra
expenses and business interruptions arising out of the destruction of our
offices at the World Trade Center in the terrorist attacks on September 11,
2001.
* The ongoing threat of terrorism may adversely affect the general economy,
financial and capital markets and our business.
# # #
10
- --------------------------------------------------------------------------------