EXHIBIT 99
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[Logo] One Franklin Parkway
San Mateo, CA 94403-1906
tel 650/312.2000
franklintempleton.com
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Contact: Franklin Resources, Inc.
Investor Relations: Alan Weinfeld (650) 525-8900
Corporate Communications: Lisa Gallegos (650) 312-3395
franklintempleton.com
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FOR IMMEDIATE RELEASE
FRANKLIN RESOURCES, INC. ANNOUNCES THIRD QUARTER RESULTS
SAN MATEO, CA, JULY 24, 2003 - Franklin Resources, Inc. (Franklin Templeton
Investments) (NYSE: BEN) today reported net income of $131.4 million, or $0.52
per share diluted on revenues of $683.9 million for the quarter ended June 30,
2003. In the preceding quarter, net income was $109.6 million, or $0.43 per
share diluted, on revenues of $613.1 million. In the comparable quarter a year
ago, net income was $125.7 million, or $0.48 per share diluted, on revenues of
$666.1 million. Operating income increased 21% this quarter over the prior
quarter and increased 10% over the same quarter in the prior year.
As of June 30, 2003, assets under management by the company's subsidiaries
were $287.0 billion, as compared to $252.4 billion last quarter and $270.4
billion at this time last year. Simple monthly average assets under management
during the current quarter were $272.2 billion compared to $255.1 billion in the
preceding quarter and $274.8 billion in the same quarter a year ago. Equity
assets now comprise 50% of total assets under management as compared to 47% last
quarter and 53% at June 30, 2002. Fixed-income assets now comprise 33% of total
assets under management, as compared to 36% last quarter and 31% at the same
time last year. As of June 30, 2003, hybrid/balanced assets account for 15% of
total assets under management, and remained unchanged from last quarter and the
comparable quarter a year ago. Sales exceeded redemptions by $6.0 billion for
the current quarter compared to $2.5 billion for the prior quarter and $4.5
billion for the comparable quarter a year ago.
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FISCAL THIRD QUARTER 2003 HIGHLIGHTS
PERFORMANCE AND PRODUCTS /1/,/2/
(See important footnotes in "Supplemental Information" section at the end of the
release.)
* Approximately 80% of Franklin Templeton's total equity mutual fund assets
were in funds ranked in the top two quartiles of their respective LIPPER
peer groups for the one-year period ended June 30, 2003, while over 85% of
the total equity mutual fund assets were in funds ranked in the top two
quartiles for the three-, five- and 10-year periods. /3/,/4/
* Over 75% of Templeton equity mutual fund assets were in funds ranked in the
top two quartiles of their respective LIPPER peer groups for the one-year
period ended June 30, 2003, while over 90% of Templeton equity mutual fund
assets were in funds ranked in the top quartile for the three-, five- and
10-year periods. /3/,/5/
* Our flagship global, international and emerging markets funds, Templeton
Growth Fund, Templeton Foreign Fund and Templeton Developing Markets Trust,
each ranked in the top two quartiles of their respective LIPPER peer groups
for the one-, three-, five- and 10-year periods ended June 30, 2003. All
three funds were also rated 4 stars overall by MORNINGSTAR. /3/,/6/,/7/
* All six 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 June 30, 2003. /3/,/8/
* Over 85% of Franklin Templeton's taxable income 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 June 30,
2003. /3/,/9/
* Our flagship hybrid/balanced product, Franklin Income Fund, ranked in the
top 35% of its LIPPER peer group for the one-, three-, five- and 10-year
periods ended June 30, 2003. The fund was also rated 4 stars overall by
MORNINGSTAR. /3/,/7/,/10/
* Franklin Large Cap Value Fund, ranked in the top half of its LIPPER peer
group for the one-year period and ranked #1 for the three-year period ended
June 30, 2003. The fund was also rated 5 stars overall by
MORNINGSTAR. /3/,/7/,/11/
* Franklin MicroCap Value Fund, ranked in the top half of its LIPPER peer
group for the one-, three- and five-year periods ended June 30, 2003. The
fund was also rated 4 stars overall by MORNINGSTAR. The fund recently
re-opened to new investors. /3/,/7/,/12/
* Franklin Federal Tax-Free Income Fund and Franklin New York Tax-Free Income
Fund were rated 4 stars overall by MORNINGSTAR as of June 30, 2003. /7/
* Franklin U.S. Government Securities Fund ranked in the top two quartiles of
its LIPPER peer group for the one-, three-, five- and 10-year periods ended
June 30, 2003. /3/,/13/
* Franklin Strategic Income Fund ranked in the top quartile of its LIPPER
peer group for the one-, three- and five-year periods ended June 30,
2003. /3/,/14/
GLOBAL BUSINESS DEVELOPMENTS
* Fiduciary Trust Company International received funding for a $264 million
global fixed income assignment from Shinko Investment Trust in Tokyo.
* Launched Franklin Structured Large Cap Core Equity Fund and Franklin
Structured Large Cap Growth Equity Fund to offer institutional investors a
new approach to enhanced index-based investing that seeks to limit risk.
* Published a white paper titled "FINDING OPPORTUNITIES IN FIXED INCOME: THE
CASE FOR INVESTING IN SPREAD SECTORS" outlining the company's case for
out-performance in the core-plus sectors in the coming five years.
* In Canada, Franklin Templeton's Quotential program, a family of investment
portfolios comprised of funds from across the company, has grown to more
than US$239 million in assets since its August 2002 launch. The program is
one of the best selling investments of its type in Canada and introduced a
new global equity portfolio that holds funds managed by Franklin,
Templeton, Bissett, Mutual Series and Fiduciary Trust.
* Appointed as a fund manager for the Ministry of Information and
Communication, the second largest institutional investor in Korea.
* Received first place as the Best Asset Manager for Fixed-Income for
year-to-date performance from Korea Fund Research.
* Franklintempleton.com scored highest in The Customer Respect Group's Spring
2003 online study of financial services firms. /15/
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FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets
under management and per share data) THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30 JUNE 30
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2003 2002 % 2003 2002 %
---- ---- CHANGE ---- ---- CHANGE
OPERATING REVENUES
Investment management fees $376,553 $384,840 (2%) $1,075,862 $1,107,416 (3%)
Underwriting and distribution fees 225,632 213,300 6% 605,727 602,844 -
Shareholder servicing fees 57,430 48,832 18% 160,796 144,197 12%
Other, net 24,292 19,078 27% 60,108 55,768 8%
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TOTAL OPERATING REVENUES 683,907 666,050 3% 1,902,493 1,910,225 -
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OPERATING EXPENSES
Underwriting and distribution 207,071 191,586 8% 548,986 541,180 1%
Compensation and benefits 163,230 167,570 (3%) 483,157 487,477 (1%)
Information systems, technology and
occupancy 70,459 75,573 (7%) 214,458 223,364 (4%)
Advertising and promotion 22,281 29,268 (24%) 69,151 81,174 (15%)
Amortization of deferred sales commissions 19,159 17,677 8% 52,244 51,467 2%
Amortization of intangible assets 4,244 4,238 - 12,716 12,871 (1%)
Other 28,088 26,286 7% 73,245 67,956 8%
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TOTAL OPERATING EXPENSES 514,532 512,198 - 1,453,957 1,465,489 (1%)
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OPERATING INCOME 169,375 153,852 10% 448,536 444,736 1%
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OTHER INCOME (EXPENSES)
Investment and other income 22,415 18,017 24% 50,276 51,128 (2%)
Interest expense (6,736) (3,158) 113% (12,805) (9,134) 40%
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OTHER INCOME, NET 15,679 14,859 6% 37,471 41,994 (11%)
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Income before taxes on income 185,054 168,711 10% 486,007 486,730 -
Taxes on income 53,666 43,021 25% 135,256 122,525 10%
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NET INCOME $131,388 $125,690 5% $350,751 $364,205 (4%)
=========================================================
EARNINGS PER SHARE
Basic $0.52 $0.48 8% $1.37 $1.39 (1%)
Diluted $0.52 $0.48 8% $1.37 $1.39 (1%)
DIVIDENDS PER SHARE $0.075 $0.070 7% $0.225 $0.210 7%
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 252,633 261,952 (4%) 255,721 261,507 (2%)
Diluted 253,254 263,087 (4%) 256,343 262,401 (2%)
OPERATING MARGIN /1/ 25% 23% - 24% 23% -
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $252,378 $274,474 (8%) 247,760 $246,385 1%
Sales 21,956 18,606 18% 56,699 56,288 1%
Reinvested distributions 967 1,113 (13%) 3,034 4,216 (28%)
Redemptions (15,997) (14,128) 13% (47,168) (43,930) 7%
Distributions (1,514) (1,692) (11%) (4,766) (6,484) (26%)
Acquisitions - - - - - -
Appreciation/(depreciation) 29,164 (7,940) N/A 31,395 13,958 125%
END OF PERIOD $286,954 $270,433 6% $286,954 $270,433 6%
SIMPLE MONTHLY AVERAGE FOR PERIOD $272,174 $274,816 (1%) $261,817 $265,578 (1%)
/1/ 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
30-JUN-03 31-MAR-03 % 31-DEC-02 30-SEP-02 30-JUN-02
--------- --------- CHANGE --------- --------- ---------
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OPERATING REVENUES
Investment management fees $376,553 $347,897 8% $351,412 $355,239 $384,840
Underwriting and distribution fees 225,632 194,158 16% 185,937 189,853 213,300
Shareholder servicing fees 57,430 55,315 4% 48,051 47,105 48,832
Other, net 24,292 15,765 54% 20,051 16,110 19,078
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TOTAL OPERATING REVENUES 683,907 613,135 12% 605,451 608,307 666,050
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OPERATING EXPENSES
Underwriting and distribution 207,071 173,068 20% 168,847 175,054 191,586
Compensation and benefits 163,230 160,809 2% 159,118 157,627 167,570
Information systems, technology and
occupancy 70,459 71,404 (1%) 72,595 70,797 75,573
Advertising and promotion 22,281 24,226 (8%) 22,644 25,703 29,268
Amortization of deferred sales commissions 19,159 17,040 12% 16,045 16,141 17,677
Amortization of intangible assets 4,244 4,238 - 4,234 4,236 4,238
Other 28,088 22,644 24% 22,513 17,983 26,286
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TOTAL OPERATING EXPENSES 514,532 473,429 9% 465,996 467,541 512,198
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OPERATING INCOME 169,375 139,706 21% 139,455 140,766 153,852
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OTHER INCOME (EXPENSES)
Other-than-temporary decline in investments
value - - - - (60,068) -
Investment and other income 22,415 15,558 44% 12,303 14,015 18,017
Interest expense (6,736) (3,037) 122% (3,032) (3,168) (3,158)
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OTHER INCOME (EXPENSES), NET 15,679 12,521 25% 9,271 (49,221) 14,859
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Income before taxes on income 185,054 152,227 22% 148,726 91,545 168,711
Taxes on income 53,666 42,624 26% 38,966 23,027 43,021
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NET INCOME $131,388 $109,603 20% $109,760 $68,518 $125,690
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EARNINGS PER SHARE
Basic $0.52 $0.43 21% $0.43 $0.26 $0.48
Diluted $0.52 $0.43 21% $0.43 $0.26 $0.48
DIVIDENDS PER SHARE $0.075 $0.075 - $0.075 $0.070 $0.070
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 252,633 257,023 (2%) 257,600 260,444 261,952
Diluted 253,254 257,654 (2%) 258,218 261,497 263,087
OPERATING MARGIN /1/ 25% 23% - 23% 23% 23%
EMPLOYEES 6,540 6,619 (1%) 6,670 6,711 6,457
BILLABLE SHAREHOLDER ACCOUNTS /2/(in millions) 15.2 14.3 6% 10.1 9.6 9.7
/1/ Operating Margin: Operating income divided by total operating revenues.
/2/ Effective January 1, 2003, billable shareholder accounts include additional partial service shareholder accounts.
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FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts in thousands)
PRELIMINARY
JUNE SEPTEMBER
30, 2003 30, 2002
-------- --------
ASSETS
Current assets $2,988,762 $2,322,808
Banking/ finance assets 1,052,309 1,091,223
Non-current assets 3,004,236 3,008,707
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TOTAL ASSETS $7,045,307 $6,422,738
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $449,914 $455,019
Banking/ finance liabilities 897,966 883,936
Non-current liabilities 1,336,136 816,837
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Total liabilities 2,684,016 2,155,792
Total stockholders' equity 4,361,291 4,266,946
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,045,307 $6,422,738
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ENDING SHARES OF COMMON STOCK OUTSTANDING 250,678 258,555
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ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) 30-JUN-03 31-MAR-03 31-DEC-02 30-SEP-02 30-JUN-02
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EQUITY
Global/international $91.6 $75.7 $81.4 $76.5 $93.6
Domestic (U.S.) 50.7 42.7 43.5 41.4 48.5
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Total equity 142.3 118.4 124.9 117.9 142.1
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HYBRID/BALANCED 42.8 37.4 38.3 36.6 39.6
FIXED-INCOME
Tax-free 53.6 52.3 52.1 52.8 50.2
Taxable:
Domestic (U.S.) 31.4 29.4 27.3 26.1 24.7
Global/international 10.9 9.4 9.1 8.6 8.4
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Total fixed-income 95.9 91.1 88.5 87.5 83.3
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MONEY MARKET 6.0 5.5 6.0 5.8 5.4
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TOTAL ENDING ASSETS $287.0 $252.4 $257.7 $247.8 $270.4
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SIMPLE MONTHLY AVERAGE ASSETS $272.2 $255.1 $254.8 $259.0 $274.8
=============================================================
ASSETS UNDER MANAGEMENT & FLOWS
(in billions) THREE MONTHS ENDED
30-JUN-03 31-MAR-03 % CHANGE 30-JUN-02 % CHANGE
--------- --------- -------- --------- --------
BEGINNING ASSETS UNDER MANAGEMENT $252.4 $257.7 (2%) $274.5 (8%)
U.S. RETAIL ASSETS
Beginning assets $160.4 $162.7 (1%) $172.8 (7%)
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Sales 11.7 9.2 27% 11.4 3%
Reinvested distributions 0.9 0.6 50% 1.1 (18%)
Redemptions (8.5) (7.7) 10% (8.8) (3%)
Distributions (1.4) (1.1) 27% (1.6) (13%)
Acquisitions - - - - -
Appreciation/(depreciation) 16.9 (3.3) N/A (5.0) N/A
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Ending assets 180.0 160.4 12% 169.9 6%
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OTHER ASSETS, INCLUDING INTERNATIONAL AND INSTITUTIONAL
Beginning assets $92.0 $95.0 (3%) $101.7 (10%)
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Sales 10.2 8.4 21% 7.2 42%
Reinvested distributions 0.1 - 100% - 100%
Redemptions (7.5) (7.4) 1% (5.3) 42%
Distributions (0.1) - 100% (0.1) -
Acquisitions - - - - -
Appreciation/(depreciation) 12.3 (4.0) N/A (3.0) N/A
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Ending assets 107.0 92.0 16% 100.5 6%
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ENDING ASSETS UNDER MANAGEMENT $287.0 $252.4 14% $270.4 6%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $252.4 $257.7 (2%) $274.5 (8%)
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Sales 21.9 17.6 24% 18.6 18%
Reinvested distributions 1.0 0.6 67% 1.1 (9%)
Redemptions (16.0) (15.1) 6% (14.1) 13%
Distributions (1.5) (1.1) 36% (1.7) (12%)
Acquisitions - - - - -
Appreciation/(depreciation) 29.2 (7.3) N/A (8.0) N/A
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ENDING ASSETS $287.0 $252.4 14% $270.4 6%
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Note: Institutional assets totaling approximately $18.7 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 June 30, 2003, were approximately $94.9 billion, of which high net-worth assets comprised $10.0
billion.
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ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
THREE MONTHS ENDED 30-JUN-03 31-MAR-03 30-JUN-02
- ------------------ --------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning assets $75.7 $81.4 $93.9
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Sales 6.3 5.4 7.0
Reinvested distributions 0.1 - 0.1
Redemptions (5.7) (4.6) (4.7)
Distributions (0.1) - (0.1)
Acquisitions - - -
Appreciation/(depreciation) 15.3 (6.5) (2.6)
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Ending assets 91.6 75.7 93.6
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DOMESTIC (U.S.) EQUITY
Beginning assets 42.7 43.5 53.2
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Sales 3.2 2.3 3.6
Reinvested distributions 0.2 - 0.3
Redemptions (2.1) (2.1) (2.6)
Distributions (0.2) - (0.4)
Acquisitions - - -
Appreciation/(depreciation) 6.9 (1.0) (5.6)
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Ending assets 50.7 42.7 48.5
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HYBRID/BALANCED
Beginning assets 37.4 38.3 40.8
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Sales 2.6 1.9 1.2
Reinvested distributions 0.2 0.1 0.2
Redemptions (1.1) (1.2) (0.6)
Distributions (0.3) (0.2) (0.2)
Acquisitions - - -
Appreciation/(depreciation) 4.0 (1.5) (1.8)
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Ending assets 42.8 37.4 39.6
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TAX-FREE INCOME
Beginning assets 52.3 52.1 48.7
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Sales 1.7 1.4 1.8
Reinvested distributions 0.3 0.4 0.3
Redemptions (1.5) (1.4) (1.4)
Distributions (0.6) (0.6) (0.6)
Acquisitions - - -
Appreciation 1.4 0.4 1.4
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Ending assets 53.6 52.3 50.2
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TAXABLE FIXED-INCOME
Beginning assets 38.8 36.4 32.3
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Sales 5.4 4.3 2.7
Reinvested distributions 0.2 0.1 0.2
Redemptions (3.3) (2.9) (2.3)
Distributions (0.3) (0.3) (0.3)
Acquisitions - - -
Appreciation 1.5 1.2 0.5
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Ending assets 42.3 38.8 33.1
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MONEY MARKET
Beginning assets 5.5 6.0 5.6
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Sales 2.7 2.3 2.3
Reinvested distributions - - -
Redemptions (2.3) (2.9) (2.5)
Distributions - - -
Acquisitions - - -
Appreciation 0.1 0.1 -
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Ending assets 6.0 5.5 5.4
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ENDING ASSETS UNDER MANAGEMENT $287.0 $252.4 $270.4
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CONFERENCE CALL INFORMATION
On Thursday, July 24, 2003, Franklin Resources, Inc., [NYSE:BEN] will
release its third fiscal quarter 2003 financial results. Martin Flanagan and
Greg Johnson, co-presidents of Franklin Resources, Inc., will lead a live
conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss
the quarterly results and answer analysts' questions.
Access to the teleconference will be available via franklintempleton.com 10
minutes before the start of the call or by dialing (877) 574-4065 in the U.S. or
(706) 679-3804 internationally.
A replay of the call will be archived on franklintempleton.com through
August 7, 2003. The replay can also be accessed by calling (800) 642-1687 in the
U.S. or (706) 645-9291 internationally using access code #1538370, after 7:30
p.m. Eastern Time on July 24, 2003, through 11:59 p.m. Eastern Time on August 7,
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 Resources, Inc. is a global investment organization operating as
Franklin Templeton Investments. Franklin Templeton provides global and domestic
investment management services through its Franklin, Templeton, Mutual Series
and Fiduciary Trust subsidiaries. The San Mateo, CA-based company has over 50
years of investment experience and approximately $287 billion in assets under
management as of June 30, 2003. For more information, please call 1-800/DIAL
BEN(R) or visit franklintempleton.com.
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 5/31/03 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 4 to 1098. 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., 6/30/03. Of the eligible Franklin Templeton
non-money market equity funds tracked by LIPPER, 8, 24, 21 and 9 funds
ranked in the top quartile and 16, 7, 10 and 10 funds ranked in the
second quartile, for the one-, three-, five- and 10-year periods,
respectively, in their respective LIPPER peer groups.
5. Source: LIPPER(R)INC., 6/30/03. While shorter-term performance for
some Templeton funds has been negative, 1 out of 10 eligible Templeton
equity funds ranked in the top LIPPER quartile for the one-year
period, 8 of 9 for the three-year period, 4 of 9 for the five-year
period and 3 of 8 for the 10-year period in their respective LIPPER
peer groups. 3 out of 10 eligible Templeton equity funds ranked in the
second LIPPER quartile for the one-year period, 1 of 9 for the
three-year period, 3 of 9 for the five-year period and 3 of 8 for the
10-year period in their respective LIPPER peer groups.
6. Source: LIPPER(R)INC., 6/30/03. Templeton Growth Fund Class A ranked
85 in a universe of 315 funds in LIPPER's "Global Funds" group for the
one-year period, 15 of 218 for the three-year period, 11 of 163 for
the five-year period and 6 of 35 for the 10-year period. Templeton
Foreign Fund Class A ranked 226 in a universe of 818 funds in LIPPER's
"International Funds" group for the one-year period, 27 of 617 for the
three-year period, 41 of 461 for the five-year period and 13 of 103
for the 10-year period. Templeton Developing Markets Trust Class A
ranked 26 in a
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universe of 179 funds in Lipper's "Emerging Markets Funds" group for
the one-year period, 33 of 132 for the three-year period, 46 of 115
for the five-year period and 3 of 9 for the 10-year period. Templeton
Growth Fund, Templeton Foreign Fund and Templeton Developing Markets
Trust have experienced negative shorter-term fund performance.
7. Source: [MORNINGSTAR](C)6/30/03. 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 252; 199; 48 World Stock funds
for the respective 3-, 5- and 10-year periods ended 6/30/03, as
applicable. For the 3-, 5- and 10-year periods ended 6/30/03, the
MORNINGSTAR ratings were: Templeton Growth Fund 4, 4, 4. The following
fund was rated against 682; 524; 111 Foreign Stock funds for the
respective 3-, 5- and 10-year periods ended 6/30/03, as applicable.
For the 3-, 5- and 10-year periods ended 6/30/03, the MORNINGSTAR
ratings were: Templeton Foreign Fund 4, 4, 4. The following fund was
rated against 126; 110; 8 Diversified Emerging Markets funds for the
respective 3-, 5- and 10-year periods ended 6/30/03, as applicable.
For the 3-, 5- and 10-year periods ended 6/30/03, the MORNINGSTAR
ratings were: Templeton Developing Markets Trust 3, 3, 5. The
following fund was rated against 153; 117; 26 Conservative Allocation
funds for the respective 3-, 5- and 10-year periods ended 6/30/03, as
applicable. For the 3-, 5- and 10-year periods ended 6/30/03, the
Morningstar ratings were: Franklin Income Fund 5, 4, 3. The following
fund was rated against 632; N/A; N/A Large Value funds for the
respective 3-, 5- and 10-year periods ended 6/30/03, as applicable.
For the 3-, 5- and 10-year periods ended 6/30/03, the MORNINGSTAR
ratings were: Franklin Large Cap Value Fund 5, N/A, N/A. The following
fund was rated against 180; 128; N/A Small Value funds for the
respective 3-, 5- and 10-year periods ended 6/30/03, as applicable.
For the 3-, 5- and 10-year periods ended 6/30/03, the MORNINGSTAR
ratings were: Franklin MicroCap Value Fund 5, 4, N/A. The following
fund was rated against 229; 204; 104 Muni National Long funds for the
respective 3-, 5- and 10-year periods ended 6/30/03, as applicable.
For the 3-, 5- and 10-year periods ended 6/30/03, the MORNINGSTAR
ratings were: Franklin Federal Tax-Free Income Fund 3, 3, 4. The
following fund was rated against 77; 71; 38 Muni New-York Long funds
for the respective 3-, 5- and 10-year periods ended 6/30/03, as
applicable. For the 3-, 5- and 10-year periods ended 6/30/03, the
MORNINGSTAR ratings were: Franklin New York Tax-Free Income Fund 3, 4,
5.
8. Source: LIPPER(R)INC., 6/30/03. 6 out of 6 eligible Mutual Series
equity funds ranked in the top two Lipper quartiles for the one-year
period, 6 of 6 ranked in the top LIPPER quartile for the three-year
period, 6 of 6 ranked in the top quartile for the five-year period and
4 of 4 ranked in the top quartile for the 10-year period in their
respective LIPPER peer groups.
9. Source: LIPPER(R)INC., 6/30/03. Of the eligible Franklin Templeton
non-money market taxable income funds tracked by LIPPER, 5, 3, 3 and 3
funds ranked in the top quartile and 3, 5, 3 and 1 fund(s) ranked in
the second quartile, for the one-, three-, five- and 10-year periods,
respectively, in their respective LIPPER peer groups.
10. Source: LIPPER(R)INC., 6/30/03. Franklin Income Fund Class A ranked #2
in a universe of 142 funds in LIPPER's "Income Funds" group for the
one-year period, 4 of 88 for the three-year period, 4 of 73 for the
five-year period and 6 of 17 for the 10-year period.
11. Source: LIPPER(R)INC., 6/30/03. Franklin Large Cap Value Fund Class A
ranked 142 in a universe of 387 funds in LIPPER's "Large-Cap Value
Funds" group for the one-year period and 1 of 288 for the three-year
period.
12. Source: LIPPER(R)INC., 06/30/03. Franklin MicroCap Value Fund Class A
ranked 124 in a universe of 250 funds in LIPPER's "Small-Cap Value
Funds" group for the one-year period, 13 of 179 for the three-year
period and 28 of 120 for the five-year period. Franklin MicroCap Value
Fund has experienced negative shorter-term fund performance.
13. Source: LIPPER(R)INC., 6/30/03. Franklin U.S. Government Securities
Fund Class A ranked 23 in a universe of 65 funds in LIPPER's "GNMA
Funds" group for the one-year period, 17 of 53 for the three-year
period, 15 of 46 for the five-year period and 5 of 24 for the 10-year
period.
14. Source: LIPPER(R)INC., 6/30/03. Franklin Strategic Income Fund Class A
ranked 7 in a universe of 110 funds in LIPPER's "Multi-Sector Income
Funds" group for the one-year period, 24 of 101 for the three-year
period and 15 of 85 for the five-year period.
15. For more information on The Customer Respect Group, visit
http://www.customerrespect.com.
9
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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, and
Franklin's most recent Form 10-Q.
* Continuing volatility in the equity markets have caused the levels of
our assets under management to fluctuate significantly.
* 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.
* The ongoing threat of terrorism and the recent reports of accounting
irregularities may adversely affect the general economy, financial and
capital markets and our business.
* We face risks associated with conducting operations in numerous
foreign countries.
* Our emerging market portfolios and related revenues are vulnerable to
market-specific political and economic risks.
* Our ability to meet cash needs depends upon certain factors, including
our asset value, credit worthiness and the market value of our stock.
* Technology and operating risk and limitations could constrain our
operations.
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