EXHIBIT 99.1
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One Franklin Parkway
San Mateo, CA 94403-1906
tel 650/312.2000
franklintempleton.com
[LOGO OMITTED]
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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 SECOND QUARTER RESULTS
SAN MATEO, CA, APRIL 22, 2004 - Franklin Resources, Inc. (Franklin
Templeton Investments) (NYSE: BEN) today reported net income of $172.8 million,
or $0.68 per share diluted on revenues of $874.6 million for the quarter ended
March 31, 2004. The results for the quarter ended March 31, 2004 include a
charge to income of $60.0 million ($45.6 million, net of taxes), which
represents the costs that can be currently estimated related to ongoing
governmental investigations of the company as previously disclosed in the
Statement on Current Industry Issues on the company website at
franklintempleton.com. The results for the quarter also include an insurance
recovery of $30.3 million ($18.3 million, net of taxes) related to the September
11, 2001 terrorist attacks. Net income was $172.3 million, or $0.69 per share
diluted, on revenues of $806.2 million in the preceding quarter. In the
comparable quarter a year ago, net income was $109.6 million, or $0.43 per share
diluted on revenues of $613.1 million. Operating income increased 1% this
quarter over the prior quarter and increased 61% over the same quarter in the
prior year.
As of March 31, 2004, assets under management by the company's subsidiaries
were $351.6 billion, as compared to $336.7 billion last quarter and $252.4
billion at this time last year. Simple monthly average assets under management
during the current quarter were $345.7 billion compared to $318.7 billion in the
preceding quarter and $255.1 billion in the same quarter a year ago. Equity
assets now comprise 55% of total assets under management as compared to 54% last
quarter and 47% at March 31, 2003. Fixed-income assets now comprise 28% of total
assets under management as compared to 29% last quarter and 36% at the same time
last year. As of March 31, 2004, 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 $6.5 billion for
the current quarter compared to $7.4 billion for the prior quarter and $2.5
billion for the comparable quarter a year ago.
FISCAL SECOND QUARTER 2004 HIGHLIGHTS
PERFORMANCE AND PRODUCTS /1,/2
(See important footnotes in "Supplemental Information" section at the end of
the release.)
* Over 70% of Franklin Templeton's long-term mutual fund assets were in funds
ranked in the top two quartiles of their respective LIPPER peer groups for
the one-year period ended March 31, 2004, and over 90% of the long-term
mutual fund assets were in funds ranked in the top two quartiles for the
three-, five- and 10-year periods. /3,/4
* Over 90% of Franklin tax-free 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 March 31, 2004.
Furthermore, 90% of Franklin tax-free income mutual fund assets were in
funds rated either 4 or 5 stars overall by MORNINGSTAR as of March 31,
2004. /3,/5,/8
* More than 70% of Franklin's 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 March 31, 2004, and over 85% of Franklin equity
mutual fund assets were in funds ranked in the top two quartiles for the
three-, five- and 10-year periods. /3,/6
* Franklin Income Fund, the company's largest fund with $21 billion in
assets, ranked in the top 5% of the LIPPER Income Funds peer group over the
one-, three- and five-year periods and ranked in the top third for the
10-year period ended March 31, 2004. The fund, managed by Franklin
Advisers, Inc., also received Lipper Leaders awards for Consistent Return,
Preservation, and Total Return, and was rated 5 stars overall by
MORNINGSTAR among 199 Conservative Allocation funds as of March 31, 2004.
/7,/8,/9
* Franklin Flex Cap Growth Fund, managed by Franklin Advisers, Inc., ranked
in the top third of the LIPPER Multi-Cap Growth Funds peer group over the
one-, three-, five- and 10-year periods ended March 31, 2004. The fund also
received a Lipper Leaders award for Consistent Return as of March 31, 2004.
/9,/10
* Franklin Small-Mid Cap Growth Fund and Franklin Small Cap Growth Fund II,
managed by Franklin Advisers, Inc., ranked in the top two quartiles of the
LIPPER Mid-Cap Growth Funds peer group and Small-Cap Growth Funds peer
group, respectively, for the one- and three-year periods, and the Franklin
Small-Mid Cap Growth Fund ranked in the top quartile for the five- and
10-year periods ended March 31, 2004. The funds also received Lipper
Leaders awards for Consistent Return as of March 31, 2004. /9,/11
* Templeton Growth Fund and Templeton World Fund ranked in the top two
quartiles of the Lipper Global Funds peer group for the one-year period,
and ranked in the top quartile for the three-, five- and 10-year periods
ended March 31, 2004. The funds, managed by Templeton Global Advisors
Limited, received Lipper Leaders awards for Total Return and were rated 4
stars overall by Morningstar among 283 World Stock funds as of March 31,
2004. /8,/9,/12
Performance quoted represents past performance, which does not guarantee future
results. Investment return and principal value will fluctuate with market
conditions so that you may have a gain or loss when you sell your shares.
Current performance may be lower or higher than performance quoted. Please call
Franklin Templeton Investments at 1-800/DIAL BEN(R) (1-800/342-5236) or visit
franklintempleton.com for most recent month-end performance.
GLOBAL BUSINESS DEVELOPMENTS
* Franklin Templeton's assets under management in Switzerland and Japan
crossed the $1 billion and $3 billion marks, respectively.
* Franklin Templeton Investments (India) is now the largest private sector
mutual fund group as of March 31, 2004.
* Franklin Federal Intermediate-Term Tax-Free Income Fund, Franklin Income
Fund and Franklin Templeton Hard Currency Fund received awards for
delivering consistent returns that put them at the top of their respective
peer groups at the 2004 U.S. LIPPER Fund Awards.
* FONDSPROFESSIONELL, the leading IFA magazine in Germany and Austria, ranked
Franklin Templeton #1 out of 25 firms for the second consecutive year and
additionally recognized the company with the Service-Award 2004 for the
third consecutive year. FINANZEN MAGAZINE also named Franklin Templeton as
Fund Company of the Year 2003 for the second consecutive year.
2
* Templeton Emerging Markets Investment Trust (TEMIT) was named Best Large
Trust 2003 by INVESTMENT TRUSTS magazine, a UK publication.
* Franklin Advisers, Inc. was awarded the GLOBAL INVESTOR Award for
Investment Excellence in U.S. Equities based on a survey of global
consultants.
* Franklin Templeton Investments received numerous awards from LIPPER and S&P
for outstanding fund performance in Taiwan.
* Franklin Templeton was named among the three most popular fund families
among brokers by "kasina".
* Over 1,000 financial advisors attended Franklin Templeton's Chief
Investment Officers' conference call, a 20% increase over the previous
semi-annual call.
3
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED SIX MONTHS ENDED
management and per share data) MARCH 31 MARCH 31
-------------------------------------------------------------
% %
2004 2003 CHANGE 2004 2003 CHANGE
---- ---- ------ ---- ---- ------
OPERATING REVENUES
Investment management fees $499,595 $347,897 44% $954,103 $699,309 36%
Underwriting and distribution fees 294,003 194,158 51% 566,755 380,095 49%
Shareholder servicing fees 61,724 55,315 12% 123,062 103,366 19%
Consolidated sponsored investment products income, net 1,483 -- N/A 1,509 -- N/A
Other, net 17,836 15,765 13% 35,381 35,816 (1%)
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TOTAL OPERATING REVENUES 874,641 613,135 43% 1,680,810 1,218,586 38%
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OPERATING EXPENSES
Underwriting and distribution 264,368 173,068 53% 510,247 341,915 49%
Compensation and benefits 197,139 160,809 23% 386,343 319,927 21%
Information systems, technology and occupancy 68,413 71,404 (4%) 138,061 143,999 (4%)
Advertising and promotion 31,935 24,226 32% 53,167 46,870 13%
Amortization of deferred sales commissions 24,997 17,040 47% 47,445 33,085 43%
Amortization of intangible assets 4,401 4,238 4% 8,803 8,472 4%
Provision for governmental investigations, proceedings
and actions 60,000 -- N/A 60,000 -- N/A
September 11, 2001 recovery, net (30,277) -- N/A (30,277) -- N/A
Other 28,455 22,644 26% 58,951 45,157 31%
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TOTAL OPERATING EXPENSES 649,431 473,429 37% 1,232,740 939,425 31%
-------------------------------------------------------------
OPERATING INCOME 225,210 139,706 61% 448,070 279,161 61%
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OTHER INCOME (EXPENSES)
Consolidated sponsored investment products gains, net 5,819 -- N/A 9,819 -- N/A
Investment and other income 28,946 15,558 86% 45,137 27,861 62%
Interest expense (7,799) (3,037) 157% (14,910) (6,069) 146%
-------------------------------------------------------------
OTHER INCOME, NET 26,966 12,521 115% 40,046 21,792 84%
-------------------------------------------------------------
Income before taxes on income and cumulative effect
of an accounting change 252,176 152,227 66% 488,116 300,953 62%
Taxes on income 79,385 42,624 86% 147,808 81,590 81%
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INCOME BEFORE CUMULATIVE EFFECT OF AN ACCOUNTING
CHANGE, NET OF TAX 172,791 109,603 58% 340,308 219,363 55%
Cumulative effect of an accounting change, net of tax -- -- -- 4,779 -- N/A
-------------------------------------------------------------
NET INCOME $172,791 $109,603 58% $345,087 $219,363 57%
=============================================================
BASIC EARNINGS PER SHARE
Income before cumulative effect of an accounting change $0.69 $0.43 60% $1.37 $0.85 61%
Cumulative effect of an accounting change -- -- -- 0.02 -- N/A
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Net income $0.69 $0.43 60% $1.39 $0.85 64%
=============================================================
DILUTED EARNINGS PER SHARE
Income before cumulative effect of an accounting change $0.68 $0.43 58% $1.35 $0.85 59%
Cumulative effect of an accounting change -- -- -- 0.02 -- N/A
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Net income $0.68 $0.43 58% $1.37 $0.85 61%
=============================================================
DIVIDENDS PER SHARE $0.085 $0.075 13% $0.170 $0.150 13%
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 249,549 257,023 (3%) 248,649 257,315 (3%)
Diluted 252,823 257,654 (2%) 251,588 257,918 (2%)
4
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED SIX MONTHS ENDED
management and per share data) MARCH 31 MARCH 31
-------------------------------------------------------------
% %
2004 2003 CHANGE 2004 2003 CHANGE
---- ---- ------ ---- ---- ------
OPERATING MARGIN /1 26% 23% -- 27% 23% --
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $336,721 $257,735 31% $301,857 $247,760 22%
Sales 25,832 17,619 47% 49,661 34,743 43%
Reinvested distributions 900 630 43% 2,820 2,067 36%
Redemptions (19,355) (15,136) 28% (35,803) (31,171) 15%
Distributions (1,379) (1,157) 19% (4,038) (3,252) 24%
Acquisitions -- -- -- 878 -- N/A
Appreciation/(depreciation) 8,923 (7,313) N/A 36,267 2,231 1526%
END OF PERIOD $351,642 $252,378 39% $351,642 $252,378 39%
SIMPLE MONTHLY AVERAGE FOR PERIOD $345,740 $255,056 36% $331,599 $254,551 30%
/1 Operating margin: Operating income divided by total operating revenues.
5
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except
per share data) THREE MONTHS ENDED
31-MAR-04 31-DEC-03 % CHANGE 30-SEP-03 30-JUN-03 31-MAR-03
OPERATING REVENUES
Investment management fees $499,595 $454,508 10% $411,469 $376,553 $347,897
Underwriting and distribution fees 294,003 272,752 8% 238,947 225,632 194,158
Shareholder servicing fees 61,724 61,338 1% 56,429 57,430 55,315
Consolidated sponsored investment products
income, net 1,483 26 5,604% 93 -- --
Other, net 17,836 17,545 2% 15,017 24,292 15,765
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TOTAL OPERATING REVENUES 874,641 806,169 8% 721,955 683,907 613,135
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OPERATING EXPENSES
Underwriting and distribution 264,368 245,879 8% 211,857 207,071 173,068
Compensation and benefits 197,139 189,204 4% 166,725 163,230 160,809
Information systems, technology and
occupancy 68,413 69,648 (2%) 70,871 70,459 71,404
Advertising and promotion 31,935 21,232 50% 23,248 22,281 24,226
Amortization of deferred sales commissions 24,997 22,448 11% 21,257 19,159 17,040
Amortization of intangible assets 4,401 4,402 -- 4,245 4,244 4,238
Provision for governmental investigations,
proceedings and actions 60,000 -- N/A -- -- --
September 11, 2001 recovery, net (30,277) -- N/A (4,401) -- --
Other 28,455 30,496 (7%) 28,613 28,088 22,644
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TOTAL OPERATING EXPENSES 649,431 583,309 11% 522,415 514,532 473,429
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OPERATING INCOME 225,210 222,860 1% 199,540 169,375 139,706
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OTHER INCOME (EXPENSES)
Consolidated sponsored investment products
gains, net 5,819 4,000 45% 1,645 -- --
Investment and other income 28,946 16,191 79% 20,116 22,415 15,558
Interest expense (7,799) (7,111) 10% (7,105) (6,736) (3,037)
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OTHER INCOME, NET 26,966 13,080 106% 14,656 15,679 12,521
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Income before taxes on income and
cumulative effect of an accounting change 252,176 235,940 7% 214,196 185,054 152,227
Taxes on income 79,385 68,423 16% 62,117 53,666 42,624
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INCOME BEFORE CUMULATIVE EFFECT OF AN
ACCOUNTING CHANGE, NET OF TAX 172,791 167,517 3% 152,079 131,388 109,603
Cumulative effect of an accounting change,
net of tax -- 4,779 (100%) -- -- --
-----------------------------------------------------------------
NET INCOME $172,791 $172,296 -- $152,079 $131,388 $109,603
=================================================================
BASIC EARNINGS PER SHARE
Income before cumulative effect of an
accounting change $0.69 $0.68 1% $0.61 $0.52 $0.43
Cumulative effect of an accounting change -- 0.02 (100%) -- -- --
-----------------------------------------------------------------
Net income $0.69 $0.70 (1%) $0.61 $0.52 $0.43
=================================================================
DILUTED EARNINGS PER SHARE
Income before cumulative effect of an
accounting change $0.68 $0.67 1% $0.61 $0.52 $0.43
Cumulative effect of an accounting change -- 0.02 (100%) -- -- --
-----------------------------------------------------------------
Net income $0.68 $0.69 (1%) $0.61 $0.52 $0.43
=================================================================
DIVIDENDS PER SHARE $0.085 $0.085 -- $0.075 $0.075 $0.075
6
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except
Per share data)
THREE MONTHS ENDED
%
31-MAR-04 31-DEC-03 CHANGE 30-SEP-03 30-JUN-03 31-MAR-03
--------- --------- ------ --------- --------- ---------
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 249,549 247,758 1% 247,761 252,633 257,023
Diluted 252,823 250,234 1% 249,263 253,254 257,654
OPERATING MARGIN /2 26% 28% -- 28% 25% 23%
EMPLOYEES 6,484 6,462 -- 6,504 6,540 6,619
BILLABLE SHAREHOLDER ACCOUNTS (in millions) 16.0 15.1 6% 14.2 15.2 14.3
2 Operating margin: Operating income divided by total operating revenues.
7
FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts in thousands)
PRELIMINARY
MARCH 31, SEPTEMBER 30,
2004 2003
---- ----
ASSETS
Current assets $3,514,651 $2,968,827
Banking/ finance assets 1,001,222 918,425
Non-current assets 3,352,136 3,083,497
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TOTAL ASSETS $7,868,009 $6,970,749
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $739,082 $488,526
Banking/ finance liabilities 843,419 801,980
Non-current liabilities 1,422,615 1,344,791
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Total liabilities 3,005,116 2,635,297
Minority interest 62,040 25,344
Total stockholders' equity 4,800,853 4,310,108
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,868,009 $6,970,749
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ENDING SHARES OF COMMON STOCK OUTSTANDING 249,934 245,932
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8
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) 31-MAR-04 31-DEC-03 30-SEP-03 30-JUN-03 31-MAR-03
-------------------------------------------------------------
EQUITY
Global/international $126.7 $118.5 $99.8 $91.6 $75.7
Domestic (U.S.) 66.0 63.6 55.4 50.7 42.7
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Total equity 192.7 182.1 155.2 142.3 118.4
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HYBRID/BALANCED 54.1 51.1 45.8 42.8 37.4
FIXED-INCOME
Tax-free 53.0 52.4 52.2 53.6 52.3
Taxable:
Domestic (U.S.) 32.4 32.2 31.1 31.4 29.4
Global/international 13.6 13.1 11.8 10.9 9.4
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Total fixed-income 99.0 97.7 95.1 95.9 91.1
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MONEY MARKET 5.8 5.8 5.8 6.0 5.5
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TOTAL ENDING ASSETS $351.6 $336.7 $301.9 $287.0 $252.4
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SIMPLE MONTHLY AVERAGE ASSETS $345.7 $318.7 $294.0 $272.2 $255.1
=============================================================
ASSETS UNDER MANAGEMENT & FLOWS
(in billions) THREE MONTHS ENDED
31-MAR-04 31-DEC-03 % CHANGE 31-MAR-03 % CHANGE
--------- --------- -------- --------- --------
BEGINNING ASSETS UNDER MANAGEMENT $336.7 $301.9 12% $257.7 31%
U.S. RETAIL ASSETS
Beginning assets $208.0 $188.0 11% $162.7 28%
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Sales 14.5 13.4 8% 9.2 58%
Reinvested distributions 0.7 1.7 (59%) 0.6 17%
Redemptions (9.1) (8.4) 8% (7.7) 18%
Distributions (1.2) (2.3) (48%) (1.1) 9%
Acquisitions -- -- -- -- --
Appreciation/(depreciation) 5.6 15.6 (64%) (3.3) N/A
---------------------------------------------------------------------------------------------
Ending assets 218.5 208.0 5% 160.4 36%
---------------------------------------------------------------------------------------------
OTHER ASSETS, INCLUDING INTERNATIONAL AND INSTITUTIONAL
Beginning assets $128.7 $113.9 13% $95.0 35%
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Sales 11.3 10.4 9% 8.4 35%
Reinvested distributions 0.2 0.2 -- -- N/A
Redemptions (10.2) (8.0) 28% (7.4) 38%
Distributions (0.2) (0.4) (50%) -- N/A
Acquisitions -- 0.9 (100%) -- --
Appreciation/(depreciation) 3.3 11.7 (72%) (4.0) N/A
---------------------------------------------------------------------------------------------
Ending assets 133.1 128.7 3% 92.0 45%
---------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $351.6 $336.7 4% $252.4 39%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $336.7 $301.9 12% $257.7 31%
--------------------------------------------------------------------------------------------
Sales 25.8 23.8 8% 17.6 47%
Reinvested distributions 0.9 1.9 (53%) 0.6 50%
Redemptions (19.3) (16.4) 18% (15.1) 28%
Distributions (1.4) (2.7) (48%) (1.1) 27%
Acquisitions -- 0.9 (100%) -- --
Appreciation/(depreciation) 8.9 27.3 (67%) (7.3) N/A
--------------------------------------------------------------------------------------------
ENDING ASSETS $351.6 $336.7 4% $252.4 39%
--------------------------------------------------------------------------------------------
Note: Institutional assets totaling approximately $26.7 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 March 31, 2004, were approximately $117.0 billion, of which high net-worth assets comprised $11.1
billion.
9
ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
THREE MONTHS ENDED 31-MAR-04 31-DEC-03 31-MAR-03
- ------------------ --------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning assets $118.5 $99.8 $81.4
------------------------------------------------------------------------------------------
Sales 9.9 8.8 5.4
Reinvested distributions 0.2 0.9 --
Redemptions (6.4) (5.6) (4.6)
Distributions (0.2) (1.1) --
Acquisitions -- 0.3 --
Appreciation/(depreciation) 4.7 15.4 (6.5)
------------------------------------------------------------------------------------------
Ending assets 126.7 118.5 75.7
------------------------------------------------------------------------------------------
DOMESTIC (U.S.) EQUITY
Beginning assets 63.6 55.4 43.5
------------------------------------------------------------------------------------------
Sales 4.3 4.1 2.3
Reinvested distributions -- 0.2 --
Redemptions (3.9) (2.8) (2.1)
Distributions -- (0.3) --
Acquisitions -- -- --
Appreciation/(depreciation) 2.0 7.0 (1.0)
------------------------------------------------------------------------------------------
Ending assets 66.0 63.6 42.7
------------------------------------------------------------------------------------------
HYBRID/BALANCED
Beginning assets 51.1 45.8 38.3
------------------------------------------------------------------------------------------
Sales 3.7 3.3 1.9
Reinvested distributions 0.2 0.3 0.1
Redemptions (1.2) (1.0) (1.2)
Distributions (0.3) (0.4) (0.2)
Acquisitions -- -- --
Appreciation/(depreciation) 0.6 3.1 (1.5)
------------------------------------------------------------------------------------------
Ending assets 54.1 51.1 37.4
------------------------------------------------------------------------------------------
TAX-FREE INCOME
Beginning assets 52.4 52.2 52.1
------------------------------------------------------------------------------------------
Sales 1.4 1.2 1.4
Reinvested distributions 0.3 0.3 0.4
Redemptions (1.5) (1.5) (1.4)
Distributions (0.6) (0.6) (0.6)
Acquisitions -- -- --
Appreciation 1.0 0.8 0.4
------------------------------------------------------------------------------------------
Ending assets 53.0 52.4 52.3
------------------------------------------------------------------------------------------
TAXABLE FIXED-INCOME
Beginning assets 45.3 42.9 36.4
------------------------------------------------------------------------------------------
Sales 4.3 4.1 4.3
Reinvested distributions 0.2 0.2 0.1
Redemptions (3.9) (3.2) (2.9)
Distributions (0.3) (0.3) (0.3)
Acquisitions -- 0.6 --
Appreciation 0.4 1.0 1.2
------------------------------------------------------------------------------------------
Ending assets 46.0 45.3 38.8
------------------------------------------------------------------------------------------
MONEY MARKET
Beginning assets 5.8 5.8 6.0
------------------------------------------------------------------------------------------
Sales 2.2 2.3 2.3
Reinvested distributions -- -- --
Redemptions (2.4) (2.3) (2.9)
Distributions -- -- --
Acquisitions -- -- --
Appreciation 0.2 -- 0.1
------------------------------------------------------------------------------------------
Ending assets 5.8 5.8 5.5
------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $351.6 $336.7 $252.4
10
CONFERENCE CALL INFORMATION
- ---------------------------
On Thursday, April 22, 2004, Franklin Resources, Inc., [NYSE:BEN] will
release its second fiscal quarter 2004 financial results. Martin Flanagan and
Greg Johnson, co-CEOs 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
April 29, 2004. The replay can also be accessed by calling (800) 642-1687 in the
U.S. or (706) 645-9291 internationally using access code #6656313, after 5:30
p.m. Eastern Time on April 22, 2004, through 11:59 p.m. Eastern Time on April
29, 2004.
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. [NYSE:BEN], is a global investment organization
operating as Franklin Templeton Investments. Franklin Templeton Investments
provides global and domestic investment management solutions managed by its
Franklin, Templeton, Mutual Series and Fiduciary Trust investment teams. The San
Mateo, CA-based company has more than 50 years of investment experience and over
$351 billion in assets under management as of March 31, 2004. For more
information, please call 1-800/DIAL BEN(R) or visit franklintempleton.com.
SUPPLEMENTAL INFORMATION
Investors should carefully consider a fund's investment goals, risks, charges
and expenses before investing. To obtain a prospectus, which contains this and
other information, for any U.S. Franklin Templeton fund, an investor should talk
to their financial advisors or call Franklin Templeton Distributors, Inc. at
1-800/DIAL BEN(R) (1-800/342-5236). Please read the prospectus carefully before
investing.
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. 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. MORNINGSTAR ratings and LIPPER rankings for Franklin Templeton funds
are based on Class A shares, with the exception of LIPPER rankings for
Mutual Series funds, which are based on Class Z shares. Class Z shares
are offered to qualified investors only and have no sales charges nor
Rule 12b-1 fees. Franklin Templeton funds are compared against a
universe of all share classes. All Franklin Templeton Class A (Class
Z) asset data is based on 2/29/04 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.
3. LIPPER calculates averages by taking all the funds and share classes
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 1064. 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., 3/31/04. Of the eligible Franklin Templeton
long-term mutual funds tracked by LIPPER, 40, 51, 49 and 26 funds
ranked in the top quartile and 24, 22, 23 and 28 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., 3/31/04. Of the eligible Franklin Templeton
non-money market tax-free funds tracked by LIPPER, 27, 24, 20 and 14
funds ranked in the top quartile and 5, 9, 11 and 16 funds ranked in
the second quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective LIPPER peer groups. Source:
MORNINGSTAR(C) 3/31/04. Two tax-free mutual funds received 5 stars, 22
received 4 stars, and nine received 3 stars.
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6. Source: LIPPER(R) Inc., 3/31/04. Of the eligible Franklin equity funds
tracked by LIPPER, 5, 10, 14 and 3 funds ranked in the top quartile
and 11, 7, 5 and 8 funds ranked in the second quartile, for the one-,
three-, five- and 10-year periods, respectively, for their respective
LIPPER peer groups.
7. Source: LIPPER(R) Inc., 3/31/04. Franklin Income Fund Class A ranked 8
in a universe of 159 funds in LIPPER'S "Income Funds" group for the
one-year period, 5 of 108 for the three-year period, 2 of 78 for the
five-year period and 6 of 19 for the 10-year period.
8. Source: MORNINGSTAR(C)3/31/04. 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 199; 146; 40 Conservative
Allocation funds for the respective 3-, 5- and 10-year periods ended
3/31/04, as applicable. For the 3-, 5- and 10-year periods ended
3/31/04, the MORNINGSTAR ratings were: Franklin Income Fund 5, 5, 4.
The following funds were rated against 283; 215; 62 World Stock funds
for the respective 3-, 5- and 10-year periods ended 3/31/04, as
applicable. For the 3-, 5- and 10-year periods ended 3/31/04, the
MORNINGSTAR ratings were: Templeton Growth Fund 4, 4, 4 and Templeton
World Fund 4, 4, 4.
9. Source: LIPPER(R) Inc., 3/31/04. A LIPPER LEADERS DISTINCTION DOES NOT
IMPLY THAT A FUND NAMED AS A LIPPER LEADER HAD THE BEST PERFORMANCE IN
ITS CATEGORY. Lipper Leaders Awards are based on Class A shares.
LIPPER ratings for Consistent Return reflect funds' historical
risk-adjusted returns, adjusted for volatility, relative to peers.
LIPPER ratings for Total Return reflect funds' historical total return
performance relative to peers. LIPPER ratings for Preservation reflect
funds' historical loss avoidance relative to other funds within the
same asset class. Preservation ratings are relative, rather than
absolute, measures, and funds named Lipper Leaders for Preservation
may still experience losses periodically; those losses may be larger
for equity and mixed equity funds than for fixed income funds. THE
LIPPER RATINGS ARE SUBJECT TO CHANGE EVERY MONTH AND ARE BASED ON AN
EQUAL-WEIGHTED AVERAGE OF PERCENTILE RANKS FOR THE CONSISTENT RETURN,
TOTAL RETURN AND PRESERVATION METRICS OVER THREE-, FIVE-, AND 10-YEAR
PERIODS (IF APPLICABLE). 20% of funds in each peer group are named
Lipper Leaders, the next 20% receive a score of 2, the middle 20% are
scored 3, the next 20% are scored 4, and the lowest 20% are scored 5.
Franklin Flex Cap Growth Fund, in LIPPER'S Multi-Cap Growth
classification, received the following ratings for the 3-, 5-, and
10-year periods respectively: Consistent Return: Lipper Leader [313],
Lipper Leader [184], Lipper Leader [57]. Franklin Small-Mid Cap Growth
Fund, in LIPPER'S Mid-Cap Growth classification, received the
following ratings for the 3-, 5-, and 10-year periods respectively:
Consistent Return: Lipper Leader [392], Lipper Leader [242], Lipper
Leader [78]. Franklin Small Cap Growth Fund II, in LIPPER'S Small-Cap
Growth classification, received the following rating for the 3-year
period: Consistent Return: 2 [386]. Franklin Income Fund, in LIPPER'S
Income classification, received the following ratings for the 3-, 5-,
and 10-year periods respectively: Consistent Return: Lipper Leader
[105], Lipper Leader [77], 2 [16]; Preservation (in Mixed Equity asset
class): 2 [936], Lipper Leader [745], Lipper Leader [261]; Total
Return: Lipper Leader [108], Lipper Leader [78], 2 [19]. Templeton
Growth Fund, in LIPPER'S Global classification, received the following
ratings for the 3-, 5-, and 10-year periods respectively: Total
Return: Lipper Leader [254], Lipper Leader [180], Lipper Leader [49].
Templeton World Fund, in LIPPER'S Global classification, received the
following ratings for the 3-, 5-, and 10-year periods respectively:
Total Return: Lipper Leader [254], 2 [180], 2 [49]. LIPPER ratings are
not intended to predict future results, and Lipper does not guarantee
the accuracy of this information. More information is available at
WWW.LIPPERLEADERS.COM. Lipper Leader Copyright 2003, Reuters, All
Rights Reserved.
10. Source: LIPPER(R) Inc., 3/31/04. Franklin Flex Cap Growth Fund Class A
ranked 113 in a universe of 422 funds in LIPPER'S "Multi-Cap Growth
Funds" group for the one-year period, 39 of 340 for the three-year
period, 12 of 191 for the five-year period and 4 of 70 for the 10-year
period.
11. Source: LIPPER(R) Inc., 3/31/04. Franklin Small-Mid Cap Growth Fund
Class A ranked 227 in a universe of 497 funds in LIPPER'S "Mid-Cap
Growth Funds" group for the one-year period, 170 of 399 for the
three-year period, 61 of 249 for the five-year period and 14 of 92 for
the 10-year period. Franklin Small Cap Growth Fund II Class A ranked
146 in a universe of 488 funds in LIPPER'S "Small-Cap Growth Funds"
group for the one-year period and 139 of 406 for the three-year
period.
12. Source: LIPPER(R) Inc., 3/31/04. Templeton Growth Fund Class A ranked
124 in a universe of 322 funds in LIPPER'S "Global Funds" group for
the one-year period, 20 of 254 for the three-year period, 18 of 180
for the five-year period and 7 of 49 for the 10-year period. Templeton
World Fund Class A ranked 93 in a universe of 322 funds in LIPPER'S
"Global Funds" group for the one-year period, 30 of 254 for the
three-year period, 38 of 180 for the five-year period and 10 of 49 for
the 10-year period.
12
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, some of which are listed below, 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 and other risks,
uncertainties and other important factors are described in more detail 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,
2003, and Franklin's most recent Form 10-Q.
* Governmental investigations, ongoing and proposed governmental
actions, and regulatory examinations of the company and its business
activities as described in more detail in the company's press releases
and regulatory filings as well as civil litigation arising out of or
related to such matters could adversely impact our assets under
management, increase costs and negatively impact the profitability of
the company and future financial results.
* Regulatory or legislative actions and reforms, particularly those
specifically focused on the mutual fund industry, could adversely
impact our assets under management, increase costs and negatively
impact the profitability of the company and future financial results.
* Volatility in the equity markets may cause 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.
* We face risks associated with conducting operations in numerous
foreign countries.
* Certain of the portfolios we manage, including our emerging market
portfolios and related revenues, are vulnerable to market-specific
political or 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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