EXHIBIT 99.1
------------
One Franklin Parkway
San Mateo, CA 94403-1906
tel 650/312.2000
franklintempleton.com
[LOGO OMITTED]
Contact: Franklin Resources, Inc.
Investor Relations: Greta Gahl (650) 312-4091
Corporate Communications: Holly Gibson Brady (650) 312-4701
franklintempleton.com
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
FRANKLIN RESOURCES, INC. ANNOUNCES THIRD QUARTER RESULTS
SAN MATEO, CA, JULY 22, 2004 - Franklin Resources, Inc. (Franklin Templeton
Investments) (NYSE: BEN) today reported net income of $173.9 million, or $0.69
per share diluted on revenues of $862.8 million for the quarter ended June 30,
2004. The results for the quarter ended June 30, 2004 include a charge to income
of $21.5 million ($17.3 million, net of taxes), which represents the costs that
can be currently estimated relating to anticipated settlement of governmental
investigations concerning payments to securities dealers who sell fund shares, a
matter that has been previously disclosed in the company's public announcements.
This $21.5 million charge is in addition to the $60.0 million charge to income
taken by the company in the quarter ended March 31, 2004 primarily for ongoing
governmental investigations, proceedings and actions related to market timing
allegations.
In the quarter ended March 31, 2004, net income was $172.8 million, or
$0.68 per share diluted, on revenues of $874.6 million. The results for the
quarter ended March 31, 2004 also included an insurance recovery of $30.3
million ($18.3 million, net of taxes) related to the September 11, 2001
terrorist attacks. For the quarter ended June 30, 2003, net income was $131.4
million, or $0.52 per share diluted on revenues of $683.9 million. Operating
income increased 7% this quarter over the prior quarter and increased 42% over
the same quarter in the prior year.
As of June 30, 2004, assets under management by the company's subsidiaries
were $350.8 billion, as compared to $351.6 billion last quarter and $287.0
billion at this time last year. Simple monthly average assets under management
during the current quarter were $347.8 billion compared to $345.7 billion in the
preceding quarter and $272.2 billion in the same quarter a year ago. Equity
assets now comprise 56% of total assets under management as compared to 55% last
quarter and 50% at June 30, 2003. Fixed-income assets now comprise 27% of total
assets under management as compared to 28% last quarter and 33% at the same time
last year. As of June 30, 2004, hybrid/balanced assets account for 16% of total
assets under management as compared to 15% last quarter and 15% at June 30,
2003. Sales exceeded redemptions by $2.0 billion for the current quarter
compared to $6.5 billion for the prior quarter and $5.9 billion for the
comparable quarter a year ago.
FISCAL THIRD QUARTER 2004 HIGHLIGHTS
PERFORMANCE AND PRODUCTS1,2
(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 June 30, 2004, while 95% 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
* More than 90% of Franklin Templeton's fixed-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, 2004.
/3,/5
* Over 85% 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-,
three-, five- and 10-year periods ended June 30, 2004. /3,/6
* Franklin Income Fund, the company's largest fund with $23 billion in
assets, ranked in the top third of the LIPPER Income Funds peer group in
total return for the one-, three-, five- and 10-year periods ended June 30,
2004. /7 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 205 Conservative Allocation
funds as of June 30, 2004./11,/12
* Franklin Flex Cap Growth Fund, managed by Franklin Advisers, Inc., ranked
in the top quartile of the LIPPER Multi-Cap Growth Funds peer group in
total return for the one-, three-, five- and 10-year periods ended June 30,
2004. /8 The fund also received LIPPER Leaders awards for Consistent Return
and Total Return as of June 30, 2004. /11
* Templeton World Fund, managed by Templeton Global Advisors Limited, ranked
in the top two quartiles of the LIPPER Global Multi-Cap Core Funds peer
group in total return for the one-, three-, five- and 10-year periods ended
June 30, 2004. /9 The fund was rated 4 stars overall by MORNINGSTAR among
273 World Stock funds as of June 30, 2004. /12
* Franklin Federal Tax-Free Income Fund, managed by Franklin Advisers, Inc.,
ranked in the top two quartiles of the LIPPER General Municipal Debt Funds
peer group in total return for the one-, three-, five- and 10-year periods
ended June 30, 2004. /10 The fund was rated 4 stars overall by MORNINGSTAR
among 260 Muni National Long funds as of June 30, 2004. /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
* Total SICAV assets under management exceeded $20 billion during the
quarter, an increase of over 55% from the same period last year.
* Franklin Templeton Canada was rated "Best Fund Family" in MONEYSENSE
MAGAZINE'S April/May 2004 issue.
* A leading insurance company funded two sub-advised mandates, totaling $431
million in assets, for variable insurance sub-accounts.
* Launched Fiduciary Trust Global Bond Fund, an Australian domiciled trust,
to Australian and New Zealand investors.
* In a quarterly survey of shareholder satisfaction conducted by National
Quality Review (NQR), a third party customer service evaluator, 95% of
customers responding to the survey said that they would recommend Franklin
Templeton Investments to others, and 92% rated their overall satisfaction a
four or five (five representing "Completely Satisfied").
* Introduced Fiduciary Trust Company of Canada to offer investment
management, trust and executor, and other wealth management services to
Canada's high net-worth market in July 2004.
* In their most recent quarterly ranking of financial services web sites,
DALBAR ranked franklintempleton.com among the top five web sites in the
"Mutual Fund Consumer" and "Mutual Fund Financial Professional" categories.
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED NINE MONTHS ENDED
management and per share data) JUNE 30 JUNE 30
------------------------------------------------------------
% %
2004 2003 CHANGE 2004 2003 CHANGE
---- ---- ------ ---- ---- ------
OPERATING REVENUES
Investment management fees $505,409 $376,553 34% $1,459,512 $1,075,862 36%
Underwriting and distribution fees 277,790 225,632 23% 844,545 605,727 39%
Shareholder servicing fees 60,582 57,430 5% 183,644 160,796 14%
Consolidated sponsored investment products income, net 1,136 -- N/A 2,645 -- N/A
Other, net 17,836 24,292 (27%) 53,217 60,108 (11%)
------------------------------------------------------------
TOTAL OPERATING REVENUES 862,753 683,907 26% 2,543,563 1,902,493 34%
------------------------------------------------------------
OPERATING EXPENSES
Underwriting and distribution 247,930 207,071 20% 758,177 548,986 38%
Compensation and benefits 193,532 163,230 19% 579,875 483,157 20%
Information systems, technology and occupancy 67,464 70,459 (4%) 205,525 214,458 (4%)
Advertising and promotion 31,139 22,281 40% 84,306 69,151 22%
Amortization of deferred sales commissions 24,688 19,159 29% 72,133 52,244 38%
Amortization of intangible assets 4,398 4,244 4% 13,201 12,716 4%
Provision for governmental investigations, proceedings
and actions 21,500 -- N/A 81,500 -- N/A
September 11, 2001 recovery, net -- -- -- (30,277) -- N/A
Other 31,116 28,088 11% 90,067 73,245 23%
------------------------------------------------------------
TOTAL OPERATING EXPENSES 621,767 514,532 21% 1,854,507 1,453,957 28%
------------------------------------------------------------
OPERATING INCOME 240,986 169,375 42% 689,056 448,536 54%
------------------------------------------------------------
OTHER INCOME (EXPENSES)
Consolidated sponsored investment products (losses)
gains, net (3,463) -- N/A 6,356 -- N/A
Investment and other income 14,300 22,415 (36%) 59,437 50,276 18%
Interest expense (7,832) (6,736) 16% (22,742) (12,805) 78%
------------------------------------------------------------
OTHER INCOME, NET 3,005 15,679 (81%) 43,051 37,471 15%
------------------------------------------------------------
Income before taxes on income and cumulative effect of
an accounting change 243,991 185,054 32% 732,107 486,007 51%
Taxes on income 70,095 53,666 31% 217,903 135,256 61%
------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF AN ACCOUNTING
CHANGE, NET OF TAX 173,896 131,388 32% 514,204 350,751 47%
Cumulative effect of an accounting change, net of tax -- -- -- 4,779 -- N/A
------------------------------------------------------------
NET INCOME $173,896 $131,388 32% $518,983 $350,751 48%
============================================================
BASIC EARNINGS PER SHARE
Income before cumulative effect of an accounting change $0.70 $0.52 35% $2.06 $1.37 50%
Cumulative effect of an accounting change -- -- -- 0.02 -- N/A
------------------------------------------------------------
Net income $0.70 $0.52 35% $2.08 $1.37 52%
============================================================
DILUTED EARNINGS PER SHARE
Income before cumulative effect of an accounting change $0.69 $0.52 33% $2.04 $1.37 49%
Cumulative effect of an accounting change -- -- -- 0.02 -- N/A
------------------------------------------------------------
Net income $0.69 $0.52 33% $2.06 $1.37 50%
============================================================
DIVIDENDS PER SHARE $0.085 $0.075 13% $0.255 $0.225 13%
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 249,802 252,633 (1%) 249,032 255,721 (3%)
Diluted 253,116 253,254 -- 252,244 256,343 (2%)
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except assets under THREE MONTHS ENDED NINE MONTHS ENDED
management and per share data) JUNE 30 JUNE 30
------------------------------------------------------------
% %
2004 2003 CHANGE 2004 2003 CHANGE
---- ---- ------ ---- ---- ------
OPERATING MARGIN /1 28% 25% -- 27% 24% --
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $351,642 $252,378 39% $301,857 $247,760 22%
Sales 23,822 21,956 8% 73,483 56,699 30%
Reinvested distributions 1,224 967 27% 4,044 3,034 33%
Redemptions (21,846) (15,997) 37% (57,649) (47,168) 22%
Distributions (1,730) (1,514) 14% (5,768) (4,766) 21%
Acquisitions -- -- -- 878 -- N/A
(Depreciation)/appreciation (2,337) 29,164 N/A 33,930 31,395 8%
END OF PERIOD $350,775 $286,954 22% $350,775 $286,954 22%
SIMPLE MONTHLY AVERAGE FOR PERIOD $347,793 $272,174 28% $336,072 $261,817 28%
/1 Operating margin: Operating income divided by total operating revenues.
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except
per share data) THREE MONTHS ENDED
30-JUN-04 31-MAR-04 % CHANGE 31-DEC-03 30-SEP-03 30-JUN-03
--------- --------- -------- --------- --------- ---------
OPERATING REVENUES
Investment management fees $505,409 $499,595 1% $454,508 $411,469 $376,553
Underwriting and distribution fees 277,790 294,003 (6%) 272,752 238,947 225,632
Shareholder servicing fees 60,582 61,724 (2%) 61,338 56,429 57,430
Consolidated sponsored investment products
income, net 1,136 1,483 (23%) 26 93 --
Other, net 17,836 17,836 -- 17,545 15,017 24,292
-----------------------------------------------------------------
TOTAL OPERATING REVENUES 862,753 874,641 (1%) 806,169 721,955 683,907
-----------------------------------------------------------------
OPERATING EXPENSES
Underwriting and distribution 247,930 264,368 (6%) 245,879 211,857 207,071
Compensation and benefits 193,532 197,139 (2%) 189,204 166,725 163,230
Information systems, technology and
occupancy 67,464 68,413 (1%) 69,648 70,871 70,459
Advertising and promotion 31,139 31,935 (2%) 21,232 23,248 22,281
Amortization of deferred sales commissions 24,688 24,997 (1%) 22,448 21,257 19,159
Amortization of intangible assets 4,398 4,401 -- 4,402 4,245 4,244
Provision for governmental investigations,
proceedings and actions 21,500 60,000 (64%) -- -- --
September 11, 2001 recovery, net -- (30,277) (100%) -- (4,401) --
Other 31,116 28,455 9% 30,496 28,613 28,088
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TOTAL OPERATING EXPENSES 621,767 649,431 (4%) 583,309 522,415 514,532
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OPERATING INCOME 240,986 225,210 7% 222,860 199,540 169,375
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OTHER INCOME (EXPENSES)
Consolidated sponsored investment products
(losses) gains, net (3,463) 5,819 N/A 4,000 1,645 --
Investment and other income 14,300 28,946 (51%) 16,191 20,116 22,415
Interest expense (7,832) (7,799) -- (7,111) (7,105) (6,736)
-----------------------------------------------------------------
OTHER INCOME, NET 3,005 26,966 (89%) 13,080 14,656 15,679
-----------------------------------------------------------------
Income before taxes on income and
cumulative effect of an accounting change 243,991 252,176 (3%) 235,940 214,196 185,054
Taxes on income 70,095 79,385 (12%) 68,423 62,117 53,666
-----------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF AN
ACCOUNTING CHANGE, NET OF TAX 173,896 172,791 1% 167,517 152,079 131,388
Cumulative effect of an accounting change,
net of tax -- -- -- 4,779 -- --
-----------------------------------------------------------------
NET INCOME $173,896 $172,791 1% $172,296 $152,079 $131,388
=================================================================
BASIC EARNINGS PER SHARE
Income before cumulative effect of an
accounting change $0.70 $0.69 1% $0.68 $0.61 $0.52
Cumulative effect of an accounting change -- -- -- 0.02 -- --
-----------------------------------------------------------------
Net income $0.70 $0.69 1% $0.70 $0.61 $0.52
=================================================================
DILUTED EARNINGS PER SHARE
Income before cumulative effect of an
accounting change $0.69 $0.68 1% $0.67 $0.61 $0.52
Cumulative effect of an accounting change -- -- -- 0.02 -- --
-----------------------------------------------------------------
Net income $0.69 $0.68 1% $0.69 $0.61 $0.52
=================================================================
DIVIDENDS PER SHARE $0.085 $0.085 -- $0.085 $0.075 $0.075
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED
30-JUN-04 31-MAR-04 % CHANGE 31-DEC-03 30-SEP-03 30-JUN-03
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 249,802 249,549 -- 247,758 247,761 252,633
Diluted 253,116 252,823 -- 250,234 249,263 253,254
OPERATING MARGIN /2 28% 26% -- 28% 28% 25%
EMPLOYEES 6,557 6,484 1% 6,462 6,504 6,540
BILLABLE SHAREHOLDER ACCOUNTS (in millions) 15.9 16.0 (1%) 15.1 14.2 15.2
/2 Operating margin: Operating income divided by total operating revenues.
FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts in thousands)
PRELIMINARY
JUNE 30, SEPTEMBER 30,
2004 2003
---- ----
ASSETS
Current assets $3,699,501 $2,968,827
Banking/ finance assets 955,883 918,425
Non-current assets 3,419,202 3,083,497
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TOTAL ASSETS $8,074,586 $6,970,749
- ---------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $856,267 $488,526
Banking/ finance liabilities 803,269 801,980
Non-current liabilities 1,434,001 1,344,791
- ---------------------------------------------------------------------------------------
Total liabilities 3,093,537 2,635,297
Minority interest 75,780 25,344
Total stockholders' equity 4,905,269 4,310,108
- ---------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,074,586 $6,970,749
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
ENDING SHARES OF COMMON STOCK OUTSTANDING 249,361 245,932
- ---------------------------------------------------------------------------------------
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) 30-JUN-04 31-MAR-04 % CHANGE 31-DEC-03 30-SEP-03 30-JUN-03
--------------------------------------------------------------------
EQUITY
Global/international $128.6 $126.7 1% $118.5 $99.8 $91.6
Domestic (U.S.) 66.3 66.0 -- 63.6 55.4 50.7
------------------------------------------------------------------
Total equity 194.9 192.7 1% 182.1 155.2 142.3
------------------------------------------------------------------
HYBRID/BALANCED 55.9 54.1 3% 51.1 45.8 42.8
FIXED-INCOME
Tax-free 49.9 53.0 (6%) 52.4 52.2 53.6
Taxable:
Domestic (U.S.) 30.1 32.4 (7%) 32.2 31.1 31.4
Global/international 13.6 13.6 -- 13.1 11.8 10.9
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Total fixed-income 93.6 99.0 (5%) 97.7 95.1 95.9
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MONEY MARKET 6.4 5.8 10% 5.8 5.8 6.0
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TOTAL ENDING ASSETS $350.8 $351.6 -- $336.7 $301.9 $287.0
------------------------------------------------------------------
SIMPLE MONTHLY AVERAGE ASSETS $347.8 $345.7 1% $318.7 $294.0 $272.2
==================================================================
ASSETS UNDER MANAGEMENT & FLOWS
(in billions) THREE MONTHS ENDED
30-JUN-04 31-MAR-04 % CHANGE 30-JUN-03 % CHANGE
BEGINNING ASSETS UNDER MANAGEMENT $351.6 $336.7 4% $252.4 39%
U.S. RETAIL ASSETS
Beginning assets $218.5 $208.0 5% $160.4 36%
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Sales 11.0 14.5 (24%) 11.7 (6%)
Reinvested distributions 1.1 0.7 57% 0.9 22%
Redemptions (10.0) (9.1) 10% (8.5) 18%
Distributions (1.6) (1.2) (33%) (1.4) 14%
Acquisitions -- -- -- -- --
(Depreciation)/appreciation (1.4) 5.6 N/A 16.9 N/A
---------------------------------------------------------------------------------------------
Ending assets 217.6 218.5 -- 180.0 21%
---------------------------------------------------------------------------------------------
OTHER ASSETS, INCLUDING INTERNATIONAL AND INSTITUTIONAL
Beginning assets $133.1 $128.7 3% $92.0 45%
---------------------------------------------------------------------------------------------
Sales 12.8 11.3 13% 10.2 25%
Reinvested distributions 0.1 0.2 (50%) 0.1 --
Redemptions (11.8) (10.2) 16% (7.5) 57%
Distributions (0.1) (0.2) (50%) (0.1) --
Acquisitions -- -- -- -- --
(Depreciation)/appreciation (0.9) 3.3 N/A 12.3 N/A
---------------------------------------------------------------------------------------------
Ending assets 133.2 133.1 -- 107.0 24%
---------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $350.8 $351.6 -- $287.0 22%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $351.6 $336.7 4% $252.4 39%
--------------------------------------------------------------------------------------------
Sales 23.8 25.8 (8%) 21.9 9%
Reinvested distributions 1.2 0.9 33% 1.0 20%
Redemptions (21.8) (19.3) 13% (16.0) 36%
Distributions (1.7) (1.4) 21% (1.5) 13%
Acquisitions -- -- -- -- --
(Depreciation)/appreciation (2.3) 8.9 N/A 29.2 N/A
--------------------------------------------------------------------------------------------
ENDING ASSETS $350.8 $351.6 -- $287.0 22%
--------------------------------------------------------------------------------------------
Note: Institutional assets totaling approximately $26.9 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 June 30, 2004, were approximately $115.3 billion,
of which high net-worth assets comprised $11.5 billion.
ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
THREE MONTHS ENDED 30-JUN-04 31-MAR-04 30-JUN-03
- ------------------ --------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning assets $126.7 $118.5 $75.7
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Sales 8.8 9.9 6.3
Reinvested distributions 0.1 0.2 0.1
Redemptions (6.3) (6.4) (5.7)
Distributions (0.2) (0.2) (0.1)
Acquisitions -- -- --
(Depreciation)/appreciation (0.5) 4.7 15.3
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Ending assets 128.6 126.7 91.6
------------------------------------------------------------------------------------------
DOMESTIC (U.S.) EQUITY
Beginning assets 66.0 63.6 42.7
------------------------------------------------------------------------------------------
Sales 3.7 4.3 3.2
Reinvested distributions 0.2 -- 0.2
Redemptions (4.0) (3.9) (2.1)
Distributions (0.2) -- (0.2)
Acquisitions -- -- --
Appreciation 0.6 2.0 6.9
------------------------------------------------------------------------------------------
Ending assets 66.3 66.0 50.7
------------------------------------------------------------------------------------------
HYBRID/BALANCED
Beginning assets 54.1 51.1 37.4
------------------------------------------------------------------------------------------
Sales 3.1 3.7 2.6
Reinvested distributions 0.3 0.2 0.2
Redemptions (1.2) (1.2) (1.1)
Distributions (0.4) (0.3) (0.3)
Acquisitions -- -- --
Appreciation -- 0.6 4.0
------------------------------------------------------------------------------------------
Ending assets 55.9 54.1 42.8
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TAX-FREE INCOME
Beginning assets 53.0 52.4 52.3
------------------------------------------------------------------------------------------
Sales 1.1 1.4 1.7
Reinvested distributions 0.3 0.3 0.3
Redemptions (2.2) (1.5) (1.5)
Distributions (0.6) (0.6) (0.6)
Acquisitions -- -- --
(Depreciation)/appreciation (1.7) 1.0 1.4
------------------------------------------------------------------------------------------
Ending assets 49.9 53.0 53.6
------------------------------------------------------------------------------------------
TAXABLE FIXED-INCOME
Beginning assets 46.0 45.3 38.8
------------------------------------------------------------------------------------------
Sales 4.2 4.3 5.4
Reinvested distributions 0.3 0.2 0.2
Redemptions (5.3) (3.9) (3.3)
Distributions (0.3) (0.3) (0.3)
Acquisitions -- -- --
(Depreciation)/appreciation (1.2) 0.4 1.5
------------------------------------------------------------------------------------------
Ending assets 43.7 46.0 42.3
------------------------------------------------------------------------------------------
MONEY MARKET
Beginning assets 5.8 5.8 5.5
------------------------------------------------------------------------------------------
Sales 2.9 2.2 2.7
Reinvested distributions -- -- --
Redemptions (2.8) (2.4) (2.3)
Distributions -- -- --
Acquisitions -- -- --
Appreciation 0.5 0.2 0.1
------------------------------------------------------------------------------------------
Ending assets 6.4 5.8 6.0
------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $350.8 $351.6 $287.0
CONFERENCE CALL INFORMATION
- ---------------------------
On Thursday, July 22, 2004, Franklin Resources, Inc., [NYSE:BEN] will
release its third 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 July
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 #8471551, after 5:30 p.m.
Eastern Time on July 22, 2004, through 11:59 p.m. Eastern Time on July 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
$350 billion in assets under management as of June 30, 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
5/31/04 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 143 peer groups of long-term U.S. retail mutual funds, and
the groups vary in size from 4 to 1024. 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., 6/30/04. Of the eligible Franklin Templeton
long-term mutual funds tracked by LIPPER, 29, 43, 41 and 24 funds ranked in
the top quartile and 42, 29, 34 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., 6/30/04. Of the eligible Franklin Templeton
non-money market fixed-income funds tracked by LIPPER, 18, 25, 19 and 17
funds ranked in the top quartile and 22, 17, 21 and 17 funds ranked in the
second quartile, for the one-, three-, five- and 10-year periods,
respectively, for their respective LIPPER peer groups.
6. Source: LIPPER(R) Inc., 6/30/04. Of the eligible Franklin equity funds
tracked by Lipper, 7, 10, 14 and 3 funds ranked in the top quartile and 15,
7, 7 and 7 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., 6/30/04. Franklin Income Fund Class A ranked 27 in
a universe of 159 funds in LIPPER'S "Income Funds" group for the one-year
period, 3 of 110 for the three-year period, 2 of 79 for the five-year
period and 6 of 19 for the 10-year period.
8. Source: LIPPER(R) Inc., 6/30/04. Franklin Flex Cap Growth Fund Class A
ranked 51 in a universe of 434 funds in LIPPER'S "Multi-Cap Growth Funds"
group for the one-year period, 36 of 342 for the three-year period, 14 of
200 for the five-year period and 4 of 74 for the 10-year period.
9. Source: LIPPER(R) Inc., 6/30/04. Templeton World Fund Class A ranked 9 in a
universe of 47 funds in LIPPER'S "Global Multi-Cap Core Funds" group for
the one-year period, 11 of 39 for the three-year period, 12 of 29 for the
five-year period and 2 of 6 for the 10-year period.
10. Source: LIPPER(R) Inc., 6/30/04. Franklin Federal Tax-Free Income Fund
Class A ranked 39 in a universe of 295 funds in LIPPER'S "General Municipal
Debt Funds" group for the one-year period, 84 of 267 for the three-year
period, 80 of 231 for the five-year period and 36 of 124 for the 10-year
period.
11. Source: LIPPER(R)Inc., 6/30/04. 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.
Bracketed information represents the number of funds in each category.
Franklin Flex Cap Growth Fund, in LIPPER'S Multi-Cap Growth classification,
received the following ratings for the three-, five-, and 10-year periods
respectively: Total Return: LIPPER Leader [342], LIPPER Leader [200],
LIPPER Leader [74]; Consistent Return: LIPPER Leader [323], LIPPER Leader
[195], LIPPER Leader score of 3 [58]. Franklin Income Fund, in LIPPER'S
Income classification, received the following ratings for the three-,
five-, and 10-year periods respectively: Consistent Return: LIPPER Leader
[107], LIPPER Leader [78], LIPPER Leader score of 2 [16]; Preservation (in
Mixed Equity asset class): LIPPER Leader score of 2 [936], Lipper Leader
[740], LIPPER Leader [268]; Total Return: LIPPER Leader [110], LIPPER
Leader [79], LIPPER Leader score of 2 [19]. 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.
12. Source: [MORNINGSTAR](C)6/30/04. 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 205; 159; 44
Conservative Allocation funds for the respective three-, five- and 10-year
periods ended 6/30/04, as applicable. For the three-, five- and 10-year
periods ended 6/30/04, the MORNINGSTAR ratings were: Franklin Income Fund
5, 5, 4. The following fund was rated against 273; 204; 66 World Stock
funds for the respective three-, five- and 10-year periods ended 6/30/04,
as applicable. For the three-, five- and 10-year periods ended 6/30/04, the
MORNINGSTAR ratings were: Templeton World Fund 4, 3, 4. Franklin Federal
Tax-Free Income Fund was rated against 260; 231; 134 Muni National Long
funds for the respective three-, five- and 10-year periods ended 6/30/04,
as applicable. For the three-, five- and 10-year periods ended 6/30/04, the
MORNINGSTAR ratings were: Franklin Federal Tax-Free Income Fund 3, 3, 4.
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, settlements of such 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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