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 SECOND QUARTER RESULTS
SAN MATEO, CA, APRIL 28, 2005 - Franklin Resources, Inc. (Franklin Templeton
Investments) (NYSE: BEN) today reported net income of $221.3 million, or $0.85
per share diluted on revenues of $1,051.2 million for the quarter ended March
31, 2005. The results for the quarter ended March 31, 2005, include a charge to
income of $42.0 million ($26.5 million, net of taxes), representing the
previously announced settlement with the Ontario Securities Commission
concerning market timing activity. In the quarter ended December 31, 2004, net
income was $240.0 million, or $0.92 per share diluted, on revenues of $986.0
million. For the quarter ended March 31, 2004, net income was $172.8 million, or
$0.67 per share diluted on revenues of $879.0 million. Operating income
decreased 9% this quarter over the prior quarter and increased 21% over the same
quarter in the prior year.
As of March 31, 2005, assets under management by the company's subsidiaries were
$412.1 billion, as compared to $402.2 billion last quarter and $351.6 billion at
this time last year. Simple monthly average assets under management during the
current quarter were $407.4 billion compared to $381.0 billion in the preceding
quarter and $345.7 billion in the same quarter a year ago. Equity assets now
comprise 57% of total assets under management as compared to 57% last quarter
and 55% at March 31, 2004. Fixed-income assets now comprise 24% of total assets
under management as compared to 25% last quarter and 28% at the same time last
year. As of March 31, 2005, hybrid assets account for 17% of total assets under
management as compared to 17% last quarter and 15% at March 31, 2004. Sales
exceeded redemptions by $11.5 billion for the current quarter compared to $8.8
billion for the prior quarter and $6.5 billion for the comparable quarter a year
ago.
On March 15, 2005, our Board of Directors declared a regular quarterly cash
dividend of $0.10 per share and a special cash dividend of $2.00 per share, each
payable on April 15, 2005 to stockholders of record on March 31, 2005. The
quarterly dividend of $0.10 is equivalent to the dividend paid for the prior
quarter and represents an 18% increase over the dividend paid for the same
quarter last year. The special dividend is an extra dividend intended to return
additional value to our stockholders.
-1-
FISCAL SECOND QUARTER 2005 HIGHLIGHTS
PERFORMANCE AND PRODUCTS /1, /2
(See important footnotes in "Supplemental Information" section at the end of the
release.)
* Over 80% 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, 2005, and over 90% of 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 95% 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 March 31,
2005. /3, /5
* Over 75% of Franklin Templeton'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, 2005, and over 85% of 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 over $32 billion in
assets as of March 31, 2005, ranked in the top quintile of the LIPPER
Income Funds peer group for total return among 216, 128, 88 and 23 funds
for the one-, three-, five- and 10-year periods. /3, /7 The fund also
received LIPPER Leader awards for Total Return, Consistent Return and
Preservation, and was rated 5 stars overall by MORNINGSTAR among 238
Conservative Allocation funds as of March 31, 2005. /12, /13
* Franklin Flex Cap Growth Fund ranked in the top two quartiles of the LIPPER
Multi-Cap Growth Funds peer group for total return among 432, 368, 245 and
73 funds for the one-, three-, five- and 10-year periods ended March 31,
2005. /3,/8 The fund received a LIPPER Leader award for Total Return as of
March 31, 2005. /12
* Mutual Shares Fund ranked in the top two quartiles of the LIPPER Multi-Cap
Value Funds peer group for total return among 478 funds for the one-year
period ended March 31, 2005, and ranked in the top quintile for total
return among 365, 248 and 89 funds over the three-, five- and 10-year
periods. /3, /9 Mutual Shares Fund received LIPPER Leader awards for Total
Return and Preservation, and was rated 4 stars overall by MORNINGSTAR among
796 Large Value funds as of March 31, 2005. /12, /13
* Templeton Growth Fund ranked in the top quartile of the LIPPER Global
Large-Cap Value Funds peer group for total return among 22, 22, 17 and 3
funds for the one-, three-, five- and 10-year periods ended March 31, 2005.
/3, /10 Templeton Growth Fund received LIPPER Leader awards for Total
Return, Preservation and Consistent Return and was rated 4 stars overall by
MORNINGSTAR among 280 World Stock funds as of March 31, 2005. /12, /13
* Franklin Federal Tax-Free Income Fund ranked in the top quartile of the
LIPPER General Municipal Debt Funds peer group for total return among 284,
261, 228 and 144 funds over the one-, three-, five- and 10-year periods
ended March 31, 2005. /3, /11 The fund received a LIPPER Leader award for
Tax Efficiency and was rated 4 stars overall by MORNINGSTAR among 255 Muni
National Long funds as of March 31, 2005. /12, /13
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 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 India Flexi Cap Fund, a diversified equity fund that invests
in Indian stocks across the entire market capitalization range, was
launched for Indian investors, raising approximately $450 million.
* Franklin Templeton Investments Japan reached $4 billion in assets
under management.
* For the second consecutive year, Franklin Templeton Canada was rated
"Best Fund Family" by MoneySense Magazine.
* 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 they would
recommend Franklin Templeton Investments to others.
* Franklin Templeton India was awarded 2005 Mutual Fund of the Year
Award by the CNBC-TV 18-CRISIL Mutual Fund Awards.
* DEUTSCHEN FONDSPREIS, a German fund professional magazine, rated
Franklin Templeton Investments #1 in service quality for the fourth
consecutive year.
* Fiduciary Trust received the 2004 Merit Award for three-year
performance in global fixed income from Asia Asset Management Fund
Managers Awards.
-2-
* Franklin Templeton Investments was awarded first place in the 2005
Sacramento Workplace Excellence Leader (SWEL) awards from the
Sacramento Area Human Resource Association.
* In its most recent quarterly ranking of financial services web sites,
DALBAR ranked franklintempleton.com #2, an improvement from last
quarter's fourth place ranking.
* franklintempleton.com was recognized by kasina as one of the Top 10
Sites for Financial Professionals in 2004.
-3-
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
(Dollar amounts in thousands except per share data) THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31 MARCH 31
---------------------------------------------------------------------
% %
2005 2004 CHANGE 2005 2004 CHANGE
---- ---- ------ ---- ---- ------
OPERATING REVENUES
Investment management fees $592,674 $499,595 19% $1,159,157 $954,103 21%
Underwriting and distribution fees 377,341 298,357 26% 717,719 574,606 25%
Shareholder servicing fees 64,312 61,724 4% 127,479 123,062 4%
Consolidated sponsored investment products income,
net 1,361 1,483 (8%) 1,976 1,509 31%
Other, net 15,493 17,836 (13%) 30,872 35,381 (13%)
---------------------------------------------------------------------
TOTAL OPERATING REVENUES 1,051,181 878,995 20% 2,037,203 1,688,661 21%
---------------------------------------------------------------------
OPERATING EXPENSES
Underwriting and distribution 347,376 268,057 30% 658,798 516,785 27%
Compensation and benefits 217,909 197,139 11% 429,416 386,343 11%
Information systems, technology and occupancy 69,808 68,413 2% 136,613 138,061 (1%)
Advertising and promotion 31,108 31,935 (3%) 57,216 53,167 8%
Amortization of deferred sales commissions 30,617 24,997 22% 61,995 47,445 31%
Amortization of intangible assets 4,349 4,401 (1%) 8,760 8,803 --
Provision for governmental investigations, proceedings
and actions 42,043 60,000 (30%) 42,043 60,000 (30%)
September 11, 2001 recovery, net -- (30,277) (100%) -- (30,277) (100%)
Other 34,690 29,120 19% 68,997 60,264 14%
---------------------------------------------------------------------
TOTAL OPERATING EXPENSES 777,900 653,785 19% 1,463,838 1,240,591 18%
---------------------------------------------------------------------
---------------------------------------------------------------------
OPERATING INCOME 273,281 225,210 21% 573,365 448,070 28%
---------------------------------------------------------------------
OTHER INCOME (EXPENSES)
Consolidated sponsored investment products (losses)
gains, net (1,552) 5,819 N/A 14,611 9,819 49%
Investment and other income 38,576 28,946 33% 65,965 45,137 46%
Interest expense (8,241) (7,799) 6% (16,228) (14,910) 9%
---------------------------------------------------------------------
OTHER INCOME, NET 28,783 26,966 7% 64,348 40,046 61%
---------------------------------------------------------------------
Income before taxes on income and cumulative effect
of an accounting change 302,064 252,176 20% 637,713 488,116 31%
Taxes on income 80,790 79,385 2% 176,450 147,808 19%
---------------------------------------------------------------------
INCOME BEFORE CUMULATIVE EFFECT OF AN ACCOUNTING
CHANGE, NET OF TAX 221,274 172,791 28% 461,263 340,308 36%
Cumulative effect of an accounting change, net of tax -- -- -- -- 4,779 (100%)
---------------------------------------------------------------------
NET INCOME $221,274 $172,791 28% $461,263 $345,087 34%
=====================================================================
BASIC EARNINGS PER SHARE
Income before cumulative effect of an accounting
change $0.88 $0.69 28% $1.84 $1.37 34%
Cumulative effect of an accounting change -- -- -- -- 0.02 (100%)
---------------------------------------------------------------------
Net income $0.88 $0.69 28% $1.84 $1.39 32%
=====================================================================
DILUTED EARNINGS PER SHARE /1
Income before cumulative effect of an accounting
change $0.85 $0.67 27% $1.77 $1.32 34%
Cumulative effect of an accounting change -- -- -- -- 0.02 (100%)
---------------------------------------------------------------------
Net income $0.85 $0.67 27% $1.77 $1.34 32%
=====================================================================
DIVIDENDS PER SHARE $0.100 $0.085 18% $0.200 $0.170 18%
SPECIAL CASH DIVIDEND 2.000 -- N/A 2.000 -- N/A
-4-
FRANKLIN RESOURCES, INC.
CONSOLIDATED INCOME STATEMENTS
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31 MARCH 31
---------------------------------------------------------------------
% %
2005 2004 CHANGE 2005 2004 CHANGE
---- ---- ------ ---- ---- ------
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 250,692 249,549 -- 250,553 248,649 1%
Diluted /1 263,386 261,032 1% 262,998 259,797 1%
OPERATING MARGIN /2 26% 26% -- 28% 27% --
ASSETS UNDER MANAGEMENT (in millions)
Beginning of period $402,206 $336,721 19% $361,860 $301,857 20%
Sales 32,911 25,832 27% 61,298 49,661 23%
Reinvested distributions 1,081 900 20% 5,369 2,820 90%
Redemptions (21,373) (19,355) 10% (41,010) (35,803) 15%
Distributions (1,548) (1,379) 12% (6,799) (4,038) 68%
Acquisitions 83 -- N/A 83 878 (91%)
(Depreciation)/appreciation (1,303) 8,923 N/A 31,256 36,267 (14%)
END OF PERIOD $412,057 $351,642 17% $412,057 $351,642 17%
SIMPLE MONTHLY AVERAGE FOR PERIOD $407,376 $345,740 18% $393,065 $331,599 19%
/1 Diluted earnings per share and diluted average shares outstanding for all periods shown reflect the adoption of the Emerging
Issues Task Force Issue No. 04-8, "The Effect of Contingency Convertible Debt on Diluted Earnings Per Share."
/2 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-05 31-DEC-04 % CHANGE 30-SEP-04 30-JUN-04 31-MAR-04
----------- ----------- -------- ---------- ---------- ----------
OPERATING REVENUES
Investment management fees $592,674 $566,483 5% $511,116 $505,409 $499,595
Underwriting and distribution fees 377,341 340,378 11% 293,464 282,852 298,357
Shareholder servicing fees 64,312 63,167 2% 60,419 60,582 61,724
Consolidated sponsored investment products
income, net 1,361 615 121% 874 1,136 1,483
Other, net 15,493 15,379 1% 15,859 17,836 17,836
-------------------------------------------------------------------------------
TOTAL OPERATING REVENUES 1,051,181 986,022 7% 881,732 867,815 878,995
-------------------------------------------------------------------------------
OPERATING EXPENSES
Underwriting and distribution 347,376 311,422 12% 266,076 252,250 268,057
Compensation and benefits 217,909 211,507 3% 189,563 193,532 197,139
Information systems, technology and
occupancy 69,808 66,805 4% 68,015 67,464 68,413
Advertising and promotion 31,108 26,108 19% 27,711 31,139 31,935
Amortization of deferred sales commissions 30,617 31,378 (2%) 26,760 24,688 24,997
Amortization of intangible assets 4,349 4,411 (1%) 4,403 4,398 4,401
Provision for governmental investigations,
proceedings and actions 42,043 -- N/A 23,500 21,500 60,000
September 11, 2001 recovery, net -- -- -- -- -- (30,277)
Other 34,690 34,307 1% 33,935 31,858 29,120
-------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 777,900 685,938 13% 639,963 626,829 653,785
-------------------------------------------------------------------------------
OPERATING INCOME 273,281 300,084 (9%) 241,769 240,986 225,210
-------------------------------------------------------------------------------
OTHER INCOME (EXPENSES)
Consolidated sponsored investment products
(losses) gains, net (1,552) 16,163 N/A (2,963) (3,463) 5,819
Investment and other income 38,576 27,389 41% 30,869 14,300 28,946
Interest expense (8,241) (7,987) 3% (7,916) (7,832) (7,799)
-------------------------------------------------------------------------------
OTHER INCOME, NET 28,783 35,565 (19%) 19,990 3,005 26,966
-------------------------------------------------------------------------------
Income before taxes 302,064 335,649 (10%) 261,759 243,991 252,176
Taxes on income 80,790 95,660 (16%) 74,078 70,095 79,385
-------------------------------------------------------------------------------
NET INCOME $221,274 $239,989 (8%) $187,681 $173,896 $172,791
===============================================================================
BASIC EARNINGS PER SHARE $0.88 $0.96 (8%) $0.75 $0.70 $0.69
DILUTED EARNINGS PER SHARE /3 0.85 0.92 (8%) 0.73 0.67 0.67
DIVIDENDS PER SHARE $0.100 $0.100 -- $0.085 $0.085 $0.085
SPECIAL CASH DIVIDEND 2.000 -- N/A -- -- --
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 250,692 250,418 -- 249,564 249,802 249,549
Diluted /3 263,386 262,629 -- 260,638 261,325 261,032
OPERATING MARGIN /4 26% 30% -- 27% 28% 26%
EMPLOYEES 6,868 6,779 1% 6,696 6,557 6,484
BILLABLE SHAREHOLDER ACCOUNTS (in millions) 17.0 15.9 7% 15.3 15.9 16.0
/3 Diluted earnings per share and diluted average shares outstanding for all periods shown reflect the adoption of the
Emerging Issues Task Force Issue No. 04-8, "The Effect of Contingently Convertible Debt on Diluted Earnings Per Share".
/4 Operating margin: Operating income divided by total operating revenues.
-6-
FRANKLIN RESOURCES, INC.
PRELIMINARY SUMMARY BALANCE SHEET
(Dollar amounts and number of shares in thousands)
PRELIMINARY
MARCH 31, 2005 SEPTEMBER 30, 2004
-------------- ------------------
ASSETS
Current assets $4,378,228 $4,044,212
Banking/finance assets 924,484 825,844
Non-current assets 3,396,743 3,358,079
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $8,699,455 $8,228,135
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $1,296,622 $921,115
Banking/finance liabilities 757,968 658,717
Non-current liabilities 1,493,920 1,465,430
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,548,510 3,045,262
Minority interest 89,658 76,089
Total stockholders' equity 5,061,287 5,106,784
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $8,699,455 $8,228,135
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
ENDING SHARES OF COMMON STOCK OUTSTANDING 251,071 249,680
- -------------------------------------------------------------------------------------------------------------------------
-7-
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions) 31-MAR-05 31-DEC-04 % CHANGE 30-SEP-04 30-JUN-04 31-MAR-04
--------------------------------------------------------------------------------
EQUITY
Global/international $163.8 $155.7 5% $132.9 $128.6 $126.7
Domestic (U.S.) 72.3 73.3 (1%) 66.4 66.3 66.0
--------------------------------------------------------------------------------
Total equity 236.1 229.0 3% 199.3 194.9 192.7
--------------------------------------------------------------------------------
HYBRID 69.1 66.4 4% 59.0 55.9 54.1
FIXED-INCOME
Tax-free 51.9 51.8 -- 51.3 49.9 53.0
Taxable:
Domestic (U.S.) 32.2 32.5 (1%) 31.3 30.1 32.4
Global/international 16.8 16.3 3% 14.2 13.6 13.6
--------------------------------------------------------------------------------
Total fixed-income 100.9 100.6 1% 96.8 93.6 99.0
--------------------------------------------------------------------------------
MONEY MARKET 6.0 6.2 (3%) 6.8 6.4 5.8
--------------------------------------------------------------------------------
TOTAL ENDING ASSETS $412.1 $402.2 2% $361.9 $350.8 $351.6
--------------------------------------------------------------------------------
SIMPLE MONTHLY AVERAGE ASSETS $407.4 $381.0 7% $353.3 $347.8 $345.7
================================================================================
ASSETS UNDER MANAGEMENT & FLOWS
(in billions) THREE MONTHS ENDED
31-MAR-05 31-DEC-04 % CHANGE 31-MAR-04 % CHANGE
--------- --------- -------- --------- --------
BEGINNING ASSETS UNDER MANAGEMENT $402.2 $361.9 11% $336.7 19%
U.S. RETAIL ASSETS
Beginning assets $246.5 $224.3 10% $208.0 19%
-----------------------------------------------------------------------------------------------------------------
Sales 15.1 13.9 9% 14.5 4%
Reinvested distributions 0.8 3.9 79% 0.7 14%
Redemptions (9.1) (8.2) 11% (9.1) --
Distributions (1.3) (4.9) (73%) (1.2) 8%
Acquisitions -- -- -- -- --
(Depreciation)/appreciation (1.2) 17.5 N/A 5.6 N/A
-----------------------------------------------------------------------------------------------------------------
Ending assets $250.8 $246.5 2% $218.5 15%
-----------------------------------------------------------------------------------------------------------------
OTHER ASSETS, INCLUDING INTERNATIONAL AND INSTITUTIONAL
Beginning assets $155.7 $137.6 13% $128.7 21%
-----------------------------------------------------------------------------------------------------------------
Sales 17.8 14.5 23% 11.3 58%
Reinvested distributions 0.3 0.4 (25%) 0.2 50%
Redemptions (12.3) (11.5) 7% (10.2) 21%
Distributions (0.2) (0.4) (50%) (0.2) --
Acquisitions 0.1 -- N/A -- N/A
(Depreciation)/appreciation (0.1) 15.1 N/A 3.3 N/A
-----------------------------------------------------------------------------------------------------------------
Ending assets $161.3 $155.7 4% $133.1 21%
-----------------------------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $412.1 $402.2 2% $351.6 17%
TOTAL ASSETS UNDER MANAGEMENT
BEGINNING ASSETS $402.2 $361.9 11% $336.7 19%
----------------------------------------------------------------------------------------------------------------
Sales 32.9 28.4 16% 25.8 28%
Reinvested distributions 1.1 4.3 (74%) 0.9 22%
Redemptions (21.4) (19.6) 9% (19.3) 11%
Distributions (1.5) (5.4) (72%) (1.4) 7%
Acquisitions 0.1 -- N/A -- N/A
(Depreciation)/appreciation (1.3) 32.6 N/A 8.9 N/A
----------------------------------------------------------------------------------------------------------------
ENDING ASSETS $412.1 $402.2 2% $351.6 17%
----------------------------------------------------------------------------------------------------------------
Note: Institutional assets totaling approximately $32.7 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, 2005,
were approximately $133.7 billion, of which high net-worth assets comprised $10.7 billion.
-8-
ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
THREE MONTHS ENDED 31-MAR-05 31-DEC-04 31-MAR-04
- ------------------ --------- --------- ---------
GLOBAL/INTERNATIONAL EQUITY
Beginning assets $155.7 $132.9 $118.5
---------------------------------------------------------------------------------------------------------
Sales 15.2 10.5 9.9
Reinvested distributions 0.2 2.3 0.2
Redemptions (8.4) (6.1) (6.4)
Distributions (0.1) (2.7) (0.2)
Acquisitions 0.1 -- --
Appreciation 1.1 18.8 4.7
---------------------------------------------------------------------------------------------------------
Ending assets 163.8 155.7 126.7
---------------------------------------------------------------------------------------------------------
DOMESTIC (U.S.) EQUITY
Beginning assets 73.3 66.4 63.6
---------------------------------------------------------------------------------------------------------
Sales 4.0 4.0 4.3
Reinvested distributions -- 1.0 --
Redemptions (3.5) (3.7) (3.9)
Distributions -- (1.1) --
Acquisitions -- -- --
(Depreciation)/appreciation (1.5) 6.7 2.0
---------------------------------------------------------------------------------------------------------
Ending assets 72.3 73.3 66.0
---------------------------------------------------------------------------------------------------------
HYBRID
Beginning assets 66.4 59.0 51.1
---------------------------------------------------------------------------------------------------------
Sales 5.3 4.5 3.7
Reinvested distributions 0.3 0.4 0.2
Redemptions (1.9) (1.4) (1.2)
Distributions (0.4) (0.6) (0.3)
Acquisitions -- -- --
(Depreciation)/appreciation (0.6) 4.5 0.6
---------------------------------------------------------------------------------------------------------
Ending assets 69.1 66.4 54.1
---------------------------------------------------------------------------------------------------------
TAX-FREE INCOME
Beginning assets 51.8 51.3 52.4
---------------------------------------------------------------------------------------------------------
Sales 1.4 1.2 1.4
Reinvested distributions 0.3 0.3 0.3
Redemptions (1.3) (1.2) (1.5)
Distributions (0.6) (0.6) (0.6)
Acquisitions -- -- --
Appreciation 0.3 0.8 1.0
---------------------------------------------------------------------------------------------------------
Ending assets 51.9 51.8 53.0
---------------------------------------------------------------------------------------------------------
TAXABLE FIXED-INCOME
Beginning assets 48.8 45.5 45.3
---------------------------------------------------------------------------------------------------------
Sales 4.9 5.5 4.3
Reinvested distributions 0.3 0.3 0.2
Redemptions (3.9) (3.8) (3.9)
Distributions (0.4) (0.4) (0.3)
Acquisitions -- -- --
(Depreciation)/appreciation (0.7) 1.7 0.4
---------------------------------------------------------------------------------------------------------
Ending assets 49.0 48.8 46.0
---------------------------------------------------------------------------------------------------------
MONEY MARKET
Beginning assets 6.2 6.8 5.8
---------------------------------------------------------------------------------------------------------
Sales 2.1 2.7 2.2
Reinvested distributions -- -- --
Redemptions (2.4) (3.4) (2.4)
Distributions -- -- --
Acquisitions -- -- --
Appreciation 0.1 0.1 0.2
---------------------------------------------------------------------------------------------------------
Ending assets 6.0 6.2 5.8
---------------------------------------------------------------------------------------------------------
ENDING ASSETS UNDER MANAGEMENT $412.1 $402.2 $351.6
-9-
CONFERENCE CALL INFORMATION
On Thursday, April 28, 2005, 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) 480-6346 in the U.S. or
(706) 645-0197 internationally.
A replay of the call will be archived on franklintempleton.com through May
6, 2005. The replay can also be accessed by calling (800) 642-1687 in the U.S.
or (706) 645-9291 internationally using access code #4913263, after 5:30 p.m.
Eastern Time on April 28, 2005, through 11:59 p.m. Eastern Time on May 6, 2005.
Franklin Resources, Inc. [NYSE:BEN], is a global investment management
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 $412 billion in assets under management as of March 31, 2005. 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, INVESTORS 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
U.S.-based funds are based on Class A shares, with the exception of
LIPPER rankings for Mutual Series funds (less Mutual Recovery), 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
3/31/05 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 U.S. retail mutual funds,
and the groups vary in size from 4 to 939 funds. 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., 3/31/05. Of the eligible Franklin Templeton
long-term mutual funds tracked by LIPPER, 62, 51, 53 and 36 funds
ranked in the top quartile and 10, 20, 16 and 19 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., 3/31/05. Of the eligible Franklin Templeton
non-money market fixed income funds tracked by LIPPER, 40, 35, 34 and
26 funds ranked in the top quartile and 2, 6, 6 and 12 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., 3/31/05. Of the eligible Franklin Templeton
equity funds tracked by LIPPER, 22, 16, 19 and 10 funds ranked in the
top quartile and 8, 14, 10 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., 3/31/05. Franklin Income Fund Class A ranked
25 in a universe of 216 funds in LIPPER'S "Income Funds" group for the
one-year period, 2 of 128 for the three-year period, 2 of 88 for the
five-year period and 4 of 23 for the 10-year period.
8. Source: LIPPER(R) Inc., 3/31/05. Franklin Flex Cap Growth Fund Class A
ranked 134 in a universe of 432 funds in LIPPER'S "Multi-Cap Growth
Funds" group for the one-year period, 84 of 368 for the three-year
period, 84 of 245 for the five-year period and 8 of 73 for the 10-year
period. Franklin Flex Cap Growth Fund has experienced negative fund
performance.
-10-
9. Source: LIPPER(R) Inc., 3/31/05. Mutual Shares Fund Class Z ranked 205
in a universe of 478 funds in LIPPER'S "Multi-Cap Value Funds" group
for the one-year period, 71 of 365 for the three-year period, 48 of
248 for the five-year period and 18 of 89 for the 10-year period.
10. Source: LIPPER(R) Inc., 3/31/05. Templeton Growth Fund Class A ranked
2 in a universe of 22 funds in LIPPER'S "Global Large-Cap Value Funds"
group for the one-year period, 2 of 22 for the three-year period, 2 of
17 for the five-year period and 1 of 3 for the 10-year period.
11. Source: LIPPER(R) Inc., 3/31/05. Franklin Federal Tax-Free Income Fund
Class A ranked 1 in a universe of 284 funds in LIPPER'S "General
Municipal Debt Funds" group for the one-year period, 37 of 261 for the
three-year period, 52 of 228 for the five-year period and 28 of 144
for the 10-year period.
12. Source: LIPPER(R) Inc., 3/31/05. 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. LIPPER
ratings for Tax Efficiency reflect funds' historical success in
postponing taxable distributions relative to peers. 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,
PRESERVATION AND TAX-EFFICIENCY 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.
Not Available indicates that there were not enough funds in a category
to constitute a class. FRANKLIN INCOME FUND, in LIPPER'S Income
classification, received the following ratings for the three-, five-
and 10-year periods respectively: Total Return: LIPPER Leader [128],
LIPPER Leader [88], LIPPER Leader [23]; Preservation (in Mixed Equity
asset class): 2 [975], LIPPER Leader [764], LIPPER Leader [334];
Consistent Return: LIPPER Leader [126], LIPPER Leader [88], 2 [17].
TEMPLETON GROWTH FUND, in LIPPER'S Global Large-Cap Value
classification, received the following ratings for the three-, five-
and 10-year periods respectively: Consistent Return: LIPPER Leader
[22], LIPPER Leader [17], Not Available [Not Available]; Preservation
(in Equity asset class): LIPPER Leader [7624], LIPPER Leader [5442],
LIPPER Leader [1838]; Total Return: LIPPER Leader [22], LIPPER Leader
[17], Not Available [Not Available]. FRANKLIN FEDERAL TAX-FREE INCOME
FUND, in LIPPER'S General Municipal Debt classification, received the
following ratings for the three-, five- and 10-year periods
respectively: Tax Efficiency: LIPPER Leader [261], LIPPER Leader
[228], LIPPER Leader [144]. FRANKLIN FLEX CAP GROWTH FUND, in LIPPER'S
Multi-Cap Growth Funds classification, received the following ratings
for the three-, five- and 10-year periods respectively: Total Return:
2 [368], 2 [245], LIPPER Leader [73]. MUTUAL SHARES FUND, in LIPPER'S
Multi-Cap Value Funds classification, received the following ratings
for the three-, five- and 10-year periods respectively: Total Return:
2 [365], 2 [248], Not Available [Not Available]; Preservation (in
Equity asset class): LIPPER Leader [7624], LIPPER Leader [5442], Not
Available [Not Available]. 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.
13. Source: [MORNINGSTAR](C) 3/31/05. 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 238; 170; 62 Conservative
Allocation funds for the respective three-, five- and 10-year periods
ended 3/31/05, as applicable. For the three-, five- and 10-year
periods ended 3/31/05, the MORNINGSTAR ratings were: FRANKLIN INCOME
FUND 5, 5, 5. The following fund was rated against 280; 212; 75 World
Stock funds for the respective three-, five- and 10-year periods ended
3/31/05, as applicable. For the three-, five- and 10-year periods
ended 3/31/05, the MORNINGSTAR ratings were: TEMPLETON GROWTH FUND 4,
4, 4. The following fund was rated against 255; 225; 151 Muni National
Long funds for the respective three-, five- and 10-year periods ended
3/31/05, as applicable. For the three-, five- and 10-year periods
ended 3/31/05, the MORNINGSTAR ratings were: FRANKLIN FEDERAL TAX-FREE
INCOME FUND 3, 4, 4. The following fund was rated against 796; 562
Large Value funds for the respective three- and five-year periods
ended 3/31/05, as applicable. For the three- and five-year periods
ended 3/31/05, the MORNINGSTAR ratings were: MUTUAL SHARES FUND 4, 4.
-11-
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, 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 Resources, Inc.'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, 2004 and Franklin's most recent quarterly report on Form 10-Q.
* Regulatory investigations, settlements of such investigations, regulatory
actions and examinations of the company and certain of its subsidiaries 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.
* We face strong competition from numerous and sometimes larger companies
with competing offerings and products.
* Changes in the distribution channels on which we depend could reduce our
revenues and hinder our growth.
* We have become subject to an increased risk of volatility of the assets we
manage caused by changes in the financial and equity markets.
* The levels of our assets under management, which impact revenues, are
subject to significant fluctuations.
* Our future results are dependent upon maintaining an appropriate level of
expenses, which are subject to fluctuation.
* We face risks associated with conducting operations in numerous foreign
countries.
* Our ability to successfully integrate widely varied business lines can be
impeded by systems and other technological limitations.
* Our ability to meet cash needs depends upon certain factors, including our
asset value, credit worthiness and the market value of our stock.
* Certain of the portfolios we manage, including our emerging market
portfolios, and related revenues, are vulnerable to market-specific
political or economic risks.
* Our revenues could be adversely affected if the terms of our investment
management agreements are significantly altered or these agreements are
terminated by the funds we advise.
* Diverse and strong competition limits the interest rates that we can charge
on consumer loans.
* We are subject to extensive regulation domestically and abroad.
* Technology and operating risk and limitations could constrain our
operations.
# # #