BW20030424000126 20030424T135222Z UTC
( BW)(FRANKLIN-RESOURCES-INC)(FKR) Franklin Resources, Inc. Announces
Second Quarter Results
Business Editors
UK REGULATORY NEWS
SAN MATEO, Calif.--(BUSINESS WIRE)--April 24, 2003--
Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE:BEN)
today reported net income of $109.6 million, or $0.43 per share
diluted on revenues of $613.1 million for the quarter ended March 31,
2003. In the preceding quarter, net income was $109.8 million, or
$0.43 per share diluted, on revenues of $605.5 million. In the
comparable quarter a year ago, net income was $120.0 million, or $0.46
per share diluted, on revenues of $626.0 million. Operating income
this quarter was approximately the same as in the prior quarter and
decreased 6% over the same quarter in the prior year.
As of March 31, 2003, assets under management by the company's
subsidiaries were $252.4 billion, as compared to $257.7 billion last
quarter and $274.5 billion at this time last year. Simple monthly
average assets under management during the current quarter were $255.1
billion compared to $254.8 billion in the preceding quarter and $267.9
billion in the same quarter a year ago. Equity assets now comprise 47%
of total assets under management as compared to 48% last quarter and
54% at March 31, 2002. Fixed-income assets now comprise 36% of total
assets under management, as compared to 34% last quarter and 30% at
the same time last year. As of March 31, 2003, balanced/hybrid 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 $2.6 billion for the current quarter
compared to $1.1 billion for the prior quarter and $4.5 billion for
the comparable quarter a year ago.
Fiscal Second Quarter 2003 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 total equity 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,
2003.(3,8)
-- Over 95% of Templeton 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 March 31, 2003,
while over 70% of assets were in funds ranked in the top
quartile.(4,8)
-- Franklin Federal Tax-Free Income Fund and Franklin New York
Tax-Free Income Fund were both rated 4 stars overall by Morningstar as
of March 31, 2003.(6)
-- Franklin U.S. Government Securities Fund ranked in the top half of
its Lipper peer group for the one-, three-, five- and 10-year periods
ended March 31, 2003.(7,8)
-- Templeton Foreign Fund and Templeton Growth Fund ranked in the top
20% of their respective Lipper peer groups for the one-, three-, five-
and 10-year periods ended March 31, 2003, and were also rated 4 stars
overall by Morningstar as of March 31, 2003.(5,6,8)
-- All six Mutual Series funds were rated either 4 or 5 stars overall
by Morningstar as of March 31, 2003, and ranked in the top quintile of
their respective Lipper peer groups for the applicable one-, three-,
five- and 10-year periods ended March 31, 2003.(6,8,9)
-- Franklin MicroCap Value Fund received a U.S. Lipper Fund Award for
consistent performance compared to its peers in the "Small-Cap Value
Funds" category. The fund ranked in the top decile of its Lipper peer
group for the one-, three- and five-year periods ended March 31, 2003.
The fund was also rated 5 stars overall by Morningstar.(6,8,10,11)
-- Franklin Income Fund ranked in the top half of its Lipper peer
group for the one-, three-, five- and 10-year periods ended March 31,
2003. The fund was also rated 4 stars overall by Morningstar. As of
March 31, 2003, the fund's assets under management reached an all-time
high of $10.5 billion.(6,8,12)
-- Franklin Utilities Fund ranked in the top two quartiles of its
Lipper peer group for the one-, three-, five- and 10-year periods
ended March 31, 2003. The fund was also rated 4 stars overall by
Morningstar.(6,8,13)
-- Franklin Balance Sheet Investment Fund ranked in the top half of
its Lipper peer group over the one-, three-, five- and 10-year periods
ended March 31, 2003. The fund was also rated 4 stars overall by
Morningstar.(6,8,14)
-- Franklin Flex Cap Growth Fund ranked in the top third of its Lipper
peer group for the one-, three-, five- and 10-year periods ended March
31, 2003. The fund was also rated 4 stars overall by
Morningstar.(6,8,15)
Global Business Developments
-- Franklin Templeton Investments won an additional $100 million
fixed-income separate account mandate from the Central Bank of China.
-- The Wall Street Journal named Franklin Templeton Investments as the
largest foreign retail fund company in the German market.
-- Franklin Templeton Investments was ranked #1 out of 64 by IFA
Magazine for offering superior service to independent financial
advisors in Germany, and was awarded the "Service Award 2003" (ranked
#1) by Fonds Professionell, the leading IFA magazine in Germany and
Austria.
-- The S&P Investment Fund Awards in Belgium recognized Franklin
Templeton Investments for "Best Overall Performance for a Family of
Funds over a 3-year Period". In Singapore, Mutual Beacon Fund was
awarded "Best Performing Equity Global Fund" for three-year
performance, and China Fund for "Best Performing Equity China
(Greater) Fund" for three-year returns.
-- Fiduciary Trust was recognized as the best Global Fixed Income
(unhedged) manager for one-year performance in Asian Investor's 2003
Achievement Awards.
-- Franklin Templeton Korea was recognized by three local papers, in
conjunction with various rating agencies, for consistent high
performance over the past three years.
-- Internet consultant kasina named Franklin Templeton Investments in
the top three for eMail Marketing in Canada and the U.S. among 118
asset management firms worldwide.
-- Mark Mobius, managing director of Templeton Asset Management, Ltd.,
received an "Award of Excellence" from the Capital Link Forum for his
contribution to the closed-end fund industry.
-- Franklin Templeton Investments was awarded the 529 mandate for New
Jersey, to market and manage investments for NJBEST and Franklin
Templeton 529 College Savings Plan.
-- Approximately 900 financial advisors attended Franklin Templeton's
Chief Investment Officer conference call, a 68% increase over the
previous semi-annual call.
Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands
except assets under management
and per share data)
Three months ended Six months ended
March 31 March 31
-------------------------- --------------------------
% %
2003 2002 Change 2003 2002 Change
--------- --------- ------ --------- --------- ------
Operating
revenues
Investment
management fees $347,897 $365,778 (5%) $699,309 $722,576 (3%)
Underwriting and
distribution
fees 194,158 197,537 (2%) 380,095 389,544 (2%)
Shareholder
servicing fees 55,315 48,024 15% 103,366 95,365 8%
Other, net 15,765 14,629 8% 35,816 36,690 (2%)
--------- --------- ------ --------- --------- ------
Total operating
revenues 613,135 625,968 (2%) 1,218,586 1,244,175 (2%)
--------- --------- ------ --------- --------- ------
Operating
expenses
Underwriting and
distribution 173,068 177,327 (2%) 341,915 349,594 (2%)
Compensation and
benefits 160,809 159,764 1% 319,927 319,907 -
Information
systems,
technology and
occupancy 71,404 73,197 (2%) 143,999 147,791 (3%)
Advertising and
promotion 24,226 25,481 (5%) 46,870 51,906 (10%)
Amortization of
deferred sales
commissions 17,040 17,047 - 33,085 33,790 (2%)
Amortization of
intangible
assets 4,238 4,258 - 8,472 8,633 (2%)
Other 22,644 20,875 8% 45,157 41,670 8%
--------- --------- ------ --------- --------- ------
Total operating
expenses 473,429 477,949 (1%) 939,425 953,291 (1%)
--------- --------- ------ --------- --------- ------
Operating income 139,706 148,019 (6%) 279,161 290,884 (4%)
--------- --------- ------ --------- --------- ------
Other income
(expenses)
Investment and
other income 15,558 14,782 5% 27,861 33,111 (16%)
Interest expense (3,037) (2,808) 8% (6,069) (5,976) 2%
--------- --------- ------ --------- --------- ------
Other income,
net 12,521 11,974 5% 21,792 27,135 (20%)
--------- --------- ------ --------- --------- ------
Income before
taxes on income 152,227 159,993 (5%) 300,953 318,019 (5%)
Taxes on income 42,624 39,997 7% 81,590 79,504 3%
--------- --------- ------ --------- --------- ------
Net income $109,603 $119,996 (9%) $219,363 $238,515 (8%)
========= ========= ====== ========= ========= ======
Earnings per
share
Basic $0.43 $0.46 (7%) $0.85 $0.91 (7%)
Diluted $0.43 $0.46 (7%) $0.85 $0.91 (7%)
Dividends per
share $0.075 $0.070 7% $0.150 $0.140 7%
Average shares
outstanding (in
thousands)
Basic 257,023 261,596 (2%) 257,315 261,284 (2%)
Diluted 257,654 262,111 (2%) 257,918 261,981 (2%)
Operating
Margin(1) 23% 24% - 23% 23% -
Assets under
management (in
millions)
Beginning of
period $257,735 $266,287 (3%) 247,760 $246,385 1%
Sales 17,441 18,759 (7%) 34,565 37,682 (8%)
Reinvested
distributions 630 567 11% 2,067 3,103 (33%)
Redemptions (14,871) (14,318) 4% (30,906) (29,802) 4%
Distributions (1,157) (1,129) 2% (3,252) (4,792) (32%)
Acquisitions - - - - - -
(Depreciation)/
appreciation (7,400) 4,308 N/A 2,144 21,898 (90%)
End of period $252,378 $274,474 (8%) $252,378 $274,474 (8%)
Simple monthly
average for
period $255,056 $267,923 (5%) $254,551 $261,570 (3%)
(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
--------------------------------------------------------
%
31-Mar-03 31-Dec-02 Change 30-Sep-02 30-Jun-02 31-Mar-02
--------- --------- ------ --------- --------- ---------
Operating
revenues
Investment
management
fees $347,897 $351,412 (1%) $355,239 $384,840 $365,778
Underwriting
and
distribution
fees 194,158 185,937 4% 189,853 213,300 197,537
Shareholder
servicing
fees 55,315 48,051 15% 47,105 48,832 48,024
Other, net 15,765 20,051 (21%) 16,110 19,078 14,629
--------- --------- ------ --------- --------- ---------
Total
operating
revenues 613,135 605,451 1% 608,307 666,050 625,968
--------- --------- ------ --------- --------- ---------
Operating
expenses
Underwriting
and
distribution 173,068 168,847 2% 175,054 191,586 177,327
Compensation
and benefits 160,809 159,118 1% 157,627 167,570 159,764
Information
systems,
technology
and
occupancy 71,404 72,595 (2%) 70,797 75,573 73,197
Advertising
and
promotion 24,226 22,644 7% 25,703 29,268 25,481
Amortization
of deferred
sales
commissions 17,040 16,045 6% 16,141 17,677 17,047
Amortization
of
intangible
assets 4,238 4,234 - 4,236 4,238 4,258
Other 22,644 22,513 1% 17,983 26,286 20,875
--------- --------- ------ --------- --------- ---------
Total
operating
expenses 473,429 465,996 2% 467,541 512,198 477,949
--------- --------- ------ --------- --------- ---------
Operating
income 139,706 139,455 - 140,766 153,852 148,019
--------- --------- ------ --------- --------- ---------
Other income
(expenses)
Other-than-
temporary
decline in
investments
value - - - (60,068) - -
Investment
and other
income 15,558 12,303 26% 14,015 18,017 14,782
Interest
expense (3,037) (3,032) - (3,168) (3,158) (2,808)
--------- --------- ------ --------- --------- ---------
Other income
(expenses),
net 12,521 9,271 35% (49,221) 14,859 11,974
--------- --------- ------ --------- --------- ---------
Income before
taxes on
income 152,227 148,726 2% 91,545 168,711 159,993
Taxes on
income 42,624 38,966 9% 23,027 43,021 39,997
--------- --------- ------ --------- --------- ---------
Net income $109,603 $109,760 - $68,518 $125,690 $119,996
========= ========= ====== ========= ========= =========
Earnings per
share
Basic $0.43 $0.43 - $0.26 $0.48 $0.46
Diluted $0.43 $0.43 - $0.26 $0.48 $0.46
Dividends per
share $0.075 $0.075 - $0.070 $0.070 $0.070
Average
shares
outstanding
(in thousands)
Basic 257,023 257,600 - 260,444 261,952 261,596
Diluted 257,654 258,218 - 261,497 263,087 262,111
Operating
Margin(1) 23% 23% - 23% 23% 24%
Employees 6,619 6,670 (1%) 6,711 6,457 6,444
Billable
shareholder
accounts(2)
(in millions) 14.3 10.1 42% 9.6 9.7 9.5
(1) Operating Margin: Operating income divided by total operating
revenues.
(2) Effective January 1, 2003, billable shareholder accounts include
3.9 million additional partial service shareholder accounts.
Franklin Resources, Inc.
Preliminary Summary Balance Sheet
(Dollar amounts in thousands)
Preliminary
March September
31, 2003 30, 2002
----------- -----------
Assets
Current assets $2,369,499 $2,322,808
Banking/ finance assets 1,154,508 1,091,223
Non-current assets 3,082,298 3,008,707
----------- -----------
Total assets $6,606,305 $6,422,738
----------- -----------
Liabilities and stockholders' equity
Current liabilities $405,511 $455,019
Banking/ finance liabilities 963,157 883,936
Non-current liabilities 869,150 816,837
----------- -----------
Total liabilities 2,237,818 2,155,792
Total stockholders' equity 4,368,487 4,266,946
----------- -----------
Total liabilities and stockholders' equity $6,606,305 $6,422,738
----------- -----------
Ending shares of common stock outstanding 255,464 258,555
----------- -----------
ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions)
31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
03 02 02 02 02
------- ------- ------- ------- -------
Equity
Global/international $75.7 $81.4 $76.5 $93.6 $93.9
Domestic (U.S.) 42.7 43.5 41.4 48.5 53.2
------- ------- ------- ------- -------
Total equity 118.4 124.9 117.9 142.1 147.1
------- ------- ------- ------- -------
Balanced/hybrid 37.4 38.3 36.6 39.6 40.8
Fixed-income
Tax-free 52.3 52.1 52.8 50.2 48.7
Taxable:
Domestic (U.S.) 29.4 27.3 26.1 24.7 24.6
Global/international 9.4 9.1 8.6 8.4 7.7
------- ------- ------- ------- -------
Total fixed-income 91.1 88.5 87.5 83.3 81.0
------- ------- ------- ------- -------
Money 5.5 6.0 5.8 5.4 5.6
------- ------- ------- ------- -------
Total ending assets $252.4 $257.7 $247.8 $270.4 $274.5
------- ------- ------- ------- -------
Simple monthly average assets $255.1 $254.8 $259.0 $274.8 $267.9
======= ======= ======= ======= =======
ASSETS UNDER MANAGEMENT & FLOWS
(in billions)
Three Months Ended
-------------------------------------
31-Mar 31-Dec % 31-Mar %
03 02 Change 02 Change
------- ------- ------ ------- ------
Beginning assets under
management $257.7 $247.8 4% $266.3 (3%)
U.S. retail assets
Beginning assets $162.7 $157.7 3% $167.9 (3%)
------- ------- ------ ------- ------
Sales 9.0 9.4 (4%) 11.3 (20%)
Reinvested distributions 0.6 1.3 (54%) 0.5 20%
Redemptions (7.4) (8.8) (16%) (8.7) (15%)
Distributions (1.1) (1.9) (42%) - 100%
Acquisitions - - - - -
(Depreciation)/appreciation (3.4) 5.0 N/A 1.8 N/A
------- ------- ------ ------- ------
Ending assets 160.4 162.7 (1%) 172.8 (7%)
------- ------- ------ ------- ------
Other Assets, including international and institutional
Beginning assets $95.0 $90.1 5% $98.4 (3%)
------- ------- ------ ------- ------
Sales 8.4 7.7 9% 7.5 12%
Reinvested distributions - 0.1 (100%) - -
Redemptions (7.4) (7.2) 3% (5.6) 32%
Distributions - (0.2) (100%) (1.1) (100%)
Acquisitions - - - - -
(Depreciation)/appreciation (4.0) 4.5 N/A 2.5 N/A
------- ------- ------ ------- ------
Ending assets 92.0 95.0 (3%) 101.7 (10%)
------- ------- ------ ------- ------
Ending assets under management $252.4 $257.7 (2%) $274.5 (8%)
Total assets under management
Beginning assets $257.7 $247.8 4% $266.3 (3%)
------- ------- ------ ------- ------
Sales 17.4 17.1 2% 18.8 (7%)
Reinvested distributions 0.6 1.4 (57%) 0.5 20%
Redemptions (14.8) (16.0) (8%) (14.3) 3%
Distributions (1.1) (2.1) (48%) (1.1) -
Acquisitions - - - - -
(Depreciation)/appreciation (7.4) 9.5 N/A 4.3 N/A
------- ------- ------ ------- ------
Ending assets $252.4 $257.7 (2%) $274.5 (8%)
------- ------- ------ ------- ------
Note: Institutional assets totaling approximately $15.6 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, 2003, were approximately $82.2 billion,
of which high net-worth assets comprised $9.3 billion.
ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE
(in billions)
Three Months Ended 31-Mar 31-Dec 31-Mar
03 02 02
------ ------ ------
Global/international equity
Beginning assets $81.4 $76.5 $89.4
------ ------ ------
Sales 5.4 6.5 6.9
Reinvested distributions - 0.6 -
Redemptions (4.6) (5.8) (5.1)
Distributions - (0.6) -
Acquisitions - - -
(Depreciation)/appreciation (6.5) 4.2 2.7
------ ------ ------
Ending assets 75.7 81.4 93.9
------ ------ ------
Domestic (U.S.) equity
Beginning assets 43.5 41.4 51.7
------ ------ ------
Sales 2.3 2.5 3.8
Reinvested distributions - 0.3 -
Redemptions (2.0) (2.6) (2.2)
Distributions - (0.3) -
Acquisitions - - -
(Depreciation)/appreciation (1.1) 2.2 (0.1)
------ ------ ------
Ending assets 42.7 43.5 53.2
------ ------ ------
Balanced/hybrid
Beginning assets 38.3 36.6 38.6
------ ------ ------
Sales 1.8 0.9 1.6
Reinvested distributions 0.1 0.1 0.1
Redemptions (1.1) (1.0) (0.4)
Distributions (0.2) (0.2) (0.2)
Acquisitions - - -
(Depreciation)/appreciation (1.5) 1.9 1.1
------ ------ ------
Ending assets 37.4 38.3 40.8
------ ------ ------
Tax-free income
Beginning assets 52.1 52.8 48.3
------ ------ ------
Sales 1.4 1.5 1.7
Reinvested distributions 0.4 0.3 0.3
Redemptions (1.4) (1.5) (1.2)
Distributions (0.6) (0.7) (0.6)
Acquisitions - - -
Appreciation/(depreciation) 0.4 (0.3) 0.2
------ ------ ------
Ending assets 52.3 52.1 48.7
------ ------ ------
Taxable fixed-income
Beginning assets 36.4 34.7 32.5
------ ------ ------
Sales 4.2 3.1 2.4
Reinvested distributions 0.1 0.1 0.1
Redemptions (2.8) (2.3) (2.7)
Distributions (0.3) (0.3) (0.3)
Acquisitions - - -
Appreciation 1.2 1.1 0.3
------ ------ ------
Ending assets 38.8 36.4 32.3
------ ------ ------
Money
Beginning assets 6.0 5.8 5.8
------ ------ ------
Sales 2.3 2.6 2.4
Reinvested distributions - - -
Redemptions (2.9) (2.8) (2.7)
Distributions - - -
Acquisitions - - -
Appreciation 0.1 0.4 0.1
------ ------ ------
Ending assets 5.5 6.0 5.6
------ ------ ------
Ending assets under management $252.4 $257.7 $274.5
Conference Call Information
On Thursday, April 24, 2003, Franklin Resources, Inc., (NYSE:BEN) will
release its second fiscal quarter 2003 financial results. Martin
Flanagan and Greg Johnson, co-presidents of Franklin Resources, Inc.,
will lead a live conference call at 4:30 p.m. Eastern Time (1:30 p.m.
Pacific Time) to discuss the quarterly results and answer analysts'
questions.
Access to the teleconference will be available via
franklintempleton.com 10 minutes before the start of the call or by
dialing (877) 574-4065 in the U.S. or (706) 679-3804 internationally.
A replay of the call will be archived on franklintempleton.com through
May 1, 2003. The replay can also be accessed by calling (800) 642-1687
in the U.S. or (706) 645-9291 internationally using access code
#9203079, after 7:30 p.m. Eastern Time on April 24, 2003, through
11:59 p.m. Eastern Time on May 1, 2003. Any questions regarding the
teleconference call should be directed to Franklin Resources, Inc.
Investor Relations at (650) 525-8900 or Corporate Communications at
(650) 312-3395.
Franklin Templeton Investments provides global and domestic investment
management services to its Franklin, Templeton, Mutual Series,
Fiduciary Trust and other sponsored investment products. The San
Mateo, CA-based company has over 50 years of investment experience.
For more information, please visit franklintempleton.com or call
1-800/DIAL BEN(R).
Supplemental Information
1. Nothing in this section shall be considered a solicitation to buy
or an offer to sell a security to any person in any jurisdiction where
such offer, solicitation, purchase or sale would be unlawful under the
securities laws of such jurisdiction. For more information on any U.S.
Franklin Templeton fund, investors should request a prospectus
containing more complete information, including sales charges,
expenses and risks, from securities dealers or by calling Franklin
Templeton Distributors, Inc. at 1-800/DIAL BEN(R) (1-800/342-5236).
Investors should read the prospectus carefully before investing or
sending money. Franklin Templeton Distributors, Inc., One Franklin
Parkway, San Mateo, CA, is the funds' principal distributor and a
wholly owned subsidiary of Franklin Resources, Inc.
2. Past performance does not guarantee future results. Morningstar
ratings are based on Class A shares. Lipper rankings are based on
Class A shares, with the exception of those for Mutual Series, which
are based on Class Z shares, which are offered to qualified investors
only and have no sales charges nor Rule 12b-1 fees. All asset data is
based on 2/28/03 figures unless noted otherwise. Indices are unmanaged
and one cannot invest directly in them. Unless otherwise noted, fund
returns quoted reflect Class A shares. Performance returns, ratings
and rankings for other classes may vary. Investment return and
principal value will fluctuate with market conditions and an investor
may experience a gain or loss when they sell their shares.
3. Source: Lipper(R) Inc., 3/31/03. Of the eligible Franklin Templeton
non-money market equity funds tracked by Lipper, 19, 25, 16 and 11
funds ranked in the top quartile and 8, 7, 14 and 6 funds ranked in
the second quartile of their respective Lipper peer groups, for the
one-, three-, five- and 10-year periods, respectively.
4. Source: Lipper(R) Inc., 3/31/03. While shorter-term performance for
some Templeton funds has been negative, 6 out of 12 eligible Templeton
equity funds ranked in the top quartile for the one-year period, 9 of
11 for the three-year period, 2 of 11 for the five-year period and 4
of 9 for the 10-year period within their respective Lipper peer
groups. 8 out of 12 eligible Templeton equity funds ranked in the top
quartile for the one-year period, 10 of 11 for the three-year period,
7 of 11 for the five-year period and 5 of 9 for the 10-year period
within their respective Lipper peer groups.
5. Source: Lipper(R) Inc., 3/31/03. Templeton Growth Fund Class A
ranked 44 in a universe of 311 funds in Lipper's "Global Funds" group
for the one-year period, 14 of 221 for the three-year period, 22 of
166 for the five-year period and 5 of 33 for the 10-year period.
Templeton Foreign Fund Class A ranked 143 in a universe of 823 funds
in Lipper's "International Funds" group for the one-year period, 20 of
616 for the three-year period, 55 of 457 for the five-year period and
13 of 100 for the 10-year period. Templeton Growth Fund and Templeton
Foreign Fund have experienced negative short-term performance.
6. Source: (Morningstar)(C) 3/31/03. For each fund with at least a
three-year history, Morningstar calculates a Morningstar Rating based
on a Morningstar Risk-Adjusted Return measure that accounts for
variation in a fund's monthly performance (including the effects of
sales charges, loads, and redemption fees), placing more emphasis on
downward variations and rewarding consistent performance. The top 10%
of funds in each category receive 5 stars, the next 22.5% receive 4
stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars
and the bottom 10% receive 1 star. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may
cause slight variations in the distribution percentages.) The Overall
Morningstar Rating for a fund is derived from a weighted-average of
the performance figures associated with its three-, five- and 10-year
(if applicable) Morningstar Rating metrics. Past performance does not
guarantee future results. Morningstar Rating is for the A share class
only; other classes may have different performance characteristics.
The following fund was rated against 287; 246; 113 Municipal National
Long funds for the respective 3-, 5- and 10-year periods ended
3/31/03, as applicable. For the 3-, 5- and 10-year periods ended
3/31/03, the Morningstar ratings were: Franklin Federal Tax-Free
Income Fund 3, 3, 4. The following fund was rated against 88; 84; 43
Municipal New York Long funds for the respective 3-, 5- and 10-year
periods ended 3/31/03, as applicable. For the 3-, 5- and 10-year
periods ended 3/31/03, the Morningstar ratings were: Franklin New York
Tax-Free Income Fund 3, 4, 4. The following fund was rated against
681; 510; 107 Foreign Stock funds for the respective 3-, 5- and
10-year periods ended 3/31/03, as applicable. For the 3-, 5- and
10-year periods ended 3/31/03, the Morningstar ratings were: Templeton
Foreign Fund 5, 4, 4. The following fund was rated against 260; 203;
44 "World Stock Funds" for the respective 3-, 5- and 10-year periods
ended 3/31/03, as applicable. For the 3-, 5- and 10-year periods ended
3/31/03, the Morningstar ratings were: Templeton Growth Fund 5, 4, 4.
The following funds were rated against 167; 125; N/A Mid-Cap Value
funds for the respective 3-, 5- and 10-year periods ended 3/31/03, as
applicable. For the 3-, 5- and 10-year periods ended 3/31/03, the
Morningstar ratings were: Mutual Beacon 3, 4, N/A; Mutual Qualified 3,
4, N/A; Mutual Shares 3, 4 ,N/A. The following fund was rated against
260; 203; N/A World Stock funds for the respective 3-, 5- and 10-year
periods ended 3/31/03, as applicable. For the 3-, 5- and 10-year
periods ended 3/31/03, the Morningstar ratings were: Mutual Discovery
5, 5, N/A. The following fund was rated against 124; 63; N/A Europe
Stock funds for the respective 3-, 5- and 10-year periods ended
3/31/03, as applicable. For the 3-, 5- and 10-year periods ended
3/31/03, the Morningstar ratings were: Mutual European 5, 5, N/A. The
following fund was rated against 83; 50; N/A Specialty-Financial funds
for the respective 3-, 5- and 10-year periods ended 3/31/03, as
applicable. For the 3-, 5- and 10-year periods ended 3/31/03, the
Morningstar ratings were: Mutual Financial Services 4, 5, N/A. The
following fund was rated against 742; 584; 149 Domestic Hybrid funds
for the respective 3-, 5- and 10-year periods ended 3/31/03, as
applicable. For the 3-, 5- and 10-year periods ended 3/31/03, the
Morningstar ratings were: Franklin Income Fund 5, 4, 3. The following
fund was rated against 72; 64; 20 Specialty-Utilities funds for the
respective 3-, 5- and 10-year periods ended 3/31/03, as applicable.
For the 3-, 5- and 10-year periods ended 3/31/03, the Morningstar
ratings were: Franklin Utilities Fund 5, 5, 3. The following funds
were rated against 178; 122; 30 Small Value funds for the respective
3-, 5- and 10-year periods ended 3/31/03, as applicable. For the 3-,
5- and 10-year periods ended 3/31/03, the Morningstar ratings were:
Franklin Balance Sheet Investment Fund 4, 4, 4; Franklin MicroCap
Value Fund 5, 5, N/A. The following fund was rated against 514; 346;
95 Mid-Cap Growth funds for the respective 3-, 5- and 10-year periods
ended 3/31/03, as applicable. For the 3-, 5- and 10-year periods ended
3/31/03, the Morningstar ratings were: Franklin Flex Cap Growth Fund
3, 3, 5.
7. Source: Lipper(R) Inc., 3/31/03. Franklin U.S. Government
Securities Fund Class A ranked 20 in a universe of 66 funds in
Lipper's "GNMA Funds" group for the one-year period, 18 of 53 for the
three-year period, 12 of 41 for the five-year period and 5 of 24 for
the 10-year period.
8. Lipper calculates averages by taking all funds in a peer group and
averaging their total returns for the periods indicated. Lipper tracks
129 peer groups of long-term U.S. retail mutual funds, and the groups
vary in size from 4 to 1057. 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.
9. Source: Lipper(R) Inc., 3/31/03. While our Mutual Series funds
experienced declines in 2002 and into 2003, 6 out of 6 eligible Mutual
Series equity funds ranked in the top Lipper quartiles for the
one-year period, 6 of 6 for the three-year period, 6 of 6 for the
five-year period and 4 of 4 for the 10-year period for their
respective Lipper peer groups.
10. Source: Lipper(R) Inc., 3/31/03. Franklin MicroCap Value Fund
Class A ranked 5 in a universe of 246 funds in Lipper's "Small-Cap
Value Funds" group for the one-year period, 8 of 175 for the
three-year period, and 10 of 112 for the five-year period. Franklin
MicroCap Value Fund has experienced negative short-term performance.
11. Source: Lipper(R) Inc., 3/31/03. Awards are subject to change, are
based on past performance and are not intended to predict future
results. The award was based on a Consistent Return score determined
by using a risk-adjusted return and the strength of the fund's
performance trend for the three-year period ended December 31, 2002.
12. Source: Lipper(R) Inc., 3/31/03. Franklin Income Fund Class A
ranked 48 in a universe of 126 funds in Lipper's "Income Funds" group
for the one-year period, 4 of 89 for the three-year period, 15 of 72
for the five-year period and 6 of 14 for the 10-year period. Franklin
Income Fund has experienced negative short-term performance.
13. Source: Lipper(R) Inc., 3/31/03. Franklin Utilities Fund Class A
ranked 5 in a universe of 88 funds in Lipper's "Utility Funds" group
for the one-year period, 2 of 76 for the three-year period, 5 of 69
for the five-year period and 9 of 22 for the 10-year period. Franklin
Utilities Fund has experienced negative short-term performance.
14. Source: Lipper(R) Inc., 3/31/03. Franklin Balance Sheet Investment
Fund Class A ranked 30 in a universe of 209 funds in Lipper's "Mid-Cap
Value Funds" group for the one-year period, 13 of 123 for the
three-year period, 26 of 91 for the five-year period and 4 of 25 for
the 10-year period. Franklin Balance Sheet Investment Fund has
experienced negative short-term performance.
15. Source: Lipper(R) Inc., 3/31/03. Franklin Flex Cap Growth Fund
Class A ranked 124 in a universe of 403 funds in Lipper's "Multi-Cap
Growth Funds" group for the one-year period, 86 of 261 for the
three-year period, 14 of 168 for the five-year period and 4 of 50 for
the 10-year period. Franklin Flex Cap Growth Fund has experienced
negative short-term fund performance.
Forward-Looking Statements
Statements in this press release regarding Franklin Resources, Inc.'s
business which are not historical facts are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve a number
of risks, uncertainties and other important factors that could cause
the actual results and outcomes to differ materially from any future
results or outcomes expressed or implied by such forward-looking
statements. These risks, uncertainties and other important factors are
described in more detail in the "Risk Factors" section in Franklin's
recent filings with the U.S. Securities and Exchange Commission,
including, without limitation, the "Risk Factors" section of the
Management's Discussion and Analysis of Financial Condition and
Results of Operations in Franklin's Annual Report on Form 10-K for the
fiscal year ended September 30, 2002, and Franklin's most recent Form
10-Q.
-- Continuing volatility in the equity markets have caused the levels
of our assets under management to fluctuate significantly.
-- Continued weak market conditions may lower our assets under
management and reduce our revenues and income.
-- We face strong competition from numerous and sometimes larger
companies.
-- Changes in the distribution channels on which we depend could
reduce our revenues or hinder our growth.
-- The September 11, 2001 World Trade Center tragedy may adversely
affect our ability to achieve the benefits we expect from the
acquisition of Fiduciary Trust Company International.
-- The ongoing threat of terrorism and the recent reports of
accounting irregularities may adversely affect the general economy,
financial and capital markets and our business.
-- We face risks associated with conducting operations in numerous
foreign countries.
-- Our emerging market portfolios and related revenues are vulnerable
to market-specific political and economic risks.
-- Our ability to meet cash needs depends upon certain factors,
including our asset value, credit worthiness and the market value of
our stock.
-- Technology and operating risk and limitations could constrain our
operations.
Short Name: FranklinResourcesInc
Category Code: IR
Sequence Number: 00004246
Time of Receipt (offset from UTC): 20030424T142322+0100
--30--mh/uk*
CONTACT: Franklin Resources, Inc.
Alan Weinfeld, 650/525-8900 (Investor Relations)
Lisa Gallegos, 650/312-3395 (Corporate Communications)
franklintempleton.com
KEYWORD: CALIFORNIA UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: BANKING CONFERENCE CALLS EARNINGS
SOURCE: Franklin Resources, Inc.
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