Franklin Resources, Inc. Announces First Quarter Results.SAN MATEO San Mateo (săn mətā`ō), city (1990 pop. 85,486), San Mateo co., W Calif., on San Francisco Bay; inc. 1894. It is a commercial and retail center with some high-technology manufacturing. San Mateo, Spanish for St. , Calif. -- Franklin Resources, Inc. (Franklin Templeton Investments Franklin Resources Inc. NYSE: BEN is an investment firm originally founded in New York in 1947 as Franklin Distributors, Inc. It is listed on the NYSE under the ticker BEN as in Benjamin Franklin, whom founder Charlie Johnson admired. ) (NYSE NYSE See: New York Stock Exchange : BEN) today announced net income of $426.8 million, or $1.67 per share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. , on revenues of $1,427.8 million for the quarter ended December December: see month. 31, 2006. In the quarter ended September September: see month. 30, 2006, net income was $381.7 million, or $1.49 per share diluted, on revenues of $1,297.2 million. For the quarter ended December 31, 2005, net income was $318.0 million, or $1.21 per share diluted, on revenues of $1,181.5 million. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter ended December 31, 2006 was $508.1 million, as compared to $427.1 million for the prior quarter and $404.6 million for the quarter ended December 31, 2005. The company's non-operating income for the quarter ended December 31, 2006 included $71.1 million of investment and other income, net, as compared to $57.8 million in the prior quarter and $32.4 million for the quarter ended December 31, 2005. Assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. by the company's subsidiaries were $552.9 billion at December 31, 2006, as compared to $511.3 billion at September 30, 2006 and $464.8 billion at December 31, 2005. Simple monthly average assets under management during the quarter ended December 31, 2006 were $533.1 billion compared to $500.4 billion in the preceding quarter and $453.3 billion in the same quarter a year ago. Equity assets comprised 60% of total assets under management at December 31, 2006, as compared to 59% at September 30, 2006 and December 31, 2005. Fixed-income assets comprised 21% of total assets under management at December 31, 2006, as compared to 22% at September 30, 2006 and 23% at December 31, 2005. Hybrid assets accounted for 18% of total assets under management at December 31, 2006 and September 30, 2006, as compared to 17% at December 31, 2005. Sales exceeded redemptions by $10.0 billion for the quarter ended December 31, 2006, as compared to $2.4 billion for the prior quarter and $5.8 billion for the comparable quarter a year ago. Fiscal First Quarter 2007 Highlights Performance and Products(1,2) (See important footnotes in the "Supplemental Information" section at the end of the release.) * 81% of Franklin Templeton's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. mutual fund assets Fund assets The total value of a portfolio's securities, cash, and other holdings, minus any outstanding debts. were in funds ranked in the top two quartiles of their respective Lipper Business Description Lipper, Inc., a subsidiary of Reuters provides mutual and hedge fund information, analytical tools, data and commentary. Lipper's benchmarking provides a guidepost to asset managers, fund companies, financial intermediaries, traditional media, peer groups for the three-year period, 87% for the five-year period and 94% for the 10-year period ended December 31, 2006.3,4 * 74% 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 three-year period, 80% for the five-year period and 92% for the 10-year period ended December 31, 2006.3,5 * 97% 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 three-year period, 100% for the five-year period and 99% for the 10-year period ended December 31, 2006.3,6 * 75% of Franklin equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 80% for the five-year period and 91% for the 10-year period ended December 31, 2006.3,7 * 65% of Templeton Templeton self-centered rat. [Children’s Lit.: Charlotte’s Web] See : Egotism equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 74% for the five-year period and 90% for the 10-year period ended December 31, 2006.3,8 * 100% of Mutual Series equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-, five- and 10-year periods ended December 31, 2006.3,9 * 87% of Franklin Templeton's taxable fixed income mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-year period, 100% for the five-year period and 97% for the 10-year period ended December 31, 2006.3,10 * 100% of Franklin Templeton's tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. fixed income mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the three-, five- and 10-year periods ended December 31, 2006.3,11 * Franklin Balance Sheet Investment Fund ranked in the top two quartiles of the Lipper Mid-Cap Mid-cap Short for "Middle Cap," mid cap refers to stocks with a market capitalization of between $2 billion to $10 billion. Notes: As the name implies, a mid-cap is in the middle of the pack. A mid-cap isn't too big, but at the same time has a relatively decent market cap. Value Funds peer group for total return among 297, 222, 166 and 48 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return, Preservation, Expense and Tax Efficiency, and was rated 4 stars overall by Morningstar among 268 Mid-Cap Value funds as of December 31, 2006.12,21,22 * Templeton Growth Fund ranked in the top quartile Quartile A statistical term describing a division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations. Notes: Each quartile contains 25% of the total observations. of the Lipper Global Large-Cap Large-cap A stock with a high level of capitalization, usually at least $5 billion market value. large-cap 1. Of or relating to the common stock of a big corporation that has considerable retained earnings and a large amount of Value Funds peer group for total return among 24, 19, 18 and 5 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received a Lipper Leader award for Preservation, and was rated 4 stars overall by Morningstar among 415 World Stock funds as of December 31, 2006.13,21,22 * Mutual Shares Fund ranked in the top two quartiles of the Lipper Multi-Cap Value Funds peer group for total return among 444, 341, 253 and 100 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return and Preservation, and was rated 4 stars overall by Morningstar among 1111 Large Value funds as of December 31, 2006.14,21,22 * Mutual Beacon Beacon, city (1990 pop. 13,243), Dutchess co., SE N.Y., on the E bank of the Hudson River; settled 1663, inc. in 1913 when Fishkill Landing and Matteawan villages were united. Fund ranked in the top quartile of the Lipper Multi-Cap Core Funds peer group for total return among 916, 648, 469 and 197 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return and Preservation, and was rated 4 stars overall by Morningstar among 1111 Large Value funds as of December 31, 2006.15,21,22 * Mutual Discovery Fund ranked in the top two quartiles of the Lipper Global Multi-Cap Value Funds peer group for total return among 53, 46, 31 and 14 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received a Lipper Leader award for Preservation, and was rated 4 stars overall by Morningstar among 415 World Stock funds as of December 31, 2006.16,21,22 * Franklin Federal Tax-Free Income tax-free income The income received but not subject to income taxes. For example, interest from most municipal bonds is free of federal income taxes and often from state and local income taxes as well. Compare tax-deferred income, tax-sheltered income. Fund ranked in the top quartile of the Lipper General Municipal Debt Funds peer group for total return among 257, 250, 227 and 145 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return, Consistent Return and Expense, and was rated 4 stars overall by Morningstar among 284 Muni National Long funds as of December 31, 2006.17,21,22 * Franklin California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). High Yield Municipal Fund ranked in the top quartile of the Lipper California Municipal Debt Funds peer group for total return among 116, 111, 95 and 68 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return, Consistent Return and Tax Efficiency, and was rated 5 stars overall by Morningstar among 157 Muni California Long funds as of December 31, 2006.18,21,22 * Franklin Income Fund ranked in the top decile decile one of the groups when a series of ranked data is divided into ten equal parts, or dividing points between such groups. See also quartile. of the Lipper Mixed-Asset Target Allocation In air defense, the process, following weapon assignment, of allocating a particular target or area to a specific surface-to-air missile unit or interceptor aircraft. Moderate Funds peer group for total return among 425, 306, 219 and 107 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received Lipper Leader awards for Total Return and Consistent Return, and was rated 5 stars overall by Morningstar among 339 Conservative Allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as funds as of December 31, 2006.19,21,22 * Templeton Global Bond Fund ranked in the top decile of the Lipper Global Income Funds peer group for total return among 103, 93, 78 and 52 funds for the one-, three-, five- and 10-year periods ended December 31, 2006. The fund received a Lipper Leader award for Total Return, and was rated 5 stars overall by Morningstar among 160 World Bond funds as of December 31, 2006.20,21,22 Performance quoted represents past performance, which cannot predict or guarantee future results. Global Business Developments * In a quarterly survey of shareholder satisfaction conducted by National Quality Review, a third party customer service evaluator, 95% of customers responding to the survey said that they would recommend Franklin Templeton Investments to others. * Our retail web site, franklintempleton.com, was recognized by kasina In Buddhism, kasina are a class of basic visual objects of meditation. There are ten kasina:
institution that provide the market function of matching borrowers and lenders or traders. " survey. * Franklin Templeton Investments and China Life Group announced the formation of a strategic partnership through the proposed formation of "China Life Franklin Asset Management Co. Limited" in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. to manage non-RMB assets of China Life Group. * Launched three new products for Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. investors: a corporate bond fund, a managed yield fund and a Canadian balanced fund Balanced Fund A mutual fund that invests its assets into the money market, bonds, preferred stock, and common stock with the intention to provide both growth and income. Also known as an asset allocation fund. . * Opened two new SICAV SICAV Société d'Investissement à Capital Variable (Societes d'Investissement a Capital Variable) funds: an Asian flex cap fund and an absolute return (Euro) fund, and also launched a Korea-domiciled global bond fund. * Franklin Templeton Portfolio Advisors, Inc.'s Franklin Portfolio Advisors All Cap Growth portfolio was made available to unified managed account investors at a major brokerage firm. * Completed a final closing of a European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. private equity real estate fund of funds Fund of Funds A mutual fund that invests in other mutual funds. Notes: For example, an investor would select a general risk profile and the fund-of-funds manager would pick underlying investments from a range of products managed by external managers. vehicle. * Introduced retirement planning Retirement financial planning refers to a collection of systems, methods, and processes which, in their aggregate, support a family unit's (client's) desire to achieve a state of financial independence, such that the need to be gainfully employed is optional. presentation for financial advisors, developed in conjunction with Ibbotson Associates, Inc., featuring new proprietary research findings that evaluate portfolio asset allocation Portfolio asset allocation The distribution, by type of asset, of a portfolio's holdings. and income distribution strategies that have the highest probability of generating a given level of income for at least 30 years. * James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. C. Goodfellow Goodfellow refers to:
1. Company International. Mr. Goodfellow, formerly vice chairman, was also appointed chairman. Mr. Johnson continues as president. * Sukumar Rajah, chief investment officer - equity, and KN Siva Subramanian, portfolio manager, both of Franklin Templeton Asset Management (India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. ) Private Limited, were named among the top five fund managers in India by Business Standard: Fund Manager in their first annual fund manager rankings. * Celebrated the 10th anniversary of the acquisition of Mutual Series and completed a successful marketing campaign focused on Mutual Series' funds resulting in first time sales from over 9,000 new financial advisors. * Established a dedicated web site for investors in Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . * Launched an advertising campaign for Systematic Investment Plans in India to promote regular savings and stabilize stabilize See peg. future sales trends. [TABLE OMITTED] 1 Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: : Operating income divided by total operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. . 2 The quarter ended December 31, 2006 includes the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of assets under management of a former subsidiary at October October: see month. 1, 2006. [TABLE OMITTED] 1 Operating margin: Operating income divided by total operating revenues. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] 1 U.S. retail assets include institutional assets totaling approximately $40.4 billion that are invested in U.S. retail fund and annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. products. Total institutional and high net-worth assets at December 31, 2006 were approximately $172.5 billion, of which high net-worth assets comprised $12.2 billion. 2 The quarter ended December 31, 2006 includes the divestiture of assets under management of a former subsidiary at October 1, 2006. [TABLE OMITTED] 1 The quarter ended December 31, 2006 includes the divestiture of assets under management of a former subsidiary at October 1, 2006. Conference Call Information On Thursday Thursday: see week. , January January: see month. 25, 2007, Franklin Resources, Inc. [NYSE:BEN] President and Chief Executive Officer, Greg Johnson Greg Johnson may refer to:
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 the "Our Company" page of franklintempleton.com through February February: see month. 8, 2007. The replay can also be accessed by calling (800) 642-1687 in the U.S. or (706) 645-9291 internationally using access code 6218075, after 5:30 p.m. Eastern Time on January 25, 2007, through 11:59 p.m. Eastern Time on February 8, 2007. Questions regarding the teleconference call should be directed to Franklin Resources, Inc., Investor Relations Investor relations The process by which the corporation communicates with its investors. at (650) 312-4091 or Corporate Communications Corporate communications is the process of facilitating information and knowledge exchanges with internal and key external groups and individuals that have a direct relationship with an enterprise. at (650) 312-3395. 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 60 years of investment experience and over $552 billion in assets under management at December 31, 2006. 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.-registered 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 solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual 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 Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Franklin Resources, Inc. 2. Morningstar ratings and Lipper rankings for Franklin Templeton U.S.-registered funds are based on Class A shares. Franklin Templeton funds are compared against a universe of all share classes. All Franklin Templeton Class A asset data is based on 11/30/06 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 145 peer groups of U.S. retail mutual funds, and the groups vary in size from 5 to 972 funds. Lipper total return calculations include reinvested dividends and capital gains, but do not include sales charges Sales Charge A commission or fee paid by an investor at the time of purchasing mutual fund shares. The charge is paid to a mutual fund salesperson or financial advisor and is intended to provide compensation for the financial salesperson's efforts in assisting their client select or expense subsidization sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. by the manager. Results may have been different if these or other factors had been considered. Lipper Performance Rankings of Franklin Templeton's Long-Term Mutual Funds (see also footnote Text that appears at the bottom of a page that adds explanation. It is often used to give credit to the source of information. When accumulated and printed at the end of a document, they are called "endnotes." 2 and 3 above) [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] 4. Source: Lipper[R] Inc., 12/31/06. Of the eligible Franklin Templeton long-term mutual funds tracked by Lipper, 38, 44, 49 and 40 funds ranked in the top quartile and 34, 25, 23 and 24 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., 12/31/06. Of the eligible Franklin Templeton equity funds tracked by Lipper, 14, 14, 17 and 12 funds ranked in the top quartile and 17, 14, 12 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., 12/31/06. Of the eligible Franklin Templeton non-money market fixed income funds tracked by Lipper, 24, 30, 32 and 28 funds ranked in the top quartile and 17, 11, 11 and 12 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., 12/31/06. Of the eligible Franklin equity funds tracked by Lipper, 6, 8, 10 and 5 funds ranked in the top quartile and 12, 9, 8 and 9 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 8. Source: Lipper[R] Inc., 12/31/06. Of the eligible Templeton equity funds tracked by Lipper, 4, 3, 3 and 2 funds ranked in the top quartile and 3, 1, 2 and 3 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 9. Source: Lipper[R] Inc., 12/31/06. Of the eligible Mutual Series equity funds tracked by Lipper, 4, 3, 4 and 5 funds ranked in the top quartile and 2, 4, 2 and 0 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 10. Source: Lipper[R] Inc., 12/31/06. Of the eligible Franklin Templeton non-money market taxable fixed income funds tracked by Lipper, 5, 2, 5 and 3 funds ranked in the top quartile and 3, 6, 5 and 4 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 11. Source: Lipper[R] Inc., 12/31/06. Of the eligible Franklin Templeton non-money market tax-free fixed income funds tracked by Lipper, 19, 28, 27 and 25 funds ranked in the top quartile and 14, 5, 6 and 8 funds ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups. 12. Source: Lipper[R] Inc., 12/31/06. Franklin Balance Sheet Investment Fund Class A ranked 114 in a universe of 297 funds in Lipper's "Mid-Cap Value Funds" group for the one-year period, 45 of 222 for the three-year period, 30 of 166 for the five-year period and 9 of 48 for the 10-year period. 13. Source: Lipper[R] Inc., 12/31/06. Templeton Growth Fund Class A ranked 6 in a universe of 24 funds in Lipper's "Global Large-Cap Value Funds" group for the one-year period, 4 of 19 for the three-year period, 3 of 18 for the five-year period and 1 of 5 for the 10-year period. 14. Source: Lipper[R] Inc., 12/31/06. Mutual Shares Fund Class A ranked 204 in a universe of 444 funds in Lipper's "Multi-Cap Value Funds" group for the one-year period, 110 of 341 for the three-year period, 44 of 253 for the five-year period and 19 of 100 for the 10-year period. 15. Source: Lipper[R] Inc., 12/31/06. Mutual Beacon Fund Class A ranked 50 in a universe of 916 funds in Lipper's "Multi-Cap Core Funds" group for the one-year period, 38 of 648 for the three-year period, 28 of 469 for the five-year period and 46 of 197 for the 10-year period. 16. Source: Lipper[R] Inc., 12/31/06. Mutual Discovery Fund Class A ranked 26 in a universe of 53 funds in Lipper's "Global Multi-Cap Value Funds" group for the one-year period, 12 of 46 for the three-year period, 13 of 31 for the five-year period and 3 of 14 for the 10-year period. 17. Source: Lipper[R] Inc., 12/31/06. Franklin Federal Tax-Free Income Fund Class A ranked 58 in a universe of 257 funds in Lipper's "General Municipal Debt Funds" group for the one-year period, 27 of 250 for the three-year period, 38 of 227 for the five-year period and 31 of 145 for the 10-year period. 18. Source: Lipper[R] Inc., 12/31/06. Franklin California High Yield Municipal Fund Class A ranked 5 in a universe of 116 funds in Lipper's "California Municipal Debt Funds" group for the one-year period, 4 of 111 for the three-year period, 5 of 95 for the five-year period and 3 of 68 for the 10-year period. 19. Source: Lipper[R] Inc., 12/31/06. Franklin Income Fund Class A ranked 9 in a universe of 425 funds in Lipper's "Mixed-Asset Target Allocation Moderate Funds" group for the one-year period, 24 of 306 for the three-year period, 2 of 219 for the five-year period and 5 of 107 for the 10-year period. 20. Source: Lipper[R] Inc., 12/31/06. Templeton Global Bond Fund Class A ranked 2 in a universe of 103 funds in Lipper's "Global Income Funds" group for the one-year period, 2 of 93 for the three-year period, 2 of 78 for the five-year period and 5 of 52 for the 10-year period. 21. Source: Lipper[R] Inc., 12/31/06. 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 Risk-Adjusted Return A measure of how much risk a fund or portfolio takes on to earn its returns, usually expressed as a number or a rating. Notes: This is often represented by the Sharpe Ratio. The more return per unit of risk, the better. , 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. Lipper ratings for Expense reflect funds' expense minimization relative to peers with similar load structures. Lipper ratings are computed for all Lipper classifications with five or more distinct portfolios and span both equity and fixed-income funds (e.g., large-cap core, general U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. , etc.). The Lipper ratings are subject to change every month and are based on an equal-weighted average of percentile ranks The percentile rank of a score is the percentage of scores in its frequency distribution which are lower. For example, a test score which is greater than 85% of the scores of people taking the test is said to be at the 85th percentile. for the Consistent Return, Total Return, Preservation, Tax-Efficiency, and Expense metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. over three-, five- and 10-year periods (if applicable). 20% of funds in each peer group are named Lipper Leaders, the next 20% receive a score of 2, the middle 20% are scored 3, the next 20% are scored 4 and the lowest 20% are scored 5. Franklin Balance Sheet Investment Fund, in Lipper's Mid-Cap Value classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: 2 [222], Lipper Leader [166], Lipper Leader [48]; Preservation (in Equity asset class): 2 [8429], Lipper Leader [6670], Lipper Leader [2533]; Expense: Lipper Leader [78], Lipper Leader [64], Lipper Leader [26]; Tax Efficiency: Lipper Leader [222], 2 [166], Lipper Leader [48]. Templeton Growth Fund, in Lipper's Global Large-Cap Value classification, received the following ratings for the three-, five and 10-year periods respectively: Preservation (in Equity asset class): Lipper Leader [8429], Lipper Leader [6670], Lipper Leader [2533]. 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 [340], Lipper Leader [252], Lipper Leader [99]; Preservation (in Equity asset class): Lipper Leader [8429], Lipper Leader [6670], Lipper Leader [2533]. Mutual Beacon Fund, in Lipper's Multi-Cap Core Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [646], Lipper Leader [468], 2 [197]; Preservation (in Equity asset class): Lipper Leader [8429], Lipper Leader [6670], Lipper Leader [2533]. Mutual Discovery Fund, in Lipper's Global Multi-Cap Value Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Preservation (in Equity asset class): Lipper Leader [8429], Lipper Leader [6670], Lipper Leader [2533]. Franklin Federal Tax-Free Income Fund, in Lipper's General Municipal Debt Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [250], Lipper Leader [227], 2 [145]; Consistent Return: 2 [240], 2 [219], 2 [119]; Expense: Lipper Leader [102], Lipper Leader [96], Lipper Leader [74]. Franklin California High Yield Municipal Fund, in Lipper's California Municipal Debt Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [111], Lipper Leader [95], Lipper Leader [68]; Consistent Return: 3 [108], Lipper Leader [95], Lipper Leader [50]; Tax Efficiency: Lipper Leader [111], 2 [95], Lipper Leader [68]. Franklin Income Fund, in Lipper's Mixed-Asset Target Allocation Moderate Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [306], Lipper Leader [219], Lipper Leader [107]; Consistent Return: Lipper Leader [299], Lipper Leader [214], 3 [92]. Templeton Global Bond Fund, in Lipper's Global Income Funds classification, received the following ratings for the three-, five- and 10-year periods respectively: Total Return: Lipper Leader [93], Lipper Leader [79], Lipper Leader [52]. 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 Reuters British cooperative news agency. Founded in 1851 by Paul Julius Reuter, it was initially concerned with commercial news but began to serve a growing newspaper clientele after the London Morning Advertiser subscribed in 1858. , All Rights Reserved. 22. Source: Morningstar[R] 12/31/06. 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 Redemption fee A fee some mutual funds charge when an investor sells shares within a specified short period of time. ), 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 268; 186; 54 Mid-Cap Value funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Franklin Balance Sheet Investment Fund 3, 4, 4. The following fund was rated against 415; 326; 154 World Stock funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Templeton Growth Fund 3, 4, 4. The following funds were rated against 1111; 835; 397 Large Value funds for the respective three- five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Mutual Shares Fund 3, 4, 5 and Mutual Beacon Fund 3, 4, 5. The following fund was rated against 415; 326; 154 World Stock funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Mutual Discovery Fund 4, 4, 5. The following fund was rated against 284; 266; 196 Muni National Long funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Franklin Federal Tax-Free Income Fund 3, 3, 4. The following fund was rated against 157; 139; 110 Muni California Long funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Franklin California High Yield Municipal Fund 5, 5, 5. The following fund was rated against 339; 177; 88 Conservative Allocation funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Franklin Income Fund 5, 5, 5. The following fund was rated against 160; 141; 93 World Bond funds for the respective three-, five- and 10-year periods ended 12/31/06, as applicable. For the three-, five- and 10-year periods ended 12/31/06, the Morningstar ratings were: Templeton Global Bond Fund 5, 5, 4. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : The financial results in this press release are preliminary. Statements in this press release regarding Franklin Resources, Inc., which are not historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements involve a number of known and unknown 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, in Risk Factors and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations in Franklin's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September 30, 2006. * We are subject to extensive and often complex, overlapping and frequently changing regulation domestically and abroad. * Regulatory and legislative actions and reforms are making the regulatory environment in which we operate more costly and future actions and reforms could adversely impact our assets under management, increase costs and negatively impact our profitability and future financial results. * Our ability to maintain the beneficial tax treatment we anticipate with respect to foreign earnings we have repatriated is based on current interpretations of the American Jobs Creation Act of 2004 (the "Jobs Act") and timely and permitted use of such amounts in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with our domestic reinvestment plan reinvestment plan See dividend reinvestment plan (DRIP). and the Jobs Act. * Any significant limitation or failure of our software applications and other technology systems that are critical to our operations could constrain con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. our operations. * We face risks, and corresponding potential costs and expenses, associated with conducting operations and growing our business in numerous foreign countries. * We depend on key personnel and our financial performance could be negatively affected by the loss of their services. * Strong competition from numerous and sometimes larger companies with competing offerings and products could limit or reduce sales of our products, potentially resulting in a decline in our market share, revenues and net income. * Changes in the distribution channels on which we depend could reduce our revenues and hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. our growth. * The amount or mix of our assets under management are subject to significant fluctuations and could negatively impact our revenues and income. * Our increasing focus on international markets as a source of investments and sales of investment products subjects us to increased exchange rate and other risks in connection with earnings and income generated overseas. * Poor investment performance of our products could affect our sales or reduce the level of assets under management, potentially negatively impacting our revenues and income. * We could suffer losses in earnings or revenue if our reputation is harmed. * Our future results are dependent upon maintaining an appropriate level of expenses, which are subject to fluctuation Fluctuation A price or interest rate change. . * Our ability to successfully integrate widely varied business lines can be impeded im·pede tr.v. im·ped·ed, im·ped·ing, im·pedes To retard or obstruct the progress of. See Synonyms at hinder1. [Latin imped by systems and other technological limitations. * Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability. * Certain of the portfolios we manage, including our emerging market portfolios, are vulnerable to market-specific political, economic or other risks, any of which may negatively impact our revenues and income. * Our revenues, earnings and income could be adversely affected if the terms of our 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. * Civil litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. arising out of or relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc previously settled governmental investigations or other matters, governmental or regulatory investigations and/or examinations and the legal risks associated with our business could adversely impact our assets under management, increase costs and negatively impact our profitability and/or our future financial results. * Our ability to meet cash needs depends upon certain factors, including our asset value, credit worthiness and the market value of our stock. |
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