Franklin Resources Inc

Franklin Resources, Inc. Announces First Quarter Results

Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE:BEN)
today reported net income of $172.3 million, or $0.69 per share
diluted on revenues of $806.2 million for the quarter ended December
31, 2003, including a cumulative effect of an accounting change of
$4.8 million, net of tax or $0.02 per share diluted, resulting from
adopting FASB Interpretation No. 46, Consolidation of Variable
Interest Entities (revised December 2003). Net income was $152.1
million, or $0.61 per share diluted, on revenues of $722.0 million in
the preceding quarter. In the comparable quarter a year ago, net
income was $109.8 million, or $0.43 per share diluted on revenues of
$605.5 million. Operating income increased 12% this quarter over the
prior quarter and increased 60% over the same quarter in the prior
year.

As of December 31, 2003, assets under management by the company's
subsidiaries were $336.7 billion, as compared to $301.9 billion last
quarter and $257.7 billion at this time last year. Simple monthly
average assets under management during the current quarter were $318.7
billion compared to $294.0 billion in the preceding quarter and $254.8
billion in the same quarter a year ago. Equity assets now comprise 54%
of total assets under management as compared to 51% last quarter and
48% at December 31, 2002. Fixed-income assets now comprise 29% of
total assets under management, as compared to 32% last quarter and 34%
at the same time last year. As of December 31, 2003, hybrid/balanced
assets account for 15% of total assets under management and remained
unchanged from last quarter and the comparable quarter a year ago.
Sales exceeded redemptions by $7.4 billion for the current quarter
compared to $4.9 billion for the prior quarter and $1.1 billion for
the comparable quarter a year ago.

Fiscal First Quarter 2004 Highlights

Performance and Products(1,2)

(See important footnotes in "Supplemental Information" section at the
end of the release.)

-- Approximately 70% of Franklin Templeton's long-term mutual fund
assets were in funds ranked in the top two quartiles of their
respective Lipper peer groups for the one-year period ended December
31, 2003, while approximately 95% of the long-term mutual fund assets
were in funds ranked in the top two quartiles for the three-, five-
and 10-year periods ended December 31, 2003.(3,4)

-- More than 70% of Franklin's equity mutual fund assets were in funds
ranked in the top two quartiles of their respective Lipper peer groups
for the one-year period ended December 31, 2003, while over 85% of
Franklin's equity mutual fund assets were in funds ranked in the top
two quartiles for the three-, five- and 10-year periods.(3,5)

-- Franklin Flex Cap Growth Fund, managed by Franklin Advisers, Inc.,
ranked in the top third of its Lipper peer group for the one-, three-,
five- and 10-year periods ended December 31, 2003. The fund was also
rated 4 stars overall by Morningstar as of December 31, 2003.(6,7)

-- Franklin Income Fund, Franklin Templeton's largest fund with $18
billion in assets, ranked in the top decile of its Lipper peer group
for the one-, three- and five-year periods and ranked in the top two
quartiles of its Lipper peer group for the 10-year period ended
December 31, 2003. The fund, managed by Franklin Advisers, Inc., was
also rated 4 stars overall by Morningstar as of December 31,
2003.(6,8)

-- Templeton Growth Fund and Templeton World Fund ranked in the top
two quartiles of their Lipper peer group over the one-year period, and
ranked in the top quartile over the three-, five- and 10-year periods
ended December 31, 2003. The funds, managed by Templeton Global
Advisors Limited, were also rated 4 stars overall by Morningstar as of
December 31, 2003.(6,9)

-- All six Mutual Series open-end funds received Lipper Leaders awards
for Total Return and Preservation as of December 31, 2003.(10)

-- Over 97% of Franklin tax-free income mutual fund assets were in
funds ranked in the top two quartiles of their respective Lipper peer
groups for the one-, three-, five- and 10-year periods ended December
31, 2003.(3,11)

-- Franklin Federal Tax-Free Income Fund, managed by Franklin
Advisers, Inc., ranked in the top two quartiles of its Lipper peer
group for the one-, three-, five- and 10-year periods ended December
31, 2003. The fund was also rated 4 stars overall by Morningstar as of
December 31, 2003.(6,12)

Global Business Developments

-- Franklin Resources appointed Martin Flanagan and Greg Johnson as
co-CEOs effective January 1, 2004.

-- Franklin Templeton's assets under management in Italy, Hong Kong
and India crossed the $1 billion, $2 billion and $3 billion marks,
respectively.

-- Since the acquisition in October 2000, Bissett assets under
management have increased approximately 90% to more than $7 billion.

-- Shares of Franklin Mutual Recovery Fund were made available for
sale to retail investors.

-- Templeton Growth (Euro) Fund and Franklin High Yield Fund, two
foreign-sold Franklin Templeton Investment Funds (SICAV), each crossed
the $3 billion mark in total assets under management.

-- Morningstar Korea ranked Franklin Templeton as 2nd best equity
manager and 3rd best fixed-income manager in Korea.

-- New fund launches in Canada, Bissett Income Trust and Dividend Fund
and Bissett Canadian Short Term Bond Fund, and two local fund-of-fund
products in India, which invest in existing Franklin Templeton India
funds.

-- Launched Fiduciary International Small Cap Growth Strategy to U.S.
institutional investors.

-- Franklintempleton.com was recognized for the fourth consecutive
year as a "Top 10 Intermediary Web Site" in an annual "Intermediary
Web Site Trends and Best Practices" study by kasina, an internet
consultant.

-- Fiduciary Trust was awarded the Financial News Award for "Swiss
Asset Management Firm of the Year," which was voted on by a panel of
40 pension and investment consultants from across Europe.

-- Three new Franklin Templeton television commercials aired on major
networks highlighting Franklin Templeton's distinct brands.


Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands except 
 assets under management and per 
 share data)        
                                        Three months ended
                                           December 31
                                                                 %
                                          2003       2002      Change
                                       ---------- ---------- ---------
Operating revenues
Investment management fees              $454,508   $351,412        29%
Underwriting and distribution fees       272,752    185,937        47%
Shareholder servicing fees                61,338     48,051        28%
Consolidated sponsored investment
 products income, net                         26         --       N/A
Other, net                                17,545     20,051      (12%)
                                       ---------- ---------- ---------
Total operating revenues                 806,169    605,451        33%
                                       ---------- ---------- ---------

Operating expenses
Underwriting and distribution            245,879    168,847        46%
Compensation and benefits                189,204    159,118        19%
Information systems, technology and
 occupancy                                69,648     72,595       (4%)
Advertising and promotion                 21,232     22,644       (6%)
Amortization of deferred sales
 commissions                              22,448     16,045        40%
Amortization of intangible assets          4,402      4,234         4%
Other                                     30,496     22,513        35%
                                       ---------- ---------- ---------
Total operating expenses                 583,309    465,996        25%
                                       ---------- ---------- ---------

Operating income                         222,860    139,455        60%
                                       ---------- ---------- ---------
Other income (expenses)
Consolidated sponsored investment
 products gains, net                       4,000         --       N/A
Investment and other income               16,191     12,303        32%
Interest expense                          (7,111)    (3,032)      135%
                                       ---------- ---------- ---------
Other income, net                         13,080      9,271        41%
                                       ---------- ---------- ---------

Income before taxes on income and
 cumulative effect of an accounting
 change                                  235,940    148,726        59%
Taxes on income                           68,423     38,966        76%
                                       ---------- ---------- ---------

Income before cumulative effect of an
 accounting change, net of tax           167,517    109,760        53%
Cumulative effect of an accounting
 change, net of tax                        4,779         --       N/A

                                       ---------- ---------- ---------

Net income                              $172,296   $109,760        57%
                                       ========== ========== =========

Basic earnings per share
Income before cumulative effect of an
 accounting change                         $0.68      $0.43        58%
Cumulative effect of an accounting
 change                                     0.02         --       N/A
                                       ---------- ---------- ---------
Net income                                 $0.70      $0.43        63%
                                       ========== ========== =========

Diluted earnings per share
Income before cumulative effect of an
 accounting change                         $0.67      $0.43        56%
Cumulative effect of an accounting
 change                                     0.02         --       N/A
                                       ---------- ---------- ---------
Net income                                 $0.69      $0.43        60%
                                       ========== ========== =========

Dividends per share                       $0.085     $0.075        13%
Average shares outstanding (in
 thousands)
     Basic                               247,758    257,600       (4%)
     Diluted                             250,234    258,218       (3%)


Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands except
 assets under management and per share
 data)
                                          Three months ended
                                             December 31
                                                                %
                                             2003      2002   Change
                                         --------- --------- ---------

Operating margin(1)                            28%       23%       --
Assets under management (in millions)
Beginning of period                      $301,857  $247,760        22%
     Sales                                 23,829    17,124        39%
     Reinvested distributions               1,920     1,437        34%
     Redemptions                          (16,448)  (16,035)        3%
     Distributions                         (2,659)   (2,095)       27%
     Acquisitions                             878        --       N/A
     Appreciation                          27,344     9,544       187%
End of period                            $336,721  $257,735        31%
Simple monthly average for period        $318,739  $254,842        25%

(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-Dec-03 30-Sep-03 Change  30-Jun-03 31-Mar-03 31-Dec-02
             --------- --------- ------  --------- --------- ---------
Operating
 revenues
Investment
 management
 fees        $454,508  $411,469     10%  $376,553  $347,897  $351,412
Underwriting
 and
 distribution
 fees         272,752   238,947     14%   225,632   194,158   185,937
Shareholder
 servicing
 fees          61,338    56,429      9%    57,430    55,315    48,051
Consolidated
 sponsored
 investment
 products
 income, net       26        93    (72%)       --        --        --
Other, net     17,545    15,017     17%    24,292    15,765    20,051
             --------- --------- ------  --------- --------- ---------
Total
 operating
 revenues     806,169   721,955     12%   683,907   613,135   605,451
             --------- --------- ------  --------- --------- ---------

Operating
 expenses
Underwriting
 and
 distribution 245,879   211,857     16%   207,071   173,068   168,847
Compensation
 and benefits 189,204   166,725     13%   163,230   160,809   159,118
Information
 systems,
 technology
 and
 occupancy     69,648    70,871     (2%)   70,459    71,404    72,595
Advertising
 and
 promotion     21,232    23,248     (9%)   22,281    24,226    22,644
Amortization
 of deferred
 sales
 commissions   22,448    21,257      6%    19,159    17,040    16,045
Amortization
 of intangible
 assets         4,402     4,245      4%     4,244     4,238     4,234
September 11,
 2001
 recovery, net     --    (4,401)  (100%)       --        --        --
Other          30,496    28,613      7%    28,088    22,644    22,513
             --------- --------- ------  --------- --------- ---------
Total
 operating
 expenses     583,309   522,415     12%   514,532   473,429   465,996
             --------- --------- ------  --------- --------- ---------

Operating
 income       222,860   199,540     12%   169,375   139,706   139,455
             --------- --------- ------  --------- --------- ---------

Other income
 (expenses)
Consolidated
 sponsored
 investment
 products
 gains, net     4,000     1,645    143%        --        --        --
Investment
 and other
 income        16,191    20,116    (20%)   22,415    15,558    12,303
Interest
 expense       (7,111)   (7,105)    --     (6,736)   (3,037)   (3,032)
             --------- --------- ------  --------- --------- ---------
Other income,
 net           13,080    14,656   (11%)    15,679    12,521     9,271
             --------- --------- ------  --------- --------- ---------

Income before
 taxes on
 income and
 cumulative
 effect of an
 accounting
 change       235,940   214,196     10%   185,054   152,227   148,726
Taxes on
 income        68,423    62,117     10%    53,666    42,624    38,966
             --------- --------- ------  --------- --------- ---------

Income before
 cumulative
 effect of an
 accounting
 change, net
 of tax       167,517   152,079     10%   131,388   109,603   109,760
Cumulative
 effect of an
 accounting
 change, net
 of tax         4,779        --    N/A         --        --        --
             --------- --------- ------  --------- --------- ---------

Net income   $172,296  $152,079     13%  $131,388  $109,603  $109,760
             ========= ========= ======  ========= ========= =========

Basic earnings 
 per share
Income before
 cumulative
 effect of an
 accounting
 change         $0.68     $0.61     11%     $0.52     $0.43     $0.43
Cumulative
 effect of an
 accounting
 change          0.02        --    N/A         --        --        --
             --------- --------- ------  --------- --------- ---------
Net income      $0.70     $0.61     15%     $0.52     $0.43     $0.43
             ========= ========= ======  ========= ========= =========

Diluted
 earnings 
 per share
Income before
 cumulative
 effect of an
 accounting
 change         $0.67     $0.61     10%     $0.52     $0.43     $0.43
Cumulative
 effect of an
 accounting
 change          0.02        --    N/A         --        --        --
             --------- --------- ------  --------- --------- ---------
Net income      $0.69     $0.61     13%     $0.52     $0.43     $0.43
             ========= ========= ======  ========= ========= =========

Dividends per
 share         $0.085    $0.075     13%    $0.075    $0.075    $0.075


Franklin Resources, Inc.
Consolidated Income Statements
(Dollar amounts in thousands
 except per share data)
                                  Three Months Ended
                 31-Dec-   30-Sep-    %     30-Jun-  31-Mar-   31-Dec-
                   03        03     Change     03       03        02
                 -------  --------  ------  -------  --------  -------
Average shares
 outstanding 
 (in thousands)
     Basic       247,758   247,761      --  252,633  257,023  257,600
     Diluted     250,234   249,263      --  253,254  257,654  258,218

Operating
 margin(2)            28%       28%     --       25%      23%      23%

Employees          6,462     6,504     (1%)   6,540    6,619    6,670
Billable
 shareholder
 accounts (in
 millions)          15.1      14.2      6%     15.2     14.3     10.1

(2) Operating margin: Operating income divided by total operating
revenues.


Franklin Resources, Inc.
Preliminary Summary Balance Sheet
(Dollar amounts in thousands)
                                          Preliminary
                                          December 31,   September 30,
                                                 2003           2003
                                         -------------   -------------
Assets
Current assets                             $3,311,870      $2,968,827
Banking/finance assets                        851,379         918,425
Non-current assets                          3,254,153       3,083,497
---------------------------------------- -------------   -------------
Total assets                               $7,417,402      $6,970,749
---------------------------------------- -------------   -------------

Liabilities and stockholders' equity
Current liabilities                          $649,846        $488,526
Banking/finance liabilities                   728,487         801,980
Non-current liabilities and minority
 interest                                   1,440,440       1,370,135
---------------------------------------- -------------   -------------
Total liabilities                           2,818,773       2,660,641
Total stockholders' equity                  4,598,629       4,310,108
---------------------------------------- -------------   -------------
Total liabilities and stockholders'
 equity                                    $7,417,402      $6,970,749
---------------------------------------- -------------   -------------

---------------------------------------- -------------   -------------
Ending shares of common stock 
 outstanding                                  248,761         245,932
---------------------------------------- -------------   -------------


New Accounting Standards

FIN 46

In January 2003, the Financial Accounting Standards Board issued
Interpretation No. 46, "Consolidation of Variable Interest Entities"
("FIN 46"). Under FIN 46, a variable interest entity ("VIE") is
defined as a corporation, trust, partnership or other entity where the
equity investment holders have not contributed sufficient capital to
finance the activities of the VIE or the equity investment holders do
not have defined rights and obligations normally associated with an
equity investment. FIN 46 requires consolidation of a VIE by the
enterprise that has the majority of the risks and rewards of
ownership, referred to as the primary beneficiary. The consolidation
and disclosure provisions of FIN 46 are effective immediately for VIEs
created after January 31, 2003. Effective July 1, 2003, six of our
sponsored investment products created after January 31, 2003, were
consolidated in our financial statements.

In December 2003, the FASB published FASB Interpretation No. 46,
Consolidation of Variable Interest Entities (revised December 2003)
(FIN 46-R), clarifying FIN 46 and exempting certain entities from the
provisions of FIN 46. Generally, application of FIN 46-R is required
in financial statements of public entities that have interests in
structures commonly referred to as special-purpose entities for
periods ending after December 15, 2003, and, for other types of VIEs,
for periods ending after March 15, 2004. We early adopted FIN 46-R as
of December 31, 2003, and, as a result, we have recognized a
cumulative effect of an accounting change, net of tax, as of this date
to reflect the accumulated retained earnings of VIEs in which we
became an interest holder prior to February 1, 2003.

The following tables present the effect on our consolidated results of
operations and financial position of applying FIN 46-R. These tables
present the effect of consolidating VIEs for which the Company is the
primary beneficiary and are intended to provide transparency. These
tables reflect the continuing activity of VIEs with inception dates
after January 31, 2003, which were consolidated effective July 1,
2003, and they present the cumulative effect adjustment for sponsored
investment products with an inception date prior to February 1, 2003.
These products primarily include open-end funds registered in Canada
and in other international locations. The cumulative effect
adjustment, net of tax related to the sponsored investment products
included in Table I is $8.0 million. The impact of consolidating these
sponsored investment products on our balance sheet, included in the
Table II presentation, is to increase current assets by $44.6 million,
current liabilities by $9.7 million and minority interest by $34.9
million.

In addition to consolidating certain sponsored investment products, we
qualified as the primary beneficiary of a lessor trust, a special
purpose entity that financed the construction of our headquarters
campus. The cumulative effect adjustment, net of tax, related to this
trust is a charge of $3.2 million. The impact of consolidating the
lessor trust in our balance sheet at December 31, 2003, is to increase
property and equipment, net, by approximately $157.6 million, and debt
by approximately $164.9 million. The debt matures on September 30,
2004, and will continue to be shown in our consolidated balance sheet
as a current liability until it is refinanced or paid.

TABLE I
Consolidated Income Statement
(Dollar amounts in thousands
 except per share data)
                           Three Months
                         Ended Dec. 31,                   Consolidated
                            2003 Before                   Three Months
                               FIN 46-R        FIN 46-R Ended Dec. 31,
                            Adjustments  Adjustments(3)           2003
                         -------------- --------------- --------------
Operating revenues
Investment management
 fees                         $454,646            ($138)     $454,508
Underwriting and
 distribution fees             272,754               (2)      272,752
Shareholder servicing
 fees                           61,352              (14)       61,338
Sponsored investment
 products income, net               --               26            26
Other, net                      17,545               --        17,545
                         -------------- --------------- --------------
Total operating revenues       806,297             (128)      806,169
                         -------------- --------------- --------------

Operating expenses
Underwriting and
 distribution                  245,879              --        245,879
Compensation and benefits      189,204              --        189,204
Information systems,
 technology and occupancy       69,648              --         69,648
Advertising and promotion       21,232              --         21,232
Amortization of deferred 
 sales commissions              22,448              --         22,448
Amortization of
 intangible assets               4,402              --          4,402
September 11, 2001
 recovery, net                      --              --             --
Other                           30,496              --         30,496
                         -------------- --------------- --------------
Total operating expenses       583,309              --        583,309
                         -------------- --------------- --------------
Operating income               222,988            (128)       222,860
                         -------------- --------------- --------------

Other income (expenses)
Sponsored investment
 product gains, net                 --           4,000          4,000
Investment and other
 income                         17,742          (1,551)        16,191
Interest expense                (7,111)             --         (7,111)
                         -------------- --------------- --------------
Other income, net               10,631           2,449         13,080
                         -------------- --------------- --------------

Income before taxes on 
 income and cumulative 
 effect of an accounting 
 change                        233,619           2,321        235,940
Taxes on income                 67,750             673         68,423
                         -------------- --------------- --------------

Income before cumulative 
 effect of an accounting
 change, net of tax            165,869           1,648        167,517

Cumulative effect of an 
 accounting change, net
 of tax                             --           4,779          4,779
                         -------------- --------------- --------------
Net income                    $165,869          $6,427       $172,296
                         ============== =============== ==============

Basic earnings per share
Income before cumulative 
 effect of an accounting 
 change                                                         $0.68
Cumulative effect of
 an accounting change                                            0.02
                                                       ---------------
Net income                                                      $0.70
                                                       ===============
Diluted earnings per
 share
Income before
 cumulative effect of
 an accounting change                                           $0.67
Cumulative effect of
 an accounting change                                            0.02
                                                       ---------------
Net income                                                      $0.69
                                                       ===============
Average shares outstanding 
 (in thousands)
     Basic                                                    247,758
     Diluted                                                  250,234

(3) Adjustments to consolidate variable interest entities and related
elimination adjustments.

TABLE II
Consolidated Balance Sheet
(Dollar amounts in thousands)

                            Preliminary
                           December 31,                    Preliminary
                            2003 Before                   Consolidated
                               FIN 46-R        FIN 46-R   December 31,
                            Adjustments  Adjustments(4)          2003
                         -------------- --------------- --------------
Assets
Current assets              $3,257,467         $54,403     $3,311,870
Banking/finance assets         851,379              --        851,379
Non-current assets           3,096,548         157,605      3,254,153
------------------------ -------------- --------------- --------------
Total assets                $7,205,394        $212,008     $7,417,402
------------------------ -------------- --------------- --------------

Liabilities and
 stockholders' equity
Current liabilities           $471,333        $178,513       $649,846
Banking/finance
 liabilities                   728,487              --        728,487
Non-current liabilities
 and minority interest       1,403,756          36,684      1,440,440
------------------------ -------------- --------------- --------------
Total liabilities            2,603,576         215,197      2,818,773
Total stockholders' 
 equity                      4,601,818          (3,189)     4,598,629
------------------------ -------------- --------------- --------------
Total liabilities and
 stockholders' equity       $7,205,394        $212,008     $7,417,402
------------------------ -------------- --------------- --------------

(4) Adjustments to consolidate variable interest entities and related
elimination adjustments.


ASSETS UNDER MANAGEMENT BY INVESTMENT OBJECTIVE
(in billions)                  31-Dec- 30-Sep- 30-Jun- 31-Mar- 31-Dec-
                                  03      03      03      03      02
                               ------- ------- ------- ------- -------
   Equity
          Global/
           international       $118.5   $99.8   $91.6   $75.7   $81.4
          Domestic (U.S.)        63.6    55.4    50.7    42.7    43.5
                               ------- ------- ------- ------- -------
          Total equity          182.1   155.2   142.3   118.4   124.9
                               ------- ------- ------- ------- -------

   Hybrid/balanced               51.1    45.8    42.8    37.4    38.3

   Fixed-income
          Tax-free               52.4    52.2    53.6    52.3    52.1
          Taxable:
             Domestic (U.S.)     32.2    31.1    31.4    29.4    27.3
             Global/
              international      13.1    11.8    10.9     9.4     9.1
                               ------- ------- ------- ------- -------
          Total fixed-income     97.7    95.1    95.9    91.1    88.5
                               ------- ------- ------- ------- -------

   Money market                   5.8     5.8     6.0     5.5     6.0

                               ------- ------- ------- ------- -------
Total ending assets            $336.7  $301.9  $287.0  $252.4  $257.7
                               ------- ------- ------- ------- -------
Simple monthly average assets  $318.7  $294.0  $272.2  $255.1  $254.8
                               ======= ======= ======= ======= =======

ASSETS UNDER MANAGEMENT & FLOWS
(in billions)                       Three Months Ended
                     31-Dec-03 30-Sep-03 % Change  31-Dec-02 % Change
                     --------- --------- --------- --------- ---------
Beginning assets
 under management      $301.9    $287.0         5%   $247.8        22%
   U.S. retail
    assets
      Beginning 
       assets          $188.0    $180.0         4%   $157.7        19%
      -------------- --------- --------- --------- --------- ---------
      Sales              13.4      12.9         4%      9.4        43%
      Reinvested
       distributions      1.7       0.6       183%      1.3        31%
      Redemptions        (8.4)    (10.0)     (16%)     (8.8)      (5%)
      Distributions      (2.3)     (1.1)      109%     (1.9)       21%
      Acquisitions         --        --        --        --        --
      Appreciation       15.6       5.6       179%      5.0       212%
      -------------- --------- --------- --------- --------- ---------
      Ending assets     208.0     188.0        11%    162.7        28%
      -------------- --------- --------- --------- --------- ---------
   Other assets, 
    including
    international 
    and institutional
      Beginning 
       assets          $113.9    $107.0         6%    $90.1        26%
      -------------- --------- --------- --------- --------- ---------
      Sales              10.4      11.7      (11%)      7.7        35%
      Reinvested
       distributions      0.2        --       N/A       0.1       100%
      Redemptions        (8.0)     (9.7)     (18%)     (7.2)       11%
      Distributions      (0.4)     (0.1)      300%     (0.2)      100%
      Acquisitions        0.9        --       N/A        --       N/A
      Appreciation       11.7       5.0       134%      4.5       160%
      -------------- --------- --------- --------- --------- ---------
      Ending assets     128.7     113.9        13%     95.0        35%
      -------------- --------- --------- --------- --------- ---------
Ending assets under
 management            $336.7    $301.9        12%   $257.7        31%
Total assets under
 management
      Beginning 
       assets          $301.9    $287.0         5%   $247.8        22%
      -------------- --------- --------- --------- --------- ---------
      Sales              23.8      24.6       (3%)     17.1        39%
      Reinvested
       distributions      1.9       0.6       217%      1.4        36%
      Redemptions       (16.4)    (19.7)     (17%)    (16.0)        2%
      Distributions      (2.7)     (1.2)      125%     (2.1)       29%
      Acquisitions        0.9        --       N/A        --       N/A
      Appreciation       27.3      10.6       158%      9.5       187%
      -------------- --------- --------- --------- --------- ---------
      Ending assets    $336.7    $301.9        12%   $257.7        31%
      -------------- --------- --------- --------- --------- ---------

Note: Institutional assets totaling approximately $24.4 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 December 31, 2003, were approximately $113.2
billion, of which high net-worth assets comprised $10.8 billion.


ASSETS UNDER MANAGEMENT & FLOWS BY INVESTMENT OBJECTIVE (in billions)
Three Months Ended                     31-Dec-03  30-Sep-03  31-Dec-02
------------------------------------- ---------- ---------- ----------
Global/international equity
    Beginning assets                      $99.8      $91.6      $76.5
    ---------------------------------- --------- ---------- ----------
    Sales                                   8.8        7.9        6.5
    Reinvested distributions                0.9         --        0.6
    Redemptions                            (5.6)      (7.3)      (5.8)
    Distributions                          (1.1)        --       (0.6)
    Acquisitions                            0.3         --         --
    Appreciation                           15.4        7.6        4.2
    ---------------------------------- --------- ---------- ----------
    Ending assets                         118.5       99.8       81.4
    ---------------------------------- --------- ---------- ----------
Domestic (U.S.) equity
    Beginning assets                       55.4       50.7       41.4
    ---------------------------------- --------- ---------- ----------
    Sales                                   4.1        4.3        2.5
    Reinvested distributions                0.2         --        0.3
    Redemptions                            (2.8)      (2.1)      (2.6)
    Distributions                          (0.3)        --       (0.3)
    Acquisitions                             --         --         --
    Appreciation                            7.0        2.5        2.2
    ---------------------------------- --------- ---------- ----------
    Ending assets                          63.6       55.4       43.5
    ---------------------------------- --------- ---------- ----------
Hybrid/balanced
    Beginning assets                       45.8       42.8       36.6
    ---------------------------------- --------- ---------- ----------
    Sales                                   3.3        3.2        0.9
    Reinvested distributions                0.3        0.1        0.1
    Redemptions                            (1.0)      (1.1)      (1.0)
    Distributions                          (0.4)      (0.2)      (0.2)
    Acquisitions                             --         --         --
    Appreciation                            3.1        1.0        1.9
    ---------------------------------- --------- ---------- ----------
    Ending assets                          51.1       45.8       38.3
    ---------------------------------- --------- ---------- ----------
Tax-free income
    Beginning assets                       52.2       53.6       52.8
    ---------------------------------- --------- ---------- ----------
    Sales                                   1.2        1.6        1.5
    Reinvested distributions                0.3        0.3        0.3
    Redemptions                            (1.5)      (2.2)      (1.5)
    Distributions                          (0.6)      (0.6)      (0.7)
    Acquisitions                             --         --         --
    Appreciation/(depreciation)             0.8       (0.5)      (0.3)
    ---------------------------------- --------- ---------- ----------
    Ending assets                          52.4       52.2       52.1
    ---------------------------------- --------- ---------- ----------
Taxable fixed-income
    Beginning assets                       42.9       42.3       34.7
    --------------------------------- ---------- ---------- ----------
    Sales                                   4.1        5.1        3.1
    Reinvested distributions                0.2        0.2        0.1
    Redemptions                            (3.2)      (4.1)      (2.3)
    Distributions                          (0.3)      (0.4)      (0.3)
    Acquisitions                            0.6         --         --
    Appreciation/(depreciation)             1.0       (0.2)       1.1
    ---------------------------------- --------- ---------- ----------
    Ending assets                          45.3       42.9       36.4
    ---------------------------------- --------- ---------- ----------
Money market
    Beginning assets                        5.8        6.0        5.8
    ---------------------------------- --------- ---------- ----------
    Sales                                   2.3        2.5        2.6
    Reinvested distributions                 --         --         --
    Redemptions                            (2.3)      (2.9)      (2.8)
    Distributions                            --         --         --
    Acquisitions                             --         --         --
    Appreciation                             --        0.2        0.4
    ---------------------------------- --------- ---------- ----------
    Ending assets                           5.8        5.8        6.0
    ---------------------------------- --------- ---------- ----------
Ending assets under management            $336.7    $301.9     $257.7


    Conference Call Information

On Thursday, January 22, 2004, Franklin Resources, Inc.,
(NYSE:BEN) will release its first fiscal quarter 2004 financial
results. Martin Flanagan and Greg Johnson, co-CEOs of Franklin
Resources, Inc., will lead a live conference call at 4:30 p.m. Eastern
Time (1:30 p.m. Pacific Time) to discuss the quarterly results and
answer analysts' questions.

Access to the teleconference will be available via
franklintempleton.com 10 minutes before the start of the call or by
dialing (877) 574-4065 in the U.S. or (706) 679-3804 internationally.

A replay of the call will be archived on franklintempleton.com through
January 29, 2004. The replay can also be accessed by calling (800)
642-1687 in the U.S. or (706) 645-9291 internationally using access
code #4951519, after 5:30 p.m. Eastern Time on January 22, 2004,
through 5:30 p.m. Eastern Time on January 29, 2004.

Questions regarding the teleconference call should be directed to
Franklin Resources, Inc., Investor Relations at (650) 525-8900 or
Corporate Communications at (650) 312-3395.

Franklin Resources, Inc. is a global investment organization operating
as Franklin Templeton Investments. Franklin Templeton provides global
and domestic investment management services through its Franklin,
Templeton, Mutual Series and Fiduciary Trust subsidiaries. The San
Mateo, CA-based company has over 50 years of investment experience and
more than $336 billion in assets under management as of December 31,
2003. For more information, please call 1-800/DIAL BEN(R) or visit
franklintempleton.com.

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 11/30/03 figures unless noted otherwise. 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. Lipper calculates averages by taking all the 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 1098. 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., 12/31/03. Of the eligible Franklin
Templeton long-term mutual funds tracked by Lipper, 34, 44, 44 and 30
funds ranked in the top quartile and 25, 29, 25 and 20 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., 12/31/03. Of the eligible Franklin equity
funds tracked by Lipper, 6, 9, 12 and 2 funds ranked in the top
quartile and 9, 8, 6 and 6 funds ranked in the second quartile, for
the one-, three-, five- and 10-year periods, respectively, for their
respective Lipper peer groups.

6. Source: Morningstar(C) 12/31/03. 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 613; 396; 126 Mid-Cap Growth
funds for the respective 3-, 5- and 10-year periods ended 12/31/03, as
applicable. For the 3-, 5- and 10-year periods ended 12/31/03, the
Morningstar ratings were: Franklin Flex Cap Growth Fund 3, 3, 5. The
following fund was rated against 177; 140; 35 Conservative Allocation
funds for the respective 3-, 5- and 10-year periods ended 12/31/03, as
applicable. For the 3-, 5- and 10-year periods ended 12/31/03, the
Morningstar ratings were: Franklin Income Fund 5, 5, 3. The following
funds were rated against 268; 211; 59 World Stock funds for the
respective 3-, 5- and 10-year periods ended 12/31/03, as applicable.
For the 3-, 5- and 10-year periods ended 12/31/03, the Morningstar
ratings were: Templeton Growth Fund 4, 4, 4 and Templeton World Fund
4, 4, 4. The following fund was rated against 237, 215, 120 Municipal
National Long funds for the respective 3-, 5- and 10-year periods
ended 12/31/03, as applicable. For the 3-, 5- and 10-year periods
ended 12/31/03, the Morningstar ratings were: Franklin Federal
Tax-Free Income Fund 3, 3, 4.

7. Source: Lipper(R) Inc., 12/31/03. Franklin Flex Cap Growth Fund
Class A ranked 78 in a universe of 384 funds in Lipper's "Multi-Cap
Growth Funds" group for the one-year period, 92 of 300 for the
three-year period, 11 of 158 for the five-year period and 3 of 63 for
the 10-year period. Franklin Flex Cap Growth Fund has experienced
negative fund performance.

8. Source: Lipper(R) Inc., 12/31/03. Franklin Income Fund Class A
ranked 8 in a universe of 154 funds in Lipper's "Income Funds" group
for the one-year period, 3 of 95 for the three-year period, 2 of 74
for the five-year period and 7 of 19 for the 10-year period.

9. Source: Lipper(R) Inc., 12/31/03. Templeton Growth Fund Class A
ranked 150 in a universe of 332 funds in Lipper's "Global Funds" group
for the one-year period, 16 of 244 for the three-year period, 15 of
179 for the five-year period and 7 of 44 for the 10-year period.
Templeton World Fund Class A ranked 142 in a universe of 332 funds in
Lipper's "Global Funds" group for the one-year period, 26 of 244 for
the three-year period, 39 of 179 for the five-year period and 11 of 44
for the 10-year period.

10. Source: Lipper(R) Inc., 12/31/03. Lipper Leaders Awards are based
on Class A shares only. Lipper scores for Total Return reflect funds'
historical total return performance relative to peers. Lipper scores
for Preservation reflect funds' historical loss avoidance relative to
other funds within the same asset class. Preservation ratings are
relative, rather than absolute, measures, and funds named Lipper
Leaders for Preservation may still experience losses periodically;
those losses may be larger for equity and mixed equity funds than for
fixed-income funds. The Lipper ratings are subject to change every
month and are based on an equal-weighted average of percentile
rankings for the Total Return and Preservation metrics over 3-, 5- 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. The following Mutual Series open-end funds were awarded
Lipper Leader status in Total Return: Mutual Shares Fund, Mutual
Beacon Fund and Mutual Qualified Fund rated among 313 Multi-Cap Value
funds; Mutual Discovery Fund rated among 38 Global Small-Cap funds;
Mutual European Fund rated among 119 European Region funds; and Mutual
Financial Services Fund rated among 92 Financial Services funds. The
following Mutual Series open-end funds were awarded Lipper Leader
status in Preservation: Mutual Shares, Mutual Beacon, Mutual
Qualified, Mutual Discovery, Mutual European and Mutual Financial
Services Funds rated among 6,996 Equity funds. Under no circumstances
does information about Lipper Leaders constitute a recommendation to
buy or sell funds, nor does it necessarily imply that a fund named as
a Lipper Leader had the best performance within its category. Lipper
Leaders ratings are based on past fund performance, and past
performance does not guarantee future results. Lipper Leaders are
determined monthly using data available at the time of calculation;
Lipper undertakes no responsibility for updating the calculations more
frequently than monthly to incorporate more current data.

11. Source: Lipper(R) Inc., 12/31/03. Of the eligible Franklin
Templeton non-money market tax-free funds tracked by Lipper, 21, 15,
17 and 19 funds ranked in the top quartile and 9, 18, 13 and 10 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., 12/31/03. Franklin Federal Tax-Free Income
Fund Class A ranked 36 in a universe of 296 funds in Lipper's "General
Municipal Debt Funds" group for the one-year period, 100 of 257 for
the three-year period, 69 of 219 for the five-year period and 29 of
116 for the 10-year period.

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's recent filings with the U.S. Securities and Exchange
Commission, including, without limitation, the "Risk Factors" section
of the Management's Discussion and Analysis of Financial Condition and
Results of Operations in Franklin's Annual Report on Form 10-K for the
fiscal year ended September 30, 2003.

-- Volatility in the equity markets may cause the levels of our assets
under management, which in turn impacts revenue, to fluctuate
significantly.

-- Weak market conditions may lower our assets under management and
reduce our revenues and income.

-- We face strong competition from numerous and sometimes larger
companies.

-- Changes in the distribution channels on which we depend could
reduce our revenues or hinder our growth.

-- We face risks associated with conducting operations in numerous
foreign countries.

-- Certain of the portfolios we manage, including our emerging market
portfolios and related revenues, are vulnerable to market-specific
political 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 risks and limitations could constrain our
operations.

-- Governmental investigations and regulatory or legislative actions
and reforms, particularly those specifically focused on the mutual
fund industry, could adversely impact our assets under management and
revenues, increase costs or otherwise negatively impact the
profitability of the company and future financial results.

CONTACT: Franklin Resources, Inc.
         Investor Relations: 
         Alan Weinfeld, 650-525-8900
         Corporate Communications: 
         Holly Gibson Brady, 650-312-4701
         franklintempleton.com