San Mateo, CA, October 23, 2003—Franklin Resources, Inc. (Franklin Templeton Investments) (NYSE: BEN) today reported net income of $152.1 million, or $0.61 per share diluted on revenues of $722.0 million for the quarter ended September 30, 2003. Net income was $131.4 million, or $0.52 per share diluted, on revenues of $683.9 million in the preceding quarter. In the comparable quarter a year ago, net income was $68.5 million, or $0.26 per share diluted (after a pre-tax, non-cash, non-operating charge of $60.1 million relating to an unrealized loss in the company's corporate investments, or $0.17 per share diluted after tax), on revenues of $608.3 million. Operating income increased 18% this quarter over the prior quarter and increased 42% over the same quarter in the prior year.

Net income for the year ended September 30, 2003, was $502.8 million, or $1.97 per share diluted, on revenues of $2,624.4 million as compared to net income of $432.7 million, or $1.65 per share diluted, on revenues of $2,518.5 million a year ago. Operating income increased 11% as compared to the prior year primarily due to a 4% increase in revenue resulting from a 3% increase in simple monthly average assets under management, partially offset by a 2% increase in operating expenses.

As of September 30, 2003, assets under management by the company's subsidiaries were $301.9 billion, as compared to $287.0 billion last quarter and $247.8 billion at this time last year. Simple monthly average assets under management during the current quarter were $294.0 billion compared to $272.2 billion in the preceding quarter and $259.0 billion in the same quarter a year ago. Equity assets now comprise 51% of total assets under management as compared to 50% last quarter and 48% at September 30, 2002. Fixed-income assets now comprise 32% of total assets under management, as compared to 33% last quarter and 35% at the same time last year. As of September 30, 2003, hybrid/balanced assets accounted for 15% of total assets under management, and remained unchanged from last quarter and the comparable quarter a year ago. Sales exceeded redemptions by $4.4 billion for the current quarter compared to $6.0 billion for the prior quarter and $2.5 billion for the comparable quarter a year ago.

• Performance and Products^1,2
  
  (See important footnotes in "Supplemental Information" section at the end of the release.)
  
  
• Over 75% 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-, three-, five- and 10-year periods ended September 30, 2003.^3,4
• Approximately 70% of Franklin Templeton's equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the one-year period ended September 30, 2003, while over 85% of the equity mutual fund assets ranked in the top two quartiles for the three-, five- and 10-year periods.^3,5
• Franklin Income Fund, the company's largest fund with $15 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 September 30, 2003. The fund, managed by Franklin Advisers, Inc., was also rated 4 stars overall by Morningstar.^6,7
• Franklin Flex Cap Growth Fund, managed by Franklin Advisers, Inc., ranked in the top two quartiles of its Lipper peer group over the one-, three-, five- and 10-year periods ended September 30, 2003. The fund was also rated 4 stars overall by Morningstar.^6,8
• Over 90% of Franklin Templeton's taxable 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 September 30, 2003. In addition, Franklin Strategic Income Fund ranked in the top quartile of its Lipper peer group for the one-, three- and five-year periods ended September 30, 2003. The fund was also rated 4 stars overall by Morningstar.^6,9,10
• Over 90% of Templeton equity mutual fund assets were in funds ranked in the top two quartiles of their respective Lipper peer groups for the one-, three-, five- and 10-year periods ended September 30, 2003. Moreover, 96% of Templeton's equity mutual fund assets were in funds rated 4 stars overall by Morningstar as of September 30, 2003.^3,6,11,12

• Global Business Developments
  
  
• Completed, on October 1, 2003, the acquisition of Darby Overseas Investments, Ltd. and Darby Overseas Partners, L.P., a group specializing in emerging markets private equity and mezzanine funds with managed assets of approximately $1 billion as of June 30, 2003.
• In the 2003 DALBAR Financial Professional Survey of Financial Advisors, Franklin Templeton tied for 2nd place, up from 4th place in 2002, in the overall general opinion category.
• Franklin Templeton funds in India earned top honors in five out of six categories for performance from Credit Rating and Information Services India Limited, an S&P affiliate.
• Received approval by the China Securities Regulatory Commission to establish a joint venture fund management company with Sealand Securities.
• Franklin Templeton's assets in Taiwan exceeded $4 billion.
• Launched Franklin Templeton Limited Duration Income Trust [AMEX: FTF], which raised approximately $425 million in its initial offering.
• Expanded Franklin Templeton's municipal bond offerings with three new shorter-term maturity tax-free income funds.
• Launched Tapestry, a group of 11 investment strategies targeting Canada's high net-worth investors.

Franklin Resources, Inc. Consolidated Income Statements
(Dollar amounts in thousands except assets under management and per share data)
	Three months ended September 30				Year ended September 30
	2003	2002	% Change		2003	2002	% Change
Operating revenues
Investment management fees	$411,469	$355,239	16%		$1,487,331	$1,462,655	2%
Underwriting and distribution fees	238,947	189,853	26%		844,674	792,697	7%
Shareholder servicing fees	56,429	47,105	20%		217,225	191,302	14%
Sponsored investment product income, net	93	-	N/A		93	-	N/A
Other, net	15,017	16,110	(7%)		75,125	71,878	5%
Total operating revenues	721,955	608,307	19%		2,624,448	2,518,532	4%
Operating expenses
Underwriting and distribution	211,857	175,054	21%		760,843	716,234	6%
Compensation and benefits	166,725	157,627	6%		649,882	645,104	1%
Information systems, technology and occupancy	70,871	70,797	-		285,329	294,161	(3%)
Advertising and promotion	23,248	25,703	(10%)		92,399	106,877	(14%)
Amortization of deferred sales commissions	21,257	16,141	32%		73,501	67,608	9%
Amortization of intangible assets	4,245	4,236	-		16,961	17,107	(1%)
September 11, 2001 recovery, net	(4,401)	-	N/A		(4,401)	-	N/A
Other	28,613	17,983	59%		101,858	85,939	19%
Total operating expenses	522,415	467,541	12%		1,976,372	1,933,030	2%
Operating income	199,540	140,766	42%		648,076	585,502	11%
Other income (expenses)
Sponsored investment product gains, net	1,645	-	N/A		1,645	-	N/A
Other-than-temporary decline in investments value	-	(60,068)	(100%)		-	(60,068)	(100%)
Investment and other income	20,116	14,015	44%		70,392	65,143	8%
Interest expense	(7,105)	(3,168)	124%		(19,910)	(12,302)	62%
Other income (expenses), net	14,656	(49,221)	N/A		52,127	(7,227)	N/A
Income before taxes on income	214,196	91,545	134%		700,203	578,275	21%
Taxes on income	62,117	23,027	170%		197,373	145,552	36%
Net income	$152,079	$68,518	122%		$502,830	$432,723	16%
Earnings per share
Basic	$0.61	$0.26	135%		$1.98	$1.66	19%
Diluted	$0.61	$0.26	135%		$1.97	$1.65	19%
Dividends per share	$0.075	$0.070	7%		$0.300	$0.280	7%
Average shares outstanding (in thousands)
Basic	247,761	260,444	(5%)		253,714	261,239	(3%)
Diluted	249,263	261,497	(5%)		254,681	262,054	(3%)
Operating Margin1	28%	23%	-		25%	23%	-
Assets under management (in millions)
Beginning of period	$286,954	$270,433	6%		$247,760	$246,385	1%
Sales	24,087	16,083	50%		80,786	72,371	12%
Reinvested Distributions	657	628	5%		3,691	4,843	(24%)
Redemptions	(19,697)	(13,562)	45%		(66,865)	(57,492)	16%
Distributions	(1,194)	(1,166)	2%		(5,960)	(7,235)	(18%)
Acquisitions	-	779	(100%)		-	779	(100%)
Appreciation/(depreciation)	11,050	(25,435)	N/A		42,445	(11,891)	N/A
End of period	$301,857	$247,760	22%		$301,857	$247,760	22%
Simple monthly average for period	$293,979	$258,993	14%		$269,779	$263,178	3%

1 Operating Margin: Operating income divided by total operating revenues.

2 Operating Margin: Operating income divided by total operating revenues.
3 Effective January 1, 2003, billable shareholder accounts include additional partial service shareholder accounts.

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, and, originally, for interim or annual reporting periods beginning after June 15, 2003 for VIEs created before February 1, 2003. However, in October 2003, the FASB issued Staff Position FIN 46-6 deferring the consolidation provisions of FIN 46 to interim or annual reporting periods ending after December 15, 2003 for VIEs created before February 1, 2003.

The following tables present the effect of the adoption of FIN 46 on the consolidated results of operations and financial position of Franklin Resources, Inc. and its subsidiaries (the "Company") for VIEs created after January 31, 2003. These tables present the effect of consolidating VIEs for which the Company is the primary beneficiary and are intended to provide transparency as to the impact of the consolidation. The Company is continuing its evaluation of sponsored investment products and will adopt the consolidation provision of FIN 46 for entities created before February 1, 2003 in the quarter ending December 31, 2003 in accordance with Staff Position FIN 46-6.

Six VIEs, all sponsored investment products with inception dates after January 31, 2003, have been consolidated in the Company's financial statements at September 30, 2003. As shown in Table I and II, the Company's operating revenues include net operating revenues of $93 thousand related to the results of operations of these VIEs from inception. In addition, an aggregate of $174 thousand of investment management fees, underwriting and distribution fees, and shareholder servicing fees related to these products have been eliminated on consolidation. Other income includes net realized and unrealized gains of the sponsored investment products of $1,645 thousand and $43 thousand of minority interest representing the portion of these sponsored investment products' income that the Company does not own. The net result of these entries required under FIN 46 increased net income by $1,141 thousand for the quarter and year ended September 30, 2003.

Prior to the adoption of FIN 46, these sponsored investment products would have been classified as investment securities, available-for-sale, in the consolidated balance sheet, and the Company's portion of the sponsored investment products' net change in value of $1,141 thousand would have been credited to other comprehensive income in the consolidated balance sheet, until realized.

As shown in Table III, the impact of consolidating these VIEs on the Company's balance sheet was to increase current assets by $10,358 thousand, current liabilities by $2,068 thousand and minority interest by $8,290 thousand. The net impact of $10,358 thousand includes an increase in current assets of $48,965 thousand representing the assets of the sponsored investment products, partially offset by a decrease of $38,607 thousand, representing the Company's carrying value of these investments prior to the adoption of FIN 46.

In addition to our sponsored investment products, we expect to consolidate our headquarters campus under the requirements of FIN 46 in the period ending December 31, 2003. The Company qualifies as the primary beneficiary of the lessor trust, a special purpose entity that financed the construction of the campus. The Company estimates the impact on the consolidated balance sheet at October 1, 2003 will be to increase property and equipment, net, by approximately $159.0 million, and debt by approximately $164.9 million. The debt matures on September 30, 2004, and will be shown in the Company's consolidated balance sheet as a current liability until it is refinanced or paid. During the quarter ended September 30, 2003, under the current operating lease treatment, the Company has recognized and remitted to the special purpose entity rental payments of approximately $0.7 million included in information systems, technology and occupancy expense. As rental payments due under the lease agreement are equal to the interest charges incurred by the special purpose entity on the loan, after adopting of FIN 46, rent expense will decline and interest expense will increase by the same amount. In addition, the Company will recognize a quarterly depreciation charge related to the campus of approximately $1.4 million in information systems, technology and occupancy expense.

SFAS 150

In May 2003, Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150"), was issued. SFAS 150 clarifies the accounting for certain financial instruments with characteristics of both liabilities and equity and requires that these instruments be classified as liabilities in statements of financial position. As disclosed previously, the Company sells put options giving the purchaser the right to sell shares of its common stock to the Company at a specified price on the designated expiration dates. Prior to fiscal fourth quarter 2003, these put options were treated as equity instruments and the related premium received was recorded in stockholders' equity as capital in excess of par value. Under SFAS 150, effective July 1, 2003, these put options are presented as liabilities and measured at fair value. Changes in fair value are recognized in investment and other income in the Company's consolidated income statements. The increase in fair value of these instruments during the quarter ended September 30, 2003 contributed approximately $5.0 million to non-operating income. At September 30, 2003, there were 1.9 million put options outstanding with various expiration dates from December 2003 through January 2004 and exercise prices ranging from $33 to $35.

TABLE I Consolidated Income Statements
(Dollar amounts in thousands except assets under management and per share data)
		Three months ended September 30, 2003 before FIN 46 adjustments		FIN 46 adjustments4		Consolidated three months ended September 30, 2003
Operating revenues
Investment management fees		$411,603		$(134)		$411,469
Underwriting and distribution fees		238,985		(38)		238,947
Shareholder servicing fees		56,431		(2)		56,429
Sponsored investment product income, net		-		93		93
Other, net		15,017		-		15,017
Total operating revenues		722,036		(81)		721,955
Operating expenses
Underwriting and distribution		211,857		-		211,857
Compensation and benefits		166,725		-		166,725
Information systems, technology and occupancy		70,871		-		70,871
Advertising and promotion		23,248		-		23,248
Amortization of deferred sales commissions		21,257		-		21,257
Amortization of intangible assets		4,245		-		4,245
September 11, 2001 recovery, net		(4,401)		-		(4,401)
Other		28,613		-		28,613
Total operating expenses		522,415		-		522,415
Operating income		199,621		(81)		199,540
Other income (expenses)
Sponsored investment product gains, net		-		1,645		1,645
Investment and other income		20,073		43		20,116
Interest expense		(7,105)		-		(7,105)
Other income, net		12,968		1,688		14,656
Income before taxes on income		212,589		1,607		214,196
Taxes on income		61,651		466		62,117
Net income		$150,938		$1,141		$152,079
Earnings per share
Basic	$0.61
Diluted	$0.61
Average shares outstanding (in thousands)
Basic	247,761
Diluted	249,263

4 Adjustments to consolidate certain sponsored investment products and related elimination adjustments.

TABLE II Consolidated Income Statements
(Dollar amounts in thousands except assets under management and per share data)
		Year ended September 30, 2003 before FIN 46 adjustments		FIN 46 adjustments4		Consolidated Year ended September 30, 2003
Operating revenues
Investment management fees		$1,487,465		$(134)		$1,487,331
Underwriting and distribution fees		844,712		(38)		844,674
Shareholder servicing fees		217,227		(2)		217,225
Sponsored investment product income, net		-		93		93
Other, net		75,125		0		75,125
Total operating revenues		2,624,529		(81)		2,624,448
Operating expenses
Underwriting and distribution		760,843		-		760,843
Compensation and benefits		649,882		-		649,882
Information systems, technology and occupancy		285,329		-		285,329
Advertising and promotion		92,399		-		92,399
Amortization of deferred sales commissions		73,501		-		73,501
Amortization of intangible assets		16,961		-		16,961
September 11, 2001 recovery, net		(4,401)		-		(4,401)
Other		101,858		-		101,858
Total operating expenses		1,976,372		-		1,976,372
Operating income		648,157		(81)		648,076
Other income (expenses)
Sponsored investment product gains, net		-		1,645		1,645
Investment and other income		70,349		43		70,392
Interest expense		(19,910)		-		(19,910)
Other income, net		50,439		1,688		52,127
Income before taxes on income		698,596		1,607		700,203
Taxes on income		196,907		466		197,373
Net income		$501,689		$1,141		$502,830
Earnings per share
Basic	$1.98
Diluted	$1.97
Average shares outstanding (in thousands)
Basic	253,714
Diluted	254,681

5 Adjustments to consolidate certain sponsored investment products and related elimination adjustments.

TABLE III Consolidated Balance Sheet
(Dollar amounts in thousands)
		Preliminary September 30, 2003 before FIN 46 adjustments		FIN 46 adjustments6		Preliminary Consolidated September 30, 2003
Assets
Current assets		$2,961,429		$10,358		$2,971,787
Banking/finance assets		874,951		-		874,951
Non-current assets		3,083,497		-		3,083,497
Total Assets		$6,917,877		$10,358		$6,930,235
Liabilities and stockholders' equity
Current liabilities		$492,485		$2,068		$494,553
Banking/ finance liabilities		758,506		-		758,506
Non-current liabilities		1,364,877		8,290		1,373,167
Total liabilities		2,615,868		10,358		2,626,226
Total stockholders' equity		4,304,009		-		4,304,009
Total liabilities and stockholders' equity		$6,919,877		$10,358		$6,930,235

6 Adjustments to consolidate certain sponsored investment products and related elimination adjustments.

Note: Institutional assets totaling approximately $20.6 billion are invested in U.S. retail fund and annuity products and are disclosed in U.S. retail assets in the above table. Total institutional and high net-worth assets at September 30, 2003, were approximately $100.4 billion, of which high net-worth assets comprised $10.1 billion.

Conference Call Information

On Thursday, October 23, 2003, Franklin Resources, Inc., [NYSE:BEN] will release its fourth fiscal quarter 2003 financial results. Martin Flanagan and Greg Johnson, co-presidents of Franklin Resources, Inc., will lead a live conference call at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the quarterly results and answer analysts' questions.

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

A replay of the call will be archived on franklintempleton.com through November 6, 2003. The replay can also be accessed by calling (800) 642-1687 in the U.S. or (706) 645-9291 internationally using access code #2775729, after 7:30 p.m. Eastern Time on October 23, 2003, through 11:59 p.m. Eastern Time on November 6, 2003.

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 $301 billion in assets under management as of September 30, 2003. For more information, please call 1-800/DIAL BEN® 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® (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 8/31/03 figures unless noted otherwise. Indices are unmanaged and one cannot invest directly in them. Unless otherwise noted, fund returns quoted reflect Class A shares. Performance returns, ratings and rankings for other classes may vary. Investment return and principal value will fluctuate with market conditions and an investor may experience a gain or loss when they sell their shares.
3. 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 1127. 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® Inc., 9/30/03. Of the eligible Franklin Templeton long-term mutual funds tracked by Lipper, 33, 37, 39 and 30 funds ranked in the top quartile and 28, 30, 27 and 22 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® Inc., 9/30/03. Of the eligible Franklin Templeton non-money market equity funds tracked by Lipper, 8, 23, 16 and 9 funds ranked in the top quartile and 15, 8, 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.
6. Source: [Morningstar]© 9/30/03. 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 156; 115; 29 Conservative Allocation funds for the respective 3-, 5- and 10-year periods ended 9/30/03, as applicable. For the 3-, 5- and 10-year periods ended 9/30/03, the Morningstar ratings were: Franklin Income Fund 4, 4, 3. The following fund was rated against 547; 366; 112 Mid-Cap Growth funds for the respective 3-, 5- and 10-year periods ended 9/30/03, as applicable. For the 3-, 5- and 10-year periods ended 9/30/03, the Morningstar ratings were: Franklin Flex Cap Growth Fund 3, 3, 5. The following fund was rated against 135; 110; N/A Multisector Bond funds for the respective 3-, 5- and 10-year periods ended 9/30/03, as applicable. For the 3-, 5- and 10-year periods ended 9/30/03, the Morningstar ratings were: Franklin Strategic Income Fund 3, 4, N/A.
7. Source: Lipper® Inc., 9/30/03. Franklin Income Fund Class A ranked 6 in a universe of 149 funds in Lipper's "Income Funds" group for the one-year period, 4 of 91 for the three-year period, 4 of 73 for the five-year period and 7 of 18 for the 10-year period.
8. Source: Lipper® Inc., 9/30/03. Franklin Flex Cap Growth Fund Class A ranked 148 in a universe of 409 funds in Lipper's "Multi-Cap Growth Funds" group for the one-year period, 131 of 289 for the three-year period, 11 of 159 for the five-year period and 4 of 62 for the 10-year period.
9. Source: Lipper® Inc., 9/30/03. Of the eligible Franklin Templeton non-money market taxable income funds tracked by Lipper, 5, 4, 3 and 3 funds ranked in the top quartile and 3, 4, 4 and 1 fund(s) ranked in the second quartile, for the one-, three-, five- and 10-year periods, respectively, for their respective Lipper peer groups.
10. Source: Lipper® Inc., 9/30/03. Franklin Strategic Income Fund Class A ranked 7 in a universe of 109 funds in Lipper's "Multi-Sector Income Funds" group for the one-year period, 25 of 103 for the three-year period, and 13 of 89 for the five-year period.
11. Source: Lipper® Inc., 9/30/03. Of the eligible Templeton equity funds tracked by Lipper, 1 out of 10 funds ranked in the top Lipper quartile for the one-year period, 7 of 9 for the three-year period, 3 of 9 for the five-year period and 3 of 8 for the 10-year period for their respective Lipper peer groups. 7 out of 10 eligible Templeton equity funds ranked in the second Lipper quartile for the one-year period, 2 of 9 for the three-year period, 3 of 9 for the five-year period and 3 of 8 for the 10-year period for their respective Lipper peer groups.
12. Source: [Morningstar]© 9/30/03. Five Templeton equity mutual funds received 4 stars, three received 3 stars, and one received 2 stars.

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, 2002, and Franklin's most recent Form 10-Q.

• Volatility in the equity markets may cause the levels of our assets under management to fluctuate significantly.
• Weak market conditions may lower our assets under management and reduce our revenues and income.
• We face strong competition from numerous and sometimes larger companies.
• Changes in the distribution channels on which we depend could reduce our revenues or hinder our growth.
• We face risks associated with conducting operations in numerous foreign countries.
• Certain of the portfolios we manage, including our emerging market portfolios and related revenues, are vulnerable to market-specific political 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.
• Regulatory and legislative actions and reforms, including those directed at the mutual fund industry, could impact the Company.