ANNUAL
REPORT
[GRAPHIC - WHEELS]
TEMPLETON GROWTH FUND, INC.
AUGUST 31, 1999
[LOGO - FRANKLIN TEMPLETON]
PAGE
[GRAPHIC - FRANKLIN TEMPLETON CELEBRATING OVER 50 YEARS]
Thank you for investing with Franklin Templeton. We encourage our investors to
maintain a long-term perspective and remember that all securities markets move
both up and down, as do mutual fund share prices. We appreciate your past
support and look forward to serving your investment needs in the years ahead.
In 1992, Sir John Templeton retired after a 50-year career of helping investors
manage their money. Currently he devotes all of his time and efforts to the John
Templeton Foundation. A major portion of his assets remain invested in the
Templeton funds which are managed by many of the investment professionals he
selected and trained.
[PHOTO OF MARK G. HOLOWESKO APPEARS HERE]
MARK G. HOLOWESKO, CFA
Portfolio Manager
Templeton Growth Fund, Inc.
Mark G. Holowesko is president and portfolio manager of Templeton Growth Fund
and several other Templeton funds. He joined the Templeton organization in 1985
in Nassau, Bahamas, and serves as chief investment officer of equity research
worldwide, as well as an officer and director of Templeton Worldwide, Inc. Mr.
Holowesko received a B.A. in economics from Holy Cross College and an M.B.A.
from Babson College. He is a Chartered Financial Analyst and a former director
of the International Society of Financial Analysts.
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SHAREHOLDER LETTER
- -------------------------------------------------------------------------------
YOUR FUND'S GOAL: TEMPLETON GROWTH FUND, INC. SEEKS LONG-TERM CAPITAL GROWTH.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST PRIMARILY IN THE EQUITY
SECURITIES OF COMPANIES LOCATED ANYWHERE IN THE WORLD, INCLUDING EMERGING
MARKETS.
- -------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to bring you this annual report of Templeton Growth Fund, Inc.,
which covers the 12 months ended August 31, 1999. During this time, the
investment principles we have followed for the last several years proved
successful, as many of the investments that hurt our performance last year
helped performance during the period under review. Templeton Growth Fund - Class
A posted a one-year cumulative total return of 34.72%, outperforming the Fund's
benchmark, the Morgan Stanley Capital International(R) (MSCI) World Index, which
provided a cumulative total return of 33.51% for the same period./1/
In early 1998, our search for value and our process of buying during times of
pessimism led us to invest in
1. Source: Standard & Poor's(R) Micropal. The unmanaged MSCI World Index tracks
the performance of approximately 1,450 securities in 22 countries and is
designed to measure world stock market performance. It includes reinvested
dividends. One cannot invest directly in an index, nor is an index
representative of the Fund's portfolio.
You will find a complete listing of the Fund's portfolio holdings, including
dollars value and number of Shares or principal amount, beginning on page 21 of
this report.
CONTENTS
Shareholder Letter 1
Interview with
Mark Holowesko 9
Performance Summary 12
Financial Highlights &
Statement of Investments 17
Financial Statements 28
Notes to Financial
Statements 31
Independent Auditors' Report 35
Tax Designation 36
Change in Independent
Auditor 38
[PYRAMID]
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GEOGRAPHIC DISTRIBUTION
BASED ON TOTAL NET ASSETS
8/31/99
[BAR CHART]
unpopular areas of Asia, cyclical stocks, industrial companies and
commodity-related firms. On August 31, 1999, North America represented 26.1% of
the Fund's total net assets, Europe 34.4%, Asia 18%, and 6.2%.
NORTH AMERICA
Compared to the MSCI World Index, we were underweighted in North America
throughout the reporting period. This was primarily the result of our bottom-up
approach to investing. Rather than making investment decisions based on the
overall performance of stock markets, we look at the world on a stock-by-stock
basis. Generally, throughout the fiscal year U.S. stocks were close to all-time
high valuations. On August 31, 1999, the Standard & Poor's 400(R) Industrials
(S&P Industrials) price-to-earnings (P/E) ratio was over 38 times (38x), which
is quite high considering it has averaged roughly 18x for the previous 20 years.
Similarly, the S&P Industrials price-to-book value was 8x, compared with its
traditional range of 2x to 3x. Furthermore, the Index's price-to-sales ratio was
over 2x, while the 20-year average is less than one.(2) Valuations such as these
made it difficult to find significant bargains in America.
Unfortunately, a large amount of debt has also been built up in the American
economy relative to stock purchases. This is best illustrated by looking at
margin debt as a percentage of gross domestic product (GDP). Twenty years ago,
margin debt as a percentage of GDP was less than one-half of a percent; today it
is more than two percent.(3)
2. Source: Standard & Poor's(R) Corporation.
3. Source: Ned Davis Research, Inc.
2
PAGE
Despite the fact that the overall market performed well, the tendency of
investors to favor large, well-known companies created a broad spread in
valuations in the U.S. stock market. The largest fifty stocks in the S&P 500,
for example, have an average P/E ratio ten times higher than the next 450
stocks. In some of the basic industry groups in the S&P 500, such as
automobiles, oil & gas, aluminum and aerospace, valuations as of August 31,
1999, were one-third to one-tenth of the more expensive industry groups. This is
somewhat justified by differences in growth between the sectors, but the
valuation spread is unusually large. Although we were underweighted in the U.S.
market, at 23.3% of Fund assets, we are comfortable with our holdings. We
believe our North American stocks are cheap on an absolute basis, not only
relative to a very expensive index. On August 31, 1999, the Fund's largest
American holdings included General Motors Corp., Potomac Electric Power Co., and
Boeing Co.
EUROPE
In Europe, we continued to find ideas in the U.K. market. During the reporting
period, U.K. stocks underperformed continental European stocks as investor
enthusiasm regarding the introduction of the euro helped push continental
European stock prices higher. On August 31, 1999, U.K. holdings represented
approximately 40% of our total European exposure. In our opinion, many of our
European holdings may be well positioned to benefit from two major trends. The
first is the
3
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TOP 10 EQUITY HOLDINGS
8/31/99
NAME, % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- ----------------- ----------
Sony Corp.
Appliances & Household
Durables, Japan 2.1%
HSBC Holdings PLC
Banking, Hong Kong* 1.6%
Koninklijke Philips Electronics NV
Electrical & Electronics,
Netherlands 1.5%
Telefonos de Mexico
SA (Telmex), L, ADR
Telecommunications, Mexico 1.5%
ABB Ltd.
Electrical & Electronics,
Sweden 1.5%
Boeing Co.
Aerospace & Military
Technology, U.S. 1.5%
Singapore Airlines Ltd., fgn
Transportation, Singapore(1) 4%
Swire Pacific Ltd., A
Multi-Industry, Hong Kong* 1.3%
General Motors Corp.
Automobiles, U.S. 1.3%
British Steel PLC
Metals & Mining, U.K 1.2%
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
possibility of lower taxes. The impact of lower taxes in the U.S. over the last
ten years has been very visible with almost one-half of the earnings growth the
result of lower taxes and reduced interest costs.(4) Although Europe has
introduced a common currency, and interest rates declined and converged, the
region does not enjoy a common level of taxation. We anticipate this will change
in the future. A recent report released by Bloomberg in June of 1999, indicated
that the German government was discussing a plan to cut corporate tax rates to a
unified rate of 25 percent in 2001 from as high as 40 percent. We believe these
discussions may spread across Europe. Lower taxes would not only free up cash
flow for corporations, but also boost consumer disposable income and provide a
more competitive environment for European companies.
We also believe that the current boom in European buyouts and acquisitions may
continue to help boost share prices. We estimate in 1994, less than $20 billion
was utilized for corporate buyouts in Europe. This figure is expected to exceed
$150 billion in 1999. Corporate activity of this nature helps to increase the
attractiveness of value investing. We are encouraged by the level of corporate
activity we have seen in many of the holdings in our funds. Among the Fund's
largest European holdings were General Electric Co. PLC in the United Kingdom,
Koninklijke Philips Electronics NV in the Netherlands, ABB Ltd. in Sweden,
Alcatel SA in France and UPM-Kymmene Corp. in Finland.
4. Source: Templeton Du Pont Analysis.
4
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ASIA
Our Asian holdings continued to bolster Fund performance during the reporting
period. As the economic situation in the region stabilized early in 1999,
investor attention was drawn to the attractive valuations of many Asian
companies. An important issue for investors in the region is the future
direction of the Japanese economy. Recent reports from Japan are encouraging.
Many investors are anticipating an economic turn-around in the region, which has
boosted the Japanese stock market, and added to the stability of non-Japan Asia.
During the reporting period, our Japanese and Hong Kong holdings benefited from
this perception, with many of the Hong Kong holdings in our portfolio
appreciating significantly in value.
In our opinion, a remaining concern for investors in the region is the potential
for the devaluation of China's currency. The probability of this occurring has
increased. However, we believe a properly executed devaluation could improve
China's competitive position and benefit Hong Kong, which is a major exporter of
Chinese goods, and has its own productive capacity in mainland China. We believe
China has the financial strength to maintain an orderly devaluation. As of
August 31, 1999, our largest Asian positions were Sony Corp, HSBC Holdings PLC,
and Singapore Airlines Ltd., fgn.
5
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LATIN AMERICA
During the fiscal year, the performance of our Latin American holdings was
important to the overall return of the Fund. As in Europe, an encouraging
development in Latin America has been the increase in corporate activity. One of
the Fund's largest Latin American holdings over the course of the last twelve
months, YPF Sociedad Anonima, an Argentinean oil company, was taken over by
Repsol SA, a Spanish oil company. The elimination of this holding and the
profits taken in some of our other holdings has reduced our overall Latin
American exposure.
LOOKING FORWARD
We remain optimistic about the potential for global equity markets and Templeton
Growth Fund, and believe that the Fund's holdings could benefit from what
appears to be a return to value-based investing. Although during most of the
'80s and '90s, value investing provided above-average returns for investors,
there have been a few years during this period when value investing
underperformed, as it did in 1998. Since March 1999, however, investor attention
appears to be turning once again toward stocks that appear cheap on the basis of
price-to-book, price-to-sales, price-to-cash- flow or price-to-earning models.
We believe the Fund is well positioned in these types of securities.
6
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The Fund may also benefit from a renewed interest in non-North American stocks.
High returns from North American securities, combined with poor economic results
in many areas of Asia and Latin America, have dissuaded investors from investing
overseas. But with North American stocks selling at all-time high valuations,
and economic fundamentals improving around the world, many investors are
beginning to search globally for value.
Our lack of currency hedging should also help the Fund's performance. Last year,
the fear that the Asian economic crisis would spill over to Eastern Europe and
other parts of the world caused a flight towards the U.S. dollar, strengthening
it and hurting the value of our foreign holdings. However, we are enthusiastic
about the current level of foreign currency valuations. Many appear undervalued
relative to the dollar and could boost our performance going forward.
Finally, our optimism continues to be bolstered by the level of value we have in
our various holdings. Despite the fact that the equity markets and many of the
more popular indices appear to be trading at extended valuation levels, we
believe we own a collection of attractively priced securities which, over the
long run, have the potential to provide above-average returns.
This discussion reflects our views, opinions and portfolio holdings as of August
31, 1999, the end of the reporting period. However, market and economic
conditions are changing constantly, which can be expected to affect our
investment strategies and the Fund's portfolio composition. Although historical
performance is no guarantee of future
7
PAGE
results, these insights may help you better understand our investment and
management philosophy.
Please remember that there are special risks associated with global investing
related to market, currency, economic, social, political and other factors.
Emerging markets involve similar but heightened risks, in addition to those
associated with their relatively small size and lesser liquidity. Investing in
any emerging market security means accepting a certain amount of volatility and,
in some cases, the consequences of severe market corrections. For example,
Mexico's equity market has increased 3,760% in the last 15 years, but has
suffered eight declines of more than 15% during that time.(5) While short-term
volatility can be disconcerting, declines in excess of 50% are not unusual in
emerging markets. These special risks and other considerations are discussed in
the Fund's prospectus.
Thank you for investing in Templeton Growth Fund, Inc. We welcome your comments
and look forward to serving you in the future.
Sincerely,
/s/MARK G. HOLOWESKO
- ------------------------------------
Mark G. Holowesko, CFA
President
Templeton Growth Fund, Inc.
5. Source: Mexico Bolsa Index. Based on quarterly percentage price change over
15 years ended June 30, 1999. Market return is measured in U.S. dollar terms and
does not include reinvested dividends.
8
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THE FOLLOWING IS AN INTERVIEW WITH MARK HOLOWESKO, PORTFOLIO MANAGER OF
TEMPLETON GROWTH FUND:
WITH THE U.S. EQUITY MARKET CONTINUING TO SET NEW RECORD HIGHS, HOW DO YOU
DETERMINE AN APPROPRIATE "SELL" TARGET FOR FUND HOLDINGS IN THIS COUNTRY?
Our U.S. holdings are much cheaper than the market as a whole, and our decision
process for purchasing U.S. securities was, and is, independent of the market
level. We try to purchase securities that are cheap on an absolute basis, not
cheap relative to the market. Therefore, our decision to sell is independent of
the current overall market or its future direction. We sell securities if the
stock performance does not live up to our expectations, if a security reaches
what we view as "fair value," or if we need to raise cash to purchase other,
more attractive securities.
[GRAPHIC - LARGE Q&A]
9
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THE YEAR 2000 (Y2K) COMPUTER BUG HAS RECEIVED A LOT OF MEDIA ATTENTION. DO YOU
BELIEVE THE FUND'S HOLDINGS IN EMERGING MARKET COUNTRIES ARE AT GREATER RISK OF
Y2K-RELATED DECLINES THAN THOSE OF COMPANIES IN DEVELOPED COUNTRIES? IF SO, HAS
THIS AFFECTED YOUR INVESTMENT STRATEGY IN THESE REGIONS?
Developing countries have, in general, done less to prepare for Y2K than
developed countries. However, it should be remembered that the level of computer
usage in developing countries is much less than in developed countries. We have
carefully analyzed all of our holdings worldwide for Y2K impact and believe we
have done as good a job as anyone in the industry to minimize this risk. This
includes our investments in the developing markets.
VALUE INVESTING APPEARS TO HAVE MADE A COMEBACK IN RECENT MONTHS. DO YOU THINK
THIS IS TEMPORARY OR THE BEGINNING OF A LONG-TERM TREND?
The value investing style has made a rebound lately. The underperformance of the
value style last year and its surge in popularity this year, are not abnormal.
Value investing has worked in the majority of the past 20 years. However, there
have been a few years (and there will be future years) when it has provided
below-average results. This underperformance has traditionally been followed by
very strong returns in subsequent years.
10
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We feel the value style will continue to provide strong returns for several
reasons. In periods of volatility, investors look for downside price support.
You do not find this support with stocks that have increased in price due to
momentum or popularity. Earnings, assets or dividends provide this support,
which is typically found in stocks popular with value investing. Also, the
recent surge in corporate activity outside of the U.S. provides strong support
for the value style. Industry executives generally do not make acquisitions
based on momentum decisions. They typically engage in corporate activity for
sound business reasons that help reduce valuation anomalies.
11
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CLASS A (formerly Class I):
Subject to the current, maximum 5.75% initial sales charge. Prior to July 1,
1992, Fund shares were offered at a higher initial sales charge. Thus, actual
total returns would have been lower. On January 1, 1993, the Fund implemented a
Rule 12b-1plan, which affects subsequent performance.
CLASS B:
Subject to no initial
sales charge, but subject to a contingent deferred sales charge (CDSC) declining
from 4% to 0% over six years. These shares have higher annual fees and expenses
than Class A shares.
CLASS C (formerly Class II):
Subject to 1% initial sales charge and 1% CDSC for shares redeemed within 18
months of investment. These shares have higher annual fees and expenses than
Class A shares.
ADVISOR CLASS:
No initial sales charge or Rule
12b-1 fees and are available to a limited class of investors.
PERFORMANCE SUMMARY AS OF 8/31/99
Distributions will vary based on earnings of the Fund's portfolio and any
profits realized from the sale of the portfolio's securities, as well as the
level of each class' operating expenses. Past distributions
are not indicative of future trends. All total returns
include reinvested distributions at net asset value.
PRICE AND DISTRIBUTION INFORMATION
<TABLE>
<CAPTION>
Class A Change 8/31/99 8/31/98
- ------- ------ ------- -------
<S> <C> <C> <C>
Net Asset Value +$2.78 $19.56 $16.78
</TABLE>
<TABLE>
Distributions (9/1/98 - 8/31/99)
--------------------------------
<S> <C>
Dividend Income $0.4050
Long-term Capital Gain $1.6950
Short-term Capital Gain $0.3400
TOTAL $2.4400
</TABLE>
<TABLE>
<CAPTION>
CLASS B CHANGE 8/31/99 1/1/99
- ------- ------ ------- ------
<S> <C> <C> <C>
Net Asset Value +$3.09 $19.46 $16.37
</TABLE>
<TABLE>
<CAPTION>
CLASS C CHANGE 8/31/99 8/31/98
- ------- ------ ------- -------
<S> <C> <C> <C>
Net Asset Value +$2.66 $19.15 $16.49
</TABLE>
<TABLE>
<CAPTION>
Distributions (9/1/98 - 8/31/99)
--------------------------------
<S> <C>
Dividend Income $0.3104
Long-term Capital Gain $1.6950
Short-term Capital Gain $0.3400
TOTAL $2.3454
</TABLE>
<TABLE>
<CAPTION>
ADVISOR CLASS CHANGE 8/31/99 8/31/98
- ------------- ------ ------- -------
<S> <C> <C> <C>
Net Asset Value +$2.81 $19.61 $16.80
</TABLE>
<TABLE>
<CAPTION>
Distributions (9/1/98 - 8/31/99)
--------------------------------
<S> <C>
Dividend Income $0.4398
Long-term Capital Gain $1.6950
Short-term Capital Gain $0.3400
TOTAL $2.4748
</TABLE>
Templeton Growth Fund paid distributions derived from long-term capital gains of
$1.6950 per share in October, 1998. The Fund hereby designates such
distributions as capital gain dividends per Internal Revenue Code Section 852
(b)(3).
Past performance is not predictive of future results.
12
PAGE
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR 10-YEAR (11/29/54)
- ------- ------ ------ ------- ----------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 34.72% 83.33% 230.21% 45,546.03%
Average Annual Total Return(2) 27.00% 11.55% 12.03% 14.51%
Value of $10,000 Investment(3) $12,700 $17,279 $31,126 $4,302,194
</TABLE>
<TABLE>
<CAPTION>
8/31/95 8/31/96 8/31/97 8/31/98 8/31/99
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 9.51% 10.85% 28.28% -12.61% 34.72%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS B (1/1/99)
- ------- --------
<S> <C>
Cumulative Total Return(1) 18.88%
Aggregate Total Return(2) 14.88%
Value of $10,000 Investment(3) $11,488
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
- ------- ------ ------ --------
<S> <C> <C> <C>
Cumulative Total Return(1) 33.77% 47.61% 75.53%
Average Annual Total Return(2) 31.42% 13.47% 13.60%
Value of $10,000 Investment(3) $13,142 $14,613 $17,378
</TABLE>
<TABLE>
<CAPTION>
8/31/96 8/31/97 8/31/98 8/31/99
------- ------- ------- -------
<S> <C> <C> <C> <C>
One-Year
Total Return(4) 9.99% 27.30% -13.32% 33.77%
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
ADVISOR CLASS(5) 1-YEAR 5-YEAR 10-YEAR (11/29/54)
- -------------- ------ ------ ------- ----------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 35.16% 84.51% 232.37% 45,845.51%
Average Annual Total Return(2) 35.16% 13.03% 12.75% 14.70%
Value of $10,000 Investment(3) $13,516 $18,451 $33,237 $4,594,551
</TABLE>
<TABLE>
<CAPTION>
8/31/95 8/31/96 8/31/97 8/31/98 8/31/99
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
One-Year
Total Return(4) 9.51% 10.85% 28.39% -12.41% 35.16%
</TABLE>
1. Cumulative total return represents the change in value of an investment over
the periods indicated and does not include sales charges.
2. Average annual total return represents the average annual change in value of
an investment over the periods indicated and includes the current, applicable,
maximum sales charge(s) for that class. Since Class B shares have existed for
less than one year, the figures for that class represent aggregate total return
from inception; therefore, average annual total returns are not provided.
3. These figures represent the value of a hypothetical $10,000 investment in the
Fund over the periods indicated and include the current, applicable, maximum
sales charge(s) for that class.
4. One-year total return represents the change in value of an investment over
the one-year periods ended on the specified dates and does not include sales
charges.
5. On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
Class A performance, excluding the effect of the Class A sales charge, but
including the effect of Rule 12b-1 fees and other Class A expenses; and (b) for
periods after January 1, 1997, figures reflect actual Advisor Class performance,
including the deduction of all fees and expenses applicable to that class. Since
January 2, 1997 (commencement of sales), the cumulative and average annual total
returns of Advisor Class shares were 37.46% and 12.70%, respectively.
Since markets can go down as well as up, investment return and principal value
will fluctuate with market conditions, currency volatility and the social,
economic and political climates of countries where the Fund invests. Emerging
markets involve heightened risks related to the same factors, in addition to
those associated with their relatively small size and lesser liquidity. You may
have a gain or loss when you sell your shares.
Past performance is not predictive of future results.
13
PAGE
AVERAGE ANNUAL TOTAL RETURN
8/31/99
CLASS A
- -------
1-Year 27.00%
5-Year 11.55%
10-Year 12.03%
Since Inception (11/29/54) 14.51%
AVERAGE ANNUAL TOTAL RETURN
8/31/99
CLASS C
- -------
1-Year 31.42%
3-Year 13.47%
Since Inception (5/1/95) 13.60%
TOTAL RETURN INDEX COMPARISON
FOR HYPOTHETICAL $10,000 INVESTMENT
The unmanaged index differs from the Fund in composition,
does not pay management fees or expenses and includes reinvested dividends. One
cannot invest directly in an index. Total return represents the change in value
of an investment over the periods shown. It includes the current, applicable,
maximum sales charges, Fund expenses, account fees, and reinvested
distributions.
The following line graph compares the performance of Templeton Growth Fund's
Class A shares to that of the Morgan Stanley Capital International World Index
and the Consumer Price Index, based on a $10,000 investment from 9/1/89 to
8/31/99.
Templeton MSCI World CPI
Growth Fund Index
-Class A*
- --------------------------------------------------------
09/01/1989 $9,427 $10,000 $10,000
09/30/1989 $9,438 $10,284 $10,032
10/31/1989 $9,053 $9,943 $10,081
11/30/1989 $9,220 $10,341 $10,104
12/31/1989 $9,559 $10,675 $10,119
01/31/1990 $9,134 $10,179 $10,224
02/28/1990 $9,134 $9,744 $10,272
03/31/1990 $9,334 $9,157 $10,328
04/30/1990 $9,043 $9,027 $10,345
05/31/1990 $9,874 $9,979 $10,369
06/30/1990 $9,929 $9,909 $10,425
07/31/1990 $10,196 $10,001 $10,464
08/31/1990 $9,237 $9,067 $10,560
09/30/1990 $8,388 $8,113 $10,649
10/31/1990 $8,270 $8,872 $10,713
11/30/1990 $8,537 $8,728 $10,737
12/31/1990 $8,693 $8,912 $10,737
01/31/1991 $9,184 $9,240 $10,801
02/28/1991 $9,868 $10,097 $10,817
03/31/1991 $9,981 $9,801 $10,833
04/30/1991 $10,140 $9,879 $10,849
05/31/1991 $10,571 $10,104 $10,880
06/30/1991 $10,040 $9,482 $10,914
07/31/1991 $10,651 $9,932 $10,929
08/31/1991 $10,704 $9,902 $10,961
09/30/1991 $10,810 $10,163 $11,010
10/31/1991 $10,972 $10,330 $11,026
11/30/1991 $10,696 $9,881 $11,057
12/31/1991 $11,417 $10,603 $11,066
01/31/1992 $11,520 $10,408 $11,082
02/29/1992 $11,742 $10,230 $11,122
03/31/1992 $11,542 $9,750 $11,178
04/30/1992 $11,868 $9,887 $11,194
05/31/1992 $12,312 $10,282 $11,210
06/30/1992 $12,075 $9,940 $11,250
07/31/1992 $12,046 $9,967 $11,275
08/31/1992 $11,698 $10,211 $11,306
09/30/1992 $11,668 $10,119 $11,338
10/31/1992 $11,508 $9,848 $11,378
11/30/1992 $11,647 $10,025 $11,394
12/31/1992 $11,898 $10,109 $11,387
01/31/1993 $12,055 $10,144 $11,443
02/28/1993 $12,320 $10,386 $11,483
03/31/1993 $12,750 $10,991 $11,524
04/30/1993 $13,007 $11,501 $11,555
05/31/1993 $13,387 $11,769 $11,571
06/30/1993 $13,329 $11,671 $11,587
07/31/1993 $13,677 $11,914 $11,587
08/31/1993 $14,446 $12,462 $11,619
09/30/1993 $14,388 $12,234 $11,643
10/31/1993 $15,051 $12,573 $11,692
11/30/1993 $14,769 $11,864 $11,700
12/31/1993 $15,788 $12,446 $11,699
01/31/1994 $16,666 $13,270 $11,732
02/28/1994 $16,245 $13,100 $11,773
03/31/1994 $15,627 $12,537 $11,813
04/30/1994 $15,896 $12,927 $11,829
05/31/1994 $16,048 $12,962 $11,836
06/30/1994 $15,689 $12,929 $11,876
07/31/1994 $16,415 $13,177 $11,908
08/31/1994 $16,980 $13,576 $11,957
09/30/1994 $16,594 $13,222 $11,988
10/31/1994 $16,748 $13,600 $11,997
11/30/1994 $16,058 $13,013 $12,013
12/31/1994 $15,917 $13,141 $12,013
01/31/1995 $15,790 $12,946 $12,060
02/28/1995 $16,260 $13,138 $12,108
03/31/1995 $16,564 $13,773 $12,149
04/30/1995 $17,143 $14,256 $12,189
05/31/1995 $17,653 $14,381 $12,213
06/30/1995 $17,908 $14,379 $12,237
07/31/1995 $18,712 $15,102 $12,237
08/31/1995 $18,595 $14,768 $12,270
09/30/1995 $19,016 $15,201 $12,293
10/31/1995 $18,409 $14,964 $12,333
11/30/1995 $18,828 $15,487 $12,324
12/31/1995 $19,074 $15,943 $12,316
01/31/1996 $19,755 $16,233 $12,389
02/29/1996 $19,821 $16,335 $12,429
03/31/1996 $20,052 $16,610 $12,493
04/30/1996 $20,503 $17,003 $12,541
05/31/1996 $20,745 $17,021 $12,565
06/30/1996 $20,767 $17,111 $12,573
07/31/1996 $20,096 $16,509 $12,597
08/31/1996 $20,613 $16,702 $12,621
09/30/1996 $21,031 $17,359 $12,661
10/31/1996 $21,374 $17,483 $12,701
11/30/1996 $22,537 $18,466 $12,725
12/31/1996 $22,994 $18,174 $12,725
01/31/1997 $23,547 $18,395 $12,765
02/28/1997 $23,735 $18,610 $12,803
03/31/1997 $23,629 $18,246 $12,835
04/30/1997 $24,159 $18,845 $12,851
05/31/1997 $25,359 $20,012 $12,843
06/30/1997 $26,371 $21,013 $12,858
07/31/1997 $27,372 $21,984 $12,874
08/31/1997 $26,442 $20,517 $12,898
09/30/1997 $28,148 $21,634 $12,931
10/31/1997 $26,308 $20,499 $12,963
11/30/1997 $26,388 $20,865 $12,955
12/31/1997 $26,715 $21,122 $12,940
01/31/1998 $26,756 $21,715 $12,963
02/28/1998 $28,229 $23,187 $12,989
03/31/1998 $29,482 $24,170 $13,015
04/30/1998 $29,634 $24,409 $13,038
05/31/1998 $28,739 $24,107 $13,062
06/30/1998 $27,913 $24,683 $13,077
07/31/1998 $27,252 $24,646 $13,093
08/31/1998 $23,107 $21,363 $13,109
09/30/1998 $23,685 $21,745 $13,124
10/31/1998 $25,702 $23,715 $13,156
11/30/1998 $26,625 $25,129 $13,156
12/31/1998 $26,052 $26,360 $13,148
01/31/1999 $25,861 $26,941 $13,180
02/28/1999 $25,670 $26,228 $13,193
03/31/1999 $27,469 $27,324 $13,233
04/30/1999 $30,874 $28,405 $13,330
05/31/1999 $29,760 $27,371 $13,330
06/30/1999 $31,145 $28,651 $13,330
07/31/1999 $31,113 $28,569 $13,370
08/31/1999 $31,129 $28,523 $13,402
The following line graph compares the performance of Templeton Growth Fund's
Class C shares to that of the Morgan Stanley Capital International World Index,
based on a $10,000 investment from 5/1/95 to 8/31/99.
Templeton MSCI World CPI
Growth Fund- Index
Class C*
- ---------------------------------------------------------
05/01/1995 $9,898 $10,000 $10,000
05/31/1995 $10,187 $10,088 $10,020
06/30/1995 $10,329 $10,086 $10,040
07/31/1995 $10,788 $10,593 $10,040
08/31/1995 $10,708 $10,359 $10,067
09/30/1995 $10,941 $10,663 $10,086
10/31/1995 $10,588 $10,497 $10,119
11/30/1995 $10,818 $10,863 $10,112
12/31/1995 $10,960 $11,183 $10,105
01/31/1996 $11,340 $11,387 $10,164
02/29/1996 $11,372 $11,458 $10,197
03/31/1996 $11,493 $11,651 $10,250
04/30/1996 $11,746 $11,927 $10,289
05/31/1996 $11,873 $11,940 $10,309
06/30/1996 $11,880 $12,002 $10,316
07/31/1996 $11,493 $11,581 $10,335
08/31/1996 $11,778 $11,716 $10,355
09/30/1996 $12,006 $12,177 $10,388
10/31/1996 $12,191 $12,264 $10,421
11/30/1996 $12,847 $12,953 $10,441
12/31/1996 $13,107 $12,748 $10,441
01/31/1997 $13,412 $12,904 $10,473
02/28/1997 $13,506 $13,054 $10,505
03/31/1997 $13,439 $12,799 $10,531
04/30/1997 $13,729 $13,219 $10,544
05/31/1997 $14,405 $14,038 $10,537
06/30/1997 $14,973 $14,739 $10,550
07/31/1997 $15,527 $15,421 $10,563
08/31/1997 $14,993 $14,392 $10,583
09/30/1997 $15,947 $15,175 $10,609
10/31/1997 $14,898 $14,379 $10,636
11/30/1997 $14,928 $14,636 $10,629
12/31/1997 $15,108 $14,816 $10,617
01/31/1998 $15,124 $15,232 $10,636
02/28/1998 $15,944 $16,265 $10,657
03/31/1998 $16,637 $16,954 $10,678
04/30/1998 $16,716 $17,122 $10,697
05/31/1998 $16,196 $16,910 $10,717
06/30/1998 $15,723 $17,314 $10,730
07/31/1998 $15,337 $17,288 $10,742
08/31/1998 $13,004 $14,985 $10,755
09/30/1998 $13,319 $15,253 $10,768
10/31/1998 $14,444 $16,635 $10,794
11/30/1998 $14,952 $17,627 $10,794
12/31/1998 $14,625 $18,491 $10,788
01/31/1999 $14,507 $18,898 $10,814
02/28/1999 $14,399 $18,398 $10,825
03/31/1999 $15,388 $19,167 $10,858
04/30/1999 $17,285 $19,925 $10,937
05/31/1999 $16,650 $19,199 $10,937
06/30/1999 $17,413 $20,098 $10,937
07/31/1999 $17,394 $20,040 $10,969
08/31/1999 $17,385 $20,007 $10,996
Past performance is not predictive of future results.
14
PAGE
The following line graph compares the performance of Templeton Growth Fund's
Advisor Class shares to that of the Morgan Stanley Capital International World
Index, based on a $10,000 investment from 9/1/89 to 8/31/99.
Templeton MSCI World CPI
Growth Fund-
Advisor Class
- ---------------------------------------------------------
09/01/1989 $10,000 $10,000 $10,000
09/30/1989 $10,012 $10,284 $10,032
10/31/1989 $9,603 $9,943 $10,081
11/30/1989 $9,780 $10,341 $10,104
12/31/1989 $10,140 $10,675 $10,119
01/31/1990 $9,689 $10,179 $10,224
02/28/1990 $9,689 $9,744 $10,272
03/31/1990 $9,902 $9,157 $10,328
04/30/1990 $9,593 $9,027 $10,345
05/31/1990 $10,474 $9,979 $10,369
06/30/1990 $10,532 $9,909 $10,425
07/31/1990 $10,815 $10,001 $10,464
08/31/1990 $9,799 $9,067 $10,560
09/30/1990 $8,898 $8,113 $10,649
10/31/1990 $8,772 $8,872 $10,713
11/30/1990 $9,055 $8,728 $10,737
12/31/1990 $9,221 $8,912 $10,737
01/31/1991 $9,742 $9,240 $10,801
02/28/1991 $10,467 $10,097 $10,817
03/31/1991 $10,587 $9,801 $10,833
04/30/1991 $10,756 $9,879 $10,849
05/31/1991 $11,214 $10,104 $10,880
06/30/1991 $10,650 $9,482 $10,914
07/31/1991 $11,298 $9,932 $10,929
08/31/1991 $11,354 $9,902 $10,961
09/30/1991 $11,467 $10,163 $11,010
10/31/1991 $11,638 $10,330 $11,026
11/30/1991 $11,346 $9,881 $11,057
12/31/1991 $12,110 $10,603 $11,066
01/31/1992 $12,220 $10,408 $11,082
02/29/1992 $12,456 $10,230 $11,122
03/31/1992 $12,244 $9,750 $11,178
04/30/1992 $12,589 $9,887 $11,194
05/31/1992 $13,060 $10,282 $11,210
06/30/1992 $12,809 $9,940 $11,250
07/31/1992 $12,778 $9,967 $11,275
08/31/1992 $12,409 $10,211 $11,306
09/30/1992 $12,377 $10,119 $11,338
10/31/1992 $12,207 $9,848 $11,378
11/30/1992 $12,355 $10,025 $11,394
12/31/1992 $12,621 $10,109 $11,387
01/31/1993 $12,788 $10,144 $11,443
02/28/1993 $13,068 $10,386 $11,483
03/31/1993 $13,525 $10,991 $11,524
04/30/1993 $13,797 $11,501 $11,555
05/31/1993 $14,201 $11,769 $11,571
06/30/1993 $14,139 $11,671 $11,587
07/31/1993 $14,508 $11,914 $11,587
08/31/1993 $15,324 $12,462 $11,619
09/30/1993 $15,263 $12,234 $11,643
10/31/1993 $15,966 $12,573 $11,692
11/30/1993 $15,666 $11,864 $11,700
12/31/1993 $16,747 $12,446 $11,699
01/31/1994 $17,679 $13,270 $11,732
02/28/1994 $17,232 $13,100 $11,773
03/31/1994 $16,576 $12,537 $11,813
04/30/1994 $16,862 $12,927 $11,829
05/31/1994 $17,023 $12,962 $11,836
06/30/1994 $16,643 $12,929 $11,876
07/31/1994 $17,413 $13,177 $11,908
08/31/1994 $18,012 $13,576 $11,957
09/30/1994 $17,603 $13,222 $11,988
10/31/1994 $17,766 $13,600 $11,997
11/30/1994 $17,034 $13,013 $12,013
12/31/1994 $16,884 $13,141 $12,013
01/31/1995 $16,749 $12,946 $12,060
02/28/1995 $17,249 $13,138 $12,108
03/31/1995 $17,571 $13,773 $12,149
04/30/1995 $18,185 $14,256 $12,189
05/31/1995 $18,726 $14,381 $12,213
06/30/1995 $18,996 $14,379 $12,237
07/31/1995 $19,849 $15,102 $12,237
08/31/1995 $19,725 $14,768 $12,270
09/30/1995 $20,172 $15,201 $12,293
10/31/1995 $19,527 $14,964 $12,333
11/30/1995 $19,972 $15,487 $12,324
12/31/1995 $20,233 $15,943 $12,316
01/31/1996 $20,956 $16,233 $12,389
02/29/1996 $21,026 $16,335 $12,429
03/31/1996 $21,271 $16,610 $12,493
04/30/1996 $21,749 $17,003 $12,541
05/31/1996 $22,006 $17,021 $12,565
06/30/1996 $22,029 $17,111 $12,573
07/31/1996 $21,318 $16,509 $12,597
08/31/1996 $21,866 $16,702 $12,621
09/30/1996 $22,309 $17,359 $12,661
10/31/1996 $22,673 $17,483 $12,701
11/30/1996 $23,906 $18,466 $12,725
12/31/1996 $24,391 $18,174 $12,725
01/31/1997 $24,978 $18,395 $12,765
02/28/1997 $25,178 $18,610 $12,803
03/31/1997 $25,065 $18,246 $12,835
04/30/1997 $25,627 $18,845 $12,851
05/31/1997 $26,900 $20,012 $12,843
06/30/1997 $27,986 $21,013 $12,858
07/31/1997 $29,047 $21,984 $12,874
08/31/1997 $28,074 $20,517 $12,898
09/30/1997 $29,884 $21,634 $12,931
10/31/1997 $27,957 $20,499 $12,963
11/30/1997 $28,042 $20,865 $12,955
12/31/1997 $28,397 $21,122 $12,940
01/31/1998 $28,455 $21,715 $12,963
02/28/1998 $30,022 $23,187 $12,989
03/31/1998 $31,354 $24,170 $13,015
04/30/1998 $31,529 $24,409 $13,038
05/31/1998 $30,563 $24,107 $13,062
06/30/1998 $29,700 $24,683 $13,077
07/31/1998 $28,997 $24,646 $13,093
08/31/1998 $24,591 $21,363 $13,109
09/30/1998 $25,221 $21,745 $13,124
10/31/1998 $26,776 $23,715 $13,156
11/30/1998 $27,738 $25,129 $13,156
12/31/1998 $27,157 $26,360 $13,148
01/31/1999 $26,975 $26,941 $13,180
02/28/1999 $26,776 $26,228 $13,193
03/31/1999 $28,650 $27,324 $13,233
04/30/1999 $32,214 $28,405 $13,330
05/31/1999 $31,070 $27,371 $13,330
06/30/1999 $32,513 $28,651 $13,330
07/31/1999 $32,496 $28,569 $13,370
08/31/1999 $33,529 $28,523 $13,402
AVERAGE ANNUAL TOTAL RETURN
8/31/99
ADVISOR CLASS***
- ----------------
1-Year 35.16%
5-Year 13.03%
10-Year 12.75%
Since Inception (11/29/54) 14.70%
*Source: Standard and Poor's(R) Micropal. The unmanaged MSCI World Index tracks
the performance of approximately 1,450 securities in 22 countries and is
designed to measure world stock market performance. It includes reinvested
dividends.
**Source: Consumer Price Index, U.S. Bureau of Labor Statistics (8/31/99). The
Consumer Price Index is a commonly used measure of inflation.
***On January 2, 1997, the Fund began selling Advisor Class shares to certain
eligible investors as described in the prospectus. This share class does not
have sales charges or a Rule 12b-1 plan. Performance quotations have been
calculated as follows: (a) For periods prior to January 2, 1997, figures reflect
Class A performance, excluding the effect of the Class A sales charge, but
including the effect of Rule 12b-1 fees and other Class A expenses; and (b) for
periods after January 1, 1997, figures reflect actual Advisor Class performance,
including the deduction of all fees and expenses applicable to Advisor Class
shares. One cannot invest directly in an index, nor is an index representative
of the Fund's portfolio.
Past performance is not predictive of future results.
15
PAGE
TEMPLETON GROWTH FUND, INC.
CLASS A
If you had invested $10,000 in Templeton Growth Fund Class A at inception, it
would have been worth more than $4,300,000 on August 31, 1999. The chart below
illustrates the cumulative total return of a hypothetical $10,000 investment in
the Fund on November 29, 1954 (inception), with income dividends and capital
gains reinvested as shown through August 31, 1999.*
This chart shows in a logarithmic format the growth of a $10,000 investment in
Templeton Growth Fund's Class A shares from 11/29/54 to 8/31/99.
TEMPLETON GROWTH FUND, INC.
CLASS - A
<TABLE>
<CAPTION>
Principal + Principal + Total Value Principal Income Cap Gains
Dividends Cap Gains
<S> <C> <C> <C> <C> <C> <C>
11/29/1954 $9,425 $9,425 $9,425 $9,425 $0 $0
12/31/1954 $9,576 $9,576 $9,576 $9,576 $0 $0
12/30/1955 $10,250 $10,250 $10,250 $10,250 $0 $0
12/31/1956 $10,726 $10,726 $10,726 $10,726 $0 $0
12/31/1957 $8,911 $8,911 $8,911 $8,911 $0 $0
12/31/1958 $13,261 $13,261 $13,261 $13,261 $0 $0
12/31/1959 $15,118 $15,118 $15,118 $15,118 $0 $0
12/30/1960 $17,210 $17,210 $17,210 $17,210 $0 $0
12/29/1961 $20,358 $20,358 $20,358 $20,358 $0 $0
12/31/1962 $17,606 $17,606 $17,606 $17,606 $0 $0
12/31/1963 $18,511 $18,511 $18,511 $18,511 $0 $0
12/31/1964 $23,802 $23,506 $23,802 $23,506 $296 $0
12/31/1965 $29,073 $28,313 $29,073 $28,313 $760 $0
12/30/1966 $27,532 $26,484 $27,532 $26,484 $1,048 $0
12/29/1967 $31,314 $29,632 $31,314 $29,632 $1,682 $0
12/31/1968 $43,140 $40,283 $43,140 $40,283 $2,857 $0
12/31/1969 $51,622 $47,446 $51,622 $47,446 $4,176 $0
12/31/1970 $48,298 $43,676 $48,298 $43,676 $4,622 $0
12/31/1971 $57,875 $52,568 $58,888 $51,555 $6,320 $1,013
12/29/1972 $95,625 $87,991 $99,262 $84,354 $11,271 $3,637
12/31/1973 $78,886 $79,614 $89,415 $69,085 $9,801 $10,529
12/31/1974 $68,188 $69,154 $78,623 $58,719 $9,469 $10,435
12/31/1975 $93,732 $93,528 $108,183 $79,077 $14,655 $14,451
12/31/1976 $136,291 $135,840 $158,747 $113,384 $22,907 $22,456
12/30/1977 $155,058 $162,988 $191,091 $126,955 $28,103 $36,033
12/29/1978 $184,488 $192,793 $227,799 $149,482 $35,006 $43,311
12/31/1979 $231,142 $241,865 $288,936 $184,071 $47,071 $57,794
12/31/1980 $275,936 $302,407 $363,734 $214,609 $61,327 $87,798
12/31/1981 $276,915 $296,033 $362,862 $210,086 $66,829 $85,947
12/31/1982 $293,516 $322,039 $402,077 $213,478 $80,038 $108,561
12/30/1983 $392,896 $419,717 $534,385 $278,228 $114,668 $141,489
12/31/1984 $391,770 $423,667 $545,974 $269,463 $122,307 $154,204
12/31/1985 $482,618 $536,261 $697,673 $321,206 $161,412 $215,055
12/31/1986 $572,151 $637,582 $845,831 $363,902 $208,249 $273,680
12/31/1987 $550,763 $653,004 $872,099 $331,668 $219,095 $321,336
12/30/1988 $682,364 $784,305 $1,077,885 $388,784 $293,580 $395,521
12/29/1989 $831,578 $935,100 $1,321,060 $445,618 $385,960 $489,482
12/31/1990 $737,439 $834,403 $1,201,437 $370,405 $367,034 $463,998
12/31/1991 $912,476 $1,101,649 $1,577,839 $436,286 $476,190 $665,363
12/31/1992 $889,019 $1,161,911 $1,644,333 $406,597 $482,422 $755,314
12/31/1993 $1,121,883 $1,558,304 $2,181,978 $498,209 $623,674 $1,060,095
12/30/1994 $1,068,973 $1,589,759 $2,199,826 $458,906 $610,067 $1,130,853
12/29/1995 $1,203,902 $1,922,768 $2,636,095 $490,575 $713,327 $1,432,193
12/31/1996 $1,434,285 $2,296,080 $3,177,868 $552,497 $881,788 $1,743,583
12/31/1997 $1,510,347 $2,730,272 $3,692,079 $548,540 $961,807 $2,181,732
12/31/1998 $1,354,973 $2,708,431 $3,600,538 $462,866 $892,107 $2,245,565
08/31/1999 $1,619,017 $3,236,222 $4,302,173 $553,066 $1,065,951 $2,683,156
</TABLE>
* Cumulative total return represents the change in value of an investment over
the indicated period. All figures have been restated to reflect the current,
maximum 5.75% initial sales charge; thus actual total return for purchasers of
shares during the periods shown may differ. Prior to July 1, 1992, these shares
were offered at a higher initial sales charge. On January 1, 1993, the Fund's
Class A shares implemented a plan of distribution under Rule 12b-1, which will
affect subsequent performance.
Except as noted, all figures assume reinvestment of dividends and capital gains
at net asset value. Since markets can go down as well as up, investment return
and principal value will fluctuate with market conditions, and you may have a
gain or loss when you sell your shares.
The historical data shown above pertain only to Class A shares of the Fund. The
Fund offers other share classes, subject to different fees and expenses, which
will affect their performance. Please see the prospectus for more details.
Past performance is not predictive of future results.
16
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------------------
1999+ 1998 1997 1996 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year............... $16.78 $22.47 $18.75 $18.96 $18.95
---------------------------------------------------------------------
Income from investment operations:
Net investment income........................... .46 .50 .54 .50 .39
Net realized and unrealized gains (losses)...... 4.76 (2.76) 4.48 1.34 1.20
---------------------------------------------------------------------
Total from investment operations................. 5.22 (2.26) 5.02 1.84 1.59
---------------------------------------------------------------------
Less distributions from:
Net investment income........................... (.41) (.55) (.49) (.44) (.29)
Net realized gains.............................. (2.03) (2.88) (.81) (1.61) (1.29)
---------------------------------------------------------------------
Total distributions.............................. (2.44) (3.43) (1.30) (2.05) (1.58)
---------------------------------------------------------------------
Net asset value, end of year..................... $19.56 $16.78 $22.47 $18.75 $18.96
=====================================================================
Total Return*.................................... 34.72% (12.61)% 28.28% 10.85% 9.51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's).................. $13,368,945 $11,116,564 $12,129,283 $8,450,737 $6,964,298
Ratios to average net assets:
Expenses........................................ 1.12% 1.08% 1.08% 1.09% 1.12%
Net investment income........................... 2.60% 2.53% 2.81% 2.87% 2.40%
Portfolio turnover rate.......................... 32.01% 48.23% 41.81% 19.63% 35.21%
</TABLE>
*Total return does not reflect sales commissions.
+Based on average weighted shares outstanding.
17
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS B
----------------
PERIOD ENDED
AUGUST 31, 1999+
----------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $16.37
-------
Income from investment operations:
Net investment income...................................... .24
Net realized and unrealized gains.......................... 2.85
----------------
Total from investment operations............................ 3.09
----------------
Net asset value, end of period.............................. $19.46
================
Total Return*............................................... 18.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $27,573
Ratios to average net assets:
Expenses................................................... 1.88%**
Net investment income...................................... 1.91%**
Portfolio turnover rate..................................... 32.01%
</TABLE>
*Total return does not reflect the contingent deferred sales charge and is not
annualized.
**Annualized.
+Effective date of Class B shares was January 1, 1999. Based on average weighted
shares outstanding.
18
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------
YEAR ENDED AUGUST 31,
---------------------------------------------------------
1999++ 1998 1997 1996 1995+
------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year......................... $16.49 $22.18 $18.57 $18.90 $17.48
---------------------------------------------------------
Income from investment operations:
Net investment income..................................... .32 .38 .42 .49 .04
Net realized and unrealized gains (losses)................ 4.68 (2.77) 4.39 1.19 1.38
---------------------------------------------------------
Total from investment operations........................... 5.00 (2.39) 4.81 1.68 1.42
---------------------------------------------------------
Less distributions from:
Net investment income..................................... (.31) (.42) (.39) (.40) --
Net realized gains........................................ (2.03) (2.88) (.81) (1.61) --
---------------------------------------------------------
Total distributions........................................ (2.34) (3.30) (1.20) (2.01) --
---------------------------------------------------------
Net asset value, end of year............................... $19.15 $16.49 $22.18 $18.57 $18.90
=========================================================
Total Return*.............................................. 33.77% (13.32)% 27.30% 9.99% 8.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............................ $1,021,159 $872,219 $755,184 $280,087 $42,548
Ratios to average net assets:
Expenses.................................................. 1.86% 1.83% 1.84% 1.87% 1.86%**
Net investment income..................................... 1.84% 1.79% 2.14% 2.25% 1.61%**
Portfolio turnover rate.................................... 32.01% 48.23% 41.81% 19.63% 35.21%
</TABLE>
*Total return does not reflect sales commissions or the contingent deferred
sales charge and is not annualized.
**Annualized.
+For the period May 1, 1995 (effective date) to August 31, 1995.
++Based on average weighted shares outstanding.
19
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
-------------------------------------
YEAR ENDED AUGUST 31,
-------------------------------------
1999++ 1998 1997+
-----------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net asset value, beginning of year.......................... $16.80 $22.49 $19.37
-------------------------------------
Income from investment operations:
Net investment income...................................... .51 .56 .37
Net realized and unrealized gains (losses)................. 4.77 (2.78) 2.75
-------------------------------------
Total from investment operations............................ 5.28 (2.22) 3.12
-------------------------------------
Less distributions from:
Net investment income...................................... (.44) (.59) --
Net realized gains......................................... (2.03) (2.88) --
-------------------------------------
Total distributions......................................... (2.47) (3.47) --
-------------------------------------
Net asset value, end of year................................ $19.61 $16.80 $22.49
=====================================
Total Return*............................................... 35.16% (12.41)% 16.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)............................. $50,751 $36,301 $29,531
Ratios to average net assets:
Expenses................................................... .87% .83% .83%**
Net investment income...................................... 2.85% 2.81% 3.68%**
Portfolio turnover rate..................................... 32.01% 48.23% 41.81%
</TABLE>
*Total return is not annualized.
**Annualized.
+For the period January 2, 1997 (effective date) to August 31, 1997.
++Based on average weighted shares outstanding.
See Notes to Financial Statements.
20
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 86.4%
AEROSPACE & MILITARY TECHNOLOGY 3.4%
Boeing Co. ................................................. United States 4,684,700 $ 212,275,469
Lockheed Martin Corp. ...................................... United States 903,600 33,433,200
Raytheon Co., A............................................. United States 2,147,015 144,118,382
Rolls-Royce PLC............................................. United Kingdom 24,575,804 97,704,934
---------------
487,531,985
---------------
APPLIANCES & HOUSEHOLD DURABLES 2.2%
Sony Corp. ................................................. Japan 2,356,700 304,783,674
Toro Co. ................................................... United States 550,000 20,212,500
---------------
324,996,174
---------------
AUTOMOBILES 5.1%
Autoliv Inc., SDR........................................... Sweden 205,752 7,174,788
Bayerische Motorenwerke AG BMW.............................. Germany 4,160,000 128,523,897
Delphi Automotive Systems Corp. ............................ United States 1,750,400 32,820,000
Ford Motor Co. ............................................. United States 3,016,600 157,240,275
*General Motors Corp. ...................................... United States 2,804,400 185,440,950
Regie Nationale des Usines Renault SA....................... France 1,500,000 80,802,746
Volkswagen AG............................................... Germany 168,350 10,144,566
Volvo AB, B................................................. Sweden 4,785,300 133,842,390
---------------
735,989,612
---------------
BANKING 4.0%
Australia & New Zealand Banking Group Ltd. ................. Australia 14,009,105 90,954,883
Banco Popular Espanol SA, Reg D............................. Spain 255,500 18,715,527
Guoco Group Ltd. ........................................... Hong Kong 19,237,000 57,102,934
HSBC Holdings PLC........................................... Hong Kong 18,714,423 231,967,601
National Australia Bank Ltd. ............................... Australia 10,723,122 161,855,609
Unibanco Uniao de Bancos Brasileiros SA, GDR................ Brazil 773,440 13,535,200
---------------
574,131,754
---------------
BROADCASTING & PUBLISHING .2%
South China Morning Post Holdings, Ltd. .................... Hong Kong 30,911,000 19,605,117
South China Morning Post Holdings, Ltd., 144A............... Hong Kong 8,976,000 5,692,974
---------------
25,298,091
---------------
BUILDING MATERIALS & COMPONENTS 1.4%
Caradon PLC................................................. United Kingdom 5,154,667 14,380,452
Cemex SA.................................................... Mexico 5,179,350 22,862,255
Cemex SA, B................................................. Mexico 4,694,000 20,819,959
+Hepworth PLC............................................... United Kingdom 16,767,410 61,471,426
+Owens Corning.............................................. United States 2,893,300 81,374,063
---------------
200,908,155
---------------
</TABLE>
21
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
BUSINESS & PUBLIC SERVICES .5%
*Humana Inc. ............................................... United States 7,848,200 $ 71,124,312
---------------
CHEMICALS 4.4%
Akzo Nobel NV............................................... Netherlands 2,950,000 137,256,403
BASF AG..................................................... Germany 2,671,000 119,338,051
Cookson Group PLC........................................... United Kingdom 24,025,284 89,238,646
DSM NV, Br. ................................................ Netherlands 1,273,290 149,755,312
Eastman Chemical Co. ....................................... United States 1,100,000 51,081,250
Great Lakes Chemical Corp. ................................. United States 364,200 15,000,488
Lyondell Chemical Co. ...................................... United States 5,068,600 73,811,488
---------------
635,481,638
---------------
CONSTRUCTION & HOUSING
Hollandsche Beton Groep NV.................................. Netherlands 544,171 6,437,513
---------------
ELECTRICAL & ELECTRONICS 6.8%
*ABB Ltd. .................................................. Sweden 2,074,782 212,527,615
Alcatel SA.................................................. France 900,000 137,839,979
Fuji Photo Film Co. Ltd. ................................... Japan 4,000,000 145,925,487
General Electric Co. PLC.................................... United Kingdom 15,500,000 155,271,663
Hitachi Ltd. ............................................... Japan 1,903,000 19,282,530
Koninklijke Philips Electronics NV.......................... Netherlands 2,159,174 222,474,132
Motorola Inc. .............................................. United States 1,067,600 98,486,100
---------------
991,807,506
---------------
ELECTRONIC COMPONENTS & INSTRUMENTS .7%
Hewlett Packard Co. ........................................ United States 1,000,000 105,375,000
---------------
ENERGY SOURCES 6.2%
Amerada Hess Corp. ......................................... United States 1,423,300 88,333,556
*Barrett Resources Corp. ................................... United States 1,100,000 39,668,750
Burlington Resources Inc. .................................. United States 2,000,000 83,625,000
Fortum OJY.................................................. Finland 1,219,700 6,222,499
Norsk Hydro ASA............................................. Norway 3,724,747 155,207,680
Occidental Petroleum Corp. ................................. United States 3,000,000 65,062,500
Perez Companc SA, B......................................... Argentina 769,253 4,477,500
*Ranger Oil Ltd. ........................................... Canada 2,810,900 13,000,412
*Renaissance Energy Ltd. ................................... Canada 5,250,000 80,920,788
Shell Transport & Trading Co. PLC........................... United Kingdom 19,784,000 157,626,859
Societe Elf Aquitaine SA, Br. .............................. France 930,000 163,063,111
Valero Energy Corp. ........................................ United States 1,637,800 34,803,250
---------------
892,011,905
---------------
</TABLE>
22
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
FINANCIAL SERVICES .9%
Lend Lease Corp. Ltd. ...................................... Australia 2,355,172 $ 28,724,428
Merrill Lynch & Co. Inc. ................................... United States 680,300 50,767,387
Nomura Securities Co. Ltd. ................................. Japan 4,000,000 58,552,601
---------------
138,044,416
---------------
FOOD & HOUSEHOLD PRODUCTS 1.8%
Archer-Daniels Midland Co. ................................. United States 9,694,434 126,027,636
Northern Foods PLC.......................................... United Kingdom 10,687,600 22,598,437
Panamerican Beverages Inc., A............................... Mexico 1,261,100 23,724,444
Tate & Lyle PLC............................................. United Kingdom 13,600,000 86,925,761
---------------
259,276,278
---------------
FOREST PRODUCTS & PAPER 5.9%
Aracruz Celulose SA, ADR.................................... Brazil 2,338,900 46,339,456
Assidoman AB................................................ Sweden 1,198,100 23,138,025
Bowater Inc. ............................................... United States 2,454,800 131,638,650
Carter Holt Harvey Ltd. .................................... New Zealand 21,502,738 25,457,684
Champion International Corp. ............................... United States 1,000,000 55,000,000
Fletcher Challenge Paper Ltd. .............................. New Zealand 9,544,516 6,908,306
International Paper Co. .................................... United States 1,600,000 75,300,000
Metsa-Serla OY, B........................................... Finland 2,611,000 24,710,388
Mo Och Domsjoe AB (MODO), B................................. Sweden 2,950,000 90,010,897
Norske Skogindustrier ASA, A................................ Norway 994,000 41,545,970
St. Joe Co. ................................................ United States 1,036,700 24,232,862
*Stora Enso OYJ, A.......................................... Finland 98,700 1,344,843
*Stora Enso OYJ, A, fgn. ................................... Finland 718,823 8,351,785
*Stora Enso OYJ, R.......................................... Finland 4,973,575 66,191,756
*Stora Enso OYJ, R, fgn. ................................... Finland 4,361,145 62,186,910
UPM-Kymmene Corp. .......................................... Finland 4,801,840 166,105,371
---------------
848,462,903
---------------
HEALTH & PERSONAL CARE .5%
Merck KGAA.................................................. Germany 2,500 86,084
Rhone-Poulenc SA............................................ France 1,450,000 70,329,020
---------------
70,415,104
---------------
INDUSTRIAL COMPONENTS 2.5%
Goodyear Tire & Rubber Co. ................................. United States 1,722,600 96,680,925
Michelin SA, B.............................................. France 1,800,000 77,969,897
Sandvik AB, A............................................... Sweden 150,100 4,089,175
Sandvik AB, B............................................... Sweden 3,656,000 100,264,439
SKF AB, A................................................... Sweden 1,002,995 21,373,910
SKF AB, B................................................... Sweden 2,480,374 56,460,868
---------------
356,839,214
---------------
</TABLE>
23
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
INSURANCE 2.1%
Ace Ltd. ................................................... Bermuda 2,000,000 $ 42,875,000
Allstate Corp. ............................................. United States 700,000 22,968,750
American General Corp. ..................................... United States 1,100,000 78,100,000
Partnerre Ltd. ............................................. Bermuda 739,400 27,172,950
+Berkley W R Corp. ......................................... United States 1,680,650 38,234,787
Torchmark Corp. ............................................ United States 1,800,000 51,300,000
XL Capital Ltd., A.......................................... Bermuda 1,000,000 50,312,500
---------------
310,963,987
---------------
LEISURE & TOURISM .5%
Rank Group PLC.............................................. United Kingdom 3,775,959 15,694,962
Shangri-La Asia Ltd. ....................................... Hong Kong 48,233,000 54,660,940
---------------
70,355,902
---------------
MACHINERY & ENGINEERING 1.6%
+Agco Corp. ................................................ United States 4,739,500 48,876,094
Invensys PLC................................................ United Kingdom 20,067,655 102,772,879
METSO OYJ................................................... Finland 2,000,000 25,349,881
New Holland NV.............................................. Netherlands 1,600,000 24,800,000
Vickers Group PLC........................................... United Kingdom 8,396,987 23,898,421
---------------
225,697,275
---------------
MERCHANDISING 5.3%
Albertson's Inc. ........................................... United States 2,871,288 137,642,368
Dairy Farm International Holdings Ltd., fgn. ............... Hong Kong 36,629,531 36,446,383
Gucci Group NV, Reg D....................................... Netherlands 1,291,400 108,154,750
JC Penney Co. Inc. ......................................... United States 2,700,000 97,875,000
Marks & Spencer PLC......................................... United Kingdom 14,000,000 93,196,765
Safeway PLC................................................. United Kingdom 26,432,027 109,866,041
Sears Roebuck & Co. ........................................ United States 2,600,000 97,500,000
Somerfield PLC.............................................. United Kingdom 8,547,000 31,884,099
W.H. Smith Group PLC........................................ United Kingdom 5,963,290 55,278,685
---------------
767,844,091
---------------
METALS & MINING 5.1%
AK Steel Holding Corp. ..................................... United States 1,629,900 34,227,900
Alcan Aluminum Ltd. ........................................ Canada 3,483,533 114,623,690
Alcan Aluminum Ltd., fgn. .................................. Canada 528,900 17,387,587
Anglo American Platinum Corp. Ltd. ......................... South Africa 3,000,000 68,267,017
Billiton PLC................................................ United Kingdom 19,141,800 77,871,001
British Steel PLC........................................... United Kingdom 63,665,600 167,120,792
Companhia Siderurgica Nacional CSN, ADR..................... Brazil 1,177,905 29,300,387
Cyprus Amax Minerals Co. ................................... United States 2,066,800 35,006,425
Grupo Mexico SA de CV, B.................................... Mexico 5,009,300 21,657,652
</TABLE>
24
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
METALS & MINING (CONT.)
Industrias Penoles SA....................................... Mexico 3,223,400 $ 8,471,778
Pohang Iron & Steel Co. Ltd. ............................... South Korea 1,093,160 149,480,819
+Titanium Metals............................................ United States 2,222,000 19,025,875
---------------
742,440,923
---------------
MISC MATERIALS & COMMODITIES 1.1%
+Agrium Inc. ............................................... Canada 6,182,100 62,593,762
De Beers/Centenary Linked Units, ADR........................ South Africa 2,950,000 80,203,125
De Beers/Centenary Linked Units, Reg........................ South Africa 870,850 23,768,678
---------------
166,565,565
---------------
MULTI-INDUSTRY 6.1%
Alfa SA de CV, A............................................ Mexico 4,791,600 18,136,454
Amoy Properties Ltd. ....................................... Hong Kong 49,166,000 48,436,914
Broken Hill Proprietary Co. Ltd. ........................... Australia 9,287,048 99,705,483
Cheung Kong Holdings Ltd. .................................. Hong Kong 18,115,400 157,471,459
DESC SA de CV DESC, B....................................... Mexico 10,295,000 9,549,685
Elementis PLC............................................... United Kingdom 20,177,882 37,960,673
First Pacific Co. Ltd. ..................................... Hong Kong 16,284,572 12,582,813
Hutchison Whampoa Ltd. ..................................... Hong Kong 8,000,000 78,040,991
Inchcape PLC................................................ United Kingdom 3,833,333 23,884,751
Jardine Matheson Holdings Ltd., fgn. ....................... Hong Kong 10,087,768 48,219,531
Jardine Strategic Holdings Ltd., fgn. ...................... Hong Kong 14,245,732 32,765,184
Metra OY, B................................................. Finland 284,280 5,104,579
Pacific Dunlop Ltd. ........................................ Australia 14,099,277 20,931,204
Pilkington PLC.............................................. United Kingdom 40,000,000 69,463,427
Swire Pacific Ltd., A....................................... Hong Kong 33,386,500 172,411,177
Swire Pacific Ltd., B....................................... Hong Kong 24,383,300 18,997,568
Wheelock and Company Ltd. .................................. Hong Kong 20,338,809 26,454,347
---------------
880,116,240
---------------
REAL ESTATE 1.0%
Hang Lung Development Co. Ltd. ............................. Hong Kong 21,291,000 24,539,700
New World Development Co. Ltd. ............................. Hong Kong 16,276,244 39,196,379
Rouse Co. .................................................. United States 2,782,500 63,301,875
Wereldhave NV............................................... Netherlands 313,594 15,418,855
---------------
142,456,809
---------------
TELECOMMUNICATIONS 5.7%
Cable & Wireless HKT Ltd. .................................. Hong Kong 33,834,748 76,905,572
General Motors Corp., H..................................... United States 1,491,000 76,786,500
Nippon Telegraph & Telephone Corp. ......................... Japan 13,500 151,443,294
SK Telecom Co. Ltd., ADR.................................... South Korea 7,815,979 88,418,262
Smartone Telecommunications Holdings Ltd. .................. Hong Kong 16,023,500 53,445,027
Telecom Argentina Stet-France SA (Teco), B, ADR............. Argentina 2,974,700 84,035,275
Telefonica de Argentina SA, B, ADR.......................... Argentina 1,960,080 58,312,380
</TABLE>
25
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
TELECOMMUNICATIONS (CONT.)
Telefonica del Peru SA, B................................... Peru 8,459,874 $ 11,459,989
Telefonica del Peru SA, B, ADR.............................. Peru 1,083,200 14,826,300
Telefonos de Mexico SA (Telmex), L, ADR..................... Mexico 2,900,000 215,687,500
---------------
831,320,099
---------------
TEXTILES & APPAREL .6%
Adidas-Salomon AG........................................... Germany 950,000 88,051,228
---------------
TRANSPORTATION 3.3%
+Airborne Freight Corp. .................................... United States 3,200,000 80,600,000
British Airways PLC......................................... United Kingdom 15,650,000 102,544,982
Peninsular & Oriental Steam Navigation Co. ................. United Kingdom 5,023,230 80,932,554
Singapore Airlines Ltd., fgn. .............................. Singapore 20,868,300 195,760,340
Stolt-Nielsen SA............................................ Norway 463,500 7,010,437
Stolt Nielsen SA, B, ADR.................................... Norway 331,800 5,889,450
---------------
472,737,763
---------------
UTILITIES ELECTRICAL & GAS 7.5%
CLP Holdings Ltd. .......................................... Hong Kong 18,639,900 88,336,775
Electrabel SA............................................... Belgium 130,852 43,716,385
Entergy Corp. .............................................. United States 3,600,000 107,325,000
Gener SA, ADR............................................... Chile 1,467,200 26,868,100
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 41,999,600 138,193,052
Iberdrola SA, Br. .......................................... Spain 8,700,000 124,974,914
Illinova Corp. ............................................. United States 2,900,000 92,437,500
Korea Electric Power Corp. ................................. South Korea 1,811,260 67,509,903
National Grid Group PLC..................................... United Kingdom 2,066,100 13,720,624
National Power PLC.......................................... United Kingdom 6,800,000 48,410,542
Potomac Electric Power Co. ................................. United States 5,187,734 137,474,951
Powergen PLC................................................ United Kingdom 6,000,000 60,201,637
Thames Water Group PLC...................................... United Kingdom 3,826,785 55,071,836
Transportadora de Gas del Sur SA, B, Reg S, ADR............. Argentina 1,400,000 10,675,000
Veba AG..................................................... Germany 1,100,000 69,305,519
---------------
1,084,221,738
---------------
TOTAL COMMON STOCKS (COST $11,039,515,132).................. 12,506,903,180
---------------
PREFERRED STOCKS 2.5%
Ballast Nedam NV, ctf., cvt., pfd. ......................... Netherlands 20,851 546,189
Banco Bradesco SA BBD, Reg D, pfd. ......................... Brazil 2,330,355,953 9,214,727
Cia Vale do Rio Doce, A, ADR, pfd. ......................... Brazil 1,350,400 29,930,822
Cia Vale do Rio Doce, A, pfd. .............................. Brazil 949,560 21,046,439
Embratel Participacoes SA, ADR, pfd. ....................... Brazil 2,654,000 28,364,625
Petroleo Brasileiro SA (Petrobras), Reg D, pfd. ............ Brazil 350,000,000 46,800,208
Tele Sudeste Celular Participacoes SA, ADR, pfd. ........... Brazil 205,000 4,804,687
Telecomunicacoes Brasileiras SA (Telebras), unit, pfd. ..... Brazil 875,600,000 65,282,768
Telecomunicacoes de Minas Gerais SA, Telemig, B, pfd. ...... Brazil 38,363,000 938,117
</TABLE>
26
PAGE
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, AUGUST 31, 1999 (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCKS (CONT.)
*Telecomunicacoes de Minas Gerais SA, Telemig, C, pfd. ..... Brazil 38,363,000 $ 305,387
Telecomunicacoes de Sao Paulo SA (Telesp), Reg D, pfd. ..... Brazil 220,000,000 19,284,912
Telesp Participacoes SA, ADR, pfd. ......................... Brazil 2,025,000 33,032,812
Volkswagen AG, pfd. ........................................ Germany 2,965,960 103,695,037
---------------
TOTAL PREFERRED STOCKS (COST $524,542,303).................. 363,246,730
---------------
<CAPTION>
PRINCIPAL
AMOUNT**
--------
<S> <C> <C> <C>
BONDS 3.5%
U.S. Treasury Bonds:
7.875%, 2/15/21........................................... United States $ 128,500,000 148,979,687
6.25%, 8/15/23............................................ United States 155,303,000 152,294,004
3.625%, 4/15/28........................................... United States 15,413,700 14,404,695
3.875%, 4/15/29........................................... United States 15,165,150 14,798,445
U.S. Treasury Notes:
6.00%, 10/15/99........................................... United States 108,000,000 108,236,304
3.625%, 7/15/02........................................... United States 15,566,700 15,426,570
3.375%, 1/15/07........................................... United States 15,734,700 15,060,945
3.625%, 1/15/08........................................... United States 15,431,700 14,976,570
3.875%, 1/15/09........................................... United States 15,201,500 15,004,695
---------------
TOTAL BONDS (COST $490,797,960)............................. 499,181,915
---------------
SHORT TERM INVESTMENTS (COST $1,093,916,462) 7.6%
U.S. Treasury Bills, 4.36% to 4.91%, with maturities to
2/03/00................................................... United States 1,106,933,000 1,093,966,642
---------------
TOTAL INVESTMENTS (COST $13,148,771,857) 100.0%............. 14,463,298,467
OTHER ASSETS, LESS LIABILITIES.............................. 5,129,452
---------------
TOTAL NET ASSETS 100.0%..................................... $14,468,427,919
===============
</TABLE>
*Non-income producing.
**Securities denominated in U.S. dollars.
+The Investment Company Act of 1940 defines "affiliated persons" to include any
persons, such as the Fund, that owns 5% or more of the outstanding voting
securities of another person. Investments in "affiliated persons" at August 31,
1999, were $392,176,007.
See Notes to Financial Statements.
27
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$13,148,771,857).......................................... $14,463,298,467
Cash....................................................... 207,220
Receivables:
Investment securities sold................................ 89,544,555
Capital shares sold....................................... 26,305,558
Dividends and interest.................................... 32,551,007
---------------
Total assets.......................................... 14,611,906,807
---------------
Liabilities:
Payables:
Investment securities purchased........................... 110,453,166
Capital shares redeemed................................... 16,997,882
To affiliates............................................. 13,722,023
Accrued expenses........................................... 2,305,817
---------------
Total liabilities..................................... 143,478,888
---------------
Net assets, at value........................................ $14,468,427,919
===============
Net assets consist of:
Undistributed net investment income........................ $ 329,302,184
Net unrealized appreciation................................ 1,314,526,610
Accumulated net realized gain.............................. 442,071,013
Capital shares............................................. 12,382,528,112
---------------
Net assets, at value........................................ $14,468,427,919
===============
CLASS A:
Net asset value per share ($13,368,945,034 / 683,551,488
shares outstanding)...................................... $19.56
===============
Maximum offering price per share ($19.56 / 94.25%)......... $20.75
===============
CLASS B:
Net asset value and maximum offering price per share
($27,573,127 / 1,417,089 shares outstanding)*............. $19.46
===============
CLASS C:
Net asset value per share ($1,021,158,688 / 53,327,502
shares outstanding)*...................................... $19.15
===============
Maximum offering price per share ($19.15 / 99.00%)......... $19.34
===============
ADVISOR CLASS:
Net asset value and maximum offering price per share
($50,751,070 / 2,588,034 shares outstanding).............. $19.61
===============
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
28
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $27,719,194)
Dividends.................................................. $421,700,407
Interest................................................... 84,549,543
------------
Total investment income............................... $ 506,249,950
Expenses:
Management fees (Note 3)................................... 82,894,582
Administrative fees (Note 3)............................... 10,796,198
Distribution fees (Note 3)
Class A................................................... 31,642,650
Class B................................................... 70,013
Class C................................................... 9,507,388
Transfer agent fees (Note 3)............................... 18,188,000
Custodian fees............................................. 3,810,000
Reports to shareholders.................................... 1,568,200
Registration and filing fees............................... 216,000
Professional fees.......................................... 183,800
Directors' fees and expenses............................... 174,700
Other...................................................... 47,390
------------
Total expenses........................................ 159,098,921
--------------
Net investment income........................... 347,151,029
--------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 446,770,314
Foreign currency transactions............................. (5,618,368)
------------
Net realized gain..................................... 441,151,946
Net unrealized appreciation on investments............ 3,187,700,802
--------------
Net realized and unrealized gain............................ 3,628,852,748
--------------
Net increase in net assets resulting from operations........ $3,976,003,777
==============
</TABLE>
See Notes to Financial Statements.
29
PAGE
TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED AUGUST 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
-------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 347,151,029 $ 352,041,372
Net realized gain from investments and foreign currency
transactions............................................. 441,151,946 1,794,895,388
Net unrealized appreciation (depreciation) on
investments.............................................. 3,187,700,802 (3,948,921,534)
-------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ 3,976,003,777 (1,801,984,774)
Distributions to shareholders from:
Net investment income:
Class A.................................................. (266,948,419) (309,635,887)
Class C.................................................. (16,090,109) (16,109,670)
Advisor Class............................................ (974,268) (846,245)
Net realized gains:
Class A.................................................. (1,337,678,480) (1,624,126,003)
Class C.................................................. (105,487,917) (109,111,611)
Advisor Class............................................ (4,508,052) (4,067,274)
Capital share transactions (Note 2):
Class A.................................................. 165,182,221 2,570,690,896
Class B.................................................. 26,627,554 --
Class C.................................................. 269,118 389,245,855
Advisor Class............................................ 6,948,870 17,030,051
-------------------------------------
Net increase (decrease) in net assets................... 2,443,344,295 (888,914,662)
Net assets:
Beginning of year.......................................... 12,025,083,624 12,913,998,286
-------------------------------------
End of year................................................ $14,468,427,919 $12,025,083,624
=====================================
Undistributed net investment income included in net assets:
End of year................................................ $ 329,302,184 $ 268,936,336
=====================================
</TABLE>
See Notes to Financial Statements.
30
PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Templeton Growth Fund, Inc. (the Fund) is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company. The Fund
seeks long-term capital growth. Under normal market conditions, the Fund invests
primarily in the equity securities of companies located anywhere in the world,
including emerging markets. The following summarizes the Fund's significant
accounting policies.
a. SECURITY VALUATION:
Securities listed or traded on a recognized national exchange or NASDAQ are
valued at the latest reported sales price. Over-the-counter securities and
listed securities for which no sale is reported are valued within the range of
the latest quoted bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
in accordance with procedures established by the Board of Directors.
b. FOREIGN CURRENCY TRANSLATION:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date. When
the Fund purchases or sells foreign securities it will customarily enter into a
foreign exchange contract to minimize foreign exchange risk from the trade date
to the settlement date of such transactions.
The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions, and the difference between the recorded
amounts of dividends, interest, and foreign withholding taxes and the U.S.
dollar equivalent of the amounts actually received or paid. Net unrealized
foreign exchange gains and losses arise from changes in foreign exchange rates
on foreign currency denominated assets and liabilities other than investments in
securities held at the end of the reporting period.
c. INCOME TAXES:
No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable income.
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Certain income from foreign securities is recorded as soon as
31
PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS (CONT.)
information is available to the Fund. Interest income and estimated expenses are
accrued daily. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Realized and unrealized gains and losses and net investment income, other than
class specific expenses, are allocated daily to each class of shares based upon
the relative proportion of net assets of each class.
e. ACCOUNTING ESTIMATES:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the amounts of income and expense during the reporting
period. Actual results could differ from those estimates.
2. CAPITAL STOCK
The Fund offers four classes of shares: Class A, Class B, Class C, and Advisor
Class shares. Effective January 1, 1999, Class I and Class II shares were
renamed Class A and Class C respectively, and a fourth class of shares, Class B,
was established. The shares differ by their initial sales load, distribution
fees, voting rights on matters affecting a single class of shares and the
exchange privilege of each class.
At August 31, 1999, there were 1.8 billion shares authorized ($0.01 par value)
of which 1.2 billion, 100 million, 400 million and 100 million were designated
Class A shares, Class B shares, Class C shares and Advisor Class shares,
respectively. Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------------------------
1999 1998
---------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold....................................... 240,450,684 $ 4,294,680,279 162,377,765 $ 3,342,332,950
Shares issued on reinvestment of distributions.... 91,924,630 1,440,499,083 84,313,094 1,737,946,375
Shares redeemed................................... (311,355,509) (5,569,997,141) (123,878,907) (2,509,588,429)
-----------------------------------------------------------------------
Net increase...................................... 21,019,805 $ 165,182,221 122,811,952 $ 2,570,690,896
=======================================================================
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED
AUGUST 31, 1999*
-----------------------
SHARES AMOUNT
-----------------------
<S> <C> <C>
CLASS B SHARES:
Shares sold....................................... 1,444,372 $ 27,145,001
Shares redeemed................................... (27,283) (517,447)
-------------------------------
Net increase...................................... 1,417,089 $ 26,627,554
===============================
</TABLE>
32
PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (continued)
2. CAPITAL STOCK (CONT.)
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------------------------
1999 1998
--------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold....................................... 19,198,655 $ 331,903,925 21,887,098 $ 446,684,900
Shares issued on reinvestment of distributions.... 6,947,652 107,274,041 5,371,460 109,391,107
Shares redeemed................................... (25,697,020) (438,908,848) (8,429,791) (166,830,152)
-----------------------------------------------------------------------
Net increase...................................... 449,287 $ 269,118 18,828,767 $ 389,245,855
=======================================================================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------------------------
1999 1998
--------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold....................................... 1,605,201 $ 29,335,282 1,306,769 $ 26,289,488
Shares issued on reinvestment of distributions.... 334,899 5,247,867 235,380 4,848,120
Shares redeemed................................... (1,512,522) (27,634,279) (694,766) (14,107,557)
-----------------------------------------------------------------------
Net increase...................................... 427,578 $ 6,948,870 847,383 $ 17,030,051
=======================================================================
</TABLE>
*Effective date of Class B shares was January 1, 1999.
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Certain officers of the Fund are also officers or directors of Templeton Global
Advisors Ltd. (TGAL), Franklin Templeton Services, Inc. (FT Services),
Franklin/Templeton Distributors, Inc. (Distributors), and Franklin/Templeton
Investor Services, Inc. (Investor Services), the Fund's investment manager,
administrative manager, principal underwriter, and transfer agent, respectively.
The Fund pays an investment management fee to TGAL based on the average daily
net assets of the Fund as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.75% First $200 million
0.675% Over $200 million, up to and including $1.3 billion
0.60% Over $1.3 billion
</TABLE>
33
PAGE
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (continued)
3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
The Fund pays an administrative fee to FT Services based on the Fund's average
daily net assets as follows:
<TABLE>
<CAPTION>
ANNUALIZED
FEE RATE AVERAGE DAILY NET ASSETS
- -----------------------------------------------------------------
<S> <C>
0.15% First $200 million
0.135% Over $200 million, up to and including $700 million
0.10% Over $700 million, up to and including $1.2 billion
0.075% Over $1.2 billion
</TABLE>
The Fund reimburses Distributors for costs incurred in marketing the Fund's
shares up to 0.25%, 1.00% and 1.00% per year of the average daily net assets of
Class A, Class B and Class C shares, respectively. Under the Class A
distribution plan, costs exceeding the maximum may be reimbursed in subsequent
periods. At August 31, 1999, unreimbursed costs were $645,339. Distributors
received net commissions from sales of the Fund's shares and received contingent
deferred sales charges for the period of $1,973,958 and $587,876, respectively.
4. INCOME TAXES
At August 31, 1999, the net unrealized appreciation based on the cost of
investments for income tax purposes of $13,154,432,406 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation.................................... $ 2,377,044,251
Unrealized depreciation.................................... (1,068,178,190)
---------------
Net unrealized appreciation................................ $ 1,308,866,061
===============
</TABLE>
At August 31, 1999, the Fund had deferred currency losses occurring subsequent
to October 31, 1998 of $4,000,000. For tax purposes, such losses will be
reflected in the year ending August 31, 2000.
5. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the year
ended August 31, 1999 aggregated $3,989,451,341 and $4,701,458,814,
respectively.
34
PAGE
TEMPLETON GROWTH FUND, INC.
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Templeton Growth Fund, Inc.
(the "Fund") at August 31, 1999, the results of its operations, the changes in
its net assets and the financial highlights for the year then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at August 31, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above. The financial statements for the year ended August
31, 1998, including financial highlights for each of the four years in the
period then ended, were audited by other independent accountants whose report
dated September 29, 1998 expressed an unqualified opinion on those financial
statements.
PricewaterhouseCoopers LLP
Ft. Lauderdale, Florida
September 30, 1999
35
PAGE
TEMPLETON GROWTH FUND, INC.
Tax Designation
Under Section 852(b)(3)(C) of the Internal Revenue Code, the Fund hereby
designates $449,570,027 as a capital gain dividend for the fiscal year ended
August 31, 1999.
Under Section 854(b)(2) of the Internal Revenue Code, the Fund hereby designates
14.51% of the ordinary income dividends as income qualifying for the dividends
received deduction for the fiscal year ended August 31, 1999.
At August 31, 1999, more than 50% of the Fund's total assets were invested in
securities of foreign issuers. In most instances, foreign taxes were withheld
from dividends paid to the fund on these investments. The Fund intends to make
an election under Section 853 of the Internal Revenue Code. This election will
allow shareholders to treat their proportionate share of foreign taxes paid by
the Fund as having been paid directly by them.
The following table provides a breakdown by country of foreign source income and
foreign taxes paid, as designated by the Fund to Class A, Class B, Class C, and
Advisor Class shareholders in October 1999.
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------------------------
FOREIGN TAX FOREIGN SOURCE FOREIGN TAX FOREIGN SOURCE
COUNTRY PAID PER SHARE INCOME PER SHARE PAID PER SHARE INCOME PER SHARE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Argentina.............................................. $0.0000 $0.0115 $0.0000 $0.0116
Australia.............................................. 0.0003 0.0193 0.0003 0.0196
Belgium................................................ 0.0003 0.0016 0.0003 0.0016
Bermuda................................................ 0.0000 0.0017 0.0000 0.0017
Brazil................................................. 0.0038 0.0197 0.0038 0.0199
Canada................................................. 0.0007 0.0033 0.0007 0.0033
Chile.................................................. 0.0005 0.0009 0.0005 0.0009
Finland................................................ 0.0013 0.0062 0.0013 0.0063
France................................................. 0.0014 0.0094 0.0014 0.0095
Germany................................................ 0.0012 0.0087 0.0012 0.0088
Hong Kong.............................................. 0.0000 0.0443 0.0000 0.0448
Japan.................................................. 0.0002 0.0008 0.0002 0.0008
Luxembourg............................................. 0.0000 0.0005 0.0000 0.0005
Mexico................................................. 0.0003 0.0091 0.0003 0.0092
Netherlands............................................ 0.0030 0.0277 0.0030 0.0280
New Zealand............................................ 0.0003 0.0013 0.0003 0.0013
Norway................................................. 0.0009 0.0046 0.0009 0.0046
Peru................................................... 0.0000 0.0002 0.0000 0.0002
Singapore.............................................. 0.0004 0.0056 0.0004 0.0056
South Africa........................................... 0.0000 0.0044 0.0000 0.0045
South Korea............................................ 0.0010 0.0041 0.0010 0.0042
Spain.................................................. 0.0007 0.0035 0.0007 0.0036
Sweden................................................. 0.0017 0.0083 0.0017 0.0084
United Kingdom......................................... 0.0189 0.1300 0.0189 0.1315
------------------------------------------------------------------------
TOTAL.................................................. $0.0369 $0.3267 $0.0369 $0.3304
========================================================================
</TABLE>
36
PAGE
TEMPLETON GROWTH FUND, INC.
Tax Designation (continued)
<TABLE>
<CAPTION>
CLASS C ADVISOR CLASS
------------------------------------------------------------------------
FOREIGN TAX FOREIGN SOURCE FOREIGN TAX FOREIGN SOURCE
COUNTRY PAID PER SHARE INCOME PER SHARE PAID PER SHARE INCOME PER SHARE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Argentina.............................................. $0.0000 $0.0083 $0.0000 $0.0126
Australia.............................................. 0.0003 0.0141 0.0003 0.0212
Belgium................................................ 0.0003 0.0012 0.0003 0.0018
Bermuda................................................ 0.0000 0.0012 0.0000 0.0018
Brazil................................................. 0.0038 0.0143 0.0038 0.0216
Canada................................................. 0.0007 0.0024 0.0007 0.0036
Chile.................................................. 0.0005 0.0007 0.0005 0.0010
Finland................................................ 0.0013 0.0045 0.0013 0.0068
France................................................. 0.0014 0.0068 0.0014 0.0103
Germany................................................ 0.0012 0.0063 0.0012 0.0095
Hong Kong.............................................. 0.0000 0.0322 0.0000 0.0486
Japan.................................................. 0.0002 0.0006 0.0002 0.0009
Luxembourg............................................. 0.0000 0.0004 0.0000 0.0006
Mexico................................................. 0.0003 0.0066 0.0003 0.0100
Netherlands............................................ 0.0030 0.0201 0.0030 0.0304
New Zealand............................................ 0.0003 0.0009 0.0003 0.0014
Norway................................................. 0.0009 0.0033 0.0009 0.0050
Peru................................................... 0.0000 0.0002 0.0000 0.0002
Singapore.............................................. 0.0004 0.0041 0.0004 0.0061
South Africa........................................... 0.0000 0.0032 0.0000 0.0048
South Korea............................................ 0.0010 0.0030 0.0010 0.0045
Spain.................................................. 0.0007 0.0026 0.0007 0.0039
Sweden................................................. 0.0017 0.0060 0.0017 0.0091
United Kingdom......................................... 0.0189 0.0945 0.0189 0.1425
------------------------------------------------------------------------
TOTAL.................................................. $0.0369 $0.2375 $0.0369 $0.3582
========================================================================
</TABLE>
In January 2000, shareholders will receive Form 1099-DIV which will include
their share of taxes withheld and foreign source income distributed during the
calendar year 1999. Shareholders are advised to check with their tax advisors
for information on the treatment of these amounts on their individual income tax
returns.
37
PAGE
TEMPLETON GROWTH FUND, INC.
CHANGE IN INDEPENDENT AUDITOR
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund. McGladrey resigned pursuant to their agreement to sell
their investment company practice to PricewaterhouseCoopers LLP (PwC). The
McGladrey partners and professionals previously serving the Fund, have joined
PwC and performed the August 31, 1999 audit.
None of the reports of McGladrey on the financial statements of the Fund,
including those of the past two fiscal years have ever contained an adverse
opinion or a disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles.
During the period McGladrey served the Fund, including the two most recent
fiscal years and subsequent interim period, there were no disagreements with
McGladrey on any matter of accounting principle or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of McGladrey would have caused it to make
reference to the subject matter of disagreement in connection with its report.
On August 31, 1999, the Fund, with the approval of its Board of Directors and
its Audit Committee, engaged PwC as its independent auditors.
38
PAGE
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ANNUAL REPORT
PRINCIPAL UNDERWRITER
Franklin/Templeton Distributors, Inc.
1-800/DIAL BEN(R)
www.franklintempleton.com
SHAREHOLDER SERVICES
1-800/632-2301
This report must be preceded or accompanied by the current Templeton Growth
Fund, Inc. prospectus, which contains more complete information including risk
factors, charges and expenses. Like any investment in securities, the value of
the Fund's portfolio will be subject to the risk of loss from market, currency,
economic, political and other factors, as well as investment decisions by the
Investment Manager, which will not always be profitable or wise. The Fund and
its investors are not protected from such losses by the Investment Manager.
Therefore, investors who cannot accept this risk should not invest in shares of
the Fund.
To ensure the highest quality of service, telephone calls to or from
our service departments may be monitored, recorded and accessed. These calls can
be determined by the presence of a regular beeping tone.
101 A99 10/99 [RECYCLE SYMBOL] Printed on recycled paper
