Semi
Annual
Report
FEBRUARY 29, 2000
TEMPLETON GROWTH FUND, INC.
[FRANKLIN TEMPLETON LOGO]
[GRAPHIC - 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.
[PHOTO - MARK G. HOLOWESKO, CFA]
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
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YOUR FUND'S GOAL: TEMPLETON GROWTH FUND 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.
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Dear Shareholder:
This semiannual report of Templeton Growth Fund covers the six months ended
February 29, 2000, a period when Y2K nervousness proved to be unwarranted, and
the new millennium rang in without incident. It was also a time when many
investors abandoned their investment styles in favor of "hot" technology stocks
and borrowed extensively to purchase them.(1) Although many global economies
performed well, most investor attention focused upon the U.S., where
unemployment reached 30-year lows and gross domestic product (GDP) climbed a
blistering 7.3% during the fourth quarter of 1999 despite rising interest rates.
At year's end, the Dow Jones Industrial Average (the Dow) was 6.2% higher
1. Source: Bloomberg(R); Margin Debt Index. On average, margin debt in the
United States increased 50.35% for the six-month period ending 2/29/00, rising
from $176.4 billion to $265.2 billion. Figures are calculated from NYSE member
organizations that are required to report monthly their aggregate debits in
margin accounts (how much stock was purchased on margin).
All portfolio holdings mentioned in the report are listed by their complete
legal titles in the Fund's Statement of Investments (SOI), a complete listing of
the Fund's portfolio holdings, including dollar value and number of shares or
principal amount. The SOI begins on page 16.
CONTENTS
Shareholder Letter ............... 1
Performance Summary .............. 9
Financial Highlights &
Statement of Investments ......... 12
Financial Statements ............. 24
Notes to Financial
Statements ............. 27
[PYRAMID - FUND CATEGORY]
than it had been at the beginning of the reporting period, and the Nasdaq
Composite(R) Index (Nasdaq) had risen 48.5%.(2) However, in mid-January, those
concerned about rising interest rates fled the relative safety of the Dow and
took refuge in the tech-heavy Nasdaq. Investor demand even drove up prices on
many companies with no profits at all. By February 29, the Dow had fallen 5.9%
for the reporting period, while the Nasdaq had risen 71.6%.(3)
Within this environment, Templeton Growth Fund - Class A posted a six-month
cumulative total return of - 1.78% as shown in the Performance Summary on page
9. The Fund's benchmark, the Morgan Stanley Capital International(R) (MSCI(R))
World Index, provided a cumulative total return of 9.53% for the same period.(4)
The Fund's underperformance relative to the MSCI was due largely to the fact
that throughout the period, we adhered to our value style, investing in
unpopular sectors of Asian and North American markets: cyclical stocks,
industrial companies and out-of-favor financial issues.
NORTH AMERICA
Although the Fund's portfolio was underweighted in the U.S. market, compared to
the MSCI index at the beginning of the reporting period, our U.S. buying
activity increased significantly during the six months under review. This may
seem surprising
2. Source: Standard & Poor's(R) Micropal.
The Dow Jones Industrial Average is price-weighted based on the average market
price of 30 blue chip (NYSE) stocks. The average is found by adding the prices
of the 30 stocks and dividing by a denominator that has been adjusted for stock
splits, stock dividends, and substitutions of stocks. It represents about 25% of
the NYSE market capitalization.
The Nasdaq Composite Index measures all Nasdaq domestic and non-U.S. based
common stocks listed on the Nasdaq Stock Market. The Index is market-value
weighted and includes over 5,000 companies (as of 2/29/00).
3. Source: Standard & Poor's(R) Micropal.
4. Source: Standard & Poor's Micropal. The unmanaged MSCI World Index tracks the
performance of approximately 1,500 securities in 23 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.
2
given the historically high valuation of the U.S. indexes. However, it reflects
the fact that behind these lofty index levels and the unprecedented valuation of
technology and Internet companies, many "traditional economy" stocks have
experienced dramatic declines. During the first two months of 2000, two-thirds
of the Dow stocks declined, some by as much as 20%. Paper, steel, food, autos,
banks, pharmaceutical and retail stocks were marked down in price, many to
bargain levels as investors rotated out of these sectors and into the "new
economy" Internet and technology stocks. Taking advantage of these falling
prices, we purchased shares in what we believed to be undervalued companies in
these sectors. A number of U.S. securities we bought in the last few months of
the reporting period had declined 30% to 40% from their 52-week highs, and a few
were off 60% to 70%.
When I first joined the Templeton organization in 1985, we had the opportunity
to purchase U.S. securities with 4-5% dividend yields at eight to 12 times
earnings. During the six months under review, we had the chance to do this
again. Examples of companies recently purchased for the Fund include H.J. Heinz,
a global manufacturer and marketer of processed food products, Bank of America
Corp., the holding company for Bank of America and NationsBank, and Abbot Labs,
a developer and manufacturer of pharmaceuticals and health care products. These
companies' share prices declined 42%, 40% and 37%, respectively, from their
52-week highs. H.J. Heinz and Bank of America Corp. have dividend yields over 4%
and trade at 12x and 8x our expectation of 2000 earnings, respectively. On
February 29, 2000, the Fund's North American holdings also included automobile
manufacturers Ford and General Motors, aerospace and defense manufacturer
Raytheon, and building
3
materials producer Owens Corning.
EUROPE
Among the Fund's largest European holdings are Volvo (Sweden), Aventis (France),
Koninklijke Philips Electronics (Netherlands), and BMW (Germany). The U.K.
market has underperformed the continental European markets in the past two
years. Aerospace and retail stocks in particular have performed poorly. Among
the Fund's largest U.K. holdings are Rolls-Royce, a manufacturer of industrial
gas turbine engines for civil and military aircraft, and Marks & Spencer, a
major retail department store operator. Rolls-Royce sells at only 11x our
expected earnings estimate for 2000. Because of a difficult operating
environment, Marks & Spencer's share price has declined to a level that's close
to the value of its real estate holdings alone, implying its retail trading
operations are virtually worthless to investors. However, investors have been
paid a 5.43% dividend yield while management restructures operations to improve
profitability. We believe the franchise of the company, which has traditionally
maintained a reputation as a top British retailer, remains intact.
In Germany, we added to several holdings we believe might benefit from the
possible reduction of tax rates, such as BMW, Veba and Adidas. Taxes are
generally much higher in Europe than in the United States, and although Europe
has completed a year with its common currency and interest rates converging, the
region does not enjoy a common level of taxation. Recognizing that uneven
taxation has hampered investment and European competitiveness, politicians are
debating legislation to lower corporate and personal tax levels. If they
succeed, the result could be higher corporate profits and the breaking up of
corporate cross holdings, as many German companies hold
4
huge stakes in the common shares of other German companies. Many of these German
companies have shown a desire to reduce these holdings, but this has so far been
hindered by high tax rates.(5)
ASIA
As of February 29, 2000, some of our larger Asian positions included Japan's
Sony Corp., Singapore Airlines, and South Korea's SK Telecom. During the
reporting period, the rising prices of many of our Pacific Rim holdings led us
to take some profits and reduce some positions. Despite this, we still
maintained an overweight position in Hong Kong at period's end compared to the
MSCI World Index, at 9.0% to 1.2%, respectively. Our largest Hong Kong position,
Cheung Kong Holdings, a real estate development and investment company, was
selling at a substantial discount to its investment in Hutchison Whampoa. By the
end of the reporting period, Cheung Kong's ownership of Hutchison shares were
valued in excess of Cheung Kong's total market value despite its considerable
land assets.
On the buy side, rising interest rates pushed down the prices of banking stocks
in Australia, and we used this weakness to build our position in National
Australia Bank during the middle of the reporting period. One of the largest and
most competitive banks in Australia, its share price had fallen by one-third,
and was selling at 10x our projected 2000 earnings when we bought it.
LATIN AMERICA
The Fund's exposure to Latin America, which increased from 6.2% of total net
assets at the beginning of the period to 7.3% by the end of February,
contributed greatly to its overall performance. As in Europe, an encouraging
development in
5. Source: Templeton Du Pont analysis.
TOP 10 EQUITY HOLDINGS
2/29/00
<TABLE>
<CAPTION>
COMPANY % OF TOTAL
INDUSTRY, COUNTRY NET ASSETS
- --------------------------------------------------------------
<S> <C>
Merrill Lynch & Co. Inc.,
Financial Services,
United States ......................................... 1.7%
Cheung Kong Holdings Ltd.,
Multi-Industry, Hong Kong* ............................ 1.6%
Fuji Photo Film Co. Ltd.,
Electrical & Electronics, Japan ....................... 1.6%
General Motors Corp.,
Automobiles, United States ............................ 1.5%
HSBC Holdings PLC,
Banking, Hong Kong .................................... 1.5%
Koninklijke Philips
Electronics NV,
Electrical & Electronics,
Netherlands ........................................... 1.5%
Bank of America Corp.,
Banking, United States ................................ 1.5%
SK Telecom Co. Ltd., ADR,
Telecommunications,
South Korea ........................................... 1.4%
H.J. Heinz Co.,
Food & Household Products,
United States ......................................... 1.4%
Ford Motor Co.,
Automobiles, United States ............................ 1.3%
</TABLE>
*Hong Kong reverted to the sovereignty of China on July 1, 1997.
5
GEOGRAPHIC DISTRIBUTION
Based on Total Net Assets
2/29/00
[BAR CHART]
<TABLE>
<S> <C>
North American Stocks ............................ 34.1%
European Stocks .................................. 31.2%
Asian Stocks ..................................... 17.8%
Latin American Stocks ............................ 7.3%
Australian & New Zealand Stocks .................. 3.4%
Mid-East/African Stocks .......................... 1.1%
Fixed-Income Securities .......................... 4.9%
Short-Term Investments
& Other Net Assets ............................... 0.2%
</TABLE>
Latin America has been a rise in corporate activity. In Mexico, Brazil and
Argentina, we focused the Fund's positions toward the telecommunications sector.
Bids from European companies such as Spain's Telefonia for Latin telecom
operators, coupled with the excitement of Internet participation by the sector,
have driven share prices up sharply. Although we have trimmed some holdings,
telecommunications remains our largest industry investment in the region. Latin
markets and economies have benefited from the strong growth in the U.S. and an
abnormal amount of North American liquidity.
LOOKING FORWARD
Our analysis of equity markets during the reporting period reveals the potential
for dramatic divergence of performance between industry sectors. Many stock
prices were based on unrealistic prospects while others were selling at
historically low valuations. The most-overvalued companies were providing the
best performance, with prices often defying logic. Understandably, many
professional investors have become nervous about the extent of these valuations,
the size and importance of the market relative to the economy, and the amount of
speculation. We believe these concerns are best illustrated by the 50%-plus
increase in U.S. margin debt during the reporting period, which rose from $176
billion to over $265 billion, and the willingness of investors to pay huge sums
for stocks of companies with no earnings and little revenue.1 Even those who
invest only outside the U.S. worry that a significant decline in U.S. securities
will jeopardize global growth, since the
1. Source: Bloomberg(R); Margin Debt Index. On average, margin debt in the
United States increased 50.35% for the six-month period ending 2/29/00, rising
from $176.4 billion to $265.2 billion. Figures are calculated from NYSE member
organizations that are required to report monthly their aggregate debits in
margin accounts (how much stock was purchased on margin).
6
U.S. economy has been such a catalyst in maintaining economic activity the
world over.
There is, however, a difference between our holdings and the general market.
This difference is illustrated by the valuation table to the right and the chart
below, which show the average valuation of our holdings in the Fund compared to
the valuations of the stocks in the Nasdaq Composite and MSCI World Indexes. In
most cases, we are holding or buying securities that are well over 50% cheaper
than the overall market. In our assessment, this provides significant long-term
possibilities not available to those who base investment decisions on trends
alone.
AVERAGE STOCK VALUATION*
Price to Earnings Ratio
Templeton Growth vs. MSCI World & Nasdaq Composite
(8/31/99 - 2/29/00)
[GRAPHIC]
Price To Earnings
Templeton Growth MSCI World Index NASDAQ (Right Scale)
---------------- ---------------- --------------------
Aug-99 17.10 32.80 116.92
Sept-99 16.80 32.40 145.71
Oct-99 16.40 34.90 114.14
Nov-99 17.50 33.00 208.31
Dec-99 18.30 36.00 281.08
Jan-00 16.50 33.60 326.00
Feb-00 14.60 33.10 364.35
*Source: Bloomberg
In months to come, we shall continue to search the globe for bargain stocks,
employing our time-tested strategy of diversification which allows us to spread
risk over a large number of countries and industries, and helps to expand the
areas for discovering undervalued assets. Of course, there are special risks
involved with global investing related to market, currency, economic,
Templeton Growth Fund 16.7X
MSCI World Index 33.7X
Nasdaq Composite Index 222.4X
7
TOP 10 COUNTRIES*
REPRESENTED IN THE FUND
2/29/00
% OF TOTAL
COUNTRY NET ASSETS
----------------------------
United States 31.0%
United Kingdom 11.5%
Hong Kong 9.0%
Japan 5.4%
Germany 4.7%
Brazil 3.9%
Netherlands 3.8%
France 3.4%
Sweden 3.0%
Australia 2.9%
*Based on equity securities.
social, political and other factors. Emerging market securities involve similar
but heightened risks, in addition to those associated with the relatively small
size and lesser liquidity of those markets. Investing in any emerging market
means accepting a certain amount of volatility and, in some cases, severe market
corrections. For example, Hong Kong's equity market has increased 1,322% in the
past 15 years, but has suffered 6 declines of more than 15% during the same
time. (6) While short-term volatility can be disconcerting, declines in excess
of 50% are not unusual in emerging markets. These risks and considerations are
discussed in the Fund's prospectus.
Thank you for investing in Templeton Growth Fund. We welcome your comments and
look forward to serving you in the future.
Sincerely,
/s/ Mark G. Holowesko, CFA
- ---------------------------
Mark G. Holowesko, CFA
President
Templeton Growth Fund, Inc.
This discussion reflects our views, opinions and portfolio holdings as of
February 29, 2000, the end of the reporting period. The information provided is
not a complete analysis of every aspect of any country, industry, security or
the Fund. Market and economic conditions are changing constantly, which can be
expected to affect our strategies and the Fund's portfolio composition. Although
past performance is not predictive of future results, these insights may help
you better understand our investment and management philosophy.
(6.) Source: Bloomberg, Hang Seng Index. Based on quarterly percentage price
change over 15 years ended December 31, 1999. Market return is measured in U.S.
dollar terms and does not include reinvested dividends. The Hang Seng Index is a
capitalization-weighted index of 33 companies that represent approximately 70%
of the total market capitalization of the Stock Exchange of Hong Kong. The
components of the index are divided into four subindexes: Commerce and Industry,
Finance, Utilities, and Properties.
8
SIX-MONTH PERFORMANCE SUMMARY AS OF 2/29/00
Six-month total return does not include sales charges. 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 operating expenses for
each class. Past distributions are not indicative of future trends. All
CLASS A
<TABLE>
<S> <C> <C>
Six-Month Total Return - 1.78%
Net Asset Value (NAV) $17.96 (2/29/00) $19.56 (8/31/99)
Change in NAV - $1.60
Distributions (9/1/99 - 2/29/00) Dividend Income $0.5349
Short-Term Capital Gain $0.0290
Long-Term Capital Gain $0.6622
--------------------------------
TOTAL $1.2261
</TABLE>
CLASS B
<TABLE>
<S> <C> <C>
Six-Month Total Return - 2.14%
Net Asset Value (NAV) $17.82 (2/29/00) $19.46 (8/31/99)
Change in NAV - $1.64
Distributions (9/1/99 - 2/29/00) Dividend Income $0.5055
Short-Term Capital Gain $0.0290
Long-Term Capital Gain $0.6622
--------------------------------
TOTAL $1.1967
</TABLE>
CLASS C
<TABLE>
<S> <C> <C>
Six-Month Total Return - 2.18%
Net Asset Value (NAV) $17.66 (2/29/00) $19.15 (8/31/99)
Change in NAV - $1.49
Distributions (9/1/99 - 2/29/00) Dividend Income $0.3596
Short-Term Capital Gain $0.0290
Long-Term Capital Gain $0.6622
--------------------------------
TOTAL $1.0508
</TABLE>
ADVISOR CLASS
<TABLE>
<S> <C> <C>
Six-Month Total Return - 1.65%
Net Asset Value (NAV) $17.97 (2/29/00) $19.61 (8/31/99)
Change in NAV - $1.64
Distributions (9/1/99 - 2/29/00) Dividend Income $0.5965
Short-Term Capital Gain $0.0290
Long-Term Capital Gain $0.6622
--------------------------------
TOTAL $1.2877
</TABLE>
Past performance is not predictive of future results.
CLASS A:
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-1 plan, 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:
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. total returns include reinvested distributions at net asset value.
9
(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.
(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.) 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 only to that class.
Since January 2, 1997 (commencement of sales), the cumulative and average annual
total returns of Advisor Class shares were 35.62% and 12.14% 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.
ADDITIONAL PERFORMANCE
AS OF 3/31/00
<TABLE>
<CAPTION>
INCEPTION
CLASS A 1-YEAR 5-YEAR 10-YEAR (11/29/54)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 19.37% 97.95% 251.28% 47,981.04%
Average Annual Total Return(2) 12.53% 13.28% 12.72% 14.44%
Value of $10,000 Investment(3) $11,253 $18,657 $33,106 $4,531,675
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS B 1-YEAR (1/1/99)
- ----------------------------------------------------------------
<S> <C> <C>
Cumulative Total Return(1) 18.46% 24.68%
Average Annual Total Return(2) 14.46% 16.28%
Value of $10,000 Investment(3) $11,446 $12,068
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
CLASS C 1-YEAR 3-YEAR (5/1/95)
- -------------------------------------------------------------------
<S> <C> <C> <C>
Cumulative Total Return(1) 18.53% 35.72% 84.27%
Average Annual Total Return(2) 16.36% 10.35% 12.99%
Value of $10,000 Investment(3) $11,636 $13,437 $18,239
</TABLE>
<TABLE>
<CAPTION>
INCEPTION
ADVISOR CLASS(4) 1-YEAR 5-YEAR 10-YEAR (11/29/54)
<S> <C> <C> <C> <C>
Cumulative Total Return(1) 19.74% 101.35% 257.31% 48,806.29%
Average Annual Total Return(2) 19.74% 15.02% 13.58% 14.64%
Value of $10,000 Investment(3) $ 11,974 $20,135 $35,731 $4,890,629
</TABLE>
For updated performance figures, see "Prices and Performance" on the Internet at
www.franklintempleton.com, or call Franklin Templeton at 1-800/342-5236.
Past performance does not guarantee future results.
10
TEMPLETON GROWTH FUND
CLASS A
If you had invested $10,000 in Templeton Growth Fund - Class A at inception, it
would have been worth more than $4.2 million on February 29, 2000. 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 February 29, 2000.*
*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 three other share classes, subject to different fees and expenses,
which will affect their performance. Please see the prospectus for more details.
Past performance does not guarantee future results.
[GRAPHIC - 3-DIMENSIONAL MOUNTAIN CHART]
TEMPLETON GROWTH
<TABLE>
<CAPTION>
PRINCIPAL + PRINCIPAL +
PERIOD END TOTAL VALUE CAP GAINS DIVIDENDS INFLATION Principal Income Cap Gains CPI
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11/29/1954 9,425 9,425 9,425 10,000 9,425
12/31/1954 9,576 9,576 9,576 9,963 9,576 -0.37%
12/31/55 10,250 10,250 10,250 10,000 10,250 0.37%
12/31/56 10,726 10,726 10,726 10,299 10,726 2.99%
12/31/57 8,911 8,911 8,911 10,598 8,911 2.90%
12/31/58 13,261 13,261 13,261 10,784 13,261 1.76%
12/31/59 15,118 15,118 15,118 10,971 15,118 1.73%
12/31/60 17,210 17,210 17,210 11,120 17,210 1.36%
12/31/61 20,358 20,358 20,358 11,194 20,358 0.67%
12/31/62 17,606 17,606 17,606 11,343 17,606 1.33%
12/31/63 18,511 18,511 18,511 11,529 18,511 1.64%
12/31/64 23,802 23,506 23,802 11,641 23,506 296 0 0.97%
12/31/65 29,073 28,313 29,073 11,865 28,313 760 0 1.92%
12/31/66 27,532 26,484 27,532 12,275 26,484 1,048 0 3.46%
12/31/67 31,314 29,632 31,314 12,648 29,632 1,682 0 3.04%
12/31/68 43,140 40,283 43,140 13,245 40,283 2,857 0 4.72%
12/31/69 51,622 47,446 51,622 14,066 47,446 4,176 0 6.20%
12/31/70 48,298 43,676 48,298 14,850 43,676 4,622 0 5.57%
12/31/71 58,888 52,568 57,875 15,336 51,555 6,320 1,013 3.27%
12/31/72 99,262 87,991 95,625 15,858 84,354 11,271 3,637 3.41%
12/31/73 89,415 79,614 78,886 17,240 69,085 9,801 10,529 8.71%
12/31/74 78,623 69,154 68,188 19,367 58,719 9,469 10,435 12.34%
12/31/75 108,183 93,528 93,732 20,711 79,077 14,655 14,451 6.94%
12/31/76 158,747 135,840 136,291 21,718 113,384 22,907 22,456 4.86%
12/31/77 191,091 162,988 155,058 23,173 126,955 28,103 36,033 6.70%
12/31/78 227,799 192,793 184,488 25,263 149,482 35,006 43,311 9.02%
12/31/79 288,936 241,865 231,142 28,621 184,071 47,071 57,794 13.29%
12/31/80 363,734 302,407 275,936 32,204 214,609 61,327 87,798 12.52%
12/31/81 362,862 296,033 276,915 35,076 210,086 66,829 85,947 8.92%
12/31/82 402,077 322,039 293,516 36,420 213,478 80,038 108,561 3.83%
12/31/83 534,385 419,717 392,896 37,800 278,228 114,668 141,489 3.79%
12/31/84 545,974 423,667 391,770 39,293 269,463 122,307 154,204 3.95%
12/31/85 697,673 536,261 482,618 40,786 321,206 161,412 215,055 3.80%
12/31/86 845,831 637,582 572,151 41,235 363,902 208,249 273,680 1.10%
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL + PRINCIPAL +
PERIOD END TOTAL VALUE CAP GAINS DIVIDENDS INFLATION Principal Income Cap Gains CPI
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/87 872,099 653,004 550,763 43,062 331,668 219,095 321,336 4.43%
12/31/88 1,077,885 784,305 682,364 44,965 388,784 293,580 395,521 4.42%
12/31/89 1,321,060 935,100 831,578 47,056 445,618 385,960 489,482 4.65%
12/31/90 1,201,437 834,403 737,439 49,931 370,405 367,034 463,998 6.11%
12/31/91 1,577,839 1,101,649 912,476 51,459 436,286 476,190 665,363 3.06%
12/31/92 1,644,333 1,161,911 889,019 52,951 406,597 482,422 755,314 2.90%
12/31/93 2,181,978 1,558,304 1,121,883 54,407 498,209 623,674 1,060,095 2.75%
12/31/94 2,199,826 1,589,759 1,068,973 55,860 458,906 610,067 1,130,853 2.67%
12/31/95 2,636,095 1,922,768 1,203,902 57,279 490,575 713,327 1,432,193 2.54%
12/31/96 3,177,868 2,296,080 1,434,285 59,181 552,497 881,788 1,743,583 3.32%
12/31/97 3,692,079 2,730,272 1,510,347 60,187 548,540 961,807 2,181,732 1.70%
12/31/98 3,600,538 2,708,431 1,354,973 61,156 462,866 892,107 2,245,565 1.61%
12/31/99 4,696,374 3,475,052 1,785,696 62,795 564,374 1,221,322 2,910,678 2.68%
2/29/00 4,225,797 3,126,852 1,606,770 63,316 507,825 1,098,945 2,619,027 0.83%
</TABLE>
TEMPLETON GROWTH FUND, INC.
Financial Highlights
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2000 -----------------------------------------------------------------
(UNAUDITED)+ 1999+ 1998 1997 1996 1995
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout
the period)
Net asset value, beginning of
period.............................. $19.56 $16.78 $22.47 $18.75 $18.96 $18.95
-------------------------------------------------------------------------------------
Income from investment operations:
Net investment income................ .10 .46 .50 .54 .50 .39
Net realized and unrealized gains
(losses)........................... (.47) 4.76 (2.76) 4.48 1.34 1.20
-------------------------------------------------------------------------------------
Total from investment operations...... (.37) 5.22 (2.26) 5.02 1.84 1.59
-------------------------------------------------------------------------------------
Less distributions from:
Net investment income................ (.54) (.41) (.55) (.49) (.44) (.29)
Net realized gains................... (.69) (2.03) (2.88) (.81) (1.61) (1.29)
-------------------------------------------------------------------------------------
Total distributions................... (1.23) (2.44) (3.43) (1.30) (2.05) (1.58)
-------------------------------------------------------------------------------------
Net asset value, end of period........ $17.96 $19.56 $16.78 $22.47 $18.75 $18.96
=====================================================================================
Total Return*......................... (1.78)% 34.72% (12.61)% 28.28% 10.85% 9.51%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)..... $12,815,729 $13,368,945 $11,116,564 $12,129,283 $8,450,737 $6,964,298
Ratios to average net assets:
Expenses............................. 1.11%** 1.12% 1.08% 1.08% 1.09% 1.12%
Net investment income................ 1.09%** 2.60% 2.53% 2.81% 2.87% 2.40%
Portfolio turnover rate............... 23.27% 32.01% 48.23% 41.81% 19.63% 35.21%
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+Based on average weighted shares outstanding.
12
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS B
---------------------------------------
SIX MONTHS ENDED
FEBRUARY 29, 2000 PERIOD ENDED
(UNAUDITED) AUGUST 31, 1999+
------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE++
(For a share outstanding throughout the period)
Net asset value, beginning of period........................ $19.46 $16.37
---------------------------------------
Income from investment operations:
Net investment income...................................... .02 .24
Net realized and unrealized gains (losses)................. (.46) 2.85
---------------------------------------
Total from investment operations............................ (.44) 3.09
---------------------------------------
Less distributions from:
Net investment income...................................... (.51) --
Net realized gains......................................... (.69) --
---------------------------------------
Total distributions......................................... (1.20) --
---------------------------------------
Net asset value, end of period.............................. $17.82 $19.46
=======================================
Total Return*............................................... (2.14)% 18.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)........................... $49,945 $27,573
Ratios to average net assets:
Expenses................................................... 1.87%** 1.88%**
Net investment income...................................... .25%** 1.91%**
Portfolio turnover rate..................................... 23.27% 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.
13
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
CLASS C
-------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2000 -----------------------------------------------------
(UNAUDITED)++ 1999++ 1998 1997 1996 1995+
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the
period)
Net asset value, beginning of period.......... $19.15 $16.49 $22.18 $18.57 $18.90 $17.48
-------------------------------------------------------------------------
Income from investment operations:
Net investment income........................ .03 .32 .38 .42 .49 .04
Net realized and unrealized gains (losses)... (.47) 4.68 (2.77) 4.39 1.19 1.38
-------------------------------------------------------------------------
Total from investment operations.............. (.44) 5.00 (2.39) 4.81 1.68 1.42
-------------------------------------------------------------------------
Less distributions from:
Net investment income........................ (.36) (.31) (.42) (.39) (.40) --
Net realized gains........................... (.69) (2.03) (2.88) (.81) (1.61) --
-------------------------------------------------------------------------
Total distributions........................... (1.05) (2.34) (3.30) (1.20) (2.01) --
-------------------------------------------------------------------------
Net asset value, end of period................ $17.66 $19.15 $16.49 $22.18 $18.57 $18.90
=========================================================================
Total Return*................................. (2.18)% 33.77% (13.32)% 27.30% 9.99% 8.12%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)............. $993,346 $1,021,159 $872,219 $755,184 $280,087 $42,548
Ratios to average net assets:
Expenses..................................... 1.86%** 1.86% 1.83% 1.84% 1.87% 1.86%**
Net investment income........................ .34%** 1.84% 1.79% 2.14% 2.25% 1.61%**
Portfolio turnover rate....................... 23.27% 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.
14
TEMPLETON GROWTH FUND, INC.
Financial Highlights (continued)
<TABLE>
<CAPTION>
ADVISOR CLASS
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 29, 2000 -----------------------------------
(UNAUDITED)++ 1999++ 1998 1997+
----------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the period)
Net asset value, beginning of period...................... $19.61 $16.80 $22.49 $19.37
----------------------------------------------------------
Income from investment operations:
Net investment income.................................... .12 .51 .56 .37
Net realized and unrealized gains (losses)............... (.47) 4.77 (2.78) 2.75
----------------------------------------------------------
Total from investment operations.......................... (.35) 5.28 (2.22) 3.12
----------------------------------------------------------
Less distributions from:
Net investment income.................................... (.60) (.44) (.59) --
Net realized gains....................................... (.69) (2.03) (2.88) --
----------------------------------------------------------
Total distributions....................................... (1.29) (2.47) (3.47) --
----------------------------------------------------------
Net asset value, end of period............................ $17.97 $19.61 $16.80 $22.49
==========================================================
Total Return*............................................. (1.65)% 35.16% (12.41)% 16.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's)......................... $115,825 $50,751 $36,301 $29,531
Ratios to average net assets:
Expenses................................................. .86%** .87% .83% .83%**
Net investment income.................................... 1.27%** 2.85% 2.81% 3.68%**
Portfolio turnover rate................................... 23.27% 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.
15
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS 90.5%
AEROSPACE & MILITARY TECHNOLOGY 3.4%
BAE Systems PLC............................................. United Kingdom 18,694,349 $ 92,298,645
Boeing Co. ................................................. United States 1,968,800 72,599,500
Lockheed Martin Corp. ...................................... United States 5,179,200 90,312,300
Raytheon Co., A............................................. United States 5,247,015 103,956,485
Rolls-Royce PLC............................................. United Kingdom 34,940,489 113,627,607
---------------
472,794,537
---------------
APPLIANCES & HOUSEHOLD DURABLES 1.3%
Sony Corp. ................................................. Japan 561,405 166,088,594
Toro Co. ................................................... United States 447,000 14,806,875
---------------
180,895,469
---------------
AUTOMOBILES 5.3%
Autoliv Inc., SDR........................................... Sweden 205,752 5,491,727
Bayerische Motorenwerke AG BMW.............................. Germany 5,122,200 132,161,627
Ford Motor Co. ............................................. United States 4,516,600 188,003,475
General Motors Corp. ....................................... United States 2,834,400 215,591,550
Regie Nationale des Usines Renault SA....................... France 1,800,000 71,744,216
Volkswagen AG............................................... Germany 168,350 6,855,948
Volvo AB, B................................................. Sweden 4,834,300 113,868,250
---------------
733,716,793
---------------
BANKING 6.6%
Australia & New Zealand Banking Group Ltd. ................. Australia 16,009,105 98,418,039
*Banca Nazionale del Lavoro SpA............................. Italy 125,000 446,115
Banco Popular Espanol SA, Reg D............................. Spain 511,000 14,217,813
Bank of America Corp. ...................................... United States 4,500,000 207,281,250
Deutsche Bank AG............................................ Germany 1,555,200 130,561,996
Foreningssparbanken AB, A................................... Sweden 4,000,000 50,644,462
Guoco Group Ltd. ........................................... Hong Kong 19,041,000 37,799,179
HSBC Holdings PLC........................................... Hong Kong 18,747,630 214,990,232
National Australia Bank Ltd. ............................... Australia 10,512,865 138,168,308
Unibanco Uniao de Bancos Brasileiros SA, GDR................ Brazil 773,440 22,526,440
---------------
915,053,834
---------------
BROADCASTING & PUBLISHING .2%
South China Morning Post Holdings Ltd. ..................... Hong Kong 22,387,000 22,292,652
South China Morning Post Holdings Ltd., 144A................ Hong Kong 8,976,000 8,938,171
---------------
31,230,823
---------------
</TABLE>
16
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
BUILDING MATERIALS & COMPONENTS 1.1%
Caradon PLC................................................. United Kingdom 5,154,667 $ 10,782,120
*Cemex SA, ADR.............................................. Mexico 1,456,970 31,142,734
+Hepworth PLC............................................... United Kingdom 16,767,410 39,704,973
+Owens Corning.............................................. United States 4,479,900 64,958,550
---------------
146,588,377
---------------
BUSINESS & PUBLIC SERVICES 1.0%
*Humana Inc. ............................................... United States 7,848,200 53,465,862
Waste Management Inc. ...................................... United States 6,000,000 90,000,000
---------------
143,465,862
---------------
CHEMICALS 3.8%
Akzo Nobel NV............................................... Netherlands 2,970,000 114,403,431
BASF AG..................................................... Germany 2,871,000 127,561,303
Cookson Group PLC........................................... United Kingdom 19,025,284 64,423,765
DSM NV, Br. ................................................ Netherlands 3,616,251 118,616,403
Eastman Chemical Co. ....................................... United States 1,100,000 39,531,250
+Lyondell Chemical Co. ..................................... United States 7,068,600 60,524,888
---------------
525,061,040
---------------
DATA PROCESSING & REPRODUCTION .5%
Compaq Computer Corp. ...................................... United States 2,800,000 69,650,000
---------------
ELECTRICAL & ELECTRONICS 5.3%
*ABB Ltd. .................................................. Switzerland 946,291 100,382,187
Fuji Photo Film Co. Ltd. ................................... Japan 5,000,000 219,835,237
Hitachi Ltd. ............................................... Japan 5,000,000 68,226,298
Koninklijke Philips Electronics NV.......................... Netherlands 1,159,173 214,550,067
Marconi PLC................................................. United Kingdom 10,786,484 134,352,133
---------------
737,345,922
---------------
ELECTRONIC COMPONENTS & INSTRUMENTS .6%
Hewlett Packard Co. ........................................ United States 600,000 80,700,000
---------------
ENERGY EQUIPMENT & SERVICES .4%
TransCanada PipeLines Ltd. ................................. Canada 8,006,064 54,624,420
TransCanada PipeLines Ltd., fgn. ........................... Canada 43,500 299,063
---------------
54,923,483
---------------
ENERGY SOURCES 6.5%
Amerada Hess Corp. ......................................... United States 1,923,300 97,246,856
*Barrett Resources Corp. ................................... United States 1,080,900 31,481,212
Burlington Resources Inc. .................................. United States 4,200,000 116,025,000
Consol Energy............................................... United States 681,700 7,924,763
Dynegy Inc. ................................................ United States 2,400,000 112,500,000
Fortum Corp. ............................................... Finland 3,515,650 15,671,143
</TABLE>
17
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
ENERGY SOURCES (CONT.)
Norsk Hydro ASA............................................. Norway 1,924,827 $ 71,706,317
Occidental Petroleum Corp. ................................. United States 6,279,000 100,856,438
*Ranger Oil Ltd. ........................................... Canada 2,810,900 10,365,194
*Renaissance Energy Ltd. ................................... Canada 5,250,000 42,694,693
Shell Transport & Trading Co. PLC........................... United Kingdom 19,784,000 136,328,297
Societe Elf Aquitaine SA, Br. .............................. France 569,334 89,344,696
Valero Energy Corp. ........................................ United States 3,183,700 81,184,350
---------------
913,328,959
---------------
FINANCIAL SERVICES 2.8%
ING Groep NV................................................ Netherlands 25,055 1,266,873
Lend Lease Corp. Ltd. ...................................... Australia 2,355,172 30,953,516
Merrill Lynch & Co. Inc. ................................... United States 2,380,300 243,980,750
Nomura Securities Co. Ltd. ................................. Japan 4,000,000 112,876,064
St. George Bank Ltd. ....................................... Australia 1,144,730 7,803,683
---------------
396,880,886
---------------
FOOD & HOUSEHOLD PRODUCTS 2.9%
Archer-Daniels Midland Co. ................................. United States 9,738,559 97,994,249
H.J. Heinz Co. ............................................. United States 6,000,000 191,625,000
Northern Foods PLC.......................................... United Kingdom 10,687,600 15,648,826
Panamerican Beverages Inc., A............................... Mexico 2,480,500 42,323,531
Tate & Lyle PLC............................................. United Kingdom 13,600,000 54,694,135
---------------
402,285,741
---------------
FOREST PRODUCTS & PAPER 4.6%
Aracruz Celulose SA, ADR.................................... Brazil 723,300 15,144,094
Assidoman AB................................................ Sweden 1,198,100 17,629,166
Bowater Inc. ............................................... United States 2,454,800 120,745,475
Carter Holt Harvey Ltd. .................................... New Zealand 19,997,738 19,324,676
Champion International Corp. ............................... United States 1,000,000 51,750,000
Fletcher Challenge Paper Ltd. .............................. New Zealand 5,461,516 3,819,038
Georgia-Pacific Timber Co. ................................. United States 386,600 8,529,362
Holmen Aktiebolag AB, B..................................... Sweden 2,521,150 71,318,034
International Paper Co. .................................... United States 2,000,000 73,625,000
Metsa Serla OY, B........................................... Finland 2,656,000 23,397,164
Norske Skogindustrier ASA, A................................ Norway 994,000 38,274,066
St. Joe Co. ................................................ United States 2,036,700 49,262,681
*Stora Enso OYJ, A (EURO Traded)............................ Finland 718,823 7,612,524
*Stora Enso OYJ, R (EURO Traded)............................ Finland 4,361,145 47,025,411
Stora Enso OYJ, R (EURO/FIM Traded)......................... Finland 2,266,181 22,908,568
Stora Enso OYJ, R (SEK Traded).............................. Finland 44,994 454,200
UPM-Kymmene Corp. .......................................... Finland 2,801,840 77,687,271
---------------
648,506,730
---------------
</TABLE>
18
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
HEALTH & PERSONAL CARE 2.9%
Abbott Laboratories......................................... United States 4,200,000 $ 137,550,000
Aetna Inc. ................................................. United States 1,750,000 71,968,750
Aventis SA.................................................. France 2,063,963 105,315,387
Pharmacia & Upjohn Inc. .................................... United States 2,000,000 95,250,000
---------------
410,084,137
---------------
INDUSTRIAL COMPONENTS 2.1%
Goodyear Tire & Rubber Co. ................................. United States 3,222,600 73,112,738
Michelin SA, B.............................................. France 2,000,000 62,444,040
Sandvik AB, A............................................... Sweden 150,100 4,066,243
Sandvik AB, B............................................... Sweden 3,476,650 93,191,827
SKF AB, A................................................... Sweden 1,002,995 18,762,539
SKF AB, B................................................... Sweden 2,433,574 48,299,518
---------------
299,876,905
---------------
INSURANCE 3.3%
Ace Ltd. ................................................... Bermuda 2,021,800 36,139,675
Allstate Corp. ............................................. United States 4,917,100 95,883,450
American General Corp. ..................................... United States 1,100,000 57,406,250
Partnerre Ltd. ............................................. Bermuda 1,004,530 31,140,430
Scor........................................................ France 701,525 28,096,391
Torchmark Corp. ............................................ United States 1,818,500 36,029,031
+W. R. Berkley Corp. ....................................... United States 1,680,650 26,995,441
XL Capital Ltd., A.......................................... Bermuda 1,660,700 67,154,556
Zurich Allied AG............................................ Switzerland 520 220,355
Zurich Allied PLC........................................... United Kingdom 10,000,000 85,247,454
---------------
464,313,033
---------------
LEISURE & TOURISM .3%
Rank Group PLC.............................................. United Kingdom 3,100,166 7,720,439
Shangri-La Asia Ltd. ....................................... Hong Kong 47,598,000 38,223,711
---------------
45,944,150
---------------
MACHINERY & ENGINEERING 1.2%
+Agco Corp. ................................................ United States 4,739,500 52,134,500
Invensys PLC................................................ United Kingdom 20,185,448 92,729,740
METSO OYJ................................................... Finland 2,000,000 26,186,831
---------------
171,051,071
---------------
MERCHANDISING 5.3%
Albertson's Inc. ........................................... United States 4,521,288 110,771,556
Dairy Farm International Holdings Ltd. ..................... Hong Kong 32,966,577 18,626,116
Gucci Group NV, Reg D....................................... Netherlands 787,500 68,857,031
J.C. Penney Co. Inc. ....................................... United States 4,875,000 76,781,250
*Kmart Corp. ............................................... United States 8,615,900 75,927,619
Marks & Spencer PLC......................................... United Kingdom 26,860,000 97,208,225
</TABLE>
19
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
MERCHANDISING (CONT.)
Safeway PLC................................................. United Kingdom 35,748,027 $ 86,625,971
Sears Roebuck & Co. ........................................ United States 3,000,000 82,687,500
Somerfield PLC.............................................. United Kingdom 11,000,000 9,464,046
*The Kroger Co. ............................................ United States 6,000,000 89,250,000
W.H. Smith PLC.............................................. United Kingdom 5,963,290 29,748,199
---------------
745,947,513
---------------
METALS & MINING 4.0%
+AK Steel Holding Corp. .................................... United States 6,629,900 55,111,044
Alcan Aluminum Ltd. ........................................ Canada 327,333 10,749,426
Alcan Aluminum Ltd., fgn. .................................. Canada 528,900 17,453,700
Anglo American Platinum Corp. Ltd. ......................... South Africa 2,461,100 69,821,741
Barrick Gold Corp. ......................................... Canada 6,000,000 97,794,624
Companhia Siderurgica Nacional CSN, ADR..................... Brazil 1,177,905 36,146,960
Corus Group PLC............................................. United Kingdom 63,285,600 105,900,601
Grupo Mexico SA de CV, B.................................... Mexico 2,255,000 11,193,158
Industrias Penoles SA....................................... Mexico 1,144,400 3,084,554
Pohang Iron & Steel Co. Ltd. ............................... South Korea 956,473 101,985,738
USX-U. S. Steel Group....................................... United States 2,000,000 43,750,000
---------------
552,991,546
---------------
MISC MATERIALS & COMMODITIES 1.0%
+Agrium Inc. ............................................... Canada 6,182,100 53,706,994
De Beers/Centenary Linked Units, ADR........................ South Africa 2,950,000 67,665,625
De Beers/Centenary Linked Units, Reg........................ South Africa 870,850 19,078,625
---------------
140,451,244
---------------
MULTI-INDUSTRY 5.0%
*Alfa SA de CV, A........................................... Mexico 4,791,600 16,879,035
Amoy Properties Ltd. ....................................... Hong Kong 26,787,100 15,058,021
Broken Hill Proprietary Co. Ltd. ........................... Australia 6,111,048 60,394,765
Cheung Kong Holdings Ltd. .................................. Hong Kong 17,248,400 229,378,810
Cheung Kong Infrastructure Holdings Ltd. ................... Hong Kong..... 14,000,000 19,157,630
*DESC SA de CV DESC, B...................................... Mexico 7,044,000 4,661,913
Elementis PLC............................................... United Kingdom 20,177,882 22,934,841
Hutchison Whampoa Ltd. ..................................... Hong Kong 1,184,000 18,559,901
Inchcape PLC................................................ United Kingdom 2,471,599 9,461,880
Jardine Matheson Holdings Ltd. ............................. Hong Kong 9,845,099 34,457,846
Jardine Strategic Holdings Ltd. ............................ Hong Kong 14,245,732 22,508,257
Metra OY, B................................................. Finland 284,280 5,829,616
Pacific Dunlop Ltd. ........................................ Australia 14,099,277 13,941,076
Pilkington PLC.............................................. United Kingdom 40,000,000 42,307,996
Swire Pacific Ltd., A....................................... Hong Kong 31,418,000 150,574,523
Swire Pacific Ltd., B....................................... Hong Kong 24,383,300 15,821,512
</TABLE>
20
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
MULTI-INDUSTRY (CONT.)
Wheelock and Company Ltd. .................................. Hong Kong 19,628,809 $ 13,240,896
Williams PLC................................................ United Kingdom 115,000 478,372
---------------
695,646,890
---------------
REAL ESTATE .9%
Hang Lung Development Co. Ltd. ............................. Hong Kong 34,376,000 26,722,362
New World Development Co. Ltd. ............................. Hong Kong 16,276,244 23,422,667
Rouse Co. .................................................. United States 2,892,200 63,266,875
Wereldhave NV............................................... Netherlands 313,594 12,725,632
---------------
126,137,536
---------------
TELECOMMUNICATIONS 8.1%
Alcatel SA.................................................. France 505,416 118,338,649
Cable & Wireless HKT Ltd. .................................. Hong Kong 30,334,748 101,144,410
*General Motors Corp., H.................................... United States 391,000 47,115,500
Motorola Inc. .............................................. United States 367,600 62,675,800
Nippon Telegraph & Telephone Corp. ......................... Japan 13,126 181,616,859
SK Telecom Co. Ltd., ADR.................................... South Korea 4,435,479 199,319,338
Smartone Telecommunications Holdings Ltd. .................. Hong Kong 12,361,600 47,808,521
Telecom Argentina Stet-France SA (Teco), B, ADR............. Argentina 2,974,700 124,007,806
Telecom Corp. of New Zealand Ltd. .......................... New Zealand 11,082,456 45,743,903
Telefonica de Argentina SA, ADR............................. Argentina 986,180 45,056,099
Telefonos de Mexico SA (Telmex), L, ADR..................... Mexico 2,509,800 165,019,350
---------------
1,137,846,235
---------------
TEXTILES & APPAREL .6%
Adidas-Salomon AG........................................... Germany 1,450,000 76,849,204
---------------
TRANSPORTATION 2.5%
+Airborne Freight Corp. .................................... United States 3,422,100 63,308,850
British Airways PLC......................................... United Kingdom 16,901,000 80,242,730
Peninsular & Oriental Steam Navigation Co. ................. United Kingdom 5,621,630 63,142,943
Singapore Airlines Ltd. .................................... Singapore 15,348,300 142,468,411
Stolt Nielsen SA, B, ADR.................................... Norway 129,800 2,271,500
---------------
351,434,434
---------------
UTILITIES ELECTRICAL & GAS 7.0%
CLP Holdings Ltd. .......................................... Hong Kong 18,639,900 82,388,415
Electrabel SA............................................... Belgium 95,002 25,673,744
Endesa SA................................................... Spain 3,033,600 64,165,624
Entergy Corp. .............................................. United States 3,600,000 72,900,000
Gener SA, ADR............................................... Chile 1,467,200 22,741,600
Hong Kong Electric Holdings Ltd. ........................... Hong Kong 39,983,200 122,012,772
Iberdrola SA, Br. .......................................... Spain 9,657,600 121,151,189
Korea Electric Power Corp. ................................. South Korea 1,511,260 37,811,395
National Grid Group PLC..................................... United Kingdom 2,066,100 16,063,687
</TABLE>
21
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
COUNTRY SHARES VALUE
-------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS (CONT.)
UTILITIES ELECTRICAL & GAS (CONT.)
National Power PLC.......................................... United Kingdom 9,800,000 $ 57,938,275
Potomac Electric Power Co. ................................. United States 5,187,734 105,375,847
Powergen PLC................................................ United Kingdom 10,000,000 69,105,691
Thames Water Group PLC...................................... United Kingdom 6,326,785 68,516,450
Transportadora de Gas del Sur SA, B, ADR.................... Argentina 1,400,000 12,950,000
Veba AG..................................................... Germany 2,113,400 93,798,669
---------------
972,593,358
---------------
TOTAL COMMON STOCKS (COST $12,767,726,681).................. 12,643,595,712
---------------
PREFERRED STOCKS 4.4%
*Banco Bradesco SA, pfd., new............................... Brazil 147,319,549 1,058,170
Cia Vale do Rio Doce, A, ADR, pfd. ......................... Brazil 1,350,400 35,868,211
Cia Vale do Rio Doce, A, pfd. .............................. Brazil 949,560 25,221,430
Embratel Participacoes SA, ADR, pfd. ....................... Brazil 2,082,100 49,970,400
News Corp. Ltd., ADR, pfd. ................................. Australia 1,211,100 60,933,469
News Corp. Ltd., pfd. ...................................... Australia 83,353 1,043,122
Petroleo Brasileiro SA, pfd. ............................... Brazil 450,000,000 116,982,198
Telecomunicacoes Brasileiras SA, pfd. ...................... Brazil 875,600,000 128,408,138
Telecomunicacoes de Minas Gerais Celular Telemig, pfd. ..... Brazil 38,363,000 737,125
Telecomunicacoes de Sao Paulo SA, ADR, pfd. ................ Brazil 2,036,700 69,629,681
Telecomunicacoes de Sao Paulo SA, pfd. ..................... Brazil 1,191,806,000 40,398,149
Telesp Celular Participacoes SA, pfd. ...................... Brazil 50,033 1,075
Volkswagen AG, pfd. ........................................ Germany 3,765,960 88,104,081
---------------
TOTAL PREFERRED STOCKS (COST $552,012,312).................. 618,355,249
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT**
---------
<S> <C> <C> <C>
BONDS 4.9%
U.S. Treasury Bonds:
8.750%, 8/15/20........................................... United States $ 50,000,000 62,906,250
7.875%, 2/15/21........................................... United States 128,500,000 149,501,783
6.250%, 8/15/23........................................... United States 155,303,000 152,730,872
7.50%, 11/15/24........................................... United States 60,000,000 68,343,780
6.750%, 8/15/26........................................... United States 60,000,000 63,093,780
6.625%, 2/15/27........................................... United States 65,000,000 67,376,595
3.625%, 4/15/28........................................... United States 30,000,000 28,504,839
3.875%, 4/15/29........................................... United States 30,000,000 29,292,333
</TABLE>
22
TEMPLETON GROWTH FUND, INC.
STATEMENT OF INVESTMENTS, FEBRUARY 29, 2000 (UNAUDITED) (CONT.)
<TABLE>
<CAPTION>
PRINCIPAL
COUNTRY AMOUNT** VALUE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS (CONT.)
U.S. Treasury Notes:
3.625%, 7/15/02........................................... United States $ 15,000,000 $ 15,629,907
3.375%, 1/15/07........................................... United States 15,000,000 15,077,453
3.625%, 1/15/08........................................... United States 15,000,000 14,927,960
3.875%, 1/15/09........................................... United States 15,000,000 14,907,456
---------------
TOTAL BONDS (COST $670,021,779)............................. 682,293,008
---------------
SHORT TERM INVESTMENTS (COST $45,712,955) .3%
U.S. Treasury Bills, 5.63% to 5.64%, with maturities to
6/15/00................................................... United States 46,427,000 45,719,882
---------------
TOTAL INVESTMENTS (COST $14,035,473,727) 100.1%............. 13,989,963,851
OTHER ASSETS, LESS LIABILITIES (.1%)........................ (15,118,941)
---------------
TOTAL NET ASSETS 100.0%..................................... $13,974,844,910
===============
</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 February
29, 2000, were $416,445,240.
See Notes to Financial Statements.
23
TEMPLETON GROWTH FUND, INC.
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (cost
$14,035,473,727).......................................... $13,989,963,851
Cash....................................................... 16,850,255
Receivables:
Investment securities sold................................ 30,291,213
Capital shares sold....................................... 40,718,348
Dividends and interest.................................... 29,797,232
---------------
Total assets.......................................... 14,107,620,899
---------------
Liabilities:
Payables:
Investment securities purchased........................... 76,922,112
Capital shares redeemed................................... 40,061,616
To affiliates............................................. 13,508,282
Accrued expenses........................................... 2,283,979
---------------
Total liabilities..................................... 132,775,989
---------------
Net assets, at value........................................ $13,974,844,910
===============
Net assets consist of:
Undistributed net investment income........................ $ 13,790,935
Net unrealized depreciation................................ (45,509,876)
Accumulated net realized gain.............................. 976,118,679
Capital shares............................................. 13,030,445,172
---------------
Net assets, at value........................................ $13,974,844,910
===============
CLASS A:
Net asset value per share ($12,815,728,535 / 713,761,611
shares outstanding)...................................... $17.96
===============
Maximum offering price per share ($17.96 / 94.25%)......... $19.06
===============
CLASS B:
Net asset value and maximum offering price per share
($49,945,236 / 2,803,161 shares outstanding)*............. $17.82
===============
CLASS C:
Net asset value per share ($993,345,821 / 56,238,843 shares
outstanding)*............................................. $17.66
===============
Maximum offering price per share ($17.66 / 99.00%)......... $17.84
===============
ADVISOR CLASS:
Net asset value and maximum offering price per share
($115,825,318 / 6,446,322 shares outstanding)............. $17.97
===============
</TABLE>
*Redemption price per share is equal to net asset value less any applicable
sales charge.
See Notes to Financial Statements.
24
TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
(net of foreign taxes of $5,915,121)
Dividends.................................................. $ 123,972,797
Interest................................................... 35,879,933
--------------
Total investment income............................... $ 159,852,730
Expenses:
Management fees (Note 4)................................... 44,125,190
Administrative fees (Note 4)............................... 5,731,649
Distribution fees (Note 4)
Class A................................................... 16,740,292
Class B................................................... 205,519
Class C................................................... 5,137,681
Transfer agent fees (Note 4)............................... 9,488,000
Custodian fees............................................. 1,829,000
Reports to shareholders.................................... 703,000
Registration and filing fees............................... 58,000
Professional fees.......................................... 229,300
Directors' fees and expenses............................... 72,000
Other...................................................... 78,082
--------------
Total expenses........................................ 84,397,713
---------------
Net investment income........................... 75,455,017
---------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments............................................... 1,056,296,050
Foreign currency transactions............................. (5,089,406)
--------------
Net realized gain..................................... 1,051,206,644
Net unrealized depreciation on investments............ (1,360,036,486)
---------------
Net realized and unrealized loss............................ (308,829,842)
---------------
Net decrease in net assets resulting from operations........ $ (233,374,825)
===============
</TABLE>
See Notes to Financial Statements.
25
TEMPLETON GROWTH FUND, INC.
Financial Statements (continued)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 29, 2000 YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
---------------------------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income..................................... $ 75,455,017 $ 347,151,029
Net realized gain from investments and foreign currency
transactions............................................. 1,051,206,644 441,151,946
Net unrealized appreciation (depreciation) on
investments.............................................. (1,360,036,486) 3,187,700,802
---------------------------------------
Net increase (decrease) in net assets resulting from
operations............................................ (233,374,825) 3,976,003,777
Distributions to shareholders from:
Net investment income:
Class A.................................................. (368,704,085) (266,948,419)
Class B.................................................. (945,827) --
Class C.................................................. (19,446,974) (16,090,109)
Advisor Class............................................ (1,869,380) (974,268)
Net realized gains:
Class A.................................................. (476,302,911) (1,337,678,480)
Class B.................................................. (1,310,017) --
Class C.................................................. (37,445,269) (105,487,917)
Advisor Class............................................ (2,100,781) (4,508,052)
Capital share transactions (Note 3):
Class A.................................................. 512,144,471 165,182,221
Class B.................................................. 25,872,962 26,627,554
Class C.................................................. 50,627,579 269,118
Advisor Class............................................ 59,272,048 6,948,870
---------------------------------------
Net increase (decrease) in net assets................... (493,583,009) 2,443,344,295
Net assets:
Beginning of period........................................ 14,468,427,919 12,025,083,624
---------------------------------------
End of period.............................................. $13,974,844,910 $14,468,427,919
=======================================
Undistributed net investment income included in net assets:
End of period.............................................. $ 13,790,935 $ 329,302,184
=======================================
</TABLE>
See Notes to Financial Statements.
26
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited)
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. 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 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.
27
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT.)
d. 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. MERGER WITH TEMPLETON INSTITUTIONAL FUNDS INC. -- GROWTH SERIES
On October 28, 1999, the Fund acquired all of the net assets of the Templeton
Institutional Funds Inc. -- Growth Series pursuant to a plan of reorganization
approved by the Growth Series Fund's shareholders. The merger was accomplished
by a tax-free exchange of 3,509,662 Advisor shares (valued at $17.54 per share)
for the net assets of the Growth Series Fund which aggregated $61,559,476,
including $8,429,288 of unrealized appreciation. The combined net assets of the
Fund immediately after the merger were $13,841,506,977.
3. 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 February 29, 2000, 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>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A SHARES:
Shares sold....................................... 178,064,538 $ 3,346,375,000 240,450,684 $ 4,294,680,279
Shares issued on reinvestment of distributions.... 42,254,800 748,709,279 91,924,630 1,440,499,083
Shares redeemed................................... (190,109,215) (3,582,939,808) (311,355,509) (5,569,997,141)
-----------------------------------------------------------------------
Net increase...................................... 30,210,123 $ 512,144,471 21,019,805 $ 165,182,221
=======================================================================
</TABLE>
28
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)
3. CAPITAL STOCK (CONT.)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999*
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS B SHARES:
Shares sold....................................... 1,440,791 $ 27,040,268 1,444,372 $ 27,145,001
Shares issued on reinvestment of distributions.... 113,321 1,992,102 -- --
Shares redeemed................................... (168,040) (3,159,408) (27,283) (517,447)
-----------------------------------------------------------------------
Net increase...................................... 1,386,072 $ 25,872,962 1,417,089 $ 26,627,554
=======================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
CLASS C SHARES:
Shares sold....................................... 10,073,956 $ 186,559,426 19,198,655 $ 331,903,925
Shares issued on reinvestment of distributions.... 2,899,680 50,485,714 6,947,652 107,274,041
Shares redeemed................................... (10,062,295) (186,417,561) (25,697,020) (438,908,848)
-----------------------------------------------------------------------
Net increase...................................... 2,911,341 $ 50,627,579 449,287 $ 269,118
=======================================================================
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 29, 2000 AUGUST 31, 1999
-----------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------------------------------------------------------------
<S> <C> <C> <C> <C>
ADVISOR CLASS SHARES:
Shares sold....................................... 1,101,988 $ 12,331,733 1,605,201 $ 29,335,282
Shares issued on reinvestment of distributions.... 212,187 3,806,290 334,899 5,247,867
Shares issued on merger........................... 3,509,662 61,559,476 -- --
Shares redeemed................................... (965,549) (18,425,451) (1,512,522) (27,634,279)
-----------------------------------------------------------------------
Net increase...................................... 3,858,288 $ 59,272,048 427,578 $ 6,948,870
=======================================================================
</TABLE>
*Effective date of Class B shares was January 1, 1999.
4. 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.
29
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)
4. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONT.)
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>
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 February 29, 2000, unreimbursed costs were $2,696,143. Distributors
received net commissions from sales of the Fund's shares and received contingent
deferred sales charges for the period of $1,116,344 and $152,496, respectively.
5. 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.
At February 29, 2000, the net unrealized depreciation based on the cost of
investments for income tax purposes of $14,039,295,212 was as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................... $ 2,365,784,698
Unrealized depreciation................................... (2,415,116,059)
---------------
Net unrealized depreciation............................... $ (49,331,361)
===============
</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.
30
TEMPLETON GROWTH FUND, INC.
Notes to Financial Statements (unaudited) (continued)
6. INVESTMENT TRANSACTIONS
Purchases and sales of securities (excluding short-term securities) for the
period ended February 29, 2000, aggregated $4,075,884,431 and $3,233,140,794,
respectively.
31
SEMIANNUAL 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. 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 S00 04/00 [RECYCLE GRAPHIC] Printed on recycled paper
