MESSAGE FROM THE PRESIDENT
October 15, 1996
Dear Shareholder,
We are pleased to bring you the Franklin Universal Trust annual report for the
12-month period ended August 31, 1996.
As you may know, the Federal Reserve Board (the Fed) lowered interest rates
twice in the last half of 1995 to help spur our languishing U.S. economy. With
the Gross Domestic Product (GDP), a measure of the nation's economic output,
posting a sluggish 2% annual growth rate for the last six months of 1995, the
Fed lowered rates in July, December, and once again in January 1996. This third
reduction lowered the federal funds target rate (the interest rate banks charge
one another for overnight loans) to 5.25%.*
The economy began to change direction in early 1996. February employment reports
showed the strongest job creation in eight years, and essentially quashed
investors' hopes for further interest-rate reductions. Positive employment
reports followed in March and April, while later economic reports put the
annualized GDP at 3.4% for the first half of the year. Even though the economy
was gaining momentum, inflation remained under control. For 1995, inflation (as
measured by the Consumer Price Index) was a moderate 2.54%, and for the first
half of 1996, an annualized 2.28%.
GRAPHIC MATERIAL 1 OMITTED - SEE APPENDIX AT END OF DOCUMENT
*Source: Bloomberg.
Most financial markets performed well within this environment. The Dow Jones
Industrial Average(R) topped 5000 for the first time in November 1995.
Throughout 1996, its somewhat choppy ascent continued, and ended at 5616.21 by
the close of the Trust's fiscal year. During the reporting period, the Dow Jones
Industrial Average returned 24.8%.+*
Bond and utility-stock prices were aided by the lower interest-rate environment.
The unmanaged Lehman Brothers High-Yield Corporate Bond Index posted a 9.64%
cumulative total return from September 1, 1995, through August 31, 1996, while
the Standard and Poor's(R) Utilities Index booked a 12.44% total return for the
same period.+*
The Franklin Universal Trust also performed favorably within this environment,
and the Managers' Discussion on page three provides specific details about your
fund's performance and investment strategies.
GRAPHIC MATERIAL 2 OMITTED - SEE APPENDIX AT END OF DOCUMENT
As always, we appreciate your continued investment in the Franklin Universal
Trust and look forward to serving your future investment needs.
Sincerely,
Charles B. Johnson
President
Franklin Universal Trust
*Source: Bloomberg.
+Total returns include reinvested interest or dividends.
MANAGER'S DISCUSSION
YOUR FUND'S OBJECTIVE:
The Franklin Universal Trust seeks to provide high current income consistent
with preservation of capital. The Franklin Universal Trust generated a
cumulative total return of 12.84% for the 12-month period ended August 31, 1996,
based on its change in market price on the New York Stock Exchange. This
performance compares well with the fund's benchmark indices -- the Lehman
Brothers High Yield Corporate Index (+9.64%) and the Standard and Poor's(R)
Utilities Index (+12.44%).1
Moderate growth, mild inflation and declining interest rates during most of the
Trust's fiscal year helped the performance of the fund's largest asset classes
- -- corporate bonds and utility stocks. In addition, the Trust benefited from the
solid performance of individual securities.
GRAPHIC MATERIAL 3 OMITTED - SEE APPENDIX AT END OF DOCUMENT
1. Total returns include reinvested interest or dividends.
Indices are unmanaged, and one cannot invest directly
in an index.
SECTOR DISCUSSIONS
MEDIA/BROADCASTING, CABLE TELEVISION,
AND TELECOMMUNICATIONS
The Trust maintained a strong weighting in media/broadcasting and cable
television (12% of total net assets), growing industries that are benefiting
from the Telecommunications Act, which Congress passed in February 1996.
Essentially, this law allows regional phone companies to offer long-distance and
cable services, TV networks to own more TV and radio stations, and cable
companies to set their own prices. The law has resulted in a rally for cable
television and media/broadcasting bonds, as companies compete and consolidate.
Our holding in Continental Cablevision, for instance, appreciated significantly
following the announcement of its planned merger with U.S. West.
FRANKLIN UNIVERSAL TRUST
Top 10 Company Holdings
As a Percentage of Total Net Assets
August 31, 1996
COMPANY % OF TOTAL
INDUSTRY NET ASSETS
Thermadyne Industries, Inc.3.47%
Industrial (stock and bond)
SCANA Corp. 3.30%
Utility (stock)
Texas Utilities Co. 3.22%
Utility (stock)
DPL, Inc. 2.76%
Utility (stock)
Southern Co. 2.56%
Utility (stock)
Wisconsin Energy Corp. 2.47%
Utility (stock)
CINergy Corp. 2.42%
Utility (stock)
Del Monte Corp. 2.31%
Food and Beverages (bond)
American Electric Power Co., Inc. 2.25%
Utility (stock)
Dominion Resources, Inc. 2.20%
Utility (stock)
FOR A COMPLETE LIST OF THE TRUST'S PORTFOLIO, PLEASE SEE PAGE 12 OF THIS REPORT.
Additionally, the Trust has positioned itself to take advantage of positive
global trends in telecommunications with holdings such as Milicom International
Cellular, a company with diversified operations in several developing markets.
UTILITIES
The value of utility stocks tends to increase when interest rates fall. Although
interest rates did rise somewhat in the last six months of the reporting period,
they remained at lower levels than one year ago. In addition to the positive
economic environment, the performance of the portfolio's utility-stock portion
(30.3% of total net assets) was aided by our selection of several strong
performers, including Duke Power Co., SCANA Corp., and Texas Utilities.
The changing regulatory environment may have a significant impact on utility
stocks. Industry-wide deregulation could give customers the power to choose
their utility-provider. We have focused our holdings on utilities we believe can
best handle increased competition -- companies with low production costs, strong
entrepreneurial management teams, and service areas located in regions
experiencing growth.
HEALTH CARE
Positive industry trends and ongoing consolidations among health-care companies
continued to make this sector active and profitable for the Trust. The selection
of specific securities, including two high-performing acute-care providers
- --OrNda Healthcorp and Tenet Healthcare -- helped the Trust's performance over
the 12-month period. Both companies have shown positive improvements in their
creditworthiness and should provide solid upside potential for 1996-97 as well.
FOREST & PAPER PRODUCTS
This industry comprised 6.9% of total net assets on August 31, 1996. The bonds
of two Indonesian companies, Tjiwi Kimia International and Rapp International
Finance, appreciated significantly. Their exceptional performance was attributed
to the Indonesian economy's strong overall performance and to their access to
low-cost fiber and labor.
As you may know, the Trust's high yields reflect the higher risks associated
with certain lower-rated securities in the portfolio. As of August 31, 1996, the
Trust held two defaulted issues -- Beatrice Foods, Inc. and Forstmann Textiles &
Co., Inc. -- which comprised only .4% of total net assets.
WHAT'S AHEAD?
Recent economic data continue to suggest moderate economic growth and stable
interest rates for the near term. Inflation, while inching up slightly, seems to
be under control. Should this environment continue, high-yield corporate bonds
and utility equities should remain attractive investments over the short to
intermediate term, and this would bode favorably for the Franklin Universal
Trust.
Just as economic and market conditions constantly change, our strategies,
evaluations, conclusions and decisions regarding portfolio holdings discussed
above will also change as new circumstances arise. Although past performance of
a specific investment or sector cannot guarantee future performance, such
information can be useful in analyzing our selection process for the Trust's
purchases.
PERFORMANCE SUMMARY
The Franklin Universal Trust's share price on the New York Stock Exchange (NYSE)
increased from $8.875 on August 31, 1995, to $9.125 on August 31, 1996. The
Trust's net asset value per share increased 17 cents from $9.36 on August 31,
1995, to $9.53 on August 31, 1996.
During the reporting period, the Trust distributed income dividends totaling
84.6 cents ($.846) per share, which included a 4.2 centper share income
distribution in December 1995 to meet excise tax requirements. Based on an
annualization of the current monthly dividend of 6.7 cents ($.067) per share and
the NYSE closing price of $9.125 on August 31, 1996, the Trust's distribution
rate was 8.81%. Dividends will vary based on the earnings of the portfolio, and
past distributions are not predictive of future trends.
The Franklin Universal Trust reported a cumulative total return of 12.84% for
the one-year period ended August 31, 1996. Total return reflects the change in
the Trust's share price on the NYSE. Based on the change in net asset value (as
opposed to market price), the one-year total return for the same period was
11.13%. All total returns assume the reinvestment of dividends and capital gains
according to the terms specified in the Trust's dividend reinvestment plan.
Past performance is not predictive of future trends.
We urge you to view your investment in theFranklin Universal Trust with a
long-term perspective. As the chart to the right shows, the Trust reported a
cumulative total return of 148.79%, based on net asset value, since its
inception on September 23, 1988.
FRANKLIN UNIVERSAL TRUST
Periods Ended August 31, 1996
SINCE
INCEPTION
1-YEAR 5-YEAR (9/23/88)
Cumulative Total Return1
Based on change in net asset value 11.74% 104.90% 148.79%
Based on change in market price 12.84% 106.52% 121.36%
Average Annual Total Return1
Based on change in net asset value 11.74% -- 15.43%
Based on change in market price 12.84% 15.61% 10.52%
Distribution Rate2 8.81%
1. Total return calculations represent the change in value of an investment over
the periods indicated and assume reinvestment of all distributions according to
the terms specified in the Trust's dividend reinvestment plan.
2. Distribution rate is based on the annualization of the Trust's current 6.7
cent per share monthly dividend and the New York Stock Exchange closing price of
$9.125 on August 31, 1996. Past performance is not predictive of future results.
PORTFOLIO OPERATIONS
CHRISTOPHER MOLUMPHY
Senior Portfolio Manager
Franklin Advisers, Inc.
Christopher Molumphy has responsibility for the day-to-day management of the
Franklin Universal Trust.
Molumphy holds a bachelor of arts degree in economics from Stanford University
and a master's degree in finance from the University of Chicago. He has been
with Franklin Advisers since 1988. Molumphy is a Chartered Financial Analyst
(CFA) and a member of several securities industry associations. He has managed
the Franklin Universal Trust since 1991.
* * * * *
As of August 31, 1996, Morningstar awarded the Franklin Universal
Trust a five-star overall rating, measuring its performance
against a universe of 63 closed-end fixed-income funds for the
five-year period.*
*Morningstar proprietary ratings reflect historical risk-adjusted performance
and are subject to change every month. Past performance is no guarantee of
future results. Morningstar ratings are calculated from the fund's three-year
and five-year average annual returns in excess of 90-day Treasury bill returns
and a risk factor that reflects fund performance below 90-day T-bill returns.
Ten percent of the funds in an investment category receive five stars, 22.5%
receive four stars and 35% receive three stars. Ratings for other periods ended
August 31, 1996: four stars for the three-year period, out of a universe of 93
closed-end fixed-income funds.
DIVIDEND REINVESTMENT PLAN
The Fund's Dividend Reinvestment Plan (the "Plan") offers you a prompt and
simple way to reinvest income dividends and capital gain distributions in shares
of the Fund. PNC Bank, National Association (the "Plan Agent"), c/o PFPC Inc.,
P.O. Box 8950, Wilmington, Delaware 19899, acts as your Plan Agent in
administering the Plan. All reinvestments are in full and fractional shares,
carried to two decimal places. The complete Terms and Conditions of the Dividend
Reinvestment Plan are contained in the Fund's prospectus, dated September 23,
1988, used in connection with its initial public offering. A copy of that
prospectus may be obtained from the Fund at the address on the cover of this
report.
You are automatically enrolled in the Plan unless you elect to receive dividends
or distributions in cash. You should notify the Plan Agent, in writing, if you
wish to receive dividends or distributions in cash.
If the Fund declares an income dividend or a capital gains distribution payable
in either the Fund's shares or in cash, you, as a participant in the Plan, will
automatically receive an equivalent amount of shares of the Fund. If the market
price per share on the valuation date equals or exceeds the net asset value per
share on that date, the Fund will issue new shares to you at the higher of the
net asset value or 95% of the market price on the valuation date. The valuation
date is generally the payment date or, if that date is not a trading day on the
New York Stock Exchange, the next preceding trading day. If the net asset value
per share exceeds the market price per share at such time, or if the Fund
declares a dividend or distribution payable only in cash, you will be deemed to
have elected to receive shares of the Fund valued at the market price on the
valuation date, purchased on your behalf by the Plan Agent in the open market.
If, before the Plan Agent has completed its purchases, the market price exceeds
the net asset value per share, the average per share purchase price paid by the
Plan Agent may exceed the net asset value per share of the Fund, resulting in
the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund.
There is no direct charge to participants for reinvesting dividends and
distributions, since the Plan Agent's fees are paid by the Fund. However, when
shares are purchased in the open market, each participant will pay a pro rata
portion of any brokerage commissions incurred.
The automatic reinvestment of dividends and distributions does not relieve
shareholders of liability for any taxes which may be payable on such dividends
or distributions. Generally, income and capital gains resulting from dividends
and distributions received in the form of shares of the Fund are realized
notwithstanding the fact that cash is not received by shareholders.
You will receive an annual account statement from the Plan Agent, showing total
dividends and distributions, date of investment, shares acquired and price per
share, and total shares of record held by you and by the Plan Agent for you. You
are entitled to vote all shares of record, including shares purchased for you by
the Plan Agent, and, if you vote by proxy, your proxy will include all such
shares.
As long as you participate in the Plan, the Plan Agent will hold the shares it
has acquired for you in safekeeping, in non-certificated form. This convenience
provides added protection against loss, theft or inadvertent destruction of
certificates.
You may withdraw from the Plan at any time, without penalty, by notifying the
Plan Agent in writing at the address above. If you withdraw from the Plan, you
will receive a certificate issued in your name for all full shares and the Plan
Agent will convert any fractional shares you hold at the time of withdrawal to
cash at the then current market price and send you a check for the proceeds.
If you hold shares in your own name, please address all notices, correspondence,
questions, or other communications regarding the Plan to the Plan Agent at the
address noted above. If shares are not held in your name, you should contact
your brokerage firm, bank, or other nominee for more information.
`
FRANKLIN UNIVERSAL TRUST
Statement of Investments in Securities and Net Assets, August 31, 1996
<TABLE>
<CAPTION>
Shares,
Warrants Value
& Rights (Note 2)
Automotive .2%
<S> <C> <C>
60,800 aHarvard Industries, Inc., Class B ............................................ $ 471,200
-------------
Containers & Packaging .1%
46,137 aGaylord Container Corp., warrants ............................................ 348,911
-------------
Energy .8%
9,000 aMcMoRan Oil & Gas Co. ........................................................ 18,000
14,935 aSanta Fe Energy Resources, Inc. .............................................. 175,486
66,600 Ultramar Corp. ................................................................ 1,831,500
-------------
2,024,986
-------------
Financial Services
15,180 aWestfed Holdings, Inc. , Series B ............................................ --
-------------
Health Care .4%
4,066 aKendall International, Inc., Class A, warrants ............................... 383,891
4,348 aKendall International, Inc., Class B, warrants ............................... 388,776
2,456 aKendall International, Inc., rights .......................................... 231,883
-------------
1,004,550
-------------
Home Building .1%
35,141 a,bNVR, Inc. .................................................................. 329,447
35,607 a,bNVR, Inc., warrants ........................................................ 17,804
-------------
347,251
-------------
Industrial .1%
7,254 aThermadyne Industries, Inc. .................................................. 151,427
-------------
Lodging
752a Host Marriott Corp. ........................................................... 10,340
752 Marriott International, Inc. .................................................. 41,266
-------------
51,606
-------------
Metals & Mining 2.7%
228,000 Driefontein Consolidated Mines, Ltd., ADR ..................................... 2,935,500
131,350 Free State Consolidated Gold Mines, Ltd., ADR ................................. 1,461,269
4,500 Freeport-McMoRan Copper & Gold, Inc. .......................................... 126,563
63,156 Freeport-McMoRan Copper & Gold, Inc., Class B ................................. 1,855,208
15,000 Freeport-McMoRan, Inc. ........................................................ 515,625
4,000 aGulf States Steel, warrants .................................................. 20,000
-------------
6,914,165
-------------
Technology/Information Systems .1%
84,885 aMemorex Telex N.V., ADR ...................................................... 106,106
-------------
Transportation .2%
5,446 aContinental Airlines, Inc., Class A .......................................... $ 119,812
15,160 aContinental Airlines, Inc., Class B .......................................... 342,995
-------------
462,807
-------------
Utilities 30.3%
138,600 American Electric Power Co., Inc. ............................................. 5,751,900
205,600 CINergy Corp. ................................................................. 6,168,000
79,700 Delmarva Power & Light Co. .................................................... 1,633,850
150,000 Dominion Resources, Inc. ...................................................... 5,606,250
298,000 DPL, Inc. ..................................................................... 7,040,250
80,000 Duke Power Co. ................................................................ 3,740,000
74,600 Edison International .......................................................... 1,296,175
35,300 New England Electric System ................................................... 1,151,663
90,000 New Jersey Resources Corp. .................................................... 2,576,250
175,000 New York State Electric & Gas Corp. ........................................... 3,762,500
140,000 PECO Energy Co. ............................................................... 3,290,000
77,000 Pinnacle West Capital Corp. ................................................... 2,213,750
100,000 Public Service Co. of Colorado ................................................ 3,562,500
309,200 SCANA Corp. ................................................................... 8,425,700
289,300 Southern Co. .................................................................. 6,545,413
200,200 Texas Utilities Co. ........................................................... 8,208,200
229,400 Wisconsin Energy Corp. ........................................................ 6,308,500
-------------
77,280,901
-------------
Wireless/Telecommunications 1.2%
40,600 BellSouth Corp. ............................................................... 1,471,750
130 fNippon Telegraph & Telephone Corp.(Japan) .................................... 922,503
15,300 SBC Communications, Inc. ...................................................... 713,363
-------------
3,107,616
-------------
Total Common Stocks, Warrants & Rights (Cost $81,554,349) ............... 92,271,526
-------------
Partnership Units .1%
Financial Services
5 cPG Partners, L.P., Preference Units (Cost $209,806) .......................... 395,850
-------------
Preferred Stocks 6.6%
Automotive .6%
69,017 Harvard Industries, Inc., 14.25% pfd., PIK .................................... 1,535,635
-------------
Cable Television 1.2%
31,272 Cablevision Systems Corp., 11.125% pfd., PIK, Series L ........................ 2,955,224
-------------
Consumer Products .9%
420,000 RJR Nabisco Holdings, $0.6012 cvt. pfd., Series C ............................. $ 2,257,500
-------------
Financial Services 2.2%
40,000 First Nationwide Bank, 11.50% pfd. ............................................ 4,360,000
50,000 Security Capital Pacific, 1.75% cvt. pfd., Series A ........................... 1,275,000
49,806 Westfed Holdings, Inc., 15.50% cum. senior pfd., Series A ..................... 498
-------------
5,635,498
-------------
Media and Broadcasting 1.6%
2,332 PanAmSat Corp.,12.75% pfd., PIK ............................................... 2,671,173
142,190 Triathlon Broadcasting Co., 9.00% cvt. pfd..................................... 1,421,900
-------------
4,093,073
-------------
Restaurants .1%
30,000 Flagstar Cos., Inc., $2.25 cvt. pfd., Series A ................................ 331,875
-------------
Total Preferred Stocks (Cost $22,637,556) ............................... 16,808,805
-------------
Face
Amount
Non-Convertible Bonds 82.9%
Automotive 3.0%
$4,000,000 Harvard Industries, Inc., senior notes, 12.00%, 07/15/04 ...................... 3,620,000
3,800,000 SPX Corp., senior sub. notes, 11.75%, 06/01/02 ................................ 4,104,000
-------------
7,724,000
-------------
Cable Television 4.2%
5,000,000 Bell Cablemedia, Plc., senior disc. notes, zero coupon to 07/15/99, (original
accretion rate 11.95%), 11.95% thereafter, 07/15/04 .......................... 3,762,500
3,000,000 Cablevision Systems Corp., senior sub. deb., 9.875%, 04/01/23 ................. 2,782,500
1,000,000 Comcast Corp., senior sub. deb., 9.50%, 01/15/08 .............................. 1,005,000
3,000,000 Tele-Communications, Inc., senior deb., 9.80%, 02/01/12 ....................... 3,187,797
-------------
10,737,797
-------------
Chemicals 4.7%
3,000,000 Arcadian Partners, S.F., senior sub. notes, Series B, 10.75%, 05/01/05 ........ 3,270,000
4,000,000 Harris Chemical North America, Inc., senior secured disc. notes, 10.25%, 07/15/01 4,020,000
500,000 IMC Global, Inc., senior deb., 9.45%, 12/15/11 ................................ 528,750
1,000,000 IMC Global, Inc., senior notes, 9.25%, 10/01/00 ............................... 1,050,000
1,500,000 IMC Global, Inc., senior notes, Series B, 10.125%, 06/15/01 ................... 1,631,250
1,350,000 IMC Global, Inc., senior notes, Series B, 10.75%, 06/15/03 .................... 1,473,188
-------------
11,973,188
-------------
Consumer Products 4.0%
$2,750,000 Coleman Holdings, Inc., senior secured disc. notes, (original accretion rate
10.875%), 0.00%, 05/27/98 .................................................... $ 2,351,250
3,000,000 Revlon Consumer Products Corp., senior sub. notes, Series B, 10.50%, 02/15/03 . 3,112,500
1,500,000 Revlon Worldwide Corp., senior secured disc. notes, Series B, (original accretion
rate 12.00%), 0.00%, 03/15/98 ................................................ 1,276,875
1,500,000 RJR Nabisco, Inc., senior notes, 9.25%, 08/15/13 .............................. 1,471,875
2,000,000 Sealy Corp., senior sub. notes, 9.50%, 05/01/03 ............................... 1,990,000
-------------
10,202,500
-------------
Containers & Packaging 2.8%
1,000,000 Container Corp. of America, guaranteed senior notes, Series A, 11.25%, 05/01/04 1,050,000
3,000,000 Container Corp. of America, senior notes, 9.75%, 04/01/03 ..................... 3,000,000
3,000,000 Owens-Illinois, Inc., senior sub. notes, 9.75%, 08/15/04 ...................... 3,052,500
-------------
7,102,500
-------------
Energy 1.4%
3,500,000 Gulf Canada Resources, Ltd., senior sub. deb., 9.25%, 01/15/04 ................ 3,561,250
-------------
Food & Beverages 5.4%
1,600,000 a,b,eBeatrice Foods, Inc., S.F., senior sub. notes, 12.00%, 12/01/01 .......... 680,000
600,000 Curtice-Burns Foods, Inc., senior sub. notes, 12.25%, 02/01/05 ................ 573,000
6,064,861 Del Monte Corp., sub. notes, PIK, 12.25%, 09/01/02 ............................ 5,882,916
850,000 Doane Products Co., senior notes, 10.625%, 03/01/06 ........................... 871,250
300,000 Dr Pepper Bottling Co. of Texas, senior sub. notes, 10.25%, 02/15/00 .......... 309,000
2,800,000 PMI Acquisition Corp., guaranteed senior sub. notes, 10.25%, 09/01/03 ......... 2,856,000
1,000,000 Specialty Foods Corp., senior sub. notes, Series B, 11.25%, 08/15/03 .......... 815,000
2,000,000 Specialty Foods Corp., senior unsecured notes, Series B, 10.25%, 08/15/01 ..... 1,830,000
-------------
13,817,166
-------------
Food Retailing 7.2%
4,000,000 Bruno's, Inc., senior sub. notes, 10.50%, 08/01/05 ............................ 4,090,000
1,000,000 Dominick's Finer Foods, senior sub. notes, 10.875%, 05/01/05 .................. 1,091,250
1,100,000 P & C Food Markets, Inc., senior sub. notes, 11.50%, 10/15/01 ................. 1,017,500
4,000,000 Pathmark Stores, Inc., senior sub. notes, 9.625%, 05/01/03 .................... 3,800,000
1,000,000 Penn Traffic Co., senior notes, 8.625%, 12/15/03 .............................. 825,000
2,000,000 Penn Traffic Co., senior notes, 10.375%, 10/01/04 ............................. 1,750,000
2,000,000 Pueblo Xtra International, senior notes, 9.50%, 08/01/03 ...................... 1,760,000
1,000,000 Ralphs Grocery Co., sub. notes, 10.45%, 06/15/04 .............................. 990,000
3,000,000 Smith's Food & Drug Centers, Inc., senior sub. notes, 11.25%, 05/15/07 ........ 3,157,500
-------------
18,481,250
-------------
Forest & Paper Products 6.9%
$1,812,995 Fort Howard Corp., sub. deb., 11.00%, 01/02/02 ................................ $ 1,885,515
4,000,000 Rapp International Finance, company guaranteed, secured notes, 13.25%, 12/15/05 4,340,000
1,000,000 REPAP New Brunswick, senior notes, 9.875%, 07/15/00 ........................... 1,000,000
2,000,000 REPAP New Brunswick, senior notes, 10.625%, 04/15/05 .......................... 1,910,000
1,000,000 REPAP New Brunswick, senior notes, FRN, 8.8125%, 07/15/00 ..................... 985,000
1,500,000 REPAP Wisconsin, Inc., senior secured notes, 9.25%, 02/01/02 .................. 1,477,500
500,000 REPAP Wisconsin, Inc., senior secured notes, 9.875%, 05/01/06 ................. 468,750
2,200,000 S.D. Warren Co., senior sub.notes, 12.00%, 12/15/04 ........................... 2,337,500
3,000,000 Tjiwi Kimia International, guaranteed senior notes, 13.25%, 08/01/01 .......... 3,315,000
-------------
17,719,265
-------------
Gaming & Leisure 4.7%
4,000,000 Aztar Corp., senior sub. notes, 13.75%, 10/01/04 .............................. 4,500,000
2,000,000 Harvey's Casino Resorts, senior sub. notes, 10.625%, 06/01/06 ................. 2,070,000
1,000,000 Players International, Inc., senior notes, 10.875%, 04/15/05 .................. 1,000,000
4,000,000 Showboat, Inc., senior sub. notes, 13.00%, 08/01/09 ........................... 4,470,000
-------------
12,040,000
-------------
Health Care 5.5%
4,000,000 Abbey Healthcare Group, Inc., senior sub. notes, 9.50%, 11/01/02 .............. 4,160,000
1,500,000 cMaxxim Medical, Inc., senior sub. notes, 10.50%, 08/01/06 .................... 1,522,500
4,000,000 OrNda Healthcorp, guaranteed senior sub. notes, 11.375%, 08/15/04 ............. 4,445,000
600,000 Tenet Healthcare Corp., senior notes, 8.625%, 12/01/03 ........................ 625,500
500,000 Tenet Healthcare Corp., senior sub. notes, 9.625%, 09/01/02 ................... 545,000
2,500,000 Tenet Healthcare Corp., senior sub. notes, 10.125%, 03/01/05 .................. 2,696,875
-------------
13,994,875
-------------
Industrial 5.9%
3,000,000 American Standard, Inc., S.F., deb., 9.25%, 12/01/16 .......................... 3,000,000
1,000,000 American Standard, Inc., S.F., senior sub. deb., zero coupon to 06/01/98,
(original accretion rate 10.50%), 10.50% thereafter, 06/01/05 ................ 900,000
2,400,000 Inter-City Products Corp., senior secured notes, 9.75%, 03/01/00 .............. 2,310,000
3,631,000 Thermadyne Industries, Inc., senior notes, 10.25%, 05/01/02 ................... 3,653,694
5,035,000 Thermadyne Industries, Inc., sub. notes, 10.75%, 11/01/03 ..................... 5,060,175
-------------
14,923,869
-------------
Insurance 1.0%
2,600,000 cAetna Industries, Inc., senior notes, 11.875%, 10/01/06 ...................... 2,600,000
-------------
Lodging 2.3%
4,000,000 John Q. Hammons Hotels, first mortgage, 8.875%, 02/15/04 ...................... 3,800,000
2,000,000 Red Roof Inns, senior notes, 9.625%, 12/15/03 ................................. 1,945,000
-------------
5,745,000
-------------
Media & Broadcasting 4.6%
$2,000,000 American Media Operation, senior sub. notes, 11.625%, 11/15/04 ................ $ 2,070,000
1,000,000 Hollinger International Publishing, senior sub. notes, 9.25%, 02/01/06 ........ 942,500
3,000,000 New World Communications Group Inc. , senior notes, 11.00%, 06/30/05 .......... 3,210,000
4,000,000 PanAmSat Capital Corp., L.P., senior sub. disc. notes, zero coupon to 08/01/98,
(original accretion rate 11.375%), 11.375% thereafter, 08/01/03 .............. 3,560,000
2,000,000 Turner Broadcasting Systems, Inc., senior deb., 8.40%, 02/01/24 ............... 1,838,243
-------------
11,620,743
-------------
Metals & Mining 4.6%
5,000,000 Acme Metals, Inc., guaranteed senior secured disc. notes, zero coupon to 08/01/97,
(original accretion rate 13.50%), 13.50% thereafter, 08/01/04 ................ 4,575,000
3,000,000 Envirosource, Inc., senior notes, 9.75%, 06/15/03 ............................. 2,850,000
4,000,000 Gulf States Steel, units, 13.50%, 04/15/03 .................................... 3,580,000
615,000 UCAR Global Enterprises, senior sub. notes, 12.00%, 01/15/05 .................. 701,868
-------------
11,706,868
-------------
Restaurants 3.1%
2,112,462 bAtherton Franchise Capital, L.P., 11.00%, 05/01/06 ........................... 1,774,468
2,000,000 Family Restaurants, Inc., senior notes, 9.75%, 02/01/02 ....................... 1,225,000
1,500,000 Flagstar Corp., senior notes, 10.875%, 12/01/02 ............................... 1,320,000
1,510,000 Flagstar Corp., S.F., senior sub. deb., 11.25%, 11/01/04 ...................... 1,000,374
2,500,000 Foodmaker, Inc., S.F., senior sub. notes, 9.25%, 03/01/99 ..................... 2,506,250
-------------
7,826,092
-------------
Technology/Information Systems .8%
2,000,000 ADT Operations, Ltd., guaranteed senior sub. notes, 9.25%, 08/01/03 ........... 2,085,000
-------------
Textiles & Apparel 1.0%
2,000,000 Collins & Aikman Corp., senior sub. notes, 11.50%, 04/15/06 ................... 2,050,000
1,550,000 a,eForstmann Textile & Co., Inc., S.F., senior sub. notes, 14.75%, 04/15/99 ... 612,250
-------------
2,662,250
-------------
Utilities 1.9%
2,000,000 El Paso Electric Co., first mortgage, Series E, 9.40%, 05/01/11 ............... 2,022,500
775,818 Midland Funding II, S.F., deb., Series C, 10.33%, 07/23/02 .................... 811,700
2,000,000 Midland Funding II, S.F., secured lease obligation, Series A, 11.75%, 07/23/05 2,135,000
-------------
4,969,200
-------------
Wireless/Telecommunications 7.9%
6,000,000 Arch Communications Group, Inc., senior disc. notes, zero coupon to 03/15/01,
(original accretion rate 10.875%), 10.875% thereafter, 03/15/08 .............. 3,195,000
6,000,000 Comcast Cellular Corp., senior sub. deb., Series B, (original accretion rate 11.37%),
0.00%, 03/05/00 .............................................................. 4,207,500
Wireless/Telecommunications (cont.)
$6,000,000 cMillicom International Cellular, SA, senior disc. notes, zero coupon to 06/01/00,
(original accretion rate 13.50%), 13.50% thereafter, 06/01/06 ................ $ 3,225,000
3,000,000 Nextel Communications, senior disc. notes, (original accretion rate 9.75%), 0.00%,
08/15/04 ..................................................................... 1,773,750
4,000,000 Rogers Cantel Mobile Communications, Inc., senior secured deb., 9.75%, 06/01/16 3,860,000
5,000,000 Sprint Spectrum, L.P., senior disc. notes, zero coupon to 08/15/01, (original
accretion rate 12.50%), 12.50% thereafter, 08/15/06 .......................... 2,837,500
1,700,000 Teleport Communications Group, Inc., senior disc. notes, zero coupon to 07/01/01,
(original accretion rate 11.125%), 11.125% thereafter, 07/01/07 .............. 1,045,500
-------------
20,144,250
-------------
Total Non-Convertible Bonds (Cost $209,564,112) ......................... 211,637,063
-------------
Convertible Bonds 2.1%
Electronics .6%
1,500,000 cDovatron International, Inc., cvt. sub. notes, 6.00%, 10/15/02 ............... 1,545,000
-------------
Financial Services .3%
1,000,000 cPeregrine Investment Finance, cvt. guaranteed, 4.50%, 12/01/00 ............... 850,000
-------------
Health Care .5%
200,000 Sun Healthcare Group, Inc., cvt. sub. notes, 6.00%, 03/01/04 .................. 174,000
850,000 cU.S. Diagnostic Labs, Inc., cvt., sub. deb., 9.00%, 03/31/03 ................. 1,100,750
-------------
1,274,750
-------------
Media & Broadcasting .4%
1,000,000 cAll American Communications, Inc., cvt. sub. notes, 6.50%, 10/01/03 .......... 860,000
-------------
Technology/Information Systems .3%
700,000 cAltera Corp., cvt. sub. notes, 5.75%, 06/15/02 ............................... 751,624
-------------
Total Convertible Bonds (Cost $5,171,267) ............................... 5,281,374
-------------
Total Bonds (Cost $214,735,379) ......................................... 216,918,437
-------------
Foreign Government Agencies .3%
4,350,000 dESCOM, E168, utility deb. (South Africa), 11.00%, 06/01/08 (Cost $1,030,750) . 742,625
-------------
Total Long Term Investments (Cost $320,167,840).......................... 327,137,243
-------------
gReceivables from Repurchase Agreements
76,260 Joint Repurchase Agreement, 5.226%, 09/03/96, (Maturity Value $75,973)
(Cost $75,929)
B.A. Securities, Inc., (Maturity Value $10,514)
Collateral: U.S. Treasury Bills, 10/17/96
U.S. Treasury Notes, 6.00% - 7.875%, 02/28/97 - 05/31/98
Bear, Stearns & Co., Inc., (Maturity Value $10,514)
Collateral: U.S. Treasury Notes, 5.625% - 7.00%, 10/31/97 - 10/31/00
B.T. Securities Corp., (Maturity Value $10,514)
Collateral: U.S. Treasury Notes, 7.25%, 11/30/96
Daiwa Securities America, Inc., (Maturity Value $10,514)
Collateral: U.S. Treasury Notes, 5.00% - 5.25%, 01/31/98 - 01/31/01
Donaldson, Lufkin & Jenrette Securities Corp., (Maturity Value $10,514)
Collateral: U.S. Treasury Notes,5.25% - 7.25%, 08/31/96 - 06/30/00
Fuji Securities, Inc., (Maturity Value $10,514)
Collateral: U.S. Treasury Notes, 7.75% - 8.75%, 05/15/97 - 08/15/01
UBS Securities, L.L.C., (Maturity Value $12,845)
Collateral: U.S. Treasury Notes, 6.375% - 7.125%, 02/29/00 - 07/31/01 ...... 75,929
-------------
Total Investments (Cost $320,243,769) 128.2% ....................... 327,213,172
Liabilities in Excess of Other Assets (28.2)% ...................... (72,013,341)
-------------
Net Assets 100.0% .................................................. $255,199,831
=============
At August 31,1996 the net unrealized appreciation based on the
cost of investments for income tax purposes of $320,274,708
was as follows:
Aggregate gross unrealized appreciation for all investments in which there was an
excess of value over tax cost ................................................ $ 27,740,998
Aggregate gross unrealized depreciation for all investments in which there was an
excess of tax cost over value ................................................ (20,802,534)
-------------
Net unrealized appreciation ................................................. $ 6,938,464
=============
</TABLE>
PORTFOLIO ABBREVIATIONS:
FRN - Floating Rate Note
L.L.C. - Limited Liability Corp.
L.P. - Limited Partnership
PIK - Payment-in-Kind
S.F. - Sinking Fund
aNon-income producing.
bSee Note 8 regarding restricted securities.
cPurchased in a private placement transaction; resale may only be to qualified
institutional buyers.
dFace amount is stated in foreign currency and value is stated in U.S. dollars.
eSee Note 9 regarding defaulted securities.
fSecurities traded in foreign currency and valued in U.S. dollars.
gFace amount for repurchase agreements is for the underlying collateral.
See Note 2(g) regarding joint repurchase
agreement.
The accompanying notes are an integral part of these financial statements.
FRANKLIN UNIVERSAL TRUST
Financial Statements
Statement of Assets and Liabilities
August 31, 1996
Assets:
Investments in securities, at value
(identified cost $320,167,840) $327,137,243
Receivables from repurchase
agreements, at value and cost 75,929
Dividends and interest receivable 5,112,433
Unamortized note issuance costs
(Note 3) 247,659
--------------
Total assets 332,573,264
--------------
Liabilities:
Payables:
Notes (Note 3) 74,973,947
Accrued interest (Note 3) 2,109,375
Management fees 207,053
Accrued expenses and other liabilities 83,058
--------------
Total liabilities 77,373,433
--------------
Net assets, at value $255,199,831
==============
Net assets consist of:
Undistributed net investment income $ 1,252,117
Net unrealized appreciation on
investments and translation of
assets and liabilities denominated
in foreign currencies 6,969,000
Undistributed net realized gain on
investments and foreign currency
transactions 107,572
Capital shares 246,871,142
--------------
Net assets, at value $255,199,831
==============
Net asset value per share:
($255,199,831 / 26,779,333 shares
of beneficial interest outstanding) $9.53
==============
Statement of Operations
for the year ended August 31, 1996
Investment income:
Dividends, net of foreign
taxes withheld of $7,679 $ 6,505,316
Interest 22,730,256
--------------
Total income $29,235,572
Expenses:
Management fees (Note 6) 2,491,558
Shareholder servicing costs 193,238
Amortization of note
issuance costs 124,165
Professional fees 50,135
Reports to shareholders 32,518
Trustees' fees and expenses 21,255
Custodian fees 17,801
Other 50,482
--------------
Operating expenses 2,981,152
Interest expense (Note 3) 4,231,812
--------------
Total expenses 7,212,964
--------------
Net investment income 22,022,608
--------------
Realized and unrealized gain
(loss) from investments and
foreign currency:
Net realized gain (loss) from:
Investments 4,588,243
Foreign currency
transactions (9,570)
Net unrealized appreciation
(depreciation) on:
Investments 520,907
Translation of assets and
liabilities denominated
in foreign currency (561)
--------------
Net realized and unrealized
gain from investments and
foreign currencies 5,099,019
--------------
Net increase in net assets
resulting from operations $27,121,627
==============
The accompanying notes are an integral part of these
financial statements.
FRANKLIN UNIVERSAL TRUST
Financial Statements (cont.)
Statements of Changes in Net Assets
for the years ended August 31, 1996 and 1995
1996 1995
---------- ----------
Increase (decrease) in net assets:
Operations:
Net investment income $ 22,022,608 $ 22,806,562
Net realized gain from
investments and foreign
currency transactions 4,578,673 5,243,923
Net unrealized appre-
ciation on investments
and translation of assets
and liabilities denomi-
nated in foreign currencies 520,346 11,072,599
---------- ----------
Net increase in net
assets resulting from
operations 27,121,627 39,123,084
Distributions to
shareholders from
undistributed net
investment income (22,655,316) (21,691,260)
---------- ----------
Net increase in
net assets 4,466,311 17,431,824
Net assets:
Beginning of year 250,733,520 233,301,696
---------- ----------
End of year (including
undistributed net
investment income of
$1,252,117 at 8/31/96
and $1,948,330 at
8/31/95) $255,199,831 $250,733,520
========== ==========
Statement of Cash Flows
for the year ended August 31, 1996
Interest and dividends received $ 24,166,715
Operating expenses paid (2,869,704)
Interest expense paid (4,218,765)
--------------
Cash provided - operations 17,078,246
--------------
Investment purchases (1,112,286,385)
Investment sales 1,117,863,455
--------------
Cash provided - investments 5,577,070
--------------
Distributions to shareholders (22,655,316)
--------------
Cash used - financing activities (22,655,316)
--------------
Net change in cash --
Cash at beginning of year --
--------------
Cash at end of year $ --
==============
The accompanying notes are an integral part of these financial statements.
FRANKLIN UNIVERSAL TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION
Franklin Universal Trust (the Fund) was organized as a Massachusetts business
trust on April 26, 1988, and is registered as a diversified, closed-end
management investment company under the Investment Company Act of 1940. The Fund
has two classes of securities: senior fixed-rate notes (the Notes) and shares of
beneficial interest (the Shares). The Fund seeks to provide high current income
consistent with preservation of capital.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION:
Portfolio securities listed on a securities exchange or on the NASDAQ for which
market quotations are readily available are valued at the last sale price or, if
there is no sale price, within the range of the most recent quoted bid and asked
prices. Other securities are valued based on a variety of factors, including
yield, risk, maturity, trade activity and recent developments related to the
securities. Portfolio securities which are traded both in the over the counter
market and on a securities exchange are valued according to the broadest and
most representative market as determined by the Manager. The Fund may utilize a
pricing service, bank or broker/dealer experienced in such matters to perform
any of the pricing functions, under procedures approved by the Board of Trustees
(the Board). Securities for which market quotations are not available, and
securities restricted as to resale, are valued in accordance with procedures
established by the Board.
The value of a foreign security is determined as of the earlier of the close of
trading on the foreign exchange on which it is traded or the close of trading on
the New York Stock Exchange. That value is then converted into its U.S. dollar
equivalent at the foreign exchange rate in effect at noon, New York time, on the
day the value of the foreign security is determined. If no sale is reported at
that time, the mean between the current bid and asked prices is used.
Occasionally, events which affect the values of foreign securities and foreign
exchange rates may occur between the times at which they are determined and the
close of the exchange and will, therefore, not be reflected in the computation
of the Fund's net asset value, unless material. If events which materially
affect the value of these foreign securities occur during such period, these
securities will be valued in accordance with procedures established by the
Board.
B. INCOME TAXES:
The Fund intends to continue to qualify for the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and to make the
requisite distributions to its shareholders which will be sufficient to relieve
it from income and excise taxes.
C. SECURITY TRANSACTIONS:
Security transactions are accounted for on the date the securities are purchased
or sold (trade date). Realized gains and losses on security transactions are
determined on the basis of specific identification.
D. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS:
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income and estimated expenses are accrued daily.
Original issue discount is amortized as required by the Internal Revenue Code.
Net investment income differs for financial statement and tax purposes primarily
due to differing treatment of foreign currency transactions and defaulted
securities - see Note 9. Net realized capital gains and losses differ for
financial statement and tax purposes primarily due to differing treatment of
wash sale and foreign currency transactions.
E. ACCOUNTING ESTIMATES:
The preparation of the 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 expenses during
the reporting period. Actual results could differ from those estimates.
F. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. All assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the rate of exchange of the currencies against U.S. dollars on the
valuation date. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the day that the transactions are
recorded. Differences between income and expense amounts recorded and collected
or paid are recognized when reported by the custodian.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.
Realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, gains or losses realized
between the trade and settlement dates on security transactions, the difference
between the amounts of dividends, interest, and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized appreciation or depreciation on
translation of assets and liabilities denominated in foreign currencies arises
from changes in the value of assets and liabilities, other than investments in
securities at the end of the reporting period, resulting from changes in
exchange rates.
G. REPURCHASE AGREEMENTS:
The Fund may enter into a joint repurchase agreement whereby its uninvested cash
balance is deposited into a joint cash account to be used to invest in one or
more repurchase agreements with government securities dealers recognized by the
Federal Reserve Board and/or member banks of the Federal Reserve System. The
value and face amount of the joint repurchase agreement are allocated to the
Fund based on its pro-rata interest. A repurchase agreement is accounted for as
a loan by the Fund to the seller, collateralized by underlying U.S. government
securities, which are delivered to the Fund's custodian. The market value,
including accrued interest, of the initial collateralization is required to be
at least 102% of the dollar amount invested by the Fund, with the value of the
underlying security marked to market daily to maintain coverage of at least
100%. At August 31, 1996, all outstanding repurchase agreements held by the Fund
had been entered into on August 30, 1996.
NOTE 3 - SENIOR FIXED-RATE NOTES
On August 30, 1993, the Fund issued $75 million aggregate principal amount of a
new class of five-year senior notes and received proceeds of $74,522,250 after
deduction of underwriting commissions and discounts. The Notes are general
unsecured obligations of the Fund and rank senior to all existing or future
unsecured indebtedness of the Fund. The Notes are senior to the Shares and, in
any liquidation of the Fund, the Notes must be paid in full before any payments
would be made with respect to the Shares.
The Notes carry a rating by Standard & Poor's Corporation of "AAA" and bear
interest, payable semi-annually, at the rate of 5.625% per annum, to maturity on
September 1, 1998. The market value of the Notes as of August 31, 1996, is
$73,507,500. Under the Investment Company Act of 1940, the Fund is required to
maintain asset coverage for the Notes of at least 300%. In addition, pursuant to
the agreement with respect to the Notes, the Fund is required to maintain on a
semi-monthly basis a specified discounted asset value for its portfolio that
equals or exceeds an amount determined under guidelines established by Standard
& Poor's Corporation. The Fund has met these requirements during the year ended
August 31, 1996.
The costs of $620,282 incurred by the Fund in connection with the issuance of
the Notes are deferred and amortized on a straight-line basis over the term of
the notes.
The discount relating to the issuance of these Notes, which amounted to $65,250,
is being amortized to interest expense over a period of five years from August
30, 1993.
NOTE 4 - NET REALIZED CAPITAL GAINS - TAX BASIS
At August 31, 1996, for tax purposes, the Fund had accumulated net realized
gains of $138,511. For tax purposes, the aggregate cost of securities is higher
(and unrealized appreciation is lower) than for financial statement purposes at
August 31, 1996 by $30,939.
NOTE 5 - TRUST SHARES
At August 31, 1996, there was an unlimited number of $.01 par value shares
authorized. During the years ended August 31, 1996 and 1995, no shares were
issued pursuant to the Fund's Dividend Reinvestment Plan; all reinvested
dividends were satisfied with previously issued shares purchased in the open
market pursuant to such Plan.
NOTE 6 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
A. MANAGEMENT AGREEMENT
Under the terms of a management agreement, Franklin Advisers, Inc. (Advisers),
provides investment advice, administrative services, office space and facilities
to the Fund, and receives fees computed weekly and payable monthly at an
annualized rate of 0.75% of the Fund's average weekly net assets (total assets
less liabilities other than the principal amount of the Notes).
B. OTHER AFFILIATES AND RELATED PARTY TRANSACTIONS
Certain officers and trustees of the Fund are also officers and/or directors of
Advisers, a wholly-owned subsidiary of Franklin Resources, Inc.
NOTE 7 - STATEMENT OF CASH FLOWS
The Fund's financial statements for the year ended August 31, 1996 include a
Statement of Cash Flows in compliance with SFAS 102. Cash provided from
operations differs from net investment income because of amortization of bond
discount, amortization of note issuance costs, commissions and discounts, bonds
paid-in-kind, stock dividends and year-end income and expense accrual changes
aggregating $4,944,362.
NOTE 8 - RESTRICTED SECURITIES
A restricted security is a security which has not been registered with the
Securities and Exchange Commission pursuant to the Securities Act of 1933. The
Fund may purchase restricted securities through a private offering and they
cannot be sold without prior registration under the Securities Act of 1933
unless such sale is pursuant to an exemption therefrom. Subsequent costs of
registration of such securities are borne by the issuer. A secondary market
exists for certain privately placed securities. The Fund's restricted securities
are currently valued as disclosed in Note 2. At August 31, 1996, the Fund held
restricted securities with a value aggregating $2,801,719, representing 1.10% of
the Fund's net assets. Such securities are:
<TABLE>
<CAPTION>
Face Acquisition
Amount Security Date Cost Value
-------- -------------------------------------------- ------- -------- --------
<S> <C> <C> <C> <C>
$2,112,462 Atherton Franchise Capital, L.P., 11.00%, 05/01/06......... 04/28/94 $2,112,463 $1,774,468
1,600,000 Beatrice Foods, Inc. S.F., senior sub. notes, 12.00%, 12/01/01 11/19/91 1,600,000 680,000
Shares/
Warrants
--------
35,141 NVR, Inc. ................................................. 11/25/88 685,392 329,447
35,607 NVR, Inc., warrants ....................................... 09/29/93 151,330 17,804
</TABLE>
NOTE 9 - CREDIT RISK AND DEFAULTED SECURITIES
The Fund has 68.44% of its portfolio invested in lower rated and comparable
quality unrated securities. At August 31, 1996, the Fund held two defaulted
securities issued by two companies with a value aggregating $1,292,250,
representing .51% of the Fund's net assets.
Note 10 - OTHER CONSIDERATIONS
As the Fund's Manager, Advisers may serve as a member of various credit
committees, representing credit interests in certain corporate restructuring
negotiations. Currently, Advisers serves on the credit committees for Forstmann
Textile & Co., Inc. and Beatrice Foods, Inc. and therefore may be in possession
of certain material non-public information. Advisers has not sold, nor does it
intend to sell, any of the Fund's holdings in these securities while in
possession of material non-public information in contravention of the Federal
Securities Laws.
NOTE 11 - SUBSEQUENT EVENTS
On September 13, 1996, the Board of Trustees declared dividends as follows:
From Undistributed Net
Record Date Payment Date Investment Income
--------------- --------------- ----------------
September 13, 1996 September 30, 1996 $.067
October 15, 1996 October 31, 1996 .067
NOTE 12 - FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period are as follows:
<TABLE>
<CAPTION>
Year Ended August 31,
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ...................... $9.36 $8.71 $9.81 $8.94 $7.50
------- ------- ------- ------- -------
Net investment income..................................... 0.82 0.85 0.84 0.88 0.80
Net realized and unrealized gain (loss) on securities .... 0.20 0.61 (1.08) 0.74 1.465
------- ------- ------- ------- -------
Total from investment operations........................... 1.02 1.46 (0.24) 1.62 2.265
------- ------- ------- ------- -------
Less distributions from:
Net investment income..................................... (0.85) (0.81) (0.86) (0.750) (0.797)
Return of capital......................................... -- -- -- -- (0.028)
------- ------- ------- ------- -------
Total distributions........................................ (0.85) (0.81) (0.86) (0.750) (0.825)
------- ------- ------- ------- -------
Net asset value at end of period .......................... $9.53 $9.36 $8.71 $9.81 $8.94
======= ======= ======= ======= =======
Market value per share at end of period1................... $9.125 $8.875 $8.125 $9.50 $8.50
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN:
Based on market value per share2.......................... 12.84% 20.42% (5.60)% 21.16% 32.39%
RATIO TO AVERAGE NET ASSETS:
Expenses.................................................. 2.17% 2.26% 2.30% 3.24% 3.36%
Net investment income..................................... 6.63% 7.30% 7.04% 7.39% 7.28%
SUPPLEMENTAL DATA:
Net assets at end of period (in 000's).................... $255,200 $250,734 $233,302 $262,793 $239,486
Portfolio turnover rate................................... 19.24% 27.41% 36.76% 39.49% 30.44%
Average commission rate3.................................. $ .0528 -- -- -- --
Total debt outstanding at end of period (in 000's)........ $ 74,974 $ 74,961 $ 74,948 $ 74,523 $ 71,475
Asset coverage per $1,000 of debt $ 3,404 $ 3,345 $ 3,113 $ 3,526 $ 3,351
</TABLE>
(FOR NOTES OUTSTANDING THROUGHOUT THE YEAR)
<TABLE>
<CAPTION>
Year Face Amount of Average Monthly Average Average Amount of
Ended Notes Outstanding Face Amount of Monthly Shares Notes Per Share
August 31, End of Year Notes Outstanding Outstanding During the Year
------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
1992 $71,600,000 $71,600,000 26,779,333 $2.67
1993 $75,000,000 $71,883,333 26,779,333 $2.68
1994 $75,000,000 $75,000,000 26,779,333 $2.80
1995 $75,000,000 $75,000,000 26,779,333 $2.80
1996 $75,000,000 $75,000,000 26,779,333 $2.80
</TABLE>
1Based on last sale on the New York Stock Exchange.
2Total return measures the change in value of an investment over the periods
indicated. It is not annualized. It reflects the change in market value of the
capital shares, and assumes reinvestment of dividends and capital gains in
accordance with the dividend reinvestment plan.
3Represents the average broker commission rate per share paid by the Fund in
connection with the execution of the Fund's portfolio transactions in equity
securities.
The percentage of income dividends paid (including short-term capital gains
distribution, if any) by the Fund during the fiscal year ended August 31, 1996,
which qualified for the 70% dividends received deduction, was 16.26%. The Fund
hereby designates these amounts as dividends qualifying for the dividends
received deductions under Internal Revenue Code Section 854(b)(2).
FRANKLIN UNIVERSAL TRUST
Report of Independent Auditors
To the Shareholders and Board of Trustees
of Franklin Universal Trust
We have audited the accompanying statements of assets and liabilities of the
Franklin Universal Trust (the Fund), including the Fund's statement of
investments in securities and net assets, as of August 31, 1996, and the related
statements of operations and cash flows for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended, and
the financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1996, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Fund as of August 31, 1996, the results of its operations and its cash flows for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and its financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
San Francisco, California
October 3, 1996
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.
Franklin Universal Trust Annual Report 8/31/96
APPENDIX
DESCRIPTION OF GRAPHIC MATERIAL OMITTED FROM EDGAR FILING
(PURSUANT TO ITEM 304 (a) OF REGULATION S-T)
GRAPHIC MATERIAL (1)
This line graph shows the federal funds target rate for the period of 3/1/95
through 8/31/96.
Period Ending Target Rate
3/1/95 6.00%
3/2/95 6.00%
3/3/95 6.00%
3/6/95 6.00%
3/7/95 6.00%
3/8/95 6.00%
3/9/95 6.00%
3/10/95 6.00%
3/13/95 6.00%
3/14/95 6.00%
3/15/95 6.00%
3/16/95 6.00%
3/17/95 6.00%
3/20/95 6.00%
3/21/95 6.00%
3/22/95 6.00%
3/23/95 6.00%
3/24/95 6.00%
3/27/95 6.00%
3/28/95 6.00%
3/29/95 6.00%
3/30/95 6.00%
3/31/95 6.00%
4/3/95 6.00%
4/4/95 6.00%
4/5/95 6.00%
4/6/95 6.00%
4/7/95 6.00%
4/10/95 6.00%
4/11/95 6.00%
4/12/95 6.00%
4/13/95 6.00%
4/17/95 6.00%
4/18/95 6.00%
4/19/95 6.00%
4/20/95 6.00%
4/21/95 6.00%
4/24/95 6.00%
4/25/95 6.00%
4/26/95 6.00%
4/27/95 6.00%
4/28/95 6.00%
5/1/95 6.00%
5/2/95 6.00%
5/3/95 6.00%
5/4/95 6.00%
5/5/95 6.00%
5/8/95 6.00%
5/9/95 6.00%
5/10/95 6.00%
5/11/95 6.00%
5/12/95 6.00%
5/15/95 6.00%
5/16/95 6.00%
5/17/95 6.00%
5/18/95 6.00%
5/19/95 6.00%
5/22/95 6.00%
5/23/95 6.00%
5/24/95 6.00%
5/25/95 6.00%
5/26/95 6.00%
5/30/95 6.00%
5/31/95 6.00%
6/1/95 6.00%
6/2/95 6.00%
6/5/95 6.00%
6/6/95 6.00%
6/7/95 6.00%
6/8/95 6.00%
6/9/95 6.00%
6/12/95 6.00%
6/13/95 6.00%
6/14/95 6.00%
6/15/95 6.00%
6/16/95 6.00%
6/19/95 6.00%
6/20/95 6.00%
6/21/95 6.00%
6/22/95 6.00%
6/23/95 6.00%
6/26/95 6.00%
6/27/95 6.00%
6/28/95 6.00%
6/29/95 6.00%
6/30/95 6.00%
7/3/95 6.00%
7/5/95 6.00%
7/6/95 5.75%
7/7/95 5.75%
7/10/95 5.75%
7/11/95 5.75%
7/12/95 5.75%
7/13/95 5.75%
7/14/95 5.75%
7/17/95 5.75%
7/18/95 5.75%
7/19/95 5.75%
7/20/95 5.75%
7/21/95 5.75%
7/24/95 5.75%
7/25/95 5.75%
7/26/95 5.75%
7/27/95 5.75%
7/28/95 5.75%
7/31/95 5.75%
8/1/95 5.75%
8/2/95 5.75%
8/3/95 5.75%
8/4/95 5.75%
8/7/95 5.75%
8/8/95 5.75%
8/9/95 5.75%
8/10/95 5.75%
8/11/95 5.75%
8/14/95 5.75%
8/15/95 5.75%
8/16/95 5.75%
8/17/95 5.75%
8/18/95 5.75%
8/21/95 5.75%
8/22/95 5.75%
8/23/95 5.75%
8/24/95 5.75%
8/25/95 5.75%
8/28/95 5.75%
8/29/95 5.75%
8/30/95 5.75%
8/31/95 5.75%
9/1/95 5.75%
9/5/95 5.75%
9/6/95 5.75%
9/7/95 5.75%
9/8/95 5.75%
9/11/95 5.75%
9/12/95 5.75%
9/13/95 5.75%
9/14/95 5.75%
9/15/95 5.75%
9/18/95 5.75%
9/19/95 5.75%
9/20/95 5.75%
9/21/95 5.75%
9/22/95 5.75%
9/25/95 5.75%
9/26/95 5.75%
9/27/95 5.75%
9/28/95 5.75%
9/29/95 5.75%
10/2/95 5.75%
10/3/95 5.75%
10/4/95 5.75%
10/5/95 5.75%
10/6/95 5.75%
10/9/95 5.75%
10/10/95 5.75%
10/11/95 5.75%
10/12/95 5.75%
10/13/95 5.75%
10/16/95 5.75%
10/17/95 5.75%
10/18/95 5.75%
10/19/95 5.75%
10/20/95 5.75%
10/23/95 5.75%
10/24/95 5.75%
10/25/95 5.75%
10/26/95 5.75%
10/27/95 5.75%
10/30/95 5.75%
10/31/95 5.75%
11/1/95 5.75%
11/2/95 5.75%
11/3/95 5.75%
11/6/95 5.75%
11/7/95 5.75%
11/8/95 5.75%
11/9/95 5.75%
11/10/95 5.75%
11/13/95 5.75%
11/14/95 5.75%
11/15/95 5.75%
11/16/95 5.75%
11/17/95 5.75%
11/20/95 5.75%
11/21/95 5.75%
11/22/95 5.75%
11/24/95 5.75%
11/27/95 5.75%
11/28/95 5.75%
11/29/95 5.75%
11/30/95 5.75%
12/1/95 5.75%
12/4/95 5.75%
12/5/95 5.75%
12/6/95 5.75%
12/7/95 5.75%
12/8/95 5.75%
12/11/95 5.75%
12/12/95 5.75%
12/13/95 5.75%
12/14/95 5.75%
12/15/95 5.75%
12/18/95 5.75%
12/19/95 5.50%
12/20/95 5.50%
12/21/95 5.50%
12/22/95 5.50%
12/26/95 5.50%
12/27/95 5.50%
12/28/95 5.50%
12/29/95 5.50%
1/2/96 5.50%
1/3/96 5.50%
1/4/96 5.50%
1/5/96 5.50%
1/8/96 5.50%
1/9/96 5.50%
1/10/96 5.50%
1/11/96 5.50%
1/12/96 5.50%
1/15/96 5.50%
1/16/96 5.50%
1/17/96 5.50%
1/18/96 5.50%
1/19/96 5.50%
1/22/96 5.50%
1/23/96 5.50%
1/24/96 5.50%
1/25/96 5.50%
1/26/96 5.50%
1/29/96 5.50%
1/30/96 5.50%
1/31/96 5.25%
2/1/96 5.25%
2/2/96 5.25%
2/5/96 5.25%
2/6/96 5.25%
2/7/96 5.25%
2/8/96 5.25%
2/9/96 5.25%
2/12/96 5.25%
2/13/96 5.25%
2/14/96 5.25%
2/15/96 5.25%
2/16/96 5.25%
2/20/96 5.25%
2/21/96 5.25%
2/22/96 5.25%
2/23/96 5.25%
2/26/96 5.25%
2/27/96 5.25%
2/28/96 5.25%
2/29/96 5.25%
3/1/96 5.25%
3/4/96 5.25%
3/5/96 5.25%
3/6/96 5.25%
3/7/96 5.25%
3/8/96 5.25%
3/11/96 5.25%
3/12/96 5.25%
3/13/96 5.25%
3/14/96 5.25%
3/15/96 5.25%
3/18/96 5.25%
3/19/96 5.25%
3/20/96 5.25%
3/21/96 5.25%
3/22/96 5.25%
3/25/96 5.25%
3/26/96 5.25%
3/27/96 5.25%
3/28/96 5.25%
3/29/96 5.25%
4/1/96 5.25%
4/2/96 5.25%
4/3/96 5.25%
4/4/96 5.25%
4/8/96 5.25%
4/9/96 5.25%
4/10/96 5.25%
4/11/96 5.25%
4/12/96 5.25%
4/15/96 5.25%
4/16/96 5.25%
4/17/96 5.25%
4/18/96 5.25%
4/19/96 5.25%
4/22/96 5.25%
4/23/96 5.25%
4/24/96 5.25%
4/25/96 5.25%
4/26/96 5.25%
4/29/96 5.25%
4/30/96 5.25%
5/1/96 5.25%
5/2/96 5.25%
5/3/96 5.25%
5/6/96 5.25%
5/7/96 5.25%
5/8/96 5.25%
5/9/96 5.25%
5/10/96 5.25%
5/13/96 5.25%
5/14/96 5.25%
5/15/96 5.25%
5/16/96 5.25%
5/17/96 5.25%
5/20/96 5.25%
5/21/96 5.25%
5/22/96 5.25%
5/23/96 5.25%
5/24/96 5.25%
5/27/96 5.25%
5/29/96 5.25%
5/30/96 5.25%
5/31/96 5.25%
6/3/96 5.25%
6/4/96 5.25%
6/5/96 5.25%
6/6/96 5.25%
6/7/96 5.25%
6/10/96 5.25%
6/11/96 5.25%
6/12/96 5.25%
6/13/96 5.25%
6/14/96 5.25%
6/17/96 5.25%
6/18/96 5.25%
6/19/96 5.25%
6/20/96 5.25%
6/21/96 5.25%
6/24/96 5.25%
6/25/96 5.25%
6/26/96 5.25%
6/27/96 5.25%
6/28/96 5.25%
7/1/96 5.25%
7/2/96 5.25%
7/3/96 5.25%
7/5/96 5.25%
7/8/96 5.25%
7/9/96 5.25%
7/10/96 5.25%
7/11/96 5.25%
7/12/96 5.25%
7/15/96 5.25%
7/16/96 5.25%
7/17/96 5.25%
7/18/96 5.25%
7/19/96 5.25%
7/22/96 5.25%
7/23/96 5.25%
7/24/96 5.25%
7/25/96 5.25%
7/26/96 5.25%
7/29/96 5.25%
7/30/96 5.25%
7/31/96 5.25%
8/1/96 5.25%
8/2/96 5.25%
8/5/96 5.25%
8/6/96 5.25%
8/7/96 5.25%
8/8/96 5.25%
8/9/96 5.25%
8/12/96 5.25%
8/13/96 5.25%
8/14/96 5.25%
8/15/96 5.25%
8/16/96 5.25%
8/19/96 5.25%
8/20/96 5.25%
8/21/96 5.25%
8/22/96 5.25%
8/23/96 5.25%
8/26/96 5.25%
8/27/96 5.25%
8/28/96 5.25%
8/29/96 5.25%
8/30/96 5.25%
GRAPHIC MATERIAL (2)
This line graph shows the Dow Jones Industrial Average closing prices for the
period of 3/1/95 through 8/31/96.
Period Ending Price
3/1/95 3994.8
3/2/95 3979.93
3/3/95 3989.61
3/6/95 3997.56
3/7/95 3962.63
3/8/95 3979.23
3/9/95 3983.39
3/10/95 4035.61
3/13/95 4025.23
3/14/95 4048.75
3/15/95 4038.37
3/16/95 4069.15
3/17/95 4073.65
3/20/95 4083.68
3/21/95 4072.61
3/22/95 4082.99
3/23/95 4087.83
3/24/95 4138.668
3/27/95 4157.34
3/28/95 4151.809
3/29/95 4160.797
3/30/95 4172.559
3/31/95 4157.688
4/3/95 4168.406
4/4/95 4201.609
4/5/95 4200.566
4/6/95 4205.406
4/7/95 4192.617
4/10/95 4198.148
4/11/95 4187.078
4/12/95 4197.809
4/13/95 4208.18
4/17/95 4195.379
4/18/95 4179.129
4/19/95 4207.488
4/20/95 4230.656
4/21/95 4270.09
4/24/95 4303.977
4/25/95 4300.168
4/26/95 4299.828
4/27/95 4314.699
4/28/95 4321.27
5/1/95 4316.078
5/2/95 4328.879
5/3/95 4373.148
5/4/95 4359.656
5/5/95 4343.398
5/8/95 4383.867
5/9/95 4390.777
5/10/95 4404.617
5/11/95 4411.188
5/12/95 4430.559
5/15/95 4437.469
5/16/95 4435.047
5/17/95 4422.598
5/18/95 4340.637
5/19/95 4341.328
5/22/95 4395.629
5/23/95 4436.438
5/24/95 4438.156
5/25/95 4412.227
5/26/95 4369
5/30/95 4378.68
5/31/95 4465.137
6/1/95 4472.75
6/2/95 4444.387
6/5/95 4476.547
6/6/95 4485.199
6/7/95 4462.03
6/8/95 4458.57
6/9/95 4423.99
6/12/95 4446.46
6/13/95 4484.51
6/14/95 4491.08
6/15/95 4496.27
6/16/95 4510.79
6/19/95 4553.68
6/20/95 4550.56
6/21/95 4547.1
6/22/95 4589.64
6/23/95 4585.84
6/26/95 4551.25
6/27/95 4542.61
6/28/95 4556.79
6/29/95 4550.56
6/30/95 4556.1
7/3/95 4585.15
7/5/95 4615.23
7/6/95 4664
7/7/95 4702.73
7/10/95 4702.39
7/11/95 4680.6
7/12/95 4727.29
7/13/95 4727.48
7/14/95 4708.82
7/17/95 4736.29
7/18/95 4686.28
7/19/95 4628.87
7/20/95 4641.55
7/21/95 4641.55
7/24/95 4668.67
7/25/95 4714.45
7/26/95 4707.06
7/27/95 4732.77
7/28/95 4715.51
7/31/95 4708.47
8/1/95 4700.37
8/2/95 4690.15
8/3/95 4701.42
8/4/95 4683.46
8/7/95 4693.32
8/8/95 4693.32
8/9/95 4671.49
8/10/95 4643.66
8/11/95 4618.3
8/14/95 4659.86
8/15/95 4640.84
8/16/95 4639.08
8/17/95 4630.63
8/18/95 4617.6
8/21/95 4614.78
8/22/95 4620.42
8/23/95 4584.85
8/24/95 4580.62
8/25/95 4601.4
8/28/95 4594
8/29/95 4608.44
8/30/95 4604.57
8/31/95 4610.56
9/1/95 4647.54
9/5/95 4670.08
9/6/95 4683.81
9/7/95 4669.72
9/8/95 4700.72
9/11/95 4704.94
9/12/95 4747.21
9/13/95 4765.52
9/14/95 4801.8
9/15/95 4797.57
9/18/95 4780.41
9/19/95 4767.04
9/20/95 4792.69
9/21/95 4767.4
9/22/95 4764.1
9/25/95 4769.93
9/26/95 4765.6
9/27/95 4762.35
9/28/95 4787.64
9/29/95 4789.08
10/2/95 4761.26
10/3/95 4749.7
10/4/95 4740.67
10/5/95 4762.71
10/6/95 4769.21
10/9/95 4726.22
10/10/95 4720.8
10/11/95 4735.25
10/12/95 4764.88
10/13/95 4793.78
10/16/95 4784.38
10/17/95 4795.94
10/18/95 4777.52
10/19/95 4802.45
10/20/95 4794.86
10/23/95 4755.48
10/24/95 4783.66
10/25/95 4753.68
10/26/95 4703.82
10/27/95 4741.75
10/30/95 4756.57
10/31/95 4755.48
11/1/95 4766.68
11/2/95 4808.59
11/3/95 4825.57
11/6/95 4814.01
11/7/95 4797.03
11/8/95 4852.67
11/9/95 4864.23
11/10/95 4870.37
11/13/95 4872.9
11/14/95 4871.81
11/15/95 4922.75
11/16/95 4969.36
11/17/95 4989.95
11/20/95 4983.09
11/21/95 5023.55
11/22/95 5041.61
11/24/95 5048.84
11/27/95 5070.88
11/28/95 5078.1
11/29/95 5105.56
11/30/95 5074.49
12/1/95 5087.13
12/4/95 5139.52
12/5/95 5177.45
12/6/95 5199.13
12/7/95 5159.39
12/8/95 5156.86
12/11/95 5184.32
12/12/95 5174.92
12/13/95 5216.47
12/14/95 5182.15
12/15/95 5176.73
12/18/95 5075.21
12/19/95 5109.89
12/20/95 5059.32
12/21/95 5096.53
12/22/95 5097.97
12/26/95 5110.26
12/27/95 5105.92
12/28/95 5095.8
12/29/95 5117.12
1/2/96 5177.45
1/3/96 5194.07
1/4/96 5173.84
1/5/96 5181.43
1/8/96 5197.68
1/9/96 5130.13
1/10/96 5032.94
1/11/96 5065.1
1/12/96 5061.12
1/15/96 5043.78
1/16/96 5088.22
1/17/96 5066.9
1/18/96 5124.35
1/19/96 5184.68
1/22/96 5219.36
1/23/96 5192.27
1/24/96 5242.84
1/25/96 5216.83
1/26/96 5271.75
1/29/96 5304.98
1/30/96 5381.21
1/31/96 5395.3
2/1/96 5405.06
2/2/96 5373.99
2/5/96 5407.59
2/6/96 5459.61
2/7/96 5492.12
2/8/96 5539.45
2/9/96 5541.62
2/12/96 5600.15
2/13/96 5601.23
2/14/96 5579.55
2/15/96 5551.37
2/16/96 5503.32
2/20/96 5458.53
2/21/96 5515.97
2/22/96 5608.46
2/23/96 5630.49
2/26/96 5565.1
2/27/96 5549.21
2/28/96 5506.21
2/29/96 5485.62
3/1/96 5536.56
3/4/96 5600.15
3/5/96 5642.42
3/6/96 5629.77
3/7/96 5641.69
3/8/96 5470.45
3/11/96 5581
3/12/96 5583.89
3/13/96 5568.72
3/14/96 5586.06
3/15/96 5584.97
3/18/96 5683.6
3/19/96 5669.51
3/20/96 5655.42
3/21/96 5626.88
3/22/96 5636.64
3/25/96 5643.86
3/26/96 5670.6
3/27/96 5626.88
3/28/96 5630.85
3/29/96 5587.14
4/1/96 5637.72
4/2/96 5671.68
4/3/96 5689.74
4/4/96 5682.88
4/8/96 5594.37
4/9/96 5560.41
4/10/96 5485.98
4/11/96 5487.07
4/12/96 5532.59
4/15/96 5592.92
4/16/96 5620.02
4/17/96 5549.93
4/18/96 5551.74
4/19/96 5535.48
4/22/96 5564.74
4/23/96 5588.59
4/24/96 5553.9
4/25/96 5566.91
4/26/96 5567.99
4/29/96 5573.41
4/30/96 5569.08
5/1/96 5575.22
5/2/96 5498.27
5/3/96 5478.03
5/6/96 5464.31
5/7/96 5420.95
5/8/96 5474.06
5/9/96 5475.14
5/10/96 5518.14
5/13/96 5582.6
5/14/96 5624.71
5/15/96 5625.44
5/16/96 5635.05
5/17/96 5687.5
5/20/96 5748.82
5/21/96 5736.26
5/22/96 5778
5/23/96 5762.12
5/24/96 5762.86
5/28/96 5709.67
5/29/96 5673.83
5/30/96 5693.41
5/31/96 5643.18
6/3/96 5624.71
6/4/96 5665.71
6/5/96 5697.48
6/6/96 5667.19
6/7/96 5697.11
6/10/96 5687.87
6/11/96 5668.66
6/12/96 5668.29
6/13/96 5657.95
6/14/96 5649.45
6/17/96 5652.78
6/18/96 5628.03
6/19/96 5648.35
6/20/96 5659.43
6/21/96 5705.23
6/24/96 5717.79
6/25/96 5719.27
6/26/96 5682.7
6/27/96 5677.53
6/28/96 5654.63
7/1/96 5729.98
7/2/96 5720.38
7/3/96 5703.02
7/5/96 5588.14
7/8/96 5550.83
7/9/96 5581.86
7/10/96 5603.65
7/11/96 5520.5
7/12/96 5510.56
7/15/96 5349.51
7/16/96 5358.76
7/17/96 5376.88
7/18/96 5464.18
7/19/96 5426.82
7/22/96 5390.94
7/23/96 5346.55
7/24/96 5354.69
7/25/96 5422.01
7/26/96 5473.06
7/29/96 5434.59
7/30/96 5481.93
7/31/96 5528.91
8/1/96 5594.75
8/2/96 5679.83
8/5/96 5674.28
8/6/96 5696.11
8/7/96 5718.67
8/8/96 5713.49
8/9/96 5681.31
8/12/96 5704.98
8/13/96 5647.28
8/14/96 5666.88
8/15/96 5665.78
8/16/96 5689.45
8/19/96 5699.44
8/20/96 5721.26
8/21/96 5689.82
8/22/96 5733.47
8/23/96 5722.74
8/26/96 5693.89
8/27/96 5711.27
8/28/96 5712.38
8/29/96 5647.65
8/30/96 5616.21
GRAPHIC MATERIAL (3)
This pie chart shows the breakdown of the portfolio's securities on 8/31/96,
based on total market value.
Portfolio Breakdown on August 31, 1996
Corporate Bonds 64.68%
Natural Resources Equities & Preferred 2.73%
Foreign Government Agencies 0.23%
Utilities Stocks 23.62%
Convertible Bonds 1.61%
Partnership Units 0.12%
Miscellaneous 6.99%
Cash & Equivalents 0.02%
