<PAGE>
Templeton Capital
Accumulator Fund, Inc.
[PHOTO APPEARS HERE]
Gary P. Motyl, CFA
President
Templeton Capital
Accumulator Fund, Inc.
- ------------------------
Your Fund's Objective:
The Templeton Capital Accumulator Fund seeks long-term capital growth by
investing in a portfolio primarily composed of common stocks in various
nations throughout the world.
April 14, 1995
Dear Shareholder:
This report for the Templeton Capital Accumulator Fund covers the six months
ended February 28, 1995. Investors were subjected to some severe jolts over
this period, including the sharp devaluation of the Mexican peso, the
bankruptcy of Orange County, California and the collapse of Barings Bank in
the United Kingdom. Steadily rising short-term interest rates in the United
States and Europe, and political problems in several countries, also
adversely affected global investors.
Considering this difficult backdrop, it is not surprising that share prices
were under pressure. The Templeton Capital Accumulator Fund was no
exception, posting a six-month total return of -5.10%. Over the same time
period, the Morgan Stanley Capital International (MSCI) World Index* posted a
total return of -3.23%. Total return measures the change in value of an
investment, assuming reinvestment of dividends and capital gains, and does
not include sales and creation charges. The Performance
*The Fund's performance differs from that of the index because in addition to
not being managed according to any investment strategy, the index does not
contain cash (the Fund generally carries a certain percentage of cash at any
given time) and includes no management expenses. Of course, one cannot invest
directly in an index, and past performance is not predictive of future results.
1
<PAGE>
Summary on page 5 details the Fund's short-term and more favorable long-term
results.
The Fund's cash position increased somewhat over the last few months of the
period, as we took profits in several stocks. One such company was Telebras,
the Brazilian telecommunications company, which we sold when its stock price
advanced sharply in anticipation of a favorable outcome in the Brazilian
presidential elections. We also sold our profitable positions in two
European chemical companies, Solvay and BASF, whose share prices had achieved
our targets.
It is interesting to note that the number of stocks on our "buy list," which we
consider to be bargains, increased during this period, while the number on our
"sell list," stocks we own that we consider to be fully priced, declined. These
lists are not used as market timing indicators, but they do reflect our opinion
that more long-term value exists in global equity markets now than existed six
months ago. Having a more favorable outlook about the financial markets in 1995,
as compared to 1994, we anticipate that our cash position will be worked down to
a more normal level over the next several months.
We have already increased our position in Goodyear Tire & Rubber Co. because
we are optimistic about the replacement-tire market and because the company
has been successful in reducing its costs. Goodyear is now our largest
individual holding, with 1.4% of total net assets, as shown in the Top 10
Holdings table on page 3. Other additions include WMX Technologies, a
leading waste management firm, and Great Lakes Chemical Company, a maker of
specialty chemicals.
- --------------------------------------------------------------------------------
TEMPLETON CAPITAL ACCUMULATOR FUND
Geographic Distribution on 2/28/95
Based on Total Net Assets
[GRAPH APPEARS HERE]
<TABLE>
<S> <C>
European Stocks 27.5%
Australian & New Zealand Stocks 6.4%
Latin American Stocks 3.2%
Asian Stocks 9.4%
United States Stock 18.9%
Other Stocks 2.0%
Short-Term Obligations & Other Net Assets 32.6%
</TABLE>
Although the economic recovery remains intact in the U.S., we think the rate
of increase is likely to decline over the next several months, as higher
interest rates restrict consumption. The inflation rate should remain
relatively subdued, as economic growth slackens, providing a favor
2
<PAGE>
able environment for stocks. We have a positive outlook for the rest of the
developed world, with European countries and Japan still in the early stages
of economic rebound. The situation in the developing countries is more
varied. Although the widely publicized crisis in Mexico is likely to
constrain that economy for at least the next year, most of the developing
Asian economies continue to make strong progress.
Political developments, as usual, are difficult to foresee. In the U.S., we
witnessed an historic event, as the Republican party regained control of the
Congress. The Republicans have stated that they will pursue an aggressive
agenda, which could have a significant impact on investors here and abroad,
and their progress will be closely monitored. Looking past the U.S. and
Mexico, the political environment remains fluid, as British Prime Minister
John Major is under increasing pressure, Italy has just installed its
fifty-fourth government since the end of World War II, and Russia and China
continue their difficult attempts at integration into the world economic and
political community.
Although this six-month period was hardly satisfactory for most investors, we
maintain the long-term approach that we have practiced for many years. While
short-term volatility can be disconcerting, declines of as much as
<TABLE>
<CAPTION>
- ------------------------------------------------------------
Templeton Capital Accumulator Fund
Top 10 Holdings on 2/28/95
As a Percentage of Total Net Assets
% of Total
Company, Industry, Country Net Assets
- ------------------------------------------------------------
<S> <C>
Goodyear Tire & Rubber Co.;
Industrial Components, United States 1.4%
- ------------------------------------------------------------
Stora Kopparbergs Bergslags, AB, O;
Forest Products & Paper, Sweden 1.2%
- ------------------------------------------------------------
American International Group, Inc.;
Insurance, United States 1.2%
- ------------------------------------------------------------
Australia & New Zealand Banking Group, Ltd.;
Banking, Australia 1.2%
- ------------------------------------------------------------
SKF, AB; Industrial Components, Sweden 1.2%
- ------------------------------------------------------------
ABN AMRO Holding NV; Banking, Netherlands 1.1%
- ------------------------------------------------------------
Banco Bilbao Vizcaya, SA; Banking, Spain 1.1%
- ------------------------------------------------------------
Iberdrola, SA; Utilities - Electric & Gas, Spain 1.1%
- ------------------------------------------------------------
Georgia-Pacific Corp.; Forest Products & Paper,
United States 1.1%
- ------------------------------------------------------------
Brambles Industries, Ltd.; Transportation,
Australia 1.1%
- ------------------------------------------------------------
</TABLE>
For a complete list of portfolio holdings, see page 7 of this report.
40% to 50% are not unusual in emerging markets. For example, the Hong Kong
market has increased 1000% in the last 15 years, but has suffered nine declines
of more than 20% during that time. As always, we remind our shareholders that,
in general, investments in foreign securities involve special risks, such as
market and currency volatility and adverse economic, social and political
developments in the countries where the Fund is invested. Developing markets are
represented in the Fund's portfolio, and involve heightened risks related to the
same factors, in addition to risks associated with the relatively
3
<PAGE>
small size and lesser liquidity of these markets. These special risks and
other considerations are discussed in the Fund's prospectus. Overall we
believe well-managed companies can find virtually unlimited opportunities in
the expanding global marketplace, and patient investors could view declines
in the stock market as opportunities to purchase undervalued shares for the
long term.
We remain committed to providing you with the best possible investment
management and shareholder services, and we thank you for your support.
Sincerely,
/s/ Gary P. Motyl, CFA
Gary P. Motyl, CFA
President
Templeton Capital Accumulator Fund, Inc.
4
<PAGE>
Performance Summary
The Templeton Capital Accumulator Fund reported a total return of -5.10% for the
six-month period ended February 28, 1995. Total return measures the change in
value of an investment, assuming reinvestment of dividends and capital gains
distributions, and includes no sales and creation charges. Of course, we have
always maintained a long-term perspective when managing the Fund, and we
encourage shareholders to view their investments in a similar manner. As you can
see from the chart to the right, the Fund has delivered a cumulative total
return of more than 63% since its inception on March 1, 1991.
During the reporting period, the Fund's share price, as measured by net asset
value, decreased from $16.21 on August 31, 1994 to $14.63 on February 28, 1995.
Shareholders received distributions of 19.5 cents ($0.195) in dividend income
and $0.575 per share in capital gains, of which 50.5 cents ($0.505) represented
long-term capital gains and 7 cents ($0.07) represented short-term capital
gains. Of course, past performance is not predictive of future results, and
distributions will vary depending on income earned by the Fund, as well as any
profits realized from the sale of securities in the portfolio.
- --------------------------------------------------------------------------------
Templeton Capital Accumulator fund
Periods Ended 2/28/95
<TABLE>
<CAPTION>
Since
Inception
One-Year Three-Year (3/1/91)
<S> <C> <C> <C>
Cumulative
Total Return* -2.14% 47.74% 63.93%
</TABLE>
* Cumulative total return represents the change in value of an investment over
the specified periods, assuming reinvestment of dividends and capital gains.
It does not include any sales and creation charges. Investment return and
principal value will fluctuate so that your shares, when redeemed, may be
worth more or less than their initial cost. Past performance is not predictive
of future results.
5
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Highlights
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE (For a share outstanding throughout the period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31
FEBRUARY 28, 1995 --------------------------------
(UNAUDITED) 1994 1993 1992 1991+
----------------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $ 16.21 $ 13.74 $ 10.95 $10.42 $10.00
------- ------- ------- ------ ------
Income from investment
operations:
Net investment income .08 .19 .20 .17 .15
Net realized and
unrealized gain (loss) (.89) 2.60 2.88 .55 .27
------- ------- ------- ------ ------
Total from investment
operations (.81) 2.79 3.08 .72 .42
------- ------- ------- ------ ------
Distributions:
Dividends from net
investment income (.20) (.14) (.20) (.19) --
Distributions from net
realized gains (.57) (.18) (.09) -- --
------- ------- ------- ------ ------
Total distributions (.77) (.32) (.29) (.19) --
------- ------- ------- ------ ------
Change in net asset value (1.58) 2.47 2.79 .53 .42
------- ------- ------- ------ ------
Net asset value, end of
period $ 14.63 $ 16.21 $ 13.74 $10.95 $10.42
======= ======= ======= ====== ======
TOTAL RETURN* (5.10)% 20.64% 29.11% 7.01% 4.20%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(000) $47,707 $38,323 $18,365 $8,690 $3,635
Ratio of expenses to
average net assets 1.40%** 1.58% 1.91% 1.84% 3.99%**
Ratio of expenses, net of
reimbursement, to
average net assets 1.00%** 1.00% 1.00% 1.00% 1.00%
Ratio of net investment
income to average net
assets 1.36%** 1.58% 1.99% 2.06% 3.80%**
Portfolio turnover rate 7.82% 15.25% 14.97% 16.42% --
</TABLE>
+ PERIOD FROM MARCH 1, 1991 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1991.
* NOT ANNUALIZED IN PERIODS OF LESS THAN ONE YEAR.
**ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- -----------------------------------------------------------------------------
COMMON STOCKS: 67.0%
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Appliances & Household Durables: 1.0%
Electrolux AB, B Swe. 4,250 $ 214,296
Sony Corp. Jpn. 6,000 260,937
-----------
475,233
- -----------------------------------------------------------------------------
Automobiles: 1.2%
Ciadea SA Arg. 20,000 109,994
Ford Motor Co. U.S. 17,500 457,187
-----------
567,181
- -----------------------------------------------------------------------------
Banking: 7.1%
ABN AMRO Holding NV Neth. 15,000 546,440
Australia & New Zealand
Banking Group Ltd. Aus. 160,000 562,328
Banco Bilbao Vizcaya Sp. 20,000 533,542
Banco Portugues de
Investimento SA Port. 18,240 305,005
Bank of Montreal Can. 10,000 194,661
Bankinter SA Sp. 2,500 204,968
Barclays Bank PLC U.K. 22,100 212,106
HSBC Holdings PLC H.K. 22,000 231,197
Korea Long Term Credit Bank Kor. 5,250 139,619
NationsBank Corp. U.S. 5,800 289,275
Philippine National Bank Phil. 16,170 179,317
-----------
3,398,458
- -----------------------------------------------------------------------------
Broadcasting & Publishing: 0.7%
News Corp. Ltd. Aus. 70,000 312,175
Sing Tao Holdings Ltd. H.K. 52,800 34,146
-----------
346,321
- -----------------------------------------------------------------------------
Building Materials & Components: 1.5%
*Owens Corning Fiberglas
Corp. U.S. 5,500 184,938
Pioneer International Ltd. Aus. 200,815 483,366
Tolmex Empresas Tolteca de
Mexico Mex. 20,000 63,598
-----------
731,902
- -----------------------------------------------------------------------------
Business & Public Services: 1.3%
Esselte AB, B Swe. 14,000 185,315
WMX Technologies Inc. U.S. 16,000 422,000
-----------
607,315
- -----------------------------------------------------------------------------
</TABLE>
7
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Chemicals: 1.7%
Bayer AG Ger. 420 $ 103,631
Great Lakes Chemical Corp. U.S. 7,400 444,925
Rhone-Poulenc SA, A Fr. 10,200 243,638
-----------
792,194
- ----------------------------------------------------------------------------
Construction & Housing: 0.7%
*National Gypsum Co. U.S. 6,500 320,125
- ----------------------------------------------------------------------------
Data Processing & Reproduction: 0.9%
*Newbridge Networks Corp. Can. 13,000 440,812
- ----------------------------------------------------------------------------
Electrical & Electronics: 3.4%
BBC Brown Boveri AG, br. Swtz. 552 481,770
Great Wall Electronic
International Ltd. H.K. 1,540,000 119,511
Hitachi Ltd. Jpn. 20,000 174,994
Matsushita Electric
Industrial Co. Ltd. Jpn. 10,000 144,965
Motorola Inc. U.S. 4,000 230,000
Philips Electronics NV Neth. 13,940 462,590
-----------
1,613,830
- ----------------------------------------------------------------------------
Electronic Components & Instruments: 0.7%
Intel Corp. U.S. 4,000 319,000
- ----------------------------------------------------------------------------
Energy Equipment & Services: 0.2%
*Parker Drilling Co. U.S. 25,000 121,875
- ----------------------------------------------------------------------------
Energy Sources: 6.9%
Amerada Hess Corp. U.S. 3,000 147,000
Norsk Hydro AS Nor. 5,000 189,847
Plains Petroleum Co. U.S. 20,000 450,000
Royal Dutch Petroleum Co. Neth. 800 89,700
Saga Petroleum SA, B Nor. 34,070 422,407
Societe Elf Aquitane SA Fr. 5,500 394,979
Tosco Corp. U.S. 12,000 346,500
Total SA, B Fr. 6,000 331,910
USX-Marathon Group Inc. U.S. 20,000 325,000
Valero Energy Corp. U.S. 11,650 208,244
YPF Sociedad Anonima, ADR Arg. 20,000 380,000
-----------
3,285,587
- ----------------------------------------------------------------------------
Financial Services: 0.4%
American Express Co. U.S. 6,050 204,188
- ----------------------------------------------------------------------------
</TABLE>
8
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ----------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Food & Household Products: 1.4%
Dairy Farm International
Holdings Ltd. H.K. 300,000 $ 360,861
Grupo Embotellador de
Mexico SA, B Mex. 15,000 49,456
Nestle SA Swtz. 170 164,489
Vitro SA Mex. 35,000 111,180
------------
685,986
- ----------------------------------------------------------------------------------
Forest Products & Paper: 6.8%
Boise Cascade Corp. U.S. 7,000 224,875
Enso Gutzeit (OY), R Fin. 50,000 388,263
Fletcher Challenge Ltd.,
N.Z. N.Z. 130,737 325,618
Fletcher Forestry, N.Z. N.Z. 32,684 41,427
Georgia-Pacific Corp. U.S. 7,000 524,125
Hansol Paper Co. Ltd.,
GDR Kor. 16,687 400,499
*Hansol Paper Co. Ltd.,
GDS, new Kor. 2,252 53,367
International Paper Co. U.S. 5,500 420,063
Stora Kopparbergs
Bergslags AB, B Swe. 9,000 580,919
Unipapel SA Sp. 12,000 305,105
------------
3,264,261
- ----------------------------------------------------------------------------------
Health & Personal Care: 3.0%
Astra AB, B Swe. 20,000 495,357
Ciba-Geigy AG Swtz. 800 507,618
Windmere Corp. U.S. 50,000 431,250
------------
1,434,225
- ----------------------------------------------------------------------------------
Industrial Components: 3.2%
BW/IP Inc. U.S. 18,000 288,000
Goodyear Tire & Rubber
Co. U.S. 18,400 678,500
SKF AB, B Swe. 30,000 554,718
------------
1,521,218
- ----------------------------------------------------------------------------------
Insurance: 5.2%
Aegon NV Neth. 7,000 483,438
American International
Group Inc. U.S. 5,500 570,625
CCP Insurance Inc. U.S. 10,000 212,500
International
Nederlanden Group Neth. 10,000 490,418
Kemper Corp. U.S. 6,000 241,500
Progressive Corp. Ohio U.S. 2,000 77,750
Swiss Reinsurance Co. Swtz. 100 60,049
Swiss Reinsurance Co.,
br. Swtz. 605 363,294
------------
2,499,574
- ----------------------------------------------------------------------------------
Leisure & Tourism: 0.0%
*Queens Moat Houses PLC U.K. 200,000 0
- ----------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- ---------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Machinery & Engineering: 1.1%
*Tampella AB (OY) Fin. 15,000 $ 36,275
*Tampella AB (OY), 144A Fin. 30,000 72,550
VA Technologie AG, br. Aust. 4,000 429,966
-----------
538,791
- ---------------------------------------------------------------------------------
Merchandising: 1.3%
Burton Group PLC U.K. 450,000 479,284
K Mart Corp. U.S. 10,000 127,500
-----------
606,784
- ---------------------------------------------------------------------------------
Metals & Mining: 2.0%
Comalco Ltd. Aus. 100,000 347,025
Pechiney SA, invt. ctf. Fr. 4,000 269,085
SIG (Schweizerische
Industrie Gesellschaft)
Holdings AG Swtz. 173 344,878
-----------
960,988
- ---------------------------------------------------------------------------------
Multi-Industry: 3.1%
Cheung Kong Holdings
Ltd. H.K. 65,000 283,321
Hutchison Whampoa Ltd. H.K. 101,500 430,602
Jardine Matheson
Holdings Ltd. H.K. 32,336 297,491
Swire Pacific Ltd., A H.K. 50,000 350,837
Swire Pacific Ltd., B H.K. 100,000 108,646
-----------
1,470,897
- ---------------------------------------------------------------------------------
Real Estate: 0.5%
*Catellus Development
Corp. U.S. 40,000 220,000
- ---------------------------------------------------------------------------------
Telecommunications: 3.2%
Alcatel Alsthom SA Fr. 1,461 117,655
Compania de Telefonos de
Chile SA, ADR Chil. 4,500 274,500
Philippine Long Distance
Telephone Co. Phil. 3,000 178,016
STET (Sta Finanziaria
Telefonica Torino) SPA Itl. 137,100 381,117
*Telecomunicacoes
Brasileiras SA, ADR Braz. 227 6,654
Telefonica de Argentina
SA, B, ADR Arg. 12,600 234,675
Telefonica de Espana SA Sp. 15,500 193,409
Telefonos de Mexico SA,
L, ADR Mex. 5,000 138,125
-----------
1,524,151
- ---------------------------------------------------------------------------------
Textiles & Apparel: 1.8%
*Fruit of the Loom Inc.,
A U.S. 19,000 444,125
PT Indorama Synthetics,
fgn. Indo. 150,000 394,203
-----------
838,328
- ---------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Investment Portfolio, February 28, 1995 (unaudited) (cont.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDUSTRY ISSUE COUNTRY SHARES VALUE
- --------------------------------------------------------------------------------------------
COMMON STOCKS (CONT.)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Transportation: 2.2%
American President Cos.
Ltd. U.S. 4,500 $ 102,375
Brambles Industries Ltd. Aus. 55,000 523,860
British Airways PLC U.K. 31,500 194,565
Cathay Pacific Airways
Ltd. H.K. 150,000 242,514
-------------------------
1,063,314
- --------------------------------------------------------------------------------------------
Utilities Electrical & Gas: 3.6%
Electricidad de Caracas Venz. 160,761 140,212
Empresa Nacional de
Electricidad SA (Endesa) Sp. 4,800 209,161
Evn Energie-Versorgung Aust. 2,000 241,200
Iberdrola SA Sp. 85,000 531,977
Nova Corp. of Alberta Can. 36,200 292,260
VEBA AG Ger. 800 289,911
-------------------------
1,704,721
- --------------------------------------------------------------------------------------------
Wholesale & International Trade: 0.9%
Brierley Investments
Ltd. N.Z. 450,000 325,114
Sime Darby Hongkong Ltd. H.K. 90,000 98,946
-------------------------
424,060
-------------------------
TOTAL COMMON STOCKS (cost $28,361,087) 31,981,319
- --------------------------------------------------------------------------------------------
PREFERRED STOCKS: 0.3%
ABN Amro Holdings NV,
conv., pfd. Neth. 333 11,764
News Corp. Ltd., conv.,
pfd. Aus. 35,000 139,031
-------------------------
TOTAL PREFERRED STOCKS (cost $124,643) 150,795
- --------------------------------------------------------------------------------------------
<CAPTION>
PRINCIPAL IN
LOCAL CURRENCY
- --------------------------------------------------------------------------------------------
SHORT TERM OBLIGATIONS: 32.3% (cost $15,392,405)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bills,
5.18% to 5.65% with
maturities to 4/27/95 U.S. $15,463,000 15,395,767
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS: 99.6% (cost $43,878,135) 47,527,881
OTHER ASSETS, LESS LIABILITIES: 0.4% 179,140
-------------------------
TOTAL NET ASSETS: 100.0% $ 47,707,021
=========================
</TABLE>
*NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1995 (unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities, at value (identified cost $43,878,135) $47,527,881
Cash 9,033
Receivables:
Investment securities sold 149,928
Capital shares sold 107,188
Dividends and interest 69,787
Other 28,700
-----------
Total assets 47,892,517
-----------
Liabilities:
Payables:
Investment securities purchased 38,589
Capital shares redeemed 26,262
Accrued expenses 120,645
-----------
Total liabilities 185,496
-----------
Net assets, at value $47,707,021
===========
Net assets consists of:
Undistributed net investment income $ 181,905
Net unrealized appreciation 3,649,746
Accumulated net realized gain 257,453
Net capital paid in on shares of capital stock 43,617,917
-----------
Net assets, at value $47,707,021
===========
Shares outstanding 3,260,118
===========
Net asset value per share ($47,707,021 / 3,260,118) $ 14.63
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
for the six months ended February 28, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment income:
(net of $20,043 foreign taxes withheld)
Dividends $ 256,461
Interest 241,853
----------
Total income $ 498,314
Expenses:
Management fees (Note 3) 160,860
Administrative fees (Note 3) 32,172
Custodian fees 23,602
Reports to shareholders 50,000
Audit fees 6,500
Legal fees 4,500
Registration and filing fees 10,000
Directors' fees and expenses 8,000
Other 288
----------
Total expenses 295,922
Less expenses reimbursed (Note 3) (84,976)
----------
Total expenses less reimbursement 210,946
-----------
Net investment income 287,368
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investments 808,747
Foreign currency transactions (14,712)
----------
794,035
----------
Net unrealized depreciation on investments (3,178,341)
----------
Net realized and unrealized loss (2,384,306)
-----------
Net decrease in net assets resulting from operations $(2,096,938)
===========
</TABLE>
12
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Financial Statements (cont.)
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28, 1995 YEAR ENDED
(UNAUDITED) AUGUST 31, 1994
----------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 287,368 $ 439,034
Net realized gain on investment and for-
eign currency transactions 794,035 1,079,019
Net unrealized appreciation (depreciation) (3,178,341) 3,568,551
----------- -----------
Net increase (decrease) in net assets re-
sulting from operations (2,096,938) 5,086,604
Distributions to shareholders:
From net investment income (511,127) (207,482)
From net realized gain (1,532,855) (269,390)
Capital share transactions (Note 2) 13,525,374 15,348,130
----------- -----------
Net increase in net assets 9,384,454 19,957,862
Net assets:
Beginning of period 38,322,567 18,364,705
----------- -----------
End of period $47,707,021 $38,322,567
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES
Templeton Capital Accumulator Fund, Inc. (the Fund) is an open-end, diversified
management investment company registered under the Investment Company Act of
1940. Shares of the Fund are offered to the general public only through Temple-
ton Capital Accumulation Plans. The following summarizes the Fund's significant
accounting policies.
A. Securities Valuations:
Securities listed or traded on a recognized national or foreign stock exchange
or NASDAQ are valued at the last reported sales prices on the principal ex-
change on which the securities are traded. Over-the-counter securities and
listed securities for which no sale is reported are valued at the mean between
the last current bid and asked prices. Securities for which market quotations
are not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Directors.
B. Foreign Currency Translations:
Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of portfolio securities and income items denominated in foreign curren-
cies are translated into U.S. dollar amounts on the respective dates of such
transactions. When the Fund purchases or sells foreign securities it customar-
ily enters into foreign exchange contracts to minimize foreign exchange risk
between the trade date and the settlement date of such transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of for-
eign currencies, currency gains or losses realized between the trade and set-
tlement dates on securities transactions, the differences 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 foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities, resulting
from changes in the exchange rates.
C. Income Taxes:
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no provision has been made for
income taxes.
D. Security Transactions, Investment Income, Distributions and Expenses:
Security transactions are accounted for on trade date. Dividend income is re-
corded on the ex-dividend date. Certain dividend income from foreign securities
is recorded as soon as information is available to the Fund. Interest income
and estimated expenses are accrued daily. Distributions to shareholders, which
are determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
14
<PAGE>
Templeton Capital Accumulator Fund, Inc.
Notes to Financial Statements (unaudited) (cont.)
- --------------------------------------------------------------------------------
2. TRANSACTIONS IN SHARES OF CAPITAL STOCK
At February 28, 1995, there were 100 million shares of capital stock authorized
($0.01 par value). Transactions in the Fund's shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1995 AUGUST 31, 1994
-------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 817,505 $12,350,505 1,072,392 $16,053,892
Shares issued on
reinvestment of
distributions 135,356 2,042,123 33,496 475,853
Shares redeemed (57,435) (867,254) (78,036) (1,181,615)
------- ----------- --------- -----------
Net increase 895,426 $13,525,374 1,027,852 $15,348,130
======= =========== ========= ===========
</TABLE>
3. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Certain officers of the Fund are also directors or officers of Templeton In-
vestment Counsel, Inc. (TICI) and Templeton Global Investors, Inc. (TGII), the
Fund's investment manager and administrative manager, respectively. The Fund
pays monthly an investment management fee to TICI, equal, on an annual basis,
to 0.75% of its average daily net assets of the Fund. The Fund pays to TGII
monthly a fee of 0.15% per annum on the first $200 million of the Fund's aver-
age daily net assets, 0.135% of the next $500 million, 0.10% of the next $500
million and 0.075% per annum of such average net assets in excess of $1.2 bil-
lion. TGII has voluntarily agreed to limit the total expenses of the fund to an
annual rate of 1.00% of the Fund's average net assets. The amount of the reim-
bursement for the six months ended February 28, 1995 is set forth in the State-
ment of Operations.
An officer of the Company is a partner of Dechert Price & Rhoads, legal counsel
for the Fund, which firm received fees of $4,500 for the six months ended Feb-
ruary 28, 1995.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (excluding short-term securities) for the six
months ended February 28, 1995 aggregated $3,370,436 and $2,556,167, respec-
tively. The cost of securities for federal income tax purposes is the same as
that shown in the investment portfolio. Realized gains and losses are reported
on an identified cost basis.
At February 28, 1995, the aggregate gross unrealized appreciation and deprecia-
tion of portfolio securities, based on cost for federal income tax purposes,
was as follows:
<TABLE>
<S> <C>
Unrealized appreciation $ 5,506,747
Unrealized depreciation (1,857,001)
-----------
Net unrealized appreciation $ 3,649,746
===========
</TABLE>
15
<PAGE>
- --------------------------
TEMPLETON CAPITAL
ACCUMULATOR FUND,
INC.
PRINCIPAL UNDERWRITER:
Franklin Templeton
Distributors, Inc.
700 Central Avenue
St. Petersburg,
Florida 33701-3628
Account Services
1-800-354-9191
Sales Information
1-800-292-9293
This report must be
preceded or accompanied
by the prospectus of
Templeton Capital
Accumulator Fund, Inc.
Like any investment in
securities, the value
of the Fund's portfolio
will be subject to the
risk of loss from
market, currency,
economic, political and
other factors, as well
as investment decisions
by the investment
manager which will not
always be profitable or
wise. The Fund and its
investors are not
protected from such
losses by the
investment manager.
Therefore, investors
who cannot accept this
risk should not invest
in shares of the Fund.
To ensure the highest
quality of service,
telephone calls to or
from our service
departments may be
monitored, recorded and
accessed. These calls
can be determined by
the presence of a
regular beeping tone.
- --------------------------
TLCAP S95 04/95
[LOGO OF RECYCLED PAPER APPEARS HERE]
TEMPLETON
CAPITAL
ACCUMULATOR
FUND, INC.
Semi-Annual Report
February 28, 1995
[LOGO OF FRANKLIN TEMPLETON APPEARS HERE]
