N-CSR 1 primary-document.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-CSR
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
 
Investment Company Act file number 811-00537
 
Franklin Custodian Funds
(Exact name of registrant as specified in charter)
 
_One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
 
Alison Baur, One Franklin Parkway, San Mateo, CA 94403-1906

(Name and address of agent for service)
 
Registrant's telephone number, including area code: 650 312-2000
 
Date of fiscal year end: 9/30
 
Date of reporting period: 9/30/22
 
Item 1.  Reports to Stockholders.
 
a.)
 
The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)


b.)
 
Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not Applicable
.
 
ANNUAL
REPORT
AND
SHAREHOLDER
LETTER
Franklin
Custodian
Funds
September
30,
2022
Sign
up
for
electronic
delivery
at
franklintempleton.com/edelivery
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Not
FDIC
Insured
May
Lose
Value
No
Bank
Guarantee
franklintempleton.com
Annual
Report
1
Shareholder
Letter
Dear
Shareholder:
U.S.
economic
performance
was
mixed
during
the
12
months
ended
September
30,
2022.
Gross
domestic
product
grew
in
2021’s
last
quarter
amid
an
ongoing
pandemic
recovery,
but
it
contracted
in
2022’s
first
half
due
to
declines
in
inventory
investment
and
federal
government
spending.
Consumer
spending
slowly
expanded,
helped
by
the
reopening
of
businesses,
widespread
vaccinations,
and
federal
assistance
programs.
Inflation
increased
during
the
12-month
period,
influenced
by
pandemic-related
supply-
chain
issues,
higher
energy
prices,
Russia’s
invasion
of
Ukraine
and
broader
price
pressures.
To
combat
high
inflation,
the
U.S.
Federal
Reserve
began
decreasing
its
monthly
asset
purchases
in
November
2021
and
ended
them
in
March
2022.
The
Federal
Reserve
also
raised
the
federal
funds
rate
by
0.25%
in
March,
0.50%
in
May,
and
0.75%
in
each
of
June,
July
and
September,
for
a
total
of
3.00%,
increasing
the
rate
from
0.25%
to
3.25%
during
the
period.
Additionally,
the
Federal
Reserve
stated
its
intention
to
continue
reducing
its
U.S.
Treasury,
government
agency
debt
and
agency
mortgage-backed
securities
holdings,
and
anticipated
future
federal
funds
rate
increases
would
be
appropriate.
The
10-year
U.S.
Treasury
yield
was
1.52%
on
September
30,
2021,
and
it
increased
to
3.83%
by
the
end
of
September
2022.
In
this
environment,
the
prices
of
U.S.
stocks,
as
measured
by
the
Standard
&
Poor’s
®
500
Index
(S&P
500
®
),
declined
16.76%,
(the
index
decreasing
from
4,307.54
to
3,585.62).
1,2
Reflecting
the
rise
in
interest
rates,
investment-
grade
bonds,
as
measured
by
the
Bloomberg
U.S.
Aggregate
Bond
Index
(Bloomberg
Index),
posted
a
-14.60%
total
return
(an
index
decrease
from
2,354.86
to
2,011.06),
which
includes
reinvestment
of
interest
income.
3
We
are
committed
to
our
long-term
perspective
and
disciplined
investment
approach
as
we
conduct
a
rigorous,
fundamental
analysis
of
securities
with
a
regular
emphasis
on
investment
risk
management.
We
believe
active,
professional
investment
management
serves
investors
well.
We
also
recognize
the
important
role
of
financial
professionals
in
today’s
markets
and
encourage
investors
to
continue
to
seek
their
advice.
Amid
changing
markets
and
economic
conditions,
we
are
confident
investors
with
a
well-diversified
portfolio
and
a
patient,
long-term
outlook
should
be
well
positioned
for
the
years
ahead.
Franklin
Custodian
Funds’
annual
report,
covering
Franklin
DynaTech
Fund,
Franklin
Focused
Growth
Fund,
Franklin
Growth
Fund,
Franklin
Income
Fund,
Franklin
U.S.
Government
Securities
Fund
and
Franklin
Utilities
Fund,
includes
more
detail
about
investment
decisions
during
the
period.
All
securities
markets
fluctuate
in
value,
as
do
mutual
fund
share
prices.
We
thank
you
for
investing
with
Franklin,
welcome
your
questions
and
comments,
and
look
forward
to
serving
your
future
investment
needs.
Sincerely,
Rupert
H.
Johnson,
Jr.
Chairman
Franklin
Custodian
Funds
This
letter
reflects
our
analysis
and
opinions
as
of
September
30,
2022,
unless
otherwise
indicated.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Copyright
©
2022,
S&P
Dow
Jones
Indices
LLC.
All
rights
reserved.
2.
Source:
Morningstar.
The
changes
in
index
prices
shown
for
the
S&P
500
do
not
include
reinvestments
of
income
and
distributions,
which
are
included
in
its
total
return,
which
was:
S&P
500
-15.47%
(index
total
return
resulting
in
a
decrease
from
8,994.83
to
7,603.14).
3.
Sources:
Morningstar
and
Bloomberg
indexes.
For
the
Bloomberg
Index,
only
total
return
as
shown
is
available,
not
price
change
without
the
inclusion
of
reinvested
income
and
distributions.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
franklintempleton.com
Annual
Report
2
Contents
Annual
Report
Economic
and
Market
Overview
3
Franklin
DynaTech
Fund
4
Franklin
Focused
Growth
Fund
12
Franklin
Growth
Fund
20
Franklin
Income
Fund
26
Franklin
U.S.
Government
Securities
Fund
34
Franklin
Utilities
Fund
40
Financial
Highlights
and
Schedules
of
Investments
47
Financial
Statements
118
Notes
to
Financial
Statements
128
Report
of
Independent
Registered
Public
Accounting
Firm
156
Tax
Information
157
Board
Members
and
Officers
158
Shareholder
Information
163
Visit
franklintempleton.com
for
fund
updates,
to
access
your
account,
or
to
find
helpful
financial
planning
tools.
3
franklintempleton.com
Annual
Report
ANNUAL
REPORT
Economic
and
Market
Overview
U.S.
equities,
as
measured
by
the
Standard
&
Poor’s
®
500
Index,
posted
a
-15.47%
total
return
for
the
12
months
ended
September
30,
2022.
1
High
inflation,
rising
interest
rates
and
geopolitical
instability
contributed
to
a
sharp
decline
in
equity
prices.
Although
consumer
spending
continued
to
rise,
deteriorating
financial
conditions
negatively
impacted
consumer
sentiment,
which
improved
slightly
at
the
end
of
the
period
after
falling
in
June
2022
to
the
lowest
level
in
over
60
years.
Elevated
inflation
was
a
major
concern
for
both
consumers
and
investors,
as
inflation
accelerated
in
June
2022
to
the
highest
rate
since
1981.
Continued
supply-chain
disruptions,
strong
consumer
demand,
and
volatile
energy
prices
drove
inflation
higher.
Russia’s
invasion
of
Ukraine
also
disrupted
financial
markets
and
led
to
a
rise
in
oil
and
commodity
prices,
although
much
of
that
increase
abated
by
period-
end.
The
U.S.
unemployment
rate
declined
from
4.7%
in
September
2021
to
3.5%
in
September
2022
as
notable
employment
gains
occurred
in
the
leisure
and
hospitality
and
health
care
sectors.
Wages
climbed
at
the
fastest
rate
in
decades,
which
added
to
some
investors’
inflation
concerns.
Following
a
robust
expansion
in
2021,
U.S.
gross
domestic
product
contracted
in
the
first
half
of
2022,
despite
continued
job
growth.
An
inventory
drawdown,
declining
residential
and
business
investment
and
lower
levels
of
government
spending
contributed
to
the
economic
slowdown.
Rising
interest
rates
translated
to
higher
borrowing
costs
for
individuals
and
businesses,
which
dampened
economic
activity.
Mortgage
rates
reached
the
highest
level
since
2007,
and
new
home
construction
slowed
toward
period-end.
In
an
effort
to
control
inflation,
the
U.S.
Federal
Reserve
(Fed)
began
to
raise
the
federal
funds
target
rate
in
March
2022,
the
first
such
increase
since
2018.
The
Fed
raised
the
federal
funds
rate
again
at
each
of
its
four
subsequent
meetings
to
end
the
period
at
a
range
of
3.00%–3.25%.
The
Fed
noted
in
its
September
2022
meeting
that
inflation
remained
elevated
amid
robust
job
growth
and
low
unemployment.
Furthermore,
the
Fed
said
it
would
continue
to
reduce
its
bond
holdings,
and
Fed
Chair
Jerome
Powell
indicated
that
reducing
inflation
was
likely
to
require
a
period
of
below-trend
growth.
The
foregoing
information
reflects
our
analysis
and
opinions
as
of
September
30,
2022.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
fund.
Statements
of
fact
are
from
sources
considered
reliable.
1.
Source:
Morningstar.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
4
franklintempleton.com
Annual
Report
Franklin
DynaTech
Fund
This
annual
report
for
Franklin
DynaTech
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation
by
investing
primarily
in
equity
securities
of
companies
that
emphasize
innovation
and
new
technologies,
have
superior
management
and
that
benefit
from
new
industry
conditions
in
the
dynamically
changing
global
economy.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-40.15%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
1000
®
Growth
Index,
which
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
1000
®
Index
companies
with
relatively
higher
price-
to-book
ratios
and
higher
forecasted
growth
rates,
posted
a
cumulative
total
return
of
-22.59%.
1
Also
for
comparison,
the
broad
U.S.
stock
market,
as
measured
by
the
Standard
&
Poor’s
500
Index
(S&P
500),
posted
a
-15.47%
cumulative
total
return.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
8
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Investment
Strategy
We
use
fundamental,
bottom-up
research
to
seek
companies
meeting
our
criteria
of
growth
potential,
quality
and
valuation.
In
seeking
sustainable
growth
characteristics,
we
look
for
companies
we
believe
can
produce
sustainable
earnings
and
cash
flow
growth,
evaluating
the
long-term
market
opportunity
and
competitive
structure
of
an
industry
to
target
leaders
and
emerging
leaders.
We
define
quality
companies
as
those
with
strong
and
improving
competitive
positions
in
attractive
markets.
We
also
believe
important
attributes
of
quality
are
experienced
and
talented
management
teams
as
well
as
financial
strength
reflected
in
the
capital
structure,
gross
and
operating
margins,
free
cash
flow
generation
and
returns
on
capital
employed.
Our
valuation
analysis
includes
a
range
of
potential
outcomes
based
on
an
assessment
of
multiple
scenarios.
In
assessing
value,
we
consider
whether
security
prices
fully
reflect
the
balance
of
the
sustainable
growth
opportunities
relative
to
business
and
financial
risks.
Manager’s
Discussion
During
the
period
under
review,
the
Fund’s
prolonged
stretch
of
gains
reversed
into
significant
and
widespread
losses,
with
most
of
the
selling
occurring
from
November
2021
through
September
2022
(while
October
2021,
and
both
March
and
July
2022
were
the
Fund’s
only
positive
months).
In
general,
many
investors
expressed
their
valuation
concerns
by
divesting
innovative
and
high-tech
companies
that
held
the
potential
to
disrupt
lots
of
businesses
in
the
future
but
offered
little
or
no
earnings
in
the
present.
The
Fund
was
broadly
undermined
by
an
investment
style
rotation
in
the
equity
market
as
U.S.
and
global
growth
stocks,
whose
valuations
were
negatively
impacted
by
sharply
rising
interest
rates,
declined
substantially
more
than
their
value-oriented
counterparts
across
all
market
capitalizations.
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Software
28.4%
Semiconductors
&
Semiconductor
Equipment
11.5%
Life
Sciences
Tools
&
Services
8.5%
IT
Services
7.9%
Internet
&
Direct
Marketing
Retail
7.8%
Health
Care
Equipment
&
Supplies
6.6%
Interactive
Media
&
Services
5.3%
Automobiles
4.2%
Capital
Markets
2.2%
Technology
Hardware,
Storage
&
Peripherals
1.9%
Pharmaceuticals
1.9%
Electric
Utilities
1.7%
Health
Care
Providers
&
Services
1.7%
Chemicals
1.6%
Other
7.7%
Short-Term
Investments
&
Other
Net
Assets
1.1%
1.
Source:
Morningstar.
Frank
Russell
Company
is
the
source
and
owner
of
the
trademarks,
service
marks
and
copyrights
related
to
the
Russell
Indexes.
Russell
®
is
a
trademark
of
Frank
Russell
Company.
The
indexes
are
unmanaged
and
include
reinvestment
of
any
income
or
distributions.
They
do
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
52
.
Franklin
DynaTech
Fund
5
franklintempleton.com
Annual
Report
Various
challenges
tested
innovative
companies
in
a
deteriorating
macroeconomic
environment.
A
combination
of
rising
interest
rates,
elevated
inflation
and
recession
fears
contributed
to
increased
equity
market
uncertainty
and
downside
volatility.
We
think
meaningful
resolution
of
this
uncertainty
has
been
deferred
beyond
September
of
2022.
However,
we
also
saw
increasing
clarity
around
which
companies
will
structurally
grow
faster
post-
pandemic.
In
particular,
the
information
technology
(IT)
and
communication
services
sectors
and
e-commerce
companies
in
the
consumer
discretionary
sector
have
sold
off
dramatically.
Immature
growth-focused
businesses,
whose
heavy
investing
led
to
negative
free
cash
flow,
have
seen
their
equity
valuation
multiples
compress
with
the
sharp
climb
in
the
cost
of
capital,
as
inflation
fears
caused
nominal
rates
to
rise.
In
our
view,
a
higher
cost
of
capital
can
serve
as
a
positive
longer-term
catalyst
because
it
encourages
companies
to
develop
resilience
and
restraint
from
not
being
overfunded.
We
believe
it
can
also
contribute
to
dwindling
competition
and
potentially
more
profitability
over
time
as
it
forces
rationality
into
the
marketplace.
We
view
this
as
a
healthy
part
of
the
economic
cycle.
History
has
shown
us
that
exogenous
shocks
can
accelerate
change
beyond
the
natural
organic
adoption
rate.
Two
such
exogenous
shocks
such
as
COVID-19
and
the
Russia-
Ukraine
war
appear
to
be
providing
catalysts
to
drive
the
adoption
of
new
technologies,
in
our
view.
We
saw
an
opportunity
for
the
war
to
accelerate
pre-existing
innovation
trends
in
agriculture,
renewable
energy,
cybersecurity
and
supply-chain
logistics,
to
name
a
few.
For
example,
within
agriculture
this
included
innovations
to
increase
crop
yields
which
included
gene-edited
seeds
that
are
herbicide
resistant
and
synthetic
biology-derived
crop
protection
products.
We
believe
technologies
and
advancements
accelerated
by
exogenous
shocks
often
become
permanent
and
pervasive
in
society,
thereby
displacing
legacy
processes
or
technologies.
The
pandemic
accelerated
many
of
the
trends
we
highlighted
in
2019
and
earlier,
and
we
expect
the
following
to
endure
beyond
2022
including
cashless
payments,
workplace
collaboration,
e-commerce
in
non-
traditional
areas
such
as
automobiles
and
health
care,
genetic
medicine,
bioprocessing,
and
digital
transformation/
cloud
infrastructure
adoption.
As
it
pertains
to
portfolio
performance,
all
11
of
the
Fund’s
sector
allocations
were
net
detractors
from
performance
in
absolute
terms
amid
the
market
environment
outlined
above,
with
most
of
the
overall
losses
occurring
in
the
IT,
health
care,
communication
services
and
consumer
discretionary
sectors;
when
combined,
these
holdings
comprised
a
predominant
portion
of
the
Fund’s
total
net
assets.
For
most
of
the
annual
period,
the
Fund’s
substantial
absolute
declines
in
the
IT
sector
(averaging
around
half
of
total
net
assets)
were
related
to
stock
multiples
compressing
with
higher
interest
rates.
However,
by
the
latter
half
of
the
period,
we
began
to
see
fundamental
weakness
in
consumer-oriented
hardware
such
as
personal
computers
(PCs),
electronics,
and
smartphones,
which
had
a
disproportionate
impact
on
NVIDIA,
ASML
Holding
and
most
of
our
other
holdings
in
the
semiconductor
industry.
In
particular,
graphics
chip
company
NVIDIA,
our
largest
position
in
the
semiconductors
and
semiconductor
equipment
industry,
lowered
its
forward
guidance
on
an
unexpected
decline
in
demand
for
graphics
chips
targeted
at
video
game
consoles
but
also
used
for
cryptocurrency
mining.
NVIDIA
joined
a
host
of
other
companies
that
curbed
their
prior
guidance
or
offered
an
outlook
for
the
remainder
of
2022
that
was
below
Wall
Street
estimates,
pointing
to
soft
sales
in
PCs,
smartphones
and
other
devices,
with
reduced
demand
in
some
cases
spreading
to
cloud
data
center,
automotive
and
industrial
customers.
We
continue
to
hold
NVIDIA
shares
for
an
expected
rebound
over
the
longer
term.
Once
mostly
a
graphics
chip
company,
NVIDIA
now
participates
in
nearly
every
disruptive
tech
trend
such
as
cloud
computing,
cryptocurrency
mining,
artificial
intelligence,
autonomous
cars,
and
even
the
metaverse,
which
has
recently
helped
its
revenues
to
grow
solidly.
E-commerce
companies
Amazon.com
and
MercadoLibre
were
a
primary
point
of
weakness
in
the
consumer
discretionary
sector.
IT
services
and
software
companies
Top
10
Holdings
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Amazon.com,
Inc.
6.8%
Internet
&
Direct
Marketing
Retail,
United
States
Microsoft
Corp.
5.8%
Software,
United
States
Alphabet,
Inc.
4.6%
Interactive
Media
&
Services,
United
States
Tesla,
Inc.
4.2%
Automobiles,
United
States
Danaher
Corp.
3.1%
Life
Sciences
Tools
&
Services,
United
States
Thermo
Fisher
Scientific,
Inc.
3.0%
Life
Sciences
Tools
&
Services,
United
States
NVIDIA
Corp.
2.9%
Semiconductors
&
Semiconductor
Equipment,
United
States
Mastercard,
Inc.
2.9%
IT
Services,
United
States
ServiceNow,
Inc.
2.6%
Software,
United
States
Intuit,
Inc.
2.4%
Software,
United
States
Franklin
DynaTech
Fund
6
franklintempleton.com
Annual
Report
involved
in
advertising,
marketing,
customer
relations
and
payments
processing,
which
also
have
strong
ties
to
e-commerce
sales
and
business
activity,
generally
sold
off
as
the
robust
levels
of
consumer
spending
seen
in
2020
and
2021
were
perceived
as
decelerating
against
a
backdrop
of
negative
real
wage
growth,
including
key
detractors
Shopify,
Adyen,
Mastercard,
HubSpot
and
Salesforce,
all
of
which
began
to
see
more
difficult
year-over-year
comparisons
in
their
quarterly
financial
reports
over
the
period.
The
Fund’s
smaller
portion
of
communication
services
holdings,
which
also
had
been
greatly
reduced
during
the
12-month
period
under
review,
were
major
net
detractors
that
collectively
shed
more
than
half
of
their
equity
value.
The
declines
were
most
severe
in
the
entertainment
industry
where
Sea,
a
Singapore-based
consumer
internet
company
was
the
largest
detractor,
having
lost
considerable
share
value
following
a
stellar
rise
in
previous
reporting
periods
(not
held
at
period-end).
Sea
is
a
Southeast
Asian
internet
and
mobile
platform
company
that
has
been
investing
heavily
to
grow
its
business
in
three
high-growth
industries,
which
include
e-commerce
(Shopee),
digital
payments
and
financial
services
(SeaMoney),
and
video
game
development
and
publishing
(Garena).
Revenue
and
gross
profit
began
to
miss
consensus
expectations
and
management
began
lowering
its
full-year
guidance
for
2022.
Garena
continued
to
be
the
most
profitable
segment,
which
allows
Sea
to
invest
in
its
other
businesses,
but
its
growth
has
decelerated
on
normalization
of
hours
spent
playing
video
games
post-Covid.
At
the
same
time,
Shopee’s
operational
loss
more
than
doubled
on
a
year-ago
basis
despite
a
strong
competitive
position
in
Southeast
Asia,
but
likely
associated
with
aggressive
expansions
into
Latin
America
and
Europe
along
with
parent-company
research
and
development
costs,
both
of
which
Sea
is
now
tempering.
Elsewhere
in
the
communication
services
sector,
technology
and
social
media
giants
Alphabet
(Google’s
parent
company)
and
Meta
Platforms
(formerly
Facebook,
not
held
at
period-end)
were
significant
Fund
holdings
that
saw
steep
declines
from
all-time
highs
during
the
year
under
review.
These
companies
began
to
post
revenues
that
came
up
shy
of
consensus
estimates
as
a
stalling
economy
hurt
advertising-based
companies.
Additionally,
some
investors
grew
concerned
that
Meta
Platforms
would
find
it
difficult
to
navigate
Apple’s
(also
a
Fund
holding)
new
privacy
restrictions,
which
had
negatively
impacted
its
ability
to
target
its
customers’
ads.
Meta
Platforms
and
Alphabet
were
also
contending
with
heightened
scrutiny
from
regulators
after
numerous
reports
of
the
companies’
failing
to
properly
address
misinformation,
hate
speech,
and
other
troubling
behavior
on
their
sites.
In
general,
companies
that
advertise
to
make
money,
like
Alphabet,
were
pointing
out
economic
turbulence
on
the
horizon
and
bracing
for
a
more
challenging
operating
environment.
Alphabet
makes
most
of
its
money
by
selling
ads
on
its
two
most
popular
internet
platforms,
Google
Search
and
YouTube,
with
projections
into
2023
suggesting
business
spending,
and
therefore
discretionary
ad
budgets,
might
shrink
when
the
economy
is
doing
poorly.
We
saw
this
play
out
in
Alphabet’s
revenue
growth
over
the
past
year,
which
has
dramatically
decelerated,
going
from
40%
growth
year-over-year
to
12%
growth
in
the
four
quarters
through
June
2022.
At
period-end,
Alphabet
was
trading
at
its
lowest
price-to-earnings
(P/E)
ratio
in
a
decade,
while
its
two
largest
platforms
(Google
and
YouTube)
remained
top-notch
internet
traffic
magnets,
suggesting
the
company’s
ad
revenue
will
recover
once
the
economy
improves
because
its
websites
remain
the
dominant
internet
destinations
where
brands
prioritize
their
ad
budgets.
Conversely,
the
declines
described
above
were
partially
offset
by
minimal
contributions
from
individual
holdings
that
bucked
the
overall
downtrend.
It
was
a
relatively
short
list
with
a
combined
positive
impact
that
was
negligible
given
the
magnitude
of
the
detractors.
Some
of
them
advanced
on
better-than-expected
earnings
and
company-specific
successes
during
a
time
when
most
of
their
competitors
were
suffering.
In
some
cases,
the
overall
contribution
was
due
in
part
to
our
decisions
to
opportunistically
divest
select
holdings,
decisions
that
often
allowed
us
to
avoid
the
one-
year
losses
that
would
have
resulted
if
we
had
held
them
for
the
full
annual
period.
Among
the
notable
contributors
that
were
held
for
the
entire
period
and
rose
against
the
market’s
downdraft,
we
saw
solid
results
in
managed
healthcare
and
insurance
provider
UnitedHealth
Group,
within
health
care
providers
and
services,
Enphase
Energy,
a
manufacturer
of
energy
solutions
which
specializes
in
micro
inverter
systems
for
the
residential
solar
photovoltaic
industry,
within
semiconductors
and
semiconductor
equipment,
Cadence
Design
Systems,
an
electronic
design
automation
and
computational
software
developer,
within
software
and
Argenx,
a
Netherlands-based
developer
of
therapies
for
the
treatment
of
autoimmune
diseases,
within
biotechnology.
Key
contributor
Enphase
Energy,
stood
in
stark
contrast
to
its
peers
in
the
semiconductor
industry,
as
nearly
all
other
related
portfolio
holdings
posted
double-digit
percentage
declines.
Enphase
Energy
reported
a
strong
showing
as
demand
for
renewable
energy
sources
rose
in
its
primary
market,
North
America,
and
secondary
market,
Europe.
Solar-related
stocks
initially
came
under
pressure
in
an
environment
of
rising
interest
rates
(since
most
residential
solar
equipment
is
financed),
supply
chain
disruptions
and
high
inflation.
Sentiment
toward
solar
stocks
shifted
Franklin
DynaTech
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7
franklintempleton.com
Annual
Report
in
June
2022,
however,
after
news
broke
that
the
Biden
administration
was
preparing
executive
actions
intended
to
eliminate
U.S.
supply
chain
bottlenecks
for
solar
panel
imports.
The
administration
will
use
the
Defense
Production
Act
(DPA)
to
set
an
estimated
goal
of
22.5
gigawatts
of
domestic
manufacturing
capacity
by
2024,
a
tripling
of
the
current
target;
interestingly,
the
DPA
will
be
used
as
a
lever
to
stop
any
new
solar
tariffs
from
being
implemented
until
after
this
capacity
is
in
place,
effectively
creating
a
two-year
safe
harbor
for
Chinese
solar
panel
imports.
Elsewhere
in
the
IT
sector,
within
software,
investors
bid
up
Cadence
Design
Systems
as
it
continued
to
benefit
from
strong
microchip
design
activity,
market-share
gains,
a
durable
and
highly
visible
recurring
revenue
stream,
and
strong
incremental
earnings
before
interest,
taxes,
depreciation,
and
amortization
margins.
All
product
groups
appear
strong,
but
we
believe
Cadence
Design
Systems
verification
hardware
business
and
focus
on
developing
higher-return
intellectual
property
are
the
largest
drivers
of
upside
relative
to
management’s
expectations.
We
continue
to
see
Cadence
Design
Systems
as
a
high-quality
company
with
room
for
further
growth
acceleration.
The
company
has
a
go-to-market
plan
of
selling
multiple
software
licenses
to
be
run
in
parallel
by
one
engineer,
allowing
companies
to
meet
accelerated
timelines
for
chip
and
system
design
cycles.
In
addition,
Cadence
Design
Systems
has
made
tuck-in
acquisitions
entering
the
non-semiconductor
simulation
markets,
which
we
believe
will
experience
secular
growth
as
simulation
replaces
physical
prototypes.
In
the
health
care
sector,
within
biotechnology,
we
think
mid-capitalization
biotechnology
company
Argenx
is
a
high-
quality,
commercial-stage
company
with
a
best-in-class
antibody
discovery
platform,
a
top
management
team
and
a
best-in-class
drug
(Vyvgart)
with
potential
applicability
across
four
severe
autoimmune
diseases.
The
company
is
now
in
the
commercial
stage
with
sales
ramping
up
better-
than-expected
and
positive
developments
on
several
fronts,
in
our
view,
including
the
addition
of
new
high-value
pipeline
programs.
These
contributors
were
joined
by
a
robust
rally
within
software
by
Aspen
Technology.
Vertical
software
provider
Aspen
makes
software
primarily
used
to
engineer
and
manage
performance
of
energy
assets,
though
it
has
smaller
exposures
to
many
other
industries
including
mining.
Among
other
boosts
to
its
bottom
line,
Aspen’s
business
has
expanded
with
the
development
of
large
liquefied
natural
gas
(LNG)
terminals
in
the
U.S.,
and
investors
were
attracted
to
projections
for
brisk
(though
decelerating)
growth
through
midyear
2023.
We
view
innovation
as
spastic
and
non-linear,
sometimes
accelerating
rapidly
and
sometimes
appearing
to
take
a
step
backward.
Subsequently,
innovation-driven
stocks
may
also
experience
periods
of
outperformance
and
periods
of
drawdowns.
However,
fundamental
strength
will
usually
translate
to
stock
performance
over
time.
We
believe
that
the
fundamentals
of
our
portfolio
are
still
strong,
with
forecasted
growth
well
above
expected
gross
domestic
product
(GDP)
growth
and
the
vast
majority
of
the
portfolio
profitable
on
cash
flow
from
operations.
Thank
you
for
your
continued
participation
in
Franklin
DynaTech
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Matthew
J.
Moberg,
CPA
Rupert
H.
Johnson,
Jr.
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
September
30,
2022
Franklin
DynaTech
Fund
8
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
1-Year
-40.15%
-43.44%
5-Year
+56.96%
+8.20%
10-Year
+233.33%
+12.16%
Advisor
1-Year
-39.99%
-39.99%
5-Year
+58.95%
+9.71%
10-Year
+241.72%
+13.08%
See
page
10
for
Performance
Summary
footnotes.
Franklin
DynaTech
Fund
Performance
Summary
9
franklintempleton.com
Annual
Report
See
page
10
for
Performance
Summary
footnotes
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
indexes
include
reinvestment
of
any
income
or
distributions.
They
differ
from
the
Fund
in
composition
and
do
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(9/30/12–9/30/22)
Advisor
Class
(9/30/12–9/30/22)
Franklin
DynaTech
Fund
Performance
Summary
10
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
Stocks
historically
have
outperformed
other
asset
classes
over
the
long
term,
but
tend
to
fluctuate
more
dramatically
over
the
short
term.
Investments
in
fast-growing
industries,
like
the
technology
and
health
care
sectors
(which
have
historically
been
volatile)
could
result
in
increased
price
fluctuation,
especially
over
the
short
term,
due
to
the
rapid
pace
of
product
change
and
development
and
changes
in
government
regulation
of
companies
emphasizing
scientific
or
technological
advancement
or
regulatory
approval
for
new
drugs
and
medical
instruments.
The
Fund
may
also
invest
in
small-
and
mid-capitalization
companies,
which
can
be
particularly
sensitive
to
changing
economic
conditions,
and
their
prospects
for
growth
are
less
certain
than
those
of
larger,
more
established
companies.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
total
annual
operating
expenses
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
Morningstar.
The
Russell
1000
Growth
Index
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
1000
Index
companies
with
relatively
higher
price-to-book
ratios
and
higher
forecasted
growth
rate.
The
S&P
500
is
a
market
capitalization-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(10/1/21–9/30/22)
Share
Class
Long-Term
Capital
Gain
A
$2.2173
C
$2.2173
R
$2.2173
R6
$2.2173
Advisor
$2.2173
Total
Annual
Operating
Expenses
6
Share
Class
A
0.79%
Advisor
0.54%
Your
Fund’s
Expenses
Franklin
DynaTech
Fund
11
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$719.40
$3.80
$1,020.65
$4.47
0.88%
C
$1,000
$716.60
$7.02
$1,016.89
$8.25
1.63%
R
$1,000
$718.50
$4.88
$1,019.39
$5.73
1.13%
R6
$1,000
$720.90
$1.99
$1,022.76
$2.33
0.46%
Advisor
$1,000
$720.30
$2.72
$1,021.91
$3.20
0.63%
12
franklintempleton.com
Annual
Report
Franklin
Focused
Growth
Fund
This
annual
report
for
Franklin
Focused
Growth
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation
by
investing
in
an
equity
securities
portfolio
of
approximately
20–50
companies
that
we
believe
offers
a
compelling
trade-off
between
growth
opportunity,
business
and
financial
risk
and
valuation.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-38.61%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Russell
1000
®
Growth
Index,
which
is
market
capitalization
weighted
and
measures
performance
of
those
Russell
1000
®
Index
companies
with
relatively
higher
price-
to-book
ratios
and
higher
forecasted
growth
rates,
posted
a
cumulative
total
return
of
-22.59%.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
16
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Investment
Strategy
We
use
fundamental,
bottom-up
research
to
seek
companies
meeting
our
criteria
of
growth
potential,
quality
and
valuation.
In
seeking
sustainable
growth
characteristics,
we
look
for
companies
we
believe
can
produce
sustainable
earnings
and
cash
flow
growth,
evaluating
the
long-term
market
opportunity
and
competitive
structure
of
an
industry
to
target
leaders
and
emerging
leaders.
We
define
quality
companies
as
those
with
strong
and
improving
competitive
positions
in
attractive
markets.
We
also
believe
important
attributes
of
quality
are
experienced
and
talented
management
teams
as
well
as
financial
strength
reflected
in
the
capital
structure,
gross
and
operating
margins,
free
cash
flow
generation
and
returns
on
capital
employed.
Our
valuation
analysis
includes
a
range
of
potential
outcomes
based
on
an
assessment
of
multiple
scenarios.
In
assessing
value,
we
consider
whether
security
prices
fully
reflect
the
balance
of
the
sustainable
growth
opportunities
relative
to
business
and
financial
risks.
Manager’s
Discussion
During
the
period
under
review,
the
Fund
experienced
a
prolonged
stretch
of
declines
that
resulted
in
negative
returns
for
nearly
all
portfolio
holdings.
In
general,
many
investors
expressed
their
valuation
concerns
by
divesting
innovative
companies
that
appear
expensive
relative
to
their
current
sales
or
earnings.
The
Fund
was
broadly
undermined
by
an
investment
style
rotation
in
the
equity
market
as
U.S.
and
global
growth
stocks,
whose
valuations
were
negatively
impacted
by
sharply
rising
interest
rates,
declined
substantially
more
than
their
value-oriented
counterparts
across
all
market
capitalizations.
Various
challenges
tested
innovative
companies
in
a
deteriorating
macroeconomic
environment.
A
combination
of
rising
interest
rates,
elevated
inflation
and
recession
fears
contributed
to
increased
equity
market
uncertainty
and
downside
volatility.
We
think
meaningful
resolution
of
this
uncertainty
has
been
deferred
beyond
September
of
2022.
However,
we
also
saw
increasing
clarity
around
which
companies
will
structurally
grow
faster
post-
pandemic.
In
particular,
the
information
technology
(IT)
and
communication
services
sectors
and
e-commerce
companies
in
the
consumer
discretionary
sector
have
sold
off
dramatically.
Immature
growth-focused
businesses,
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Software
22.6%
Semiconductors
&
Semiconductor
Equipment
12.3%
Internet
&
Direct
Marketing
Retail
10.6%
IT
Services
8.0%
Life
Sciences
Tools
&
Services
6.7%
Automobiles
6.3%
Health
Care
Equipment
&
Supplies
6.0%
Interactive
Media
&
Services
5.6%
Food
&
Staples
Retailing
5.5%
Electric
Utilities
5.3%
Equity
Real
Estate
Investment
Trusts
(REITs)
2.5%
Capital
Markets
2.1%
Personal
Products
1.4%
Health
Care
Technology
1.2%
Other
2.1%
Short-Term
Investments
&
Other
Net
Assets
1.8%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
62
.
Franklin
Focused
Growth
Fund
13
franklintempleton.com
Annual
Report
whose
heavy
investing
led
to
negative
free
cash
flow,
have
seen
their
equity
valuation
multiples
compress
with
the
sharp
climb
in
the
cost
of
capital,
as
inflation
fears
caused
nominal
rates
to
rise.
In
our
view,
a
higher
cost
of
capital
can
serve
as
a
positive
longer-term
catalyst
because
it
encourages
companies
to
develop
resilience
and
restraint
from
not
being
overfunded.
We
believe
it
can
also
contribute
to
dwindling
competition
and
potentially
more
profitability
over
time
as
it
forces
rationality
into
the
marketplace.
We
view
this
as
a
healthy
part
of
the
economic
cycle.
History
has
shown
us
that
exogenous
shocks
can
accelerate
innovation
beyond
the
natural
organic
adoption
rate.
Two
such
exogenous
shocks
such
as
COVID-19
and
the
Russia-
Ukraine
war
appear
to
be
providing
catalysts
to
drive
the
adoption
of
new
technologies,
in
our
view.
We
saw
an
opportunity
for
the
war
to
accelerate
pre-existing
innovation
trends
in
agriculture,
renewable
energy,
cybersecurity
and
supply-chain
logistics,
to
name
a
few.
For
example,
within
agriculture
this
included
innovations
to
increase
crop
yields
such
as
gene-edited
seeds
that
are
herbicide
resistant
and
synthetic
biology-derived
crop
protection
products.
We
believe
technologies
and
advancements
accelerated
by
exogenous
shocks
often
become
permanent
and
pervasive
in
society,
thereby
displacing
legacy
processes
or
technologies.
The
pandemic
accelerated
many
of
the
trends
we
highlighted
in
2019
and
earlier,
and
we
expect
the
following
to
endure
beyond
2022
including
cashless
payments,
workplace
collaboration,
e-commerce
in
non-
traditional
areas
such
as
automobiles
and
health
care,
genetic
medicine,
bioprocessing,
and
digital
transformation/
cloud
infrastructure
adoption.
As
it
pertains
to
portfolio
performance,
all
11
of
the
Fund’s
sector
allocations
were
net
detractors
from
performance
in
absolute
terms,
with
most
of
the
overall
losses
occurring
in
the
IT,
consumer
discretionary,
communication
services
and
health
care
sectors;
when
combined,
these
holdings
comprised
a
predominant
portion
of
the
Fund’s
total
net
assets.
For
most
of
the
annual
period,
the
Fund’s
substantial
absolute
declines
in
the
IT
sector
(averaging
just
under
half
of
total
net
assets)
were
related
to
stock
multiples
compressing
with
higher
interest
rates.
However,
by
the
latter
half
of
the
period
we
began
to
see
fundamental
weakness
in
consumer-oriented
hardware
such
as
personal
computers
(PCs),
electronics,
and
smartphones,
which
had
a
disproportionate
impact
on
NVIDIA,
ASML
Holding,
Advanced
Micro
Devices
(bought
and
sold
during
the
period)
and
most
of
our
other
holdings
in
the
semiconductor
industry.
In
particular,
graphics
chip
company
NVIDIA,
our
largest
position
in
the
semiconductors
and
semiconductor
equipment
industry,
lowered
its
forward
guidance
on
an
unexpected
decline
in
demand
for
graphics
chips
targeted
at
video
game
consoles
but
also
used
for
cryptocurrency
mining.
NVIDIA
joined
a
host
of
other
companies
that
curbed
their
prior
guidance
or
offered
an
outlook
for
the
remainder
of
2022
that
was
below
Wall
Street
estimates,
pointing
to
soft
sales
in
PCs,
smartphones
and
other
devices,
with
reduced
demand
in
some
cases
spreading
to
cloud
data
center,
automotive
and
industrial
customers.
We
continue
to
hold
NVIDIA
shares
for
an
expected
rebound
over
the
longer
term.
Once
mostly
a
graphics
chip
company,
NVIDIA
now
participates
in
nearly
every
disruptive
tech
trend
such
as
cloud
computing,
cryptocurrency
mining,
artificial
intelligence,
autonomous
cars,
and
even
the
metaverse,
which
has
recently
helped
its
revenues
to
grow
solidly.
Elsewhere
in
the
IT
sector,
some
of
the
other
key
individual
detractors
included
Shopify,
a
cloud
computing
platform
that
helps
companies
manage
e-commerce
workflows,
which
lost
roughly
four-fifths
of
its
equity
value;
and
software
industry
holdings
such
as
Microsoft,
ServiceNow
and
Atlassian.
E-commerce
companies
Amazon.com
and
MercadoLibre
were
a
primary
point
of
weakness
in
the
consumer
discretionary
sector.
IT
services
and
software
companies
involved
in
advertising,
marketing,
customer
relations
and
payments
processing,
which
also
have
strong
ties
to
e-commerce
sales
and
business
activity,
generally
sold
off
as
the
robust
levels
of
consumer
spending
seen
in
2020
and
2021
were
perceived
as
decelerating
against
a
backdrop
of
negative
real
wage
growth,
including
key
detractors
Shopify,
Top
10
Holdings
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Microsoft
Corp.
11.2%
Software,
United
States
Amazon.com,
Inc.
9.9%
Internet
&
Direct
Marketing
Retail,
United
States
Tesla,
Inc.
6.3%
Automobiles,
United
States
Alphabet,
Inc.
5.6%
Interactive
Media
&
Services,
United
States
Costco
Wholesale
Corp.
5.5%
Food
&
Staples
Retailing,
United
States
NextEra
Energy,
Inc.
5.3%
Electric
Utilities,
United
States
NVIDIA
Corp.
5.1%
Semiconductors
&
Semiconductor
Equipment,
United
States
Danaher
Corp.
5.1%
Life
Sciences
Tools
&
Services,
United
States
Mastercard,
Inc.
3.7%
IT
Services,
United
States
ServiceNow,
Inc.
3.5%
Software,
United
States
Franklin
Focused
Growth
Fund
14
franklintempleton.com
Annual
Report
Adyen,
Mastercard
and
Salesforce,
all
of
which
began
to
see
more
difficult
year-over-year
comparisons
in
their
quarterly
financial
reports
over
the
period.
The
Fund’s
smaller
portion
of
communication
services
holdings,
which
also
had
been
greatly
reduced
during
the
12-month
period
under
review,
fared
poorly
as
they
collectively
shed
more
than
half
of
their
equity
value.
The
declines
were
most
severe
in
the
entertainment
industry
where
Sea,
a
Singapore-based
consumer
internet
company
was
the
largest
detractor,
having
lost
considerable
share
value
following
a
stellar
rise
in
previous
reporting
periods
(not
held
at
period-end).
Sea
is
a
Southeast
Asian
internet
and
mobile
platform
company
that
has
been
investing
heavily
to
grow
its
business
in
three
high-growth
industries
which
include:
e-commerce
(Shopee),
digital
payments
and
financial
services
(SeaMoney),
and
video
game
development
and
publishing
(Garena).
Revenue
and
gross
profit
began
to
miss
consensus
expectations
and
management
began
lowering
its
full-year
guidance
for
2022.
Garena
continued
to
be
the
most
profitable
segment,
which
allows
Sea
to
invest
in
its
other
businesses,
but
its
growth
has
decelerated
on
normalization
of
hours
spent
playing
video
games
post-Covid.
At
the
same
time,
Shopee’s
operational
loss
more
than
doubled
on
a
year-ago
basis
despite
a
strong
competitive
position
in
Southeast
Asia,
but
likely
associated
with
aggressive
expansions
into
Latin
America
and
Europe
along
with
parent-company
research
and
development
costs,
both
of
which
Sea
is
now
tempering.
Elsewhere
in
the
communication
services
sector,
technology
and
social
media
giants
Alphabet
(Google’s
parent
company)
and
Meta
Platforms
(formerly
Facebook,
not
held
at
period-end)
were
significant
Fund
holdings
that
saw
steep
declines
from
all-time
highs
during
the
year
under
review.
These
companies
began
to
post
revenues
that
came
up
shy
of
consensus
estimates
as
a
stalling
economy
hurt
advertising-based
companies.
Additionally,
some
investors
grew
concerned
that
Meta
Platforms
would
find
it
difficult
to
navigate
Apple’s
(not
a
Fund
holding)
new
privacy
restrictions,
which
had
negatively
impacted
its
ability
to
target
its
customers’
ads.
Meta
Platforms
and
Alphabet
were
also
contending
with
heightened
scrutiny
from
regulators
after
numerous
reports
of
the
companies’
failing
to
properly
address
misinformation,
hate
speech,
and
other
troubling
behavior
on
their
sites.
In
general,
companies
that
advertise
to
make
money,
like
Alphabet,
were
pointing
out
economic
turbulence
on
the
horizon
and
bracing
for
a
more
challenging
operating
environment.
Alphabet
makes
most
of
its
money
by
selling
ads
on
its
two
most
popular
internet
platforms,
Google
Search
and
YouTube,
with
projections
into
2023
suggesting
business
spending,
and
therefore
discretionary
ad
budgets,
might
shrink
when
the
economy
is
doing
poorly.
We
saw
this
play
out
in
Alphabet’s
revenue
growth
over
the
past
year,
which
has
dramatically
decelerated,
going
from
40%
growth
year-over-year
to
12%
growth
in
the
four
quarters
through
June
2022.
At
period-end,
Alphabet
was
trading
at
its
lowest
price-to-earnings
(P/E)
ratio
in
a
decade
while
its
two
largest
platforms
(Google
and
YouTube)
remain
top-notch
internet
traffic
magnets,
suggesting
the
company’s
ad
revenue
will
recover
once
the
economy
improves,
because
its
websites
remain
the
dominant
internet
destinations
where
brands
prioritize
their
ad
budgets.
Health
care
sector
holdings
comprised
a
small
portion
of
the
overall
portfolio
and
collectively
shed
just
over
one
third
of
their
equity
value.
All
related
holdings
sold
off,
including
key
detractors
IDEXX
Laboratories,
a
provider
of
products
and
services
for
the
companion
animal
veterinary
and
livestock
markets,
and
Intuitive
Surgical,
a
maker
of
robotic
surgery
systems,
both
of
which
pulled
back
following
prolonged
rallies
in
2020
and
2021.
Conversely,
the
declines
described
above
were
partially
offset
by
minimal
contributions
from
two
individual
holdings
that
bucked
the
overall
downtrend.
Their
combined
positive
impact
was
negligible
given
the
magnitude
of
the
detractors.
Chinese
multinational
technology
and
entertainment
conglomerate
Tencent
(not
held
at
period-
end)
was
the
strongest
of
the
two
contributors.
The
other,
lesser
contributor
was
Taiwan
Semiconductor
Manufacturing,
a
Taiwanese
multinational
semiconductor
contract
manufacturing
and
design
company
(not
held
at
period-end).
Notably,
we
eliminated
the
Fund’s
exposure
to
China-
and
Taiwan-based
companies
in
the
first
half
of
the
period
as
we
found
more
compelling
investment
opportunities
not
tied
to
Beijing’s
increasingly
unpredictable
and
opaque
regulatory
regime,
nor
threatened
by
a
potential
China-Taiwan
conflict.
Thank
you
for
your
participation
in
Franklin
Focused
Growth
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Matthew
J.
Moberg,
CPA
Portfolio
Manager
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
Franklin
Focused
Growth
Fund
15
franklintempleton.com
Annual
Report
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
September
30,
2022
Franklin
Focused
Growth
Fund
16
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9
/3
0
/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
1-Year
-38.61%
-41.98%
5-Year
+55.38%
+7.98%
Since
Inception
(4/13/16)
5
+107.56%
+10.98
%
Advisor
1-Year
-38.44%
-38.44%
5-Year
+57.40%
+9.50%
Since
Inception
(4/13/16)
5
+111.04%
+12.24%
See
page
18
for
Performance
Summary
footnotes.
Franklin
Focused
Growth
Fund
Performance
Summary
17
franklintempleton.com
Annual
Report
See
page
18
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(4/13/16–9/30/22)
Advisor
Class
(4/13/16–9/30/22)
Franklin
Focused
Growth
Fund
Performance
Summary
18
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
To
the
extent
the
Fund
focuses
on
particular
countries,
regions,
industries,
sectors
or
types
of
investment
from
time
to
time,
it
may
be
subject
to
greater
risks
of
adverse
developments
in
such
areas
of
focus
than
a
fund
that
invests
in
a
wider
variety
of
countries,
regions,
industries,
sectors
or
investments.
Growth
stock
prices
reflect
projections
of
future
earnings
or
revenues,
and
can,
therefore,
fall
dramati-
cally
if
the
company
fails
to
meet
those
projections.
The
Fund
may
also
invest
in
small-
and
mid-capitalization
companies,
which
can
be
particularly
sensitive
to
changing
economic
conditions,
and
their
prospects
for
growth
are
less
certain
than
those
of
larger,
more
established
companies.
Foreign
investing
carries
additional
risks
such
as
currency
and
market
volatility,
and
political
or
social
instability;
risks
which
are
heightened
in
developing
countries.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
Gross
expenses
are
the
Fund’s
total
annual
operating
expenses
and
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
Net
expenses
reflect
contractual
fee
waivers,
expense
caps
and/or
reimbursements,
which
cannot
be
terminated
prior
to
1/31/23
without
Board
consent.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Effective
2/14/20,
the
Fund
began
offering
Class
A
shares.
Class
A
performance
shown
has
been
calculated
as
follows:
(a)
for
periods
prior
to
2/14/20,
a
restated
figure
is
used
based
on
the
Fund’s
Advisor
Class
performance
that
includes
any
Rule
12b-1
rate
differential
that
exists
between
Class
A
and
Advisor
Class;
and
(b)
for
periods
after
2/14/20,
actual
Class
A
performance
is
used,
reflecting
all
charges
and
fees
applicable
to
that
class.
5.
Since
Inception
returns
are
based
on
the
performance
inception
date
of
4/13/16.
6.
Source:
Morningstar.
The
Russell
1000
Growth
Index
is
market
capitalization-weighted
and
measures
performance
of
those
Russell
1000
Index
companies
with
relatively
higher
price-to-book
ratios
and
higher
forecasted
growth
rates.
7.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(10/1/21–9/30/22)
Share
Class
Long-Term
Capital
Gain
A
$0.1756
C
$0.1756
R
$0.1756
R6
$0.1756
Advisor
$0.1756
Total
Annual
Operating
Expenses
7
Share
Class
With
Fee
Waiver
Without
Fee
Waiver
A
1.10%
1.37%
Advisor
0.85%
1.12%
Your
Fund’s
Expenses
Franklin
Focused
Growth
Fund
19
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$709.80
$4.72
$1,019.55
$5.57
1.10%
C
$1,000
$706.80
$7.91
$1,015.80
$9.35
1.85%
R
$1,000
$708.70
$5.78
$1,018.30
$6.83
1.35%
R6
$1,000
$710.10
$4.05
$1,020.33
$4.79
0.95%
Advisor
$1,000
$710.80
$3.66
$1,020.79
$4.32
0.85%
20
franklintempleton.com
Annual
Report
Franklin
Growth
Fund
This
annual
report
for
Franklin
Growth
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
capital
appreciation
by
investing
substantially
in
equity
securities
of
companies
that
are
leaders
in
their
industries.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-23.83%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Standard
&
Poor’s
500
Index
(S&P
500),
which
is
a
broad
measure
of
U.S.
stock
performance,
posted
a
-15.47%
cumulative
total
return.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
22
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Investment
Strategy
We
use
fundamental,
bottom-up
research
to
seek
companies
meeting
our
criteria
of
growth
potential,
quality
and
valuation.
In
seeking
sustainable
growth
characteristics,
we
look
for
companies
we
believe
can
produce
sustainable
earnings
and
cash
flow
growth,
evaluating
the
long-term
market
opportunity
and
competitive
structure
of
an
industry
to
target
leaders
and
emerging
leaders.
We
define
quality
companies
as
those
with
strong
and
improving
competitive
positions
in
attractive
markets.
We
also
believe
important
attributes
of
quality
are
experienced
and
talented
management
teams
as
well
as
financial
strength
reflected
in
the
capital
structure,
gross
and
operating
margins,
free
cash
flow
generation
and
returns
on
capital
employed.
Our
valuation
analysis
includes
a
range
of
potential
outcomes
based
on
an
assessment
of
multiple
scenarios.
In
assessing
value,
we
consider
whether
security
prices
fully
reflect
the
balance
of
the
sustainable
growth
opportunities
relative
to
business
and
financial
risks.
The
investment
manager’s
process
generally
includes
an
assessment
of
the
potential
impacts
of
any
material
environmental,
social
and
governance
(“ESG”)
factors
on
the
long-term
risk
and
return
profile
of
a
company.
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund’s
Schedule
of
Investments
(SOI),
which
can
be
found
later
in
the
report.
Manager’s
Discussion
For
the
12
months
under
review,
the
Fund
underperformed
its
benchmark.
Results
versus
the
benchmark
index
were
hindered
primarily
by
stock
selection
and
an
overweighting
in
the
information
technology
(IT)
sector.
Technology
companies
faced
headwinds
over
the
period
that
included
rising
interest
rates
and
recession
fears.
In
addition,
a
general
rotation
into
cyclical
corners
of
the
market
and
profit-taking
following
tech’s
multi-year
gains
weighed
further
on
IT
stocks.
A
heavy
allocation
to
the
software
industry
produced
weak
performers
that
included
digital
workflow
manager
ServiceNow
and
payment
solutions
provider
Bill.
com
Holdings.
These
companies
tracked
markets
lower
despite
their
strong
fundamentals
and
solid
leverage
to
secular
growth
in
digital
transformation,
which
represents
a
multi-trillion-dollar
opportunity
and
offers
the
prospect
of
long,
sustained
and
significant
growth.
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Software
16.4%
Life
Sciences
Tools
&
Services
6.5%
Semiconductors
&
Semiconductor
Equipment
6.2%
IT
Services
5.4%
Aerospace
&
Defense
5.2%
Technology
Hardware,
Storage
&
Peripherals
4.7%
Health
Care
Equipment
&
Supplies
4.4%
Pharmaceuticals
4.3%
Capital
Markets
4.2%
Machinery
4.2%
Internet
&
Direct
Marketing
Retail
3.8%
Beverages
3.7%
Interactive
Media
&
Services
3.7%
Electronic
Equipment,
Instruments
&
Components
3.4%
Other*
23.5%
Short-Term
Investments
&
Other
Net
Assets
0.4%
1.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
69
.
Franklin
Growth
Fund
21
franklintempleton.com
Annual
Report
Relative
performance
was
also
negatively
impacted
by
stock
selection
in
the
health
care
sector.
Leading
detractors
included
Catalent,
Wuxi
Biologics
Cayman
(not
held
at
period-end)
and
Intuitive
Surgical.
Contract
drug
manufacturer
Catalent
faced
foreign
exchange
headwinds,
inflationary
pressures,
and
supply
chain
logistics
challenges,
which
weighed
on
its
stock.
A
selloff
in
Chinese
biotechnology
stocks
following
U.S.
sanctions
against
some
companies
in
the
industry
had
a
negative
impact
on
Hong
Kong-based
Wuxi
Biologics
Cayman.
Robotic
surgery
systems
company
Intuitive
Surgical
faced
continued
disruptions
from
COVID-19
delays
on
surgical
procedures
that
had
a
negative
impact
on
revenue.
In
contrast,
the
Fund
benefited
most
from
stock
selection
and
an
overweighting
in
the
industrials
sector
and
an
underweighting
in
the
communication
services
sector.
In
the
industrials
sector,
leading
contributors
included
defense
giant
Northrop
Grumman,
which
saw
some
recovery
in
the
aerospace
market;
and
railroad
operator
Union
Pacific,
which
was
helped
by
strong
pricing
and
cargo
yields.
In
the
communication
services
sector,
an
underweight
position
in
technology
conglomerate
Meta
Platforms
(formerly
Facebook)
helped
relative
returns.
The
social
media
and
networking
company
faced
multiple
headwinds
that
included
data
privacy
issues,
platform
changes
at
Apple
(also
a
Fund
holding),
supply
chain
and
inflationary
pressures,
and
decreased
user
engagement.
Elsewhere,
in
the
consumer
staples
sector,
energy
drink
maker
Monster
Beverage
announced
a
general
price
increase
that
boosted
its
stock.
Thank
you
for
your
continued
participation
in
Franklin
Growth
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Serena
Perin
Vinton,
CFA
Robert
Rendler,
CFA
Joyce
Lin,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Microsoft
Corp.
5.0%
Software,
United
States
Apple,
Inc.
4.7%
Technology
Hardware,
Storage
&
Peripherals,
United
States
Amazon.com,
Inc.
3.8%
Internet
&
Direct
Marketing
Retail,
United
States
Alphabet,
Inc.
3.6%
Interactive
Media
&
Services,
United
States
Northrop
Grumman
Corp.
2.3%
Aerospace
&
Defense,
United
States
Eli
Lilly
&
Co.
2.3%
Pharmaceuticals,
United
States
Intuit,
Inc.
2.1%
Software,
United
States
Union
Pacific
Corp.
2.1%
Road
&
Rail,
United
States
Danaher
Corp.
2.0%
Life
Sciences
Tools
&
Services,
United
States
Mastercard,
Inc.
2.0%
IT
Services,
United
States
CFA
®
is
a
trademark
owned
by
CFA
Institute.
Performance
Summary
as
of
September
30,
2022
Franklin
Growth
Fund
22
franklintempleton.com
Annual
Report
The
performance
table
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
5.50%
and
the
minimum
is
0%.
Class
A:
5.50%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4
1-Year
-23.83%
-28.02%
5-Year
+50.95%
+7.36%
10-Year
+200.22%
+10.99%
Advisor
1-Year
-23.64%
-23.64%
5-Year
+52.85%
+8.86%
10-Year
+207.81%
+11.90%
See
page
24
for
Performance
Summary
footnotes.
Franklin
Growth
Fund
Performance
Summary
23
franklintempleton.com
Annual
Report
See
page
24
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(9/30/12–9/30/22)
Advisor
Class
(9/30/12–9/30/22)
Franklin
Growth
Fund
Performance
Summary
24
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
The
market
values
of
securities
or
other
investments
owned
by
the
Fund
will
go
up
or
down,
sometimes
rapidly
or
unpredictably.
The
Fund
may
focus
on
particular
sectors
of
the
market
from
time
to
time,
which
can
carry
greater
risks
of
adverse
developments
in
such
sectors.
While
the
Fund
historically
has
focused
on
larger
companies,
it
may
invest
up
to
25%
of
its
assets
in
small,
relatively
new
and/
or
unseasoned
companies,
which
involves
additional
risks,
as
these
companies
may
have
less
certain
growth
prospects
and
limited
or
less
developed
product
lines
or
markets,
and
less
secure
financing.
Growth
stock
prices
can
be
volatile,
particularly
over
the
short
term.
The
Fund
may
invest
up
to
40%
of
its
net
assets
in
stocks
of
foreign
companies,
which
involve
special
risks,
including
currency
fluctuations
and
economic
as
well
as
political
uncertainty.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
total
annual
operating
expenses
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Prior
to
9/10/18,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
5.75%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
5.50%.
5.
Source:
Morningstar.
The
S&P
500
is
a
market
capitalization-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
6.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(10/1/21–9/30/22)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
–
$0.0588
$13.7618
$13.8206
C
–
$0.0588
$13.7618
$13.8206
R
–
$0.0588
$13.7618
$13.8206
R6
$0.0984
$0.0588
$13.7618
$13.9190
Advisor
–
$0.0588
$13.7618
$13.8206
Total
Annual
Operating
Expenses
6
Share
Class
A
0.79%
Advisor
0.54%
Your
Fund’s
Expenses
Franklin
Growth
Fund
25
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$778.30
$3.68
$1,020.93
$4.18
0.82%
C
$1,000
$775.50
$7.01
$1,017.18
$7.96
1.57%
R
$1,000
$777.40
$4.79
$1,019.68
$5.44
1.07%
R6
$1,000
$779.80
$2.07
$1,022.74
$2.36
0.46%
Advisor
$1,000
$779.40
$2.56
$1,022.19
$2.91
0.57%
26
franklintempleton.com
Annual
Report
Franklin
Income
Fund
This
annual
report
for
Franklin
Income
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
to
maximize
income,
while
maintaining
prospects
for
capital
appreciation
by
investing,
under
normal
market
conditions,
in
a
diversified
portfolio
of
debt
and
equity
securities.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
cumulative
total
return
of
-7.28%
for
the
12
months
under
review.
In
comparison,
the
Fund’s
equity
benchmark,
the
Standard
&
Poor’s
500
Index
(S&P
500),
which
is
a
broad
measure
of
U.S.
stock
performance,
posted
a
-15.47%
cumulative
total
return.
1
The
Fund’s
secondary
benchmark,
the
blended
50%
MSCI
USA
High
Dividend
Yield
Index
+
25%
Bloomberg
High
Yield
Very
Liquid
Index
+
25%
Bloomberg
U.S.
Aggregate
Bond
Index
(Blended
Benchmark),
which
is
a
combination
of
leading
stock
and
bond
indexes,
posted
a
-10.95%
cumulative
total
return.
2
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
29
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Investment
Strategy
In
analyzing
debt
and
equity
securities,
we
consider
such
factors
as
a
company’s
experience
and
managerial
strength;
responsiveness
to
changes
in
interest
rates
and
business
conditions;
debt
maturity
schedules
and
borrowing
requirements;
changing
financial
condition
and
market
recognition
of
the
change;
and
a
security’s
relative
value
based
on
such
factors
as
anticipated
cash
flow,
interest
or
dividend
coverage,
asset
coverage
and
earnings.
When
choosing
investments
for
the
Fund,
we
apply
a
bottom-up,
value
oriented,
long-term
approach,
focusing
on
the
market
price
of
a
company’s
securities
relative
to
the
investment
manager’s
evaluation
of
the
company’s
long-term
earning,
asset
value
and
cash
flow
potential.
Manager’s
Discussion
During
the
period
under
review,
our
equity
weighting
decreased
from
57.7%
to
42.9%,
and
our
fixed
income
weighting
increased
from
39.9%
to
55.8%.
The
Fund’s
cash
position
decreased
from
2.4%
to
1.7%
of
total
net
assets.
The
Fund
generated
negative
returns
during
the
period
with
weak
performance
from
both
equity
and
fixed
income
holdings.
Overweight
Fund
exposure
to
the
equity
sector
over
the
period
helped
support
absolute
performance
as
the
equity
holdings
outperformed
fixed
income
returns
during
the
period.
The
Fund’s
underweight
allocation
to
credit
broadly
and
interest-rate
sensitive
assets
led
to
strong
fixed
income
performance
relative
to
the
Fund’s
blended
benchmark
during
the
period
under
review.
Dividend
stocks,
particularly
value-oriented
sectors,
outperformed
growth-oriented
sectors
during
the
period
under
review.
The
equity
component
of
the
Fund’s
blended
benchmark
declined
with
the
MSCI
USA
High
Dividend
Yield
Index
posting
negative
returns
for
the
12-month
period.
The
Fund’s
equity
positions
outperformed
the
Fund’s
blended
benchmark.
After
strong
performance
through
the
end
of
the
calendar
year,
corporate
credit
spreads
widened
materially
during
2022
as
inflationary
concerns,
central
bank
tightening
expectations,
and
geopolitical
risks
weighed
on
risk
markets.
In
addition
to
widening
credit
spreads,
interest
rates
broadly
increased,
which
weighed
on
the
more
duration
sensitive
portions
of
the
Fund’s
benchmark.
Fixed
income
returns
for
the
Fund
outperformed
the
Fund’s
blended
benchmark.
The
Bloomberg
U.S.
Aggregate
Bond
Index
posted
negative
returns,
while
the
Bloomberg
U.S.
High
Yield
Very
Liquid
Index
also
posted
negative
returns
at
period-end.
The
Fund
entered
the
period
with
an
increased
equity
weighting
and
a
decreased
fixed
income
weighting,
while
also
holding
a
portion
in
cash
equivalents,
with
the
Fund
having
already
started
to
reduce
its
peak
equity
allocation
earlier
in
2021.
This
transition
to
a
less
equity-tilted
portfolio
continued
over
the
period
as
we
decreased
our
equity
weighting
and
increased
our
fixed
income
weighting,
while
also
continuing
to
hold
a
portion
in
cash
equivalents
at
period-end.
1.
Source:
Morningstar.
2.
Source:
FactSet.
The
Fund’s
Blended
Benchmark
was
calculated
internally.
The
indexes
are
unmanaged
and
include
reinvestment
of
any
income
or
distributions.
They
do
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
80
.
Franklin
Income
Fund
27
franklintempleton.com
Annual
Report
*Categories
within
the
Other
category
are
listed
in
full
in
the
Fund’s
Schedule
of
Investments
(SOI),
which
can
be
found
later
in
the
report.
Fixed
Income
holdings
posted
negative
returns
during
the
period
with
outperformance
relative
to
the
Fund’s
blended
fixed
income
benchmark.
As
an
asset
class,
fixed
income
underperformed
the
equity
asset
class,
which
benefited
the
Fund
given
its
overweight
allocation
to
equities
relative
to
the
Fund’s
blended
benchmark.
The
Fund’s
duration
positioning
at
the
front
end
of
the
yield
curve
in
the
face
of
rising
interest-rates
during
the
period
was
a
key
source
driving
the
outperformance
relative
to
the
Fund’s
benchmark.
Additionally,
while
corporate
credit
spreads
widened
during
the
period
under
review,
the
Fund
had
an
underweight
position
to
corporate
credit
at
the
start
of
the
period,
which
contributed
to
the
outperformance
relative
to
the
Fund’s
benchmark
as
well.
The
Fund
took
advantage
of
the
rate
and
spread
driven
selloff
in
credit
to
increase
our
exposure
to
the
asset
class
during
the
period
under
review,
particularly
within
the
Fund’s
allocation
to
corporate
credit
(both
investment-
grade
and
sub-investment
grade).
Every
corporate
credit
sector
generated
negative
absolute
returns
during
the
period
under
review.
Relative
to
the
Fund’s
blended
benchmark,
health
care
was
the
only
detractor,
while
financials
and
communication
services
were
the
leading
positive
contributors.
Our
holdings
in
U.S.
Treasuries
and
agency
MBS
were
absolute
detractors
during
the
period.
However,
these
positions
were
shorter
in
duration
and
much
smaller
in
size
relative
to
the
benchmark,
which
resulted
in
these
sectors
being
positive
contributors
relative
to
the
Fund’s
blended
benchmark.
The
largest
contributors
to
performance
were
found
in
the
energy
sector
with
bonds
of
refining
peers
PBF
Energy
(not
held
at
period-end)
and
Calumet
Specialty
Products
producing
strong
returns.
In
terms
of
fixed
income
detractors,
high-yield
hospital
provider
CHS/Community
Health
Systems
and
specialty
pharmaceutical
company
Bausch
Health
generated
negative
returns.
U.S.
Treasury
holdings
were
also
an
absolute
detractor
during
the
period,
as
previously
noted.
Equity
holdings
decreased
over
the
period.
As
an
asset-
class,
equities
outperformed
fixed
income
during
the
period.
The
Fund
actively
trimmed
its
equity
overweighting
during
the
period
under
review.
*Includes
convertible
bonds.
Energy,
utilities
and
health
care
holdings
were
positive
absolute
contributors
relative
to
the
Fund’s
benchmark
during
the
period
with
financials,
information
technology
(IT)
and
materials
being
the
largest
detractors
from
performance.
Energy
returns
were
led
by
strong
returns
from
Chevron,
Exxon
Mobil
and
Chesapeake
Energy
during
the
period.
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Diversified
Financial
Services
13.0%
Banks
7.6%
Pharmaceuticals
7.4%
Oil,
Gas
&
Consumable
Fuels
6.2%
Health
Care
Providers
&
Services
5.8%
Electric
Utilities
5.1%
Semiconductors
&
Semiconductor
Equipment
4.9%
Media
3.7%
Capital
Markets
2.9%
Aerospace
&
Defense
2.8%
Hotels,
Restaurants
&
Leisure
2.3%
Communications
Equipment
2.3%
Metals
&
Mining
2.2%
Consumer
Finance
2.1%
Other*
30.4%
Short-Term
Investments
&
Other
Net
Assets
1.3%
Top
Five
Fixed
Income
Holdings
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
U.S.
Treasury
Notes
11.7%
Diversified
Financial
Services
,
United
States
CHS/Community
Health
Systems,
Inc.
3.4%
Health
Care
Providers
&
Services
,
United
States
Bausch
Health
Cos.,
Inc.
1.9%
Pharmaceuticals
,
United
States
DISH
DBS
Corp.
1.3%
Media
,
United
States
Tenet
Healthcare
Corp.
1.2%
Health
Care
Providers
&
Services
,
United
States
Top
Five
Equity
Holdings
*
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
Bank
of
America
Corp.
1.9%
Banks
,
United
States
Chevron
Corp.
1.9%
Oil,
Gas
&
Consumable
Fuels
,
United
States
NextEra
Energy,
Inc.
1.7%
Electric
Utilities
,
United
States
Exxon
Mobil
Corp.
1.5%
Oil,
Gas
&
Consumable
Fuels,
United
States
Texas
Instruments,
Inc.
1.5%
Semiconductors
&
Semiconductor
Equipment
,
United
States
Franklin
Income
Fund
28
franklintempleton.com
Annual
Report
Utility
returns
were
led
by
Southern,
American
Electric
Power
and
Sempra
Energy.
Top
performers
in
the
Fund
outside
of
energy
and
utilities
included
pharmaceutical
peers
AbbVie,
Pfizer
and
Bristol-
Meyers
Squibb.
Despite
negative
absolute
contributions,
equity
holdings
in
the
communications,
industrials
and
consumer
staples
sectors
were
positive
contributors
to
performance
during
the
period
under
review
relative
to
the
Fund’s
benchmark.
At
the
individual
security
level,
the
largest
detractors
from
performance
during
the
period
came
from
equity
holdings
of
financial
peers
JPMorgan
Chase,
Bank
of
America
and
Citigroup.
Outside
of
these
financial
holdings,
IT
company
Intel
and
industrial
company
Siemens
were
notable
detractors.
During
the
period,
the
Fund
used
derivatives
such
as
equity
call
and
put
options
to
sell
and
reduce
positions
(call
options)
and/or
to
initiate
and
add
to
positions,
which
generated
gains
during
the
period
under
review.
Thank
you
for
your
continued
participation
in
Franklin
Income
Fund.
We
look
forward
to
serving
your
future
investment
needs.
Edward
D.
Perks,
CFA
Lead
Portfolio
Manager
Brendan
Circle,
CFA
Todd
Brighton,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
September
30,
2022
Franklin
Income
Fund
29
franklintempleton.com
Annual
Report
The
performance
tables
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4,5
1-Year
-7.28%
-10.75%
5-Year
+17.67%
+2.52%
10-Year
+64.49%
+4.70%
Advisor
1-Year
-7.44%
-7.44%
5-Year
+19.11%
+3.56%
10-Year
+67.44%
+5.29%
30-Day
Standardized
Yield
7
Share
Class
Distribution
Rate
6
(with
fee
waiver)
(without
fee
waiver)
A
5.24%
4.44%
4.43%
Advisor
5.83%
4.88%
4.88%
See
page
32
for
Performance
Summary
footnotes.
Franklin
Income
Fund
Performance
Summary
30
franklintempleton.com
Annual
Report
See
page
32
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
indexes
include
reinvestment
of
any
income
or
distributions.
They
differ
from
the
Fund
in
composition
and
do
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(9/30/12–9/30/22)
Advisor
Class
(9/30/12–9/30/22)
Franklin
Income
Fund
Performance
Summary
31
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
possible
loss
of
principal.
The
Fund’s
portfolio
includes
a
substantial
portion
of
higher-yielding,
lower-rated
corporate
bonds
and
some
floating
rate
loans,
which
are
also
higher-yielding
and
lower-rated.
These
investments
have
more
credit
risk
than
investment-grade
securities
and
are
subject
to
increased
risk
of
default
and
potential
loss
of
principal.
The
Fund’s
share
price
and
yield
will
be
affected
by
interest
rate
movements.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
Thus,
as
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
Stock
prices
fluctuate,
sometimes
rapidly
and
dramat-
ically,
due
to
factors
affecting
individual
companies,
particular
industries
or
sectors,
or
general
market
conditions.
Foreign
investing
involves
additional
risks
such
as
currency
and
market
volatility,
as
well
as
political
and
social
instability.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
consider-
ations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
Net
Asset
Value
Share
Class
(Symbol)
9/30/22
9/30/21
Change
A
(FKIQX)
$2.14
$2.47
-$0.33
A1
(FKINX)
$2.15
$2.48
-$0.33
C
(FCISX)
$2.18
$2.52
-$0.34
R
(FISRX)
$2.10
$2.43
-$0.33
R6
(FNCFX)
$2.13
$2.47
-$0.34
Advisor
(FRIAX)
$2.12
$2.46
-$0.34
Distributions
(10/1/21–9/30/22)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
$0.1129
$0.0156
$0.0364
$0.1649
A1
$0.1165
$0.0156
$0.0364
$0.1685
C
$0.1033
$0.0156
$0.0364
$0.1553
R
$0.1069
$0.0156
$0.0364
$0.1589
R6
$0.1213
$0.0156
$0.0364
$0.1733
Advisor
$0.1201
$0.0156
$0.0364
$0.1721
Total
Annual
Operating
Expenses
10
Share
Class
A
0.72%
Advisor
0.47%
Franklin
Income
Fund
Performance
Summary
32
franklintempleton.com
Annual
Report
1.
The
total
annual
operating
expenses
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Effective
9/10/18,
Class
A
shares
closed
to
new
investors,
were
renamed
Class
A1
shares,
and
a
new
Class
A
share
with
a
different
expense
structure
became
available.
Class
A
performance
shown
has
been
calculated
as
follows:
(a)
for
periods
prior
to
9/10/18,
a
restated
figure
is
used
based
on
the
Fund’s
Class
A1
performance
that
includes
any
Rule
12b-1
rate
differential
that
exists
between
Class
A1
and
Class
A;
and
(b)
for
periods
after
9/10/18,
actual
Class
A
performance
is
used,
reflecting
all
charges
and
fees
applicable
to
that
class.
5.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
6.
Distribution
rate
is
based
on
an
annualization
of
the
respective
class’s
September
dividend
and
the
maximum
offering
price
(NAV
for
Advisor
Class)
per
share
on
9/30/22.
7.
The
Fund’s
30-day
standardized
yield
is
calculated
over
a
trailing
30-day
period
using
the
yield
to
maturity
on
bonds
and/or
the
dividends
accrued
on
stocks.
It
may
not
equal
the
Fund’s
actual
income
distribution
rate,
which
reflects
the
Fund’s
past
dividends
paid
to
shareholders.
8.
Source:
Morningstar.
The
S&P
500
is
a
market
capitalization-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
9.
Source:
FactSet.
The
Blended
50%
MSCI
USA
High
Dividend
Yield
Index
+
25%
Bloomberg
High
Yield
Very
Liquid
Index
+
25%
Bloomberg
U.S.
Aggregate
Index
measures
performance
of
high
dividend-paying
global
and
developed
and
emerging
stocks,
noninvestment-grade
corporate
bonds
and
tracks
performance
of
the
U.S.
investment-grade
bond
market.
10.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Your
Fund’s
Expenses
Franklin
Income
Fund
33
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$870.30
$3.33
$1,021.51
$3.60
0.71%
A1
$1,000
$871.50
$2.86
$1,022.01
$3.09
0.61%
C
$1,000
$867.20
$5.19
$1,019.51
$5.62
1.11%
R
$1,000
$870.60
$4.50
$1,020.26
$4.86
0.96%
R6
$1,000
$871.30
$1.85
$1,023.09
$2.00
0.39%
Advisor
$1,000
$870.60
$2.16
$1,022.76
$2.33
0.46%
34
franklintempleton.com
Annual
Report
Franklin
U.S.
Government
Securities
Fund
This
annual
report
for
Franklin
U.S.
Government
Securities
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
income
by
investing
at
least
80%
of
its
net
assets
in
U.S.
government
securities.
The
Fund
presently
invests
substantially
all
of
its
assets
in
Government
National
Mortgage
Association
obligations
(Ginnie
Maes).
Since
1983,
the
Fund
has
invested
substantially
in
Ginnie
Mae
securities,
which
carry
a
guarantee
backed
by
the
full
faith
and
credit
of
the
U.S.
government
as
to
the
timely
payment
of
interest
and
principal.
1
Issued
by
the
Government
National
Mortgage
Association
(GNMA),
Ginnie
Maes
have
been
among
the
highest
yielding
U.S.
government
obligations
available.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
-12.50%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
Bloomberg
U.S.
Government
-
Intermediate
Index,
the
intermediate
component
of
the
Bloomberg
U.S.
Government
Index,
posted
a
-9.18%
cumulative
total
return.
2
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
36
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Investment
Strategy
We
currently
invest
the
Fund’s
assets
substantially
in
GNMA
obligations.
We
analyze
securities
using
proprietary
models
to
help
us
identify
attractive
investment
opportunities.
Manager’s
Discussion
During
the
12
months
under
review,
as
widely
expected,
the
Federal
Open
Market
Committee
(FOMC)
lifted
interest
rates
by
25
basis
points
(bps)
at
its
March
2022
meeting
in
an
effort
to
bring
inflation
under
control.
With
inflation
proving
to
be
a
more
pervasive
problem
compared
with
a
stable
to
strong
U.S.
employment
picture,
a
50
bp
increase
was
announced
at
its
May
2022
FOMC
meeting,
followed
by
two
consecutive
75
bp
increases.
From
the
Fed’s
annual
symposium
at
Jackson
Hole,
Wyoming,
Chair
Jerome
Powell
indicated
that
further
forceful
policy
moves
lie
ahead,
that
restoring
price
stability
will
take
time
and
that
it
would
be
painful
for
households
and
businesses.
Against
this
backdrop,
U.S.
Treasury
(UST)
yields
rose
sharply
across
the
curve
and
the
yield
curve
flattened,
with
the
2-year
to
10-year
portion
of
the
curve
inverting.
MBS
spreads
widened
over
the
period,
driven
by
heightened
volatility,
macroeconomic
releases
and
uncertainty
over
global
geopolitical
issues,
with
extreme
widening
occurring
at
the
end
of
the
period.
With
their
balance
sheet
normalization
underway,
the
Fed’s
support
for
the
agency
mortgage-
backed
security
(MBS)
market
decreased,
further
pressuring
spreads.
Mortgage
rates
increased
to
a
15-year
high,
more
than
doubling
over
the
period,
with
the
Freddie
Mac
Primary
Mortgage
Market
Survey
(PMMS)
at
6.70%
as
of
September
29,
2022.
At
current
rates,
there
is
only
a
very
small
amount
of
the
universe
with
economic
incentive
to
refinance,
in
our
view,
compared
to
a
much
larger
portion
in
2020,
and
we
expect
prepayments
to
be
negligible.
The
Fund
maintains
a
conservative,
disciplined
investment
strategy
and
invests
primarily
in
GNMA
mortgage
pass-
throughs,
which
remain
the
only
MBS
that
are
backed
by
the
full
faith
and
credit
of
the
U.S.
government—the
same
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Mortgage-Backed
Securities
97.7%
Other
0.6%
Short-Term
Investments
&
Other
Net
Assets
1.7%
1.
Securities
owned
by
the
Fund,
but
not
shares
of
the
Fund,
are
guaranteed
by
the
U.S.
government,
its
agencies
or
instrumentalities
as
to
the
timely
payment
of
principal
and
interest.
The
Fund’s
yield
and
share
price
are
not
guaranteed
and
will
vary
with
market
conditions.
2.
Source:
Morningstar.
The
index
is
unmanaged
and
includes
reinvestment
of
any
income
or
distributions.
It
does
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
108
.
Franklin
U.S.
Government
Securities
Fund
35
franklintempleton.com
Annual
Report
guarantee
applicable
to
U.S.
Treasuries.
1
We
believe
our
collateral-intensive
research
approach
can
allow
us
to
uncover
dislocations
across
the
GNMA
markets
and
associated
mispricing
of
prepayment
risk.
We
continue
to
focus
on
specified
pools
where
we
believe
our
experience
and
continual
investment
in
new
technologies
help
us
uncover
these
discrepancies.
Total
return
performance
was
negative,
and
extremely
volatile,
across
agency
MBS
sectors
during
the
reporting
period,
posting
some
of
the
best
and
worst
monthly
performances
on
record.
GMNA
MBS
was
the
best
performer
on
a
relative
basis,
followed
by
Fannie
Mae
MBS
and
Freddie
Mac
MBS.
Across
the
GNMA
coupon
stack,
higher
coupon
4.0%
through
5.0%
coupons
were
the
best
performers,
while
lower
coupon
1.5%
through
3.0%
coupons
lagged.
At
period-end,
we
remained
heavily
weighted
to
GNMA
II
securities
(comprised
of
multiple-issuer
pools),
with
over
85%
of
allocation
in
the
sector,
versus
GNMA
I
securities
(comprised
of
single-issuer
pools).
Over
the
period,
we
added
to
GNMA
II
4.0%
coupons,
while
reducing
exposure
to
GNMA
II
2.0%
and
3.0%
coupons.
The
portfolio’s
largest
absolute
allocations
were
in
GNMA
II
2.5%
through
3.5%
at
period-end
and
relative
to
the
Bloomberg
GNMA
Index
the
portfolio
was
significantly
underweight
the
2.0%
coupons
and
overweight
the
3.0%
coupon
through
4.0%
coupons.
The
Fund’s
underweight
allocation
to
GNMA
II
2.0%
coupons
was
a
significant
contributor
to
performance.
Additionally,
underweight
allocation
to
GNMA
II
2.5%
and
1.5%
and
GNMA
I
3.0%
boosted
returns.
Security
selection
in
GNMA
II
2.0%,
2.5%
and
3.5%
coupons
benefited
performance.
Overweight
allocation
to
GNMA
II
3.0%
through
4.0%
coupons
was
the
largest
detractor
from
performance,
as
was
overweight
allocation
to
GNMA
I
4.0%
and
higher
coupons.
Thank
you
for
your
continued
participation
in
Franklin
U.S.
Government
Securities
Fund.
We
welcome
your
comments
and
questions
and
look
forward
to
serving
your
investment
needs
in
the
years
ahead.
Paul
Varunok
Neil
Dhruv
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Performance
Summary
as
of
September
30,
2022
Franklin
U.S.
Government
Securities
Fund
36
franklintempleton.com
Annual
Report
The
performance
tables
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9/30/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4,5
1-Year
-12.50%
-15.78%
5-Year
-6.29%
-2.04%
10-Year
-1.88%
-0.57%
Advisor
1-Year
-12.39%
-12.39%
5-Year
-5.26%
-1.08%
10-Year
-0.04%
0.00%
30-Day
Standardized
Yield
7
Share
Class
Distribution
Rate
6
(with
fee
waiver)
(without
fee
waiver)
A
2.66%
2.01%
2.00%
Advisor
3.02%
2.34%
2.34%
See
page
38
for
Performance
Summary
footnotes.
Franklin
U.S.
Government
Securities
Fund
Performance
Summary
37
franklintempleton.com
Annual
Report
See
page
38
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
index
includes
reinvestment
of
any
income
or
distributions.
It
differs
from
the
Fund
in
composition
and
does
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(9/30/12–9/30/22)
Advisor
Class
(9/30/12–9/30/22)
Franklin
U.S.
Government
Securities
Fund
Performance
Summary
38
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
loss
of
principal.
The
Fund’s
share
price
and
yield
will
be
affected
by
interest
rate
movements
and
mortgage
prepayments.
Bond
prices
generally
move
in
the
opposite
direction
of
interest
rates.
Thus,
as
the
prices
of
bonds
in
the
Fund
adjust
to
a
rise
in
interest
rates,
the
Fund’s
share
price
may
decline.
Changes
in
the
financial
strength
of
a
bond
issuer
or
in
a
bond’s
credit
rating
may
affect
its
value.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
imposed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberat-
tacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
1.
The
total
annual
operating
expenses
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Effective
9/10/18,
Class
A
shares
closed
to
new
investors,
were
renamed
Class
A1
shares,
and
a
new
Class
A
share
with
a
different
expense
structure
became
available.
Class
A
performance
shown
has
been
calculated
as
follows:
(a)
for
periods
prior
to
9/10/18,
a
restated
figure
is
used
based
on
the
Fund’s
Class
A1
performance
that
includes
any
Rule
12b-1
rate
differential
that
exists
between
Class
A1
and
Class
A;
and
(b)
for
periods
after
9/10/18,
actual
Class
A
performance
is
used,
reflecting
all
charges
and
fees
applicable
to
that
class.
5.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
6.
Distribution
rate
is
based
on
an
annualization
of
the
respective
class’s
September
dividend
and
the
maximum
offering
price
(NAV
for
Advisor
Class)
per
share
on
9/30/22.
7.
The
Fund’s
30-day
standardized
yield
is
calculated
over
a
trailing
30-day
period
using
the
yield
to
maturity
on
bonds
and/or
the
dividends
accrued
on
stocks.
It
may
not
equal
the
Fund’s
actual
income
distribution
rate,
which
reflects
the
Fund’s
past
dividends
paid
to
shareholders.
8.
Source:
Morningstar.
Bloomberg
U.S.
Government
-
Intermediate
Index
is
the
intermediate
component
of
the
Bloomberg
U.S.
Government
Index,
which
includes
U.S.
dollar-denominated,
fixed-rate,
nominal
U.S.
Treasuries
and
U.S.
agency
debentures
(securities
issued
by
U.S.
government-owned
or
government-sponsored
entities,
and
debt
explicitly
guaranteed
by
the
U.S.
government).
9.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Distributions
(10/1/21–9/30/22)
Share
Class
Net
Investment
Income
A
$0.1338
A1
$0.1398
C
$0.1110
R
$0.1200
R6
$0.1545
Advisor
$0.1473
Total
Annual
Operating
Expenses
9
Share
Class
A
0.87%
Advisor
0.62%
Your
Fund’s
Expenses
Franklin
U.S.
Government
Securities
Fund
39
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration):
Divide
your
account
value
by
$1,000
(if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$918.10
$4.12
$1,020.78
$4.34
0.86%
A1
$1,000
$918.60
$3.61
$1,021.31
$3.80
0.75%
C
$1,000
$917.50
$6.04
$1,018.77
$6.36
1.26%
R
$1,000
$917.00
$5.31
$1,019.53
$5.60
1.11%
R6
$1,000
$920.40
$2.29
$1,022.68
$2.42
0.48%
Advisor
$1,000
$919.50
$2.91
$1,022.03
$3.07
0.61%
40
franklintempleton.com
Annual
Report
Portfolio
Composition
9/30/22
%
of
Total
Net
Assets
Electric
Utilities
57.6%
Multi-Utilities
30.0%
Oil,
Gas
&
Consumable
Fuels
3.8%
Construction
&
Engineering
1.9%
Independent
Power
and
Renewable
Electricity
Producers
1.7%
Gas
Utilities
1.7%
Water
Utilities
1.3%
Other
0.9%
Short-Term
Investments
&
Other
Net
Assets
1.1%
Franklin
Utilities
Fund
This
annual
report
for
Franklin
Utilities
Fund
covers
the
fiscal
year
ended
September
30,
2022.
Your
Fund’s
Goal
and
Main
Investments
The
Fund
seeks
both
capital
appreciation
and
current
income
by
investing
at
least
80%
of
its
net
assets
in
the
securities
of
public
utility
companies.
These
are
companies
that
provide
electricity,
natural
gas,
water,
and
communications
services
to
the
public
and
companies
that
provide
services
to
public
utilities
companies.
The
Fund
concentrates
(invests
more
than
25%
of
its
total
assets)
in
companies
operating
in
the
utilities
industry.
The
Fund
invests
primarily
in
equity
securities,
which
consist
mainly
of
common
stocks.
Performance
Overview
The
Fund’s
Class
A
shares
posted
a
+5.56%
cumulative
total
return
for
the
12
months
under
review.
In
comparison,
the
S&P
500
Utilities
Index,
which
measures
the
performance
of
all
utilities
stocks
in
Standard
&
Poor’s
500
Index
(S&P
500),
posted
a
-5.58%
cumulative
total
return,
and
the
S&P
500
Index,
which
is
a
broad
measure
of
U.S.
stock
performance,
posted
a
-15.47%
cumulative
total
return.
1
You
can
find
the
Fund’s
long-term
performance
data
in
the
Performance
Summary
beginning
on
page
42
.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Investment
Strategy
We
search
for
the
best
return
opportunities
available
in
the
global
utilities
arena
with
a
specific
focus
on
the
U.S.
electricity
and
gas
sector.
Generally,
we
seek
to
invest
in
companies
producing
a
high
percentage
of
earnings
from
their
regulated
operations.
Manager’s
Discussion
During
the
12
months
under
review,
electric
utilities,
multi-
utilities,
and
the
oil,
gas
and
consumable
fuels
industries
drove
performance.
Only
the
water
utilities
industry
detracted,
marginally,
on
an
absolute
basis.
Among
the
individual
contributors,
Sempra
Energy,
a
natural
gas
and
electric
utility
that
also
transports
liquefied
natural
gas
(LNG),
benefited
from
rising
LNG
prices,
especially
in
Europe,
amid
concerns
of
a
shortage
of
natural
gas
there
heading
into
the
winter
heating
season.
Sempra
Energy
has
taken
advantage
of
increased
export
opportunities
to
Europe
through
multiple
contracts
with
customers
on
the
continent
after
Russia
cut
off
some
supply
in
response
to
Western
sanctions
from
the
ongoing
Russia-Ukraine
war.
Sempra
Energy’s
recent
revenue
and
earnings
growth
beat
expectations,
and
the
company
raised
full-year
guidance.
Cheniere
Energy,
an
LNG
transmission
company,
also
benefited
from
swiftly
rising
LNG
prices
and
export
opportunities
to
Europe.
Cheniere
Energy
rapidly
expanded
production
and
announced
plans
for
further
increases,
reported
strong
second-quarter
2022
profit
growth
and
revised
its
guidance
upward.
Shares
of
Exelon
also
rose
during
the
period,
as
the
lead
up
to
and
completion
of
the
company’s
spinoff
in
February
2022
of
its
generation
and
retail
business,
including
the
company’s
nuclear
power
plants,
from
its
utility
business,
supported
investor
sentiment.
Shares
of
Exelon,
now
a
pure
electric
and
gas
transmission/distribution
utility,
reported
strong
revenue
growth
after
the
spinoff.
Shares
experienced
some
1.
Source:
Morningstar.
The
indexes
are
unmanaged
and
include
reinvestment
of
any
income
or
distributions.
They
do
not
reflect
any
fees,
expenses
or
sales
charges.
One
cannot
invest
directly
in
an
index,
and
an
index
is
not
representative
of
the
Fund’s
portfolio.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
The
dollar
value,
number
of
shares
or
principal
amount,
and
names
of
all
portfolio
holdings
are
listed
in
the
Fund’s
Schedule
of
Investments
(SOI).
The
SOI
begins
on
page
116
.
Franklin
Utilities
Fund
41
franklintempleton.com
Annual
Report
volatility
after
the
company
said
the
Inflation
Reduction
Act,
which
became
law
in
August
2022,
could
significantly
raise
its
tax
liability,
but
Exelon
lowered
its
tax-impact
estimate
just
before
the
end
of
the
period.
Conversely,
Germany-based
energy
giant
E.ON,
in
the
multi-
utilities
industry,
weighed
on
absolute
performance.
E.ON
shares,
which
stood
at
multi-year
highs
in
February
2022
after
recording
strong
profit
growth
in
2021,
declined
sharply
after
Russia
invaded
Ukraine
and
the
company
lowered
its
2022
earnings
guidance,
admitting
that
the
impact
of
the
war
was
unpredictable.
Later,
the
company
reported
a
profit
dip
in
the
second
quarter
2022
despite
stronger
sales
than
the
year
prior.
Nonetheless,
E.ON
confirmed
its
full-year
outlook
and
reaffirmed
its
targets
through
2026,
including
plans
to
maintain
its
dividend
policy.
PPL,
a
largely
electric
utility
operating
in
Pennsylvania,
Kentucky
and
Rhode
Island,
weighed
on
returns
in
the
wake
of
a
2021
strategy
shift
that
saw
the
company
sell
its
U.K.
utility
business
in
a
$10
billion
deal
and
the
2022
acquisition
of
a
Rhode
Island
electric
company.
PPL
executed
the
sale
of
their
U.K.
operations
in
2021,
which
resulted
in
earnings
dilution
and
required
the
company
to
reduce
the
dividend.
Having
previously
been
critical
of
PPL,
we
applaud
the
shift,
which
both
improved
earnings
quality
and
strengthened
the
balance
sheet,
in
our
view.
Looking
forward,
we
believe
the
company
has
considerable
investment
and
earnings
growth
opportunity
from
transitioning
away
from
coal-based
power
and
supportive
regulatory
environments
that
should
support
the
transition.
Pinnacle
West
Capital,
which
runs
the
Arizona
Public
Service
electric
utility,
hindered
the
Fund’s
performance
as
the
stock
declined
during
the
period.
In
late
2021,
Arizona
regulators
cut
Pinnacle
West’s
allowed
return
on
equity
(ROE),
resulting
in
a
sizable
rate-cut
which
reduced
earnings
considerably
in
2022
and
beyond.
We
believe
that
a
growing
customer
base,
higher
ROE
allowances
for
federally
regulated
transmission
projects,
and
management’s
history
of
solid
cost
control
will
likely
help
the
company
manage
the
regulatory
setback
over
time.
Thank
you
for
your
continued
participation
in
Franklin
Utilities
Fund.
We
look
forward
to
serving
your
future
investment
needs.
John
Kohli,
CFA
Blair
Schmicker,
CFA
Portfolio
Management
Team
The
foregoing
information
reflects
our
analysis,
opinions
and
portfolio
holdings
as
of
September
30,
2022,
the
end
of
the
reporting
period.
The
way
we
implement
our
main
investment
strategies
and
the
resulting
portfolio
holdings
may
change
depending
on
factors
such
as
market
and
economic
conditions.
These
opinions
may
not
be
relied
upon
as
investment
advice
or
an
offer
for
a
particular
security.
The
information
is
not
a
complete
analysis
of
every
aspect
of
any
market,
country,
industry,
security
or
the
Fund.
Statements
of
fact
are
from
sources
considered
reliable,
but
the
investment
manager
makes
no
representation
or
warranty
as
to
their
completeness
or
accuracy.
Although
historical
performance
is
no
guarantee
of
future
results,
these
insights
may
help
you
understand
our
investment
management
philosophy.
Top
10
Holdings
9/30/22
Company
Industry
,
Country
%
of
Total
Net
Assets
a
a
NextEra
Energy,
Inc.
11.8%
Electric
Utilities,
United
States
Southern
Co.
(The)
4.3%
Electric
Utilities,
United
States
Sempra
Energy
4.2%
Multi-Utilities,
United
States
Dominion
Energy,
Inc.
4.1%
Multi-Utilities,
United
States
Duke
Energy
Corp.
3.9%
Electric
Utilities,
United
States
CMS
Energy
Corp.
3.9%
Multi-Utilities,
United
States
Edison
International
3.8%
Electric
Utilities,
United
States
Exelon
Corp.
3.7%
Electric
Utilities,
United
States
American
Electric
Power
Co.,
Inc.
3.7%
Electric
Utilities,
United
States
Entergy
Corp.
3.4%
Electric
Utilities,
United
States
Performance
Summary
as
of
September
30,
2022
Franklin
Utilities
Fund
42
franklintempleton.com
Annual
Report
The
performance
tables
and
graphs
do
not
reflect
any
taxes
that
a
shareholder
would
pay
on
Fund
dividends,
capital
gain
distributions,
if
any,
or
any
realized
gains
on
the
sale
of
Fund
shares.
Total
return
reflects
reinvestment
of
the
Fund’s
dividends
and
capital
gain
distributions,
if
any,
and
any
unrealized
gains
or
losses.
Your
dividend
income
will
vary
depending
on
dividends
or
interest
paid
by
securities
in
the
Fund’s
portfolio,
adjusted
for
operating
expenses
of
each
class.
Capital
gain
distributions
are
net
profits
realized
from
the
sale
of
portfolio
securities.
Performance
as
of
9
/3
0
/22
1
Cumulative
total
return
excludes
sales
charges.
Average
annual
total
return
includes
maximum
sales
charges.
Sales
charges
will
vary
depending
on
the
size
of
the
investment
and
the
class
of
share
purchased.
The
maximum
is
3.75%
and
the
minimum
is
0%.
Class
A:
3.75%
maximum
initial
sales
charge;
Advisor
Class
:
no
sales
charges.
For
other
share
classes,
visit
franklintempleton.com.
Performance
data
represent
past
performance,
which
does
not
guarantee
future
results.
Investment
return
and
principal
value
will
fluctuate,
and
you
may
have
a
gain
or
loss
when
you
sell
your
shares.
Current
performance
may
differ
from
figures
shown.
For
most
recent
month-end
performance,
go
to
franklintempleton.com
or
call
(800)
342-5236
.
Share
Class
Cumulative
Total
Return
2
Average
Annual
Total
Return
3
–
A
4,5
1-Year
+5.56%
+1.60%
5-Year
+40.24%
+6.18%
10-Year
+136.57%
+8.58%
Advisor
1-Year
+5.82%
+5.82%
5-Year
+41.86%
+7.24%
10-Year
+141.34%
+9.21%
30-Day
Standardized
Yield
7
Share
Class
Distribution
Rate
6
(with
fee
waiver)
(without
fee
waiver)
A
2.17%
2.35%
2.34%
Advisor
2.51%
2.72%
2.71%
See
page
45
for
Performance
Summary
footnotes.
Franklin
Utilities
Fund
Performance
Summary
43
franklintempleton.com
Annual
Report
See
page
45
for
Performance
Summary
footnotes.
Total
Return
Index
Comparison
for
a
Hypothetical
$10,000
Investment
1
Total
return
represents
the
change
in
value
of
an
investment
over
the
periods
shown.
It
includes
any
applicable
maximum
sales
charge,
Fund
expenses,
account
fees
and
reinvested
distributions.
The
unmanaged
indexes
include
reinvestment
of
any
income
or
distributions.
They
differ
from
the
Fund
in
composition
and
do
not
pay
management
fees
or
expenses.
One
cannot
invest
directly
in
an
index.
Class
A
(9/30/12–9/30/22)
Advisor
Class
(9/30/12–9/30/22)
Franklin
Utilities
Fund
Performance
Summary
44
franklintempleton.com
Annual
Report
Each
class
of
shares
is
available
to
certain
eligible
investors
and
has
different
annual
fees
and
expenses,
as
described
in
the
prospectus.
All
investments
involve
risks,
including
loss
of
principal.
Investing
in
a
Fund
concentrating
in
the
utilities
sector
involves
special
risks,
including
increased
sus-
ceptibility
to
adverse
economic
and
regulatory
developments
affecting
the
sector.
Stocks
historically
have
outperformed
other
asset
classes
over
the
long
term,
but
tend
to
fluctuate
more
dramatically
over
the
short
term.
Securities
issued
by
utility
companies
have
been
historically
sensitive
to
interest
rate
changes.
When
interest
rates
fall,
utility
securities
prices,
and
thus
a
utilities
Fund’s
share
price,
tend
to
rise;
when
interest
rates
rise,
their
prices
generally
fall.
The
manager’s
portfolio
selection
strategy
is
not
solely
based
on
ESG
considerations,
and
therefore
the
issuers
in
which
the
fund
invests
may
not
be
considered
ESG-focused
companies.
Integrating
ESG
considerations
into
the
investment
process
is
not
a
guarantee
that
better
performance
will
be
achieved.
Events
such
as
the
spread
of
deadly
diseases,
disasters,
and
financial,
political
or
social
disruptions,
may
heighten
risks
and
adversely
affect
performance.
The
Fund’s
prospectus
also
includes
a
description
of
the
main
investment
risks.
Russia’s
military
invasion
of
Ukraine
in
February
2022,
the
resulting
responses
by
the
United
States
and
other
countries,
and
the
potential
for
wider
conflict
could
increase
volatility
and
uncertainty
in
the
financial
markets
and
adversely
affect
regional
and
global
economies.
The
United
States
and
other
countries
have
im-
posed
broad-ranging
economic
sanctions
on
Russia
and
certain
Russian
individuals,
banking
entities
and
corporations
as
a
response
to
its
invasion
of
Ukraine.
The
United
States
and
other
countries
have
also
imposed
economic
sanctions
on
Belarus
and
may
impose
sanctions
on
other
countries
that
support
Russia’s
military
invasion.
These
sanctions,
as
well
as
any
other
economic
consequences
related
to
the
invasion,
such
as
additional
sanctions,
boycotts
or
changes
in
consumer
or
purchaser
preferences
or
cyberattacks
on
governments,
companies
or
individuals,
may
further
decrease
the
value
and
liquidity
of
certain
Russian
securities
and
securities
of
issuers
in
other
countries
that
are
subject
to
economic
sanctions
related
to
the
invasion.
Net
Asset
Value
Share
Class
(Symbol)
9/30/22
9/30/21
Change
A
(FKUQX)
$20.26
$20.20
+$0.06
A1
(FKUTX)
$20.27
$20.21
+$0.06
C
(FRUSX)
$20.14
$20.09
+$0.05
R
(FRURX)
$20.17
$20.12
+$0.05
R6
(FUFRX)
$20.47
$20.40
+$0.07
Advisor
(FRUAX)
$20.47
$20.40
+$0.07
Distributions
(10/1/21–9/30/22)
Share
Class
Net
Investment
Income
Short-Term
Capital
Gain
Long-Term
Capital
Gain
Total
A
$0.4702
$0.0658
$0.5338
$1.0698
A1
$0.4923
$0.0658
$0.5338
$1.0919
C
$0.3832
$0.0658
$0.5338
$0.9828
R
$0.4159
$0.0658
$0.5338
$1.0155
R6
$0.5413
$0.0658
$0.5338
$1.1409
Advisor
$0.5250
$0.0658
$0.5338
$1.1246
Total
Annual
Operating
Expenses
9
Share
Class
A
0.82%
Advisor
0.57%
Franklin
Utilities
Fund
Performance
Summary
45
franklintempleton.com
Annual
Report
1.
The
total
annual
operating
expenses
are
sourced
from
the
Fund's
annual
report
available
at
the
time
of
publication.
Actual
expenses
may
be
higher
and
may
impact
portfolio
returns.
2.
Cumulative
total
return
represents
the
change
in
value
of
an
investment
over
the
periods
indicated.
3.
Average
annual
total
return
represents
the
average
annual
change
in
value
of
an
investment
over
the
periods
indicated.
Return
for
less
than
one
year,
if
any,
has
not
been
annualized.
4.
Effective
9/10/18,
Class
A
shares
closed
to
new
investors,
were
renamed
Class
A1
shares,
and
a
new
Class
A
share
with
a
different
expense
structure
became
available.
Class
A
performance
shown
has
been
calculated
as
follows:
(a)
for
periods
prior
to
9/10/18,
a
restated
figure
is
used
based
on
the
Fund’s
Class
A1
performance
that
includes
any
Rule
12b-1
rate
differential
that
exists
between
Class
A1
and
Class
A;
and
(b)
for
periods
after
9/10/18,
actual
Class
A
performance
is
used,
reflecting
all
charges
and
fees
applicable
to
that
class.
5.
Prior
to
3/1/19,
these
shares
were
offered
at
a
higher
initial
sales
charge
of
4.25%,
thus
actual
returns
(with
sales
charges)
would
have
differed.
Average
annual
total
returns
(with
sales
charges)
have
been
restated
to
reflect
the
current
maximum
initial
sales
charge
of
3.75%.
6.
Distribution
rate
is
based
on
an
annualization
of
the
respective
class’s
current
quarterly
dividend
and
the
maximum
offering
price
(NAV
for
Advisor
Class)
per
share
on
9/30/22.
7.
The
Fund’s
30-day
standardized
yield
is
calculated
over
a
trailing
30-day
period
using
the
yield
to
maturity
on
bonds
and/or
the
dividends
accrued
on
stocks.
It
may
not
equal
the
Fund’s
actual
income
distribution
rate,
which
reflects
the
Fund’s
past
dividends
paid
to
shareholders.
8.
Source:
Morningstar.
The
S&P
500
Utilities
Index
is
market
capitalization
weighted
and
consists
of
all
utility
stocks
in
the
S&P
500.
The
S&P
500
is
a
market
capitaliza-
tion-weighted
index
of
500
stocks
designed
to
measure
total
U.S.
equity
market
performance.
9.
Figures
are
as
stated
in
the
Fund’s
current
prospectus
and
may
differ
from
the
expense
ratios
disclosed
in
the
Your
Fund’s
Expenses
and
Financial
Highlights
sections
in
this
report.
In
periods
of
market
volatility,
assets
may
decline
significantly,
causing
total
annual
Fund
operating
expenses
to
become
higher
than
the
figures
shown.
See
www.franklintempletondatasources.com
for
additional
data
provider
information.
Your
Fund’s
Expenses
Franklin
Utilities
Fund
46
franklintempleton.com
Annual
Report
As
a
Fund
shareholder,
you
can
incur
two
types
of
costs:
(1)
transaction
costs,
including
sales
charges
(loads)
on
Fund
purchases
and
redemptions;
and
(2)
ongoing
Fund
costs,
including
management
fees,
distribution
and
service
(12b-1)
fees,
and
other
Fund
expenses.
All
mutual
funds
have
ongoing
costs,
sometimes
referred
to
as
operating
expenses.
The
table
below
shows
ongoing
costs
of
investing
in
the
Fund
and
can
help
you
understand
these
costs
and
compare
them
with
those
of
other
mutual
funds.
The
table
assumes
a
$1,000
investment
held
for
the
six
months
indicated.
Actual
Fund
Expenses
The
table
below
provides
information
about
actual
account
values
and
actual
expenses
in
the
columns
under
the
heading
“Actual.”
In
these
columns
the
Fund’s
actual
return,
which
includes
the
effect
of
Fund
expenses,
is
used
to
calculate
the
“Ending
Account
Value”
for
each
class
of
shares.
You
can
estimate
the
expenses
you
paid
during
the
period
by
following
these
steps
(
of
course,
your
account
value
and
expenses
will
differ
from
those
in
this
illustration
):
Divide
your
account
value
by
$1,000
(
if
your
account
had
an
$8,600
value,
then
$8,600
÷
$1,000
=
8.6
).
Then
multiply
the
result
by
the
number
in
the
row
for
your
class
of
shares
under
the
headings
“Actual”
and
“Expenses
Paid
During
Period”
(
if
Actual
Expenses
Paid
During
Period
were
$7.50,
then
8.6
x
$7.50
=
$64.50
).
In
this
illustration,
the
actual
expenses
paid
this
period
are
$64.50.
Hypothetical
Example
for
Comparison
with
Other
Funds
Under
the
heading
“Hypothetical”
in
the
table,
information
is
provided
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund’s
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund’s
actual
return.
This
information
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period,
but
it
can
help
you
compare
ongoing
costs
of
investing
in
the
Fund
with
those
of
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
for
the
class
of
shares
you
hold
with
the
5%
hypothetical
examples
that
appear
in
the
shareholder
reports
of
other
funds.
Please
note
that
expenses
shown
in
the
table
are
meant
to
highlight
ongoing
costs
and
do
not
reflect
any
transactional
costs.
Therefore,
information
under
the
heading
“Hypothetical”
is
useful
in
comparing
ongoing
costs
only,
and
will
not
help
you
compare
total
costs
of
owning
different
funds.
In
addition,
if
transactional
costs
were
included,
your
total
costs
would
have
been
higher.
1.
Expenses
are
equal
to
the
annualized
expense
ratio
for
the
six-month
period
as
indicated
above—in
the
far
right
column—multiplied
by
the
simple
average
account
value
over
the
period
indicated,
and
then
multiplied
by
183/365
to
reflect
the
one-half
year
period.
2.
Reflects
expenses
after
fee
waivers
and
expense
reimbursements.
Does
not
include
acquired
fund
fees
and
expenses.
Actual
(actual
return
after
expenses)
Hypothetical
(5%
annual
return
before
expenses)
Share
Class
Beginning
Account
Value
4/1/22
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
Ending
Account
Value
9/30/22
Expenses
Paid
During
Period
4/1/22–9/30/22
1,2
a
Net
Annualized
Expense
Ratio
2
A
$1,000
$887.10
$3.88
$1,020.96
$4.15
0.82%
A1
$1,000
$887.70
$3.40
$1,021.46
$3.64
0.72%
C
$1,000
$885.10
$5.76
$1,018.96
$6.17
1.22%
R
$1,000
$885.90
$5.06
$1,019.70
$5.42
1.07%
R6
$1,000
$888.50
$2.33
$1,022.60
$2.50
0.49%
Advisor
$1,000
$888.20
$2.70
$1,022.21
$2.89
0.57%
Franklin
Custodian
Funds
Financial
Highlights
Franklin
DynaTech
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
47
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$157.23
$121.24
$82.84
$81.16
$63.10
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.64)
(0.82)
(0.38)
(0.20)
(0.23)
Net
realized
and
unrealized
gains
(losses)
...........
(61.59)
36.81
39.44
3.79
19.45
Total
from
investment
operations
....................
(62.23)
35.99
39.06
3.59
19.22
Less
distributions
from:
Net
realized
gains
.............................
(2.22)
—
(0.66)
(1.91)
(1.16)
Net
asset
value,
end
of
year
.......................
$92.78
$157.23
$121.24
$82.84
$81.16
Total
return
c
...................................
(40.15)%
29.68%
47.47%
4.77%
30.88%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.82%
0.79%
0.85%
0.86%
0.86%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
0.82%
e
0.79%
e
0.84%
0.85%
0.86%
e
Net
investment
(loss)
............................
(0.50)%
(0.56)%
(0.39)%
(0.26)%
(0.32)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$7,214,315
$12,129,483
$8,378,574
$4,504,434
$3,741,562
Portfolio
turnover
rate
............................
40.72%
18.77%
13.82%
20.01%
17.22%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
48
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$128.06
$99.49
$68.60
$68.07
$53.49
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(1.29)
(1.55)
(0.91)
(0.66)
(0.65)
Net
realized
and
unrealized
gains
(losses)
...........
(49.80)
30.12
32.46
3.10
16.39
Total
from
investment
operations
....................
(51.09)
28.57
31.55
2.44
15.74
Less
distributions
from:
Net
realized
gains
.............................
(2.22)
—
(0.66)
(1.91)
(1.16)
Net
asset
value,
end
of
year
.......................
$74.75
$128.06
$99.49
$68.60
$68.07
Total
return
c
...................................
(40.60)%
28.72%
46.37%
3.97%
29.93%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.57%
1.54%
1.60%
1.61%
1.61%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
1.57%
e
1.54%
e
1.59%
1.60%
1.61%
e
Net
investment
(loss)
............................
(1.26)%
(1.31)%
(1.14)%
(1.01)%
(1.07)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$715,976
$1,339,016
$1,095,702
$597,927
$611,221
Portfolio
turnover
rate
............................
40.72%
18.77%
13.82%
20.01%
17.22%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
49
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$151.52
$117.13
$80.26
$78.88
$61.51
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.91)
(1.14)
(0.60)
(0.39)
(0.40)
Net
realized
and
unrealized
gains
(losses)
...........
(59.25)
35.53
38.13
3.68
18.93
Total
from
investment
operations
....................
(60.16)
34.39
37.53
3.29
18.53
Less
distributions
from:
Net
realized
gains
.............................
(2.22)
—
(0.66)
(1.91)
(1.16)
Net
asset
value,
end
of
year
.......................
$89.14
$151.52
$117.13
$80.26
$78.88
Total
return
....................................
(40.
29)%
29.36%
47.09%
4.52%
30.57%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.07%
1.04%
1.10%
1.11%
1.11%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
1.07%
d
1.04%
d
1.09%
1.10%
1.11%
d
Net
investment
(loss)
............................
(0.75)%
(0.81)%
(0.63)%
(0.51)%
(0.57)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$188,831
$311,646
$221,041
$123,721
$95,925
Portfolio
turnover
rate
............................
40.72%
18.77%
13.82%
20.01%
17.22%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
50
ue
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$165.26
$127.01
$86.46
$84.31
$65.28
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
(0.18)
(0.36)
(0.05)
0.07
0.04
Net
realized
and
unrealized
gains
(losses)
...........
(64.91)
38.61
41.26
3.99
20.15
Total
from
investment
operations
....................
(65.09)
38.25
41.21
4.06
20.19
Less
distributions
from:
Net
realized
gains
.............................
(2.22)
—
(0.66)
(1.91)
(1.16)
Net
asset
value,
end
of
year
.......................
$97.95
$165.26
$127.01
$86.46
$84.31
Total
return
....................................
(39.92)%
30.12%
47.97%
5.15%
31.38%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.46%
0.46%
0.50%
0.51%
0.50%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.45%
0.46%
d
0.50%
d
0.50%
0.50%
d
Net
investment
income
(loss)
......................
(0.13)%
(0.23)%
(0.05)%
0.09%
0.04%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$6,322,021
$9,820,184
$5,817,028
$2,473,942
$1,688,595
Portfolio
turnover
rate
............................
40.72%
18.77%
13.82%
20.01%
17.22%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
51
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$163.27
$125.58
$85.58
$83.56
$64.78
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.34)
(0.48)
(0.15)
(0.01)
(0.06)
Net
realized
and
unrealized
gains
(losses)
...........
(64.07)
38.17
40.81
3.94
20.00
Total
from
investment
operations
....................
(64.41)
37.69
40.66
3.93
19.94
Less
distributions
from:
Net
realized
gains
.............................
(2.22)
—
(0.66)
(1.91)
(1.16)
Net
asset
value,
end
of
year
.......................
$96.64
$163.27
$125.58
$85.58
$83.56
Total
return
....................................
(39.99)%
30.01%
47.83%
5.04%
31.21%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.57%
0.54%
0.60%
0.61%
0.61%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.57%
d
0.54%
d
0.59%
0.60%
0.61%
d
Net
investment
(loss)
............................
(0.26)%
(0.32)%
(0.15)%
(0.01)%
(0.07)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$2,280,138
$4,352,531
$2,884,489
$1,154,604
$680,066
Portfolio
turnover
rate
............................
40.72%
18.77%
13.82%
20.01%
17.22%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
DynaTech
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
52
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
98.8%
Aerospace
&
Defense
0.8%
a
Axon
Enterprise,
Inc.
...................................
United
States
500,000
$
57,875,000
HEICO
Corp.
........................................
United
States
500,000
71,990,000
TransDigm
Group,
Inc.
.................................
United
States
15,000
7,872,300
137,737,300
Automobiles
4.2%
a
Tesla,
Inc.
...........................................
United
States
2,650,000
702,912,500
Biotechnology
0.9%
a
Argenx
SE
..........................................
Netherlands
300,000
106,768,389
a
Halozyme
Therapeutics,
Inc.
.............................
United
States
1,000,000
39,540,000
a
Moderna,
Inc.
........................................
United
States
50,000
5,912,500
152,220,889
Capital
Markets
2.2%
FactSet
Research
Systems,
Inc.
..........................
United
States
100,000
40,011,000
Moody's
Corp.
........................................
United
States
100,000
24,311,000
MSCI,
Inc.
...........................................
United
States
400,000
168,716,000
Tradeweb
Markets,
Inc.,
A
...............................
United
States
2,500,000
141,050,000
374,088,000
Chemicals
1.6%
Corteva,
Inc.
.........................................
United
States
2,500,000
142,875,000
FMC
Corp.
..........................................
United
States
250,000
26,425,000
Linde
plc
............................................
United
Kingdom
350,000
94,356,500
263,656,500
Construction
&
Engineering
0.8%
Quanta
Services,
Inc.
..................................
United
States
1,000,000
127,390,000
Electric
Utilities
1.7%
NextEra
Energy,
Inc.
...................................
United
States
3,700,000
290,117,000
Electrical
Equipment
0.0%
†
a,b
NuScale
Power
Corp.
..................................
United
States
100,000
1,168,000
a
Shoals
Technologies
Group,
Inc.,
A
........................
United
States
200,000
4,310,000
5,478,000
Electronic
Equipment,
Instruments
&
Components
1.2%
Amphenol
Corp.,
A
....................................
United
States
500,000
33,480,000
Keyence
Corp.
.......................................
Japan
200,000
66,105,256
a
Keysight
Technologies,
Inc.
..............................
United
States
500,000
78,680,000
Samsung
SDI
Co.
Ltd.
.................................
South
Korea
50,000
18,660,381
196,925,637
Energy
Equipment
&
Services
0.3%
Schlumberger
NV
.....................................
United
States
1,550,000
55,645,000
Entertainment
0.1%
a
Sea
Ltd.,
ADR
........................................
Singapore
350,000
19,617,500
Equity
Real
Estate
Investment
Trusts
(REITs)
1.0%
Crown
Castle,
Inc.
.....................................
United
States
200,000
28,910,000
SBA
Communications
Corp.
.............................
United
States
500,000
142,325,000
171,235,000
Health
Care
Equipment
&
Supplies
6.6%
Abbott
Laboratories
....................................
United
States
1,650,000
159,654,000
a
Edwards
Lifesciences
Corp.
.............................
United
States
1,000,000
82,630,000
a
IDEXX
Laboratories,
Inc.
................................
United
States
725,000
236,205,000
a
Inspire
Medical
Systems,
Inc.
............................
United
States
800,000
141,896,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
53
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Health
Care
Equipment
&
Supplies
(continued)
a
Insulet
Corp.
.........................................
United
States
350,000
$
80,290,000
a
Intuitive
Surgical,
Inc.
..................................
United
States
950,000
178,068,000
a
Shockwave
Medical,
Inc.
................................
United
States
25,000
6,951,750
STERIS
plc
..........................................
United
States
1,000,000
166,280,000
Stryker
Corp.
........................................
United
States
250,000
50,635,000
1,102,609,750
Health
Care
Providers
&
Services
1.7%
a
Guardant
Health,
Inc.
..................................
United
States
350,000
18,840,500
a
Privia
Health
Group,
Inc.
................................
United
States
250,000
8,515,000
UnitedHealth
Group,
Inc.
................................
United
States
515,000
260,095,600
287,451,100
Health
Care
Technology
0.6%
a
Veeva
Systems,
Inc.,
A
.................................
United
States
650,000
107,172,000
Hotels,
Restaurants
&
Leisure
0.9%
a
Airbnb,
Inc.,
A
........................................
United
States
1,000,000
105,040,000
a
Booking
Holdings,
Inc.
.................................
United
States
25,000
41,080,250
146,120,250
Interactive
Media
&
Services
5.3%
a
Alphabet,
Inc.,
A
......................................
United
States
6,000,000
573,900,000
a
Alphabet,
Inc.,
C
......................................
United
States
2,000,000
192,300,000
a
ZoomInfo
Technologies,
Inc.,
A
...........................
United
States
2,750,000
114,565,000
880,765,000
Internet
&
Direct
Marketing
Retail
7.8%
a
Amazon.com,
Inc.
.....................................
United
States
10,000,000
1,130,000,000
a
MercadoLibre,
Inc.
....................................
Brazil
200,000
165,556,000
1,295,556,000
IT
Services
7.9%
Accenture
plc,
A
......................................
United
States
100,000
25,730,000
a,c
Adyen
NV,
144A,
Reg
S
................................
Netherlands
200,000
249,445,135
a
Cloudflare,
Inc.,
A
.....................................
United
States
750,000
41,482,500
a
Globant
SA
..........................................
United
States
250,000
46,770,000
Jack
Henry
&
Associates,
Inc.
............................
United
States
25,000
4,556,750
Mastercard,
Inc.,
A
....................................
United
States
1,700,000
483,378,000
a
MongoDB,
Inc.
.......................................
United
States
800,000
158,848,000
a
Shopify,
Inc.,
A
.......................................
Canada
2,000,000
53,847,824
a
Snowflake,
Inc.,
A
.....................................
United
States
450,000
76,482,000
Visa,
Inc.,
A
..........................................
United
States
1,000,000
177,650,000
1,318,190,209
Life
Sciences
Tools
&
Services
8.4%
a
Bio-Rad
Laboratories,
Inc.,
A
.............................
United
States
200,000
83,428,000
Danaher
Corp.
.......................................
United
States
2,000,000
516,580,000
a
Evotec
SE
...........................................
Germany
650,000
11,301,363
Lonza
Group
AG
......................................
Switzerland
200,000
97,378,256
a
Repligen
Corp.
.......................................
United
States
1,000,000
187,110,000
Thermo
Fisher
Scientific,
Inc.
............................
United
States
1,000,000
507,190,000
1,402,987,619
Machinery
0.7%
a
Chart
Industries,
Inc.
...................................
United
States
600,000
110,610,000
Pharmaceuticals
1.9%
AstraZeneca
plc,
ADR
..................................
United
Kingdom
2,200,000
120,648,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
54
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Pharmaceuticals
(continued)
a
Catalent,
Inc.
........................................
United
States
2,000,000
$
144,720,000
Eli
Lilly
&
Co.
........................................
United
States
75,000
24,251,250
a
Jazz
Pharmaceuticals
plc
...............................
United
States
200,000
26,658,000
316,277,250
Professional
Services
0.2%
a
CoStar
Group,
Inc.
....................................
United
States
500,000
34,825,000
Semiconductors
&
Semiconductor
Equipment
11.5%
Analog
Devices,
Inc.
...................................
United
States
1,900,000
264,746,000
ASM
International
NV
..................................
Netherlands
200,000
44,783,699
ASML
Holding
NV,
NYRS
...............................
Netherlands
750,000
311,512,500
a
Enphase
Energy,
Inc.
..................................
United
States
490,000
135,960,300
Entegris,
Inc.
.........................................
United
States
1,000,000
83,020,000
Intel
Corp.
...........................................
United
States
750,000
19,327,500
KLA
Corp.
...........................................
United
States
500,000
151,315,000
Lam
Research
Corp.
...................................
United
States
500,000
183,000,000
a
Lattice
Semiconductor
Corp.
.............................
United
States
100,000
4,921,000
Monolithic
Power
Systems,
Inc.
...........................
United
States
500,000
181,700,000
NVIDIA
Corp.
........................................
United
States
4,000,000
485,560,000
a
SiTime
Corp.
.........................................
United
States
400,000
31,492,000
a
SolarEdge
Technologies,
Inc.
............................
United
States
125,000
28,932,500
1,926,270,499
Software
28.4%
a
Adobe,
Inc.
..........................................
United
States
300,000
82,560,000
a
ANSYS,
Inc.
.........................................
United
States
600,000
133,020,000
a
Aspen
Technology,
Inc.
.................................
United
States
440,000
104,808,000
a
Atlassian
Corp.
plc,
A
..................................
United
States
1,000,000
210,590,000
a
Bill.com
Holdings,
Inc.
..................................
United
States
25,000
3,309,250
a
Cadence
Design
Systems,
Inc.
...........................
United
States
2,250,000
367,717,500
Constellation
Software,
Inc.
..............................
Canada
25,000
34,787,700
a
Crowdstrike
Holdings,
Inc.,
A
.............................
United
States
800,000
131,848,000
a
Datadog,
Inc.,
A
......................................
United
States
1,500,000
133,170,000
a
Descartes
Systems
Group,
Inc.
(The)
......................
Canada
400,000
25,412,000
a
Gitlab,
Inc.,
A
........................................
United
States
1,000,000
51,220,000
a
HubSpot,
Inc.
........................................
United
States
800,000
216,096,000
Intuit,
Inc.
...........................................
United
States
1,050,000
406,686,000
Microsoft
Corp.
.......................................
United
States
4,150,000
966,535,000
a
Monday.com
Ltd.
......................................
United
States
525,000
59,503,500
a
Palo
Alto
Networks,
Inc.
................................
United
States
1,050,000
171,979,500
a
Paycom
Software,
Inc.
.................................
United
States
250,000
82,497,500
a
Paylocity
Holding
Corp.
.................................
United
States
100,000
24,158,000
a
Procore
Technologies,
Inc.
..............................
United
States
1,000,000
49,480,000
Roper
Technologies,
Inc.
................................
United
States
500,000
179,820,000
a
Salesforce,
Inc.
.......................................
United
States
1,500,000
215,760,000
a
ServiceNow,
Inc.
......................................
United
States
1,150,000
434,251,500
a
Synopsys,
Inc.
.......................................
United
States
1,250,000
381,887,500
a
Tyler
Technologies,
Inc.
.................................
United
States
350,000
121,625,000
a
Workday,
Inc.,
A
......................................
United
States
1,000,000
152,220,000
a
Xero
Ltd.
............................................
New
Zealand
50,000
2,313,830
4,743,255,780
Technology
Hardware,
Storage
&
Peripherals
1.9%
Apple,
Inc.
..........................................
United
States
2,300,000
317,860,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
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accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
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55
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Trading
Companies
&
Distributors
0.2%
Fastenal
Co.
.........................................
United
States
700,000
$
32,228,000
Total
Common
Stocks
(Cost
$12,679,296,576)
...................................
16,519,201,783
Preferred
Stocks
0.1%
Life
Sciences
Tools
&
Services
0.1%
d
Sartorius
AG,
0.36%
...................................
Germany
50,000
17,296,097
Total
Preferred
Stocks
(Cost
$21,957,465)
......................................
17,296,097
Total
Long
Term
Investments
(Cost
$12,701,254,041)
............................
16,536,497,880
a
Short
Term
Investments
1.6%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
1.6%
e,f
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
270,863,972
270,863,972
Total
Money
Market
Funds
(Cost
$270,863,972)
.................................
270,863,972
a
a
a
g
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
0.0%
†
A
A
Money
Market
Funds
0.0%
†
e,f
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
385,000
385,000
a
Principal
Amount
*
a
Repurchase
Agreements
0.0%
†
h
Joint
Repurchase
Agreement,
BNP
Paribas
SA,
2.94%,
10/03/22
(Maturity
Value
$205,136)
Collateralized
by
U.S.
Treasury
Bills,
Discount
Note,
10/18/22
-
1/26/23;
U.S.
Treasury
Bonds,
6.625%
-
7.5%,
11/15/24
-
2/15/27;
U.S.
Treasury
Bond,
Strip,
5/15/27;
U.S.
Treasury
Notes,
0.25%
-
2.5%,
7/31/24
-
2/28/27;
and
U.S.
Treasury
Notes,
Index
Linked,
0.125%,
7/15/26
-
4/15/27
(valued
at
$209,188)
.............
205,086
205,086
Total
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
(Cost
$590,086)
.............................................................
590,086
Total
Short
Term
Investments
(Cost
$271,454,058
)
...............................
271,454,058
a
Total
Investments
(Cost
$12,972,708,099)
100.5%
...............................
$16,807,951,938
Other
Assets,
less
Liabilities
(0.5)%
...........................................
(86,670,457)
Net
Assets
100.0%
...........................................................
$16,721,281,481
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
DynaTech
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
56
See
Abbreviations
on
page
155
.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
A
portion
or
all
of
the
security
is
on
loan
at
September
30,
2022.
See
Note
1(g).
c
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
September
30,
2022,
the
value
of
this
security
was
$249,445,135,
representing
1.5%
of
net
assets.
d
Variable
rate
security.
The
rate
shown
represents
the
yield
at
period
end.
e
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
f
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
g
See
Note
1(g)
regarding
securities
on
loan.
h
See
Note
1(c)
regarding
joint
repurchase
agreement.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Focused
Growth
Fund
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notes
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an
integral
part
of
these
financial
statements.
Annual
Report
57
a
Year
Ended
September
30,
Year
Ended
September
30,
2020
a
2022
2021
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$31.61
$25.05
$20.16
Income
from
investment
operations
b
:
Net
investment
(loss)
c
...................................................
(0.18)
(0.23)
(0.10)
Net
realized
and
unrealized
gains
(losses)
....................................
(11.95)
7.00
4.99
Total
from
investment
operations
.............................................
(12.13)
6.77
4.89
Less
distributions
from:
Net
realized
gains
......................................................
(0.18)
(0.21)
—
Net
asset
value,
end
of
year
................................................
$19.30
$31.61
$25.05
Total
return
d
............................................................
(38.61)%
27.17%
24.26%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
...............................
1.37%
1.36%
1.81%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
1.10%
f
1.10%
f
1.10%
Net
investment
(loss)
.....................................................
(0.69)%
(0.78)%
(0.72)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$53,027
$80,509
$26,793
Portfolio
turnover
rate
.....................................................
39.93%
22.77%
33.93%
a
For
the
period
February
14,
2020
(effective
date)
to
September
30,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Focused
Growth
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
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part
of
these
financial
statements.
58
a
Year
Ended
September
30,
Year
Ended
September
30,
2020
a
2022
2021
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$31.23
$24.94
$20.16
Income
from
investment
operations
b
:
Net
investment
(loss)
c
...................................................
(0.37)
(0.44)
(0.21)
Net
realized
and
unrealized
gains
(losses)
....................................
(11.76)
6.94
4.99
Total
from
investment
operations
.............................................
(12.13)
6.50
4.78
Less
distributions
from:
Net
realized
gains
......................................................
(0.18)
(0.21)
—
Net
asset
value,
end
of
year
................................................
$18.92
$31.23
$24.94
Total
return
d
............................................................
(39.08)%
26.20%
23.71%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
...............................
2.12%
2.12%
2.56%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
1.85%
f
1.85%
f
1.85%
Net
investment
(loss)
.....................................................
(1.44)%
(1.53)%
(1.47)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$3,954
$6,028
$3,931
Portfolio
turnover
rate
.....................................................
39.93%
22.77%
33.93%
a
For
the
period
February
14,
2020
(effective
date)
to
September
30,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Focused
Growth
Fund
(continued)
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accompanying
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an
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part
of
these
financial
statements.
Annual
Report
59
a
Year
Ended
September
30,
Year
Ended
September
30,
2020
a
2022
2021
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$31.53
$25.06
$20.16
Income
from
investment
operations
b
:
Net
investment
(loss)
c
...................................................
(0.24)
(0.31)
(0.11)
Net
realized
and
unrealized
gains
(losses)
....................................
(11.91)
6.99
5.01
Total
from
investment
operations
.............................................
(12.15)
6.68
4.90
Less
distributions
from:
Net
realized
gains
......................................................
(0.18)
(0.21)
—
Net
asset
value,
end
of
year
................................................
$19.20
$31.53
$25.06
Total
return
d
............................................................
(38.77)%
26.79%
24.31%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
...............................
1.61%
1.66%
1.65%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
1.35%
f
1.38%
f
1.04%
Net
investment
(loss)
.....................................................
(0.94)%
(1.05)%
(0.77)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$723
$984
$643
Portfolio
turnover
rate
.....................................................
39.93%
22.77%
33.93%
a
For
the
period
February
14,
2020
(effective
date)
to
September
30,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Focused
Growth
Fund
(continued)
franklintempleton.com
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The
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are
an
integral
part
of
these
financial
statements.
60
a
Year
Ended
September
30,
Year
Ended
September
30,
2020
a
2022
2021
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
............................................
$31.78
$25.10
$20.16
Income
from
investment
operations
b
:
Net
investment
(loss)
c
...................................................
(0.11)
(0.13)
(0.07)
Net
realized
and
unrealized
gains
(losses)
....................................
(12.04)
7.02
5.01
Total
from
investment
operations
.............................................
(12.15)
6.89
4.94
Less
distributions
from:
Net
realized
gains
......................................................
(0.18)
(0.21)
—
Net
asset
value,
end
of
year
................................................
$19.45
$31.78
$25.10
Total
return
d
............................................................
(38.46)%
27.59%
24.50%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
...............................
0.98%
1.05%
2.08%
Expenses
net
of
waiver
and
payments
by
affiliates
................................
0.82%
f
0.77%
f
0.85%
Net
investment
(loss)
.....................................................
(0.42)%
(0.44)%
(0.52)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
..............................................
$46
$75
$65
Portfolio
turnover
rate
.....................................................
39.93%
22.77%
33.93%
a
For
the
period
February
14,
2020
(effective
date)
to
September
30,
2020.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year,
except
for
non-recurring
expenses,
if
any.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Focused
Growth
Fund
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an
integral
part
of
these
financial
statements.
Annual
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61
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$31.75
$25.10
$17.62
$17.24
$13.36
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.13)
(0.16)
(0.09)
(0.06)
(0.05)
Net
realized
and
unrealized
gains
(losses)
...........
(12.01)
7.02
8.66
0.52
3.93
Total
from
investment
operations
....................
(12.14)
6.86
8.57
0.46
3.88
Less
distributions
from:
Net
investment
income
..........................
—
—
—
(0.01)
—
Net
realized
gains
.............................
(0.18)
(0.21)
(1.09)
(0.07)
—
Total
distributions
...............................
(0.18)
(0.21)
(1.09)
(0.08)
—
Net
asset
value,
end
of
year
.......................
$19.43
$31.75
$25.10
$17.62
$17.24
Total
return
....................................
(38.44)%
27.47%
51.20%
2.80%
29.04%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.12%
1.12%
2.04%
2.41%
2.23%
Expenses
net
of
waiver
and
payments
by
affiliates
.......
0.85%
c
0.85%
c
0.88%
1.00%
1.00%
c
Net
investment
(loss)
............................
(0.47)%
(0.53)%
(0.41)%
(0.36)%
(0.34)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$9,519
$25,041
$16,747
$4,404
$4,310
Portfolio
turnover
rate
............................
39.93%
22.77%
33.93%
28.65%
14.47%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
Focused
Growth
Fund
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part
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financial
statements.
62
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
98.2%
Aerospace
&
Defense
0.7%
a
Axon
Enterprise,
Inc.
...................................
United
States
4,127
$
477,700
Automobiles
6.3%
a
Tesla,
Inc.
...........................................
United
States
15,918
4,222,250
Capital
Markets
2.1%
MSCI,
Inc.
...........................................
United
States
3,440
1,450,958
Electric
Utilities
5.3%
NextEra
Energy,
Inc.
...................................
United
States
45,692
3,582,710
Equity
Real
Estate
Investment
Trusts
(REITs)
2.5%
SBA
Communications
Corp.
.............................
United
States
5,895
1,678,012
Food
&
Staples
Retailing
5.5%
Costco
Wholesale
Corp.
................................
United
States
7,862
3,712,987
Health
Care
Equipment
&
Supplies
6.0%
Abbott
Laboratories
....................................
United
States
13,953
1,350,092
a
IDEXX
Laboratories,
Inc.
................................
United
States
4,521
1,472,942
a
Intuitive
Surgical,
Inc.
..................................
United
States
6,435
1,206,176
4,029,210
Health
Care
Technology
1.2%
a
Veeva
Systems,
Inc.,
A
.................................
United
States
4,913
810,055
Interactive
Media
&
Services
5.6%
a
Alphabet,
Inc.,
A
......................................
United
States
39,305
3,759,523
Internet
&
Direct
Marketing
Retail
10.6%
a
Amazon.com,
Inc.
.....................................
United
States
58,958
6,662,254
a
MercadoLibre,
Inc.
....................................
Brazil
566
468,523
7,130,777
IT
Services
8.0%
a,b
Adyen
NV,
144A,
Reg
S
................................
Netherlands
983
1,226,023
Mastercard,
Inc.,
A
....................................
United
States
8,843
2,514,419
a
MongoDB,
Inc.
.......................................
United
States
2,456
487,663
a
Shopify,
Inc.,
A
.......................................
Canada
10,788
290,455
a
Snowflake,
Inc.,
A
.....................................
United
States
4,913
835,013
5,353,573
Life
Sciences
Tools
&
Services
6.7%
Danaher
Corp.
.......................................
United
States
13,265
3,426,217
a
Repligen
Corp.
.......................................
United
States
5,895
1,103,013
4,529,230
Metals
&
Mining
0.8%
Freeport-McMoRan,
Inc.
................................
United
States
18,844
515,007
Personal
Products
1.4%
Estee
Lauder
Cos.,
Inc.
(The),
A
..........................
United
States
4,421
954,494
Road
&
Rail
0.6%
Canadian
Pacific
Railway
Ltd.
............................
Canada
5,994
399,920
Semiconductors
&
Semiconductor
Equipment
12.3%
Analog
Devices,
Inc.
...................................
United
States
14,936
2,081,182
ASML
Holding
NV,
NYRS
...............................
Netherlands
5,602
2,326,791
a
Enphase
Energy,
Inc.
..................................
United
States
1,473
408,713
NVIDIA
Corp.
........................................
United
States
28,496
3,459,130
8,275,816
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Focused
Growth
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
63
s
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Software
22.6%
a
Atlassian
Corp.
plc,
A
..................................
United
States
5,895
$
1,241,428
a
HubSpot,
Inc.
........................................
United
States
1,473
397,887
Intuit,
Inc.
...........................................
United
States
3,047
1,180,164
Microsoft
Corp.
.......................................
United
States
32,427
7,552,249
a
Salesforce,
Inc.
.......................................
United
States
6,878
989,331
a
ServiceNow,
Inc.
......................................
United
States
6,288
2,374,412
a
Synopsys,
Inc.
.......................................
United
States
4,814
1,470,725
15,206,196
Total
Common
Stocks
(Cost
$74,062,846)
......................................
66,088,418
Short
Term
Investments
1.9%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
1.9%
c,d
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
1,276,224
1,276,224
Total
Money
Market
Funds
(Cost
$1,276,224)
...................................
1,276,224
Total
Short
Term
Investments
(Cost
$1,276,224
)
.................................
1,276,224
a
Total
Investments
(Cost
$75,339,070)
100.1%
...................................
$67,364,642
Other
Assets,
less
Liabilities
(0.1)%
...........................................
(95,922)
Net
Assets
100.0%
...........................................................
$67,268,720
See
Abbreviations
on
page
155
.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
September
30,
2022,
the
value
of
this
security
was
$1,226,023,
representing
1.8%
of
net
assets.
c
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
d
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Growth
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
64
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$151.73
$129.91
$110.04
$107.59
$91.61
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
0.01
(0.06)
0.33
0.46
0.41
Net
realized
and
unrealized
gains
(losses)
...........
(32.51)
32.67
25.99
3.47
18.18
Total
from
investment
operations
....................
(32.50)
32.61
26.32
3.93
18.59
Less
distributions
from:
Net
investment
income
..........................
—
(0.18)
(0.46)
(0.44)
(0.36)
Net
realized
gains
.............................
(13.82)
(10.61)
(5.99)
(1.04)
(2.25)
Total
distributions
...............................
(13.82)
(10.79)
(6.45)
(1.48)
(2.61)
Net
asset
value,
end
of
year
.......................
$105.41
$151.73
$129.91
$110.04
$107.59
Total
return
c
...................................
(23.83)%
26.44%
25.09%
3.79%
20.72%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.80%
0.79%
0.82%
0.83%
0.83%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
0.80%
e
0.79%
e
0.81%
0.83%
e
0.83%
e
Net
investment
income
(loss)
......................
0.01%
(0.04)%
0.29%
0.45%
0.41%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$9,118,403
$12,927,577
$10,990,297
$9,157,154
$9,044,834
Portfolio
turnover
rate
............................
4.95%
f
6.04%
f
9.01%
4.91%
f
6.05%
f
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
See
Note
3(h)
and
14.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Growth
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
65
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$134.93
$117.27
$100.21
$98.38
$84.25
Income
from
investment
operations
a
:
Net
investment
(loss)
b
..........................
(0.87)
(1.01)
(0.47)
(0.29)
(0.30)
Net
realized
and
unrealized
gains
(losses)
...........
(28.32)
29.28
23.52
3.16
16.68
Total
from
investment
operations
....................
(29.19)
28.27
23.05
2.87
16.38
Less
distributions
from:
Net
realized
gains
.............................
(13.82)
(10.61)
(5.99)
(1.04)
(2.25)
Net
asset
value,
end
of
year
.......................
$91.92
$134.93
$117.27
$100.21
$98.38
Total
return
c
...................................
(24.40)%
25.51%
24.16%
3.02%
19.82%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.55%
1.54%
1.57%
1.58%
1.58%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
1.55%
e
1.54%
e
1.56%
1.58%
e
1.58%
e
Net
investment
(loss)
............................
(0.75)%
(0.79)%
(0.46)%
(0.30)%
(0.34)%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$407,722
$666,348
$727,093
$704,217
$1,060,258
Portfolio
turnover
rate
............................
4.95%
f
6.04%
f
9.01%
4.91%
f
6.05%
f
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
f
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
See
Note
3(h)
and
14.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Growth
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
66
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$150.77
$129.28
$109.49
$107.00
$91.13
Income
from
investment
operations
a
:
Net
investment
income
(loss)
b
....................
(0.32)
(0.41)
0.05
0.21
0.16
Net
realized
and
unrealized
gains
(losses)
...........
(32.20)
32.51
25.86
3.46
18.09
Total
from
investment
operations
....................
(32.52)
32.10
25.91
3.67
18.25
Less
distributions
from:
Net
investment
income
..........................
—
—
(0.13)
(0.14)
(0.13)
Net
realized
gains
.............................
(13.82)
(10.61)
(5.99)
(1.04)
(2.25)
Total
distributions
...............................
(13.82)
(10.61)
(6.12)
(1.18)
(2.38)
Net
asset
value,
end
of
year
.......................
$104.43
$150.77
$129.28
$109.49
$107.00
Total
return
....................................
(24.01)%
26.13%
24.78%
3.54%
20.42%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.05%
1.04%
1.07%
1.08%
1.08%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
1.05%
d
1.04%
d
1.06%
1.08%
d
1.08%
d
Net
investment
income
(loss)
......................
(0.25)%
(0.29)%
0.04%
0.20%
0.16%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$249,874
$395,301
$420,082
$435,331
$524,960
Portfolio
turnover
rate
............................
4.95%
e
6.04%
e
9.01%
4.91%
e
6.05%
e
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
See
Note
3(h)
and
14.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Growth
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
67
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$152.40
$130.31
$110.37
$107.90
$91.90
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.46
0.41
0.71
0.83
0.77
Net
realized
and
unrealized
gains
(losses)
...........
(32.72)
32.76
26.06
3.47
18.22
Total
from
investment
operations
....................
(32.26)
33.17
26.77
4.30
18.99
Less
distributions
from:
Net
investment
income
..........................
(0.10)
(0.47)
(0.84)
(0.79)
(0.74)
Net
realized
gains
.............................
(13.82)
(10.61)
(5.99)
(1.04)
(2.25)
Total
distributions
...............................
(13.92)
(11.08)
(6.83)
(1.83)
(2.99)
Net
asset
value,
end
of
year
.......................
$106.22
$152.40
$130.31
$110.37
$107.90
Total
return
....................................
(23.57)%
26.86%
25.51%
4.16%
21.17%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.46%
0.47%
0.48%
0.48%
0.47%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.46%
d
0.47%
d
0.48%
d
0.48%
d
0.46%
Net
investment
income
...........................
0.34%
0.29%
0.63%
0.80%
0.78%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$2,000,923
$3,113,946
$2,999,370
$2,545,800
$2,634,455
Portfolio
turnover
rate
............................
4.95%
e
6.04%
e
9.01%
4.91%
e
6.05%
e
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
See
Note
3(h)
and
14.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Growth
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
68
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$152.47
$130.38
$110.41
$107.95
$91.90
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.34
0.30
0.62
0.72
0.66
Net
realized
and
unrealized
gains
(losses)
...........
(32.74)
32.79
26.07
3.47
18.23
Total
from
investment
operations
....................
(32.40)
33.09
26.69
4.19
18.89
Less
distributions
from:
Net
investment
income
..........................
—
(0.39)
(0.73)
(0.69)
(0.59)
Net
realized
gains
.............................
(13.82)
(10.61)
(5.99)
(1.04)
(2.25)
Total
distributions
...............................
(13.82)
(11.00)
(6.72)
(1.73)
(2.84)
Net
asset
value,
end
of
year
.......................
$106.25
$152.47
$130.38
$110.41
$107.95
Total
return
....................................
(23.64)%
26.76%
25.41%
4.05%
21.02%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.55%
0.54%
0.57%
0.58%
0.58%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.55%
d
0.54%
d
0.56%
0.58%
d
0.58%
d
Net
investment
income
...........................
0.25%
0.21%
0.54%
0.70%
0.66%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$2,652,765
$4,229,679
$3,549,412
$3,154,342
$3,139,208
Portfolio
turnover
rate
............................
4.95%
e
6.04%
e
9.01%
4.91%
e
6.05%
e
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
e
Excludes
the
value
of
portfolio
activity
as
a
result
of
in-kind
transactions.
See
Note
3(h)
and
14.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
Growth
Fund
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
69
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
99.3%
Aerospace
&
Defense
5.2%
BWX
Technologies,
Inc.
................................
United
States
1,382,211
$
69,621,968
Lockheed
Martin
Corp.
.................................
United
States
393,055
151,833,216
Northrop
Grumman
Corp.
...............................
United
States
697,597
328,093,821
Raytheon
Technologies
Corp.
............................
United
States
2,424,710
198,486,761
748,035,766
Auto
Components
0.3%
a
Aptiv
plc
............................................
United
States
601,463
47,040,421
Automobiles
0.9%
a
Rivian
Automotive,
Inc.,
A
...............................
United
States
845,525
27,826,228
a
Tesla,
Inc.
...........................................
United
States
401,283
106,440,315
134,266,543
Beverages
3.7%
Brown-Forman
Corp.,
B
................................
United
States
1,583,582
105,419,054
Constellation
Brands,
Inc.,
A
.............................
United
States
543,478
124,826,027
a
Monster
Beverage
Corp.
................................
United
States
2,364,663
205,631,094
PepsiCo,
Inc.
........................................
United
States
633,445
103,416,231
539,292,406
Biotechnology
2.4%
AbbVie,
Inc.
.........................................
United
States
448,287
60,164,598
Amgen,
Inc.
.........................................
United
States
524,436
118,207,874
a
Argenx
SE,
ADR
......................................
Netherlands
31,211
11,019,044
a
Mirati
Therapeutics,
Inc.
................................
United
States
234,457
16,374,477
a
Neurocrine
Biosciences,
Inc.
.............................
United
States
366,045
38,877,640
a
PTC
Therapeutics,
Inc.
.................................
United
States
956,216
48,002,043
a
Regeneron
Pharmaceuticals,
Inc.
.........................
United
States
74,146
51,076,955
343,722,631
Building
Products
1.4%
Allegion
plc
..........................................
United
States
484,185
43,421,711
Trane
Technologies
plc
.................................
United
States
1,071,969
155,231,831
198,653,542
Capital
Markets
4.2%
BlackRock,
Inc.
.......................................
United
States
127,220
70,006,622
Blackstone,
Inc.
......................................
United
States
362,007
30,299,986
Charles
Schwab
Corp.
(The)
.............................
United
States
2,900,782
208,479,202
Intercontinental
Exchange,
Inc.
...........................
United
States
1,388,990
125,495,246
S&P
Global,
Inc.
......................................
United
States
360,525
110,086,309
Tradeweb
Markets,
Inc.,
A
...............................
United
States
1,161,320
65,521,674
609,889,039
Chemicals
2.7%
Air
Products
and
Chemicals,
Inc.
..........................
United
States
487,267
113,401,649
Ecolab,
Inc.
..........................................
United
States
607,778
87,775,299
Linde
plc
............................................
United
Kingdom
708,027
190,876,999
392,053,947
Commercial
Services
&
Supplies
0.6%
Republic
Services,
Inc.
.................................
United
States
634,399
86,303,640
Construction
Materials
0.7%
Martin
Marietta
Materials,
Inc.
............................
United
States
309,397
99,653,680
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Growth
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
70
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Electric
Utilities
1.1%
NextEra
Energy,
Inc.
...................................
United
States
2,000,646
$
156,870,653
Electrical
Equipment
0.7%
AMETEK,
Inc.
........................................
United
States
682,167
77,364,560
Eaton
Corp.
plc
.......................................
United
States
232,009
30,940,720
108,305,280
Electronic
Equipment,
Instruments
&
Components
3.4%
Amphenol
Corp.,
A
....................................
United
States
2,822,515
188,995,604
a
Keysight
Technologies,
Inc.
..............................
United
States
653,166
102,782,202
TE
Connectivity
Ltd.
...................................
Switzerland
1,821,257
200,993,923
492,771,729
Entertainment
0.5%
a
ROBLOX
Corp.,
A
.....................................
United
States
1,210,186
43,373,066
a
Walt
Disney
Co.
(The)
..................................
United
States
331,020
31,225,117
74,598,183
Equity
Real
Estate
Investment
Trusts
(REITs)
1.0%
Crown
Castle,
Inc.
.....................................
United
States
978,719
141,473,831
Food
&
Staples
Retailing
0.2%
Costco
Wholesale
Corp.
................................
United
States
54,749
25,856,310
Food
Products
0.3%
Lamb
Weston
Holdings,
Inc.
.............................
United
States
534,359
41,348,699
Health
Care
Equipment
&
Supplies
4.4%
Abbott
Laboratories
....................................
United
States
1,241,419
120,119,702
a
Edwards
Lifesciences
Corp.
.............................
United
States
1,169,424
96,629,505
a
Haemonetics
Corp.
....................................
United
States
847,264
62,722,954
a
Intuitive
Surgical,
Inc.
..................................
United
States
1,040,740
195,076,306
Stryker
Corp.
........................................
United
States
400,047
81,025,519
Teleflex,
Inc.
.........................................
United
States
409,102
82,417,689
637,991,675
Health
Care
Providers
&
Services
1.2%
a
Guardant
Health,
Inc.
..................................
United
States
271,640
14,622,381
Laboratory
Corp.
of
America
Holdings
......................
United
States
379,016
77,626,267
UnitedHealth
Group,
Inc.
................................
United
States
152,215
76,874,664
169,123,312
Health
Care
Technology
0.3%
a
Veeva
Systems,
Inc.,
A
.................................
United
States
269,213
44,387,839
Hotels,
Restaurants
&
Leisure
1.2%
a
Airbnb,
Inc.,
A
........................................
United
States
355,390
37,330,166
a
Booking
Holdings,
Inc.
.................................
United
States
28,873
47,444,402
a
Las
Vegas
Sands
Corp.
.................................
United
States
2,191,183
82,213,186
166,987,754
Interactive
Media
&
Services
3.7%
a
Alphabet,
Inc.,
A
......................................
United
States
2,722,220
260,380,343
a
Alphabet,
Inc.,
C
......................................
United
States
2,730,700
262,556,805
a
Match
Group,
Inc.
.....................................
United
States
267,727
12,783,964
535,721,112
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Growth
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
71
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Internet
&
Direct
Marketing
Retail
3.8%
a
Amazon.com,
Inc.
.....................................
United
States
4,807,424
$
543,238,912
IT
Services
5.4%
a,b
Adyen
NV,
144A,
Reg
S
................................
Netherlands
64,117
79,968,369
Automatic
Data
Processing,
Inc.
..........................
United
States
108,329
24,502,937
a,c,d
Canva,
Inc.
..........................................
Australia
25,413
17,289,962
Mastercard,
Inc.,
A
....................................
United
States
1,013,526
288,185,983
a
Paymentus
Holdings,
Inc.,
A
.............................
United
States
919,885
8,941,282
a
PayPal
Holdings,
Inc.
..................................
United
States
168,462
14,499,524
a
Shopify,
Inc.,
A
.......................................
Canada
423,500
11,409,090
a
Snowflake,
Inc.,
A
.....................................
United
States
545,279
92,675,619
Visa,
Inc.,
A
..........................................
United
States
1,364,318
242,371,093
779,843,859
Life
Sciences
Tools
&
Services
6.5%
Agilent
Technologies,
Inc.
...............................
United
States
1,266,868
153,987,805
Danaher
Corp.
.......................................
United
States
1,122,672
289,974,951
a
Illumina,
Inc.
.........................................
United
States
586,214
111,843,769
a
Mettler-Toledo
International,
Inc.
..........................
United
States
225,109
244,045,169
Thermo
Fisher
Scientific,
Inc.
............................
United
States
276,834
140,407,437
940,259,131
Machinery
4.2%
Deere
&
Co.
.........................................
United
States
458,151
152,972,037
Dover
Corp.
.........................................
United
States
386,444
45,051,642
Illinois
Tool
Works,
Inc.
.................................
United
States
974,519
176,046,857
Ingersoll
Rand,
Inc.
....................................
United
States
1,912,576
82,738,038
a,e
Proterra,
Inc.
.........................................
United
States
3,915,907
19,501,217
Stanley
Black
&
Decker,
Inc.
.............................
United
States
773,632
58,184,863
Xylem,
Inc.
..........................................
United
States
814,301
71,137,335
605,631,989
Media
0.4%
Cable
One,
Inc.
.......................................
United
States
37,775
32,223,964
Comcast
Corp.,
A
.....................................
United
States
782,678
22,955,945
55,179,909
Personal
Products
0.3%
Estee
Lauder
Cos.,
Inc.
(The),
A
..........................
United
States
183,408
39,597,787
Pharmaceuticals
4.3%
AstraZeneca
plc,
ADR
..................................
United
Kingdom
2,170,116
119,009,162
a
Catalent,
Inc.
........................................
United
States
2,150,987
155,645,419
Eli
Lilly
&
Co.
........................................
United
States
1,008,584
326,125,636
Johnson
&
Johnson
...................................
United
States
165,151
26,979,067
627,759,284
Professional
Services
1.4%
a
CoStar
Group,
Inc.
....................................
United
States
1,267,223
88,262,082
Equifax,
Inc.
.........................................
United
States
477,956
81,935,997
Verisk
Analytics,
Inc.
...................................
United
States
183,321
31,261,730
201,459,809
Road
&
Rail
3.4%
Canadian
Pacific
Railway
Ltd.
............................
Canada
1,385,249
92,423,813
JB
Hunt
Transport
Services,
Inc.
..........................
United
States
487,267
76,218,304
a
Uber
Technologies,
Inc.
.................................
United
States
993,039
26,315,534
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Growth
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
72
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Road
&
Rail
(continued)
Union
Pacific
Corp.
....................................
United
States
1,522,610
$
296,634,880
491,592,531
Semiconductors
&
Semiconductor
Equipment
6.2%
ASML
Holding
NV,
NYRS
...............................
Netherlands
399,894
166,095,973
Lam
Research
Corp.
...................................
United
States
29,250
10,705,500
Monolithic
Power
Systems,
Inc.
...........................
United
States
438,545
159,367,253
NVIDIA
Corp.
........................................
United
States
2,004,525
243,329,290
NXP
Semiconductors
NV
...............................
China
684,330
100,945,518
Texas
Instruments,
Inc.
.................................
United
States
1,364,318
211,169,140
891,612,674
Software
16.1%
a
Adobe,
Inc.
..........................................
United
States
166,093
45,708,794
a
Atlassian
Corp.
plc,
A
..................................
United
States
273,562
57,609,422
a
Autodesk,
Inc.
........................................
United
States
762,513
142,437,428
a
Bill.com
Holdings,
Inc.
..................................
United
States
1,055,982
139,780,337
a,c,d
Checkout
Payments
Group
Ltd.,
B
.........................
United
Kingdom
96,603
17,717,100
a
Crowdstrike
Holdings,
Inc.,
A
.............................
United
States
136,653
22,521,781
a,e
Gitlab,
Inc.,
A
........................................
United
States
101,436
5,195,552
Intuit,
Inc.
...........................................
United
States
766,931
297,047,715
Microsoft
Corp.
.......................................
United
States
3,082,668
717,953,377
a
Paycom
Software,
Inc.
.................................
United
States
184,366
60,838,936
a
Procore
Technologies,
Inc.
..............................
United
States
68,651
3,396,852
a
PTC,
Inc.
...........................................
United
States
1,173,515
122,749,669
a
Salesforce,
Inc.
.......................................
United
States
549,462
79,034,614
a
ServiceNow,
Inc.
......................................
United
States
749,495
283,016,807
a,c,d
Stripe,
Inc.,
B
........................................
United
States
540,043
11,127,740
a
Synopsys,
Inc.
.......................................
United
States
517,620
158,138,086
a
Tyler
Technologies,
Inc.
.................................
United
States
117,452
40,814,570
a
Workday,
Inc.,
A
......................................
United
States
731,201
111,303,416
2,316,392,196
Technology
Hardware,
Storage
&
Peripherals
4.7%
Apple,
Inc.
..........................................
United
States
4,885,693
675,202,773
Textiles,
Apparel
&
Luxury
Goods
1.0%
NIKE,
Inc.,
B
.........................................
United
States
1,807,436
150,234,080
Trading
Companies
&
Distributors
0.9%
Fastenal
Co.
.........................................
United
States
2,679,213
123,350,967
Water
Utilities
0.6%
American
Water
Works
Co.,
Inc.
..........................
United
States
682,167
88,790,857
Total
Common
Stocks
(Cost
$5,502,865,279)
....................................
14,324,494,750
Convertible
Preferred
Stocks
0.3%
IT
Services
0.0%
†
a,c,d
Canva,
Inc.,
A
........................................
Australia
2,353
1,600,884
a,c,d
Canva,
Inc.,
A-3
......................................
Australia
94
63,954
a,c,d
Canva,
Inc.,
A-4
......................................
Australia
8
5,443
a,c,d
Canva,
Inc.,
A-5
......................................
Australia
5
3,402
1,673,683
Software
0.3%
a,c,d
Gusto,
Inc.,
E
........................................
United
States
822,494
24,509,385
a,c,d
OneTrust
LLC,
C
......................................
United
States
849,894
9,210,092
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Growth
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
73
See
Abbreviations
on
page
155
.
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Convertible
Preferred
Stocks
(continued)
Software
(continued)
a,c,d
Stripe,
Inc.,
H
........................................
United
States
756,137
$
15,580,419
49,299,896
Total
Convertible
Preferred
Stocks
(Cost
$76,200,357)
...........................
50,973,579
Total
Long
Term
Investments
(Cost
$5,579,065,636)
.............................
14,375,468,329
a
Short
Term
Investments
0.5%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
0.5%
f,g
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
69,725,524
69,725,524
Total
Money
Market
Funds
(Cost
$69,725,524)
..................................
69,725,524
Total
Short
Term
Investments
(Cost
$69,725,524
)
................................
69,725,524
a
Total
Investments
(Cost
$5,648,791,160)
100.1%
................................
$14,445,193,853
Other
Assets,
less
Liabilities
(0.1)%
...........................................
(15,506,373)
Net
Assets
100.0%
...........................................................
$14,429,687,480
†
Rounds
to
less
than
0.1%
of
net
assets.
a
Non-income
producing.
b
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
September
30,
2022,
the
value
of
this
security
was
$79,968,369,
representing
0.6%
of
net
assets.
c
Fair
valued
using
significant
unobservable
inputs.
See
Note
15
regarding
fair
value
measurements.
d
See
Note
10
regarding
restricted
securities.
e
A
portion
or
all
of
the
security
is
on
loan
at
September
30,
2022.
See
Note
1(g).
f
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
g
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
74
a
Year
Ended
September
30,
Year
Ended
September
30,
2018
a
2022
2021
2020
2019
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.47
$2.08
$2.30
$2.32
$2.31
Income
from
investment
operations
b
:
Net
investment
income
(loss)
c
....................
0.07
0.08
0.08
0.08
(0.04)
Net
realized
and
unrealized
gains
(losses)
...........
(0.24)
0.42
(0.18)
0.02
0.05
Total
from
investment
operations
....................
(0.17)
0.50
(0.10)
0.10
0.01
Less
distributions
from:
Net
investment
income
..........................
(0.11)
(0.11)
(0.12)
(0.12)
—
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.16)
(0.11)
(0.12)
(0.12)
—
Net
asset
value,
end
of
year
.......................
$2.14
$2.47
$2.08
$2.30
$2.32
Total
return
d
...................................
(7.28)%
24.55%
(4.48)%
4.40%
0.43%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
......
0.72%
0.72%
0.71%
0.72%
0.71%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.71%
0.72%
g
0.70%
0.72%
g
0.71%
g
Net
investment
income
...........................
3.08%
3.19%
3.64%
3.92%
3.89%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$16,829,899
$16,044,379
$10,072,437
$7,427,468
$107,057
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
For
the
period
September
10,
2018
(effective
date)
to
September
30,
2018.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
75
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
A1
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.48
$2.08
$2.30
$2.32
$2.39
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.08
0.08
0.08
0.09
0.09
Net
realized
and
unrealized
gains
(losses)
...........
(0.24)
0.43
(0.18)
0.01
(0.04)
Total
from
investment
operations
....................
(0.16)
0.51
(0.10)
0.10
0.05
Less
distributions
from:
Net
investment
income
..........................
(0.12)
(0.11)
(0.12)
(0.12)
(0.12)
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.17)
(0.11)
(0.12)
(0.12)
(0.12)
Net
asset
value,
end
of
year
.......................
$2.15
$2.48
$2.08
$2.30
$2.32
Total
return
c
...................................
(7.10)%
25.19%
(4.39)%
4.50%
2.18%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.62%
0.62%
0.61%
0.62%
0.61%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
0.61%
0.62%
e
0.60%
0.62%
e
0.61%
e
Net
investment
income
...........................
3.15%
3.32%
3.74%
4.02%
3.99%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$30,236,582
$35,704,730
$32,693,224
$39,625,649
$42,929,573
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
76
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.52
$2.12
$2.34
$2.35
$2.42
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.07
0.07
0.07
0.08
0.08
Net
realized
and
unrealized
gains
(losses)
...........
(0.25)
0.43
(0.18)
0.02
(0.04)
Total
from
investment
operations
....................
(0.18)
0.50
(0.11)
0.10
0.04
Less
distributions
from:
Net
investment
income
..........................
(0.10)
(0.10)
(0.11)
(0.11)
(0.11)
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.15)
(0.10)
(0.11)
(0.11)
(0.11)
Net
asset
value,
end
of
year
.......................
$2.19
$2.52
$2.12
$2.34
$2.35
Total
return
c
...................................
(7.89)%
24.09%
(4.80)%
4.35%
1.61%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.12%
1.13%
1.11%
1.12%
1.11%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
1.11%
1.12%
1.10%
1.12%
e
1.11%
e
Net
investment
income
...........................
2.63%
2.84%
3.24%
3.52%
3.49%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$5,654,802
$7,507,658
$9,339,238
$13,488,627
$19,895,441
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
77
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.43
$2.04
$2.26
$2.28
$2.35
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.07
0.07
0.07
0.08
0.08
Net
realized
and
unrealized
gains
(losses)
...........
(0.24)
0.43
(0.18)
0.01
(0.04)
Total
from
investment
operations
....................
(0.17)
0.50
(0.11)
0.09
0.04
Less
distributions
from:
Net
investment
income
..........................
(0.11)
(0.11)
(0.11)
(0.11)
(0.11)
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.16)
(0.11)
(0.11)
(0.11)
(0.11)
Net
asset
value,
end
of
year
.......................
$2.10
$2.43
$2.04
$2.26
$2.28
Total
return
....................................
(7.61)%
24.75%
(4.82)%
4.20%
1.86%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.97%
0.97%
0.96%
0.97%
0.96%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.96%
0.97%
d
0.95%
0.97%
d
0.96%
d
Net
investment
income
...........................
2.84%
2.97%
3.40%
3.67%
3.64%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$270,060
$257,109
$221,584
$265,531
$296,098
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
78
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.47
$2.07
$2.29
$2.30
$2.37
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.08
0.08
0.09
0.10
0.10
Net
realized
and
unrealized
gains
(losses)
...........
(0.24)
0.44
(0.19)
0.01
(0.05)
Total
from
investment
operations
....................
(0.16)
0.52
(0.10)
0.11
0.05
Less
distributions
from:
Net
investment
income
..........................
(0.12)
(0.12)
(0.12)
(0.12)
(0.12)
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.17)
(0.12)
(0.12)
(0.12)
(0.12)
Net
asset
value,
end
of
year
.......................
$2.14
$2.47
$2.07
$2.29
$2.30
Total
return
....................................
(7.38)%
25.53%
(4.23)%
5.17%
2.40%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.42%
0.43%
0.40%
0.41%
0.39%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.40%
0.41%
0.39%
0.40%
0.39%
d
Net
investment
income
...........................
3.43%
3.50%
3.96%
4.24%
4.21%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,158,685
$748,355
$1,626,735
$1,902,027
$2,062,334
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
79
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$2.46
$2.07
$2.28
$2.30
$2.37
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.08
0.08
0.08
0.09
0.10
Net
realized
and
unrealized
gains
(losses)
...........
(0.24)
0.43
(0.17)
0.01
(0.05)
Total
from
investment
operations
....................
(0.16)
0.51
(0.09)
0.10
0.05
Less
distributions
from:
Net
investment
income
..........................
(0.12)
(0.12)
(0.12)
(0.12)
(0.12)
Net
realized
gains
.............................
(0.05)
—
—
—
—
Total
distributions
...............................
(0.17)
(0.12)
(0.12)
(0.12)
(0.12)
Net
asset
value,
end
of
year
.......................
$2.13
$2.46
$2.07
$2.28
$2.30
Total
return
....................................
(7.44)%
24.98%
(3.86)%
4.65%
2.34%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.47%
0.47%
0.46%
0.47%
0.46%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.46%
0.47%
d
0.45%
0.47%
d
0.46%
d
Net
investment
income
...........................
3.32%
3.46%
3.89%
4.17%
4.14%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$11,638,757
$11,969,691
$9,712,076
$11,816,599
$11,328,761
Portfolio
turnover
rate
............................
77.65%
68.93%
69.13%
43.63%
49.95%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
Income
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
80
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
21.9%
Aerospace
&
Defense
1.2%
a
Lockheed
Martin
Corp.
.................................
United
States
1,500,000
$
579,435,000
Raytheon
Technologies
Corp.
............................
United
States
2,959,550
242,268,763
821,703,763
Air
Freight
&
Logistics
0.3%
a
United
Parcel
Service,
Inc.,
B
............................
United
States
1,250,000
201,925,000
Banks
2.3%
Bank
of
America
Corp.
.................................
United
States
19,000,000
573,800,000
a
JPMorgan
Chase
&
Co.
.................................
United
States
2,000,000
209,000,000
Truist
Financial
Corp.
..................................
United
States
5,661,181
246,487,821
US
Bancorp
.........................................
United
States
7,500,000
302,400,000
Wells
Fargo
&
Co.
.....................................
United
States
5,000,000
201,100,000
1,532,787,821
Biotechnology
0.8%
a
AbbVie,
Inc.
.........................................
United
States
2,500,000
335,525,000
a
Amgen,
Inc.
.........................................
United
States
750,000
169,050,000
504,575,000
Capital
Markets
0.6%
a
Morgan
Stanley
.......................................
United
States
5,000,000
395,050,000
Chemicals
0.6%
Air
Products
and
Chemicals,
Inc.
..........................
United
States
1,000,000
232,730,000
LyondellBasell
Industries
NV,
A
...........................
United
States
1,750,000
131,740,000
364,470,000
Communications
Equipment
0.5%
Cisco
Systems,
Inc.
...................................
United
States
8,400,000
336,000,000
Diversified
Telecommunication
Services
0.8%
BCE,
Inc.
...........................................
Canada
5,500,000
230,623,326
Verizon
Communications,
Inc.
............................
United
States
7,500,000
284,775,000
515,398,326
Electric
Utilities
2.1%
a
American
Electric
Power
Co.,
Inc.
.........................
United
States
1,500,000
129,675,000
Duke
Energy
Corp.
....................................
United
States
2,250,000
209,295,000
Edison
International
...................................
United
States
5,000,000
282,900,000
Entergy
Corp.
........................................
United
States
1,000,000
100,630,000
b
PG&E
Corp.
.........................................
United
States
5,000,000
62,500,000
a
Southern
Co.
(The)
....................................
United
States
8,500,000
578,000,000
1,363,000,000
Energy
Equipment
&
Services
0.1%
b
Weatherford
International
plc
.............................
United
States
2,400,000
77,496,000
Food
&
Staples
Retailing
0.1%
a
Walmart,
Inc.
........................................
United
States
500,000
64,850,000
Health
Care
Equipment
&
Supplies
0.1%
Medtronic
plc
........................................
United
States
500,000
40,375,000
Health
Care
Providers
&
Services
0.0%
†
b
CHS/Community
Health
Systems,
Inc.
......................
United
States
892,717
1,919,341
Household
Products
0.4%
a
Procter
&
Gamble
Co.
(The)
.............................
United
States
2,250,000
284,062,500
Industrial
Conglomerates
0.8%
3M
Co.
.............................................
United
States
1,000,000
110,500,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
81
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Industrial
Conglomerates
(continued)
Siemens
AG
.........................................
Germany
4,000,000
$
390,991,431
501,491,431
Insurance
0.4%
a
MetLife,
Inc.
.........................................
United
States
4,300,000
261,354,000
IT
Services
0.5%
a
International
Business
Machines
Corp.
.....................
United
States
2,500,000
297,025,000
Metals
&
Mining
0.6%
BHP
Group
Ltd.,
ADR
..................................
Australia
2,000,000
100,080,000
c
Rio
Tinto
plc,
ADR
.....................................
Australia
5,124,535
282,156,897
382,236,897
Multiline
Retail
0.1%
Target
Corp.
.........................................
United
States
500,000
74,195,000
Multi-Utilities
1.3%
a
Dominion
Energy,
Inc.
..................................
United
States
8,500,000
587,435,000
Sempra
Energy
.......................................
United
States
2,000,000
299,880,000
887,315,000
Oil,
Gas
&
Consumable
Fuels
3.5%
a
BP
plc,
ADR
.........................................
United
Kingdom
3,500,000
99,925,000
a
Chevron
Corp.
.......................................
United
States
6,970,000
1,001,379,900
a
Exxon
Mobil
Corp.
.....................................
United
States
8,500,000
742,135,000
a
Shell
plc,
ADR
........................................
Netherlands
4,000,000
199,040,000
a
TotalEnergies
SE,
ADR
.................................
France
5,000,000
232,600,000
2,275,079,900
Pharmaceuticals
2.6%
AstraZeneca
plc,
ADR
..................................
United
Kingdom
4,000,000
219,360,000
b
Bausch
Health
Cos.,
Inc.
................................
United
States
15,000,000
103,350,000
a
Bristol-Myers
Squibb
Co.
................................
United
States
5,000,000
355,450,000
a
Johnson
&
Johnson
...................................
United
States
3,500,000
571,760,000
a
Merck
&
Co.,
Inc.
.....................................
United
States
1,500,000
129,180,000
a
Pfizer,
Inc.
...........................................
United
States
7,500,000
328,200,000
1,707,300,000
Semiconductors
&
Semiconductor
Equipment
1.3%
Broadcom,
Inc.
.......................................
United
States
500,000
222,005,000
QUALCOMM,
Inc.
.....................................
United
States
1,000,000
112,980,000
a
Texas
Instruments,
Inc.
.................................
United
States
3,460,000
535,538,800
870,523,800
Specialty
Retail
0.5%
Home
Depot,
Inc.
(The)
.................................
United
States
1,250,000
344,925,000
Tobacco
0.4%
a
Philip
Morris
International,
Inc.
...........................
United
States
3,500,000
290,535,000
Total
Common
Stocks
(Cost
$13,112,033,148)
...................................
14,395,593,779
Management
Investment
Companies
0.1%
Capital
Markets
0.1%
d
Clarion
Partners
Real
Estate
Income
Fund,
Inc.,
Class
I
........
United
States
5,903,968
75,098,472
Total
Management
Investment
Companies
(Cost
$75,000,000)
....................
75,098,472
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
82
a
a
Country
Shares
a
Value
a
a
a
a
a
a
e
Equity-Linked
Securities
19.2%
Airlines
0.3%
f
BNP
Paribas
Issuance
BV
into
Delta
Air
Lines,
Inc.,
144A,
10%,
7/12/23
...........................................
United
States
5,500,000
$
173,148,993
Automobiles
0.5%
f
Citigroup
Global
Markets
Holdings,
Inc.
into
General
Motors
Co.,
144A,
12%,
11/10/22
.................................
United
States
2,895,000
95,510,688
f
Merrill
Lynch
International
&
Co.
CV
into
Ford
Motor
Co.,
144A,
12%,
12/07/22
..........................................
United
States
6,892,000
80,833,324
f
Royal
Bank
of
Canada
into
General
Motors
Co.,
144A,
12%,
3/17/23
United
States
4,900,000
167,575,376
343,919,388
Banks
2.7%
f
BNP
Paribas
Issuance
BV
into
Bank
of
America
Corp.,
144A,
8.5%,
7/13/23
...........................................
United
States
8,500,000
264,603,077
f
Credit
Suisse
AG
into
Citigroup,
Inc.,
144A,
10%,
8/15/23
.......
United
States
5,221,000
230,429,464
f
J.P.
Morgan
Structured
Products
BV
into
Bank
of
America
Corp.,
144A,
8.5%,
1/27/23
.................................
United
States
5,711,000
182,143,971
f
J.P.
Morgan
Structured
Products
BV
into
Bank
of
America
Corp.,
144A,
9.5%,
5/12/23
.................................
United
States
7,100,000
227,087,882
f
National
Bank
of
Canada
into
JPMorgan
Chase
&
Co.,
144A,
8%,
8/16/23
...........................................
United
States
2,643,000
282,623,313
f
National
Bank
of
Canada
into
Truist
Financial
Corp.,
144A,
9%,
10/10/23
..........................................
United
States
5,000,000
221,100,888
f
Societe
Generale
SA
into
Citigroup,
Inc.,
144A,
9%,
3/10/23
.....
United
States
4,091,000
177,331,399
f
UBS
AG
into
Citigroup,
Inc.,
144A,
8.5%,
7/19/23
.............
United
States
5,007,000
216,978,398
1,802,298,392
Biotechnology
0.3%
f
Goldman
Sachs
International
Bank
into
AbbVie,
Inc.,
144A,
9%,
1/25/23
...........................................
United
States
1,740,000
232,477,446
Capital
Markets
1.5%
f
BNP
Paribas
Issuance
BV
into
Morgan
Stanley,
144A,
8%,
5/22/23
United
States
3,050,000
245,236,570
f
Credit
Suisse
AG
into
Morgan
Stanley,
144A,
10%,
8/08/23
......
United
States
3,240,000
259,054,443
f
J.P.
Morgan
Structured
Products
BV
into
Goldman
Sachs
Group,
Inc.
(The),
144A,
8.5%,
3/09/23
............................
United
States
745,000
225,138,543
f
UBS
AG
into
Charles
Schwab
Corp.
(The),
144A,
10%,
6/16/23
...
United
States
3,567,000
239,979,698
969,409,254
Chemicals
0.4%
f
Credit
Suisse
AG
into
Air
Products
and
Chemicals,
Inc.,
144A,
8.5%,
5/15/23
...........................................
United
States
1,000,000
235,785,516
Communications
Equipment
0.7%
f
Royal
Bank
of
Canada
into
Cisco
Systems,
Inc.,
144A,
8%,
12/02/22
United
States
4,700,000
191,237,731
f
Royal
Bank
of
Canada
into
Cisco
Systems,
Inc.,
144A,
8%,
9/11/23
United
States
5,850,000
242,970,966
434,208,697
Containers
&
Packaging
0.3%
f
Mizuho
Markets
Cayman
LP
into
International
Paper
Co.,
144A,
9%,
12/20/22
..........................................
United
States
5,376,300
173,302,834
Electric
Utilities
0.8%
f
Morgan
Stanley
Finance
II
Ltd.
into
PG&E
Corp.,
144A,
10%,
11/14/23
..........................................
United
States
10,800,000
133,904,714
f
National
Bank
of
Canada
into
NextEra
Energy,
Inc.,
144A,
8.5%,
12/05/23
..........................................
United
States
3,300,000
251,765,023
f
UBS
AG
into
NextEra
Energy,
Inc.,
144A,
8%,
3/17/23
..........
United
States
1,695,000
127,598,310
513,268,047
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
83
a
a
Country
Shares
a
Value
a
a
a
a
a
a
e
Equity-Linked
Securities
(continued)
Energy
Equipment
&
Services
0.3%
f
Credit
Suisse
AG
into
Halliburton
Co.,
144A,
10%,
11/15/22
......
United
States
7,000,000
$
175,304,594
Health
Care
Equipment
&
Supplies
0.3%
f
Barclays
Bank
plc
into
Medtronic
plc,
144A,
8%,
3/10/23
........
United
States
2,600,000
217,051,436
Hotels,
Restaurants
&
Leisure
0.2%
f
Societe
Generale
SA
into
Las
Vegas
Sands
Corp.,
144A,
10.137%,
9/12/23
...........................................
United
States
2,843,000
104,567,781
Independent
Power
and
Renewable
Electricity
Producers
0.5%
f
Goldman
Sachs
International
Bank
into
NextEra
Energy
Partners
LP,
144A,
10%,
7/05/23
..................................
United
States
3,850,000
179,268,614
f
Mizuho
Markets
Cayman
LP
into
Vistra
Corp.,
144A,
11%,
11/01/22
United
States
7,740,000
157,608,823
336,877,437
Industrial
Conglomerates
0.3%
f
Goldman
Sachs
International
Bank
into
Honeywell
International,
Inc.,
144A,
8.5%,
4/04/23
.................................
United
States
1,335,000
233,124,297
Insurance
1.0%
f
National
Bank
of
Canada
into
MetLife,
Inc.,
144A,
8.5%,
12/05/22
.
United
States
4,240,000
259,112,257
f
Royal
Bank
of
Canada
into
MetLife,
Inc.,
144A,
9%,
9/22/23
.....
United
States
3,200,000
198,433,563
f
Royal
Bank
of
Canada
into
MetLife,
Inc.,
144A,
10%,
5/19/23
....
United
States
3,581,000
224,863,009
682,408,829
Interactive
Media
&
Services
0.3%
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Alphabet,
Inc.,
144A,
9%,
6/22/23
........................................
United
States
115,000
226,345,928
Internet
&
Direct
Marketing
Retail
0.7%
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Bristol
Myers
Squibb
Co.,
144A,
8.5%,
12/22/22
.............................
United
States
4,400,000
274,277,145
f
Credit
Suisse
AG
into
Amazon.com,
Inc.,
144A,
8%,
2/17/23
.....
United
States
91,000
214,481,581
488,758,726
IT
Services
0.5%
f
Goldman
Sachs
International
Bank
into
Twilio,
Inc.,
144A,
12.5%,
3/03/23
...........................................
United
States
923,000
74,516,763
f,g
UBS
AG
into
Fidelity
National
Information
Services,
Inc.,
144A,
10%,
10/19/23
..........................................
United
States
3,200,000
244,130,019
318,646,782
Machinery
0.2%
f
Goldman
Sachs
International
Bank
into
Cummins,
Inc.,
144A,
8%,
1/10/23
...........................................
United
States
650,000
135,519,216
Media
0.7%
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Comcast
Corp.,
144A,
8.5%,
6/23/23
......................................
United
States
5,667,000
175,765,038
f
Societe
Generale
SA
into
Comcast
Corp.,
144A,
8%,
4/17/23
....
United
States
5,300,000
165,238,996
f
UBS
AG
into
Comcast
Corp.,
144A,
8.5%,
7/20/23
.............
United
States
3,765,000
117,461,486
458,465,520
Metals
&
Mining
0.3%
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Barrick
Gold
Corp.,
144A,
9%,
10/13/22
..................................
Canada
3,225,000
51,391,426
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Freeport-McMoRan,
Inc.,
144A,
12%,
10/26/22
.............................
United
States
6,337,000
178,055,330
229,446,756
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
84
a
a
Country
Shares
a
Value
a
a
a
a
a
a
e
Equity-Linked
Securities
(continued)
Oil,
Gas
&
Consumable
Fuels
1.1%
f
Merrill
Lynch
International
&
Co.
CV
into
Chevron
Corp.,
144A,
10%,
12/04/23
..........................................
United
States
1,650,000
$
241,077,897
f
Mizuho
Markets
Cayman
LP
into
Exxon
Mobil
Corp.,
144A,
10%,
2/21/23
...........................................
United
States
3,200,000
256,635,015
f
UBS
AG
into
BP
plc,
144A,
10%,
6/14/23
....................
United
Kingdom
8,460,000
243,091,543
740,804,455
Pharmaceuticals
1.4%
f
BNP
Paribas
Issuance
BV
into
Bristol-Myers
Squibb
Co.,
144A,
7.5%,
4/18/23
......................................
United
States
3,300,000
238,034,315
f
J.P.
Morgan
Structured
Products
BV
into
Pfizer,
Inc.,
144A,
9.5%,
2/13/23
...........................................
United
States
4,700,000
213,325,729
f
Royal
Bank
of
Canada
into
Merck
&
Co.,
Inc.,
144A,
8.5%,
10/17/22
United
States
2,976,000
259,292,757
f
Societe
Generale
SA
into
Pfizer,
Inc.,
144A,
8.5%,
6/09/23
......
United
States
4,200,000
190,428,689
901,081,490
Road
&
Rail
0.4%
f
Merrill
Lynch
International
&
Co.
CV
into
Union
Pacific
Corp.,
144A,
Reg
S,
9%,
11/01/23
.................................
United
States
1,240,000
242,535,176
Semiconductors
&
Semiconductor
Equipment
2.9%
f
Barclays
Bank
plc
into
Texas
Instruments,
Inc.,
144A,
9%,
10/10/23
United
States
1,600,000
247,996,473
f
BNP
Paribas
Issuance
BV
into
Broadcom,
Inc.,
144A,
9%,
8/14/23
United
States
530,000
245,260,680
f
Citigroup
Global
Markets
Holdings,
Inc.
into
Intel
Corp.,
144A,
10%,
9/14/23
...........................................
United
States
8,050,000
222,291,016
f
Goldman
Sachs
International
Bank
into
Intel
Corp.,
144A,
10%,
4/04/23
...........................................
United
States
3,315,000
93,720,142
f
Goldman
Sachs
International
Bank
into
Texas
Instruments,
Inc.,
144A,
8.5%,
12/14/22
.................................
United
States
1,200,000
188,439,840
f
Merrill
Lynch
International
&
Co.
CV
into
Analog
Devices,
Inc.,
144A,
9%,
4/04/23
........................................
United
States
1,551,000
224,232,880
f
Merrill
Lynch
International
&
Co.
CV
into
Broadcom,
Inc.,
144A,
9.5%,
10/13/22
.....................................
United
States
550,000
250,757,511
f
Mizuho
Markets
Cayman
LP
into
Microchip
Technology,
Inc.,
144A,
9%,
10/11/22
.......................................
United
States
1,273,500
156,932,568
f
Morgan
Stanley
Finance
II
Ltd.
into
Microchip
Technology,
Inc.,
144A,
10%,
9/12/23
..................................
United
States
2,045,000
129,550,491
f
Royal
Bank
of
Canada
into
Intel
Corp.,
144A,
9.5%,
12/22/22
....
United
States
4,525,000
120,396,522
1,879,578,123
Software
0.2%
f
Goldman
Sachs
International
Bank
into
Salesforce,
Inc.,
144A,
8%,
2/08/23
...........................................
United
States
820,000
124,362,265
Technology
Hardware,
Storage
&
Peripherals
0.4%
f
Credit
Suisse
AG
into
Apple,
Inc.,
144A,
9%,
7/05/23
...........
United
States
1,740,000
240,316,642
Total
Equity-Linked
Securities
(Cost
$14,633,128,924)
...........................
12,613,014,020
Convertible
Preferred
Stocks
1.7%
Capital
Markets
0.1%
KKR
Group
Co.,
Inc.,
6%,
C
.............................
United
States
1,200,000
65,304,000
Electric
Utilities
1.4%
American
Electric
Power
Co.,
Inc.,
6.125%
..................
United
States
2,600,000
128,700,000
NextEra
Energy,
Inc.,
5.279%
............................
United
States
7,500,000
373,350,000
NextEra
Energy,
Inc.,
6.219%
............................
United
States
7,500,000
364,200,000
PG&E
Corp.,
5.5%
....................................
United
States
500,000
57,120,000
923,370,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
85
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Convertible
Preferred
Stocks
(continued)
Multi-Utilities
0.1%
NiSource,
Inc.,
7.75%
..................................
United
States
1,000,000
$
100,590,000
Thrifts
&
Mortgage
Finance
0.1%
b
FNMA,
5.375%
.......................................
United
States
4,240
43,460,000
b
Total
Convertible
Preferred
Stocks
(Cost
$1,377,081,194)
........................
1,132,724,000
Preferred
Stocks
0.0%
†
Thrifts
&
Mortgage
Finance
0.0%
†
b
FNMA,
8.25%,
S
......................................
United
States
4,000,000
14,720,000
b
Total
Preferred
Stocks
(Cost
$93,801,501)
......................................
14,720,000
Principal
Amount
*
Convertible
Bonds
0.2%
Airlines
0.1%
JetBlue
Airways
Corp.
,
Senior
Note
,
0.5
%
,
4/01/26
............
United
States
48,013,000
34,329,295
Hotels,
Restaurants
&
Leisure
0.0%
†
DraftKings
Holdings,
Inc.
,
Senior
Note
,
Zero
Cpn.,
3/15/28
......
United
States
44,358,000
29,073,894
Media
0.1%
DISH
Network
Corp.
,
Senior
Note
,
2.375
%
,
3/15/24
............
United
States
85,000,000
76,138,750
Real
Estate
Management
&
Development
0.0%
†
Redfin
Corp.
,
Senior
Note
,
Zero
Cpn.,
10/15/25
...............
United
States
22,550,000
13,347,345
Total
Convertible
Bonds
(Cost
$178,919,109)
...................................
152,889,284
Corporate
Bonds
43.0%
Aerospace
&
Defense
1.6%
Boeing
Co.
(The)
,
Senior
Bond,
3.2%,
3/01/29
............................
United
States
74,000,000
61,880,313
Senior
Bond,
3.625%,
2/01/31
..........................
United
States
79,000,000
65,690,074
Senior
Note,
2.196%,
2/04/26
..........................
United
States
35,000,000
31,091,561
Senior
Note,
5.04%,
5/01/27
...........................
United
States
110,000,000
106,118,349
Senior
Note,
3.25%,
2/01/28
...........................
United
States
60,000,000
52,431,886
Senior
Note,
5.15%,
5/01/30
...........................
United
States
302,000,000
279,719,125
f
Bombardier,
Inc.
,
Senior
Bond,
144A,
7.5%,
3/15/25
.......................
Canada
65,000,000
63,295,700
Senior
Note,
144A,
7.5%,
12/01/24
......................
Canada
13,600,000
13,529,144
Raytheon
Technologies
Corp.
,
Senior
Note
,
3.125
%
,
5/04/27
.....
United
States
40,000,000
36,745,320
Textron,
Inc.
,
Senior
Bond
,
3
%
,
6/01/30
.....................
United
States
76,049,000
62,758,481
TransDigm,
Inc.
,
Senior
Note,
6.375%,
6/15/26
..........................
United
States
102,500,000
96,960,644
f
Senior
Secured
Note,
144A,
8%,
12/15/25
.................
United
States
14,989,000
15,224,927
f
Senior
Secured
Note,
144A,
6.25%,
3/15/26
...............
United
States
163,000,000
158,385,470
1,043,830,994
Air
Freight
&
Logistics
0.0%
†
FedEx
Corp.
,
Senior
Bond
,
2.4
%
,
5/15/31
...................
United
States
29,000,000
22,624,108
Airlines
0.8%
f
American
Airlines
Group,
Inc.
,
Senior
Note
,
144A,
3.75
%
,
3/01/25
.
United
States
40,000,000
32,759,200
f
American
Airlines
Inc/AAdvantage
Loyalty
IP
Ltd.
,
Senior
Secured
Note,
144A,
5.5%,
4/20/26
................
United
States
145,000,000
136,421,075
Senior
Secured
Note,
144A,
5.75%,
4/20/29
...............
United
States
50,000,000
43,713,750
f
Delta
Air
Lines,
Inc.
/
SkyMiles
IP
Ltd.
,
Senior
Secured
Note
,
144A,
4.75
%
,
10/20/28
.....................................
United
States
105,775,000
98,658,819
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
86
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Airlines
(continued)
f
Mileage
Plus
Holdings
LLC
/
Mileage
Plus
Intellectual
Property
Assets
Ltd.
,
Senior
Secured
Note
,
144A,
6.5
%
,
6/20/27
.......
United
States
95,000,000
$
93,160,800
f
United
Airlines,
Inc.
,
Senior
Secured
Note,
144A,
4.375%,
4/15/26
..............
United
States
39,212,000
35,064,939
Senior
Secured
Note,
144A,
4.625%,
4/15/29
..............
United
States
96,259,000
79,892,082
519,670,665
Auto
Components
0.6%
f
Allison
Transmission,
Inc.
,
Senior
Bond
,
144A,
5.875
%
,
6/01/29
..
United
States
15,000,000
13,598,400
c
American
Axle
&
Manufacturing,
Inc.
,
Senior
Note
,
5
%
,
10/01/29
..
United
States
45,000,000
34,142,850
Dana,
Inc.
,
Senior
Note
,
4.25
%
,
9/01/30
....................
United
States
25,000,000
18,350,035
f
Dornoch
Debt
Merger
Sub,
Inc.
,
Senior
Note
,
144A,
6.625
%
,
10/15/29
..........................................
United
States
95,000,000
68,618,793
Goodyear
Tire
&
Rubber
Co.
(The)
,
c
Senior
Bond,
5%,
5/31/26
.............................
United
States
77,000,000
71,454,379
c
Senior
Bond,
5.25%,
4/30/31
...........................
United
States
52,500,000
42,186,202
c
Senior
Note,
4.875%,
3/15/27
..........................
United
States
34,757,000
30,810,690
Senior
Note,
5%,
7/15/29
.............................
United
States
130,000,000
106,356,250
Senior
Note,
5.25%,
7/15/31
...........................
United
States
45,500,000
36,455,738
f
Tenneco,
Inc.
,
Senior
Secured
Note
,
144A,
5.125
%
,
4/15/29
.....
United
States
6,817,000
6,762,711
428,736,048
Automobiles
0.6%
Ford
Motor
Co.
,
Senior
Bond,
3.25%,
2/12/32
...........................
United
States
107,500,000
77,620,912
Senior
Bond,
6.1%,
8/19/32
............................
United
States
92,000,000
81,263,600
c
Senior
Note,
4.346%,
12/08/26
.........................
United
States
145,000,000
133,255,000
General
Motors
Co.
,
Senior
Bond,
5%,
10/01/28
............................
United
States
25,000,000
23,026,570
Senior
Bond,
5.6%,
10/15/32
...........................
United
States
15,000,000
13,408,875
Senior
Bond,
5.15%,
4/01/38
...........................
United
States
105,000,000
84,698,800
413,273,757
Banks
2.5%
Bank
of
America
Corp.
,
h
AA,
Junior
Sub.
Bond,
6.1%
to
3/16/25,
FRN
thereafter,
Perpetual
United
States
70,000,000
67,151,350
h
X,
Junior
Sub.
Bond,
6.25%
to
9/04/24,
FRN
thereafter,
Perpetual
United
States
55,000,000
53,281,250
Senior
Bond,
3.419%
to
12/19/27,
FRN
thereafter,
12/20/28
...
United
States
155,000,000
137,828,361
Senior
Note,
3.004%
to
12/19/22,
FRN
thereafter,
12/20/23
....
United
States
40,000,000
39,792,501
Barclays
plc
,
Senior
Bond,
2.645%
to
6/23/30,
FRN
thereafter,
6/24/31
.....
United
Kingdom
21,000,000
15,701,356
c
Senior
Bond,
5.746%
to
8/08/32,
FRN
thereafter,
8/09/33
.....
United
Kingdom
100,000,000
90,978,602
Senior
Note,
3.65%,
3/16/25
...........................
United
Kingdom
50,000,000
47,335,757
Senior
Note,
3.932%
to
5/06/24,
FRN
thereafter,
5/07/25
......
United
Kingdom
50,000,000
48,122,019
Senior
Note,
4.375%,
1/12/26
..........................
United
Kingdom
125,000,000
117,952,253
Senior
Note,
5.501%
to
8/08/27,
FRN
thereafter,
8/09/28
......
United
Kingdom
30,000,000
28,154,318
Citigroup,
Inc.
,
h
Junior
Sub.
Bond,
5.95%
to
1/29/23,
FRN
thereafter,
Perpetual
.
United
States
118,000,000
116,893,160
c,h
D,
Junior
Sub.
Bond,
5.35%
to
5/14/23,
FRN
thereafter,
Perpetual
United
States
75,000,000
71,250,000
h
M,
Junior
Sub.
Bond,
6.3%
to
5/14/24,
FRN
thereafter,
Perpetual
United
States
105,000,000
98,179,002
Senior
Note,
3.07%
to
2/23/27,
FRN
thereafter,
2/24/28
.......
United
States
20,000,000
17,848,182
Sub.
Bond,
4.125%,
7/25/28
...........................
United
States
130,000,000
117,503,080
h
JPMorgan
Chase
&
Co.
,
i
I,
Junior
Sub.
Bond,
FRN,
6.276%,
(3-month
USD
LIBOR
+
3.47%),
Perpetual
...................................
United
States
115,959,000
115,958,157
c
Q,
Junior
Sub.
Bond,
5.15%
to
4/30/23,
FRN
thereafter,
Perpetual
United
States
60,700,000
58,648,718
c
R,
Junior
Sub.
Bond,
6%
to
7/31/23,
FRN
thereafter,
Perpetual
.
United
States
55,000,000
53,762,500
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
87
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Banks
(continued)
h
JPMorgan
Chase
&
Co.,
(continued)
S,
Junior
Sub.
Bond,
6.75%
to
1/31/24,
FRN
thereafter,
Perpetual
United
States
65,000,000
$
64,450,821
i
V,
Junior
Sub.
Bond,
FRN,
5.597%,
(3-month
USD
LIBOR
+
3.32%),
Perpetual
...................................
United
States
108,100,000
108,100,000
X,
Junior
Sub.
Bond,
6.1%
to
9/30/24,
FRN
thereafter,
Perpetual
United
States
20,000,000
19,212,500
KeyBank
NA
,
Sub.
Bond
,
4.9
%
,
8/08/32
....................
United
States
15,000,000
13,513,605
Truist
Financial
Corp.
,
Senior
Note,
1.887%
to
6/06/28,
FRN
thereafter,
6/07/29
......
United
States
20,000,000
16,385,062
Sub.
Bond,
4.916%
to
7/27/32,
FRN
thereafter,
7/28/33
.......
United
States
20,000,000
18,102,076
Wells
Fargo
&
Co.
,
h
S,
Junior
Sub.
Bond,
5.9%
to
6/14/24,
FRN
thereafter,
Perpetual
United
States
70,000,000
63,861,735
Senior
Bond,
4.478%
to
4/03/30,
FRN
thereafter,
4/04/31
.....
United
States
15,000,000
13,738,367
Senior
Note,
3.196%
to
6/16/26,
FRN
thereafter,
6/17/27
......
United
States
46,600,000
42,479,127
1,656,183,859
Beverages
0.0%
†
Anheuser-Busch
InBev
Worldwide,
Inc.
,
Senior
Bond
,
4
%
,
4/13/28
Belgium
25,000,000
23,787,749
Biotechnology
0.1%
AbbVie,
Inc.
,
Senior
Note,
3.2%,
5/14/26
............................
United
States
25,000,000
23,399,822
Senior
Note,
3.2%,
11/21/29
...........................
United
States
65,000,000
56,956,651
80,356,473
Building
Products
0.3%
f
Camelot
Return
Merger
Sub,
Inc.
,
Senior
Secured
Note
,
144A,
8.75
%
,
8/01/28
.....................................
United
States
50,000,000
41,278,093
Carrier
Global
Corp.
,
Senior
Bond,
2.7%,
2/15/31
............................
United
States
22,500,000
18,119,770
Senior
Note,
2.722%,
2/15/30
..........................
United
States
98,200,000
81,154,760
Johnson
Controls
International
plc
/
Tyco
Fire
&
Security
Finance
SCA
,
Senior
Bond
,
4.9
%
,
12/01/32
.......................
United
States
32,500,000
30,784,487
171,337,110
Capital
Markets
0.6%
Brookfield
Finance,
Inc.
,
Senior
Bond
,
4.85
%
,
3/29/29
..........
Canada
34,444,000
32,251,659
f
Coinbase
Global,
Inc.
,
Senior
Bond,
144A,
3.625%,
10/01/31
....................
United
States
60,000,000
33,389,462
c
Senior
Note,
144A,
3.375%,
10/01/28
....................
United
States
60,000,000
37,649,400
Goldman
Sachs
Group,
Inc.
(The)
,
Senior
Bond,
2.6%,
2/07/30
............................
United
States
36,250,000
29,282,690
Senior
Bond,
2.65%
to
10/20/31,
FRN
thereafter,
10/21/32
....
United
States
43,600,000
33,469,610
Senior
Note,
3.5%,
4/01/25
............................
United
States
73,000,000
69,809,797
Morgan
Stanley
,
Senior
Bond,
2.699%
to
1/21/30,
FRN
thereafter,
1/22/31
.....
United
States
50,000,000
40,588,622
Senior
Bond,
2.239%
to
7/20/31,
FRN
thereafter,
7/21/32
.....
United
States
20,482,000
15,407,312
Senior
Bond,
2.511%
to
10/19/31,
FRN
thereafter,
10/20/32
....
United
States
81,000,000
61,989,100
Senior
Note,
1.512%
to
7/19/26,
FRN
thereafter,
7/20/27
......
United
States
25,000,000
21,322,270
375,159,922
Chemicals
0.9%
f
Avient
Corp.
,
Senior
Note
,
144A,
7.125
%
,
8/01/30
.............
United
States
20,000,000
18,504,300
Celanese
US
Holdings
LLC
,
Senior
Bond,
6.379%,
7/15/32
..........................
United
States
25,000,000
23,263,857
Senior
Note,
6.165%,
7/15/27
..........................
United
States
20,000,000
18,953,532
f
Consolidated
Energy
Finance
SA
,
Senior
Note
,
144A,
6.5
%
,
5/15/26
Switzerland
125,000,000
115,949,834
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
88
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Chemicals
(continued)
f
CVR
Partners
LP
/
CVR
Nitrogen
Finance
Corp.
,
Senior
Secured
Note
,
144A,
6.125
%
,
6/15/28
...........................
United
States
31,500,000
$
27,472,764
Huntsman
International
LLC
,
Senior
Bond
,
4.5
%
,
5/01/29
.......
United
States
25,000,000
22,071,347
f
International
Flavors
&
Fragrances,
Inc.
,
Senior
Bond
,
144A,
2.3
%
,
11/01/30
..........................................
United
States
114,500,000
88,030,828
Olin
Corp.
,
Senior
Bond,
5%,
2/01/30
.............................
United
States
21,900,000
18,205,470
f
Senior
Note,
144A,
9.5%,
6/01/25
.......................
United
States
40,000,000
42,939,421
f
Rain
CII
Carbon
LLC
/
CII
Carbon
Corp.
,
Secured
Note
,
144A,
7.25
%
,
4/01/25
.....................................
United
States
33,249,000
29,281,016
f
SCIH
Salt
Holdings,
Inc.
,
Senior
Note,
144A,
6.625%,
5/01/29
.....................
United
States
119,500,000
92,028,651
Senior
Secured
Note,
144A,
4.875%,
5/01/28
..............
United
States
155,000,000
128,292,725
624,993,745
Commercial
Services
&
Supplies
0.5%
f
ADT
Security
Corp.
(The)
,
Senior
Secured
Note
,
144A,
4.125
%
,
8/01/29
...........................................
United
States
30,000,000
24,963,600
f
APX
Group,
Inc.
,
Senior
Note,
144A,
5.75%,
7/15/29
......................
United
States
115,000,000
91,165,100
Senior
Secured
Note,
144A,
6.75%,
2/15/27
...............
United
States
104,000,000
97,283,554
f
Aramark
Services,
Inc.
,
Senior
Bond
,
144A,
5
%
,
2/01/28
........
United
States
31,000,000
27,676,800
f
GFL
Environmental,
Inc.
,
Senior
Note
,
144A,
4.75
%
,
6/15/29
.....
Canada
25,000,000
21,098,500
f
Madison
IAQ
LLC
,
Senior
Secured
Note
,
144A,
4.125
%
,
6/30/28
..
United
States
31,000,000
24,945,038
f
Prime
Security
Services
Borrower
LLC
/
Prime
Finance,
Inc.
,
Senior
Secured
Note
,
144A,
3.375
%
,
8/31/27
....................
United
States
61,589,000
51,875,799
339,008,391
Communications
Equipment
1.1%
f
CommScope
Technologies
LLC
,
Senior
Note,
144A,
6%,
6/15/25
........................
United
States
394,600,000
351,166,378
Senior
Note,
144A,
5%,
3/15/27
........................
United
States
50,000,000
37,816,750
f
CommScope,
Inc.
,
Senior
Note,
144A,
8.25%,
3/01/27
......................
United
States
114,000,000
94,361,220
c
Senior
Note,
144A,
7.125%,
7/01/28
.....................
United
States
125,000,000
96,762,529
Senior
Secured
Note,
144A,
6%,
3/01/26
..................
United
States
170,085,000
156,869,395
736,976,272
Construction
&
Engineering
0.1%
Quanta
Services,
Inc.
,
Senior
Bond
,
2.9
%
,
10/01/30
...........
United
States
89,287,000
71,495,343
Consumer
Finance
2.1%
Capital
One
Financial
Corp.
,
Senior
Bond,
3.8%,
1/31/28
............................
United
States
47,300,000
42,821,058
Senior
Note,
4.985%
to
7/23/25,
FRN
thereafter,
7/24/26
......
United
States
40,000,000
39,127,500
Senior
Note,
4.927%
to
5/09/27,
FRN
thereafter,
5/10/28
......
United
States
109,182,733
104,129,197
Senior
Note,
5.247%
to
7/25/29,
FRN
thereafter,
7/26/30
......
United
States
20,000,000
18,645,131
Sub.
Note,
4.2%,
10/29/25
............................
United
States
113,000,000
108,771,921
Sub.
Note,
3.75%,
7/28/26
............................
United
States
100,200,000
92,763,860
Ford
Motor
Credit
Co.
LLC
,
Senior
Note,
2.3%,
2/10/25
............................
United
States
25,000,000
22,185,432
Senior
Note,
5.125%,
6/16/25
..........................
United
States
110,000,000
103,974,750
c
Senior
Note,
4.134%,
8/04/25
..........................
United
States
149,650,000
136,023,619
Senior
Note,
3.375%,
11/13/25
.........................
United
States
32,000,000
28,318,297
Senior
Note,
2.7%,
8/10/26
............................
United
States
50,000,000
41,532,000
Senior
Note,
4.95%,
5/28/27
...........................
United
States
115,000,000
102,916,950
Senior
Note,
5.113%,
5/03/29
..........................
United
States
100,000,000
87,001,500
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
89
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Consumer
Finance
(continued)
General
Motors
Financial
Co.,
Inc.
,
Senior
Bond,
4.35%,
1/17/27
...........................
United
States
40,000,000
$
37,128,326
Senior
Bond,
3.6%,
6/21/30
............................
United
States
37,720,000
30,598,412
Senior
Bond,
3.1%,
1/12/32
............................
United
States
80,000,000
60,445,118
Senior
Note,
4.15%,
6/19/23
...........................
United
States
75,000,000
74,662,261
Senior
Note,
5%,
4/09/27
.............................
United
States
50,000,000
47,457,481
Senior
Note,
2.4%,
4/10/28
............................
United
States
35,000,000
28,041,478
Senior
Note,
4.3%,
4/06/29
............................
United
States
69,000,000
60,043,466
John
Deere
Capital
Corp.
,
Senior
Bond
,
4.35
%
,
9/15/32
........
United
States
25,000,000
23,776,551
OneMain
Finance
Corp.
,
Senior
Bond,
5.375%,
11/15/29
.........................
United
States
42,100,000
32,695,912
Senior
Note,
6.625%,
1/15/28
..........................
United
States
26,000,000
22,368,190
Senior
Note,
4%,
9/15/30
.............................
United
States
59,675,000
41,970,323
1,387,398,733
Containers
&
Packaging
1.3%
f,j
ARD
Finance
SA
,
Senior
Secured
Note
,
144A,
PIK,
6.5
%
,
6/30/27
.
Luxembourg
25,144,215
17,267,287
f
Ardagh
Packaging
Finance
plc
/
Ardagh
Holdings
USA,
Inc.
,
Senior
Note,
144A,
5.25%,
8/15/27
......................
United
States
187,440,000
117,687,016
Senior
Secured
Note,
144A,
5.25%,
4/30/25
...............
United
States
25,669,000
24,047,232
Senior
Secured
Note,
144A,
4.125%,
8/15/26
..............
United
States
50,000,000
41,690,750
f
Mauser
Packaging
Solutions
Holding
Co.
,
Senior
Note,
144A,
7.25%,
4/15/25
......................
United
States
362,500,000
319,393,312
Senior
Secured
Note,
144A,
5.5%,
4/15/24
................
United
States
277,000,000
263,576,580
f
Pactiv
Evergreen
Group
Issuer,
Inc./Pactiv
Evergreen
Group
Issuer
LLC
,
Senior
Secured
Note
,
144A,
4
%
,
10/15/27
.............
United
States
70,000,000
58,827,825
842,490,002
Diversified
Financial
Services
0.6%
f
MPH
Acquisition
Holdings
LLC
,
c
Senior
Note,
144A,
5.75%,
11/01/28
.....................
United
States
270,000,000
203,312,700
Senior
Secured
Note,
144A,
5.5%,
9/01/28
................
United
States
130,850,000
108,197,248
f
Woodside
Finance
Ltd.
,
Senior
Bond
,
144A,
4.5
%
,
3/04/29
......
Australia
100,000,000
91,542,838
403,052,786
Diversified
Telecommunication
Services
0.5%
f
Altice
France
SA
,
Senior
Secured
Note
,
144A,
5.5
%
,
10/15/29
...
France
25,000,000
18,872,597
f
CCO
Holdings
LLC
/
CCO
Holdings
Capital
Corp.
,
Senior
Bond,
144A,
5.5%,
5/01/26
.......................
United
States
20,002,000
18,980,998
Senior
Bond,
144A,
5.125%,
5/01/27
.....................
United
States
130,000,000
117,538,200
Senior
Bond,
144A,
5%,
2/01/28
........................
United
States
105,000,000
90,716,325
f
Iliad
Holding
SASU
,
Senior
Secured
Note
,
144A,
6.5
%
,
10/15/26
..
France
40,000,000
35,042,200
Verizon
Communications,
Inc.
,
Senior
Bond
,
4.016
%
,
12/03/29
...
United
States
50,000,000
45,440,531
326,590,851
Electric
Utilities
0.8%
NextEra
Energy
Capital
Holdings,
Inc.
,
Senior
Note
,
1.875
%
,
1/15/27
United
States
65,000,000
56,493,546
f
NRG
Energy,
Inc.
,
Senior
Bond,
144A,
3.625%,
2/15/31
.....................
United
States
57,000,000
44,582,550
Senior
Note,
144A,
3.375%,
2/15/29
.....................
United
States
20,000,000
16,221,400
Pacific
Gas
and
Electric
Co.
,
Senior
Bond,
4.55%,
7/01/30
...........................
United
States
80,000,000
68,648,185
Senior
Note,
3.15%,
1/01/26
...........................
United
States
78,000,000
70,156,726
PG&E
Corp.
,
Senior
Secured
Note
,
5
%
,
7/01/28
..............
United
States
50,264,000
43,346,237
f
Vistra
Operations
Co.
LLC
,
Senior
Note,
144A,
5.5%,
9/01/26
.......................
United
States
45,000,000
41,798,025
Senior
Note,
144A,
5%,
7/31/27
........................
United
States
49,500,000
44,821,507
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
90
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Electric
Utilities
(continued)
f
Vistra
Operations
Co.
LLC,
(continued)
Senior
Note,
144A,
4.375%,
5/01/29
.....................
United
States
120,000,000
$
100,078,800
Senior
Secured
Note,
144A,
3.55%,
7/15/24
...............
United
States
25,000,000
23,840,461
Senior
Secured
Note,
144A,
3.7%,
1/30/27
................
United
States
18,000,000
15,965,706
525,953,143
Electrical
Equipment
0.0%
†
f
Vertiv
Group
Corp.
,
Senior
Secured
Note
,
144A,
4.125
%
,
11/15/28
United
States
20,668,000
16,669,052
Electronic
Equipment,
Instruments
&
Components
0.1%
Flex
Ltd.
,
Senior
Note
,
4.75
%
,
6/15/25
.....................
United
States
45,000,000
44,011,697
Teledyne
Technologies,
Inc.
,
Senior
Bond
,
2.75
%
,
4/01/31
.......
United
States
17,500,000
13,826,761
57,838,458
Energy
Equipment
&
Services
0.6%
f
Nabors
Industries
Ltd.
,
Senior
Note
,
144A,
7.25
%
,
1/15/26
......
United
States
16,000,000
13,952,865
f
Weatherford
International
Ltd.
,
Senior
Note,
144A,
11%,
12/01/24
.......................
United
States
58,649,000
59,761,572
Senior
Note,
144A,
8.625%,
4/30/30
.....................
United
States
250,000,000
218,287,197
Senior
Secured
Note,
144A,
6.5%,
9/15/28
................
United
States
80,000,000
72,112,000
364,113,634
Entertainment
0.6%
Netflix,
Inc.
,
Senior
Bond,
4.375%,
11/15/26
.........................
United
States
100,000,000
94,564,505
Senior
Bond,
4.875%,
4/15/28
..........................
United
States
69,300,000
65,012,062
Senior
Bond,
5.875%,
11/15/28
.........................
United
States
50,000,000
48,914,000
f
ROBLOX
Corp.
,
Senior
Note
,
144A,
3.875
%
,
5/01/30
..........
United
States
107,000,000
87,291,135
f
Warnermedia
Holdings,
Inc.
,
Senior
Bond,
144A,
4.279%,
3/15/32
.....................
United
States
60,000,000
49,438,098
Senior
Note,
144A,
3.755%,
3/15/27
.....................
United
States
45,000,000
40,317,675
385,537,475
Equity
Real
Estate
Investment
Trusts
(REITs)
1.1%
American
Tower
Corp.
,
Senior
Bond,
3.375%,
10/15/26
.........................
United
States
30,000,000
27,451,415
Senior
Bond,
3.55%,
7/15/27
...........................
United
States
40,000,000
36,170,251
Senior
Bond,
3.95%,
3/15/29
...........................
United
States
20,000,000
17,862,151
Senior
Bond,
2.9%,
1/15/30
............................
United
States
15,000,000
12,348,941
Senior
Note,
1.6%,
4/15/26
............................
United
States
15,000,000
13,091,797
Senior
Note,
4.05%,
3/15/32
...........................
United
States
40,000,000
34,527,878
Crown
Castle,
Inc.
,
Senior
Bond,
3.3%,
7/01/30
............................
United
States
64,583,000
54,164,617
Senior
Bond,
2.1%,
4/01/31
............................
United
States
33,500,000
25,157,681
Senior
Bond,
2.5%,
7/15/31
............................
United
States
25,000,000
19,300,241
f
Iron
Mountain,
Inc.
,
Senior
Note
,
144A,
4.875
%
,
9/15/27
........
United
States
88,500,000
79,428,750
MPT
Operating
Partnership
LP
/
MPT
Finance
Corp.
,
Senior
Bond,
5.25%,
8/01/26
...........................
United
States
30,000,000
27,505,866
Senior
Bond,
5%,
10/15/27
............................
United
States
143,000,000
123,815,120
Senior
Bond,
4.625%,
8/01/29
..........................
United
States
33,000,000
26,599,155
Senior
Bond,
3.5%,
3/15/31
............................
United
States
55,177,000
38,533,134
Service
Properties
Trust
,
Senior
Bond,
4.5%,
6/15/23
............................
United
States
69,068,000
67,507,408
Senior
Note,
4.35%,
10/01/24
..........................
United
States
32,445,000
28,766,224
VICI
Properties
LP
,
Senior
Bond,
5.125%,
5/15/32
..........................
United
States
40,000,000
35,544,588
Senior
Note,
4.95%,
2/15/30
...........................
United
States
30,000,000
27,175,050
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
91
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Equity
Real
Estate
Investment
Trusts
(REITs)
(continued)
f
VICI
Properties
LP
/
VICI
Note
Co.,
Inc.
,
Senior
Note
,
144A,
4.25
%
,
12/01/26
..........................................
United
States
43,260,000
$
39,102,669
734,052,936
Food
Products
0.4%
f
Darling
Ingredients,
Inc.
,
Senior
Note
,
144A,
6
%
,
6/15/30
.......
United
States
35,000,000
33,388,950
f
JBS
USA
LUX
SA
/
JBS
USA
Food
Co.
/
JBS
USA
Finance,
Inc.
,
Senior
Bond,
144A,
5.75%,
4/01/33
......................
United
States
60,000,000
54,338,400
Senior
Note,
144A,
5.125%,
2/01/28
.....................
United
States
20,000,000
18,782,900
f
Lamb
Weston
Holdings,
Inc.
,
Senior
Note
,
144A,
4.125
%
,
1/31/30
.
United
States
24,500,000
20,773,918
f
Post
Holdings,
Inc.
,
Senior
Bond,
144A,
5.625%,
1/15/28
.....................
United
States
59,800,000
54,691,286
Senior
Bond,
144A,
5.5%,
12/15/29
......................
United
States
10,000,000
8,660,222
Senior
Bond,
144A,
4.5%,
9/15/31
.......................
United
States
55,400,000
44,711,955
235,347,631
Health
Care
Equipment
&
Supplies
0.7%
f
Avantor
Funding,
Inc.
,
Senior
Note
,
144A,
3.875
%
,
11/01/29
.....
United
States
55,000,000
44,779,075
DENTSPLY
SIRONA,
Inc.
,
Senior
Bond
,
3.25
%
,
6/01/30
........
United
States
51,249,000
39,645,620
f
Medline
Borrower
LP
,
Senior
Note,
144A,
5.25%,
10/01/29
.....................
United
States
273,000,000
206,641,890
Senior
Secured
Note,
144A,
3.875%,
4/01/29
..............
United
States
197,500,000
158,660,637
449,727,222
Health
Care
Providers
&
Services
5.8%
Centene
Corp.
,
Senior
Note
,
4.625
%
,
12/15/29
...............
United
States
60,500,000
54,507,172
f
CHS/Community
Health
Systems,
Inc.
,
Secured
Note,
144A,
6.875%,
4/15/29
....................
United
States
834,000,000
404,692,045
Secured
Note,
144A,
6.125%,
4/01/30
....................
United
States
620,000,000
293,725,000
Senior
Note,
144A,
6.875%,
4/01/28
.....................
United
States
565,000,000
259,637,275
Senior
Secured
Note,
144A,
8%,
3/15/26
..................
United
States
460,065,000
399,086,757
Senior
Secured
Note,
144A,
5.625%,
3/15/27
..............
United
States
295,500,000
227,895,510
Senior
Secured
Note,
144A,
8%,
12/15/27
.................
United
States
382,000,000
303,103,630
Senior
Secured
Note,
144A,
6%,
1/15/29
..................
United
States
289,000,000
213,064,296
Senior
Secured
Note,
144A,
5.25%,
5/15/30
...............
United
States
188,000,000
131,322,700
CVS
Health
Corp.
,
Senior
Bond,
4.3%,
3/25/28
............................
United
States
125,000,000
118,114,827
Senior
Bond,
1.875%,
2/28/31
..........................
United
States
70,000,000
53,443,221
Senior
Bond,
5.05%,
3/25/48
...........................
United
States
40,000,000
35,320,150
f
DaVita,
Inc.
,
Senior
Bond,
144A,
3.75%,
2/15/31
......................
United
States
143,855,000
102,834,027
Senior
Note,
144A,
4.625%,
6/01/30
.....................
United
States
287,822,000
223,408,876
f
Fresenius
Medical
Care
US
Finance
III,
Inc.
,
Senior
Bond,
144A,
2.375%,
2/16/31
.....................
Germany
20,000,000
14,562,858
Senior
Bond,
144A,
3%,
12/01/31
.......................
Germany
30,941,000
22,967,621
HCA,
Inc.
,
Senior
Bond,
5.625%,
9/01/28
..........................
United
States
80,000,000
76,368,494
Senior
Note,
5%,
3/15/24
.............................
United
States
114,800,000
114,119,387
Tenet
Healthcare
Corp.
,
f
Secured
Note,
144A,
6.25%,
2/01/27
.....................
United
States
80,181,000
75,008,123
Senior
Bond,
6.875%,
11/15/31
.........................
United
States
55,258,000
49,206,696
f
Senior
Note,
144A,
6.125%,
10/01/28
....................
United
States
276,155,000
242,382,293
Senior
Secured
Note,
4.625%,
7/15/24
...................
United
States
10,000,000
9,680,950
f
Senior
Secured
Note,
144A,
4.875%,
1/01/26
..............
United
States
30,000,000
27,917,850
f
Senior
Secured
Note,
144A,
5.125%,
11/01/27
.............
United
States
18,000,000
16,188,975
f
Senior
Secured
Note,
144A,
4.625%,
6/15/28
..............
United
States
10,000,000
8,751,065
f
Senior
Secured
Note,
144A,
4.25%,
6/01/29
...............
United
States
38,000,000
31,518,910
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
92
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Health
Care
Providers
&
Services
(continued)
Tenet
Healthcare
Corp.,
(continued)
f
Senior
Secured
Note,
144A,
4.375%,
1/15/30
..............
United
States
42,000,000
$
35,148,120
f
Senior
Secured
Note,
144A,
6.125%,
6/15/30
..............
United
States
288,000,000
264,564,000
3,808,540,828
Health
Care
Technology
0.2%
f
AthenaHealth
Group,
Inc.
,
Senior
Note
,
144A,
6.5
%
,
2/15/30
.....
United
States
42,000,000
33,282,900
f,j
Multiplan
Corp.
,
Senior
Note
,
144A,
PIK,
6
%
,
10/15/27
.........
United
States
185,000,000
127,650,000
160,932,900
Hotels,
Restaurants
&
Leisure
2.1%
f
Boyd
Gaming
Corp.
,
Senior
Bond
,
144A,
4.75
%
,
6/15/31
........
United
States
25,000,000
20,282,000
f
Brinker
International,
Inc.
,
Senior
Note
,
144A,
5
%
,
10/01/24
.....
United
States
30,000,000
28,877,631
f
Caesars
Entertainment,
Inc.
,
Senior
Note,
144A,
8.125%,
7/01/27
.....................
United
States
35,000,000
33,509,350
Senior
Note,
144A,
4.625%,
10/15/29
....................
United
States
85,000,000
65,155,692
Senior
Secured
Note,
144A,
6.25%,
7/01/25
...............
United
States
110,000,000
106,196,200
f
Carnival
Corp.
,
c
Senior
Note,
144A,
7.625%,
3/01/26
.....................
United
States
45,000,000
34,268,175
Senior
Note,
144A,
5.75%,
3/01/27
......................
United
States
73,000,000
51,302,575
Senior
Note,
144A,
10.5%,
6/01/30
......................
United
States
50,000,000
40,087,000
f
Everi
Holdings,
Inc.
,
Senior
Note
,
144A,
5
%
,
7/15/29
...........
United
States
20,000,000
16,436,280
Expedia
Group,
Inc.
,
Senior
Bond,
3.8%,
2/15/28
............................
United
States
57,000,000
50,702,127
Senior
Note,
3.25%,
2/15/30
...........................
United
States
56,000,000
45,490,258
f
Fertitta
Entertainment
LLC
/
Fertitta
Entertainment
Finance
Co.,
Inc.
,
Senior
Note,
144A,
6.75%,
1/15/30
......................
United
States
100,000,000
76,188,000
Senior
Secured
Note,
144A,
4.625%,
1/15/29
..............
United
States
130,000,000
107,783,000
Marriott
International,
Inc.
,
Senior
Note
,
5
%
,
10/15/27
..........
United
States
25,000,000
24,183,549
McDonald's
Corp.
,
Senior
Bond
,
4.6
%
,
9/09/32
...............
United
States
40,000,000
38,246,053
f
Penn
Entertainment,
Inc.
,
Senior
Note,
144A,
5.625%,
1/15/27
.....................
United
States
20,000,000
17,722,660
Senior
Note,
144A,
4.125%,
7/01/29
.....................
United
States
65,000,000
49,839,409
f
Wynn
Las
Vegas
LLC
/
Wynn
Las
Vegas
Capital
Corp.
,
Senior
Bond,
144A,
5.5%,
3/01/25
.......................
United
States
307,000,000
287,867,760
Senior
Note,
144A,
4.25%,
5/30/23
......................
United
States
131,000,000
128,522,790
c
Senior
Note,
144A,
5.25%,
5/15/27
......................
United
States
144,222,000
127,258,608
Yum!
Brands,
Inc.
,
Senior
Bond
,
5.375
%
,
4/01/32
.............
United
States
42,500,000
37,771,599
1,387,690,716
Household
Durables
0.1%
KB
Home
,
Senior
Note
,
7.25
%
,
7/15/30
.....................
United
States
23,800,000
21,628,250
f
Shea
Homes
LP
/
Shea
Homes
Funding
Corp.
,
Senior
Note,
144A,
4.75%,
2/15/28
......................
United
States
33,130,000
27,035,240
Senior
Note,
144A,
4.75%,
4/01/29
......................
United
States
42,345,000
33,031,849
81,695,339
Household
Products
0.1%
f
Energizer
Holdings,
Inc.
,
Senior
Note,
144A,
6.5%,
12/31/27
......................
United
States
20,000,000
17,793,600
Senior
Note,
144A,
4.75%,
6/15/28
......................
United
States
20,000,000
15,872,900
Senior
Note,
144A,
4.375%,
3/31/29
.....................
United
States
20,000,000
14,881,597
48,548,097
Independent
Power
and
Renewable
Electricity
Producers
0.4%
f
Calpine
Corp.
,
c
Senior
Note,
144A,
5.125%,
3/15/28
.....................
United
States
115,000,000
99,008,275
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
93
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Independent
Power
and
Renewable
Electricity
Producers
(continued)
f
Calpine
Corp.,
(continued)
Senior
Secured
Bond,
144A,
5.25%,
6/01/26
...............
United
States
4,946,000
$
4,668,702
Senior
Secured
Note,
144A,
4.5%,
2/15/28
................
United
States
41,000,000
36,210,380
f,h
Vistra
Corp.
,
Junior
Sub.
Bond,
144A,
8%
to
10/14/26,
FRN
thereafter,
Perpetual
.........................................
United
States
7,000,000
6,447,994
Junior
Sub.
Bond,
144A,
7%
to
12/14/26,
FRN
thereafter,
Perpetual
.........................................
United
States
100,000,000
87,525,500
233,860,851
Industrial
Conglomerates
0.1%
3M
Co.
,
Senior
Bond,
3.375%,
3/01/29
..........................
United
States
20,000,000
17,752,900
Senior
Bond,
2.375%,
8/26/29
..........................
United
States
30,000,000
24,624,615
42,377,515
Insurance
0.1%
Lincoln
National
Corp.
,
Senior
Bond,
3.4%,
1/15/31
............................
United
States
15,000,000
12,551,902
Senior
Bond,
3.4%,
3/01/32
............................
United
States
20,572,000
16,879,557
Prudential
Financial,
Inc.
,
Junior
Sub.
Bond
,
5.7%
to
9/14/28,
FRN
thereafter
,
9/15/48
...................................
United
States
65,000,000
60,779,875
90,211,334
Interactive
Media
&
Services
0.1%
f
Meta
Platforms,
Inc.
,
Senior
Bond
,
144A,
3.85
%
,
8/15/32
.......
United
States
65,000,000
57,203,106
f
ZipRecruiter,
Inc.
,
Senior
Note
,
144A,
5
%
,
1/15/30
.............
United
States
45,000,000
36,425,250
93,628,356
Internet
&
Direct
Marketing
Retail
0.1%
f
Match
Group
Holdings
II
LLC
,
Senior
Bond,
144A,
4.125%,
8/01/30
.....................
United
States
45,000,000
37,019,025
Senior
Note,
144A,
3.625%,
10/01/31
....................
United
States
33,730,000
25,514,215
62,533,240
IT
Services
0.2%
Fidelity
National
Information
Services,
Inc.
,
Senior
Bond
,
5.1
%
,
7/15/32
...........................................
United
States
15,000,000
14,115,509
Fiserv,
Inc.
,
Senior
Bond,
3.5%,
7/01/29
............................
United
States
40,000,000
34,842,294
Senior
Bond,
2.65%,
6/01/30
...........................
United
States
23,000,000
18,670,164
Twilio,
Inc.
,
Senior
Bond,
3.875%,
3/15/31
..........................
United
States
46,500,000
36,598,848
Senior
Note,
3.625%,
3/15/29
..........................
United
States
45,000,000
36,403,425
140,630,240
Machinery
0.2%
Parker-Hannifin
Corp.
,
Senior
Bond
,
3.25
%
,
6/14/29
...........
United
States
43,000,000
37,922,194
f
Roller
Bearing
Co.
of
America,
Inc.
,
Senior
Note
,
144A,
4.375
%
,
10/15/29
..........................................
United
States
35,000,000
29,565,900
c,f
TK
Elevator
U.S.
Newco,
Inc.
,
Senior
Secured
Note
,
144A,
5.25
%
,
7/15/27
...........................................
Germany
43,000,000
36,662,015
104,150,109
Media
2.9%
f
Clear
Channel
Outdoor
Holdings,
Inc.
,
Senior
Note,
144A,
7.75%,
4/15/28
......................
United
States
129,000,000
97,614,945
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
94
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Media
(continued)
f
Clear
Channel
Outdoor
Holdings,
Inc.,
(continued)
Senior
Note,
144A,
7.5%,
6/01/29
.......................
United
States
140,000,000
$
101,721,900
Senior
Secured
Note,
144A,
5.125%,
8/15/27
..............
United
States
65,000,000
55,014,516
CSC
Holdings
LLC
,
Senior
Bond,
5.25%,
6/01/24
...........................
United
States
40,026,000
37,079,286
f
Senior
Bond,
144A,
5.5%,
4/15/27
.......................
United
States
232,900,000
205,360,739
f
Senior
Bond,
144A,
4.5%,
11/15/31
......................
United
States
85,000,000
63,988,000
f
Directv
Financing
LLC
/
Directv
Financing
Co-Obligor,
Inc.
,
Senior
Secured
Note
,
144A,
5.875
%
,
8/15/27
....................
United
States
84,500,000
73,039,688
DISH
DBS
Corp.
,
Senior
Note,
5%,
3/15/23
.............................
United
States
420,000,000
412,398,000
Senior
Note,
5.875%,
11/15/24
.........................
United
States
255,000,000
227,948,325
Senior
Note,
7.75%,
7/01/26
...........................
United
States
134,320,000
103,229,621
Senior
Note,
7.375%,
7/01/28
..........................
United
States
12,500,000
8,432,575
f
Senior
Secured
Note,
144A,
5.25%,
12/01/26
..............
United
States
100,000,000
82,112,186
f
Sirius
XM
Radio,
Inc.
,
Senior
Note
,
144A,
4
%
,
7/15/28
.........
United
States
42,000,000
35,812,980
f
Stagwell
Global
LLC
,
Senior
Note
,
144A,
5.625
%
,
8/15/29
.......
United
States
60,000,000
49,462,500
f
Univision
Communications,
Inc.
,
Senior
Secured
Note,
144A,
5.125%,
2/15/25
..............
United
States
300,000,000
285,268,500
Senior
Secured
Note,
144A,
6.625%,
6/01/27
..............
United
States
70,000,000
66,216,325
Senior
Secured
Note,
144A,
7.375%,
6/30/30
..............
United
States
20,000,000
19,131,000
1,923,831,086
Metals
&
Mining
1.3%
f
Alcoa
Nederland
Holding
BV
,
Senior
Note
,
144A,
4.125
%
,
3/31/29
.
United
States
75,122,000
63,155,046
c
ArcelorMittal
SA
,
Senior
Bond
,
4.25
%
,
7/16/29
...............
Luxembourg
35,300,000
31,634,304
f
Cleveland-Cliffs,
Inc.
,
c
Senior
Bond,
144A,
4.875%,
3/01/31
.....................
United
States
30,000,000
24,824,850
Senior
Secured
Note,
144A,
6.75%,
3/15/26
...............
United
States
50,000,000
49,243,750
f
First
Quantum
Minerals
Ltd.
,
Senior
Note,
144A,
6.5%,
3/01/24
.......................
Zambia
35,129,000
34,469,629
Senior
Note,
144A,
7.5%,
4/01/25
.......................
Zambia
120,000,000
115,654,200
f
FMG
Resources
August
2006
Pty.
Ltd.
,
Senior
Bond,
144A,
4.375%,
4/01/31
.....................
Australia
145,000,000
111,651,164
Senior
Bond,
144A,
6.125%,
4/15/32
.....................
Australia
45,000,000
38,734,200
Senior
Note,
144A,
5.125%,
5/15/24
.....................
Australia
114,540,000
112,286,998
Senior
Note,
144A,
5.875%,
4/15/30
.....................
Australia
42,000,000
36,593,964
Freeport-McMoRan,
Inc.
,
Senior
Bond,
5.25%,
9/01/29
...........................
United
States
30,000,000
27,944,250
Senior
Bond,
4.625%,
8/01/30
..........................
United
States
36,000,000
31,618,758
Senior
Note,
3.875%,
3/15/23
..........................
United
States
62,636,000
62,334,408
c,f
Glencore
Funding
LLC
,
Senior
Bond
,
144A,
2.5
%
,
9/01/30
......
Australia
100,000,000
76,617,112
f
Mineral
Resources
Ltd.
,
Senior
Note,
144A,
8%,
11/01/27
........................
Australia
20,000,000
19,284,000
Senior
Note,
144A,
8.5%,
5/01/30
.......................
Australia
25,000,000
24,214,750
860,261,383
Multiline
Retail
0.1%
Target
Corp.
,
Senior
Bond
,
4.5
%
,
9/15/32
...................
United
States
50,000,000
47,714,557
Multi-Utilities
0.2%
Dominion
Energy,
Inc.
,
A,
Senior
Note,
4.35%,
8/15/32
.........................
United
States
20,000,000
18,118,070
C,
Senior
Note,
3.375%,
4/01/30
........................
United
States
30,000,000
25,844,741
NiSource,
Inc.
,
Senior
Bond
,
3.6
%
,
5/01/30
..................
United
States
33,750,000
29,488,526
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
95
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Multi-Utilities
(continued)
Southern
Co.
Gas
Capital
Corp.
,
Senior
Bond
,
5.15
%
,
9/15/32
...
United
States
40,000,000
$
38,290,236
111,741,573
Oil,
Gas
&
Consumable
Fuels
1.6%
BP
Capital
Markets
America,
Inc.
,
Senior
Bond,
3.633%,
4/06/30
..........................
United
States
15,000,000
13,491,429
Senior
Bond,
2.721%,
1/12/32
..........................
United
States
15,000,000
12,199,419
f
Calumet
Specialty
Products
Partners
LP
/
Calumet
Finance
Corp.
,
Senior
Note,
144A,
11%,
4/15/25
........................
United
States
260,000,000
266,598,800
Senior
Note,
144A,
8.125%,
1/15/27
.....................
United
States
95,000,000
87,726,800
Senior
Secured
Note,
144A,
9.25%,
7/15/24
...............
United
States
111,402,000
114,297,993
Cheniere
Corpus
Christi
Holdings
LLC
,
Senior
Secured
Note,
5.125%,
6/30/27
...................
United
States
18,000,000
17,450,009
Senior
Secured
Note,
3.7%,
11/15/29
....................
United
States
97,245,000
84,470,341
Chevron
Corp.
,
Senior
Bond
,
2.236
%
,
5/11/30
................
United
States
20,000,000
16,728,253
f
CITGO
Petroleum
Corp.
,
Senior
Secured
Note,
144A,
7%,
6/15/25
..................
United
States
23,324,000
22,324,334
Senior
Secured
Note,
144A,
6.375%,
6/15/26
..............
United
States
30,000,000
28,073,901
f
Hilcorp
Energy
I
LP
/
Hilcorp
Finance
Co.
,
Senior
Note
,
144A,
6
%
,
4/15/30
...........................................
United
States
32,000,000
27,960,371
f
Kinetik
Holdings
LP
,
Senior
Note
,
144A,
5.875
%
,
6/15/30
........
United
States
50,000,000
45,888,200
Occidental
Petroleum
Corp.
,
Senior
Note,
8%,
7/15/25
.............................
United
States
50,000,000
53,070,000
Senior
Note,
5.5%,
12/01/25
...........................
United
States
30,000,000
30,186,750
Senior
Note,
6.375%,
9/01/28
..........................
United
States
60,000,000
59,891,400
Senior
Note,
6.625%,
9/01/30
..........................
United
States
40,000,000
40,695,800
Senior
Note,
6.125%,
1/01/31
..........................
United
States
30,000,000
29,622,900
Williams
Cos.,
Inc.
(The)
,
Senior
Bond,
3.5%,
11/15/30
...........................
United
States
17,575,000
14,948,950
Senior
Bond,
4.65%,
8/15/32
...........................
United
States
70,000,000
63,585,916
1,029,211,566
Personal
Products
0.1%
c,f
BellRing
Brands,
Inc.
,
Senior
Note
,
144A,
7
%
,
3/15/30
.........
United
States
30,000,000
27,505,500
f
GSK
Consumer
Healthcare
Capital
US
LLC
,
Senior
Bond
,
144A,
3.625
%
,
3/24/32
.....................................
United
States
55,043,000
46,754,459
74,259,959
Pharmaceuticals
3.4%
f
1375209
BC
Ltd.
,
Senior
Secured
Note
,
144A,
9
%
,
1/30/28
......
Canada
495,060,000
493,822,350
f
Bausch
Health
Cos.,
Inc.
,
Secured
Note,
144A,
14%,
10/15/30
.....................
United
States
174,340,000
95,887,000
Senior
Secured
Note,
144A,
5.5%,
11/01/25
...............
United
States
244,000,000
194,220,872
Senior
Secured
Note,
144A,
6.125%,
2/01/27
..............
United
States
224,500,000
155,982,600
Senior
Secured
Note,
144A,
5.75%,
8/15/27
...............
United
States
53,850,000
36,763,506
Senior
Secured
Note,
144A,
4.875%,
6/01/28
..............
United
States
45,000,000
29,087,100
Senior
Secured
Note,
144A,
11%,
9/30/28
.................
United
States
878,680,000
711,730,800
f
Bayer
US
Finance
II
LLC
,
Senior
Note
,
144A,
4.25
%
,
12/15/25
...
Germany
65,000,000
62,261,572
Bristol-Myers
Squibb
Co.
,
Senior
Note
,
3.9
%
,
2/20/28
..........
United
States
30,000,000
28,613,126
f,k
Endo
Dac
/
Endo
Finance
LLC
/
Endo
Finco,
Inc.
,
Secured
Note,
144A,
9.5%,
7/31/27
......................
United
States
87,160,000
13,074,000
Senior
Secured
Note,
144A,
5.875%,
10/15/24
.............
United
States
47,500,000
39,083,055
f,k
Endo
Luxembourg
Finance
Co.
I
SARL
/
Endo
US,
Inc.
,
Senior
Secured
Note
,
144A,
6.125
%
,
4/01/29
....................
United
States
66,355,000
52,483,228
f,k
Par
Pharmaceutical,
Inc.
,
Senior
Secured
Note
,
144A,
7.5
%
,
4/01/27
United
States
193,401,000
153,246,870
Royalty
Pharma
plc
,
Senior
Bond,
2.15%,
9/02/31
...........................
United
States
25,800,000
19,030,961
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
96
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Pharmaceuticals
(continued)
Royalty
Pharma
plc,
(continued)
Senior
Note,
2.2%,
9/02/30
............................
United
States
55,000,000
$
41,976,693
Utah
Acquisition
Sub,
Inc.
,
Senior
Note
,
3.95
%
,
6/15/26
.........
United
States
150,500,000
137,386,422
2,264,650,155
Road
&
Rail
0.2%
f
Ashtead
Capital,
Inc.
,
Senior
Bond,
144A,
5.5%,
8/11/32
.......................
United
Kingdom
25,000,000
23,243,280
Senior
Note,
144A,
4.375%,
8/15/27
.....................
United
Kingdom
34,500,000
31,721,887
Union
Pacific
Corp.
,
Senior
Bond
,
4.5
%
,
1/20/33
..............
United
States
55,000,000
52,271,723
107,236,890
Semiconductors
&
Semiconductor
Equipment
0.7%
Broadcom,
Inc.
,
Senior
Bond,
4.3%,
11/15/32
...........................
United
States
30,000,000
25,242,523
f
Senior
Bond,
144A,
2.45%,
2/15/31
......................
United
States
100,000,000
75,503,762
f
Senior
Bond,
144A,
4.15%,
4/15/32
......................
United
States
85,000,000
71,268,447
f
Senior
Bond,
144A,
3.469%,
4/15/34
.....................
United
States
21,000,000
15,793,688
f
Senior
Note,
144A,
4%,
4/15/29
........................
United
States
73,307,000
64,675,816
Microchip
Technology,
Inc.
,
Senior
Secured
Note
,
4.333
%
,
6/01/23
United
States
69,000,000
68,690,899
Micron
Technology,
Inc.
,
Senior
Bond,
5.327%,
2/06/29
..........................
United
States
12,000,000
11,360,266
Senior
Bond,
4.663%,
2/15/30
..........................
United
States
24,000,000
21,326,353
NXP
BV
/
NXP
Funding
LLC
,
Senior
Note
,
5.55
%
,
12/01/28
......
China
20,000,000
19,339,753
NXP
BV
/
NXP
Funding
LLC
/
NXP
USA,
Inc.
,
Senior
Note,
3.4%,
5/01/30
............................
China
16,200,000
13,524,361
Senior
Note,
2.5%,
5/11/31
............................
China
35,000,000
26,355,566
f
Qorvo,
Inc.
,
Senior
Bond
,
144A,
3.375
%
,
4/01/31
.............
United
States
30,800,000
23,113,860
436,195,294
Software
0.7%
Autodesk,
Inc.
,
Senior
Bond
,
2.85
%
,
1/15/30
.................
United
States
20,000,000
16,807,187
f
Condor
Merger
Sub,
Inc.
,
Senior
Note
,
144A,
7.375
%
,
2/15/30
...
United
States
72,875,000
59,718,876
Oracle
Corp.
,
Senior
Bond,
2.95%,
4/01/30
...........................
United
States
44,000,000
35,518,256
Senior
Bond,
3.25%,
5/15/30
...........................
United
States
21,960,000
18,193,327
Senior
Bond,
2.875%,
3/25/31
..........................
United
States
101,000,000
79,773,536
Senior
Note,
2.3%,
3/25/28
............................
United
States
50,000,000
41,840,724
f
Rocket
Software,
Inc.
,
Senior
Note
,
144A,
6.5
%
,
2/15/29
........
United
States
75,000,000
55,653,000
Roper
Technologies,
Inc.
,
Senior
Bond,
2%,
6/30/30
.............................
United
States
30,303,000
23,240,940
Senior
Bond,
1.75%,
2/15/31
...........................
United
States
20,000,000
14,773,973
Workday,
Inc.
,
Senior
Bond
,
3.8
%
,
4/01/32
..................
United
States
170,000,000
147,754,478
493,274,297
Specialty
Retail
0.9%
AutoNation,
Inc.
,
Senior
Bond,
4.75%,
6/01/30
...........................
United
States
25,000,000
22,017,505
Senior
Bond,
2.4%,
8/01/31
............................
United
States
44,451,000
31,600,212
Senior
Bond,
3.85%,
3/01/32
...........................
United
States
27,953,000
22,127,153
Senior
Note,
1.95%,
8/01/28
...........................
United
States
44,000,000
34,648,502
Bath
&
Body
Works,
Inc.
,
Senior
Bond
,
6.875
%
,
11/01/35
.......
United
States
50,000,000
41,889,750
f
Carvana
Co.
,
c
Senior
Note,
144A,
5.625%,
10/01/25
....................
United
States
40,000,000
28,200,000
Senior
Note,
144A,
10.25%,
5/01/30
.....................
United
States
200,000,000
133,865,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
97
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
Corporate
Bonds
(continued)
Specialty
Retail
(continued)
f
Gap,
Inc.
(The)
,
Senior
Bond,
144A,
3.875%,
10/01/31
....................
United
States
37,000,000
$
23,604,576
Senior
Note,
144A,
3.625%,
10/01/29
....................
United
States
15,000,000
9,773,775
Home
Depot,
Inc.
(The)
,
Senior
Note
,
4.5
%
,
9/15/32
...........
United
States
45,000,000
43,056,901
Lowe's
Cos.,
Inc.
,
Senior
Bond,
3.65%,
4/05/29
...........................
United
States
20,000,000
18,042,053
Senior
Bond,
4.5%,
4/15/30
............................
United
States
35,000,000
32,773,031
Senior
Bond,
3.75%,
4/01/32
...........................
United
States
10,000,000
8,663,413
Senior
Bond,
5%,
4/15/33
.............................
United
States
98,000,000
92,663,871
Senior
Note,
1.7%,
10/15/30
...........................
United
States
15,000,000
11,332,762
f
Michaels
Cos.,
Inc.
(The)
,
Senior
Secured
Note
,
144A,
5.25
%
,
5/01/28
...........................................
United
States
60,000,000
42,246,900
596,505,404
Technology
Hardware,
Storage
&
Peripherals
0.5%
Dell
International
LLC
/
EMC
Corp.
,
Senior
Note
,
5.3
%
,
10/01/29
..
United
States
55,000,000
51,320,112
HP,
Inc.
,
Senior
Bond,
4.2%,
4/15/32
............................
United
States
48,960,000
39,862,978
Senior
Bond,
5.5%,
1/15/33
............................
United
States
50,000,000
44,437,142
Senior
Note,
4%,
4/15/29
.............................
United
States
150,309,000
131,881,978
Senior
Note,
2.65%,
6/17/31
...........................
United
States
30,000,000
22,058,467
Seagate
HDD
Cayman
,
Senior
Bond
,
3.375
%
,
7/15/31
.........
United
States
15,900,000
11,136,921
300,697,598
Tobacco
0.4%
BAT
Capital
Corp.
,
Senior
Note,
3.222%,
8/15/24
..........................
United
Kingdom
78,500,000
75,602,434
Senior
Note,
3.557%,
8/15/27
..........................
United
Kingdom
215,000,000
189,093,616
264,696,050
Trading
Companies
&
Distributors
0.5%
United
Rentals
North
America,
Inc.
,
Secured
Note,
3.875%,
11/15/27
........................
United
States
39,000,000
34,979,490
Senior
Bond,
4.875%,
1/15/28
..........................
United
States
110,000,000
101,094,950
Senior
Bond,
4%,
7/15/30
.............................
United
States
61,623,000
50,993,649
Senior
Bond,
3.875%,
2/15/31
..........................
United
States
80,535,000
65,667,433
Senior
Bond,
3.75%,
1/15/32
...........................
United
States
31,000,000
24,401,495
f
WESCO
Distribution,
Inc.
,
Senior
Note
,
144A,
7.125
%
,
6/15/25
...
United
States
30,000,000
30,064,500
307,201,517
Wireless
Telecommunication
Services
1.5%
Sprint
Communications
LLC
,
Senior
Note
,
6
%
,
11/15/22
........
United
States
347,700,000
348,047,700
Sprint
Corp.
,
Senior
Note,
7.875%,
9/15/23
..........................
United
States
187,350,000
189,573,844
Senior
Note,
7.125%,
6/15/24
..........................
United
States
190,650,000
193,816,697
Senior
Note,
7.625%,
3/01/26
..........................
United
States
86,300,000
89,406,098
f
Sprint
Spectrum
Co.
LLC
/
Sprint
Spectrum
Co.
II
LLC
/
Sprint
Spectrum
Co.
III
LLC
,
Senior
Secured
Note
,
144A,
5.152
%
,
3/20/28
...........................................
United
States
90,000,000
88,144,464
T-Mobile
USA,
Inc.
,
Senior
Bond,
5.2%,
1/15/33
............................
United
States
45,000,000
43,080,435
Senior
Note,
3.875%,
4/15/30
..........................
United
States
20,000,000
17,752,542
969,821,780
Total
Corporate
Bonds
(Cost
$31,890,730,480)
..................................
28,278,304,993
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
98
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
U.S.
Government
and
Agency
Securities
12.4%
U.S.
Treasury
Bonds
,
3.375
%,
8/15/42
.....................
United
States
500,000,000
$
453,046,875
U.S.
Treasury
Notes
,
2.25%,
3/31/24
.....................................
United
States
1,000,000,000
970,156,250
1.75%,
3/15/25
.....................................
United
States
2,250,000,000
2,119,042,980
3.125%,
8/15/25
.....................................
United
States
750,000,000
727,060,545
2.375%,
3/31/29
.....................................
United
States
1,000,000,000
905,703,120
2.875%,
5/15/32
.....................................
United
States
1,000,000,000
924,765,620
2.75%,
8/15/32
.....................................
United
States
2,250,000,000
2,057,695,313
Total
U.S.
Government
and
Agency
Securities
(Cost
$8,531,950,702)
..............
8,157,470,703
Asset-Backed
Securities
0.1%
Airlines
0.1%
United
Airlines
Pass-Through
Trust
,
2020-1
,
A
,
5.875
%
,
10/15/27
.
.
United
States
45,023,688
43,498,177
Total
Asset-Backed
Securities
(Cost
$45,023,688)
...............................
43,498,177
Mortgage-Backed
Securities
0.0%
†
Federal
National
Mortgage
Association
(FNMA)
Fixed
Rate
0.0%
†
FNMA,
30
Year,
4%,
8/01/49
.............................
United
States
28,529,097
26,922,995
Total
Mortgage-Backed
Securities
(Cost
$30,223,013)
............................
26,922,995
Shares
a
Escrows
and
Litigation
Trusts
0.1%
b,f
Chesapeake
Energy
Corp.,
Escrow
Account,
144A
............
United
States
25,000,000
23,218,584
b,f
Entegris
Escrow
Corp.,
Escrow
Account,
144A
...............
United
States
40,000,000
35,322,983
Total
Escrows
and
Litigation
Trusts
(Cost
$64,819,977)
..........................
58,541,567
Total
Long
Term
Investments
(Cost
$70,032,711,736)
............................
64,948,777,990
a
Short
Term
Investments
1.5%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
1.3%
d,l
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
880,891,701
880,891,701
Total
Money
Market
Funds
(Cost
$880,891,701)
.................................
880,891,701
a
a
a
m
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
0.2%
Money
Market
Funds
0.2%
d,l
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
124,103,000
124,103,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
99
Short
Term
Investments
(continued)
a
a
Country
Principal
Amount
*
a
Value
a
a
a
a
a
a
Repurchase
Agreements
0.0%
†
n
Joint
Repurchase
Agreement,
BNP
Paribas
SA,
2.94%,
10/03/22
(Maturity
Value
$29,027,421)
Collateralized
by
U.S.
Treasury
Bills,
Discount
Note,
10/18/22
-
1/26/23;
U.S.
Treasury
Bonds,
6.625%
-
7.5%,
11/15/24
-
2/15/27;
U.S.
Treasury
Bond,
Strip,
5/15/27;
U.S.
Treasury
Notes,
0.25%
-
2.5%,
7/31/24
-
2/28/27;
and
U.S.
Treasury
Notes,
Index
Linked,
0.125%,
7/15/26
-
4/15/27
(valued
at
$29,600,723)
...........
29,020,311
$
29,020,311
Total
Investments
from
Cash
Collateral
Received
for
Loaned
Securities
(Cost
$153,123,311)
..........................................................
153,123,311
Total
Short
Term
Investments
(Cost
$1,034,015,012
)
.............................
1,034,015,012
a
Total
Investments
(Cost
$71,066,726,748)
100.2%
...............................
$65,982,793,002
Options
Written
(0.2)%
.......................................................
(135,982,500)
Other
Assets,
less
Liabilities
(0.0)%
†
...........................................
(58,024,622)
Net
Assets
100.0%
...........................................................
$65,788,785,880
Number
of
Contracts
Notional
Amount
#
o
Options
Written
(0.2)%
Calls
-
Exchange-Traded
Equity
Options
AbbVie,
Inc.,
November
Strike
Price
$155.00,
Expires
11/18/22
...
10,000
134,210,000
(500,000)
AbbVie,
Inc.,
November
Strike
Price
$160.00,
Expires
11/18/22
...
5,000
67,105,000
(150,000)
American
Electric
Power
Co.,
Inc.,
November
Strike
Price
$110.00,
Expires
11/18/22
....................................
5,000
43,225,000
(40,000)
Amgen,
Inc.,
November
Strike
Price
$260.00,
Expires
11/18/22
...
7,500
169,050,000
(435,000)
BP
plc,
November
Strike
Price
$35.00,
Expires
11/18/22
........
10,000
28,550,000
(180,000)
Bristol-Myers
Squibb
Co.,
November
Strike
Price
$77.50,
Expires
11/18/22
..........................................
10,000
71,090,000
(570,000)
Chevron
Corp.,
December
Strike
Price
$180.00,
Expires
12/16/22
.
20,000
287,340,000
(1,500,000)
Chevron
Corp.,
December
Strike
Price
$185.00,
Expires
12/16/22
.
20,000
287,340,000
(1,040,000)
Chevron
Corp.,
December
Strike
Price
$190.00,
Expires
12/16/22
.
20,000
287,340,000
(660,000)
Dominion
Energy,
Inc.,
October
Strike
Price
$85.00,
Expires
10/21/22
..........................................
5,000
34,555,000
(15,000)
Dominion
Energy,
Inc.,
October
Strike
Price
$87.50,
Expires
10/21/22
..........................................
5,000
34,555,000
(25,000)
Dominion
Energy,
Inc.,
January
Strike
Price
$90.00,
Expires
1/20/23
5,000
34,555,000
(70,000)
Exxon
Mobil
Corp.,
December
Strike
Price
$105.00,
Expires
12/16/22
..........................................
20,000
174,620,000
(2,080,000)
Exxon
Mobil
Corp.,
December
Strike
Price
$110.00,
Expires
12/16/22
..........................................
25,000
218,275,000
(1,425,000)
Exxon
Mobil
Corp.,
December
Strike
Price
$120.00,
Expires
12/16/22
..........................................
10,000
87,310,000
(180,000)
International
Business
Machines
Corp.,
November
Strike
Price
$140.00,
Expires
11/18/22
.............................
10,000
118,810,000
(360,000)
International
Business
Machines
Corp.,
November
Strike
Price
$150.00,
Expires
11/18/22
.............................
15,000
178,215,000
(165,000)
Johnson
&
Johnson,
November
Strike
Price
$180.00,
Expires
11/18/22
..........................................
20,000
326,720,000
(1,180,000)
Johnson
&
Johnson,
December
Strike
Price
$180.00,
Expires
12/16/22
..........................................
15,000
245,040,000
(1,710,000)
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
100
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
o
Options
Written
(continued)
Calls
-
Exchange-Traded
(continued)
Equity
Options
(continued)
JPMorgan
Chase
&
Co.,
December
Strike
Price
$135.00,
Expires
12/16/22
..........................................
20,000
209,000,000
$
(440,000)
Lockheed
Martin
Corp.,
November
Strike
Price
$480.00,
Expires
11/18/22
..........................................
5,000
193,145,000
(100,000)
Merck
&
Co.,
Inc.,
January
Strike
Price
$100.00,
Expires
1/20/23
..
15,000
129,180,000
(1,080,000)
MetLife,
Inc.,
November
Strike
Price
$75.00,
Expires
11/18/22
....
20,000
121,560,000
(850,000)
Morgan
Stanley,
December
Strike
Price
$105.00,
Expires
12/16/22
20,000
158,020,000
(300,000)
Pfizer,
Inc.,
November
Strike
Price
$52.50,
Expires
11/18/22
.....
25,000
109,400,000
(250,000)
Pfizer,
Inc.,
December
Strike
Price
$55.00,
Expires
12/16/22
.....
25,000
109,400,000
(300,000)
Philip
Morris
International,
Inc.,
November
Strike
Price
$105.00,
Expires
11/18/22
....................................
15,000
124,515,000
(225,000)
Procter
&
Gamble
Co.
(The),
November
Strike
Price
$155.00,
Expires
11/18/22
....................................
10,000
126,250,000
(120,000)
Shell
plc,
December
Strike
Price
$60.00,
Expires
12/16/22
......
10,000
49,760,000
(500,000)
Southern
Co.
(The),
November
Strike
Price
$82.50,
Expires
11/18/22
5,000
34,000,000
(50,000)
Texas
Instruments,
Inc.,
November
Strike
Price
$190.00,
Expires
11/18/22
..........................................
10,000
154,780,000
(430,000)
Texas
Instruments,
Inc.,
December
Strike
Price
$200.00,
Expires
12/16/22
..........................................
10,000
154,780,000
(345,000)
TotalEnergies
SE,
November
Strike
Price
$60.00,
Expires
11/18/22
10,000
46,520,000
(200,000)
United
Parcel
Service,
Inc.,
December
Strike
Price
$210.00,
Expires
12/16/22
..........................................
5,000
80,770,000
(240,000)
United
Parcel
Service,
Inc.,
December
Strike
Price
$220.00,
Expires
12/16/22
..........................................
5,000
80,770,000
(147,500)
Walmart,
Inc.,
December
Strike
Price
$155.00,
Expires
12/16/22
..
5,000
64,850,000
(240,000)
(18,102,500)
Puts
-
Exchange-Traded
Equity
Options
Amazon.com,
Inc.,
December
Strike
Price
$100.00,
Expires
12/16/22
10,000
113,000,000
(4,600,000)
Analog
Devices,
Inc.,
December
Strike
Price
$120.00,
Expires
12/16/22
..........................................
10,000
139,340,000
(3,100,000)
Bristol-Myers
Squibb
Co.,
November
Strike
Price
$60.00,
Expires
11/18/22
..........................................
5,000
35,545,000
(187,500)
Broadcom,
Inc.,
November
Strike
Price
$460.00,
Expires
11/18/22
.
5,000
222,005,000
(16,000,000)
Coca-Cola
Co.
(The),
November
Strike
Price
$60.00,
Expires
11/18/22
..........................................
20,000
112,040,000
(8,000,000)
Home
Depot,
Inc.
(The),
November
Strike
Price
$275.00,
Expires
11/18/22
..........................................
5,000
137,970,000
(6,350,000)
Johnson
&
Johnson,
November
Strike
Price
$155.00,
Expires
11/18/22
..........................................
20,000
326,720,000
(4,860,000)
JPMorgan
Chase
&
Co.,
November
Strike
Price
$100.00,
Expires
11/18/22
..........................................
10,000
104,500,000
(4,170,000)
Lockheed
Martin
Corp.,
November
Strike
Price
$380.00,
Expires
11/18/22
..........................................
5,000
193,145,000
(6,700,000)
Microsoft
Corp.,
December
Strike
Price
$210.00,
Expires
12/16/22
5,000
116,450,000
(3,500,000)
Microsoft
Corp.,
December
Strike
Price
$220.00,
Expires
12/16/22
10,000
232,900,000
(9,800,000)
NextEra
Energy,
Inc.,
November
Strike
Price
$75.00,
Expires
11/18/22
..........................................
10,000
78,410,000
(2,250,000)
Procter
&
Gamble
Co.
(The),
November
Strike
Price
$130.00,
Expires
11/18/22
....................................
10,000
126,250,000
(7,250,000)
QUALCOMM,
Inc.,
November
Strike
Price
$120.00,
Expires
11/18/22
10,000
112,980,000
(11,550,000)
Raytheon
Technologies
Corp.,
November
Strike
Price
$85.00,
Expires
11/18/22
....................................
5,000
40,930,000
(2,812,500)
Target
Corp.,
December
Strike
Price
$125.00,
Expires
12/16/22
...
10,000
148,390,000
(3,850,000)
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Income
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
101
At
September
30,
2022,
the
Fund
had
the
following futures
contracts
outstanding.
See
Note
1(e). 
a
a
a
Number
of
Contracts
Notional
Amount
#
a
Value
a
a
a
a
a
a
o
Options
Written
(continued)
Puts
-
Exchange-Traded
(continued)
Equity
Options
(continued)
Target
Corp.,
December
Strike
Price
$150.00,
Expires
12/16/22
...
5,000
74,195,000
$
(5,900,000)
Target
Corp.,
December
Strike
Price
$160.00,
Expires
12/16/22
...
5,000
74,195,000
(8,950,000)
Texas
Instruments,
Inc.,
October
Strike
Price
$140.00,
Expires
10/21/22
..........................................
10,000
154,780,000
(1,250,000)
Texas
Instruments,
Inc.,
November
Strike
Price
$150.00,
Expires
11/18/22
..........................................
10,000
154,780,000
(6,800,000)
(117,880,000)
Total
Options
Written
(Premiums
received
$132,493,576)
.........................
$
(135,982,500)
#
Notional
amount
is
the
number
of
units
specified
in
the
contract,
and
can
include
currency
units,
bushels,
shares,
pounds,
barrels
or
other
units.
Currency
units
are
stated
in
U.S.
dollars
unless
otherwise
indicated.
*
The
principal
amount
is
stated
in
U.S.
dollars
unless
otherwise
indicated.
†
Rounds
to
less
than
0.1%
of
net
assets.
a
A
portion
or
all
of
the
security
is
held
in
connection
with
written
option
contracts
open
at
year
end.
b
Non-income
producing.
c
A
portion
or
all
of
the
security
is
on
loan
at
September
30,
2022.
See
Note
1(g).
d
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
e
See
Note
1(f)
regarding
equity-linked
securities.
f
Security
was
purchased
pursuant
to
Rule
144A
or
Regulation
S
under
the
Securities
Act
of
1933.
144A
securities
may
be
sold
in
transactions
exempt
from
registration
only
to
qualified
institutional
buyers
or
in
a
public
offering
registered
under
the
Securities
Act
of
1933.
Regulation
S
securities
cannot
be
sold
in
the
United
States
without
either
an
effective
registration
statement
filed
pursuant
to
the
Securities
Act
of
1933,
or
pursuant
to
an
exemption
from
registration.
At
September
30,
2022,
the
aggregate
value
of
these
securities
was
$28,934,947,950,
representing
44.0%
of
net
assets.
g
A
portion
or
all
of
the
security
purchased
on
a
delayed
delivery
basis.
See
Note
1(d).
h
Perpetual
security
with
no
stated
maturity
date.
i
The
coupon
rate
shown
represents
the
rate
at
period
end.
j
Income
may
be
received
in
additional
securities
and/or
cash.
k
See
Note
7
regarding
credit
risk
and
defaulted
securities.
l
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
m
See
Note
1(g)
regarding
securities
on
loan.
n
See
Note
1(c)
regarding
joint
repurchase
agreement.
o
See
Note
1(e)
regarding
written
options.
Futures
Contracts
Description
Type
Number
of
Contracts
Notional
Amount
*
Expiration
Date
Value/
Unrealized
Appreciation
(Depreciation)
Interest
rate
contracts
U.S.
Treasury
10
Year
Notes
....................
Long
25,000
$
2,801,562,500
12/20/22
$
14,804,250
Total
Futures
Contracts
......................................................................
$14,804,250
*
As
of
period
end.
See
Abbreviations
on
page
155
.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
102
a
Year
Ended
September
30,
Year
Ended
September
30,
2018
a
2022
2021
2020
2019
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.89
$6.09
$6.07
$5.86
$5.89
Income
from
investment
operations
b
:
Net
investment
income
c
.........................
0.08
0.05
0.10
0.14
0.01
Net
realized
and
unrealized
gains
(losses)
...........
(0.81)
(0.12)
0.08
0.25
(0.02)
Total
from
investment
operations
....................
(0.73)
(0.07)
0.18
0.39
(0.01)
Less
distributions
from:
Net
investment
income
..........................
(0.13)
(0.13)
(0.16)
(0.18)
(0.02)
Net
asset
value,
end
of
year
.......................
$5.03
$5.89
$6.09
$6.07
$5.86
Total
return
d
...................................
(12.50)%
(1.15)%
3.01%
6.70%
(0.23)%
Ratios
to
average
net
assets
e
Expenses
before
waiver
and
payments
by
affiliates
......
0.87%
0.87%
0.89%
0.89%
0.86%
Expenses
net
of
waiver
and
payments
by
affiliates
f
......
0.86%
0.87%
g
0.88%
0.88%
0.86%
g
Net
investment
income
...........................
1.44%
0.79%
1.58%
2.36%
2.40%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$687,607
$1,020,574
$1,097,545
$336,646
$4,472
Portfolio
turnover
rate
............................
53.63%
89.16%
65.54%
41.34%
44.67%
a
For
the
period
September
10,
2018
(effective
date)
to
September
30,
2018.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
103
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
A1
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.90
$6.09
$6.07
$5.85
$6.13
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.09
0.05
0.10
0.15
0.15
Net
realized
and
unrealized
gains
(losses)
...........
(0.82)
(0.10)
0.09
0.25
(0.25)
Total
from
investment
operations
....................
(0.73)
(0.05)
0.19
0.40
(0.10)
Less
distributions
from:
Net
investment
income
..........................
(0.14)
(0.14)
(0.17)
(0.18)
(0.18)
Net
asset
value,
end
of
year
.......................
$5.03
$5.90
$6.09
$6.07
$5.85
Total
return
c
...................................
(12.55)%
(0.89)%
3.09%
6.94%
(1.60)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.76%
0.77%
0.78%
0.79%
0.76%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
0.76%
e
0.76%
0.77%
0.78%
0.76%
e
Net
investment
income
...........................
1.56%
0.90%
1.69%
2.46%
2.50%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,592,268
$2,104,978
$2,661,888
$2,885,194
$3,099,373
Portfolio
turnover
rate
............................
53.63%
89.16%
65.54%
41.34%
44.67%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
104
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.85
$6.04
$6.03
$5.81
$6.08
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.06
0.02
0.07
0.12
0.12
Net
realized
and
unrealized
gains
(losses)
...........
(0.80)
(0.10)
0.08
0.25
(0.24)
Total
from
investment
operations
....................
(0.74)
(0.08)
0.15
0.37
(0.12)
Less
distributions
from:
Net
investment
income
..........................
(0.11)
(0.11)
(0.14)
(0.15)
(0.15)
Net
asset
value,
end
of
year
.......................
$5.00
$5.85
$6.04
$6.03
$5.81
Total
return
c
...................................
(12.77)%
(1.41)%
2.43%
6.45%
(1.94)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.27%
1.27%
1.29%
1.29%
1.26%
Expenses
net
of
waiver
and
payments
by
affiliates
d
......
1.26%
1.27%
e
1.28%
1.28%
1.26%
e
Net
investment
income
...........................
1.04%
0.39%
1.18%
1.96%
2.00%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$116,145
$196,643
$354,483
$389,021
$571,525
Portfolio
turnover
rate
............................
53.63%
89.16%
65.54%
41.34%
44.67%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
105
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.89
$6.09
$6.07
$5.85
$6.12
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.07
0.03
0.08
0.13
0.13
Net
realized
and
unrealized
gains
(losses)
...........
(0.81)
(0.11)
0.08
0.25
(0.24)
Total
from
investment
operations
....................
(0.74)
(0.08)
0.16
0.38
(0.11)
Less
distributions
from:
Net
investment
income
..........................
(0.12)
(0.12)
(0.14)
(0.16)
(0.16)
Net
asset
value,
end
of
year
.......................
$5.03
$5.89
$6.09
$6.07
$5.85
Total
return
....................................
(12.72)%
(1.41)%
2.73%
6.58%
(1.78)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
1.12%
1.11%
1.13%
1.14%
1.11%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
1.11%
1.11%
d
1.12%
1.13%
1.11%
d
Net
investment
income
...........................
1.20%
0.55%
1.34%
2.11%
2.15%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$15,476
$19,513
$27,746
$32,906
$31,144
Portfolio
turnover
rate
............................
53.63%
89.16%
65.54%
41.34%
44.67%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
106
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.92
$6.12
$6.10
$5.87
$6.15
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.10
0.07
0.12
0.16
0.17
Net
realized
and
unrealized
gains
(losses)
...........
(0.81)
(0.12)
0.08
0.27
(0.25)
Total
from
investment
operations
....................
(0.71)
(0.05)
0.20
0.43
(0.08)
Less
distributions
from:
Net
investment
income
..........................
(0.15)
(0.15)
(0.18)
(0.20)
(0.20)
Net
asset
value,
end
of
year
.......................
$5.06
$5.92
$6.12
$6.10
$5.87
Total
return
....................................
(12.11)%
(0.80)%
3.34%
7.39%
(1.33)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.50%
0.53%
0.54%
0.51%
0.49%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.50%
d
0.51%
0.52%
0.50%
0.48%
Net
investment
income
...........................
1.81%
1.15%
1.96%
2.74%
2.78%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$202,611
$304,650
$361,791
$573,957
$694,813
Portfolio
turnover
rate
............................
53.63%
89.16%
65.54%
41.34%
44.67%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
107
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$5.92
$6.11
$6.10
$5.87
$6.15
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.09
0.06
0.11
0.16
0.16
Net
realized
and
unrealized
gains
(losses)
...........
(0.81)
(0.10)
0.07
0.26
(0.25)
Total
from
investment
operations
....................
(0.72)
(0.04)
0.18
0.42
(0.09)
Less
distributions
from:
Net
investment
income
..........................
(0.15)
(0.15)
(0.17)
(0.19)
(0.19)
Net
asset
value,
end
of
year
.......................
$5.05
$5.92
$6.11
$6.10
$5.87
Total
return
....................................
(12.39)%
(0.74)%
3.23%
7.08%
(1.45)%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.62%
0.62%
0.64%
0.64%
0.61%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.61%
0.62%
d
0.63%
0.63%
0.61%
d
Net
investment
income
...........................
1.67%
1.04%
1.84%
2.61%
2.65%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$300,303
$692,010
$743,012
$946,318
$720,281
Portfolio
turnover
rate
............................
53.63
%
89.16%
65.54%
41.34%
44.67%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
U.S.
Government
Securities
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
108
a
a
Principal
Amount
a
Value
a
a
a
a
a
U.S.
Government
and
Agency
Securities
0.6%
U.S.
Treasury
Bonds,
4.75%,
2/15/37
....................................
$
14,500,000
$
16,087,354
Total
U.S.
Government
and
Agency
Securities
(Cost
$18,546,028)
.................
16,087,354
Mortgage-Backed
Securities
97.7%
Government
National
Mortgage
Association
(GNMA)
Fixed
Rate
97.7%
GNMA
I,
30
Year,
4.5%,
4/15/40
........................................
3,765,530
3,717,062
GNMA
I,
30
Year,
5%,
9/15/40
..........................................
135,400,628
135,896,620
GNMA
I,
30
Year,
5.5%,
2/15/40
........................................
61,571,216
65,214,774
GNMA
I,
30
Year,
6%,
12/15/39
.........................................
56,631,551
61,238,665
GNMA
I,
30
Year,
6.5%,
8/15/37
........................................
15,157,258
15,801,226
GNMA
I,
30
Year,
7%,
9/15/32
..........................................
9,475,656
9,973,877
GNMA
I,
30
Year,
7.5%,
7/15/26
-
8/15/33
.................................
912,127
954,553
GNMA
I,
30
Year,
8%,
10/15/29
.........................................
1,297
1,355
GNMA
I,
30
Year,
8.5%,
11/15/24
........................................
146
146
GNMA
I,
Single-family,
30
Year,
3.5%,
4/15/43
-
5/15/43
......................
12,472,602
11,636,926
GNMA
I,
Single-family,
30
Year,
4%,
10/15/40
-
8/15/46
.......................
36,493,054
34,958,370
GNMA
I,
Single-family,
30
Year,
4.5%,
2/15/39
-
6/15/41
......................
69,398,827
68,393,463
GNMA
I,
Single-family,
30
Year,
5%,
2/15/35
...............................
18,837
18,649
GNMA
I,
Single-family,
30
Year,
5.5%,
5/15/33
-
10/15/48
......................
567,676
575,912
GNMA
I,
Single-family,
30
Year,
7.25%,
12/15/25
-
1/15/26
.....................
30,753
30,877
GNMA
I,
Single-family,
30
Year,
7.5%,
10/15/22
-
7/15/31
......................
1,013,249
1,026,980
GNMA
I,
Single-family,
30
Year,
8%,
11/15/22
-
9/15/30
.......................
357,916
361,042
GNMA
I,
Single-family,
30
Year,
8.5%,
2/15/23
-
5/15/25
......................
7,409
7,424
GNMA
I,
Single-family,
30
Year,
10%,
2/15/25
..............................
2,815
2,813
GNMA
II,
30
Year,
4.5%,
5/20/34
-
6/20/41
.................................
3,154,328
3,116,960
GNMA
II,
30
Year,
6%,
3/20/34
-
9/20/34
..................................
1,009,750
1,013,823
GNMA
II,
30
Year,
6%,
7/20/39
.........................................
25,129,383
27,010,392
GNMA
II,
30
Year,
6.5%,
9/20/31
-
9/20/32
.................................
1,067,518
1,117,265
GNMA
II,
30
Year,
7%,
7/20/32
.........................................
306,323
323,334
GNMA
II,
30
Year,
7.5%,
10/20/24
.......................................
9,564
9,567
GNMA
II,
30
Year,
8%,
12/20/28
........................................
46,799
48,058
GNMA
II,
Single-family,
30
Year,
2%,
8/20/51
...............................
176,711,373
148,210,824
GNMA
II,
Single-family,
30
Year,
2.5%,
11/20/50
............................
15,299,114
13,003,417
GNMA
II,
Single-family,
30
Year,
2.5%,
7/20/51
.............................
77,533,336
66,970,719
GNMA
II,
Single-family,
30
Year,
2.5%,
8/20/51
.............................
229,923,914
198,692,645
GNMA
II,
Single-family,
30
Year,
2.5%,
9/20/51
.............................
93,086,411
80,387,030
GNMA
II,
Single-family,
30
Year,
2.5%,
10/20/51
............................
90,708,828
78,325,320
GNMA
II,
Single-family,
30
Year,
2.5%,
12/20/51
............................
92,420,561
79,791,405
GNMA
II,
Single-family,
30
Year,
2.5%,
1/20/52
.............................
138,598,931
119,623,223
GNMA
II,
Single-family,
30
Year,
3%,
10/20/44
..............................
20,498,174
18,457,809
GNMA
II,
Single-family,
30
Year,
3%,
12/20/44
..............................
10,270,311
9,256,002
GNMA
II,
Single-family,
30
Year,
3%,
5/20/45
...............................
15,097,406
13,591,677
GNMA
II,
Single-family,
30
Year,
3%,
4/20/46
...............................
20,119,368
18,131,155
GNMA
II,
Single-family,
30
Year,
3%,
9/20/47
...............................
16,275,233
14,601,996
GNMA
II,
Single-family,
30
Year,
3%,
10/20/47
..............................
26,174,780
23,490,842
GNMA
II,
Single-family,
30
Year,
3%,
6/20/50
...............................
12,254,200
11,104,869
GNMA
II,
Single-family,
30
Year,
3%,
9/20/50
...............................
9,431,318
8,505,375
GNMA
II,
Single-family,
30
Year,
3%,
7/20/51
...............................
160,592,886
143,206,446
GNMA
II,
Single-family,
30
Year,
3%,
8/20/51
...............................
182,320,152
162,186,094
GNMA
II,
Single-family,
30
Year,
3%,
9/20/51
...............................
30,245,189
26,905,103
GNMA
II,
Single-family,
30
Year,
3%,
10/20/51
..............................
130,166,395
115,428,460
GNMA
II,
Single-family,
30
Year,
3%,
2/20/45
-
10/20/50
......................
65,462,337
59,045,070
GNMA
II,
Single-family,
30
Year,
3.5%,
7/20/42
.............................
32,248,279
29,980,275
GNMA
II,
Single-family,
30
Year,
3.5%,
9/20/42
.............................
40,505,598
37,655,816
GNMA
II,
Single-family,
30
Year,
3.5%,
5/20/43
.............................
12,009,823
11,189,060
GNMA
II,
Single-family,
30
Year,
3.5%,
6/20/43
.............................
13,931,861
12,926,788
GNMA
II,
Single-family,
30
Year,
3.5%,
9/20/47
.............................
145,972,982
135,375,303
GNMA
II,
Single-family,
30
Year,
3.5%,
11/20/47
............................
138,726,874
127,863,387
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
U.S.
Government
Securities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
109
a
a
Principal
Amount
a
Value
a
a
a
a
a
Mortgage-Backed
Securities
(continued)
Government
National
Mortgage
Association
(GNMA)
Fixed
Rate
(continued)
GNMA
II,
Single-family,
30
Year,
3.5%,
10/20/40
-
1/20/49
.....................
$
52,520,883
$
48,638,244
GNMA
II,
Single-family,
30
Year,
3.5%,
11/20/51
............................
25,246,167
23,042,362
GNMA
II,
Single-family,
30
Year,
3.5%,
2/20/52
.............................
71,767,378
65,619,670
GNMA
II,
Single-family,
30
Year,
4%,
11/20/40
..............................
10,723,979
10,251,935
GNMA
II,
Single-family,
30
Year,
4%,
9/20/41
...............................
10,709,458
10,238,029
GNMA
II,
Single-family,
30
Year,
4%,
10/20/41
..............................
13,154,413
12,575,382
GNMA
II,
Single-family,
30
Year,
4%,
11/20/41
..............................
12,359,631
11,815,057
GNMA
II,
Single-family,
30
Year,
4%,
5/20/47
...............................
34,943,574
33,198,980
GNMA
II,
Single-family,
30
Year,
4%,
6/20/47
...............................
27,072,901
25,721,416
GNMA
II,
Single-family,
30
Year,
4%,
7/20/47
...............................
17,340,588
16,475,554
GNMA
II,
Single-family,
30
Year,
4%,
5/20/40
-
12/20/49
......................
50,417,345
48,183,986
GNMA
II,
Single-family,
30
Year,
4%,
6/20/52
...............................
159,838,524
149,686,920
GNMA
II,
Single-family,
30
Year,
4.5%,
5/20/41
.............................
9,693,190
9,587,422
GNMA
II,
Single-family,
30
Year,
4.5%,
6/20/41
.............................
11,965,454
11,798,323
GNMA
II,
Single-family,
30
Year,
4.5%,
7/20/41
.............................
13,292,021
13,147,099
GNMA
II,
Single-family,
30
Year,
4.5%,
9/20/41
.............................
19,103,587
18,895,233
GNMA
II,
Single-family,
30
Year,
4.5%,
10/20/41
............................
13,592,011
13,455,241
GNMA
II,
Single-family,
30
Year,
4.5%,
5/20/33
-
2/20/44
......................
30,379,762
30,091,207
GNMA
II,
Single-family,
30
Year,
5%,
9/20/33
...............................
8,593,297
8,746,351
GNMA
II,
Single-family,
30
Year,
5%,
7/20/33
-
9/20/41
.......................
27,816,488
28,197,625
GNMA
II,
Single-family,
30
Year,
5.5%,
6/20/34
-
2/20/50
......................
39,639,275
41,003,491
GNMA
II,
Single-family,
30
Year,
6%,
6/20/34
...............................
558,981
577,246
GNMA
II,
Single-family,
30
Year,
6.5%,
6/20/24
-
1/20/39
......................
7,979,376
8,363,408
GNMA
II,
Single-family,
30
Year,
7%,
2/20/28
-
7/20/33
.......................
2,164,068
2,263,761
GNMA
II,
Single-family,
30
Year,
7.5%,
11/20/22
-
4/20/32
.....................
282,795
293,069
GNMA
II,
Single-family,
30
Year,
8%,
12/20/24
-
6/20/30
......................
143,764
149,415
GNMA
II,
Single-family,
30
Year,
8.5%,
1/20/25
-
6/20/25
......................
81
82
GNMA
II,
Single-family,
30
Year,
9.5%,
12/20/24
-
1/20/25
.....................
2,188
2,186
2,848,374,937
Total
Mortgage-Backed
Securities
(Cost
$3,216,988,840)
.........................
2,848,374,937
Total
Long
Term
Investments
(Cost
$3,235,534,868)
.............................
2,864,462,291
a
a
a
a
a
Short
Term
Investments
1.6%
Shares
a
Money
Market
Funds
1.6%
a,b
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
...................
47,626,883
47,626,883
Total
Money
Market
Funds
(Cost
$47,626,883)
..................................
47,626,883
Total
Short
Term
Investments
(Cost
$47,626,883
)
................................
47,626,883
a
Total
Investments
(Cost
$3,283,161,751)
99.9%
..................................
$2,912,089,174
Other
Assets,
less
Liabilities
0.1%
.............................................
2,321,280
Net
Assets
100.0%
...........................................................
$2,914,410,454
See
Abbreviations
on
page
155
.
a
See
Note
3
(
f
)
regarding
investments
in
affiliated
management
investment
companies.
b
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
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Financial
Highlights
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Utilities
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Annual
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The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
110
a
Year
Ended
September
30,
Year
Ended
September
30,
2018
a
2022
2021
2020
2019
Class
A
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.20
$19.76
$22.53
$18.66
$19.16
Income
from
investment
operations
b
:
Net
investment
income
c
.........................
0.46
0.43
0.51
0.53
0.02
Net
realized
and
unrealized
gains
(losses)
...........
0.67
1.94
(2.43)
4.41
(0.52)
Total
from
investment
operations
....................
1.13
2.37
(1.92)
4.94
(0.50)
Less
distributions
from:
Net
investment
income
..........................
(0.47)
(0.52)
(0.50)
(0.49)
—
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
—
Total
distributions
...............................
(1.07)
(1.93)
(0.85)
(1.07)
—
Net
asset
value,
end
of
year
.......................
$20.26
$20.20
$19.76
$22.53
$18.66
Total
return
d
...................................
5.56%
12.29%
(8.68)%
27.43%
(2.61)%
Ratios
to
average
net
assets
e
Expenses
f
,g
....................................
0.82%
0.82%
0.83%
0.83%
0.84%
Net
investment
income
...........................
2.08%
2.10%
2.46%
2.51%
2.62%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,200,671
$982,201
$742,188
$521,782
$3,536
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
For
the
period
September
10,
2018
(effective
date)
to
September
30,
2018.
b
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
c
Based
on
average
daily
shares
outstanding.
d
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable,
and
is
not
annualized
for
periods
less
than
one
year.
e
Ratios
are
annualized
for
periods
less
than
one
year.
f
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
g
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
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Funds
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Utilities
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The
accompanying
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an
integral
part
of
these
financial
statements.
Annual
Report
111
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
A1
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.21
$19.77
$22.54
$18.66
$19.18
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.47
0.45
0.52
0.53
0.50
Net
realized
and
unrealized
gains
(losses)
...........
0.68
1.94
(2.41)
4.44
(0.17)
Total
from
investment
operations
....................
1.15
2.39
(1.89)
4.97
0.33
Less
distributions
from:
Net
investment
income
..........................
(0.49)
(0.54)
(0.53)
(0.51)
(0.54)
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
(0.31)
Total
distributions
...............................
(1.09)
(1.95)
(0.88)
(1.09)
(0.85)
Net
asset
value,
end
of
year
.......................
$20.27
$20.21
$19.77
$22.54
$18.66
Total
return
c
...................................
5.67%
12.40%
(8.59)%
27.61%
1.68%
Ratios
to
average
net
assets
Expenses
d
,e
....................................
0.72%
0.72%
0.73%
0.73%
0.74%
Net
investment
income
...........................
2.16%
2.20%
2.50%
2.61%
2.72%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$3,230,150
$3,321,370
$3,388,126
$4,176,487
$3,654,795
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Utilities
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
112
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
C
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.09
$19.65
$22.42
$18.57
$19.09
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.36
0.34
0.41
0.42
0.41
Net
realized
and
unrealized
gains
(losses)
...........
0.67
1.95
(2.41)
4.43
(0.18)
Total
from
investment
operations
....................
1.03
2.29
(2.00)
4.85
0.23
Less
distributions
from:
Net
investment
income
..........................
(0.38)
(0.44)
(0.42)
(0.42)
(0.44)
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
(0.31)
Total
distributions
...............................
(0.98)
(1.85)
(0.77)
(1.00)
(0.75)
Net
asset
value,
end
of
year
.......................
$20.14
$20.09
$19.65
$22.42
$18.57
Total
return
c
...................................
5.11%
11.91%
(9.10)%
26.96%
1.18%
Ratios
to
average
net
assets
Expenses
d
,e
....................................
1.22%
1.22%
1.23%
1.23%
1.24%
Net
investment
income
...........................
1.66%
1.69%
1.98%
2.11%
2.22%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$302,959
$350,553
$537,808
$767,363
$834,070
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Total
return
does
not
reflect
sales
commissions
or
contingent
deferred
sales
charges,
if
applicable.
d
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
e
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Utilities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
113
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.12
$19.68
$22.45
$18.59
$19.11
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.40
0.38
0.44
0.45
0.44
Net
realized
and
unrealized
gains
(losses)
...........
0.67
1.94
(2.41)
4.44
(0.18)
Total
from
investment
operations
....................
1.07
2.32
(1.97)
4.89
0.26
Less
distributions
from:
Net
investment
income
..........................
(0.42)
(0.47)
(0.45)
(0.45)
(0.47)
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
(0.31)
Total
distributions
...............................
(1.02)
(1.88)
(0.80)
(1.03)
(0.78)
Net
asset
value,
end
of
year
.......................
$20.17
$20.12
$19.68
$22.45
$18.59
Total
return
....................................
5.26%
12.06%
(8.95)%
27.17%
1.33%
Ratios
to
average
net
assets
Expenses
c
,d
....................................
1.07%
1.07%
1.08%
1.08%
1.09%
Net
investment
income
...........................
1.83%
1.85%
2.15%
2.26%
2.37%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$103,579
$83,441
$84,488
$103,376
$72,927
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Utilities
Fund
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
114
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Class
R6
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.40
$19.93
$22.73
$18.81
$19.32
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.54
0.50
0.58
0.56
0.55
Net
realized
and
unrealized
gains
(losses)
...........
0.67
1.96
(2.46)
4.50
(0.17)
Total
from
investment
operations
....................
1.21
2.46
(1.88)
5.06
0.38
Less
distributions
from:
Net
investment
income
..........................
(0.54)
(0.58)
(0.57)
(0.56)
(0.58)
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
(0.31)
Total
distributions
...............................
(1.14)
(1.99)
(0.92)
(1.14)
(0.89)
Net
asset
value,
end
of
year
.......................
$20.47
$20.40
$19.93
$22.73
$18.81
Total
return
....................................
5.90%
12.71%
(8.44)%
27.89%
1.97%
Ratios
to
average
net
assets
Expenses
before
waiver
and
payments
by
affiliates
......
0.54%
0.58%
0.56%
0.53%
0.52%
Expenses
net
of
waiver
and
payments
by
affiliates
c
......
0.50%
0.50%
0.50%
0.50%
0.48%
Net
investment
income
...........................
2.41%
2.42%
2.75%
2.84%
2.98%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$223,710
$153,969
$144,079
$150,244
$230,393
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Financial
Highlights
Franklin
Utilities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
115
a
Year
Ended
September
30,
2022
2021
2020
2019
2018
Advisor
Class
Per
share
operating
performance
(for
a
share
outstanding
throughout
the
year)
Net
asset
value,
beginning
of
year
...................
$20.40
$19.93
$22.73
$18.81
$19.32
Income
from
investment
operations
a
:
Net
investment
income
b
.........................
0.52
0.48
0.56
0.56
0.54
Net
realized
and
unrealized
gains
(losses)
...........
0.68
1.97
(2.46)
4.48
(0.18)
Total
from
investment
operations
....................
1.20
2.45
(1.90)
5.04
0.36
Less
distributions
from:
Net
investment
income
..........................
(0.53)
(0.57)
(0.55)
(0.54)
(0.56)
Net
realized
gains
.............................
(0.60)
(1.41)
(0.35)
(0.58)
(0.31)
Total
distributions
...............................
(1.13)
(1.98)
(0.90)
(1.12)
(0.87)
Net
asset
value,
end
of
year
.......................
$20.47
$20.40
$19.93
$22.73
$18.81
Total
return
....................................
5.82%
12.62%
(8.51)%
27.78%
1.82%
Ratios
to
average
net
assets
Expenses
c
,d
....................................
0.57%
0.57%
0.58%
0.58%
0.59%
Net
investment
income
...........................
2.32%
2.35%
2.66%
2.76%
2.87%
Supplemental
data
Net
assets,
end
of
year
(000’s)
.....................
$1,383,667
$1,200,859
$1,179,002
$1,262,883
$927,845
Portfolio
turnover
rate
............................
5.66%
5.18%
12.19%
7.90%
4.58%
a
The
amount
shown
for
a
share
outstanding
throughout
the
period
may
not
correlate
with
the
Statement
of
Operations
for
the
period
due
to
the
timing
of
sales
and
repurchases
of
the
Fund’s
shares
in
relation
to
income
earned
and/or
fluctuating
fair
value
of
the
investments
of
the
Fund.
b
Based
on
average
daily
shares
outstanding.
c
Benefit
of
expense
reduction
rounds
to
less
than
0.01%.
d
Benefit
of
waiver
and
payments
by
affiliates
rounds
to
less
than
0.01%.
Franklin
Custodian
Funds
Schedule
of
Investments,
September
30,
2022
Franklin
Utilities
Fund
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
116
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
98.9%
Construction
&
Engineering
1.9%
MDU
Resources
Group,
Inc.
.............................
United
States
4,400,000
$
120,340,000
Diversified
Telecommunication
Services
0.9%
a
TELUS
Corp.
........................................
Canada
3,000,000
59,574,314
Electric
Utilities
57.6%
Alliant
Energy
Corp.
...................................
United
States
3,750,000
198,712,500
American
Electric
Power
Co.,
Inc.
.........................
United
States
2,750,000
237,737,500
Constellation
Energy
Corp.
..............................
United
States
1,499,999
124,784,917
Duke
Energy
Corp.
....................................
United
States
2,700,000
251,154,000
Edison
International
...................................
United
States
4,300,000
243,294,000
Emera,
Inc.
..........................................
Canada
1,800,000
72,831,391
Entergy
Corp.
........................................
United
States
2,200,000
221,386,000
Evergy,
Inc.
..........................................
United
States
3,700,000
219,780,000
Eversource
Energy
....................................
United
States
2,200,000
171,512,000
Exelon
Corp.
.........................................
United
States
6,350,000
237,871,000
FirstEnergy
Corp.
.....................................
United
States
2,000,000
74,000,000
NextEra
Energy,
Inc.
...................................
United
States
9,686,286
759,501,685
OGE
Energy
Corp.
....................................
United
States
1,600,000
58,336,000
Origin
Energy
Ltd.
.....................................
Australia
7,000,000
23,225,778
a
PG&E
Corp.
.........................................
United
States
10,000,000
125,000,000
Pinnacle
West
Capital
Corp.
.............................
United
States
1,250,000
80,637,500
PNM
Resources,
Inc.
..................................
United
States
1,000,000
45,730,000
PPL
Corp.
...........................................
United
States
6,000,000
152,100,000
Southern
Co.
(The)
....................................
United
States
4,100,000
278,800,000
Xcel
Energy,
Inc.
......................................
United
States
2,100,000
134,400,000
3,710,794,271
Gas
Utilities
1.7%
Southwest
Gas
Holdings,
Inc.
............................
United
States
700,000
48,825,000
Spire,
Inc.
...........................................
United
States
1,000,000
62,330,000
111,155,000
Independent
Power
and
Renewable
Electricity
Producers
1.7%
Clearway
Energy,
Inc.,
C
................................
United
States
600,000
19,110,000
Vistra
Corp.
..........................................
United
States
4,500,000
94,500,000
113,610,000
Multi-Utilities
30.0%
Ameren
Corp.
........................................
United
States
1,668,250
134,377,538
Black
Hills
Corp.
......................................
United
States
784,393
53,126,938
CenterPoint
Energy,
Inc.
................................
United
States
6,250,000
176,125,000
CMS
Energy
Corp.
....................................
United
States
4,300,000
250,432,000
Consolidated
Edison,
Inc.
...............................
United
States
1,000,000
85,760,000
Dominion
Energy,
Inc.
..................................
United
States
3,800,000
262,618,000
DTE
Energy
Co.
......................................
United
States
1,500,000
172,575,000
E.ON
SE
............................................
Germany
9,000,000
69,148,491
National
Grid
plc
......................................
United
Kingdom
5,000,000
51,468,248
NiSource,
Inc.
........................................
United
States
5,600,000
141,064,000
NorthWestern
Corp.
...................................
United
States
1,300,000
64,064,000
Public
Service
Enterprise
Group,
Inc.
......................
United
States
2,200,000
123,706,000
Sempra
Energy
.......................................
United
States
1,800,000
269,892,000
WEC
Energy
Group,
Inc.
................................
United
States
900,000
80,487,000
1,934,844,215
Oil,
Gas
&
Consumable
Fuels
3.8%
Cheniere
Energy,
Inc.
..................................
United
States
700,000
116,137,000
DT
Midstream,
Inc.
....................................
United
States
1,400,000
72,646,000
Equitrans
Midstream
Corp.
..............................
United
States
2,000,000
14,960,000
Franklin
Custodian
Funds
Schedule
of
Investments
Franklin
Utilities
Fund
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
117
a
a
Country
Shares
a
Value
a
a
a
a
a
a
Common
Stocks
(continued)
Oil,
Gas
&
Consumable
Fuels
(continued)
Williams
Cos.,
Inc.
(The)
................................
United
States
1,400,000
$
40,082,000
243,825,000
Water
Utilities
1.3%
Essential
Utilities,
Inc.
..................................
United
States
1,500,000
62,070,000
United
Utilities
Group
plc
................................
United
Kingdom
2,000,000
19,747,431
81,817,431
Total
Common
Stocks
(Cost
$3,357,654,123)
....................................
6,375,960,231
Short
Term
Investments
1.0%
a
a
Country
Shares
a
Value
a
a
a
Money
Market
Funds
1.0%
b,c
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.....
United
States
67,045,219
67,045,219
Total
Money
Market
Funds
(Cost
$67,045,219)
..................................
67,045,219
Total
Short
Term
Investments
(Cost
$67,045,219
)
................................
67,045,219
a
Total
Investments
(Cost
$3,424,699,342)
99.9%
..................................
$6,443,005,450
Other
Assets,
less
Liabilities
0.1%
.............................................
1,729,677
Net
Assets
100.0%
...........................................................
$6,444,735,127
See
Abbreviations
on
page
155
.
a
Non-income
producing.
b
See
Note
3(f)
regarding
investments
in
affiliated
management
investment
companies.
c
The
rate
shown
is
the
annualized
seven-day
effective
yield
at
period
end.
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Assets
and
Liabilities
September
30,
2022
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
118
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
.................................
$12,701,254,041
$74,062,846
$5,579,065,636
Cost
-
Non-controlled
affiliates
(Note
3
f
and
12
)
.................
271,248,972
1,276,224
69,725,524
Cost
-
Unaffiliated
repurchase
agreements
....................
205,086
—
—
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$539,417,
$—
and
$4,724,722,
respectively)
...........................
$16,536,497,880
$66,088,418
$14,375,468,329
Value
-
Non-controlled
affiliates
(Note
3
f
and
12
)
................
271,248,972
1,276,224
69,725,524
Value
-
Unaffiliated
repurchase
agreements
....................
205,086
—
—
Receivables:
Investment
securities
sold
.................................
19,110,420
26,354
—
Capital
shares
sold
......................................
21,019,328
18,045
4,007,917
Dividends
and
interest
...................................
3,215,269
4,017
6,644,347
Affiliates
..............................................
—
18,492
—
Total
assets
........................................
16,851,296,955
67,431,550
14,455,846,117
Liabilities:
Payables:
Investment
securities
purchased
............................
83,222,393
26
—
Capital
shares
redeemed
.................................
31,728,051
76,887
12,472,694
Management
fees
.......................................
6,481,041
—
5,721,093
Distribution
fees
........................................
2,342,575
16,066
2,512,364
Transfer
agent
fees
......................................
4,910,493
27,996
4,461,847
Professional
fees
.......................................
64,422
29,827
75,115
Trustees'
fees
and
expenses
...............................
18,547
1,197
7,461
Payable
upon
return
of
securities
loaned
(Note
1
g
)
................
590,086
—
—
Accrued
expenses
and
other
liabilities
.........................
657,866
10,831
908,063
Total
liabilities
.......................................
130,015,474
162,830
26,158,637
Net
assets,
at
value
...............................
$16,721,281,481
$67,268,720
$14,429,687,480
Net
assets
consist
of:
Paid-in
capital
...........................................
$13,819,862,249
$87,621,502
$4,184,282,775
Total
distributable
earnings
(losses)
...........................
2,901,419,232
(20,352,782)
10,245,404,705
Net
assets,
at
value
...............................
$16,721,281,481
$67,268,720
$14,429,687,480
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Assets
and
Liabilities
(continued)
September
30,
2022
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
119
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Class
A:
Net
assets,
at
value
.....................................
$7,214,315,052
$53,027,022
$9,118,402,598
Shares
outstanding
......................................
77,759,805
2,747,534
86,502,485
Net
asset
value
per
share
a
................................
$92.78
$19.30
$105.41
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
94.50%)
..............................................
$98.18
$20.42
$111.54
Class
C:
Net
assets,
at
value
.....................................
$715,975,995
$3,953,756
$407,722,298
Shares
outstanding
......................................
9,578,336
208,925
4,435,812
Net
asset
value
and
maximum
offering
price
per
share
a
...........
$74.75
$18.92
$91.92
Class
R:
Net
assets,
at
value
.....................................
$188,831,187
$722,862
$249,874,213
Shares
outstanding
......................................
2,118,458
37,641
2,392,798
Net
asset
value
and
maximum
offering
price
per
share
...........
$89.14
$19.20
$104.43
Class
R6:
Net
assets,
at
value
.....................................
$6,322,021,431
$46,188
$2,000,923,167
Shares
outstanding
......................................
64,541,187
2,374
18,836,843
Net
asset
value
and
maximum
offering
price
per
share
...........
$97.95
$19.45
$106.22
Advisor
Class:
Net
assets,
at
value
.....................................
$2,280,137,816
$9,518,892
$2,652,765,204
Shares
outstanding
......................................
23,595,196
489,857
24,967,670
Net
asset
value
and
maximum
offering
price
per
share
...........
$96.64
$19.43
$106.25
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Assets
and
Liabilities
(continued)
September
30,
2022
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
120
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Assets:
Investments
in
securities:
Cost
-
Unaffiliated
issuers
.................................
$69,957,711,736
$3,235,534,868
$3,357,654,123
Cost
-
Non-controlled
affiliates
(Note
3
f
and
12
)
.................
1,079,994,701
47,626,883
67,045,219
Cost
-
Unaffiliated
repurchase
agreements
....................
29,020,311
—
—
Value
-
Unaffiliated
issuers
(Includes
securities
loaned
of
$164,915,959,
$—
and
$—,
respectively)
.....................
$64,873,679,518
$2,864,462,291
$6,375,960,231
Value
-
Non-controlled
affiliates
(Note
3
f
and
12
)
................
1,080,093,173
47,626,883
67,045,219
Value
-
Unaffiliated
repurchase
agreements
....................
29,020,311
—
—
Cash
..................................................
75,855,948
—
—
Foreign
currency,
at
value
(cost
$3,187,
$–
and
$711,091,
respectively)
3,223
—
711,091
Receivables:
Investment
securities
sold
.................................
56,404,303
—
—
Capital
shares
sold
......................................
36,284,973
1,024,832
4,718,458
Dividends
and
interest
...................................
571,275,123
8,972,071
12,471,063
European
Union
tax
reclaims
(Note
1
h
)
.......................
40,540,138
—
—
Deposits
with
brokers
for:
Futures
contracts
......................................
50,000,000
—
—
Total
assets
........................................
66,813,156,710
2,922,086,077
6,460,906,062
Liabilities:
Payables:
Investment
securities
purchased
............................
626,735,260
—
2,265,446
Capital
shares
redeemed
.................................
43,046,054
3,517,375
8,330,305
Management
fees
.......................................
21,258,247
1,139,962
2,709,531
Distribution
fees
........................................
10,844,605
412,688
954,045
Transfer
agent
fees
......................................
11,784,813
1,018,692
1,366,946
Trustees'
fees
and
expenses
...............................
—
2,543
—
Pricing
fees
...........................................
5,183
1,084,204
18,722
Distributions
to
shareholders
...............................
174
41
—
Variation
margin
on
futures
contracts
.........................
14,765,750
—
—
Options
written,
at
value
(premiums
received
$132,493,576,
$–
and
$–,
respectively)
............................................
135,982,500
—
—
Payable
upon
return
of
securities
loaned
(Note
1
g
)
................
153,123,311
—
—
Accrued
expenses
and
other
liabilities
.........................
6,824,933
500,118
525,940
Total
liabilities
.......................................
1,024,370,830
7,675,623
16,170,935
Net
assets,
at
value
...............................
$65,788,785,880
$2,914,410,454
$6,444,735,127
Net
assets
consist
of:
Paid-in
capital
...........................................
$71,725,920,338
$4,069,923,368
$3,338,064,106
Total
distributable
earnings
(losses)
...........................
(5,937,134,458)
(1,155,512,914)
3,106,671,021
Net
assets,
at
value
...............................
$65,788,785,880
$2,914,410,454
$6,444,735,127
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Assets
and
Liabilities
(continued)
September
30,
2022
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
121
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Class
A:
Net
assets,
at
value
.....................................
$16,829,898,842
$687,606,708
$1,200,670,508
Shares
outstanding
......................................
7,853,480,180
136,630,667
59,257,667
Net
asset
value
per
share
a
................................
$2.14
$5.03
$20.26
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
..............................................
$2.22
$5.23
$21.05
Class
A1:
Net
assets,
at
value
.....................................
$30,236,582,067
$1,592,268,199
$3,230,150,098
Shares
outstanding
......................................
14,077,881,483
316,246,015
159,365,568
Net
asset
value
per
share
a
................................
$2.15
$5.03
$20.27
Maximum
offering
price
per
share
(net
asset
value
per
share
÷
96.25%)
..............................................
$2.23
$5.23
$21.06
Class
C:
Net
assets,
at
value
.....................................
$5,654,802,307
$116,145,285
$302,958,534
Shares
outstanding
......................................
2,587,136,048
23,249,159
15,041,926
Net
asset
value
and
maximum
offering
price
per
share
a
...........
$2.19
$5.00
$20.14
Class
R:
Net
assets,
at
value
.....................................
$270,059,896
$15,476,180
$103,578,929
Shares
outstanding
......................................
128,616,174
3,074,659
5,134,411
Net
asset
value
and
maximum
offering
price
per
share
...........
$2.10
$5.03
$20.17
Class
R6:
Net
assets,
at
value
.....................................
$1,158,685,351
$202,611,299
$223,710,484
Shares
outstanding
......................................
542,065,796
40,061,212
10,929,718
Net
asset
value
and
maximum
offering
price
per
share
...........
$2.14
$5.06
$20.47
Advisor
Class:
Net
assets,
at
value
.....................................
$11,638,757,417
$300,302,783
$1,383,666,574
Shares
outstanding
......................................
5,470,726,316
59,436,563
67,598,021
Net
asset
value
and
maximum
offering
price
per
share
...........
$2.13
$5.05
$20.47
a
Redemption
price
is
equal
to
net
asset
value
less
contingent
deferred
sales
charges,
if
applicable.
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Operations
for
the
year
ended
September
30,
2022
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
122
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$987,059,
$6,178
and
$1,082,804,
respectively)
Unaffiliated
issuers
......................................
$69,207,564
$377,988
$151,942,839
Non-controlled
affiliates
(Note
3
f
and
12
)
......................
1,718,371
8,575
418,777
Interest:
Unaffiliated
issuers
......................................
988,541
—
—
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
...................
628,115
—
418,315
Non-controlled
affiliates
(Note
3
f
)
...........................
14,454
—
21,203
Total
investment
income
.................................
72,557,045
386,563
152,801,134
Expenses:
Management
fees
(Note
3
a
)
.................................
95,450,626
672,116
80,518,849
Distribution
fees:
(Note
3c
)
    Class
A
..............................................
24,780,170
182,192
29,168,503
    Class
C
..............................................
10,474,531
55,480
5,688,906
    Class
R
..............................................
1,284,021
4,470
1,666,120
Transfer
agent
fees:
(Note
3e
)
    Class
A
..............................................
13,948,177
175,409
13,617,109
    Class
C
..............................................
1,456,090
13,354
659,309
    Class
R
..............................................
362,402
2,152
387,226
    Class
R6
.............................................
1,955,771
63
684,429
    Advisor
Class
..........................................
4,783,496
40,040
4,269,207
Custodian
fees
(Note
4
)
....................................
419,367
1,520
134,734
Reports
to
shareholders
fees
................................
1,769,312
12,948
770,258
Registration
and
filing
fees
..................................
872,417
95,559
398,709
Professional
fees
.........................................
92,510
53,572
124,350
Trustees'
fees
and
expenses
................................
257,541
2,170
200,362
Other
..................................................
496,678
5,927
457,741
Total
expenses
.......................................
158,403,109
1,316,972
138,745,812
Expense
reductions
(Note
4
)
.............................
(291)
(6)
(1,351)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
............
(849,505)
(258,698)
(269,989)
Net
expenses
.......................................
157,553,313
1,058,268
138,474,472
Net
investment
income
(loss)
..........................
(84,996,268)
(671,705)
14,326,662
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:*
Unaffiliated
issuers
....................................
(812,656,499)
(11,581,821)
1,846,120,164
Foreign
currency
transactions
..............................
(41,351)
4,802
(9,546)
Net
realized
gain
(loss)
................................
(812,697,850)
(11,577,019)
1,846,110,618
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
....................................
(10,578,219,521)
(33,530,525)
(6,521,605,358)
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
...........................................
(15,692)
(26)
(857)
Net
change
in
unrealized
appreciation
(depreciation)
..........
(10,578,235,213)
(33,530,551)
(6,521,606,215)
Net
realized
and
unrealized
gain
(loss)
..........................
(11,390,933,063)
(45,107,570)
(4,675,495,597)
Net
increase
(decrease)
in
net
assets
resulting
from
operations
........
$(11,475,929,331)
$(45,779,275)
$(4,661,168,935)
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Operations
(continued)
for
the
year
ended
September
30,
2022
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
123
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Investment
income:
Dividends:
(net
of
foreign
taxes
of
$17,710,854,
$–
and
$1,845,292,
respectively)
Unaffiliated
issuers
......................................
$1,098,788,261
$—
$194,872,313
Non-controlled
affiliates
(Note
3
f
and
12
)
......................
21,247,268
211,609
289,726
Interest:
Unaffiliated
issuers:
Paydown
gain
(loss)
...................................
(448,595)
(33,707,547)
—
Paid
in
cash
a
.........................................
1,620,079,987
118,131,152
62,491
Non-controlled
affiliates
(Note
3
f
and
12
)
......................
1,438,036
—
—
Income
from
securities
loaned:
Unaffiliated
entities
(net
of
fees
and
rebates)
...................
872,532
—
—
Non-controlled
affiliates
(Note
3
f
)
...........................
478,102
—
—
Other
income
(Note
1
h
)
....................................
8,975,951
—
16,398
Total
investment
income
.................................
2,751,431,542
84,635,214
195,240,928
Expenses:
Management
fees
(Note
3
a
)
.................................
272,294,523
16,491,243
30,834,004
Distribution
fees:
(Note
3c
)
    Class
A
..............................................
43,561,243
2,136,191
2,926,823
    Class
A1
.............................................
52,270,016
2,691,821
5,352,676
    Class
C
..............................................
45,071,625
1,008,335
2,299,766
    Class
R
..............................................
1,396,372
85,741
492,116
Transfer
agent
fees:
(Note
3e
)
    Class
A
..............................................
15,464,258
1,263,135
1,242,685
    Class
A1
.............................................
30,768,249
2,771,851
3,787,305
    Class
C
..............................................
6,106,289
228,508
375,582
    Class
R
..............................................
248,078
25,424
104,484
    Class
R6
.............................................
400,896
89,557
141,093
    Advisor
Class
..........................................
10,964,615
756,060
1,451,880
Custodian
fees
(Note
4
)
....................................
578,790
34,325
56,138
Reports
to
shareholders
fees
................................
927,193
—
332,234
Registration
and
filing
fees
..................................
1,014,763
107,530
122,164
Professional
fees
.........................................
949,184
85,776
48,225
Trustees'
fees
and
expenses
................................
702,987
40,939
63,562
Interest
expense
.........................................
—
3
3,874
Other
..................................................
144,980
467,318
166,261
Total
expenses
.......................................
482,864,061
28,283,757
49,800,872
Expense
reductions
(Note
4
)
.............................
(930,425)
(42,440)
(75)
Expenses
waived/paid
by
affiliates
(Note
3
f
and
3
g
)
............
(4,171,933)
(151,995)
(206,401)
Net
expenses
.......................................
477,761,703
28,089,322
49,594,396
Net
investment
income
..............................
2,273,669,839
56,545,892
145,646,532
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Operations
(continued)
for
the
year
ended
September
30,
2022
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
124
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Realized
and
unrealized
gains
(losses):
Net
realized
gain
(loss)
from:
Investments:
Unaffiliated
issuers
....................................
375,698,492
(58,392,142)
109,552,587
Non-controlled
affiliates
(Note
3
f
and
12
)
....................
(279,046,485)
—
—
Written
options
.........................................
337,171,136
—
—
Foreign
currency
transactions
..............................
(3,319,361)
—
(184,786)
Net
realized
gain
(loss)
................................
430,503,782
(58,392,142)
109,367,801
Net
change
in
unrealized
appreciation
(depreciation)
on:
Investments:
Unaffiliated
issuers
....................................
(8,291,059,492)
(461,258,575)
64,720,347
Non-controlled
affiliates
(Note
3
f
and
12
)
....................
497,464,859
—
—
Translation
of
other
assets
and
liabilities
denominated
in
foreign
currencies
...........................................
(6,642,628)
—
(103,600)
Written
options
.........................................
(1,418,082)
—
—
Futures
contracts
.......................................
14,804,250
—
—
Net
change
in
unrealized
appreciation
(depreciation)
..........
(7,786,851,093)
(461,258,575)
64,616,747
Net
realized
and
unrealized
gain
(loss)
..........................
(7,356,347,311)
(519,650,717)
173,984,548
Net
increase
(decrease)
in
net
assets
resulting
from
operations
........
$(5,082,677,472)
$(463,104,825)
$319,631,080
*Includes
gains
from
redemptions
in-kind
(Note
3h
and
14)
$122,527,851
a
Includes
amortization
of
premium
and
accretion
of
discount.
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
125
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
(loss)
.......
$(84,996,268)
$(110,881,188)
$(671,705)
$(644,039)
Net
realized
gain
(loss)
............
(812,697,850)
373,789,285
(11,577,019)
421,805
Net
change
in
unrealized
appreciation
(depreciation)
.................
(10,578,235,213)
5,609,997,011
(33,530,551)
16,905,656
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
(11,475,929,331)
5,872,905,108
(45,779,275)
16,683,422
Distributions
to
shareholders:
Class
A
........................
(172,943,583)
—
(493,434)
(319,730)
Class
C
........................
(23,184,109)
—
(38,188)
(38,815)
Class
R
........................
(4,586,975)
—
(5,897)
(5,388)
Class
R6
.......................
(134,824,197)
—
(415)
(542)
Advisor
Class
...................
(60,590,104)
—
(131,680)
(143,074)
Total
distributions
to
shareholders
.....
(396,128,968)
—
(669,614)
(507,549)
Capital
share
transactions:
(Note
2
)
Class
A
........................
192,477,080
1,166,707,331
8,401,386
43,462,387
Class
C
........................
(72,201,401)
(76,438,621)
711,737
883,316
Class
R
........................
10,119,125
22,853,993
196,571
179,679
Class
R6
.......................
788,549,445
2,023,008,052
415
(6,601)
Advisor
Class
...................
(278,464,615)
546,990,073
(8,229,494)
3,763,971
Total
capital
share
transactions
.......
640,479,634
3,683,120,828
1,080,615
48,282,752
Net
increase
(decrease)
in
net
assets
.....................
(11,231,578,665)
9,556,025,936
(45,368,274)
64,458,625
Net
assets:
Beginning
of
year
..................
27,952,860,146
18,396,834,210
112,636,994
48,178,369
End
of
year
......................
$16,721,281,481
$27,952,860,146
$67,268,720
$112,636,994
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
Annual
Report
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
126
Franklin
Growth
Fund
Franklin
Income
Fund
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$14,326,662
$4,643,091
$2,273,669,839
$2,291,660,125
Net
realized
gain
(loss)
............
1,846,110,618
2,255,944,532
430,503,782
8,277,786,020
Net
change
in
unrealized
appreciation
(depreciation)
.................
(6,521,606,215)
2,537,596,777
(7,786,851,093)
4,453,738,736
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
(4,661,168,935)
4,798,184,400
(5,082,677,472)
15,023,184,881
Distributions
to
shareholders:
Class
A
........................
(1,168,961,036)
(914,505,600)
(1,152,988,107)
(592,401,375)
Class
A1
.......................
—
—
(2,410,250,572)
(1,711,720,100)
Class
C
........................
(66,622,776)
(64,091,884)
(440,734,378)
(403,199,100)
Class
R
........................
(34,890,151)
(32,805,859)
(18,070,687)
(11,176,955)
Class
R6
.......................
(278,038,777)
(241,399,632)
(71,339,359)
(54,960,003)
Advisor
Class
...................
(380,494,855)
(294,899,901)
(871,094,088)
(551,809,902)
Total
distributions
to
shareholders
.....
(1,929,007,595)
(1,547,702,876)
(4,964,477,191)
(3,325,267,435)
Capital
share
transactions:
(Note
2
)
Class
A
........................
278,407,375
(27,036,183)
3,309,460,327
4,037,666,517
Class
A1
.......................
—
—
(809,147,805)
(2,988,069,908)
Class
C
........................
(49,537,765)
(175,973,220)
(977,179,035)
(3,537,489,972)
Class
R
........................
(30,209,220)
(90,877,145)
53,857,218
(4,876,292)
Class
R6
.......................
(204,647,567)
(384,267,389)
581,612,935
(1,087,687,048)
Advisor
Class
...................
(306,999,175)
74,268,334
1,445,415,173
449,167,160
Total
capital
share
transactions
.......
(312,986,352)
(603,885,603)
3,604,018,813
(3,131,289,543)
Net
increase
(decrease)
in
net
assets
.....................
(6,903,162,882)
2,646,595,921
(6,443,135,850)
8,566,627,903
Net
assets:
Beginning
of
year
..................
21,332,850,362
18,686,254,441
72,231,921,730
63,665,293,827
End
of
year
......................
$14,429,687,480
$21,332,850,362
$65,788,785,880
$72,231,921,730
Franklin
Custodian
Funds
Financial
Statements
Statements
of
Changes
in
Net
Assets
(continued)
franklintempleton.com
The
accompanying
notes
are
an
integral
part
of
these
financial
statements.
Annual
Report
127
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Year
Ended
September
30,
2022
Year
Ended
September
30,
2021
Increase
(decrease)
in
net
assets:
Operations:
Net
investment
income
............
$56,545,892
$44,586,688
$145,646,532
$137,021,391
Net
realized
gain
(loss)
............
(58,392,142)
(37,616,745)
109,367,801
264,123,410
Net
change
in
unrealized
appreciation
(depreciation)
.................
(461,258,575)
(55,832,649)
64,616,747
331,068,816
Net
increase
(decrease)
in
net
assets
resulting
from
operations
.
(463,104,825)
(48,862,706)
319,631,080
732,213,617
Distributions
to
shareholders:
Class
A
........................
(20,267,585)
(23,887,218)
(55,029,799)
(73,915,473)
Class
A1
.......................
(46,598,044)
(56,617,836)
(176,291,048)
(326,246,620)
Class
C
........................
(3,045,344)
(5,344,917)
(16,186,173)
(47,366,175)
Class
R
........................
(367,976)
(439,687)
(4,384,032)
(7,457,012)
Class
R6
.......................
(7,008,183)
(8,320,373)
(9,709,506)
(14,174,816)
Advisor
Class
...................
(13,110,289)
(18,999,076)
(67,381,826)
(115,894,567)
Total
distributions
to
shareholders
.....
(90,397,421)
(113,609,107)
(328,982,384)
(585,054,663)
Capital
share
transactions:
(Note
2
)
Class
A
........................
(204,548,972)
(41,286,508)
235,216,595
231,006,447
Class
A1
.......................
(227,866,480)
(476,854,975)
(116,776,805)
(149,939,578)
Class
C
........................
(57,456,291)
(148,136,268)
(52,951,717)
(208,206,881)
Class
R
........................
(1,409,442)
(7,497,229)
21,829,002
(3,125,939)
Class
R6
.......................
(63,528,606)
(46,647,889)
75,674,198
6,307,964
Advisor
Class
...................
(315,646,464)
(25,201,526)
198,701,770
(6,498,496)
Total
capital
share
transactions
.......
(870,456,255)
(745,624,395)
361,693,043
(130,456,483)
Net
increase
(decrease)
in
net
assets
.....................
(1,423,958,501)
(908,096,208)
352,341,739
16,702,471
Net
assets:
Beginning
of
year
..................
4,338,368,955
5,246,465,163
6,092,393,388
6,075,690,917
End
of
year
......................
$2,914,410,454
$4,338,368,955
$6,444,735,127
$6,092,393,388
Franklin
Custodian
Funds
Notes
to
Financial
Statements
128
franklintempleton.com
Annual
Report
1.
Organization
and
Significant
Accounting
Policies
Franklin
Custodian
Funds (Trust)
is
registered
under
the
Investment
Company
Act
of
1940
(1940
Act)
as
an
open-end
management
investment
company,
consisting
of
six
separate
funds
(Funds)
and
applies
the
specialized
accounting
and
reporting
guidance
in
U.S.
Generally
Accepted
Accounting
Principles
(U.S.
GAAP).
The
classes
of
shares
offered
within
each
of
the
Funds
are
indicated
below.
Class
C
shares
automatically
convert
to
Class
A
shares
on
a
monthly
basis,
after
they
have
been
held
for
8
years.
Each
class
of
shares
may
differ
by
its
initial
sales
load,
contingent
deferred
sales
charges,
voting
rights
on
matters
affecting
a
single
class,
its
exchange
privilege
and
fees
due
to
differing
arrangements
for
distribution
and
transfer
agent
fees. 
Class
A,
Class
C,
Class
R,
Class
R6,
&
Advisor
Class
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Class
A,
Class
A1,
Class
C,
Class
R,
Class
R6,
&
Advisor
Class
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
The
following
summarizes
the Funds'
significant
accounting
policies
. 
a.
Financial
Instrument
Valuation 
The
Funds'
investments
in
financial
instruments
are
carried
at
fair
value
daily.
Fair
value
is
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
The
Funds
calculate
the
net
asset
value
(NAV)
per
share
each
business
day
as
of
4
p.m.
Eastern
time
or
the
regularly
scheduled
close
of
the
New
York
Stock
Exchange
(NYSE),
whichever
is
earlier.
Under
compliance
policies
and
procedures
approved
by
the
Trust’s
Board
of
Trustees
(the
Board),
the
Board
has
designated
the
Funds’
investment
manager
as
the
valuation
designee
and
has
responsibility
for
oversight
of
valuation.
The
investment
manager
is
assisted
by
the
Funds'
administrator
in
performing
this
responsibility,
including
leading
the
cross-
functional
Valuation
Committee
(VC).
The
Funds
may
utilize
independent
pricing
services,
quotations
from
securities
and
financial
instrument
dealers,
and
other
market
sources
to
determine
fair
value. 
Equity
securities
and
derivative
financial
instruments
listed
on
an
exchange
or
on
the
NASDAQ
National
Market
System
are
valued
at
the
last
quoted
sale
price
or
the
official
closing
price of
the
day,
respectively.
Foreign
equity
securities
are
valued
as
of
the
close
of
trading
on
the
foreign
stock
exchange
on
which
the
security
is
primarily
traded,
or
as
of
4
p.m.
Eastern
time.
The
value
is
then
converted
into
its
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
day
that
the
value
of
the
security
is
determined.
Over-the-counter
(OTC)
securities
are
valued
within
the
range
of
the
most
recent
quoted
bid
and
ask
prices.
Securities
that
trade
in
multiple
markets
or
on
multiple
exchanges
are
valued
according
to
the
broadest
and
most
representative
market.
Certain
equity
securities
are
valued
based
upon
fundamental
characteristics
or
relationships
to
similar
securities. 
Debt
securities
generally
trade
in
the
OTC
market
rather
than
on
a
securities
exchange.
The
Funds'
pricing
services
use
multiple
valuation
techniques
to
determine
fair
value.
In
instances
where
sufficient
market
activity
exists,
the
pricing
services
may
utilize
a
market-based
approach
through
which
quotes
from
market
makers
are
used
to
determine
fair
value.
In
instances
where
sufficient
market
activity
may
not
exist
or
is
limited,
the
pricing
services
also
utilize
proprietary
valuation
models
which
may
consider
market
characteristics
such
as
benchmark
yield
curves,
credit
spreads,
estimated
default
rates,
anticipated
market
interest
rate
volatility,
coupon
rates,
anticipated
timing
of
principal
repayments,
underlying
collateral,
and
other
unique
security
features
in
order
to
estimate
the
relevant
cash
flows,
which
are
then
discounted
to
calculate
the
fair
value.
Securities
denominated
in
a
foreign
currency
are
converted
into
their
U.S.
dollar
equivalent
at
the
foreign
exchange
rate
in
effect
at
4
p.m.
Eastern
time
on
the
date
that
the
values
of
the
foreign
debt
securities
are
determined.
Investments
in
open-end
mutual
funds
are
valued
at
the
closing
NAV.
Investments
in
repurchase
agreements
are
valued
at
cost,
which
approximates
fair
value.
The
Funds
have
procedures
to
determine
the
fair
value
of
financial
instruments
for
which
market
prices
are
not
reliable
or
readily
available.
Under
these
procedures,
the
Funds
primarily
employ
a
market-based
approach
which
may
use
related
or
comparable
assets
or
liabilities,
recent
transactions,
market
multiples,
book
values,
and
other
relevant
information
for
the
investment
to
determine
the
fair
value
of
the
investment.
An
income-based
valuation
Franklin
Custodian
Funds
Notes
to
Financial
Statements
129
franklintempleton.com
Annual
Report
approach
may
also
be
used
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
to
calculate
fair
value.
Discounts
may
also
be
applied
due
to
the
nature
or
duration
of
any
restrictions
on
the
disposition
of
the
investments.
Due
to
the
inherent
uncertainty
of
valuations
of
such
investments,
the
fair
values
may
differ
significantly
from
the
values
that
would
have
been
used
had
an
active
market
existed.
Trading
in
securities
on
foreign
securities
stock
exchanges
and
OTC
markets
may
be
completed
before
4
p.m.
Eastern
time.
In
addition,
trading
in
certain
foreign
markets
may
not
take
place
on
every
Funds'
business
day.
Events
can occur
between
the
time
at
which
trading
in
a
foreign
security
is
completed
and
4
p.m.
Eastern
time
that
might
call
into
question
the
reliability
of
the
value
of
a
portfolio
security
held
by
the
Fund.
As
a
result,
differences
may
arise
between
the
value
of
the
Funds'
portfolio
securities
as
determined
at
the
foreign
market
close
and
the
latest
indications
of
value
at
4
p.m.
Eastern
time.
In
order
to
minimize
the
potential
for
these
differences,
an
independent
pricing
service
may
be
used
to
adjust
the
value
of
the
Funds'
portfolio
securities
to
the
latest
indications
of
fair
value
at
4
p.m.
Eastern
time.
At
September
30,
2022,
certain
securities
may
have
been
fair
valued
using
these
procedures,
in
which
case
the
securities
were
categorized
as
Level
2
inputs
within
the
fair
value
hierarchy
(referred
to
as
“market
level
fair
value”).
See
the
Fair
Value
Measurements
note
for
more
information.
When
the
last
day
of
the
reporting
period
is
a
non-business
day,
certain
foreign
markets
may
be
open
on
those
days
that
the
Funds'
NAV
is
not
calculated,
which
could
result
in
differences
between
the
value
of
the
Funds'
portfolio
securities
on
the
last
business
day
and
the
last
calendar
day
of
the
reporting
period.
Any
security
valuation
changes
due
to
an
open
foreign
market
are
adjusted
and
reflected
by
the
Funds
for
financial
reporting
purposes.
b.
Foreign
Currency
Translation 
Portfolio
securities
and
other
assets
and
liabilities
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
based
on
the
exchange
rate
of
such
currencies
against
U.S.
dollars
on
the
date
of
valuation.
The
Funds
may
enter
into
foreign
currency
exchange
contracts
to
facilitate
transactions
denominated
in
a
foreign
currency.
Purchases
and
sales
of
securities,
income
and
expense
items
denominated
in
foreign
currencies
are
translated
into
U.S.
dollars
at
the
exchange
rate
in
effect
on
the
transaction
date.
Portfolio
securities
and
assets
and
liabilities
denominated
in
foreign
currencies
contain
risks
that
those
currencies
will
decline
in
value
relative
to
the
U.S.
dollar.
Occasionally,
events
may
impact
the
availability
or
reliability
of
foreign
exchange
rates
used
to
convert
the
U.S.
dollar
equivalent
value.
If
such
an
event
occurs,
the
foreign
exchange
rate
will
be
valued
at
fair
value
using
procedures
established
and
approved
by
the
Board.
The
Funds
do
not
separately
report
the
effect
of
changes
in
foreign
exchange
rates
from
changes
in
market
prices
on
securities
held.
Such
changes
are
included
in
net
realized
and
unrealized
gain
or
loss
from
investments
in
the
Statements
of
Operations.
Realized
foreign
exchange
gains
or
losses
arise
from
sales
of
foreign
currencies,
currency
gains
or
losses
realized
between
the
trade
and
settlement
dates
on
securities
transactions
and
the
difference
between
the
recorded
amounts
of
dividends,
interest,
and
foreign
withholding
taxes
and
the
U.S.
dollar
equivalent
of
the
amounts
actually
received
or
paid.
Net
unrealized
foreign
exchange
gains
and
losses
arise
from
changes
in
foreign
exchange
rates
on
foreign
denominated
assets
and
liabilities
other
than
investments
in
securities
held
at
the
end
of
the
reporting
period.
c.
Joint
Repurchase
Agreement
Certain
or
all
Funds
enter
into
a
joint
repurchase
agreement
whereby
their
uninvested
cash
balance
is
deposited
into
a
joint
cash
account
with
other
funds
managed
by
the
investment
manager
or
an
affiliate
of
the
investment
manager
and
is
used
to
invest
in
one
or
more
repurchase
agreements.
The
value
and
face
amount
of
the
joint
repurchase
agreement
are
allocated
to
the
funds
based
on
their
pro-rata
interest.
A
repurchase
agreement
is
accounted
for
as
a
loan
by
the
Fund
to
the
seller,
collateralized
by
securities
which
are
delivered
to
the
Funds'
custodian.
The
fair
value,
including
accrued
interest,
of
the
initial
collateralization
is
required
to
be
at
least
102%
of
the
dollar
amount
invested
by
the
funds,
with
the
value
of
the
underlying
securities
marked
to
market
daily
to
maintain
coverage
of
at
least
100%.
Repurchase
agreements
are
subject
to
the
terms
of
Master
Repurchase
Agreements
(MRAs)
with
approved
counterparties
(sellers).
The
MRAs
contain
various
provisions,
including
but
not
limited
to
events
1.
Organization
and
Significant
Accounting
Policies
(continued)
a.
Financial
Instrument
Valuation 
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
130
franklintempleton.com
Annual
Report
of
default
and
maintenance
of
collateral
for
repurchase
agreements.
In
the
event
of
default
by
either
the
seller
or
the
Funds,
certain
MRAs
may
permit
the
non-defaulting
party
to
net
and
close-out
all
transactions,
if
any,
traded
under
such
agreements.
The
Funds
may
sell
securities
it
holds
as
collateral
and
apply
the
proceeds
towards
the
repurchase
price
and
any
other
amounts
owed
by
the
seller
to
the
Funds
in
the
event
of
default
by
the
seller.
This
could
involve
costs
or
delays
in
addition
to
a
loss
on
the
securities
if
their
value
falls
below
the
repurchase
price
owed
by
the
seller.
The
joint
repurchase
agreement
held
by
the
Funds
at
year
end,
as
indicated
in
the
Schedules
of
Investments,
had
been
entered
into
on
September
30,
2022.
d.
Securities
Purchased
on
a
Delayed
Delivery
Basis
Certain
or
all
Funds
purchase
securities
on
a
delayed
delivery
basis,
with
payment
and
delivery
scheduled
for
a
future
date.
These
transactions
are
subject
to
market
fluctuations
and
are
subject
to
the
risk
that
the
value
at
delivery
may
be
more
or
less
than
the
trade
date
purchase
price.
Although
the
Funds
will
generally
purchase
these
securities
with
the
intention
of
holding
the
securities,
they
may
sell
the
securities
before
the
settlement
date.
e.
Derivative
Financial
Instruments
Certain
or
all
Funds
invested
in
derivative
financial
instruments
in
order
to
manage
risk
or
gain
exposure
to
various
other
investments
or
markets.
Derivatives
are
financial
contracts
based
on
an
underlying
or
notional
amount,
require
no
initial
investment
or
an
initial
net
investment
that
is
smaller
than
would
normally
be
required
to
have
a
similar
response
to
changes
in
market
factors,
and
require
or
permit
net
settlement.
Derivatives
contain
various
risks
including
the
potential
inability
of
the
counterparty
to
fulfill
their
obligations
under
the
terms
of
the
contract,
the
potential
for
an
illiquid
secondary
market,
and/or
the
potential
for
market
movements
which
expose
the
Fund
to
gains
or
losses
in
excess
of
the
amounts
shown
in
the
Statements
of
Assets
and
Liabilities.
Realized
gain
and
loss
and
unrealized
appreciation
and
depreciation
on
these
contracts
for
the
period
are
included
in
the
Statements
of
Operations.
Collateral
requirements
differ
by
type
of
derivative.
Collateral
or
initial
margin
requirements
are
set
by
the
broker
or
exchange
clearing
house
for
exchange
traded
and
centrally
cleared
derivatives.
Initial
margin
deposited
is
held
at
the
exchange
and
can
be
in
the
form
of
cash
and/or
securities.
Certain
or
all
Funds
entered
into
exchange
traded
futures
contracts
primarily
to
manage
and/or
gain
exposure
to
interest
rate
risk
.
A
futures
contract
is
an
agreement
between
the
Fund
and
a
counterparty
to
buy
or
sell
an
asset
at
a
specified
price
on
a
future
date.
Required
initial
margins
are
pledged
by
the
Fund,
and
the
daily
change
in
fair
value
is
accounted
for
as
a
variation
margin
payable
or
receivable
in
the
Statements
of
Assets
and
Liabilities.
Certain
or
all
Funds
purchased
or
wrote
exchange
traded
option
contracts
primarily
to
manage
exposure
to
equity
price
risk.
An
option
is
a
contract
entitling
the
holder
to
purchase
or
sell
a
specific
amount
of
shares
or
units
of
an
asset
or
notional
amount
of
a
swap
(swaption),
at
a
specified
price.
When
an
option
is
purchased
or
written,
an
amount
equal
to
the
premium
paid
or
received
is
recorded
as
an
asset
or
liability,
respectively.
Upon
exercise
of
an
option,
the
acquisition
cost
or
sales
proceeds
of
the
underlying
investment
is
adjusted
by
any
premium
received
or
paid.
Upon
expiration
of
an
option,
any
premium
received
or
paid
is
recorded
as
a
realized
gain
or
loss.
Upon
closing
an
option
other
than
through
expiration
or
exercise,
the
difference
between
the
premium
received
or
paid
and
the
cost
to
close
the
position
is
recorded
as
a
realized
gain
or
loss.
See
Note 11 regarding
other
derivative
information.
f.
Equity-Linked
Securities
Certain
or
all
Funds
invest in
equity-linked
securities.
Equity-linked
securities
are
hybrid
financial
instruments
that
generally
combine
both
debt
and
equity
characteristics
into
a
single
note
form.
Income
received
from
equity-linked
securities
is
recorded
as
realized
gains
in
the
Statements
of
Operations
and
may
be
based
on
the
performance
of
an
underlying
equity
security,
an
equity
index,
or
an
option
position.
The
risks
of
investing
in
equity-linked
securities
include
unfavorable
price
movements
in
the
underlying
security
and
the
credit
risk
of
the
issuing
financial
institution.
There
may
be
no
guarantee
of
a
return
of
principal
with
equity-linked
securities
and
the
appreciation
potential
may
be
limited.
Equity-linked
securities
may
be
more
volatile
and
less
liquid
than
other
investments
held
by
the
Funds.
1.
Organization
and
Significant
Accounting
Policies
(continued)
c.
Joint
Repurchase
Agreement
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
131
franklintempleton.com
Annual
Report
g.
Securities
Lending
Certain
or
all
Funds
participate
in
an
agency
based
securities
lending
program
to
earn
additional
income.
The
Fund
receives
collateral
in
the
form
of
cash
and/or
U.S.
Government
and
Agency
securities
against
the
loaned
securities
in
an
amount
equal
to
at
least
102%
of
the
fair
value
of
the
loaned
securities.
Collateral
is
maintained
over
the
life
of
the
loan
in
an
amount
not
less
than
100%
of
the
fair
value
of
loaned
securities,
as
determined
at
the
close
of
Fund
business
each
day;
any
additional
collateral
required
due
to
changes
in
security
values
is
delivered
to
the
Fund
on
the
next
business
day.
Any
cash
collateral
received
is
deposited
into
a
joint
cash
account
with
other
funds
and
is
used
to
invest
in
a
money
market
fund
managed
by
Franklin
Advisers,
Inc.,
an
affiliate
of
the
Funds,
and/or
a
joint
repurchase
agreement.
Additionally,
at
September
30,
2022,
Franklin
Growth
Fund
and
Franklin
Income
Fund
held
$5,176,710
and
$18,161,269,
respectively,
in
U.S.
Government
and
Agency
securities
as
collateral.
These
securities
are
held
as
collateral
in
segregated
accounts
with
the
Fund’s
custodian.
The
Fund
cannot
repledge
or
resell
these
securities
held
as
collateral.
As
such,
the
non-
cash
collateral
is
excluded
from
the
Statements
of
Assets
and
Liabilities.
The
Fund
may
receive
income
from
the
investment
of
cash
collateral,
in
addition
to
lending
fees
and
rebates
paid
by
the
borrower.
Income
from
securities
loaned,
net
of
fees
paid
to
the
securities
lending
agent
and/or
third-
party
vendor,
is
reported
separately
in
the
Statements
of
Operations.
The
Fund
bears
the
market
risk
with
respect
to
any
cash
collateral
investment,
securities
loaned,
and
the
risk
that
the
agent
may
default
on
its
obligations
to
the
Fund.
If
the
borrower
defaults
on
its
obligation
to
return
the
securities
loaned,
the
Fund
has
the
right
to
repurchase
the
securities
in
the
open
market
using
the
collateral
received.
The
securities
lending
agent
has
agreed
to
indemnify
the
Fund
in
the
event
of
default
by
a
third
party
borrower.
h.
Income
and
Deferred
Taxes
It
is each
Fund's
policy
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code. Each
Fund
intends
to
distribute
to
shareholders
substantially
all
of
its
taxable
income
and
net
realized
gains
to
relieve
it
from
federal
income
and excise
taxes.
As
a
result,
no
provision
for
U.S.
federal
income
taxes
is
required.
The
Funds
may
be
subject
to
foreign
taxation
related
to
income
received,
capital
gains
on
the
sale
of
securities
and
certain
foreign
currency
transactions
in
the
foreign
jurisdictions
in
which
the
Funds
invest.
Foreign
taxes,
if
any,
are
recorded
based
on
the
tax
regulations
and
rates
that
exist
in
the
foreign
markets
in
which
the
Funds
invest.
When
a
capital
gain
tax
is
determined
to
apply,
certain
or
all
Funds
record
an
estimated
deferred
tax
liability
in
an
amount
that
would
be
payable
if
the
securities
were
disposed
of
on
the
valuation
date.
As
a
result
of
several
court
cases,
in
certain
countries
across
the
European
Union,
certain
or
all
Funds
filed
additional
tax
reclaims
for
previously
withheld
taxes
on
dividends
earned
in
those
countries
(EU
reclaims).
Income
recognized,
if
any,
for
EU
reclaims
is
reflected
as
other
income
in
the
Statements of
Operations
and
any
related
receivable,
if
any,
is
reflected
as
European
Union
tax
reclaims
in
the
Statements
of
Assets
and
Liabilities.
Any
fees
associated
with
these
filings
are
reflected
in
other
expenses
in
the
Statements
of
Operations.
When
uncertainty
exists
as
to
the
ultimate
resolution
of
these
proceedings,
the
likelihood
of
receipt
of
these
EU
reclaims,
and
the
potential
timing
of
payment,
no
amounts
are
reflected
in
the
financial
statements.
For
U.S.
income
tax
purposes,
EU
reclaims
received
by
the
Funds,
if
any,
reduce
the
amount
of
foreign
taxes
Fund
shareholders
can
use
as
tax
deductions
or
credits
on
their
income
tax
returns.
Each
Fund
may
recognize
an
income
tax
liability
related
to
its
uncertain
tax
positions
under
U.S.
GAAP
when
the
uncertain
tax
position
has
a
less
than
50%
probability
that
it
will
be
sustained
upon
examination
by
the
tax
authorities
based
on
its
technical
merits.
As
of
September
30,
2022, each
Fund
has
determined
that
no
tax
liability
is
required
in
its
financial
statements
related
to
uncertain
tax
positions
for
any
open
tax
years
(or
expected
to
be
taken
in
future
tax
years).
Open
tax
years
are
those
that
remain
subject
to
examination
and
are
based
on
the
statute
of
limitations
in
each
jurisdiction
in
which
the
Fund
invests. 
i.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
Security
transactions
are
accounted
for
on
trade
date.
Realized
gains
and
losses
on
security
transactions
are
determined
on
a
specific
identification
basis.
Interest
income
and
estimated
expenses
are
accrued
daily.
Amortization
of
premium
and
accretion
of
discount
on
debt
securities
are
included
in
interest
income.
Paydown
gains
and
losses
are
recorded
separately
on
the Statements
of
Operations.
1.
Organization
and
Significant
Accounting
Policies
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
132
franklintempleton.com
Annual
Report
Facility
fees
are
recognized
as
income
over
the
expected
term
of
the
loan.
Dividend
income
is
recorded
on
the
ex-
dividend
date
except
for
certain
dividends
from
securities
where
the
dividend
rate
is
not
available.
In
such
cases,
the
dividend
is
recorded
as
soon
as
the
information
is
received
by
the
Funds.
Distributions
to shareholders
are
recorded
on
the
ex-dividend
date.
Distributable
earnings
are
determined
according
to
income
tax
regulations
(tax
basis)
and
may
differ
from
earnings
recorded
in
accordance
with
U.S.
GAAP.
These
differences
may
be
permanent
or
temporary.
Permanent
differences
are
reclassified
among
capital
accounts
to
reflect
their
tax
character.
These
reclassifications
have
no
impact
on
net
assets
or
the
results
of
operations.
Temporary
differences
are
not
reclassified,
as
they
may
reverse
in
subsequent
periods.
Common
expenses
incurred
by
the
Trust
are
allocated
among
the
Funds
based
on
the
ratio
of
net
assets
of
each
Fund
to
the
combined
net
assets
of
the
Trust
or
based
on
the
ratio
of
number
of
shareholders
of
each
Fund
to
the
combined
number
of
shareholders
of
the
Trust.
Fund
specific
expenses
are
charged
directly
to
the
Fund
that
incurred
the
expense.
Realized
and
unrealized
gains
and
losses
and
net
investment
income,
excluding
class
specific
expenses,
are
allocated
daily
to
each
class
of
shares
based
upon
the
relative
proportion
of
net
assets
of
each
class.
Differences
in
per
share
distributions
by
class
are
generally
due
to
differences
in
class
specific
expenses.
j.
Accounting
Estimates
The
preparation
of
financial
statements
in
accordance
with
U.S.
GAAP
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.
k.
Guarantees
and
Indemnifications
Under
the
Trust's
organizational
documents,
its
officers
and
trustees
are
indemnified
by
the
Trust
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Trust.
Additionally,
in
the
normal
course
of
business,
the
Trust,
on
behalf
of
the
Funds,
enters
into
contracts
with
service
providers
that
contain
general
indemnification
clauses.
The
Trust's
maximum
exposure
under
these
arrangements
is
unknown
as
this
would
involve
future
claims
that
may
be
made
against
the
Trust
that
have
not
yet
occurred.
Currently,
the
Trust
expects
the
risk
of
loss
to
be
remote.
1.
Organization
and
Significant
Accounting
Policies
(continued)
i.
Security
Transactions,
Investment
Income,
Expenses
and
Distributions
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
133
franklintempleton.com
Annual
Report
2.
Shares
of
Beneficial
Interest
At
September
30,
2022,
there
were
an
unlimited
number
of
shares
authorized
(without
par
value).
Transactions
in
the
Funds'
shares
were
as
follows:
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Shares
Amount
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
September
30,
2022
Shares
sold
a
...................................
14,363,386
$1,856,702,021
1,213,199
$33,600,799
Shares
issued
in
reinvestment
of
distributions
..........
1,053,354
163,733,239
15,386
489,286
Shares
redeemed
...............................
(14,802,906)
(1,827,958,180)
(1,027,936)
(25,688,699)
Net
increase
(decrease)
..........................
613,834
$192,477,080
200,649
$8,401,386
Year
ended
September
30,
2021
Shares
sold
a
...................................
22,450,304
$3,225,590,483
2,298,548
$66,948,165
Shares
issued
in
reinvestment
of
distributions
..........
—
—
11,547
311,678
Shares
redeemed
...............................
(14,413,505)
(2,058,883,152)
(832,827)
(23,797,456)
Net
increase
(decrease)
..........................
8,036,799
$1,166,707,331
1,477,268
$43,462,387
Class
C
Class
C
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
1,588,693
$169,004,456
97,172
$2,671,024
Shares
issued
in
reinvestment
of
distributions
..........
175,065
22,063,462
1,220
38,258
Shares
redeemed
a
..............................
(2,641,655)
(263,269,319)
(82,494)
(1,997,545)
Net
increase
(decrease)
..........................
(877,897)
$(72,201,401)
15,898
$711,737
Year
ended
September
30,
2021
Shares
sold
...................................
2,828,390
$329,663,898
181,084
$5,135,059
Shares
issued
in
reinvestment
of
distributions
..........
—
—
1,441
38,661
Shares
redeemed
a
..............................
(3,385,379)
(406,102,519)
(147,086)
(4,290,404)
Net
increase
(decrease)
..........................
(556,989)
$(76,438,621)
35,439
$883,316
Class
R
Class
R
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
453,729
$56,189,217
24,654
$667,940
Shares
issued
in
reinvestment
of
distributions
..........
30,631
4,583,974
186
5,897
Shares
redeemed
...............................
(422,749)
(50,654,066)
(18,389)
(477,266)
Net
increase
(decrease)
..........................
61,611
$10,119,125
6,451
$196,571
Year
ended
September
30,
2021
Shares
sold
...................................
616,643
$85,062,126
8,048
$254,410
Shares
issued
in
reinvestment
of
distributions
..........
—
—
198
5,336
Shares
redeemed
...............................
(446,989)
(62,208,133)
(2,717)
(80,067)
Net
increase
(decrease)
..........................
169,654
$22,853,993
5,529
$179,679
Class
R6
Franklin
Custodian
Funds
Notes
to
Financial
Statements
134
franklintempleton.com
Annual
Report
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Shares
Amount
Shares
Amount
Class
R6
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
19,924,717
$2,652,793,439
—
$—
Shares
issued
in
reinvestment
of
distributions
..........
819,201
134,013,149
13
415
Shares
redeemed
...............................
(15,624,599)
(1,998,257,143)
—
—
Net
increase
(decrease)
..........................
5,119,319
$788,549,445
13
$415
Year
ended
September
30,
2021
Shares
sold
...................................
25,514,587
$3,822,032,801
—
$—
Shares
issued
in
reinvestment
of
distributions
..........
—
—
18
490
Shares
redeemed
...............................
(11,892,075)
(1,799,024,749)
(248)
(7,091)
Net
increase
(decrease)
..........................
13,622,512
$2,023,008,052
(230)
$(6,601)
Advisor
Class
Advisor
Class
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
8,399,379
$1,127,784,359
315,963
$8,974,322
Shares
issued
in
reinvestment
of
distributions
..........
331,088
53,493,894
4,116
131,564
Shares
redeemed
...............................
(11,793,370)
(1,459,742,868)
(618,869)
(17,335,380)
Net
increase
(decrease)
..........................
(3,062,903)
$(278,464,615)
(298,790)
$(8,229,494)
Year
ended
September
30,
2021
Shares
sold
...................................
11,005,673
$1,635,552,794
914,232
$27,927,761
Shares
issued
in
reinvestment
of
distributions
..........
—
—
1,206
32,617
Shares
redeemed
...............................
(7,316,134)
(1,088,562,721)
(794,013)
(24,196,407)
Net
increase
(decrease)
..........................
3,689,539
$546,990,073
121,425
$3,763,971
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
135
franklintempleton.com
Annual
Report
Franklin
Growth
Fund
Franklin
Income
Fund
Shares
Amount
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
September
30,
2022
Shares
sold
a
...................................
7,112,775
$950,008,754
1,967,528,153
$4,769,802,324
Shares
issued
in
reinvestment
of
distributions
..........
7,829,335
1,123,352,847
441,349,127
1,064,714,504
Shares
redeemed
...............................
(13,642,430)
(1,794,954,226)
(1,046,858,486)
(2,525,056,501)
Net
increase
(decrease)
..........................
1,299,680
$278,407,375
1,362,018,794
$3,309,460,327
Year
ended
September
30,
2021
Shares
sold
a
...................................
10,761,385
$1,530,421,261
2,486,746,513
$6,012,096,557
Shares
issued
in
reinvestment
of
distributions
..........
6,500,918
849,149,921
227,899,336
535,039,091
Shares
redeemed
...............................
(16,660,446)
(2,406,607,365)
(1,066,730,651)
(2,509,469,131)
Net
increase
(decrease)
..........................
601,857
$(27,036,183)
1,647,915,198
$4,037,666,517
Class
A1
Class
A1
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
—
$—
462,966,749
$1,128,353,082
Shares
issued
in
reinvestment
of
distributions
..........
—
—
921,359,816
2,231,616,951
Shares
redeemed
...............................
—
—
(1,716,035,662)
(4,169,117,838)
Net
increase
(decrease)
..........................
—
$—
(331,709,097)
$(809,147,805)
Year
ended
September
30,
2021
Shares
sold
...................................
—
$—
479,110,753
$1,144,654,736
Shares
issued
in
reinvestment
of
distributions
..........
—
—
670,125,547
1,566,412,599
Shares
redeemed
...............................
—
—
(2,421,276,941)
(5,699,137,243)
Net
increase
(decrease)
..........................
—
$—
(1,272,040,641)
$(2,988,069,908)
Class
C
Class
C
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
555,692
$66,038,572
376,265,055
$933,445,062
Shares
issued
in
reinvestment
of
distributions
..........
521,624
65,667,219
172,175,078
424,342,430
Shares
redeemed
a
..............................
(1,579,860)
(181,243,556)
(943,189,191)
(2,334,966,527)
Net
increase
(decrease)
..........................
(502,544)
$(49,537,765)
(394,749,058)
$(977,179,035)
Year
ended
September
30,
2021
Shares
sold
...................................
878,018
$110,767,406
369,536,736
$901,731,340
Shares
issued
in
reinvestment
of
distributions
..........
540,219
63,146,424
163,270,374
386,364,385
Shares
redeemed
a
..............................
(2,680,063)
(349,887,050)
(1,962,492,383)
(4,825,585,697)
Net
increase
(decrease)
..........................
(1,261,826)
$(175,973,220)
(1,429,685,273)
$(3,537,489,972)
Class
R
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
136
franklintempleton.com
Annual
Report
Franklin
Growth
Fund
Franklin
Income
Fund
Shares
Amount
Shares
Amount
Class
R
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
225,684
$29,038,794
38,495,084
$91,632,223
Shares
issued
in
reinvestment
of
distributions
..........
244,578
34,832,817
7,597,250
17,950,459
Shares
redeemed
...............................
(699,391)
(94,080,831)
(23,493,263)
(55,725,464)
Net
increase
(decrease)
..........................
(229,129)
$(30,209,220)
22,599,071
$53,857,218
Year
ended
September
30,
2021
Shares
sold
...................................
250,280
$35,061,835
21,710,983
$51,205,964
Shares
issued
in
reinvestment
of
distributions
..........
250,543
32,588,126
4,834,655
11,084,861
Shares
redeemed
...............................
(1,128,351)
(158,527,106)
(29,013,897)
(67,167,117)
Net
increase
(decrease)
..........................
(627,528)
$(90,877,145)
(2,468,259)
$(4,876,292)
Class
R6
Class
R6
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
3,675,674
$475,633,325
297,381,010
$723,113,206
Shares
issued
in
reinvestment
of
distributions
..........
1,758,267
253,489,423
25,240,470
60,705,956
Shares
redeemed
in-kind
(Note
14)
..................
(448,827)
(65,832,485)
—
—
Shares
redeemed
...............................
(6,581,226)
(867,937,830)
(83,879,771)
(202,206,227)
Net
increase
(decrease)
..........................
(1,596,112)
$(204,647,567)
238,741,709
$581,612,935
Year
ended
September
30,
2021
Shares
sold
...................................
3,272,102
$463,210,889
89,459,562
$211,443,897
Shares
issued
in
reinvestment
of
distributions
..........
1,693,859
221,624,576
21,206,893
47,792,309
Shares
redeemed
in-kind
(Note
14)
..................
(859,936)
(116,617,086)
—
—
Shares
redeemed
...............................
(6,691,054)
(952,485,768)
(593,615,276)
(1,346,923,254)
Net
increase
(decrease)
..........................
(2,585,029)
$(384,267,389)
(482,948,821)
$(1,087,687,048)
Advisor
Class
Advisor
Class
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
5,539,441
$691,586,170
1,421,259,437
$3,411,492,621
Shares
issued
in
reinvestment
of
distributions
..........
2,305,617
332,746,676
333,722,149
799,087,621
Shares
redeemed
in-kind
(Note
3h)
..................
(924,131)
(104,759,504)
—
—
Shares
redeemed
...............................
(9,694,616)
(1,226,572,517)
(1,157,679,072)
(2,765,165,069)
Net
increase
(decrease)
..........................
(2,773,689)
$(306,999,175)
597,302,514
$1,445,415,173
Year
ended
September
30,
2021
Shares
sold
...................................
6,084,784
$911,711,800
1,011,404,240
$2,393,159,824
Shares
issued
in
reinvestment
of
distributions
..........
1,944,250
254,677,320
215,574,797
501,000,847
Shares
redeemed
...............................
(7,510,655)
(1,092,120,786)
(1,052,411,881)
(2,444,993,511)
Net
increase
(decrease)
..........................
518,379
$74,268,334
174,567,156
$449,167,160
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
137
franklintempleton.com
Annual
Report
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Shares
Amount
Shares
Amount
Class
A
Class
A
Shares:
Year
ended
September
30,
2022
Shares
sold
a
...................................
28,163,866
$157,662,763
20,426,933
$453,472,027
Shares
issued
in
reinvestment
of
distributions
..........
3,489,049
19,245,353
2,332,270
48,266,115
Shares
redeemed
...............................
(68,182,403)
(381,457,088)
(12,123,828)
(266,521,547)
Net
increase
(decrease)
..........................
(36,529,488)
$(204,548,972)
10,635,375
$235,216,595
Year
ended
September
30,
2021
Shares
sold
a
...................................
89,048,888
$536,625,922
22,811,120
$471,624,865
Shares
issued
in
reinvestment
of
distributions
..........
3,796,157
22,766,715
3,159,167
62,740,214
Shares
redeemed
...............................
(99,939,196)
(600,679,145)
(14,909,843)
(303,358,632)
Net
increase
(decrease)
..........................
(7,094,151)
$(41,286,508)
11,060,444
$231,006,447
Class
A1
Class
A1
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
10,992,579
$61,460,301
6,815,891
$150,191,697
Shares
issued
in
reinvestment
of
distributions
..........
7,641,977
42,120,329
7,794,675
161,036,003
Shares
redeemed
...............................
(59,374,388)
(331,447,110)
(19,602,339)
(428,004,505)
Net
increase
(decrease)
..........................
(40,739,832)
$(227,866,480)
(4,991,773)
$(116,776,805)
Year
ended
September
30,
2021
Shares
sold
...................................
32,558,459
$196,137,703
6,411,233
$130,366,150
Shares
issued
in
reinvestment
of
distributions
..........
7,736,135
46,404,671
15,028,911
298,136,413
Shares
redeemed
...............................
(120,294,904)
(719,397,349)
(28,494,750)
(578,442,141)
Net
increase
(decrease)
..........................
(80,000,310)
$(476,854,975)
(7,054,606)
$(149,939,578)
Class
C
Class
C
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
4,759,211
$26,534,963
2,115,656
$46,531,797
Shares
issued
in
reinvestment
of
distributions
..........
546,780
2,996,336
769,737
15,737,676
Shares
redeemed
a
..............................
(15,663,297)
(86,987,590)
(5,296,474)
(115,221,190)
Net
increase
(decrease)
..........................
(10,357,306)
$(57,456,291)
(2,411,081)
$(52,951,717)
Year
ended
September
30,
2021
Shares
sold
...................................
12,752,895
$76,470,649
2,249,049
$45,668,999
Shares
issued
in
reinvestment
of
distributions
..........
876,685
5,224,662
2,345,268
46,172,729
Shares
redeemed
a
..............................
(38,672,490)
(229,831,579)
(14,504,035)
(300,048,609)
Net
increase
(decrease)
..........................
(25,042,910)
$(148,136,268)
(9,909,718)
$(208,206,881)
Class
R
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
138
franklintempleton.com
Annual
Report
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Shares
Amount
Shares
Amount
Class
R
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
781,481
$4,240,961
1,807,582
$39,910,876
Shares
issued
in
reinvestment
of
distributions
..........
66,564
366,299
212,284
4,365,844
Shares
redeemed
...............................
(1,083,625)
(6,016,702)
(1,033,330)
(22,447,718)
Net
increase
(decrease)
..........................
(235,580)
$(1,409,442)
986,536
$21,829,002
Year
ended
September
30,
2021
Shares
sold
...................................
908,077
$5,471,084
938,885
$19,039,802
Shares
issued
in
reinvestment
of
distributions
..........
71,959
431,680
376,330
7,434,213
Shares
redeemed
...............................
(2,226,889)
(13,399,993)
(1,459,736)
(29,599,954)
Net
increase
(decrease)
..........................
(1,246,853)
$(7,497,229)
(144,521)
$(3,125,939)
Class
R6
Class
R6
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
9,713,988
$54,869,336
5,404,404
$121,039,182
Shares
issued
in
reinvestment
of
distributions
..........
1,245,685
6,913,611
460,767
9,666,565
Shares
redeemed
...............................
(22,336,576)
(125,311,553)
(2,484,233)
(55,031,549)
Net
increase
(decrease)
..........................
(11,376,903)
$(63,528,606)
3,380,938
$75,674,198
Year
ended
September
30,
2021
Shares
sold
...................................
14,680,034
$88,831,810
2,602,530
$53,255,623
Shares
issued
in
reinvestment
of
distributions
..........
1,368,088
8,243,208
705,440
14,135,443
Shares
redeemed
...............................
(23,746,448)
(143,722,907)
(2,987,204)
(61,083,102)
Net
increase
(decrease)
..........................
(7,698,326)
$(46,647,889)
320,766
$6,307,964
Advisor
Class
Advisor
Class
Shares:
Year
ended
September
30,
2022
Shares
sold
...................................
26,643,569
$146,873,967
18,972,988
$427,940,062
Shares
issued
in
reinvestment
of
distributions
..........
2,135,912
11,924,174
3,023,204
63,261,713
Shares
redeemed
...............................
(86,296,878)
(474,444,605)
(13,271,920)
(292,500,005)
Net
increase
(decrease)
..........................
(57,517,397)
$(315,646,464)
8,724,272
$198,701,770
Year
ended
September
30,
2021
Shares
sold
...................................
100,843,441
$605,662,748
15,271,199
$312,500,667
Shares
issued
in
reinvestment
of
distributions
..........
2,890,966
17,388,910
5,397,482
108,098,490
Shares
redeemed
...............................
(108,356,509)
(648,253,184)
(20,941,268)
(427,097,653)
Net
increase
(decrease)
..........................
(4,622,102)
$(25,201,526)
(272,587)
$(6,498,496)
a
May
include
a
portion
of
Class
C
shares
that
were
automatically
converted
to
Class
A.
2.
Shares
of
Beneficial
Interest
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
139
franklintempleton.com
Annual
Report
3.
Transactions
with
Affiliates
Franklin
Resources,
Inc.
is
the
holding
company
for
various
subsidiaries
that
together
are
referred
to
as
Franklin
Templeton.
Certain
officers
and
trustees
of
the
Trust
are
also
officers
and/or
directors
of
the
following
subsidiaries:
a.
Management
Fees
Franklin
Income
Fund
and
Franklin
Utilities
Fund
pay
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
month-end
net
assets
of
each
of
the
Funds
as
follows:
Franklin
DynaTech
Fund,
Franklin
Growth
Fund
and
Franklin
U.S.
Government
Securities
Fund
pay
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
month-end
net
assets
of
each
of
the
Funds
as
follows:
Subsidiary
Affiliation
Franklin
Advisers,
Inc.
(Advisers)
Investment
manager
Franklin
Templeton
Services,
LLC
(FT
Services)
Administrative
manager
Franklin
Distributors,
LLC
(Distributors)
Principal
underwriter
Franklin
Templeton
Investor
Services,
LLC
(Investor
Services)
Transfer
agent
Annualized
Fee
Rate
Net
Assets
0.625%
Up
to
and
including
$100
million
0.500%
Over
$100
million,
up
to
and
including
$250
million
0.450%
Over
$250
million,
up
to
and
including
$7.5
billion
0.440%
Over
$7.5
billion,
up
to
and
including
$10
billion
0.430%
Over
$10
billion,
up
to
and
including
$12.5
billion
0.420%
Over
$12.5
billion,
up
to
and
including
$15
billion
0.400%
Over
$15
billion,
up
to
and
including
$17.5
billion
0.380%
Over
$17.5
billion,
up
to
and
including
$20
billion
0.360%
Over
$20
billion,
up
to
and
including
$35
billion
0.355%
Over
$35
billion,
up
to
and
including
$50
billion
0.350%
Over
$50
billion,
up
to
and
including
$65
billion
0.345%
Over
$65
billion,
up
to
and
including
$80
billion
0.340%
In
excess
of
$80
billion
Annualized
Fee
Rate
Net
Assets
0.625%
Up
to
and
including
$100
million
0.500%
Over
$100
million,
up
to
and
including
$250
million
0.450%
Over
$250
million,
up
to
and
including
$7.5
billion
0.440%
Over
$7.5
billion,
up
to
and
including
$10
billion
0.430%
Over
$10
billion,
up
to
and
including
$12.5
billion
0.420%
Over
$12.5
billion,
up
to
and
including
$15
billion
0.400%
Over
$15
billion,
up
to
and
including
$17.5
billion
0.380%
Over
$17.5
billion,
up
to
and
including
$20
billion
0.360%
Over
$20
billion,
up
to
and
including
$35
billion
0.355%
Over
$35
billion,
up
to
and
including
$50
billion
0.350%
In
excess
of
$50
billion
Franklin
Custodian
Funds
Notes
to
Financial
Statements
140
franklintempleton.com
Annual
Report
Franklin
Focused
Growth
Fund
pays
an
investment
management
fee,
calculated
daily
and
paid
monthly,
to
Advisers
based
on
the
average
daily
net
assets
of
the
Fund as
follows:
For
the
year
ended
September
30,
2022,
each
Fund's
gross
effective
investment
management
fee
rate
based
on
average
daily
net
assets
was
as
follows:
b.
Administrative
Fees
Under
an
agreement
with
Advisers,
FT
Services
provides
administrative
services
to
the
Funds.
The
fee
is
paid
by
Advisers
based
on
each
of
the
Funds'
average
daily
net
assets,
and
is
not
an
additional
expense
of
the
Funds.
c.
Distribution
Fees
The
Board
has
adopted
distribution
plans
for
each
share
class,
with
the
exception
of
Class
R6
and
Advisor
Class
shares,
pursuant
to
Rule
12b-1
under
the
1940
Act.
Under
the
Funds’
Class
A
and
A1
reimbursement
distribution
plans,
the
Funds
reimburse
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of each
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
Under
the
Class
A
and
A1
reimbursement
distribution
plans,
costs
exceeding
the
maximum
for
the
current
plan
year
cannot
be
reimbursed
in
subsequent
periods.
In
addition,
under
the
Funds’
Class
C
and
R
compensation
distribution
plans,
the
Funds
pay
Distributors
for
costs
incurred
in
connection
with
the
servicing,
sale
and
distribution
of
each
Fund's
shares
up
to
the
maximum
annual
plan
rate
for
each
class.
The
plan
year,
for
purposes
of
monitoring
compliance
with
the
maximum
annual
plan
rates,
is
February
1
through
January
31
for
each
Fund.
The
maximum
annual
plan
rates,
based
on
the
average
daily
net
assets,
for
each
class,
are
as
follows:
Annualized
Fee
Rate
Net
Assets
0.700%
Up
to
and
including
$500
million
0.600%
Over
$500
million,
up
to
and
including
$1
billion
0.550%
Over
$1
billion,
up
to
and
including
$3
billion
0.500%
Over
$3
billion,
up
to
and
including
$5
billion
0.450%
In
excess
of
$5
billion
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Gross
effective
investment
management
fee
rate
........
0.414%
0.700%
0.426%
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Gross
effective
investment
management
fee
rate
........
0.373%
0.449%
0.456%
3.
Transactions
with
Affiliates
(continued)
a.
Management
Fees
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
141
franklintempleton.com
Annual
Report
d.
Sales
Charges/Underwriting
Agreements
Front-end
sales
charges
and
contingent
deferred
sales
charges
(CDSC)
do
not
represent
expenses
of
the
Funds.
These
charges
are
deducted
from
the
proceeds
of
sales
of
fund
shares
prior
to
investment
or
from
redemption
proceeds
prior
to
remittance,
as
applicable.
Distributors
has
advised
the
Funds
of
the
following
commission
transactions
related
to
the
sales
and
redemptions
of
the
Funds'
shares
for
the
year:
e.
Transfer
Agent
Fees
Each
class
of
shares
pays
transfer
agent
fees
to
Investor
Services
for
its
performance
of
shareholder
servicing
obligations.
The
fees
are
based
on
an
annualized
asset
based
fee
of
0.02%
plus
a
transaction
based
fee.
In
addition,
each
class
reimburses
Investor
Services
for
out
of
pocket
expenses
incurred
and,
except
for
Class
R6,
reimburses
shareholder
servicing
fees
paid
to
third
parties.
These
fees
are
allocated
daily
based
upon
their
relative
proportion
of
such
classes'
aggregate
net
assets.
Class
R6
pays
Investor
Services
transfer
agent
fees
specific
to
that
class.
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Reimbursement
Plans:
Class
A
...............................
0.25%
0.25%
0.25%
Compensation
Plans:
Class
C
...............................
1.00%
1.00%
1.00%
Class
R
...............................
0.50%
0.50%
0.50%
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Reimbursement
Plans:
Class
A
...............................
0.25%
0.25%
0.25%
Class
A1
..............................
0.15%
0.15%
0.15%
Compensation
Plans:
Class
C
...............................
0.65%
0.65%
0.65%
Class
R
...............................
0.50%
0.50%
0.50%
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..................
$3,095,898
$58,275
$1,291,324
CDSC
retained
...........................
$286,770
$16,301
$67,019
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Sales
charges
retained
net
of
commissions
paid
to
unaffiliated
brokers/dealers
..................
$2,564,668
$36,458
$150,471
CDSC
retained
...........................
$1,255,359
$189,827
$53,013
3.
Transactions
with
Affiliates
(continued)
c.
Distribution
Fees
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
142
franklintempleton.com
Annual
Report
For
the
year
ended
September
30,
2022,
the
Funds
paid
transfer
agent
fees
as
noted
in
the
Statements
of
Operations
of
which
the
following
amounts
were
retained
by
Investor
Services:
f.
Investments
in
Affiliated
Management
Investment
Companies
Certain
or
all
Funds
invest
in
one
or
more
affiliated
management
investment
companies.
As
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
fund’s
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
fund.
The
Funds
do
not
invest
for
purposes
of
exercising
a
controlling
influence
over
the
management
or
policies.
Management
fees
paid
by
the
Funds
are
waived
on
assets
invested
in
the
affiliated
management
investment
companies,
as
noted
in
the
Statements
of
Operations,
in
an
amount
not
to
exceed
the
management
and
administrative
fees
paid
directly
or
indirectly
by
each
affiliate.
During
the
year
ended
September
30,
2022,
investments
in
affiliated
management
investment
companies
were
as
follows:
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Transfer
agent
fees
........................
$7,712,599
$124,164
$7,678,928
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Transfer
agent
fees
........................
$25,912,466
$2,413,403
$2,940,777
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
a      
a  
a  
a  
a  
a  
a  
a  
Franklin
DynaTech
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$
396,130,154
$
3,825,731,647
$
(3,950,997,829)
$
—
$
—
$
270,863,972
270,863,972
$
1,718,371
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$44,677,000
$997,539,000
$(1,041,831,000)
$—
$—
$385,000
385,000
$14,454
Total
Affiliated
Securities
...
$440,807,154
$4,823,270,647
$(4,992,828,829)
$—
$—
$271,248,972
$1,732,825
Franklin
Focused
Growth
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$3,205,079
$36,012,053
$(37,940,908)
$—
$—
$1,276,224
1,276,224
$8,575
Total
Affiliated
Securities
...
$3,205,079
$36,012,053
$(37,940,908)
$—
$—
$1,276,224
$8,575
3.
Transactions
with
Affiliates
(continued)
e.
Transfer
Agent
Fees
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
143
franklintempleton.com
Annual
Report
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
Franklin
Growth
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$
141,998,542
$
1,980,861,202
$
(2,053,134,220)
$
—
$
—
$
69,725,524
69,725,524
$
418,777
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$76,774,000
$524,994,000
$(601,768,000)
$—
$—
$—
—
$21,203
Total
Affiliated
Securities
...
$218,772,542
$2,505,855,202
$(2,654,902,220)
$—
$—
$69,725,524
$439,980
Franklin
Income
Fund
Non-Controlled
Affiliates
Dividends
Clarion
Partners
Real
Estate
Income
Fund,
Inc.,
Class
I
....
$—
$75,000,000
$—
$—
$98,472
$75,098,472
5,903,968
$647,448
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
3,428,988,776
21,584,042,238
(24,132,139,313)
—
—
880,891,701
880,891,701
7,156,120
Total
Non-Controlled
Affiliates
$3,428,988,776
$21,659,042,238
$(24,132,139,313)
$
—
$
98,472
$955,990,173
$
7,803,568
Non-Controlled
Affiliates
Income
from
securities
loaned
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$1,876,000
$1,121,047,697
$(998,820,697)
$—
$—
$124,103,000
124,103,000
$478,102
Total
Affiliated
Securities
...
$3,430,864,776
$22,780,089,935
$(25,130,960,010)
$—
$98,472
$1,080,093,173
$8,281,670
Franklin
U.S.
Government
Securities
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$85,708,046
$906,997,286
$(945,078,449)
$—
$—
$47,626,883
47,626,883
$211,609
Total
Affiliated
Securities
...
$85,708,046
$906,997,286
$(945,078,449)
$—
$—
$47,626,883
$211,609
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
144
franklintempleton.com
Annual
Report
g.
Waiver
and
Expense
Reimbursements
Advisers
has
contractually
agreed
in
advance
to
waive
or
limit
its
respective
fees
and
to
assume
as
its
own
expense
certain
expenses
otherwise
payable
by
Franklin
Focused
Growth
Fund
so
that
the
operating
expenses
(excluding
interest
expense,
distribution
fees,
acquired
fund
fees
and
expenses
and
certain
non-routine
expenses
or
costs,
including
those
relating
to
litigation,
indemnification,
reorganizations,
and
liquidations)
for
each
class
of
the
Fund
does
not
exceed
0.85%
based
on
the
average
net
assets
of
each
class
until
January
31,
2023.
Total
expenses
waived
or
paid
are
not
subject
to
recapture
subsequent
to
the
Fund’s
fiscal
year
end.
Investor
Services
has
contractually
agreed
in
advance
to
waive
or
limit
its
fees
so
that
the
Class
R6
transfer
agent
fees
do
not
exceed
0.03%
based
on
the
average
net
assets
of
the
class
until
January
31,
2023.
h.
Other
Affiliated
Transactions
During
the
year
ended
September
30,
2022,
the
New
Jersey
Better
Educational
Savings
Trust
Program
–
Franklin
Templeton
Managed
Investments
Options
(529
Portfolios)
redeemed
out
of
Franklin
Growth
Fund.
As
a
result,
on
July
15,
2022,
the
Fund
delivered
portfolio
securities
and
cash
that
were
transferred
in-kind
to
the
529
Portfolios,
which
included
$74,761,884
of
net
realized
gains.
As
such
gains
are
not
taxable
to
the
Fund
and
are
not
distributed
to
remaining
shareholders,
they
are
reclassified
from
accumulated
net
realized
gains
to
paid-in
capital.
i.
Interfund
Transactions
Certain
or
all
Funds
engaged
in
purchases
and
sales
of
investments
with
funds
or
other
accounts
that
have
common
investment
managers
(or
affiliated
investment
managers),
directors,
trustees
or
officers.
These
purchases,
sales
and
the
related
net
realized
gains
(losses),
if
any,
for
the
year
ended
September
30,
2022,
were
as
follows:
    aa
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares
Held
at
End
of
Year
Investment
Income
Franklin
Utilities
Fund
Non-Controlled
Affiliates
Dividends
Institutional
Fiduciary
Trust
-
Money
Market
Portfolio,
2.42%
.
$
12,629,462
$
562,887,117
$
(508,471,360)
$
—
$
—
$
67,045,219
67,045,219
$
289,726
Total
Affiliated
Securities
...
$12,629,462
$562,887,117
$(508,471,360)
$—
$—
$67,045,219
$289,726
Franklin
Income
Fund
Purchases
..............................
$18,212,500
Sales
..................................
—
Net
Realized
Gains
(Losses)
.................
—
3.
Transactions
with
Affiliates
(continued)
f.
Investments
in
Affiliated
Management
Investment
Companies
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
145
franklintempleton.com
Annual
Report
4.
Expense
Offset
Arrangement
The
Funds
have entered
into
an
arrangement
with
their
custodian
whereby
credits
realized
as
a
result
of
uninvested
cash
balances
are
used
to
reduce
a
portion
of
the
Funds'
custodian
expenses.
During
the year
ended
September
30,
2022, the
custodian
fees
were
reduced
as
noted
in
the
Statements
of
Operations.
5.
Income
Taxes
For
tax
purposes,
capital
losses
may
be
carried
over
to
offset
future
capital
gains.
At
September
30,
2022,
the
capital
loss
carryforwards
were
as
follows:
For
tax
purposes,
the
Funds
may
elect
to
defer
any
portion
of
a
post-October
capital
loss
or
late-year
ordinary
loss
to
the
first
day
of
the
following
fiscal
year.
At
September
30,
2022,
the
deferred
losses
were
as
follows:
The
tax
character
of
distributions
paid
during
the
years
ended
September
30,
2022
and
2021,
was
as
follows:
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
1
1
1
Capital
loss
carryforwards
not
subject
to
expiration:
Short
term
.............................
$686,503,830
$348,984,907
Long
term
.............................
—
434,722,766
Total
capital
loss
carryforwards
............
$686,503,830
$783,707,673
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
a
a
a
Late-year
ordinary
loss
.....................
$50,086,969
$430,108
Post-October
capital
loss
...................
883,455,170
11,785,456
$933,542,139
$12,215,564
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
2022
2021
2022
2021
Distributions
paid
from:
Ordinary
income
........................
$—
$—
$—
$169,579
Long
term
capital
gain
....................
396,128,968
—
669,614
337,970
$396,128,968
$—
$669,614
$507,549
Franklin
Growth
Fund
Franklin
Income
Fund
2022
2021
2022
2021
Distributions
paid
from:
Ordinary
income
........................
$10,164,224
$36,384,494
$3,902,195,620
$3,325,267,435
Long
term
capital
gain
....................
1,918,843,371
1,511,318,382
1,062,281,571
—
$1,929,007,595
$1,547,702,876
$4,964,477,191
$3,325,267,435
Franklin
Custodian
Funds
Notes
to
Financial
Statements
146
franklintempleton.com
Annual
Report
At
September
30,
2022,
the
cost
of
investments,
net
unrealized
appreciation
(depreciation),
undistributed
ordinary
income
and
undistributed
long
term
capital
gains
for
income
tax
purposes
were
as
follows:
Differences
between
income
and/or
capital
gains
as
determined
on
a
book
basis
and
a
tax
basis
are
primarily
due
to
differing
treatments
of
defaulted
securities,
EU
reclaims,
paydown
losses,
bond
discounts
and
premiums,
equity-linked
securities,
wash
sales
and
gains
realized
on
in-kind
shareholder
redemptions.
Franklin
Growth
Fund
and
Franklin
U
tilities
Fund
utilized
a
tax
accounting
practice
to
treat
a
portion
of
the
proceeds
from
capital
shares
redeemed
as
a
distribution
from
net
investment
income
and
realized
capital
gains.
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
2022
2021
2022
2021
Distributions
paid
from:
Ordinary
income
........................
$90,397,421
$113,609,107
$167,618,020
$162,038,791
Long
term
capital
gain
....................
—
—
161,364,364
423,015,872
$90,397,421
$113,609,107
$328,982,384
$585,054,663
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
a
a
a
a
Cost
of
investments
.......................
$12,972,956,138
$75,501,835
$5,643,831,714
Unrealized
appreciation
.....................
$4,511,511,846
$3,190,838
$9,272,588,809
Unrealized
depreciation
.....................
(676,516,046)
(11,328,031)
(471,226,670)
Net
unrealized
appreciation
(depreciation)
.......
$3,834,995,800
$(8,137,193)
$8,801,362,139
Distributable
earnings:
Undistributed
ordinary
income
................
$—
$—
$9,170,919
Undistributed
long
term
capital
gains
...........
—
—
1,434,873,065
Total
distributable
earnings
..................
$—
$—
$1,444,043,984
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
a
a
a
a
Cost
of
investments
.......................
$71,256,664,083
$3,284,330,400
$3,425,469,020
Unrealized
appreciation
.....................
$2,429,286,668
$8,450,291
$3,073,917,444
Unrealized
depreciation
.....................
(7,824,335,999)
(380,691,517)
(56,381,014)
Net
unrealized
appreciation
(depreciation)
.......
$(5,395,049,331)
$(372,241,226)
$3,017,536,430
Distributable
earnings:
Undistributed
ordinary
income
................
$106,771,415
$436,025
$—
Undistributed
long
term
capital
gains
...........
—
—
89,297,072
Total
distributable
earnings
..................
$106,771,415
$436,025
$89,297,072
5.
Income
Taxes
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
147
franklintempleton.com
Annual
Report
6.
Investment
Transactions
Purchases
and
sales
of
investments
(excluding
short
term
securities
and
in-kind
transactions)
for
the
year
ended
September
30,
2022,
were
as
follows:
At
September
30,
2022,
in
connection
with
securities
lending
transactions,
certain
or
all
Funds
loaned
investments
and
received
cash
collateral
as
follows:
7.
Credit Risk
and
Defaulted
Securities
At
September
30,
2022,
Franklin
Income
Fund
had
27.3%
of
its
portfolio
invested
in
high
yield
securities,
or
other
securities
rated
below
investment
grade
and
unrated
securities.
These
securities
may
be
more
sensitive
to
economic
conditions
causing
greater
price
volatility
and
are
potentially
subject
to
a
greater
risk
of
loss
due
to
default
than
higher
rated
securities.
Franklin
Income
Fund
held
defaulted
securities
and/or
other
securities
for
which
the
income
has
been
deemed
uncollectible.
At
September
30,
2022,
the
aggregate
value
of
these
securities
was
$257,887,153,
representing
0.4%
of
the
Fund's
net
assets.
The
Fund
discontinues
accruing
income
on
securities
for
which
income
has
been
deemed
uncollectible
and
provides
an
estimate
for
losses
on
interest
receivable.
The
securities
have
been
identified
in
the
accompanying Schedule
of
Investments.
8.
Geopolitical
Risk 
On
February
24,
2022,
Russia
engaged
in
military
actions
in
the
sovereign
territory
of
Ukraine.
The
current
political
and
financial
uncertainty
surrounding
Russia
and
Ukraine
may
increase
market
volatility
and
the
economic
risk
of
investing
in
securities
in
these
countries
and
may
also
cause
uncertainty
for
the
global
economy
and
broader
financial
markets.
The
ultimate
fallout
and
long-term
impact
from
these
events
are
not
known.
The
Funds
will
continue
to
assess
the
impact
on
valuations
and
liquidity
and
will
take
any
potential
actions
needed
in
accordance
with
procedures
approved
by
the
Board.
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Purchases
..............................
$9,692,202,359
$39,904,031
$928,234,294
Sales
..................................
$9,251,264,503
$37,519,310
$2,906,524,877
a
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Purchases
..............................
$60,024,096,189
$1,929,391,163
$524,096,373
Sales
..................................
$54,460,658,312
$2,787,739,222
$376,702,766
a
Sales
of
investments
excludes
in-kind
transactions
of
$166,811,092.
Franklin
DynaTech
Fund
Franklin
Growth
Fund
Franklin
Income
Fund
Securities
lending
transactions
a
:
Equity
investments
b
........................
$590,086
$—
$153,123,311
a
The
agreements
can
be
terminated
at
any
time.
b
The
gross
amount
of
recognized
liability
for
such
transactions
is
included
in
payable
upon
return
of
securities
loaned
in
the
Statements
of
Assets
and
Liabilities.
Franklin
Custodian
Funds
Notes
to
Financial
Statements
148
franklintempleton.com
Annual
Report
9.
Novel
Coronavirus
Pandemic 
The
global
outbreak
of
the
novel
coronavirus
disease,
known
as
COVID-19, has
caused
adverse
effects
on
many
companies,
sectors,
nations,
regions
and
the
markets
in
general, and
may
continue for
an unpredictable duration.
The
effects
of
this
pandemic
may
materially
impact
the
value
and
performance
of
the
Funds, their ability
to
buy
and
sell
fund
investments
at
appropriate
valuations
and their ability
to
achieve their investment
objectives.
10.
Restricted
Securities
Certain
or
all
Funds
invest
in
securities
that
are
restricted
under
the
Securities
Act
of
1933
(1933
Act).
Restricted
securities
are
often
purchased
in
private
placement
transactions,
and
cannot
be
sold
without
prior
registration
unless
the
sale
is
pursuant
to
an
exemption
under
the
1933
Act.
Disposal
of
these
securities
may
require
greater
effort
and
expense,
and
prompt
sale
at
an
acceptable
price
may
be
difficult.
The
Funds
may
have
registration
rights
for
restricted
securities.
The
issuer
generally
incurs
all
registration
costs.
At
September
30,
2022,
investments
in
restricted
securities,
excluding
securities
exempt
from
registration
under
the
1933
Act,
were
as
follows:
Shares
Issuer
Acquisition
Date
Cost
Value
Franklin
Growth
Fund
25,413
Canva,
Inc.
................................
11/08/21
$
43,323,040
$
17,289,962
2,353
Canva,
Inc.,
A
..............................
11/08/21
4,011,298
1,600,884
94
Canva,
Inc.,
A-3
.............................
11/08/21
160,247
63,954
8
Canva,
Inc.,
A-4
.............................
11/08/21
13,638
5,443
5
Canva,
Inc.,
A-5
.............................
11/08/21
8,524
3,402
96,603
Checkout
Payments
Group
Ltd.,
B
...............
1/11/22
30,000,062
17,717,100
822,494
Gusto,
Inc.,
E
...............................
7/13/21
24,999,977
24,509,385
849,894
OneTrust
LLC,
C
............................
4/01/21
16,666,676
9,210,092
540,043
Stripe,
Inc.,
B
...............................
5/18/21
21,671,052
11,127,740
756,137
Stripe,
Inc.,
H
...............................
3/15/21
30,339,997
15,580,419
Total
Restricted
Securities
(Value
is
0.7%
of
Net
Assets)
..............
$171,194,511
$97,108,381
Franklin
Custodian
Funds
Notes
to
Financial
Statements
149
franklintempleton.com
Annual
Report
11.
Other
Derivative
Information
At
September
30,
2022,
investments
in
derivative
contracts
are
reflected
in
the
Statements
of
Assets
and
Liabilities
as
follows:
For
the
year
ended
September
30,
2022,
the
effect
of
derivative
contracts
in
the
Statements
of
Operations
was
as
follows:
For
the
year
ended
September
30,
2022,
the
average
month
end
notional
amount
of
options
represented
41,020,631
shares.
The
average
month
end
notional
amount
of
futures
contract
was
$215,504,808.
See
Note
1(e) regarding
derivative
financial
instruments. 
12.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
The
1940
Act
defines
"affiliated
companies"
to
include
investments
in
portfolio
companies
in
which
a
fund
owns
5%
or
more
of
the
outstanding
voting
securities.
Additionally,
as
defined
in
the
1940
Act,
an
investment
is
deemed
to
be
a
“Controlled
Affiliate”
of
a
fund
when
a
fund
owns,
either
directly
or
indirectly,
25%
or
more
of
the
affiliated
companies’
outstanding
shares
or
has
the
power
to
exercise
control
over
management
or
policies
of
such
company.
During
the
year
ended
September
30,
2022,
investments
in
“affiliated
companies”
were
as
follows:
Asset
Derivatives
Liability
Derivatives
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Statement
of
Assets
and
Liabilities
Location
Fair
Value
Franklin
Income
Fund
Interest
rate
contracts
.......
Variation
margin
on
futures
contracts
$
14,804,250
a
Variation
margin
on
futures
contracts
$
—
Equity
contracts
...........
Investments
in
securities,
at
value
—
Options
written,
at
value
135,982,500
Total
....................
$14,804,250
$135,982,500
a
This
amount
reflects
the
cumulative
appreciation
(depreciation)
of
futures
contracts
as
reported
in
the
Schedule
of
Investments.
Only
the
variation
margin
receivable/payable
at
year
end
is
separately
reported
within
the
Statement
of
Assets
and
Liabilities.
Prior
variation
margin
movements
were
recorded
to
cash
upon
receipt
or
payment.
Derivative
Contracts
Not
Accounted
for
as
Hedging
Instruments
Statement
of
Operations
Location
Net
Realized
Gain
(Loss)
for
the
Year
Statement
of
Operations
Location
Net
Change
in
Unrealized
Appreciation
(Depreciation)
for
the
Year
Franklin
Income
Fund
Net
realized
gain
(loss)
from:
Net
change
in
unrealized
  appreciation
(depreciation)
on:
Interest
rate
contracts
..........
Futures
contracts
$—
Futures
contracts
$14,804,250
Equity
Contracts
..............
Written
options
337,171,136
Written
options
(1,418,082)
Total
.......................
$337,171,136
$13,386,168
Franklin
Custodian
Funds
Notes
to
Financial
Statements
150
franklintempleton.com
Annual
Report
13.
Credit
Facility
The
Funds,
together
with
other
U.S.
registered
and
foreign
investment
funds
(collectively,
Borrowers),
managed
by
Franklin
Templeton,
are
borrowers
in
a
joint
syndicated
senior
unsecured
credit
facility
totaling
$2.675
billion
(Global
Credit
Facility)
which
matures
on
February
3,
2023.
This
Global
Credit
Facility
provides
a
source
of
funds
to
the
Borrowers
for
temporary
and
emergency
purposes,
including
the
ability
to
meet
future
unanticipated
or
unusually
large
redemption
requests.
Under
the
terms
of
the
Global
Credit
Facility,
the
Funds
shall,
in
addition
to
interest
charged
on
any
borrowings
made
by
the
Funds
and
other
costs
incurred
by
the
Funds,
pay
their
share
of
fees
and
expenses
incurred
in
connection
with
the
implementation
and
maintenance
of
the
Global
Credit
Facility,
based
upon
their
relative
share
of
the
aggregate
net
assets
of
all
of
the
Borrowers,
including
an
annual
commitment
fee
of
0.15%
based
upon
the
unused
portion
of
the
Global
Credit
Facility.
These
fees
are
reflected
in
other
expenses
in
the
Statements
of
Operations.
During
the
year ended
September
30,
2022,
the
Funds
did
not
use
the
Global
Credit
Facility.
14.
Redemption
In-Kind
During
the
year
ended
September
30,
2022
and
year
ended
September
30,
2021,
Franklin
Growth
Fund
realized
$47,765,967
and
$80,827,002,
respectively,
of
net
gains
resulting
from
redemptions
in-kind
in
which
a
shareholder
redeemed
fund
shares
for
cash
and
securities
held
by
the
Fund.
Because
such
gains
are
not
taxable
to
the
Fund
and
are
not
distributed
to
remaining
shareholders,
they
are
reclassified
from
accumulated
net
realized
gains
to
paid-in
capital.
Value
at
Beginning
of
Year
Purchases
Sales
Realized
Gain
(Loss)
Net
Change
in
Unrealized
Appreciation
(Depreciation)
Value
at
End
of
Year
Number
of
Shares/Principal
Amount
Held
at
End
of
Year
Investment
Income
Franklin
Income
Fund
Non-Controlled
Affiliates
Dividends
Chesapeake
Energy
Corp.
$
307,950,000
$
—
$
(427,970,354)
$
(148,488,476)
$
268,508,830
$
—
a
—
$
10,834,844
Chesapeake
Energy
Corp.,
2/09/26
..........
391,333,500
—
(443,405,549)
(211,75
5
,187)
263,8
27
,236
—
a
—
—
Chesapeake
Energy
Corp.,
Escrow
Account,
144A
26,742,500
—
—
—
—
b
—
b
—
b
1,468,750
CHS/Community
Health
Systems,
Inc.
......
117,000,000
—
(35,262,898)
(61,717,673)
—
b
—
b
—
b
—
Civitas
Resources,
Inc.
.
162,860,000
—
(178,910,510)
50,730,510
(34,680,000)
—
a
—
1,140,106
Weatherford
International
plc.
............
232,499,400
—
(299,424,341)
92,184,341
—
b
—
b
—
b
—
$1,238,385,400
$—
$(1,384,973,652)
$
(279,04
6
,485)
$
497,65
6
,066
$—
—
$
13,44
3
,700
Interest
Civitas
Resources,
Inc.,
Senior
Note,
7.5%,
4/30/26
..........
33,003,296
—
(32,713,617)
—
(289,679)
—
a
—
1,438,036
Total
Affiliated
Securities
(Value
is
—%
of
Net
Assets)
..........
$1,271,388,696
$—
$(1,417,687,269)
$(279,046,485)
$497,366,387
$—
$14,881,736
a
As
of
September
30,
2022,
no
longer
held
by
the
fund.
b
As
of
September
30,
2022,
no
longer
an
affiliate.
12.
Holdings
of
5%
Voting
Securities
of
Portfolio
Companies
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
151
franklintempleton.com
Annual
Report
15.
Fair
Value
Measurements
The Funds
follow
a
fair
value
hierarchy
that
distinguishes
between
market
data
obtained
from
independent
sources
(observable
inputs)
and
the Funds'
own
market
assumptions
(unobservable
inputs).
These
inputs
are
used
in
determining
the
value
of
the Funds' financial
instruments
and
are
summarized
in
the
following
fair
value
hierarchy:
Level
1
–
quoted
prices
in
active
markets
for
identical
financial
instruments
Level
2
–
other
significant
observable
inputs
(including
quoted
prices
for
similar
financial
instruments,
interest
rates,
prepayment
speed,
credit
risk,
etc.)
Level
3
–
significant
unobservable
inputs
(including
the Funds'
own
assumptions
in
determining
the
fair
value
of
financial
instruments)
The
input
levels
are
not
necessarily
an
indication
of
the
risk
or
liquidity
associated
with
financial
instruments
at
that
level.
A
summary
of
inputs
used
as
of
September
30,
2022,
in
valuing
the
Funds'
assets
and
liabilities
carried
at
fair
value,
is
as
follows:
Level
1
Level
2
Level
3
Total
Franklin
DynaTech
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
$
137,737,300
$
—
$
—
$
137,737,300
Automobiles
..........................
702,912,500
—
—
702,912,500
Biotechnology
.........................
45,452,500
106,768,389
—
152,220,889
Capital
Markets
........................
374,088,000
—
—
374,088,000
Chemicals
...........................
263,656,500
—
—
263,656,500
Construction
&
Engineering
...............
127,390,000
—
—
127,390,000
Electric
Utilities
........................
290,117,000
—
—
290,117,000
Electrical
Equipment
....................
5,478,000
—
—
5,478,000
Electronic
Equipment,
Instruments
&
Components
........................
112,160,000
84,765,637
—
196,925,637
Energy
Equipment
&
Services
.............
55,645,000
—
—
55,645,000
Entertainment
.........................
19,617,500
—
—
19,617,500
Equity
Real
Estate
Investment
Trusts
(REITs)
.
171,235,000
—
—
171,235,000
Health
Care
Equipment
&
Supplies
.........
1,102,609,750
—
—
1,102,609,750
Health
Care
Providers
&
Services
..........
287,451,100
—
—
287,451,100
Health
Care
Technology
.................
107,172,000
—
—
107,172,000
Hotels,
Restaurants
&
Leisure
.............
146,120,250
—
—
146,120,250
Interactive
Media
&
Services
..............
880,765,000
—
—
880,765,000
Internet
&
Direct
Marketing
Retail
..........
1,295,556,000
—
—
1,295,556,000
IT
Services
...........................
1,068,745,074
249,445,135
—
1,318,190,209
Life
Sciences
Tools
&
Services
............
1,294,308,000
108,679,619
—
1,402,987,619
Machinery
............................
110,610,000
—
—
110,610,000
Pharmaceuticals
.......................
316,277,250
—
—
316,277,250
Professional
Services
...................
34,825,000
—
—
34,825,000
Semiconductors
&
Semiconductor
Equipment
.
1,881,486,800
44,783,699
—
1,926,270,499
Software
.............................
4,740,941,950
2,313,830
—
4,743,255,780
Technology
Hardware,
Storage
&
Peripherals
.
317,860,000
—
—
317,860,000
Trading
Companies
&
Distributors
..........
32,228,000
—
—
32,228,000
Preferred
Stocks
........................
—
17,296,097
—
17,296,097
Short
Term
Investments
...................
271,248,972
205,086
—
271,454,058
Total
Investments
in
Securities
...........
$16,193,694,446
$614,257,492
a
$—
$16,807,951,938
Franklin
Custodian
Funds
Notes
to
Financial
Statements
152
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
Focused
Growth
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
$
477,700
$
—
$
—
$
477,700
Automobiles
..........................
4,222,250
—
—
4,222,250
Capital
Markets
........................
1,450,958
—
—
1,450,958
Electric
Utilities
........................
3,582,710
—
—
3,582,710
Equity
Real
Estate
Investment
Trusts
(REITs)
.
1,678,012
—
—
1,678,012
Food
&
Staples
Retailing
.................
3,712,987
—
—
3,712,987
Health
Care
Equipment
&
Supplies
.........
4,029,210
—
—
4,029,210
Health
Care
Technology
.................
810,055
—
—
810,055
Interactive
Media
&
Services
..............
3,759,523
—
—
3,759,523
Internet
&
Direct
Marketing
Retail
..........
7,130,777
—
—
7,130,777
IT
Services
...........................
4,127,550
1,226,023
—
5,353,573
Life
Sciences
Tools
&
Services
............
4,529,230
—
—
4,529,230
Metals
&
Mining
.......................
515,007
—
—
515,007
Personal
Products
.....................
954,494
—
—
954,494
Road
&
Rail
..........................
399,920
—
—
399,920
Semiconductors
&
Semiconductor
Equipment
.
8,275,816
—
—
8,275,816
Software
.............................
15,206,196
—
—
15,206,196
Short
Term
Investments
...................
1,276,224
—
—
1,276,224
Total
Investments
in
Securities
...........
$66,138,619
$1,226,023
b
$—
$67,364,642
Franklin
Growth
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
748,035,766
—
—
748,035,766
Auto
Components
......................
47,040,421
—
—
47,040,421
Automobiles
..........................
134,266,543
—
—
134,266,543
Beverages
...........................
539,292,406
—
—
539,292,406
Biotechnology
.........................
343,722,631
—
—
343,722,631
Building
Products
......................
198,653,542
—
—
198,653,542
Capital
Markets
........................
609,889,039
—
—
609,889,039
Chemicals
...........................
392,053,947
—
—
392,053,947
Commercial
Services
&
Supplies
...........
86,303,640
—
—
86,303,640
Construction
Materials
..................
99,653,680
—
—
99,653,680
Electric
Utilities
........................
156,870,653
—
—
156,870,653
Electrical
Equipment
....................
108,305,280
—
—
108,305,280
Electronic
Equipment,
Instruments
&
Components
........................
492,771,729
—
—
492,771,729
Entertainment
.........................
74,598,183
—
—
74,598,183
Equity
Real
Estate
Investment
Trusts
(REITs)
.
141,473,831
—
—
141,473,831
Food
&
Staples
Retailing
.................
25,856,310
—
—
25,856,310
Food
Products
........................
41,348,699
—
—
41,348,699
Health
Care
Equipment
&
Supplies
.........
637,991,675
—
—
637,991,675
Health
Care
Providers
&
Services
..........
169,123,312
—
—
169,123,312
Health
Care
Technology
.................
44,387,839
—
—
44,387,839
Hotels,
Restaurants
&
Leisure
.............
166,987,754
—
—
166,987,754
Interactive
Media
&
Services
..............
535,721,112
—
—
535,721,112
Internet
&
Direct
Marketing
Retail
..........
543,238,912
—
—
543,238,912
IT
Services
...........................
682,585,528
79,968,369
17,289,962
779,843,859
Life
Sciences
Tools
&
Services
............
940,259,131
—
—
940,259,131
Machinery
............................
605,631,989
—
—
605,631,989
Media
...............................
55,179,909
—
—
55,179,909
Personal
Products
.....................
39,597,787
—
—
39,597,787
Pharmaceuticals
.......................
627,759,284
—
—
627,759,284
15.
Fair
Value
Measurements
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
153
franklintempleton.com
Annual
Report
Level
1
Level
2
Level
3
Total
Franklin
Growth
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Common
Stocks:
Professional
Services
...................
$
201,459,809
$
—
$
—
$
201,459,809
Road
&
Rail
..........................
491,592,531
—
—
491,592,531
Semiconductors
&
Semiconductor
Equipment
.
891,612,674
—
—
891,612,674
Software
.............................
2,287,547,356
—
28,844,840
2,316,392,196
Technology
Hardware,
Storage
&
Peripherals
.
675,202,773
—
—
675,202,773
Textiles,
Apparel
&
Luxury
Goods
..........
150,234,080
—
—
150,234,080
Trading
Companies
&
Distributors
..........
123,350,967
—
—
123,350,967
Water
Utilities
.........................
88,790,857
—
—
88,790,857
Convertible
Preferred
Stocks
...............
—
—
50,973,579
50,973,579
Short
Term
Investments
...................
69,725,524
—
—
69,725,524
Total
Investments
in
Securities
...........
$14,268,117,103
$79,968,369
c
$97,108,381
$14,445,193,853
Franklin
Income
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Aerospace
&
Defense
...................
821,703,763
—
—
821,703,763
Air
Freight
&
Logistics
...................
201,925,000
—
—
201,925,000
Banks
...............................
1,532,787,821
—
—
1,532,787,821
Biotechnology
.........................
504,575,000
—
—
504,575,000
Capital
Markets
........................
395,050,000
—
—
395,050,000
Chemicals
...........................
364,470,000
—
—
364,470,000
Communications
Equipment
..............
336,000,000
—
—
336,000,000
Diversified
Telecommunication
Services
.....
515,398,326
—
—
515,398,326
Electric
Utilities
........................
1,363,000,000
—
—
1,363,000,000
Energy
Equipment
&
Services
.............
77,496,000
—
—
77,496,000
Food
&
Staples
Retailing
.................
64,850,000
—
—
64,850,000
Health
Care
Equipment
&
Supplies
.........
40,375,000
—
—
40,375,000
Health
Care
Providers
&
Services
..........
1,919,341
—
—
1,919,341
Household
Products
....................
284,062,500
—
—
284,062,500
Industrial
Conglomerates
................
110,500,000
390,991,431
—
501,491,431
Insurance
............................
261,354,000
—
—
261,354,000
IT
Services
...........................
297,025,000
—
—
297,025,000
Metals
&
Mining
.......................
382,236,897
—
—
382,236,897
Multiline
Retail
........................
74,195,000
—
—
74,195,000
Multi-Utilities
..........................
887,315,000
—
—
887,315,000
Oil,
Gas
&
Consumable
Fuels
.............
2,275,079,900
—
—
2,275,079,900
Pharmaceuticals
.......................
1,707,300,000
—
—
1,707,300,000
Semiconductors
&
Semiconductor
Equipment
.
870,523,800
—
—
870,523,800
Specialty
Retail
........................
344,925,000
—
—
344,925,000
Tobacco
.............................
290,535,000
—
—
290,535,000
Management
Investment
Companies
.........
75,098,472
—
—
75,098,472
Equity-Linked
Securities
...................
—
12,613,014,020
—
12,613,014,020
Convertible
Preferred
Stocks
:
Capital
Markets
........................
65,304,000
—
—
65,304,000
Electric
Utilities
........................
923,370,000
—
—
923,370,000
Multi-Utilities
..........................
100,590,000
—
—
100,590,000
Thrifts
&
Mortgage
Finance
...............
—
43,460,000
—
43,460,000
Preferred
Stocks
........................
14,720,000
—
—
14,720,000
Convertible
Bonds
.......................
—
152,889,284
—
152,889,284
Corporate
Bonds
........................
—
28,278,304,993
—
28,278,304,993
U.S.
Government
and
Agency
Securities
.......
—
8,157,470,703
—
8,157,470,703
Asset-Backed
Securities
..................
—
43,498,177
—
43,498,177
15.
Fair
Value
Measurements
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
154
franklintempleton.com
Annual
Report
A
reconciliation
in
which
Level
3
inputs
are
used
in
determining
fair
value
is
presented
when
there
are
significant
Level
3
assets
and/or
liabilities
at
the
beginning
and/or
end
of
the year. 
Level
1
Level
2
Level
3
Total
Franklin
Income
Fund
(continued)
Assets:
(continued)
Investments
in
Securities:
Convertible
Preferred
Stocks:
Mortgage-Backed
Securities
................
$
—
$
26,922,995
$
—
$
26,922,995
Escrows
and
Litigation
Trusts
...............
—
58,541,567
—
58,541,567
Short
Term
Investments
...................
1,004,994,701
29,020,311
—
1,034,015,012
Total
Investments
in
Securities
...........
$16,188,679,521
$49,794,113,481
d
$—
$65,982,793,002
Other
Financial
Instruments:
Futures
contracts
........................
$
14,804,250
$
—
$
—
$
14,804,250
Total
Other
Financial
Instruments
.........
$14,804,250
$—
$—
$14,804,250
Liabilities:
Other
Financial
Instruments:
Options
written
..........................
$
135,982,500
$
—
$
—
$
135,982,500
Total
Other
Financial
Instruments
.........
$135,982,500
$—
$—
$135,982,500
Franklin
U.S.
Government
Securities
Fund
Assets:
Investments
in
Securities:
e
U.S.
Government
and
Agency
Securities
.......
—
16,087,354
—
16,087,354
Mortgage-Backed
Securities
................
—
2,848,374,937
—
2,848,374,937
Short
Term
Investments
...................
47,626,883
—
—
47,626,883
Total
Investments
in
Securities
...........
$47,626,883
$2,864,462,291
$—
$2,912,089,174
Franklin
Utilities
Fund
Assets:
Investments
in
Securities:
Common
Stocks
:
Construction
&
Engineering
...............
120,340,000
—
—
120,340,000
Diversified
Telecommunication
Services
.....
—
59,574,314
—
59,574,314
Electric
Utilities
........................
3,687,568,493
23,225,778
—
3,710,794,271
Gas
Utilities
..........................
111,155,000
—
—
111,155,000
Independent
Power
and
Renewable
Electricity
Producers
..........................
113,610,000
—
—
113,610,000
Multi-Utilities
..........................
1,814,227,476
120,616,739
—
1,934,844,215
Oil,
Gas
&
Consumable
Fuels
.............
243,825,000
—
—
243,825,000
Water
Utilities
.........................
62,070,000
19,747,431
—
81,817,431
Short
Term
Investments
...................
67,045,219
—
—
67,045,219
Total
Investments
in
Securities
...........
$6,219,841,188
$223,164,262
f
$—
$6,443,005,450
a
Includes
foreign
securities
valued
at
$614,052,406,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
b
Includes
foreign
securities
valued
at
$1,226,023,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
c
Includes
foreign
securities
valued
at
$79,968,369,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
d
Includes
foreign
securities
valued
at
$390,991,431,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
e
For
detailed
categories,
see
the
accompanying
schedule
of
investments.
f
Includes
foreign
securities
valued
at
$163,589,948,
which
were
categorized
as
Level
2
as
a
result
of
the
application
of
market
level
fair
value
procedures.
See
the
Financial
Instrument
Valuation
note
for
more
information.
15.
Fair
Value
Measurements
(continued)
Franklin
Custodian
Funds
Notes
to
Financial
Statements
155
franklintempleton.com
Annual
Report
Currency
USD
United
States
Dollar
16.
New
Accounting
Pronouncements
In
March
2020,
the
Financial
Accounting
Standards
Board
(FASB)
issued
Accounting
Standards
Update
(ASU)
No.
2020-04,
Reference
Rate
Reform
(Topic
848)
–
Facilitation
of
the
Effects
of
Reference
Rate
Reform
on
Financial
Reporting.
In
January
2021,
the
FASB
issued
ASU
No.
2021-01,
with
further
amendments
to
Topic
848.
The
amendments
in
the
ASUs
provide
optional
temporary
accounting
recognition
and financial
reporting
relief
from
the
effect
of
certain
types
of
contract
modifications
due
to
the
planned
discontinuation
of
the
London
Interbank
Offered
Rate
(LIBOR)
and
other
interbank-offered
based
reference
rates
as
of
the
end
of
2021
for
certain
LIBOR
settings
and
2023
for
the
remainder. The
ASUs
are
effective
for
certain
reference
rate-related
contract
modifications
that
occur
during
the
period
March
12,
2020
through
December
31,
2022.
Management
has
reviewed
the
requirements
and
believes
the
adoption
of
these
ASUs
will
not
have
a
material
impact
on
the
financial
statements. 
In June
2022,
the
FASB
issued
ASU
No.
2022-03,
Fair
Value
Measurement
(Topic
820)
–
Fair
Value
Measurement
of
Equity
Securities
Subject
to
Contractual
Sale
Restrictions.
The
amendments
in
the
ASU
clarify
that
a
contractual
restriction
on
the
sale
of
an
equity
security
is
not
considered
part
of
the
unit
of
account
of
the
equity
security
and,
therefore,
should
not
be
considered
in
measuring
fair
value.
The
ASU
is
effective
for
interim
and
annual
reporting
periods
beginning
after
December
15,
2023,
with
the
option
of
early
adoption.
Management
is
currently
evaluating
the
impact,
if
any,
of
applying
this
ASU.
17.
Subsequent
Events
The
Funds
have
evaluated
subsequent
events
through
the
issuance
of
the
financial
statements
and
determined
that
no
events
have
occurred
that
require
disclosure.
Abbreviations
Selected
Portfolio
ADR
American
Depositary
Receipt
FNMA
Federal
National
Mortgage
Association
FRN
Floating
Rate
Note
GNMA
Government
National
Mortgage
Association
LIBOR
London
Inter-Bank
Offered
Rate
NYRS
New
York
Registry
Shares
PIK
Payment-In-Kind
Franklin
Custodian
Funds
Report
of
Independent
Registered
Public
Accounting
Firm
156
franklintempleton.com
Annual
Report
To
the
Board
of
Trustees
of
Franklin
Custodian
Funds
and
Shareholders
of
Franklin
DynaTech
Fund,
Franklin
Focused
Growth
Fund,
Franklin
Growth
Fund,
Franklin
Income
Fund,
Franklin
U.S.
Government
Securities
Fund,
and
Franklin
Utilities
Fund
Opinions
on
the
Financial
Statements
We
have
audited
the
accompanying
statements
of
assets
and
liabilities,
including
the
schedules
of
investments,
of
Franklin
DynaTech
Fund,
Franklin
Focused
Growth
Fund,
Franklin
Growth
Fund,
Franklin
Income
Fund,
Franklin
U.S.
Government
Securities
Fund,
and
Franklin
Utilities
Fund
(constituting
Franklin
Custodian
Funds,
hereafter
collectively
referred
to
as
the
"Funds")
as
of
September
30,
2022,
the
related
statements
of
operations
for
the
year
ended
September
30,
2022,
the
statements
of
changes
in
net
assets
for
each
of
the
two
years
in
the
period
ended
September
30,
2022,
including
the
related
notes,
and
the
financial
highlights
for
each
of
the
periods
indicated
therein
(collectively
referred
to
as
the
“financial
statements”).
In
our
opinion,
the
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
each
of
the
Funds
as
of
September
30,
2022,
the
results
of
each
of
their
operations
for
the
year
then
ended,
the
changes
in
each
of
their
net
assets
for
each
of
the
two
years
in
the
period
ended
September
30,
2022
and
each
of
the
financial
highlights
for
each
of
the
periods
indicated
therein
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
of
America.
Basis
for
Opinions
These
financial
statements
are
the
responsibility
of
the
Funds’
management.
Our
responsibility
is
to
express
an
opinion
on
the
Funds’
financial
statements
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(PCAOB)
and
are
required
to
be
independent
with
respect
to
the
Funds
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.
We
conducted
our
audits
of
these
financial
statements
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audit
to
obtain
reasonable
assurance
about
whether
the
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud.
Our
audits
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
financial
statements.
Our
procedures
included
confirmation
of
securities
owned
as
of
September
30,
2022
by
correspondence
with
the
custodian,
transfer
agent
and
brokers;
when
replies
were
not
received
from
brokers,
we
performed
other
auditing
procedures.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinions.
PricewaterhouseCoopers
LLP
San
Francisco,
California
November
15,
2022
We
have
served
as
the
auditor
of
one
or
more
investment
companies
in
the
Franklin
Templeton
Group
of
Funds
since
1948.
Franklin
Custodian
Funds
Tax
Information
(unaudited)
157
franklintempleton.com
Annual
Report
By
mid-February,
tax
information
related
to
a
shareholder's
proportionate
share
of
distributions
paid
during
the
preceding
calendar
year
will
be
received,
if
applicable.
Please
also
refer
to
www.franklintempleton.com
for
per
share
tax
information
related
to
any
distributions
paid
during
the
preceding
calendar
year.
Shareholders
are
advised
to
consult
with
their
tax
advisors
for
further
information
on
the
treatment
of
these
amounts
on
their
tax
returns.
The
following
tax
information
for
the
Funds
is
required
to
be
furnished
to
shareholders
with
respect
to
income
earned
and
distributions
paid
during
its
fiscal
year.
The
Funds
hereby
report
the
following
amounts,
or
if
subsequently
determined
to
be
different,
the
maximum
allowable
amounts,
for
the
fiscal
year
ended
September
30,
2022:
Note
(1)
-
The
Law
varies
in
each
state
as
to
whether
and
what
percentage
of
dividend
income
attributable
to
Federal
obligations
is
exempt
from
state
income
tax.
Shareholders
are
advised
to
consult
with
their
tax
advisors
to
determine
if
any
portion
of
the
dividends
received
is
exempt
from
state
income
taxes.
Pursuant
to:
Franklin
DynaTech
Fund
Franklin
Focused
Growth
Fund
Franklin
Growth
Fund
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$396,128,968
$669,614
$2,099,662,713
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$56,376,266
$328,145
$126,422,435
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$67,610,222
$369,356
$146,832,800
Short-Term
Capital
Gain
Dividends
Distributed
§871(k)(2)(C)
—
—
$7,311,051
Section
163(j)
Interest
Dividends
Earned
§163(j)
—
—
$32,051
Pursuant
to:
Franklin
Income
Fund
Franklin
U.S.
Government
Securities
Fund
Franklin
Utilities
Fund
Long-Term
Capital
Gain
Dividends
Distributed
§852(b)(3)(C)
$1,062,281,571
—
$168,579,500
Income
Eligible
for
Dividends
Received
Deduction
(DRD)
§854(b)(1)(A)
$804,944,381
—
$179,375,354
Qualified
Dividend
Income
Earned
(QDI)
§854(b)(1)(B)
$1,015,969,614
—
$196,702,262
Qualified
Net
Interest
Income
(QII)
§871(k)(1)(C)
$1,269,300,441
$90,961,677
—
Short-Term
Capital
Gain
Dividends
Distributed
§871(k)(2)(C)
$457,549,549
—
$21,202,070
Section
163(j)
Interest
Dividends
Earned
§163(j)
$1,406,329,438
$90,800,307
$259,949
Interest
Earned
from
Federal
Obligations
Note
(1)
$108,012,009
—
—
Franklin
Custodian
Funds
Board
Members
and
Officers
158
franklintempleton.com
Annual
Report
The
name,
year
of
birth
and
address
of
the
officers
and
board
members,
as
well
as
their
affiliations,
positions
held
with
the
Trust,
principal
occupations
during
at
least
the
past
five
years
and
number
of
U.S.
registered
portfolios
overseen
in
the
Franklin
Templeton/Legg
Mason
fund
complex,
are
shown
below.
Generally,
each
board
member
serves
until
that
person’s
successor
is
elected
and
qualified.
Independent
Board
Members
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Harris
J.
Ashton
(1932)
Trustee
Since
1976
119
Bar-S
Foods
(meat
packing
company)
(1981-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Director,
RBC
Holdings,
Inc.
(bank
holding
company)
(until
2002);
and
President,
Chief
Executive
Officer
and
Chairman
of
the
Board,
General
Host
Corporation
(nursery
and
craft
centers)
(until
1998).
Terrence
J.
Checki
(1945)
Trustee
Since
2017
100
Hess
Corporation
(exploration
of
oil
and
gas)
(2014-present).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Member
of
the
Council
on
Foreign
Relations
(1996-present);
Member
of
the
National
Committee
on
U.S.-China
Relations
(1999-present);
member
of
the
board
of
trustees
of
the
Economic
Club
of
New
York
(2013-present);
member
of
the
board
of
trustees
of
the
Foreign
Policy
Association
(2005-present);
member
of
the
board
of
directors
of
Council
of
the
Americas
(2007-present)
and
the
Tallberg
Foundation
(2018-present);
and
formerly
,
Executive
Vice
President
of
the
Federal
Reserve
Bank
of
New
York
and
Head
of
its
Emerging
Markets
and
Internal
Affairs
Group
and
Member
of
Management
Committee
(1995-2014);
and
Visiting
Fellow
at
the
Council
on
Foreign
Relations
(2014).
Mary
C.
Choksi
(1950)
Trustee
Since
2014
120
Omnicom
Group
Inc.
(advertising
and
marketing
communications
services)
(2011-present)
and
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2017-present);
and
formerly
,
Avis
Budget
Group
Inc.
(car
rental)
(2007-2020).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(investment
management
group)
(2015-2017);
Founding
Partner
and
Senior
Managing
Director,
Strategic
Investment
Group
(1987-2015);
Founding
Partner
and
Managing
Director,
Emerging
Markets
Management
LLC
(investment
management
firm)
(1987-2011);
and
Loan
Officer/Senior
Loan
Officer/Senior
Pension
Investment
Officer,
World
Bank
Group
(international
financial
institution)
(1977-1987).
Franklin
Custodian
Funds
159
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Edith
E.
Holiday
(1952)
Lead
Independent
Trustee
Trustee
since
1998
and
Lead
Independent
Trustee
since
2019
120
Hess
Corporation
(exploration
of
oil
and
gas)
(1993-present),
Santander
Consumer
USA
Holdings,
Inc.
(consumer
finance)
(2016-present);
Santander
Holdings
USA
(holding
company)
(2019-present);
and
formerly
,
Canadian
National
Railway
(railroad)
(2001-2021),
White
Mountains
Insurance
Group,
Ltd.
(holding
company)
(2004-
2021),
RTI
International
Metals,
Inc.
(manufacture
and
distribution
of
titanium)
(1999-2015)
and
H.J.
Heinz
Company
(processed
foods
and
allied
products)
(1994-2013).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
or
Trustee
of
various
companies
and
trusts;
and
formerly
,
Assistant
to
the
President
of
the
United
States
and
Secretary
of
the
Cabinet
(1990-1993);
General
Counsel
to
the
United
States
Treasury
Department
(1989-1990);
and
Counselor
to
the
Secretary
and
Assistant
Secretary
for
Public
Affairs
and
Public
Liaison-United
States
Treasury
Department
(1988-1989).
J.
Michael
Luttig
(1954)
Trustee
Since
2009
120
Boeing
Capital
Corporation
(aircraft
financing)
(2006-2010).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Counselor
and
Special
Advisor
to
the
CEO
and
Board
of
Directors
of
the
Coca-Cola
Company
(beverage
company)
(2021-present);
and
formerly
,
Counselor
and
Senior
Advisor
to
the
Chairman,
CEO,
and
Board
of
Directors,
of
The
Boeing
Company
(aerospace
company),
and
member
of
the
Executive
Council
(2019-2020);
Executive
Vice
President,
General
Counsel
and
member
of
the
Executive
Council,
The
Boeing
Company
(2006-2019);
and
Federal
Appeals
Court
Judge,
United
States
Court
of
Appeals
for
the
Fourth
Circuit
(1991-2006).
Larry
D.
Thompson
(1945)
Trustee
Since
2007
120
Graham
Holdings
Company
(education
and
media
organization)
(2011-2021);
The
Southern
Company
(energy
company)
(2014-2020;
previously
2010-
2012)
and
Cbeyond,
Inc.
(business
communications
provider)
(2010-
2012).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
Counsel,
Finch
McCranie,
LLP
(law
firm)
(2015-present);
John
A.
Sibley
Professor
of
Corporate
and
Business
Law,
University
of
Georgia
School
of
Law
(2015-present;
previously
2011-2012);
and
formerly
,
Independent
Compliance
Monitor
and
Auditor,
Volkswagen
AG
(manufacturer
of
automobiles
and
commercial
vehicles)
(2017-2020);
Executive
Vice
President
-
Government
Affairs,
General
Counsel
and
Corporate
Secretary,
PepsiCo,
Inc.
(consumer
products)
(2012-2014);
Senior
Vice
President
-
Government
Affairs,
General
Counsel
and
Secretary,
PepsiCo,
Inc.
(2004-2011);
Senior
Fellow
of
The
Brookings
Institution
(2003-2004);
Visiting
Professor,
University
of
Georgia
School
of
Law
(2004);
and
Deputy
Attorney
General,
U.S.
Department
of
Justice
(2001-2003).
Independent
Board
Members
(continued)
Franklin
Custodian
Funds
160
franklintempleton.com
Annual
Report
Interested
Board
Members
and
Officers
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Valerie
M.
Williams
(1956)
Trustee
Since
2021
100
Omnicom
Group,
Inc.
(advertising
and
marketing
communications
services)
(2016-present),
DTE
Energy
Co.
(gas
and
electric
utility)
(2018-present),
Devon
Energy
Corporation
(exploration
and
production
of
oil
and
gas)
(2021-present);
and
formerly
,
WPX
Energy,
Inc.
(exploration
and
production
of
oil
and
gas)
(2018-
2021).
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
of
various
companies;
and
formerly
,
Regional
Assurance
Managing
Partner,
Ernst
&
Young
LLP
(public
accounting)
(2005-2016),
various
roles
of
increasing
responsibility
at
Ernst
&
Young
(1981-2005).
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
**Gregory
E.
Johnson
(1961)
Trustee
Since
2013
131
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Executive
Chairman,
Chairman
of
the
Board
and
Director,
Franklin
Resources,
Inc.;
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
Vice
Chairman,
Investment
Company
Institute;
and
formerly
,
Chief
Executive
Officer
(2013-2020)
and
President
(1994-2015)
Franklin
Resources,
Inc.
**Rupert
H.
Johnson,
Jr.
(1940)
Chairman
of
the
Board,
Trustee
and
Vice
President
Chairman
of
the
Board
since
2013,
Trustee
since
1983
and
Vice
President
since
1982
120
None
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Director
(Vice
Chairman),
Franklin
Resources,
Inc.;
Director,
Franklin
Advisers,
Inc.;
and
officer
and/or
director
or
trustee,
as
the
case
may
be,
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Alison
E.
Baur
(1964)
Vice
President
Since
2012
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Deputy
General
Counsel,
Franklin
Templeton;
and
officer
of
some
of
the
other
subsidiaries
of
Franklin
Resources,
Inc.
and
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Breda
M.
Beckerle
(1958)
Chief
Compliance
Officer
Since
2020
Not
Applicable
Not
Applicable
280
Park
Avenue
New
York,
NY
10017
Principal
Occupation
During
at
Least
the
Past
5
Years:
Chief
Compliance
Officer,
Fiduciary
Investment
Management
International,
Inc.,
Franklin
Advisers,
Inc.,
Franklin
Mutual
Advisers,
LLC,
Franklin
Templeton
Institutional,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Independent
Board
Members
(continued)
Franklin
Custodian
Funds
161
franklintempleton.com
Annual
Report
Name,
Year
of
Birth
and
Address
Position
Length
of
Time
Served
Number
of
Portfolios
in
Fund
Complex
Overseen
by
Board
Member*
Other
Directorships
Held
During
at
Least
the
Past
5
Years
Steven
J.
Gray
(1955)
Vice
President
and
Co-Secretary
Vice
President
since
2009
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Distributors,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Matthew
T.
Hinkle
(1971)
Chief
Executive
Officer
–
Finance
and
Administration
Since
2017
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Vice
President,
Franklin
Templeton
Services,
LLC;
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex;
and
formerly
,
Vice
President,
Global
Tax
(2012-April
2017)
and
Treasurer/Assistant
Treasurer,
Franklin
Templeton
(2009-2017).
Susan
Kerr
(1949)
Vice
President
–
AML
Compliance
Since
2021
Not
Applicable
Not
Applicable
620
Eighth
Avenue
New
York,
NY
10018
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Compliance
Analyst,
Franklin
Templeton;
Chief
Anti-Money
Laundering
Compliance
Officer,
Legg
Mason
&
Co.,
or
its
affiliates;
Anti
Money
Laundering
Compliance
Officer;
Senior
Compliance
Officer,
LMIS;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Christopher
Kings
(1974)
Chief
Financial
Officer,
Chief
Accounting
Officer
and
Treasurer
Since
January
2022
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Treasurer,
U.S.
Fund
Administration
&
Reporting;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Edward
D.
Perks
(1970)
President
and
Chief
Executive
Officer
–
Investment
Management
Since
2018
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
President
and
Director,
Franklin
Advisers,
Inc.
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Navid
J.
Tofigh
(1972)
Vice
President
Since
2015
Not
Applicable
Not
Applicable
One
Franklin
Parkway
San
Mateo,
CA
94403-1906
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Lori
A.
Weber
(1964)
Vice
President
and
Co-Secretary
Vice
President
since
2011
and
Co-Secretary
since
2019
Not
Applicable
Not
Applicable
300
S.E.
2nd
Street
Fort
Lauderdale,
FL
33301-
1923
Principal
Occupation
During
at
Least
the
Past
5
Years:
Senior
Associate
General
Counsel,
Franklin
Templeton;
Assistant
Secretary,
Franklin
Resources,
Inc.;
Vice
President
and
Secretary,
Templeton
Investment
Counsel,
LLC;
and
officer
of
certain
funds
in
the
Franklin
Templeton/Legg
Mason
fund
complex.
Interested
Board
Members
and
Officers
(continued)
Franklin
Custodian
Funds
162
franklintempleton.com
Annual
Report
*We
base
the
number
of
portfolios
on
each
separate
series
of
the
U.S.
registered
investment
companies
within
the
Franklin
Templeton/Legg
Mason
fund
complex.
These
portfolios
have
a
common
investment
manager
or
affiliated
investment
managers.
**Gregory
E.
Johnson
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
of
Franklin
Resources,
Inc.
(Resources),
which
is
the
parent
company
of
the
Fund’s
investment
manager
and
distributor.
Rupert
H.
Johnson,
Jr.
is
considered
to
be
an
interested
person
of
the
Fund
under
the
federal
securities
laws
due
to
his
position
as
an
officer
and
director
and
major
shareholder
of
Resources.
Note
1:
Rupert
H.
Johnson,
Jr.
is
the
uncle
of
Gregory
E.
Johnson.
Note
2:
Officer
information
is
current
as
of
the
date
of
this
report.
It
is
possible
that
after
this
date,
information
about
officers
may
change.
The
Sarbanes-Oxley
Act
of
2002
and
Rules
adopted
by
the
Securities
and
Exchange
Commission
require
the
Fund
to
disclose
whether
the
Fund’s
Audit
Committee
includes
at
least
one
member
who
is
an
audit
committee
financial
expert
within
the
meaning
of
such
Act
and
Rules.
The
Fund’s
Board
has
determined
that
there
is
at
least
one
such
financial
expert
on
the
Audit
Committee
and
has
designated
Mary
C.
Choksi
as
its
audit
committee
financial
expert.
The
Board
believes
that
Ms.
Choksi
qualifies
as
such
an
expert
in
view
of
her
extensive
business
background
and
experience.
She
served
as
a
director
of
Avis
Budget
Group,
Inc.
(2007
to
2020)
and
formerly,
Founder
and
Senior
Advisor,
Strategic
Investment
Group
(1987
to
2017).
Ms.
Choksi
has
been
a
Member
of
the
Fund’s
Audit
Committee
since
2014.
As
a
result
of
such
background
and
experience,
the
Board
believes
that
Ms.
Choksi
has
acquired
an
understanding
of
generally
accepted
accounting
principles
and
financial
statements,
the
general
application
of
such
principles
in
connection
with
the
accounting
estimates,
accruals
and
reserves,
and
analyzing
and
evaluating
financial
statements
that
present
a
breadth
and
level
of
complexity
of
accounting
issues
generally
comparable
to
those
of
the
Fund,
as
well
as
an
understanding
of
internal
controls
and
procedures
for
financial
reporting
and
an
understanding
of
audit
committee
functions.
Ms.
Choksi
is
an
independent
Board
member
as
that
term
is
defined
under
the
relevant
Securities
and
Exchange
Commission
Rules
and
Releases.
The
Statement
of
Additional
Information
(SAI)
includes
additional
information
about
the
board
members
and
is
available,
without
charge,
upon
request.
Shareholders
may
call
(800)
DIAL
BEN/342-5236
to
request
the
SAI.
Interested
Board
Members
and
Officers
(continued)
Franklin
Custodian
Funds
Shareholder
Information
163
franklintempleton.com
Annual
Report
Liquidity
Risk
Management
Program
Each
of
the
Franklin
Templeton
and
Legg
Mason
Funds
has
adopted
and
implemented
a
written
Liquidity
Risk
Management
Program
(the
“LRMP”)
as
required
by
Rule
22e-4
under
the
Investment
Company
Act
of
1940
(the
“Liquidity
Rule”).
The
LRMP
is
designed
to
assess
and
manage
each
Fund’s
liquidity
risk,
which
is
defined
as
the
risk
that
the
Fund
could
not
meet
requests
to
redeem
shares
issued
by
the
Fund
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
In
accordance
with
the
Liquidity
Rule,
the
LRMP
includes
policies
and
procedures
that
provide
for:
(1)
assessment,
management,
and
review
(no
less
frequently
than
annually)
of
each
Fund’s
liquidity
risk;
(2)
classification
of
each
Fund’s
portfolio
holdings
into
one
of
four
liquidity
categories
(Highly
Liquid,
Moderately
Liquid,
Less
Liquid,
and
Illiquid);
(3)
for
Funds
that
do
not
primarily
hold
assets
that
are
Highly
Liquid,
establishing
and
maintaining
a
minimum
percentage
of
the
Fund’s
net
assets
in
Highly
Liquid
investments
(called
a
“Highly
Liquid
Investment
Minimum”
or
“HLIM”);
and
(4)
prohibiting
the
Fund’s
acquisition
of
Illiquid
investments
that
would
result
in
the
Fund
holding
more
than
15%
of
its
net
assets
in
Illiquid
assets.
The
LRMP
also
requires
reporting
to
the
Securities
and
Exchange
Commission
(“SEC”)
(on
a
non-public
basis)
and
to
the
Board
if
the
Fund’s
holdings
of
Illiquid
assets
exceed
15%
of
the
Fund’s
net
assets.
Funds
with
HLIMs
must
have
procedures
for
addressing
HLIM
shortfalls,
including
reporting
to
the
Board
and,
with
respect
to
HLIM
shortfalls
lasting
more
than
seven
consecutive
calendar
days,
reporting
to
the
SEC
(on
a
non-public
basis).
The
Director
of
Liquidity
Risk
within
the
Investment
Risk
Management
Group
(the
“IRMG”)
is
the
appointed
Administrator
of
the
LRMP.
The
IRMG
maintains
the
Investment
Liquidity
Committee
(the
“ILC”)
to
provide
oversight
and
administration
of
policies
and
procedures
governing
liquidity
risk
management
for
Franklin
Templeton
and
Legg
Mason
products
and
portfolios.
The
ILC
includes
representatives
from
Franklin
Templeton’s
Risk,
Trading,
Global
Compliance,
Legal,
Investment
Compliance,
Investment
Operations,
Valuation
Committee,
Product
Management
and
Global
Product
Strategy.
In
assessing
and
managing
each
Fund’s
liquidity
risk,
the
ILC
considers,
as
relevant,
a
variety
of
factors,
including
the
Fund’s
investment
strategy
and
the
liquidity
of
its
portfolio
investments
during
both
normal
and
reasonably
foreseeable
stressed
conditions;
its
short
and
long-term
cash
flow
projections;
and
its
cash
holdings
and
access
to
other
funding
sources
including
the
Funds’
interfund
lending
facility
and
line
of
credit.
Classification
of
the
Fund’s
portfolio
holdings
in
the
four
liquidity
categories
is
based
on
the
number
of
days
it
is
reasonably
expected
to
take
to
convert
the
investment
to
cash
(for
Highly
Liquid
and
Moderately
Liquid
holdings)
or
sell
or
dispose
of
the
investment
(for
Less
Liquid
and
Illiquid
investments),
in
current
market
conditions
without
significantly
changing
the
investment’s
market
value.
Each
Fund
primarily
holds
liquid
assets
that
are
defined
under
the
Liquidity
Rule
as
"Highly
Liquid
Investments,"
and
therefore
is
not
required
to
establish
an
HLIM.
Highly
Liquid
Investments
are
defined
as
cash
and
any
investment
reasonably
expected
to
be
convertible
to
cash
in
current
market
conditions
in
three
business
days
or
less
without
the
conversion
to
cash
significantly
changing
the
market
value
of
the
investment.
At
meetings
of
the
Funds’
Board
of
Trustees
held
in
May
2022,
the
Program
Administrator
provided
a
written
report
to
the
Board
addressing
the
adequacy
and
effectiveness
of
the
program
for
the
year
ended
December
31,
2021.
The
Program
Administrator
report
concluded
that
(i.)
the
LRMP,
as
adopted
and
implemented,
remains
reasonably
designed
to
assess
and
manage
each
Fund’s
liquidity
risk;
(ii.)
the
LRMP,
including
the
Highly
Liquid
Investment
Minimum
(“HLIM”)
where
applicable,
was
implemented
and
operated
effectively
to
achieve
the
goal
of
assessing
and
managing
each
Fund’s
liquidity
risk;
and
(iii.)
each
Fund
was
able
to
meet
requests
for
redemption
without
significant
dilution
of
remaining
investors’
interests
in
the
Fund.
Proxy
Voting
Policies
and
Procedures
The
Trust’s
investment
manager
has
established
Proxy
Voting
Policies
and
Procedures
(Policies)
that
the
Trust
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities.
Shareholders
may
view
the
Trust’s
complete
Policies
online
at
franklintempleton.com.
Alternatively,
shareholders
may
request
copies
of
the
Policies
free
of
charge
by
calling
the
Proxy
Group
collect
at
(954)
527-
7678
or
by
sending
a
written
request
to:
Franklin
Templeton
Companies,
LLC,
300
S.E.
2nd
Street,
Fort
Lauderdale,
FL
33301,
Attention:
Proxy
Group.
Copies
of
the
Trust’s
proxy
voting
records
are
also
made
available
online
at
franklintempleton.com
and
posted
on
the
U.S.
Securities
and
Exchange
Commission’s
website
at
sec.gov
and
reflect
the
most
recent
12-month
period
ended
June
30.
Franklin
Custodian
Funds
Shareholder
Information
164
franklintempleton.com
Annual
Report
Quarterly
Schedule
of
Investments
The
Trust
files
a
complete
schedule
of
investments
with
the
U.S.
Securities
and
Exchange
Commission
for
the
first
and
third
quarters
for
each
fiscal
year
as
an
exhibit
to
its
report
on
Form
N-PORT.
Shareholders
may
view
the
filed
Form
N-PORT
by
visiting
the
Commission’s
website
at
sec.gov.
The
filed
form
may
also
be
viewed
and
copied
at
the
Commission’s
Public
Reference
Room
in
Washington,
DC.
Information
regarding
the
operations
of
the
Public
Reference
Room
may
be
obtained
by
calling
(800)
SEC-0330.
Householding
of
Reports
and
Prospectuses
You
will
receive,
or
receive
notice
of
availability
of,
the
Fund’s
financial
reports
every
six
months.
In
addition,
you
will
receive
an
annual
updated
summary
prospectus
(detail
prospectus
available
upon
request).
To
reduce
Fund
expenses,
we
try
to
identify
related
shareholders
in
a
household
and
send
only
one
copy
of
the
financial
reports
(to
the
extent
received
by
mail)
and
summary
prospectus.
This
process,
called
“householding,”
will
continue
indefinitely
unless
you
instruct
us
otherwise.
If
you
prefer
not
to
have
these
documents
householded,
please
call
us
at
(800)
632-2301.
At
any
time
you
may
view
current
prospectuses/
summary
prospectuses
and
financial
reports
on
our
website.
If
you
choose,
you
may
receive
these
documents
through
electronic
delivery.
FCF
A
11/22
©
2022
Franklin
Templeton
Investments.
All
rights
reserved.
Authorized
for
distribution
only
when
accompanied
or
preceded
by
a
summary
prospectus
and/or
prospectus.
Investors
should
carefully
consider
a
fund’s
investment
goals,
risks,
charges
and
expenses
before
investing.
A
prospectus
contains
this
and
other
information;
please
read
it
carefully
before
investing.
To
help
ensure
we
provide
you
with
quality
service,
all
calls
to
and
from
our
service
areas
are
monitored
and/or
recorded.
Annual
Report
and
Shareholder
Letter
Franklin
Custodian
Funds
Investment
Manager
Distributor
Shareholder
Services
Franklin
Advisers,
Inc.
Franklin
Distributors,
LLC
(800)
DIAL
BEN
®
/
342-5236
franklintempleton.com
(800)
632-2301
Item 2. Code of Ethics.
 
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer. 
 
(c) N/A
 
(d) N/A
 
(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
 
 
Item 3. Audit Committee Financial Expert.
 
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
 
(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
 
 
Item 4.
 Principal Accountant Fees and Services.
 
(a)      Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $460,292 for the fiscal year ended September 30, 2022 and $458,671 for the fiscal year ended September 30, 2021.
 
(b)      Audit-Related Fees
The aggregate fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4 were $9,000 for the fiscal year ended September 30, 2022 and $9,399 for the fiscal year ended September 30, 2021. The services for which these fees were paid included attestation services.
 
There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  
 
 
 
 
 
 
(c)      Tax Fees
There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.
 
The were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.
 
 
(d)      All Other Fees
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $43,364 for the fiscal year ended September 30, 2022 and $89,027 for the fiscal year ended September 30, 2021. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process
 
and professional fees in connection with SOC 1 Reports.
 
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $258,207 for the fiscal year ended September 30, 2022 and $37,812 for the fiscal year ended September 30, 2021. The services for which these fees were paid included benchmarking services in connection with the ICI TA Survey, professional fees in connection with determining the feasibility of a U.S. direct lending structure, assets under management certification, professional services relating to the readiness assessment over Greenhouse Gas Emissions and Energy, fees in connection with a license for accounting and business knowledge platform Viewpoint, fees in connection with a license for employee development tool ProEdge, and professional fees in connection with SOC 1 Reports.
(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:
 
      (i)   pre-approval of all audit and audit related services;
 
      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;
 
      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and
 
      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.
 
(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.
 
(f) No disclosures are required by this Item 4(f).
 
(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $310,571 for the fiscal year ended September 30, 2022 and $136,238 for the fiscal year ended September 30, 2021.
 
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
 
(i) N/A
 
 
(j) N/A
 
 
Item 5. Audit Committee
 
of Listed Registrants.  N/A
 
 
Item 6. Schedule of Investments.          N/A


 
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.   N/A
 
 
Item 8. Portfolio Managers of Closed-End Management Investment Companies.                                         N/A
 
 
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and
Affiliated Purchasers. N/A
 
 
Item 10. Submission of Matters to a Vote of Security Holders.
 
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
 
Item 11. Controls and Procedures.
 
(a)
 
Evaluation of Disclosure Controls and Procedures
. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
 
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
 
(b)
 
Changes in Internal Controls
.
There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
 
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                             N/A
 
 
Item 13. Exhibits.
 
(a)(1) Code of Ethics
 
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
(a)(2)(1) There were no written solicitations to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the Registrant to 10 or more persons.
 
(a)(2)(2) There was no change in the Registrant’s independent public accountant during the period covered by the report.
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Christopher Kings, Chief Financial Officer, Chief Accounting Officer and Treasurer
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
FRANKLIN
CUSTODIAN FUNDS
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  November 30, 2022
 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
By S\MATTHEW T. HINKLE______________________
Matthew T. Hinkle
      Chief Executive Officer - Finance and Administration
Date  November 30, 2022
 
 
By S\CHRISTOPHER KINGS______________________
      Christopher Kings
      Chief Financial Officer, Chief Accounting Officer and Treasurer
Date  November 30, 2022